A life insurance policy arrangement in which premiums, cash values, and death benefits are divided between two parties—typically a corporation and a key employee or executive. Usually, the employer owns the policy and pays the premiums, while the employee has the right to name the beneficiary of the death benefit. Factors like age, health, and the type and amount of insurance affect costs and availability. Life insurance policies include expenses such as mortality charges and may impose surrender fees and tax consequences if canceled early. Before using life insurance as part of a financial plan, it’s important to confirm insurability. Policy guarantees depend on the issuing company’s ability to pay claims.