Life Insurance Policy Valuation

Mallette performs actuarial valuations to certify the market value of life insurance policies for tax purposes. For example, such valuations are required when a policyholder wishes to transfer the policy to a shareholder, employee or other corporation.

The transfer of ownership of a life insurance policy constitutes a disposition of an interest in the policy under section 148 of the Income Tax Act, and this can have significant tax implications. On the one hand, this may result in a gain on the policy for the person or entity making the transfer, i.e. the person who disposes of the property, and on the other hand, it may confer an advantage on a shareholder since a life insurance policy is not considered a locked-in asset and is not eligible for the deferral provided for in section 85 of the Income Tax Act.

Our experts take many factors into account to establish the fair market value (FMV) of the life or critical illness insurance policy and advise our clients on the decisions to be made regarding the tax implications of an eventual transfer of ownership.

Given the particularities of each situation, an initial contact will enable us to identify your needs and refer you to the appropriate parties.

For more information, contact Marika Lévesque at [email protected] or by telephone at 418-653-4455, ext. 2453.