Finance indicates that extending s. 110.6(15)(a) to address disability coverage would raise potential policy issues

The two individual shareholders of a small business corporation agree that on the disability of either of them, his shares will be purchased out of the proceeds of a policy purchased by the corporation. What is the policy reason for not applying the s. 110.6(15)(a) cash-surrender-value rule so as to exclude the death benefit in determining whether the corporation qualifies as an SBC? Finance responded:

[T]he examination of such an issue could only be made in the context of a comprehensive review of the taxation of disability and critical illness insurance policies - unlike life insurance policies, the Act does not provide a comprehensive set of tax rules for disability and critical illness insurance policies. In addition, there may be significant differences between life insurance and disability or critical illness insurance, including the fact that an insured event under disability or critical illness insurance does not necessarily imply that the insured person ceases to participate in the corporation's business on a permanent basis.

Neal Armstrong. Summary of 6 October 2017 APFF Financial Strategies and Instruments Roundtable, Q.3 under s. 110.6(15)(a).