Charitable Split Dollar Insurance Plan
Definition of "Charitable split dollar insurance plan"
Arrangement that provides for the reduction of estate taxes and the payment of tax-deductible life insurance premiums. The procedure is for a donor to present a charity with a gift of a sum of money that is tax deductible to the donor. The charity then transfers this gift in the form of a premium payment on an ordinary life insurance policy on the donor's life (the insured). The beneficiaries under the policy are the charity and the donor's heirs. Upon the death of the donor, the charity and the donor's heirs share in the death benefit from the policy. The donor's heirs also receive the cash value accrued on a tax-deferred basis within the policy.
Popular Insurance Terms
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Removal of money from an individual life insurance policy or an employee benefit plan. A cash withdrawal from a life insurance policy reduces the death benefit by the amount of the ...
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