Open-end Credit Plan Credit Plan

Transcription

1 Open-end Credit Plan

2 Credit and Security Agreement and Truth in Lending Disclosure DEFINITIONS In these agreements, the words, you, your and yours will mean all persons who borrow under this plan. The words we, us and ours, will mean City County Credit Union of Fort Lauderdale. CREDIT AGREEMENT By accepting, using, or accessing any proceeds under this plan, you agree to the terms and conditions of this agreement and any future amendments thereto, and promise to pay us all amounts due. Finance Charge The Finance Charge is the total cost to you of obtaining credit through this credit plan. The Finance Charge begins to accrue on the date of each advance and accrues for each day the balance remains unpaid. The unpaid principal balance for each day is multiplied by the daily periodic rate to determine the Finance Charge for that day. The sum of these daily charges is the Finance Charge you will pay. The unpaid principal balance is that balance which is in your account at the close of business after all transactions, including payments and new borrowings, have been entered. The daily periodic rate and corresponding Annual Percentage Rate for the types of loans offered under this plan are shown in the Addendum. Advances We will make loan advances to you. We have informed you of how you may obtain loan advances under this Open-end Credit Plan. You understand that all advances must be made for good purpose. We reserve the right to refuse to make any advance without affecting the liability of any co-borrower. Negative Information Notice We may report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your credit report. Liability for Unauthorized Use If the Credit Union allows access to your Plan via an ATM/Debit card, and you use an ATM/Debit card to access your plan, you may be liable for the unauthorized use of the card. You must tell the Credit Union at once if you believe your ATM/Debit card has been lost, stolen, or used without your permission. You may contact the Credit Union at: City County Credit Union, 1982 N. State Rd. 7, Margate, FL or call: (800) for Debit cards and (954) for ATM cards. You will not be liable for unauthorized use that occurs after you notify the Credit Union of the loss, theft, or possible unauthorized use. If the card is used to obtain advances directly from the Plan, your total liability will not exceed $ If the unauthorized withdrawal is from a share draft account, your liability is governed by the Regulation E disclosures you received at the time you received your ATM/Debit card, even if the withdrawal results in an advance being made from your overdraft subaccount under your Open-end Credit Plan. You also have certain rights and responsibilities under the Fair Credit Billing Act if you believe your periodic statement is incorrect. See Billing Rights Notice at the end of this agreement. Credit Limits Advances against your open-end credit plan will at no time, in total, exceed the limit as set forth in the loan policy of the credit union. The not fully secured by shares balance due under the Open-end Credit Plan shall not your assigned credit limit or the limit as set forth in the loan policy of the credit union. An advance against your Openend Credit Plan shall not cause your balance to exceed your assigned credit limit. Security Interest Collateral is required for all advances in excess of your not fully secured by shares limit. The credit union will take a security interest in the property purchased with the advance or in property identified in the Advance/Revolving Request form or other security agreement for each secured advance under this plan. Credit/Debit Cards The Credit Union may, at its option, issue you debit cards, loan drafts or credit cards (including but not limited to drafts, cards, plates, debit cards or other credit devices) if they are now or in the future made part of your Open-end Credit Plan. Overdraft Protection If you request Overdraft Protection, any overdrafts on your share draft account will be charged against your Ready Access Loan or other not fully secured by shares line the credit union may make available. Overdrafts will be subject to the Finance Charge applicable to your not fully secured by shares amount. Overdraft protection may be terminated by us upon prior notice to you, or without notice if: (1) the payment of the share draft(s) will cause all your available not fully secured by shares loan limits to have been exceeded or; (2) you are in default of any term set forth in this Agreement. Overdraft Protection Advances In addition, an overdraft fee may be charged, refer to the separate account disclosure, which may be amended from time to time. Payments (1) Member Choice Lines of Credit The minimum monthly payment on not fully secured by shares lines of credit is based upon your approved limit. Advances within the limit will not affect your payment. The minimum monthly payment and the due date will be disclosed to you at your initial advance and with an adjustment to your credit limit. Your minimum monthly payment will never be less than $25.00 and will not change unless you request additional advances or fail to keep your agreement. (2) Ready Access Loan The minimum monthly payment for a Ready Access Loan will be 2% of the outstanding balance owed or $10.00 whichever is greater. The minimum payment is subject to change monthly based upon the amount of your outstanding balance. The minimum payment will be disclosed on your monthly statement and automatically deducted from your draft account on the 20th day of the month or the next business day if the 20th is a holiday or weekend. (3) all other loans The minimum monthly payment and due date on all other loans will be set and disclosed to you at the time each advance is made.your minimum payment will be based upon the amount of your outstanding balances immediately after your most recent advance.your minimum monthly payment will never be less than $ However, if you accept an overdraft product that is not specified in this agreement, your minimum monthly payment will be based on a percentage (established by the Credit Union) of your outstanding balance owed or $10.00 whichever is greater.you may pay the credit balance in full or in part at any time without penalty. However, minimum periodic payments are required on each loan account as long as any balance exists. Late Charges If a payment is late by 15 days or more, you agree to pay a late charge of 5% of your payment or $9.99, whichever is greater. Other Charges You agree to pay the documentary stamp tax required by the State of Florida, which shall be collected with each advance. Filing Fee You will be charged a filing fee at the time of advance if the credit union takes a security interest in your collateral. The amount of the filing fee will be based upon the amount of fee required by the credit union to obtain a lien on your property. The amount of the filing fee will be disclosed on the voucher. Property Insurance You are required to carry insurance against loss by fire, theft, or collision and comprehensive coverage on motor vehicles and other property pledged as security on your loan. The insurance may be obtained from any insurance agent or company of your choice. The credit union has the right to designate reasonable financial requirements as to the company and the adequacy of the coverage. Credit Insurance Credit life and/or credit disability insurance is voluntary and not a condition of opening your Plan or obtaining any advance. Borrower will only have this coverage if Borrower

3 applies for the coverage, meets the eligibility requirements, and agrees to pay the premiums. The premium will be charged and collected monthly and will become part of my minimum monthly payment. If Borrower fails to pay the insurance premiums, Credit Union can cancel the coverage or, at its option, pay the premiums and add it to Borrower's outstanding plan balance. Borrower may cancel coverage at any time. Credit union retains a portion of the premium (or a portion is paid back to the credit union by the service providers) as compensation for making this service available. See Certificate for specific terms and conditions of the insurance contract. Default - Applies to Florida Borrowers. For Borrowers in other states, see State Law Notices and Contractual Terms You shall be considered in default if any of the following occur: (1) If you break any promise or fail to comply with any term contained in this Credit Agreement, the Security Agreement or any other document executed in connection with a loan pursuant to the Open-end Credit Plan; or (2) if you do not use the money we advanced you for the purpose stated in your application; or (3) if we should, in good faith, believe that prospect of payment, performance or realization of the collateral, if any, is impaired; or (4) if you die; or (5) if you file a petition in bankruptcy, insolvency, or receivership or you are put involuntarily into such proceedings; or (6) if the collateral, if any, given as security for this account is lost, damaged or destroyed, or if it is levied against, impounded, attached or garnished; or (7) if you do not pay on time any of your other or future debts to us. If you default, we may, at our option, declare this account immediately due and payable, and you must immediately pay to us at that time the total unpaid balance, as well as the Finance Charge to date, any late charges and costs of collection permitted under law, including reasonable attorney s fees. Costs of collection include, but are not limited to, repossession fees, appraisals, environmental site assessments, casualty damage insurance coverage, and attorney s fees for any action taken by an attorney in order to collect this loan or preserve or protect the credit union s rights and remedies, including, without limitation, pre-suit demands for payment, pre-suit mediation or settlement negotiations, investigation and assessment of the credit unions rights, participation in bankruptcy cases, matters, and proceedings (including, without limitation, filing proofs of claim, pursuing reaffirmation agreements, attending meetings of creditors, and pursuing complaints, motions, and objections that relate in any way to the credit union s collateral or right to payment), collateral disposition, non-bankruptcy suits and/or administrative actions, and appeals. The principal balance in default shall bear interest at the contract rate. Illegal Use and Internet Gambling You agree that all transactions that you initiate by use of any advance or any card which accesses your Plan are legal in the jurisdiction where you live and/or where the transaction occurred. Internet gambling may be illegal in the jurisdiction in which you are located, including the United States. Your Plan and any card which accesses your Plan may only be used for legal transactions. Display of a payment card logo by an online merchant does not mean that internet gambling transactions are lawful in all jurisdictions in which you may be located.you agree to repay according to the terms of this Agreement all transactions you initiate by taking an advance or using your card(s), whether deemed legal or illegal. Borrower Responsibility You promise to notify us of any change in your name, address or employment. You promise not to apply for an advance if you know there is a reasonable probability that you will be unable to repay your obligation according to the terms of the credit extension. You promise to inform us of any new information which relates to your ability to repay your obligation. You promise not to submit false or inaccurate information or willfully conceal information regarding your creditworthiness, credit standing, or credit capacity. Co-Borrower s Liability At times, we may advance sums under this agreement to more then one person, each of whom has signed this agreement. All persons called Co-Borrowers, agree to the following: (1) That the terms you, your and yours apply to all of them. (2) That each is equally liable under this agreement to fulfill all of its terms and conditions. (3) That each of them is named the agent of the other for the purpose of applying for and receiving loan advances under the agreement now and in the future. (4) That any notice mailed to one shall be considered notice mailed to all. You understand that you may remove yourself from responsibility as Co-Borrower at any time by notifying us in writing. However, that does not release you from any liabilities already incurred. Authorization to Apply Shares In the event payments are not made as agreed and this loan becomes more than 30 days past due, you hereby give signed authorization to City County Credit Union of Fort Lauderdale to bring the account up-to-date by transferring funds from your account. If we transfer funds from your account and apply as a payment due under this Agreement, a transfer fee of $20.00 may be charged. Termination You understand that we may terminate any further use of the Open-end Credit Plan, which shall not affect your obligation to continue to pay the balance outstanding at that time under the same terms and conditions. The termination will occur upon: (1) adverse re-evaluation of your creditworthiness; (2) at your option upon written notice; (3) at our option, for good cause, and upon written notice; or (4) your failure to meet the terms of the agreement and Security Agreement. Additional Provisions (1) You agree to provide us with a current financial statement if so requested and that no advance will be made until we have reviewed the financial statement. (2) In case any provision of this agreement is held invalid for any reason such determination shall not affect the remaining provisions of the agreement. But the agreement shall be enforced as if such provision was never included. (3) You admit that you have received a copy of this agreement, and that you have fully read and understand all of its terms and conditions. (4) Your signing and endorsing any checks or drafts issued under this agreement or obtaining advances through any other access method made available by the credit union shows your acceptance of its terms and conditions. (5) You knowingly and after careful consideration, knowingly, voluntarily, and intentionally waive the right to a trail by jury with respect to any litigation arising out of the Open-end Credit Plan, or out of any course of conduct, course of dealing, statements (verbal or written), or actions by you or us. This waiver is a material inducement to our approval of your participation in this plan. Change of Terms We may change the terms of this agreement at any time. But we will give you written notice of any change at least 15 days before the change takes effect. Delay In Enforcement We may delay enforcing any of our rights under this agreement without losing them. Irregular Payments We may accept late payments or partial payments, even though marked payment in full, without losing any of our rights under this agreement. Governing Law These agreements shall be construed and enforced in accordance with the laws of the State of Florida. Contractual Pledge of Shares: You pledge all your shares and deposits in the credit union, including future additions, as security for this loan. THIS PLEDGE OF SHARES INCLUDES ADVANCES TAKEN ON MY CREDIT CARD ACCOUNT(S). In case you default, we may apply these shares and deposits to the payment of all sums due at the time of default, including costs of collection and reasonable attorney s fees. No lien or right to impress a lien on shares and deposits shall apply to any of your shares which may be held in an Individual Retirement Account or Keogh Plan. SECURITY AGREEMENT Security Interest; PLEDGE OF SHARES; Statutory Lien; Set-off; Administrative Freeze To secure the payment of Borrower's Open-end Credit Plan ( Plan ), and any and all future advances under the Plan: (a) You grant the Credit Union a security interest in the property described in any Advance Receipt form or other document executed in connection with the Plan. ( Collateral ). The security interest includes all increases, substitutions and additions to the secured property, proceeds from any insurance on the secured property and all earnings received from the secured property. The security interest also includes all accessions. Accessions are things which are attached to or installed in the property now or in the future. The security interest also includes any replacements for the property which you buy within 10 days of the Advance or any extensions, renewals or refinancing of the Advance. If the value of the property declines, you promise to give us more security if asked to do so. You also agree to abide by the terms of the Security Agreement and any Advance Receipt or similar document. (b) YOU GRANT AND PLEDGE TO US A CONSENSUAL LIEN ON ALL SUMS ON DEPOSIT to secure your obligations to the credit union pursuant to applicable state law.

4 If you have a credit card account(s) under your plan, this pledge of shares also applies to the credit card account(s). All sums on deposit and shares for purposes of this pledge means all deposits in any share savings, share draft, club, certificate, P.O.D., revocable trust or custodial accounts(s), whether jointly or individually held, that we have on deposit now or in the future, all of which are deemed general deposits for the purpose of this pledge. Your pledge does not include any IRA, Keogh, tax escrow, irrevocable trust or fiduciary account in which you do not have vested ownership interest. (c) You acknowledge and agree to impressment of the Credit Union's statutory lien rights under the Federal Credit Union Act and/or applicable state law as of the date you opened your credit plan, which gives us the right to apply the sums in your account(s), to satisfy any obligations you owe to the credit union, regardless of contributions at the time of default, and without further notice to you or any owner of the account(s). (d) You acknowledge and agree to our "common law" right to set off under applicable state law which authorizes us to apply the funds in any joint or individual account to any obligations owed to us if you default or fail to pay or satisfy any obligation to us without any legal process, court proceeding or any notice to any owner of the account(s) affected hereunder or otherwise under this Agreement. (e) You specifically agree that we have a right to place an administrative freeze on any of your joint or individual account(s) and that such action shall not violate 11 USC 362 or other applicable law. Multiple Rights; Cumulative Remedies You understand and agree that the Credit Union has multiple rights as enumerated above and that the remedies are cumulative. Nothing herein shall limit or restrict the remedies available to us following any event of default under the terms of your Open-end Plan. Cross-collateralization: Property given as security under this Plan or for any other loan Borrower has with the credit union will secure all amounts Borrower owes the credit union now and in the future. However, property securing another debt will not secure advances under the Plan if such property is Borrower s principal residence (unless the proper rescission notices are given and any other legal requirements are satisfied), or are non-purchase money household goods. Transfer of Collateral You will not change the location of, sell or transfer the collateral unless you have our prior written consent. You do not intend to use the collateral as a residence or occupy for more than 14 days a year. Good Title You warrant that you have good title to the collateral, free of all security interests except that given to the credit union and except for any interest of a non-co-borrower owner of the collateral. Maintenance of Collateral You will pay all taxes, assessments, and liens against or attached to the property described, and further agree to keep the property in good condition and housed in a suitable shelter. You agree to execute financing statements and security agreement amendments at our request and will defend the property against adverse third party claims. Others Bound This security agreement not only binds you, but your executors, administrators, heirs and assigns. Additional Security Should we feel at any time that the security presented has diminished in value, or for any other reason feel that additional security is required, you agree to assign to us within (10) days whatever additional security we feel is necessary to protect ourself against possible loss. Advances Any additional advances made to you, or on your behalf, for the payment of taxes, assessments, liens of any kind, or premiums on authorized or required insurance, and interest at the contract rate owing thereon, shall also be secured by this agreement. Property Insurance You will maintain insurance to cover any vehicle or other property in which we have a security interest. This insurance will be in a form and an amount satisfactory to us. You will supply us with proof of such insurance until all sums owed to us and secured by this property are repaid. If you fail to maintain such insurance, naming the credit union as loss payee, we may, but are not required to, obtain insurance of our own protecting our interest in the vehicle or other property on which we have a security interest and add the amount of premium paid by us to the sums owed. This amount will bear interest at the contract rate until paid. You further assign to us the right to receive the proceeds of any insurance on such property, and direct any insurer to pay those proceeds directly to us. You authorize us to endorse any check or draft provided as the proceeds of such insurance, and apply those proceeds to the sums owed to us. You further authorize us to provide our Insurance Service Center with the necessary information for verification of adequate coverage. You acknowledge that insurance, or any extension thereof, placed by us (i) is without benefit to you individually but is primarily for the protection of us, (ii) may provide for coverage to maturity of this loan, even if such maturity is greater than one year, and (iii) may, upon your obtainment of other insurance coverage in fulfillment of the requirement of this loan, be canceled based upon the Rule of 78 s or other accelerated earnings method applicable to the refund of unearned premium. Actions Upon Default - Applies to Florida Borrowers. For Borrowers in other states, see State Law Notices and Contractual Terms If a default as defined in the credit agreement should occur, we have the authority, upon such default, to repossess and sell the collateral in a lawful manner. In such cases, we or our authorized representatives may, at our option, enter the premises where the collateral is kept and take possession, subject to applicable laws. We have the right to render the property pledged as collateral unusable and dispose of the collateral on the premises where the collateral is kept. If we decide to sell the collateral at a public sale, private sale or otherwise dispose of the collateral, we will provide reasonable notice if required by law and will otherwise comply with applicable state law. If we sell or otherwise dispose of the collateral we may collect from you reasonable expenses incurred in the retaking, holding and preparing the collateral for and arranging the sale of the collateral. We may also collect reasonable attorney s fees and legal expenses, permitted by applicable law, incurred in connection with disposition of the property. Unless you default, you may keep possession of the property (collateral) described and use it in any lawful manner consistent with this agreement or with the insurance policy on the collateral. You understand that we have certain rights and legal remedies available to us under the Uniform Commercial Code and other applicable laws, and that we may use these rights to enforce payment if you default. In that event, you will at our request assemble the property (collateral) and make it available to us at a place of our choosing. If we decide to waive this default, it will not constitute a waiver of any other subsequent defaults. Attorney in Fact You hereby appoint the credit union as your Attorney-in-Fact to perform any acts which we feel are necessary to protect the collateral and the security interest which this agreement creates. Additional Provisions (1) We may meet all requirements for sending you a notice of any kind if we send it to you by means of United States mail, at your last given address. (2) If there is more than one borrower, your obligations under this agreement are joint and several, each being equally responsible to fulfill the terms of the agreement. Further Assurances You agree to execute any further documents, and to take any further actions, reasonably requested by Credit Union in order to evidence or perfect the security interests granted herein or to effectuate the rights granted to Credit Union. Governing Law This Security Agreement is being executed and delivered in, and is intended to be performed in, the State of Florida and shall be construed and enforced in accordance with the laws of the State of Florida, except to the extent that the Uniform Commercial Code provides for the application of the law of another state. Fees for Statements and Accountings Credit Union reserves the right to impose a fee for any statements or accountings requested, in accordance with applicable law. Authorization to File Financing Statement You authorize Credit Union to file any financing statement(s) necessary to evidence or perfect the security interest granted herein.

5 Billing Rights Notice - Keep this notice for future use This notice contains important information about your rights and our responsibilities under the Fair Credit Billing Act. NOTIFY US IN CASE OF ERRORS OR QUESTIONS ABOUT YOUR STATEMENT If you think your statement is wrong, or if you need more information about a transaction shown on it, write to us at the address listed on your statement, as soon as possible. We must hear from you no later than 60 days after we sent you the first statement on which the error or problem appeared. You may telephone us, but doing so will not preserve your rights. In your letter, give us the following information: 1. Your name and account number. 2. The dollar amount of the suspected error. 3. Describe the error and explain, if you can, why you believe there is an error. If you need more information, describe the item you are not sure about. YOUR RIGHTS AND OUR RESPONSIBILITIES AFTER WE RECEIVE YOUR WRITTEN NOTICE We must acknowledge your letter within 30 days, unless we have corrected the error by then. Within 90 days, we must either correct the error or explain why we believe the statement was correct. After we receive your letter, we cannot try to collect any amount you question, or report you as delinquent. We can continue to bill you for the amount you question, including finance charges, and we can apply any unpaid amount against your credit limit. You do not have to pay any questioned amount while we are investigating, but you are still obligated to pay the parts of your statement that are not in question. If we find that we made a mistake on your statement, you will not have to pay any finance charges related to any questioned amount. If we didn t make a mistake, you may have to pay finance charges and you will have to make up any missed payments on the questioned amount. In either case, we will send you a statement of the amount you owe and the date that it is due. If you fail to pay the amount that we think you owe, we may report you as delinquent. However, if our explanation does not satisfy you and you write to us within ten days telling us that you still refuse to pay, we must tell anyone we report you to that you have a question about your statement. And, we must tell you the name of anyone we reported you to. We must tell anyone we report you to that the matter has been settled between us when it finally is. If we don t follow these rules, we can t collect the first $50 of the questioned amount, even if your statement was correct. Special Rule for Credit Card Purchases If you have a problem with the quality of property or services that you purchased with a credit card, and you have tried in good faith to correct the problem with the merchant, you may not have to pay the remaining amount due on the goods and services. There are two limitations on this right: (a) you must have made the purchase in your home state or, if not within your home state, within 100 miles of your current mailing address; and (b) the purchase price must have been more than $ These limitations do not apply if the credit union owns or operates the merchant, or if we mailed you the advertisement for the goods or services. Credit Life and Disability Insurance CREDITOR BENEFICIARY (POLICYHOLDER) CITY COUNTY CREDIT UNION M CERTIFICATE OF GROUP CREDIT INSURANCE Minnesota Life Insurance Company 400 Robert Street North St. Paul, Minnesota CREDIT LIFE INSURANCE CREDIT DISABILITY INSURANCE GROUP POLICY NUMBER INSURANCE MAXIMUM GROUP POLICY NUMBER MAXIMUM MONTHLY DISABILITY BENEFIT MAXIMUM LOAN REPAYMENT PERIOD* G-500 $50, G-500 $ Months MAXIMUM LOAN REPAYMENT PERIOD* MAX. AGGREGATE DISABILITY BENEFIT WAITING PERIOD RETROACTIVE BENEFIT 180 Months $50, Days Yes Monthly Premium per $ of Outstanding Loan Balance Single Credit Life: $.062 Joint Credit Life: $.109 Credit Disability: $.200 *NOTE: If the maximum loan repayment period is greater than 120 months, loans with repayment periods in excess of 120 months will be insured for full life coverage but only during the first 120 months. Disability coverage will remain in effect for the entire repayment period of up to 120 months but a maximum of only 60 monthly benefits are payable. This certificate is issued in consideration of your application and the payment of the required premium. It summarizes the main provisions of the group policy(ies) that affect you. You may examine the group policy(ies) at the principal office of the policyholder during regular business hours. You may contact us at the following address and telephone number if you want information about your insurance coverage or if you need help with a complaint. Minnesota Life Insurance Company 400 Robert Street North St. Paul, MN Telephone (651) Notice of your right to examine this certificate for 30 days. It is important to us that you are satisfied with this insurance. If you are not satisfied, you may return this certificate to us or to your insurance representative within 30 days of its receipt, and you will receive a full refund of any premiums you have paid within 30 days after we receive your notice of cancellation Rev CC /05 FI12374 Rev

6 To whom will benefits be payable? Claim payments will be made to the policyholder to reduce or extinguish your loan. If claim payments are more than the balance of your loan, remaining payments will be made to you or to your estate or, if required by law and you have named one, to a secondary beneficiary. What is the amount of the death benefit? The death benefit will be the lesser of: (1) the unpaid balance of your loan on the date of your death; or (2) the maximum amount of insurance specified on your application. If you are jointly insured and your co-debtor dies, the death benefit will be determined on the same basis. Only one death benefit is payable, even if both jointly insured debtors should die on the same date. Are there limitations/exclusions affecting the amount of the death benefit? As to each advance on an open-end loan, we will not pay a claim on that advance if death occurs within 6 months after the advance is disbursed and is caused by a pre-existing medical condition as defined below. A pre-existing medical condition is a condition for which the insured debtor received medical advice or treatment either for that same condition or a related condition within the 6 month period immediately prior to the date the advance is disbursed. If you, whether sane or insane, die by suicide within 6 months from the effective date of your insurance, our liability is limited to an amount equal to the premium charges. For open-end outstanding balance coverage, this suicide exclusion applies to each advance disbursed to you. The insurance effective date for an advance is the date the advance is disbursed to you. If joint life insurance is in force, these limitations/exclusions shall apply upon the death of either jointly insured debtor. What is the amount of your monthly disability benefit? Your monthly disability benefit will be an amount equal to the lesser of: (1) your minimum scheduled installment payment as specified in your loan agreement, excluding any delinquencies and/or late fees, due in the month in which total disability commences; or (2) the maximum monthly disability benefit available without evidence of insurability specified in your application if you did not submit any required evidence of insurability or, if submitted, we did not approve it; or (3) the maximum monthly disability benefit specified in your application. If your minimum scheduled installment payment increases according to a procedure specified in your loan agreement to recognize periodic changes in the loan interest rate (variable interest loan), we will increase your monthly disability benefit accordingly provided: (1) the date of scheduled installment payment increase is after total disability commences; and (2) the monthly disability benefit we were paying immediately prior to the increase was not limited to either the maximum monthly disability benefit available without evidence of insurability or the maximum monthly disability benefit available. In no event will any other increase (or decrease) in your minimum scheduled installment payment, after total disability commences, serve to change the amount of monthly disability benefit payable. The benefit for each day of disability will be 1/30th of your monthly disability benefit amount. What is the definition of total disability? During the first 12 months of disability, your complete and continuous inability, due either to sickness or injury, to perform the duties of your regular occupation. Thereafter, your complete and continuous inability, due either to sickness or injury, to engage in any occupation for which you are suited by age, training or experience. For how long will monthly disability benefits be paid? We will pay the monthly disability benefit for any continuous period of total disability until any one of the following conditions are met: (1) the payments total an amount equal to the unpaid balance of your loan on the date total disability commences, including principal and interest, under the terms of the loan note or agreement; or (2) sixty monthly disability benefits have been paid; or (3) the maximum aggregate disability benefit specified in your application has been paid; or (4) your loan reaches its initial scheduled maturity date or; if the maturity date has been adjusted according to a procedure specified in the loan agreement to recognize periodic changes in the loan interest rate (variable interest loan), your loan reaches its adjusted maturity date; or (5) you reach age 66. What disabilities are not covered? We will not insure any loss resulting directly or indirectly from any total disability caused by: (1) intentionally self-inflicted injuries; or (2) normal pregnancies, normal childbirths, or elective abortions. Complications due to pregnancy or childbirth will be covered only if the complications themselves are totally disabling; or (3) a condition for which you received medical treatment or advice either for that same condition or a related condition within the six month period immediately prior to the date of your insurance. However, total disability resulting from any such condition or related condition will not be excluded if total disability commences six months or more after the date of your insurance. For open-end coverage, this pre-existing condition exclusion applies to each advance disbursed to you and the insurance effective date for the advance is the date the advance is disbursed to you.

7 When will benefits be payable? The death benefit will be payable when we receive a certified copy of the death certificate and a statement from the policyholder. Disability benefits will be payable when we receive proof you have become totally disabled while you are insured and prior to your 66th birthday. Also, you must be under the regular care of a physician for the sickness or injury. We will pay the monthly disability benefit at the end of each month of continuous total disability following the expiration of the waiting period. If the retroactive benefit is effective, we will pay the monthly disability benefit at the end of each month of continuous total disability from the date total disability commences but benefits will not begin until the waiting period expires. When must notice of a disability claim be given? You must give us notice within 30 days or as soon as possible after the occurrence or commencement of any loss covered by the group policy. The notice of claim must be in writing and given to our authorized agent or sent to our home office in St. Paul, Minnesota. We shall have the right to have you medically examined at our own expense as often as may reasonably be required while a disability claim is being considered or paid. As deemed necessary to determine continued disability we may request written proof of loss during the course of a claim. How are premiums calculated? Premiums for your insurance are calculated each month on the remaining insured outstanding balance of your loan using the premium rate in effect under the group policy. The premium rate is subject to change not more than once each year upon 45 days prior written notice to you. How are refunds calculated? If your insurance terminates before the scheduled maturity date of your loan or the premium you were charged is greater than the premium required for your age and amount of insurance, the unearned premium will be refunded to you. The method of calculating refunds is the Pro Rata formula. However, refunds of less than $1.00 will not be made. If 16 days or more of a loan month have been earned, the refund will be computed from the end of the loan month; if 15 days or less of a loan month have been earned, the refund will be computed from the beginning of the loan month. When does your insurance terminate? Your insurance will terminate on the date any of the following events occurs: (1) your loan is charged off or discharged through payment, prepayment, renewal or refinancing; or (2) your loan reaches its scheduled maturity date or, if the maturity date has been adjusted according to a procedure specified in the loan agreement to recognize periodic changes in the loan interest rate (variable interest loan), the date your loan reaches the adjusted maturity date; or (3) an open-end loan agreement reaches its expiration date; or (4) the policyholder transfers the loan without recourse and no longer services the loan; or (5 any required loan repayment which includes your insurance premium is more than 90 days overdue; or (6) you request in writing that your insurance be terminated; or (7) the group policy terminates provided you receive 30 days written notice; or (8) you die. If joint life insurance is in force, your insurance terminates when either you or your co-debtor dies; or (9 you have disability insurance and we have paid 60 monthly disability benefits; or (10) you have disability insurance and you reach age 66; or (11) you have life insurance and the Maximum Term of Insurance of 120 months expires; or (12) you have life insurance and you reach age 71. If joint life insurance is in force and insurance terminates on one of the joint insured debtors due to the attainment of age 71, insurance will continue on the other debtor under single life insurance coverage. What if your age is misstated? If you stated you were under age 66 when you applied for disability insurance but you were not, we will refund your premium when we discover this and no benefits will be paid. If you or your co-debtor stated you were under age 71 when you applied for life insurance but you were not, we will refund your premium when we discover this and no benefits will be paid. Can we contest your insurance? After your insurance has been in force during your lifetime for two years from the effective date of your insurance (excluding any period during which you are disabled), we cannot contest your insurance for any loss that is incurred more than two years after the effective date, except for the nonpayment of premium.