Insurance in a 401(k) plan

[Guest erepper]

A plan sponsor would like to offer the option of allowing the participants to elect life insurance coverage in their 401(k) plan. If the insurance company requires a minimum premium and/or face amount in order to write the policy, can this result in a failure of the benefits rights & features section of 401(a)(4)? My sense is that it will fail BRF because the insurance would be available as a percentage of pay for the owner which is much lower than what is available to the NCEs as a percentage of pay.

[Belgarath]

There can be a minimum face amount, but it has to be very low. If you go to the LRM language for prototype documents, I think you'll find it is somewhere in the range of 1,000 to 3,000 for a "maximum minimum" face amount, but I honestly don't recall the specific details offhand. Other than that, yes, I think you are quite right to be concerned with BRF issues.