Split Dollar Life Insurance plans are used by LLC’s, Sole Proprietorships, Partnerships and Closely Held C Corps to achieve 5 goals:
- Life and Long-Term Disability Insurance Protection Prior to Retirement for KeyPerson(s)
- Allows the business to start funding the buyout of an Equity Partner of the business upon their retirement.
- Fund an additional Tax-Advantaged Retirement Savings Plan for KeyPerson(s) outside of their 401(k)
- Business Insuring itself against the loss of a Valuable Executive (KeyMan or Buy/Sell)
- Helps Business’s retain Key Employees
There are 4 types of Business Split Dollar Plans, however, we’ll focus exclusively on:
Split Dollar Endorsement “Economic Benefit Regime”