How is Life Insurance Taxed?

Life insurance can be divided into two types: term and permanent. Term insurance has no investment component and pays out a tax-free death benefit. Generally universal life or whole-life is designed to last throughout your life time. It often has an investment component allowing you to build up cash values inside the policy in a tax-sheltered manner.

The laws regarding the taxation of life insurance in Canada are anything but straight forward and can be a complex topic; the best possible advice will come from a tax professional that can assess your own individual circumstances. The subject of taxes and life insurance are basically broken down into two main areas; the payments that are made at death,

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Canadian Life Insurance Brokers

Canadian Life Insurance Brokers are professionals who specialize in providing insurance policies from various insurance companies. The main difference between a broker and an agent is that the agent sells insurance from a single company. On the other hand,  a broker represents multiple companies. This allows a broker to provide more options to find you the most suitable coverage at the best rates.

Licensing in Canada

In Canada, each province is responsible for specific licensing requirements for brokers. Thus, the province regulates and monitors the market to insure that fair and ethical practices are being followed. A Canadian life insurance broker is a particular type of broker who specializes only in life insurance.

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