BOLI / COLI Case Study: Supports Business Succession and the Executive’s Family


The bank implemented a Salary Continuation Plan as a way to reward and retain certain key executives. The Bank purchased BOLI as way to informally finance this benefit plan while also providing key person protection for the Bank.

One of the bank’s top executives passed away suddenly. Based on the Salary Continuation Plan, the executive’s widow received 15 years of survivor benefits. This benefit helped her to maintain her lifestyle and keep her family in their home. In addition, the bank needed to hire two people to replace the work done by the key executive.

The executive’s widow did not receive this benefit directly from the BOLI purchased by the Bank. However, BOLI provided the following for the bank:

1. Tax-free income to offset the increase in the liability for the 15 year survivor income stream, and
2. Tax-free key person protection for the bank to hire replacements for the executive without incurring extra loss.

Bottom Line:
It is important to have good benefits on key executives – it is good for the bank and also for the executives’ families. BOLI helps to finance these benefits and protect the bank and family from incurring further monetary losses in an already tough time.


For more information on COLI / BOLI uses, please contact Executive Benefits Network.

See all of EBN’s BOLI / COLI case studies HERE.