If a business owner is no longer able to work due to a critical illness, the business could suffer loss of revenue, loss of customer relationships and loss of skills and knowledge. Critical illness insurance provides a cash injection into the company to help secure the business against losses, hire a replacement or just provide additional capital should a critical illness strike a shareholder.

This is an important risk management strategy, but Critical Illness Insurance can also be a tool to realize double digit returns by exercising a “Refund of Premium Option” if a claim on the policy is never made. Here’s how it works….

If your company has retained earnings and/or free cash flow you can maximize a critical illness contract and:

1. Add value to your company, through shareholder coverage
2. Generate guaranteed double digit returns for the you, the shareholder

The plan is set up so that the corporation pays the premiums for the critical illness coverage and the you pay the premium refund option. One of two scenarios will unfold:

Either a critical illness occurs and your company receives the tax-free Critical Illness benefit,
or,

You enjoy good health and at some point in the future you choose to cancel the policy and personally receive a refund of all the premiums that were paid both corporately and personally. This creates a guaranteed double digit rate of return that is not based on market factors or performance.
This is a game changer for Critical Illness insurance, not only providing important financial security but also an opportunity for shareholders to draw retained earnings out of their business or holding company on a tax-favorable basis.