Benefits of Corporate Owned Life Insurance

Pay for life insurance with after-tax corporate dollars

  • Corporate rate is 15.5%
  • Personal rate 46.41%
  • If you need $1,000 to pay the premium you must earn $1,866 personally or $1,183 in the corporation – a significant difference.

 

Convert Corporate Cash Surplus into Tax-Free Cash

  • Life insurance benefits are tax-free to the corporation upon death of the insured.
  • The death benefit proceeds in excess of the cost base of the policy can flow out of the corporation tax-free to the common shareholders:
    •  This is one of the only investment products in which the entire benefit can be paid out tax-free from a corporation to a surviving shareholder
    • Additional considerations include health, life expectancy and insurability to evaluate the IRR.
  • This product allows corporations to convert their excess trapped corporate surplus into tax-free proceeds.