Life insurance purchased as a db plan investment must be 'incidental' or less than 50% of the plan's annual contribution amount. The db plan uses the 100 times the death benefit formula for determining incidental benefits. I know a db plan can use excess amounts toward a subsequent year's contribution and that minimum funding requirements do not permit shortfalls in ER contributions. But is there any situation regarding plan performance, where the Plan's LI could lose it's incidental character while complying with the 100 times rule?

No, not that I'm aware of. Is there a particular circumstance that has you worried?