Corporate-owned life insurance for incorporated professionals

If you own a corporation, where a policy is owned changes its tax math — sometimes dramatically.

Why own it in the corporation

Premiums are paid with lower-taxed corporate dollars rather than after-tax personal income, which can make permanent coverage markedly cheaper to fund. On death, the benefit less the policy's adjusted cost basis flows to the Capital Dividend Account (CDA), letting the corporation pay that amount to shareholders (your estate) tax-free.

Common uses

Funding a buy-sell agreement between shareholders, key-person coverage, estate equalization, and tax-efficient wealth transfer for professionals with surplus corporate cash.

The trade-offs

The corporation owns and controls the policy (creditor and structuring implications), and the analysis is genuinely complex — ownership, beneficiary, and CDA mechanics need to be set up correctly. This is a "get a tax and insurance professional" decision, not a DIY one.