Big Benefits For Small Business
Corporate Life Insurance
Corporate owned life insurance on the life of an owner-manager can be an effective planning tool for Canadian- Controlled Private Corporations. The receipt of life insurance proceeds by a corporation can be used to: fund the buy out of a deceased shareholder’s interest; fund the tax liability owed by a deceased shareholder’s estate; or, offset the economic loss as a result of the death of a key employee. In addition, corporate owned life insurance may assist in securing bank financing.
There are many benefits associated with corporate ownership of life insurance. These benefits include the death benefit being received tax-free by the corporation, as well as the death benefit being credited to the capital dividend account, and using tax-deferred funds in the holding company to fund premiums.
Using Corporate Funds to Fund Life Insurance Premiums
One of the key advantages to having a life insurance policy owned by one’s holding or operating company is that these entities are taxed at a lower rate than individuals.
If the corporate earnings are paid out to the shareholder by way of a dividend, the shareholder will pay tax on those dividends. If the company retains its earnings, it then may invest these tax-deferred funds prior to paying them out as a dividend to the shareholder. If the company uses the tax-deferred funds to pay the premiums for life insurance on the shareholder, then the funds will accumulate exempt from tax in the policy. When the shareholder dies, the company receives a tax-free death benefit, and all or a large percentage of those proceeds are credited to its capital dividend account. The amount credited to the CDA can then be paid tax-free to the beneficiaries of the shareholder, thereby eliminating a tax liability that would have otherwise arisen if he/she had withdrawn the funds from the holding company by way of a taxable dividend.
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We are a 10 Employee business and have worked with Wescan Insurance for the past 4 years and have found their services to be very cost effective. There are enough options offered at the time of renewal in terms of optimizing the plan design and reevaluation of our group experience etc. The service is very personalized and we have been quite happy working with Mr.Deepak Jotwani as our benefits advisor.We are pleased to recommend services of Wescan Insurance to other small/medium businesses.
We are a construction company with 20 -25 Employees and have got our Employee Benefits through Wescan Insurance Brokers about a year ago. At the time of deciding on the benefits carrier – We were provided a detailed Market Analysis on most carriers, their specialty, how each carrier prices their benefits and different types of benefits available.
In addition, to getting the best deal and understanding of the marketplace , we have also received assistance from Wescan Insurance on a claim which was declined by the carrier and was finally approved due to their involvement in the reclaiming process. We are pleased to recommend services of Wescan Insurance to other companies.
We are a small growing construction company located in Calgary, AB and have been involved with Wescan Insurance – Employee Benefits program since 2011 and have been very happy with their service. They are very easy to deal with and have always been available to solve our problems, whenever we needed them. We would strongly recommend their services to businesses.
We are a mid-size printing company located in Calgary, AB and had signed up for Group Benefits with Wescan Insurance Brokers a few years ago. We have found their service very efficient & reliable. Besides, their willingness to always help out with service issues & claims, they are available on the phone late in the evenings or, weekends for advice. In addition, they have access to & knowledge about most carriers in the marketplace & have always looked after our best interest. We will highly recommend services of Wescan Insurance to all businesses.
Wescan Insurance Brokers is an independent brokerage based in Calgary, Alberta. We specialize in Employee Benefits for small/ medium businesses. The challenge today for the Employer or, the Plan Sponsor in the small/medium business segment of the market is the escalating cost and reducing benefits for their Employees.
Wescan Insurance Brokers has the knowledge and experience in implementing various strategies, which can be applied to your current plan , so that we make it more cost-effective and sustainable.
Why do you need Employee Benefits?
Although expensive, there are many intrinsic benefits to providing your employees with a comprehensive benefit plan. For most, it is the ability to find and keep highly qualified staff that is the key driver. With the sector being highly competitive and the number of new employees entering the workforce dwindling, employers are challenged to become even more creative and responsive in the design, timing and generosity of their benefit plans. The more progressive the organization, the more flexible the structure is in response to today’s challenges: i.e. like having four different generations of employees working side by side. Employers who continue to provide the more traditional and limited program, may find it more difficult to find and keep different types of employees.
The insurance broker in Calgary Here are just a few of the advantages of offering benefits to your employees:
- By providing increased access and flexibility in employee benefits, employers can not only recruit but retain qualified employees
- Providing benefits to employees is seen as managing high-risk coverage at low costs and easing the company’s financial burden
- Employee benefits have been proven to improve productivity because employees are more effective when they are assured of security for themselves and their families
- Premiums are tax deductible as corporation expense, which means savings for the organization
- Employees can experience a peace of mind which leads to increased productivity and satisfaction by being assured that they are their families are protected in any mishap
- Employees with personal life and disability insurance can enjoy additional protection including income replacement in the event of serious illness or disability
- Employees can feel a sense of pride in their employer if they are satisfied with the coverage they receive
As an Employer / Plan sponsor, if your Employees can feel a sense of pride and satisfaction with their Benefits package that is a major accomplishment of providing Employee Benefits. We offer strategies and processes to achieve the end goal of making your Employees, feel that sense of pride and satisfaction working for you.