If you are a doctor, dentist, lawyer, or business owner operating through a corporation, the way you structure your life insurance matters just as much as the coverage itself.

Many incorporated professionals overpay for personal insurance when they could be leveraging corporate dollars at a significantly lower after-tax cost.

When you pay for life insurance personally, you use after-tax dollars. If your marginal tax rate is 50%, a $5,000 annual premium can require $10,000 in pre-tax income. That is money leaving your pocket unnecessarily.

When your corporation owns and pays for a life insurance policy, premiums come from corporate dollars, which may be taxed at a lower rate than personal income. Upon a claim, insurance proceeds received by the corporation can often be paid to the estate through the Capital Dividend Account, tax-free to shareholders.

Participating whole life insurance, owned corporately, has become a popular tax-efficient tool for incorporated professionals in Canada. It offers guaranteed lifetime coverage, tax-sheltered cash value growth, annual dividends, and a tax-efficient estate planning strategy.

Corporate-owned life insurance is not for everyone. It depends on your cash flow, corporate surplus, and estate goals. That is why working with an advisor who understands this area is important.

At SJ Financial, we have worked with incorporated professionals across Brampton and the GTA for over 17 years. We help you understand your options and build a strategy that works for your corporation and your family.

Call 416-707-9900 or book a consultation online.