Corporate-Owned Life Insurance
The corporate owned life insurance or the COLI as it is usually called is being owned by the company or the corporation.
Generally the company buys such insurance policy for each of its employee.
All the benefits related to the insurance policy are being enjoyed by the corporation.
The corporation really enjoys all the benefits.
In the past when there was no such insurance policy, the company really used to suffer a huge loss when their employee use to leave the job or some high official used to die.
All such cases really ask for sudden recruitment and I do feel that this is impossible if the company had not insured itself from all such cases.
Coli are used primarily for masses of non key employees in order to get the tax benefits.
This is a practice which is known as janitor insurance or the dead peasant insurance.
Can you really give answer to the fact that why most of the fortune 500 companies buy the corporate owned life insurance? I must tell you that they do this because they find it beneficial.
This insurance program is generally made for the corporations only.
The premium for such insurance is paid by the company itself.
However the company cuts some part of the salary of the employees' salary and then collectively pays the insurance premium.
I must tell you that this is not the health insurance which the company asks their employees to participate in.
If you are an employee of any company then you must have been sometimes asked to sign in any stamp paper.
If you have read it carefully then you must remember that that document is the proof in the hands of the company that you are the employee of the company from the date stated and you are given the specified salary.
You must have questions in your mind that what does this really mean? How is the company benefited by such policy? I must tell you that the company really asks you to sign the agreement because it wants the bank know that you are the employee in their company.
By specifying such thing the company gets the tax benefits.
They are then required to pay less tax as compared to the previous tax.
If the employee dies then the company pays heavy compensation to the family of its employee which is based on the grade of the employee.
Do you still feel that the company is in loss after paying such compensation? This is certainly not the case.
The company really gets its share from the insurance company who are really responsible for paying such compensation.
I do feel that you would have now got the point what this kind of insurance is really all about.
Generally the company buys such insurance policy for each of its employee.
All the benefits related to the insurance policy are being enjoyed by the corporation.
The corporation really enjoys all the benefits.
In the past when there was no such insurance policy, the company really used to suffer a huge loss when their employee use to leave the job or some high official used to die.
All such cases really ask for sudden recruitment and I do feel that this is impossible if the company had not insured itself from all such cases.
Coli are used primarily for masses of non key employees in order to get the tax benefits.
This is a practice which is known as janitor insurance or the dead peasant insurance.
Can you really give answer to the fact that why most of the fortune 500 companies buy the corporate owned life insurance? I must tell you that they do this because they find it beneficial.
This insurance program is generally made for the corporations only.
The premium for such insurance is paid by the company itself.
However the company cuts some part of the salary of the employees' salary and then collectively pays the insurance premium.
I must tell you that this is not the health insurance which the company asks their employees to participate in.
If you are an employee of any company then you must have been sometimes asked to sign in any stamp paper.
If you have read it carefully then you must remember that that document is the proof in the hands of the company that you are the employee of the company from the date stated and you are given the specified salary.
You must have questions in your mind that what does this really mean? How is the company benefited by such policy? I must tell you that the company really asks you to sign the agreement because it wants the bank know that you are the employee in their company.
By specifying such thing the company gets the tax benefits.
They are then required to pay less tax as compared to the previous tax.
If the employee dies then the company pays heavy compensation to the family of its employee which is based on the grade of the employee.
Do you still feel that the company is in loss after paying such compensation? This is certainly not the case.
The company really gets its share from the insurance company who are really responsible for paying such compensation.
I do feel that you would have now got the point what this kind of insurance is really all about.
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