CALU Practice note

Canadian individuals and private corporations often acquire life insurance policies to meet liquidity needs on death, as well as accumulate capital on a tax-advantaged basis during the lifetime of the insured

This Practice Note will review the tax treatment of an offshore corporate individual DI/CI policy with an ROP rider owned by and with benefits payable to the shareholder and/or executive combined with a leveraging program; and the tax treatment of offshore corporate grouped DI/CI policies with ROP riders owned by and with benefits payable to executives and/or shareholders combined with a leveraging program.

This Practice Note will discuss the tax treatment of domestic shared ownership arrangements involving a corporate owned individual CI policy with a ROP rider owned by and with benefits payable to the employee/shareholder of the corporation (with or without leverage).

In the mid-2000’s CALU published two CALU Reports which detailed the growth of the life settlements market in the United States, the regulatory environment in Canada which generaly prohibits this type of activity, and the tax and other regulatory rules that apply to life settlements in the United States and Canada...

This Practice Note reviews provincial restrictions relating to policyholder inducements and considers how these rules may apply to three situations which involve an advisor...

This Practice Note provides background on various insured annuity arrangements, discusses the LIA policy rules introduced in 2013, and reviews newer arrangements that may be the subject of review by the Canada Revenue Agency or the Department of Finance. This Note also comments on best practices when putting in place investment loans which are collaterally secured by life insurance and/or annuity products.

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