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Bank Owned Life Insurance: A Critical Examination of Banking Strategy

This paper is an investigation of a rampant insurance practice in the US banking sector, namely the permitted practice of employer-paid insurance policy. Under this policy, employee’s life policy paid for by the employer, pays large sums as policy benefits to the employer not to the employee’s famil...

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Main Authors: You, Leyuan, Dandapani, Krishnan
Format: Article
Language:English
Published: Universiti Utara Malaysia 2012
Subjects:
HG Finance
Online Access:http://repo.uum.edu.my/25013/1/IJBF%209%201%202012%2015%2026.pdf
http://repo.uum.edu.my/25013/
http://ijbf.uum.edu.my/index.php/previous-issues/147-the-international-journal-of-banking-and-finance-ijbf-vol-9-no-3-september-2012
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spelling my.uum.repo.250132018-10-25T00:29:16Z http://repo.uum.edu.my/25013/ Bank Owned Life Insurance: A Critical Examination of Banking Strategy You, Leyuan Dandapani, Krishnan HG Finance This paper is an investigation of a rampant insurance practice in the US banking sector, namely the permitted practice of employer-paid insurance policy. Under this policy, employee’s life policy paid for by the employer, pays large sums as policy benefits to the employer not to the employee’s family. Employers suggest that taking insurance covers the possible monetary loss value of an employee departing the firm, and hence the benefit is quite permissible, kosher. Our findings show its widespread occurrence in beefing up the earnings and even the capital base of the US banks. It calls into question if this practice, though legal, is socially responsible since an employee with such employer-paid policy would be deprived of tax deduction for his own self-paid policy cover, in most instances. Banking sector’s prevalent use of this practice to cover even low-paid workers such as janitors brings into focus the ethics of this practice. Universiti Utara Malaysia 2012 Article PeerReviewed application/pdf en http://repo.uum.edu.my/25013/1/IJBF%209%201%202012%2015%2026.pdf You, Leyuan and Dandapani, Krishnan (2012) Bank Owned Life Insurance: A Critical Examination of Banking Strategy. The International Journal of Banking and Finance, 9 (3). pp. 15-26. ISSN 1617-722 http://ijbf.uum.edu.my/index.php/previous-issues/147-the-international-journal-of-banking-and-finance-ijbf-vol-9-no-3-september-2012
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HG Finance
spellingShingle HG Finance
You, Leyuan
Dandapani, Krishnan
Bank Owned Life Insurance: A Critical Examination of Banking Strategy
description This paper is an investigation of a rampant insurance practice in the US banking sector, namely the permitted practice of employer-paid insurance policy. Under this policy, employee’s life policy paid for by the employer, pays large sums as policy benefits to the employer not to the employee’s family. Employers suggest that taking insurance covers the possible monetary loss value of an employee departing the firm, and hence the benefit is quite permissible, kosher. Our findings show its widespread occurrence in beefing up the earnings and even the capital base of the US banks. It calls into question if this practice, though legal, is socially responsible since an employee with such employer-paid policy would be deprived of tax deduction for his own self-paid policy cover, in most instances. Banking sector’s prevalent use of this practice to cover even low-paid workers such as janitors brings into focus the ethics of this practice.
format Article
author You, Leyuan
Dandapani, Krishnan
author_facet You, Leyuan
Dandapani, Krishnan
author_sort You, Leyuan
title Bank Owned Life Insurance: A Critical Examination of Banking Strategy
title_short Bank Owned Life Insurance: A Critical Examination of Banking Strategy
title_full Bank Owned Life Insurance: A Critical Examination of Banking Strategy
title_fullStr Bank Owned Life Insurance: A Critical Examination of Banking Strategy
title_full_unstemmed Bank Owned Life Insurance: A Critical Examination of Banking Strategy
title_sort bank owned life insurance: a critical examination of banking strategy
publisher Universiti Utara Malaysia
publishDate 2012
url http://repo.uum.edu.my/25013/1/IJBF%209%201%202012%2015%2026.pdf
http://repo.uum.edu.my/25013/
http://ijbf.uum.edu.my/index.php/previous-issues/147-the-international-journal-of-banking-and-finance-ijbf-vol-9-no-3-september-2012
_version_ 1644284201227255808
score 13.211869

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