What type of life insurance arrangement allows an employee to choose the beneficiary while receiving funds from their employer?

A split-dollar plan is a unique arrangement often used in employer-employee relationships, particularly for life insurance coverage. In this setup, the employer and employee share the costs and benefits of a life insurance policy. The employee has the flexibility to select a beneficiary for the policy, which differentiates it from other types of life insurance arrangements that may not allow for such customization regarding beneficiary designations.

The key feature of a split-dollar plan is that it combines employee benefits with life insurance, where the employer typically pays a portion of the premium, and upon the employee's death, the death benefit is distributed to the chosen beneficiary, potentially offering tax advantages as well. This flexibility and the shared responsibility of premium payments make it a popular choice for funding certain employee benefits while allowing for personal beneficiary designations, aligning with the option selected.