412i Plans Insurance

A 412(i) plan is a type of defined benefit pension plan that is funded entirely by an insurance contract.  It is designed for small business owners and self-employed individuals and allows them to contribute significant amounts of pre-tax income to the plan, which can then be used to provide retirement benefits for themselves or their employees.

In a 412(i) plan, the employer purchases an insurance contract such as an annuity or life-insurance contract that guarantees a specified level of retirement benefits.

As for insurance, a 412(i) plan can be insured with a life insurance contract, that basically funds the plan entirely. In other words, the life insurance contract provides a guaranteed death benefit, which can be used to fund the retirement benefits if the plan participant dies before retirement

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