Toronto-based BMO Life Assurance Co. (BMO Life Insurance) is expanding its footprint in the segregated funds market with the launch of two new guaranteed investment fund (GIF) options.
BMO Life Insurance is adding BMO GIF 75/75 Guarantee Option and BMO GIF 75/100 Guarantee Option to its seg fund lineup. The firm entered the seg fund market in 2013, with BMO GIF 100/100 Guarantee Option.
“We always planned to be in these [additional] markets,” says Steve Carter, senior vice president, product management and development, with BMO Insurance. “It was just a question of systems development and implementation and gradually expanding the product line.”
With this launch, BMO Life Insurance can now target a very large part of the market. The 75/100 GIF options are popular with many investors who are looking for some downside protection but are prioritizing a higher death guarantee, and prefer the lower fees that come with a reduced maturity guarantee, Carter says.
BMO GIF 75/75 offers a maturity guarantee amount of 75% of the investor’s deposits at the maturity date, which is set for the date at which the client reaches 100 years old. It offers a death guarantee of 75%.
This option will benefit professionals and business owners looking for downside risk protection, creditor protection and lower fees, according to the firm’s announcement released Tuesday.
BMO GIF 75/100 offers a 75% maturity guarantee when the client turns 100 years old and 100% death guarantee on deposits made before the age of 80. The death guarantee shifts to 75% for deposits made once the client reaches 80.
This GIF has an automatic reset option, which goes into effect once every three years during the holding of the GIF, and one final time in the year the client turns 80.
The products available for these two new GIF options include a money-market fund, exchange-traded funds (ETFs) and ETF portfolios. They are:
> Low Volatility Canadian Equity ETF
> Low Volatility U.S. Equity ETF
> Fixed Income ETF Portfolio
> Income ETF Portfolio
> Conservative ETF Portfolio
> Balanced ETF Portfolio
> Growth ETF Portfolio
> Equity Growth ETF Portfolio.
The firm also announced changes to its existing GIF 100/100 that are applicable to new and current policyholders. The 100% death guarantee will now be extended to deposits made before the age of 80, an increase from age 75.
The firm is removing the monthly processing restriction, in which only new deposits were processed, and moved into the client’s chosen fund on one specific day of the month. Deposits will now be processed into the appropriate fund on the day they are made, as long as it is a business day.
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