Insurance Changes in 2016

At the end of 2016, life insurance rules in Canada will be changing, and it’s bad news for business owners. The 15 minute video below is designed to be extremely educational and I highly suggest you set aside the time to watch it in it’s entirety.


Insurance is a great way for business owners to build and protect wealth tax efficiently, but in the future these policies will attract more taxes. A properly structured permanent life insurance policy is one of only 3 remaining tax shelters in Canada (along with your principal residence and a Tax Free Savings Account) and the government is moving to change that.

For business owners that have previously been able to use insurance to move assets out of a corporation tax free, the new rules will result in additional taxes. Policies purchased and settled before the rules come into effect on January 1st, 2017 (which means you need to apply by mid-2016) will be grandfathered, meaning that you have a limited time to take advantage of the current rules. This can save hundreds of thousands of dollars in taxes compared to policies purchased in 2017 and beyond, so reviewing this strategy in the context of your wider financial plan is more than worthwhile.

Please watch the video above for more information, and contact me at adrian@emeritusfinancial.com or 647-982-0887 with any questions or to request a review of your position.

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If you’d like a one page summary of these insurance rule changes, please click here.

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