With corporate- and bank-owned life insurance, the employer, corporation or bank is both the owner and beneficiary of permanent life insurance covering the lives of participating executives.
Corporate- and bank-owned life insurance offers the following benefits to employers:
The insurance amount is usually related to the benefits projected to be payable on the basis of current pay, or sometimes on amounts that anticipate some future pay increases. Each employee must consent to the corporation or bank owning the policy and must be notified of the policy’s maximum amount of coverage and beneficiary designation. In turn, the corporation or bank pays the premiums, owns the cash value of the policies, and is beneficiary of the policy.