Split Dollar Plan
A Split Dollar Insurance Plan is a method whereby an employer can help an employee purchase large amounts of life insurance at little or no cost to the individual. In essence, the premiums are shared by both employee and employer. For that promise, the employee agrees contractually to reimburse the employer for the employer's share of the premiums at some future date, usually retirement. The cost of such a plan can be minimal or zero to the employer (only time value) and it allows the employer to attract and keep key executives.
Split Dollar insurance can help an employee pay estate taxes at death; replace needed family income lost at the employees death; and help redeem any ownership interest that the employee may have had in the business
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