CORPORATE OWNED LIFE INSURANCE (COLI)


a cost-efficient and effective means for companies to offset rising employee benefit costs.

COLI provides a cost-efficient and effective means for companies to offset rising employee benefit costs, such as supplemental executive retirement, deferred compensation programs, and post-retirement medical obligations.

In a COLI program, a corporation purchases life insurance on a group of executives, officers and directors. The corporation pays the policy premiums, owns the cash value of the policies and is the designated beneficiary. The corporation must obtain each employee’s consent prior to purchasing an insurance policy insuring his or her life, and the employee must be notified about the beneficiary designation and the maximum amount of insurance coverage under the policy on his or her life.

COLI Benefits

  • Can be used to help fund and support deferred compensation and other post-retirement programs
  • Potentially offers annual after-tax returns that are higher than the returns earned on other investments
  • Earnings derived may come from growth in the account value each year or from life insurance benefits generally payable on an income tax-free basis upon an insured’s death
  • The growth in a policy’s cash value is tax-deferred until accessed via a partial-withdrawal or surrender, if permitted, under the terms of the policy

COLI provides a cost-efficient and effective means for companies to offset rising employee benefit costs, such as supplemental executive retirement, deferred compensation programs, and post-retirement medical obligations.

In a COLI program, a corporation purchases life insurance on a group of executives, officers and directors. The corporation pays the policy premiums, owns the cash value of the policies and is the designated beneficiary. The corporation must obtain each employee’s consent prior to purchasing an insurance policy insuring his or her life, and the employee must be notified about the beneficiary designation and the maximum amount of insurance coverage under the policy on his or her life.

COLI Benefits

  • Pre-Purchase Documentation
  • Regular Policy Value Reporting
  • General Ledger Entries
  • Independent Third Party Carrier Credit Analysis*
  • Quarterly Compliance Reporting
    • Social Security Sweeps*
    • Peer Group Analysis
    • Concentration and Lending Limit Analysis
  • Quarterly Carrier Due Diligence
    • Review of Carrier Financials
    • Review of Carrier Ratings
    • Comparative Carrier Analysis
  • IRS Form 8925 Tax reporting assistance and support
  • Death Claim Processing
  • Carrier Standard Confirmation requests
  • Implementation and review of BOLI Investment policy
  • Storage and retention of:
    • BOLI Insurance Policies
    • Employee Consent forms
    • Carrier Annual Reports
    • Carrier Statements
    • Trust documents
    • Plan Legal Agreements
    • Plan Forms, such as beneficiary designations and election forms
  • Regular updates
    • Carrier Ratings and Financials
    • Carrier and Insurance news
    • Industry and Market Compliance Issues
  • In-Person Annual Performance Review and Projection
  • Assistance with Auditors and Regulators
  • Secure online access

*Provided by third party administrator. Not affiliated with Newcleus.

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