Why Do Banks Buy Whole Life Insurance? The BOLI Strategy Explained

Hey Money Multipliers, welcome back to another episode of The Money Multiplier Podcast. I'm your host, Hannah Kessler, and we asked ourselves, do our dollars make sense? I'm here in a new studio set up today. I'm up here in Buffalo, New York. I am joined by Mr. Chris Noggle today, and we're going to be taking a journey down why banks... own so much in whole life insurance? What is BOLI? How are they doing this? Why would they even want to put so much money into cash value life insurance? So stick around and Chris and I are going to be going through all the details together. Every single week I am here with a new episode. Hit the subscribe button, comment down below, and I want to hear from y'all. So reach out to me, podcast at themoneymultiplier.com. Let's get into it. You know, I find it to be interesting that banks, traditional banks that we all go to and deposit our money, are actually doing the thing that we're told not to do by the gurus out there. Yeah. They're putting money in BOLI, but can you tell them what BOLI actually is? Yep. So BOLI, Bank Owned Life Insurance, B-O-L-I, and go out and research it. But banks own more in whole life insurance than any of their land and their buildings that they own. And I want people to go and look this stuff up, bank-owned life insurance. Now, how they're doing this is through a whole life insurance policy, not any other insurance vehicles that are out there. It's 100% whole life policies. Now, banks, though, they have to have somebody to put the policy on. So how are they doing this? Well, this is useless facts, but I looked it up. So 64%, actually a little bit more than 64% of all banks have BOLI policies. To the tune of, as of 2023, $202.4 billion. Literally, banks are putting that much money in these policies. But banks are corporations, so they can't just buy a policy. On the corporation. No, they need a body to insure. So welcome our audience. Like, who is the body that they're insuring, Hannah? Yes, when you walk into a bank, I want y'all to really tune into this. Look at the name tags of all the employees that are there working, and I want you to tell me how many of them are the key executives, the vice presidents. It's like the vice president of the door when you walk in, vice presidents of the loan department, vice president of the coffee machine, making sure the coffee's refilled, it seems like. And the whole purpose of why they are making them these key executives is because now the bank has an insurable interest on them. them. So what does the bank do? Bank is the owner. Well, yeah, the bank is the owner and payor, the VP is now the insured. So here's how it works. So banks are regulated and they're mandated to keep a certain amount, a certain percentage of our deposits in what they call tier one assets, a little more than 10%. And those assets have to be guaranteed. Well, BOLI whole life insurance is a guaranteed product. It's contractually guaranteed. I want to really drive that one home. Guaranteed, no matter what happens in the world, in the economy, financial, or even the climate, guaranteed no matter what. And I really want to drive that one home. Yeah, more money tomorrow than there is today. I mean, isn't that a beautiful thing? So if banks have this really valuable tier one asset, they need to protect that. They need to diversify that money, but they also need to use that money to provide benefits to these vice presidents. And so when the bank promotes somebody to a VP, it's not like the bank just buys a a policy and says, hey, thanks for being a VP, they give that employee something. They give them employee benefits called deferred compensation plans, money that they're going to get when they retire after spending 20-plus years at that bank. Now, the other thing they do... Also, yeah, health, health benefits, dental benefits, all of the different insurances that folks need, right? Yeah, which is offset and funded by these BOLI policies, the cash value. But the cash value also serves another function, and that is... They pay for a death benefit. So the death benefit in the policy is actually given to the employee, but not all of it. No, no. Usually it's, if you ask VPs at banks, it's usually like $50,000 paid up death benefit or up to $250,000 is probably the range that's common. So the bank buys this policy and promises that employee that they can have a fully paid up life insurance policy when they die. Now, that's a nice benefit for the employees, but do you really think that's... Not all of it. It's not all of it. Because you can. You can actually split up the death benefit into percentages or dollar amounts, and that's mostly what banks are doing is they'll say, hey, employee, I'll give you X amount of death benefit, $200,000, but they don't know, their employee doesn't know that they have more death benefit on the back end that's now going to get paid out to the corporation, that bank. Yeah, so I can imagine this, right? We take our hard-earned dollars that we trade. ...hours for. We deposit it in the bank. The bank has to keep about 10% of that in Tier 1 assets. So the bank takes a large percentage of those Tier 1 assets and buys life insurance, specifically whole life insurance called BOLI, on executives of the bank. And then they give that executive a paid-up benefit, like a death benefit. They give them deferred compensation, health benefits, dental, and all this. But the bank knows one thing for sure. What is that? That they're going to die. We're all going to die. And they know... Graduate, is what I like to say. Graduate, and go on to a better place. And when that graduation date happens for that VP, the corporation, known as the bank, will still be around, and therefore the corporation will be replenished all of the money that they funded this policy with, and then some, and then some, and then some. But they got to use all that tier one capital that they put into the policies... Every year or what I like to call the living benefits. So here's what Chris and I are saying. Banks do this. Why can't we just mimic and imitate what the banks are doing? And you can if you know myself, Hannah Kessler and Chris Noggle, if y'all follow us, you know, we're talking all day long about how to take back control of your money and be your own banker in your life. So Chris, let's dive into how exactly we do this. Hey, Money Multipliers, really quick, I'm here every single week dropping a new episode. Hit the like button, subscribe. I'm here for you, really just to take back the time freedom in your life. All right, let's get back to the episode. So let me just kind of show a visual. So banks take their tier one capital and they put that money into this policy. The banks then have the ability because they have the liquidity to move that money out and do different things like deferred compensation. I mean, they use it for guaranteed growth of their money. They use it for tax advantages. So they use that money over there for everything. But the coolest thing is, They understand exactly what we're doing. All of that where they might invest this money and they just bring it right back into the exact source where it came from and they just keep repeating this. So if that's what banks are doing. Why can't we just mimic the same thing? Because isn't this what Nelson Nash always talks about? How there has to be a pool of money somewhere. You pull from the pool of money. You have it come through here to buy and finance the things for maybe your employees, whether it is the deferred cop plans, tax-free benefits, having the death benefit there to protect their key employees. If something does happen to them, they're going to need those resources to go and find somebody else to replace them. And so now the dollar's got to go back into the pool of money of where it came from. But wouldn't that hurt the banks? All of us just started doing what the banks did. If we mimicked exactly what the banks did, we created our own pool of money over here instead of keeping that money at the banks, which they then used, which we just described. But now we're keeping it in the insurance companies, in the policies, and then we're using it to pay off the banks, like we pay off the car loans, the credit cards, the lines of credit, and we take the money we used to pay in interest to the banks, and as you described, We just roll that money back into our pool of money that never stopped earning interest and dividends compounding over and over. Well, what would happen to the banks? The banks don't want you to know this because then banks will have no more depositors. They need us. They need us, honestly, more than we need them. If you kind of think about it, it's almost like a parasite host relationship, right? Almost like the government, where the government cannot survive without us, we the people. Same thing with the banks. The banks need us because they need those deposits because then what they're going to do, fractional reserve lending, take our deposits and then go and... Pay it out to other people to go buy the things that they want to go buy in life, the houses, the cars. And that's the biggest problem that we have. And I really want people to get this, is that we need to capitalize our own warehouse of wealth. When we neglect the capitalization, that's why we got to go to the banks and other people to do it for us. This is exactly why so many of you watching this video have never heard of this, or you've heard the exact opposite. Oh, that's a scam. That doesn't work. Don't do that. Put your money in term insurance and invest the difference. Buy term, invest the difference. You hear this all the time. It is absolutely what banks want you to know. They want you to buy term insurance from their broker and invest their money in their brokerage division so they keep control of it. Because if they taught you, or if the schooling systems or colleges taught you what the banks do, which we just showed you, the banks wouldn't have control of your money. So folks, wake up. This is how you take back control of your money. This is how you become your own banker. And becoming your own banker means You do the same thing a bank does every single day, but you are the vice president of your banking system. Matter of fact, you're the CEO. And Chris, lastly, this has not been on trial, right? This has been around for a long, long, long, long time. I mean, this concept, whole life insurance, it's been around even longer than our tax code's even been here. So I don't want to reinvent the wheel. All I want to do is just mimic and imitate what the elite and the wealthy people are doing. And that's what they're doing here with product of a whole life insurance policy and a mutually owned company that pays dividends. Yeah, and some of you are thinking, well, yeah, how do I do this or how do I learn more? Well, in the bio, there's a little link, and you can watch a complete video on how you can become your own bank. But I do want to preface one thing that we said earlier. You may have forgotten. Banks, traditional banks, have $202.4 billion of their money sitting in whole life policies. And when you really go deeper, and you can Google the same thing, when you go deeper than that, 65 plus percent of banks are doing this, but yet they are telling you to do the complete opposite. Makes you think. Now that you know what the elite and wealthy people have been doing for all of these years, don't you think it's your time to get started? Y'all, the wealth train is going to keep on moving down the track. It's your responsibility to show up at that station. If you want to learn more, click the show notes down below and onto the next video.