Bank-Owned Life Insurance

Smart Financing Alternatives

Banks need to provide a competitive suite of employee benefits while also managing costs. One way to do that is by offsetting these expenses and/or informally funding executive benefits with a tax-advantaged bank-owned life insurance (BOLI) asset.

BOLI is a life insurance policy you can buy to insure the lives of your key employees. As the policy's owner and beneficiary, your bank gets unique benefits, including the ability to:

• Insure the economic loss of a key employee’s premature death
• Offset the ever-increasing costs of employee health and welfare ERISA plans
• Provide cost recovery for pre- and post-retirement executive compensation and benefit plans
• Have an asset with a value highly correlated to the changing value of a liability obligation, i.e., a "hedge"

These benefits are a direct result of the fact that BOLI offers:

• An asset value that accumulates on a tax-deferred basis, treating the change in value as "other non-interest income"
• Income-tax-free death proceeds for recovering the present and long-term costs of employee benefits and compensation plans
• A more efficient method of financing employee benefit and compensation plans than alternatives

Our unique BOLI service model will help you understand every aspect of the transaction and plan design. We'll also help you implement, monitor and maintain those assets in line with the most current regulatory and compliance requirements.

Our BOLI Administration Solution

At NFP, we’ve built a simple, sophisticated and streamlined BOLI system — all with the way you work in mind.

We call it CPADS, and it makes managing your BOLI program easier than ever.

Take as much – or as little – control of your BOLI administration as you need, with our proprietary, all-in-one tool that delivers:

• Monthly, quarterly and annual reporting
• BOLI compliance reporting
• Insurance carrier financial and rating information
• Retirement and split-dollar benefit accounting
• Participants statements
• Tax reporting
• Weekly social security sweeps
• Secure online access

As always, we’re completely upfront about how we can help you, every step of the way. There are no hidden costs, and if you ever have questions, just call up your account executive for help figuring out the answer.