Is life insurance permissible in a 403(b) Plan?

[Santo Gold]

Life insurance allowed in 403(b) plans? Does it matter whether it is an ERISA or non-ERISA plan? I thought the 2009 403(b) regs prohibited life insurance in these plans.

Thanks

[ETA Consulting LLC]

Well, in order to life insurance to exist, it must be offered under the annuity contract. You cannot purchase a life policy in the plan (the way you can for qualified plans). Remember, 403(b)(1)s are annuities and 403(b)(7)s are for brokerage accounts holding "mutual funds only". You can easily, however, purchase a life policy in a 403(b)(9).

Good Luck!

[Peter Gulia]

If an insurance contract provides only incidental life insurance protection and was issued before September 24, 2007, it can be treated as a contract held under a 403(b) plan. 26 C.F.R. §§ 1.403(b)-6(g), 1.403(b)-11(f). If it is so treated, the contract might continue to receive contributions.