Effective Funding For Large Scale Plans
The MBS team has long specialized in COLI funding, bringing deep experience and expertise to every program.
As an informal funding strategy for executive benefits, COLI has been widely used by public and private companies, banks, and other financial institutions for over 50 years. This institutionally priced life insurance policy is purchased by a corporation on the lives of its key employees with their consent. It offers companies a range of tax and accounting advantages, while providing a way to hedge the liabilities of benefit programs. The coverage doesn’t cost the employees anything and makes the benefit plan more financially viable. A win-win.
An Experienced COLI Partner
MBS Financial has deep experience with COLI and can help you objectively understand if it’s the right funding strategy for your organization. Our team can help you navigate this unique funding vehicle.
Deep COLI
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 24-year average client tenure speaks volumes about our commitment to ongoing support and continuous improvement. We’re with you through every step and beyond.
COLI By The Numbers
77
Clients
24
Years Average Client Relationship
$9.4B
AUM
12,912
Policies
How COLI Works
COLI is a life insurance policy purchased by a corporation on the lives of its key employees.
- The corporation (or trust) is the owner and beneficiary of the policies.
- COLI can reduce the cost of offering benefit plans, including deferred compensation plans.
- It receives favorable accounting treatment relative to taxable investments.
- It can reduce and eliminate taxes on invested assets, increasing returns and shareholder value.
- Targets hedging P&L volatility and tracking benefit plan balance sheet liabilities.
- Differs from retail life insurance in that it offers institutional pricing, is immediately accretive to earnings, and is guaranteed issue (no medical underwriting necessary).
Supporting Your COLI 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 COLI options.
We help clients with:
- Existing COLI audit & benchmarking
- Pre-purchase analysis & product study
- Employee communication and consent
- Guaranteed issue negotiation with insurance company
- Policy paperwork preparation
- Compliance with regulatory guidelines
- Annual COLI and benefit review
- Ongoing monitoring of insurance company performance
- Legislative and regulatory updates
Take Advantage Of A Proven Funding Vehicle
Building on decades of experience, we help our clients take full advantage of what COLI offers:
- 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
1Subject to IRC §§7702 and 817
2Subject to IRC §§7702, 7702A, 7702 (f)(7) and 72
3Rev. Rul 82-54
4Subject to IRC §§7702 and 101