The company said PrincipalSplit Dollar Plus capitalizes on recent regulatory changes in nonqualifiedbenefits to utilize a “loan regime” and incorporates manyof the aspects of the decades-old split dollar concept. Essentially, the employer provides the funding forpersonally owned, permanent life insurance in the form of a low-interestloan, according to the Principal news media release.
With this product, an employer lends the cost ofpermanent life insurance to the employee. A relatively lowinterest rate, established by IRS, is used to determine employee income. Inreturn, the employer receives a security interest in the policy.