Taxation of Life Insurance in Gov'tl 457(b) Plan

[Guest aciepluch]

I am finding conflicting information on the tax treatment of life insurance policies held in a 457(b) plan of a governmental employer and nothing definitive. Reg. Section 1.457-10(d), which appears to apply equally to non-profit employer plans and governemental employer plans, provides that "no amount paid or made avialable under an eligible plan as death benefits or life insurance proceeds is excludable from gross income under section 101." The fact that benefits are taxed on the back end suggests to me that participants would not be taxed on the economic benefit of premiums as paid, but I am finding secondary source materials that suggest that they in fact should be.

Is anyone aware guidance on this issue that I should be considering?

Thanks.