Principal Launches Life Insurance Product

February 27, 2003 ( - The Principal Financial Group has introduced a new insurance vehicle that plan sponsors can utilize to provide key employees with death benefits and retirement savings.

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.