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Corporate-owned life insurance
Your professional corporation can own an insurance policy on the shareholder's life and be the policy’s beneficiary. Potential benefits are:
- Accumulate corporate tax dollars tax-free.
- Distribute the death benefit to the surviving family members by giving them tax-free dividends through the capital dividends account.
- Leverage the corporate investment portfolio by borrowing against the cash surrender value and making additional investments.
- Creditor proofing from the shareholder’s potential creditors.
- Finance the premiums (non-deductible) by corporate dollars as opposed to high tax-paid personal dollars.
On an annual premium of $5,000 – you can save around $4,350 in taxes by paying life insurance premiums from the corporation.
