BMO Insurance launches investment option

Market indexed account is available exclusively on company’s universal life insurance policies

BMO Insurance launches investment option

BMO Insurance announced the launch of the North American Equity Enhanced Market Indexed Account (EMIA) yesterday, a new investment option available exclusively on its universal life insurance policies.

"People in Canada want more certainty when it comes to their life insurance policies," said Steven Cooney, Senior Vice President, Head of Individual Life and Annuities, BMO Insurance. "This has become even more important given recent market volatility."

The returns credited on the investment component of universal life insurance policies are important to meeting financial objectives. In today's low interest-rate environment, some policy holders want higher returns than are available with guaranteed interest options, yet may not want the risks associated with equity-linked accounts. For these individuals, BMO Insurance created the EMIA.

"The BMO Insurance EMIA is an ideal investment option for those wanting the upside potential of equity-linked returns without the risk of negative returns," said Cooney.

The investment strategy backing up the EMIA is managed by BMO Insurance in partnership with BMO Capital Markets. Using a combination of long-term bonds and enhanced equity investments, they can mitigate investment risk during market downturns. The credited rate is indexed to the S&P/TSX Composite Low Volatility Index (TXLV) and S&P500 Low Volatility Index (SP5LVI), giving policy owners exposure to returns linked to both the Canadian and U.S. markets. BMO Insurance applies a smoothing formula to provide its policy owners with a more stable credited rate on their universal life insurance policies.

Meanwhile, BMO Insurance also announced the launch of a Financial Hardship Life Advance, an extension of its Compassionate Benefit Program.

The Financial Hardship Life Advance is a non-contractual benefit for individuals who already have a BMO Insurance permanent life insurance policy. Under this program, these clients may apply for an advance of their policy's death benefit, if they are faced with financial hardship and have a limited life expectancy (of five years or less).

"Canadians are sometimes faced with unexpected medical-related expenses at a very difficult time in their lives," said Cooney. "We want to do more to help our policyholders cope with health-related hardships. We are, after all, in the business of supporting the financial well-being of our clients."

With this program, BMO Insurance can provide its clients with an advance of up to 50 per cent of the death benefit on their permanent life insurance policy up to a maximum of $250,000 (payable in annual instalments over five years).

In addition to the Financial Hardship Life Advance, BMO Insurance's Compassionate Benefit Program also includes a Terminal Illness Life Advance, a non-contractual policy benefit that provides terminally ill clients (with a life expectancy of 12 months or less) with a lump sum advance of 50 per cent of their policy's death benefit (up to a maximum of $250,000).