Income Tax Act — I-3.3 (a)
of the Income Tax Regulations ), or a disability benefit, under the policy, and (b) does not result in the termination of a coverage (as defined in subsection 1401(3) of the Income Tax Regulations ) under the policy, O is, in the case of a policy that is issued after 2016 and is not an annuity contract, the total of all amounts each of which is — if a benefit on death (as defined in subsection 1401(3) of the Income Tax Regulations ) under a coverage (as defined in section 310 of the Income Tax Regulations for the purposes of section 306 of the Income Tax Regulations ) under the policy is paid before that time as a consequence of the death of an individual whose life is insured under the coverage (and, in the case where the particular time at which the policy is issued is determined under subsection (11), at or after the particular time) and the payment results in the termination of the coverage — the amount, if any, determined with respect to the coverage by the formula [P × (Q + R + S)/T] – U where P is the adjusted cost basis of the policyholder’s interest immediately before the termination, Q is the amount of the fund value benefit (as defined in subsection 1401(3) of the Income Tax Regulations ) under the policy paid in respect of the coverage (as defined in section 310 of the Income Tax Regulations for the purposes of section 306 of the Income Tax Regulations ) on the termination, R is the total of all amounts — each of which is in respect of a coverage (as defined in subsection 1401(3) of the Income Tax Regulations ) in respect of a specific life or two or more specific lives jointly insured under the coverage referred to in the description of O — that would be the present value, determined for the purposes of section 307 of the Income Tax Regulations , on the last policy anniversary (as defined in section 310 of the Income Tax Regulations ) on or before the termination, of the fund value of the coverage (as defined in subsection 1401(3) of the Income Tax Regulations ) if the fund value of the coverage on that policy anniversary were equal to the fund value of the coverage on the termination, S is the total of all amounts — each of which is in respect of a coverage (as defined in subsection 1401(3) of the Income Tax Regulations and referred to in this description as a “particular coverage”) in respect of a specific life or two or more specific lives jointly insured under the coverage referred to in the description of O — that would be determined, on that policy anniversary, for paragraph (a) of the description of C in the definition net premium reserve in subsection 1401(3) of the Income Tax Regulations in respect of the particular coverage, if the benefit on death under the particular coverage, and the fund value of the coverage (as defined in subsection 1401(3) of the Income Tax Regulations ), on that policy anniversary were equal to the benefit on death under the particular coverage and the fund value of the coverage, as the case may be, on the termination, T is the amount that would be, on that policy anniversary, the net premium reserve (as defined in subsection 1401(3) of the Income Tax Regulations ) in respect of the policy for the purposes of section 307 of the Income Tax Regulations , if the fund value benefit (as defined in subsection 1401(3) of the Income Tax Regulations ) under the policy, the benefit on death under each coverage (as defined in subsection 1401(3) of the Income Tax Regulations ) and the fund value of each coverage (as defined in subsection 1401(3) of the Income Tax Regulations ) on that policy anniversary were equal to the fund value benefit, the benefit on death under each coverage and the fund value of each coverage, as the case may be, under the policy on the termination, and U is the amount, if any, determined under subsection (4) in respect of a disposition before that time of the interest because of paragraph (2)(e) in respect of the payment in respect of the fund value benefit under the