Manulife Financial Corp.’s recently launched Executive LTD insurance product is designed to help fill what the Toronto-based insurer calls the “income-replacement gap” that high-income earners face with conventional long-term disability coverage.

“We have found, over the past couple of years,” says Rosemary Peros, product manager, disability and absence management services, group benefits, with Manulife in Toronto, “that many executives and professional executives were underinsured and did not have an adequate amount of disability [insurance coverage] that would allow them to have an appropriate level of income replacement. And should these individuals find themselves in a disability situation, they would be financially at risk.”

Regular LTD insurance covers a percentage of an executive’s salary. Manulife’s Executive LTD product features three tiers of increasing coverage:

> Tier 1 consists of Manulife’s existing disability coverage that a client or plan member would have today; no medical evidence is required to be submitted for a claim. Benefit amounts are determined based on various factors, such as an individual’s salary and the size of the group covered.

> Tier 2 provides access to another layer of disability coverage in addition to that provided by Tier 1. This can provide an employee with an additional $1,000-$7,500 of income a month, depending on the number of executives in the group and their average salary. This tier requires simplified underwriting, which includes answering four health questions.

“We wanted to provide a product that would give these individuals access to additional coverage,” says Peros. “But [we] also wanted to give them an option if they didn’t have the time to go through a full medical underwriting.”

> Tier 3 provides still another layer of benefits that sits on top of the previous two tiers and allows an executive to top up his/her monthly income benefit amount up to the company’s maximum amount (which varies, depending on number of employees in the company).

Tier 3 requires an executive to complete a full medical underwriting.

The Executive LTD product is available to employers with as few as five eligible employees.

With Executive LTD, employees can utilize a number of optional features and executive services, including access to health-care navigation — an online and telephone service that provides clients with assistance in navigating the Canadian health-care system.

The Executive LTD product also provides clients with access to a number of organizations that allow clients to interact with physicians and medical specialists. As well, clients can utilize the absence-management access tool, which provides support during an employee’s absence and is beneficial for employers who are looking for more assistance in processing their short-term and long-term disability claims. The employer will be able to refer more complex cases to Manulife for assistance.

Executive LTD also provides the use of a personal health assessment service for executives.

“We brought in these three services to start with,” says Peros. “But are hopeful that down the road, as we evolve the product, we will continue to add additional services that we really feel the employer and the employee value.” IE