Life Insurance Premiums Tax Deductible Canada — CRA Rules & Business Use (2026)
Whether life insurance premiums are tax deductible in Canada depends on who owns the policy and for what purpose. This guide summarizes CRA rules: personal policies (usually not deductible), and business use (sometimes deductible in specific cases). For more detail see are life insurance premiums tax deductible and Canadian taxation of life insurance.
Updated March 16, 2026
Personal life insurance premiums
For individuals, premiums you pay on a life insurance policy that you own on your own life (or a family member’s) are not tax deductible in Canada. The trade-off is that the death benefit is generally tax-free to your beneficiaries. So you don’t get a deduction on the premium, but the payout is not taxed. For more on tax see is life insurance taxable in Canada.
Business and corporate-owned policies
When a corporation owns life insurance (e.g. key person, buy-sell, or collateral), the CRA may allow a deduction for premiums in certain situations — for example when the policy is required for business purposes and the company is the beneficiary. When the policy benefits a shareholder personally, premiums are generally not deductible. Rules are nuanced; always get advice from a tax professional. For an overview see are life insurance premiums tax deductible and Canadian taxation of life insurance.
FAQ
Are life insurance premiums tax deductible for individuals?
Generally no. Personal life insurance premiums are not deductible; death benefits are typically tax-free to beneficiaries.
Can a business deduct life insurance premiums?
Sometimes, when the policy serves a business purpose and the company is beneficiary. Shareholder-personal benefit policies are generally not deductible. Confirm with a tax advisor.
Where are CRA rules on life insurance?
CRA publishes guidance on life insurance and corporate policies. See canada.ca/revenue-agency and a tax professional.
Compare life insurance
Compare life insurance quotes from 50+ Canadian providers. For business and key person coverage, a licensed advisor can help structure the policy and explain tax impact.