John purchased a permanent life insurance policy for his grandson, Richard, when Richard was born...

Comprehensive and Detailed Explanation From Exact Extract:

In Canada, the transfer of a life insurance policy from a grandparent to a grandchild is not tax-deferred. However, transferring first to the parent (John's child) and then from parent to Richard qualifies as a tax-free rollover under the Income Tax Act, as the child-parent-grandchild chain preserves tax deferral. LLQP outlines this indirect transfer as a compliant tax strategy.