Henry Korenblum Vice President Sales & Tax Planning,
Oberon Capital Corporation
How to Use Canada Life’s My Par GiftTM to Achieve Your Client’s Philanthropic Goals

New Life Insurance Product Designed Specifically for Charitable Giving

As regular readers of this newsletter are aware, planned giving involves a donor who is interested in making a meaningful gift to a registered Canadian charity either during his/her lifetime or at death. A Charitable Donation Tax Credit (“CDTC”) is generally available to the donor equal to the value of the gifted property. There are numerous methods to donate tax-efficiently (e.g., in-kind donation of marketable securities, donation of Flow-Through Shares, gift of life insurance (“LI”), etc.

The purpose of this article is to provide an overview of Canada Life’s (“CL”) recently launched My Par GiftTM (“MPG”) product, which was designed specifically for the Canadian charitable sector.


A gift of LI can be structured to provide tax benefits during a donor’s lifetime or at death. The timing of the gift is generally made to align with the donor’s specific tax and estate planning objectives. For example, a registered Canadian charity [including a donor advised fund (“DAF”) or a Private Family Foundation] may be a policy owner on an LI policy that insures the life (or lives) of a donor(s). Generally, under such circumstances, the annual insurance premium qualifies for a CDTC, which reduces the after-tax cost of the gift, and may allow for the donor to leverage their resources and make a more impactful gift in support of the cause(s) that are important to him/her.

Some in the insurance profession have described the above-noted LI gifting structure as challenging and have compared it to “fitting a square peg into a round hole,” as the insurance products are not specifically designed or optimized to address the unique needs of donors and charities. For example, from a charitable perspective, when these structures require ongoing premium commitments (when the policy is owned by the charity), there can be complexity and servicing challenges, such as a lack of resources or capacity to manage, etc.

What is the Canada Life My Par GiftTM?

The CL MPG, which launched in April of this year, is the first LI product designed specifically for the Canadian charitable space. Effectively, the MPG is a permanent participating whole life product funded with a single-premium payment. he policy is owner and controlled by the charity (which may include DAFs like those at the Jewish Foundation of Greater Toronto).

How does the CL MPG work?

  • The donor makes a one-time premium payment (which is eligible for the CDTC, issued by the charity)
  • The charity is the owner and beneficiary of the LI policy
  • In most cases, the donation is immediately enhanced (i.e., the insurance payout would exceed the after-tax cost of a cash gift equal to the same premium amount)
  • The charity has guaranteed access to cash values (which may grow over time)
  • The charity can access the policy’s values during the donor’s lifetime (e.g., through policy cash dividends) and the charity will receive the death benefit (“DB”) tax-free on the insured person’s passing.

It should be highlighted that with a “traditional” gift of LI, the policy generally maintains tax exempt status to avoid income tax applying to the policy’s growth during the insured’s life. However, the CL MPG product is designed to be non-exempt as the charity (who is the policy owner) would generally be a tax-exempt entity (i.e., having the MPG be non-tax exempt is not a concern as the charity generally does not pay income tax as it is a tax-exempt entity).

As may be evident from the foregoing, the key value proposition of the MPG to donors, insurance advisors, and the charitable sector is the simplicity of the product design: that the product requires a single-premium payment (with no ongoing/multi-year premium commitments) and no need to consider when the LI may be “paid-up” or eligible for “premium offset.”

What are the Benefits of the My Par Gift Strategy?

Benefits to Donor

As alluded to above, there are numerous methods to donate to a charity. In certain cases, a gift of LI may be the most cost-effective strategy to magnify one’s legacy goals. As noted by CL, “using Canada Life My Par GiftTM, you may be able to make a bigger impact at a smaller cost. It’s a simple, single premium, participating life insurance policy designed for charitable giving.” That is, allowing a donor to receive an immediate tax benefit, multiply the value of their donation, and be satisfied with the “one and done” financial contribution of a single-premium to leave a meaningful legacy to causes which the donor supports and values.

The CL MPG website provides the following numerical example to illustrate how a $50,000 gift can enhance one’s charitable goals (assuming non-smoker male and female Ontario individuals, both age 60, with a single-premium payment of $50,000 for a Joint-Last-To-Die Policy—with paid-up addition dividend option using the CL Dividend Scale effective July 1, 2022) :

Amount of gift $50,000
Tax savings from donation (current) ($24,940)
After-tax cost of donation $25,060
Immediate enhancement from using LI $67,975
Insurance Cash Value (“CV”) at year 15 $68,595
Insurance payout at death at year 30 $173,347
Insurance internal rate of return of payout at death (year 30) 6.7%

Benefits to Charity

With the CL MPG, the donor provides the charity with the flexibility to receive the insurance payout upon the passing of the insured and/or the charity may decide to access (a portion of) the policy’s CV as it grows (during the insured’s lifetime). Moreover, as the single-premium represents a paid-up policy, there is no requirement to follow up with the donor annually to ensure that ongoing premium payments are made in order to keep the policy in-force.

Benefits to Advisors

It is anticipated that the development of this new charitably focused LI product will encourage new client conversations about one’s legacy and gifting goals and remove some of the roadblocks which may exist in traditional LI planned giving discussions (e.g., the concern of having to fund a legacy gift over multiple years, which raises the associated uncertainty of a client’s future cash flows being available to fund such charitable gifts).

Moreover, even though there is only one premium payment, whereas most other products have premium payments over many years, there is still considerable growth in this new policy, resulting in a significant charitable gift being made for a relatively low after-tax cost.


In summary, using LI (such as with the MPG product, where appropriate) can serve as a powerful planning technique to maximize the impact of a donor’s philanthropy, while also providing tax benefits.

It is important to work with a qualified estate and tax professional who can help one navigate through the planning process, evaluate options, and understand the implications to determine which strategy makes sense and is optimal for a particular client’s specific facts and circumstances.

About the Author

Henry Korenblum is a trusted and highly experienced consultant to accomplished business owners and affluent families on matters associated with transition and wealth.

By taking time to thoroughly understand specific goals and objectives, he helps guide families through the unique opportunities and challenges they may be facing in the areas of wealth, insurance, tax and estate planning, philanthropy, family governance, and business succession planning.

When dealing with business owners, Henry helps ensure that personal and business goals are aligned by examining the entire financial situation—including the interaction between family, business, and ownership structures for today—and with a future transition in mind.

In addition to being a chartered professional accountant, chartered accountant (CPA, CA), Henry is a chartered investment manager (CIM), a certified financial planner (CFP), a trust and estate practitioner (TEP), a master financial advisor-philanthropy (MFA-P), a family enterprise advisor (FEA), and a US certified public accountant (CPA, Illinois).

Henry earned his master of business administration (MBA) from the Schulich School of Business. Henry has completed Levels I, II, and III of the CPA Canada In-Depth Tax Program and has been a group study leader for the program. Henry has also taught a tax course with the University of Toronto.