Under the Ontario Disability Support Program, life insurance includes:

  • annuities
  • deferred annuities and
  • segregated funds.

For you and each family member, up to $100,000 of the cash surrender value of a life insurance policy is exempt as an asset under the Ontario Disability Support Program. This means it does not affect your eligibility for Income Support.

"Cash surrender value" refers to the money an insurance company will pay when the insurance policy is terminated by the insurer or the policyholder cancels a life insurance policy early.

If you or a family member has a trust and a life insurance policy, up to $100,000 of the combined value of the trust and the cash surrender value may be exempt as an asset.

If a life insurance policy does not have a cash surrender value, we do not consider it an asset.

Your Ontario Disability Support Program worker can help you figure out how your life insurance policy could affect your eligibility for Income Support.

Income earned on a life insurance policy

Dividends or interest earned from a life insurance policy is exempt as income if:

  • it is reinvested in the policy, and
  • the cash surrender value of the policy is still within the allowable limits.

You must report any dividends or interest earned from your life insurance policy and the changes to your policy to your worker.

Payments from a life insurance policy

You must report any payments you receive from a life insurance policy to your worker. This includes dividends or interest earned that are paid out.

Generally, we consider payments from a life insurance policy as income when you receive them.

But there are some exceptions. Up to $6,000 of the total value of all gifts, voluntary payments and payments from a life insurance policy or trust you receive in a 12-month period is exempt as income.

Also, if you use the payment for a disability-related item or service that has been approved in advance (such as attendant services), it may be exempt as income and may not count against your $6,000 limit.

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