Tip of the Week

Employment-Related Split-Dollar Arrangements

Split dollar appeals to employers and employees, not only for cash accumulation but for inexpensive life insurance as well. While the math involved in split-dollar administration is not very challenging, there is a learning curve. If one keeps to the basics, however, it is manageable. The calculation of the imputed interest income or the economic benefit is repetitive, so software spreadsheets are a helpful tool. If a financial service professional gets involved in split dollar, eventually the number-crunching of administration will be delegated to a staff member or to a third-party administrator if the case involves too many lives.

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