What Does Split Dollar Life Insurance Mean?

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   Jerry Vanderzanden, CLU, ChFC

   Co-Founder, Coastal Financial Partners Group, California

   Split dollar is not a type of life insurance policy but rather, when used by a business, is an arrangement that allocates the policy benefits between the business and the key employee. Typically, the business assists the key employee by paying the premium while the key employee receives most of the policy benefits. The business ultimately recovers its total outlay from policy benefits. The employee receives a valuable life insurance benefit for a very low out of pocket cost.

   Answered on April 21, 2013

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