Professional Corporations and Insurance Planning

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It wasn't until a just few years ago that professionals became able to incorporate and take advantage of this structure for tax planning purposes. Income splitting and lower corporate tax rates were highlighted as the main reasons for incorporating, but there are other opportunities that are seldom discussed.


Professionals understand the need for risk management and the reasons for insurance planning, but little is known about the significant advantages of holding life and disability insurance policies inside a corporation. Here are some ideas that you might want to explore:


1) Selling your personal life insurance policy to your corporation could result in you being paid tax free dollars

2) Fund the life insurance policy with corporate dollars and have the invested funds grow tax sheltered, thus avoiding the higher tax rates on passive investment income. Upon retirement you can then use these funds for additional retirement income at preferred tax rates.

3) Utilize the Capital Dividend Account to distribute tax free funds to shareholders

4) Transfer your Disability Income policy into the corporation and deduct the premiums

5) Maximize monthly disability income to better provide for your family needs and permit further tax planning opportunities in the event of a disability.

6) Secure your estate planning needs.

7) Fund Buy/Sell Agreements

8) Allow for Legacy planning


Working with your other advisors we take the complexity out of this type of planning. Contact us for more information