Maximizing Benefits & Minimizing Risk for
Corporate Owned Life Insurance

Why Institute a COLI Program?

• Protects against the loss of a key employee or member
• Substantially increases funding for grant programs
• Create lucrative investment and reinvestment opportunities
• Forms an effective hedge against expenses and liabilities
• Builds liquidity for short-term concerns and long-range viability
• Funds employee benefit or SERP plans as well as any other organizational expenses and programs

Corporate owned life insurance (COLI) has been used by businesses and organizations for decades to raise capital for operational budgets, offset expenses and to help fund employee benefit programs. The insurable interests of an organization’s COLI program are the insured members or employees of the business or organization, and the benefits derived from the program are typically distributed first to the underlying organization as the beneficiary.

The organization, in turn, can issue these benefits how they see fit. These life insurance benefits are designed to be received tax-free and can be used to help fund various operational expenses and employee benefit programs or to supplement the pensions of key employees or executives through SERP (supplemental executive retirement plan) programs.

The COLI managers of Teachers Pension Advisory Services build corporate owned life insurance programs with a conservative philosophy. Our COLI model will take nearly all the risk out of your benefit program while generating potentially millions of dollars in tax-free liquidity for your company or organization to utilize and all with minimal out-of-pocket costs associated with it.

Protect Against Loss of Key Employees or Members

Corporate owned life insurance offers another way for those individuals who played an essential role in building successful companies and organizations to continue to leave an indelible mark once they are gone. Losing a key member, executive or the owner and founder of a company to retirement or death can cause years of setbacks or potentially derail the direction of the entire business operation itself.

Corporate owned life insurance helps to ensure that the legacy these individuals helped to build remains fully intact. COLI plans can be formed on vital individuals (often called a “key man” plan) or on up to approximately 35% of all employees or members of a company or organization based on compensation. TPA Services corporate owned life insurance plans are designed as safeguards to protect a company or organization through the tax-free benefits payable to the organization itself. These immense benefits will help to guarantee that your organization will be financially prepared for whatever the future may hold.

Secure Lower Interest Rates

Teachers Pension Advisory Services offers corporate owned life insurance not simply as an employee benefit program. These plans also offer attractive lending opportunities for organizations that choose to incept them. The leveraging of a COLI program costs transforms life insurance from merely a corporate safety net into a spread instrument for your employee benefits. This structure allows for exponentially higher yields over any other type of employee or organizational benefit program available. The result is a program with significantly less cost and risk than any traditional, unfinanced employee benefit program that utilizes life insurance as a component.

Some organizations may think their borrowing terms are unrivaled, but there is always room to improve. Can you imagine the difference to your business or organization’s bottom line if it was able to pay significantly less in debt service every year?

As a Teachers Pension Advisory Services client, we represent YOUR organization’s interests. We maintain close affiliations with some of the premier lending institutions in the world. TPA Services presents all of its Corporate and Foundation Services clients with the opportunity to pursue preferred, relationship terms that we can secure through our relationships and large client base.

Our objective is to help you obtain even more favorable interest rates, borrowing and refinancing terms not solely for your corporate owned life insurance program but for your other business needs as well.

Offset Expenses and Increase Benefits Using Secure Income

Is your company or organization experiencing a major slow down in revenue, donations, grants or funding? Are continually increasing taxes, expenses or employee benefit costs placing a drain on your operational budget?

A well-planned COLI program will maximize employee benefits and may offer just the solution your organization has been looking for. By partnering with TPA Services, we will see to it that you are also minimizing the inherent risks in your corporate owned life insurance program. The tax-free benefits and distributions awarded through COLI programs can be used at the discretion of the business or organization. Wouldn’t it be nice to have millions of additional dollars on hand to help supplement SERP programs, finance employee benefit packages, compensate board members and shareholders or for the funding of any other essential operational expenses and programs?

Is Your Organization Eligible For These Kind Of Benefits?

TPA Services’ corporate owned life insurance enhances split dollar, key man or any other type or life insurance benefit program designating corporations, foundations, nonprofits, school districts, universities or most any other public or private entities as the beneficiaries.

By incorporating our advanced life insurance planning solutions into your organizational portfolio, you will impose more control over your employee benefit costs while at the same time exponentially increasing the benefits that your organization will be able to offer. Contact us today to schedule a meeting with one of our corporate owned life insurance managers. Let us help you to reassess your current employee benefit structure and assist in expanding on it by implementing a COLI program that your organization can enjoy for decades to come.

Join The Rest Of The Best

According to the American Council of Life Insurers, businesses invest approximately $8 billion in insurance premiums annually on corporate owned life insurance. This represents a large segment of the overall insurance market, accounting for more than 20% of the total life insurance sold each year.

The performance of corporate owned life insurance programs can be maximized through the use of leverage. Successful companies and organizations understand this concept. In fact, more than 70% of recent Fortune 1000 companies report financing their SERP obligations through this type of corporate owned life insurance structure.

In doing so, these organizations have drastically cut down on their life insurance benefit costs while becoming eligible to receive millions of additional tax-free dollars in benefits compared to what was previously in place with a non-financed program. Financed buy-sell agreements also pay huge dividends both for a company and its owners as well.

Advanced life insurance planning strategies and techniques are required in order to successfully finance a corporate owned life Insurance program. It is imperative to have a COLI management team in place with deep industry knowledge, insight and the ability to customize each program to suit the client’s needs.

TPA Services is just this type of organization. We manage our corporate owned life insurance programs with preferred, relationship terms that minimize COLI risks while maximizing its benefits. We are corporate owned life insurance management specialists. The COLI managers of TPA Services will design your program to be a customizable, low-risk and high-yield life insurance, spread instrument. Financed COLI programs represent the ultimate use of arbitrage in generating tax-free liquidity. Corporate owned life insurance plans are incredibly secure and are designed to create significant, tax-advantage yields.

Corporate owned life insurance programs help to provide organizations with the flexibility they need to prepare for any financial challenge that might have to be faced in the future. Businesses can utilize the tax-free liquidity created through corporate owned life insurance programs in numerous ways including to supplement the existent pension plans for key executives. The benefits can also be set aside as working capital for the business itself.  COLI plans are an ideal way for businesses and organizations to offset ongoing costs, fund SERP plans or to help meet future obligations.

Warning: Changes to Federal Law Could Dramatically Affect Benefits Contained in Your Split Dollar, Key Man, Corporate or Employer Owned Life Insurance

On June 15, 2009 IRS Notice 2009-48 went into effect, which outlines the new reporting and notice requirements for all of the above types of life insurance benefit programs. Failure to abide by these new regulations could subject all life insurance proceeds to taxation as gross income.

Is your current corporate owned life insurance plan up-to-date and in compliance with these federal changes to the laws regulating these programs? Contact the COLI specialists at TPA Services, who will provide you with the free, independent consultation and analysis of your current corporate owned life insurance plan and advise you on how it can be improved upon.

What If I Already Have A COLI Plan?

Let the TPA Services corporate owned life insurance management team provide you with a free review and assessment of your current COLI plan.

Are you paying way too much into your current corporate owned life insurance program and still receiving inferior benefits? Not all corporate owned life insurance programs are created equally.

Do you currently have a high risk, low-reward structure in place that is sabotaging your COLI program’s effectiveness and bleeding your benefits because of outrageously high cost of insurance charges?

Is there another type of corporate owned life insurance strategy that is clearly more beneficial, cost effective and transparent with less risk than what you currently have in place?

TPA Services answer all of these questions and more for our clients.

Life insurance benefits receive very favorable treatment from the IRS. The tax benefits contained in corporate owned life insurance allow for tax-free, like kind exchanges where the cash values earned through a prior COLI plan may be transferred tax-free into a new and improved one. There is absolutely no downside for your organization to start a better corporate owned life insurance program with TPA Services.