A Beneficial Funding Approach For Banks Of All Sizes
MBS Financial helps leading banks implement Bank-owned Life Insurance (BOLI) as a funding vehicle for employee benefits.
BOLI provides banks with a valuable way to offset employee benefit expense and boost investment returns. This institutionally priced life insurance policy is purchased by banks on the lives of key employees and directors with their consent. It offers a variety of tax, accounting, and risk management advantages, while providing a way to secure program liabilities.
An Experienced BOLI Partner
BOLI plans are complex. Having an objective partner helping you understand if it’s the right funding strategy for your institution is key. Our team can help you navigate this unique funding vehicle.
Deep BOLI
Expertise
We have helped hundreds of organizations fund their benefits programs using life insurance. Our decades of experience with this product and deep relationships with insurance company partners offer an important advantage.
Independent
And Unbiased
Our objectivity can help you make the best decisions for your business. We evaluate insurance company providers based on their financial strength, product diversification, and commitment to service.
Innovative And
Results Oriented
With deep experience comes fresh ideas and new approaches. We have a reputation for creative problem solving no matter your situation.
Long-Term Client
Relationships
Our 27-year average client tenure speaks volumes about our commitment to ongoing support and continuous improvement. We’re with you through every step and beyond.
BOLI By The Numbers
9
Clients
27
Years Average Client Relationship
$492M
AUM
1,524
BOLI Policies
How BOLI Works
BOLI is a life insurance policy purchased by a bank on the lives of its key employees.
- The bank (or trust) is the owner and beneficiary of the policies.
- BOLI can reduce the cost of offering all types of benefit plans.
- It receives favorable accounting treatment relative to taxable investments.
- It can reduce and eliminate taxes on invested assets, increasing returns and shareholder value.
- Differs from retail life insurance in that it offers institutional pricing, is immediately accretive to earnings, and is guaranteed issue (no medical underwriting necessary).
Take Advantage Of A Proven Funding Vehicle
Building on decades of experience, we help our clients take full advantage of BOLI benefits:
- Can reduce taxes on invested assets
- Favorable accounting and P&L treatment
- Tax-deferred growth1
- Potential tax-free withdrawals to basis and low net-cost loans2
- Tax-free investment reallocation within the policy3
- Tax-free receipt of death proceeds4
- After-tax yields higher than Treasuries for enhanced shareholder value
- Capital guarantees
- Minimal credit risk
1Subject to IRC §§7702, 72 and 817
2Subject to IRC §§7702, 7702A, 7702 (f)(7) and 72
3Rev. Rul 82-54
4Subject to IRC §§7702 and 101
Supporting Your BOLI Needs
MBS Financial specializes in helping companies use institutional insurance to finance employee benefits. We have long-standing relationships with insurance company partners who we select for their financial strength, product diversification, and superior service. Our clients have access to exceptional BOLI options.
We help large financial institutions with:
- Existing BOLI audit & benchmarking
- Pre-purchase analysis & BOLI product study
- Employee communication and consent
- Guaranteed issue negotiation with insurance company
- Policy paperwork preparation
- Compliance with regulatory guidelines
- Annual BOLI reviews
- Ongoing monitoring of insurance company performance
- Legislative and regulatory updates