Planning for growth: The Business Guaranteed Insurability Option
Learn how BGIO helps business owners increase life insurance coverage as their business grows, without new medical evidence.
Updated 
4 min. read
Business owners rarely have fixed insurance needs. A client who needs $500,000 of coverage today may need significantly more in five or ten years. The challenge is planning for that growth without overcommitting upfront or risking that the client won’t qualify later. The Business Guaranteed Insurability Option (BGIO) is a life insurance rider designed for business owners who expect their insurance needs to grow as their business grows. It allows future coverage increases without new medical evidence, subject to financial justification and rider limits.
Advisors see this tension all the time:
- Buy too much coverage early and strain cash flow.
- Wait and risk higher costs or declined coverage if health changes.
A practical way to structure for growth
BGIO gives you a way to address this challenge. Added at the time the policy is issued, BGIO lets business owners secure insurance today, while preserving the ability to increase their coverage later as their business grows.
This creates a more balanced approach. BGIO helps address two realities:
- Business value can increase over time.
- Insurability can change.
Unlike purchasing a larger amount of coverage today, BGIO allows business owners to align coverage growth with business growth while helping preserve future insurability.
For example, a business owner who purchases $500,000 of coverage today may find that coverage needs increase as the business grows in value. BGIO can provide the flexibility to increase coverage over time, subject to rider limits and financial justification.
How it works
BGIO is added to the policy at issue and allows clients to increase their insurance coverage up to four times during the term of the rider.
Key points:
- No medical evidence is required when exercising the option.
- Increases must be supported by financial justification, based on the growth in the business’s fair market value.
- Coverage increases are not automatic and must reflect that growth.
- Limits apply, including a maximum total amount that can be purchased under the rider.
- The rider must be selected at issue and cannot be added later.
At the time of application, underwriting considers both the initial coverage and the potential future coverage available through the rider.
How it works in real client conversations
BGIO supports a more practical way to design coverage for business owners.
It allows you to:
- Align insurance with the expected growth trajectory of the business.
- Avoid over-insuring early when cash flow may be a concern.
- Protect clients against the risk of becoming uninsurable later.
It can also support common planning strategies such as:
- Succession planning.
- Funding buy-sell agreements.
- Protecting against the loss of a key person.
Rather than treating insurance as a one-time decision, it becomes part of a longer-term strategy.
What’s changed
Recent enhancements have made BGIO at BMO Insurance more flexible and easier to use in practice. Advisors now have more flexibility in how they structure coverage, including the ability to:
- Offer BGIO across a broader range of product structures, including joint cases.
- Give clients more opportunities to increase coverage over time (up to four times).
- Structure coverage increases in smaller increments while still reaching the same overall limits.
This allows clients to adjust coverage in step with how their business actually grows, rather than committing to larger increases earlier than necessary.
When to consider BGIO
- A business that is expected to grow in value.
- An owner who does not want to commit to full coverage today.
- A situation where future insurability is a concern.
A simple way to frame the conversation
- A way to lock in insurability today.
- A way to scale coverage as the business grows.
- A way to manage both affordability and future risk.
That framing may resonate, especially with clients who are balancing competing priorities.
Supporting your discussions
For advisors who want to go deeper, BGIO is supported by tools such as a worksheet to help estimate business value and determine appropriate coverage levels, along with the form used when exercising the option.
These resources can help you move from concept to implementation once the idea resonates with the client. Read our online guide for full details: Business Guaranteed Insurability Option (BGIO) Rider
Disclaimer:
Information contained in this article is general in nature and should not be construed as legal or tax advice. You are encouraged to seek the advice of other professionals such as legal and tax experts. Please consult the appropriate policy contract for details on the terms, conditions, benefits, guarantees, exclusions and limitations. The actual policy issued governs. Each policyholder’s financial circumstances are unique, and they must obtain and rely upon independent tax, accounting, legal and other advice concerning the structure of their insurance, as they deem appropriate for their particular circumstances. BMO Life Assurance Company does not provide any such advice to the policyholder or to the insurance advisor.
Insurer: BMO Life Assurance Company1119E
