Disability Insurance for Investment Bankers

Delivery of true own-occupation coverage splits the five carriers into three groups rather than one uniform feature. Principal builds true own-occupation into its base contract at no separate cost. Guardian and Ameritas each offer a base-contract choice among true and modified own-occupation forms. MassMutual and The Standard deliver true own-occupation only through a separately priced Own Occupation Rider elected at issue, and without that rider their base contracts fall back to a narrower, modified definition. Two quotes carrying the same monthly benefit and premium can be structurally different policies depending on which of these paths delivered the definition, which is exactly what an investment banker comparing carriers needs to check before choosing one.

Own Occupation Definition by Carrier for Investment Bankers

	Ameritas Life Insurance Corp. 4501NC	Guardian Berkshire Life Insurance Co. of America ICC16 18ID, Provider Choice	MassMutual Massachusetts Mutual Life Insurance Co. ICC15-XLIS-RC, Radius Choice	Principal Principal Life Insurance Company ICC22-800-IDI, Income Protector	The Standard Standard Insurance Company B180(7/17), Platinum Advantage
How own occupation coverage is delivered	Base contract, choice of true or modified own occupation forms	Base contract, named choice of three definitions	Not in the base definition. A separately priced Own Occupation Rider	Built into the base definition	A separately priced Own Occupation Benefit Rider
The clause that changes the definition from true to modified own occupation	Modified form adds “and you are not working in any occupation for wage or profit” (specimen)	Modified form adds “and You are not Gainfully Employed” (specimen)	Own occupation only exists once the rider is elected and itemized on the policy specifications page (specimen)	No such clause. Working in another occupation does not end the benefit (specimen)	Modified form adds “you are not engaged in any other job or occupation for wage or profit” (specimen). The own occupation form drops this clause entirely
Total disability definition, verbatim from the specimen	“Totally Disabled means that, solely due to sickness or injury, you are not able to perform the material and substantial duties of your occupation.”	“Totally Disabled means that, solely due to Injury or Sickness, You are not able to perform the material and substantial duties of Your Occupation” (base Own Occupation choice; the modified choice adds the Gainfully Employed clause above)	Not published in the base definition. The rider supplies the own occupation standard once elected	“Totally Disabled even if You are Working in another occupation as long as You are unable to perform the Substantial and Material Duties of Your Own Occupation.”	Rider language supplies the own occupation standard once elected; the base modified-form definition is quoted in the row above
Applies to an investment banker’s occupation class without a separate election	Yes. The general own occupation definition applies to all occupational classes, including the finance and securities classes an investment banker is typically assigned	Yes. All three definition choices are available regardless of occupation class	No. The Own Occupation Rider must be selected and priced at issue; it is not automatic for any occupation class	Yes. The base definition applies to all occupation classes	No. The Own Occupation Benefit Rider must be selected and priced at issue; it is not automatic for any occupation class

Source: specimen policy contracts held by Set for Life Insurance for Ameritas Life Insurance Corp. (form 4501NC), Berkshire Life Insurance Company of America underwriting for Guardian (form ICC16 18ID, Provider Choice), Massachusetts Mutual Life Insurance Company (form ICC15-XLIS-RC, Radius Choice), Principal Life Insurance Company (form ICC22-800-IDI, Income Protector), and Standard Insurance Company (form B180(7/17), Platinum Advantage). Quoted language is verbatim contract text. Lloyd’s of London coverage, placed through Petersen International Underwriters, is excess and specialty coverage and is not included in this comparison. Terms shown are from specimen policy language and are subject to underwriter review at the time of application.

Compare Own-Occupation Delivery by Carrier

A bank’s group long-term disability plan defines covered monthly earnings as base salary only, even when a signing bonus, year-end bonus, or deferred stock appears on the identical W-2. Firms structure investment-banking pay this way deliberately, keeping base salary fixed and moving compensation into bonus and multi-year vesting schedules to control fixed costs and retain talent. The plan document sets the earnings definition once, at the employer level, and it does not follow total compensation upward as a banker’s bonus share grows with seniority. This is exactly why an investment banker whose bonus has grown past base salary needs an individual policy underwritten against total income rather than the group plan’s base-salary figure alone.

Check What Your Group Plan Actually Insures

An individual disability insurance carrier sets an investment banker’s benefit amount against documented earned income at application, evaluated against the carrier’s own issue and participation limits, not a fixed base-salary figure the way a group plan works. Principal’s Income Protector, form ICC22-800-IDI, carries a monthly issue limit of $35,000 at occupation classes 6A+ through 3A for ages 18 to 60, sized to total compensation rather than base salary alone. A signing bonus and a year-end bonus both count as earned income once documented through tax returns or W-2s, subject to each carrier’s income-verification rules. An application filed close to a strong bonus year can support a higher benefit amount than one filed the year after a weaker one.

Get Your Bonus Counted Toward Coverage

Occupation class is the underwriting tier a carrier assigns based on an investment banker’s actual duties and documented income, not job title alone, and it sets the ceiling on how much monthly benefit a policy can carry. Ameritas, Guardian, and The Standard each name Investment Banker directly on their eligibility lists. MassMutual classifies the occupation under Broker and Principal cross-references it to Stockbroker, since neither publishes a class entry under the exact title. Required income to reach the top class ranges from $150,000 a year at Ameritas and Principal to $250,000 a year with a five-year minimum tenure at MassMutual.

Occupation Class for Investment Bankers by Carrier

	Ameritas Life Insurance Corp.	Guardian Berkshire Life Insurance Co. of America	MassMutual Massachusetts Mutual Life Insurance Co.	Principal Principal Life Insurance Company	The Standard Standard Insurance Company
Top occupation class reachable	5A	No published class number. Standard financial underwriting applies	5A	5A (under the nearest named title, Stockbroker)	5A
Income required to reach the top class	$150,000 a year for at least two years	Two years of financial documentation, no published income floor tied to a class	$250,000 a year for three years, minimum five years in the business	$150,000 a year for two years, minimum five years in the business	$200,000 a year for each of the last two years
Lower tier class and its threshold	4A below $150,000 a year	No published tiered scale for this eligibility list	4A at $150,000 to $200,000 a year	4A at $75,000 a year for two years, minimum five years in the business	4A at $100,000 a year for each of the last two years
How the guide names the title	Named directly as Investment Bankers, in the same income scale as Fund Managers, Portfolio Managers and Financial Analysts	Named directly as Investment Bankers on the financial industry occupations eligibility list	Not named directly. Classified under Broker: stock, bond or commodity broker or trader, investment or mortgage broker	Not named directly. Nearest cross-referenced title is Stockbroker	Named directly as Investment Banker, cross-referenced to the banking and finance occupation table

Source: producer-facing field underwriting and product guides held by Set for Life Insurance for Ameritas Life Insurance Corp., Berkshire Life Insurance Company of America underwriting for Guardian, Massachusetts Mutual Life Insurance Company, Principal Life Insurance Company, and Standard Insurance Company. These figures come from underwriting guidance, not policy contract language, so no policy form ID applies to this table. Guardian and Principal do not publish an occupation-class number under the exact title Investment Banker; Guardian’s figures reflect its financial-underwriting eligibility criteria and Principal’s figures reflect the nearest named title, Stockbroker. Class assignment is subject to underwriter review at the time of application and may vary by specific role, employer, and income documentation.

Find Your Occupation Class and Coverage Limit

Residual disability benefits pay a partial benefit when an investment banker loses income to a disability without becoming totally unable to work, and each carrier calculates the loss against a different prior-earnings average, which matters most for income that swings with the deal cycle. Ameritas averages the highest 12 or 24 month period and indexes it for inflation during a claim. Guardian averages the last 24 months or the best two of the last three years, whichever is higher, letting one strong bonus year anchor the calculation. MassMutual and The Standard average the last 24 months, and Principal averages the last 12 months, so an identical drop in bonus income produces a different check depending on the carrier.

	Ameritas Life Insurance Corp. 4501NC · Enhanced Residual Rider (AERES)	Guardian Berkshire Life Insurance Co. of America ICC16 18ID · Provider Choice + Enhanced Partial Rider	Lloyd’s Petersen International Underwriters PDI111521 · Optional Residual Rider	Mass Mutual Massachusetts Mutual Life Insurance Co. ICC15-XLIS-RC · Extended Partial Disability (EPR)	Principal Principal Life Insurance Company ICC22-800-IDI · Income Protector	The Standard Standard Insurance Company B180(7/17) · Platinum Advantage + Residual Riders
1 · Income Loss Threshold That Triggers Residual Benefits
Minimum income loss required % of prior earnings that must be lost before residual benefits begin	15% loss of monthly earnings (Specimen) One of the lowest thresholds available. Rider text states: loss must be “at least 15% of your prior monthly earnings” due to sickness or injury.	Loss of Income due to disability (Specimen) Guardian’s Enhanced Partial rider defines “Loss of Income” as the difference between Prior Income and Current Income attributable solely to the Injury or Sickness. No explicit percentage floor in the base rider. Benefit scales proportionally with income loss. Must be Gainfully Employed.	Optional rider, threshold per rider terms (Specimen) Base Lloyd’s specimen (PDI111521) notes “Residual Disability is an optional benefit that only applies if the rider was purchased.” Rider text not included in this specimen. Typical Lloyd’s/PIU residual riders require income loss and inability to perform all material duties.	20–80% loss of Predisability Earnings (Standard) EPR benefit is payable when Monthly Earnings fall to 20%–80% of Predisability Earnings. Below 20% earnings remaining triggers full benefit. Above 80% earnings remaining, no EPR benefit is paid.	Loss of Earnings from own occupation (Specimen) Principal’s Residual Disability Benefit Rider requires a loss of Earnings due to Disability. The specimen confirms “Earnings” excludes unearned income. No explicit minimum percentage floor. Benefit scales pro-rata with the earnings loss ratio.	20% loss of Predisability Earnings (Enhanced); 15–20% for Short-Term version (Specimen) Specimen lists Basic, Enhanced, and Short-Term Residual riders. Enhanced Residual: benefit payable when Monthly Earnings are 20%–80% of Predisability Earnings.
2 · Monthly Benefit Calculation Formula
Residual benefit formula How the monthly residual check is calculated	Residual Monthly Benefit = (Loss of Monthly Earnings / Prior Monthly Earnings) x Base Monthly Benefit (Specimen) First 6 months minimum: The greater of (a) 50% of base monthly benefit OR (b) the formula result. 75%+ loss rule: If loss exceeds 75% of prior monthly earnings, treated as 100% loss and full base benefit is paid. Prior earnings: Average of highest 12-month or 24-month period before disability, indexed annually for CPI-U after year 1.	Partial Disability Benefit = (Loss of Income / Prior Income) x Monthly Benefit (Specimen) Prior Income: Average monthly income for either (a) last 24 calendar months, or (b) the two calendar years with highest earnings in the three years before disability, whichever is greater. Current Income: All income for services during disability, excluding pre-disability earned-but-not-yet-received income. Full benefit floor: If loss of income is 100% or more of Prior Income, full monthly benefit is paid.	Proportional formula, rider required (Specimen) Rider language not included in this specimen. Lloyd’s/PIU residual riders typically use a proportional income-loss formula: (income loss / pre-disability income) x base benefit. Confirm with current rider filing.	EPR Benefit = [(Predisability Earnings – Monthly Earnings) / Predisability Earnings] x Monthly Benefit (Standard) Full benefit if earnings are less than 20% of predisability earnings. No benefit if earnings are greater than 80% of predisability earnings. Prior earnings: Average of the 24 months before disability began.	Residual Benefit = (Loss of Earnings / Prior Earnings) x Maximum Monthly Benefit (Standard) Prior Earnings: Average monthly Earnings for the 12 months before disability. Current Earnings: Earnings during the disability period, excludes passive/unearned income. Minimum benefit: Typically 50% of base benefit for first 6 months.	Residual Benefit = [(Predisability Earnings – Monthly Earnings) / Predisability Earnings] x Basic Monthly Benefit (Standard) Full benefit trigger: If Monthly Earnings are less than 20% of Predisability Earnings, full Basic Monthly Benefit is paid. Basic Residual Rider: Flat 50% of base benefit when qualifying criteria met. Enhanced Residual Rider: Proportional formula above; includes Recovery Benefit.
3 · Prior Total Disability Requirement and Whether Residual Can Trigger Independently
Independent trigger Does residual require a prior period of total disability, or can it trigger on its own?	Fully independent, no prior total disability required (Specimen) Ameritas AERES rider states benefits begin the later of: (1) the day after the end of the Elimination Period, OR (2) the day following a period of total disability for which benefits have been paid. Either path is valid. Days of both total and residual disability satisfy the elimination period.	Fully independent, no prior total disability required (Specimen) Guardian’s Enhanced Partial Disability Benefit Rider uses its own Elimination/Accumulation Period. The insured must satisfy the Accumulation Period but does not need to first be Totally Disabled. Residual days count toward satisfying the Elimination Period.	Rider-dependent, verify current rider (Specimen) Lloyd’s specimen confirms residual is an optional rider. The base policy elimination period can be satisfied by successive periods of Total Disability or Residual Disability, but rider must be reviewed for independence trigger language.	Fully independent, no prior total disability required (Standard) MassMutual’s EPR rider allows residual disability claims to trigger directly after the elimination period without a prior total disability period. Both total and partial disability days satisfy the elimination period.	Fully independent, no prior total disability required (Standard) Principal’s residual/partial disability rider triggers after the elimination period regardless of whether any total disability period occurred. The elimination period can be met by residual disability days alone.	Fully independent, no prior total disability required (Standard) Standard’s Enhanced Residual Disability Benefit Rider triggers after the Benefit Waiting Period is satisfied, independent of any total disability. Days of Disability during the Benefit Waiting Period need not be consecutive.
4 · Benefit Period for Residual Disability
Residual benefit period Maximum duration for which residual benefits can be paid	Remaining unused portion of the Total Disability Maximum Benefit Period (Specimen) The Residual Maximum Benefit Period equals the total unused portion of the maximum benefit period for total disability shown on the schedule. Combined total and residual payments cannot exceed this period. Typically to Age 65/67 when selected.	Same Benefit Period as Total Disability, to Age 65, 67, or 70 (Specimen) Benefit Periods of To Age 70/67/65 or 10/5/2 Years are available. The Enhanced Partial rider benefit period matches the policy benefit period. To Age 70 option available for physicians, distinctive among carriers.	Per Schedule of Benefits / rider terms (Specimen) The residual rider benefit period is set at time of issue and shown on the Schedule of Benefits (Section 1-D). Confirm with current rider.	To Age 65 (base); Extended to Age 65 via Maximum Benefit Period Endorsement (Specimen) Specimen shows coverage end date for Extended Partial Disability corresponding to the policy’s non-cancellable period to age 65. A separate Maximum Benefit Period Endorsement is available with its own premium schedule.	Same as base policy Maximum Benefit Period, 2 years, 5 years, To Age 65/67/70 (Specimen) Options include To Age 65, 67, and 70. Residual benefits run within this same period. To Age 70 available depending on occupation class.	Same as base policy Maximum Benefit Period, to Age 67 in this specimen (Specimen) Maximum Benefit Period schedule applies (e.g., if disability begins at 62: 60 months; at 63: 48 months). Enhanced Residual Disability Benefit Rider matches base benefit period.
5 · Recovery Benefit Provisions
Recovery benefit Protections after returning to work, continued payments if income remains depressed	Explicit Recovery Benefit provision (Specimen) Triggers after a disability benefit period ends if the insured has returned to work, is performing material duties 80% or more of prior time, and still has 15% or more loss of monthly earnings demonstrably caused by the prior disability. Duration: Continues up to the residual maximum benefit period.	Recovery Benefit, income-loss based, ongoing (Specimen) Benefits continue post-recovery as long as Loss of Income persists due to the disability. Because Guardian uses an income-loss formula, benefits naturally continue as long as Current Income remains below Prior Income due to the disabling condition. Prior Income protection: Uses the best 24-month or best-2-of-3-years average.	Recovery benefit per rider, verify current rider (Specimen) Lloyd’s base specimen does not contain recovery benefit language. Standard Lloyd’s/PIU residual riders may include recovery provisions, but this must be confirmed against the current executed rider.	Recovery Benefit included in EPR rider (Standard) After returning to full-time work following a disability for which EPR benefits were paid, if Monthly Earnings remain below Predisability Earnings due to the disability, a proportional recovery benefit continues. Duration: up to the remaining Maximum Benefit Period.	Recovery Benefit, proportional, ongoing post-return (Standard) Provides recovery benefits when an insured has returned to Full Time Work but Earnings remain below prior levels due to the disability. Benefit calculated using the same proportional formula.	Recovery Benefit included, Enhanced Residual Rider only (Specimen) The Basic Residual Rider does not include the Recovery Benefit. The Enhanced version is required. The base policy confirms premiums are waived while Recovery Benefits are payable. Short-Term Residual Rider: does not include recovery benefit.

Source: specimen policy contracts and riders held by Set for Life Insurance, Ameritas Life Insurance Corp. (form 4501NC, Enhanced Residual Rider AERES), Berkshire Life Insurance Company of America underwriting for Guardian (form ICC16 18ID, Provider Choice, Enhanced Partial Disability Benefit Rider), Petersen International Underwriters for Lloyd’s of London (form PDI111521, Optional Residual Rider), Massachusetts Mutual Life Insurance Company (form ICC15-XLIS-RC, Radius Choice, Extended Partial Disability Rider), Principal Life Insurance Company (form ICC22-800-IDI, Income Protector), and Standard Insurance Company (form B180(7/17), Platinum Advantage, Enhanced Residual Disability Benefit Rider). Punctuation in the comparison table above (em dashes recast to commas or periods) was normalized for house style at embed time; no factual content was changed. Terms shown are from specimen policy language and are subject to underwriter review at the time of application.

Compare Residual Benefit Formulas by Carrier

Group long-term disability coverage from a bank and an individually owned policy protect an investment banker’s income in different, non-overlapping ways. Group coverage usually converts its own-occupation definition to a stricter any-occupation test after 24 months, caps the maximum monthly benefit at a flat dollar figure unrelated to bonus growth, and is taxable to the employee under Internal Revenue Code Section 104(a)(3) when the employer pays the premium. An individual policy stays own-occupation for the full benefit period at several carriers, sets its benefit by occupation class and documented income including bonus, and pays tax-free when the banker pays the premium. The two are complementary, not competing, coverage.

Group Long-Term Disability Versus an Individual Policy

Source: the Set for Life Insurance Wall Street Income Protection Report, “How a group disability benefit is calculated,” “Own-occupation coverage is usually time-limited,” “The maximum monthly benefit binds first,” “Whether the benefit is taxed,” and “What happens to the coverage when you leave” (group LTD findings across contracts examined for that report, none from a financial services employer directly, all underwritten by carriers active in this sector); Principal Life Insurance Company’s Disability Product Guide, form ICC22-800-IDI, Income Protector (individual maximum monthly benefit example); and Internal Revenue Code Section 104(a)(3) (taxability). The individual-policy maximum monthly benefit shown is Principal’s own published limit and is not asserted as a figure common to all five carriers SFL represents. Group plan terms vary by employer and are shown as the common structure, not a specific plan’s terms. Terms shown are subject to the individual employer’s plan documents and underwriter review at the time of application.

Request a Coverage Review

An individually owned disability insurance policy belongs to the investment banker, not the employer, so it stays in force unchanged through a move from one bank to another, a firm merger, or a shift from a bulge bracket bank to a boutique advisory shop. A group long-term disability plan works the opposite way, ending the day employment ends, and a new employer’s group plan starts its own eligibility waiting period and pre-existing-condition clock from zero. An investment banker who buys individual coverage while employed keeps the same policy, the same premium, and the same underwriting decision regardless of how many times an employer changes over a career.

Keep Your Coverage When You Change Firms

A Future Increase Option rider lets an investment banker raise the monthly benefit on an existing individual disability insurance policy at set future dates or income milestones without new medical underwriting, though the increase still requires financial evidence that current income supports it. This matters most for an analyst or associate who locks in coverage at a lower occupation class early in a banking career, since income and occupation class both tend to rise sharply by the time a banker reaches vice president or managing director. Electing the rider at issue preserves the ability to add coverage later even if a new health condition would otherwise make raising the benefit difficult or impossible to underwrite.

Protect Your Ability to Increase Coverage Later

A managing director or partner sitting at a carrier’s top occupation class and standard issue-and-participation limit can reach a ceiling on standard-issue coverage before their income is fully insured. Lloyd’s of London, placed through Petersen International Underwriters, writes supplemental, excess disability coverage above what Ameritas, Guardian, MassMutual, Principal, and The Standard issue individually, layered on top of a standard-issue policy rather than replacing it. This high-limit layer applies specifically at the income tier where base salary contributes the least to total compensation and a group plan’s flat benefit cap leaves the most income uninsured. An investment banker approaching a carrier’s issue limit should confirm existing standard-issue coverage before applying for the excess layer.

Ask About Coverage Above Standard Limits

A non-cancellable and guaranteed renewable individual disability insurance policy locks the premium and the terms for the life of the contract, so a carrier cannot raise the rate or change the definitions after an investment banker’s income, occupation, or health changes. This matters across a career that runs from an incoming analyst’s signing bonus to a managing director’s year-end payout, since the protections that applied at a lower occupation class and lower premium stay fixed even after a promotion or a new health diagnosis would otherwise justify a rate increase. Ameritas, Guardian, MassMutual, Principal, and The Standard all issue their individual policies on this basis, unlike group coverage, which the employer can change or drop at renewal.

Lock In Your Terms Before Your Next Career Move

A multi-life discount reduces the premium on an individual disability insurance policy when multiple employees at the same firm apply through an employer-sponsored or association-sponsored arrangement, and several of the five carriers SFL represents offer one to eligible groups. A bank, boutique advisory shop, or trading desk with enough investment bankers applying together can qualify for simplified underwriting and a lower rate than each banker would receive applying individually. Eligibility and discount size depend on the number of applicants, the carrier, and the specific arrangement negotiated at the firm, so confirming availability requires checking current terms rather than assuming every workplace qualifies.

Ask About Multi-Life Discount Eligibility

Elimination period options vary by carrier and by the benefit period you select. Ameritas offers the widest range, from 30 to 730 days, and Guardian offers 30 to 720 days, both with some restrictions tied to benefit period and state. Principal, The Standard, and MassMutual all offer a choice of 60, 90, 180, or 365 days. A shorter elimination period costs more in premium but pays sooner, so the right choice generally comes down to how much cash reserve you have to cover a short gap before benefits begin.

Compare Elimination Period Options

Most individual disability policies offer a Cost of Living Adjustment rider that increases your monthly benefit each year you remain on claim, tied to the Consumer Price Index. Guardian, Ameritas, Principal, and The Standard all let you choose a 3 percent or 6 percent maximum increase when you buy the policy. MassMutual’s rider applies a fixed 3 percent compound increase with no higher option. Most carriers require a full year of disability before the adjustments begin.

Ask About Cost of Living Adjustment Riders