Corporate-Owned Life Insurance (COLI)
Strengthen Your Financial Postion, Resiliency, and Continuity
Unlike standard life insurance, COLI strengthens a company’s financial position, resiliency, and continuity by creating new lines of revenue and safeguarding against unexpected financial challenges.
The Power of COLI
Funding Employee Benefits
Tax-deferred cash value growth helps fund employee benefits like
Non-Qualified Deferred Compensation (NQDC) retirement and retention programs.
Key Person Protection
Tax-free death benefits protect against financial loss if a key executive dies, covering potential lost business and recruitment costs.
Key Person Benefit Enhancement
Death benefits remove the coverage limits of traditional group-term plans, providing more meaningful protection for highly compensated employees.
Balance Sheet Strengthening
COLI cash value is an asset which can turn expenses into assets and generate new revenue through non-interest income.
Philanthropic Initiatives
Death benefit proceeds can support a company’s philanthropic and community programs.
%
Companies use COLI as Primary Finance Vehicle
Placed by Newcleus in 2023
Why COLI
The company can borrow money or make withdrawals against the policy cash value.
There is a wide array of investment options available.
Companies use COLI as a way to fund or finance NQDC plans like 401k Excess Plans, Supplemental Executive Retirement Plans (SERPs), and Phantom Equity Plans.
Although the premiums are not tax-deductible, earnings on the cash surrendered value are tax- deferred and death benefits are usually received tax-free.
COLI is separate and distinct from the company's group life insurance.
How COLI works
A proven investment vehicle, specifically designed for companies offering competitive retirement and retention programs.
The company:
- Places COLI policies on key employees, owners, or directors with their consent.
- Pays the premiums.
- Owns the policy’s cash value.
- Is the policy’s beneficiary.
- Can offer a split-dollar variation, providing heirs a portion of the death benefit.
- Uses revenue to offset or recover existing employee benefit expenses and implement powerful new retention and retirement benefits, including NQDC.
Client Testimonial
“Newcleus assisted with conducting due diligence on the credit risk of all of the carriers and was able to secure eight competitive options. We liked the idea of COLI, the tax advantages, and the stability of the insurance companies.
We were so impressed by the results, we plan to add to the policy in the coming year.”
– $22B NE Manufacturing Company
Harness COLI to Elevate Your Strategy
Partner with Newcleus to redefine your benefits and finance strategies with Corporate-Owned Life Insurance, your tool for reaching your strategic goals.
