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Products January 4, 2013
Company Insures 401(k) Contributions
January 4, 2013 (PLANSPONSOR.com) - Corporate Compensation Plans, Inc. (CCP) introduced an insurance product that would continue contributions to employees' retirement plans if they become disabled.
Reported by Rebecca Moore
Under the program, if employees become disabled they will receive a tax-free lump sum payment equal to the value of all of their retirement plan contributions to age 65. For example, a 45-year-old employee has $20,000 a year being contributed to his 401(k) plan; 12 months after his disability, he will be paid a lump sum of $400,000 in tax-free cash—20 times his $20,000 contribution. He can then invest the $400,000 to offset the loss of his retirement plan contributions.
CCP’s plan can also continue contributions to non-qualified deferred compensation plans, with lump sum payments available of up to $3,000,000 (see “New Program Is Designed to Protect NQDC Benefits”).
The plan is available on a guaranteed issue no-medical examination basis and can be acquired in addition to employees’ in-force disability insurance.
E-mail Tasha Mayberry, vice president of marketing, at tmayberry@corpcompinc.com, or visit www.corpcompinc.com, for more information.