One of the things we help entrepreneurs with when looking at their financial plans is how they can effectively structure their insurance strategy. The biggest challenge with owning insurance personally is that you’re paying for it with dollars that have been taxed at a significantly higher rate.
If you have a corporation, you definitely want to own your insurance inside of your corporate structure. You’re paying tax on earnings inside the corporation at 13.5%, which gives you a significantly higher amount to purchase that insurance. This is much better than paying personal taxes at the 40% tax rate (sometimes even higher) and buying your insurance with those after-tax dollars.
If you’re incorporated, it’s important to ensure that you are maximizing the benefits of your corporation and owning your insurance inside of the corporate structure.