BOLI Product Types and Executive Benefit Applications

A bank assuming that product type preference alone determines its BOLI structure is overlooking the constraint that actually gates the decision first.

Within the bank-owned life insurance market, benefit application is the constraint decided first, since the intended benefit funding purpose, SERP funding, split-dollar or director benefit programs among them, typically determines which of the three account structures is administratively appropriate before product preference alone is considered.

This page describes three BOLI product types and six executive benefit application categories strictly as market segments.

It provides no tax, accounting or regulatory compliance guidance, and states nothing about the crediting rate, investment return or accounting treatment any product type delivers.

A bank funding a single SERP for one or two executives generally has different product needs than a bank layering split-dollar arrangements across a broader group of directors and key producers.

That funding-purpose-driven pattern is why advisors experienced in this market open a product conversation by confirming benefit application before discussing account structure in detail.

For buyers, identifying the specific benefit application an institution is funding is a more reliable starting point than product type preference alone.

For providers, product-level expertise across all three account structures captures institutions whose benefit funding needs shift as their executive compensation program matures.

This pattern is most visible at larger institutions layering multiple benefit applications simultaneously, where a single account structure rarely serves every funding purpose across SERP, deferred compensation and director benefit programs at once.

Buyers who confirm benefit application before account structure generally report a more efficient initial advisory conversation than those who start from a stated product preference.

This principle extends to institution type as well, since a benefit application appropriate for a national bank's layered compensation structure may not suit a community bank funding a single SERP.

Institutions that select an account structure before confirming benefit application frequently discover a mismatch only once a specific SERP or split-dollar design is drafted, requiring a costly restructuring that could have been avoided by sequencing the decision correctly from the outset.

General Account BOLI

General Account BOLI is one of the three product type categories tracked in this report.

It is named here as a market category, and this page states nothing about how it is credited or what investment return it delivers.

General Account BOLI accounts for the largest product type category in this report by aggregate cash surrender value, reflecting its established position as the simplest and most widely adopted BOLI structure.

Smaller and first-time purchasing institutions generally specify General Account BOLI almost exclusively, reflecting its comparatively lower administrative complexity relative to Separate Account structures.

This category is generally paired with SERP funding and nonqualified deferred compensation, the two most common executive benefit applications this report tracks.

For buyers, General Account BOLI is generally the entry point into this market, particularly for community banks and credit unions new to BOLI-adjacent benefit funding.

For providers, this category remains the largest and most established of the three product types tracked in this report.

Commercially, this category typically involves the most standardised underwriting and administration process of the three product types, given its widespread adoption across institution types and asset sizes.

Institutions moving beyond a first BOLI purchase frequently retain a General Account allocation even after adding Separate Account or Hybrid Account coverage, reflecting its role as a stable base layer within a broader BOLI portfolio.

General Account BOLI's underwriting process typically requires less documentation than Separate Account structures, since the carrier retains investment discretion rather than requiring the purchasing institution to specify an investment mandate.

Hybrid Account BOLI

Hybrid Account BOLI sits between the General Account and Separate Account structures covered elsewhere on this page.

This category is named here as a market category, and this page states nothing about how it is structured or what investment outcome it delivers.

Hybrid Account BOLI forms part of the fast-growing product type category in this report, reflecting rising interest in structures that blend general account stability with elements of separate account flexibility.

Institutions moving beyond an initial General Account purchase frequently evaluate Hybrid Account structures before committing to a full Separate Account allocation.

Commercially, this category typically requires more advisory involvement than General Account BOLI, given the additional structural features a purchasing institution must evaluate.

For providers, Hybrid Account capability is a meaningful differentiator for institutions transitioning from a first BOLI purchase toward a more diversified BOLI portfolio.

Regional and super regional banks are more frequently associated with this category than community banks, reflecting their typically larger and more diversified existing BOLI holdings.

For buyers, Hybrid Account BOLI is generally evaluated once an institution's treasury function has grown comfortable managing more than a single-carrier General Account relationship.

Institutions evaluating Hybrid Account BOLI for the first time frequently request a side-by-side illustration against their existing General Account holding, a comparison exercise that typically extends the initial evaluation period beyond what a straightforward General Account addition would require.

Separate Account BOLI

Separate Account BOLI completes the product type dimension tracked in this report.

Separate Account BOLI is generally specified by the largest institutions this report tracks, and the asset size bands specifying it sit toward the upper end of this report's institution profile.

This category is named here as a market category, and this page states nothing about how it is structured or what investment risk it carries relative to General Account BOLI.

Separate Account BOLI is generally specified by national and super regional banks with the treasury capacity to evaluate segregated-account structures directly.

Commercially, this category typically requires the most extensive advisory involvement of the three product types tracked in this report, reflecting its structural complexity.

For providers, Separate Account capability is a differentiator for institutions in the largest asset size bands this report tracks specifically.

Institutions specifying this category frequently layer multiple executive benefit applications across a single Separate Account structure, distinct from the single-application pattern more common with General Account BOLI.

For buyers, Separate Account BOLI generally involves the longest initial evaluation period of the three product types, given the additional structural review most institutions undertake.

Institutions specifying Separate Account BOLI frequently retain independent investment consultants alongside their BOLI advisor, reflecting the additional investment governance this structure introduces relative to a General Account policy.

SERP Funding and Nonqualified Deferred Compensation

SERP funding and nonqualified deferred compensation form two of the six executive benefit application categories tracked in this report.

Both are named here as market categories, and this page states nothing about the tax or accounting treatment either benefit application receives.

SERP funding and nonqualified deferred compensation together account for the largest executive benefit application category in this report, reflecting their established position as the most common benefit funding purpose across institution types.

SERP funding is generally associated with a smaller, more senior group of executives than nonqualified deferred compensation, which frequently extends further into an institution's leadership bench.

Commercially, both applications are generally funded through General Account BOLI at smaller institutions and increasingly through Hybrid or Separate Account structures at larger institutions.

For providers, this application grouping continues to anchor the largest share of overall demand despite growth concentrating in split-dollar arrangements elsewhere in the segmentation.

Institutions layering both applications simultaneously frequently coordinate funding across a single BOLI relationship rather than maintaining separate policies for each benefit type.

For buyers, confirming which of these two applications a program is funding, or both, is a useful early step before a specific product structure is discussed.

Institutions renewing an existing SERP funding arrangement following an executive departure or retirement frequently revisit account structure at the same time, since a benefit obligation's funding needs can change materially even when the underlying plan design does not.

Executive Bonus, Split-Dollar, Director Benefit and Retention Programs

Executive bonus programs, split-dollar arrangements, director benefit programs and retention programs complete the executive benefit application dimension tracked in this report.

Each of these applications carries its own considerations depending on the regulatory framework a purchasing institution falls under, since charter type and supervisory relationship can shape which benefit structures an institution's board favours.

All four are named here as market categories, and this page states nothing about how any benefit application is administered or funded.

Split-dollar arrangements form a fast-growing benefit application category in this report, tied to executive retention pressure identified among this report's market drivers.

Director benefit programs and retention programs are generally associated with mutual banks and credit unions more frequently than the SERP-heavy pattern typical of larger national banks.

Commercially, this grouping requires advisors with established multi-application structuring experience, given how frequently these four applications appear in combination rather than in isolation.

For providers, split-dollar and director benefit program capability is a meaningful differentiator for institutions extending BOLI-funded benefits beyond the C-suite.

For buyers, confirming which of these four applications, alone or in combination, a program needs generally clarifies which product structure and distribution model fits before a specific carrier conversation begins.

Executive bonus programs are generally the simplest of the four applications in this grouping to administer, reflecting their more direct funding structure relative to the longer-term liability profile split-dollar arrangements and deferred director benefit programs typically carry.