7 December 1993 Income Tax Severed Letter 9335565 - Accident Insurance Policy

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

                 RULINGS DIRECTORATE
                CORRESPONDENCE SUMMARY

DOCUMENT TYPE:

         Opinion

PRINCIPAL ISSUES:

         Whether an insurance policy covering
         accidental death would be a life insurance 
         policy. 

POSITION TAKEN:

         Paragraph 5 of 
IT-430R
 states it 
         would not be. No additional comfort provided.

REASONS FOR POSITION TAKEN:

         Unless the writer elaborates on her concerns 
         no additional comfort will be provided 
         (i.e., we may not have been provided with all 
         the relevant information).

LEGAL:

FINANCE OPINION:

JURISPRUDENCE:

RCT PUBLICATIONS:

HAA NUMBER:

         6562

                                    933556
XXXXXXXXXX                           (613) 957-8953

Attention: XXXXXXXXXX

December 7, 1993

Dear Sirs:

Re: Proceeds of an Accident Insurance Policy

This is with respect to your letter dated December 3, 1993 concerning the above.

Paragraph 5 of Interpretation Bulletin IT-430R , to which you refer, is explicit in stating that a life insurance policy does not include an insurance policy which covers death only by reason of accident. Nevertheless you appear to be concerned that in certain cases an insurance policy covering accidental death would be a life insurance policy. Without knowing the basis of your concern it would not be appropriate for us to make comment beyond the general comments noted in the Interpretation Bulletin.

Should you wish to elaborate on your concerns we would be prepared to consider them provided that they do not deal with a specific taxpayer. If your concern is with respect to a policy that has been issued to a specific taxpayer then your query should be directed to the relevant District Office.

We trust that the above is helpful.

Yours truly,

Chief Financial Institutions Section Financial Industries Division Rulings Directorate