What does Bank-Owned Life Insurance – BOLI – mean?

Bank owned life insurance is a type of insurance which has modeled principles in such way to benefit the banking institution, in the sense that BOLI becomes a source of tax deferred pool for the bank. The beneficiary of this type of insurance is the bank itself.

Bank-Owned Life Insurance – BOLI- explained

Being a tax deferred option it means it is very advantageous for the banking institutions, because BOLI practically becomes a pool where from banks will pay certain benefits towards its workers. Banks prepare the arrangements which have the form of contracts basically, and then proceed to making the deposits towards the trust funds. Then, when necessary they pay those employees which have the necessary coverage; all in all this is a process which is less costly for the banking institution.