What Does Split Dollar Life Insurance Mean? 
Split dollar is not a type of life insurance policy but rather , when used by a business , is an arrangement that allocates the policy benefits between the business and the key employee . Typically , the business assists the key employee by paying the premium while the key employee receives most of the policy benefits . The business ultimately recovers its total outlay from policy benefits . The employee receives a valuable life insurance benefit for a very low out of pocket cost . 