For most tech professionals, base salary is the smallest part of the package. Bonus, and especially restricted stock units, can make up the majority of total compensation at established technology companies. That structure is exactly what employer disability coverage tends to miss, because group long-term disability almost always insures base salary only. The question that decides whether your coverage actually protects your income is a specific one: how does a disability carrier treat equity when it sizes the benefit?
The short answer is that it depends on the form the equity takes. Income you have received and can document counts. Future or contingent equity does not. This page walks through each component of a tech pay package and how carriers treat it, drawn from how the five major individual carriers underwrite earned income as of 2026.
What counts as insurable income for a tech worker?
Disability carriers underwrite earned income, which they define as compensation you receive for work: salary, wages, bonus, and commission. Vested RSUs are reported as W-2 wages in the year they vest, so they fall inside that definition. What sits outside it is future value that has not been received, and passive income that is not pay for work. The table below summarizes how each part of a typical tech package is generally treated.
| Compensation component | How carriers generally treat it |
|---|---|
| Base salary | Counted directly. |
| Cash bonus | Counted; usually averaged over about two years to smooth a single strong or weak year. |
| Commission (sales roles) | Counted; averaged the same way as bonus. |
| Vested RSUs (on your W-2) | Generally counted as earned income when the vesting is consistent and documented. |
| One-time or cliff RSU vesting | Weighed more cautiously; a single large event may be discounted rather than treated as recurring income. |
| Unvested RSUs and restricted stock | Not counted. Future value that has not been received. |
| Stock options (unexercised) | Not counted. |
| ESPP discount | Generally not separately counted as income. |
| Dividends, capital gains, investment income | Excluded. This is unearned income, not pay for work, so it neither adds to nor offsets a benefit. |
Why do vested RSUs count when unvested grants do not?
The line carriers draw is between income received and value promised. When an RSU vests, its value is taxed as ordinary wages and shows up on your W-2 alongside your salary. The IRS puts it plainly: "Upon vesting, the Fair Market Value of the RSU is includable on the W-2 form" (Internal Revenue Service). At that point it is earned income, indistinguishable in the carrier's eyes from a cash bonus of the same size. In our experience as of 2026, an underwriter who sees two or three years of consistent vesting can treat that as a recurring part of your earnings and size the benefit accordingly.
Unvested RSUs are different. They represent value you may receive if you stay employed and the shares vest on schedule, which makes them contingent rather than received. Stock options that you have not exercised are contingent in the same way, and their value depends on a share price you have not locked in. Because neither has been received as income, neither counts toward the benefit. As those shares vest year by year, the income they produce becomes part of what a carrier can credit, which is why locking in the ability to increase coverage later matters for an equity-heavy career.
The sizing mistake: insuring base salary only
The most common and most expensive error an equity-compensated tech worker makes is relying on an employer plan. Group long-term disability typically builds its benefit on base salary alone, so for a package weighted toward bonus and vesting RSUs, the larger share of compensation sits outside it entirely; the rest of the group-plan limits, from monthly caps to the 24-month own-occupation window, are covered in our group vs. individual guide for tech workers.
An individual policy can be sized to your full earned income: base, plus documented bonus, plus the vested equity on your W-2. Equity compensation is a defining feature of the tech professionals we work with, and tech is now the fastest-growing part of our client base, so sizing the benefit correctly to total earned compensation rather than to the base salary on an offer letter is the decision that determines whether coverage replaces real income at claim time. Applying young and healthy matters too; roughly 28% of placed policies picked up an exclusion or rating in Disability Insurance Agency's 2026 book review, with mental and nervous conditions the leading cause (State of Disability Underwriting). For how this fits the broader picture, see our tech disability insurance hub.
How do you document equity income for underwriting?
Documentation is what turns a tech worker's equity into income a disability carrier will count. As of 2026, carriers generally want about two years of federal tax returns and W-2s, which already include vested RSU value as wages. For a clearer read on the pattern, an underwriter will also look at vesting statements or a grant summary from your equity platform that shows what has vested and when. A steady annual vesting schedule reads as recurring income; a single large cliff vesting reads as a one-time event and is weighed more cautiously.
Equity, portability, and a fast-rising income
Two policy features matter most for equity-heavy tech pay: portability and the ability to increase the benefit later. Portability means an individual policy stays with you across job changes and equity events, while group coverage ends at each departure. The second is a future increase option, which lets you raise the benefit as your compensation climbs, with no new medical underwriting, through promotions, a new role, or a liquidity event. Together they let coverage keep pace with an income that grows quickly and is structured around equity that vests over time.
Presenting equity income is something we specialize in: documenting vesting history and refresh grants so steady RSU vesting reads as the recurring income it is, and pushing back or re-shopping the file when an underwriter discounts it.
Carriers also differ in how they handle variable and equity-weighted pay. We are independent and run all five major carriers, Guardian, Principal, MassMutual, Ameritas, and The Standard, on every case, and compare them on how the benefit is sized as well as on own-occupation language and price. Start with a quote comparison, or read our own-occupation guide for how the right definition protects technical work.