The following extension applies only for New Business applications received WITH a TIA between September 1, 2016 and December 28, 2016.
We are happy to announce an update for clients applying for life insurance coverage above the current $1,000,000 TIA limit who also wish to secure coverage under the current (G2) tax rules.
This announcement also includes an extension of the deadline that we previously announced for all applications received with a TIA. Please read the following for further details.
If a Wave 32.1 life insurance application is received by December 28, 2016 and also meets all of the following conditions, the G2 tax rules will still apply:
□ The total amount of insurance applied for on the life insured is up to a maximum of $10,000,000
□ A life insurance application (126E) is completed and received in good order
□ The proposed life insured applies and qualifies for a TIA:
o For face amounts up to $1,000,000: use the TIA in the Face-to-Face Life and Critical Illness Insurance Application Form (126E)
o For face amounts from $1,000,001 to $10,000,000: use the “Large Case Application for Temporary Insurance” form (740E)
□ The application is accompanied by a payment of 1/12th of the annual premium
□ Our underwriting decision is completed, the policy is delivered to the owner and a delivery receipt is signed by March 31, 2017.
For more complete details, review the following scenarios and the required steps to take:
Type of Case | What to Do |
New life insurance applications with face amounts up to $1,000,000, | -Submit a fully completed life insurance application including an Application for Temporary Insurance (126E) by December 28, 2016 -Include a cheque for 1/12th of the annual premium |
New applications with face amounts from $1,000,001 to $10,000,000, | -Submit a completed life insurance application (126E) (including all of the medical questions) by December 28, 2016 -Include a completed “Large Case Application for Temporary Insurance” form (740E) -Include a cheque for 1/12th of the annual premium -Submit underwriting requirements (such as replacement forms, AML forms, supplemental questionnaires, financial information etc.) by December 28, 2016. Once issued, policy delivery requirements must be completed within 90 days of the date that the life insurance application (126E) and Large Case TIA (740E) forms are signed or March 31, 2017, whichever is earlier. These delivery requirements must then be received at our Head office no later than |
Pending applications with face amounts from $1,000,001 to $10,000,000 which were already received at our Head Office on or after September 1, 2016 | If: -The life insurance application (126E) has already been submitted to BMO Insurance and; -The application is not being shopped with multiple carriers and; -You do not expect your client(s) to be a substandard risk based on your field underwriting of the life insured(s) and; -You don’t expect the medical underwriting is to be completed by December 16, 2016 Then: -If you submitted the life insurance application (126E) without completing the medical questions, you will be required to do so as part of the Large Case TIA review -Note: If you completed the medical questionnaire and there has been no change of insurability since you submitted life insurance application, the Underwriter will need to have your client sign a statement of good health (166E) -Submit a “Large Case Application for Temporary Insurance” form (740E) by December 16, 2016 -Include a cheque for 1/12th of the annual premium Once issued, policy delivery requirements must be completed within 90 days of the date that the Large Case TIA (740E) is signed. These delivery requirements must be received at our Head office no later than |
Pending applications greater than $10,000,000 or any case that is being shopped with multiple carriers | Temporary Insurance Agreements do not apply in these cases. Underwriting must be completed and the policy must be issued by December 30, 2016 in order to qualify for the G2 tax rules. |
Any applications received where the life insured does not qualify for a TIA (or where one was not submitted) | Underwriting must be completed and the policy must be issued by December 30, 2016 in order to qualify for the G2 tax rules. |
Please note that submitting applications by these deadlines does not guarantee the policy will be issued under the G2 tax rules although every effort will be made to do so.
As part of the Large Case TIA (740E), an underwriting review of the life insured(s) will be performed including an index check. Also, a TIA will be terminated when BMO Insurance cancels or declines the coverage at which point we will mail a notice of cancellation to the policy owner.
All applications received after the end of business day onDecember 28, 2016 will be processed under the new G3 tax rules.
MB 440 (2016/12/05)