BMO Insurance has launched a new optional benefit for its segregated fund product that locks-in market gains for beneficiaries.
For funds invested before age 75, BMO’s Guaranteed Investment Fund (GIF) guarantees 100% of deposits at death. On every 3rd policy anniversary (up to and including the last policy anniversary before age 75), BMO's new Death Guarantee Reset Option will compare the market value with the total deposits and, if the market value is higher, the amount guaranteed at death will reset to this new amount. This will lock in any market gains.
The new reset feature comes at a price. For the Canadian Balanced Growth Fund and the U.S. Balanced Growth Fund, the additional annual fee is 0.20%, with a limit of 0.30%. For the Canadian Income Strategy Fund and the North American Income Strategy Fund, the annual fee is 0.15% and the limit is 0.30%. There is no additional fee to add the reset option to the Money Market Fund. The fee for each fund will be calculated daily and collected every 6 months (on June 30 and December 31) until age 75 by withdrawing units from each fund.
