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Kris Racine

7150 Hawthorne Dr. Unit 104
Windsor, ON, N8T 3N3

Phone: (519) 974-6688
Toll Free: +1 866-973-4846
Fax: (519) 974-7192

Corporate IRP

What is it?

  • The accumulated value in a corporate-owned life insurance policy provides a cash flow at a point in the future by serving as collateral for a bank loan.
  • Either the corporation or the shareholder obtain a bank loan.
  • Where the corporation borrows, funds flow out to the shareholder as a taxable bonus of dividend.
  • Repayment of the bank loan occurs at death of the insured.

Who can benefit from the Corporate Insured Retirement Program?

  • The shareholder of a private corporation that requires life insurance protection. (i.e. key person, buy-sell, estate liquidity)
  • Corporations with excess cash flow not required for business operations.
  • Shareholders who want to access corporate dollars on a tax-advantage basis.

Benefits of the Corporate IRP

  • Permanent insurance protection
  • Use of "cheaper" corporate dollars
  • Cash values are a corporate asset
  • Tax deferred accumulation within exempt life insurance
  • Access to cash values on tax efficient basis via bank loan
  • Bank loan repaid by tax-free insurance proceeds
  • Excess death benefit and other assets (equal to bank loan) paid out to estate tax-free

How Does the Corporate IRP Work?

  1. The corporation purchases and makes deposits into an exempt life insurance contract under which the shareholder is the life insured.
  2. At a point in the future, the company borrows from the bank using the life insurance policy to secure the debt (up to 75% of cash value). The company pays bonus / dividend to the shareholder.

Mutual funds are offered through Manulife Securities Investment Services Inc. Insurance products and services are offered through Seguin Financial Group Ltd. Seguin Financial Group is a trade name used for both mutual fund & Insurance business activities. Banking products and services are offered through referral.