Navigating Corporate Owned Life Insurance Taxation

Corporate Owned Life Insurance policy overview

Intro

Navigating the intricate maze of Corporate Owned Life Insurance (COLI) taxation can feel like deciphering hieroglyphics. Yet, understanding the underlying principles is essential for financial professionals and corporate leaders. COLI often serves as a strategic financial instrument, offering businesses not just death benefits, but also an array of potential tax advantages.

In the forthcoming sections, we will peel back the layers of this complex topic, clarifying key terminology, scrutinizing IRS regulations, and discussing the overall financial impact of COLI on corporate strategies. This knowledge is indispensable for anyone involved in corporate finance, as it bears significant implications not just for the long-term health of an organization but also for compliance and strategic planning.

The discussion will delve into the distinguished features of COLI, examine its benefits in terms of tax treatment, and evaluate its role in enhancing the financial portfolios of corporations. Moreover, we'll take a closer look at the various IRS guidelines that govern COLI, ensuring that you have a holistic understanding to navigate this financial landscape.

Foreword to Corporate Owned Life Insurance

The landscape of corporate financing has shifted over the years, and within that dynamic, Corporate Owned Life Insurance (COLI) has emerged as a tool wielded by companies for several strategic advantages. Understanding this concept is crucial for businesses aiming to optimize their financial strategies while taking into account taxation implications. When companies opt for COLI, they essentially invest in life insurance policies on the lives of key employees. This act isn't merely about ensuring a payout upon the untimely passing of these employees; it represents a multifaceted approach to capital management, risk mitigation, and overall financial health.

The crux of why corporations pursue COLI can be summarized in its ability to generate cash value that can be utilized for various business needs — from funding employee benefits to backing loans. Moreover, businesses gravitate towards COLI due to the favorable tax treatment that is often associated with these policies, making them more enticing than traditional investments.

Key Points:

Strategic Financial Tool: COLI aids in ensuring the company maintains liquidity while minimizing financial risks.
Tax Advantages: Companies can benefit from potential tax-deferred growth, which can be a game-changer for cash flow management.
Risk Management: COLI provides a safety net by compensating for the loss of key individuals without impacting operational continuity severely.

In examining Corporate Owned Life Insurance, it cannot be understated how this financial strategy intersects with tax legislation, stakeholder interests, and long-term corporate planning. Businesses, therefore, need to be acutely aware of both the benefits and potential complexities involved in COLI taxation.

Let us first establish a clear definition of COLI.

Taxation Principles and Corporate Owned Life Insurance

Understanding the tax implications surrounding Corporate Owned Life Insurance (COLI) is essential for any business looking to leverage these financial instruments effectively. The taxation principles that guide COLI can significantly impact a company's tax liability, financial health, and strategic plans. By grasping these principles, businesses can make informed decisions that align with their financial objectives and compliance obligations.

Understanding the Tax Structure

The tax structure related to COLI is multifaceted, encompassing a range of rules and regulations that dictate how these products are treated under federal and state laws. The Internal Revenue Service (IRS) has specific guidelines for COLI that necessitate businesses to approach their tax strategies with care. Companies must navigate the potential tax advantages while also being aware of the looming risks of non-compliance.

Taxation on COLI is not a one-size-fits-all scenario. Each corporation's strategy will depend on several factors, including the type of life insurance policy, the purpose of the insurance, and the company’s overall financial objectives. It is critical for corporations to closely work with tax professionals who can provide guidance tailored to their unique situation. This way, a business can integrate COLI effectively into its financial planning, enhancing its overall strategy and ensuring regulatory compliance.

Types of Taxes Applicable

Income Tax

Income tax plays a vital role in the taxation landscape of COLI. The portion of the policy’s income that a company receives can be subject to income tax, which makes it a key factor to consider. The unique characteristic of this tax is that it only applies to the gains derived from the policy when the cash value is accessed. For many businesses, this can be a beneficial aspect as it allows them to grow their capital without immediate tax implications until they decide to realize those gains.

However, the potential disadvantage is that income tax can erode returns if not carefully managed. To mitigate this impact, companies often select policies that match their long-term financial targets, ideally deferring taxes as long as possible.

Gift Tax

Gift tax can come into play under specific circumstances, particularly when a company decides to transfer ownership of a COLI policy or when the benefits of the policy are conferred onto an individual. The key characteristic of the gift tax is that it focuses on the value passed from one individual to another without an exchange of adequate consideration.

This tax can be thought of as a double-edged sword. On one hand, it can be beneficial if structured properly to be under the annual exclusion limit. Yet, the challenge arises if the policyholder isn't aware of these limits, which may inadvertently lead to tax liabilities that could have been avoidable. Understanding the nuances of the gift tax is essential for corporate financial strategists, as any oversight might lead to unintended consequences.

Estate Tax

When a policyholder passes away, the estate tax can significantly affect the value of a COLI policy. Essentially, the estate tax applies to the total value of the deceased's estate, including any COLI policies with cash value or death benefit. A crucial aspect to consider is that while the death benefit is typically received tax-free by the beneficiaries, it might still be included in the estate for tax purposes, often pushing the estate’s value into a higher tax bracket.

Managing the implications of the estate tax is critical for businesses keen on effective succession planning. Strategies such as ensuring ownership of the policy is placed in a trust or transferring it to a spouse can mitigate potential tax burdens. However, these strategies require careful planning and timely execution to avoid pitfalls.

In short, understanding the various taxes applicable to COLI can help businesses navigate their financial and strategic objectives effectively.

Benefits of Corporate Owned Life Insurance

The concept of Corporate Owned Life Insurance (COLI) is not just a financial instrument; it’s a strategic asset that can yield various advantages for corporations. Understanding the benefits of COLI can help companies improve their financial standing and provide security for their employees and stakeholders. In this section, we will explore the unique benefits associated with COLI, emphasizing tax advantages, credit enhancement, and employee benefits.

Tax Advantages

When businesses consider corporate-owned life insurance, the first thought that pops into their minds is often the tax benefits it could bring. Here’s the gist: when the insured individual passes away, the death benefit paid out to the company is typically not subject to federal income tax. This can be a natural boon for any corporation looking to bolster its financial cushion. Not only does this create a tax-free infusion of cash, but it also helps maintain liquidity, making it easier to cover any immediate financial responsibilities, such as settling liabilities or funding succession planning.

Moreover, businesses can often deduct the premiums paid on a COLI policy if the policy is utilized for a qualifying purpose. This can soothe the financial strain on a company, especially during years of tight budgets.

“Tax advantages associated with COLI can be the straw that stirs the drink in corporate finance.”

These merits underscore why many businesses view COLI as a beneficial financial strategy when considering long-term growth and stability. Awareness of these tax advantages is crucial in capitalizing on them effectively.

Enhancing Creditworthiness

Creditworthiness is vital for a company aiming to secure loans or attract investors. Often, stakeholders assess financial resilience through various lenses, and COLI can significantly bolster this aspect. When a corporation holds a significant life insurance policy, it can add an additional layer to its balance sheet, essentially presenting a safety net that is recognized by lenders.

By enhancing its creditworthiness, a company stands to benefit in several ways:

Lower interest rates on loans: A strong credit profile often equates to favorable lending terms.
More borrowing power: The corp might have broader avenues for financing, as creditors will see a more secure and stable organization.
Investor interest: A perceived lower risk can attract more equity investment, enhancing market appeal.

Moreover, should the unexpected happen, funds from the COLI policy can be used to pay off debts, ensuring the company maintains its good standing and financial health even during challenging times.

Employee Benefits and Retention

In the grand scheme of corporate benefits, keeping valuable employees engaged and satisfied is pivotal. COLI not only acts as a financial safety net for the corporation but can also serve as a tool for employee retention.

Many corporations choose to set up COLI plans as part of their employee benefits program. Here’s how this works:

Key Person Insurance: Some firms use COLI to insure top executives, and the benefits support the business in case of an unlikely event. This strategy reassures employees about the company's stability.
Supplementary Benefits: Companies can leverage the cash value of COLI policies to offer additional retirement benefits, ensuring employees feel valued and enhancing loyalty.
Incentives for Long-Term Employees: By implementing COLI strategies, businesses can promote loyalty by rewarding tenure through increasing insurance benefits or bonuses.

Such measures not only help retain critical talent but also foster a sense of belonging, creating a more cohesive organizational culture. In the end, having a COLI strategy can be an ace in the hole for organizations striving to outpace their competition.

IRS Regulations Governing COLI

Understanding the IRS regulations that pertain to Corporate Owned Life Insurance (COLI) is essential for any business considering the integration of this financial tool into their strategy. The IRS has laid out specific rules that dictate how these insurance policies should be treated for tax purposes. Familiarity with these regulations not only aids in compliant financial planning but also enhances strategic decision-making regarding employee benefits, risk management, and overall corporate finance practices.

Key IRS Sections Impacting COLI

Several key sections of the Internal Revenue Code play pivotal roles in how COLI is managed and taxed:

Section 101(a): This section outlines the general tax treatment of life insurance death benefits. In most circumstances, the death benefits received by the policyholder (the corporation, in this case) are typically excluded from gross income. This exemption is a significant draw for businesses looking to utilize COLI as a means of securing financial support after the loss of key employees.
Section 264: This section restricts the deductibility of premiums for life insurance policies when the corporation or another individual who is an investor in the corporation is the beneficiary. It emphasizes the need for careful planning about who benefits from the policy. If not structured correctly, organizations may face limitations on claiming those critical tax deductions.
Section 7702: It defines what constitutes a life insurance contract. For COLI to qualify as life insurance under tax laws, it must meet certain stipulations to ensure it maintains its status for favorable tax treatment. This means businesses must structure their policies carefully to avoid potential financial pitfalls.

"Proper understanding of the tax code articles is fundamental for effective COLI management. Missteps can lead to significant tax liabilities that undermine the insurance's intended benefits."

Given these sections, businesses must consider how their decisions align with IRS expectations, preserving the longevity and effectiveness of their COLI plans.

Changes in Tax Legislation

Tax legislation is dynamic, and it's crucial for businesses utilizing COLI to stay abreast of any changes that may impact their insurance policies.

Ongoing Reviews and Revisions: The IRS periodically updates regulations that can directly affect COLI. For instance, if new rules emerge concerning deductions or federal tax liabilities, it can ripple through corporate financial strategies. Keeping an eye on communiqués from the IRS or changes proposed in Congress related to tax legislation ensures businesses don’t get caught flat-footed.
Tax Reform Implications: Major tax reform efforts can bring about sweeping changes that could influence COLI's benefits and responsibilities. If the tax rate for corporations were to change, or if new taxes were introduced on certain corporate structures, COLI may face a reevaluation of its benefits.

A thorough understanding of legislative trends ties back into effective risk management. Organizations can not only protect their interests but also leverage potential tax advantages grounded in emerging legislation, thus maximizing the benefits of using COLI in their financial structures.

Staying informed should not be an afterthought but an integral part of strategic planning. Corporate financial leaders need to integrate a proactive approach to IRS regulations and tax legislation concerning COLI to fully harness its potential advantages.

Challenges and Considerations in COLI Taxation

Navigating the waters of Corporate Owned Life Insurance (COLI) taxation presents various challenges that can stir confusion, not just for corporations but also for advisors and policyholders. A thorough understanding of the issues at hand is vital, as they can make or break a business’s financial strategy. Addressing the complexities of tax compliance risks and potential audits can provide a clearer path for organizations looking to optimize their use of COLI.

Tax Compliance Risks

Tax compliance in the realm of COLI is no walk in the park. Many corporations often grapple with the intricacies surrounding the rules that govern these financial instruments. The stakes are high; non-compliance can lead to hefty penalties that can financially strain even the most robust businesses. Corporations need to ensure they’re following all IRS guidelines and regulations to avoid unnecessary repercussions.

Inadequate Documentation: One of the most significant risks stems from improper or insufficient documentation. Companies must keep meticulous records of their COLI transactions to substantiate their claims and deductions during tax submissions.
Misinterpretation of Tax Laws: Given the evolving nature of tax legislation, misunderstandings can easily arise. Companies might misinterpret tax obligations, leading to incorrect filings that could trigger audits or fines.
Changes in Ownership Structure: When corporate ownership changes, the tax implications attached to COLI can shift dramatically. Understanding these implications becomes crucial to managing potential risks.

Addressing these compliance issues requires not just diligence but also a proactive strategy to keep abreast of the evolving regulations. Establishing a comprehensive compliance framework can save corporations from unintended pitfalls.

Potential for Tax Audits

With the complexities of COLI taxation, the potential for tax audits looms large. Once a corporation decides to implement COLI strategies, they open themselves up to the possibility of a review by tax authorities. Auditors are typically on the lookout for inconsistencies and anomalies, making it crucial for companies to maintain transparency in their reporting.

An audit isn't merely a disruption but a lens through which corporations can assess their fiscal health.

Common Triggers for Audits: Certain activities may increase the likelihood of an audit, such as high-value transactions or significant losses in reported income. Being aware of these triggers helps in mitigating risks.
Audit Trails: Maintaining clear audit trails can effectively demonstrate compliance during tax examinations. Corporations should prioritize well-organized documentation that clearly delineates the purpose, transactions, and outcomes related to their COLI.
Seeking Professional Guidance: Engaging tax professionals or legal experts can be a lifeline. They bring a wealth of knowledge and can help ensure that businesses are less likely to come under the auditor’s microscope.

Accounting Treatment of COLI

Understanding the accounting treatment of Corporate Owned Life Insurance (COLI) is vital for any business that wants to manage its balance sheet effectively. COLI can function as a powerful financial tool, but its accounting needs careful consideration to align with corporate strategy and tax implications. The way COLI is classified on financial statements can significantly influence the perceived financial health of a company.

Book Value vs. Fair Value

When it comes to accounting for COLI, businesses often face the choice between reporting on a book value or fair value basis.

Book value represents the cost of the insurance policy minus any accumulated depreciation or amortization. In a sense, it follows the historical cost principle, reflecting what the company actually spent on the policy. On the other hand, fair value aims to provide a current market assessment, which can vary significantly over time based on interest rates and policy performance.

For instance, let’s say a company invests in a life insurance policy worth $100,000. If it holds the policy for several years and its cash surrender value increases to $120,000, the book value would remain at the initial $100,000 unless modified for amortization. Under fair value accounting, the financial statements would reflect the current market value of $120,000, portraying a more accurate picture of the company’s assets.

Choosing whether to report under book value or fair value has implications not just for internal decision-making, but also for how stakeholders perceive the company's financial viability. It can influence investment decisions, credit evaluations, and affect the overall market perception.

Impact on Financial Statements

The accounting treatment of COLI directly impacts various components of financial statements, affecting both the balance sheet and income statement. Here’s how it can play out:

Balance Sheet Implications:
Income Statement Effects:

If reported at book value, the insurance policy may be understated compared to its market value.
Fair value reporting can lead to more volatility in asset valuations, potentially affecting loan covenants.

The difference between cash surrender value changes and the premium payments can impact the net income of a company.
Any gains realized upon the death benefit or cash surrender can contribute positively to earnings, thus influencing profitability metrics.

Furthermore, analysts often evaluate long-term liabilities in relation to COLI. For a business, understanding these financial metrics is crucial. The treatment not only affects tax positions but also drives growth strategies. Firms need to decide on their approach carefully, ensuring that it aligns with their overall financial strategy and preserves their integrity in reporting.

"Accurate accounting of COLI is not just an obligation; it's a significant aspect of strategic financial planning."

In summary, the accounting treatment of COLI is far more than a box on a ledger. It’s central to how companies articulate their value and manage financial expectations from investors, creditors, and other stakeholders. Understanding this dynamic is essential for a well-rounded grasp on corporate finance, particularly in navigating the often murky waters of tax implications and financial regulation.

Integration of COLI into Corporate Strategy

Integrating Corporate Owned Life Insurance (COLI) into a company's financial strategy is more than just a numbers game; it's directly intertwined with the organization’s risk management and succession planning. Done right, this integration provides powerful tools that bolster a business's financial standing while also safeguarding it against unforeseen threats.

Risk Management Strategies

At its core, risk management is all about anticipating and mitigating potential threats before they turn into larger issues. When a company incorporates COLI into its risk management framework, it can effectively shield itself from a variety of perils. For instance, if a key employee were to pass unexpectedly, the company may face significant operational disruption. By having COLI policies in place, businesses ensure that they receive a substantial death benefit that can be used to cover immediate costs like hiring and training replacements.

The advantages of integrating COLI in risk management include:

Liquidity Provision: The death benefits provide immediate cash flow, enhancing liquidity during times of crisis.
Mitigation of Financial Impact: Helps dampen the economic shock associated with losing a crucial employee.
Continuity Planning: Aids in maintaining operational stability, as funds can quickly address staffing gaps or essential functions.

Moreover, companies can model their risk exposure with data derived from COLI policies to refine their overall risk management strategy. Utilizing these insights, businesses are often better equipped to allocate resources judiciously, taking into account the financial safety nets that COLI provides.

Funding Buy-Sell Agreements

Buy-sell agreements are fundamental in businesses with multiple owners or partners, especially regarding succession planning and ownership transfers. These agreements effectively allow for the smooth transition of ownership, particularly in the event of retirement, death, or incapacity of an owner. Here, COLI shines brightly as a funding mechanism.

When companies include COLI policies as part of buy-sell agreements, it creates a win-win scenario:

Immediate Access to Cash: In cases where an owner passes away, the death benefit from the policy provides the necessary funds to buy out the deceased's share. This ensures that the business does not have external parties stepping into ownership roles.
Prevents Disputes: By establishing a pre-agreed price through the buy-sell agreement and funding it with COLI, potential conflicts among remaining owners and heirs are minimized.
Structured Transition: A clear pathway is established for transferring ownership, reducing anxiety and uncertainty surrounding ownership dynamics.

Impact on Business Succession Planning

In the intricate tapestry of corporate finance, business succession planning emerges as a critical thread, especially when it involves Corporate Owned Life Insurance (COLI). This strategy not only ensures the continuity of operations but also addresses the complexities that arise when ownership transitions occur. By effectively integrating COLI into succession plans, businesses can enhance their financial stability and secure the future for both the company and its stakeholders.

Role of COLI in Succession Planning

Corporate Owned Life Insurance serves as a powerful tool in succession planning. It all boils down to providing a financial safety net that can safeguard the interests of the business, shareholders, and employees alike. Here are a few ways COLI plays its part:

Liquidity Provision: One of the prominent advantages of COLI is its ability to supply necessary liquidity upon the death of a key individual. This ensures that funds are readily available to cover estate costs, pay off debts, or facilitate a seamless transfer of ownership to heirs or buyers.
Continuity of Operations: The unexpected loss of a vital team member can throw a wrench in daily operations. However, having COLI in place means that the organization can maintain stability, allowing for the business to keep running smoothly during a tumultuous change.
Valuation Stability: In the context of succession planning, accurately valuating a business is crucial. COLI not only helps in determining a fair value for the life insurance policy but also reflects the overall value of the business, adding clarity during negotiations or the potential sale of the company.

In summary, COLI weaves itself into the broader context of succession planning by bolstering financial resilience and facilitating a smoother transition of leadership. It's a strategy that not only secures assets but also provides peace of mind for all parties involved.

Mitigating Taxes in Business Transitions

As businesses gear up for ownership transitions, tax implications can loom large. The right application of COLI can significantly alleviate the tax burden associated with such transitions. Here are several avenues by which COLI aids in mitigating taxes during these crucial periods:

Tax-Free Death Benefits: The death benefits from a COLI policy are typically not subject to income tax, providing substantial financial relief for heirs or stakeholders. This feature allows the organization to approach succession without the immediate worry of tax liabilities that could stifle a smooth transition.
Estate Tax Inclusion: While estate taxes can be a biting issue during business transitions, COLI can help strategize how to minimize the taxable estate. By structuring the ownership of the policy strategically, businesses may keep certain assets off the estate tax radar, enhancing the overall value available to beneficiaries.
Cash Value Growth: The cash value accumulated in a COLI policy can also serve as a financial cushion during transitions. Businesses can withdraw or borrow against this cash value without immediate tax consequences, providing necessary funds during ownership transfer phases.

Understanding these tax implications can empower businesses to make informed decisions that not only streamline succession but also preserve the wealth locked within the organization. Every dollar saved in tax can be a dollar reinvested into the business operations or allocated toward growth strategies.

For those delving deeper into the tax laws surrounding business transitions, resources such as IRS.gov can be invaluable.

Incorporating Corporate Owned Life Insurance into business succession planning isn't just about insurance; it's about charting a course for sustainable growth amidst the unpredictability of life events. It's about establishing a lasting legacy.

Future Considerations in COLI Taxation

The landscape of Corporate Owned Life Insurance (COLI) taxation is an ever-changing one, shaped significantly by economic conditions, legislative changes, and the shifting priorities of corporate finance. As businesses adapt to these nuances, understanding future considerations becomes integral. Here are a few pivotal elements regarding this topic:

Regulatory Compliance: Companies must stay vigilant about upcoming regulations from the IRS. The intricate tax framework surrounding COLI indicates a strong need for firms to anticipate changes to avoid penalties and leverage new tax benefits.
Strategic Planning: Future taxation can profoundly affect how businesses strategize insurance investments. Knowing the potential changes allows corporations to align their fiscal policies and insurance strategies effectively.
Market Dynamics: As market conditions fluctuate—ranging from interest rates to the economy's health—companies find themselves reassessing their insurance policies based on projected profitability and risk. COLI provides varying benefits depending on these external factors, necessitating a keen awareness of trends both in insurance markets and broader economic policies.

"The challenge lies in the ability to foresee these changes. Companies that fail to adapt may find themselves carried away by the tide of legislation rather than riding its waves."

Anticipated Regulatory Changes

Historically, the IRS has introduced adjustments to how COLI is taxed based on the prevailing economic climate and compliance issues noticed within the industry. Going forward, one can expect a few potential regulatory shifts:

Adjustments to Tax Benefits: There’s a chance that tax exemptions currently benefiting COLI may see alterations or eliminations, making it crucial for companies to prepare for tighter regulations.
Increased Scrutiny on Outsourcing: The IRS may ramp up scrutiny on corporate practices related to COLI, especially how policies are structured and whether they align with intended tax benefits.
Common Practices Review: New regulations can emerge that reevaluate common industry practices to ensure they align with the spirit of tax law without providing unjust advantage.

Being engaged with these anticipated changes is vital for any business utilizing COLI to foster stability and growth without unexpected liabilities.

Emerging Trends in Corporate Insurance Strategies

As the tax implications of COLI evolve, innovative strategies are surfacing where companies find new value not just in the benefits but also in risk management that comes with these policies:

Integration with Retirement Plans: Firms are exploring how COLI can supplement employee retirement accounts, presenting tax advantages while ensuring a safety net for future needs.
Sustainable Practices: New movements towards sustainability are influencing corporate insurance strategies. Companies that align their insurance practices with eco-friendly policies may find favorable treatment in the eyes of regulators and clients alike.
Technology Adoption: Emerging tech solutions aimed at insurance management can provide better oversight and analysis of COLI portfolios, ensuring they are compliant and beneficial in a rapidly changing tax landscape.

As these trends materialize, businesses will need to maintain agility in their insurance and financial strategies to remain competitive and compliant.

Additional Resources:

Culmination

In closing, the topic of Corporate Owned Life Insurance (COLI) taxation stands as a pivotal element in the financial arsenal of corporations. It offers significant benefits, yet also presents its share of challenges that businesses must navigate with keen awareness. Understanding these tax implications is not just about compliance; it's about leveraging COLI to enhance financial strategy, manage risk, and execute effective business succession planning.

Summarizing Key Insights

The previous sections have illustrated several key insights:

Tax Benefits and Strategic Usage: Organizations can use COLI not merely for risk management, but as a sophisticated means to improve both tax efficiency and capital management. The intrinsic value of life insurance policies can provide liquidity when needed, serving as a safety net against unforeseen circumstances.
IRS Regulations and Future Outlook: The regulatory landscape governing COLI is subject to change, making it crucial for stakeholders to stay informed about any shifts in IRS policies that could affect tax liabilities. Keeping abreast of these regulations is vital for maintaining compliance and optimizing tax efficiency.
Integration with Corporate Strategy: COLI should not be seen in isolation. Its role in risk management, employee benefits, and succession planning integrates within a broader corporate strategy. Particularly, understanding how COLI can mitigate tax implications during transitions lays a foundational stone for future growth.

"Successful navigation of COLI not only aids in meeting regulatory requirements but enhances overall corporate financial strategy."

Final Thoughts on COLI in Corporate Finance

As businesses continue to evolve in an ever-changing financial landscape, the role of COLI remains relevant. It's a tool that promotes not only tax advantages but also drives strategic thinking around capital allocation and risk management. As we look to the future, companies that approach COLI with rigor and foresight will find themselves better positioned to capitalize on its benefits while mitigating its challenges. The sophistication of corporate finance demands that decision-makers aren’t just informed but proactive about tax strategies and regulations surrounding COLI. In this way, it can be transformed from a mere insurance policy into a linchpin of corporate financial strategy.

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