Benefits of Using Split Dollar for the Employee

  • Split dollar provides the employee a substantial amount of tax-free death benefit at minimal cost*.
  • Employee benefits from today’s historically low interest (AFR) rates.
  • Employee can be the owner of the policy and can retain all policy rights except for the company’s right to receive back it’s cash outlay and interest.
  • The growth of the policy’s cash value in excess of premiums can be accessed by the employee on a tax-free basis as a supplemental retirement income benefit.
  • The employee can remove the death proceeds from his/her estate by use of a third-party owner (e.g. irrevocable trust).

*The only cost is the interest cost for the premiums borrowed.