Archimage Posted March 13, 2003 Posted March 13, 2003 A plan allows participants to invest in insurance. Is it okay for a participant to have a policy on someone else's life other than their own for a qualified plan?
Mike Preston Posted March 13, 2003 Posted March 13, 2003 No, I don't think so. That was one of the arguments against second to die policies in plans. Essentially, the insurance is potentially for the non-participant, not the participant, so the IRS took a dim view.
Belgarath Posted March 13, 2003 Posted March 13, 2003 Actually, it is permissible in a profit sharing plan. See 1.401-1(B)(1)(ii).
Kirk Maldonado Posted March 13, 2003 Posted March 13, 2003 Here is the language from the regulation: A profit-sharing plan within the meaning of section 401 is primarily a plan of deferred compensation, but the amounts allocated to the account of a participant may be used to provide for him or his family incidental life or accident or health insurance. Kirk Maldonado
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