Split-dollar financing of life insurance premium payments is useful in a situation where one person or entity has the cash to pay the premiums and another has the need for life insurance coverage. In recent years, these arrangements have been used in a wealth transfer context, allowing the annual gift to the Irrevocable Life Insurance Trust to be much less than the entire premium payment. Leveraging Life Insurance Premium Payments examines and explains the rules for the two premium financing regimes that came into effect ...
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Split-dollar financing of life insurance premium payments is useful in a situation where one person or entity has the cash to pay the premiums and another has the need for life insurance coverage. In recent years, these arrangements have been used in a wealth transfer context, allowing the annual gift to the Irrevocable Life Insurance Trust to be much less than the entire premium payment. Leveraging Life Insurance Premium Payments examines and explains the rules for the two premium financing regimes that came into effect with the final Split-Dollar Regulations in 2003 - the loan regime, the most prevalent form of split-dollar financing, and the economic benefit regime -- as well as the tax consequences and planning techniques of each.
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