Life insurance versatility makes it an excellent choice for meeting a dual need experienced by many small businesses. It's common for one party within a business to need the financial protection that life insurance provides against death, either theirs or someone else within the company, while another person needs a tax-sheltered investment vehicle.
The split-dollar concept is simple. It is a funding arrangement that helps one individual obtain life insurance at a cost lower than would otherwise be possible. This is achieved by sharing (splitting) the premium with another individual or entity, such as a business. The arrangement, provided by a written agreement, generally calls for the sharing of premiums in exchange for the sharing of death benefits and, in some cases, cash value.
Split-dollar insurance is a versatile arrangement that works well in a number of situations, not just generational transfers of assets. For instance, split-dollar insurance can be effective:
In the business context, a split dollar arrangement can be used in a number of different ways. For example, an employer may need key person insurance on an executive and the executive might want a tax-sheltered investment. The employer and the executive could enter into a split dollar arrangement where the employer pays for and owns a level death benefit on the life of the executive andthe executive pays for and owns the cash surrender value component of the policy. The beneficiary of the level death benefit is the employer, while the beneficiary of the cash value is designated by the executive (his or her spouse, for example).
Options:Each business has unique needs, call us and one of our licensed experienced Insurance Advisor in the field of developing solutions for business owners shall be happy to assist; or simply have a quick quote by clicking on one of the options as under:-
Permanent Life Insurance(Online Quote) - permanent insurance is perfect match as it allows both coverage protection (death benefit) and also CSV - Cash Surrender Value