This short publication discusses the tax treatment of a return of premium (ROP) benefit from the maturity of a term life insurance policy, based on a recent Tax Court of Canada case, Akhavan v. The King. It explains why the ROP in the Akhavan case was taxable, discusses the tax treatment for other types of ROP benefits, and concludes with recommendations for CALU members whose clients are thinking of buying a life insurance policy with an ROP benefit.

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