Blog Tag: bank-owned life insurance
Running a successful financial institution in today’s market can be a challenge. Increased regulations, heightened competition and a fluctuating economy make it a tough and complicated job. However, many financial institutions have discovered that using bank-owned life insurance (BOLI) can help make that job a bit easier. BOLI can be used for various business purposes, including to cover the costs of employee benefits and to recover losses associated with the death of a key executive. Under this arrangement, the bank purchases life insurance on a select group of key employees, with the bank named beneficiary on the policies. Originally, BOLI was often combined with a new benefit plan for senior bank executives, but more recently, banks are utilizing BOLI to offset the rising cost of existing employee benefit expenses. So how can banks use BOLI to strengthen their overall business plan? You’re about to find out.