Page 10 - 1Q 2018 Reporter

The BOLI Boon for Community Banks continued

Of course, the bank should provide full
disclosure to any employee it wishes to purchase
BOLI upon; after all, the employee may be
required to undergo a medical check-up before
the insurance is issued. In addition, an employee
has the right to decline the bank’s offer but, as
explained above, if the policy’s financial benefits
are fully explained to a long-vested employee, For more
chances are good that he or she will ultimately
agree.

It should be noted that the bank retains information,
the policy on the employee’s life even if that
please contact
employee retires. Most BOLI providers track plan
participants on a quarterly basis via their Social
Security numbers, and can therefore learn of the
retired employee’s death within a reasonable Kevin Killian at
time frame.
kevin.killian@
Another matter to consider is the upfront cost
of purchasing BOLI. Additionally, as a long-term
investment, BOLI may be viewed as “illiquid” in
the short term. The policy can be surrendered pentegra.com or
at any time, but doing so will almost always
involve significant tax consequences to the bank. call 1.908.872.4801
However, the overall tax benefits – namely, that
the growth of the cash surrender value is tax-
deferred and the death benefits received are
tax-free – can go a long way toward overcoming
those concerns.
Other potential benefits of BOLI can easily
be explained by a reputable financial services
provider. If you have not already done so, I
encourage you to begin exploring BOLI as soon
as you can.

*Source: Equias Alliance/Michael White Report

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