Life Insurance Benefit
When is the Life Insurance Benefit payable?
If You die while covered under The Policy, We will pay Your Life Insurance Benefit after We receive Proof of Loss, in accordance with the Proof of Loss provision. The Life Insurance Benefit will be paid according to the General Provisions of The Policy.
What is the benefit?
In the event that You are diagnosed as Terminally Ill while You are:
- covered under The Policy for an Amount of Life Insurance of at least $10,000; and
- under age 60;
We will pay the Accelerated Benefit amount as shown below, provided We receive proof of such Terminal Illness.
You must request in writing that a portion of Your Amount of Life Insurance be paid as an Accelerated Benefit.
The Amount of Life Insurance payable upon Your death will be reduced by any Accelerated Benefit Amount paid under this benefit.
You may request a minimum Accelerated Benefit amount of $3,000, and a maximum of $50,000. However, in no event will the Accelerated Benefit Amount exceed 80% of Your Amount of Life Insurance. This option may be exercised only once.
For example, if You are covered for a Life Insurance Benefit Amount under The Policy of $20,000 and are Terminally Ill, You can request any portion of the Amount of Life Insurance Benefits from $3,000 to $16,000 to be paid now instead of to Your beneficiary upon death. However, if You decide to request only $3,000 now, You cannot request the additional $13,000 in the future.
A person who submits proof satisfactory to Us of his or her Terminal Illness will also meet the definition of Disabled for Waiver of Premium.
Any benefits received under this benefit may be taxable. You should consult a personal Tax Advisor for further information.
In the event:
- You are required by law to accelerate benefits to meet the claims of creditors; or
- if a government agency requires You to apply for benefits to qualify for a government benefit or entitlement;
You will still be required to satisfy all the terms and conditions herein in order to receive an Accelerated Benefit.
If You have executed an Assignment of rights and interest with respect to Your Amount of Life Insurance, in order to receive the Accelerated Benefit, We must receive a release from the assignee before any benefits are payable.
Terminal Illness or Terminally Ill means a condition that a physician certifies will reasonably be expected to result in a drastically limited life span of 12 months or less.
Proof of Terminal Illness and Examinations
Must proof of Terminal Illness be submitted?
We reserve the right to require satisfactory Proof of Terminal Illness on an ongoing basis. Any diagnosis submitted must be provided by a Physician.
If You do not submit proof of Terminal Illness satisfactory to Us, or if You refuse to be examined by a Physician, as We may require, then We will not pay an Accelerated Benefit.
No Longer Terminally Ill
What happens to my coverage if I am no longer Terminally Ill?
If You are diagnosed by a Physician as no longer Terminally Ill and:
- return to an Eligible Class, coverage will remain in force, provided premium is paid;
- do not return to an Eligible Class, but You continue to meet the definition of Disabled, coverage will remain in force, subject to the Waiver of Premium provision; or
- are not in an Eligible Class, but You do not continue to meet the definition of Disabled, coverage will end and You may be eligible to exercise the Conversion Right, if You do so within the time limits described in such provision.
In any event, the amount of coverage will be reduced by the Accelerated Benefit paid.
If coverage under The Policy ends, do I have a right to convert?
If Life Insurance coverage or any portion of it under The Policy ends for any reason, You may have the right to convert the coverage that terminated to an individual conversion policy without providing Evidence of Insurability. Conversion is not available for any Amount of Life Insurance for which You were not eligible and covered under The Policy.
If coverage under The Policy ends because:
- The Policy is terminated; or
- Coverage for an Eligible Class is terminated;
then You must have been insured under The Policy for 5 years or more, in order to be eligible to convert coverage. The amount which may be converted under these circumstances is limited to the lesser of:
- $2,000; or
- the Life Insurance Benefit under The Policy less any Amount of Life Insurance for which You may become eligible under any group life insurance policy issued or reinstated within 31 days of termination of group life coverage.
If coverage under The Policy ends for any other reason, the full amount of coverage which ended may be converted.
Insurer, as used in this provision, means Us or another insurance company which has agreed to issue conversion policies according to this Conversion Right.
How do I convert my coverage?
To convert Your coverage, You must:
- complete a Notice of Conversion Right form; and
- have your Employer sign the form.
The Insurer must receive this within:
- 31 days after Life Insurance terminates; or
- 15 days from the date Your Employer signs the form;
whichever is later. However, We will not accept requests for Conversion if they are received more than 91 days after Life Insurance terminates.
After the Insurer verifies eligibility for coverage, the Insurer will send You a Conversion Policy proposal. You must:
- complete and return the request form in the proposal; and
- pay the required premium for coverage;
within the time period specified in the proposal.
Any individual policy issued to You under the Conversion Right:
- will be effective as of the 32nd day after the date coverage ends; and
- will be in lieu of coverage for this amount under The Policy.
Conversion Policy Provisions
What are the Conversion Policy provisions?
The Conversion Policy will:
- be issued on one of the Life Insurance policy forms the Insurer is issuing for this purpose at the time of conversion; and
- base premiums on the Insurer’s rates in effect for new applicants of Your class and age at the time of conversion.
The Conversion Policy will not provide:
- the same terms and conditions of coverage as The Policy;
- any benefit other than the Life Insurance Benefit; and
- term insurance.
However, Conversion is not available for any Amount of Life Insurance which was, or is being, continued in accordance with the Waiver of Premium provision, until such coverage ends.
Death within the Conversion Period
What if I die before coverage is converted?
We will pay the Amount of Life Insurance You would have had the right to apply for under this provision if:
- coverage under The Policy terminates;
- You die within 31 days of date coverage terminates; and
- We receive Proof of Loss.
If the Conversion Policy has already taken effect, no Life Insurance Benefit will be payable under The Policy for the amount converted.