Bank Owned Life Insurance (BOLI) is and will continue to be a viable earning asset for banking institutions because BOLI provides tax-deferred earnings and ultimately tax-free death benefits. In the community bank marketplace, banks have almost exclusively purchased a product referred to as general account BOLL The premiums paid are invested within the insurance carrier's overall portfolio and interest is credited (typically) based upon the return of the portfolio, which most typically consists of bonds and mortgage backed securities.Today, over 4,200 banks have BOLI and the top 100 banks account for about 75 percent of the $120 billion of in-force BOLI holdings. BOLI has consistently outperformed other bank eligible investments over the last two decades. In the last few years there has been a significant increase in the number of BOLI vendors in the market place, many of which have their own approach and affinity to different carrier's products.
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"Separate Account BOLI Now Available to Community Bankers"Please download to view full document