What is key-person insurance?
Definition
Educational information only. Last reviewed August 25, 2026.
How it works in Canada
The proceeds provide cash to stabilize operations, repay debt, reassure lenders and customers, and fund recruitment of a replacement. Premiums are generally not deductible, and a corporate death benefit may credit the capital dividend account.
Example
A firm dependent on a founder's client relationships may insure that founder for an amount reflecting lost profit plus recruitment costs.
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Written and reviewed by CanadaGFI.ca Editorial Team
Licensed insurance and financial professionals contributing to CanadaGFI.ca
Published and last reviewed August 25, 2026. Read our editorial policy and disclosures.
This page is educational information about Canadian financial concepts. It is not personalized financial, tax, insurance or legal advice, and it does not consider your individual circumstances. Product availability, eligibility, pricing and tax treatment depend on the provider, your situation and current Canadian rules. Speak with a professional licensed in your province before acting.
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