The following employer is an ideal candidate for reducing the risk associated with the group LTD plan by introducing individual disability coverage for the company’s executives. By restructuring the company’s disability program, we could increase its overall plan maximum and produce a slight overall savings.

–2,160 employees.

–40 executives making $180,000 or more.

–Offers group LTD plan to all employees.

–60% taxable benefit.

–$11,000 maximum benefit; employer is paying a “load” for the maximum benefit that only benefits 40 employees.

By lowering the taxable group LTD replacement ratio to 50% and the maximum monthly benefit to $9,000 on the executive class only, an employer could save 8% ($62,000 annually) on the group LTD coverage. Those savings could be used to buy individual disability coverage for the executive group on a guaranteed-issue basis. Combining the group LTD coverage and individual coverage would replace 70% of income (100% with catastrophic coverage) and produce an overall monthly maximum benefit of $13,000.