What are the two parties typically involved in a Split-Dollar Plan?

In a Split-Dollar Plan, the two parties typically involved are a corporation and an employee. This arrangement is primarily used to provide life insurance benefits in a way that is mutually beneficial for both the employer and the employee.

In this structure, the employer pays a portion of the insurance premiums while also providing the employee with a benefit that can serve as a form of compensation. The employee, in turn, secures coverage that can be advantageous for their financial planning. This method allows for flexible arrangement terms regarding premium payments and death benefits, often enhancing employee retention and satisfaction.

The other choices do not fit as they pertain to different types of relationships or agreements. For example, an individual and a broker generally relate to the purchase of insurance rather than a structured plan between an employer and employee. Similarly, a bank and a borrower refer to loan agreements, which do not typically involve split-dollar arrangements, and a government and a contractor pertain to service agreements rather than employee benefit plans. Thus, the corporation-employee dynamic is specific to Split-Dollar Plans and illustrates the intended use of life insurance in corporate employee benefits.