Products January 4, 2013

Company Insures 401(k) Contributions

Corporate Compensation Plans Inc. (CCP) introduced an insurance product that would continue contributions to employees’ retirement plans if they become disabled.
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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. 

E-mail Tasha Mayberry, vice president of marketing, at tmayberry@corpcompinc.com, or visit www.corpcompinc.com, for more information.

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