Equity Split Dollar Life Insurance

Definition - What does Equity Split Dollar Life Insurance mean?

Equity split dollar life insurance is life insurance that consists of two or more parties purchasing the policy together and splitting the benefits. Family members or employers and employees often buy these types of policies. Doing so prevents one party from having to shoulder the full cost of the policy themselves while still enjoying some financial protection.

Insuranceopedia explains Equity Split Dollar Life Insurance

Equity split dollar life insurance has a number of advantages. First, employers can save money because premiums paid to these policies are tax deductible. Also, it is a way for employers to affordably provide benefits to employees as it can be less costly to offer than other benefits. Finally, employees receive the money they paid in premiums back after the insured person passes. The employee benefits by gaining access to the benefits without having to pay for the full costs on their own.

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