Corporate Insured Annuity

Corporate Insured Annuity

Need

Shareholder of a private corporation who has a strong desire to leave a legacy at death. Gratified by immediate completion of planning strategies. Prefers locked-in planning strategies. Age 65 and older. Corporation with liquid investments (to purchase
annuity).

Structure

Corporation uses surplus cash, currently invested in taxable investments, to fund a non-prescribed annuity. Corporation purchases a life insurance policy to replace capital. Annuity provides a stream of payments for life. After tax amount of each
payment funds the life insurance policy. Remaining balance of annuity payments supplements corporate income.

Comparative Analysis

Compare cash flows and estate benefits from an annuity-funded corporate owned life insurance policy to a taxable investment.

Benefits

Increase corporate cash flow. Annuity payments fully guaranteed. At death, life insurance proceeds replace capital for corporation. Proceeds generate credit to Capital Dividend Account. Can be a fully guaranteed solution.

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