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

• Category: Insurance - Contracts
• State: Multi-State
• City: Houston
• 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.

The Houston, Texas Split-Dollar Insurance Agreement with Policy Owned Jointly by Employer and Employee is a specific type of insurance arrangement commonly used in the corporate world. It involves an agreement between an employer and an employee to jointly own a life insurance policy. This type of arrangement is often used as an employee benefit or a perk in executive compensation packages. In a Houston, Texas Split-Dollar Insurance Agreement with Policy Owned Jointly by Employer and Employee, the employer pays the premium for the life insurance policy, while the employee is typically designated as the policy owner and has certain rights to the policy's cash value. The agreement outlines the terms of ownership, beneficiary designations, and the distribution of policy proceeds upon the insured person's death. There are several variations or types of Split-Dollar Insurance Agreements in Houston, Texas that can be tailored to meet the needs of both the employer and the employee. These include: 1. Endorsement Split-Dollar: With this type of agreement, the employer endorses and contributes to an existing life insurance policy owned by the employee. The employer's contribution is typically based on a predetermined formula, and the policy's cash value is shared between the employer and the employee. 2. Collateral Assignment Split-Dollar: In this arrangement, the employer lends money to the employee to pay for a new life insurance policy, and the policy serves as collateral for the loan. The employee retains ownership, and the employer's interest is typically reimbursed upon the insured person's death. 3. Equity Split-Dollar: This type of agreement allows the employee to build equity in the life insurance policy over time by paying a portion of the premiums. The employer and employee share in the policy's cash value based on a predetermined formula, providing a potential source of additional income for the employee. 4. Reverse Split-Dollar: In this arrangement, the employee owns the life insurance policy, but the employer acts as the beneficiary and pays the premiums. Upon the insured person's death, the employer is reimbursed for the premiums paid, and any remaining proceeds go to the employee's designated beneficiaries. Overall, the Houston, Texas Split-Dollar Insurance Agreement with Policy Owned Jointly by Employer and Employee offers an attractive incentive for both employers and employees. It allows employers to provide valuable benefits to their employees while also providing additional financial security to the insured person's beneficiaries.