New Jersey Life Producer Practice Exam

The correct choice is a Split-Dollar Agreement. This type of agreement allows two parties to share the costs and benefits of a life insurance policy. Typically, one party, often the employer, pays the premiums while the other party, usually the employee or executive, may receive a portion of the death benefit or cash value. This financial arrangement is often used in employment situations for key personnel, providing both parties with advantages, such as attracting and retaining talent while ensuring that the premium financial burden is shared.

Joint policies are indeed designed for more than one insured, but they do not explicitly focus on shared ownership as a structured agreement. Life Settlement Agreements typically involve selling an existing life insurance policy to a third party, which does not entail shared ownership. Key Person Insurance is specifically designed to protect a business from the financial impact of losing a key employee but does not inherently involve shared ownership of the policy itself. Thus, a Split-Dollar Agreement best describes a scenario where ownership and benefits are collaboratively managed.