Aug 31
Corporate owned life insurance
Businesses use corporate owned life insurance to protect against financial uncertainty and secure their employees’ futures.
In general, under a COLI arrangement, an employer purchases a life insurance policy or policies on the lives of specific employees. The non-deductible premiums for the coverage are paid by the employer, and in the event of a covered employee’s death, the employer gets the proceeds of the policy. COLI helps employers meet future financial liabilities tied to foreseeable human events; such as premature death of a key employee, benefit costs, or business succession planning.
Businesses need to consider how to protect against events that may threaten the future of the business, like the death of a proprietor, partner or key employee. COLI coverage takes over should income be interrupted.
For more information on corporate owned life insurance see this article in Forbes. It’s a bit old, but the information is still really relavent.
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September 14th, 2007 at 12:08 am
Is the death of an employee a “foreseeable human event?” I’m beginning to wonder what type of company takes out insurance policies on employees they foresee may not be there
I guess it wouldn’t be hard selling insurance to them, though…
Jerry