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Business Planning





We Work With Sole Proprietorships, Partnerships, Corporations and Limited Liability Companies

Planning is one of the most important parts of running a business. Whether you’re a large multinational corporation or a small business, our firm has the knowledge and resources to help keep your company on track.

Business Insurance Facilitates and Funds Business Operations:

For example, the loss of human capital. An issue for the owner might be helping them answer the following question: Do their business plans dovetail with their personal estate plans? Business insurance planning can help your business to address the “three R’s” of business management with insurance, investments, and benefits. How?

  • Economic loss to the business when a key employee dies or is disabled
  • Disposition of a business owner’s interest upon death, disability, or other separation from the business
  • Attraction and retention of valuable employees and
  • Rewarding faithful employees
  • Risk management, and
  • Salary continuation

The Items We Address:

  • Business Continuation Concepts
  • Employer-owned life insurance
  • Key employee life insurance
  • Group term life insurance
  • Business valuation
  • Employee Benefit plans
    • Group Health
    • Group Life
    • Group Disability
    • Voluntary or payroll deduction plans
  • Executive bonus arrangements
  • Cafeteria plans
  • Buy-sell strategies and agreements
  • Disability buy-out agreements
  • Executive bonus arrangements
  • Split-dollar life insurance arrangements
  • Nonqualified deferred compensation

Qualified Retirement Plans

  • 401 (k) plans
    • Safe harbor
    • Roth 401 (k)
  • Profit-Sharing plans (both standard & cross tested designs)
  • Pension Plans
    • Traditional Defined Benefit Plans
    • Fully Insured Defined Benefit plans
    • Cash Balance Defined Benefit plans
  • Plan Investments
  • Design and Administration
  • Simplified Employee Pension Plans (SEPs)

Where does this go?

A Split Dollar Insurance Plan Can Be a Great Way To Retain Talent

By: Maxwell A. Coulliette, CFP, CLU, ChFC, CEA, CRPS


If you want to reward a few key executives with low-cost life insurance benefit. Can you do it without the cost of providing the same benefit to all the other employees? You can with a properly designed qualified split dollar life insurance plan target rewarding only certain key employees or executives. In fact, the right split dollar plan design and arrangement can provide a business with several significant benefits. One is it can help you deal with the management issue “the 3 R’s” Recruit, Retain employees, and Reward key employees or executives. A split dollar plan can also be used to fund severance packages and certain other benefit plans for key employees.

How does a split dollar life insurance plan work?

The interworking of the Split dollar life insurance plan is an agreement between an employer and an employee to share the costs and benefits of a life insurance policy. Specifically, the parties come together and purchase an insurance policy on the life of the employee and, in a written agreement they split the cost of the insurance premiums, in addition to the policy’s death proceeds, cash value, and other benefits. The actual life insurance policy used can be whole life, universal life, second-to-die (survivorship), or any other cash value policy.

Split-Dollar is a method of buying life insurance in a business setting, it may help the employer’s need to provide a valuable fringe benefit to retain and or reward a key employee, or to attract a potential key employee into the business. For the employee, the split-dollar arrangement provides the benefits of the life insurance policy such as protection for survivors at a lower net cost than a personally purchased policy.

Split dollar arrangements usually take one of two forms. One is the endorsement form, under this form the employer is formally designated as the owner of the life insurance contract and endorses the contract to specify the portion of the death proceeds payable to the employee’s beneficiary. Second you have the collateral assignment form, in this split dollar format the employee is formally designated as the owner of the contract, and the employer premium advances are secured by a collateral assignment of the policy.

Note for a public company: The Sarbanes-Oxley Act of 2002 makes it a criminal offense for a public company to lend money to its executives or directors. This may prohibit the use of the collateral assignment form in these companies.

Why use a split dollar life insurance plan in a business setting?

Split dollar life insurance has been widely used in gift and estate planning and can be an important part of the compensation package of key employees. You don’t have to cover all your employees–the coverage, amounts, and terms of the split dollar arrangement are generally not subject to Employee Retirement Income Security Act (ERISA) nondiscrimination rules.

Split dollar plans can be used to:

  • Recruit, reward, motivate, and retain employees
  • Provide low-cost life insurance protection to employees
  • Fund severance benefits
  • Fund stock purchase agreements
  • Fund nonqualified deferred compensation plans

What are the advantages of split dollar life insurance plans? Split dollar life insurance offers several advantages:

  • A split dollar plan allows an executive to obtain personal life insurance coverage using employer funds.
  • The investment by your business in the plan is fully secured. If the insured employee dies or his or her employment is terminated, your business is reimbursed from the policy proceeds for its payment of premiums.
  • Split dollar plans can be customized to meet the objectives of both employer and employees.
  • The death benefit from a split dollar plan (both the employer’s share and the share the beneficiary of the employee) is generally free from income tax.

Note: If the death proceeds are paid in installments, any interest element in the installment payments will generally be taxable.

What are the disadvantages of split dollar life insurance plans?

Split dollar plans have some disadvantages as well, including the following:

  • Your business will generally receive no tax deduction for its share of premium payments under the split dollar plan.
  • Depending on how the agreement is structured, employees may have to pay income taxes each year on the value of the economic benefits provided to them. Alternatively, if the employer’s premium payments are considered a series of loans to the employee, then the employee must pay a reasonable rate of interest to the employer. If the employee does not do so, the employee is considered to have received taxable income up to the amount of interest that should be paid.
  • Tax rules regarding split dollar life insurance are complicated.

There can be some tax issues. Under current regulations, two mutually exclusive sets of rules govern the taxation of split dollar arrangements. Generally, if the employer owns the policy (an endorsement form arrangement), the employer is treated as transferring “economic benefits” to the employee. The employee must include in income the value of the life insurance protection provided by the employer, plus the cash value (if any) which he or she may have access (to the extent that it has not been considered in a prior taxable year). Under the loan regime, the employer is treated as lending premium payments to the employee. The loan regime generally governs the taxation of those arrangements under which the employer’s premium advances are secured by a collateral assignment of the policy.

Note: Before entering a split dollar life insurance arrangement, it’s important to consult a knowledgeable advisor or tax specialist to assess how the current regulations might impact your business.

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