Toronto-based BMO Life Assurance Co. (BMO Insurance) has expanded its life insurance offerings with the launch of a non-participating whole life policy on Monday.

BMO Insurance Whole Life Plan offers a death benefit that grows over time through an annual performance bonus. The policy features guaranteed level premiums payable for 10 or 20 years or to age 100, after which time the policy becomes fully paid.

“This plan provides a competitive alternative to participating whole life plans,” says Peter McCarthy, president and CEO of BMO Insurance, in a statement.

The performance bonus is calculated annually and is used to automatically purchase paid-up additions, which increase the total death benefit and cash value available on the policy. The rate of the bonus is determined by the returns on a portfolio of investments being managed with the help of BMO Capital Markets and BMO Global Asset Management.

The performance bonus rate is guaranteed to be at least 5.5% until April 30, 2020, according to BMO Insurance. The performance bonus is also guaranteed never to be negative.

The portfolio uses a smoothing formula that aims to reduce year-to-year volatility in returns, resulting in “more predictable growth in the death benefit and cash values,” McCarthy said.

The new policy features a premium switch option, enabling clients to change their premium payments to a lower-cost schedule (for example, from a 10-pay option to a 20-pay option) after their policy has been in force for at least two years.

The policy also allows clients to stop paying premiums ahead of schedule by opting to reduce their coverage amount.

The policy is available to clients up to age 80, with initial face amounts ranging from $50,000 to $10 million.

Photo copyright: flytnt/123RF