Tag Archives: Taxation of Life Insurance
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 if you die during the life of the policy. Permanent insurance, generally universal life or whole-life is designed to last throughout your life time and 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;