Business Life Insurance
What is a split-dollar life insurance plan?
A split-dollar life insurance plan is an arrangement where two parties (typically an employer and employee) share the costs and benefits of a life insurance policy. The employer pays part of the premium and receives a portion of the death benefit or cash value. Split-dollar plans are used as executive compensation.
Key Points
- Split-dollar: employer and employee share costs and benefits of a life insurance policy
- Employer pays part of premium and receives portion of death benefit or cash value
- Used as executive compensation
- Two types: endorsement split-dollar and collateral assignment split-dollar
- An independent agent can help you understand split-dollar plans