Principal Issues: Where a life insurance policy is converted from a term policy to a permanent policy under the terms and conditions of the term policy, when is the permanent policy considered to have been acquired for purposes of paragraph 248(35)(b)?
Position: Whether the conversion of a term life insurance policy to a permanent life insurance policy results in a new policy acquired by the policyholder at the time of the conversion for purposes of paragraph 248(35)(b) of the Act is a mixed question of fact and law and can only be determined on a case-by-case basis.
Reasons: All the terms of an insurance policy should be reviewed to determine whether the changes are so fundamental as to go to the root of the policy. Paragraph 148(10)(d) which may deem a life insurance policy not to have been disposed of or acquired in certain limited situations does not apply for purposes of subsection 248(35).
