BOLI - Bank Owned Life Insurance

BOLI or Bank Owned Life Insurance  is held by most banks and recommended by the FDIC. On the contrary, you've probably heard that life insurance is a bad investment. And, that you should buy the cheapest term insurance available. Well something else that you've probably heard is "you get what you pay for."

If permanent life insurance is such a bad investment, why do you think banks own so much? And, if you listen to who is saying "buy term" it's usually the banks and Wall Street. Why? Because they are now selling term insurance and it is the MOST PROFITABLE FOR THEM, and of course they want to sell you their mutual funds. Mutual fund managers rake in hundreds of millions of dollars every year, while you take the risk and whether or not the mutual funds make money or not.

Financial Institutions do the opposite of what they tell us to do. They understand the velocity of money and why permanent life insurance is a safe, liquid way to hold and use capital.
 

In reality, banks own more permanent life insurance than anyone. Banks understand the value of permanent life insurance, and that is why they own Bank Owned Life Insurance or BOLI.

Citigroup, one of the largest bank and financial institutions in the world, obviously knows the value and strength of permanent life insurance. As of 12/31/06, Citibank reported $3,281 Billion in cash surrender value for its BOLI Tier One account. Yet they continue to tell their customers different. Primerica, owned by Citigroup, created the "buy term invest the difference" philosophy.

Another example is Bank of America, who according to recent reports was the world's most profitable bank. Bank of America owned $13,883 billion of BOLI at year end 2006.