Premium Tax

Provinces levy premium tax on life insurance, ranging from 2% to 4%. The province is is based on the residence of the policyowner

  • premium tax included in the premium you pay (not added on as with sales tax)
  • if you move to another province, the premium tax rate may vary, which can cause your premium or the insurance charges to vary

With term insurance, the premium usually includes a blended premium tax rate which is charged to policyowners across Canada. So term insurance don't generally vary by province.

The same tax rates usually apply for life, health, accident and sickness insurance. Tax rates for property and casualty insurance (e.g., for your care and home) are usually higher.

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