Owning a captive provides small business owners income and estate tax planning advantages. Similar to commercial insurance premiums, premiums paid by a business to a CIC are tax deductible to the payor as a business expense (under IRC ยง162). Also, the owner of a CIC does not pay income taxes on premiums received, as long as total premiums are kept under $1.2 million. In addition, small business owners can incorporate dynastic estate planning concepts into the ownership structure of the CIC to allow for wealth preservation.