What Is Split Dollar Life Insurance? 
Split dollar life insurance refers to the method of funding the life insurance ; it is not a type of life insurance policy , as split dollar can be used with a variety of life insurance policies . The owner of the policy splits the life insurance premium with someone else . When the Insured person passes , the death benefit can be used to reimburse one of more of the persons who paid the premium , then the remainder goes to the beneficiary . Businesses often use split dollar life insurance as a way of providing life insurance coverage to older persons for whom the cost of life insurance is high , or as a way to fund a buy-sell agreement that passes the business from one generation to another . 