Insurance Center

BOLI life insurance policies are purchased by banks on the lives of their employees in order to collect benefits when an insured current or former employee dies.

According to a report by a firm of lawyers many of the world’s largest banks have been purchasing “bank-owned life insurance” or “BOLI” policies for years.

In a BOLI life insurance program, a bank designates itself as the beneficiary of life insurance policies covering its employees. Nearly half of all U.S. banks have reported owning BOLI policies. The total amount of BOLI policies runs to some $120 billion.

The bank purchasing a BOLI life insurance policy must provide the insurer with full personal information of the insured, including his Social Security number. Social Security numbers are then used to conduct “death sweeps” where banks hire brokers to search public records for names of the insured who may have died.

Thousands of bank employees have been laid off but the banks still stand to benefit financially when those employees die.

A person whose life a bank has insured without consent or knowledge may have a right to sue for the bank’s misappropriation of their identity and insured employees may be able to recover profits made by the bank, broker and insurer.