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Yes, life insurance premiums in Saskatchewan are taxable by 3%. And activesigned before April 1, 2000 are taxed by 2% until the policy ends.
In contrast, there are many provinces in Canada that do not tax life insurance premiums. But regardless of your province of residence, most life insurance payouts are not taxed. That means your loved ones can enjoy the full amount you intended them to get. There are certain exceptions to this, like:
Mortgage life insurance is not mandatory in Saskatchewan. Compared to term life insurance, mortgage life insurance is also less helpful to your beneficiaries.
With mortgage life insurance, the funds will go toward paying off your mortgage (to your bank or mortgage lender). But if you have a term life insurance plan, your beneficiaries will receive a lump sum death benefit to use for whatever they need. To help your family feel more financially secure, get a term insurance plan that covers the value of your mortgage and other future expenses.
When your term life insurance policy in Saskatchewan expires, you no longer have to pay premiums and won’t be eligible to receive the death benefit. The premiums you already paid are non-refundable.
Term life insurance gives you affordable protection for a pre-determined period. So before your policy expires, you should consider extending it. This is usually a more affordable option compared to letting your policy expire and having to apply to get a new one.
In Saskatchewan, life insurance plans will have a suicide clause that tells you what happens to your coverage if you die by suicide.
The provision typically states that the policy will be void if the policyholder dies by suicide within a certain period. This period is usually two years and the insurer will refund all premiums paid before the period ends.
