Benefits of a Captive
Why consider a captive for your business? There are many benefits to forming a captive, including:
- You keep the profits from the premiums
Forming a captive insurance company allows your business to pay itself to insure risks. Otherwise, you would be paying an insurance company to do this for you. Why not keep these funds for your business?
- You could save money
Captives allow you to insure only your company’s risk. Why pay higher premiums to cover the losses of other companies? In addition, while each situation is different, most small to mid-sized captives can save your company $200,000 to $400,000 each year.
- You can save on taxes
You can receive a tax deduction for your captive premium payments. If the total premium payments to the captive are less than $1.2 million, your business may not have to pay tax on the underwriting profits.
- Estate planning benefits
Captives can be passed along to successors tax-free, making them a great strategy for family-owned businesses.
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