BOLI – Executive Benefits – Fee Income Strategies
Stay Informed with IZALE Financial Group
2nd & 3rd Quarter 2021 eNews | Issue No. 25

I’m not sure who said it, but in my 50+ years I’ve frequently heard “the only constant is change.” Seasons change, my hair has grayed (and thinned!), my waistline…well, I’m not 18 anymore. IZALE remains committed to providing best-in-class client service - we are humbled by the feedback many clients share on how we do with that – but we are always incorporating feedback to improve our processes and systems. We also continue to look for additional ways we can add value to and for clients without distracting us from the promises we’ve already made. To that end, I’m excited to share the following:

  • Ken Smith is leading our charge for personalized insurance services. I’ve known Ken for almost 10 years and we share the same philosophy on client service. Whether you have a personal need or you want to offer the service to your clients, IZALE can help. Read more from Ken below.

  • IZALE has become a Subject Matter Expert of and partnered with My Financial Coach. My Financial Coach is an unbiased, fee-based planning service that is offered as an executive benefit. For a very reasonable price-point, your employer can offer a service that integrates employer-provided benefits with personal assets to give your key people peace of mind and less distraction from day-to-day duties. We recently sent clients a link to a recorded webinar with MFC and attached is a redacted example of an enrollment booklet for the program. Let’s schedule 30-60 minutes to learn how this can benefit you.

  • IZALE has subscribed to BizEquity, a tool to help business owners value what they’ve built. Attached is a brochure on why you might want to do that and here’s a link to see how it works. We are offering this service directly to our non-financial institution clients and prospects. For our bank and credit union clients – this can be a great value-add to your business clients. Let’s have a conversation how that benefits them and you and strengthens your partnership with IZALE.

As we are now in the 4th quarter, we wish you continued success and the best of good health.

Scott & Your Friends at IZALE

Scott Richardson, Brenda Haag, Bruce Barge, Chris Richardson, Deb Hardimon, Fannie Mae Pantaleon, Jeff Prescher, Ken Smith, Joe Tripalin, Patrick Costello and Phil Aderton  

IZALE is proud to announce our latest endorsement from the CBSC in Illinois!

For more information on what this means to the Community Bankers of Illinois, contact Phil Aderton, 630-561-9071!
Personalized Insurance Services &
Welcome Ken Smith, CLU, CHFC to Our Team
Most of our clients know us as managers of insurance related products to help our banking, credit union and corporate clients gain yield. What you may not know is IZALE also assists our clients on a personal level in analyzing both their current insurance and possible needs for new products. If you are interested in talking with someone on our private client side please reach out to your representative.

Recently we connected with one of our corporate clients c-suite executives who wanted to have their current life insurance policies reviewed. In our initial meeting we discovered that they had been investigating purchasing long-term care insurance due to their personal experience with parents and their need for care. We were able to repurpose cash values inside of a current contract into a hybrid life/long-term care contract that continued to provide life insurance at levels that satisfied that need and provide long-term care benefits for both spouses without requiring any additional out of pocket outlay.

Contact IZALE at 855-492-5334 or by email.

View more information by clicking these links!
BOLI and Executive Benefits – Two Peas in a Pod
by Scott Richardson, President & CEO of IZALE
Could the spike in deposits have come at a worse time? Loan yields are down, loan demand has not kept pace with deposit growth, and returns on permissible investments are near historical lows. Yet the cost of retaining and rewarding all employees continues to grow. It puts incredible pressure on earnings. What’s a bank to do?

Since the early 1980s, bank-owned life insurance or BOLI has been the go-to strategy for banks to offset the cost of executive and employee benefits. At the end of 2020, more than 3,200 banks reported owning $184.3 billion -more than 10% of bank capital – in cash surrender value. In Illinois, 234 banks owned $6.9 billion. Over $3 billion was purchased in the 4th quarter of 2020 alone. What makes BOLI work so well?

BOLI is an institutional life insurance policy insuring bank officers (and sometimes directors). Unlike the typical life insurance policy we buy as individuals, BOLI is engineered to provide the least amount of death benefit gain and maximum amount of growth in cash surrender value (CSV). The growth in CSV is recorded monthly as “other non-interest income,” and is accrued without any provision for taxes. When held to “maturity” – in other words, the death of the insured – BOLI offers tax-equivalent yields nearing 4%. With increasing chatter from Washington, DC about raising the Federal corporate tax rate, equivalent yield will be even higher if that happens.

For Full Article, click to visit our IZALE Blog!
Split Dollar Loans – Are They Still a Good Option?
Has your financial institution considered implementing executive benefits to retain and reward your top talent? One option that continues to generate interest is a split dollar loan. This type of benefit can provide tax-free distributions for participants and a cost-recovery mechanism so the institution can recoup the cost of the benefit. Their recent popularity was driven, in part, by the low interest rates dictated by the IRS for this plan type. So, with those interest rates slowly rising, does it make sense to still consider a split dollar loan?
Yes, in our opinion it does make sense to consider a Split Dollar loan. Include them along with all your benefit plan design options so you put a plan in place that meets your objectives. Perhaps the best solution for you is a split dollar loan….but maybe a Restricted Executive Benefit Arrangement or a traditional SERP makes more sense for you and your team.  
During our discussions with potential clients, we review the options available and show a side-by-side comparison of how each plan design impacts the balance sheet. But we only show those options after we complete a thorough review, including, a Retirement Income Analysis, to determine an appropriate, quantifiable benefit amount.
Did you know banks can now put split dollar plans in place?!? Give us a call at IZALE so we can have a conversation about executive benefits options.

 For more information, call 855-492-5334 today!
IZALE Webinar W.O.W.S. Anytime!
Have you visited our online learning Video Library? We created a place for you to go 24/7 to discover more about the expert services we provide at IZALE. Current titles include:  The Art & Science of Executive BenefitsDemystifying BOLI, and Split Dollar Loans.

Thursday, November 18th at 10:30 am CT
Monday, December 13th at 10:30 am CT
Wednesday, January 19th at 10:30 am CT

Tuesday, December 13th in Springfield, IL
Click for updates to our calendar!
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Securities offered through Lion Street Financial, LLC., Member FINRA & SIPC.