Corporately Owned Life Insurance
is owned and paid for by a corporation; holding company or operating company. Types of policies that may be corporately owned are; term life, whole life, universal life, critical illness insurance, disability insurance, and health benefits. *Refer below or to the “Life Insurance” and “Living benefits” section for descriptions of these types of insurance coverages.
are typically offered through an employer or a corporate entity to provide extended health, drug and dental benefits to their employees. These benefits usually come with the option for some term life, disability insurance, and sometimes critical illness insurance.
Health Spending Accounts (HSA)
are self insured private health benefit plans put in place by a business entity, for their employees to use towards health and dental expenses. The business allocates an annual dollar amount to each employee (There is a max amount allowed by CRA), and the employee chooses what covered services they want to spend on. Eligible claims are reimbursed to the employee, and the expense is 100% tax-deductible for the business . HSA can be used to supplement other health benefits plans, or as a stand alone plan.
Business Overhead Expense Insurance
is a disability insurance used to cover off the business’ operating expenses in the event that the owner becomes disabled. The expenses typically cover such things as; payroll, rent, utilities, taxes, accounting, insurance expense, office supplies, etc.
Key Person Insurance
covers off the risk of losing a key person in your business. This risk can be covered off with life insurance (term or permanent) and disability insurance.
Funding Required for a Shareholder Agreement
can be put in place by using insurance polices designed to fund the purchase of a shareholder’s equity in the event of the shareholder’s death or disability. The exact terms of the purchase are documented in the shareholders agreement or buy/sell agreement.