Response: "Sure it would. The premiums are not a business expense, however, because, eventually, you'll recover your costs under the plan."

Objection: "I'd buy term if I wanted low-cost insurance. I'll recover my cost in the split-dollar plan, but I'll lose earnings on my contributions."

Response: "Term insurance is useful in many situations. The real issue here is not permanent insurance or term. It isn't even about getting your money back.

"The issue is strengthening the bond and loyalty with a valued employee (or parent or child).

"A split-dollar plan is a lot more than a financial arrangement. It's an expression of goodwill and trust between the people involved, and helps bond these relationships. After all, what's more important to you, the money or the relationship?"

Objection: "This is too complicated."

Response: "Sometimes effective business planning isn't done as the crow flies. This is one of those times. Split-dollar is a way for someone who needs life insurance to be assisted by someone with the means and incentive to help pay for it. Most people think it's worth taking the long way around to get there."

Objection: "Won't this plan be subject to the accumulated earnings tax and alternative minimum tax?"

Response: "That's a valid question. In a C Corporation, the investment of corporate assets in a split-dollar life insurance plan with a substantial shareholder has not resulted in accumulated earnings taxation. The alternative minimum tax exposure is really just a minor consideration.

"We can review that with your CPA or attorney; but first, let's see if you can qualify for the plan."