Corporate-owned life insurance: protect the business without losing sight of wealth.
A corporation can own and pay for life insurance when the structure serves a genuine business or wealth-planning need. The important question is not only how much insurance, but who owns the policy, who receives the benefit and how it fits the rest of the plan.
Why would a corporation own life insurance?
Common needs include key-person protection, shareholder-agreement funding, liquidity at death and estate planning.
The capital dividend account
When a private corporation is beneficiary of a policy, net life-insurance proceeds received on death can increase its capital dividend account. The calculation depends in part on the proceeds and the policy adjusted cost basis.
Are premiums deductible?
In most cases, life-insurance premiums are not deductible. A limited deduction may sometimes be available when a policy is required and assigned as collateral for a business loan.
Corporate or personal ownership?
Corporate ownership is not automatically better. Personal and corporate needs, premium source, intended beneficiary and future flexibility should be compared.
See your situation as a whole.
The Protection & Wealth Assessment helps organize the important pieces before a deeper conversation.
Related guides
Frequently asked questions
Yes, although tax, accounting and estate implications depend on the exact structure.
Death proceeds receive special tax treatment. For a private corporation, net proceeds can contribute to the capital dividend account.
No. Term may fit temporary needs, while permanent insurance may fit certain lasting estate or liquidity needs.
For tax or regulatory details, also consult government sources and validate your situation with the appropriate professionals.
How we work
We first understand your situation before recommending a solution. When tax, legal or accounting questions require specialized advice, we coordinate with the appropriate professionals.