Large bank holding companies and stand-alone banks reported bank-owned life insurance assets of $126.1 billion in 2008, up 5% from $120.4 billion in 2007, according to an annual study.

BOLI are insurance contract on employees’ lives, the proceeds from which are used to cover the cost of supplemental employee health insurance benefits on a tax-free basis and to offset the liabilities of retirement benefits.

Large top-tier BHCs increased their 2008 BOLI holdings by 5.2%, from $117.5 billion in 2007 to $123.7 billion in 2008. Of 1,526 stand-alone banks, 436 or 28.6% recorded an additional $2.4 billion in BOLI holdings, down 5.3% from $2.5 billion in 2007, according to the report from Michael White Associates L.L.C., Radnor Pa., sponsored by Meyer-Chatfield Corp., Jenkintown, Pa.