Corporate-Owned Life Insurance
A corporation can be both the owner and the beneficiary of a life insurance policy. In this case, the corporation pays the premium for the policy and since it is the beneficiary, upon death of one of the covered persons (shareholders), the corporation will receive the proceeds based on the insurance contract. Please note that in most case, the premiums paid for the policy is not tax-deductible (cannot be considered as the corporation expense) but those premiums can still be financed by corporate dollars before tax rather than after tax dollars per person. The insurance proceeds, once received, are not taxable to the corporation. It will be first cost-adjusted and then added to the company’s capital dividend account which then can be paid, tax free, as capital dividends to the shareholders.
Some of the major benefits o consider about corporate-owned life insurance are as follows:
Due to the great variety of conditions and facilities in preparing and using any kinds of insurance, it is recommended that you consult with one of our insurance advisors before making any decision. Our expert team at Forever Insure is always ready to provide the right consultation to you and thus help you make the right choice.
For more information, please contact one of our advisors at Forever Insure for a free consultation.