West Virginia Split-Dollar Life Insurance refers to a unique form of life insurance arrangement that allows mutually beneficial financial planning between a company and its key employee or executive. It provides a means for businesses in West Virginia to provide valuable benefits to their key employees, while also serving as an efficient tool for executive compensation and estate planning. In a West Virginia Split-Dollar Life Insurance plan, the employer and employee agree to split the premium costs and benefits of a life insurance policy. Typically, the employer pays a portion of the premium while the employee pays the rest. This arrangement offers tax advantages for both parties involved. It allows the employer to recover its premium contributions through loans or cash value withdrawals, while the employee's beneficiaries receive the death benefit. There are different types of West Virginia Split-Dollar Life Insurance, including economic benefit regime and loan regime. 1. Economic Benefit Regime: In this type of split-dollar arrangement, the employer is considered the policy owner and pays the premium. The employee is the insured individual and receives the economic benefit portion of the policy, which is the current value of the life insurance protection. Upon the employee's death, the employer recovers its premium contributions and the remaining portion is paid to the employee's beneficiaries. 2. Loan Regime: In the loan regime, the employee is the policy owner and is responsible for paying the premiums. The employer provides loans to the employee to pay the premiums, securing the loans with the policy's cash value. The employee's beneficiaries receive the death benefit, and the employer is repaid from the policy's cash value before any remaining amount is paid to the beneficiaries. West Virginia Split-Dollar Life Insurance offers a range of benefits for both employers and employees. For employers, it can be a valuable tool for retaining and rewarding key employees. It also enables companies to provide executive compensation in a tax-efficient manner. For employees, it offers life insurance coverage with potentially lower out-of-pocket costs and the opportunity to build cash value within the policy. To maximize the benefits of a West Virginia Split-Dollar Life Insurance plan, it is important for employers and employees to consult with qualified insurance professionals and tax advisors. This will help ensure compliance with West Virginia insurance regulations and tax laws while tailoring the arrangement to meet the specific needs and objectives of all parties involved.