Corporately Owned Life Insurance... Excellent Strategy

Owning a Life or Living Benefits Policy in your Corporation is a good idea for many reasons, and while nothing is foolproof, this basic, simple strategy has been a foundation for many resilient companies. 

Corporate dollars are more efficient

Paying premiums from pre tax dollars stretches the purchasing power.  Whether you see it as more affordable, or that you get more for your money, its all the same.  Its a more efficient way to pay premiums.

Funding the Universal Shareholders Agreement (Buy Sell)

Private shareholders, (partners in a corporation) are strongly encouraged to have a USA in force...but without actual liquid funding, buying a shareholder out may be impractical or impossible.  Sharing premiums from the corporation ensures equity for shareholders despite differences in the premium for each individual shareholder's life.  Buy sell policies are often required as part of a loan, or capital funding application...

Avoiding Corporate PIT (Passive Income Tax)

Policies can be devised to have a Cash Value equity component that grows at an attractive fixed income rate,  non taxable.  The "Corporate Estate Bond" concept is widely acknowledged as a simple and effective way to grow wealth inside a corporation for the benefits of its owners.  The best part of equity insurance policies is that they're not market traded, and often have gains vested annually avoiding any downside risk from year to  year.  Yes its legal and accepted.  The policy is actually an asset on the balance sheet like the land and building, except it doesn't have associated costs like property tax or building maintenance. 

Living benefits Return of Premium (ROP)

Return of premium is an additional "rider" added on to some Critical Illness or Disability policies.  When corporately owned the ROP benefit is payable to the beneficiary tax free.  So Premiums come from Corporate funds, and go to an individual tax free.  Yep its a thing.

All Policies require Review and servicing... some more than others.

Part of annual business planning is to review all the policies, along with the assets and debts.  Often adjustments need to be made to avoid tax pitfalls later on or worse coverage issues.  Likely the broker who sold the policy is long gone.  Guest what I'm here to help. 

Time to start asking questions...

These strategies aren't "sold" they're placed by preparing clients over a series of years.  Now's a great time to get started