Equity Split Dollar Life Insurance
What Does Equity Split Dollar Life Insurance Mean?
Equity split-dollar life insurance is a type of life insurance in which two or more parties jointly purchase a policy and share the benefits. These policies are commonly purchased by family members or by employers and employees. This arrangement allows each party to enjoy financial protection without bearing the full cost of the policy individually.
Insuranceopedia Explains Equity Split Dollar Life Insurance
Equity split-dollar life insurance offers several advantages. First, employers can save money, as premiums paid toward these policies are tax-deductible. Additionally, it provides an affordable way for employers to offer benefits to employees, often at a lower cost than other benefit options. Finally, after the insured person passes, employees receive back the premiums they contributed. This setup allows employees to access the benefits without bearing the full costs themselves.
