Bank Owned Fund definition
DEFINITION of 'Bank-Owned Life Insurance-BOLI'. A form of life insurance purchased by banks where the bank is the beneficiary, and/or owner.This form of insurance is a tax shelter for the administering bank, as it is a tax-free funding scheme for employee benefits.Next Up.ll premiums paid into the fund, as well as all capital appreciation, are tax free for the bank. Therefore, banks can use the BOLI system to fund employee benefits on a tax-free basis.