Under the program, employees who become disabled will receive a tax-free lump sum payment equal to the value of all 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 nonqualified deferred compensation plans, with lump sum payments available of up to $3,000,000.
The plan is available on a guaranteed issue no-medical examination basis and can be acquired in addition to employees’ in-force disability insurance.