Maryland Split-Dollar Insurance Agreement: Policy Ownership Jointly by Employer and Employee In Maryland, a Split-Dollar Insurance Agreement is a contractual arrangement between an employer and an employee regarding the ownership and benefits of a life insurance policy. This form of insurance agreement allows both the employer and employee to share the policy ownership and enjoy its associated benefits. Split-Dollar Insurance Agreements are often used as an employee benefit or executive compensation tool. This type of agreement involves the joint ownership of a life insurance policy where the employer pays the premiums for the policy, either partially or entirely. The employee, on the other hand, is typically designated as the primary beneficiary. The agreement specifies the rights and obligations of both parties throughout the duration of the policy. By adopting a Maryland Split-Dollar Insurance Agreement with policy ownership jointly by the employer and employee, various advantages can be achieved. For the employer, this arrangement allows them to provide a valuable benefit to their employees, aiding in talent retention and recruitment efforts. It also presents an opportunity for the employer to recover the premiums paid in the event of the employee's death, either by being reimbursed from the policy's death proceeds or through other means. For the employee, this agreement provides a tax-efficient way of obtaining life insurance coverage, as the premiums paid by the employer are typically considered a non-taxable employee benefit. In addition, the employee may have access to certain policy benefits, such as cash value accumulation or the ability to borrow against the policy's cash value. There are various types of Maryland Split-Dollar Insurance Agreements with policy ownership jointly by the employer and employee. Some common types include: 1. Endorsement Split-Dollar Agreement: In this type of agreement, the employer endorses the split-dollar arrangement on the life insurance policy owned by the employee. The endorsement typically defines the rights and responsibilities of both parties. 2. Collateral Assignment Split-Dollar Agreement: This agreement involves the employer providing a loan or collateral to the employee, which is secured by the cash value of the life insurance policy. The employer's interest in the policy is then repaid upon the policy's termination or the employee's death. 3. Equity Split-Dollar Agreement: This type of agreement allows the employee to gradually acquire ownership of the policy's equity over time. It often involves a predetermined schedule outlining the employee's rights to the policy's cash value or death benefits. It is important to note that the specific terms and conditions of a Maryland Split-Dollar Insurance Agreement with policy ownership jointly by the employer and employee can vary based on individual circumstances, company policies, and legal requirements. Seeking professional advice from insurance and legal experts is crucial when implementing such an arrangement.