Universal Loan Insurance

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1 Creditor Insurance Universal Loan Insurance EXCELLENCE, YOUR LIVING BENEFITS SPECIALIST INVESTED IN YOU.

2 UNIVERSAL LOAN INSURANCE PROTECT YOUR LOANS YOU and Your Needs Buying a property or a new vehicle or signing for a line of credit involves a substantial financial commitment. Do you have the right coverage? Here are a few points to remember about the mortgage insurance that banks sell: disability coverage is generally limited to two years of benefits; insurability is generally only verified in full when a claim is made; insurance coverage is tied to the loan, which means it is non-transferable; insurance is not usually sold by financial security advisors. WHAT WE OFFER: UNIVERSAL LOAN INSURANCE Creditor insurance coverage that offers disability insurance, life insurance and critical illness insurance who insurability is verified at the time of insurance purchase. A single insurance contract that covers all your loans. Coverage that s completely separate from your creditors. Above all, coverage that pays benefits directly to you - benefits that are non-taxable and are not integrated with your other disability benefits. OUR LOAN COVERAGE YOU ARE ELIGIBLE if You... are between the ages of 18 and 59 inclusively; work, at least: 21 hours per week on a regular and continuous basis; or eight months per year totalling 1,050 hours per year; meet the Insurer s underwriting criteria; are a Canadian citizen, or reside in Canada and meet certain criteria. 2

3 YOU ARE CONSIDERED Totally Disabled if TOTAL DISABILITY For the first 24 months, as the result of an illness or accident, you are in a state of continuous incapacity that prevents you from performing the activities of your regular occupation and you are not performing any other work for which you are, or should be, paid. As of the 25 th month and for the remainder of the benefit period, you are considered totally disabled if that same state of continuous incapacity prevents you from exercising any reasonable occupation and you are not performing any other work for which you are, or should be, paid. Also, to be considered totally disabled, you must: have developed an illness or sustained an accident while the Disability Insurance coverage was in effect; be under the regular care of a physician according to the frequency required for your condition for the duration of your state of incapacity. UNIVERSAL LOAN INSURANCE Regular occupation means any employment, job, occupation or profession for which you were receiving income prior to the onset of your disability. Any reasonable occupation means, regardless of whether such work is available, any employment, job, occupation or profession that is likely to provide you with suitable income compared with that earned prior to your total disability and that you are able to hold by virtue of the experience, education, training or knowledge you currently hold or may reasonably acquire. WAIVER of Premiums Payment of your premiums will automatically be waived for all coverages under your contract if you meet the definition of total disability and your disability begins before your 60 th birthday. The waiver of premiums begins as soon as your waiting period expires, subject to a minimum of 30 days, and terminates when you are no longer eligible for Disability Insurance benefits. TIPS FROM A PRO EXTENSION OF THE REGULAR OCCUPATION PERIOD ($) With this option, you benefit from a definition of total disability based on your regular occupation for a period of 60 months or up to age 65. If you are in occupational class B, you can be covered for your regular occupation for a maximum of 60 months. PARTIAL DISABILITY This option entitles you to a benefit even if you are not considered totally disabled, provided you are working full-time when you become partially disabled. If you are unable to perform 50% of the duties of your regular occupation on a continuous basis, you are eligible for 50% of your monthly benefit. The benefit is payable as of the expiry of your waiting period and for a maximum of 12 months. 3

4 UNIVERSAL LOAN INSURANCE HOW WILL YOU Be Covered? Universal Loan Insurance offers, protection for your loans by covering monthly payments in the event of disability due to illness or accident. Monthly benefit per $50 increment Benefit period Waiting period Minimum $300 Maximum $5,000* 2 years, 5 years or up to age 65** 30 days 30 days + 60 days 60 days + 90 days 90 days + *Note that for buildings with four or more apartments, the eligible monthly benefit is limited to $3,000. **For corporate or business loans, the benefit period is limited to two years. In the event of day surgery or hospitalization for more than 18 hours, benefits are payable from the first day. Benefit payment can commence from the first day in the case of an accident with the + option. If, for medical reasons, you do not qualify for our complete coverage, the Insurer may offer you Disability Insurance in the Event of Accident. BE READY for Anything! TEMPORARY LOSS OF REMUNERATIVE WORK If you lose your job, take a parental leave or stop working temporarily but have not retired, then your Disability Insurance coverage will remain in effect under our Maintenance of Coverage when Remunerative Work Ceases clause for a period of 12 months as of the date your work ceases. Benefits payable in the event of total disability are subject to a waiting period of 90 days. For the purposes of applying this clause, you are totally disabled if, as the result of illness or accident, you are in a state of continuous incapacity that prevents you from performing any reasonable occupation and you are not performing any other work for which you are, or should be, paid. GRADUAL RETURN TO WORK This feature is available at no additional cost and continues to pay a portion of the monthly benefit for those who are gradually returning to work. When an attending physician recommends a gradual return to work, the monthly disability benefit is only reduced by the number of days worked. Disability benefits for a gradual return to work begin upon expiry of the waiting period (minimum 30 days) and are payable for a maximum of two months. EXTENSION AT AGE 65 You may choose to extend your Disability Insurance in the Event of Accident until age 75, without evidence of insurability, provided you are working full-time at age 65. During the extension period, you will be eligible for benefits equal to 50% of those in effect before age 65, subject to a 90-day waiting period and a maximum benefit period of two years. REINSTATEMENT OF BENEFITS If you decide to reduce your coverage, you may choose to reinstate your monthly benefits up to initial level within two years of the coverage reduction. To do so, simply fill out a Short Declaration of Health stipulating that your health has not changed since you requested the reduction in benefits. 4

5 CHOOSING Your Benefits Universal Loan Insurance provides creditor insurance that covers all your loans under a single contract. This means that if you ever become disabled, you only need to file a single claim. Benefits will also be paid to you directly. THE FOLLOWING ARE CONSIDERED ELIGIBLE LOANS: Mortgage Loans Buying property is by far the biggest investment you re likely to make in your life. Universal Loan Insurance provides comprehensive coverage that is adapted to your needs: coverage of up to 125% of the mortgage payment for your primary residence so that you can pay your mortgage and fixed expenses (taxes, utilities, etc.); coverage for apartment buildings and commercial buildings; coverage that includes the accelerated repayment of your mortgage loan if such accelerated payments are made regularly before you become disabled. UNIVERSAL LOAN INSURANCE Lines of Credit Since lines of credit are an increasingly popular way to consolidate debt, including as a means to finance real estate, Universal Loan Insurance offers you coverage for the monthly interest payments, whether payable or not, as well as an additional monthly amount equal to 0.5% of the balance owing on the line of credit. Some lines of credit require monthly repayment of a percentage of your balance, in which case benefits are limited to the amount required by your financial institution, to a maximum of 3% of the balance owing. If you make predetermined monthly payments to repay your line of credit, these may justify your monthly benefit as long as you can provide a supporting document to this effect. Other Loans In short, Universal Loan Insurance covers any loan that you take out with a financial institution or a recognized body and that provides for a minimum payment at regular intervals, including: car, boat, motorcycle or recreational vehicle loans (lease or purchase); personal loans, joint loans or corporate loans; leverage loans for investment purposes; credit cards. If your disability extends beyond the term of your car lease, the loan to finance the residual value of the contract is eligible. Moreover, when a loan is taken out by several parties with a solidary obligation, that loan is 100% eligible for each of the Insureds, to a maximum of the loan s total monthly payments. 5

6 UNIVERSAL LOAN INSURANCE COVERAGE FOR A SPOUSE Without Remunerative Work If your spouse is not engaged in remunerative work and is legally responsible for certain loans, Universal Loan Insurance provides disability insurance coverage for him or her. Your spouse is eligible for a maximum coverage of $1,000 per month, subject to a 90-day waiting period and a maximum benefit period of two years. A spouse without remunerative work is considered totally disabled if, as the result of an illness or accident, he or she is in a state of continuous incapacity that prevents him or her from performing most of his or her usual daily activities. Also, to be considered totally disabled, he or she must have developed an illness or sustained an accident while the selected coverage was in effect and be under the regular care of a physician according to the frequency required for his or her condition for the duration of his or her state of incapacity. CHOOSING Your Premiums Our premium rates are based on the coverages that you choose as well as your age, occupation, gender and status as a smoker or non-smoker. GUARANTEED RENEWABLE CONTRACT: INSURING YOU FOR THE LONG TERM We undertake to renew your contract from year to year until your 65 th birthday, provided your renewal premiums are paid. However, the Insurer may adjust premiums based on product results and experience. Our goal is to ensure that premiums remain stable. Whatever your financial capacity, we offer you two methods of payment to keep your contract in force: Up to age 65; or For consecutive 5-year periods. BROADEN YOUR COVERAGE by Adding Riders Term Life Insurance to Age 65 Critical Illness Insurance Please refer to your contract for more information about the covered expenses, limitations and exclusions for the riders you choose. Please note that family coverage is also available for some riders. TIPS FROM A PRO OCCUPATIONAL CLASS ENHANCEMENT Based on certain criteria related to your type of employment, years of experience and income, your occupational class may be enhanced. An enhancement may mean that you ll pay lower premiums for your Disability Insurance coverage. RETURN OF PREMIUMS: TURNING YOUR INSURANCE CONTRACT INTO AN INVESTMENT ($) With this option, 50% of all premiums paid for your Disability Insurance are refunded, including the portion applicable to the Return of Premiums, less any disability claims paid under your contract. Premiums may be returned at age 55, 60 or 65, as you choose; however, no premiums are returned for contracts that have been in force for less than 120 months. Payment of a Return of Premiums terminates the Disability Insurance coverage. Payment is automatic at age 65. 6

7 LIMITATIONS AND EXCLUSIONS applicable to Disability Insurance LIMITATIONS The benefits payable are limited to the monthly payments for eligible loans. No benefit shall be payable beyond the maturity date of an eligible loan. For corporate or business loans, the maximum benefit period is two years. Loans covering a building with four or more apartments are limited to $3,000 per month. For lines of credit, credit cards and leverage loans for investment purposes, the maximum benefit period shall be the lesser of 15 years or the benefit period selected by the Insured. For the Maintenance of Coverage when Remunerative Work Ceases clause, the minimum waiting period is 90 days. Also, if you are not totally disabled, entitlement to monthly disability benefits is suspended as of the 13 th month without remunerative work. For a spouse without remunerative work, the sum insured are limited to $1,000 per month with a waiting period of 90 days and a maximum benefit period of two years. UNIVERSAL LOAN INSURANCE GENERAL EXCLUSIONS No benefits shall be payable for a disability resulting directly or indirectly from any of the following: active membership in the armed forces of any country; suicide, attempted suicide or self-inflicted injury, whether the Insured is sane or insane; injury sustained while the Insured is actively participating in a riot, an insurrection or hostilities, or injury sustained during a war, whether declared or not; commission or attempted commission of a criminal act by the Insured; participation by the Insured in any type of flight or attempted flight while he or she is travelling aboard the craft other than as a passenger; pregnancy, natural childbirth, childbirth by Caesarean section, or miscarriage; the operating of a motor vehicle by the Insured while impaired, under the influence of narcotics or alcohol or while your blood alcohol concentration exceeds the limit prescribed by law; participation in a race, trial or speed contest for automobiles, motorcycles or any other motor vehicle; participation in any sport for compensation. SPECIFIC EXCLUSIONS Loans specifically covered by other insurance or deferred loans for which the monthly payment is not clearly determined prior to the appearance of the first symptoms that ultimately lead to a state of disability are not eligible. Furthermore, eligible loan excludes: any new loan contracted while the Insured is disabled; any new loan contracted in 120 days prior to the total disability and after the appearance of the first symptoms that ultimately lead to a total disability. These limitations also apply to any increase to an existing loan other than the renewal of a mortgage loan upon maturity of the current term for an identical period of amortization, frequency of payments, and term. Note that a loan contracted to repay the residual value of an automobile leasing contract is not considered a new loan. For the Maintenance of Coverage when Remunerative Work Ceases clause, no benefit shall be payable if the disability is caused directly or indirectly by any nervous, psychological or psychiatric illness, any degenerative disease, a disease affecting your neurological system, or fibromyalgia. If a Primary Insured receives disability benefits for the maximum period stipulated in the applicable regular occupation definition of total disability, no further benefits shall be payable for a same medical condition unless it is shown that he or she is unable to exercise any reasonable occupation. INTERIM INSURANCE AGREEMENT To benefit from the Interim Insurance Agreement, you must answer every question on the short Declaration of Health found in the application, then sign and return it to the Insurer along with the application and payment for the first premium. NOTE This documentation is a short summary of the coverages and conditions in your contract and is therefore incomplete. Please refer to your personal contract: it is important that you read and understand it. 7

8 The Excellence Life Insurance Company 5055 Metropolitain East, Suite 202 Montreal (Quebec) H1R 1Z7 Customer service iaexcellence.com Tel.: Toll-free: Fax: Toll-free: MB-UL1E