What type of life insurance is often used as a benefit security arrangement in executive plans?

Company-owned life insurance (COLI) is frequently utilized as a benefit security arrangement in executive plans because it allows companies to provide insurance coverage for their key executives while also managing costs and risks associated with employee benefits. COLI enables the company to pay the premiums and own the policy, ensuring that in the unfortunate event of the executive's death, the company receives the death benefit. This can be used to cover liabilities, fund deferred compensation arrangements, or assist in the business's existing employee benefit obligations.

In addition, COLI allows the company to leverage the tax advantages that come with life insurance, since the death benefits are generally received tax-free, and the cash value that accumulates within the policy grows on a tax-deferred basis. This makes it a strategic financial product for organizations in designing their executive compensation and retention strategies.

Other types of life insurance mentioned, such as term life insurance, group life insurance, and universal life insurance, generally do not offer the same benefits for corporate ownership and strategic financial planning as COLI does. Term life insurance provides coverage for a limited period and doesn't build cash value, while group life insurance is typically provided to a larger group of employees and may not address the specific needs of executives. Universal life insurance is more flexible than