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Random Term
Split-dollar life insurance

A type of life-insurance policy in which the premiums and the death benefits and/or cash value are split between two parties. For example, a company can pay the premiums while a company executive’s family receives the full death benefit. Depending on how these split-dollar life-insurance arrangements are structured (e.g. right by executive to access the cash surrender value) or modified, they can be considered a form of deferred compensation that raises issues under IRC Section 409A, as explained in IRS Notice 2007-34, in a memo by CCH, and in a memo by the law firm McGuireWoods.