Bank Owned Life Insurance

Vining Sparks offers Bank Owned Life Insurance (BOLI) through a strategic alliance with Renaissance Bank Advisors (RBA). We chose RBA for this alliance because they offer industry leading capabilities and services and they have earned an excellent customer service and support reputation.

RBA, a wholly owned subsidiary of National Financial Partners (NFP), is a full service employee and executive benefit consulting firm. RBA has worked with financial institutions, insurance companies, and financial products for over 20 years, specifically on Bank Owned Life Insurance. BOLI is an institutionally priced life insurance contract that offers financial institutions a tax efficient economic hedge for bank sponsored employee benefit plans.

In today’s economic climate, financial institutions are faced with a variety of issues and opportunities. Many institutions have experienced unprecedented growth in deposits while simultaneously faced with ever escalating premium increases in their employee medical plans. Where to put the excess funds in a low rate environment is a dilemma. Operating within a highly regulated industry, financial institutions have relatively few choices for investing their assets. These restrictions can limit a financial institution’s ability to both increase its earnings and provide competitive employee benefit plans.

Vining Sparks strives in creating solutions for our customers. We think that our strategic alliance with RBA is one of the possible solutions you should consider. The tax deferred growth of BOLI values and the ultimate tax-free receipt of death benefits paid make BOLI an attractive tax efficient strategy that can produce favorable results.

Bank regulators recognize this cost containment challenge and commented in the Interagency Statement on the Purchase and Risk Management of Life Insurance (2004) as follows:

“Life Insurance holdings can serve a number of appropriate business purposes. Because the cash flows from a BOLI policy are generally income tax free if the institution holds the policy for its full term, BOLI can provide attractive tax-equivalent yields to help offset the rapidly rising costs of providing employee benefits.”