Income Tax Act — I-3.3 148
 but does not include (f) an assignment of all or any part of an interest in the policy for the purpose of securing a debt or a loan other than a policy loan, (g) a lapse of the policy in consequence of the premiums under the policy remaining unpaid, if the policy was reinstated not later than 60 days after the end of the calendar year in which the lapse occurred, (h) a payment under a policy as a disability benefit or as an accidental death benefit, (i) an annuity payment, (j) a payment under a life insurance policy (other than an annuity contract) that (i) was last acquired before December 2, 1982, or (ii) is an exempt policy in consequence of the death of any person whose life was insured under the policy, or (k) any transaction or event by which an individual becomes entitled to receive, under the terms of an exempt policy, all of the proceeds (including or excluding policy dividends) payable under the policy in the form of an annuity contract or annuity payments, if, at the time of the transaction or event, the individual whose life is insured under the policy was totally and permanently disabled; ( disposition ) interest , in relation to a policy loan, has the meaning assigned by subsection 138(12); ( intérêt ) policy loan means an amount advanced by an insurer to a policyholder in accordance with the terms and conditions of the life insurance policy; ( avance sur police ) premium under a policy includes (a) interest paid after 1977 to a life insurer in respect of a policy loan, other than interest deductible in the 1978 or any subsequent taxation year pursuant to paragraph 20(1)(c) or 20(1)(d), and (b) a prepaid premium under the policy to the extent that it cannot be refunded otherwise than on termination or cancellation of the policy, but does not include (c) the portion of any amount paid under the policy with respect to an accidental death benefit, a disability benefit, an additional risk as a result of insuring a substandard life, an additional risk in respect of the conversion of a term policy into another policy after the end of the year, an additional risk under a settlement option, or an additional risk under a guaranteed insurability benefit, if (i) in the case of an annuity contract, a policy issued before 2017 or in respect of which the particular time at which the policy is issued is determined under subsection (11), where the interest in the policy was last acquired after December 1, 1982, the payment is made after May 31, 1985 and, if the particular time at which the policy is issued is determined under subsection (11), before the particular time, or (ii) in the case where the taxpayer’s interest in the policy was last acquired before December 2, 1982, (A) subsection 12.2(9) of the Income Tax Act , chapter 148 of the Revised Statutes of Canada , 1952, applies to the interest, (B) the particular time at which the policy is issued is determined under subsection (11), and (C) the payment is made in the period that starts at the later of May 31, 1985 and the first time at which that subsection 12.2(9) applies in respect of the interest and that ends at the particular time; ( prime ) proceeds of the disposition of an interest in a life insurance policy means the amount of the proceeds that the policyholder, beneficiary or assignee, as the case may be, is entitled to receive on a disposition of an interest in the policy and for greater certainty, (a) in respect of a surrender or maturity thereof, means the amount determined by the formula (A - B) - C where A is the cash surrender value of the interest in the policy at the time of surrender or maturity, B is that portion of the cash surrender value represented by A that is applicable to the policyholder’s interest in the related segregated fund trust as referred to in paragraph 138.1(1)(e), and C is the total of amounts each of which is (i) an amount by which the amount payable in respect of a policy loan in respect of the policy is reduced as a consequence of t