NAIFA: Is Michael Moore’s Film True For Corporate-Owned Life Insurance?

By Patrick Cooper Posted in Life Insurance News


The NAIFA, National Association of Insurance and Financial Advisers, is a non-profit organization that monitors the insurance and financial industries. Recently, they submitted a rebuttal to Michael Moore’s scathing movie “Capitalism: A Love Story.” In the article they attempt to explain exactly what corporate-owned life insurance is and how it benefits the economy.

What Is COLI

COLI, or corporate-owned life insurance, is a type of life insurance that companies purchase for their employees. According to an article published by the NAIFA on October 14, 2009, “COLI is a life insurance policy used by employers to keep businesses running and protect jobs after the death of owners or key employees.” NAIFA has a strong position on the benefits of this type of insurance.

Corporate owned life insurance offers protection for jobs and other employees by assigning a monetary value to the employee the insurance is covering. The employee does not get to name the beneficiary because the company owns the policy. The company is the beneficiary and receives the money when the employee passes away. Or, the company might be co-beneficiary with one of the employees family members.

COLI Protected Under Federal Law

In 2006, Congress signed a new bill that protected the rights of employers to purchase life insurance for their key employees. The Pension Protection Act states that it is acceptable for companies to purchase corporate-owned life insurance policys for their most valuable employees as long as they notify and have consent with the life insurance company.

What Does Michael Moore Say About COLI

In his latest film, “Capitalism: A Love Story”, Michael Moore commits a small section of the movie to COLI. In the movie he implies that COLI is a tool that companies use to benefit from the death of their employees. In response to his position in the film, many trade groups are teaming up to defend corporate-owned life insurance and hail the benefits of using COLI as a benefit to their employees.

Related posts:

  1. What Role Does NAIFA Play In The Legislative/Regulatory Environment?
  2. What Is A Tax Free Death Benefit For Life Insurance?
  3. When Someone Dies, Who “Owns” A Life Insurance Policy?
  4. What Is Split-Dollar Life Insurance?
  5. How Do Employer Paid Life Insurance Premiums Work?

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