Group Critical Illness

Transcription

1 TECHNICAL GUIDE Group Critical Illness Because everyone needs a back-up plan

2 Product Overview This guide explains the main features of our Group Critical Illness (GCI) product. Please note that Unum s Group Critical Illness policy is only available through authorised intermediaries. GCI provides a tax-free lump sum direct to a member of the policy if they are diagnosed with a critical illness or undergo a surgical procedure that is covered by our policy and meets our policy definition. The lump sum can be used as the member sees fit members must survive at least 14 days after the critical illness event allows you to choose Base Cover (which insures against some of the most serious Critical Illness events) or Extra Cover (which covers a number of additional serious conditions) member s children are automatically covered at no extra cost for a percentage of the members benefit - from 30 days old until 18 years old (21 if in full time education). You can also choose to insure a member s spouse/partner at an extra cost can be funded entirely by you, funded by both you and your employee or entirely by the employee does not have a surrender value The product information contained in this guide complies with the Association of British Insurers (ABI) Statement of Best Practice for Critical Illness Cover December Contents Page number A. Your commitment as the policyholder 3 B. Risk factors 3 C. How the policy works Types of cover Product features Eligibility Insured earnings Temporary absence Members based overseas 9 2 Preparing a quote 10 3 Starting and ending cover 11 4 Premium rates and policy accounting 12 5 Medical underwriting, pre-existing and related condition exclusions 15 6 Policy documents 19 7 Claiming benefits 19 8 Exclusions 19 9 Taxation Equity Partners UnumOnline Complaints Compensation 23 D. Glossary 23 E. Appendix 24 This document does not provide tax, legal or financial advice that can be relied upon in the specific circumstances of a particular Policyholder or in respect of any member insured under the policy. This includes but is not limited to any potential liability to corporation tax and income tax. You should take advice from your own professional advisers to ensure that they understand the impact of tax and legislation. Page 2 of 35

3 A. Your commitment as the policyholder By taking out a Unum policy, you are agreeing to: pay premiums on time choose the eligibility criteria for members entry to the policy and to abide by those conditions to notify us in writing if you: - want to amend the eligibility criteria - eg. by changing the eligibility from management only to all staff - acquire another company and wish to include their employees in the policy - dispose of a company which results in the removal of members from the policy - want to change the policy design eg. benefit level or Terminal Age - want to terminate the policy identify any discretionary entrants (employees who do not fulfil the standard conditions for entry) notify us of claims within the time limit set out in your policy documents supply us with any other information we may ask for For Flexible and Voluntary Benefits, where a Third Party Administrator is involved, you must also ensure we receive: - any information we ask for following your policy application or once the policy is live - membership data at each policy accounting date (usually monthly) and when you make a claim This will ensure that we are able to pay the correct benefits in the event of a claim. B. Risk factors 1. This guide should be read with the accompanying quote. Please note that the quote takes precedence if anything in it differs from this guide. 2. The policy documents take precedence if anything differs between the policy documents, the quote and this guide. 6. The guarantee period advised in your quote applies to both the premium rate (for Unit Rated policies) - or the underlying rate table (for Single Premium policies) - and the policy conditions. When the guarantee expires at the policy review date, both the premium rate (or underlying rates), and the policy conditions are reviewable. 7. For all policies, the premium rate and policy conditions are usually guaranteed for 2 years. However, we may amend the terms at any time if we believe there is a significant change in the risk profile. The factors we take into account are: a change of 30% or more in the number of members or benefit insured the inclusion of a new participating company the disposal of a participating company or closure of part of your business the inclusion of a new member category a change in policy design such as an alteration of benefit level, Terminal Age or eligibility a significant overall change in the occupations of the members or where they work a change to the level or basis of the social security or income tax systems For new policies, we may review the terms offered if there is a 30% or more change in the number of members or benefit in the data provided to produce the quote. 8. If the number of members drops below the minimum number set out in your policy documents, we reserve the right to cancel the policy at any subsequent policy accounting date. In the case of standard Group Critical Illness this is usually 5 members. 9. If premiums are unpaid cover will cease and claims will not be paid. Flexible and Voluntary Benefits also carry the following risks: 1. If employees choose benefits which do not subsequently meet their needs, or where an employee s circumstances change as a result of a Lifestyle Event and they do not adjust their benefit levels accordingly, they may find themselves inappropriately insured. 2. For flexible and voluntary policies, if the number of members drops below 50 we reserve the right to cancel the policy at any subsequent policy accounting date. 3. Full details of your insurance cover are set out in your policy documents. The policy is issued according to the Laws of England and any dispute will fall under the exclusive jurisdiction of the English Courts. 4. Customers for this product are classed as Commercial as defined by the Financial Conduct Authority s (FCA) Insurance: Conduct of Business sourcebook (ICOBS). 5. The way HMRC tax premiums and benefits may change in the future Page 3 of 33

4 C. How the policy works 1.1 Types of cover Standard Group Critical Illness Unum s standard Group Critical Illness policy is available to employees, working directors and Equity Partners. Premiums are entirely funded by you for employees and working directors. Equity Partners pay their own premiums. Standard Group Critical Illness is usually only available for policies with 5 or more members. The same benefit formula applies to all members within the eligibility categories you define. This can be either a multiple of the member s earnings or a flat benefit amount. Flexible Group Critical Illness Typically, employees will be covered for a core benefit and have the option to increase their cover by multiples of salary or benefit steps. The core benefit is funded by you in the same way as a Standard Group Critical Illness policy. Employees can choose to increase their benefit each year during their flexible benefits selection window or within 2 months of a Lifestyle Event. Benefits in excess of the core-benefit are typically taken in lieu of other benefits or are funded by the employee. Flexible Group Critical Illness is available for policies with 250 or more members at outset. Voluntary Group Critical Illness Unum s Voluntary Group Critical Illness policy is available to your employees through you but is funded by them. Employees join the policy at their discretion and select their level of cover within the parameters you choose. Employees can choose to join the policy or increase their benefit each year during their flexible benefits selection window. Benefits can also be increased within 2 months of a Lifestyle Event. You collect the premiums and pay them to Unum on the employees behalf. Voluntary Group Critical Illness is for policies with 250 or more eligible members and requires a minimum of 50 members to opt into the policy at outset. Flexible and Voluntary Policies Rules will apply to when employees can increase cover and by how much. Our typical rules are: Benefit Elections and Lifestyle Events Employees can choose to increase their benefits twice a year at the following times: once at the policy accounting date and once following an approved Lifestyle Event Employees can: flex up (increase their benefits) one step at a time flex down (decrease their benefits) by any number of steps Benefit Elections must be made before the effective date of cover, and for Lifestyle Event increases within 2 months of the Lifestyle Event. A new pre-existing and related conditions exclusion will apply to benefit increases (See section 5 - Medical underwriting, pre-existing and related condition exclusions.) The table of Lifestyle Events opposite are broad headings for information only. Unum must approve the definitions and precise wording before accepting risk. Some Lifestyle Events will incur an additional cost. Lifestyle Events Increasing benefit Birth of dependant child / adoption OR getting pregnant OR starting/returning from maternity leave Death of dependant (adult or child) Marriage/Civil Partnership, start of a Partner relationship Divorce or Separation 1 Secondment overseas Return from Secondment 2 Increase in working hours 3 Moving home Reduction in basic salary 4 Increase in salary by >5% Promotion 5 Redundancy of partner Lifestyle Events Reducing benefit There are no standard restrictions on reducing benefits within the policy. Subsequent increases will be subject to the normal rules i.e. one step at a time. Please also refer to accompanying notes below. 1. Except Partner s/spouse s cover. 2. Not eligible if through ill health. The time period of overseas secondment must have been fully completed. 3. Only allowed if changing contract of employment from part-time to full-time. 4. This will relate to basic salary only (so cannot include any other remuneration). It will not be allowed if the reduction in salary is going from full-time to part-time. It will also not be allowed if the salary reduction is due to ill health. 5. There could be an overlap with salary increase with this Lifestyle Event. In the event of both being Lifestyle Events, only one increase in total will be allowed. Page 4 of 33

5 1.2 Product Features We offer two types of cover, Base Cover and Extra Cover. The full list of conditions is set out below. Group Base cover Extra cover Cancer Heart and circulatory Organ failure Diseases of the brain and central nervous system Cancer - excluding less advanced cases Coronary artery bypass grafts* Heart attack* Heart transplant - from another donor Stroke* Kidney failure - requiring permanent dialysis Major organ transplant* - from another donor Creutzfeldt-Jakob disease - resulting in permanent symptoms Dementia includng Alzheimer s disease - resulting in permanent symptoms Motor neurone disease - resulting in permanent symptoms Multiple sclerosis* - with persisting symptoms Parkinson s disease and Parkinson plus syndromes* - resulting in permanent symptoms These headings are only a guide - the full definitions of the illnesses covered (usually in medical terms) and the circumstances when you can claim are given in the appendix and your policy documents. Aorta graft surgery* Cardiac arrest - with insertion of a defibrilator Cardiomyopathy - of specified severity Coronary angioplasty - to 2 or more coronary arteries Heart valve replacement or repair* Primary pulmonary arterial hypertension - of specified severity Pulmonary artery surgery - for disease Structural heart surgery - with surgery to divide the breastbone Aplastic anaemia - of specified severity Liver failure - of specified severity Bacterial meningitis - resulting in permanent symptoms Benign brain tumour* - with permanent symptoms or specified treatments Benign spinal cord tumour - with permanent symptoms or specified treatments Coma - with associated permanent symptoms Encephalitis - resulting in permanent symptoms Respiratory Lung transplant - from another donor Respiratory failure - of specified severity Accidents Terminal illness Disability HIV infection - caught within specified geographic limits from a blood transfusion, physical assault or at work Third degree burns* - covering 20% of the body or face Traumatic brain injury - resulting in permanent symptoms Terminal illness - where death is expected within 12 months Blindness* - permanent and irreversible Deafness - permanent and irreversible Loss of hand or foot* - permanent physical severance Loss of speech - total, permanent and irreversible Paralysis of limb* - total and irreversible Rheumatoid arthritis - of specified severity Total permanent disability - of specified severity *The Association of British Insurers produces a statement of best practice for Critical Illness. Group Critical Illness Cover provides wider cover than that definition. Page 5 of 33

6 Section 1.3 Eligibility You can insure the following people under a Unum Group Critical Illness policy: employees, working directors and Equity Partners who fulfil the eligibility set out in your policy documents children aged between 30 days and 18 years (21 if in full time education) are covered automatically for as long as the member is insured you have the option to cover member s spouses on all variations of Group Critical Illness at extra cost Eligibility Benefit Notes Employee, Working Director or Equity Partner years of age Multiple of earnings eg.1x, 2x, 3x, 4x or 5x subject to a maximum of 500,000. Or Flat benefit - eg. 50,000, 100,000 or 150,000 subject to a maximum of 150,000. The employee can be a part-time worker. Fixed term contractors can be insured for the duration of their current contract. Spouse years of age The spouse must be: the legal spouse or civil partner of the employee, and living with the employee Flat benefit up to 150,000 or the member s benefit if lower. The spouse will only be insured while the member is insured. Pre-existing and related conditions exclusions apply to the spouse s entire benefit and any increases in benefit. The spouse will be insured on the same basis as the member (Base or Extra cover). Where Extra cover applies the Total Permanent Disability definition will be Activities of Daily Living. Children 30 days 18 years (21 years if in full time education or vocational training) The child must be: 25% of the employee s benefit up to a maximum of 25,000. A child will only be insured while the member is insured. Pre-existing and related conditions exclusions apply to the child s entire benefit and any increases in benefit. the biological offspring of the member or the member s stepchild, or legally adopted by the member or financially dependent on the member The child will be insured on the same basis as the member (Base or Extra cover). Where Extra cover applies, the Total Permanent Disability definition will be Any Occupation. Page 6 of 33

7 Eligibility You should clearly state a defined eligibility for each membership category. This must be the same for each member within that category. This should include: the minimum and maximum entry ages allowed for new members the categories of member you want covered and the benefits required eg. Directors 4x earnings, Staff 2x earnings. if a minimum service requirement is in place and the duration eg. Members must be employed for 3 months before they are covered by the policy. the date when new members will be covered and when existing members will be eligible for increases in insured benefits. This can be annually, monthly or daily Daily entry and increases in benefit will apply unless otherwise agreed. If cover is dependent on membership of the employer s pension scheme, you will also need to provide the pension scheme s current eligibility requirements. Discretionary, Late and Early Entrants A Discretionary Entrant is a member you wish to cover who does not fit the eligibility criteria for the policy eg. a non-pension scheme member who you wish to be covered under a category that only covers pension scheme members. You must contact Unum to discuss whether or not we are prepared to offer cover and the terms that will apply. This may include medical underwriting on the member s full benefit. The only exception to this is where a member is to be covered as an Early or Late Entrant. An Early Entrant or Late Entrant is someone you wish to join the policy before or after their first opportunity to do so. Unum will treat these members as standard new entrants to the policy with the exception that you must inform us in advance in writing of their inclusion date for cover to be agreed. Page 7 of 33

8 Section 1.4 Insured earnings If you select a multiple of earnings for your benefit design, you must choose an insured earnings definition for calculating the members benefits. Common definitions of insured earnings include, but are not limited to: Basic annual salary Basic annual salary plus fluctuating payments during the last 12 months Basic annual salary plus fluctuating payments averaged over the last 3 years Gross Earnings P60 earnings The member s basic salary excluding other payments such as bonus, commission or dividends. The member s basic salary including other defined payments such as bonus, commission, overtime or dividends. The fluctuating payments are limited to 20% of basic annual salary. The member s basic salary including other defined payments such as bonus, commission, overtime or dividends. The fluctuating payments are averaged over the last 3 years without the 20% limitation. The earnings received during the previous 12 months. Including variable forms of pay such as overtime, bonuses and commissions. Any fluctuating payments will be limited to 20% of basic annual salary. The earnings received during the previous tax year (up to 5th April) - This would only change the benefit level when passing 6th April each year. Any fluctuating payments will be limited to 20% of basic annual salary. Alternatively, the average of the last 3 years total earnings can be used to smooth benefit changes so they are not based on a particularly high or low year. Alternatively, the average of the last 3 years P60 earnings can be used to smooth benefit changes so they are not based on a particularly high or low year. Employees Equity Partners It is important that your definitions are clear and unambiguous eg. are all fluctuating payments to be included? Or only bonuses or other specific payments? Different categories of member may have different definitions outlining how they are paid eg. members involved in sales may have a large portion of performance-related pay, while administration staff only have a basic salary. Equity Partners in partnerships and LLP members of Limited Liability Partnerships, share in the profits of the partnership, which can vary from year to year, and are taxed by HMRC under Schedule D. The normal definition of insured earnings is average of the last 3 years earnings. Changes to earnings are usually either daily or annual. Where an employer operates salary sacrifice eg. in favour of childcare vouchers or pension contributions, we can consider insured earnings reflecting the pre-sacrifice figure. Working directors We can include dividends from the employer in an insured earnings definition, but this only applies to working directors. As dividend income is irregular (depending upon the profitability of the business and the director s shareholding), we treat it the same as other fluctuating payments: basic annual salary plus average of the last 3 years dividends total earnings averaged over the last 3 years including dividend payments Working directors must receive a basic annual salary. Page 8 of 33

9 Section 1.5 Temporary absence Where an absent member is still considered by you as remaining in service, benefit may be maintained: in cases of illness or injury you have the option to continue cover for either a maximum period of 36 months (not exceeding the Terminal Age) or until the Terminal Age during statutory absences such as maternity, adoptive, paternity, unpaid parental leave - for a maximum period of 36 months not exceeding the Terminal Age for any other reason such as sabbaticals, unpaid leave or compassionate leave for a maximum period of 36 months not exceeding the Terminal Age Salary increases that result in an increase in benefit during absence for illness, injury or statutory absence will be accepted under Unum s cover provided that the increase is in line with your general pay increases and will be subject to a maximum of 5% per annum. We will not cover increases for a flat benefit. Increases to benefit during non-statutory absence will not normally apply. Section 1.6 Members based overseas Members employed outside of the UK Members who work overseas for their UK resident employer are covered, as long as: the member meets the policy eligibility conditions Secondment outside the UK Members seconded from their UK resident employer to another company (registered in the UK or overseas) are covered as long as: the member meets the policy eligibility conditions the member has a contract of employment with the UK employer the UK employer retains controls over where and for who the member works both the UK employer and member expect the latter to resume employment with the UK employer at the end of the secondment (or will retire to the UK if the period of secondment extends to the date the member chooses to retire) You must declare each member s nationality and the countries they work in at the start of the policy and at each policy review date. This affects the premium rate quoted and our ability to provide cover B enefits are paid in Sterling and to a UK account. Foreign earnings will be converted to Sterling using the same exchange rate used to convert the non-uk earnings to Sterling to establish the premium payable. References to the UK include the Channel Islands and the Isle of Man. Page 9 of 33

10 Section 2 Preparing a quote Standard Group Critical Illness We will prepare a quote based upon: the risk specification membership data claims history over the last 5 years (if previously insured) industry type the occupation and location of the members to be covered under the policy details of any employees who have had benefits declined or have had adverse underwriting decisions The membership data must be as current as possible and taken from a date within 12 months of the quotation request. Your intermediary can prepare quotes quickly and simply over the internet via our UnumOnline facility for policies with up to 100 members. Alternatively, they can submit a written request via our Regional Sales Offices which cater for a wider range and more complex benefit bases. Once we have the data, specification and claims experience, we will supply a quote detailing the applicable rate, premium and Automatic Entry Limit. The premium we charge will depend on a number of factors. These include the nature and level of the benefits to be provided and details of the employees you want to insure, such as, but not limited to: the multiple of insured earnings or flat benefit definition of incapacity selected (for Total Permanent Disability under an Extra Cover policy) whether temporary absence for illness or injury is provided for 3 years or until Terminal Age Terminal Age for cover eligibility and entry conditions age and gender of employees Flexible and Voluntary Group Critical Illness In addition to the information required under Standard Group Critical Illnesss, when preparing a quote for Flexible and Voluntary Group Critical Illness policies, we also require: the core and default levels of benefit (Flexible policies only) the maximum level of benefit size of steps Lifestyle Events Once we have all the information required, we will provide the following: Flexible Group Critical Illness a quote illustrating the Unit Rate for the core benefit plus a rate table illustrating the top up premiums applicable for increasing benefits Voluntary Group Critical Illness a rate table illustrating the premiums applicable for each unit or benefit step Please note that the top-up and voluntary rate tables can be provided in the following formats: Gender Specific rates the table provided will illustrate rates that are specific to the gender of the member or Unisex rates illustrates the same rates for male and female members and Individual age rates (current or age next birthday) illustrates will illustrate rates for each age or 5-year age banded rates illustrates rates in 5-year age bands It may only be possible to offer unisex and 5-year age-banded rates for existing policies or new policies where the potential membership is high. occupation, industry and locations of employees claims history, if previously insured our then current minimum annual premium We will normally guarantee the quote for 3 months. Page 10 of 33

11 Section 3 Starting and ending cover Setting up the policy Standard Group Critical Illness Your intermediary needs to contact us in writing in advance to advise us when you want cover to commence. So cover for a 1st January start date will begin at a.m. on 1st January - subject to satisfactory answers to any specific caveats shown in our quote. We will not backdate cover. Once you have accepted our quote, you will need to provide the following information within the 30-day conditional cover period: a fully completed Quotation Acceptance and Application Form membership data at the start date deposit premium or Direct Debit mandate a customer verification statement signed by your intermediary You need to inform us of any material changes which may impact on the risk profile of the policy between the accepted quotation and the on risk date - eg. changes in the locations where members work, their occupations, the industries they work in or your claims history. We will then advise you if we will continue cover, of any additional requirements and if needed, the revised premium. Unum We cannot cancel the policy unless: the number of members insured under the policy drops below the number stipulated for the policy (usually 5 for Standard policies and 50 for Flexible and Voluntary policies) premiums are overdue you fail to provide all the information we ask for when applying for the policy, administering the policy or when claiming for benefit relating to a member the company stops trading trade sanction controls are put in place against an employer or members with a significant shareholding the policy no longer complies with current legislation you assign the policy without our agreement you amend or terminate an associated policy If the information we asked for is not provided within 30 days, cover will stop. We will then charge a premium based on the time we have provided cover. Flexible and Voluntary Group Critical Illness Once you have accepted the quote for a Flexible or Voluntary policy, you will have up to 3 months from your chosen start date to communicate the benefits, terms and premiums to your employees. The 30-day conditional cover period provided under a standard policy will not apply. Cancelling cover The policyholder You can cancel the policy at any time, provided you do so in writing. Cover will then end and you will not be liable for payments for periods after this date. Cancellation cannot be backdated. If the policy is cancelled, we will still consider claims for events which occurred before the cancellation date provided there are no outstanding premiums. Page 11 of 33

12 Section 4 Premium rates and policy accounting Standard Group Critical Illness Quote Rate Guarantee Costing basis Additional premiums Unit Rated or Simplified Administration policies (20 or more members) The 1st-year premium advised at the start date of your policy is provisional. The premium is based on the total benefit roll at the start date and the unit rate (expressed as a cost per 1,000 of benefit). Our quote states an estimated 1st-year cost assuming an annual premium is paid and that all members can be accepted for their full benefit entitlement on standard terms. Unit rates are usually guaranteed for 2 or 3 years and are then reviewable. New rates and terms may apply at the end of this period or at any event which triggers a policy review. If the number of members insured under an existing policy falls below 20 at a policy accounting date, we may calculate the premium on the Single Premium basis. Premiums may vary if there are: Single Premium policies (between 5 and 19 members) Premiums will be calculated for each member according to our current premium rates. Premiums are recalculated each year and depend on the age of the member and their benefit at each policy accounting date. Our quote states an estimated 1st-year cost assuming an annual premium is paid and that all members can be accepted for their full benefit entitlement on standard terms. The underlying premium rate table is usually guaranteed for 2 or 3 years and is then reviewable. New rate tables and terms may apply at the end of this period or at any event which triggers a policy review. If the number of members insured under an existing policy increases to 20 or more at a policy accounting date, we may calculate the cost on the Unit Rated basis. members whose benefits exceed the Automatic Entry Limit and they have been declined for the excess benefits or loaded on their benefit members who have been restricted to the Automatic Entry Limit due to non-provision of medical evidence members who are joining outside the normal eligibility conditions, (Discretionary Entrants) Additional premiums, restrictions or exclusions may be due to particular medical conditions or if the member takes part in an unusually hazardous pursuit. If applicable, additional premiums are payable from the date we make the decision. Account We calculate a premium adjustment at the end of each policy accounting period, based on the average total benefit for all members covered by the policy during that time. This means changes in salary and membership are treated as if they occurred halfway through the accounting period. We will apply any premium adjustment for members who leave, join or whose benefit increases at the policy accounting date. We calculate a premium adjustment at the end of each policy accounting period, taking into account joiners, leavers and changes in benefit throughout that time. This means that premiums are calculated on the specific duration and level of cover for each member. Page 12 of 33

13 Data requirements Unit Rated or Simplified Administration policies (20 or more members) At the start date and at each policy accounting date, we require a list of all members showing: Single Premium policies (between 5 and 19 members) name date of birth gender earnings (where multiples of earnings are insured) benefit entitlement membership category date of joining or date of leaving (if applicable) You must identify members whose benefits exceed the Automatic Entry Limit or who are joining outside the policy s normal eligibility conditions. Where spouses are insured, we require their: date of birth gender benefit entitlement Where children are insured, details are only required when making a claim. Non-annual premium payment Commission New joiners Premiums are normally paid annually or monthly by Direct Debit. There is a standard load of 3% for all non-annual payments. Any commission paid to your intermediary is a percentage of the gross premium paid. The premium shown in our quote includes the level of commission payable. Other than at the policy accounting dates, we only need details of new joiners if their benefit exceeds the Automatic Entry Limit or if they are joining outside the normal eligibility conditions of the policy. Page 13 of 33

14 Flexible and Voluntary Group Critical Illness Flexible Group Critical Illness Rates Core (Unit Rated) rates Top-up (single premium) rates Voluntary Group Critical Illness Rates The annual rate of premium that applies to all members is calculated at the start of the guarantee period and is referred to as the Core Rate. The 1st-year premium notified at the Commencement Date of your Unum policy is provisional. It is based on the total benefit at the Commencement Date multiplied by the Unit Rate. Unit Rates are usually guaranteed for 2 years and are subject to review after. A new rate may apply at the end of this period. Premiums will be calculated for each member according to our current age - and gender-related premium rates. Premiums are recalculated at each policy accounting date and are dependent on the age of the member at that time. Premium rates increase with age. The underlying rate table is usually guaranteed for 2 years and is subject to review after. A new rate table may apply at the end of this period. Premiums will be calculated for each member according to our current age - and gender-related premium rates. Premiums are recalculated at each policy accounting date and are dependent on the age of the member at that time. Premium rates increase with age. The underlying rate table is usually guaranteed for 1 policy accounting period for previously uninsured policies and 2 policy accounting periods for established polices and is subject to review after. A new rate table may apply once the guarantee has expired. Flexible and Voluntary Data Each month, we will require the following defined individual membership data in electronic format: member s name, date of birth, gender, flex or voluntary benefit and their corresponding premium calculations joiners and leavers benefit movements (up and down) identifying Lifestyle Event changes any lives to be medically underwritten If applicable, spouses gender, date of birth and benefit entitlement Page 14 of 33

15 Section 5 Medical underwriting, pre-existing and related condition exclusions Pre-existing and related conditions exclusion Where a member has previously experienced a critical illness, they will not subsequently be able to claim for that event. If a member has already suffered or received a previous diagnosis of one of the critical illnesses in the heart and circulatory group, they may not claim for any subsequent incidences of any critical illnesses in that group. If a member has previously suffered any critical illness no benefit is payable under terminal illness or any critical illness in disability group 1 or 2. A member who qualifies under the terminal illness event will not be able to claim again under any other critical illness event. Under the related conditions exclusion, a member will not be able to claim for a critical illness event which is linked to a related condition which the member was aware of, or received treatment or advice for, on or before the date they joined the policy. The related conditions either apply indefinitely or are limited to the 2 years after joining. The pre-existing and related conditions exclusions apply from when the member joins the policy, after a successful Critical Illness claim and to all increases in benefit other than those related to standard pay increases. Details of the specific exclusions which apply to each critical illness event. Group Critical Illness Events Related conditions Cancer Heart and circulatory Base cover Cancer - excluding less advanced cases Base cover Coronary artery bypass grafts Heart attack Heart transplant - from another donor Stroke Extra cover Aorta graft surgery Cardiac arrest - with insertion of a defibrillator Cardiomyopathy - of specified severity Coronary angioplasty - to 2 or more coronary arteries Heart valve replacement or repair Primary pulmonary arterial hypertension - of specified severity Pulmonary artery surgery - for disease Structural heart surgery - with surgery to divide the breastbone Applies for 2 years Polyposis coli Papilloma of the bladder Any carcinoma-in-situ Applies for 2 years Any disease or disorder of the heart Any obstructive or occlusive arterial disease Blood pressure treated at any time by prescribed medication Applies indefinitely Diabetes mellitus Page 15 of 33

16 Group Critical Illness Events Related conditions Organ failure Diseases of the brain and central nervous system Base cover Kidney failure - requiring permanent dialysis Major organ transplant - from another donor (other than heart or lung transplant) Extra cover Aplastic anaemia - of specified severity Liver failure - of specified severity Base cover Creutzfeldt-jakob disease - resulting in permanent symptoms Dementia including Alzheimer s disease resulting in permanent symptoms Motor neurone disease - resulting in permanent symptoms Multiple sclerosis - with persisting symptoms Parkinson s disease and Parkinson plus syndromes - resulting in permanent symptoms Applies for 2 years Any chronic renal disease or disorder Any chronic liver disease Chronic pancreatitis Chronic leukemia Applies indefinitely Diabetes mellitus Applies for 2 years Any disease or disorder of the brain or central nervous system Extra cover Bacterial meningitis - resulting in permanent symptoms Benign brain tumour - with permanent symptoms or specified treatments Benign spinal cord tumour - with permanent symptoms or specified treatments Coma with associated permanent symptoms Encephalitis - resulting in permanent symptoms Respiratory Base cover Lung transplant - from another donor Applies for 2 years Any chronic lung disease Extra cover Respiratory failure - of specified severity Page 16 of 33

17 Group Critical Illness Events Related conditions Accidents Terminal illness Disability group 1 Disability group 2 Extra cover HIV infection - caught within specified geographic limits from a blood transfusion, physical assault or at work Third degree burns - covering 20% of the body or face Traumatic brain injury - resulting in permanent symptoms Extra cover Terminal illness - where death is expected within 12 months Extra cover Blindness - permanent and irrevirsible Deafness - permanent and irreversible Loss of hand and foot - permanent physical severance Loss of speech - total, permanent and irreversible Rheumatoid arthritis - of a specified severity Extra cover Paralysis of limb - total and irreversible Total permanent disability - of specified severity There are no related conditions Applies indefinitely All other critical illness events Applies for 2 years Any disease or disorder of the brain or central nervous system Peripheral vascular disease Inflammatory polyarthropathy Applies indefinitely All other critical illness events Diabetes mellitus Applies indefinitely All other critical illness events Any disease or disorder of the brain or central nervous system Chronic or recurring mental illness Chronic symptoms of fatigue, back, joint or muscle pain Diabetes mellitus Page 17 of 33

18 Medical Underwriting For most policies, medical underwriting will not be carried out because the pre-existing or related conditions exclusion is applied. Where medical underwriting does apply, a Scheme Member s Application Form must be completed. This may lead to requests for further information that may include, but is not limited to, a GP report, medical examination or blood tests. Switch Terms for a policy with existing members whose benefits have been medically underwritten. We need details of the previous insurer s Free Cover Limit or Automatic Entry Limit, and - for each member whose cover has been medically underwritten or restricted: name date of birth gender full underwriting decision special term or restriction applied (including percentage loadings and amount of benefit above which the loading/restriction applied) benefit on risk at previous policy cancellation date Claims arising before full cover has been agreed A member whose benefit entitlement does not exceed the Automatic Entry Limit is fully covered as soon as they join the policy (subject to the pre-existing and related conditions exclusions). If a member whose benefit entitlement exceeds the Automatic Entry Limit claims before we have agreed full cover, the following terms will apply: Temporary Cover Temporary cover pending underwriting is subject to ALL of the conditions opposite Temporary cover starts Where a member s benefit needs underwriting because it exceeds the Automatic Entry Limit, we provide a maximum period of 3 months temporary cover in respect of the amount being underwritten. During this period, any benefit that exceeds either the Automatic Entry Limit or the member s insured benefit level immediately before the start of the policy will be subject to a pre-existing and related conditions exclusion. This means we will not pay benefit for any medical condition where the member received treatment, care or services (including diagnostic measures), or took prescribed drugs or medicines during the 12 months before the date they first became eligible, or the date of any increase in cover either the date the member joins the policy with benefits above the Automatic Entry Limit, or the effective date of an increase in benefit above the Automatic Entry Limit Temporary cover ends on the first date either of the following events occur we issue terms following completion of medical underwriting, or the 3-month period of temporary cover expires For underwriting purposes, a new member of a policy that has no Automatic Entry Limit is treated as a Discretionary entrant. Once we have agreed full cover, we treat a Discretionary entrant in the same way as an ordinary member, granting temporary cover the next time we underwrite an increase in cover. What happens if a critical illness event arises before we have agreed full cover? If a member claims after the temporary cover period ends, but before we have agreed full cover, benefit is restricted to: In the case of new business - either our quoted Automatic Entry Limit, or, if previously insured, any amount the member was covered for and which we have agreed to accept without additional medical underwriting. In the case of existing business - the amount insured with us immediately before the effective date of the increase being underwritten. Exclusions from temporary cover The pre-existing and related conditions exclusion will apply to the full amount of benefit being underwritten in the event of a claim during the temporary cover period. Benefits will not be paid under temporary cover arrangements for conditions resulting from hazardous sports and pastimes, attempted suicide or self-inflicted injury. If you selected Total Permanent Disability Any Occupation or Total Permanent Disability Own Occupation, neither will apply in the event of a claim during the temporary cover period. If a member becomes disabled because of an illness commencing or an injury sustained during the temporary cover period, a claim for Total Permanent Disability will be payable if the member satisfies the Activities of Daily Living conditions. Page 18 of 33

19 Section 6 Policy documents Once cover under the policy commences goes live, we will issue a copy of your Policy Documents. The policy is issued on the basis of the information provided: in the quotation request or specification the Quotation Acceptance and Application Form completed by you any questionnaire completed by a member any proposal or supplementary proposal made by you or on your behalf The policy comprises the policy conditions, the schedule (including any endorsements) and any special provisions or notices specified in writing by us. Your policy conditions could change following any event which triggers a policy review. Section 7 Claiming benefits This section deals with common questions that arise when a member suffers from one of the insured Critical Illness events. For a claim to be valid, the following criteria must be met: the claimant must be an eligible member of the policy the claim event which occurs or is diagnosed must meet one of the Critical Illness definitions listed in your policy conditions the member must not have suffered a pre-existing or related condition (where applicable) the claimant must survive for 14 days after satisfying the definition for a qualifying Critical Illness event. Notification of Claim Please notify us of a claim under this policy as soon as possible after the event or diagnosis - ideally within 21 days - by telephoning our Customer Care department on We will issue you with the appropriate claim forms. We may not consider a claim where the claim forms are received more than 90 days after the event of diagnosis. a claim form completed by the policyholder a claim form completed by the claimant, together with the claimant s consent under the Access to Medical Reports Act and Data Protection Act, granting us the authority to ask for further information from the claimant s doctors the claimant s original birth certificate confirmation that the claimant fulfilled the survival period for the Critical Illness event if the claim is for a spouse - their original birth and marriage certificates if the claim is for a child - their original birth certificate When we have received all the necessary documents, we will review the medical evidence to ensure the diagnosis satisfies the Critical Illness event as defined in your policy conditions. If the claimant satisfies the criteria, for the Critical Illness event, we will pay the claim by Direct Credit to them - tax free. Section 7.2 Recurrence of a claim event Once a claim is admitted for a specific Critical Illness event, no further claims can be made in for that and some some other events. Cover will automatically continue, but a new pre-existing and related conditions exclusion will apply as if the member has just joined the policy. Section 7.3 How to appeal a claim decision If you are not satisfied with a claim decision, you can ask us to review it. Any request for a decision review should be addressed to our Quality Assurance Manager, Claims Department, Unum, Milton Court, Dorking, Surrey, RH4 3LZ and detail the reasons why you disagree with our decision, plus any additional evidence (medical or otherwise) that you would like us to consider. Any request for a review should be made within 90 days of the date of the decision. If you remain dissatisfied, you can make a formal complaint at any time. See our Compliants section for details. Section 8 Exclusions Other than the pre-existing and related condition exclusions illustrated under each group of Critical Illness events, there are no standard exclusions under this policy. If any specific exclusions are applied this will be illustrated in your policy documents. Section 7.1 Making a claim We require the following: evidence that the claimant is eligible to claim under the policy evidence of the claimant s earnings where a multiple of earnings is insured Page 19 of 33

20 Section 9 Taxation Employee, Working Director, Spouse or Child Employer-paid Group Critical Illness Employee, Working Director, Spouse or Child Employee-paid Group Critical Illness Equity Partner Policyholder Premiums paid by you to insure employees, working directors, spouses or children against Group Critical Illness events are a trading expense and can be offset against Corporation Tax. You may be liable for Class 1A National Insurance Contributions on the premiums. Although you are the policyholder, you are collecting the premiums on behalf of the employee, working director, spouse or child and passing them on to us. The premiums will already have been subject to taxation including any 1A National Insurance liability. You cannot offset the premiums as a trading expense against Corporation Tax. Premiums are collected by the partnership on behalf of the Equity Partners. Premium The employee or working director is taxed on the amount of the premium paid on their behalf by their employer as a benefit in kind. This will include any premium payable for spouses or children s cover. The premium is collected from the employee or working director s net earnings. There is no tax relief on the premium paid. Each Equity Partner (not taxed under PAYE) pays for their cover. There is no tax relief on the premium paid. Employee Benefit A tax-free lump sum is paid direct to the employee or working director in the event of a claim. Where a claim is for a spouse or child of the member, a tax-free lump sum will be paid direct to the member. A tax-free lump sum is paid direct to the employee or working director in the event of a claim. Where a claim is in respect of a spouse or child of the member, a tax-free lump sum will be paid direct to the member. A tax-free lump sum is paid direct to the Equity Partner. Where a claim is in respect of a spouse or child of the member, a tax-free lump sum will be paid direct to the member. This information is based on our understanding of current tax legislation. Employers should refer to their professional advisers for advice on the tax implications for themselves and their employees. Equity Partners should refer to their local HMRC office for clarification on the tax position or speak to their professional advisors for advice on the tax implications. Page 20 of 33

21 Section 10 Equity Partners The Terms and Conditions of our standard Group Critical Illness policy for employers will generally apply to our policy for Equity Partners. Some aspects of the policy may differ for Equity Partners. Please refer to the conditions as noted below. The policy for Equity Partners is available to those partners with an equity share in the firm and whose earnings from the firm are taxed under Schedule D. Premiums Participation Policy Accounting Claiming benefits each Equity Partner (taxed under Schedule D) pays for their own cover, but all premiums are paid by the partnership together in one payment. you must include all Equity Partners for cover under the policy when they first become eligible. we normally calculate benefits using the Single Premium Costing method, regardless of the number of people insured. This is so premiums can be illustrated for all members who are expected to pay their own premiums. claims must be made by the Partnership. Section 11 UnumOnline UnumOnline is our online quote and on risk facility that intermediaries can use to create new business quotations. The table below outlines the terms which are available. Product Variants Number of Lives Categories Earnings Definitions Standard Group Critical Illness only Base or Extra cover policies with members you can include up to 4 membership categories basic annual salary plus all fluctuating payments averaged over the last 3 years non-paye taxed eg. Equity Partners - average annual net taxable earnings received in the previous 3 years gross earnings in the previous 12 months (fluctuating payments are limited to 20% of basic annual salary) P60 earnings in the previous tax year (fluctuating payments are limited to 20% of basic annual salary) basic annual salary plus all fluctuating payments received in the last 12 months (fluctuating payments are limited to 20% of basic annual salary) Temporary Absence for illness or injury 3 years Terminal Age TPD (Extra Cover only) Own Occupation Any Occupation Activities of Daily Living Eligibility the client must be a UK-registered company or a UK-based Equity Partnership the policy must be open to new entrants and not have a closed eligibility Page 21 of 33