Congress created the 401(k) to help Americans secure their retirements by supplementing social security, a program that was never intended to serve as the sole vehicle for retirement income. While Congress amended the act to include borrowing from one’s 401(k), it doesn’t protect the borrower in all situations.
THE PROBLEM: Due to a lack of alternative credit sources, it is estimated that at the end of 2010, Americans will have approximately 20 million outstanding loans totaling nearly $241 billion dollars against their 401(k) and other defined contribution plans. Taking into account unforeseen circumstances, such as death and disability, between $5 and $7 billion are lost annually from default on these loans.
The Answer: Retirement savings loan protection is a simple, affordable solution that ensures the value of individual 401(k) plans will be 100% covered in the event of death or disability. At as little as 5 cents per day, Custodia’s loan insurance offers guaranteed loan protection to anyone, regardless of health, and protects the value of account balances.
