Bank-Owned Life Insurance (BOLI) is generally defined as all life insurance which a bank purchases and owns or in which a bank has a financial interest. BOLI is used as a tax efficient method for offsetting the costs of employee benefit programs. The cash value growth in the policy is tax deferred (tax free if held until death) and the death benefits are tax-free. The policies insure the lives of key employees and/or bank directors.
BOLI is a tax-favored asset with returns that typically exceed after-tax returns of more traditional bank investments, such as Muni Funds, Mortgage Backed Securities and 5 & 10 Year Treasuries by 150 to 300 basis points.
- Bank-Owned Life Insurance (BOLI)
- What is CUOLI
- Why do Credit Unions Invest in Life Insurance
- What Specific types of benefit plans do Credit Unions Utilize CUOLI to fund
- What are the regulations regarding CUOLI
- How are the insurance policies underwritten
- What product types are available
- How do you report CUOLI for Call Report or Regulatory Financial Purposes
- What is the typical makeup of a carriers general account
- Split Dollar Programs
- Life Insurance Audit
- Disability & Long Term Care
- Frequently Asked Questions About COLI