In an endorsement method split-dollar life insurance arrangement, who owns the policy?

In an endorsement method split-dollar life insurance arrangement, who owns the policy?

• A. The employee owns the policy.
• B. The employer owns the policy and is the beneficiary.
• C. The insurance company owns the policy.
• D. The beneficiary is determined by the employee.

Answer: (B)

In an endorsement method split-dollar life insurance arrangement, the employer owns the policy and is the beneficiary. This arrangement typically involves a split-dollar agreement where the employer pays a portion of the life insurance premiums, and the employee has some rights to the policy benefits, typically during their employment. This model allows the employer to retain control over the policy, ensuring that the death benefit can serve as a source of funding for the company or as part of a broader employee compensation package. The arrangement can provide benefits to the employee in terms of coverage, while the employer retains ownership and the rights to the death benefit, which is structured to encourage employee retention. In contrast, the other options suggest alternative ownership or beneficiary structures that do not align with how endorsement method split-dollar arrangements are designed to function.

In an endorsement method split-dollar life insurance arrangement, the employer owns the policy and is the beneficiary. This arrangement typically involves a split-dollar agreement where the employer pays a portion of the life insurance premiums, and the employee has some rights to the policy benefits, typically during their employment.

This model allows the employer to retain control over the policy, ensuring that the death benefit can serve as a source of funding for the company or as part of a broader employee compensation package. The arrangement can provide benefits to the employee in terms of coverage, while the employer retains ownership and the rights to the death benefit, which is structured to encourage employee retention.

In contrast, the other options suggest alternative ownership or beneficiary structures that do not align with how endorsement method split-dollar arrangements are designed to function.