Final answer:
Life insurance will be considered 'incidental' to a qualified plan if no more than 50% of the contributions are used to pay insurance premiums.
Step-by-step explanation:
In insurance, life insurance will be considered 'incidental' to a qualified plan if no more than 50% of the contributions are used to pay insurance premiums.
This means that if more than 50% of the contributions are allocated towards insurance premiums, the plan would not be considered qualified and may not receive certain tax benefits or other advantages associated with qualified plans.
For example, if a company's qualified retirement plan allows employees to contribute a portion of their salary towards insurance premiums, the maximum amount that can be used for insurance premiums would be 50% of the total contributions.