I’ve been a customer at BMO since my university days. There were no RESPs back then and my parents banked with BMO so they liked being able to transfer money from their account to mine for free from their home branch. No need to worry about lost cheques or late rent payments. (Thanks Mom and Dad!) Even so, I was suspicious when an envelope arrived telling me to open it because they had a free reward they wanted to offer me: When I opened it, the offer was $2000 of accidental death insurance for one year.

$2 000 In Accidental Death Insurance Is Insulting

Frankly, I found the offer more insulting than interesting. BMO requires me to keep half this amount in my bank account just to get free chequing. Even the CPP Death Benefit is $2500 (although that is taxable income to the person who receives it.) This is such an incredibly small amount of money I doubt it would even pay for the refreshments at a wake or funeral service.

Why Did They Offer “Accidental Death” Insurance Not Life Insurance?

It’s another insult: it’s because they know that “accidental” deaths are very uncommon in my age and gender bracket. Deaths from disease are Number One for my group. So they chance they might have to pay out is fairly high for a true life insurance policy and is very very low for an accidental death policy.

Why Is BMO Really Making This Offer?

• Well, firstly they want you to open the envelope so they can get their advertising in your line of sight.
• And secondly, they want to remind you that they sell insurance nowadays.
• Thirdly, they want you to consider buying more coverage from them, either for accidents or for other insurance risks.

I also have a bad feeling about the “for one year” part of their offer. I wonder if the policy will automatically renew with you having to pay for it after the end of the first year if you enroll. The offer already clearly states that if you request additional coverage, you will have the premiums deducted from your bank account, which is partially identified on the offer.

Unfortunately, I can’t find any details about whether there is an auto-renewal or not on the letters they mailed to me. I hope no one finds out the hard way that there is such a scheme in place!

Should I Accept the Offer of $2000 in Free Insurance?

Personally, I’m not interested. In particular, I’ve had trouble getting BMO to properly handle changes in GIC instructions at renewal so I’m not confident that they would cancel this policy at the end of the first year before any premiums became due.

If you really think $2000 is worth it, by all means accept. Be very sure to select the “I opt out of receiving information and offers on BMO Insurance products and services” box on the form, though. If you don’t, I’d be very surprised if you don’t get a phone call or email asking you to increase your coverage.

And make sure to contact BMO a month or so before your coverage is due to expire to ensure it does not get renewed into a contract that costs you an unexpected amount.

Related Reading

• Why I Won’t Buy a Market-Linked GIC
• Why I Hate Buying GICs Through a Bank Instead of a Brokerage Account

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