Retirement Protection Plus*

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Retirement Protection Plus

• Protection for Retirement Plan Contributions

FOR PRODUCER USE ONLY. NOT FOR USE WITH THE
GENERAL PUBLIC. Disability income products
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
(Guardian). Product provisions and features may
vary by state.
8562-11-09 2009-11697
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Retirement Planning A Critical Issue for
Everyone

• Planning and saving for retirement is one of the
  most critical financial issues that we all face
• But to complete the plan and assure an adequate
  retirement income you must be able to work and
  contribute to that plan

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Your Retirement Plan is Vulnerable

• A disabling injury or illness is a serious threat
  to ones ability to earn a living
• and ability to make retirement contributions.

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Your Retirement Plan is Vulnerable

• Contributions continue only as long as you remain
  on the payroll
• Group and individual disability insurance do not
  normally cover retirement plan contributions

5
Whats the Impact?

• Individual age 35 works to age 65 and makes
  1,500 monthly contributions to a defined
  contribution plan.

2,235,539
Age
Assumes annual rate of return of 8 on
retirement contributions with no disbursements
taken prior to age 65. This rate is for
Illustration purposes only. Actual results may
vary.
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Retirement Protection Plus

• Helps to protect retirement income in the event
  of a serious disability
• Pays benefits to replace lost retirement plan
  contributions

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Retirement Protection Plus Program What is it?

• A way to use the ProVider Plus policy to help
  protect your retirement plan.
• Stand-alone policy or by rider
• May replace up to 100 of an employees
  retirement plan contributions, plus the
  employers match
• Not a pension plan or a substitute for one

The stand-alone policy is not available in CA
the rider is not available in NJ or NY.
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How It Works

• Benefits are paid directly into a special trust
• Trustee is Berkshire Bank, Pittsfield, MA
• Trust assets are invested by trustee at your
  direction
• Trust assets distributed at age 65

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Retirement Protection Plus Program How it works

• Coverage is fully underwritten, but issued
  separately from any other coverage
• Over and above normal issue and participation
  limits
• Can be employer-pay or individual-pay

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RPP Program Guidelines

• Definition of disability Own occupation and not
  gainfully employed
• Elimination periods 6 or 12 months
• Benefit period to age 65
• Available to occ classes 6 3 6M 3M

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RPP Program Guidelines

• Maximum benefit 4,090 per month
• accommodates 2010 maximum defined contribution
  limits of 49,000
• higher amounts may be considered
• Catch-up contributions covered for age 50 (up
  to 4,550 per month)
• Minimum issue amount 500 per month

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RPP Program Guidelines

• Issue limits
• Employee-paid premiums
• Up to 100 of current total employee and employer
  contributions
• Employer-paid premiums
• 133 of current total employee and employer
  contributions
• Limited to current maximum issue limit

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Stand-alone RPP Policy Riders Available

• COLA (3 or 6)
• Future Increase Option (FIO)
• Up to 2X base policy
• Total coverage not to exceed 6,000 per month
• If FIO is not applied for, the Automatic Benefit
  Enhancement Rider may be attached

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RPP Program Guidelines

• Benefit amount issued may include
• EE contribution
• ER match
• All current discounts apply
• Multi-policy, ER sponsored, association
• Classes of risk Preferred, Select, Standard

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Eligible Retirement Plans

• Profit sharing plans
• Money purchase plans
• Employee Stock Ownership Plans (ESOP)
• 401(k), 403(b), 457 plans
• IRAs Roth IRAs

Note Plan must be in effect and funded for at
least one year.
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Eligible Retirement Plans

• Simplified Employee Pensions (SEP)
• SIMPLE plans
• Keogh plans
• Non-qualified deferred comp arrangements
• considered only on a case-by-case basis

Note Plan must be in effect and funded for at
least one year.
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Non-eligible Retirement Plans

• Deferred Stock Option Plans
• Government retirement plans
• Federal Employees Retirement System (FERS)
• Civil Service Retirement System (CSRS)
• Public Employees Retirement System (PERS)
• State Teachers Retirement System (STRS)

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Non-eligible Retirement Plans

• SERPS (Supplemental Employee Retirement Plans)
• Most Defined Benefit plans
• Small business defined benefit plans may be
  eligible(1-3 principals).
• Insurance-funded plans with waiver of premium

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Markets for RPP

• Existing clients
• Individuals who are contributing to a qualified
  plan
• High-income professionals executives
• Medical professionals who have maxed out on DI
  coverage
• Attorneys, dentists, CPAs, etc.
• Business clients with a retirement plan

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Opportunity Talk with CPAs

• CPAs advise their clients about retirement plans
• They appreciate being kept up-to-date on latest
  offerings to help their clients
• Distinguishes you in the eyes of the CPA

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Opportunity RPP in a Worksite Program

• RPP coverage on a guaranteed standard issue basis
• Employer-pay or voluntary plans
• Minimum of
• 10 covered employees if employer-paid
• 75 eligible employees if voluntary
• Uses Income ProVider policy
• A terrific opportunity to offer GSI coverage to
  medical market clientsAsk us for more details
  onour Worksite DI program

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RPP Underwriting Guidelines

• Normal medical underwriting guidelines apply
• If fully underwritten DI policy was issued in the
  last 6 months by us
• completed non-medical
• documentation of retirement contributions, if
  required

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RPP Underwriting Guidelines

• If applicant has total in-force coverage that is
  above our current I P limits for his or her
  income, we will not count the first 500 against
  the amount of monthly indemnity issued under the
  RPP program

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RPP Underwriting Guidelines

• Self-employed professionals and business owners
  generally may include pension contributions when
  applying for basic DI coverage
• If contributions are included in earned income,
  RPP coverage is not permitted
• If pension contributions are excluded from earned
  income, RPP coverage is permitted

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RPP Underwriting Guidelines

• Total earned income 300,000
• Includes pension contributions of 45,000
• Option 1 Insure 300,000 at 10,700/mo. (assumes
  individual pay)
• Option 2 Insure 255,000 at 9,800/mo. plus
  RPP coverage of 3,750.

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RPP Underwriting Guidelines
RPP 3,750
ProVider Plus 10,700
ProVider Plus 9,800
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Application Requirements

• Application for Insurance (DI-2007)
• For stand-alone policy
• Complete the RPP program Supplement (DI-RPP-2007)
• For RPP Disability Benefit Rider
• Indicate on the IDI Supplement (DI-TDI-2007)

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Financial Documentation

• RPP program requires standard financial
  underwriting documentation
• No proof of retirement contributions required if
  applying for
• Up to 15 of earned income (individual-pay)
• Up to 19 of earned income (employer-pay)
• For greater amounts, documentation of plans
  existence, adoption date employer match
• For GSI Worksite cases, we will accept an
  electronic census providing current employee
  and employer contributions

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RPP Documents

• Authorization Irrevocable Assignment
• Authorizes establishment of trust
• Authorizes exchange of information
• Assigns to trust the right to receive benefits
• Certifies that client has received Disclosure
  Statement
• Disclosure Statement
• Given to the applicant
• Outlines tax issues
• Investment management fees (by investment
  companies)

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RPP Documents

• Declaration of Trust
• Sample Declaration of Trust may be given to
  client.
• The actual Declaration of Trust will be executed
  at the time of disability

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RPP Documents

• RPP Contribution Worksheet
• For non-owner employees
• Helps you and the applicant calculate the
  appropriate applied for amount of monthly
  benefit
• Not required, but may be submitted with the
  application for the underwriters use
• All documents are available at www.berkshirelifet
  ools.com

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Berkshire Bank

• Client directs investments of trust asset
• Select from one of more than 200 equity or fixed
  income funds available through Federated
  Investors (www.federatedinvestors.com)
• Personal management, full access to capital
  markets available for trust assets that exceed
  100,000

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Tax Issues

• Policy benefits
• Individual pay benefits are non-taxable
• Employer pay benefits are taxable
• Trust earnings are taxable to the insured, as the
  beneficiary of the trust.
• If policy owner chooses an annuity, there is
  generally no tax on earnings

This publication is provided as a courtesy by
Berkshire Life Insurance Company of America and
does not modify the provisions of any policy. It
is offered for the purpose of education and
information only and is not intended to
constitute tax or legal advice. For information
on your specific situation, please consult your
personal legal or tax advisor.
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Tax Issues

• Trust reports taxable earnings each year
• Form 1099 issued to insured
• Trust will reimburse insured for any taxes paid
• upon written request
• may also reimburse the insured for taxes due on
  employer-paid benefits
• At distribution no income tax on funds
  distributed by the trust for which taxes have
  been paid

This publication is provided as a courtesy by
Berkshire Life Insurance Company of America and
does not modify the provisions of any policy. It
is offered for the purpose of education and
information only and is not intended to
constitute tax or legal advice. For information
on your specific situation, please consult your
personal legal or tax advisor.
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RPP Marketing Tools

• Producer Guide
• Letters
• Brochures
• Imprintable flyers
• Sales presentations for employer employees
• Byline articles

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Retirement Protection Plus

• Protection for Retirement Plan Contributions