An employee benefit carve-out is a design in which a subset of employees (often executives or key staff) receive enhanced benefits separate from the broad group plan. In life or disability insurance, carve-outs can increase coverage amounts, add riders, or layer individual policies for portability. Employers use carve-outs to recruit and retain talent while managing overall benefits cost and discrimination rules.

HR and advisors carve out executives for higher life or DI limits using individual policies layered atop group plans. This delivers portability and tailored riders without increasing costs for all employees. Documentation addresses nondiscrimination, evidence of insurability, and payroll handling of taxable benefits where applicable.