It is not uncommon for people, especially as they get older and develop health issues, to have trouble getting accepted for life insurance. However, even if you have health issues you can still qualify. One option is the Guaranteed Life Plus coverage that is offered through BMO insurance in addition to other polices that are offered by brokers under the guaranteed issue and simplified issue life insurance coverage categories.
About Guaranteed Life Plus Coverage
A recent report sent out by BMO insurance stated that since 2007, Canadian families have received more than 100 million dollars in Guaranteed Life Plus benefits. Additionally, BMO insurance claims that during this time, not a single claim for basic benefits has been denied.
BMO also states that the payout process is also beneficial for families. Typically, claim cheques are sent out to families within two business days from the day all documentation and paperwork is received. The quick action to payout the claims are not really surprising for a couple reasons.
First, the plan is a guaranteed issue policy, meaning that you will be paid out no matter what. Second, when you purchased coverage, you do not have to answer any health questions or take any medical tests.
A Caveat About No Medical Life Insurance
When it comes to no medical life insurance policies such as Guaranteed Life Plus, people need to understand that there are two categories of coverage; guaranteed issue and simplified issue coverage. While guaranteed issue coverage requires that you take no medical test and answer no questions, you can also expect to pay a higher premium when compared to simplified issues coverage.
For simplified issue, you will have to answer some questions; but without having to take medical tests, you can expect a lower premium, a non-smoker discount, and a larger face amount (up to $150,000). Therefore, it is important to weigh the pros and cons of these options before choosing a policy coverage category.
What you Need to Know About Guaranteed Life Plus Coverage from BMO
If you are considering the Guaranteed Life Plus coverage as a potential option when it comes to your no medical life insurance coverage, the following will provide you with the ins and out of the coverage.
Age requirements: Applicants must be between the ages of 40 to 75 to qualify for coverage.
Benefits and premiums: The basic benefit never decreases and the premium rates never increase for the duration of the coverage.
Premium payout: When you sign up for the policy, you can expect it to be paid in full by the time you reach age 95. If your life past 95, this means that you will stop paying for your premium, but your coverage will continue for the duration of your lifetime.
According to World Bank, as of 2010, the life expectancy of Canadians is slightly under 81 years, with males living to 78 and females living to 83 on average. This means that one caveat of this type of coverage is that it only makes sense for people to apply if they are in poor health, especially considering there are no health questions or exams. If you have a choice, choose simplified issue coverage over guaranteed issue coverage. Guaranteed issue coverage is better suited for people that are older and do not expect to life a long time due to a pre-existing health condition.
How to purchase coverage: The policy is sold direct through BMO’s call center or website and is not available via their broker network. This begs the question about how you should purchase the policy. Is it more beneficial to purchase it directly from BMO or through a life insurance broker and opt for simplified issue coverage? Again, this brings up the topic of comparing your options when it comes to a guaranteed issue or simplified issue policy. Keep in mind that if you choose to use a broker and opt for simplified issue coverage you will benefit in a number of ways. There will still be no medical tests, there is a much higher face amount for the policy, coverage can start immediately, and the premiums are much lower than guaranteed issues policies.
Payouts are tax free: Regardless of the coverage you select, the death benefits in the policy are paid out tax-free. This is the same feature available with every other life insurance company. Nothing is different when it comes to life insurance and tax on payouts.
Payout Schedule: BMO insurance pays all completed claims within two days of receiving the required documents. This allows recipients to receive payouts quickly and not make the process long or drawn out. But, remember that you need to provide proper documentation to receive payment. Make sure your documents are in order to avoid delays.
Non Accidental death benefit payouts: Non accidental death benefits within the first two years are limited to the return of premium plus interest.
Accidental death: While the BMO plan pays out five times the basic benefit if the insured dies by accident, this is not common. Even though it does this seem like a good deal at first glance, keep in mind that a very small percentage of deaths are actually accidental, as outlined in your policy. In fact, less than 5% of all life insurance claims are from a policy holder who died from accidental causes, and most accidental death policies expired at age 70. Therefore, refrain from making your decision based on the accidental death benefit alone.
When taking a look at the BMO Guaranteed Life Plus policy or any other no medical test life insurance policy, it is important to understand exactly what you will receive for the premium you will pay. For more information about Guaranteed Life Plus coverage from BMO and your life insurance options, call 1-866-899-4849 to talk with one of our life insurance professionals.
NoMedicalLifeInsurance.ca is an initiative of independent insurance expert Tamara Humphries and LSM Insurance.
