Critical Illness Insurance For Business Owners

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Running a business is a labour of love, and a tremendous amount of work. Without proper protection, all the time and money spent building your company could be at risk. A corporately owned critical illness policy ensures that if you are diagnosed with a serious illness, your business will continue to operate, allowing you to focus on your recovery.

Use corporate dollars to provide a lump sum benefit, whether you continue working or not, to inject cash into your business which can be used to replace lost revenue, pay for alternative or private medical care, hire additional staff to help with some of your duties, or any other use.

If you are fortunate to never get sick and never have a claim paid, these policies can be structured to provide a retirement benefit in the later years, when 100% of ALL premiums paid are refunded on a tax-free basis.

WHY CRITICAL ILLNESS IS RELEVANT TO ME:

Current statistics from Heart & Stroke Foundation and Canadian Cancer Society site the following:

  • 1 in 2 Canadians will be diagnosed with Cancer in their lifetime
  • 63% of Canadians diagnosed with cancer are expected to survive at least 5 years
  • Every 7 minutes, someone has a heart attack in Canada
  • 9 in 10 Canadians have at least one risk factor for heart disease or stroke

OVERVIEW OF CRITICAL ILLNESS (CI) INSURANCE:

  • Critical illness insurance pays out a lump sum payment of the entire CI benefit 30 days after diagnosis
  • The lump sum payment can be used in any way you chose, there are no limitations or stipulations
  • Basic plans cover cancer, heart attack and stroke and more comprehensive plans cover many other
  • Serious illnesses including but not limited to – paralysis, multiple sclerosis, bypass surgery, dementia etc

BENEFITS OF CRITICAL ILLNESS POLICY OWNED IN MY CORPORATION

  • KEEP THE LIGHTS ON – critical illness policy pays a tax-free lump sum to help ensure that overhead is covered, and financial obligations are met, allowing you to focus on treatment and recovery.
  • USE CHEAPER DOLLARS – You can use corporate dollars to fund a critical illness policy. While the premiums may not be tax deductible, paying with corporate dollars is typically more tax efficient.
  • FLEXIBLE PAYOUT – The lump sum payment can be used in any way you choose. Income replacement, overhead expense coverage, demand debt repayment, hiring additional temporary staff/replacement for key executive during recovery, fund a buy-sell arrangement etc.
  • GET YOUR MONEY BACK – You can add a return of premium option to the coverage and the return of premium is not considered passive income when it is paid back to the corp.
  • ESTABLISH A RETIREMENT FUND – The return of premium can be used for retirement funding etc. (see article on PPP, Personal Pension Plans, for terminal funding concept that is deductible to your corp)

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