LIFE INSURANCE. Product guide. Traditional insurance. For exclusive use by the agent

Transcription

1 LIFE INSURANCE Product guide Traditional insurance For exclusive use by the agent

2 Table of contents 1. TRADITIONAL INSURANCE IN BRIEF TRADITIONAL INSURANCE CLIENTELE WHOLE LIFE INSURANCE Whole life insurance coverages Types of insurance Type of face amount Face amount Surrender value What happens at age 100? Paid-up insurance Age at issue Child Life & Health Duo Life and Serenity Guaranteed Insurability (GI) included automatically TERM INSURANCE Choice of coverages Types of insurance Types of face amount Face amount Age at issue Renewal privilege Conversion privilege From term to permanent From term to term JOINT INSURANCE Joint insurance options Premiums Modifications after issue New contract following a death Dissociation Dissolution Proposal changes when one of the lives is not insurable Medical requirements PREMIUMS Premiums by band Preferred underwriting Payment options COMPLEMENTARY COVERAGES POLICY FEES Traditional Insurance December 2017

3 9. TRANSACTION FEES APPENDIX I - CRITICAL ILLNESS AND MEDICAL CONDITIONS DEFINITIONS APPENDIX II - CRITICAL ILLNESS JUVENILE DEFINITIONS APPENDIX III PREVENTION Exclusions and Restrictions applicable to Prevention + Benefit Traditional Insurance December 2017

4 1. TRADITIONAL INSURANCE In Brief By combining multiple term, whole life and complementary protection options, our new TRADITIONAL INSURANCE product offers virtually unlimited possibilities to provide your clients with customized protection that evolves according to their needs throughout their life. All coverages are available for a single insured or for several insureds on a same contract, whether it be families or business clients. Preferred rates are also available for term insurance (smokers and non-smokers). All whole life insurance coverages, T10/T20 (R&C) and Pick-A-Term are offered as: Basic coverage Additional coverage for the principal insured Coverage for additional insureds WHOLE LIFE INSURANCE Choice of protection: L10 L20 Child Life & Health Duo L65 Life and Serenity 65 L100 T100 Subscribed to as basic coverage or a rider, for each insured. Guaranteed premium and face amount. Face amount L10, L20, L65, L100, T100: $10,000 to $10,000,000* Child Life & Health Duo: $20,000 to $500,000 Life and Serenity 65: $10,000 to $1,000,000 * A volume of insurance of over $10,000,000 requires a special quotation from Head Office. Surrender value and paid-up insurance: Guaranteed and available starting on the 11th policy anniversary (except T100) A privilege for insured children Integrated insurability benefit (except for T100 and Life and Serenity 65): For children age 0 to 20 at issue, the applicant has the possibility to increase the amount of insurance, without proof of insurability, up to 200% of the initial face amount (maximum $150,000).. 1

5 Type of insurance: Individual* Joint first to die insurance Joint last to die insurance Joint last to die insurance, paid-up on the first death *The Child Life & Health Duo and Life and Serenity 65 are offered on an individual basis only. Age at issue: L10, L20 and L100: 0 70 years Child Life & Health Duo: 0-20 years L65: 0-54 years Life and Serenity 65: years T100: 0-85 years Multi-insured coverage: Up to 9 people on the same contract, including the principal insured Rate bands: Band 1: $10,000 to $49,999 Band 2: $50,000 to $99,999 Band 3: $100,000 to $199,999 Band 4: $200,000 to $499,999 Band 5: $500,000 and over The premiums are established according to the sex, tobacco use and insurance volume for each coverage. Premium payments: On an annual basis On a monthly basis (PAC). The monthly payment factor is 0.09 On a quarterly or semi-annual basis Contact Head Office to find out the conversion table. Complementary protection - Disability credit - Accidental Death (AD) - Accidental Death and Dismemberment (AD&D) - Waiver of premiums in the event of the applicant s disability (WPDis) - Waiver of premiums in the event of the insured's disability (WPIDis) - Waiver of premiums in the event of the applicant s death (WPD) - Accidental Fracture (AF) - Guaranteed Insurability (GI) - Hospitalization - Hospitalization and Home Care - Critical Illness - Child Critical Illness - Child Module - Child Module Plus - Supplementary Income (SI) - Paramedical care in the Event of an Accident 2

6 TERM INSURANCE Choice of coverage: T10 (R&C), T20 (R&C) Renewable and convertible Guaranteed level premiums for the duration of the term Pick-A-Term: All terms from T10 to T40 (Example: T17, T33) Renewable and convertible Guaranteed level premiums for the duration of the term and YRT afterward Guaranteed premium and face amount. Renewal: Guaranteed premiums T10 (R&C), T20 (R&C): Renewable to age 85 Pick-A-Term: Renewable to age 100 Conversion: Conversion into whole life insurance until age 71 Premiums established at the time of conversion according to the insured s attained age and current premiums No medical requirements Type of face amount: T10 (R&C), T20 (R&C): Level Pick-A-Term: T10 to T40: Level T10 to T40: Decreasing to 50% Face amount: T10 (R&C), T20 (R&C): $10,000 to $10,000,000* Pick-A-Term: $20,000 to $10,000,000* * A volume of insurance of over $10,000,000 requires a special quotation from Head Office. Type of insurance: Individual Joint insurance payable on the 1st death which can cover up to 5 people Joint insurance payable on the 2nd death (T10/T20 (R&C) only) Joint insurance payable on the 1st death and covering up to 5 people is ideal for your business clients! Age at issue: T10 (R&C), T20 (R&C): 0 to 70 years Pick-A-Term: Level: 0 to (85 less duration of the term)* Decreasing to 50%: 18 to (85 less duration of the term)* *The age at issue cannot exceed 70 years. 3

7 Multiple insured protection: Up to 9 people on the same contract, including the principal insured Rate bands: Band 1 T10 (R&C), T20 (R&C): $10,000 to $49,999 Band 1 Pick-A-Term: $20,000 to $49,999 Band 2: $50,000 to $99,999 Band 3: $100,000 to $199,999 Band 4: $200,000 to $499,999 Band 5: $500,000 and over The premiums are established according to sex, tobacco use and insurance volume for each coverage. Preferred underwriting: Band 5: $500,000 and over 4 preferred rate classes (2 for smokers and 2 for non-smokers) reward insureds whose health, physical condition and lifestyle are better than the average insured. Premium payments: On an annual basis On a monthly basis (PAC). The monthly payment factor is 0.09 On a quarterly or semi-annual basis Contact Head Office to find out the conversion table. Complementary protection Same as whole life insurance 4

8 Disability Credit Rider Benefit period: - 2 years - 5 years (maximum of 60 monthly benefits) - up to age 65 Age at issue: 18 to 59 years Monthly benefit: minimum: $300 maximum: 1.5% of the life face amount (max. $3,500) Premiums: Level and guaranteed for the duration of the coverage Proof of loan: At the time of the claim only Disability definition: own occupation for 24 months Protection: On a single basis (also available for joint coverage) Elimination period and waiting period: - Elimination: 30 days - Waiting: 90 days with payments retroactive to the 31st day of disability If accident or hospitalization for a minimum of 72 hours: - Elimination: 30 days - Waiting: 30 days For more details, see section 7.5 TRADITIONAL INSURANCE, THE BEST IN LIFE INSURANCE Personalized insurance coverage for each insured on the contract (max. 9 persons) Several guarantees: Guaranteed premiums and face amount (term and whole life) Guaranteed surrender values (whole life) Guaranteed paid-up insurance (whole life) Very large choice of term coverages (all terms between T10 and T40) to better meet the specific needs of each insured. Hybrid Child Life & Health Duo protection, designed specifically for children Life and Serenity 65 coverage is specially designed for people aged 40 to 60. It gives insured access to the face amount in the form of a monthly benefit while they're alive, to maintain their quality of life in case of loss of independent existence. Partial or total conversion of term insurance options Dissociation of a multiple-insureds contract to an individual contract while maintaining the same conditions as the original contract. Conversion of a joint insurance option (joint first to die only) to two individual insurance options (dissolution): each insured's coverage is equal to 50% of the joint insurance option without evidence of insurability Disability credit insurance rider available on all basic coverages (whole life and term) Several complementary coverages available And much more 5

9 2. Traditional insurance clientele TRADITIONAL INSURANCE is a very flexible product offered as term and whole life coverages to provide customized financial protection to all family members and small business owners. Family market Traditional Life Insurance is ideal for individuals who want to insure their family's financial security in case of death, disability or critical illness. By taking into account each client's specific needs and budget, TRADITIONAL INSURANCE allows you to develop a customized life insurance plan for each stage in life, from generation to generation. TRADITIONAL INSURANCE meets several important needs, such as: Maintains lifestyle by preventing the family from making difficult decisions such as selling the family home and valuables, borrowing money to repay unpaid debts, abandoning plans for the future, etc. Preserves estate assets by providing the heirs with the funds needed to cover income taxes payable at death Smoothes transition by providing temporary financial support to supplement the family income, when one spouse dies Insures children by offering a wide range of insurance options at reasonable prices Makes an excellent gift to children and guarantees their insurability for life and critical illness insurance Provides the necessary funds for children s education costs in case one parent dies prematurely Eliminates debts by providing cash to repay the balance of the mortgage or other debts when one of the main sources of income is lost through the death of one parent Provides parents with the financial support needed to stay at their child s side if he is stricken with a critical illness Ensure the autonomy of future retirees by providing monthly benefits so that they can afford health care in case of loss of independent existence. 6

10 Sales approaches T10, T20 (R&C) and Pick-A-Term T10 to T40: Low cost term insurance providing coverage for a specified period. L10, L20, L65 and L100: Whole life insurance that allows the policy to be paid-up rapidly through guaranteed accelerated payments (L10, L20, Child Life & Health Duo, L65) Whole life insurance that comes with several guaranteed elements including a surrender value and paid-up insurance Insurance that automatically includes Guaranteed Insurability (GI) for insureds age 20 or under at issue. T100: Families seeking affordable, guaranteed and permanent insurance. Child Life & Health Duo Whole life insurance that accelerates payment of 50% of the face amount in case of critical illness before age 30. Integrated GI to increase the face amount even if a critical illness diagnosis was made. Ideal protection to offset a parent's lost income to allow him to stay at his child's bedside. The critical illness portion can be converted to permanent critical illness between age 18 and 30 without medical proof. Life and Serenity 65 Whole life insurance that provides a monthly benefit from the face amount, during the insured's lifetime, in case of loss of independent existence. The benefit paid at death is never lower than 25% of the initial face amount. Waiver of premiums in the event of the insured's disability (WPIDis) takes effect on the diagnosis of one of the covered critical illnesses or conditions. Reassuring coverage for future retirees who don't want to become a burden for their children when they can no longer live independently and their savings won't be enough to pay for the necessary care. Business market TRADITIONAL INSURANCE options are well suited to business owners. The success of small- and medium-sized businesses often depends on a minimal number of shareholders (one, two or three) or on a key individual in the business. Obviously, the death of one of these persons can have a serious impact on the continuation of the company's operations and can create a major financial liability. TRADITIONAL INSURANCE term options (and in some cases the permanent options) are particularly suited to meet the specific needs of this target market in the following situations: Financing a "buy-sell" agreement Purchasing a term life insurance policy to finance a buy-sell agreement between shareholders provides for the tax-free payment of the capital needed to purchase one of the partner's shares in the event of death. 7

11 The surviving partners use the death benefit to buy the deceased partner's shares, which prevents them from having to borrow money or sell assets to pay debts. TRADITIONAL INSURANCE is generally used in one of two ways: 1- Criss-cross coverage: Each partner can buy a life insurance policy on the lives of the other partners for a face amount equal to a proportion of the value of each partner's shares. Each partner is the policyowner and beneficiary of the life insurance policy (or policies if there are more than two partners) and pays the premiums. 2- Corporate-owned coverage: The company purchases a life insurance policy on the lives of each partner or a single policy to cover each partner. The company is the applicant, the premium payer and the beneficiary for each coverage. If one of the partners dies, the company uses the death benefit to purchase the deceased's shares. Key person insurance The advantage of buying a TRADITIONAL INSURANCE term insurance policy on the life of a person who occupies a key position is that it increases the company's financial security. The death benefit paid in the event of a key person's death temporarily covers lost income for the company and insures its survival while it takes the time to recruit and train a replacement. The company is the applicant, the premium payer and the beneficiary of the death benefit. Collateral insurance Banks and creditors may require that a life insurance policy be purchased to meet the financial obligations of a loan or line of credit in the event the owner or one of the business owners dies. Transfer of a family business to the next generation Life insurance proceeds can provide the cash needed to pay the capital gains taxes when the family business is transferred to the children on the death of the business owner. Multi-insured coverage With the TRADITIONAL INSURANCE whole life and term insurance options, up to nine individuals can be insured on the same contract including the principal insured. In addition, there can be more than one applicant on the policy. This flexibility considerably reduces policy fees, which is a great way for your clients to save. For the family: Combine the life insurance plan for all family members in the same contract. For the business: Combine a company's partners on the same policy. 8

12 3. Whole life insurance 3.1 Whole life insurance coverages Our whole life insurance is designed to offer financial protection throughout an insured's lifetime. The benefit is payable on the insured's death, regardless of when death occurs. This type of insurance differs from term insurance by offering additional guaranteed values such as guaranteed surrender value and guaranteed paidup insurance (except for T100). TRADITIONAL INSURANCE offers seven permanent insurance options: L10, L20, Child Life & Health Duo, L65, Life and Serenity 65, L100 and T100. These options provide a face amount guaranteed for life, and payable on the insured's death. All three options can be purchased as basic coverage or as a rider for each insured on a contract. L10: L20: permanent life insurance with premiums payable for 10 years permanent life insurance with premiums payable for 20 years Child Life & Health Duo: Whole life insurance whose premiums are payable until age 30, on which term critical illness coverage is automatically included (see section 3.10). L65: Whole life insurance whose premiums are payable until age 65 Life and Serenity 65: Whole life insurance whose premiums are payable until age 100, which provides for the payment of a monthly benefit from the face amount if the insured suffers from one of the four covered illnesses or medical conditions (see section 3.11). L100: Whole life insurance whose premiums are payable until age 100 T100: Permanent life insurance whose premiums are payable until age 100 The T100 doesn't accumulate a surrender value. 3.2 Types of insurance TRADITIONAL INSURANCE offers the following types of whole life coverage: Individual Joint insurance payable on the 1st death Joint insurance payable on the 2nd death Joint insurance payable on the 2nd death, paid-up on the 1st death Two people can be covered under joint whole life coverage. The Child Life & Health Duo and Life and Serenity 65 are offered on an individual basis only. 9

13 3.3 Type of face amount The face amount for all whole life coverages is level for the duration of the contract. However: 50% of the Child Life & Health Duo face amount can be paid in advance if a critical illness occurs before age 30. The death benefit paid under the Life and Serenity 65 coverage could be lower than the initial face amount if the Serenity 65 benefit has been paid. However, this benefit will never be lower than 25% of the face amount in-force before benefit payments began. 3.4 Face amount The following insurance amounts are offered for the principal insured and for each additional insured: L10, L20, L65, L100, T100: $10,000 to $10,000,000* Child Life & Health Duo: $20,000 to $500,000 Life and Serenity 65: $10,000 to $1,000,000 * A volume of insurance of over $10,000,000 requires a special quotation from Head Office. 3.5 Surrender value The L10, L20, Child Life & Health Duo, L65, Life and Serenity 65 and L100 whole life insurance options include guaranteed surrender values, starting on the 11th policy year. An important advantage for your clients! Note: The insurance protection for the particular insured terminates if the applicant withdraws the surrender value. The main advantages of the surrender value: Policy loan; Collateral assignment Liquidity Create a retirement income Possibility to pay up the coverage when less insurance is needed. 3.6 What happens at age 100? At age 100 of the insured, the policy is paid up, i.e. the insured remains covered until death, but no longer has to pay premiums. In general, at age 100, the surrender value is equal to the face amount. If the policyholder chooses to withdraw this surrender value, it will be taxable, whereas the face amount paid at death is not taxable. 10

14 3.7 Paid-up insurance Thanks to paid-up insurance, the policyowner can stop premium payments and maintain a reduced face amount for the life of the insured. As with the surrender value, the paid-up insurance is guaranteed starting on the 11th policy year. At age 100, the entire face amount of the insurance is paid-up. The face amount is maintained to so that it is transferred to the beneficiary tax-free at death. Example 1 20-year-old female non-smoker TRADITIONAL INSURANCE L100 $100,000 Annual premium: $344 Age Face amount Surrender value Paid-up insurance Guaranteed Guaranteed Guaranteed 30 $100,000 $340 $1, $100,000 $2,080 $18, $100,000 $5,590 $35, $100,000 $12,990 $51, $100,000 $18,930 $60, $100,000 $26,780 $65, $100,000 $48,620 $77, $100,000 $71,480 $88, $100,000 $100,000 $100,000 In this situation, at age 65 the client can benefit from a surrender value of $18,930 fully guaranteed. In the same example, the client can stop paying premiums at age 50 and still take advantage of a $35,000 guaranteed face amount. TRADITIONAL INSURANCE offers the best of both worlds: the security of solid insurance coverage combined with flexible premium payments! 3.8 Age at issue Child Life & Health Duo: 0 to 20 years L10, L20, L100: 0 to 70 years L65: 0 to 54 years Life and Serenity 65: 15 to 60 years T100: 0 to 85 years 11

15 3.9 Child Life & Health Duo The new Child Life & Health Duo is hybrid coverage that offers a practical solution to parents who want to insure their children and cover their critical illness insurance needs at an affordable cost. When a child is stricken with a critical illness, the Child Life & Health Duo provides parents with the financial support they need to stay at his side and assume the resulting expenses. Description: Offered starting at birth, on an individual basis only, the Child Life & Health Duo coverage contains whole life insurance coverage and term critical illness coverage until the insured reaches age 30. The critical illness coverage covers 30 illnesses and afflictions. This coverage is accelerated coverage since, if a critical illness diagnosis takes place before the insured reaches age 30, the insured can receive 50% of the life face amount. The remaining 50% will be payable at death. Here are the main product features: Issue age: 0 to 20 years Duration of premium payments: until the insured reaches age 30 Face amount: minimum $20,000 maximum $500,000 The critical illness face amount is equal to 50% of the life face amount. If the insured dies without having benefited from the critical illness coverage, the face amount at death corresponds to 100% of the life face amount. Otherwise it will be reduced to 50%. The face amount in case of death and the critical illness face amount are guaranteed. Upon the 30 th insured's birthday, the whole life insurance is paid up and the critical illness coverage terminates. If the policyholder chooses to use the surrender value to pay up the policy before the insured reaches age 30, the benefit payable in the event of critical illness (before the insured s 30th birthday) will be equal to 50% of the reduced life face amount. The critical illness insurance can be converted into permanent critical illness coverage without proof of insurability (see further down). The critical illness coverage covers: 25 critical illnesses and afflictions; 5 juvenile critical illnesses; the Prevention + benefit. The riders and additional benefits AF, GI and AD/AD&D are payable for 10 years, regardless of the age at issue of the insured. No change to the basic Child Life & Health Duo coverage can be made within 13 months after the contract is issued. 12

16 List of covered illnesses and afflictions Aortic Surgery Aplastic anemia Bacterial Meningitis Benign Brain Tumour Blindness Cancer (Life-Threatening) Coma Coronary Artery Bypass Surgery Deafness Dementia, including Alzheimer s Disease Heart Attack Heart Valve Replacement or Repair Kidney Failure Loss of Independent Existence Loss of Limbs Loss of Speech Major Organ Failure on Waiting List Major Organ Transplant Motor Neuron Disease Multiple Sclerosis Occupational HIV Infection Paralysis Parkinson's Disease and Specified Atypical Parkinsonian Disorders Severe Burns Stroke (Cerebrovascular Accident) The Child Life & Health Duo also covers the following 5 juvenile critical illnesses if a diagnosis is made before the insured's 25th birthday: Cerebral palsy Congenital heart disease Cystic fibrosis Muscular dystrophy Type 1 diabetes mellitus Refer to the appendices for a detailed description of the illnesses and medical conditions, including their exclusions and restrictions. Prevention + benefit The Prevention + benefit pays a partial benefit equal to 15% of the face amount up to $50,000 if the insured is diagnosed with one of the following seven diseases: Coronary angioplasty Cancers detected in early stages: o Gastrointestinal stromal tumours (GIST) and neuroendocrine tumours (classified less than AJCC Stage 2) o Stage 1 malignant melanoma o Stage A prostate cancer (T1a or T1b) o Ductal Carcinoma in situ of the breast o Papillary or follicular thyroid cancer stage T1 o Rai Stage 0 chronic lymphocytic leukemia (CLL) The Prevention + benefit can be paid up to four times for all of the illnesses above (once per illness) for the term of the contract. The insured can therefore receive up to a total of $200,000 with the Prevention + benefit. The contract continues under the same conditions after the benefit is paid and the face amount is not reduced by the amount paid. Diagnosis in Canada and the United States The diagnosis of a critical illness must be made by specialist authorized to exercise his profession in Canada or in the United States and be confirmed by modern investigation techniques relevant to this illness, normally used at the time of settlement. The specialist must not be the insured, the applicant, a relative or a business partner of the insured or of the applicant. 13

17 Diagnosis outside Canada and the United States When the diagnosis of a critical illness is made outside of Canada and the United States by a specialist exercising his profession in a jurisdiction deemed to be acceptable by the Company, the benefit is paid if all of the following conditions are respected: The Company receives all medical files; Based on the medical files received, the Company is assured that: - the same diagnosis would have been made if the critical illness or accident had been diagnosed by a specialist exercising his profession in Canada; - the same treatment would have been prescribed in accordance with Canadian standards; - the same treatment, including any required surgery, when applicable, would have been prescribed if the treatment had been provided in Canada. The Company may require that the insured undergo an independent medical examination performed for a physician designated by the Company. For elective surgery, the required medical examination will have to be performed before the surgery. LIMITATIONS AND EXCLUSIONS Limitations There is a 90-day exclusion moratorium period for cancer and benign brain tumor. Refer to appendix I Definitions of covered illnesses and conditions. After diagnosis of the following critical illness or condition, the benefit will be paid if Illness Details Paralysis Coma Loss of speech Bacterial meningitis The paralysis lasts for at least 90 days The Glasgow coma scale must indicate 4 or less for a continuous period of 96 hours The loss of speech persists for at least 180 days The meningitis results in a neurological deficit documented for at least 90 days from the date of diagnosis Exclusions No benefit is paid if the insured s condition: Results from self-inflicted injuries or an attempt to commit suicide, whether or not the insured was conscious of his or her actions Results from voluntary absorption of medications, drugs, steroids, narcotics or toxic substances, unless taken as prescribed by a licensed physician Results from wars, armed conflicts, riots, insurrections or public demonstrations, regardless of whether or not the insured was an active participant Results from service in the armed forces, engaged in surveillance, training, peacekeeping duties or war, whether war was declared or not 14

18 Occurs while the insured was committing, attempting to commit or provoking a criminal offence Occurs while the insured was driving a vehicle under the influence of drugs or a blood alcohol concentration exceeding 0.08 Conversion privilege for term critical illness coverage Between the insured's 18th and 30th birthdays, if no critical illness benefit has been paid, the term coverage can be converted into permanent critical illness coverage. The converted coverage can be part of a new critical illness contract. Critical illness face amount: maximum 50% of the life insurance face amount Premiums are calculated according to the attained age by the insured at conversion. The conversion takes place without proof of insurability if the face amount is equal to or lower than the critical illness face amount when the conversion takes place. Once the conversion is completed, only the whole life Child Life & Health Duo coverage remains in effect and the premium is unchanged. The life insurance face amount remains identical Life and Serenity 65 Life expectancy continues to increase, when health and home care services are more and more expensive. Baby boomers know that they risk outliving their savings, and they don t want to become a burden for their children. The following questions should be seriously considered by your clients: Who will take care of me if I am unable to take care of myself? Will I be able to leave some money to my heirs? Description: Life and Serenity 65 is whole life insurance with additional protection for the four main health problems that come with age. Starting at age 65, your client's health can allow him/her to profit from their life face amount by receiving a monthly benefit that they can use to pay for long-term health care. Life and Serenity 65 s unique advantage is that a minimum of 25% of the face amount will be paid to the beneficiaries upon death, even if the monthly benefits have completely depleted the life insurance coverage. Type of insurance: Whole life Type of coverage: Individual only Target clientele: People between age 40 and 60 Age at issue: 15 to 60 Premium payment period: up to age 100 for the insured Face amount: minimum of $10,000 maximum of $1,000,000 Designation of beneficiaries: The beneficiary of the Serenity 65 portion must be the policyholder. Serenity 65 Coverage Type of benefit: Monthly benefit equalling 1% of the life face amount in force when benefit payments begin The date at which the annuity becomes payable: The monthly contract anniversary that immediately follows the insured s 65th birthday. If the insured is younger than age 65 at the time of diagnosis, the benefit payments will begin as of their 65th birthday. Covered illnesses and medical conditions 15

19 Dementia, including Alzheimer s Disease Parkinson's Disease and Specified Atypical Parkinsonian Disorders Paralysis Loss of independent existence Please refer to Appendix 1 for the definitions of these illnesses and medical conditions. Start date for benefit payment: The benefit is payable starting from the monthly contract anniversary immediately following the diagnosis. For Life and Serenity 65, the term diagnosis means confirmation by a specialist that the insured s state of health meets the definition of the critical illness that he/she is stricken with, as described in the contract. Example In June 2011, Paul, age 68, is diagnosed with Alzheimer s disease. On this date, Paul is independent and can still perform the activities of daily living without supervision. Paul will therefore not be eligible for the Serenity 65 benefit until a specialist confirms that his state of health meets the definition of Alzheimer s disease given in the contract. Duration of benefit payment: The benefit is paid until the first of the following events: The death of the insured At the time the face amount is completely depleted (after 100 months). Once benefit payment has begun, it cannot be temporarily interrupted. Taxation of the monthly benefit: The benefit is non-taxable. There is a waiver of premiums upon diagnosis and at which time: The surrender value of Life and Serenity 65 is no longer available. The reduced paid-up insurance no longer applies. Impact of benefit payment: The face amount is decreased by an amount equal to the benefits paid; however, the death benefit is never less than 25% of the face amount. Risk selection: In addition to the usual selection for life insurance, a simplified questionnaire with six questions (Q9A) must be filled out to qualify for the Serenity 65 coverage. The proposed insured must answer NO to all the questions. Death benefit The death benefit is equal to the remaining face amount at the time of death, BUT NEVER LESS THAN 25% OF THE INITIAL FACE AMOUNT. Example 1 Example 2 Example 3 Example 4 Face amount at the beginning of benefit payment Cumulative total of monthly payments on date of death $150,000 $150,000 $150,000 $150,000 $0 $60,000 $135,000 $150,000 Death benefit paid to heirs $150,000 $90,000 $37,500 $37,500 Total paid $150,000 $150,000 $172,500 $187,500 16

20 Policy loan: The benefit is payable if all amounts due to the company were reimbursed Guaranteed Insurability (GI) included automatically This benefit is automatically included in all TRADITIONAL INSURANCE L10, L20, Child Life & Health Duo, L65 and L100 whole life options issued between 0 and 20 years of age. It offers the applicant the possibility to subscribe to an additional amount of insurance on the insured s life, without proof of insurability. The applicant may exercise this option at certain ages or when specific events take place, until the insured reaches age 40. Exercise conditions The option to increase the insurance can be exercised in the 31 days following the insured s birthday at the attained ages of 20 and 25 or in the 31 days after one of the following events: obtain a college or university degree, marriage of the insured, birth or adoption of a child. Minimum: $10,000 Maximum per subscription: 100% of the initial face amount, to a maximum of $50,000 Total maximum increase: 200% of the initial face amount, to a maximum of $150,000 (including the nonsmoker bonus, if any). This maximum is applicable per insured. Maximum number of exercises per insured The number of underwriting exercise rights is limited to two for the duration of the contract, before the insured reaches age 40, or a maximum of three rights when the insured has another permanent TRADITIONAL INSURANCE coverage containing a GI benefit included automatically. When an underwriting right is exercised, the additional amount of requested life insurance must be a type of insurance which is usually issued by the company, except for any term insurance. The benefit is only granted for standard risks. The insurance premium is based on the rates in effect at the attained age according to the same risk class (sex and tobacco status) as the basic contract to which the guaranteed insurability is attached. Preferred rates are not applicable. The GI included automatically contains different features from Guarantee Insurability (GI) offered as an additional benefit. For more details on this latter benefit, refer to the Riders and Additional Benefits Guide on the Extranet (Documentation Center). 17

21 4. Term insurance 4.1 Choice of coverages TRADITIONAL INSURANCE offers two choices of term coverage: T10 (R&C): Renewable and convertible term life insurance for a 10-year term. T20 (R&C): Renewable and convertible term life insurance for a 20-year term. Pick-A-Term which offers you terms ranging from T10 to T40 These options offer a guaranteed face amount only while the insurance is in force. These options can be purchased as basic coverage or as a rider for each insured on a contract. 4.2 Types of insurance TRADITIONAL INSURANCE offers the following types of term coverage: Individual Joint insurance payable on the 1st death, which can cover up to 5 people (ideal for business clients) Joint insurance payable on the 2nd death (T10 and T20 (R&C) only) 4.3 Types of face amount T10 (R&C) and T20 (R&C) For T10 (R&C) and T20 (R&C) coverages, the face amount is level for the duration of the term. Pick-A-Term Pick-A-Term offers two types of face amount: level or decreasing to 50%. Level: The face amount is equal to the initial face amount for the duration of the coverage. This type of face amount is ideal for people who want a fixed amount of insurance. Decreasing to 50%: The face amount decreases once a year, on the annual anniversary of the coverage, to imitate a mortgage decrease. The initial face amount can be higher than the balance of the loan or credit line when the protection is established. For a decreasing to 50% face amount, the face amount decreases to reach 50% of the initial face amount and then remains level. The decrease is calculated like a mortgage amortization calendar, at an 8% interest rate. A calendar showing the decrease in the face amount attached to each new contract. The face amount cannot be changed from decreasing to level during the term. 18

22 The face amount doesn t have to correspond exactly to the balance of the loan or credit line and no proof of loan is required at issue or when a claim is made. In the 13 months after the contract is issued, the type of face amount can be changed from one to another, i.e. decreasing to level or level to decreasing. When the face amount is changed from decreasing to level, the established face amount will correspond to the current face amount when the change is made. Afterward, this type of change can no longer be made. 4.4 Face amount The following insurance amounts are offered for the principal insured and each additional insured: T10 (R&C), T20 (R&C): $10,000 to $10,000,000* Pick-A-Term (all terms): $20,000 to $10,000,000* * A volume of insurance of over $10,000,000 requires a special quotation from Head Office. 4.5 Age at issue T10 (R&C), T20 (R&C): 0 to 70 years Pick-A-Term: Level: 0 to (85 less duration of the term)* Decreasing to 50%: 18 to (85 less duration of the term)* *The age at issue cannot exceed 70 years. 4.6 Renewal privilege T10 (R&C) and T20 (R&C) T10 (R&C) and T20(R&C) term options are renewable until age 85, age at which the protection ends. Renewal premiums are guaranteed and calculated according to the insured s attained age when the renewal takes place. Renewal premiums are established according to the initial risk class (nonpreferred, Preferred or Elite) and the initial smoking status. Renewal without evidence of insurability if the face amount is equal to or lower than the basic face amount and it is renewed for the same period (until the insured reaches age 85). Renewal with evidence of insurability if the insured wants to change risk classes. If the insured wants to take advantage of current rates, they must purchase a new policy by providing evidence of insurability and all documents required to proceed with new issue. Pick-A-Term At the end of the initial term, the protection is automatically renewed under the following conditions: 19

23 Renewal premiums are established on a YRT basis. Renewal premiums are guaranteed at issue and are calculated according to the insured s attained age when the renewal takes place. Renewal premiums could change if the face amount changes at renewal. If the contract contains disability credit coverage, it is renewed automatically and the premium remains unchanged until the end of the coverage, i.e. to age 60 for the 2- or 5-year benefit options or to age 65 for the until age 65 option. Renewal without evidence of insurability if: - The face amount is equal to or lower than the face amount at time of renewal. Renewal with evidence of insurability if: - The insured wants to increase the face amount or change his smoking status. At age 100 (of the oldest person on joint protection), the insurance is paid-up for the entire face amount. The face amount is maintained. The applicant must send a written request to Head Office to stop the automatic renewal. 4.7 Conversion privilege From term to permanent Before the insured s 71 st birthday, T10 (R&C), T20 (R&C) and Pick-A-Term protections are convertible to any traditional whole life or universal life product offered by the company at the time of conversion. However, Life and Serenity 65 and Child Life & Health Duo are not available for conversion. Individual life products can only be converted to individual life products. Similarly, joint first-to-die or last-to-die life insurance can only be converted to whole life joint first-to-die or last-to-die coverage. Premiums are calculated according to the insured s attained age at the time of conversion. They are established according to the initial risk class (non-preferred, Preferred or Elite) and the initial smoking status. Conversion without evidence of insurability if: - The face amount is equal to or less than the basic face amount of the term insurance. Conversion with evidence of insurability if the insured wants to: - Increase the face amount, change risk classes or modify smoking status. For Pick-A-Term coverage with decreasing death benefit, the face amount for the new policy will be equal to the face amount at the time of conversion. Once the Pick-A-term life coverage is converted to permanent coverage, the disability coverage terminates. For conversion to EquiBuild, the only PUA purchase option available is the Bonus PUA option (not the Fund PUA option) From term to term A 10-year term insurance coverage (T10 R&C and Pick-A-Term 10 years) may be converted to a 20 or 30-year term insurance coverage, depending on the client s needs. 20

24 Conversions permitted: The term to term conversion may only occur within the first five (5) years of the policy, without exceeding the maximum age when the converted product is issued; Partial conversion: Individual life coverage may only be converted to individual life coverage; additionally, joint first-to-die coverage (or joint-last-to-die) can be converted to a joint first-to-die coverage (or joint-last-to-die). Conversions not permitted: Conversion to Pick-A-Term with a face amount decreasing to 50%. Calculating the premium: Premiums are calculated based on the age of the insured when the conversion occurs. Premiums are set while maintaining the initial risk class (Non-preferred, Preferred, Elite) and the initial tobacco status. Proof of insurability: Conversion is done without proof of insurability if the face amount is equal to or less than the basic 10- year term face amount; Conversion is done with proof of insurability if the insured wishes to increase the face amount, change the initial risk class or tobacco status. Table Conversion options for T10 Start T10 R&C Pick-A-Term 10 years T10 R&C UL End T20 R&C Pick-A-Term 20 years (level) Pick-A-Term 30 years (level) T20 R&C UL (if the basic UL policy is in effect) T20 R&C Pick-A-Term 20 years (level) Pick-A-Term 30 years (level) T20 R&C UL (if the basic UL policy is in effect) T20 R&C UL T20 R&C Traditional (new policy if required) Pick-A-Term 20 years (new policy if required) Pick-A-Term 30 years (new policy if required) 21

25 5. Joint insurance 5.1 Joint insurance options Minimum age at issue: 15 for each insured. Whole life insurance Joint whole life insurance insures the life of two people and provides for the payment of the face amount according to one of the following three options: Joint insurance payable on the first death The death benefit is payable when the first insured dies and the policy terminates. In addition if, within 45 days following the first death, the surviving insured dies and is under age 70, the Company will pay an additional amount equal to the death benefit to the beneficiary. Day 0 Day 1-45 Face amount Death of insured 1 or 2 No death 1 time Death of the insured The surviving insured dies while aged less than 2 times 1 or 2 70 years. In the case of simultaneous death of the insured or in circumstances where it is not possible to determine which insured died first, the youngest insured is deemed to have survived the other insured. Simultaneous death of both insured If one of the two insured is under 70 years old If the two insured are aged over 70 years old Face amount 2 times 1 time Joint insurance payable on the second death The death benefit is payable when the second insured dies and the insurance costs continue after the first death. Joint insurance payable on the second death, paid-up on the first death The death benefit is payable when the second insured dies and the costs of insurance are paid up after the first death. This option is only available for whole life coverages (L10, L20, L65, and L100 and T100). Joint insurance can be purchased on the lives of two people of the same sex or the opposite sex. 22

26 Term insurance T10 (R&C) and T20 (R&C) The T10 (R&C) and T20 (R&C) coverages offer the possibility to purchase joint insurance according to the following two options: Joint insurance payable on the first death Two to five people can be covered under joint insurance payable on the first death. The death benefit is payable when the first insured dies and the policy terminates. In addition if, within 45 days following the first death, the surviving insured dies and is under age 70, the Company will pay an additional amount equal to the death benefit to the beneficiary. Joint insurance payable on the last death The death benefit is payable when the second insured dies and the insurance costs continue after the first death. Two to five lives can be covered under joint insurance payable on the last death. Pick-A-Term Pick-A-Term offers the possibility to purchase joint insurance on two to five people according to the following option: Joint insurance payable on the first death: The death benefit is payable when the first insured dies and the policy terminates. Extended coverage If, within 45 days following the first death, one of the surviving insureds dies and is under age 70, the Company will pay an additional amount equal to the death benefit to the beneficiary. Should both life insureds die simultaneously or if circumstances make it impossible to determine who died first for the purpose of death benefit payments, the younger life insured will be deemed to have survived the other. Death #1 : Day 0 Death #2 : Day 1 to 45 Face Amount Insured 1 or 2 None 1 time Insured 1 or 2 Insured 1 and 2 Insured 1 and 2 Insured 1 or 2 is younger than 70 years old Insured 1 or 2 if one of the insured is younger than 70 years old If both insured are older than 70 years old 2 times 2 times 1 time This benefit is granted under the condition that the choice described under section New Contract below has not been exercised. 23

27 5.2 Premiums The joint insurance premium is calculated according to the equivalent age or the percentage (%) rule (see the software for the premium calculation.) The percentage rule grants a discount on the total of both premiums taken individually. Premium discount (%) Age difference* 1st death Last death 0 to 10 years 10% 65% 11 years and over 5% 60% *When Pick-A-Term joint protection covers more than 2 insureds, the age difference is calculated according to the age of the youngest insured and the oldest insured. SUMMARY TABLE Availability Joint insurance payable on: Coverage Calculation Method 1 st death Last Death Last death, paid up on the first death L10, L20, L65, L100, T100 Equivalent age (Male non-smoker) T10 (R&C) T20 (R&C) % rule N/A Pick-A-Term % rule N/A N/A 24

28 5.3 Modifications after issue New contract following a death Applicable to joint 1st to die insurance only. Within 45 days following the death of one of the insureds, the surviving insured(s) under age 70 can request to convert the insurance without proof of insurability: into individual whole life insurance, if the joint coverage was on two lives; into joint whole life insurance, if the joint coverage was on at least three lives. The face amount of the new policy must not exceed the face amount of the previous policy on a joint basis. The new coverage is issued at the surviving insured's attained age according to the same conditions as the joint insurance coverage and initial smoking status Dissociation Subject to the consent of the applicant and irrevocable beneficiary, if any, the additional insureds can dissociate and continue to be insured according to their own TRADITIONAL INSURANCE policy or an equivalent policy, without submitting proof of insurability. The following terms apply to a dissociation: The effective date of the new policy is the same as the insurance in force according to the terms of the old policy. The amount of insurance under the new policy is the same as that in-force under the old policy. Annual policy fees are payable under the new policy Dissolution Dissolution is only allowed for joint 1st to die insurance only TRADITIONAL INSURANCE gives the insureds (joint) or business partners the ability to convert their joint insurance coverage to individual coverage on the life of each insured without evidence of insurability. The L20, L65 and L100 plans established on a joint basis must not have been transformed into reduced paidup insurance in order to use this option. When there is a dissolution: New policies are issued: on an individual basis on the date the request is received without proof of insurability 25

29 according to the same risk class and tobacco status of each insured on the original issue date of the joint insurance policy Each insured's coverage is equal to 50% of the joint face amount on the previous policy. The premiums are established according to: the age of each insured and the rates in effect on the date the joint policy is issued the rate band corresponding to the new insurance amount The effective date of the individual contracts is the same as the joint contract. 5.4 Proposal changes when one of the lives is not insurable Only a joint last-to-die policy provides coverage on an uninsurable life. The uninsurable life is eligible for the following coverage: L10, L20, L65, L100, T100, T10 (R&C), T20 (R&C). A) Joint first-to-die insurance proposal This type of joint insurance is not permitted on an uninsurable life. The initial joint insurance application will be modified to offer a policy on the insurable life only. The premiums are established according to the age, sex and risk class. B) Joint last-to-die insurance proposal The initial joint insurance application will be maintained and a joint last to die policy will be issued. The premiums are established according to the age, sex and risk class. C) Joint last-to-die insurance proposal, paid-up on the 1st death This type of joint insurance is not permitted on an uninsurable life. The initial joint insurance application will be maintained and a joint last-to-die policy will be issued without being paid up on the first death. The premiums are established according to the age, sex and risk class. Please note that joint coverage with an uninsurable life cannot be illustrated. 5.5 Medical requirements Each insured is subject to the medical requirements corresponding to his or her actual age (not the equivalent age). 26

30 6. Premiums 6.1 Premiums by band The life insurance premiums are based on the face amount at issue. They are level and guaranteed for the initial term of the contract. The premiums are based on the age, sex, tobacco use and state of health of each insured. Premiums are offered according to the following five bands: Band Insurance volume ($) 1 10,000 to 49, ,000 to 99, ,000 to 199, ,000 to 499, ,000 + These bands apply to the face amount of the individual coverage for each insured, and not to the combined insurance coverages. 6.2 Preferred underwriting TRADITIONAL INSURANCE offers preferred rates on its term options, for both smoker and non-smoker insureds, who are aged between 15 and 80 years old. Preferred underwriting is available for a volume of insurance equal to or greater than $500,000 per contract, namely band 5. BAND INSURANCE VOLUME ($) PREFERRED CLASSES Preferred Elite (Smoker/non-smoker) (Smoker/non-smoker) 5 500, $200,000 to 499,999 N/A 3 100,000 to 199,999 N/A 2 $50,000 to 99,999 N/A 1 10,000 to 49,999 N/A 27

31 Class eligibility Preferred (smoker/non smoker): Eligible to the insured who presents a preferred risk compared to the average insured. Elite (smoker/non smoker): Eligible to the insured that presents an ultimate preferred risk compared to the average insured. These four preferred classes allow the client to obtain a reduced premium based on state of health, physical fitness, lifestyle and family history. However, medical evidence is required to allow Underwriting to categorize the insured into the appropriate class. For more details, consult the Preferred Underwriting Information Guide (F13-408A) or the requirements Table (F13-166A) available on the Document Centre. 6.3 Payment options The client can choose to pay premiums on an annual, semi-annual, quarterly or monthly basis through preauthorized cheques (PAC). If the payments are monthly, the premium is equal to the annual premium multiplied by To find out the conversion factor for the other options, contact Head Office. 7. Complementary coverages Complete insurance coverage adapted to each individual s needs is the cornerstone of a good financial security program. That is why we encourage you to offer the following additional benefits to your clients according to their needs so that they will be well-protected when certain difficult situations arise Additional Benefits: Accidental Death (AD) Accidental Death and Dismemberment (AD&D) Waiver of premiums in the event of the applicant's disability (WPDis) Waiver of premiums in the event of the insured's disability (WPIDis) Waiver of premiums in the event of the applicant's death (WPD) Accidental Fracture (AF) Guaranteed Insurability (GI) Child Critical Illness For joint enrolment in the Pick-A-Term basic plan, all insureds must be covered with the same additional benefits. Riders: Disability Credit Rider Hospitalization Hospitalisation and Home Care Critical Illness Child Module Child Module PLUS Supplemental Income (SI) Paramedical care in case of accident 28

32 You will find the details of these coverages in the RIDERS AND ADDITIONAL BENEFITS GUIDE on the Document Centre. Note: When more than two lives are covered by joint insurance, only the WPDis, WPD and Disability Credit Rider supplementary coverages are available. 8. Policy fees Individual insurance 1 insured: $60 2 or more insureds: $90 Joint insurance No additional insured: $90 With additional insured: $120 These fees are guaranteed and are charged as long as the policy includes non paid-up insurance coverage. 9. Transaction fees You can find the service charges on the Document Centre under Policies and procedures guide/transaction Fees section. 29

33 Appendix I - Critical Illness and Medical Conditions Definitions You will find here below definitions for each of the 25 Critical Illnesses and medical conditions covered by the contract. Aortic Surgery The undergoing of Surgery for disease of the aorta requiring excision and surgical replacement of any part of the diseased aorta with a graft. Aorta means the thoracic and abdominal aorta but not its branches. The Surgery must be determined to be medically necessary by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable for angioplasty, intra-arterial procedures, percutaneous trans-catheter procedures or non-surgical procedures. Aplastic Anemia A definite Diagnosis of a chronic persistent bone marrow failure, confirmed by biopsy, which results in anemia, neutropenia and thrombocytopenia requiring blood product transfusion, and treatment with at least one of the following: - marrow stimulating agents; - immunosuppressive agents; - bone marrow transplantation. The Diagnosis of Aplastic Anemia must be made by a Specialist. Bacterial Meningitis A definite Diagnosis of meningitis, confirmed by cerebrospinal fluid showing growth of pathogenic bacteria in culture, resulting in neurological deficit documented for at least 90 days from the date of Diagnosis. The Diagnosis of Bacterial Meningitis must be made by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable for viral meningitis. Benign Brain Tumour A definite Diagnosis of a non-malignant tumour located in the cranial vault and limited to the brain, meninges, cranial nerves or pituitary gland. The tumour must require surgical or radiation treatment or cause irreversible objective neurological deficit(s). The Diagnosis of Benign Brain Tumour must be made by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable if, within the first 90 days following the later of, the Effective Date of the Policy, or the date of last Reinstatement of the Policy, the Life Insured has any of the following: - signs, symptoms or investigations that lead to a Diagnosis of Benign Brain Tumour (covered or excluded under the policy), regardless of when the Diagnosis is made; or - a Diagnosis of Benign Brain Tumour (covered or excluded under the policy). 30

34 Medical information about the Diagnosis and any signs, symptoms or investigations leading to the Diagnosis must be reported to the Company within 6 months of the date of the Diagnosis. If this information is not provided within this period, the Company has the right to deny any claim for Benign Brain Tumour or, any Critical Illness caused by any Benign Brain Tumour or its treatment. No Critical Illness Benefit will be payable for pituitary adenomas less than 10 mm. Blindness A definite Diagnosis of the total and irreversible loss of vision in both eyes, evidenced by: - the corrected visual acuity being 20/200 or less in both eyes; or, - the field of vision being less than 20 degrees in both eyes. The Diagnosis of Blindness must be made by a Specialist. Cancer (Life-Threatening) A definite Diagnosis of a tumour, which must be characterized by the uncontrolled growth and spread of malignant cells and the invasion of tissue. Types of cancer include carcinoma, melanoma, leukemia, lymphoma, and sarcoma. The diagnosis of Cancer must be made by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable under this condition if, within the first 90 days following the later of, the Effective Date of the Policy, or the date of last Reinstatement of the Policy, the Life Insured has any of the following: - signs, symptoms or investigations, that lead to a diagnosis of Cancer (covered or excluded under the Policy), regardless of when the Diagnosis is made; or - a Diagnosis of Cancer (covered or excluded under the Policy). Medical information about the Diagnosis and any signs, symptoms or investigations leading to the Diagnosis must be reported to the Company within 6 months of the date of the Diagnosis. If this information is not provided within this period, the Company has the right to deny any claim for cancer or, any Critical Illness caused by any cancer or its treatment. No Critical Illness Benefit will be payable for the following: - lesions described as benign, pre-malignant, uncertain, borderline, non-invasive, carcinoma in-situ (Tis), or tumors classified as Ta; - malignant melanoma skin cancer that is less than or equal to 1.0 mm in thickness, unless it is ulcerated or is accompanied by lymph node or distant metastasis; - any non-melanoma skin cancer, without lymph node or distant metastasis; - prostate cancer classified as T1a or T1b, without lymph node or distant metastasis; - papillary thyroid cancer or follicular thyroid cancer, or both, that is less than or equal to 2.0 cm in greatest diameter and classified as T1, without lymph node or distant metastasis; - chronic lymphocytic leukemia classified less than Rai stage 1; or - malignant gastrointestinal stromal tumours (GIST) and malignant carcinoid tumours, classified less than AJCC Stage 2. For purposes of the Policy, the terms Tis, Ta, T1a, T1b, T1 and AJCC Stage 2 are to be applied as defined in the American Joint Committee on Cancer (AJCC) cancer staging manual, 7 th Edition,

35 For purposes of the Policy, the term Rai staging is to be applied as set out in KR Rai, A Sawitsky, EP Cronkite, AD Chanana, RN Levy and BS Pasternack: Clinical staging of chronic lymphocytic leukemia. Blood 46:219, Coma A definite Diagnosis of a state of unconsciousness with no reaction to external stimuli or response to internal needs for a continuous period of at least 96 hours, and for which period the Glasgow coma score must be 4 or less. The Diagnosis of Coma must be made by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable for: - a medically induced coma; or, - a coma which results directly from alcohol or drug use; or, - a Diagnosis of brain death. Coronary Artery Bypass Surgery The undergoing of heart Surgery to correct narrowing or blockage of one or more coronary arteries with bypass graft(s). The Surgery must be determined to be medically necessary by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable for angioplasty, intra-arterial procedures, percutaneous trans-catheter procedures or non-surgical procedures. Deafness A definite Diagnosis of the total and Irreversible loss of hearing in both ears, with an auditory threshold of 90 decibels or greater within the speech threshold of 500 to 3,000 hertz. The Diagnosis of Deafness must be made by a Specialist. Dementia, including Alzheimer s Disease A definite Diagnosis of dementia, which must be characterized by a progressive deterioration of memory and at least one of the following areas of cognitive function: - aphasia (a disorder of speech); - apraxia (difficulty performing familiar tasks); - agnosia (difficulty recognizing objects); or - disturbance in executive functioning (e.g. inability to think abstractly and to plan, initiate, - sequence, monitor, and stop complex behaviour), which is affecting daily life. The Life Insured must exhibit: - dementia of at least moderate severity, which must be evidenced by a Mini Mental State Exam of 20/30 or less, or equivalent score on another generally medically accepted test or tests of cognitive function; and - evidence of progressive worsening in cognitive and daily functioning either by serial cognitive tests or by history over at least a 6 month period. The Diagnosis of Dementia must be made by a Specialist. 32

36 Exclusion from this definition: No Critical Illness Benefit will be payable for affective or schizophrenic disorders, or delirium. For purposes of the Policy, reference to the Mini Mental State Exam is to Folstein MF, Folstein SE, McHugh PR, J Psychiatr Res. 1975;12(3):189. Heart Attack A definite Diagnosis of the death of heart muscle due to obstruction of blood flow, that results in rise and fall of biochemical cardiac markers to levels considered Diagnostic of myocardial infarction, with at least one of the following: - heart attack symptoms; - new electrocardiogram (ECG) changes consistent with a heart attack; - development of new Q waves during or immediately following an intra-arterial cardiac procedure including, but not limited to, coronary angiography and coronary angioplasty. The Diagnosis of Heart Attack must be made by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable for: - elevated biochemical cardiac markers as a result of an intra-arterial cardiac procedure, including, but not limited to, coronary angiography and coronary angioplasty, in the absence of new Q waves, or - ECG changes suggesting a prior myocardial infarction, which do not meet the Heart Attack definition as described above. Heart Valve Replacement or Repair The undergoing of Surgery to replace any heart valve with either a natural or mechanical valve or to repair heart valve defects or abnormalities. The Surgery must be determined to be medically necessary by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable for angioplasty, intra-arterial procedures, percutaneous trans-catheter procedures or non-surgical procedures. Kidney Failure A definite Diagnosis of chronic Irreversible failure of both kidneys to function, as a result of which regular haemodialysis, peritoneal dialysis or renal transplantation is initiated. The Diagnosis of Kidney Failure must be made by a Specialist. Loss of Independent Existence A definite Diagnosis of the total inability to perform, by oneself, at least 2 of the following 6 Activities of Daily Living for a continuous period of at least 90 days with no reasonable chance of recovery. The Diagnosis of Loss of Independent Existence must be made by a Specialist. Activities of Daily Living are: 33

37 - bathing the ability to wash oneself in a bathtub, shower or by sponge bath, with or without the aid of assistive devices; - dressing the ability to put on and remove necessary clothing, braces, artificial limbs or other surgical appliances with or without the aid of assistive devices; - toileting the ability to get on and off the toilet and maintain personal hygiene with or without the aid of assistive devices; - bladder and bowel continence the ability to manage bowel and bladder function with or without protective undergarments or surgical appliances so that a reasonable level of hygiene is maintained; - transferring the ability to move in and out of a bed, chair or wheelchair, with or without the aid of assistive devices; and - feeding the ability to consume food or drink that already has been prepared and made available, with or without the use of assistive devices. Loss of Limbs A definite Diagnosis of the complete severance of two or more limbs at or above the wrist or ankle joint as the result of an Accident or medically required amputation. The Diagnosis of Loss of Limbs must be made by a Specialist. Loss of Speech A definite Diagnosis of the total and Irreversible loss of the ability to speak as the result of physical injury or disease, for a period of at least 180 days. The Diagnosis of Loss of Speech must be made by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable for all psychiatric related causes. Major Organ Failure on Waiting List A definite Diagnosis of the Irreversible failure of the heart, both lungs, liver, both kidneys or bone marrow, and transplantation must be medically necessary. To qualify under Major Organ Failure on Waiting List, the Life Insured must become enrolled as the recipient in a recognized transplant centre in Canada or the United States of America that performs the required form of transplant Surgery. For the purposes of the Survival Period, the date of Diagnosis is the date of the Life Insured s enrolment in the transplant centre. The Diagnosis of the major organ failure must be made by a Specialist. Major Organ Transplant A definite Diagnosis of the Irreversible failure of the heart, both lungs, liver, both kidneys or bone marrow, and transplantation must be medically necessary. To qualify under Major Organ Transplant, the Life Insured must undergo a transplantation procedure as the recipient of a heart, lung, liver, kidney or bone marrow, and limited to these entities. The Diagnosis of the major organ failure must be made by a Specialist. Motor Neuron Disease 34

38 A definite Diagnosis of one of the following: amyotrophic lateral sclerosis (ALS or Lou Gehrig s disease), primary lateral sclerosis, progressive spinal muscular atrophy, progressive bulbar palsy, or pseudo bulbar palsy, and limited to these conditions. The Diagnosis of Motor Neuron disease must be made by a Specialist. Multiple Sclerosis A definite Diagnosis of at least one of the following: - two or more separate clinical attacks, confirmed by magnetic resonance imaging (MRI) of the nervous system, showing multiple lesions of demyelination; or, - well-defined neurological abnormalities lasting more than 6 months, confirmed by MRI imaging of the nervous system, showing multiple lesions of demyelination; or, - a single attack, confirmed by repeated MRI imaging of the nervous system, which shows multiple lesions of demyelination which have developed at intervals at least one month apart. The Diagnosis of Multiple Sclerosis must be made by a Specialist. Occupational HIV Infection A definite Diagnosis of infection with Human Immunodeficiency Virus (HIV) resulting from accidental injury during the course of the Life Insured s normal occupation, which exposed the person to HIV contaminated body fluids. The accidental injury leading to the infection must have occurred after the later of the Effective Date of the Policy, or the Effective Date of last Reinstatement of the Policy. The critical Illness Benefit is payable if all of the following conditions are satisfied: - The accidental injury must be reported to the insurer within 14 days of the accidental injury; - A serum HIV test must be taken within 14 days of the accidental injury and the result must be negative; - A serum HIV test must be taken between 90 days and 180 days after the accidental injury and the result must be positive; - All HIV tests must be performed by a duly licensed laboratory in Canada or the United States of America; - The accidental injury must have been reported, investigated and documented in accordance with current Canadian or United States of America workplace guidelines. The Diagnosis of Occupational HIV Infection must be made by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable if: - The Life Insured has elected not to take any available licensed vaccine offering protection against HIV; or, - A licensed cure for HIV infection has become available prior to the accidental injury; or, - HIV infection has occurred as a result of non-accidental injury including, but not limited to, sexual transmission and intravenous (IV) drug use. Paralysis A definite Diagnosis of the total loss of muscle function of two or more limbs as a result of injury or disease to the nerve supply of those limbs, for a period of at least 90 days following the precipitating event. The Diagnosis of Paralysis must be made by a Specialist. 35

39 Parkinson's Disease and Specified Atypical Parkinsonian Disorders* Parkinson s Disease is defined as a definite Diagnosis of primary Parkinson s disease, a permanent neurologic condition which must be characterized by bradykinesia (slowness of movement) and at least one of: muscular rigidity or rest tremor. The Life Insured must exhibit objective signs of progressive deterioration in function for at least one year, for which the treating neurologist has recommended dopaminergic medication or other generally medically accepted equivalent treatment for Parkinson s Disease. Specified Atypical Parkinsonian Disorders are defined as a definite Diagnosis of progressive supranuclear palsy, corticobasal degeneration, or multiple system atrophy. The Diagnosis of Parkinson s Disease or a Specified Atypical Parkinsonian Disorder must be made by a neurologist. Exclusion from this definition: No Critical Illness Benefit will be payable for Parkinson s Disease or Specified Atypical Parkinsonian Disorders if, within the first year following the later of, the Effective Date of the Policy, or the date of last Reinstatement of the Policy, the Life Insured has any of the following: - signs, symptoms or investigations that lead to a diagnosis of Parkinson s Disease, a Specified Atypical Parkinsonian Disorder or any other type of parkinsonism, regardless of when the diagnosis is made; or - a Diagnosis of Parkinson s Disease, a Specified Atypical Parkinsonian Disorder or any other type of parkinsonism. Medical information about the diagnosis and any signs, symptoms or investigations leading to the Diagnosis must be reported to the Company within 6 months of the date of the Diagnosis. If this information is not provided within this period, the Company has the right to deny any claim for Parkinson s Disease or Specified Atypical Parkinsonian Disorders or, any critical illness caused by Parkinson s Disease or Specified Atypical Parkinsonian Disorders or its treatment. No Critical Illness Benefit will be payable for any other type of parkinsonism. Severe Burns A definite Diagnosis of third-degree burns over at least 20% of the body surface. The Diagnosis of Severe Burns must be made by a Specialist. Stroke (Cerebrovascular Accident) A definite Diagnosis of an acute cerebrovascular event caused by intra-cranial thrombosis or haemorrhage, or embolism from an extra-cranial source, with acute onset of new neurological symptoms, and new objective neurological deficits on clinical examination, persisting for more than 30 days following the date of Diagnosis. These new symptoms and deficits must be corroborated by Diagnostic imaging testing. The Diagnosis of Stroke must be made by a Specialist. Exclusion from this definition: No Critical Illness Benefit will be payable for: - Transient Ischaemic Attacks; or, - Intracerebral vascular events due to trauma; or, - Lacunar infarcts which do not meet the definition of stroke as described above. 36

40 Appendix II - Critical Illness Juvenile Definitions This list provides definitions for each of the 5 Critical Illnesses and medical conditions covered by the contract. Cerebral Palsy A definitive Diagnosis of Cerebral Palsy, a non-progressive neurological defect characterized by spasticity and incoordination of movements. The Diagnosis of Cerebral Palsy must be made by a Specialist. Congenital Heart Disease A definite Diagnosis of Congenital Heart Disease listed below, made by a Specialist and supported by appropriate cardiac imaging. For the purposes of the Survival Period, the date of the Diagnosis is the latter of the end date of the Survival Period and the end date of the 30-day period following the birth of the Life Insured. 1) The following Congenital Heart Diseases are covered: - Transposition of the great vessels - Truncus arteriosus - Atresia of any heart valve - Tetralogy of Fallot - Coarctation of the aorta - Eisenmenger syndrome - Single ventricle - Double inlet ventricle - Hypoplastic left heart syndrome - Hypoplastic right ventricle - Double outlet left ventricle - Ebstein s anomaly - Total anomalous pulmonary venous connection 2) The following Congenital Heart Diseases are covered if open-heart Surgery is determined medically necessary by a Specialist. - Pulmonary stenosis - Aortic stenosis - Discrete subvalvular aortic stenosis - Ventricular septal defect - Atrial septal defect Exclusion from this definition: No Critical Illness Benefit is payable if the Congenital Heart Disease is not listed in items 1) and 2) above and for techniques such as valvuloplasty and percutaneous interauricular communication closure. Cystic Fibrosis A definitive Diagnosis of Cystic Fibrosis with evidence of chronic lung disease and pancreatic insufficiency and high levels of chlorine in sweat (60 mmol/l or higher). The Diagnosis of Cystic Fibrosis must be made by a Specialist. 37

41 Muscular Dystrophy A definitive Diagnosis of Muscular Dystrophy, characterized by well-defined neurological abnormalities, confirmed by electromyography and muscle biopsy. The Diagnosis of Muscular Dystrophy must be made by a Specialist. Type 1 Diabetes Mellitus A definite Diagnosis of Type 1 Diabetes Mellitus, characterized by an absolute deficiency of insulin secretion and continued dependence on exogenous insulin for survival. Diagnosis must be made by a Specialist practising in Canada or the United States of America. In addition, there must be proof that there has been insulin dependence for a minimum of three months. APPENDIX III PREVENTION + Any Critical Illness and condition covered under the Prevention + Benefit has a 30-day Survival Period unless otherwise indicated in its definition. The following critical illnesses and conditions are covered under the Prevention + Benefit: Coronary angioplasty The undergoing of an interventional procedure to unblock or widen a coronary artery that supplies blood to the heart to allow an uninterrupted flow of blood. The procedure must be determined to be medically necessary by a Specialist. Ductal carcinoma in situ of the breast A definite Diagnosis of ductal carcinoma in situ of the breast, confirmed by biopsy. The Diagnosis must be made by a Specialist. Gastrointestinal stromal tumours (GIST) and neuroendocrine tumours (classified less than AJCC Stage 2) A definite Diagnosis of malignant gastrointestinal stromal tumours (GIST) and malignant neuroendocrine tumours, classified less than AJCC Stage 2. The Diagnosis must be made by a Specialist and confirmed by biopsy. Stage 1 malignant melanoma A definite Diagnosis of stage 1A or 1B malignant melanoma not ulcerated into the dermis equal to or lower than a depth of one millimetere confirmed by biopsy. The Diagnosis must be made by a Specialist. Exclusion from this definition: No Prevention + Benefit will be payable under this Critical Illness for any malignant melanoma in situ. 38

42 Stage A (T1a or T1b) prostate cancer A definite Diagnosis of stage A (T1a or T1b) prostate cancer, confirmed by biopsy. The Diagnosis must be made by a Specialist. Rai stage 0 chronic lymphocytic leukemia (CLL) A definite Diagnosis of Rai stage 0 chronic lymphocytic leukemia (CLL) confirmed by appropriate blood tests. The Diagnosis must be made by a Specialist. For the purposes of the Policy, the term Rai staging is to be applied as set out in Rai, K.R., Sawitsky, A., Cronkite, E.P., Chanana, A.D., Levy, R.N. & Pasternack, B.S (1975). Clinical staging of chronic lymphocytic leukemia. Blood, Volume 46, p.219. Exclusion from this definition: No Prevention + Benefit will be payable under this Critical Illness for any monoclonal lymphocytosis of undetermined significance (MLUS). Papillary or follicular thyroid cancer stage T1 A definite Diagnosis of papillary or follicular thyroid cancer or both, that is less than or equal to two centimetres in greatest diameter and classified as T1, without lymph node or distant metastasis, confirmed by a biopsy. The Diagnosis must be made by a Specialist. Exclusions and Restrictions applicable to Prevention + Benefit Subject to any other exclusions and restrictions under this Policy, no Prevention + Benefit is payable to the Diagnosis of any of the cancers described in provision (Terminology of Critical Illnesses covered under Prevention + Benefit) if, within the first 90 days following the latter of the Effective Date of the Policy and the date of last Reinstatement of the Policy, the Insured has any of the following: - signs, symptoms or investigations, that lead to a Diagnosis of Cancer (covered or excluded under this Policy), regardless of when the Diagnosis is made; or - a Diagnosis of Cancer (covered or excluded under this Policy). Medical information about the Diagnosis and any signs, symptoms or investigations leading to the Diagnosis must be reported to the Company within six months of the date of the Diagnosis. If this information is not provided within this period, the Company has the right to deny any claim for cancer or any Critical Illness caused by any cancer or its treatment. 39

43 SRM310A-1(18-03) ia Financial Group is a business name and trademark of Industrial Alliance Insurance and Financial Services Inc. ia.ca