CORPORATE OWNED LIFE INSURANCE

Everything you think you know about Corporate Owned Life Insurance can be mired in false assumptions, that can lead to wasted money and lost opportunities. This ignorance and thoughtlessness in the effective use of Life Insurance eliminates many tax and cost beneficial strategies.

Corporate Owned Life Insurance

Everything you think you know about Corporate Owned Life Insurance can be mired in false assumptions, that can lead to wasted money and lost opportunities. This ignorance and thoughtlessness in the effective use of Life Insurance eliminates many tax and cost beneficial strategies.  The compelling question that we all should ask is: If your current strategies were leading to unnecessary tax and expenses; How soon would you like to know about it?  When would you like to fix it?

Corporate Owned Life Insurance is a useful tool in Business Risk Planning, securing Collateral Debt Obligations, Deferred Compensation, Succession Planning, Corporate and Personal Tax and Enhanced Income Planning, and Charitable Giving. The broad range of tax and financial planning options available to Corporate Planning, necessitate a more thoughtful and knowledgeable approach. The potential cross-over benefits to your personal planning are compelling. Unfortunately, not everyone who sells Life Insurance understands: How to effectively use it, nor more importantly: How to set up the structures.

As premiums are paid with after tax dollars, lower corporate tax rate dollars allow for a most cost-effective purchase of insurance. Since the corporation pays the premiums the proceeds upon death are paid to the corporate beneficiary in tax free dollars. This is as simple and straightforward as you get. However, the complexity of cost savings and tax benefits occur when you indicate how this premium money will be used or distributed. It is the What, How and Where that tax planning gold resides.

The most compelling strategic uses of insurance are for those companies which are Privately Owned and Canadian Controlled Corporation. If you qualify for the small business tax rates, or with proper planning could qualify, the benefits are significant.

Notably, Corporate Owned Insurance does not enjoy the same creditor protection provisions that Individually owned Insurance enjoys. Consequently, establishing a Corporate Owned Life Insurance Policy requires more care in both the acquisition of a policy and where the ownership of this policy resides. 

Throughout the I’m Curious pages in the Business Owner and Professionals area we will highlight the range of planning options that can be beneficial to you, your company, your loved ones or causes which reflect your values and social advocations.

Go explore our I’m Curious pages or Click on the following links to go directly to an intriguing subject:

Buy/Sell Agreements  
Retirement Compensation Arrangements (RCA)   
Key Person Insurance    
Immediate Funding Arrangements (IFA)     
Enhanced Personal Income Planning        
Personal Estate Planning with Corp Owned Insurance      
Corporate Succession Planning
Charitable Giving

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