Split Life Insurance
What Does Split Life Insurance Mean?
Split life insurance is a type of life insurance policy purchased by two or more parties, who share various aspects of the policy, including responsibility for premium payments, death benefit payouts, and dividends. It is commonly offered by employers as an employee benefit.
Insuranceopedia Explains Split Life Insurance
Many people opt for split life insurance because it provides access to life insurance benefits without requiring them to cover the entire cost of the policy. For instance, two individuals might agree to a split life insurance policy with a $100,000 death benefit, sharing both the benefit and the cost. Before signing on, it helps to look at the average cost of life insurance to see whether splitting the premium actually saves money compared to buying an individual policy. Some people also weigh a shared arrangement against a straightforward term life insurance policy in their own name, since that route avoids tying the coverage to another person’s ability or willingness to keep paying. Employers often favor split life insurance as it enables them to offer a valuable employee benefit without bearing the entire financial burden.
