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Reverse Split Dollar is a plan that pays a death benefit to the employer during
the employee's working years. When the plan is terminated, the employee owns
the entire contract with no loan. This arrangement provides several advantages
to the employer and the employees.
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Employer is compensated for the loss of key employees.
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At retirement, employee has insurance protection or additional income.
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Employer can decide which employees are eligible and the amount of benefit each
will receive.
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Insurance proceeds are received income tax-free by either the employer or
employee.
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Additional Advantages to the Employer
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Helps attract and retain key employees.
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Selectivity and flexibility.
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An ideal supplement to other employee benefits.
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Full cost recovery.
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Insurance proceeds will be received income tax-free by the corporation.
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Additional Advantages to the Employee
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Future personal insurance paid for with business dollars.
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Protects future insurability.
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Does not affect other fringe benefits.
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