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Insurance Incidental Limits


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Hello. This is my first time posting a question on this board.

A PS plan has a whole life policy for the principal. The pension firm that set up the policy used a method of calculating the maximum employer contributions available for premiums by taking 100% of the PS contributions that had been in the plan at least 2 years.

What are the risks in using this method to calculate the Incidental Death Benefit limits? FWIW, the plan allows for in-service distribution, but the premiums are paid by the corporation.

Thanks for your assistance.

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