The RIAP program addresses situations where employees become disabled before their normal retirement age and are no longer able to participate in their company’s retirement plan. Under the RIAP program, group LTD insurance is purchased by an employer to protect their employees who participate in the company’s 401(k), 403(b) or 457 qualified retirement plans from the potentially devastating effect that a disability could have on their future retirement income.
According to the Council for Disability Awareness (CDA), a non-profit group dedicated to helping the American workforce become aware of the likelihood of disability and its financial consequences, more than 4 million Americans between the ages of 21 and 65 are expected to suffer a disabling injury or illness in 2012 alone. That compares with more than 36 million Americans classified as disabled by the U.S. Census Bureau, about 12% of the total population. Of those workers who were disabled, more than 50% were between the ages of 18 and 64.
Based on the CDA Personal Disability Quotient (PDQ) calculator, a typical 35-year old female, nonsmoker, with normal height/weight, who works mostly in an office setting with some outdoor physical responsibilities, and who leads a healthy lifestyle, has a 24% chance of becoming disabled for 3 months or longer during her working career. There’s a 38% chance that the disability will last 5 years or longer, with the average disability for someone like her lasting 82 months.
“The time has come for American companies with defined contribution retirement plans to implement RIAP for the benefit of their covered workforce,” said Paul D. Hinson, President of Pension Advisory Group. “In life insurance, waiver of premium is a well-established benefit. A similar “waiver of contributions”
“There are a few individual disability insurance products designed to protect retirement plan contributions in the market today, but RIAP is different from them”, said Dan Burns, President of Pro Financial Services. “The RIAP program is guaranteed issue, with no individual underwriting for insurability. Premiums are paid by the employer and should be tax deductible to the employer as a business expense. Because the product is written on a group insurance basis, the cost is significantly less than for a comparable individual contract. Benefits are based on actual contributions, indexed to the Qualified Plan limits, with benefits deferred until Normal Retirement Age.”
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About Pension Advisory Group
Pension Advisory Group, Inc. is an independent insurance production and consulting organization, specializing in employee retirement and welfare benefit programs. The company is the originator and Master General Agent for the Retirement Income Assurance Policy program. With over 100 years combined experience in dealing with qualified retirement plans, the principals of Pension Advisory Group, Inc. are positioned on the cutting edge of retirement plan design activities.
About Pro Financial Services
Pro Financial Services, LLC (PFS) is a Managing General Underwriter with binding authorities on behalf of Lloyd’s of London and several other insurance carriers. For over three decades, the company has been a leading source of specialized disability insurance that protects professionals from unexpected and ruinous financial loss due to disability. Top talents in the corporate, sports and entertainment industries have turned to PFS to design customized insurance programs for their key personnel. PFS’s position as an experienced Managing General Underwriter provides us with the flexibility and control to create products that help remove risk from your clients’ balance sheets. PFS is a wholly owned subsidiary of National Financial Partners Corp., (NYSE: NFP), a leading provider of benefits, insurance and wealth management services.
Pension Advisory Group, Inc.
212 Morton St.
Richmond, TX 77469
Phone (281) 232-5800
Fax (281) 232-5811
Pro Financial Services
500 West Madison St., Suite 266
Chicago, IL 60661
Phone (312) 376-4640
Fax (312) 376-4668