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.