Protecting Your Income Even at the Top
Posted on 28. Feb, 2011 by admin in Insurance, Personal Finance, World Finance
At the beginning of this economic downturn, many top level employees must have breathed a sigh of relief. After all, top level jobs are vitally important to running any company. Most top level employees are irreplaceable, or so they might like to think. However, now we know this isn’t the case. Top level employees run the same, if not more, risk of being laid off as a low level employee. This is why even top level employees need income protection insurance, which is insurance that will provide money to a person if they lose their job or their source of income.
Top level employees need income protection because they may be more at risk of being laid off then lower level employees. First of all, top level employees are paid much more than lower level employees. So, a company in distress can save much more money by laying off one top level employee than one lower level employee. In fact, a company can save the same amount they would save by getting rid of ten or fifteen lower level employees by just eliminating one top level position. With more and more companies being forced to get “creative” these days, top level employees should minimize their risk by obtaining income protection insurance.
Not only can companies save a large amount of money by cutting top level jobs, companies are also finding that they can consolidate many top level jobs. Vice president jobs are especially at risk for consolidation. Companies can combine two or three vice presidents positions into one job and lay off the now extraneous vice presidents. The remaining vice president may find their increased job duties to be difficult to perform, and thus also risks being laid off. Income protection is extremely important for vice presidents, as they never know when they could find themselves in this situation.
In a more robust economy, being laid off didn’t necessarily mean months or years of unemployment. However, these days, a period of unemployment can drag on for much longer than in the past, making income protection a necessity. It can also take top level employees much longer than others to find a job. There are only so many top level positions available, and an ever growing pool of eager applicants are competing for these few positions. Top level employees may also feel reluctant to take a lower level position, which may increase their unemployment time. A highly qualified employee that is willing to take a lower level job may find themselves turned away because they are over qualified and the company does not want to risk them quitting as soon as something better comes along. No one knows when or how long they may be laid off, so income insurance is only sensible.
Top level employees are used to making a top level salary. In these uncertain times it seems an employee can be laid off at any time, for any reason. Income protection insurance is essential for all employees, but especially top level employees.