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NEW YORK, Oct. 08, 2026 (GLOBE NEWSWIRE) — “Disability Coverage Stops at Base Salary,” a new study by the Income Protection Journal released during the 2026 open enrollment period, finds just 37 of 2,912 financial services employers with a group disability plan provide coverage above base salary.
The remaining 99% of financial services firms cover base pay alone, in a sector where bonus, equity and other variable pay structures account for a growing share, and in many cases the majority, of total compensation.
Disability insurance carriers call the amount a group disability plan actually protects covered earnings. But that term has no industry standard, and is defined differently by underwriters.
The report examines the current state of group disability coverage for investment banking, portfolio management, quantitative analysis, asset management and securities brokerage professionals across Wall Street, where plans whose covered earnings definitions exclude bonus and other variable pay, leaving a significant share of monthly income unprotected.
Group long-term disability coverage, the kind offered automatically through most employers, typically replaces 60% of covered earnings up to a monthly group LTD benefit cap.
The income protection shortfall plays out differently by compensation structure and role. An investment banker’s year-end bonus might be tied to deal volume that could exceed exponentially base salary. A portfolio manager or quantitative analyst might be compensated mostly through incentive compensation linked to fund performance. An asset manager’s pay might include carried interest on top of W-2 income, and a securities broker’s earnings are usually weighted toward commission.
In each case, a group disability policy calculated on base salary alone replaces only a sliver of actual take-home pay, deepening the income replacement shortfall precisely when deferred income, restricted stock units and other golden handcuffs make it hardest for a finance professional to scale back spending.
Just under one in four of today’s 20-year-olds can expect to become disabled before reaching normal retirement age, according to a report by the Social Security Administration’s Office of the Chief Actuary.
“Finance professionals assume their group disability insurance covers their paycheck,” said Jamie K. Fleischner, CLU, ChFC, LUTCF, president of Set for Life Insurance. “On Wall Street, where bonus pay can account for more than half of total compensation, that is a potentially catastrophic exposure. Most people never check how their group policy defines covered monthly earnings until it’s too late. Open enrollment is the time hedge that risk.”
Individual disability insurance (IDI), underwritten separately from an employer’s group plan, can be structured around a finance professional’s full income rather than base salary alone, and it carries several features group coverage does not.
IDI policies offer what’s called true own-occupation coverage, which means they pay a claim if the insured cannot perform the material and substantial duties of their specific occupation, even if they could work in a different field.
It can be non-cancellable and guaranteed renewable, so the carrier cannot change the premium or terms, and it is portable across employer changes, unlike a group benefit tied to a single job. Benefits paid from an individually owned policy are typically received income tax-free, since premiums are paid with after-tax dollars, and firms with multiple eligible employees may qualify for a multi-life discount.
The report includes a page-by-page breakdown of how a group disability benefit is calculated, how carriers define covered earnings differently, and a set of steps for calculating the size of that exposure and reviewing a group LTD certificate before the open enrollment window closes.
About the Income Protection Journal
The Income Protection Journal is an independent journalism site covering disability insurance, income protection and related financial-planning topics for high-earning professionals. It is published by KF Financial D/B/A Set for Life Insurance, a disability insurance brokerage with offices off Wall Street in the Standard Oil Building at Set for Life Insurance at 26 Broadway, New York, NY 10004.
CONTACT: Media Contact Eric Schwartzman AIO LLC eric@ericschwartzman.com 424-272-1270
