Guest Theresa Posted September 1, 1999 Posted September 1, 1999 If a participant takes a hardship distribution from a 401(k) plan that has life insurance, how does the life insurance premium get paid for the year in which they are not deferring any money? Can the employer 3% contribution go towards this premiums in order to keep the policy current?
Richard Anderson Posted September 3, 1999 Posted September 3, 1999 Assuming that the insurance contract is a participant directed investment, then expenses related to that investment should be allocated to that participant. The 3% employer contribution or any other asset in that participant's account can be used to pay the insurance premiums.
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