MassMutual Disability Income Insurance Proposal

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MassMutual Disability Income Insurance Proposal
Employer Presentation
Prepared for Insert company name Prepared
by Insert first producers name, Insert 2nd
producers name Insert agency name Insert
agency address Insert agency phone, fax
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You and Your Employees are Planning Ahead for
RetirementBut, are You Protecting Your
Retirement Savings Contributions from Disability?

• Defined contribution plans, including 401(k),
  403(b), TSA, SEP and Keogh plans, are based on
  one premise
• To build a retirement nest egg, one must be able
  to plan ahead and set aside a portion of their
  current income.

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Retirement is the 1 Financial Concern of Most
AmericansDid You Know...

• A total disability could prevent you or your
  employees from enjoying your golden years
  as originally planned?
• Most group long-term disability (LTD) plans do
  not protect retirement plan contributions?
• Most retirement plan, such as 401(k),
  contributions end once your income stops?

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A Long Term Disability Could Prevent You and Your
Employees From Realizing Your Dreams

• Probability of at least one long-term disability
  lasting at least 90 days before reaching age 65.
• AGE PROBABILITY
• 25 24
• 30 23
• 35 22
• 40 21
• 45 20
• 50 18
• 55 15
• 60 10

(Source 1985 Commissioners' Individual
Disability Table A, based on data from policies
issued in occupation class 1 (select white-collar
professional). These are unisex probabilities.
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The Risk

• Chances of being disabled for life on
  disabilities lasting at least 90 days.
• AGE PROBABILITY
• 25 25
• 30 26
• 35 28
• 40 30
• 45 33
• 50 36
• 55 40
• 60 45

(Source 1985 Commissioners' Individual
Disability Table A, based on data from policies
issued in occupation class 1 (select white-collar
professional). These are unisex probabilities.
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Disability is a Reality!
3.3 to 1
3.5 to 1
2.7 to 1
2.8 to 1
2.2 to 1
Source Society of Actuaries, 1985, CIDA Table
Age

• People are more likely to become disabled than to
  
• die during their working years.

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Dont Let a Disability Stand Between You and Your
Retirement
Lets look at an example An individual, age 45,
makes 20 annual payments of 9,500 to a defined
contribution plan, such as a 401(k), at 8
compounded interest. As you can see, their long
term financial picture looks quite positive...
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Dont Let a Disability Stand Between You and Your
Retirement
Now, lets look at what would happen if this same
individual becomes totally disabled at age 55.
Assume the individual now makes only 10 annual
payments of 9,500 to a defined contribution plan
at 8 compounded interest. The picture isnt
quite as bright
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As you can see, a total of 137,673 would be
lost once contributions were interrupted! This
difference includes a decrease in contribution
frequency as well as a loss in compounded
interest earnings.
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MassMutuals Disability Income Trust Concept
helps protect retirement income in the event of
total disability.
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The individual, age 45, becomes totally disabled
at age 55 with Disability Income Trust Concept
protection. Assume the individual makes 10 annual
payments of 9,500 to a defined contribution plan
at 8 compounded interest...
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Take a look at the Funds with Trust lineWhat
a difference! The total accumulation is 414,289
(previous retirement funds DI Trust) vs.
434,739 (original uninterrupted retirement
funds). Thats a loss of only 20,450! In
other words, this individual would have enjoyed
an extra 117,173 of retirement income with DI
Trust coverage.
Quite impressive, dont you think?
In this example, the Trust contributes 800 per
month (for 9 ½ years), toward the individuals
retirement, beginning 6 months after disability
(180-day waiting period). Funds with
Trust accumulation assumes taxed earnings at 28
rate at age 65 and that the retirement fund has
not been tapped to pay off living expenses from
the disability.
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Disability Income Trust Benefits Features

• Individually owned and portable.
• Premiums will never be increased and the contract
  is non-cancelable.
• Discounted premiums (discount is portable)
  available only through your sponsored plan.

At MassMutual, we are experienced in providing
supplemental income insurance plans that can
assist you in attracting and retaining the best
employees. Let our competitive
advantage become your
competitive advantage!
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Highlights of the Disability Income Trust Concept

• Insures 100 of present contributions and
  employer match to your defined contribution
  retirement program.
• The DI Trust Concept is not a pension or
  retirement program, nor a substitute for such a
  program. It is a way to help provide
  contributions for retirement in the event
  of a total disability.
• Utilizes RadiusSM, MassMutuals individual,
  non-cancelable, guaranteed renewable, total
  disability income insurance product .
• Trustee charges certain fees for administration.
  Please see the Disclosure Statement (DI1087) for
  details.

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Highlights of the Disability Income Trust Concept

• Upon Total Disability, as defined in the
  contract, benefits are paid directly to a Trust.
  BankBoston, N.A. is the Trustee.
• Benefits are taxable, if your employer pays the
  premium, or tax-free, if premiums are paid by
  you.
• Trust assets do not accumulate on a tax deferred
  basis unlike a qualified retirement plan.
• Trust funds are distributed to the insured when
  he/she reaches age 65. If the insured dies prior
  to age 65, the funds in the Trust will be paid to
  the insureds estate. Special distribution rules
  apply if the insured returns to work and the
  balance in the fund is insufficient to cover
  trust fees from investment income. Hardship rules
  apply for distribution prior to age 65.

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Why MassMutual?
Financial Highlights A.M. Best Co. A,
Superior Standard Poor's Corp. AAA,
Extremely Strong Moody's Investors Services
Inc. Aa1, Excellent Claims Paying Ability
Ratings Duff Phelp's Inc. AAA,
Highest Company Financials Assets 67
billion Total Adjusted Capital 4.7
billion Gain from Operations before
Dividends 1,318 million Dividends
Benefits Paid to Policyholders 7.1
billion Source 1998 Company Annual Report
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Why MassMutual?

• MassMutual is one of the nations premier mutual
  life insurance companies.
• We serve more than three million policyholders
  and participants, and operate the company for
  their benefit.
• We offer a complete portfolio of life and
  disability income insurance, asset accumulation
  products and retirement and investment management
  services.
• We are the third largest disability income
  insurance provider in the United States.

Source 1998 Company Annual Report
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Next Steps

• To take advantage of this offer,MassMutual will
  need the following information
• q Copy of your defined contribution plan.
• q Updated census data which includes
• Employee names
• Gender
• Dates of birth
• Occupations
• Base salaries
• Bonuses and/or commissions
• Current employee plan contributions
• Employer match contributions (if applicable)
• q We would prefer all census data in ASCii or
  Excel format. Please e-mail or mail a
  diskette with this information to your MassMutual
  Representative.

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• Disability Income Protection from MassMutual. At
  the Center of Your Financial Security.SM