Split Dollar plan
A Split Dollar plan be a valuable strategy for balance sheet-sensitive business owners.
Considerations for the business
A Split Dollar plan may be an attractive solution for balance-sheet sensitive companies to help pass-through owners save for retirement.
- In an endorsement split dollar arrangement, the business retains cash values on their books.
- In a loan regime split dollar arrangement, the business retains interest in cash values and death benefits equal to their split dollar loan.
The life insurance can provide:
- An income tax-free death benefit for the beneficiaries
- Tax-deferred growth opportunities
- A tax-efficient financial resource through income tax-free policy loans or withdrawals*
See the case study: A cost-efficient way to reward and retain your key employees (PDF)