Is Shareholder Life Insurance Deductible? 
In Canada , in most cases , life insurance premiums are not deductible . There are a couple of exceptions : 1 . If the insured is applying for a loan and the institution lending the funds requests that he or she buy life insurance as collateral , a portion of the premiums on that policy qualify as a deductible expense -LRB- the Net Cost of Pure Insurance -RRB- 2 . Where a donor donates a life insurance policy to a charity or a charity takes out a policy on the donors life , the premiums paid by the donor will be considered a charitable donation eligible for a charitable tax credit -LRB- for individuals -RRB- or deduction -LRB- for corporations -RRB- . Even though it is not deductible there are several situations where corporate owned life insurance should be considered . For example : The insurance is required to fund a buy-sell agreement , there will be more than one insured shareholder . There will probably be different ages and unequal premium rates . There may also be cost differences among shareholders due to underwriting premium ratings . Corporate-owned policies help to equalize the resulting premium differences . The taxpayer with the lowest tax rate requires less pre-tax income to pay the premiums ; their dollars are cheaper . In many cases that could be the corporation . If you have further questions , or feel that I could be of assistance , please do not hesitate to contact me . If you would like to work with a local life insurance broker , you could start with a Google search . For example , if you search for : life insurance broker Halifax or life insurance agent Halifax , my name , along with several others , will come up . You can use the same method to find a life insurance broker in your community . -LRB- Since tax laws vary by jurisdiction and do change , check with your local tax and professional advisors . -RRB- Note : The information contained in this article is intended to provide general guidelines only . The application and impact of the law can vary widely from case to case based on the specific or unique facts involved . Accordingly , the information in this article is not intended to serve as legal , accounting or tax advice . Users are encouraged to consult with their professional advisers for advice concerning specific matters before making a decision . 