Guaranteed Investment Funds (GIF)

Saving for retirement has become a challenge for today’s investors seeking better returns and less return volatility. Younger pre-retirees may be willing to take on more risk to get lower fees and higher potential returns. Retirees or those close to retiring may be looking for higher potential returns but also wanting greater capital protection. Older retirees planning to transfer their wealth on to the next generation may be less concerned with maturity guarantees and more interested in capital preservation in the event of death.

BMO Insurance now offers a wider choice of maturity and death guarantee options and investment choice of funds to help you customize a BMO GIF solution to meet each of your client’s unique needs.

  • What are GIFs

     

    BMO GIFs are segregated funds offered by BMO Insurance as alternatives to conventional mutual funds. Similar to mutual funds, BMO GIFs offer a range of investment choices for investors to meet their needs. However, unlike mutual funds, BMO GIFs offer the unique features of maturity and death benefit guarantees plus resets. By naming a beneficiary, a BMO GIF policy allows your client’s estate to bypass probate, saving time and expense. BMO GIF policies are also potentially protected from seizure by creditors† .


    † Creditor Protection rules depend on legislation and vary by province. It cannot be guaranteed. Please consult a legal advisor for your specific situation.

  • GIF Benefits

     

    Three different guarantee options to choose from:

     

    GIF 75/75

    • Lowest fees
    • Creditor protection to protect personal assets from business liability§
    • No less than 75% of investments paid to beneficiary in event of death
    • More investment fund choice with greater equity content available
    • Invests in BMO ETFs and ETF Portfolios managed by BMO Asset Management
    • Popular no-load sales charge option

     

    GIF 75/100

    • Lower fees leaving more to accumulate wealth
    • Estate protection: Up to 100% of investments paid to beneficiary in event of death**
    • Automatic triennial death guarantee resets to build legacy value††
    • No probate, executor or legal/administration fees maximizes wealth transfer
    • More fund choice with greater equity content available
    • Invests in BMO ETFs and ETF Portfolios managed by BMO Asset Management
    • Popular no-load sales charge option

     

    GIF 100/100

    • Highest level of guarantees:
      • Capital protection: Up to 100% of investments returned in as few as 15 years*
      • Estate protection: Up to 100% of investments paid to beneficiary in event of death**
    • Automatic monthly maturity guarantee resets† (automatically locks-in market gains)
    • Option for automatic triennial death guarantee resets††‡
    • Balanced funds for reduced volatility, designed by BMO Asset Management
    • Popular no-load sales charge option
    • Prestige Class pricing for high net worth clients

     

    * 100% on deposits made at least 15 years and 75% on deposits made less than 15 years from the Maturity Date.
    ** 100% on deposits made before the Annuitant is age 80 and 75% on deposits made on or after age 80.
    † Automatic monthly resets of the Maturity Guarantee Amount occur up to and including 10 years from the Maturity Date.
    †† Automatic resets of the Death Guarantee Amount occur every 3rd policy anniversary up to and including the last policy anniversary before the Annuitant’s 80th birthday.
    ‡ Additional fee applies.
    § Creditor Protection rules depend on legislation and vary by province. It cannot be guaranteed. Your clients should consult a legal advisor for their specific situation.

  • Investment Management

     

    Working closely with our portfolio manager, BMO Asset Management Inc., BMO Insurance’s two new guarantee options, GIF 75/75 and GIF 75/100, offer six new ETF Portfolio GIFs. This breadth of funds offers you and your clients greater choice and flexibility, up to 100% equity content or 100% fixed income content, with many options in between. These new ETF Portfolio GIFs also offer exposure to North American, global and emerging markets. What’s more, we’ve also added our popular BMO Low Volatility Canadian and U.S. Equity ETFs.

     

    Our GIF 100/100 Guarantee Option offers four distinctive BMO Guaranteed Investment Funds with exposure to North American and global equity and fixed income exchange traded funds (ETFs), as well as a money market fund. The balanced fund mandates of the BMO GIFs offer investors a choice of broad exposure to Canadian, North American and global based companies or a focus on income generating securities.

     

    Our portfolio manager, BMO Asset Management Inc., is part of BMO Global Asset Management, one of the world’s 50 largest asset managers with over $311 billion in combined assets under management (October 2015).

  • Guaranteed Benefits and Resets (GIF 100/100 only)

     

    The core benefits of any BMO GIF include maturity and death guarantees plus resets.


    Maturity Benefit

    When your client applies for a BMO Guaranteed Investment Funds policy, they must select a Maturity Date that provides for a term of 15 to 25 years from the Effective Date of the Contract.

    Clients receive the Maturity Benefit on the Maturity Date. When they reach a Maturity Date, it can be renewed. On the Maturity Date, the Maturity Benefit your client will receive is the greater of:

    • the Maturity Guarantee Amount; and
    • the Market Value of the Contract.

    The Maturity Guarantee Amount is based on the 100% or 75% guarantee levels. Deposits made at least 15 years to the Maturity Date are guaranteed at 100%. Deposits made within 15 years to the Maturity Date are guaranteed at 75%.


    Reset of Maturity Guarantee Amount

    The Maturity Guarantee Amount can be increased through resets. Resets occur automatically on the last day of each month up to 10 years before the Maturity Date.

    Resets do not impact the client-selected Maturity Date.


    Death Benefit

    If your client dies before the Maturity Date, we will pay the Death Benefit to their designated beneficiary. The Death Benefit will be the greater of:

    • the Death Guarantee Amount; and
    • the Market Value of the Contract.

    The Death Guarantee Amount is based on the 100% or 75% guarantee levels. Deposits made before age 80 are guaranteed at 100%. Deposits made at age 80 or older are guaranteed at 75%.


    Reset of the Death Guarantee Amount at Maturity Date Renewal

    If a Maturity Date is renewed before the Annuitant turns 80, the Death Guarantee Amount for the new term has the potential to increase to the Renewal Deposit, which is the Maturity Benefit for the previous term.

    If the Annuitant is age 80 or older at time of renewal, the Death Guarantee Amount for the previous term will be carried over to the new term.


    Death Guarantee Reset Option

    By selecting the optional Death Guarantee Reset Option, on every 3rd policy anniversary (up to and including the last policy anniversary before age 80) BMO GIF policies will automatically compare the Market Value of your client’s policy with the Death Guarantee Amount. If the Market Value is higher, the Death Guarantee Amount will be “reset” to equal the higher Market Value. In this way, market gains are locked-in to increase the minimum death benefit payable to your client’s beneficiary. In the event of your client’s death before maturity, the death benefit payable to your client’s beneficiary will be the higher of the Death Guarantee Amount or the Market Value of your client’s policy at the time of your client’s death. An additional fee applies if the Death Guarantee Reset Option is selected.



Any amount that is allocated to a segregated fund is invested at the risk of the policyowner and may increase or decrease in value. Details of BMO GIF are contained in the policy provisions and information folder.