Canada Life My Par Gift resource page

1.    Who qualifies as the owner of a Canada Life My Par Gift policy?

The owner must be a registered charity.

2.    What qualifies as a registered charity?

Canada Life doesn’t determine what charities are considered registered. A registered charity refers to an organization that’s registered as a charity with the CRA. You can visit the CRA site for more details on registered charities.

3.    Who qualifies as a beneficiary for a Canada Life My Par Gift policy?

The beneficiary is intended to be the owner or another registered charity. If the owner wishes to designate a beneficiary that is not a registered charity, before doing so, they'll obtain professional advice about if this may affect their status as a registered charity.

4.    Who qualifies as the donor for a Canada Life My Par Gift policy?

Generally, the donor will be the same as the insured.

5.    Can a corporation be a donor for a Canada Life My Par Gift policy? 

Yes. Generally, the controlling shareholder of the corporation must be the life insured of the policy.

6.    Are joint insureds allowed on Canada Life My Par Gift policies?

Yes.

7.    What is the minimum and maximum issue age for Canada Life My Par Gift?

The minimum age is age 18. The maximum age is age 75. For joint life policies, regardless of the ESA, the maximum age of any of the insureds is also 75.

8.    What is the minimum single premium amount needed to purchase a Canada Life My Par Gift policy?

$10,000.

9.   Are riders or benefits available on Canada Life My Par Gift policy?

No. There are no riders and benefits on a Canada Life My Par Gift policy. The Canada Life My Par Gift policy was designed with simplicity in mind based on feedback from advisors that work closely with charities.

10.  Can a donor donate to two charities with one Canada Life My Par Gift policy?

No. However, the donor can split their donation and have the two charities each apply for their own Canada Life My Par Gift policy. Or the donor could purchase one of Canada Life’s other permanent life insurance policies and name the two charities as beneficiaries. 

11.  Can a donor change their charity of choice after the policy has been placed in-force?

No, once the policy has been placed in force, the charity is the sole owner of the policy and the donor has no ownership rights under the contract, including naming a beneficiary. 

12.  What happens if a charity loses its registered charity status? 

Canada Life will not require a change in ownership if the registered charity loses its registered status. However, the Canada Life My Par Gift policy will remain non-exempt.

1.    Who can make a payment for the Canada Life My Par Gift policy?

The donor can make the single premium payment directly to Canada Life or they can make the donation to the charity who will make the premium payment to Canada Life.

2.    Who will issue the donation tax receipt to the donor?

All donation receipts will be issued by the registered charity, not by Canada Life.

3.    Once the donor makes a payment, how will the charity be notified? 

Canada Life will send the registered charity a notification of the amount and the date the policy was placed in-force.

4.    How will a donor ensure they receive a donation tax receipt in a calendar year?

If the donor needs certainty regarding the tax year in which their donation will be recognized by the registered charity owner, the donor should consider paying the registered charity directly during that tax year instead of Canada Life. This is because if a donor pays Canada Life directly instead of the registered charity, there is no guarantee that the calendar year the donor makes payment to Canada Life will be the calendar year the registered charity will recognize the donation for the purpose of issuing a charitable donation tax receipt. Rather, the calendar year in which the policy is placed in effect will be the calendar year the donation is recognized. This means that if the donor pays Canada Life in the current calendar year but due to underwriting and delivery processing, the policy is not in effect until the next calendar year, the donor will not receive a charitable donation tax receipt recognizing the donation for the current calendar year.

5.    What happens if my coverage isn’t issued as applied for and I have submitted payment with my application to Canada Life?

Depending on the underwriting decision, there might be times where we return some or all of the payment.  If the policy is not yet in force, the return of some or all of the payment will be made to the person who made payment. If the policy has come into effect, any return of premium paid will be paid to the charity.  In some cases such as substandard ratings, additional funds may be required to place the policy in force.

6.    Are there special tax receipting considerations for Canada Life My Par Gift policies where the selling advisor is also the donor?

There are many rules and guidelines that the CRA has with respect to donation receipting.

Canada Life isn’t a registered charity and doesn’t issue the donation tax receipts. The calculation of the net donation tax receipt will be calculated by the registered charity and the net donation amount may take into account the advisor’s compensation. We recommend advisors discuss this question with the charity.

7.    Are donors required to apply their donation credit received for a Canada Life My Par Gift policy in a single tax year or can it be spread over a few years?

Donors can use their donation tax receipt to reduce their taxes payable for the year the donation is recognized, or they can choose to carry the donation receipt forward, up to five years, according to current tax legislation. If your client has more specific questions, we recommend they speak to their professional tax advisor.

8.    Can a donor donate marketable securities to the charity, and have the charity pay the premium?

Yes. For more details, refer to this tax articleOpens a new website in a new window.

1.    Is the application/conversion process for Canada Life My Par Gift different from other par products?

Yes, because this is a unique product. Please see more details of the application/conversion process here. (link coming soon)

2.    Who receives a copy of the What you need to know about your life insurance application (form 17-8942)?

The insured, registered charity and donor (if different from the insured).

3.    Are there any changes to the form requirements to convert to a Canada Life My Par Gift?

Yes. Additional requirements are indicated on the Simplified conversion and guaranteed issue application (form 17-8345) and the Application for life policy change (form 17-8217).

4.    Are there differences in the financial underwriting requirements for a Canada Life My Par Gift policy compared to other permanent policies owned by a registered charity with 10-pay, 20-pay or pay-to-100 premium duration?

Yes. Since Canada Life My Par Gift has been structured as a single premium payment policy owned by a registered charity, evidence of past donations will not be required. For all other participating policies owned by registered charity owned policies a history of past donations will be required. Regardless of product selected for charity owned policies, all other factors in underwriting such as reputational risk and overall percentage of net worth, will continue to be evaluated when assessing all cases financially.

If at the time of application, the donor has already made the donation directly to the registered charity, a copy of the donation tax receipt should be included with the application to establish a proof of relationship between the donor and the insured.  However, there is no requirement for the donor to pay the charity directly. A donor may choose to pay Canada Life directly. Please also see Premium payment, donation receipts and tax related questions. 

5.    Why did I receive two Canada Life My Par Gift packages?

One is the contract to be given to the charity, the other is a copy of the full application and medical evidence for the insured. It’s important the charity and insured receive the correct package to protect the insured’s personal information. One is the charity’s contract which excludes the insured’s personal information while the insured’s copy of the contract contains the full application and all applicable evidence. For conversions, you will still receive only one contract for the charity.

6.    What if the donor or insured would like information on the policy once it’s in-force?

A policy information access authorization form will be included in contract package. The charity can complete and return the form to Client Service.

7.    Why are anti-money laundering (AML) requirements required for a My Par Gift policy and not for other participating life insurance products?

Unlike other participating life insurance products which are issued with the intent that they maintain a tax exempt status, My Par Gift is a non-exempt product. For this reason, FINTRAC’s AML regulatory requirements must be met. Requirements include the completion of AML forms as indicated in the application, and inclusion in your AML compliance program in policies for large cash transactions, record keeping and identity verification. It must also be added as a high-risk product in the business-based risk assessment. The revised AML compliance program template reflects these changes (Advisor site | Your Key Connection | RepNet)

8. Will the advisor have access to the My Par Gift policy after it’s in-force? 

Yes. The advisor remains the advisor-of-record on the policy after the policy is issued. This means they’ll still have access to the policy details if they need them in the future.

9. Does the advisor need to provide ongoing service for a My Par Gift policy?

The advisor remains the advisor-of-record for the policy. Since My Par Gift is a single premium payment policy, there shouldn’t be ongoing servicing needs.

1.    What is the advisor compensation for Canada Life My Par Gift?

Advisors will receive four percent first year commission (FYC) of the total single premium payment and there are no yearly trailers. This means advisors receive their full compensation on the entire premium once the policy is placed. Canada Life My Par Gift qualifies for insurance sales bonus.  

The following example shows how Canada Life My Par Gift has competitive compensation relative to other Canada Life par products. See table(s) below: 

2.     How do I get an illustration for a Canada Life My Par Gift policy?

Canada Life My Par Gift illustrations will only be available in the web-based illustration tool accessed through Workspace. If you have received your email inviting you to register for Workspace and have completed your registration, you can prepare these yourself through Workspace. You will find Canada Life My Par Gift in the drop-down menu under within the Par illustration tile.

If you're having trouble registering to Workspace or haven’t received your invitation yet, you can work with your insurance sales partner or send your request to Head Office Quote SupportOpens in a new window to obtain Canada Life My Par Gift illustrations. 

3.     How does licensing for advisors work if the donor and the registered charity are in two different provinces?

The advisor must be licensed to sell in the province in which the owner/charity sign the application.

4.     How does the advisor place the sale if they are talking to a local charity chapter in a province in which they’re licensed, but the registered charity’s headquarters (and signing officer) are in a different province where the advisor isn’t licensed?

The advisor must be licensed to sell in the province in which the owner/charity sign the application.

1.    Can a term policy be converted to a Canada Life My Par Gift policy?

Yes. Ownership of the original term policy needs to be transferred to the registered charity prior to conversion. Only standalone term policies can be converted to a Canada Life My Par Gift policy.

2.    Can the charity do a partial term conversion to a Canada Life My Par Gift policy and keep the remaining term coverage?  

Yes, they can. If the registered charity wants to keep the remaining term coverage, it’s important the registered charity considers that there will be an additional ongoing premium associated with the remaining term coverage. The remaining term coverage can't be transferred back to the donor.

3.    Why can’t guaranteed issue privileges such as guaranteed insurability rider (GIR) and business growth protection rider (BGPR) be exercised to a Canada Life My Par Gift policy?

For the single premium on the Canada Life My Par Gift policy to be considered the donation, the registered charity must be the owner at issue. For the registered charity to be the owner of the Canada Life My Par Gift policy at issue on a guaranteed issue, the ownership of the in-force policy must be transferred to the registered charity prior to the election of the option. For permanent polices, a transfer of ownership would be a taxable disposition that would likely result in a taxable policy gain being tax reported to the donor. This would reduce the overall tax benefit to the donor. This is not an issue for standalone term polices and therefore not an issue for term conversions to a Canada Life My Par Gift policy.

4.    Is the equivalent single age (ESA) for Canada Life My Par Gift different from other par policies?

In some cases, the ESA will be different.

5.    Will there be cases where the base death benefit is less than the single premium?

Yes, for some combinations of age, smoking status and substandard ratings. In these situations, consider if using the enhanced coverage option, which is guaranteed, can provide a larger total initial death benefit. Whether using enhanced coverage option or not, if dividends are credited, the policy can grow, and the death benefit can be greater than the single premium payment.

6.    Are reduced paid-up (RPU) and premium offset available?

No. Canada Life My Par Gift is a single premium product. Neither of these features are applicable to single premium products.

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