For incorporated Canadians, corporate-owned life insurance is a sophisticated planning tool — creating CDA credits, funding buy-sell agreements, and protecting against key person risk.
If the death or disability of a key person would significantly impact your business, key person insurance protects the company. Proceeds fund recruitment, cover lost revenue, and support transition.
When a business partner dies, their shares must be purchased. Without insurance funding, surviving partners may face enormous financial pressure. A funded buy-sell ensures a clean, pre-agreed transition.
Corporate-owned life insurance creates CDA credits when the death benefit is received — allowing the corporation to pay a tax-free capital dividend to the estate.
Corporate insurance funds the capital gains tax on an estate freeze, protecting your ability to transfer business growth to the next generation or a trust.