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Commercial Loan Insurance Plan
It's challenging enough to deal with the day-to-day operations of your business let alone having to deal with twists and turns that come your way. Why let the unexpected destroy your life's work? Make creditor insurance part of your financial plan
The Commercial Loan Insurance Plan helps protect your financial interests with benefits that could assist you, your family, or your business associates, with:
- a more orderly succession
- cash flow during a period of uncertainty
- compensation for lost business if sales or production were dependent on the deceased, and
- compensation for finding and training a successor.
Eligibility
If you have been approved for a BMO Bank of Montreal commercial loan, line of credit or mortgage, or play a major, active role in the operation of a borrowing business, you may be eligible for coverage and can apply at any time.
You are eligible to apply if:
- You are between the age of 18 and 64
- A BMO individual business borrower or spouse of a borrower
- A guarantor of the Loan
- A director or officer of a borrowing corporation
- An individual whose role is essential to the ability of the borrower to meet their financial obligations.
The Loan must be obtained to operate a small business, ranch or farm if the Loan is an Operating Loan or Line of Credit
Features and Benefits
This plan provides protection up to $1,000,000 in benefits for each eligible borrower. You choose the amount of your loan you want to insure based on your specific needs – 1%, 100% or any amount in between.
Term Loans and Mortgages – Life Insurance Benefit
For a commercial term loan or mortgage, if the amount of insurance you request is equal to the loan amount, Canada Life will pay BMO the unpaid balance on your loan (including accrued interest up to a maximum of 60 days) at the time of death.
For a commercial term loan or mortgage, if the amount of insurance you request is a percentage of the Loan, the life insurance benefit will be determined by applying the selected coverage percentage to the unpaid balance on your loan at time of death. Accrued interest for up to a maximum of 60 days will be payable in the same proportion as the selected coverage percentage.
Operating Loans and Lines of Credit - Life Insurance Benefit
For an operating loan or line of credit if the amount of insurance you request is equal to the loan amount and should you pass away Canada Life will pay BMO an amount equal to the authorized limit regardless of the outstanding balance (including accrued interest up to a maximum of 60 days). Any excess above the unpaid balance is paid to your estate, or in Quebec, to the beneficiary you designate. Please refer to the Read more section for a description of the benefit under percentage coverage.
If the amount of insurance requested is a percentage of the loan, the life insurance benefit is equal to the amount of insurance requested.
Accidental Dismemberment and Specific Loss of Use Benefit
Accidental Dismemberment and Specific Loss of Use insurance, is included with this plan, and will cover you for up to $50,000 if you were to lose the use of your limbs, sight or hearing due to an accidental injury.
Underwriting
Approval is automatic if you meet the eligibility criteria when you apply and the total amount of insurance you have requested on all your loans is $50,000 or less.
If the total amount of insurance you've requested on all of your loans is more than $50,000 and up to $500,000, you must answer four simple health status questions, and may, depending on your response to these questions and your age, be automatically approved for coverage without requiring medical underwriting.
If the total amount of insurance you've requested on all of your Loans is over $500,000, you will be asked to speak to a Canada Life representative for medical underwriting.
Premiums
The insurance premium is collected in arrears and is automatically debited on the last business day of each month from an account that you designate.
Use our Premium Calculator to calculate a monthly premium.
Term Loans and Mortgages
Premiums for insurance on term loans and commercial mortgages do not increase with age, and remain the same until your loan is replaced or refinanced.
Premiums* for insurance on term loans and commercial mortgages are based on:
- your age,
- gender,
- smoking status,
- the amortization period of your loan, and
- the amount of insurance you request on the loan.
* are subject to provincial sales tax where applicable.
Operating Loans and Lines of Credit
Premiums for insurance on operating loans and lines of credit are recalculated on an annual basis and will change if you enter a new age bracket.
Other Info and Key Contacts
Cancellation
You can cancel your insurance at any time. If you cancel within the first thirty (30) days of being covered, any premiums you have paid will be refunded.
Terms & Conditions
The complete terms and conditions, including exclusions and limitations of this coverage are contained in the Certificate of Insurance that you will receive when you apply. Sample Certificate of Insurance.
Contact Us
For more information please contact Canada Life at 1-800-380-4572 or visit your nearest BMO Bank of Montreal Branch.
