Banks have used BOLI since the 1980s as a simple way to offset the costs of employee benefits. Yet the cost of retaining and rewarding talent continues to grow, especially in key areas. Ready to unpack the value in BOLI and learn how to deliver key benefits?
Bank Notes cover
Originally published: May 2021 issue of BankNotes, the official magazine of the Community Bankers Association of Illinois

Successfully managing costs, delivering excellent customer service, and increasing revenue may be a potent trifecta, but it may not be enough to retain talent. One solution is to offer a life insurance policy to those in leadership positions, which can help soften an economic blow in the event of premature death. But what if the premiums are cost-prohibitive?

One viable approach is a BOLI – a tax-advantaged asset that banks can employ to counterbalance the expense. A primary benefit is that while the policy is in effect, its tax-deferred cash surrender value increases.

With a BOLI, the bank is both the owner and beneficiary of the policy, and the death benefits are tax-free. Banks may elect to share some of the death proceeds with the employee’s designated beneficiaries.

Anxious to learn how this investment tool can improve earnings and help retain talent? Read the entire published article to discover how a BOLI can create positive business outcomes.

What stood out the most for me was that IZALE provided an executive benefit plan that gave us the ability to meet both our short term and long term goals. Giving our bank additional leverage we didn’t realize we had was enlightening. BOLI was something in the old days thought of as a way to pay for the replacement of the executive. Today it has expanded to serve our bank as an incentive for employee retention.

Doug ParrottPresident & CEO, State Bank of Toulon

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IZALE founder and CEO, Scott Richardson has been delivering unsurpassed experience to clients for four decades, helping them execute optimal compensation packages. He delivers rich insight to clients by helping them structure compensation, nonqualified benefits, and both bank-owned life insurance (BOLI) and corporate-owned life insurance (COLI) plans.

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