CARD Q037
An employer and executive agree to share life-policy costs and benefits under a written arrangement. What is this called?
- An automatic premium loan
- Split-dollar life insurance
- A two-life survivorship policy
- A noncontributory medical plan
Split-dollar life insurance
Split-dollar describes an allocation of costs and benefits, not a separate insurance policy type. The allocation need not be equal.
Why each choice is right or wrong
A. An automatic premium loan
Incorrect. An automatic premium loan is a way to pay a premium from policy value.
B. Split-dollar life insurance
Correct. Split-dollar describes an allocation of costs and benefits, not a separate insurance policy type. The allocation need not be equal.
C. A two-life survivorship policy
Incorrect. Survivorship describes a second-to-die insured-life structure, not sharing costs and benefits.
D. A noncontributory medical plan
Incorrect. A noncontributory medical plan is employer-funded health coverage, not this life-policy arrangement.
Review the related terms
Use these lessons to revisit the concepts and try additional practice questions.