If you’re looking for a way to maximize the amount that you leave to your loved ones and offset the impact that taxes could have on the value of your estate, consider universal life insurance.
What is universal life insurance?
Universal life insurance is permanent life insurance coupled with an investment component. With these types of policies, you’re able to see what portion of your premiums are used to cover the cost for your insurance coverage and how much remains to be invested in a tax-deferred investment account that’s included in the policy.
Universal life insurance can be ideal if you’re looking for permanent life insurance and want a source of funds for your heirs to:
- Cover your final expenses
- Replace your lost future income, in case of your death
- Offset the taxes which will become payable on your RRSP when you dieFootnote 1
- Minimize the impact of taxes on other taxable assets in your estate – such as the capital gains tax on the increase in value of your cottageFootnote 1
- Maximize the transfer of your wealth to your heirs in a tax efficient way
- Leave a financial gift in your name to your favourite charity
With universal life plans from BMO Insurance, you'll get:
You can have a flexible premium schedule, subject to the terms of your policy and certain minimum payment requirements. For example, you may choose to pay premiums over 5 or 10 years and have the monthly insurance charges deducted from the cash value of your policy.
Tax deferred growth
By increasing your premium payments above the monthly insurance charges, you can take advantage of the tax-deferred investment account within the policy. That means that the investment in your policy remains tax-deferred up to certain maximum limits specified in the Income Tax Act (Canada).
A wide selection of investment options
You can select from a wide range of guaranteed interest and equity-linked investment accounts.
- Guaranteed-interest accounts have a minimum guaranteed rate of return
- Equity-linked investment accounts earn investment returns based on the performance of some of Canada's most recognized money managers
- Guaranteed Market Indexed Accounts and the Enhanced Market Indexed Account which offer you exposure to equity market performance and net rates of return that are guaranteed never to be negative
For more detailed information on the list of options available, please visit BMO InvestPro.
Access to cash
You may decide to access part of your tax-deferred investment account as a source of extra retirement income, to fund your child's education, to cover expenses if you become disabled or even as an emergency cash account. Ask your Insurance Advisor for more details.
Different plans to choose from:
Permanent coverage and access to investment options with tax deferred accumulation. This plan also includes guaranteed bonuses to help boost the growth of the investment component.
Life Dimensions (Low Fees)
Universal life insurance that includes permanent insurance coverage, access to investment options with tax-deferred accumulation and lower fees. This plan also includes the InvestorMaximizer to help maximize tax deferred growth of the investment component.
Universal life insurance plan for individuals or business owners looking to take full advantage of tax-deferred investment options on universal life and are willing to make an initial investment of at least $25,000 when they buy a policy.
Each of BMO Insurance's universal life plans offers a wide variety of supplementary life and critical illness insurance coverages (called "riders") such as:
- Term Insurance Rider: life insurance coverage for a given number of years (e.g. 10, 15, 20, 25 or 30 years)
- Accidental Death Rider: life insurance coverage which pays a benefit if you die as a result of an accident
- Waiver of Premium: covers your premium payments or some other specified amount in case you become disabled
- Children's Term Insurance Rider: provides term life insurance for your children
- Critical Illness Rider: provides a lump-sum payment to you if you’re diagnosed with a critical illness
- Business Guaranteed Insurability Option: ideal for business owners who want to lock in their ability to purchase additional life insurance protection in the future
For more complete list of what’s available, speak to your insurance advisor.
BMO Insurance Health Advocate™ Plan
For more information on the investment options on universal life plans, visit bmoinvestpro.fundata.com.
Contact an Investment or Insurance Advisor
You can purchase this plan by contacting your independent Insurance Advisor or we can help you find one in your area.
* BMO Insurance offers the services on a referral basis only and will not charge you for the services provided. LifeWorks and Teladoc Health, Inc. will not charge you for the services they provide. You may, however, incur additional costs for services or for providers that may be referred to you by LifeWorks or Teladoc Medical Experts. These additional charges are incurred at your sole discretion and BMO Insurance will not be liable for their payment.
1 Under the Income Tax Act (Canada) income tax on certain assets may be deferred under joint ownership or a spousal rollover. Ask your advisor for more details.
Insurance issued by BMO Life Assurance Company
Full details, terms and conditions are available on request.
Insurance benefits are tax-free payments under current legislation.