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Corporate Life Insurance

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Corporate Life Insurance is a powerful financial strategy that helps businesses protect their assets, minimize taxes, and enhance cash flow. By redirecting surplus corporate funds from taxable investments into a participating (Par) life insurance policy, companies can reduce their taxable income while ensuring tax-free growth of assets. Since only the policy’s cash surrender value is included in tax calculations, this approach helps lower the fair market value (FMV) of the corporation, ultimately reducing capital gains tax liabilities. Additionally, life insurance proceeds paid to the corporation can be transferred to the Capital Dividend Account (CDA), allowing business owners or beneficiaries to receive tax-free capital dividends.

Beyond tax efficiency, Corporate Life Insurance also serves as a retirement planning tool. Policyholders can use the accumulated cash value as collateral for a bank loan, providing a steady tax-free income stream in retirement while keeping their business assets intact. Additional premium contributions can accelerate cash value growth, ensuring that corporate wealth continues to expand on a tax-deferred basis. Whether you’re looking to protect your business, secure a tax-efficient estate plan, or create a retirement income stream, Corporate Life Insurance offers a smart and flexible financial solution.

Service Benefits

Corporate Life Insurance is a financial planning strategy that allows businesses to use life insurance as a tax-efficient tool for asset growth, estate planning, and retirement security. By shifting corporate surplus from taxable investments into a participating (Par) life insurance policy, companies can lower their tax burden while ensuring steady, long-term financial growth.

  • Tax-Efficient Growth.
  • Capital Gains Tax Reduction.
  • Tax-Free Capital Dividends.
  • Increased Corporate Value.
  •  Expert Corporate Financial Planning.
  • Customizable Insurance Solutions.
  • Tax-Advantaged Wealth Preservation.
  • Secure and Strategic Growth.

 

Have You Any Question

  • How does Corporate Life Insurance reduce taxes?

    It helps shift corporate surplus from taxable investments into a life insurance policy where assets grow tax-deferred, reducing overall tax liability.

  • What is the Capital Dividend Account (CDA)?

    The Capital Dividend Account (CDA) is a special account where excess life insurance proceeds are credited, allowing tax-free dividend distributions to business owners or beneficiaries.

  • Can Corporate Life Insurance be used for retirement planning?

    Yes, you can use the cash value as collateral for a bank loan, providing a tax-free income stream for retirement while keeping corporate assets intact.

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