Economic benefit analysis evaluates the taxable value of benefits provided to an insured or participant-often in split-dollar life insurance-by measuring current cost of pure insurance or other economic advantages. Using IRS Table 2001 or carrier rates, the analysis determines income inclusion for the party receiving the benefit. It is central to compliance in endorsement or collateral-assignment arrangements and affects payroll reporting, plan design, and after-tax cost sharing between employer and executive.

When implementing endorsement split-dollar, payroll includes annual economic-benefit amounts in the executive's W-2 using Table 2001 or carrier rates. Advisors run projections so both parties understand cash flows and after-tax costs. Proper analysis keeps the plan compliant and prevents unpleasant surprises during audits or compensation committee reviews.