Individual Executive Benefits

Many organizations strive to offer competitive executive benefit programs, but find it difficult to address the complex issues surrounding executive corporate benefits. 

Senior executives are often provided with inadequate insurance coverage from group life and long-term disability programs. Often, they are subject to benefit limits and restrictive contractual provisions that do not recognize the level and structure for items such as bonus or incentive income. IAG provides a thorough analysis of your group benefits plan and helps identify areas where there may be unfunded benefits or even liabilities as committed to in an employment agreement. We will assist you to create an executive benefits plan that will help clients recruit, reward, and retain your key employees. If our analysis shows that it is necessary, we will design a plan to replace, wrap around, or service the existing plan to bring your total program up to current expectations.

How would your organization respond to a disabled senior executive whose benefit entitlement was significantly limited due to the group insurer’s inability to accommodate their intended coverage?

• The Canadian group insurance market has provided very limited increases in benefit levels over the last decade and typically insures only a portion of an executive’s total compensation;

• Insurers limit the coverage for executives who have either high incomes and/or derive a large portion of their income from performance-based earnings (i.e. bonuses, other incentive compensation arrangements, and commissions); and

• As a result, many of these programs are not able to provide the organization’s most senior employees the intended benefit levels offered to all other employees.

Organizations commonly take one of two approaches when providing supplemental coverage to their group insurance programs:

• To make their executives “whole” with other employees by implementing coverage based on the benefit formula to which all other employees are entitled; or

• To deliver a more comprehensive benefit program that recognizes executive compensation structure and seniority within the organization.

IAG will work closely with your senior human resources staff to understand your company’s philosophy, provide guidance on industry trends, and give feedback on the competitive position of your life and disability program.

This will entail a review of your:

• Plan design;

• Contractual benefit limits;

• Contractual provisions and definitions; and

• Unfunded employer liabilities in which benefit entitlements have been stipulated in employment agreements. 
  

IAG offers solutions that meet the benefit objectives for your organization’s senior executives by:

1) Creating more innovative executive benefits as part of an overall benefit plan; and

2) Helping protect, reward and retain your senior executives

DISABILITY INCOME REPLACEMENT RATIOS

The following example illustrates the impact of a group plan’s maximum LTD limit on an executive’s income protection.

DISABILITY PROGRAM STRUCTURES

Structure For One Executive: Top-up Supplemental Policy

• Personally owned, non-taxable coverage; and

• Employer reimburses executive for premium

Structure for two or more executives: Wage Loss Replacement Program (WLRP) Tax Structure

• Premiums are tax deductible by the employer, although not a taxable benefit to the executive;

• Premium discounts of up to 25 percent; and

• Must be provided to all eligible executives of a defined class

​Structure for larger executive groups: Guaranteed Issue Coverage

• Benefit levels for groups of 10 or more with only two qualifying questions;

• Premium discounts of up to 25 percent;

• Monthly benefits available up to $25,000 (based on the number of insureds); and

• Claims on individual contracts do not impact Group LTD claims (insulating your program in the event of poor claims experience)

​Executive Life Insurance

• A group plan’s formula routinely provides for a multiple of earnings to a maximum overall benefit;

• The definition of insured earnings often excludes bonus or incentive income;

• If additional coverage is available, it will require medical underwriting;

• Individual term insurance offers minimum guaranteed premium terms of 10 years, enhanced contractual provisions, and full portability;

• Individual term rates have experienced significant rate reductions for the last 10-20 years; and

• Costs are now often equal to or below those of group optional life programs.

​​

IAG’s experience in the Executive Benefits marketplace spans over hundreds of clients and 40 years of advisory work.  Our approach is to bring strategies and practical solutions to our clients’ needs.

For more information contact an IAG advisor today.

Ontario and Eastern Canada:
Guy Bentley, President                        Victoria Reynolds, SVP    
​Phone: (416) 363-0072                         Phone: (416) 363-0070
Fax: (416) 262-0060                                Fax: (416) 363-0060
Email: gbentley@iagi.ca                      Email: vreynolds@iagi.ca   

​Western Canada:                                     Quebec:
​Janice Tchida, Insurance Advisor       Lissa-Marie Brossard, Insurance Representative
Phone: (587) 393-2813                             Phone: (514) 348-9422   
​Fax: (587) 393-2815                                   Fax: (450) 844-6855
Email: jtchida@iagi.ca                             Email: lmbrossard@iagi.ca