The economic benefit regime is the U.S. tax framework that governs certain split-dollar life insurance arrangements where the non-owner receives current economic benefits. The regime measures taxable value using Table 2001 or insurer rates and requires annual inclusion by the benefit recipient. It contrasts with the loan regime, which treats advances as loans with imputed interest. Choosing the proper regime affects taxation, documentation, and long-term plan economics for employer-executive arrangements.

Plan designers choose the economic-benefit regime for endorsement split-dollar when the employer will own the policy and provide current insurance protection as a taxable benefit. HR and payroll handle annual inclusion; the advisor monitors rate tables and compares loan-regime alternatives. Documenting the regime choice in plan materials avoids confusion and IRS scrutiny later.