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Scott Mallender Insurance

Estate Consultant and Licensed Broker

(519) 979 4242

407-1855 Normandy St., LaSalle

scott@scottmallenderinsurance.ca

Corporate Estate Bond

Corporate Estate Bond

CORPORATE ESTATE BOND … A CLIENT PROFILE

What is it?

The Corporate Estate Bond is a financial planning strategy designed to increase the size of your client’s estate by moving surplus corporate dollars exposed to tax into a tax-deferred life insurance policy.

Who is it for?

  • shareholder of a private Canadian Corporation
  • in good health
  • age 45 and older
  • strong desire to leave a legacy at death
  • receptive to long term planning strategies
  • a Corporation with surplus funds available to invest

How does it work?

Your client’s Corporation purchases an exempt life insurance policy, with your client as the life insured and the Corporation named as beneficiary. The Corporation deposits amounts into the policy in excess of what is required to pay the policy charges, creating cash value. The cash value accumulates on a tax-deferred basis that may increase the death benefit payable under the insurance policy. At death, the Corporation receives the life insurance proceeds tax free. The Corporation receives a credit to its capital dividend account for the amount of life insurance proceeds less the insurance policy’s adjusted cost basis. Capital dividends may then be paid tax free to your client’s estate.

Why does it work?

  • provides life insurance protection which increases the size of your client’s estate today and into the future
  • opportunity to create cash value that grows on a tax-deferred basis that may increase the insurance
  • proceeds payable at death
  • by moving funds into a life insurance policy, the amount of tax payable by the Corporation will be reduced
  • insurance proceeds received by your client’s Corporation, generate a credit to the Corporation’s Capital Dividend Account
  • the life insurance proceeds can be paid tax-free to your client’s estate via a tax free capital dividend and distributed to heirs or favourite charity, as directed in the client’s will.

An Example …

In the following example, your client is a male, non-smoker, 54 years old. His Corporation will invest $30,000 per year for the next 10 years at an assumed rate of 4%. He has earmarked this investment for his children when he dies. The corporate tax rate is 47% and his personal dividend tax rate is 35%. By starting with $750,000 of initial death benefit, here’s how the Corporate Estate Bond can increase the size of the gift when he dies.

Corporate Estate Bond

Why Choose Manulife?

When your client purchases a policy from us, they put their financial dreams in our hands. That’s not a responsibility we take lightly.
  • Leading edge life and living benefits products
  • Tax and estate planning expertise and support on complex tax and estate planning issues
  • A Canada-wide team of experienced actuaries can help you understand all the aspects and implications of the product your client is considering
  • Facilitators in the underwriting process to get your clients’ large cases through underwriting as quickly and as smoothly as possible
  • Marketing support to develop customized solutions to help you make the sale

Filed Under: News

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Corporate Estate Bond

Corporate Estate Bond

The Corporate Estate Bond – increase the size of your estate with tax-deferred life insurance policy protection.

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Scott Mallender Insurance

Scott Mallender can provide you with affordable solutions for all your financial security and life insurance needs.

Put your trust in an experienced insurance broker and estate planning professional. Serving families in the Windsor and Essex County area Since 1983.

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Serving Windsor, Essex County, and Southern Ontario.

Contact

Scott Mallender Insurance
407-1855 Normandy St.
LaSalle, ON N9H 2R4
(519) 979 4242
scott@scottmallenderinsurance.ca

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