Bank-Owned Life Insurance - BOLI
Categories: Insurance, Retirement, Banking, Trusts and Estates
"BOLI" for short. If Mrs. Bank Employee has an employer-matched contribution to her 401(k), chances are good that the amount paid by the bank came out of this insurance trust. As the name would suggest, a bank can purchase life insurance with itself as the owner/beneficiary. It is usually used for the purposes of a tax shelter, since it's a tax-free way for the bank to fund employee benefits. That way, Uncle Sam can't get his hands on any of the premiums paid into this specialized fund, including any capital appreciation.
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Finance a la shmoop.. what is a beneficiary? well in Latin, bene is
good so this is like a good place to catch fish...well close not [Old man fishing in the ocean]
really but being a beneficiary is good it means you get stuff like if you are
the beneficiary of weird uncle Al's will then you get his odd collection of hair
balls shaped like US presidents and thirty two thousand two hundred sixty [Uncle Al's will appears]
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set up to benefit by the death of someone who wanted to favor you with
their assets when they had you know passed on to the great beyond where hair [Uncle Al with white wings in heaven]
balls will fall....