Business insurability coverage


Policy owner

  • The Business
    • The business must have been operating for at least three consecutive years and have a head office in Canada.

The Insured

  • The owner or one of the owners of the business
    • Each owner can be insured on the same policy as long as the policyowner (the business) is the same
    • If the insured is the owner of more than one business and wishes to buy a BI for each of his businesses, a policy can be issued for each one.

Issue age - (age nearest )

  • 18 to 65 years old

Insurance amount at issue

  • Minimum: $100,000
  • Maximum (whichever is less):
    • $3.3 million OR
    • The insured’s portion of the fair market value of the business. The amount of the BI can’t exceed 200% of the total life insurance amount.

Maximum Cumulative insurance amount

  • The business can exercise up to 3 times the amount of the BI. For example, if the amount of the BI is $3.3 million, the business could exercise up to 10 million in additional life insurance during the 10 years following the policy issue date without having to give additional evidence of insurability.

Amount to exercise for each option’s period

The business can exercise an option at each policy anniversary during the first 10 years. The amount of the option is (whichever is less):

  • The insured’s portion of the fair market value of the business OR
  • The maximum cumulative amount of the BI less the additional life insurance amounts exercised prior.

At each use of the option, the financial statements of the last 3 years as well as a document indicating the owner’s portion in the business will be required by the underwriting department.

Products that accompany an option

The options can be exercised with the following life insurance coverages:

Traditional life

  • T10, T20 and T30
  • Whole life guaranteed 10, 15 and 20 pay
  • Whole life guaranteed paid at 65
  • Whole life guaranteed paid at 100

Universal life

  • T10, T20 and T100

Participating life (Estate enhancer and Accelerated growth)

  • Whole life 20 pay
  • Whole life at 100

Permanent life products available when the option is exercised

Cost of coverage

  • Level and guaranteed
  • Ceases to be payable when the BI option ends

End of coverage

The earliest of the following events:

  • the 10th anniversary of the policy
  • the insured’s death
  • when the maximum cumulative amount has been used (3 x the amount of the BI)
  • the name of the business (the policyowner) has been modified
  • the business has been dissolved
  • at the termination of the BI
  • at the termination of the life insurance coverages for the policy’s insured.