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August 17, 2005 at 08:00 PM
Helping executives from Fortune 100 to small, closely held companies understand what they have and what they have to lose can be daunting for any financial services professional. Although these may be highly educated people who have worked hard to earn their “executive privileges,” they may not understand how to address gaps in their current employee benefits coverage.
After all, many have a lot more to protect than even a few years ago. So, what’s the best way to help them overcome the mindset that the task is too overwhelming to tackle? It’s all in the approach you take.
The new 401(k)?
To us, disability income (DI), life and long term care (LTC) insurance are some of the best products for executives because they are often the weak links in the executives’ otherwise growth-oriented financial plans. Integrating this protection into financial planning is what we do and why we believe in these products.
Employers often view these products as key to staying competitive. And yet, these products are no longer about being competitive. They function as essential elements in a financial plan. In fact, we see them becoming as important and commonplace as the 401(k) in the executive benefits mix.
Think about it. If you’re an executive looking at a firm that doesn’t have a 401(k), you may wonder if it lacks comprehensiveness in other areas.
Why now-and why in the workplace?
For executive employees, there is every reason to choose the coverage, based on two key motivators: price and service. Purchasing these products through employer-provided programs brings significant discounts. No matter your income, when given the option to pay full price vs. discounted, guess which wins every time?
Executives can purchase coverage on their own or get it at a discount at work. For example, certain carriers offer spousal discounts on DI insurance and family member discounts on LTC insurance.
Secondly, the level of support they will receive and maintain is a key driver in the decision process since both the carrier and the financial services professional implementing the program have been brought to these executives by a trusted professional–their HR manager.
Overcoming Financial Paralysis
Highly compensated individuals, like the rest of the population, want to build security into their financial plan. Trouble is, even though they know they need to extend their DI insurance coverage and boost their life insurance, they become paralyzed by the enormity of the task. Researching coverage goes into the “tomorrow” pile, which never seems to become the “today” pile.
