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Business Preservation Planning

Split Dollar Agreement

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Split-dollar life insurance is an agreement between two parties to share the costs and benefits of a permanent life insurance policy. Often, the agreements are between an employee and an employer, with the split-dollar plan showing up in an executive compensation package. A change in their tax treatment in 2003 made these packages less common¹.

Split-dollar life insurance is a strategy that allows the sharing of the cost of a premium for a permanent life insurance policy. They are often a key part of an executive compensation package and can be used to provide benefits to employees while also providing tax benefits to employers⁴.

(1) Split-Dollar Life Insurance Explained - NerdWallet.

(2) How Split-Dollar Life Insurance Works - Investopedia.

(3) What is Split-Dollar Life Insurance? - Fraser Stryker PC LLO.

(4) Understanding The Split-Dollar Life Insurance Benefit - Forbes.

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