Split Dollar

  • Client Profile
    • Desire to protect business against loss of key employees.
    • Desire to create a retention tool to protect key employees from competitor poaching.
  • Solution Opportunity
    • Similar to key-person coverage, in that corporation owns UL on key employee(s).
    • Corporation pays the COI for the coverage, employee pays overfunding dollars.
    • Upon death of insured, cash values are paid to insured’s family/beneficiaries, while face amount is paid to corporation, creating CDA room.
    • Split Dollar Agreement must be drafted by a lawyer, and all parties should obtain independent legal advice. Any splitting costs and benefits are determined by the Split Dollar Agreement, not the insurance policy.

 

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