CRA indicates that the two components received under a “face amount plus fund value” universal life policy are included in computing the corporate policy owner’s CDA

CRA indicated that where an exempt universal life held by Opco on the life of its shareholder paid two amounts to Opco on the death of the individual - the fund value of the policy (being the accumulated balance of the investment accounts within the policy at the time of the death of the life insured); and the face amount – the total of those two amounts would be “proceeds of a life insurance policy” for purposes of computing the increase to the capital dividend account of Opco.

Neal Armstrong. Summary of 8 July 2020 CALU Roundtable Q. 3, 2020-0842151C6 under s. 89(1) – capital dividend account – (d)(ii).