Unleashing the Power of Wage Loss Replacement Plans

In today’s competitive job market, employees are no longer swayed solely by salaries when deciding on their next career move. A new player has entered the ring, grabbing their attention and shifting the balance of power: the alluring benefits package.

More and more we are seeing benefits packages, in addition to employment flexibility, becoming a key reason for choosing one job over another. One option that has emerged as a game-changer is the Wage Loss Replacement Plan (WLRP). While it is common for employers to provide group disability insurance, forward-thinking companies are taking it a step further by adding WLRP’s to the mix. These plans aim to provide enhanced disability income protection for a select class of employees, offering more comprehensive coverage amounts and superior disability definitions compared to standard group policies. The beauty of it all? These plans are purchased, owned and funded by the company itself, saving employees from the hassle and expense of seeking individual policies.

You might be thinking – “But what if my company is on the smaller side? Can we still provide this valuable perk?” Absolutely! Even businesses with as few as two employees can create a WLRP, which makes them attractive also to those who have too few employees for a traditional group disability plan.

Consider this scenario: Imagine you have two executives earning $330,000 annually, however the maximum coverage amount provided by your group plan is $6,000/m (tax free). Based on their incomes, they could qualify for more than double the coverage of the group plan. But here’s the catch – they would need to pay for an individual policy out of their own pockets, with after-tax income. By implementing a WLRP, you can offer the executives an additional $12,800/m taxable (equivalent to $7,350/m tax free) in disability coverage. As the employer, the cost of the WLRP is tax-deductible which makes it a win-win situation.

Let’s assume these policies would cost your company $3,150 per employee, per year – compare that to the alternative of boosting their salaries by approximately $5,000 annually so they can afford their own disability plan to supplement the group insurance. With the WLRP, your company saves money and your employees are likely to feel genuinely valued and protected.  

In an uncertain world, Wage Loss Replacement Plans can provide both employees and employers with a lifeline of resilience and financial security.

Reach out to us today to discuss a WLRP!