Mind the (Income Protection) Gap

Similar to the way a nonqualified deferred compensation plan provides an opportunity for executives to restore retirement savings rates restricted by IRS limits imposed on 401(k) plans, Supplemental Disability Income Plans can restore the income replacement rates limited for higher earners in Group Long Term Disability (LTD) Plans.

In addition to higher overall base incomes, executives and senior managers often derive a greater proportion of their annual income from variable compensation – a type of compensation generally excluded in Group LTD programs.

The result is employees in this population often do not have the income protection they think they have.


From insufficient income replacement to lost savings and increased expenses, the risks and consequences of a disability are often misunderstood or overlooked.

Consider these hidden risks of disability:

  • 4x greater likelihood of disability than death in the working years
  • High income earners have a greater probability of being the sole wage earner in a household, increasing the financial consequences of a disability
  • You’re likely to fall off your employer’s medical and dental insurance – you would need to pay out of pocket if you wish to maintain you and your family’s medical and dental coverage
  • Retirement savings are suspended
  • Company matching contributions cease

If you would like to evaluate a supplemental disability insurance program for your executive or senior management population, please contact your MBS Financial consultant via this link.  


Who is MBS?

MBS is a highly specialized corporate consulting firm with more than $13 billion dollars of our clients’ corporate investments. We manage over 225 corporate ICOLI and nonqualified plans.  Importantly, we do not replace your current investment advisors. MBS Financial is certified as a women-owned business and is recognized by the Supplier Clearinghouse.


Variable Universal Life insurance combines the protection and tax advantages of life insurance with the investment potential of a comprehensive selection of variable investment options. The insurance component provides death benefit coverage and the variable component gives you the flexibility to potentially increase the policy’s cash value.

The materials are designed to convey accurate and authoritative information concerning the subject matter covered. However, they are provided with the understanding that Mullin Barens Sanford Financial does not engage in the practice of law, or give tax, legal or accounting advice. For advice in these areas, please consult your appropriate advisors.

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