If you’re a Canadian and considering emigrating from Canada now or in the future, your life insurance policy could be the most tax-efficient asset in your financial portfolio.
When individuals sever their residential ties to Canada (i.e., emigrate), for tax purposes they are generally deemed to dispose and reacquire their property at fair market value (FMV). In many cases, this can inconveniently trigger large tax bills on deferred capital gains.
Life insurance policies, including those with large cash surrender values, are exempt from this issue. Life insurance policies are not considered a type of capital property that requires a deemed disposition. Continued… Tax Exemptions on Life Insurance for Canadian Emigrants