1. Retirement Protection Plus (RPP) Program
Maintaining a Healthy Retirement Strategy
Individual Disability Income Insurance
Retirement Protection Plus (RPP) Program
What happens to a retirement plan when a disability strikes?
What happens to the 401k plan you contributed to when you’re no longer able to make contributions?
Can a plan that continues to provide savings grow in the event of a disability?
Interesting questions.
My name is <<NAME>>
I’m here today to tell you about RPP – our Retirement Protection Plus Program which can help you protect the retirement plans you have worked diligently to put in place for your future.
Let’s begin.
This presentation is provided for informational purposes only and should not be considered tax or legal advice. Please contact your tax or legal advisor regarding the tax treatment of the policy and policy benefits. You should consult with your own independent tax and legal advisors regarding your particular set of facts and circumstances. The information provided is not intended or written to be used, and cannot be relied upon, to avoid penalties imposed under the Internal Revenue Code or state and local tax law provisions. Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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2. Your Retirement Plan Does this make my plan vulnerable?
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
Your Retirement Plan
Financing retirement is critical
Contribute to company’s retirement plan
Must be able to work and contribute to your plan
Saving for retirement is one of the most critical financial issues that we all face, and that is why you contribute to your company’s retirement plan.
But think about it - to complete even the best-thought-out plan, and to assure an adequate retirement income, you must be able to work and to contribute to the plan.
Many people fail to realize that if they became disabled and could not work, all employee and employer contributions come to a halt.
When a person becomes disabled, his or her retirement plan is also disabled.
Retirement contributions—those made by both the employee and the employer—will only continue as long as he or she remains actively at work.
But does this mean my retirement plan is really vulnerable? Am I really at risk of becoming disabled?
The fact is, disability is nothing to scoff at – we’re a lot more vulnerable then we might have once thought.
Does this make my plan vulnerable?
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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3. Disabilities can – and do – Happen
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
Disabilities can – and do – Happen
Just over 1 in 4 of today’s 20-year-olds will become disabled before they retire1
Approximately 90% of disabilities are caused by illnesses rather than accidents2
Most people think that disabilities are only caused by work related accidents or car accidents. Or, they think it only happens to older people
But research tells us something much different.
For example –statistically speaking just over 1 in 4 of today’s 20-year-olds will become disabled before they retire1
And, 95% of all long-term disabilities are not caused by car accidents or work-related accidents but are instead caused by illnesses.
Illnesses that are quite common too, for example: back or spine disorders, rheumatoid arthritis, carpal tunnel syndrome, multiple sclerosis, mental illness, cancer, or joint disorders.
Many of us, might already know someone living with these types of illnesses.
Let’s take a look at some actual claim scenarios…
Social Security Administration, Fact Sheet April 2014
Council for Disability Awareness, Long-Term Disability Claims Review, 2014
Social Security Administration, Fact Sheet April 2014
Council for Disability Awareness, Long-Term Disability Claims Review, 2014
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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4. Actual Claim Scenarios
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
Actual Claim Scenarios
OCCUPATION
AGE AT ONSET
POLICY ISSUE DATE
CLAIM* START DATE
GENDER
DIAGNOSIS
Bank Owner 37
8/21/09
11/8/10 M
Subarachnoid Hemorrhage
Accountant
10/10/09
6/4/11 F
Carotid Artery Dissection
Cardiologist 54
2/17/10
5/26/11
Malignant Pancreas Neoplasm
Engineer 40
12/25/10
2/10/11
Intracranial Injury
Consultant 60
2/1/11
9/1/12
Colon Cancer
Director 55
4/1/11
11/10/11
Multiple Sclerosis
Recent Claims*
The following chart illustrates actual claims that we’ve paid benefits and helps demystify a few myths.
Several policyholders — some rather young, are on claim.
If they had waited just “a few years,” they would have found themselves with no coverage when their disabilities occurred. Instead, they chose to protect their income with disability income insurance.
So they had the coverage they needed, when they needed it.
Another aspect about disability to consider is the improvements in medical technology.
*Claims paid for by Berkshire Life Insurance Company of America, a Guardian company. Every claim is unique and must be evaluated on its own merits. Elimination Periods vary. The diagnosis of these medical conditions alone does not entitle an individual to disability benefits. A person’s eligibility for benefits is determined on a case by case basis according to the terms and conditions of their policy.
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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5. Living Longer, Disabled Lives
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
Living Longer, Disabled Lives
Due to improvements in medical technology, people with illnesses are able to live longer – however, they’re living longer disabled lives.
Improvements in medical technology have improved people’s lives dramatically.
Improvements have allowed people with illnesses to live longer.
However, though these people are living longer…they’re living longer disabled lives.
But how can one protect oneself? When a disability happens, it wreaks havoc on the financial plans of the people we’re trying to help -- not only just for today, but for the future.
What do you think would happen to someone’s 401K plan in the event of an extended period of disability?
Would they recover? What if you weren’t able to return to work full-time? Or, became so financially strained, you had to dip into your nest egg?
Should this happen to you, all retirement planning could potentially stop because contributions are no longer made when you’re not actively at work.
Establishing a back-up plan for your retirement strategy can help you maintain a healthy retirement strategy.
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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6. Maintaining a Healthy Retirement Strategy
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
Maintaining a Healthy Retirement Strategy
Retirement Protection Plus (RPP)*
Designed to replace retirement contributions during a period of disability
Uses disability income insurance to replace up to 100% of retirement plan contributions (including employer matches)
Ease of applying
You need to protect your retirement plans to keep your future safe.
Retirement Protection Plus (RPP)** is a disability insurance program designed to replace retirement contributions during a period of disability.
While eligible for benefits, a monthly benefit insuring up to 100% of retirement contributions, including any employer-matching contributions, will be paid into a trust established by you.
Let’s take a look at the financial impact an extended period of disability can affect a retirement plan.
*Neither a pension plan nor a substitute for one.
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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7. Retirement Plan With & Without Interruption
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
Retirement Plan With & Without Interruption
Combined assets – Retirement Fund if Disabled plus RPP Trust Assets – would total $2,862,326.
This slide illustrates a retirement fund with and without an interruption of contributions.
It assumes the employee began contributing $2,000 a month beginning at age 35.
Assuming an annual rate of return of 8% and with no deductions taken prior to age 65, this employees “healthy” retirement fund would grow to close to $3 million dollars (see green line).
Now, taking the same employee and assumptions, but now illustrate a disability onset at age 36, we can see that the retirement savings gap is significant. Without protection this employee would only have approximately $250,000 at retirement time. Plus, without disability income protection, it’s likely this employee would dip into their retirement savings in an effort to replace income.
By adding RPP to their retirement strategy this employee would have close to 3 million dollars in combined assets. A considerable difference to merely $250,000.
8% average annual rate of return, based on average annualized return of the S&P500 from 1/1/ /31/10, 8.23%. This rate is for illustration purposes only. Actual rate of return may vary.
Chart Assumptions: $2,000 per month contributed to the plan beginning at age 35. Total disability occurs at age 36 and contributions stop. Disability continues to age 65. 8% return. Actual rate of return may vary.
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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8. How RPP Works Individual application
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
How RPP Works
Individual application
Benefits are irrevocably assigned to a trust at time of policy issue
At time of claim, benefits are paid directly into trust
Trust proceeds are distributed at age 65
Irrevocable Assignment of Benefits
RPP Disability Income Application
Disability Policy (Benefits Irrevocably Assigned)
How Retirement Protection Plus Program works is as follows:
You apply for your own individual policy
Benefits are irrevocably assigned to a trust at time of policy issue
At time of claim, benefits are paid directly into trust
Trust proceeds are distributed at age 65
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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9. 2015 RPP Maximum Issue Limits
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
2015 RPP Maximum Issue Limits
Ease of application – Apply for up to 15% (19% if employer-paid) of annual earned income with no proof of retirement contributions or proof of existence qualified plan
2014 RPP Maximum Monthly Issue Limit
2015 IRS Defined Contribution Limit Maximum
2015 RPP Maximum Monthly Issue Limit
Annual
Monthly
Age
4,340
53,000
4,420
Age 50 and up
4,800
59,000
4,920
The Internal Revenue Service has increased maximum limits for contributions to qualifying defined contribution plans. For 2015, participants under age 50 may contribute up to $31,000 annually to qualifying defined contribution plans. The catch-up provision for participants age 50 or older remains unchanged at $5,500 (for a total contribution of up to $59,000).
To help maintain adequate retirement contribution protection, we are increasing our maximum issue limits for the Retirement Protection Plus (RPP) program and the RPP Rider. 
New 2015 RPP Maximum Issue Limits <<read chart>>
You can apply for a monthly benefit under the RPP program of up to 15% of your annual earned income (19% when employer-paid) without actual proof of retirement contributions or proof of existence of qualified plan.   
If your actual contributions exceed 15% of your annual earned income (19% when employer-paid), you may apply for coverage by submitting proof of contributions. Total applied-for coverage under the program and any other in-force retirement contribution protection cannot be more than $500 over published RPP program maximum issue limits.
NOTE: Berkshire will not insure more than 100% of contributions and the plan must have been in effect and funded for at least one year prior to the date of application.
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state
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10. Benefit Payment & Trust Assets
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
Benefit Payment & Trust Assets
Insured Directs Investment of Trust Assets
Withdrawals may be made from the trust to pay taxes due on DI benefits and other tax obligations created by invested trust income.
Disability Policy (Benefits Irrevocably Assigned)
Disability Benefits
The Insured Directs Investment of Trust Assets
Withdrawals may be made from the trust to pay taxes due on DI benefits and other tax obligations created by invested trust income.
Trust Assets Distributed at Age 65
$$$$
Irrevocable Trust
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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11. RPP Guidelines Maximum benefit: $4,420 per month
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
RPP Guidelines
Maximum benefit: $4,420 per month
accommodates 2015 maximum defined contribution limits of $53,000
higher amounts may be considered
Maximum benefit for age 50+: $4,920 per month
Minimum issue amount: $500 per month
The maximum benefit that we will issue under RPP is $4,420 a month. This amount accommodates the new federal maximum defined contribution plan limits for 2015, an annual amount of $53,000.
Individuals over the age of 50 may make catch-up contributions of up to $5,500 per year
The minimum issue amount is $500 per month.
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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12. Plan Ahead & Protect Your Retirement with RPP
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
Plan Ahead & Protect Your Retirement with RPP
Next Steps:
Determine the level of protection you want
Complete an application
To get started, we’ll first determine the level of protection you want. (Note: we can protect both an employee’s full contribution, plus what the firm contributes. Alternatively, we can simply provide coverage of up to 15% of an employee’s income, if a voluntary program – or 19% if the company funds the disability policy – without actual proof of contributions or proof of existence of a qualified plan.)
Complete an application for insurance.
(Begin fact-finding.)
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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13. Thank You for Your Time [Agent Name, Title] [Agent Phone]
Individual Disability Income Insurance – Retirement Protection Plus (RPP) Program
Thank You for Your Time
[Agent Name, Title]
[Agent Phone]
[Agent ]
<<NOTE TO PRESENTER, FILL THIS SLIDE IN WITH YOUR CONTACT INFORMATION.>>
At this time I’d like to thank you for your time today and ask if there are any questions. Thank you.
Disability insurance policies are underwritten and issued by Berkshire Life Insurance Company of America, Pittsfield, MA, a wholly owned stock subsidiary of The Guardian Life Insurance Company of America, New York, NY. Product provisions and features may vary from state to state.
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