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Retirement Planning
Chapter 4: Qualified Pension Plans/100-TO-1 RATIO TEST FOR LIFE INSURANCE
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Chapter 4: Qualified Pension Plans

100-TO-1 RATIO TEST FOR LIFE INSURANCE

01.Core Concepts

• Limits the death benefit amount of life insurance coverage purchased within a qualified plan to 100 times the monthly accrued retirement benefit provided under the qualified plan. • Example: If the monthly benefit is $1,000 per month, life insurance coverage cannot exceed $100,000. • Usually only used with defined benefit pension plans.