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This Web site contains a compilation of more than a thousand consumer finance  columns written by Tony Novak from the 1980s through 2006, updated and reformatted for maximum usefulness today.  New material was added after 2010.

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Transfer life insurance policy?

originally posted: 11/22/2006  reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If in doubt, please send a new question or ask for an update.

Q: My business is required to provide life insurance to cover a commercial mortgage loan. The cost is tax deductible but how do I separate that cost of that insurance from the other life insurance that I already own? Should the policy be owned by the business? How would I transfer a policy to the business?

A: It is generally not smart to transfer a life insurance policy to a business. The same objective can be accomplished with a document called a "collateral assignment". This is provided free of charge with new life policies purchased online at but OnlineAdviser can also set this up for an existing life insurance policy. The document ensures that the lender receives the amount due while your beneficiaries receive the maximum amount on a tax-free basis. Do not consider changing the ownership of a policy without thinking through the tax consequences with an adviser.


More resources: life insurance services