DEATH BENEFITS 65. Incidental insurance provisions

276 | D e f i n e d C o n t r i b u t i o n P l a n L R M P a c k a g e 0 1 / 2 0 2 4

Statement of Requirement: Rev. Rul. 61-164, 1961-2 C.B. 99

Sample Plan Language:

(a) Ordinary life - For purposes of these incidental insurance provisions, ordinary life insurance contracts are contracts with both nondecreasing death benefits and nonincreasing premiums. If such contracts are purchased, less than ½ of the aggregate employer contributions allocated to any participant will be used to pay the premiums attributable to them.

(b) Term and universal life - No more than ¼ of the aggregate employer contributions allocated to any participant will be used to pay the premiums on term life insurance contracts, universal life insurance contracts, and all other life insurance contracts which are not ordinary life.

(c) Combination - The sum of ½ of the ordinary life insurance premiums and all other life insurance premiums will not exceed ¼ of the aggregate employer contributions allocated to any participant.

(Note to reviewer: If the above limitations are met, the pre-retirement death benefit may consist of the proceeds of such insurance contracts plus the participant's account balance.)