67. Conflict with insurance contracts
0325 Publ 6088 (PDF) · 2026-10-03 edition · updated 2026-10-04 · United States
Statement of Requirement: Reg. §§ 1.72-16 & 1.401-1(a)(3)(iii)
Sample Plan Language:
The trustee, if the plan is trusteed, or custodian, if the plan has a custodial account, shall apply for and will be the owner of any insurance contract purchased under the terms of this plan. The insurance contract(s) must provide that proceeds will be payable to the trustee (or custodian, if applicable), however the trustee (or custodian) shall be required to pay over all proceeds of the contract(s) to the participant's designated beneficiary in accordance with the distribution provisions of this plan. A participant's spouse will be the designated beneficiary of the proceeds in all circumstances unless a qualified election has been made in accordance with section _____, Joint and Survivor Annuity Requirements, if applicable. Under no circumstances shall the trust (or custodial account) retain any part of the proceeds. In the event of any conflict between the terms of this plan and the terms of any insurance contract purchased hereunder, the plan provisions shall control.
(Note to reviewer: The above language is designed to meet the joint and survivor annuity requirements of § 401(a)(11) of the Code. A plan may use different language provided that such language always guarantees that a participant's spouse will receive at least one-half of the vested account balance (including any proceeds
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from insurance contracts) as a survivor annuity, or in the case of a profit-sharing plan which is not subject to the survivor annuity requirements of § 401(a)(11), the entire vested account balance (including insurance proceeds).)
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