Long-term rate decrease spurs plan adjustments

Two scenarios when you might consider restructuring split-dollar life insurance agreements.

In recent years, credit unions have been dedicating more assets to split-dollar life insurance arrangements to reward and retain top executives. According to National Credit Union Administration 5300 data, assets for collateral assignment split-dollar life insurance—the most common type of split-dollar arrangement for credit unions—increased 120% from year-end 2015 through 2018.

If your credit union has been part of this trend, consider re-evaluating your split-dollar plans in light of this year’s decrease in long-term interest rates. You may be able to improve the benefit for your executive and/or make the underlying loan a more valuable asset for your credit union.

Underlying Advantages of Collateral Assignment Split-Dollar Programs

Before I get into the reasons you might restructure your existing CASD agreements, let’s look at why these arrangements are growing so quickly.


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