Corporate Leveraged Insurance Strategy / Living Buy-out

  • Client Profile
    • Desire to access corporate assets in a tax-efficient manner, either prior to or during retirement.
    • There is an underlying corporate insurance need (key person, buy-sell, etc).
    • May be used in conjunction with several other corporate insurance strategies.
  • Solution Opportunity
    • Corporation purchases and overfunds a UL contract.
    • UL contract is then used as collateral for a bank to issue a series of loans.
    • Loans are repaid via death benefit, with excess dollars paid to the corporation, tax free. Full value of insurance benefit will also be credited to corporations’ CDA, and subsequently passed to shareholders tax free.
    • Borrower pays an annual guarantor fee to the corporation.


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