An employer-owned contract is a life insurance policy applied for, owned by, and payable to an employer on the life of an employee. Uses include key-person protection, buy-sell funding, and nonqualified benefit financing. Ownership entails compliance duties, including consent and notice requirements under federal EOLI rules and potential reporting of policy-related income or benefits.

Controllers maintain consent forms and keep policy values on the balance sheet. Advisors review coverage amounts annually as roles change. In a claim, proceeds fund buy-sell obligations, replace key talent, or retire debt. Compliance checklists ensure notices, consents, and filings are complete to protect death-benefit tax treatment.