COLI, or Corporate Owned Life Insurance, provides attractive tax advantages that create greater earnings, while allowing companies to fully recover the cost of employee benefits programs. A no-cost asset for corporations, COLI offers purchase-and-loss neutrality along with several key benefits:
- Tax-advantaged cash value accumulation
- Tax-free withdrawals and loans
- Tax-free death benefits
For COLI policies, the employer is the purchaser, beneficiary and owner. The corporation is either the total or partial beneficiary on the policy, with benefits payable either to the employer or directly to the employee's named beneficiary.
BOLI, or Bank Owned Life Insurance, generates non-taxable other income, and when held to maturity, all returns are tax-free. It is an excellent vehicle for financing the rising cost of executive benefits and other employee benefit costs. Unlike other bank-eligible investments, BOLI can provide enhanced earnings without the negative consequences associated with interest rate fluctuation.
BOLI policies insure the lives of a group of bank employees (usually officers) and/or directors. The financial institution pays the premiums on BOLI policies, owns the policies and is the beneficiary of both the increase in the policies’ cash value and the death benefits.
- Offsets the rising costs of employee benefits
- Grows without tax – a smart investment
- Creates tax-free earnings
At Todd, we utilize a full-service approach: Our organization works with alongside our clients with our strategic partners to help clients navigate the compliance process by providing:
- A thorough pre-purchase process analysis of every BOLI program
- Institutional implementation and delivery
- Ongoing regulatory and legislative compliance reporting
TODD SETS THE INDUSTRY STANDARD
Unlike other advisors, Todd has access to every carrier in the BOLI market. Our firm managed the earliest BOLI transactions more than 60 years ago, offering unmatched breadth of knowledge, experience and expertise that pays big dividends for our clients.
BOLI IS AN ATTRACTIVE INVESTMENT OPTION FOR BANKING INSTITUTIONS OF ALL SIZES
Mutual Fund Based & Derivative Based Strategies
Given the changing tax rate environment, it is important to review and optimize your existing plans—as well as consider other progressive strategies for executive benefits funding. In addition to well-structured BOLI/COLI/ICOLI plans, our experts at The Todd Organization are well versed in other funding options, which may include:
- Mutual Fund Based Strategies
- Derivative Based Strategies
- Long-term Obligations
- Employee Benefit Cost Recovery
- OPEB & VEBA Funding
- Nuclear Decommissioning
- Pension Risk Transfer