Bank Owned Life Insurance Services

BOLI Pre-Purchase Analysis

The objective of the pre-purchase analysis is to help ensure the bank understands the risks, rewards, and unique characteristics of BOLI. The size of the purchase will dictate the nature and extent of the analysis. As such, it is prudent that banks adhere to good documentation standards and maintain adequate records.

A thorough pre-purchase analysis will include:

• Identify the need for insurance and determine the economic benefits and appropriate insurance type
• Quantify the amount of insurance appropriate for the institution's objectives
• Assess vendor qualifications
• Review the characteristics of the available insurance products
• Select the carrier
• Determine the reasonableness of compensation provided to the insured employee if the insurance results in additional compensation
• Analyze the associated risks and the ability to monitor and respond to those risks
• Evaluate alternatives
• Document the decision

Bank Consulting Group will work with the bank through each step of the process. BCG's goal is to help the bank purchase the right amount of BOLI, the right type of BOLI, and for the right reasons, thus enhancing the bank's financial picture. Contact Bank Consulting Group.