We have updated our Wave illustration software and enabled scenarios with either a) the Sum Insured death benefit OR b) InvestorMaximizer with the Sum Insured death benefit which require exempt test (“8%”) face amount increases, e.g. the “Increases” and “Increases and reversals” options on the Maximizer/Solves screen.
With this additional functionality, you’ll find even more reasons to showcase the advantages that universal life insurance still has for maximum funded scenarios and why it can compare favourably with an alternative taxable investment portfolio. Take a look at the following example using a 5 Pay scenario with the InvestorMaximizer and compare the difference!
Consider a 55 year old male looking to maximize the tax-deferred potential of a universal life policy:
- Insured: Male 55 Non-Smoker
- Deposits: $20,000 over 5 years (total of $100,000 to invest)
- Illustration rates: 5% policy | 5.50% alternative investment
Life Dimensions (Low Fees) with Investor Maximizer1 | Traditional Taxable Investment Portfolio2 | |
Annual Deposit (for 5 years) | $20,000 | $20,000 |
Initial Sum Insured | $272,000 | Not applicable |
Rate of Return | 5.0% | 5.50% |
Fund Value | ||
Year 10 | Age 65 | $126,249 | $127,704 |
Year 20 | Age 75 | $194,131 (+10% MORE) | $176,973 |
Year 30 | Age 85 | $299,150 (+22% MORE) | $245,869 |
Year 45 | Age 100 | $628,916 (+56% MORE) | $403,941 |
Here are a few other reasons to keep Life Dimensions (Low Fees) in mind:
- Top quartile Level COI rates
- Cumulative Fund Bonus of 0.25% payable on balances of $25,000+ in the GIA and Indexed Accounts starting in the 5th year3
- Guaranteed Market Indexed Accounts (GMIAs) – the only UL investment option of its kind in Canada
- A Preferred List of over 200 indexed accounts including 32 indexed accounts without a UL Fee
- BMO Insurance Health AdvocateTM Plan available at NO Extra Cost including immediate and extended family members
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1 2% premium tax, 50% personal tax rate; Level DB, YRT COI.
2 Assuming a Balanced Fund that has the following income: 50% interest, 30% dividends, 10% deferred capital gains and 10% realized capital gains; 35% Dividend Tax Rate; 1.5% probate fees (probate fees are not applicable in Quebec)
3 Provided that the total in those accounts is at least 200% of the Cumulative Annual Minimum Premium at the end of the policy year. Not available on the DIA or GMIA. See Life Dimensions Product Guide (182E) for details.
NOTE: These examples are based on Life Dimensions (Low Fees) (Wave 33.1) policy and are merely a projection of future results, using a set of assumptions that will change over time. Actual results are not guaranteed and will vary. This projection is not complete unless it is accompanied by all of the pages of a Life Dimensions (Low Fees) projection from the Wave illustration software.
TM Trademark of Bank of Montreal, used under licence.
MB 454 (2017/03/13)