For Professionals: Lawyers, Accountants, Engineers, Consultants and Veterinarians

Where should a professional start?

Start with the pressure your own practice puts on you. A lawyer lives on a draw that stays an estimate until the year closes. An architect or engineer carries an obligation for work delivered years ago. A consultant with one client works under a contract that ends on a printed date. A veterinarian wonders who will ever buy the practice. The twelve articles below begin with those pressures, then turn to the questions any incorporated professional meets: how you pay yourself, what profit left in the corporation costs, who owns a policy, and what replaces the billable hour when you stop. Each article stands on its own. If you already know your question, the table further down sends you to the article that answers it.

The articles explain one tool, participating whole life insurance, and the way some professionals use its cash value as a source of capital through policy loans from the insurer. The policy is life insurance first; it is not a savings account or an investment. A policy loan is an advance the insurer makes, secured by the policy's cash value. You owe the interest to the insurer, at a rate the insurer sets and may change, and a loan still outstanding when the person insured dies is deducted, with its unpaid interest, from the death benefit.

The tool does not fit every professional, and the articles say where it fails. It does not suit a household still carrying expensive debt, or a practice whose cash flow cannot fund a premium steadily for many years. It does not suit money you may need back within a few years, because cash value builds slowly and an early surrender can return less than was paid in. Do not buy a policy to pay for something you are planning soon, whether that is a partnership buy-in, new equipment or the months between two contracts. And if your income is still a forecast, as it can be in the first years of a practice, wait until it is real.

If retirement is your question, begin with the retirement calculator. It estimates what the retirement lifestyle you want could cost each year from 65 to 95, before any product is mentioned.

Does your corporation pass the personal services business test?

If you practise through your own corporation, and especially if one client supplies your work, settle this before you decide how much profit to leave in the corporation and before anyone discusses a policy the corporation would own. The Canada Revenue Agency describes a personal services business as a corporation providing services where the individual doing the work, a specified shareholder, would reasonably be considered an employee of the payer if the corporation did not exist (What is a PSB, page modified 20 November 2025, read 2 October 2026).

The CRA page Determine if the worker's corporation is carrying on a PSB (modified 2 June 2025) lists five conditions, and all five must be met:

1. You provide your services through a corporation.
2. You, or a person related to you, are a specified shareholder of the corporation.
3. The corporation employs five full-time employees or fewer in the business throughout the year.
4. The amounts it receives for its services are not paid by a corporation associated with it.
5. If the corporation did not exist, you would reasonably be considered an employee of the payer.

The answer matters. The CRA states that personal services business income is not eligible for the small business deduction or the general tax reduction, is limited in the expenses it may deduct, and bears an additional 5% tax. Provincial tax applies on top, and your accountant gives you the combined rate for your province and year. One client does not, on its own, settle the question: the CRA calls the fifth condition a question of fact, decided case by case from the actual working conditions. Have your accountant read your contracts, and the way you really work, against the five conditions, and ask for the answer in writing. The article on the contractor with one client works through the test in detail.

Even when the answer is no, other rules decide what keeping profit in the corporation costs. The small business deduction applies to active business income up to the business limit. The passive income rule reduces that limit as the corporation's adjusted aggregate investment income rises. In Quebec, the provincial small business deduction also depends on a condition tied to the hours the corporation pays for. Federal rules apply in every province, and a Quebec corporation also files with Revenu Québec. Your accountant applies each rule to your own year.

Two more limits come from outside the tax rules. Whether you may practise through a corporation at all, who may hold its shares and what it may own are set by provincial law and by your professional order or regulator; a lawyer where you are licensed confirms them. And a partnership is not a corporation. It has no capital dividend account, the rules for life insurance proceeds it receives are different, and the partnership agreement and your accountant decide how they apply to you.

Which article answers which question?

Find the row that matches your practice and the question on your mind. In real life the rows overlap: an engineer buying into a partnership may want three of these articles in the same month.

The articles on the business side of a practice belong to the wider business owners section. It covers corporate ownership of a policy, the capital dividend account and the passive income rule for any incorporated owner.

What should you ask before you act?

Tax and corporate questions belong with your accountant and your lawyer (in Quebec, a lawyer or a notary). Every policy is also subject to the insurer's underwriting: the insurer decides whether to offer coverage, and on what terms. Bring these questions to each of them, and ask for the answers in writing.

For your accountant and your lawyer

• Is my corporation carrying on a personal services business on its current contracts, and what would change the answer?
• Who would own the policy, pay the premiums and be named beneficiary? Me personally, my professional corporation or a holding company? What does each choice change for tax, for a sale or wind-up of the practice and for my estate? There is no general answer.
• What does keeping profit in the corporation cost this year? How do the small business deduction and the passive income rule apply? In Quebec, does the corporation meet the hours condition for the provincial deduction?
• Does provincial law, or my professional order, limit what my corporation or partnership may own? Who may hold its shares?
• If I practise in a partnership, what does the agreement say when a partner dies, becomes disabled or leaves? Who pays for the departure?
• If I used a policy loan in the practice, could the interest be deducted? What would the insurer have to verify on CRA Form T2210, and in Quebec on form TP-163.1-V?
• Suppose the policy were surrendered, or ended with a loan outstanding. How would any taxable amount be worked out from the adjusted cost basis?

For the insurer, through a licensed representative

• An illustration that shows the guaranteed values in their own column, apart from the values that depend on dividends. Ask for a second version at a lower dividend scale too.
• The year, if any, in which the guaranteed cash value first exceeds the total premiums paid.
• The loan provision. How is the interest rate set, and how and when can it change? What happens as the loan balance nears the cash value?
• What the contract allows if a premium cannot be paid in a lean year. Ask what each option costs and what it does to the coverage.
• The names of the owner, the person insured and the beneficiary, exactly as the application will show them.

We are paid by commissions from the insurers whose policies we arrange, and we say so before anything is signed. Ask any advisor you meet how they are paid. We are not a bank. Dividends are not guaranteed: the insurer decides each year what it pays.

If you would like to talk about your own situation, the 30-minute discovery meeting page explains what a first conversation is and what it is not.

Where are the collections for other professions?

Dentists, physicians and pharmacists face the same kinds of questions with a different practice behind them. Each group has its own collection, and a separate set of articles serves any professional who has no employer pension.

• Dentists
• Physicians
• Pharmacists
• Professionals without an employer pension