Generally, no. When you own the policy personally, the lump sum is generally received tax-free. It can be different when a business owns the policy or pays the premiums, so get tax advice for those arrangements.
Are critical illness insurance payouts taxable in Canada?
Reviewed by Garrett Agencies Ltd., October 2026. How we write
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More about critical illness insurance
A lump sum if you’re diagnosed with a serious illness such as cancer, a heart attack or a stroke.
More questions about critical illness insurance
- How does critical illness insurance differ from disability insurance in Canada?
- Can I get my critical illness insurance premiums back if I don’t get seriously ill?
- Are medical questions or exams required to apply for critical illness insurance?
- What is the difference between life insurance and critical illness insurance?
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