Monthly Archives: June 2026

 

Decanting Assets: Turning a $1M+ Portfolio Into Retirement Income You Can’t Outlive

If you are an executive within a few years of retirement and you have built more than a million dollars in investable assets, congratulations — you have won the hardest part of the game. But accumulation and income are two very different skills. The strategies that grew your wealth are not the strategies that will reliably pay you for the next thirty years. “Decanting” your assets — carefully repositioning them from a growth-focused pile into a structured, guaranteed income stream — is how you turn what you’ve saved into a paycheck you cannot outlive.

The Problem With a Million-Dollar Pile

A large 401(k), brokerage account, or deferred compensation balance feels like security, but a balance is not a plan. Left as an undifferentiated pile of market-exposed assets, that money is exposed to three retirement-specific risks: sequence-of-returns risk (a bad market early in retirement can permanently damage your income), longevity risk (outliving your money), and the very human risk of being too afraid to spend what you worked so hard to build. For high earners, there is a fourth: taxes. Without planning, large required distributions can push you into higher brackets exactly when you least expect it.

What “Decanting Your Assets” Actually Means

Decanting is the deliberate process of moving portions of your accumulated assets into vehicles designed to produce reliable, often guaranteed, lifetime income — while keeping other portions positioned for growth and legacy. Done well, it answers the only question that matters in retirement: where does my paycheck come from, and will it last? Rather than drawing down a single account and hoping the math works, you build layered, intentional income sources that cover your essential expenses with certainty and leave the rest free to grow.

Building Your Retirement Paycheck

The goal is to recreate, in retirement, the dependable paycheck you had during your working years — and ideally a “playcheck” on top of it for the life you’ve earned. This is the philosophy our friend and Perfect Plan® guest Tom Hegna champions: cover your basic needs with guaranteed income first, then invest the rest for upside. We help executives sequence their withdrawals, decide which assets to convert and when, and design the order of income so that taxes, market risk, and longevity all work in your favor instead of against you.

Why This Matters Most for Executives Near Retirement

Executives often carry a more complicated balance sheet than the typical retiree: concentrated company stock, nonqualified deferred compensation with its own distribution rules, sizable 401(k) and IRA balances, and sometimes a business interest to unwind. Each of these has different tax treatment and timing, and the decisions you make in the five years before and after retirement are largely irreversible. This is precisely the window where decanting your assets, with experienced guidance, makes the largest difference to your lifetime income.

Hear It Directly: The Perfect Plan® Podcast

In Episode 3 of The Perfect Plan® podcast, retirement-income expert Tom Hegna, CLU, ChFC, CASL, joins us to explain how to decant assets and build guaranteed income for life. Take a few minutes to hear how it works.

Related Resources

• Retirement Paycheck Design: Where Should Your Income Come From First?


• Retirement Made Simple: The Strategy of Fixed Cash Flow Planning


• The Perfect Plan®: Engineering 100% Income for Life’s What Ifs


• The Immediate Paycheck: 3 Steps to Turn Your 401(k) and NQDC Into Guaranteed Income


• The $150K Income Cliff: How to Turn Your 401(k) Into a Guaranteed Paycheck

Ready to Decant Your Assets Into Lifetime Income?

You spent a career building your nest egg. The next decision — how to turn it into income you can’t outlive — deserves the same care. If you’re an executive nearing retirement with $1 million or more in assets, schedule a confidential meeting with Schiff Executive Benefits, and we’ll help you design a decanting strategy built around the retirement you’ve earned.

 

Decanting assets is one strategy within the broader discipline of creating income in retirement, which addresses market, sequence, longevity, health, inflation, and liquidity risk together.

 

What Are Executive Benefits?

Executive benefits are specially designed compensation and retirement strategies that go beyond the standard, broad-based plans every employee receives. Where a 401(k) or group insurance plan is built for the whole workforce, executive benefits are built for the small group of people who drive most of a company’s value — the owners, founders, and key leaders you cannot afford to lose. They let a business reward, retain, and retire its most important people on a selective, flexible basis that qualified plans simply do not allow.

Why Business Owners Need More Than a 401(k)

Qualified retirement plans come with strict limits. Contribution caps, nondiscrimination testing, and coverage rules are designed to spread benefits evenly across all employees — which is exactly the problem when you want to do something extra for a handful of key people. A high earner often finds that a 401(k) replaces only a fraction of their income in retirement, leaving a significant gap. Executive benefits exist to close that gap and to give owners a tool they fully control: who participates, how much, and on what terms.

The Real Problem: Keeping Your Best People

Your most valuable executives are also the most recruitable. Competitors know who they are, and a strong leader walking out the door can take clients, institutional knowledge, and momentum with them. The right executive benefit creates “golden handcuffs” — a meaningful, often vesting, financial reason for a key person to stay and keep building with you. Retention is not about paying more today; it is about designing a future reward that is hard to walk away from.

The Main Types of Executive Benefits

There is no single “best” executive benefit — the right answer depends on your entity type, your goals, and the people you are trying to reward. Here are the core strategies, each explained in depth on its own page:

Executive Bonus Plans (Section 162)

The simplest place to start. A Section 162 executive bonus plan uses tax-deductible employer dollars to fund a personally owned policy for a key executive — straightforward, flexible, and especially powerful for pass-through entities. Mechanically, the company pays a bonus that the executive reports as taxable income, while the business generally takes a current deduction, so there is no complex plan document to maintain. Because the executive owns the policy from day one, the benefit is fully portable and vests immediately, which makes it an easy first step for owners who want to reward a key person without long-term administrative overhead.

REBA — Restricted Executive Benefit Arrangements

A bonus plan with strings attached. The REBA blueprint adds a vesting schedule and a recovery feature, turning a simple bonus into true golden handcuffs your executives actually want. Unlike a plain Section 162 bonus, the employer retains a contractual right to recover its contributions if the executive leaves before an agreed date, so the retention incentive has real teeth. It fits owners who like the tax simplicity of a bonus arrangement but need a meaningful reason for a key leader to stay and keep building the business.

Nonqualified Deferred Compensation (NQDC)

Let key people defer income beyond 401(k) limits and grow it tax-deferred. Our complete guide to NQDC covers how these plans are designed, funded, and secured — including the popular 401(k) Mirror Plan for restoring lost contribution room. Deferred amounts grow without current taxation and are taxed only when they are eventually paid out, which can be timed toward lower-income retirement years. Because these are nonqualified promises, the election and distribution timing must follow Section 409A rules carefully, making NQDC best suited to high earners who want to close the gap a capped 401(k) leaves behind.

Split Dollar Life Insurance

A sophisticated way to share the cost and benefit of a life insurance policy between the company and the executive. Split dollar architecture can deliver substantial tax-efficient value when designed correctly. The business and the executive split the premium payments and the policy's death benefit or cash value under a written agreement, allowing the company to fund coverage while the executive builds personal wealth. When the goals, ownership, and exit are structured with care, split dollar can move significant value to a key person at a fraction of the tax cost of an outright bonus.

Phantom Stock

Give key people the economic upside of ownership without handing over real equity. Phantom stock creates an ownership feel that aligns executives with long-term growth. Rather than issuing actual shares, the company grants units whose value tracks the business, then pays out in cash at a future event such as vesting, sale, or retirement. This lets owners reward performance and reinforce loyalty without diluting control, sharing voting rights, or opening the books to new equity holders.

SERPs and Employer-Funded Plans

A Supplemental Executive Retirement Plan is a company promise to pay a defined future benefit — an employer-funded pension for your most important people. The employer sets the benefit formula and typically funds it informally, often with company-owned life insurance, so the executive receives a predictable stream of retirement income the business controls. Because it is entirely employer-provided and highly customizable, a SERP is well suited to retaining one or two irreplaceable leaders whose departure would be costly to the company.

BOLI and COLI Funding

Many executive benefits are funded efficiently with institutional life insurance. Bank Owned Life Insurance (BOLI) and Corporate Owned Life Insurance (COLI) let the asset on your balance sheet recover the cost of the benefits you provide. The company owns the policy, and its cash value grows tax-deferred as a corporate asset that can offset the ongoing expense of a benefit program. At the insured's death, the tax-advantaged proceeds return to the business, effectively cost-recovering the plan and making these vehicles the funding backbone behind many SERP and deferred compensation arrangements.

Ownership Transition and Exit

When the goal is succession, an ESOP or a broader business succession plan turns your largest asset into a funded, tax-advantaged exit. An ESOP creates a built-in buyer by transferring shares to a trust for employees, giving the owner liquidity while rewarding the team that helped build the value. Paired with the right funding and timing, a succession strategy converts an illiquid ownership stake into a smooth, tax-efficient transition rather than a rushed sale.

How to Choose the Right Executive Benefit

The right plan starts with your goals, not a product. Are you trying to retain one irreplaceable leader, reward a small leadership team, build your own retirement, or plan an exit? Your entity type matters too — what works beautifully for a pass-through may be structured differently for a C corporation. The strongest plans are reverse-engineered from the outcome you want, then funded in the most tax-efficient way available. That is the heart of what we call The Perfect Plan®.

Talk to a Specialist

Executive benefits reward your power to make decisions about who you keep and how you retire. If you want to explore which strategy fits your business, schedule a meeting with Schiff Executive Benefits and we’ll help you design a plan around your goals.

 

BOLI for banks, COLI for corporations ![[HERO] Bank and corporate executives collaborating on BOLI and COLI planning for employee benefits and executive retention.](https://images.pexels.com/photos/3183150/pexels-photo-3183150.jpeg)

In business, clarity beats complexity. The right tool in the right hands can solve the right problem. The wrong tool, even if it looks similar on paper, creates confusion fast.

If you are a bank leader, you do not need to wonder whether COLI belongs on your balance sheet. It does not. If you are running a corporation, LLC, or partnership, you do not need to sort through BOLI literature. It is not your vehicle.

At Schiff Executive Benefits, we spend our days answering these "What If's." What if top talent leaves? What if retirement costs are rising faster than expected? What if a buy-sell obligation shows up before you are financially ready? We do not start with a product. We reverse engineer solutions based on your goals, your entity type, and your regulatory environment.

That is why this conversation is not about competition between BOLI and COLI. It is about fit. Both use employer-owned life insurance mechanics. Both can support long-term executive benefit planning. But they belong in different worlds.

The Right Tool for the Right Job

The easiest way to frame this is simple.

If you are a bank, credit union, or thrift, you are in the BOLI world.
Bank-Owned Life Insurance is a specialized asset class for financial institutions. It is used to help informally fund employee benefits and generate tax-advantaged income on the institution's balance sheet. It is also heavily regulated by the OCC, FDIC, and state banking departments, which means design, due diligence, and administration matter. You can learn more about our specific BOLI consulting services here.

If you are a corporation, LLC, or partnership, you are in the COLI world.
Corporate-Owned Life Insurance is the broader planning tool for non-bank businesses. It is often used to support executive retention strategies, key-person coverage, buy-sell planning, and nonqualified deferred compensation (NQDC) plans. For companies evaluating deferred compensation design, it also pairs naturally with broader executive benefit planning.

The mechanics may be similar. The use cases may overlap at a high level. But the entity determines the vehicle.

 

Where COLI Fits in the Corporate World

For corporations, LLCs, and partnerships, COLI is often part of a much broader retention and succession strategy. Many business owners are asset rich and cash poor. Their value is tied up in the business. That works well until a buyout, retirement, death, or executive transition forces a liquidity event.

If you have a buy-sell agreement in place, how will it be funded? If a key executive retires, how will you replace that talent cost-efficiently? If your best people are being recruited, what are you doing today to make staying more valuable than leaving?

This is where COLI can shine. A properly structured plan can help fund obligations tied to executive retention, deferred compensation, key-person risk, and ownership transition. It can create what we call an Ownership Feel to Non-Owners while helping the business maintain control, liquidity, and long-term alignment.

For banks, those same broad concerns may exist. But the funding vehicle is BOLI, not COLI. That distinction matters.

The "In the Room" Expertise: IRC 101(j) and 409A

Rules matter. Entity type matters. Documentation matters. This is where a lot of well-meaning advisors get lost.

When we talk about BOLI and COLI, we are not reading from a brochure. Matt Schiff brings a deep technical legacy to this work. Back in 2003 and 2005, he was in the room where it happened. As a ranking member of the AALU's NQDC Committee, he worked alongside Michael Goldstein to help draft the very laws that govern these plans today: IRC 409A and IRC 101(j).

That matters because these rules do not disappear just because you picked the right entity-specific vehicle. IRC 101(j) and 409A apply to both BOLI and COLI where relevant. Whether you are a bank implementing BOLI or a corporation structuring COLI around deferred compensation, technical compliance is still the backbone of a successful outcome.

If you want to hear more about that era and the technical nuances of these regulations, I highly recommend listening to my podcast interview with Dan Hogans, who was formerly with the IRS Treasury and was a key architect of these rules.

The 101(j) Trap

One area where many generalist advisors trip up is IRC 101(j). This regulation governs employer-owned life insurance. To keep the death benefits of a BOLI or COLI policy income-tax-free, you must comply with strict notice and consent requirements before the policy is issued.

If you fail to get the employee's written consent or fail to file the annual IRS Form 8925, the death proceeds that should help the business can suddenly become taxable income. We see this all too often in legacy plans that have never been audited. At Schiff Executive Benefits, we make sure your program is designed to comply from day one, Restoring Alignment and Retention to your organization.

The Perfect Plan^® Starts with the Right Vehicle

In today’s competitive landscape, good enough benefits do not cut it. Your best people are being recruited every single day. To keep them, you need a strategy that fits your organization and speaks directly to the outcomes your leadership team cares about.

This is why we developed The Perfect Plan^®. It is not just a product. It is a philosophy. The process starts by identifying the right vehicle for the right entity, then designing the plan around the outcome.

That means:

• Banks may use BOLI to help fund employee benefits and create tax-advantaged balance sheet support.


• Corporations, LLCs, and partnerships may use COLI to support Deferred Compensation (NQDC), executive retention, key-person coverage, and buy-sell planning.


• Both require thoughtful design, regulatory awareness, and coordination with your broader advisory team.

Imagine telling your top executive: If you stay with us for the next ten years, we have a plan that provides 100% income when you need it most in retirement, and 100% protection for your family if something happens to you tomorrow.

That is the power of a properly structured plan. It aligns the executive’s personal financial goals with the company’s long-term health.

Why the "Reverse Engineering" Approach?

Most brokers start with a product. We do not work that way.

We work as a broker with any carrier, which allows us to stay agnostic. We start with your "What If's."

• Are you a bank trying to offset benefit costs efficiently?


• Are you a corporation preparing for a business buyout?


• Are you concerned about the cost of replacing a senior executive?


• Are you looking for 100% cost recovery for the employer?


• Are you trying to keep your top talent from leaving?

Once we have the goal, we reverse engineer the solution. We work alongside your existing team of advisors: your Accountant, Attorney, and TPA: to ensure that the BOLI or COLI structure fits your legal, tax, and cultural framework.

Your Next Steps

Building a business is hard. Protecting it should not be. The first step is simple: identify your world.

If you are a bank, credit union, or thrift, your conversation starts with BOLI and the banking guidance that surrounds it. If you are a corporation, LLC, or partnership, your conversation starts with COLI and how it supports retention, buy-sell planning, and deferred compensation.

If you are ready to see how the right vehicle fits into your situation, I invite you to take a low-pressure first step. Use our Business Valuation tool to get a clearer picture of what you have built.

From there, we can sit down, grab a coffee, and talk through the practical next move. If you want to go deeper first, explore our Deferred Compensation and NQDC planning page, our COLI strategy overview, or our BOLI consulting page for banks.

To stay updated on the latest strategies for business owners and executives, visit our latest posts here or join the conversation over at The Perfect Plan^® on YouTube.

Learn more: our complete guide to Bank Owned Life Insurance (BOLI) and Corporate Owned Life Insurance (COLI).

The strength of any mission-driven organization is measured by the quality of its leadership. While a not-for-profit exists to serve the public good, it operates in a competitive talent market where the "golden handcuffs" of the corporate world are often standard. To attract and retain the visionaries capable of navigating complex philanthropic and operational landscapes, tax-exempt organizations must look beyond standard salaries and 403(b) plans.

However, the regulatory environment for executive benefits in the nonprofit sector is far more restrictive than for-profit Corporate Owned Life Insurance (COLI) or traditional NQDC arrangements. With the recent expansion of the Section 4960 excise tax under the One Big Beautiful Bill Act (OBBBA), the stakes have never been higher.

If you are a CFO, Board Member, or Executive Director, understanding the interplay between 457(b) plans, 457(f) plans, and the $1 million compensation cap is no longer optional: it is a fiduciary necessity.

The Foundation: 457(b) Eligible Deferred Compensation Plans

The most common nonqualified deferred compensation (NQDC) tool for tax-exempt entities is the 457(b) plan. Often referred to as a "Top Hat" plan, it is designed for a select group of management or highly compensated employees.

In many ways, a 457(b) feels like a 401(k) or 403(b) but without the rigorous non-discrimination testing. It allows executives to defer a portion of their salary, lowering their current taxable income while building a retirement nest egg.

Key Features of the 457(b):

• 2026 Deferral Limits: For 2026, the normal elective deferral limit is $24,500.


• Catch-Up Provisions: Unlike governmental 457(b) plans, non-governmental tax-exempt plans do not allow for the standard age-50 catch-up. However, they do offer a special "three-year catch-up" that allows participants to defer up to twice the normal limit ($49,000 in 2026) in the three years prior to the plan’s normal retirement age.


• Unfunded Requirement: To maintain its tax-deferred status, a 457(b) plan must remain "unfunded." This means the assets are technically owned by the employer and subject to the claims of the organization's general creditors.


• Taxation: Contributions and earnings are not taxed until they are distributed to the employee, typically at retirement or separation from service.

While the 457(b) is an excellent baseline, the relatively low contribution limits often fall short of the retention goals for top-tier executives. This is where the 457(f) enters the conversation.

The Powerhouse: 457(f) Ineligible Deferred Compensation Plans

When an organization needs to provide a significant retention incentive or a substantial retirement benefit that exceeds the 457(b) caps, they turn to the 457(f) plan. These plans are "ineligible" only in the sense that they are not subject to the contribution limits of Section 457(b).

A 457(f) plan allows an employer to credit substantial amounts to an executive's account, but there is a major technical catch: the Substantial Risk of Forfeiture (SRF).

The SRF and Taxation

Under IRC Section 457(f), deferred amounts are taxable to the executive the moment they vest: not when they are paid out. For a plan to successfully defer taxes, the executive must be required to perform "substantial future services." If they leave before the vesting date, they forfeit the benefit.

This "all or nothing" nature makes the 457(f) an incredibly potent retention tool. However, it also creates a significant tax event. Because the entire vested amount (including earnings) becomes taxable income in a single year, it can push an executive into the highest possible tax bracket and, more importantly, trigger the Section 4960 excise tax for the organization.

Technical Expertise in the Room

Navigating 457(f) plans requires a deep understanding of IRC 409A and 101(j). At Schiff Executive Benefits, we bring a unique perspective to these regulations. Our President, Matt Schiff, was "in the room where it happened," helping draft these laws in 2003 and 2005 as a ranking member of the AALU’s NQDC Committee alongside Michael Goldstein.

We don't just read the rules; we understand the intent behind them. This expertise is critical when designing a Perfect Plan^® that balances executive reward with organizational compliance.

The New Reality: Section 4960 and the $1M Excise Tax

The most significant shift in the nonprofit benefits landscape is the expansion of the Section 4960 excise tax. This is a 21% tax imposed on the employer (the tax-exempt organization) for remuneration paid to a "covered employee" in excess of $1 million.

For years, many organizations felt safe because this tax only applied to the top five highest-compensated employees. However, the One Big Beautiful Bill Act (OBBBA) has fundamentally changed the definitions.

The OBBBA Expansion

Under the new rules, the definition of a "covered employee" has expanded dramatically. It now includes any employee or former employee whose remuneration exceeds $1 million. The "top five" threshold is gone. If a mid-level specialist has a massive 457(f) vesting event that pushes their total compensation over the $1 million mark in a single year, the organization is on the hook for the 21% excise tax on every dollar over that limit.

Why This Matters for 457(f) Plans

Most 457(f) plans are designed with "cliff vesting": for example, a $500,000 credit that vests after five years. If that executive is already making $600,000 in salary and benefits, the $500,000 vesting event brings their total remuneration to $1.1 million.

The organization would then owe a 21% tax on that extra $100,000. This unexpected cost can wreak havoc on a nonprofit budget and create optics issues with donors or board members who may not understand why the organization is paying an "excess compensation" tax to the IRS.

Planning Implications: Restoring Alignment and Retention

The goal of executive benefits is to create alignment between the leader’s success and the organization’s mission. When a plan triggers a massive, unbudgeted tax penalty, that alignment is broken.

Effective planning in the OBBBA era requires a "reverse-engineered" approach. Instead of simply picking a dollar amount and a vesting date, we must look at the total compensation trajectory of every key employee.

1. Staggered Vesting Schedules

Rather than a single "cliff" vesting date that creates a compensation spike, we often recommend staggered vesting. By spreading the vesting of 457(f) benefits over several years, we can keep the annual remuneration below the $1 million threshold, avoiding the excise tax entirely while still providing the same total value and retention incentive to the executive.

2. Coordination with 457(b)

Maximizing the 457(b) deferrals is the first line of defense. By pushing as much as possible into the "eligible" plan where taxation is deferred until distribution, we reduce the pressure on the 457(f) "ineligible" plan.

3. Implementing The Perfect Plan^®

Every organization has a unique culture and a specific set of "What Ifs."

• What if a senior exec retires, and the replacement cost is higher than anticipated?


• What if top talent leaves for a for-profit competitor?


• What if a vesting event triggers a tax penalty that exceeds the budget?

Our process focuses on Employee Retention by designing programs that are cost-effective for the employer and truly rewarding for the executive. We ensure every program is IRC 409A compliant and structured to mitigate the impact of Section 4960.

Key Takeaway for Board Members and CFOs

The era of "set it and forget it" deferred compensation for nonprofits is over. If your organization has existing 457(f) arrangements, you must audit them immediately to identify potential "tax bombs" created by the expanded OBBBA covered employee definition.

At Schiff Executive Benefits, we specialize in helping not-for-profits map their deferred compensation arrangements, identify vesting risks, and restructure plans to ensure they remain a tool for growth: not a source of tax liability.

Is Your Plan Still "Perfect"?

Don't wait for a $1 million vesting event to discover your excise tax exposure. Let's sit back, grab a coffee, and review your current executive benefit structure. We work alongside your existing advisors: your accountants and attorneys: to provide the technical expertise required in today's shifting regulatory landscape.

Ready to protect your mission and your talent?

Click here to get started with a confidential business review and valuation.

Whether you are looking to reward a long-tenured leader or attract a new visionary to your team, we are here to help you build The Perfect Plan^®.

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In the world of institutional finance, there is a fundamental truth we all must face: markets fluctuate, but the need for stability is constant. Whether you are managing the balance sheet of a community bank or overseeing the executive benefits for a Fortune 500 company, you are constantly looking for that "sweet spot": the intersection where growth meets protection.

For years, the choice was binary. You either accepted the low-yield, safe-haven environment of General Account products or you braced yourself for the white-knuckle volatility of Variable Life. But what if there was a third way? What if you could capture the upside of the equity markets without ever having to worry about a market crash eroding your principal?

This is the promise of Institutional Indexed Universal Life (IIUL).

At Schiff Executive Benefits, we specialize in reverse-engineering solutions that align with your company’s culture and long-term intent. We don’t just sell products; we help you plan for all of life’s "What If’s": including what happens when your top talent considers leaving or how to fund a senior executive’s retirement cost-effectively.

What is Institutional Indexed Universal Life (IIUL)?

Institutional Indexed Universal Life (IIUL) is a specialized, institutional-grade version of Indexed Universal Life (IUL). While retail IUL is a popular tool for individual estate planning, the "Institutional" prefix denotes a product designed for the scale, pricing, and transparency required by banks for Bank-Owned Life Insurance (BOLI) and corporations for Corporate-Owned Life Insurance (COLI).

At its core, IIUL is a permanent life insurance vehicle where the cash value growth is linked to the performance of an external equity index, such as the S&P 500, Nasdaq-100, or the EURO STOXX 50. However, unlike a direct investment in the stock market, you aren't actually in the market. You are simply using the index as a measuring stick for interest crediting.

The Power of the 0% Floor

The most compelling feature of IIUL is the 0% floor. This is the ultimate "sleep well at night" hedge. If the S&P 500 drops 20% in a year, your policy’s cash value doesn't drop a dime due to market performance. Your floor is zero. You stay flat while the rest of the market retreats.

Of course, there is a trade-off for this protection. In exchange for the floor, the insurance carrier places a cap on your growth: typically ranging between 8% and 12%, depending on the carrier and the specific index.

This creates a "smoothed" growth curve. By cutting off the deep valleys of market crashes and slightly shaving the highest peaks, IIUL provides a steady, upward trajectory that is ideal for long-duration liabilities like Supplemental Executive Retirement Plans (SERPs) and Non-Qualified Deferred Compensation (NQDC) plans.

Why Institutions Choose IIUL for BOLI and COLI

Banks and corporations aren't just looking for a place to park cash; they are looking for a strategic asset that solves specific problems. When we look at the BOLI process or COLI strategies, IIUL often emerges as the preferred vehicle for several reasons:

1. Attracting and Retaining Talent: The "Top Talent Leaving" scenario is one of our core "What Ifs." IIUL provides the informal funding necessary to offer an "Ownership Feel to Non-Owners" through programs like Phantom Stock or Restricted Executive Bonuses.


2. Cost Recovery: One of the primary goals of any executive benefit plan is full cost recovery for the employer. The tax-free death benefit provided by IIUL allows a company to recoup the costs of the benefits paid out, plus the premiums and the time value of money.


3. Balance Sheet Efficiency: For banks, BOLI is a highly efficient asset. Because the cash value grows tax-deferred (and can be accessed tax-free if structured correctly), the "Tax Equivalent Yield" of an IIUL policy often significantly outperforms traditional fixed-income investments.

The Tax Advantages: Accumulation and Distribution

In the realm of executive benefits, taxes are often the largest "leak" in the bucket. IIUL is designed to plug those leaks.

• Tax-Deferred Accumulation: The cash value grows without being diminished by annual income taxes.


• Tax-Free Death Benefit: Under IRC 101(j), as long as proper notice and consent requirements are met, the death benefit is received by the corporation or bank income tax-free.


• Efficient Funding for NQDC: When used to informally fund a 401k Mirror or NQDC plan, the growth of the IIUL policy can be matched against the growing liability of the executive's account, creating a hedge that protects the company's P&L.

The "Insider" Advantage: Why Experience Matters

When you are implementing a program as technical as IIUL, you need more than a broker; you need a consultant who has been "in the room where it happened."

Our President, Matt Schiff, brings a level of expertise that is rare in this industry. In 2003 and 2005, Matt was a ranking member of the AALU's NQDC Committee. Alongside Michael Goldstein, he helped draft the very laws that govern these plans today: specifically IRC 409A and IRC 101(j).

We don't just read the regulations; we remember the intent behind them. This technical depth ensures that your plan isn't just "The Perfect Plan^®" on paper, but a robust, compliant solution that stands the test of time. For a deeper dive into this history, I encourage you to listen to Matt’s conversation with Dan Hogans (formerly of the IRS Treasury) on The Perfect Plan^® YouTube channel.

Leading Carriers in the IIUL Space

Because we operate as an independent consultant and broker, we have the ability to work with any carrier in the market. However, when it comes to the institutional-grade performance required for BOLI and COLI, a few names consistently rise to the top:

• Pacific Life: Known for high-capacity underwriting and a long history in the COLI market, Pacific Life offers some of the most flexible IIUL designs available today.


• Nationwide: A stalwart in the institutional space, Nationwide provides robust living benefit riders and streamlined underwriting that is perfect for broad-based corporate programs.


• Transamerica: Transamerica’s IIUL portfolio is built for accumulation, offering diverse index choices including global options like the EURO STOXX 50.

Is IIUL Right for Your Organization?

Building The Perfect Plan^® starts with asking the right questions.

• What happens to your business if a key executive leaves tomorrow?


• Are you currently losing 40% of your benefit's value to taxes?


• Does your current retention strategy provide 100% income protection to your employees' families?

If these questions are keeping you up at night, it’s time for a more sophisticated approach. Institutional Indexed Universal Life isn't just an insurance policy; it is a strategic financial tool designed to restore alignment between your company's goals and your key people’s needs.

Ready to see where you stand?

At Schiff Executive Benefits, we believe in data-driven decisions. Before you design a plan, you need to know what your business is actually worth and where the gaps lie.

We invite you to start your business valuation and data capture here. It’s the first step toward realizing your dream value and ensuring your legacy is protected.

Sit back, grab your coffee, and let’s talk about how we can help you attract, retain, and reward your best people: Restoring Alignment and Retention for the long haul.

In the high-stakes world of community and regional banking, the pursuit of yield is never just about the numbers on a spreadsheet; it is a delicate dance between regulatory capital constraints and the mandate for long-term stability. Every CFO knows the universal truth: you cannot manage what you cannot predict. When it comes to Bank Owned Life Insurance (BOLI), that predictability has historically been bifurcated. You either chose the safety and simplicity of a General Account (GA) structure or the transparency and potential of a Separate Account (SA) structure.

But the financial landscape is rarely that binary. For banks that demand the creditor insulation of a separate account without the stomach-turning volatility of mark-to-market accounting, there is a third way.

Hybrid Account Universal Life BOLI is the "best of both worlds" solution that has quietly become the preferred tool for sophisticated bank boards. It is a strategic middle ground: a product that reverse-engineers the best parts of insurance mechanics to serve the specific needs of a bank’s balance sheet.

The Structural "Sweet Spot": How Hybrid BOLI Works

To understand the value of a Hybrid Account, you first have to understand the tension it resolves.

Historically, General Account BOLI was the standard. The bank paid a premium, and those assets became part of the insurance carrier’s general investment pool. The carrier guaranteed a minimum crediting rate, and the bank enjoyed book-value accounting. The downside? The bank was essentially an unsecured creditor of the insurance company. If the carrier faltered, so did the bank’s asset.

On the other hand, Separate Account BOLI offered transparency and legal insulation. The assets were held in a separate account, away from the carrier’s general creditors. However, this often introduced "mark-to-market" volatility. Unless the bank paid for an expensive Stable Value Protection (SVP) wrap, the fluctuation in the underlying investment portfolio would flow directly through the bank’s P&L.

Hybrid Account BOLI changes the math.

In a Hybrid structure, part of the assets sit in a legally insulated separate account. This provides the bank with the transparency it desires and the creditor protection it needs. However: and this is the "magic" of the hybrid design: the carrier provides a contractually guaranteed minimum crediting rate, much like a General Account product.

Because the carrier is providing the "floor," there is no need for a Stable Value Protection wrap. The carrier contractually guarantees the book-value accounting, meaning the bank does not face direct market value exposure. You get the transparency and insulation of a separate account with the smoothed, predictable income of a general account.

Why It Matters: Yield Enhancement Without the Volatility

For a bank’s investment committee, the appeal of Hybrid BOLI usually centers on two portfolios: Yield and Yield Plus.

Unlike traditional General Account BOLI, where the bank has no say in how the assets are deployed, Hybrid Account products often allow the bank to benefit from multiple portfolio options. These portfolios are managed with an eye toward high-grade corporate bonds and other bank-eligible investments, but they are structured to allow for slightly higher yield targets than a standard GA product might offer.

Because these are Universal Life chassis, the crediting rate is declared by the carrier based on the performance of these underlying portfolios. However, since the carrier guarantees the floor, the bank doesn't have to worry about a "bad month" in the bond market hitting their quarterly earnings report.

At Schiff Executive Benefits, we specialize in this kind of goal-oriented reverse engineering. We don't just look at the carrier; we look at the intent. If your goal is to fund an Executive NQDC plan or offset the rising costs of employee benefits, the Hybrid structure offers a unique way to match those long-term liabilities with a stable, high-performing asset.

The Regulatory Reality: Accounting and Risk Weighting

From a technical perspective, Hybrid Account BOLI is a masterclass in balance sheet efficiency.

Book-Value Accounting

The primary concern for most bank CFOs is the impact on the P&L. Because Hybrid BOLI uses a crediting-rate approach backed by the carrier’s guarantee, it qualifies for book-value accounting. The bank records the Cash Surrender Value (CSV) as an "Other Asset." The growth in that CSV (the net of the crediting rate minus charges) is recognized as noninterest income. This provides a clean, predictable line item that bank analysts and regulators appreciate.

Risk Weighting

The risk weighting of BOLI is a critical component of Tier 1 Capital management. Under current regulatory frameworks (including Basel III), the risk weighting of Hybrid BOLI typically depends on its composition. While General Account BOLI is usually 100% risk-weighted (corporate-style), and Separate Account BOLI can sometimes be "looked through" to the underlying government-grade assets for a lower weight, Hybrid BOLI is often treated as a blend.

However, many institutions find that the "100% risk weight" trade-off is more than worth it when you consider the lower cost of capital compared to the volatility of a non-wrapped Separate Account.

Carrier Spotlight: The NYLIAC BOLI 50

One of the most prominent examples of this technology in action is the NYLIAC BOLI 50 from New York Life. As a Hybrid Account Universal Life product, it has become a staple for banks looking for a high-quality carrier with a "AAA" pedigree.

The BOLI 50 allows banks to access the Yield and Yield Plus portfolios while maintaining that crucial book-value treatment. It’s designed for the bank that wants a household name carrier but doesn't want to settle for the lower "current" rates of a standard general account.

The "What If" Factor: Planning for the Long Term

At Schiff Executive Benefits, we don't just sell products; we solve for the "What Ifs." When we sit down with a bank board, we aren't just talking about Hybrid BOLI; we are talking about:

1. Top talent leaving – How does this asset fund the retention package to keep your CEO?


2. Senior exec retirement – Can we offset the replacement cost effectively?


3. Running out of retirement money – How do we ensure the plan stays solvent for decades?

Our President, Matt Schiff, brings a unique level of authority to these conversations. He didn't just study the laws; he was in the room when they were written. As a ranking member of the AALU's NQDC Committee, Matt helped draft the very regulations (IRC 409A and IRC 101(j)) that govern how these plans must be structured today.

When you work with us, you are getting an architect who understands the "code" of the IRS, not just a contractor who knows how to swing a hammer. We ensure your program is fully compliant with the latest regulations, ensuring that your BOLI remains a tax-advantaged powerhouse rather than a compliance liability.

Restoring Alignment and Retention

Ultimately, Hybrid Account BOLI is a tool for alignment. It aligns the bank's need for stability with the executive's need for a robust benefit structure. It is a key component of The Perfect Plan^®, our proprietary approach to ensuring that every dollar on the balance sheet is working toward a specific cultural and financial goal.

If you are a bank decision-maker looking to optimize your BOLI portfolio or replace an underperforming General Account plan, the time to look at Hybrid options is now.

Ready to see how Hybrid BOLI fits your balance sheet?

Sit back, grab your coffee, and let’s look at the numbers. We invite you to join us for a consultative deep dive into your current benefits structure.

• Discover your bank's true value: Use our RISR Business Valuation Tool to see how your executive benefits align with your overall growth.


• Deepen your expertise: Watch our expert interviews and technical breakdowns on The Perfect Plan^® YouTube Channel.


• Explore our services: Learn more about our Integrated BOLI/COLI approach.

The "Perfect Plan^®" isn't a myth: it's a reverse-engineered reality. Let’s build it together.

Learn more: our complete guide to Bank Owned Life Insurance (BOLI).

In the world of institutional finance, transparency is the bedrock of trust. For many community and regional banks, Bank-Owned Life Insurance (BOLI) has long been a foundational asset, providing a tax-advantaged vehicle to offset employee benefit liabilities. However, as institutions grow in complexity and assets, the "General Account" model: where the bank’s capital is comingled with the insurer's general creditors: can sometimes feel like a black box.

For sophisticated bank decision-makers and ALM (Asset Liability Management) teams, the shift toward Separate Account Universal Life BOLI represents a move from passive participation to strategic control. It is a structure designed for those who demand clarity on where their dollars are invested, how they are protected, and how they can be optimized for long-term yield.

At Schiff Executive Benefits, we specialize in reverse-engineering these sophisticated benefit structures to ensure they align perfectly with your bank's culture and financial goals. Our mission is centered on Restoring Alignment and Retention.

The Architecture of Insulation: Legally Segregated Accounts

The defining characteristic of Separate Account BOLI is the legal "moat" it builds around your assets. Unlike General Account BOLI, where the bank is effectively a general creditor of the insurance company, Separate Account premiums are held in a legally segregated account.

Under OCC Bulletin 2004-56, the regulatory framework is clear: these assets are insulated from the claims of the insurer's general creditors in the event of insolvency. For a bank's risk committee, this provides a layer of counterparty risk mitigation that is simply unavailable in traditional products. You aren't just buying a policy; you are securing a dedicated asset pool.

Transparency and Investment Control through IRC 817(h)

One of the primary frustrations with traditional BOLI is the lack of visibility into the underlying portfolio. Separate Account BOLI flips this script. By utilizing third-party investment managers, banks can achieve a level of transparency that rivals their own investment portfolios.

However, this control comes with strict regulatory guardrails. To maintain the tax-advantaged status of the life insurance contract, the account must comply with IRC §817(h) diversification requirements. This ensures that the policy remains treated as insurance rather than a taxable investment.

Furthermore, "Investor Control" rules stipulate that while the bank can choose from a menu of sophisticated investment strategies managed by professional firms, they cannot direct individual security trades. This is where our expertise at Schiff Executive Benefits becomes invaluable. We help you navigate these nuances, ensuring your BOLI program remains compliant while pursuing the yield your institution requires.

Managing Volatility: The SVP "Wrap" and Book-Value Accounting

If Separate Account BOLI offers better transparency and yield potential, why doesn't every bank use it? The answer often lies in the accounting treatment.

By default, Separate Account assets are subject to mark-to-market accounting. For a bank’s P&L, the daily fluctuations of the underlying bond or equity markets can create unwanted volatility. This is where the Stable Value Protection (SVP) wrap comes into play.

An SVP wrap is a contract: often provided by a highly-rated financial institution or the insurer themselves: that allows the bank to report the asset at "book value" rather than fair market value. This "wraps" the volatility, amortizing gains and losses over time to provide a steady, predictable crediting rate. For banks with sophisticated ALM teams, the ability to harvest the "equity risk premium" or higher-duration yields without the immediate P&L sting is a game-changer.

Capital Efficiency: The Look-Through Advantage

From a regulatory capital perspective, Separate Account BOLI offers a distinct advantage over its General Account counterparts. Under the "look-through" approach, banks can risk-weight the BOLI asset based on the underlying securities within the separate account.

While General Account BOLI is typically risk-weighted at 100% (or 20% if the insurer is highly rated, though this is increasingly rare), Separate Account portfolios focused on high-quality government or agency bonds can often achieve a risk-weighting as low as 20%. This makes Separate Account BOLI an incredibly capital-efficient tool for larger regional or commercial banks looking to optimize their Tier 1 capital ratios.

Why Technical Expertise Matters: The Schiff Legacy

Navigating the intersection of life insurance, tax law, and bank regulation requires more than just a broker; it requires an architect. Matt Schiff, President of Schiff Executive Benefits, brings a unique level of authority to this space. Having served as a ranking member of the AALU's NQDC Committee, Matt helped draft the very laws: like IRC 409A and 101(j): that govern these plans today.

When you work with us, you are working with a team that was "in the room where it happened." We don't just follow the rules; we understand the intent behind them. This technical depth is why we emphasize an integrated approach, working alongside your existing accountants, attorneys, and TPAs to ensure The Perfect Plan^® is not just a concept, but a compliant reality.

Is Separate Account BOLI Right for Your Bank?

This structure is ideal for institutions that meet several criteria:

• Asset Size: Generally, banks with $1 billion or more in assets find the administrative and wrap costs of Separate Accounts more justifiable.


• ALM Sophistication: Banks with dedicated teams capable of monitoring third-party managers and understanding SVP dynamics.


• Yield Requirements: Institutions looking to outperform the "standard" General Account rates by taking a longer-term, more transparent investment view.


• Capital Constraints: Banks looking for higher risk-adjusted returns on capital.

Your Path to a More Sophisticated BOLI Strategy

The decision to transition to or implement a Separate Account structure shouldn't be made in a vacuum. It requires a deep dive into your bank’s specific "What If's": from top talent retention to the long-term cost recovery of executive benefits.

We invite you to explore our BOLI process to see how we reverse-engineer solutions based on your specific goals. If you are ready to evaluate your bank's current valuation and potential for a more sophisticated retention tool, we encourage you to use our Business Valuation and Prospect Data Capture tool.

For more insights into high-level financial planning and executive benefits, visit The Perfect Plan^® YouTube channel.

At Schiff Executive Benefits, we don't just sell insurance; we build the structures that protect your bank's most valuable asset: its people. Come join us, grab a coffee, and let's discuss how we can bring transparency and stability to your balance sheet.

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Learn more: our complete guide to Bank Owned Life Insurance (BOLI).

In the world of community banking, certainty is the ultimate currency. We often tell our clients that while the markets might be a rollercoaster, your balance sheet shouldn't be. When you are looking to offset the rising costs of executive benefits or simply looking for a stable way to deploy excess liquidity, the conversation inevitably turns to Bank Owned Life Insurance (BOLI).

Among the various structures available, General Account Universal Life BOLI remains the bedrock of the industry. It is the most common, the most straightforward, and for many institutions, the most appropriate tool for the job. But as with any sophisticated financial instrument, the "simple" option still requires a deep dive into the mechanics, the risks, and the regulatory expectations.

At Schiff Executive Benefits, we don’t just broker these plans; we reverse-engineer them. We look at your culture, your "What Ifs," and your long-term goals to ensure that the plan you implement today is the one that still makes sense twenty years from now.

What is General Account BOLI?

At its core, a General Account BOLI policy is a contract between the bank and an insurance carrier. The bank pays a premium, and those funds are pooled into the insurer’s general account. This general account is typically a massive, conservatively managed portfolio of high-quality bonds, mortgages, and real estate.

Unlike Separate Account BOLI, where the bank’s assets are segregated and the bank chooses the investment managers, General Account BOLI relies on the carrier’s overall investment performance.

The Mechanism of Stability

When you opt for a General Account structure, you are essentially trading control for a guarantee. The carrier provides a guaranteed minimum crediting rate. Even if the market takes a dive, your cash value won't drop below a certain floor.

For a community bank, the primary appeal is the lack of "mark-to-market" volatility. Because the carrier assumes the investment risk, the bank does not have to report fluctuations in the underlying bond portfolio on its P&L. Instead, you see predictable, tax-advantaged growth in the cash surrender value (CSV) of the policies.

The Trade-Off: Transparency vs. Security

No financial strategy is without its hurdles. While the stability of General Account BOLI is its greatest strength, it comes with two primary trade-offs:

1. Lack of Transparency: Since your premiums are pooled with the carrier's other assets, you don't have a window into exactly which bonds or properties are backing your policy. You are trusting the carrier’s investment committee and their historical track record.


2. Credit Risk: This is the big one. In a General Account structure, the bank is a general creditor of the insurance company. If the carrier runs into financial trouble, your BOLI assets are at risk. This is why we place such a heavy emphasis on carrier selection. We look at A.M. Best, Moody’s, and S&P ratings with a skeptical eye, ensuring the carriers we recommend have the "staying power" to fulfill their long-term promises.

Regulatory Landscape: OCC 2004-56 Compliance

If you’ve spent any time in a boardroom, you know that regulators don't just care about what you buy; they care about how you bought it. OCC 2004-56 (the Interagency Statement on the Purchase and Risk Management of Life Insurance) is the "bible" for BOLI compliance.

General Account BOLI is treated as a complex asset. Regulators expect you to perform a rigorous pre-purchase analysis that includes:

• Business Purpose: You must document exactly why you are buying BOLI. Usually, this is to fund specific executive benefit obligations like a Non-Qualified Deferred Compensation (NQDC) plan or a SERP.


• Risk Assessment: You need to quantify the liquidity, credit, and interest rate risks.


• Concentration Limits: You can't put all your eggs in one carrier's basket.


• Board Approval: Your board needs to understand the "What Ifs." What if the carrier is downgraded? What if the crediting rate drops to the minimum?

Under current regulatory capital rules, General Account BOLI is typically risk-weighted at 100%. While this is higher than the 20% weighting often found in Separate Account structures, many banks find the trade-off for P&L stability to be well worth the capital charge.

Why Community Banks Prefer the General Account

Why is this the "simplest and most common" structure? Because most community banks aren't in the business of managing insurance investment portfolios. They want a "set it and forget it" solution: though we prefer the term "set it and monitor it."

General Account BOLI provides:

• Predictable Non-Interest Income: The steady crediting rate helps smooth out earnings.


• Cost Offset: It is a highly efficient way to recover the costs of the benefits needed to attract and retain top talent.


• Simplicity: There is no need for complex daily accounting of underlying securities.

The Schiff Perspective: "In the Room Where it Happened"

When you work with Schiff Executive Benefits, you aren't just getting a broker; you’re getting a partner with deep technical roots. Our President, Matt Schiff, didn't just study these laws: he was a ranking member of the AALU's NQDC Committee and worked alongside Michael Goldstein to help draft the very regulations that govern these plans today (IRC 409A and IRC 101(j)).

We understand the nuances of IRC 101(j) notice and consent requirements. If you miss a signature or a filing date, your tax-free death benefit could become taxable. That’s a "What If" no bank wants to face. We ensure your program is bulletproof from day one.

You can hear more about these technical nuances and our approach to The Perfect Plan^® on our YouTube channel, where we break down the complexities of executive benefits into actionable insights.

Is Your BOLI Aligned?

General Account Universal Life BOLI is an incredible tool for restoring alignment and retention within your leadership team. It protects the bank's bottom line while providing the "Perfect Plan^®" for your executives' future.

However, the "set it and forget it" mentality can be dangerous. As interest rates shift and carrier credit profiles evolve, your BOLI portfolio needs regular check-ups. Are you still compliant with OCC 2004-56? Is your 101(j) paperwork in order? Are you maximizing your risk-adjusted return?

If you are ready to take a closer look at your current BOLI strategy or are considering a new purchase, let's have a conversation. We can help you navigate our BOLI Process and ensure your Bank Owned Life Insurance program is performing exactly as intended.

Sit back, grab your coffee, and let’s build something that lasts.

To get a clearer picture of your bank’s current valuation and how an executive benefit strategy can impact your bottom line, we invite you to use our RISR application. It’s a simple way to start the journey toward a more secure and aligned future.

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Learn more: our complete guide to Bank Owned Life Insurance (BOLI).

In the world of high-stakes wealth management, there is a fundamental truth that every successful executive eventually confronts: it is not what you make, but what you keep that defines your legacy. For the high-net-worth (HNW) individual, the traditional investment landscape often feels like a treadmill of high returns followed by even higher tax liabilities.

When you reach a certain level of success, the standard tools: 401(k)s, retail mutual funds, and even standard life insurance: begin to lose their edge. You need a vehicle that matches the complexity of your portfolio and the scale of your ambitions. This is where Private Placement Life Insurance (PPLI) enters the conversation.

At Schiff Executive Benefits, we specialize in reverse-engineering solutions that align with your specific goals. We don’t just offer products; we build a Perfect Plan^® designed to protect, retain, and reward. PPLI is often a cornerstone of that strategy for the most sophisticated clients.

What is Private Placement Life Insurance (PPLI)?

Think of PPLI not as a traditional "death benefit" policy you might buy for family protection, but as an institutional-grade "tax wrapper." It is a variable universal life insurance policy designed specifically for accredited investors and qualified purchasers.

Unlike retail life insurance, which offers a pre-set menu of mutual-fund-like subaccounts, PPLI allows you to wrap a wide array of tax-inefficient alternative investments: such as hedge funds, private equity, and private credit: inside the tax-advantaged structure of a life insurance policy.

The result? You maintain exposure to high-growth, high-turnover strategies without the annual "tax drag" that typically erodes your returns.

Who is it For?

PPLI is not a mass-market product. It is a sophisticated tool tailored for:

• High-Net-Worth Executives: Those looking to shield significant portions of their investment income from ordinary income tax rates.


• Business Owners: Specifically those seeking to diversify their wealth outside of their primary business while maintaining a tax-efficient growth engine.


• Family Offices: Where multi-generational wealth transfer and long-term tax deferral are paramount.

The Tax Powerhouse: Why Sophisticated Investors Choose PPLI

The primary allure of PPLI is its triple-threat tax advantage. When structured correctly within a Perfect Plan^®, it offers:

1. Tax-Deferred Growth: All dividends, interest, and realized capital gains within the PPLI wrapper accumulate without being subject to current income tax. For actively traded portfolios or high-yield private credit, this compounding effect is massive over time.


2. Tax-Free Access to Liquidity: You can access the cash value of the policy through tax-advantaged withdrawals (up to your cost basis) and policy loans. This provides a source of "tax-free" cash flow for retirement or further investment opportunities.


3. Income-Tax-Free Death Benefit: Upon the passing of the insured, the entire account value: including all the accumulated gains: passes to beneficiaries generally free of federal income tax.

PPLI vs. Traditional Life Insurance: The Institutional Edge

While both PPLI and traditional Variable Universal Life (VUL) share the same underlying tax code, the difference lies in the transparency and the "investment universe."

• Cost Transparency: Traditional policies often come with high front-load commissions and opaque internal fees. PPLI is built on institutional pricing, meaning mortality and expense (M&E) charges are typically much lower and more transparent.


• Investment Flexibility: In a retail policy, you are limited to the carrier’s subaccounts. In a PPLI structure, we can work with premier partners like Axcelus Financial to integrate sophisticated, alternative investment managers that are usually unavailable in the retail space.


• Customization: PPLI is highly customizable, allowing us to align the insurance coverage precisely with your estate planning needs and investment hurdles.

The Corporate Connection: COLI and NQDC

For the business owner or corporate decision-maker, PPLI concepts often overlap with Company Owned Life Insurance (COLI). Just as an individual uses PPLI to wrap personal investments, a corporation can use COLI to fund Non-Qualified Deferred Compensation (NQDC) plans for their top-tier talent.

By treating Insurance as an Asset Class, businesses can recover the costs of executive benefits while providing a powerful retention tool. This is a core part of how we help companies answer the critical "What If" questions: What if your top talent leaves? What if a senior executive retires unexpectedly?

Authority "In the Room Where it Happened"

When you are dealing with PPLI, you are operating in a highly regulated technical environment. Compliance is not optional; it is the foundation of the entire strategy.

Our President, Matt Schiff, brings a unique level of authority to these discussions. As a ranking member of the AALU’s NQDC Committee, Matt worked alongside industry legend Michael Goldstein to help draft the very laws that govern these plans: specifically IRC 409A and IRC 101(j).

When we talk about 409A Compliance, we aren’t just reading the rules; we were "in the room" when they were being shaped. You can hear more about this high-level regulatory history and how it impacts your planning in our interview with Dan Hogans, formerly of the IRS Treasury.

Deep Dive: The Jay Judas Conversation

If you want to understand the true potential of tax-smart life insurance strategies for HNW families and international planning, we highly recommend listening to Episode 11 of The Perfect Plan^® Podcast.

In this episode, we sit down with Jay Judas, a leading voice in the PPLI and HNW insurance space. Jay breaks down how these strategies are used for family wealth preservation and why the institutional nature of PPLI is changing the game for sophisticated investors.

Listen here: Tax-Smart Life Insurance Strategies - A Conversation with Jay Judas

Restoring Alignment and Retention

At Schiff Executive Benefits, our mission is to ensure your benefit structures match your company culture and personal intent. Whether it’s providing 100% protection to your family or ensuring you have the fixed cash flow you need in retirement, we focus on "Retirement Made Simple."

PPLI is a powerful tool, but it is only as effective as the plan surrounding it. Are you prepared for the "What Ifs"?

• What if you run out of retirement money?


• What if a key partner wants a buy-out?


• What if you could provide an "ownership feel" to non-owners without giving away equity?

We invite you to sit back, grab your coffee, and let’s discuss how a Perfect Plan^® can realize your dream value.

Ready to see where you stand?

Use our Business Valuation and Data Capture tool to start the process of restoring alignment to your executive benefits and personal wealth strategy.

In the architecture of a business, the strongest structures are often the simplest. There is a universal truth in our industry: you don’t build a skyscraper on a shifting foundation, and you don’t build a legacy without addressing the most basic "What Ifs."

When we talk about the "Types of Products" available in the executive benefits market, Term Life is the absolute bedrock of simplicity. It is insurance in its purest, most distilled form. But as any seasoned business owner knows, simplicity doesn’t always mean it’s the right tool for a complex job.

Pure Protection, No Frills

At its core, Term Life insurance is exactly what the name implies: coverage for a specific "term" or period of time (typically 10, 20, or 30 years). If the insured person passes away during that term, the policy pays a death benefit to the beneficiary. If they outlive the term, the coverage simply ends.

There is no cash value accumulation. There is no investment component. There are no "moving parts." You are paying for a pure death benefit.



For many business owners, this is the first step in creating The Perfect Plan^®. It offers the highest amount of coverage for the lowest initial premium. But in the world of high-level executive benefits and retention, Term Life is often just the starting point: not the destination.

The Strategic Role of Term Life in Business

While we often lean toward permanent structures like Corporate Owned Life Insurance (COLI) for funding complex benefits, Term Life has two very specific, vital roles in the corporate ecosystem:

1. Key Person Protection

What if your top rainmaker or your lead engineer didn't show up tomorrow? The cost to find, recruit, and train a replacement of that caliber is staggering. Term Life is a cost-effective way for a company to protect itself against the immediate financial shock of losing a key executive during their peak productive years.

2. Buy-Sell Agreement Funding

One of our core "What Ifs" is: What if your business partner dies and you end up in business with their widow?

A Buy-Sell Agreement ensures that the surviving owners can buy out the deceased partner's interest. Term Life is frequently used to fund these agreements when the business is in a high-growth phase or when the owners have a clear, time-limited exit strategy (e.g., "We are selling the company in 10 years"). It provides the necessary liquidity to execute the buyout without draining the company’s operating capital.

Why It Isn't the Choice for Executive Benefits

If Term Life is so inexpensive, why don't we use it for everything?

The answer lies in the goal. If your goal is to fund a Nonqualified Deferred Compensation (NQDC) plan or provide a "100% Income" guarantee in retirement, Term Life fails.

Because Term Life has no cash value, it cannot "reverse engineer" a solution that provides a lifetime of retirement income. It is a cost, not an asset. Permanent insurance products allow for tax-deferred growth that can be used to recover the employer’s costs: a hallmark of the plans we design at Schiff Executive Benefits.

A Note on Compliance: The "In the Room" Perspective

Whether you are using Term Life for a simple buy-sell or a complex COLI carve-out, you must remain compliant with IRC Section 101(j).

I mention this because it’s a hurdle many advisors miss. Back in 2003 and 2005, I sat on the AALU's NQDC Committee alongside Michael Goldstein. We helped draft the very laws that govern how employer-owned life insurance must be handled today. If you don't follow the notice and consent requirements before the policy is issued, the death benefit: which should be tax-free: could become taxable income.

At Schiff Executive Benefits, we don't just sell products; we ensure the structure is bulletproof. We’ve seen the "point of no return" for companies that ignored these technicalities, and we are here to make sure you never reach it.

Is Term Life Right for Your Current Phase?

Term Life is about "What If you die too soon?" Permanent insurance is about "What If you live too long (and run out of money)?"

Most established businesses need a combination of both. You might use Term Life to cover a specific bank loan or a short-term buy-sell obligation, while using COLI to build a long-term retention tool for your "Inner Circle."

Are you protected for the short term but exposed for the long haul? Or perhaps you have old Term policies that are about to expire, leaving your Buy-Sell agreement unfunded?



Sit back, grab your coffee, and let’s take a look at your current structure. Building The Perfect Plan^® starts with knowing exactly which tool belongs in which corner of your foundation.

Ready to see where your business stands?
Click here to use our Business Valuation tool and get a real-time look at what you’re protecting.

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