This new course is included as part of your ILScorp LIFE/A&S Course Subscription
In this course, learn how in certain cases Split Beneficiary Planning allows for cash extractions (free of dividend tax) from the corporation in excess of actual policy premiums; how a separate and well drafted Split Beneficiary Agreement is required, including a defendable pricing model likely using NCPI as the source cost; and that specialized legal and tax advice may be needed before implementing such planning.
Part 1 – Corporations & Insurance
Part 2 – Disruptions to Corporate Owned Insurance
Part 3 – Agreements on the use of Insurance with Corporations
Part 4 – The Pricing Models
COURSE MATERIAL SAMPLE:
1.Key Man Insurance. In the event of the death of a key employee, a corporation could sustain material financial hardship. Key Man Insurance provides funding to assist the corporation maintain working capital balances in the transition period after death.
2.Shareholder Agreements. Shareholder agreements govern actions between shareholdings in the event of the death of a shareholder. Some agreements obligate the corporation to redeem the shares in what is called a “Corporate Redemption or Corporate Repurchase”. Insurance in this context provides the needed funds to repurchase the deceased’s shares.
3.Loan Offset Insurance. Sometimes creditors of a corporation will ask that key people are insured. Should they pass away, the insurance is used to repay corporate loans.
4.Buy-Out Insurance. Similar to shareholder agreements, corporations that transition owner-managers (key people) will often insure one or both parties (acquirer and/or purchaser) so that financial exposure during the acquisition period is covered by insurance.
Corporate Funded Insurance – Benefits
- A corporation (with an insurance interest) is allowed to pay insurance premiums.
- Corporate paid premiums are normally a “non-deductible expense” (called an “add-back” on the corporate tax return).
- This allows payment of insurance AFTER corporate income tax but BEFORE personal dividend tax.
Example: Personal Ownership
An insurance policy with $1000/yr premiums needs to be paid. We assume the policy owner is also a shareholder of a corporation.
Should that policy be owned and paid for outside of the corporation, the following series of transactions would be required:
- The Corporation deducts $1923 as a Salary Expense (T4) from its tax return
- With $1923 in Salary, Personal Tax Will Be Required
- At a 48% Tax Rate this means $923 in Tax is owing
Therefore, the total cost of the insurance is $1923 of corporate resources.
Example: Corporate Ownership
An insurance policy with $1000/yr premiums needs to be paid. We assume the policy owner here is a corporation. Following are the required transactions:
- The Corporation reports $1163 as Income On its Tax Return
- At a 14% Small Business Tax Rate, $163 in Corporate Income Tax will be Paid
- This leaves $1000 of corporate funds to pay the insurance premium.
Therefore, the total cost of the insurance is $1163. Corporate owned insurance is a more effective place to pay premiums!
This new course is included as part of your ILScorp LIFE/A&S Course Subscription
Click here to learn more about this course!
Credit Hours: 2
Credit Type: Life/A&S
Credit #: AIC 47765 MB 29960
Accrediting Provinces: BC, AB, SK, MB, ON
ILScorp CAIB Exam Prep Virtual Classroom Programs are a combination of structure and flexibility.
ILScorp Virtual Classroom programs are built on a structure of daily assignments and due dates that you must meet, whether it’s taking an online chapter quiz; completing daily questions; watching weekly review videos; or participating in a discussion with fellow classmates. However, within the virtual classrooms structure you have the freedom to choose the best times to participate that sync with your individual schedule. Moderated by long-time insurance educator Todd Hochban, the ILS Virtual Classroom Programs prepare you to write your insurance licensing exam in just four weeks, sending your insurance career to new heights!
The ILScorp Virtual Classrooms are completed entirely online, and are ideal for students who benefit from learning in a more structured atmosphere with daily tasks and outlines. Within the 4 week program each day is broken down in a calendar showing what course material to cover and questions assigned to answer. There is no set “classroom time” – the daily video course material, tasks and questions can be completed at your convenience, using the calendar as a guideline to keep you on track during the 4 weeks. Through an online discussion forum you will have access to the answers of your daily assigned questions, as well as the ability to ask the instructor your own questions. Every Friday you receive a review video which summarizes the material covered during the week. Once your 4 week program is complete, you can access your course material for a full 3 months. (3 months after the end date of the virtual classroom) This ensures you can review your material until you feel you are fully prepared to write your exam. ILScorp recommends a minimum study time of 80 to 120 hours.
With a 4 week CAIB exam prep virtual classroom program you’ll receive:
- Online streaming video course with unlimited access. Log in and out as many times as you need, with the ability to pause, rewind and review
- A daily assisted learning calendar that outlines material covered each day to keep you on schedule
- Access to an online discussion forum where daily answers to questions are posted
- Weekly practice exams and review videos
- Live support!
Classes run Apr 2 – Apr 27
In Retirement Success in Canada you will be introduced to each of the “three pillars” that make up the replacement income of most Canadian retirees and the issues and solutions surrounding them.
Lesson 1 covers the first pillar of Canadian Retirement Savings, the Old Age Security program.
OAS Pension and Benefits are paid out according to:
- Canadian Residency Status & History
On top of being subject to income tax, OAS Pension benefits are subject to a recovery tax that is 15% of the amount a beneficiaries income surpasses the minimum threshold.As a retiree’s income rises, the OAS benefit amount lowers. While the OAS may recover up to 50% of an individual’s pre-retirement salary of $20,000, it will only recover 4-5% of an individual’s pre-retirement annual income of $100,000.If we are aiming for a recovery ratio of 60% – 70%, individuals across all income levels need additional sources of retirement income.
In lesson 2 we are introduced to the second pillar of Canadian Retirement Savings: Mandatory Pension Plans. Which are broken into public & private categories.Canada has a mandatory contribution pension plan called the CPP (QPP in Quebec). This plan is funded by taking a percentage of all contributors pensionable earnings, and pays a monthly pension upon retirement as well as other income-replacement benefits.
The CPP/QPP retirement benefit does not have a claw-back tax like the OAS and provides a larger retirement benefit to those who have contributed more.
In Lesson 3 we learn about Private Pension Plans (RPPs). These employer-provided, mandatory-contribution plans come in two flavors: Defined Benefit and Defined Contribution.Like the CPP/QPP plans, RPPs reward long contribution histories and high contribution amounts. Thus, RPPs benefit those with a long history of high income the most.
However, as of 2015, only 32.2% of Canada’s labor-force was covered by a registered private pension plan. Given the inadequacy of the OAS and CPP programs to meet most Canadians retirement goals, it is clear another source of retirement income is needed.
Retirement savings & income will look different for everybody.Those who do not have an employer-provided pension plan will need to focus more on contributing to their RRSP & TFSA. Those who do have employer-provided pension plan’s will be rewarded for staying with their employer longer.Those with higher incomes will receive larger benefits from their CPP and Employer-Provided Pensions. Those with lower incomes will receive larger benefits from OAS/GIS benefits.
Ultimately, retirement savings should start early, and be contributed to regularly. No one pillar will provide sufficient retirement income, a multi-pillar approach is always necessary.
Click the link below for more information:
ILS Learning Corporation – Comox, BC
ILScorp, a local online education company, is seeking a full-time bookkeeper/administrative assistant with the following qualifications:
- Minimum 3 years of full cycle accounting experience (Daily Bookkeeping, Accounts Receivable, Accounts Payable, Monthly Bank reconciliations, Company Year End, Staff Payroll, Benefits)
- Excellent use of Excel and Microsoft Word
- Proficient in Quickbooks
- Possess excellent English verbal and written skills
- Effective telephone communication / customer service skills
- Strong interpersonal, administrative and organization skills, with the ability to multitask
- Experience in an accounting firm or other professional service setting is ideal.
- Perform Administrative duties such as couriers, mail, banking, invoice preparation and office supply management
- Dealing with administrative matters as required
Email resume and cover letter to firstname.lastname@example.org
Today, is the deadline for the CSF reference period of December 1, 2015 to November 30, 2017.
The Regulation of the Chambre de la sécurité financière respecting compulsory professional development applies to every professional holding an authorization issued by the Autorité des marchés financiers allowing him to practise in any of the following sectors and registration categories:
- Group savings plan brokerage;
- Scholarship plan brokerage;
- Insurance of persons;
- Group insurance of persons.
A representative must accumulate the following professional development units (PDUs):
- 10 PDUs in general subjects;
- 10 PDUs in compliance with standards, ethics and business conduct*;
- 10 PDUs in topics specific to each sector or registration category in which he is authorized to pursue activities
The member can prove they participated in a training activity and enter the PDUs into their record by entering the proof of presence either:
- Online in their PDU Record in the Members’ Area
- By fax, at 514-282-3418
- By email, at email@example.com
- By mail at: Chambre de la sécurité financière, 2000, McGill College avenue, 12th floor, Montréal, (Quebec) H3A 3H3
How can the member enter the PDUs obtained for training activities into his PDU record?
The member can enter the proof of presence to training activities on the CSF’s website through a secure access in the Members’ Area section.
To activate their online member record, the member must go to the Members’ Area page, click on Activate your membership under the yellow authentication square, and follow the instructions.
Once the Member’s Area is activated, the member will be able to access his PDU record.
The member can enter the PDUs by:
- Opening a session on the Members’ Area by entering their certificate number and password
- Click on “To consult your PDU record, click here”
- Click on Enter activities
- Enter the identification number of the training activity. The number is listed on the proof of presence issued by the person responsible for the training activity. It contains 11 to 12 characters and is similar to CSF00-00-00000
- Enter the date when the training activity took place
- Enter your name and specify the PDU category
- Click on “Save”
The member can add training activities or delete them if they were erroneously added by mistake. When they have finished entering the PDUs, the member is encouraged to print the page and keep it until the information entered has been transferred to their PDU record.
It’s important to keep any proof of presence to training activities for 24 months following the reference period during which the activity took place, because the CSF will periodically check with members. Upon request by the CSF, the member must send their proofs of presence within 30 days.