Financial Planning
Insurance For Corporations

Corporate-Owned Insurance

When a physician and other professionals decide to incorporate, there are many things which they have to decide on. Simple things like choosing a corporate name to how income will flow out to family members will all take time.

The financial benefits of incorporation can be enormous yet financial gains are not the only reason to incorporate. Tax sheltered money, protection of assets and income splitting account for the more common reasons.

Taking advantage of the tax rules will help your planning. For example a corporation is allowed to own assets in the corporation’s name. Such an asset is your life insurance. While the premium you pay for the life insurance is generally not tax deductible, you will be able to pay the premium for life insurance with corporate dollars rather then personal dollars. This alone is beneficial.

In addition, when using a cash value life insurance product, the cash remains inside the product and grows tax deferred. This is the second advantage of corporate owned life insurance. Eventually the cash in the life insurance can be used to help fund retirement and or other important times in life. How you access the cash will be determined by your corporate structure as well as based on your desired use of the cash. At Living Benefits Atlantic, you can depend on our experience and we can advise you on how to get the most for your money.

Finally, when looking at the death benefit which is derived from a corporate owned life insurance product, you have several options. Since most people would like the death benefit to flow to their survivors, a method using a capital dividend account can help much of the benefit to flow tax free to your loved ones.

The type of insurance product you use will depend on your cash flow, the timing of your life cycle, and the need for insurance in the short term vs. long term.

Corporate owned insurance can plan a very large and impressive part of your estate and retirement plans.