A Split Dollar Arrangement is a direct perquisite for a Key Person. These plans utilize the cash build up in a life
insurance policy to accumulate cash that may be released to a Key Person upon
meeting the criteria in a performance agreement. In most cases, the company pays the premium
until the Key Person’s retirement or planned separation date. At retirement, or planned separation, the
company recovers the premium paid from the cash value and the Key-Person keeps
the balance of the cash value and the remaining death benefit. Split Dollar Arrangements are a type of plan
where the company and the Key Person may share the costs of the premium and
benefits.
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The description above is a general overview of Split Dollar Arrangements
and is not intended to provide a detailed description of a Split Dollar Arrangement. An experienced financial planner will help
you with all of the unforeseen scenarios and implement the controls to mitigate
any problems you may possibly have with these types of arrangements.
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For more information, please contact Bridgeport Benefit Advisors.
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