SullivanCotter’s Article “Life Insurance Versus Traditional Deferred Compensation Designs: 7 Key Questions” Published in Becker’s Hospital Review
Life insurance has often been marketed as a tax-efficient way to minimize or avoid the solvency risk and “substantial risk of forfeiture” required by traditional deferred compensation designs in tax-exempt organizations. Split-dollar life insurance was once the answer: What could be better than the employer paying premiums, then getting those premiums back later? For many participants in these plans — and the sponsoring employer — it was too good to be true, with many employers taking large financial losses and participants not receiving the anticipated benefit.