Real strategies, real numbers, no jargon. Long-form essays on the math I run for clients — published roughly once a month.
Borrow against the policy, live on the loan, let the death benefit repay it. The insured retirement strategy is elegant on a slide and layered underneath: two very different ways to borrow with two tax outcomes, an interest deduction that usually does not exist, and a shareholder-benefit question most presentations skip.
Most writing about immediate financing arrangements describes who they fit. This one does the opposite, because the disqualifiers are more useful and far less discussed: the cash-flow floor, the unlevered test, the tax-tail trap, and the myths that put people into these structures for the wrong reasons.
The lender decides more about an IFA than most illustrations admit: the advance ratio, the collateral haircut on your policy type, the rate, and whether the facility renews at all. This post maps who lends in Canada, what the published programs actually advance, and the terms behind the ratios.
The interest deduction is the tax engine of an immediate financing arrangement, and nothing about the arrangement makes it automatic. This post walks the direct-use test that decides it, the capitalized-interest rule most summaries get wrong, and the honest arithmetic on the much-hyped NCPI deduction.
Every IFA pitch shows a happy ending. This post shows the machine instead: the eight steps in the order they actually happen, one labeled worked example with every dollar accounted for, and the statutory rule behind each moving part.
Most owners assume a policy's tax cost equals the premiums they have paid. The Income Tax Act computes something else, and the difference decides how much tax a surrender triggers and how much the capital dividend account receives at death.
"Buy term and invest the difference" was coined for households. Inside a CCPC the comparison changes, because the portfolio route pays corporate tax as it goes, up to 50.17 percent on interest, and grinds your small business deduction, and the policy route does neither.
Life insurance premiums are paid with after-tax dollars whichever pocket they come from. For an incorporated professional, the two pockets are taxed very differently, and the gap compounds for as long as the policy runs.
Your CCPC can pay two kinds of taxable dividends, and the personal tax rate difference between them is more than eight points at the top bracket. Here is what makes a dividend eligible, why most owner dividends are not, and when that changes.
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