Hedging Your Options

You're looking for a way to hedge future benefit obligations, including the executive benefits programs you need to attract and retain key employees. Buying corporate-owned life insurance (COLI) can be a smart financial strategy that offsets costs. We'll help you figure out if COLI is right for your company, and, if it is, we'll provide highly personalized guidance on plan design, implementation and administration.

COLI is a life insurance policy your company can purchase to insure the lives of key employees. Several factors make it an attractive investment strategy:

  • Gains on policy cash value are tax-deferred and may, if held until the death, be income-tax-free.
  • Your company gets favorable access to cash values to fund plan distributions through withdrawals to basis and loans.
  • Reallocation within the policy doesn’t trigger taxable gains.

So how does it work? You pay the premium, retain full ownership of the cash value and are designated as the beneficiary. Proceeds payable from the insurance company when the death of an insured employee occurs go to you. The cash values aren’t formally linked to the value of the nonqualified benefit plan; the value of COLI is just a method to earmark assets to offset the cost of the plan.

Our relationships with top-rated COLI carriers mean you get in-depth analysis of product choices, design, costs and the supporting due diligence needed for the successful implementation of a COLI program. We guide you with ongoing reporting and administrative services, and we monitor future obligations of your employee benefits plans. Then we develop funding strategies to meet them.

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