Insurance in profit sharing plan

[Guest tbyrd]

I am not very educated on insurance in retirement plans so please pardon my ignorance but I have a few questions:

What do you do when the premiums paid on an employees life insurance policy for any given year exceed his annual contribution allocation in a profit sharing plan? (the employer pays the premiums)

Also, what exaclty is the incidental benefit limit and how do you calculate it?

[Guest tonymascia1]

tbyrd,

Are the premiums coming from "old money"? That is, monies rolled in from other qualified plans or at least two years old? If not, you have a problem.

The simplest "incidental benefit" test for "new" profit sharing monies is no more than 50% for whole life, and 25% for other life policies.