Survivorship Split Dollar Insurance
What Does Survivorship Split Dollar Insurance Mean?
Survivorship split-dollar life insurance is an arrangement where two parties share the costs and benefits of a survivorship life insurance policy. Commonly used as a workplace benefit, it helps employees access survivorship life insurance at a more affordable cost. In this arrangement, the employer pays a portion of the premiums, reducing the financial burden on employees. This serves as an added incentive for employees to remain with the company.
Insuranceopedia Explains Survivorship Split Dollar Insurance
Under a split-dollar plan, employees typically have the option to choose from various types of life insurance coverage. By participating, they purchase a permanent insurance policy that covers two lives instead of one, with the death benefit paid out only after both insured individuals pass away.
Because these policies pay out after both deaths, they have lower monthly premiums compared to regular permanent life insurance for the same coverage amount. With the split-dollar arrangement further reducing costs, employees can secure additional coverage for the same out-of-pocket expense.
