An 831(b) Plan allows business owners to mitigate risk more efficiently while reducing income to address tomorrow's risks.

 

 

 

 

 

 

 

 

 

 

 

 

 

Plans must meet a four-part test including transfer of risk, law of large numbers, fortuitous risks, and generally accepted insurance principles.

 

Primary Benefit: Mitigate Risk

Traditional insurers often limit or exclude coverage. An 831(b) Plan mitigates risks business owners face daily, filling gaps in current policies.

 

Secondary Benefit: Tax Reduction

Contribute up to $2.85 million annually (2025). When catastrophe strikes, utilize tax-deferred reserves to weather the storm.

 

Using an 831(b) Plan

You're in Control

Tailor the plan to meet specific risk management and financial needs. Select from many plan options and manage reserves to fit your risk tolerance and investment goals.

 

Designed to Complement

Plan administrator ensures the plan meets the four-part test and achieves risk mitigation goals with minimal disruption to your business.

 

Access Plan Reserves

Distribute reserves by declaring a dividend or file a claim when catastrophe strikes.

 

Important Considerations

• Tax deferral does not mean tax free
• Investment income taxable at C-Corp rate
• Dividend distributions taxable at qualified dividend rate
• Participants share risk with unrelated parties in co-ops

 

Future Benefits

• Ability to borrow from plan and use as credit line
• Ability to drop insurance company designation in the future
• Benefits to a buyer and seller when a business is sold