Why consider a captive for your business? A self-insurance program that is tailored to your organization’s needs can save you money and bring significant tax benefits. Here are some reasons to form a captive:
- Keep profits in your company. With a captive, your business pays itself to insure risks. This can benefit your bottom line by keeping profits in the business rather than paying for insurance from a third-party provider.
- Save money. Captives allow you to insure only your company’s risk—you’re not lumped into a pool of risk with other companies. (Why pay higher premiums to cover others’ losses?) Most small to mid-sized captives can save $200,000 to $400,000 per year on insurance.
- Gain tax benefits. Premiums paid to a properly structured captive are tax deductible. There are also certain tax advantages available to small captives.
- Plan your estate. Captives can be a part of an estate plan and help enhance efficiencies, making them a wise strategy for family-owned businesses.