|
What is Split-Dollar Life Insurance?
As a type of employee benefit, split-dollar has been quite popular
over the years. What business organization doesn’t have
the need to attract and retain top-notch executives? The appeal
of split-dollar plans is partially due to the fact that not only
do employers have a free hand in deciding which employees to
include, but no IRS approval is required to install a split-dollar
plan.
It is important to keep in mind that split-dollar life insurance
is not a particular type of life insurance policy. Instead, it
is an arrangement, usually between an employer and employee,
to purchase life insurance coverage for the key employee, with
each party sharing in the premiums, cash value, and death benefit.
Split-dollar has strong appeal since it offers something to both
parties:
- Employees get needed life insurance coverage at an affordable
price.
- The employer has little or no risk in providing the funds
to pay for the protection.
>>back to Business Planning<<
|
