Corporate Owned Life Insurance

Life insurance is an asset.

Key Person & Buy-Sell Agreements

Corporate ownership of life insurance (COLI) or corporate-owned life insurance refers to the insurance obtained and owned by a company on its employees. The company is responsible for making the premium payments and receives the death benefit rather than the insured person's beneficiary.

• Corporate ownership of life insurance is insurance obtained and owned by a company on its key employees, typically only the owners and senior management.
• When companies pay the premiums and then receive death benefits, those monies are received income tax-free.
• The insured employee's family does not directly receive any of the policy proceeds.
• The tax-deductible benefit paid to the employee's family is funded from the tax-free policy inflow(s).
• COLI protects the interests of the company and hedges against things like the unexpected death of a key employee or the owner.  The proceeds can also help fund company benefits.