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split dollar plans

Split dollar plans are a form of life insurance co-ownership that allows one party, often the employer, to help another person carry life insurance protection.

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split dollar plans

Split dollar plans are a form of life insurance co-ownership that allows one party, often the employer, to help another person carry life insurance protection.

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Generally, the insured pays the portion of the premium attributable to the life insurance protection while the other party pays the portion attributable to the cash value buildup. At the insured's death, an amount of the proceeds equal to the cash value is paid to the other party with the remaining amount paid to the insured's beneficiaries. This approach provides protection in a permanent life insurance contract at a very low cost to the insured.