COLI is a type of life insurance program taken out by a company on the lives of key employees. The company pays the premium on the insurance but is also the plan’s primary beneficiary.
However, COLI premiums can be financed in such a way that the company may never be required to pay the premiums – rather the premiums may be paid by the interest rate spread between what the bank charges and the guaranteed return on the cash value in the insurance policy. The key is in the plan design and the negotiation of favorable terms. This is why your business needs Kohl Benefits Group on your side.
There are a few reasons why a company would take a life insurance policy out on key employees. For one, the tax-free proceeds that are received after the death of a key person can be used to cover any costs that would arise when hiring that individual’s replacement. The insurance policy can also be used to cover employee benefit liabilities. A portion of the benefits can be provided as a benefit to the employee and their family.
Another notable benefit to the company is the cash value build up inside the insurance policy. According to an industry survey conducted in 1999 and cited by New York Life Insurance Company, 68% of the Fortune 1000 companies use COLI programs. Call us and find out if your company should also!