LLQP (Life Licence Qualification Program) Practice Exam · Question
When a life insurance policy is used as collateral for a business loan, what portion of the premium may be tax-deductible?
Under the 'Absolute Assignment' of a policy to a lender as collateral for a loan, the interest paid on the loan may be tax-deductible if the loan is used to ear
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Question: When a life insurance policy is used as collateral for a business loan, what portion of the premium may be tax-deductible?
Answer options: ✅ The premiums for the portion of the death benefit required by the lender.
- The entire annual premium of the policy.
- Only the interest on the policy loan, but not the premiums.
- Nothing is deductible regarding life insurance.
Correct answer: The premiums for the portion of the death benefit required by the lender.
Explanation: Under the 'Absolute Assignment' of a policy to a lender as collateral for a loan, the interest paid on the loan may be tax-deductible if the loan is used to earn income from a business or property.
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- A life insurance policy that offers lifelong coverage, a guaranteed death benefit, and a savings component tha
- Group benefits in Canada commonly include:
- Sarah, a 35-year-old marketing professional in Ontario, purchases a participating whole life insurance policy
- Mark, a 45-year-old business owner in British Columbia, has a Universal Life policy with a Level Cost of Insur
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