Tennessee Split-Dollar Insurance Agreement with Policy Owned Jointly by Employer and Employee

• Category: Insurance - Contracts
• State: Multi-State
• Control #: US-1086BG
• Format: Word; Rich Text

Description

In a split-dollar plan, an employer and employee execute a written agreement that outlines how they will share the premium cost, cash value and death benefit of a permanent life insurance policy. Split-dollar plans are frequently used by employers to provide supplemental benefits for executives and/or to help retain key employees. The agreement outlines what the employee needs to accomplish, how long the plan will stay in effect and how the plan will be terminated. It also includes provisions that restrict or end benefits if the employee decides to terminate employment or does not achieve agreed-upon performance metrics. Title: Tennessee Split-Dollar Insurance Agreement: An In-Depth Overview of Policies Owned Jointly by Employers and Employees Description: A Tennessee Split-Dollar Insurance Agreement refers to a specific arrangement designed to provide life insurance coverage for both employers and employees jointly. This comprehensive description aims to shed light on the different types and intricacies associated with this insurance agreement within the Tennessee jurisdiction. Types of Tennessee Split-Dollar Insurance Agreements with Joint Ownership: 1. Employer-Owned Policy with Employee-Selected Coverage: In this type of agreement, the employer holds the policy, pays the policy's premiums, and controls the policy's cash value. However, the employee has the option to choose the level of coverage provided by the policy. This type offers flexibility to employees, allowing them to customize their insurance needs. 2. Employer-Provided Policy with Equal Ownership: Here, the employer-funded policy is jointly owned by both the employer and the employee. Contributions towards insurance premiums are shared between them, while the policy's cash value is equally split. This arrangement aims to incentivize employee loyalty and serves as an attractive employee benefit. 3. Collateral Assignment Split-Dollar Agreement: Under this agreement, the employee is the policyholder and pays the premiums on the insurance policy. However, the employer is entitled to recover their portion of the premiums paid upon the death of the insured employee. The remaining policy value typically goes to the employee's beneficiary. 4. Endorsement Split-Dollar Agreement: In this arrangement, the employer endorses the employee's personal life insurance policy rather than owning it directly. The employer then covers a portion or all of the premiums paid by the policyholder. The endorsement ensures that the employee retains control over the policy, and the split-dollar agreement governs the rights and responsibilities related to the premium payments. These types of Tennessee Split-Dollar Insurance Agreements allow employers and employees to collaborate in securing life insurance protection. Such agreements provide numerous benefits, including sharing life insurance costs, tax advantages, wealth accumulation opportunities, and flexibility in policy ownership and coverage. It is crucial to consult insurance professionals or legal advisors when entering into a Tennessee Split-Dollar Insurance Agreement to ensure compliance with state regulations and to understand the tax implications associated with these agreements. Understanding the available options and clarifying the terms are essential steps towards creating a beneficial arrangement for both employer and employee in Tennessee.

Title: Tennessee Split-Dollar Insurance Agreement: An In-Depth Overview of Policies Owned Jointly by Employers and Employees Description: A Tennessee Split-Dollar Insurance Agreement refers to a specific arrangement designed to provide life insurance coverage for both employers and employees jointly. This comprehensive description aims to shed light on the different types and intricacies associated with this insurance agreement within the Tennessee jurisdiction. Types of Tennessee Split-Dollar Insurance Agreements with Joint Ownership: 1. Employer-Owned Policy with Employee-Selected Coverage: In this type of agreement, the employer holds the policy, pays the policy's premiums, and controls the policy's cash value. However, the employee has the option to choose the level of coverage provided by the policy. This type offers flexibility to employees, allowing them to customize their insurance needs. 2. Employer-Provided Policy with Equal Ownership: Here, the employer-funded policy is jointly owned by both the employer and the employee. Contributions towards insurance premiums are shared between them, while the policy's cash value is equally split. This arrangement aims to incentivize employee loyalty and serves as an attractive employee benefit. 3. Collateral Assignment Split-Dollar Agreement: Under this agreement, the employee is the policyholder and pays the premiums on the insurance policy. However, the employer is entitled to recover their portion of the premiums paid upon the death of the insured employee. The remaining policy value typically goes to the employee's beneficiary. 4. Endorsement Split-Dollar Agreement: In this arrangement, the employer endorses the employee's personal life insurance policy rather than owning it directly. The employer then covers a portion or all of the premiums paid by the policyholder. The endorsement ensures that the employee retains control over the policy, and the split-dollar agreement governs the rights and responsibilities related to the premium payments. These types of Tennessee Split-Dollar Insurance Agreements allow employers and employees to collaborate in securing life insurance protection. Such agreements provide numerous benefits, including sharing life insurance costs, tax advantages, wealth accumulation opportunities, and flexibility in policy ownership and coverage. It is crucial to consult insurance professionals or legal advisors when entering into a Tennessee Split-Dollar Insurance Agreement to ensure compliance with state regulations and to understand the tax implications associated with these agreements. Understanding the available options and clarifying the terms are essential steps towards creating a beneficial arrangement for both employer and employee in Tennessee.