What is BOLI?

    • Bank Owned Life Insurance (BOLI) is life insurance owned by the bank, issued on the lives of bank employees and directors.
    • Earnings from BOLI are income tax-free (if held to maturity) which represents an inherent earnings advantage over bank eligible investments.
    • BOLI cash value increases are reported as Non-Interest Income and cash values are reported as an Other Asset on the bank’s balance sheet.
    • Policies may be issued on a Guaranteed Issue basis with 10 or more insureds (i.e. limited or no medical underwriting)
    • BOLI cash values will not need to be marked down as yields rise per FAS 115, but rather FASB 85-4 allows for book value treatment. (link to FASB 85-4 in “Resources” tab)
    • The BOLI cash values can be backed by highly rated companies with a strong AAA credit rating
    • BOLI is immediately accretive to earnings and improves Non-Interest Income and Shareholder value
    • Annual time commitment for BOLI is minimal
    • BOLI is a long term asset and the earnings and insurance proceeds can be used to:
  • Offset the costs of new and existing employee benefit plan expenses
  • Offset costs of nonqualified plans for key employees and Directors
  • Provide Keyperson life insurance and protect Shareholder value

Click here to download sample BOLI analytics