Executive Benefits

Split-Dollar Life Insurance Isn’t Only an Executive Benefit for NCAA Coaches

Split-Dollar Life Insurance Isn’t Only an Executive Benefit for NCAA Coaches

Author Executive Benefits Team
Date March 16, 2023

Split-dollar life insurance can help universities attract and retain top coaches and smaller organizations and nonprofits better compete for top talent.

March Madness brings thrills, frustration, and a little heartbreak for most college basketball fans. For the men’s and women’s National Collegiate Athletic Association (NCAA) coaches who are directly involved in March Madness, how their teams perform can spell enhanced career longevity or an impending exit.

Recognizing that collegiate coaching careers may include salary ups and downs and even periods of unemployment, coaches are often especially interested in deferred compensation plans and other executive benefits strategies to help them manage their earnings, bonuses, and capacity to plan for a stable retirement.

No wonder many top coaches, and the universities that employ them, value the use of split-dollar life insurance as either an effective standalone executive benefit or as part of a well-designed nonqualified deferred compensation plan (NQDC).

Screenshot 2023 03 15 at 10.31.59 AM

While using split-dollar life insurance makes headlines when it involves well-known coaches, this strategy can be highly effective for many organizations, including nonprofit entities that find themselves competing with bigger organizations for top talent in the marketplace.

Learn more about which top universities are attracting and retaining top coaching talent by using split-dollar life insurance agreements by reading: Retaining Key Talent with a Split-Dollar Life Insurance Agreement.

Defining Split-Dollar Life Insurance

The following information from the Treasury Regulations helps define split-dollar life insurance.

Treasury Regulations Section 1.61-22(b) defines split-dollar life insurance as (generally) an arrangement between an owner and a non-owner of a life insurance premium contract that satisfies the following criteria:

  • Either party to the arrangement pays, directly or indirectly, all or any portion of the premiums on the life insurance contract, including a payment by means of a loan to the other party that is secured by the life insurance contract;
  • At least one of the parties to the arrangement paying premiums is entitled to recover (either conditionally or unconditionally) all or any portion of those premiums and such recovery is to be made from, or is secured by, the proceeds of the life insurance contract; and
  • The arrangement isn’t part of a group-term life insurance plan described in Section 79  of the Internal Revenue Code, unless the group-term life insurance plan provides permanent benefits to employees as defined in Section 1.79-0.

Learn more about all of the customized and comprehensive solutions available through OneDigital Insurance, Financial Services and HR Consulting.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated herein.

Securities offered through Valmark Securities, Inc. (VSI), a member of FINRA and SIPC. Investment advisory services offered through Valmark Advisers, Inc. (VAI), an SEC registered investment advisor. Please refer to your investment advisory agreement and the Form ADV disclosures provided to you for more information. VAI/VSI are separate entities from OneDigital.

Unless otherwise noted, VAI/VSI is not affiliated, associated, authorized, endorsed by, or in any way officially connected with any other company, agency or government agency identified or referenced in this document.

Subscribe to Get Executive Benefits News in Your Inbox

How would you like to subscribe?(Required)
Get news as it's published, or get our newsletter with key updates 2-3 times per month.
This field is for validation purposes and should be left unchanged.