What Is High Limit Disability Insurance?
High limit disability insurance, or HLDI, is a special type of disability insurance for high-net-worth individuals. Standard disability insurance for group and individual policies typically leaves a large gap between the limit and the individual’s current annual income. A high limit disability insurance policy offers a much higher limit so that the policyholder does not potentially lose a large portion of their income earning potential due to injury or illness.
For example, whereas the average employee may receive full compensation from disability insurance, the disability coverage of a key executive may only cover 25% of their income. In this case, traditional group or individual disability insurance is not enough. Instead, high net worth individuals should invest in high limit disability insurance.
What Are The Types Of High Limit Disability Insurance?
There are different types of high limit disability insurance. Vector Financial Group can assist you with choosing the one that best fits your policy needs. Notably, high limit disability insurance may fall under one or more of the following categories.
Own Occupation Disability Insurance
Own occupation coverage provides coverage if you are unable to perform the skills necessary for your occupation. This policy benefit kicks in even if you are able to work in other occupations.
Any Occupation Disability Insurance
Any occupation disability insurance covers you if you are fully disabled and unable to perform work in any occupation. This means if you are unable to perform in your primary occupation but can still work in related occupations, then coverage may not be available.
Lump Sum Benefits Disability Insurance
Lump sum benefits are a type of high limit disability coverage that provides a lump sum payment if you become disabled due to injury or illness. The lump sum could be paid once the monthly payments expire or immediately upon injury. For high-net-worth individuals, the lump sum benefit is sometimes as high as $50 million.
Employer Paid Disability Insurance
Some employers may provide high limit disability insurance for high-income earners within the company (i.e., high-level executives). This is usually offered as a way to improve employee retention and recruit qualified and highly talented individuals to their company.
Group, Individual, Or Voluntary Disability Insurance
Group policies may be a great way to lower the cost among multiple high-net-worth individuals. Individual policies may be right for HNWIs that want full personalization of their policy. Individual high limit disability insurance is also often used as a way to complete buy-sell agreements and as a form of key-person protection as well.
Ready To Protect Your Income With High Limit Disability Insurance?
If you are a high-net-worth individual and want to protect your income in case of injury or illness, then high limit disability insurance may be right for you. Call the disability insurance professionals at Vector Financial Group or send us a message today to discuss policy options and find out if a policy is right for you.
