What Are The Current Earnings Rates Of BOLI?
The rate of return is a function of the type of policy that is purchased. For a General Account policy the after-tax rate of return is tied to the investment portfolio of the life insurance company. The rate of return from a Variable Separate Account policy is a direct function of the earnings of the investment chosen by the bank. For example, if an MBS fund is selected as the investment fund, the bank will earn the same rate as the MBS fund, less the insurance company’s costs. The costs are contractual and explicit.
