What Is Corporate Owned Life Insurance? 
Corporate Owned Life Insurance -LRB- COLI -RRB- is life insurance that a corporation takes out on the lives of one or more employees , with the benefits payable to the corporation or the employee 's families . COLI can be structured to fund certain types of nonqualified plans , such as split-dollar life insurance that allows the company to recoup its premium with part of the death benefit and the rest of the death benefit going to the employees ' beneficiaries . Many corporations these days use COLI to insure key employees , with the corporation receiving the death benefit so they can find and hire a new employee , or as part of a buy-sell agreement so they can buy a partner 's share . of stock . 