The newest product on the market is one that allows clients to fund their retirement even though they may be disabled and not working at all, says John Ryan, of Ryan Insurance Consultants in Greenwood Village, Colorado. Now MetLife, Berkshire, Principal, and MassMutual offer a retirement disability protection plan that, while it won't allow a 45-year-old to receive benefits for the rest of his life, will allow the client to put away as much as $45,000 per year--the limit for a defined contribution plan--between the ages of 45 and 65. Benefits are not paid directly to the client; they are paid into a trust. When the client turns 65 and disability benefits cease, the trust that has been holding these retirement benefits will distribute the money to the client as if he'd been healthy and worked and built up a normal retirement benefit.
That concept, explains Ryan, is taking the place of the lifetime benefit companies have been trying to get away from. Lifetime benefit extension, he says, is an open-ended claim. "A dentist with L4 and L5 deteriorating disks could live to be 104" and be unemployable for the whole of that time. Insurance companies want to get away from "that type of potentially infinite" claim and offer something more finite "like this."