Life insurance helps you protect the financial well-being of your loved ones. It’s a contract that you get into with an insurance company or an “insurer” to help you take care of your family if in the event that you’re no longer there to protect them. If you want to learn how life insurance works and how it can help you protect your family. I’ve written a full article on life insurance and how it works here.
In answering the question: Is life insurance taxable in Canada?
The answer is YES and NO.
However, before I proceed with explaining why life insurance is taxable and not taxable.
I would like to emphasize that I’m NOT a tax expert and that this article is for information only and that I’m in no way, shape or form giving you tax advice. If you need tax advise, talk to a CPA or a tax Lawyer.
I’m sure you’re asking as to whether or not the life insurance death benefit is taxable in Canada. In this case, life insurance death benefits are NOT taxable in Canada.
Your life insurance premiums, on the other hand, are taxed at the time of contribution wherein all insurance premiums are charged their corresponding sales taxes.
Life insurance laws varies from country to country so people coming from other countries may have confusions when it comes whether or not life insurance death benefits are taxable in Canada.
Hope this article helped you address your insurance questions. If you have any more questions, please don’t hesitate to contact me by filling out the contact form here and I will do my best to get back to you at the soonest or you may request a one on one meeting here.
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