{"id":8511,"date":"2026-11-01T00:33:37","date_gmt":"2026-11-01T00:33:37","guid":{"rendered":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-split-dollar\/"},"modified":"2026-11-06T05:50:52","modified_gmt":"2026-11-06T05:50:52","slug":"key-person-insurance-split-dollar","status":"publish","type":"page","link":"https:\/\/nrcpas.com\/life-insurance-guides\/key-person-insurance\/key-person-insurance-split-dollar\/","title":{"rendered":"Split Dollar Key Person Insurance in Florida: How It Works"},"content":{"rendered":"\n
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Key Person Insurance | Florida<\/p>

Split-Dollar Key Person Insurance: How the Arrangement Works<\/h1>

A plain-English guide from NR CPAs & Business Advisors to sharing a life insurance policy between a business and a key person, and what to review before you decide. Insurance is offered by Nischay Rawal, a licensed insurance agent, separately from the firm's accounting practice.<\/p>

Call us today for a coverage review<\/a><\/div>
Call us today for a coverage review<\/a><\/div><\/div>\n<\/div><\/div>\n\n\n\n
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Key terms in plain words<\/h2>\n

Split-dollar arrangement<\/h3>

A written agreement that divides the cost, ownership and benefits of a life insurance policy between a business and an individual, such as a key employee or owner.<\/p><\/div><\/div>

Key person insurance<\/h3>

Life insurance a business may own on a person whose death would cause financial harm to the company, such as a founder, top manager or essential producer.<\/p><\/div><\/div>

Policy ownership<\/h3>

Who owns the policy, who pays the premiums and who receives the death benefit are set by the agreement. These terms should be settled in writing before the policy is issued.<\/p><\/div><\/div>

Tax treatment<\/h3>

How premiums, benefits and income are taxed depends on how the arrangement is structured and on current tax rules. Your CPA should review the structure with your licensed agent.<\/p><\/div><\/div><\/div>\n\n<\/div>\n\n\n

By Nischay Rawal \u00b7 Published October 31, 2026<\/p>\n\n

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Split-dollar key person insurance is a life insurance policy on a key person that a business and another party fund and share under a written agreement. It helps a business plan for the loss of an owner or essential employee. This page explains how the split works, what the tax regimes mean, and what drives setup cost. NR CPAs & Business Advisors is a Miami CPA firm. Its life insurance work is offered by a licensed insurance agent, separately from the accounting practice.<\/p>\n

What Split-Dollar Key Person Insurance Is and Who It Fits<\/h2>\n

Split-dollar is an arrangement, not a separate type of policy. Two parties agree how they will share the premiums, cash value, ownership and death benefit of one life insurance policy.<\/p>\n

Key person insurance is coverage a business buys on an owner, partner or essential employee. The Insurance Information Institute<\/a> explains that key person life insurance compensates a business for financial losses caused by a key employee’s death or disability. Split-dollar terms change who pays and who receives the money.<\/p>\n

This structure usually fits:<\/p>\n