Reporting Cash Value of Life Insurance Policy in retirement plan

[Casey]

DC plan has life insurance policies. In addition to reporting on Part III of Schedule A, I believe the cash value also needs to be reported on Schedule H.

My question: what line is normally used to report this? The only insurance policies that seem to be specifically mentioned are insurance company general accounts/unallocated contracts. [Line 1.c.14]

Would you put this in the "other" line -- line 1.c.15?

Thanks for your help,

Casey

[Guest 5500]

Are these allocated contracts? If so, I don't think they are treated as plan assets.

[Casey]

They are life insurance contracts on individuals, with premiums paid from the retirement plan account of the participant that is covered. The life insurance contracts have a cash value.

The cash value may be a plan asset? If so, where does the plan record it on Schedule H?

Casey

[Bird]

I haven't had the misfortune of having to deal with life insurance in a large plan, but since you're not getting a lot of action here I'll offer my opinion, in which I don't have great confidence:

If they are regular whole life contracts, I think they are reported on line 1c(14). I thought that unallocated contracts are those that contain assets that are not separated from the insurance company's general assets; i.e. they are subject to claims of the insurance company's creditors (and regular whole life contracts fall in this category). Anything with sub-accounts, e.g. variable life or a group variable annuity, is, I think, a pooled separate account.

I never thought much of the idea that insurance contracts aren't included in the assets. That means that you have to expense the premiums, which I don't think is correct. (Also raises the question of how to get the money back in the plan for reporting purposes if the contract is surrendered.)

[Guest 5500]

I believe that if the plan has access to the cash value, that portion of the insurance contract would be unallocated and reported on line 1©14 as Bird stated.