Over the past several decades, cell captives have exploded in popularity, becoming a notable novelty in the insurance world. Though some remain wary of cell captives, their simplicity makes them appealing to those looking for alternatives to other types of captives.
What Is a Cell Captive?
A cell captive, or core cell insurance company, is an entity that consists of a system of cells which contain independent assets and liabilities. These cells are legally separated from one another and therefore must be individually accounted for in any books or records.
Cell captives are more flexible than their pure captive relatives, but their essential purpose is the same: allow external organizations to access your captives — for a small fee — even when they do not have captives of their own.
Why Choose a Cell Captive?
The greatest advantage to using cell captives is that, due to their independence from one another, they are generally less risky than pure captives. Other potential benefits include tax savings opportunities, owner payouts, and lower premiums.
The flexible nature of cell captives sets them apart from other types of captives and ensures that they will endure the test of time. As the possibilities expand, consider doing additional research into cell captives and their capabilities to see which kind best suits you and your company.