SFSD Posted November 16, 2015 Posted November 16, 2015 Saw the blurb in Friday's BenefitsLink and looked at their web site, a company called Custodia Financial. Does anyone know how this product works and what exactly it is? Just curious. Web site didn't have any details.
BG5150 Posted November 16, 2015 Posted November 16, 2015 Sounds like "loan insurance" Retirement Loan Eraser, the first and only retirement loan protection program. This highly affordable program provides guaranteed issuance through auto-enrollment with a clear borrower opt-out. Thus preventing the leakage of retirement assets by repaying the loan, associated taxes, penalties and even unrealized interest upon the borrower’s death, permanent disability or involuntary job loss. The program also increases financial literacy to borrowers by advocating for clearer disclosures. Participants are presented with easy to understand program materials detailing the causes and consequences of default and the availability and cost of protection, ensuring better decision making. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
QDROphile Posted November 16, 2015 Posted November 16, 2015 The description of the product that "advocates" for "clearer disclosure" is confusing to me. If the loan is repaid because of the product, what are "the associated taxes, penalties and *** unrealized interest"?
BG5150 Posted November 16, 2015 Posted November 16, 2015 If a loan defaults and is not offset, it stays on the books accruing interest until it is paid back or offset. It seems like this "product" will pay back the loan for you, with interest and pay you for any taxes and early w/drawal peanalties. Do you have to claim their largesse as income? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
QDROphile Posted November 16, 2015 Posted November 16, 2015 But if the loan is paid timely, there are no taxes. If the loan is not paid timely, there is "leakage of retirement assets" that is not prevented. My point is that for something that "advocates" clarity of disclosure, the description of what the product does, and when, is confusing. If they cannot disclose the product up to their standard of clarity, one wonders about the standards. On the other hand, this is the hallmark of marketing insurance financial products. The less the customer understands about the insurance, the better for the commissioned seller. Got insurance in your 401(k) plan?
ESOP Guy Posted November 16, 2015 Posted November 16, 2015 Just a guess but since it only covers death and disability it sounds like so form of life/disability insurance product. My guess (once again) is the benefit level is set so you are made whole after the loan default but I guess if it pays fast enough it would allow you to pay the loan back before default. Yes because what this world needs is more credit life and disability plans!!!
QDROphile Posted November 17, 2015 Posted November 17, 2015 "involuntary job loss" is not limited to involuntary death or disability in the description. Face it: the description is hilarious (and perhaps ironic -- I would have to check with my teenager about irony) for a self-styled advocate of clarity.
ESOP Guy Posted November 17, 2015 Posted November 17, 2015 I did miss the part about the involuntary job loss. I guess I didn't read well. Although I seem to have gotten stuff in the mail that would pay my credit cards off in case of job loss as well as death and disability over the years.
BG5150 Posted November 17, 2015 Posted November 17, 2015 C'mon, people. Retirement Loan Eraser is tax and regulatory compliant and has been endorsed by many of the industry’s leading benefits attorneys and advisors. It's gotta be good! QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
ESOP Guy Posted November 17, 2015 Posted November 17, 2015 C'mon, people. Retirement Loan Eraser is tax and regulatory compliant and has been endorsed by many of the industry’s leading benefits attorneys and advisors. It's gotta be good! Either that or none of the people writing on this board qualifies as a "leading benefits attorneys and advisors". My ego is crushed. GBurns 1
QDROphile Posted November 17, 2015 Posted November 17, 2015 I have no illusions about the company I keep. I did not comment on the substance of the product itself. I offered only literary criticism. It is credit insurance. Not my interest or expertise. ESOP Guy 1
BG5150 Posted November 17, 2015 Posted November 17, 2015 C'mon, people. Retirement Loan Eraser is tax and regulatory compliant and has been endorsed by many of the industry’s leading benefits attorneys and advisors. It's gotta be good! Either that or none of the people writing on this board qualifies as a "leading benefits attorneys and advisors". My ego is crushed. I sent them an e-mail asking for specific quotes. We'll see if I ever get an answer. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
MoJo Posted September 27, 2016 Posted September 27, 2016 It seems as though this product has "resurfaced" again. Any one have any experience with it?http://www.plansponsor.com/Retirement-Loan-Eraser-Improves-Retirement-Outcomes/?fullstory=true.
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