Corporate-Owned Life Insurance (COLI) is purchased by a company to hedge against the financial cost of losing key employees to unexpected death. The funds off-set the expense of recruiting and training replacements of necessary or highly-trained personnel. They can also be used to fund corporate obligations to redeem stock upon the death of an owner.

Corporate owned insurance is usually purchased to insure highly compensated employees. The corporation keeps the coverage if the employee retires or employment is terminated. COLI is a long term program many corporations use to fund employee benefits. Policies are purchased to cover executive officers and key employees and the benefits are used to recover or offset the costs of providing pre-retirement and post-retirement benefits to directors, officers and employees. Corporations can take advantage of the special tax status of life insurance – proceeds are not taxable – to defer or eliminate taxation on invested assets.

By purchasing insurance on a group of employees, the employer can achieve substantial tax savings and finance benefit plans.

For a no-obligation quote, use our online Quote Forms under Resources or call 480.998.0096.