1 GENERAL NOTICE 5 2 NAVIGATING YOUR GENESIS 11 IRIS - UNIVERSAL LIFE INSURANCE POLICY 6 3 DEFINITIONS, ABBREVIATIONS & REFERENCES 7

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1 Table of Contents 1 GENERAL NOTICE 5 2 NAVIGATING YOUR GENESIS 11 IRIS - UNIVERSAL LIFE INSURANCE POLICY 6 3 DEFINITIONS, ABBREVIATIONS & REFERENCES 7 4 OWNERSHIP OF THIS POLICY SINGLE OWNERSHIP JOINT OWNERSHIP JOINT IN TENANCY TENANTS IN COMMON 16 5 GENERAL PROVISIONS PAYMENT OF PREMIUMS RATE CATEGORY NON-PREFERRED RATE CATEGORIES PREFERRED RATE CATEGORIES DECREASING THE FACE AMOUNT OF A TERM LIFE INSURANCE RIDER - IMPACT ON RATE CATEGORY PREMIUM TAX GRACE PERIOD AND LAPSE REINSTATEMENT INCONTESTABILITY FRAUD MISREPRESENTATION OF AGE OR SEX SUICIDE PROOF OF CLAIM PRECEDENCE OF APPLICATION OF PROVISIONS TERMINATION LIMITATION PERIOD DISSOCIATION (OPTION TO SEPARATE A COVERAGE FROM THE POLICY) DISSOLUTION (OPTION TO SEPARATE A JOINT FIRST COVERAGE INTO ONE OR MORE INDIVIDUAL COVERAGES) MODIFIED FACE AMOUNTS COST OF INSURANCE FOR DISSOLUTION UNDER A GENESIS COVERAGE COST OF INSURANCE FOR DISSOLUTION UNDER A LIFE INSURANCE TERM RIDER 22 6 GENESIS 11 IRIS - UNIVERSAL LIFE COVERAGE OPTIONS INDIVIDUAL 23 F.7009 ( ) P a g e 1

2 6.1.2 JOINT LAST TO DIE JOINT FIRST TO DIE OPTIONS TO MODIFY COVERAGES DEATH BENEFIT OPTIONS FACE AMOUNT + FUND OPTION FACE AMOUNT + FUND WITH WEALTH MAXIMIZER OPTION CHANGING THE DEATH BENEFIT OPTION PAYMENT OF THE DEATH BENEFIT COST OF INSURANCE (COI) YRT COST OF INSURANCE (YRT COI) LEVEL COST OF INSURANCE (LEVEL COI) OPTION TO CHANGE FROM YRT COI TO LEVEL COI PAID-UP INSURANCE REDUCTION OF THE FACE AMOUNT OF A COVERAGE 27 7 ACCUMULATION FUND VALUE OF THE ACCUMULATION FUND BENEFITS PAYABLE TO THE BENEFICIARY OF THE FUNDS PORTFOLIO ACCOUNT DEPOSITS TO THE PORTFOLIO ACCOUNT INTEREST CREDITED ON THE PORTFOLIO ACCOUNT BALANCE DEDUCTIONS FROM THE PORTFOLIO ACCOUNT MONTHLY DEDUCTIONS DDA (DESIGNATED DEDUCTION ACCOUNTS) 29 8 SHUTTLE FUND PORTFOLIO ACCOUNT DEPOSITS TO THE PORTFOLIO ACCOUNT INTEREST CREDITED ON THE PORTFOLIO ACCOUNT BALANCE DEDUCTIONS FROM THE PORTFOLIO ACCOUNT TRANSFERS FROM THE SHUTTLE FUND TO THE ACCUMULATION FUND TERMINATION SHUTTLE FUND 31 9 INVESTMENTS A.I.I. (AUTOMATIC INVESTMENT INSTRUCTIONS) INVESTMENT ACCOUNTS GUARANTEED INTEREST ACCOUNTS INDEX-BASED ACCOUNTS ADDITION OR DELETION OF INVESTMENT ACCOUNTS 37 F.7009 ( ) P a g e 2

3 9.4 GUARANTEE AT DEATH MARKET VALUE OF FUNDS MARKET VALUE OF THE ACCUMULATION FUND & SHUTTLE FUND MARKET VALUE ADJUSTMENTS SURRENDER SURRENDER VALUE PARTIAL WITHDRAWAL TRANSFERS TAX REFUND FREQUENT TRADING POLICY LOAN POLICY LOAN RESTRICTIONS TRANSFERS TRIGGERED BY A POLICY LOAN POLICY LOAN ADVANCES POLICY LOAN INTEREST POLICY LOAN REPAYMENTS TAXATION ADJUSTMENTS TO MAINTAIN EXEMPT STATUS AOFA COVERAGE TRANSFERS FROM THE ACCUMULATION FUND TO THE SHUTTLE FUND DECREASING AOFA COVERAGE OPTIONS TO CHANGE AOFA COVERAGE DISABILITY BENEFITS BENEFIT TOTAL DISABILITY PRIMARY ACTIVITIES OF DAILY LIVING ELIMINATION PERIOD CONDITIONS OF PAYMENT DISABILITY BENEFIT TAXATION TERMINATION OF DISABILITY BENEFIT PAYMENTS EXCLUSIONS AND LIMITATIONS 48 APPENDIX A - OPTIONS TO MODIFY GENESIS COVERAGES 49 A. OPTION TO MODIFY AN INDIVIDUAL COVERAGE TO A JOINT LAST COVERAGE 49 B. OPTION TO MODIFY A JOINT LAST COVERAGE TO ONE OR MORE INDIVIDUAL COVERAGES 51 C. OPTION TO ADD A LIFE INSURED TO A JOINT LAST COVERAGE 52 F.7009 ( ) P a g e 3

4 D. OPTION TO MODIFY AN INDIVIDUAL COVERAGE TO A JOINT FIRST COVERAGE 53 E. OPTION TO ADD A LIFE INSURED TO A JOINT FIRST COVERAGE 55 F. OPTION TO MODIFY A JOINT FIRST COVERAGE TO A JOINT LAST COVERAGE 56 G. OPTION TO WITHDRAW A LIFE INSURED FROM A JOINT FIRST COVERAGE 57 F.7009 ( ) P a g e 4

5 1 General Notice Industrial Alliance Insurance and Financial Services Inc. recommends that you consult your independent legal and financial advisors with respect to the terms and conditions of this Policy and its use in connection with your financial, tax, estate and succession planning. As well, transactions involving this Policy can have tax consequences and should therefore be reviewed with your advisors prior to implementation. This Policy is subject to relevant Canadian provincial and federal regulation and legislation. This Policy contains provisions removing or restricting the right of the insured to designate persons to whom or for whose benefit insurance money is to be payable. F.7009 ( ) P a g e 5

6 2 Navigating Your Genesis 11 IRIS - Universal Life Insurance Policy Where used in this Policy, unless the context requires otherwise, our, us and we is a reference to Industrial Alliance Insurance and Financial Services Inc., and insured, you and your means the Owner of the Policy. This Policy is divided into provisions and sub-provisions which are numbered accordingly. Any reference to a provision will include its sub-provisions unless otherwise noted. Words importing the singular include the plural and vice versa, and words importing one gender include all genders. Headings are included for convenience of reference only and do not affect the interpretation of this Policy or the provision to which a heading relates. F.7009 ( ) P a g e 6

7 3 Definitions, Abbreviations & References Where used in this Policy, unless otherwise noted in it, the following capitalized words and expressions have the meanings ascribed to them in this provision: 5-Year Average Account An Investment Account offered under the Policy, as described in provision 9.2.1a. (5-Year Average Account). A.I.I. An acronym for Automatic Investment Instructions, described in provision 9.1 (A.I.I. - Automatic Investment Instructions). AOFA An acronym for Automatic Optimization of Face Amount, described in provision 11.1 (Adjustments to Maintain Exempt Status). AOFA Coverage A Coverage which may provide additional life insurance protection under the Policy in order for the Policy to maintain its status as an Exempt Policy, as described in provision 11 (Taxation). Accumulation Fund A fund used in the determination of the cash value of your Policy. The Accumulation Fund excludes any amounts in the Shuttle Fund, and is described further in provision 7 (Accumulation Fund). Active Management Index Account A type of Investment Account offered under the Policy, as described further in provision (Index-Based Accounts). Age At any time, Age, in respect of a Coverage, is the age of the Life Insured rounded to his nearest birthday. The Age on the Effective Date of a Coverage appears on the Policy Specifications Pages. Amounts Owed to Us At any time, the sum of: a) any Transaction Fees incurred and unpaid, and b) any Outstanding Policy Loan Balance divided by 97%, and c) any amount required to keep the Policy in force until that time. Assigned Owner The person or entity (including but not limited to a corporation, trust or partnership) designated in writing by you, to whom or to which you transfer ownership of this Policy during your lifetime. Attained Age (for Individual Coverage) At the time of any transaction, Attained Age, in respect of a Coverage, is the Age of the Life Insured. F.7009 ( ) P a g e 7

8 Attained Age (for Joint Coverage) At the time of any transaction, Attained Age, in respect of any Joint Coverage except for a joint term life insurance Rider, means the Equivalent Age plus the number of years that have elapsed from the Effective Date of the Coverage to the closest Coverage Anniversary. Automatic Deduction An automatic transfer or deduction from the Investment Accounts of the Accumulation Fund to cover Monthly Deductions, as described in provision (DDA - Designated Deduction Accounts). Beneficiary Means, a person or entity designated in writing by you to whom or for whose benefit insurance money is payable. When the Life Insured is the Owner, the Beneficiary must be a person or an entity other than you or your personal representative. Beneficiary of the Death Benefit In respect of a Coverage, the Beneficiary to whom the Death Benefit under a Coverage is payable upon the death of a Life Insured. If no Beneficiary is designated, the Beneficiary of the Death Benefit will be the Owner. Beneficiary of the Funds The Beneficiary to whom the benefits described in provision (Benefits Payable to the Beneficiary of the Funds) are payable. If no Beneficiary is designated, the Beneficiary of the Funds will be the Beneficiary of the Death Benefit for the First Genesis Coverage. COI An acronym for Cost of Insurance. COI Charge An amount which we charge on the Monthly Anniversary for the insurance protection to be provided during the Policy month under a Genesis Coverage, as described in provision 6.3 (Cost of Insurance). COI Rate A unit cost, expressed per $1,000 of coverage, which we use to calculate applicable COI Charges. The applicable COI Rate may be structured on either a Level COI or YRT COI basis. Contingent Owner Subject to the legislation governing your policy, and provided the Policy does not terminate on your death, the person or entity (including but not limited to a corporation, trust or partnership) you have designated to be the owner of the Policy following your death. Contract The contract of insurance between you and us, which includes the application for Coverage, any applications for additional Coverage, for Reinstatement of Coverage or to exercise Policy options, any documents that modify any such applications or exercises of options, any medical questionnaires, medical examination reports (if any), underwriting and financial reports, the Policy and Policy Specification Pages. F.7009 ( ) P a g e 8

9 Coverage Except where otherwise indicated in the Policy, Coverage means any Genesis Coverage, AOFA Coverage or other Coverage provided by a Rider under this Policy. Coverage Anniversary The yearly anniversary of the Effective Date of a Coverage. Coverage Options The Coverage Options are used to define the circumstances under which the Death Benefit in respect of each Genesis Coverage becomes payable. The available Coverage Options are described in provision 6.1 (Coverage Options). Coverage Year The period of one year, beginning on the Effective Date of the Coverage or a Coverage Anniversary, and ending on the day prior to the subsequent Coverage Anniversary. DDA An acronym for Designated Deduction Accounts, described in provision (DDA Designated Deduction Accounts). Death Benefit The benefit that is payable to the Beneficiary of the Death Benefit upon the death of a Life Insured, in accordance with your chosen Coverage Option and Death Benefit Option. Death Benefit Options Options, described in provision 6.2 (Death Benefit Options), that provide for how Death Benefits of Genesis Coverages are determined and how their Face Amounts may be adjusted while the Policy is in force. The Death Benefit Option you selected appears on the Policy Specifications Pages under Death Benefit. Diversified Strategy Account A type of Investment Account offered under the Policy, described further in provision (Index-Based Accounts.) Effective Date The date marking the beginning of the computation of time. When used in respect of the Policy, the date that appears on the Policy Specifications Pages under contract effective date. When used in respect of a Coverage, the date that appears on the Policy Specifications Pages under such Coverage. Evidence In respect of a Life Insured for a Coverage, evidence of insurability that is deemed satisfactory by us. Equivalent Age Except with respect to a joint term life insurance Rider, the age which is established for a Joint Coverage on the later of the Effective Date of the Coverage, or the modification date of the Coverage, if applicable, which appears on the Policy Specifications Pages and is based on the Age and the Rate Category of each Life Insured. F.7009 ( ) P a g e 9

10 Exempt Policy Exempt Policy has the meaning assigned to it under the ITA, and is described further in provision 11 (Taxation). Extra Premiums Any additional Premium required from the Owner for a Coverage for which the Life Insured represents a greater risk than normal based on our underwriting guidelines and which appears on the Policy Specifications Pages under the headings, permanent extra premium, permanent YRT extra premium and extra premium. Face + Fund A short form for Face Amount + Fund Death Benefit Option, as described in provision (Face Amount + Fund Option). Face + Fund with Wealth Maximizer A short form for Face Amount + Fund with Wealth Maximizer Death Benefit Option, as described in provision (Face Amount + Fund with Wealth Maximizer Option). Face Amount The amount of insurance for a Coverage which appears on the Policy Specifications Pages under Face Amount. Where the Face Amount for that Coverage has been reduced in accordance with provision (Face Amount + Fund with Wealth Maximizer Option), Face Amount then means the reduced Face Amount calculated on the most recent Policy Anniversary. Where the Face Amount for a Coverage is reduced as described in provision 6.4 (Reduction of the Face Amount of a Coverage), the reduced Face Amount will appear on revised Policy Specifications Pages. First Genesis Coverage The first Genesis Coverage that appears on the Policy Specifications Pages for Life Insured 1. Fixed Term Account A type of Investment Account offered under the Policy, described further in provision 9.2.1b (Fixed-Term Accounts). Floor Face Amount If the Policy Specifications Pages indicate that the Face + Fund with Wealth Maximizer option applies, the Floor Face Amount is the minimum amount to which the Face Amount of the applicable Coverage can be reduced under the terms of provision (Face Amount + Fund with Wealth Maximizer Option). The Floor Face Amount is established by you and can be modified by you at any time upon Request. In no event will the Floor Face Amount exceed the Face Amount or be less than $1,000. Genesis Coverage Any universal life coverage which appears on the Policy Specifications Pages. ITA The Income Tax Act, RSC 1985, c.1 (5th supplement), as amended from time to time and the Income Tax Regulations made thereunder. F.7009 ( ) P a g e 10

11 Index-Based Accounts A type of Investment Account, offered under the Policy, described further in provision (Index-Based Accounts). Individual Coverage A Genesis Coverage issued on the life of only one Life Insured. For the purpose of provision 5.7 (Suicide), Individual Coverage also includes any Coverage issued on the life of only one Life Insured which provides life insurance protection under the Policy. Investment Accounts The accounts to which you may allocate funds from your Accumulation Fund or Shuttle Fund as described in provision 9 (Investments). The available Investment Accounts are described further in provision 9.2 (Investment Accounts). Issue Age The age of a Life Insured on the Effective Date of a Coverage rounded to his nearest birthday, which appears on the Policy Specifications Pages in respect of such Coverage. Joint Coverage A Coverage issued on the lives of at least two and no more than five Life Insureds. Joint First Coverage A short form for a Coverage with the Joint First to Die Coverage Option, as described in provision (Joint First to Die), and for any Coverage issued on the lives of more than one Life Insured, which provides life insurance protection under the Policy that is payable upon the death of the first Life Insured to die. Joint Last Coverage A short form for a Coverage with the Joint Last to Die Coverage Option as described in provision (Joint Last to Die). For the purpose of provision 5.7 (Suicide), Joint Last Coverage also includes any Coverage issued on the lives of more than one Life Insured, which provides life insurance protection under the Policy that is payable upon the death of the last Life Insured to die. Lapse After a grace period of 31 days, the termination of the Policy when the Value of the Accumulation Fund less any Amounts Owed to Us is insufficient to cover the Monthly Deductions, as described in provision 5.4 (Grace Period and Lapse). Level COI A short form for Level Cost of Insurance, described in provision (Level Cost of Insurance). Life Insured (for Individual Coverage) The individual who appears on the Policy Specifications Pages under Insured and that is insured under that Individual Coverage. F.7009 ( ) P a g e 11

12 Life Insured (for Joint Coverage) Unless otherwise noted, all the individuals who appear on the Policy Specifications Pages under Insured that are insured under that Joint Coverage. For the purposes of provisions 5.6 (Incontestability) and 5.8 (Suicide), a reference to Life Insured means each of these individuals. Life Insured 1 The person who is identified as Insured 1 on the Policy Specifications Pages. MVA An acronym for Market Value Adjustment, described in provision 9.5 (Market Value of Funds). Market Index Account A type of Investment Account offered under the Policy, described further in provision (Index-Based Accounts). Minimum Premium The initial Premium due that is calculated on the Effective Date of the Policy for each Rider and each Genesis Coverage with Level COI at inception. Based on our administration rules, the Minimum Premium may be recalculated to reflect any modification you request. Monthly Anniversary That day of each month which corresponds with the day of the month of the Effective Date of the Policy. Monthly Deductions The amounts due to us each month in respect of the Policy, as described in provision (Monthly Deductions). Net Premium The Premium amount credited to your Accumulation Fund after deducting any applicable premium tax payable, as described in provision 5.3 (Premium Tax). Outstanding Policy Loan Balance At any time, the total of all Policy loan advances which have been made to you as described in provision 10.3 (Policy Loan Advances) to the extent that they have not been repaid plus all accrued and unpaid Policy loan interest on such balances, as described in provision 10.4 (Policy Loan Interest). Owner The person or entity (including a corporation, trust or partnership) who has all the rights, privileges and interests in the Policy. When the Policy is issued, the name of the Owner appears on the Policy Specifications Pages as the applicant. Owner Deductions Transfers as described in provision 9.8 (Transfers), Partial Withdrawals and any payment of the Surrender Value. F.7009 ( ) P a g e 12

13 Partial Withdrawal An amount of money which is withdrawn from the Policy at your Request, which does not result in the surrender of your Policy, and which is remitted to you, as described in provision 9.7 (Partial Withdrawal). Policy Means the document evidencing the Contract, in form and in substance and containing such provisions as required by provincial legislation applicable to it. This Policy includes any amendments, endorsements, Riders or appendices to it, whether attached to it at the time of issue or subsequent to its issue. Policy Anniversary The yearly anniversary of the Effective Date of the Policy. Policy Specifications Pages The pages titled Contract Specifications that appear at the beginning of this Policy, indicating the specifications for each Coverage and option. We will update the Policy Specifications Pages to reflect any applicable added Coverages or Coverage modifications you elect under the provisions of the Policy. Policy Year Any one-year period, beginning on the Effective Date of the Policy or a Policy Anniversary, and ending on the day prior to the subsequent Policy Anniversary. Portfolio Account The Portfolio Account of the Accumulation Fund when it appears in provision 7 (Accumulation Fund), or the Portfolio Account of the Shuttle Fund when it appears in provision 8 (Shuttle Fund), or the Portfolio Account of the fund that is specified when it appears in any other provision. Premium Means any amount you credit to this Policy excluding the amounts paid to us as Policy Loan Repayments or payments of Policy Loan Interest. Premium also includes amounts such as automatic Transfers from the Shuttle Fund to the Accumulation Fund. Rate Category In respect of a Life Insured for a Coverage, the category of COI Rates that will be used to calculate the COI Charge, as described in provision 5.2 (Rate Category). Reference Market Index An external market index used to determine the interest accrual for a Market Index Account. The Reference Market Index for each Market Index Account that is available on the Effective Date of the Policy is indicated in provision (Index-Based Accounts). Reinstatement The terms and conditions which must be satisfied for you to reinstate your Policy if it terminates because of a Lapse, as described in provision 5.5 (Reinstatement). Request A written request made by you and accepted by us. F.7009 ( ) P a g e 13

14 Rider A set of provisions which is added to the Policy to provide specific additional coverage or options as specified in the Rider. A Rider is only added at your Request and provided our requirements for the addition of the Rider are satisfied. Any Riders added to this Policy will be identified on the Policy Specifications Pages. Subsequent Owner Means the Contingent Owner or the Assigned Owner. SRIA An acronym for Stabilized Return Index Account, an Investment Account available under the Policy, described in provision (Index-Based Accounts). Shuttle Fund A fund in which we invest excess funds that would otherwise cause the Policy to lose its status as an Exempt Policy. The Shuttle Fund excludes any amounts in the Accumulation Fund, and is described further in provision 8 (Shuttle Fund). Surrender Value The amount described in provision (Surrender Value). Target Premium The amount you chose to pay as a Premium for this Policy, which appears on the Policy Specifications Pages and which you may change at any time. Tax Refund An additional benefit that may be payable where there has been a disposition of part or all of your interest in the Policy, as described in provision 9.9 (Tax Refund). Transaction Fees Amounts charged against the Policy in respect of any transactions initiated by you. The amounts charged and the transactions to which such amounts will apply will be in accordance with our administrative rules in effect at the time of each transaction. A Transaction Fee will also be charged against the Policy for any dishonoured cheques. Transfers from the Accumulation Fund to the Shuttle Fund Automatic transfers we make at the beginning or at the end of a Policy Year as required in order for the Policy to maintain its status as an Exempt Policy, described further in provision (Transfers from the Accumulation Fund to the Shuttle Fund). Transfers from the Shuttle Fund to the Accumulation Fund Automatic transfers we make at the beginning of the second Policy Year and on each subsequent Policy Anniversary, to the extent that they do not cause the Policy to lose its status as an Exempt Policy, as described in provision (Transfers from the Shuttle Fund to the Accumulation Fund). F.7009 ( ) P a g e 14

15 Underlying Fund An external managed fund used to determine the interest accrual for an Active Management Index Account. The Underlying Fund for each Active Management Index Account that is available on the Effective Date of the Policy is indicated in provision (Index-Based Accounts). Value of the Accumulation Fund At any time, the total value of the accounts in the Accumulation Fund as described in provision 7.1 (Value of the Accumulation Fund). YRT An acronym for Yearly Renewable Term. YRT COI A short form for YRT Cost of Insurance, described further in provision (YRT Cost of Insurance). Additional definitions may be provided in the provisions of this Policy and attached Riders. F.7009 ( ) P a g e 15

16 4 Ownership of this Policy As the Owner of this Policy you are entitled to all of its rights and benefits. If there is more than one Owner, all Owners must exercise their rights, privileges and interests unanimously. Subject to the legislation that governs your Policy, you may transfer ownership of it to a Subsequent Owner. Your entitlement to the rights and benefits under the Policy terminates when the transfer of ownership of this Policy to a Subsequent Owner takes effect. Subject to the legislation governing your policy, the designation of a Contingent Owner takes effect at the time of your death and the designation of an Assigned Owner takes effect at the time of the designation. We will not be bound to recognize, for the purposes of our records and the payment of benefits under the Policy, the transfer to the Subsequent Owner until we have processed your Request. 4.1 Single ownership Should you die before the termination of this Policy and did not designate a Contingent Owner, the rights of ownership of this Policy will be transferred to your estate. 4.2 Joint ownership Joint in Tenancy Should one joint Owner die before the termination of this Policy, his ownership share passes automatically to his Contingent Owner. In the absence of a Contingent Owner, his ownership share passes to the surviving joint Owner. If there is more than one surviving joint Owner, each such Owner shall take an equal share in the deceased joint Owner s share in the Policy. Except for Policies issued in the Province of Quebec where this type of ownership does not exist, this type of ownership automatically applies unless provision (Tenants in Common) applies Tenants in Common If this Policy was issued in the province of Quebec or, if it was issued in a province or territory other than Quebec and you specified that the joint Owners are tenants in common, then should one joint Owner die before the termination of this Policy, his ownership share passes automatically to his Contingent Owner if he designated one. In the absence of a Contingent Owner, his ownership share passes to his estate. F.7009 ( ) P a g e 16

17 5 General Provisions This Policy describes all of the terms and conditions entered into between you and us. Any statement that is not part of this Policy does not bind us and no person other than us can modify this Policy. Any such modification must be expressed in writing and signed by us. We reserve the right to revise or make modifications to the Policy (a) as required by law and/or (b) which make improvements to your rights and benefits under the Policy. Other than in respect of the revisions and modifications set out in (a) and (b), any other revisions and modifications require your consent. If we do not enforce a provision of this Policy at a particular time, we reserve the right to enforce the provision after the particular time. 5.1 Payment of Premiums The initial Premium sufficient to cover the first Monthly Deduction is due on the Effective Date of the Policy. If we do not receive your initial Premium, or if your initial Premium is not honoured, this Policy will not take effect. In order to keep the Policy in force, sufficient subsequent Premiums must be paid, as described in provision 5.4 (Grace Period and Lapse). Premiums for this Policy are payable in legal Canadian currency at our head office or at one of our offices. 5.2 Rate Category The Rate Category applicable to each Coverage appears on the Policy Specifications Pages for each Life Insured. The COI Rates and the cost associated with each Rider that are applicable to a Life Insured less than 15 years of Age on the effective date of a Coverage are calculated using the Smoker Rate Category. The COI Rates and the cost associated with each Rider that are applicable to a Joint Coverage are calculated using the Male Non-Preferred Non Smoker Rate Category. Notwithstanding the other provisions of this Policy, when a Coverage is modified without Evidence, the Rate Category that appears on the Policy Specifications Pages in respect of a Life Insured will apply under the modified Coverage. However, when a COI Rate or the cost associated with a Rider is being re-calculated as a result of a Coverage modification or an option that references this provision under the Policy, and the Rate Category that appears on the Policy Specifications Pages is no longer available, we reserve the right to assign a Rate Category that we deem to be substantially similar Non-Preferred Rate Categories The Non-Preferred Rate Categories available on the Effective Date of the Policy are: Smoker and Non Smoker Preferred Rate Categories The Preferred Rate Categories are available to any term life insurance Rider under the Policy. The Preferred Rate Categories on the Effective Date of the Policy are: Elite Non Smoker, Preferred Non Smoker, Elite Smoker and Preferred Smoker Decreasing the Face Amount of a Term Life Insurance Rider - Impact on Rate Category Decreasing the Face Amount of a term life insurance Rider may lead to a change in the Rate Category if the new Face Amount is less than the minimum Face Amount required by us to qualify for the same Rate Category that applied prior to the Face Amount decrease. The new Rate Category applicable to the term life insurance Rider will be established based on our administrative rules in effect on the Effective Date of the term life insurance Rider. F.7009 ( ) P a g e 17

18 5.3 Premium Tax In the event that the premium tax rate in your province of residence at the time of a Premium payment is greater than the premium tax rate indicated in the table below, administration fee equal to the difference in these two premium tax rates multiplied by the amount of the Premium payment will be charged; otherwise, no administration fee will be charged in respect of that Premium payment. Province Premium Tax Rate (as at January 1 st 2016) Newfoundland 4% Prince Edward Island 3.50% Quebec 3.48% Nova Scotia 3% Nunavut 3% Saskatchewan 3% Northwest Territories 3% Alberta 2 % British Columbia 2% Manitoba 2% New-Brunswick 2% Ontario 2% Yukon 2% You may have to change the Target Premium as a result of an increase in the premium tax rate to keep the Policy in force. 5.4 Grace Period and Lapse After the payment of the initial Premium, we will allow a grace period of 31 days from the date the Value of the Accumulation Fund less any Amounts Owed to Us becomes insufficient to cover the Monthly Deductions. The Policy will remain in force during the grace period but failure to pay the shortfall will result in a Lapse at the end of the grace period. 5.5 Reinstatement The Policy may not be reinstated if the Surrender Value has been paid. If your Policy terminates as described in provision 5.4 (Grace Period and Lapse), you may reinstate your Policy once the following conditions have been satisfied: Within 2 years following the date of a Lapse, a) You have sent a Request to reinstate your Policy; and b) you have provided Evidence which establishes, based on our underwriting rules at the time of the reinstatement, that each Life Insured meets the conditions required to be accepted for coverage under the Policy at the time of the Request for Reinstatement; and c) You have paid an amount sufficient to cover all unpaid Monthly Deductions, and any other Amounts Owed to Us, with interest compounded annually at a rate we will determine. F.7009 ( ) P a g e 18

19 Once this Policy is reinstated: - The 2-year period that applies to provision 5.6 (Incontestability) and provision 5.7 (Suicide) will begin on the effective date of Reinstatement. - The investment accounts surrendered upon termination, if any, may not be restored. When the Policy is reinstated, you have the right to make new investment allocations according to the terms of the Policy. 5.6 Incontestability When we are assessing our risk in respect of a new Coverage, a Coverage increase, a Coverage addition, a Coverage modification or the Reinstatement of the Policy, you and each proposed life insured must disclose to us all the facts known to each of you which are material to our risk under the Policy. This duty to disclose applies to the application for insurance, the medical examination report, any other written statements or any answers furnished as Evidence of insurability including answers given during phone interviews. Except in the case of fraud as described in provision (Fraud), we will not rescind this Policy or any of its Coverage for any misrepresentation or concealment of such facts after the contestability period. The contestability period ends 2 years following the later of the last Reinstatement date of the Policy and the date on which the new Coverage, the Coverage increase, the Coverage addition or the Coverage modification took effect. Where misrepresentation or concealment of such facts is made in an application for an increase of a Coverage, addition of a Coverage or any other modification to this Policy for which Evidence is required, the right of rescission of this Policy or its Coverage due to such misrepresentation or concealment, is limited to that increase, addition or modification. Prior to the end of the 2-year contestability period, during the lifetime of the Insured, we reserve the right to rescind the Policy or any of its Coverage if you or any proposed life insured does not meet their duty to disclose, as described above. If the Policy is rescinded, we will pay you the higher of a) the amount which you paid for this Policy and b) the Surrender Value. If a Coverage is rescinded, we will refund the amount which you paid for that Coverage. We also reserve the right to contest any disability or death claim for a Life Insured prior to the end of the 2- year contestability period in the event of misrepresentation or concealment of the facts known to you and the proposed life insured which are material to our risk under the Policy Fraud In the case of fraudulent representation or concealment, we can rescind the Policy or its Coverage at any time. If the Policy is rescinded, we will pay you the higher of a) the amount which you paid for this Policy and b) the Surrender Value. If a Coverage is rescinded, we will refund the amount which you paid for that Coverage Misrepresentation of Age or Sex Subject to our administrative rules and any provincial legislation, misrepresentation of the age or sex of the Life Insured does not result in the rescission of the Policy unless at the date of the application of this Life Insured, the correct age of the Life Insured exceeds this Policy or Coverage age limits. The amount of coverage, the COI Rates or the cost associated with a Rider will be adjusted according to the correct age or sex. F.7009 ( ) P a g e 19

20 5.7 Suicide With respect to a Coverage, if a Life Insured commits suicide within the 2-year period following: a) The Effective Date of that Coverage; or b) A modification which is either an addition of a Life Insured or an increase in that Coverage; or c) The last Reinstatement of the Policy, then the Death Benefit payable upon the suicide of the Life Insured for that Coverage will be limited as described below: a) For an Individual Coverage, a Joint First Coverage, or a Joint Last to Die Coverage where the Life Insured who commits suicide is the last surviving Life Insured, the Death Benefit will be equal to the sum of the COI Charges and any Extra Premiums paid for his Coverage during the period from the applicable aforementioned date to the date of suicide. The Survivor Options described in provision (Joint First to Die) will continue to apply to the surviving Life Insureds following the suicide of the Life Insured under a Joint First Coverage. b) For a Joint Last to Die Coverage, where a Life Insured other than the last surviving Life Insured commits suicide, no Death Benefit or Benefit Payable to the Beneficiary of the Funds will be payable and the Coverage will remain in force. c) For a life insurance Rider, the Death Benefit will equal the sum of the Monthly Deductions paid in respect of the Coverage for the period from the applicable aforementioned date to the date of suicide. No benefit payable to the Beneficiary of the Funds will be payable. However, if the coming into force of a Coverage directly and simultaneously resulted in the complete or partial cancellation of another coverage in force with us on the Life Insured, the 2-year period is calculated from the later of the following dates: a) The effective date of the coverage that was completely or partially cancelled; b) The date of the last reinstatement of the Policy under which the coverage was cancelled; or c) The date of the last reinstatement of this Policy. If on the date of the suicide, the 2-year limitation period of the cancelled coverage has elapsed but the 2- year period of the Coverage under this Policy has not yet elapsed, the amount payable to the Beneficiary of the Death Benefit will equal the cancelled face amount less any surrender value that was credited or paid under the cancelled coverage, but without exceeding the Face Amount under the current Coverage. In such a case, if the Face Amount of the current Coverage exceeds the amount payable to the Beneficiary, we will reimburse the portion of the Monthly Deductions deducted for this excess amount. Where this provision applies to an increase in Coverage, the limitation of the Death Benefit will only apply to the portion of the Coverage equal to the increase. In all cases, if the suicide results in the termination of the Policy as provided for in provision 5.10 (Termination), the Surrender Value will become payable to the Beneficiary of the Funds. F.7009 ( ) P a g e 20

21 5.8 Proof of Claim Before any claim for a Death Benefit can be considered and paid under the provisions of this Policy, we must receive all the information and documentation required by us to assess the claim. In addition, the amount of any benefit payable will be subject to the limitations and restrictions, if any, imposed by provisions 5.6 (Incontestability) and 5.7 (suicide). 5.9 Precedence of Application of Provisions The application of the requirements, limitations and conditions in provisions 5.6 (Incontestability), 5.7 (Suicide) and 5.8 (Proof of Claim) to any Coverage under this Policy, or to any benefits payable under this Policy, shall take precedence over the application of any other provisions of this Policy with regard to any such Coverage or any such benefits Termination Your Policy terminates on the first of the following dates: a) The date that there is no longer a Genesis Coverage in force; b) The date of the death of the last Life Insured; c) The date of payment of the Surrender Value; d) The date of the Lapse of the Policy; and e) The date this Policy is cancelled by us within the limits permitted by law Limitation Period Every action or proceeding against an insurer for the recovery of insurance money payable under the Policy is absolutely barred unless commenced within the time set out in the Insurance Act, or other applicable legislation (e.g. Limitations Act (Ontario), Civil Code (Quebec)) Dissociation (Option to Separate a Coverage from the Policy) If the Policy has more than one Coverage, at your Request, any Coverage that provides insurance life benefits may be separated from the Policy and continued under a separate individual or joint policy of the same type that includes the features indicated on the Policy Specifications Pages. We reserve the right to issue a policy that, we, in our sole discretion, deem to be a policy that is substantially similar. Policy fees may apply to the new policy, based on our administrative rules on the modification date. A Transaction Fee will be charged for this modification option Dissolution (Option to Separate a Joint First Coverage into One or More Individual Coverages) If this Policy includes a Joint First Coverage, subject to the terms of this provision, you may submit a Request to separate that Coverage into one or more individual Coverages. If you exercise this option, a new separate policy will be issued for each new individual coverage with Policy Specifications Pages indicating the features of these new individual coverages. The Effective Dates of the new individual Coverages will be the Effective Date of the Joint First Coverage. You may be required to dissociate one or more other Coverages from this Policy, as described in provision 5.12 (Dissociation) in order to exercise this provision. A Transaction Fee will be charged for exercising this provision Modified Face Amounts The Face Amount for each new individual Coverage will equal the Face Amount of the Joint First Coverage immediately prior to the modification divided by the number of Life Insureds under the Joint First Coverage. F.7009 ( ) P a g e 21

22 Cost of Insurance for Dissolution under a Genesis Coverage Any Level COI applicable to the individual Coverage, in respect of a Life Insured, will be calculated using his Age on the Effective Date of the Joint Coverage, his Rate Category on the later of the Effective Date of the Joint Coverage and the last Reinstatement date of the Policy, and the schedule of Level COI rates that was in effect on the Effective Date of the Joint Coverage. Any YRT COI applicable to the individual Coverage, in respect of a Life Insured, will be calculated using his Rate Category on the later of the Effective Date of the Joint Coverage and the last Reinstatement date of the Policy, his Age on the Effective Date of the Joint Coverage and the schedule of YRT COI rates that were in effect on the Effective Date of the Joint Coverage taking into account the number of years that have elapsed since the Effective Date of the Joint Coverage Cost of Insurance for Dissolution under a Life Insurance Term Rider The rates applicable to the individual Coverage, in respect of a Life Insured, will be calculated using his Age on the Effective Date of the Joint Coverage, his Rate Category on the later of the Effective Date of the Joint Coverage and the last Reinstatement date of the Policy, and the schedule of life insurance term Rider rates that was in effect on the Effective Date of the Joint Coverage. F.7009 ( ) P a g e 22

23 6 Genesis 11 IRIS - Universal Life The terms contained in this Genesis 11 IRIS Universal Life provision deal specifically with Genesis Coverages unless otherwise indicated in this provision. 6.1 Coverage Options The Coverage Option for any Genesis Coverage is set on its Effective Date, or its date of modification under provision (Options to Modify Coverages), and governs the conditions under which the Death Benefit will become payable in respect of that Coverage. The Coverage Option may be modified when the Policy is in force as described in provision (Options to Modify Coverages). A Policy can have more than one Coverage on the Life Insured, provided they have the same Coverage Option. The following four Coverage Options are available: Individual Upon the death of the Life Insured, the Death Benefit is payable to the Beneficiary of the Death Benefit in respect of a Genesis Coverage and the designated portion of the benefit payable to the Beneficiary of the Funds is also payable. The Coverage terminates upon the death of the Life Insured Joint Last to Die Upon the death of the last surviving Life Insured, the Death Benefit is payable to the Beneficiary of the Death Benefit in respect of a Genesis Coverage. The designated portion of the benefit payable to the Beneficiary of the Funds is payable upon the death of each Life Insured. The Coverage terminates upon the death of the last surviving Life Insured Joint First to Die Upon the death of the first Life Insured to die, the Death Benefit is payable to the Beneficiary of the Death Benefit and the designated portion of the benefit payable to the Beneficiary of the Funds in respect of a Genesis Coverage is payable. The Coverage terminates upon the death of the first Life Insured to die. This Coverage Option provides a New Policy Option and an Extended Coverage Option. New Policy Option Within 45 days following the date of the first death under a Joint First Coverage and upon Request from you with respect to the surviving Life Insureds who are under 70 years of Age, we will issue without Evidence a new joint first to die permanent life insurance coverage and a new joint first to die term life insurance coverage, if any, under a new policy on the lives of those Life Insureds. If there is only one surviving Life Insured who is under 70 years of Age, the coverage under the new policy will be an individual permanent life insurance coverage and a new individual term life insurance coverage, if any, on that Life Insured. The effective date of the new policy will be the date the Request is received by us. The face amount under the new policy may not exceed the Death Benefit paid in respect of the first death under the existing Joint First Coverage. The new policy will contain the same conditions and restrictions as the existing Joint First Coverage for each Life Insured. The new policy will be issued based on the Attained Age and the Rate Category that appears on the Policy Specifications Pages for each surviving Life Insured who qualified for the new policy under this option and on the schedule of COI rates in effect on the effective date of the new policy. F.7009 ( ) P a g e 23

24 Where applicable, any Riders which appear on the Policy Specifications Pages may be continued under the new policy provided they are available on the Effective date of the new policy. The Riders will be issued without Evidence and will be subject to the conditions and restrictions applicable on the effective date of the new policy. The Premium for the Riders will be based on the Age of the surviving Life Insureds and on the rates in effect on the effective date of the new policy. The Rate Category that appears on the Policy Specifications Pages will apply for each surviving Life Insured. If the Rate Category is no longer available, provision 5.2 (Rate Category) will apply. Extended Coverage Option If a Request has not been received in respect of the New Policy Option described above, and if, within 45 days following the date of the first death, one or more surviving Life Insureds die before turning 70 years of Age, for each additional deceased Life Insured, and upon receipt of required proof of death, we will pay the Beneficiary of the Death Benefit of that Life Insured an amount equal to the Death Benefit paid in respect of the first death Options to Modify Coverages Where applicable, and subject to the terms of Appendix A, you may modify Coverages. If you exercise an option to modify a Coverage, new Policy Specifications Pages will be added to the Policy or, if applicable, a new policy will be issued with Policy Specifications Pages, indicating the features of the modified or new coverage. Where a new policy is issued, we reserve the right to issue a policy we deem to be a policy that is substantially similar. The following are the options to modify Coverages: A. Option to Modify an Individual Coverage to a Joint Last Coverage B. Option to Modify a Joint Last Coverage to One or More Individual Coverages C. Option to Add a Life Insured to a Joint Last Coverage D. Option to Modify an Individual Coverage to a Joint First Coverage E. Option to Add a Life Insured to a Joint First Coverage F. Option to Modify a Joint First Coverage to a Joint Last Coverage G. Option to Withdraw a Life Insured from a Joint First Coverage 6.2 Death Benefit Options The Death Benefit Options available are Face + Fund and Face + Fund with Wealth Maximizer Face Amount + Fund Option If this Death Benefit Option is selected for the First Genesis Coverage, it will also apply to all Genesis Coverages under this Policy. The Face Amount of each Genesis Coverage will be the Face Amount that appears on the Policy Specifications Pages. F.7009 ( ) P a g e 24

25 6.2.2 Face Amount + Fund with Wealth Maximizer Option This Death Benefit Option is available for all Coverage Options but can only apply to the First Genesis Coverage. If this Death Benefit Option is selected for the First Genesis Coverage, the Face Amount + Fund Option applies to all the other Genesis Coverages under this Policy. The Face Amount of each Genesis Coverage will be the Face Amount that appears on the Policy Specifications Pages, with the exception of the Face Amount of the First Genesis Coverage when it has been adjusted as described below. Beginning on the later of the 5th Policy Anniversary and the Policy Anniversary elected by you, and on each Policy Anniversary thereafter, before the First Genesis Coverage is paid-up as described in provision (Paid-Up Insurance), if the Surrender Value excluding the Tax Refund is less than the maximum value that would allow the Policy to retain its status as an Exempt Policy at that time, we will first reduce any AOFA Coverage, and then, if necessary, reduce the Face Amount of the First Genesis Coverage so that the referenced maximum value, after recalculation to reflect the reduced Face Amount, equals the Surrender Value excluding the Tax Refund. However, the maximum annual decrease under this provision for the First Genesis Coverage is 20%, subject to the further limitation that the Face Amount cannot be reduced below the Floor Face Amount Changing the Death Benefit Option You may change the Death Benefit Option by sending us a Request a Changing to Face Amount + Fund Option If you wish to change to Face + Fund Option the following changes will be made to the Policy: a) The Face Amount under the Coverage to which the Face + Fund with Wealth Maximizer Death Benefit Option applied will remain fixed thereafter at its then current value; and b) Provisions (AOFA Coverage) and (Decreasing AOFA Coverage) will not apply thereafter; and c) The AOFA Coverage provided at that time, if any, will remain fixed thereafter at its then current value and will be replaced with a new Genesis Coverage as described in provision 11.2 (Options to change AOFA Coverage); and d) The Face + Fund with Wealth Maximizer Death Benefit Option will no longer be available under the Policy b Changing to Face Amount + Fund with Wealth Maximizer Option This change is only available on the First Genesis Coverage, provided the YRT COI option described in provision (YRT Cost of Insurance) applies for this Coverage. If you change to Face + Fund with Wealth Maximizer Option, you must elect the Policy Anniversary on which to begin the reductions in the Face Amount. The chosen Policy Anniversary cannot be earlier than the 5 th Policy Anniversary. After the change, the Face + Fund Death Benefit Option will no longer be available for the First Genesis Coverage Payment of the Death Benefit Subject to provision 5.6 (Incontestability) and 5.7 (Suicide), upon the death of the Life Insured, the Death Benefit will be paid to the Beneficiary of the Death Benefit. The Death Benefit will include the Face Amounts of the Coverages in force at the time of death of the Life Insured. In addition, the benefits under provision (Benefits Payable to the Beneficiary of the Funds) are payable. We will calculate the amount of the Death Benefit as of the date the Life Insured died. Under a Joint Coverage, where two or more of the Life Insureds die at the same time or in circumstances which make it impossible to determine which of them died first, the youngest deceased Life Insured will be deemed to have been the last of them to die and the Death Benefit will be paid accordingly. F.7009 ( ) P a g e 25