CORPORATE INSURANCE

Deductible
disability.

A disability insurance whose premium is deductible as a business expense - designed for small business owners, shareholders and incorporated self-employed workers.

Talk to an advisor

HOW IT WORKS

How it works

Deductible disability lets the company pay the premium - and deduct it - in exchange for a taxable benefit when paid. It's a calculated tax trade-off.

Premium paid by the company

The premium is paid by your business and deducted as a business expense - reducing your corporate taxable income.

Deductible expense

Optimized cash flow

Paid by the company

Benefit taxable in your hands

In return, the benefit received in case of disability is taxable as personal income - unlike the non-deductible version.

Income replacement

Taxable on receipt

Tax planning required

Complementary strategy

Often used alongside a non-deductible personal disability policy - for owners who want to maximize their total replacement income.

Maximized coverage

Mixed approach possible

Tailored for businesses

Protection for active owners

Covers owner-managers who actively work in their business and whose income depends on their ability to work.

Active owners

Shareholder managers

Incorporated self-employed

FREE ANALYSIS

Deductible or non-deductible: which is optimal for you?

Alexandre calculates the scenario that maximizes your net replacement income - in coordination with your accountant.

Analysis of your current tax structure

Coordination with your accountant

Comparative scenarios before deciding

WHY THIS STRATEGY?

You're an owner.
Your money is in
your company.

Most small business owners have no disability protection - because they think the business will pay. But if you're disabled, who runs it? And how do you pay yourself?

An unplanned personal disability also hits the business. Without a structured income replacement, many owners dip into their savings or the company's to get by.

The right setup - personal, corporate or both - depends on your compensation structure. Alexandre works it out with your accountant, not by guesswork.

1/3

of small business owners will experience a disability of more than 90 days before retirement age

Source: CLHIA actuarial data

66%

of gross income covered on average by a disability policy - well calibrated for owner-managers

Source: Industry standards

2 years

average length of a long-term disability - the critical period when both operations and personal income must be protected

Source: iA statistics

Analyze my case

Deductible disability for entrepreneurs - AG Financial Services.

Deductible premium

Paid by your company

WHO IS IT FOR?

For which type of owner?

Active business owner

The owner-manager

"Your income comes from your business - if you stop, it stops"

Premium deductible by the company

Covers the manager's salary

Maintains your lifestyle

Incorporated self-employed

The incorporated professional

"Your income goes through your company - might as well deduct the premium"

Optimized tax structure

Complementary protection

Integrated into planning

Active shareholder

The active shareholder

"You draw a salary from your own company"

Covers the shareholder's salary

Complements the agreement

Annual review recommended

WHY CHOOSE US

The Alexandre advantage

Deductible disability requires rigorous tax analysis. Alexandre coordinates with your accountant so the strategy is optimal - and defensible before the CRA.

Integrated tax analysis

Calculation of the optimal scenario: deductible vs non-deductible based on your marginal rate and structure.

Accountant coordination

Alexandre works with your accountant to validate tax eligibility and the policy structure.

Tailored disability definition

Selection of the 'own-occupation' definition and complementary clauses suited to your profession.

Mixed strategy possible

Combination of a deductible corporate policy and a non-deductible personal policy when optimal.

Alexandre Garneau, Financial Security Advisor, AG Financial Services.

66%

Income covered

COMPARISON

Which strategy suits you?

	No protection	Personal disability	Deductible disability BASED ON YOUR PROFILE
Premium paid by	N/A	You personally	The company
Premium deductibility	Non	Non	Oui
Benefit taxable?	N/A	No	Yes (income)
Optimized cash flow	Non	Non	Oui
Ideal for business owners	Non	Partial	Oui
Can combine with personal policy	Non	Oui	Oui
			Analyze my case

The optimal choice depends on your personal and corporate marginal tax rates. Alexandre and your accountant run the numbers together.

TESTIMONIALS

What owners say

“My accountant and Alexandre worked together to structure my coverage. The deductible premium comes out of my company and reduces my corporate taxes. If something happens, the benefit pays me enough replacement income even after tax.”

Paul D.

Incorporated professional, South Shore

“I was afraid the taxable benefits would make the strategy less advantageous. Alexandre ran the numbers: with my marginal rate and the premium deduction, it's still a win compared to nothing at all.”

Nathalie G.

Business owner, Montreal

“We set up a combination - a non-deductible personal disability and a deductible corporate disability. The two complement each other to maximize my total replacement income.”

Marc A.

Shareholder manager, services business

* Names have been changed to protect client confidentiality.

POINTS TO ANALYZE

The decisions
to make together

Every owner has a different structure. Alexandre analyzes the variables with your accountant.

Talk to Alexandre

Deductible or non-deductible: which choice?

Short-term advantage vs long-term advantage

With a deductible premium (corporate disability), you pay less tax now - but you'll pay on the benefit if you're disabled. With a non-deductible premium (personal policy), you pay the premium in after-tax dollars - but the benefit is entirely tax-free. Alexandre helps you calculate which is advantageous based on your current and projected tax rate.

Your business structure

Corporation, partnership or sole proprietorship?

Only a corporation can deduct the premium of a group or individual disability insurance as a business expense under certain conditions. Alexandre checks with your accountant whether your structure is eligible and whether the chosen product meets CRA criteria.

The chosen disability definition

Own occupation or any occupation?

The disability definition is crucial - 'own occupation' means you're covered if you can't perform YOUR specific profession. 'Any occupation' is more restrictive. Alexandre systematically recommends the 'own occupation' definition for professionals and managers.

Income to protect

Official salary vs actual business income

The income to insure is usually the salary you pay yourself from the company - not dividends. Alexandre analyzes your salary structure to determine the optimal amount to cover and avoid income shortfalls at claim time.

PROCESS

How do you file a claim?

Disability declaration

Claim form completed with your attending physician as soon as the disability begins.

Waiting period: 30-120 days

Documentation

Medical history, specialist reports, proof of company income.

Alexandre coordinates

Insurer assessment

The insurer reviews the file and confirms eligibility according to the policy definition.

Timeline: 10-30 days

Monthly payout

Benefit paid each month - to be declared as taxable income on your personal return.

Monthly payout

COMPLETE YOUR STRATEGY

Frequently asked questions

What's the difference between deductible disability and personal disability?

With deductible disability, the premium is paid by the company and deducted as a business expense, but the benefit is taxable as income. With personal disability, the premium is paid by you with after-tax dollars, but the benefit is entirely tax-free. The choice depends on your marginal rate and structure.

Does the CRA always accept the premium deduction?

Deductibility depends on the type of policy and the business structure. A group disability insurance or certain individual policies can be deductible under specific conditions. Alexandre works with your accountant to ensure the structure meets CRA requirements before signing up.

Can I combine both types of protection?

Yes - and it's often the optimal strategy for business owners. A non-deductible personal policy covers part of the income with tax-free benefits, and a deductible corporate policy completes the coverage. Alexandre sizes both to maximize net after-tax replacement income.

How do I calculate the amount to insure?

The amount is based on your official company salary, not on dividends. Alexandre analyzes your compensation structure (salary + dividends) and determines the optimal amount to cover - generally between 60 and 70% of eligible gross income.

What is the usual waiting period?

The waiting period is the time you must be disabled before benefits begin. Common options are 30, 60, 90 or 120 days. The longer the period, the lower the premium. Alexandre helps you choose the optimal period based on your cash cushion.

If my disability ends, what happens to the policy?

The policy stays in force as long as you pay the premiums. If you return to work after a period of disability, benefits stop according to the policy terms. Some policies allow a gradual return to work with partial benefits - Alexandre makes sure your policy includes this kind of clause.

Can I deduct both the personal and corporate premium?

No, not both for the same protection. Each approach has its own tax rules - deducting the premium makes the benefit taxable, and vice versa. Alexandre structures the right mix for your situation.

What happens if my business closes?

A personal policy continues without interruption, no matter what happens to the business. A corporate policy needs to be reassessed - transferred, bought out or cancelled. Alexandre plans this transition ahead of time.

LET'S TALK

The strategy that protects
your income and your taxes.

Alexandre analyzes your corporate structure and calculates the optimal scenario - with your accountant if you wish.

Reply within 48h

Coordination with your accountant included

AMF registered #272275

Deductible
disability.