I'm not an insurance fan in DB plans per se, but is there any cite that prevents us from deducting the full premium on say a whole life policy (split funding) if the policy is a paid up policy in say 5 years, but the assumed future working lifetime of the participant is say 20 years ? Would this be an unreasonable funding method if this accelerated full premium was deducted ? There's probably a Revenue Ruling or Rev. Proc. on this but not sure where. Both opinions and cites welcome.

Well, you did ask for opinions!

My initial reaction is that it is fine. The value of the contract will still be used in the valuation.

Curiosity though, why have such a contract under the chance that it is NOT OK??

Frank, I'm guessing that the 5-year paid up policy gives the salesman more (or accelerated) commissions, but I could be wrong. It just seems a little to accelerated for my taste but maybe there is nothing wrong it with.