Join Sean King, a captive insurance expert and CPA, alongside Ryan Haley, a financial planner, as they dive into the world of captive insurance. They explore how business owners can control their insurance dollars, save on taxes, and build wealth. Learn how creating your own insurance company can mitigate risks while accumulating assets. They also discuss the importance of compliance to avoid IRS scrutiny and share strategies to navigate alleged risks in leveraging captive insurance for tax benefits.
01:14:34
forum Ask episode
web_stories AI Snips
view_agenda Chapters
auto_awesome Transcript
info_circle Episode notes
insights INSIGHT
Small Business Fragility
Small to mid-sized businesses are uniquely vulnerable due to limited access to capital, geographic concentration, and concentrated revenue streams.
Mitigate these risks with captive insurance, a strategy often used by large corporations.
volunteer_activism ADVICE
Captive Insurance Candidacy
Consider captive insurance if your business has substantial risk and cash flow.
Ensure your business has at least $300,000 in annual premiums and a tolerance for complexity.
question_answer ANECDOTE
Administrative Action Risks
A restaurant losing its liquor license due to an underage serving violation can be financially devastating.
Similarly, medical groups forced to halt procedures during COVID-19 illustrate administrative action risks.
Get the Snipd Podcast app to discover more snips from this episode
Imagine you own a thriving business or a successful practice, and every year, you’re writing large checks to insurance companies. You're likely insuring against risks specific to your business—legal claims, property damage, cyber threats—but you’re paying premiums, crossing your fingers, and seeing little return.
What if there was a way to keep those insurance dollars within your control, save on taxes, and build real wealth over time?
Enter captive insurance.
With captive insurance, you create a company that insures the unique risks of your own business. It’s a strategy the big corporations and high-net-worth families have used for years, but it’s equally accessible to successful small business owners and physicians.
Here’s the secret sauce: instead of paying premiums to an external insurance provider, you pay them to your own captive insurance company. And those premiums are tax-deductible for your business!
Here’s where the magic happens: when claims are lower than the premiums collected (and that’s often the case with well-managed risks), your captive insurance company retains the profits. So rather than those premiums disappearing, they’re building up as assets in your own company.
Over time, these funds accumulate, potentially into the millions, creating a robust financial asset you control.
Now, there are compliance steps and guidelines, but with proper management, this setup can allow you to legally minimize taxes while effectively setting aside funds for your business's future needs.
And as business owners, we know those future needs are constant—whether it’s reinvesting in the practice, planning for retirement, or covering unexpected costs.
If you want to learn more about this strategy, make sure to listen to today’s Wealth Formula Podcast episode.
Wealth Formula by Buck Joffrey