https://www.insurerbrain.com/w/index.php?action=history&feed=atom&title=Definition%3ACorporate-owned_life_insurance_%28COLI%29 2026-05-04T01:50:34Z Revision history for this page on the wiki MediaWiki 1.43.8 https://www.insurerbrain.com/w/index.php?title=Definition:Corporate-owned_life_insurance_(COLI)&diff=10679&oldid=prev 2026-03-11T16:53:27Z

<p>Bot: Creating new article from JSON</p> <p><b>New page</b></p><div>💼 &#039;&#039;&#039;Corporate-owned life insurance (COLI)&#039;&#039;&#039; is a [[Definition:Life insurance | life insurance]] policy purchased by a corporation on the lives of its employees — typically senior executives or key personnel — where the company is both the [[Definition:Policyholder | policyholder]] and the [[Definition:Beneficiary | beneficiary]]. Within the insurance industry, COLI represents a significant product line for [[Definition:Life insurance carrier | life insurers]], generating large-case [[Definition:Premium | premium]] volume and long-duration [[Definition:Liability | liabilities]] that shape an insurer&#039;s [[Definition:Asset-liability management (ALM) | asset-liability management]] strategy. The policies serve corporate buyers primarily as tax-advantaged vehicles for funding employee benefit obligations, executive compensation plans, and other long-term liabilities.<br /> <br /> ⚙️ The mechanics are straightforward in principle but involve careful structuring. A corporation purchases one or more life insurance policies, pays [[Definition:Premium | premiums]] that accumulate [[Definition:Cash surrender value | cash value]] on a tax-deferred basis, and eventually receives a [[Definition:Death benefit | death benefit]] that is generally income-tax-free under Section 101 of the Internal Revenue Code, provided notice-and-consent requirements are met. Insurers underwrite COLI programs by evaluating the mortality risk of the covered employee pool, and the policies are often designed as [[Definition:Variable universal life insurance | variable universal life]] or [[Definition:Whole life insurance | whole life]] contracts to maximize cash value growth. From an insurer&#039;s balance sheet perspective, COLI blocks generate predictable, long-tail [[Definition:Reserve | reserves]] and investment-grade asset portfolios that contribute to overall [[Definition:Solvency | solvency]] stability.<br /> <br /> 📊 For life insurers, COLI portfolios represent some of the largest and most persistent blocks of business on their books. The product&#039;s economics hinge on favorable tax treatment, which means legislative changes — such as restrictions introduced under the Pension Protection Act of 2006 — can materially affect demand and profitability. Insurers that specialize in COLI must maintain deep expertise in [[Definition:Tax compliance | tax compliance]], plan design, and [[Definition:Regulatory compliance | regulatory]] considerations across multiple jurisdictions. The product also intersects with broader industry trends: as companies seek creative financing for [[Definition:Post-retirement benefit | post-retirement benefits]] and [[Definition:Deferred compensation | deferred compensation]], COLI remains a cornerstone offering in the corporate-benefits toolkit, and its performance directly influences a carrier&#039;s competitive positioning in the large-case life market.<br /> <br /> &#039;&#039;&#039;Related concepts:&#039;&#039;&#039;<br /> {{Div col|colwidth=20em}}<br /> * [[Definition:Life insurance]]<br /> * [[Definition:Key person insurance]]<br /> * [[Definition:Cash surrender value]]<br /> * [[Definition:Death benefit]]<br /> * [[Definition:Bank-owned life insurance (BOLI)]]<br /> * [[Definition:Asset-liability management (ALM)]]<br /> {{Div col end}}</div>

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