Insurance Company Formation
A Strategic Shield for Asset Protection
Forming a private insurance company—often called a captive insurance company—is one of the most powerful asset protection tools available to high-net-worth individuals and businesses in the United States. This structure allows you to legally shift risk, build tax-advantaged reserves, and protect your wealth from external threats such as lawsuits and creditors.
At its core, a captive insurance company is a legitimate insurance entity created to insure its owner’s or affiliated businesses’ risks. Unlike traditional insurance, where premiums are paid to third-party insurers, a captive allows those premiums to be paid to your own licensed insurance company. This provides the unique opportunity to retain underwriting profits, build reserves, and create a layer of legal protection.
Who Should Consider a Captive?
Captive insurance isn’t just for Fortune 500 companies. Physicians, real estate investors, contractors, and small-to-midsize business owners can all benefit when structured properly under U.S. tax law (IRC 831(b)).
Benefits of Forming a Captive Insurance Company:
- Asset Protection: Funds held within a captive are typically protected from lawsuits and creditors.
- Tax Advantages: Premiums may be deductible, and properly managed captives can grow reserves tax-deferred.
- Risk Management: Tailor policies to ensure business-specific or hard-to-cover risks.
- Estate Planning & Succession: Captives can serve as valuable tools for wealth transfer and legacy planning.
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ASSET PROTECTION, INC.