An Advisors' Guide to Excess & Surplus Disability Insurance

5 High Limit Disability GSI Program Types You Need to Know

Posted Tue, Sep, 17th, 2019
By Exceptional Risk Advisors

For organizations employing groups of high earning individuals, those earning in excess of $500,000 annually, a High Limit Guaranteed Standard Issue (GSI) program is available which allows employers to leverage their institutional buying power, reducing coverage costs and policy underwriting requirements to streamline the application process.  Important factors for designing the right plan are understanding the eligible class and the sponsoring company's benefit philosophy for their key contributors.  If you want to look sophisticated and have the highest level of participation in a plan, you'll need to know the 5 different program types to best determine which fit your client's needs.

Program 1: Voluntary Plans

Voluntary plans best suit employers who maximize their domestic plans and are looking to help  those key employees secure more coverage to better fit their financial needs should they suffer a disability. The required number of eligible individuals for this plan is 25 and more. There are hefty discounts for a plan of this size, roughly 25-45%. The benefit amounts range between $10,000/month up to $100,000/month. 

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Program 2: Mandatory Plans

In some cases, an organization with fewer high earning individuals, a mandatory plan requiring 100% of the eligible class to participate is the best solution.  These are often paid for by the employer or partners where the need is identified and agreed to be important to the overall employee benefit program. The required number of eligible individuals is as low as 1 and as high as 100+.  Based on the required number, discounts can range from 10-45% and benefits amounts from $10,000/month up to $100,000/month.

Program 3: Opt-Out Plans

An employer may recognize the need for their employees to have an additional disability insurance plan, but also understand the busy nature of these ultra-successful individuals.  In the opt-out plan design, a master employer application is signed by the employer and requires the eligible employees only to take an action to decline the coverage.  Similar to the voluntary plans, the number of required individuals is 25 or more with a discount of 25-45% and benefit amounts between $10,000/month up to $100,000/month.

GSI program types2

Program 4: Default In Plans

The default in plans are designed similarly to the opt-out plan, but provide additional options for benefit levels based on their income. This gives the employee the opportunity to select a 45% income replacement option verses a 65% income replacement, for example,  rather declining the benefit out right.  The number of required of eligible individuals is 30 or more and include a discount of between 15-45%. The benefit amounts range from $10,000/month up to $100,000/month.

Program 5: Mandatory Plans with Buy-Up

A hybrid plan between the mandatory and voluntary plan, the mandatory with buy-up program requires 100% participation and a minimum benefit level of typically $10,000/month. The unique nature of this plan allows eligible participants to buy additional benefit based on their income gap.  The required number of eligible individuals for this plan is between 10-100+ and the discounts range between 10-45%. 

Our resident expert in the high limit executive benefits space, Laura Muka, reviews these five plans PLUS illustrates a case study for each plan type in this 30-minute webinar