Enhancing Employee Benefits with Business-Owned Life Insurance (BOLI)
Small to medium-sized enterprises (SMEs) are in a constant battle to attract and retain top talent. An excellent way to stand out? Offering a compelling benefits package. Enter Business-Owned Life Insurance (BOLI)—a strategic move not just for financial security but for making your benefits package irresistible.
Understanding BOLI
BOLI isn’t your everyday life insurance. Here, the company not only buys the policy on its employees’ lives but also owns and benefits from it. Why go this route? For starters, it’s a savvy method to fund employee benefits, with the added perk of tax efficiency.
The Benefits of BOLI for Employees
- Enhanced Financial Security: BOLI can supplement traditional employee benefits, offering additional financial protection for employees’ families.
- Attractive Employee Benefits: By offering BOLI, companies can make their benefits package more appealing to current and prospective employees.
The Advantages of BOLI for Employers
- Tax Benefits: The cash value in BOLI grows tax-deferred, and payouts are often tax-free.
- Cost Recovery: It’s a clever way to offset the costs tied to employee benefits.
- Balance Sheet Boost: BOLI’s cash surrender values are considered assets, shining up that balance sheet.
Implementing BOLI in Your Business
- Policy Selection: Work with a knowledgeable insurance advisor to choose the right BOLI policies that align with your company’s goals and employee demographics.
- Employee Consent: It’s essential to obtain consent from employees before purchasing BOLI policies on their lives.
- Continuous Review: Regularly review your BOLI policies and coverage to ensure they remain aligned with your business objectives and employee needs.
Conclusion
BOLI is more than insurance; it’s a strategic business tool. It offers tax perks, aids in financing benefits, and buffs up your balance sheet. By picking the right policies and keeping them aligned with your goals, BOLI becomes a win-win for everyone involved.
Ready to Learn More? Dive deeper into how BOLI can work for your business by contacting us or reading more about it here!