CRA notes that it generally will be impossible for a resident individual to properly compute the Canadian income tax results of holding to maturity a UK endowment policy

An individual, while a non-resident, acquired in 1998 a United Kingdom mortgage endowment policy as an investment plan with a life insurance component. The policy matured in 2023 and the individual received a lump-sum amount from the policy issuer, while a resident of Canada.

CRA noted:

• It had “previously opined that a UK endowment policy would appear to be a life insurance policy within the meaning in subsection 138(12)“.
• On the immigration, the ss. 128.1(1)(b) and (c) rules would apply.
• Although a life insurance policy issued by a non-resident insurer is not specifically precluded from qualifying as an exempt policy, this would require actuarial calculations and information that only the issuing insurer will possess.
• Similarly, the determination of the amounts to be used to compute any policy gain with respect to a life insurance policy (e.g., proceeds of disposition and adjusted cost basis) generally requires information that would be available only in the accounts of the issuer of the policy (i.e., the insurer).

Neal Armstrong. Summaries of 27 January 2025 External T.I. 2024-1018491E5 under s. 138(12) – life insurance policy and s. 148(9) – ACB.