Loan Protection. Product Disclosure Statement (PDS) Issued: 1 September Protecting your financial future with us

Transcription

1 Loan Protection Product Disclosure Statement (PDS) Issued: 1 September 2013 Protecting your financial future with us Issued by: MetLife Insurance Limited ABN AFSL , Level 9, 2 Park Street, Sydney NSW 2000 ACE Insurance ABN AFSL , O Connell Street, Sydney NSW 2000

2 About the insurers Loan Protection consists of two separate components, being life insurance and general insurance. The insurer of the life insurance component (death, terminal illness, trauma and disability benefit) is MetLife Insurance Limited (ABN ) (AFSL ) ( MetLife ). The insurer of the general insurance component (involuntary unemployment benefit) is ACE Insurance Limited (ABN ) (AFSL ) ( ACE ). These insurers are jointly responsible for the contents of this Product Disclosure Statement (PDS). Throughout this document these insurers are referred to as we or us (with the reference being to either or both insurers, as is applicable to the context and the benefit being referred to). MetLife MetLife Insurance Limited (MetLife), an affiliate of MetLife, Inc., is a specialist provider of life insurance to affinity partners, superannuation trustees and employers in Australia. MetLife has expertise in designing and executing both direct insurance programs for partners customers and insurance solutions to meet the needs of specific member groups. MetLife has been a specialist provider of life risk insurance products in Australia since MetLife, Inc. (NYSE: MET) is a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers in over 50 countries. Through its subsidiaries and affiliates MetLife holds leading market positions in the United States, Japan, Latin America, Asia Pacific, Europe and the Middle East. MetLife pay the part of your premium that relates to the life insurance component of your cover into their No. 1 statutory fund. This is the fund from where all benefits of this type are payable. ACE ACE is part of the ACE Group of Companies, one of the global leaders in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries and the authority to do business in 140 jurisdictions. Contents What is Loan Protection? 2 Type of Covers and enjoy a discount Cooling off period What are the significant benefits? 3 Repayment Cover What isn t covered? 4 When will my cover commence? When will my cover end? Applying for Cover 6 Who is eligible? When can you apply? Premiums 6 How can I pay my premiums? What does Loan Protection cost? Am I eligible for any discounts? What happens if I don t pay my premium? Important Information 7 How do I make a claim? Are there any risks in taking out a Loan Protection policy? Customer service Are Loan Protection s taxed? Protecting your Privacy Updating our PDS Register of alternative forms of remuneration Financial Claims Scheme and Compensation Arrangements Direct Debit Service Agreement The Australian Dream One of the greatest Australian dreams and achievements is having something to call your own like a car or home. So protecting what is one of your biggest assets makes complete sense. Loan Protection offers you that security where you can protect your own. This PDS will help you understand the covers available and assist with choosing your policy. Loan Protect 1

3 What is Loan Protection? Loan Protection provides financial assistance for your personal or mortgage loans if something unexpected is to occur. It offers a simple and affordable life insurance at the time you apply for a loan. The great thing about Loan Protection is that even if you ve paid off your loan, you can keep your Loan Protection policy which will provide you with insurance which may be difficult to obtain later. Type of Covers and enjoy a discount Loan Protection provides two types of covers. You can choose to select one cover or you can choose to select both covers which will come with a 10% discount. Cover s Description Death A lump sum payment of up to $1 million to help pay off the outstanding loan balance in the event of death. Repayment Cover Terminal Illness Trauma Disability Involuntary Unemployment A lump sum payment of up to $1 million to help pay off the outstanding loan balance in the event of terminal illness. Provides 20% of the sum insured if you suffer a specified trauma condition. This benefit applies if your is $50,000 or more. Your monthly benefit up to $5,000 for up to 12 months to help meet loan repayments in the event of your disablement. Your monthly benefit up to $5,000 for up to 3 months to help meet loan repayments in the event of your involuntary unemployment. Cooling off period For your peace of mind, Loan Protection comes with a 30 day cooling off period. You have 30 days from the policy commencement date to review your policy and make sure that it meets your needs. If you change your mind and wish to cancel your policy during this time, provided that you have not made a claim, you will be entitled to a full refund of premiums paid up to that time. Once you have decided to protect your loan; it s an easy process where: there are no intrusive medical questions or medical examinations; you can obtain cover even where you have previously suffered from a serious illness or injury; and you can choose your covers and adjust your level of cover to suit your needs and budget. Firstly, read this PDS as it contains important information about Loan Protection. Most PDS s can be difficult to read with so much information and legal jargon. So we ve taken these bits out of this document. For more detail, you can refer to the Policy Document. This PDS includes references to the full terms and conditions in the Policy Document to make it easier for you to understand. To obtain a free copy of the Policy Document, give us a call on or visit loan-protection/index/html. What are the significant benefits? Death No-one wants to leave a significant debt to a loved one or even think about the unexpected happening; however, this benefit will provide cover upon your death assisting your family with financial freedom, for example paying off your loan or leaving a nest egg for your family s future. Terminal Illness Worry a little less if you suffer a terminal illness* as we ll advance your Death to you to provide you with financial support. You can use this payment however you wish such as tying up outstanding debts and loans, for further medical treatments or a deserved holiday with your loved ones. If a claim for a Terminal Illness is made and the insured person dies before the benefit is paid, a claim for a Death will instead be assessed. *Terminal illness occurs when an insured person suffers a sickness which they have been diagnosed with, having considered any other evidence we may require, that their life expectancy is not greater than 12 months, regardless of any available treatment. Trauma It doesn t take long for the bills to pile up and everyday lifestyle changes if you suffer a traumatic medical condition which can put a lot of strain on you and your family. This benefit can assist you in your time of need by providing you cover if you re diagnosed with one of the 17 listed medical conditions or procedures. List of medical conditions or procedures as follows: Diagnosed as having one of the following medical conditions: 1. Cancer * 2. Benign brain tumour * 3. Heart attack * 4. Major head trauma * 5. Stroke * Diagnosed as suffering from one of the following degenerative conditions: 6. Alzheimer s disease 7. Dementia * 8. Motor neurone disease 9. Multiple sclerosis 10. Muscular dystrophy 11. Parkinson s disease Having suffered or undergone one of the following: 12. Coronary artery bypass surgery 13. Open heart surgery * 14. Organ transplant * 15. Permanent loss of an entire hand or foot 16. Permanent loss of use of a limb (paralysis) 17. Third degree burns* * To be eligible to make a claim under this Trauma, these medical conditions will need to meet the criteria as defined in Section 7 Glossary in the Policy Document. If the Trauma is paid then the Death and Terminal Illness s will be reduced by the amount paid. Repayment Cover Disability Know that you have time and financial ease to focus on recovery and rehabilitation. If you suffer a disability from an injury or sickness which prevents you from working, this benefit, after 30 days (your waiting period) will provide a monthly benefit for up to 12 months for any one claim. Involuntary Unemployment Taking out a new loan can be exciting and stressful at the same time. But to be made involuntarily unemployed could mean losing the loan altogether. Focus on finding a new job with the help of this benefit. If you are involuntarily made unemployed and remain continuously unemployed for at least 30 days (your waiting period), we will provide a monthly benefit for up to 3 months for any one claim. Loan Protect 2 Loan Protect 3

4 What isn t covered? So we ve explained what is covered under Loan Protection; it s now important to let you know what isn t covered. Cover s Death and Terminal Illness s Exclusions Any related illness, related injury or related conditions in the 5 years before the commencement date, the date of any reinstatement or the date of any increase in the sum insured (applies to the increased portion only) that the: - insured person was aware of, or - insured person received advice or treatment from a registered medical practitioner or other health professional, or - insured person or a reasonable person in the circumstances, were aware of symptoms for which a reasonable person would have sought medical advice or treatment; Intentional self-inflicted injury; A claim event which occurred whilst travelling to countries which the Australian Government has issued a do not travel or reconsider your need to travel warning; and Taking part in an illegal or criminal activity. Trauma Any related illness, related injury or related conditions in the 5 years before the commencement date, the date of any reinstatement or the date of any increase in the sum insured (applies to the increased portion only) that the: - insured person was aware of, or - insured person received advice or treatment from a registered medical practitioner or other health professional, or - insured person or a reasonable person in the circumstances, were aware of symptoms for which a reasonable person would have sought medical advice or treatment; Intentional self-inflicted injury; A claim event which occurred whilst travelling to countries which the Australian Government has issued a do not travel or reconsider your need to travel warning; Taking part in an illegal or criminal activity; If the insured person dies within 14 days of when the insured trauma condition occurs or is diagnosed; and If any of the insured trauma conditions occur or symptoms become apparent, within 90 days of the commencement date, reinstatement date of the policy or increase in sum insured (for the increased portion only), unless the occurrence of the insured event is as a result of an accident. Disability Any related illness, related injury or related conditions in the 5 years before the commencement date, the date of any reinstatement or the date of any increase in the sum insured (applies to the increased portion only) that the: - insured person was aware of, or - insured person received advice or treatment from a registered medical practitioner or other health professional, or - insured person or a reasonable person in the circumstances, were aware of symptoms for which a reasonable person would have sought medical advice or treatment; Intentional self-inflicted injury; A claim event which occurred whilst travelling to countries which the Australian Government has issued a do not travel or reconsider your need to travel warning; and Taking part in an illegal or criminal activity. Involuntary Unemployment An unemployment benefit will not be paid where unemployment occurs as a result of: - voluntary resignation, voluntary redundancy, early retirement or where employment has been abandoned; - taking part in a strike or a lockout; - being dismissed for serious misconduct or for taking part in an illegal or criminal activity; or - employment ceasing at the end of a contract, season, task or period, where the insured person was employed under a contract, seasonally or for a specified task or period; or - for unemployment existing at the commencement of the cover or where the insured person was aware at the commencement of the cover of the impending termination of their employment and the subsequent termination of that employment was the cause of the unemployment. Taking part in an illegal or criminal activity. When will my cover commence? Your cover will commence once your application has been accepted by us. You will receive a policy document and schedule detailing the level of cover for which you have been approved. The policy document along with the schedule forms the basis of your contract. If there is any inconsistency between this PDS and the policy document, the full terms and conditions contained in the policy document will prevail to the extent of the inconsistency. When will my cover end? Your cover ends on the earliest of the following events: you turn age 65; your insurance is cancelled due to non-payment of premium; you request to cancel your insurance; the date the Terminal Illness is paid in full; or the date you die. In addition: the Trauma ends once a benefit has been paid for the specified trauma condition; the Repayment Cover ends on the insured person s permanent retirement; or the Involuntary Unemployment ends as soon as we pay the Involuntary Unemployment for 12 months in total. If your policy is jointly owned, your cover will continue and premiums will be adjusted accordingly. Loan Protect 4 Loan Protect 5

5 Applying for Cover Who is eligible? Loan Protection is available for borrowers who have a personal loan or mortgage loan with a registered finance corporation or authorised deposit taking institution. To apply for Loan Protection you must: be aged between 18 and 55 (inclusive) at the time of application; have received the PDS in Australia; and be an Australian or New Zealand citizen or permanent resident, residing in Australia at the time of applying. In addition, if you apply for Repayment Cover: you must be gainfully employed and working a minimum of 20 hours per week; you must have been gainfully employed for the last 6 months; and the loan must be a personal loan or a mortgage that is secured by your principle place of residence. When can you apply? You can apply for Loan Protection: when you apply for a new loan; when you apply for an additional borrowing under an existing loan; or within 12 months after the loan commenced, or an increase in the loan, the loan is re-funded or the security for the loan is changed. Protection for one life or two Up to two borrowers can apply for Loan Protection on the one policy (Joint Policy) for the same loan. If you decide to apply as a joint policy, each insured person may have different covers and cover levels, based on your loan amount and circumstances. Example: Dan and Janice have a joint home loan of $750,000. Dan decides to apply for of 100% of their loan and Repayment Cover. Janice, a full-time stay-at-home mother, decides to apply for only Loan Cover of 25% of their loan. How much cover can you apply for? You can apply for 100%, 75%, 50% or 25% of your loan amount of up to $1,000,000. Repayment Cover You can apply for 100%, 75%, 50% or 25% of your monthly loan repayments of up to $5,000. Premiums How can I pay my premiums? You can select to pay your premiums either fortnightly, monthly or annually from your nominated bank account or credit card (Diners, American Express, VISA and MasterCard are accepted). What does Loan Protection cost? The premium payable is based on your chosen cover, the amount insured, your age, your age at entry, gender and the number of persons insured. We d like to show you just how affordable Loan Protection is below are some monthly premium examples: Kelly: female: 32 years: non-smoker Loan amount $350,000 Policy Sum insured $350,000 (100%) Monthly premium $37.35 Brian: male: 32 years: non-smoker Loan amount $450,000 Policy & Repayment Cover Sum insured $225,000 & $800 per month (both 50%) Monthly premium $66.36 Am I eligible for any discounts? Everyone loves a discount! Below are the discounts available to you: Package Discount Enjoy a 10% discount if you take out and Repayment Cover together. Easy! Sum Insured Discount A sum insured discount may apply to your policy. The size of the discount will depend on the type of cover selected; the sum insured amount and the loan type. What happens if I don t pay my premium? You must pay your premiums throughout the life of the policy when they are due. If you do not pay a premium within 30 days of it being due, we will cancel your policy. However, we will provide you with 30 days written notice, before we cancel it for this reason. Important Information How do I make a claim? If you, your family or legal personal representative needs to make a claim, they should contact us as soon as possible on We will send out a claims pack, which sets out in detail the information that is required by us to assess and complete a claim. For more information, refer to page 5 of the Policy Document. Are there any risks in taking out a Loan Protection policy? Some of the risks with taking out a Loan Protection policy include: the policy may not suit your needs; the level of cover may be insufficient; Loan Protection is not a savings plan, so if you cancel the policy after the cooling off period, you will not receive any premiums back. It is important that you ensure that the policy meets your needs both now and in the future. You may wish to seek assistance from a financial adviser if you are not sure if Loan Protection suits your personal circumstances. Customer service If you have an enquiry, wish to notify us of a change to your policy (i.e. contact details), or have a complaint, please contact MetLife Customer Service on (Monday to Friday, 8am 6pm) or write to MetLife Insurance Ltd, Reply Paid 3319, Sydney NSW We will strive to achieve the highest standard of customer service. If you have a complaint and you re not satisfied with our response, the Financial Ombudsman Service (FOS), an independent and impartial body, offers a free dispute resolution service. FOS can be contacted on , or write to The Executive Officer, Financial Ombudsman Service, GPO Box 3, Melbourne Victoria 3001, or to info@fos.org.au. Loan Protect 6 Loan Protect 7

6 Are Loan Protection s taxed? Premiums paid for the following components of should generally be non-deductible for tax purposes and any benefits paid by us under these components would not be assessable: Death ; Terminal Illness ; and Trauma. Premiums paid for the following components of Repayment Cover should generally be tax deductible and any benefits paid by us under these components should form part of assessable income for tax purposes: Disability ; and Involuntary Unemployment. GST does not apply on any insurance premiums under Loan Cover but to Repayment Cover. If tax laws are altered, we reserve the right to increase premiums or charges to reflect any applicable GST or any other Government taxes and charges that may be introduced. This information is based on MetLife s interpretation of the present taxation rules. You should seek advice from a suitably qualified professional in relation to your particular circumstances. Protecting your Privacy We respect your Privacy. MetLife and ACE Insurance Ltd handles all personal information they collects in accordance with the National Privacy Principles and, the Privacy Act The MetLife Privacy Policy can be viewed at or call us on The ACE Privacy Policy can be viewed at Updating our PDS All the information contained in this PDS is current at the time of issue. We may change or update any information from time to time. If the change is not materially adverse, we may notify you about the change by preparing an update on or website or You can also obtain a printed copy of this free of charge by contacting us. If we make a change to your policy which in your opinion was adverse to you, we will, if you make a claim, assess your claim on the terms of the policy before the change took place. Register of alternative forms of remuneration MetLife maintains a register of alternative forms of remuneration paid to intermediaries as required by the Financial Services Council of which we are a member. The purpose of this register is to provide an outline of the alternative types of remuneration paid and received. You can obtain a copy by calling us on Financial Claims Scheme and Compensation Arrangements ACE is an insurance company authorised under the Insurance Act 1973 (Insurance Act) to carry on general insurance business in Australia by the Australian Prudential Regulation Authority (APRA) and are subject to the prudential requirements of the Insurance Act. The Insurance Act contains prudential standards and practices designed to ensure that, under all reasonable circumstances, financial promises made by ACE are met within a stable, efficient and competitive financial system. Because of this: The protection provided under the Financial Claims Scheme legislation applies in relation to ACE and the Policy. If ACE were to fail and were unable to meet our obligations under the Policy, a person entitled to claim under insurance cover under the Policy may be entitled to payment under the Financial Claims Scheme (access to the Scheme is subject to eligibility criteria). Information about the Financial Claims Scheme can be obtained from the APRA website at and the APRA hotline on ; and ACE are exempted by the Corporations Act 2001 from the requirement to meet the compensation arrangements Australian financial services licensees must have in place to compensate retail clients for loss or damage suffered because of breaches by the licensee or its representatives of Chapter 7 of that Act. We have compensation arrangements in place that are in accordance with the Insurance Act. Direct Debit Service Agreement If you decide to purchase a Loan Protection policy, you authorise MetLife to debit the relevant payments from your nominated bank account or credit card in accordance with the terms of the Direct Debit Agreement with MetLife. This agreement will be sent to you with your Policy Document. For more information, refer to page 8 of the Policy Document or go to Loan Protect 8 Loan Protect 9

7 MetLife Insurance Limited ABN AFSL No Level 9, 2 Park Street Sydney NSW 2000 Telephone: MET /13