Changing the ownership of a life insurance policy is considered to be a disposition of the contract for Canadian Income Tax purposes and can result in an income inclusion for tax purposes to the policyholder if the proceeds of disposition, often the cash surrender value, exceed the adjusted cost basis of the policy. However there is tax free rollover to spouses.
"This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer."