Just when you think you know everything about retirement plans, you might learn something new. Take the rules for “prohibited” investments inside tax-deferred retirement accounts such as 401(k)s and IRAs. Many people think there’s a blanket prohibition against using retirement account funds to buy a life insurance policy. But that’s not accurate.

You may be able to purchase a life insurance policy inside a plan account, but only within specified limits. As an alternative, you might use required minimum distributions (RMDs) that you must take from tax-deferred plans to buy life insurance.

The IRS has rules about the kinds of investments you may and may not hold inside “qualified” retirement plans—401(k)s and simplified employee pensions (SEPs), among others—and IRAs. And as a general rule, you can’t use money in such plans to purchase a life insurance contract. But there is a key exception to consider, one in which you may be able to use such funds to acquire a limited amount of life-insurance coverage. Because the main purpose of these plans is to provide benefits for retirement, including life insurance must be incidental rather than the main goal. Specific rules govern this “incidental benefit” test.

The exact rule depends on the type of plan and the type of life insurance that you buy. For a “defined contribution” plan, such as a 401(k) or SEP, the cost of premiums for whole life insurance can’t exceed 50% of the amount an employer contributes to the plan. For term-life and universal-life policies, the limit is 25% of the employer contributions.

The rules for “defined benefit” plans, including traditional pension plans, are more complex. Although the same percentage limits for defined contribution plans may apply, under a “100-to-1 test” a death benefit is considered incidental within a pension plan as long as the amount of the benefit is no more than 100 times the anticipated monthly retirement benefit from the plan. And these exceptions don’t apply to IRAs.

Another potential solution is to use an RMD to purchase life insurance outside a tax-deferred retirement plan. Generally, you’re required to begin taking RMDs from your account after age 70½, whether you want to or not. But instead of pocketing the money, you could use it to pay part of or all of the premiums on a life insurance policy. And if you choose this approach, you won’t be bound by the restrictions that apply to life insurance inside a retirement plan.

Keep in mind, though, that the premiums for life insurance will continue to rise as you get older, and buying a policy when you’re already in your 70s may be expensive.