Split Dollar Insurance

Split Dollar Insurance: Brings together the life insurance needs of one person with the premium-paying ability of another.

Split-dollar insurance is often an ideal fringe benefit plan because it brings together the life insurance needs of one person with the premium-paying ability of another.

Split-dollar insurance refers not to a type of policy, but a method of paying for the policy. Three elements of a permanent life insurance policy that can be split are:

  • • ownership;
  • • beneficiary; and
  • • premium payor.

A typical plan splits these three elements between an employer and employee. Usually, the employer pays most of the premium, has limited ownership rights in the cash value during the insured’s lifetime and receives a specified amount of the death benefit. The employee pays the remaining premium, if any, and designates the beneficiary who receives the remainder of the death benefit.

Split-dollar insurance offers great flexibility in fringe benefit planning. You can actually design the split in a way that works best for you. Whether your goal is to help your key employees purchase much-needed life insurance or to provide a benefit that will attract and motivate key employees, split-dollar can work for you.

Split-dollar has strong appeal because it offers something for both employer and employee: Your employees get needed life insurance coverage at an affordable price, and you experience little or no risk in providing the funds to pay for the protection. You can also structure split-dollar life insurance to recover all of your costs associated with the plan.


Split-dollar life insurance allows you, the business owner, to:

  • Select the participants.
  • Recruit, retain and reward key people.
  • Establish the plan without IRS approval.
  • Assuming the insurance policy is adequately funded, provide a benefit with little or no adverse impact on your financial statements.
  • Have ownership of and access to policy cash values.
  • Experience a return of premium at an employee’s retirement or death.

Split-dollar life insurance allows your employees to:

  • Have life insurance coverage at a minimal cost.
  • Take over the policy at retirement, if you choose.
  • Have possible cash values available for retirement.
  • Have income tax-free death benefits.

Whatever your financial needs or goals, James Insurance Group and representing Multi Insurance Carriers has the products and financial strength that can protect you and your business.

Looking for protection and guarantees?

You’ll get both with our Multi Insurance Carriers offering Split-Dollar Insurance Planning.

Are you ready?

Take a look at what you can afford by contacting James Insurance Group today. Then ask yourself … can I really afford not to?

Talk to our James Insurance Group representative to find out more about how our products can help you.

* This information is based on current tax law and does not constitute legal or tax advice.

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