What does Company Owned Life Insurance- COLI- mean?

This type of insurance is preferred by business owners, who contract such life insurances for key employees, the ones which hold positions which are crucial to the company's well being. It is the employer who makes the necessary payments for this insurance, and he is the main beneficiary as well.

Company Owned Life Insurance - COLI- explained

By contracting such insurance, the business owner will definitely have some good advantages, especially in the case this key employee deceases. In this case, the tax deferred gains received from this COLI plan can be redirected towards the process of making the necessary arrangements for hiring another individual. This process would definitely cost him money, but with the help of the COLI he gains the necessary funds. Another major benefit for the company is when the monetary value of such an insurance policy exceeds the value of the premiums he has paid as far.