Corporate funded permanent life insurance can provide tax-advantaged growth

Corporate funded permanent life insurance can provide tax-advantaged growth
Many successful companies purchase investments using surplus cash or profits. Business owners may decide to access these funds for personal use or simply leave them as part of an estate benefit. However, passive income held in taxable investments is taxed at the highest corporate rate.
While providing coverage for a life insurance need, a permanent life insurance policy can also reduce the taxes on both the growth in these assets and on the distribution to the estate.
The potential benefits of corporate funded life insurance:
• Lower volatility
• Tax-advantaged growth
• Access to cash for emergencies, opportunities or consumption
• Tax-free death benefit
Cash value growth within a life insurance policy is exempt from annual accrual taxation, subject to limits, while the growth remains inside the policy. Death benefit proceeds are paid tax-free to the named beneficiary. Any partial surrender or withdrawal of funds are taxable to the extent that they exceed the adjusted cost basis of the policy.
A corporate funded insurance policy can help diversify your business holdings and provide a high-quality, conservative investment with preferred tax treatment.
A death benefit received by the corporation on the death of the insured may also be used to:
• Pay corporate debts
• Fund operations while replacing a key employee
• Buy out the deceased’s shares under a shareholder buy-sell agreement
Consider using Life insurance to diversify your portfolio, avoid the tax-grind on passive investments and use your assets more efficiently.

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