Category Archives: Life Insurance

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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1. Meta Description: Discover why General Account Universal Life BOLI is the preferred choice for community banks seeking stability, tax-advantaged growth, and OCC 2004-56 compliance.


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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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In a world that often prizes the "new and flashy," there is an undeniable truth that remains constant: stability is the bedrock of any successful long-term strategy. For a business, stability isn't just about this quarter's earnings; it’s about ensuring that the promises you make today: to your family, your partners, and your key executives: can be kept decades from now.

When we look at the various types of products available in the market for informal funding of executive benefits, Whole Life insurance stands as the "Old Guard." It is the architectural foundation upon which many of the most secure Corporate Owned Life Insurance (COLI) and Bank Owned Life Insurance (BOLI) programs are built.

If you are looking for a financial vehicle that eliminates the "what ifs" of market volatility, Whole Life is often the answer.

The Mechanics of Permanence

Whole Life is exactly what it sounds like: permanent life insurance designed to cover the insured for their entire life. Unlike term insurance, which expires, or universal life products, which may have flexible premiums that can fluctuate, Whole Life is defined by its rigidity: and in the corporate world, that rigidity is its greatest strength.

The core features of a Whole Life policy include:

• Guaranteed Cash Value Growth: The cash value in a Whole Life policy grows according to a set schedule. It doesn't matter what the S&P 500 does tomorrow; your cash value is contractually guaranteed to increase every year.


• Fixed Premiums: Your premiums are locked in from day one. They will never increase, regardless of the economy or the health of the insured. This allows for precise long-term budgeting for deferred compensation plans.


• Dividends (The Performance Kicker): While not guaranteed, "participating" Whole Life policies from mutual insurance companies often pay annual dividends. These dividends can be used to purchase additional insurance, reduce premiums, or boost the cash value even further.

The "Sleep Well at Night" Factor

For the risk-averse corporate buyer, Whole Life offers what we call the "sleep well at night" factor. When a company uses life insurance to fund a Supplemental Executive Retirement Plan (SERP), they are essentially creating a liability on their balance sheet. They are promising an executive a future payment.

If you fund that promise with a volatile asset, you are taking on "asset-liability mismatch" risk. If the market crashes the year your executive retires, you may find yourself short on the funds needed to pay the benefit.

Whole Life eliminates that mismatch. Because the growth is guaranteed, you can "reverse engineer" your Perfect Plan^® with mathematical certainty. You know exactly what the asset will be worth at any given point in the future, ensuring you can meet your obligations to your top talent without straining the company’s cash flow.

The Role of Whole Life in COLI and BOLI

In the realm of Bank Owned Life Insurance (BOLI), Whole Life is a staple. Banks are highly regulated entities that value capital preservation above almost all else. The guaranteed nature of Whole Life cash values aligns perfectly with a bank’s Tier 1 capital requirements.

For corporations, Whole Life serves as a powerful engine for full cost recovery. When we design a plan at Schiff Executive Benefits, our goal is often to ensure the company recovers every dollar spent on the benefit, every dollar of premium paid, and even the "opportunity cost" of those funds. The predictable, tax-advantaged growth of Whole Life makes this math not just possible, but repeatable.

Regulatory Expertise: Being in the "Room Where It Happened"

When you are dealing with permanent products like Whole Life, compliance is not optional. You need an advisor who understands the "why" behind the regulations.

Matt Schiff, the President of Schiff Executive Benefits, doesn't just read the laws; he helped write them. In 2003 and 2005, Matt served as a ranking member of the AALU's NQDC Committee alongside Michael Goldstein. Together, they helped draft the very regulations that govern IRC 409A (which dictates how deferred compensation is taxed) and IRC 101(j) (which covers employer-owned life insurance).

This "insider" expertise is why we focus so heavily on ensuring your programs are designed to satisfy every government requirement. To hear more about the history of these regulations directly from the source, we invite you to watch Matt’s conversation with Dan Hogans (formerly of the IRS Treasury) on The Perfect Plan^® Podcast.

Solving the Five "What Ifs"

Every business owner we meet is haunted by the same five questions. Whole Life is a versatile tool that provides answers to almost all of them:

1. What if you end up in business with a widow? Whole Life can fund buy-sell agreements with a guaranteed death benefit.


2. What if there is a business buy-out? The accumulated cash value provides the liquidity needed for a smooth transition.


3. What if your top talent leaves? A Whole Life-funded NQDC plan creates "Golden Handcuffs" that reward the executive for staying.


4. What if you need to replace a senior executive? The tax-free death benefit provides the capital to recruit and train a successor.


5. What if you run out of retirement money? The policy's cash value can be accessed tax-efficiently to provide a "guaranteed paycheck and a playcheck."

Restoring Alignment and Retention

At Schiff Executive Benefits, we believe that the best plans are those that align the interests of the business owner with the interests of their key people. We call this Restoring Alignment and Retention.

Whole Life is not the only tool in our belt, but for companies that value certainty, guarantees, and a "set it and forget it" approach to financial security, it is often the most appropriate.

If you’re ready to see how the mathematical certainty of Whole Life can strengthen your business, we invite you to take the first step. Use our Business Valuation Tool to see what your company is worth today, then let’s sit down, grab a coffee, and build your Perfect Plan^®.

Come join us at The Perfect Plan^® and let’s start planning for all of life's "What Ifs."

In the world of financial planning, there is a universal truth: risk and reward are the two sides of the same coin. For business owners and executives, the challenge is often finding a way to capture market growth without exposing the company's balance sheet: or their own retirement security: to the volatile whims of a market crash.

Indexed Universal Life (IUL) was designed specifically to address this tension. It is a permanent life insurance product that offers a unique middle ground: the opportunity for cash value growth linked to the performance of a stock market index, but with a built-in safety net that prevents losses during a market downturn.

What is Indexed Universal Life (IUL)?

At its core, IUL is a form of permanent life insurance. Like other universal life policies, it offers flexible premiums and a death benefit. However, the way interest is credited to the policy's cash value is what sets it apart.

Instead of a fixed interest rate (like Whole Life) or direct investment in the market (like Variable Universal Life), an IUL policy links its interest credits to a specific equity index, such as the S&P 500.

The Mechanics: Floors and Caps

The most compelling feature of IUL is the "floor." Most IUL policies come with a 0% floor, meaning that even if the underlying index drops by 20% in a given year, your policy’s cash value will not decrease due to market performance. Your "worst-case scenario" regarding market crediting is simply staying flat for that period.

To offer this protection, insurance carriers typically implement a "cap" or a "participation rate."

• The Cap: The maximum interest rate the policy can earn in a single segment. If the index grows by 15% and your cap is 10%, you receive 10%.


• Participation Rate: The percentage of the index's growth that is credited to your account.

This structure allows for a "smoothed" growth curve: eliminating the deep valleys of market crashes while still participating in the peaks of market rallies.

IUL as a Funding Vehicle for Executive Benefits

For companies looking to attract, retain, and reward talent, IUL is a powerful tool when used within a Corporate Owned Life Insurance (COLI) or Bank Owned Life Insurance (BOLI) framework.

When a business implements a Nonqualified Deferred Compensation (NQDC) plan or a SERP, they are creating a future liability. To "informally fund" that liability, many businesses purchase IUL policies on the lives of their key executives.

Why IUL for COLI?

1. Tax-Deferred Growth: The cash value within the IUL grows tax-deferred, allowing the company to build an asset that grows more efficiently than a taxable brokerage account.


2. Asset Class Diversification: IUL provides a unique asset class for the company’s balance sheet: one that has a low correlation to other traditional investments because of the downside protection.


3. Cost Recovery: Eventually, the tax-free death benefit paid to the company can provide full cost recovery for the premiums paid and the benefits distributed to the executive. This is the heart of The Perfect Plan^®.

The Importance of Technical Expertise: IRC 101(j) and 409A

Choosing the right product is only half the battle. How that product is structured and documented is where many plans fail. Because IUL is often used to fund executive benefits, it must comply with strict federal regulations.

At Schiff Executive Benefits, we don't just "sell policies": we reverse-engineer solutions based on these complex codes. Our President, Matt Schiff, was literally "in the room where it happened." As a ranking member of the AALU's NQDC Committee, Matt helped draft the very laws that govern these plans today, including IRC 409A (regarding deferred compensation) and IRC 101(j) (regarding corporate-owned life insurance).

Failing to comply with 101(j) can turn a tax-free death benefit into a fully taxable event, devastating the financial logic of the plan. This is why we emphasize an integrated approach, working alongside your existing CPA and Attorney to ensure every "What If" is accounted for. For more on this, we recommend listening to Matt’s discussion with Dan Hogans, formerly of the IRS Treasury, on The Perfect Plan^® Podcast.

Is IUL Right for Your Business?

Indexed Universal Life offers a sophisticated balance of growth and security. It’s an ideal choice for businesses that want market-linked performance to fund deferred compensation liabilities without the "haircut" of a market crash.

However, IUL is not a "one-size-fits-all" product. The caps, participation rates, and internal costs vary significantly between carriers. Our role is to act as your broker and consultant, analyzing the market to find the carrier and the structure that matches your company culture and long-term goals.

Start Planning Today

Whether you are looking to protect your top talent from leaving or ensuring you don't run out of retirement money, the first step is understanding the value of your business and the cost of your liabilities.

Click here to use our Business Valuation tool and see where you stand.

Sit back, grab your coffee, and let’s discuss how we can restore alignment and retention in your organization.

In the high-stakes world of executive retention, flexibility isn't just a luxury: it’s a survival mechanism. Business environments shift, markets oscillate, and the needs of your top talent evolve. If your benefit strategy is anchored to a static, rigid product, you may find yourself drifting off course when the winds of the economy change.

Variable Universal Life (VUL) is often positioned as the "Swiss Army Knife" of corporate-owned life insurance (COLI) and executive benefits. It offers the permanent protection of life insurance, the flexibility of adjustable premiums, and the growth potential of market-based sub-accounts. But with great potential comes great responsibility: and significant risk.

At Schiff Executive Benefits, we believe in reverse-engineering solutions based on your specific goals. VUL is a powerful engine, but it requires a skilled navigator at the helm to ensure it serves the intended purpose of The Perfect Plan^®.

What is Variable Universal Life?

At its core, Variable Universal Life is a form of permanent life insurance. Unlike Whole Life, which offers guaranteed cash value growth and fixed premiums, VUL is designed for the business owner or executive who wants more control over how their capital is deployed.

The "Variable" in VUL refers to the ability to invest the policy's cash value in a variety of sub-accounts. These sub-accounts function similarly to mutual funds, allowing you to allocate funds across stocks, bonds, and money market instruments. This means the cash value (and sometimes the death benefit) will fluctuate based on the performance of these underlying investments.

The "Universal" part refers to the flexibility of the policy. Within certain IRS limits, you can adjust your premium payments and even the death benefit amount as your corporate needs change.

The Upside: Why Corporations Choose VUL

For many of our clients, VUL is the preferred vehicle for informally funding Deferred Compensation (NQDC) plans. Here is why:

1. Market-Linked Growth Potential

In a low-interest-rate environment, traditional fixed-income products may not generate the returns necessary to keep pace with the rising costs of executive benefit obligations. VUL allows the corporation to seek higher returns by investing in equities. When the market performs well, the cash value can grow significantly, providing more "fuel" to fund the benefits promised to key leaders.

2. Tax-Deferred Accumulation

One of the most significant advantages of VUL within a corporate environment is the tax treatment. Growth within the sub-accounts is tax-deferred. This allows the company to reallocate investments within the policy without triggering immediate capital gains taxes: a crucial feature for long-term strategies like Corporate Owned Life Insurance (COLI).

3. The Power of the Tax-Free Death Benefit

As we often discuss when addressing the "5 What Ifs," the ultimate cost-recovery mechanism for any executive benefit plan is the death benefit. Because VUL provides a permanent death benefit that is generally received income tax-free by the corporation, it can be used to recover every dollar spent on the executive's retirement, plus the cost of the insurance itself.

The Downside: Understanding the Market Risk

If a product sounds too good to be true, it usually means you haven't looked at the risk profile yet. VUL is not for the faint of heart.

• No Guarantees: Unlike Indexed Universal Life (IUL), which usually provides a "floor" to protect against market losses, VUL is fully exposed to the market. If the sub-accounts lose 20%, your cash value loses 20%.


• The Risk of Underfunding: If market performance is poor, the internal costs of the insurance (which increase as the insured gets older) may eat away at the remaining cash value. This can create a "death spiral" where the policy requires massive cash infusions just to keep it from lapsing.


• Complexity and Management: VUL is not a "set it and forget it" product. It requires active monitoring of investment allocations and regular in-force illustrations to ensure the policy remains on track to meet its goals.

Strategic Fit: When Does VUL Make Sense?

In our nearly 100 years of combined experience, we’ve found that VUL is most effective when it is part of a broader, integrated approach. It makes sense for your organization if:

1. You have a long time horizon: VUL needs time (usually 15-20+ years) to weather market cycles and allow the tax-deferred growth to overcome the internal costs.


2. You are funding high-level talent: VUL is frequently used in Split Dollar Programs or 401k Mirror plans where the goal is to provide top-tier executives with significant upside.


3. You have the discipline for policy management: This is where we come in. At Schiff Executive Benefits, we don't just sell you a policy; we manage the lifecycle of the plan.

The "In the Room" Advantage: Compliance and Expertise

When dealing with VUL and other NQDC funding vehicles, compliance is non-negotiable. Our President, Matt Schiff, wasn't just studying these laws: he helped shape them. As a ranking member of the AALU’s NQDC Committee, Matt worked alongside Michael Goldstein to help draft the regulations for IRC 409A and 101(j).

This "insider" expertise is what separates a standard broker from a strategic consultant. We ensure your VUL-funded programs are designed to comply with the rigorous Top Hat filing requirements and notice/consent rules that govern COLI. You can hear more about these technical nuances in Matt's podcast interview with Dan Hogans, formerly of the IRS Treasury.

Addressing the "5 What Ifs" with VUL

A well-structured VUL policy should act as a safeguard against the uncertainties that keep business owners awake at night:

• Business with a widow: Can the policy provide the liquidity needed for a smooth transition?


• Business buy-out: Is there enough cash value or death benefit to fund a buy-sell agreement?


• Top talent leaving: Does the VUL-funded NQDC plan create enough of a "Golden Handshake" to keep your best people from looking elsewhere?


• Senior exec retirement: Will the policy provide the supplemental income needed to maintain their lifestyle?


• Running out of retirement money: VUL's growth potential is specifically designed to hedge against the risk of outliving your assets.

Restoring Alignment and Retention

At the end of the day, Variable Universal Life is just a tool. Whether it is the right tool for your company depends on your risk tolerance, your corporate culture, and your long-term vision.

Are you looking to build an "Ownership Feel" for your non-owners? Or are you focused on 100% protection for your executive families? We help you navigate these choices by reverse-engineering the solution to fit your unique goals.

If you are ready to see how VUL or other specialized products fit into your firm’s future, let’s start with the facts. Knowing the value of your business and the cost of your "What Ifs" is the first step toward The Perfect Plan^®.

Ready to evaluate your current executive strategy?
Click here to access our Business Owner Valuation tool and start the conversation today.

For more insights on the different types of products available in the market, visit our full blog feed.

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In the world of institutional finance, capital is the lifeblood of growth, yet for insurance carriers, it is also a highly regulated and scrutinized resource. Managing a balance sheet while simultaneously trying to attract and retain the industry’s brightest minds is a delicate act of precision. How do you deploy surplus capital in a way that is both productive and capital-efficient?

Institutional Corporate Owned Life Insurance (iCOLI) is a specialized subset of the broader Corporate Owned Life Insurance (COLI) market, specifically engineered for the unique regulatory and financial landscape of insurance carriers. While traditional COLI is used by general corporations to fund executive benefits, iCOLI goes a step further, optimizing the carrier’s capital structure while providing a robust vehicle for executive retention and recruitment.

What Makes iCOLI Different?

At its core, iCOLI is life insurance owned by an insurance company on the lives of its key executives. However, unlike standard policies, iCOLI is built for the institutional scale. It is an "admitted asset" on the balance sheet, meaning it is recognized by regulators as a valid piece of the company’s financial strength.

The primary driver for carriers is the Risk-Based Capital (RBC) treatment. In an environment where every dollar of capital must be allocated with extreme care, iCOLI offers a significant advantage:

• Life Insurers: Typically face a 0% RBC charge for iCOLI.


• Property & Casualty (P&C) Insurers: Typically face a 5% RBC charge.

Compared to other asset classes that might carry a much higher capital drag, iCOLI allows a carrier to deploy surplus capital into a tax-advantaged vehicle with minimal impact on their required capital ratios. This is capital efficiency at its finest: restoring alignment between corporate goals and regulatory realities.

Solving the "What Ifs" of the C-Suite

For the decision-makers at insurance carriers, the primary concern is often the "What If" regarding their human capital. What if our top talent leaves for a competitor? What if we are not providing a competitive enough retirement package to keep our senior leadership engaged?

Because iCOLI is an institutional-grade product, it is the ideal engine for funding sophisticated Non-Qualified Deferred Compensation (NQDC) plans and Supplemental Executive Retirement Plans (SERPs). It provides the company with:

1. Tax-Deferred Growth: The cash value within the policy grows without immediate tax liability.


2. Cost Recovery: The death benefit can be structured to recover the costs of the executive’s benefits, the premiums paid, and the cost of money.


3. Liquidity: The policy remains an admitted asset that can be accessed to meet future benefit obligations.

The Expert in the Room

When dealing with iCOLI, compliance is not just a checkbox; it is a fundamental requirement. Navigating the complexities of IRC Section 101(j) and IRC Section 409A requires more than just a broker: it requires an architect who was "in the room where it happened."

Matt Schiff, President of Schiff Executive Benefits, brings a unique level of authority to these discussions. As a ranking member of the AALU’s NQDC Committee, Matt helped draft the very laws that govern these programs today. His deep technical expertise ensures that your iCOLI program is not only high-performing but also fully compliant with the rigorous standards of the IRS and the NAIC. For those interested in the technical nuances of these regulations, we highly recommend listening to The Perfect Plan^® Podcast interview with Dan Hogans, a former official from the IRS Treasury, who worked alongside Matt during the development of these critical tax codes.

The Perfect Plan^® for Carriers

We believe that every executive benefit program should be reverse-engineered starting with your specific goals. For insurance carriers, those goals usually include maintaining a strong RBC ratio while building a Perfect Plan^® that secures the loyalty of their top leadership.

iCOLI is a powerful tool in that arsenal, but it is just one part of the conversation. If you are ready to see how this fits into your larger corporate strategy, we invite you to take the first step.

Determine your business's current standing and valuation through our RISR assessment tool here.

Looking for a deeper dive into the mechanics, historical context, and advanced strategies of iCOLI? Read our comprehensive guide: Institutional Corporate Owned Life Insurance (iCOLI): The Deep Dive.

At Schiff Executive Benefits, we help you plan for all of life's "What If's" while ensuring your business remains competitive, compliant, and cost-effective. Come join us( let’s build your legacy together.)

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Learn more: Corporate Owned Life Insurance (COLI).