Critical Illness 1.0 PRP. Critical Illness 1.0. Product Reference Pamphlet

Transcription

1 Critical Illness 1.0 PRP Critical Illness 1.0 Product Reference Pamphlet

2 The information contained in this product reference pamphlet is intended for the training and education of Colonial Life & Accident Insurance Company employees and benefit counselors (insurance producers in WA) only. Colonial Life has not authorized any other use of this information. Do not give or show it to prospective insureds, employers of prospective insureds, or anyone else not employed by or contracted with Colonial Life & Accident Insurance Company or other Unum Group business units. This pamphlet contains highlights of the actual product benefits. Please see the policy for your state for complete details.

3 Contents General Need for Critical Illness Insurance...1 Why is Critical Illness Insurance Necessary?...1 Survival Costs...2 Quick Product Summary...3 Product Positioning Within the Marketplace...8 Target Markets...8 Professional Market...8 Small Commercial Market...9 Competitive Advantages...9 Product Positioning Within Colonial Life s Portfolio...11 Sales Opportunities...11 Key Differences between Critical Illness (2001) and Critical Illness Support Materials Field Supplies...13 Employee Sale...13 Employer Sale...14 Support Materials Other...14 Producer Support...14 ProducerNet...15 Market Conduct Issues...15 Product Testing Procedures...17 Passing Appropriate Product Training Tests...17 Ordering Marketing Material...18 Important Policy Definitions...19 Plan Options...26 Covered Specified Critical Illnesses...27 Benefit Reduction...28 Maximum Benefit Amount...28 Additional Benefits...29 Subsequent Diagnosis Benefit...29 Cancer Vaccine Benefit...31 Health Screening Benefit...31 Covered Tests...32 Policy Exclusions...33 Eligibility Guidelines...34 Account...34 Employee...34 Spouse...34 Dependent Children...35 General Need for a Group Limited Benefit Medical Plan

4 Underwriting Guidelines...36 Underwriting Levels...36 Rate Structure...36 Sample Premiums...37 Application Guidelines...38 Simplified Issue (SI)...38 Dependent Coverage...40 Simplified Issue Level 1 (SI1)...40 Named Insured and Spouse Coverage...41 Post Enrollment Guaranteed Issue (PEGI)...41 Underwriting Coverage Chart...42 Height and Weight Chart...43 Underwriting Authorization...44 Harmony Enrollment Tips...45 Service Guidelines...48 Service for Individual Policies...48 Handling Transfers...48 Stacking Coverage...49 Reinstating Lapsed Coverage...49 Reinstatement Guidelines...49 Full Benefit Payout...49 Service for Claims...50 Claims Filing Procedures...50 Taxability of Claims Payments...50 Indemnity Benefits...51 Index...52

5 About This Pamphlet The Critical Illness 1.0 Product Reference Pamphlet provides comprehensive product and sales-related information if you are interested in selling Critical Illness 1.0 coverage. In addition, we strongly recommend that you review the policy for your state, along with the appropriate outlines of coverage, product brochures and other support materials.

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7 General Need for Critical Illness Insurance Why is Critical Illness Insurance Necessary? A critical illness can cause major financial problems for individuals, especially for those who are unprepared. Many of us struggle simply to keep up with normal medical bills. For example, nearly a third (32 percent) of Americans report that their family has had problems paying medical bills in the past year. 1 Imagine paying out-of-pocket costs, deductibles, hospital stays, etc., for a heart attack, stroke or cancer-related illness. Without adequate insurance protection, individuals with a critical illness may have to use their savings, if any, or rely on financial aid from family members during their time of need. Another strong incentive to purchase critical illness insurance is that individuals are living longer! Because of medical technology, many who would have died 30 years ago from a critical illness now survive. The following statistics further reinforce the need for critical illness coverage. 1 Kaiser Tracking Poll, 2008 Kaiser Family Foundation. Heart Attack (Myocardial Infarction) 1 in 3 men and women has some form of cardiovascular disease. 1 About 1.2 million Americans had a first or recurrent coronary attack last year. 2 1 Heart Disease and Stroke Statistics 2009 Update, American Heart Association. 2 Know the Facts, Get the Stats 2008, American Heart Association/American Stroke Association. Cancer In the U.S., men have slightly less than a 1 in 2 lifetime risk of developing cancer. For women, the risk is a little more than 1 in 3. Cancer Facts & Figures, American Cancer Society, End Stage Renal Failure More than 485,000 Americans are being treated for kidney failure (also called end stage renal failure, or ESRD). Over the last 5 years, the number of new patients with kidney failure has averaged more than 90,000 annually. National Kidney Foundation Fact Sheet, February 13, Stroke Stroke is a leading cause of serious, long-term disability in the United States. Each year about 795,000 people experience a new or recurrent stroke. About 600,000 of these are first attacks, and 195,000 are recurrent attacks. Heart Disease and Stroke Statistics 2009 Update, American Heart Association. 1

8 Organ Transplant The number of patients waiting for a transplant in the U.S. was 101,854 in June, United Network for Organ Sharing, Organ Procurement and Transplantation, June 12, Survival Costs Because more people survive, they need better financial resources if a debilitating illness occurs. Survival, while very fortunate, has both direct and indirect costs. Direct costs include: Hospital charges. Surgeon, physician, and radiologist fees. Medication and drug costs. Nursing costs. Health insurance usually covers a large percentage of direct costs. Indirect costs include: Home health care needs and household modifications. Deductibles and coinsurance. Lost income and work time for spouses or care givers. Lost income for the critical illness survivor. Rehabilitation. Housekeeping or childcare expenses. Home or car modifications. Travel expenses/transportation to and from treatment centers. Lodging and meals. Special diets. Health insurance does not usually cover these indirect costs, which can weigh heavily on patients and their families. Cancer illnesses alone cost Americans more than $228 billion annually. Of that, only 41 percent goes toward direct medical costs. Over half of direct medical costs are attributed to treatment of breast, lung, and prostate cancers. The remaining 59 percent of cancer costs involve indirect costs.* Colonial Life and Accident Insurance Company s Specified Critical Illness 1.0 policy provides additional financial resources in the form of a lump-sum benefit paid when covered persons are diagnosed with a specified critical illness. *Cancer Facts and Figures, American Cancer Society,

9 Quick Product Summary The following chart lists a few characteristics of the Critical Illness 1.0 policy. The chart is not state specific. Refer to the policy and outlines of coverage for your state for exact product details. Coverage Type Supplemental critical illness insurance that pays a lump-sum benefit per covered person upon diagnosis of a covered specified critical illness. Face Amounts Employee (named insured): $5,000-$100,000 ($1,000 units). Amounts of $76,000-$100,000: Are available for the employee only as named insured (no family coverage allowed); and Require prior approval from your Underwriting Risk Manager; and Are available at an account level only. Spouse (if named insured): $5,000-$40,000. Spouse/dependent: If covered by the employee s plan, spouse coverage is 50% of named insured s face amount and dependent child coverage is 25% of named insured s face amount. Plan Options Plan options may vary by state. For state-specific plan options, refer to your state s product proposals available on ProducerNet. Critical Illness only Critical Illness + Health Screening Critical Illness + Subsequent Diagnosis Critical Illness + Health Screening + Subsequent Diagnosis Critical Illness + Health Screening + Subsequent Diagnosis (HSA-compliant option)* The five plan options are employer choices. The Cancer option, available on all five plans, is an employee choice. One plan option is allowed per account. If the employer chooses the HSA-compliant plan option, this will be the only plan option for that account, even if some employees are not enrolled in the HSA. All plans are available for employees, spouses and dependent children. 3

10 Covered Specified Critical Illnesses (varies by state) Additional Benefits Account Eligibility Cancer (If Cancer option selected, payable once per insured) Carcinoma in Situ (If Cancer option selected, payable only once at 25 percent of face amount) Heart Attack (Myocardial Infarction) Stroke Major Organ Failure and being placed on the United Network for Organ Sharing (UNOS) list for a transplant End Stage Renal (Kidney) Failure Permanent Paralysis due to a Covered Accident Coma Blindness Occupational Infectious HIV or Occupational Infectious Hepatitis B, C or D Coronary Artery Bypass Graft Surgery (payable only once at 25 percent of face amount) Not available for HSA-compliant plan. Coronary Artery Disease (payable only once at 25 percent of face amount) Applicable to HSAcompliant plan only. Subsequent Diagnosis Benefit pays for subsequent diagnoses of specified critical illnesses that meet the policy guidelines. Guidelines vary based on whether a subsequent diagnosis is the result of a new or previously diagnosed specified critical illness. Health Screening Benefit pays $50 once per calendar year per covered person for certain health screening tests. Cancer Vaccine Benefit (if Cancer option is selected) pays $50 per covered person, per lifetime, if a covered person incurs charges for and receives any cancer vaccine approved by the Food and Drug Administration (FDA) for prevention of cancer. 3 payers 4

11 Account Eligibility (continued) Marketable to regular or special market accounts listed in the New Account Manual (form 8690). Available to both payroll-deduction and individual-pay group (IPG) accounts, following normal payment method guidelines. Non-payroll sales are not allowed (those outside of the group account setting). Risks Minimum Account Size Available to all risk groups. Simplified Issue or Simplified Issue Level 1: 3+ lives or greater Post Enrollment Guaranteed Issue (PEGI): 50+ lives; 50 approved applications or 50% participation, whichever is greater Rate Structure Premiums are: Unisex; Separate for tobacco and non-tobacco users; and Age banded: (64 in some states) Family Coverage Options Six coverage options for employees and their families: Employee only (named insured) Spouse only (named insured) Employee and spouse Employee and dependent children (named insured and dependent children) Spouse and dependent children (named insured and dependent children) Employee, spouse and dependent children (named insured, spouse and dependent children) 5

12 Underwriting Guidelines Underwriting requirements for each level below may vary by state. For state-specific guidelines, refer to your state s product proposals, available on ProducerNet. Simplified Issue (SI): Ages 17-59, $5,000-$30,000 face amount. Only three required health questions AIDS, 10- year health, and tobacco usage. Knock-out underwriting applies. (Coverage will be declined if the AIDS or 10-year health question is answered yes. ) Simplified Issue Level 1 (SI1): Ages 60-70, all face amounts, and ages 17-59, $31,000-$100,000 face amount for employees only (named insured) and 17-59, $31,000-$40,000 face amount for spouse only (as named insured). Simplified issue health questions apply, as well as the Medication, 5-year health history, and Ever Been Diagnosed questions. Height and weight are required. Knock-out underwriting applies. (Coverage may be declined based on the health history we receive.) Post Enrollment Guaranteed Issue (PEGI): Application Process Available in most states. $5,000 face amount. SI health questions apply. If participation is met, policies will be issued regardless of the applicant s answers to health questions. If participation is not met, policies will be issued or declined based on answers to health questions. Knock-back underwriting applies. (If applicant does not meet health requirements under PEGI limits for face amounts of $5,000+, coverage will be issued at $5,000.) Use the AccHlth Application for all sales. (Form number varies by state. Use the correct application for the state in which you are writing business.) 6

13 Portability Transfers/Stacking Pre-existing Conditions Renewability Coverage is portable at no increase in premium or change in plan design. We believe this product does not fall under the definition of COBRA, the Consolidated Omnibus Reconciliation Act of It is the responsibility of the employer to comply with COBRA guidelines. Transfers are allowed (under certain circumstances), while stacking is not. 12/12 in most states. (Certain states have a 30-day waiting period in lieu of a pre-existing conditions limitation. Refer to your state s proposal for additional information.) Guaranteed renewable until the Maximum Benefit Amount* is paid. Policy will not be cancelled, except for nonpayment of premium, until the Maximum Benefit Amount has been paid. *For plans with Subsequent Diagnosis, the Maximum Benefit Amount is three times the face amount for the named insured for all covered persons combined. For plans without Subsequent Diagnosis, the Maximum Benefit Amount is 100 percent of the face amount for each covered person. 7

14 Product Positioning Within the Marketplace Target Markets Critical Illness 1.0 coverage is suitable for most markets even those in which employees have excellent health coverage. How does this insurance complement existing coverage an employee may have? Health Cancer Life Disability Health insurance typically has copayments and deductibles and benefits may be reduced for out-of-network care. Cancer insurance provides benefits for cancer only. Life insurance provides benefits to beneficiaries in the event of the covered person s death. Disability insurance replaces lost income. Critical Illness 1.0 coverage provides dollars to fill gaps in medical coverage and to help meet out-of-pocket, nonmedical expenses. Critical Illness 1.0 coverage with its no-cancer policy options complements existing cancer policies by adding coverage for other illnesses. The covered person does not have to be terminally ill or die to receive Critical Illness 1.0 insurance benefits. Critical Illness 1.0 insurance pays regardless of whether a covered person is out of work long enough to collect disability. Certain markets warrant special comment. They include: The professional market. The small commercial market. Professional Market For people in the professional market, Critical Illness 1.0 coverage can help fill the gaps created by loss of income or high medical bills. Quite often, legal and medical professionals are self-employed, so they may have difficulty obtaining disability insurance policies. Even if they obtain disability coverage, they are usually limited to covering two-thirds of their income. For individuals with a relatively high income, losing one-third of their pay can be quite significant. Plus, professionals typically work longer, possibly into their 60s or 70s ages to which disability insurance may not extend. 8

15 Small Commercial Market For the small commercial market, this insurance serves as additional key-person coverage. Also, it provides coverage for entrepreneurs with short self-employment income history who may not yet be eligible for disability coverage. Competitive Advantages The competitive advantages of this product include: Multiple plan options Our Critical Illness 1.0 insurance product features multiple plan options, which gives employers flexibility to meet their employees needs. Simple benefit design This product has a simple benefit design with easy implementation and administration. Survival is not required Covered persons are not required to survive in order for benefits to be paid. In the event of death from a covered illness or covered accident, benefits are paid to the beneficiary or estate. Portable coverage The coverage is portable. It can go with covered persons if they change jobs or retire. Guaranteed renewable This insurance is guaranteed renewable as long as premiums are paid when due or within the grace period, up to the date of payment of the Maximum Benefit Amount. Issue-age rated premiums This product has issue-age rated premiums that do not increase as covered persons age. Stand-alone spouse coverage Stand-alone spouse coverage is available. Health Screening Benefit The Health Screening Benefit may decrease health insurance claims if a serious illness is detected at an early stage. Cancer Vaccine Benefit If the Cancer option is selected, the policy pays for any current or future cancer vaccine that is FDA approved for the prevention of cancer (payable once per lifetime per covered person). 9

16 Subsequent Diagnosis Benefit HSA-compliant Plan Option The Subsequent Diagnosis Benefit allows the policy to pay benefits more than once. This means the covered person may keep the policy for future occurrences of a specified critical illness, provided he meets the guidelines for payment of this benefit. This coverage is compatible with a Health Savings Account (HSA). Employees may use this coverage in conjunction with an HSA, allowing even more flexibility when dealing with a serious illness. You will learn more about these advantages and the features of this product as you progress through this pamphlet. 10

17 Product Positioning Within Colonial Life s Portfolio Sales Opportunities Health care costs continue to rise, along with health insurance deductibles and co-payments. Some employers are holding down costs by moving to health insurance plans that provide reduced benefits for out-of-network coverage. Critical Illness 1.0 insurance can help fill gaps caused by increasing deductibles and can provide benefits to help pay for out-of-network specialists. Critical Illness 1.0 insurance with the Cancer option may increase product appeal with individuals who would not have purchased cancer coverage alone. Critical Illness 1.0 without the Cancer option may appeal to our existing cancer insurance customers as they already recognize the risks associated with serious illness, and Critical Illness insurance provides a complement to existing coverage by adding coverage for serious illnesses other than cancer. Critical Illness 1.0 insurance can be presented to customers who already have existing disability, life and accident coverage during subsequent enrollments. As customers reach new milestones in their lives, you have more opportunities to discuss this product. Critical Illness 1.0 has a Subsequent Diagnosis Benefit option, which means the policy may pay benefits more than once. The customer can continue to be protected, even if he has already received a specified critical illness benefit. Key Differences between Critical Illness (2001) and Critical Illness 1.0 Review the following chart to learn the key differences between Critical Illness (2001) and Critical Illness 1.0. Critical Illness (2001) Critical Illness 1.0 Covered Benefits Heart Attack (Myocardial Infarction) Heart Attack (Myocardial Infarction) Stroke Stroke End Stage Renal Failure End Stage Renal Failure Major Organ Transplant Major Organ Failure Cancer (optional) Cancer (optional) Carcinoma in Situ (25% of face amount with Cancer option) Carcinoma in Situ (25% of face amount with Cancer option) 11

18 Covered Benefits (continued) Health Screening Critical Illness (2001) Critical Illness 1.0 Coronary Artery Surgery Coronary Artery Bypass Graft Surgery (25% of face amount) (25% of face amount non-hsa compliant options) OR Coronary Artery Disease (25% of face amount - HSAcompliant option) Not applicable Permanent Paralysis due to covered accident Not applicable Coma Not applicable Blindness Not applicable Occupational Infectious HIV/Hepatitis B, C, or D Not applicable Cancer Vaccine Benefit (with Cancer option) 5 tests if CI only 18 tests if CI with Cancer option Same 24 tests for both CI and CI with Cancer option New tests: ECG, EKG, ECHO, Carotid doppler, virtual colonoscopy Subsequent Diagnosis Not applicable Different condition: 100% of face amount every 180 days, up to the Maximum Benefit Amount Not applicable Same condition: 25% of face amount every 180 days, up to the Maximum Benefit Amount Maximum Benefit Amount 100% of face amount paid once Without Subsequent Diagnosis: 100% of face amount for all covered persons combined. With Subsequent Diagnosis: 3 x face amount for named insured for all covered persons combined. Face Amounts Employee: $5K - $50K Employee: $5K - $100K PEGI Underwriting Option Spouse (as named insured): $5K - $30K Not applicable No Spouse (as named insured): $5K - $40K or 50% of Employee Dependent child: 25% of Named Insured Yes (Minimum account size: 50+ lives; Greater of 50 approved applications or 50% participation) HSA-compliant Option No Yes Guaranteed Until all benefits paid Until all benefits paid Renewable Pre-existing Exclusion 30-day waiting period, no pre-ex 12/12 pre-ex, no waiting period (in most states) Dependent Child Coverage Not applicable Yes 12

19 Support Materials Field Supplies The following sales support materials are available for you to order from Field Supply, extension 5000, or through our online Group Trak forms management system. Employee Sale These form numbers vary by state. A disclosure of benefits, exclusions, and limitations is listed in the outlines of coverage included with the base brochures. Base Brochures: Form Numbers: Critical Illness Only form Critical Illness + Health Screening form Critical Illness + Cancer form Critical Illness + Health Screening + Cancer form Critical Illness + Subsequent Diagnosis form Critical Illness + Health Screening + Subsequent Diagnosis form Critical Illness + Cancer + Subsequent Diagnosis form Critical Illness + Health Screening + Cancer + Subsequent Diagnosis form Critical Illness + Health Screening + Subsequent Diagnosis HSA Compliant form Critical Illness + Health Screening + Cancer + Subsequent Diagnosis - HSA Compliant form Application: Form Number: AccHlth Application form

20 The following form numbers do not vary by state. Employee Pre-approach Stuffer form Employee Pre-approach Flier (Product Needs Flier for Critical Illness) form Pre-tax Disclosure Form form Taxability of Benefits Flier form Service Guide for Colonial Life Insureds form The Guide to Health Insurance for People with Medicare form Important Notice to Persons on Medicare form Field Underwriting Guide form Employer Sale Employer Topic Sheet form Voluntary Products Portfolio Brochure form Proposals and Rates See ProducerNet topic for statespecific proposals Support Materials Other Producer Support Form numbers may vary by state. Critical Illness 1.0 Individual Rate form Sheets Critical Illness 1.0 Sales Tips Flier form New Account Manual form 8690 (-37 version or higher) Critical Illness Claim Form form Wellness Claim Form (Health form Screening Benefit or Cancer Vaccine Benefit claims only) Sample Policy Order from the Producer Support Line ( ). Press 2 for Customer Service and then select Account Services. Provide producer name, producer number, state, and plan code. Do not give the sample to applicants. Product Development Catalog form

21 ProducerNet Following is a list of support tools available for download from the ProducerNet (coloniallife.com). On ProducerNet, click Product > Supplemental Health > Critical Illness 1.0 to view the following topics. There you will find: Product Overview Product Availability Product Proposals Product Bulletins Underwriting Overview Underwriting Bulletins Underwriting Guidelines Support Materials Product Training Competitive Information For a complete list of support materials organized by state, click on the Support Materials link on the ProducerNet Critical Illness 1.0 product page. Distribute only written materials that our Compliance and Marketing Communications Departments have approved. The materials listed have met that approval. This requirement applies to any written document you prepare, no matter how brief, that describes Colonial Life s business or products. Market Conduct Issues Remember to consider the following market conduct issues when you sell Critical Illness 1.0 coverage. To prevent overinsurance: We do not allow stacking of this product with another Colonial Life Critical Illness product. The exception is a covered person may own this product and the Colonial Health Advantage sm Limited Benefit Medical Plan, which includes an optional embedded Critical Illness Benefit. We do not allow stacking of this product that includes the Cancer option with a Colonial Life Cancer product. Be sure to use the Internal Replacement Form for your state if an applicant transfers coverage from one Colonial Life policy to another Colonial Life policy. This disclosure informs the applicant of the potential risks involved in transferring from one Colonial Life policy to another Colonial Life policy. (Refer to page 48 for transfer guidelines.) 15

22 Use only current advertising material provided by Colonial Life. Do not create your own advertising and do not change any advertising materials provided to you. Always disclose the full name of the carrier(s) represented on any printed materials and/or any presentations associated with a sale. Do not directly or indirectly use a method to market without disclosing the purpose is to solicit insurance and that a contact will be made by the agent or the insurance company. Avoid using any method of marketing to recommend the purchase of insurance through force, fright, threat, or other undue pressure. Misrepresentation or incomplete or fraudulent comparisons of any insurance coverage or carrier should not be used to influence or attempt to influence a customer. Accurately communicate the coverage according to terms of the policy. Avoid using synonymous terms to refer to any disease that may imply broader coverage. Do not comment on the legal or tax implications of coverage without the appropriate training, qualifications or license. Distribute the appropriate outline of coverage with the product brochure during the enrollment in all states. Ask all the questions on the application and carefully record the applicant s answers. Explain all benefits, exclusions, and limitations on the base policy including the pre-existing condition limitation or 30-day waiting period. (Certain states have a 30-day waiting period in lieu of a pre-existing conditions limitation.) Inform applicants that any provision of this policy that, on the effective date, does not agree with state laws where the policy was issued will be amended to conform to the minimum requirements of those laws. When taking an application on a person age 65 or older, complete the forms for the over-65 applicants (discussed in the Underwriting Guidelines section of this pamphlet). Do not respond to hypothetical (or perhaps real) claims situations that applicants may bring up only a benefits person with the actual facts surrounding the particular illness can provide answers for these situations. Simply limit all comments to what the contract says. If the proposed insured answers the replacement question with a yes, then the applicable replacement forms for that state must be completed and submitted with the application. 16

23 Be sure to provide any other underwriting or disclosure forms required during the enrollment, such as the Cancer Buyer s Guide. If you are a California licensee: You must adhere to an advertising requirement that became effective January 1, According to the requirement, all print advertising must have the word insurance displayed in a type size no smaller than the largest telephone number, address or fax number. Print advertisements include business cards, written price quotations for insurance products, stationery, product brochures, and any other printed sales piece. Anything that you distribute to applicants must comply with this requirement. Any person in violation of this regulation will be subject to a fine levied by the commissioner in the amount of $200 for the first offense, $500 for the second offense, and $1,000 for any subsequent offense. A separate penalty will not be imposed for each piece of printed material that fails to conform to the requirements of this section. Remember to sign your name on the application exactly as it appears on your California insurance license. In addition, include your California license number. Product Testing Procedures Colonial Life provides the training you need to feel confident and secure when marketing our products, programs and services to customers. We make a tremendous investment in providing an excellent sales education and training program that offers many learning opportunities to help you become a highperformer. A strong, competent, and professional sales organization gives us a competitive advantage a wonderful story to tell decision makers, brokers, and employees. Ultimately, a well-informed sales organization benefits our customers. To help make sure all benefit counselors and their sales managers are grounded in product knowledge, you must follow these procedures for passing appropriate product tests and ordering marketing material. Passing Appropriate Product Training Tests Our policy has always stated that you must pass product mastery tests before you can sign and submit applications during enrollments. If, through audits, we discover that you have signed and submitted applications and have not passed the mastery tests for the products you sold, we will refer you to the 17

24 Sales Contract Compliance Department. If you do not pass the required tests, the following consequences will apply, in progressive order: 1. You will lose access to the Harmony enrollment system. 2. You will move from advanced commissions to as-earned commissions. (Any advances lost during the period in which advances are turned off will not be retroactively applied to your compensation. There are no exceptions.) 3. You will have your contract terminated if you fail to take the tests within the timeframe specified by the home office. Please avoid these consequences by making sure you have passed the necessary product tests before soliciting, signing, or submitting applications. Call Field Supply at if you have questions regarding the mastery tests you have passed to date. Ordering Marketing Material Benefit counselors and sales managers may order marketing material online or by phone. We will not send these materials to you unless you have passed the mastery tests for the applicable products. In addition, if you log in to the online ordering system on ProducerNet, you will not be able to view or order marketing materials unless you have already passed the training tests. For additional information on general market conduct issues, refer to the Market Conduct Issues Training Manual (form 48606). Your Colonial Life contract and the Sales Organization General Policies and Guidelines Manual also address market conduct behavior and issues. (To view or download the manual, visit ProducerNet at Resources + Forms > Support Materials > Tutorials & Manuals > Policies and Guidelines Manual Colonial Life.) 18

25 Important Policy Definitions Before you proceed, review the following important policy definitions. These definitions may vary by state. Accident Accident means an unintended or unforeseen bodily injury sustained by a covered person, wholly independent of disease, bodily infirmity, illness, infection, or any other abnormal physical condition. Blindness Blindness means clinically proven irreversible reduction of sight in both eyes that has persisted for a period of at least 180 consecutive days. Sight must be reduced to a corrected visual acuity of less than 6/60 (Metric Acuity) or 20/200 (Snellen or E-Chart Acuity), or visual field restriction to 20o or less in both eyes. The following are not to be construed as blindness for purposes of the policy: If in general medical opinion any procedure, device, or implant could result in the partial or total restoration of sight; If the covered person has not attained age three or above on the Date of Diagnosis; and If the covered person s reduction of sight as defined above occurs prior to the Policy Effective Date of the covered person s coverage under the policy. Calendar Year Calendar Year means the period beginning on the Policy Coverage Effective Date of coverage shown on the Policy Schedule and ending on December 31 of the same year. Thereafter, it is the period beginning on January 1 and ending on December 31 of each following year. Cancer Cancer means a disease that is identified by the presence of malignant cells or a malignant tumor characterized by the uncontrolled and abnormal growth and spread of invasive malignant cells. The following are not to be construed as cancer for purposes of the policy: Pre-malignant conditions or conditions with malignant potential; Carcinoma in situ; Basal cell carcinoma and squamous cell carcinoma of the skin; and Melanoma that is diagnosed as Clark s Level I or II or Breslow less than.75mm. 19

26 Carcinoma In Situ Carcinoma in Situ means cancer that is in the natural or normal place, confined to the site of origin without having invaded neighboring tissue. Cancer and/or carcinoma in situ must be diagnosed in one of two ways: 1. A pathological diagnosis of cancer or carcinoma in situ is based on a microscopic study of fixed tissue or preparations from the hemic (blood) system. This type of diagnosis must be done by a certified Pathologist, whose diagnosis of malignancy is in keeping with the standards set up by the American Board of Pathology. 2. A clinical diagnosis of cancer or carcinoma in situ is based on the study of symptoms. We will pay benefits for a clinical diagnosis only if: A pathological diagnosis cannot be made because it is medically inappropriate or life-threatening; and There is medical evidence to support the diagnosis; and A doctor is treating the covered person for cancer and/or carcinoma in situ. Cardiologist Cardiologist means a doctor who is licensed to practice medicine and who is also licensed to practice by the American Board of Internal Medicine in the subspecialty of cardiovascular disease. Coma Coma means a continuous state of profound unconsciousness resulting from a covered accident or a covered sickness, characterized by the absence of: Eye opening, Motor response, and Verbal response. The condition must require intubation for respiratory assistance. The term coma does not include any medically-induced coma. Covered Accident Covered Accident means an accident that: Occurs on or after the Policy Coverage Effective Date of the policy; Occurs while the policy is in force; and Is not excluded by name or specific description in the policy. 20

27 Covered Sickness Covered Sickness means an illness, infection, disease or any other abnormal physical condition, not caused by an accident, that: Occurs on or after the Policy Coverage Effective Date of the policy; Occurs while the policy is in force; and Is not excluded by name or specific description in the policy. Coronary Artery Bypass Graft Surgery (Does not apply to the HSA-compliant plan.) Coronary Artery Bypass Graft Surgery means undergoing open heart surgery to correct narrowing or blockage of one or more coronary arteries utilizing venous or arterial grafts, excluding procedures such as, but not limited to, balloon angioplasty, valve replacement surgery, laser relief, stents, or other non-surgical procedures. Coronary Artery Disease (Applies to HSA-compliant plan only.) Coronary Artery Disease means a narrowing or blockage of one or more coronary arteries for which a cardiologist recommends that coronary artery bypass graft surgery occur within 60 days following the date of the recommendation. Date of Diagnosis For Heart Attack (Myocardial Infarction), the date that the ischemic death of a portion of the heart muscle occurred based on the applicable criteria listed under the heart attack (myocardial infarction) definition; For Stroke, the date a stroke occurred based on neuroimaging or other neurodiagnostic study consistent with an acute or subacute infarction, hemorrhage, embolism, thrombosis and presence of neurological deficits persisting for a period of 30 days or greater; For End Stage Renal (Kidney) Failure, the date that regular hemodialysis or peritoneal dialysis begins; For Major Organ Failure, the date that the covered person is placed on the UNOS list for transplantation; For Permanent Paralysis due to a Covered Accident, the date the doctor confirms the permanent paralysis due to a covered accident continued for a period of 180 consecutive days; For Coma, the date a doctor confirms a coma resulting from a covered accident or a covered sickness has lasted seven or more consecutive days; 21

28 For Blindness, the date the doctor confirms the irreversible reduction of sight has continued for a period of 180 consecutive days; For Occupational Infectious HIV or Occupational Infectious Hepatitis B, C or D, the date of a positive antibody test for HIV or Hepatitis B, C or D subsequent to a prior negative test for the same condition with a lapse of between 90 and 180 days between the two tests; For Coronary Artery Bypass Graft Surgery, the date the covered person undergoes the open heart surgery. For Coronary Artery Disease, the date the cardiologist recommends the covered person undergo Coronary Artery Bypass Graft Surgery within the 60 days following the date of the recommendation; and For Cancer or Carcinoma in Situ, the date the tissue specimen, blood samples or titer(s) are taken upon which the first diagnosis of cancer or carcinoma in situ is based. Dependent Children Dependent Children means any natural children, step-children, legally adopted children, foster children or children placed into the insured s custody for adoption who are: Unmarried; Chiefly dependent on the insured or his/her spouse for support; and Younger than age 26. Children born to dependent children of the named insured or the named insured s spouse are not covered by the Critical Illness 1.0 policy. Coverage on the insured s newborn children begins from the moment of birth. Coverage for the insured s adopted children begins with the date of placement into his or her custody for adoption. For a named insured policy or a named insured and spouse policy, the coverage on the newborn or newly adopted child will end 31 days later if the insured does not notify us in writing of the birth, adoption or placement into his or her custody for adoption and pay any additional premium during that time. After the Policy Coverage Effective Date, if any members of the insured s family are added to the policy, including a new spouse or child, the insured must: Notify us that he or she wishes to add a person to his or her coverage; Complete the required application form; and Pay any additional premium for the new family member. 22

29 Doctor or Physician Doctor or Physician means a person who: Is licensed by the state to practice a healing art; and Performs services for a covered person that are allowed by his license. For purposes of this definition, Doctor or Physician does not include any covered person or anyone related to any covered person by blood or marriage, a business or professional partner of any covered person, or any person who has a financial affiliation or a business interest with any covered person. End Stage Renal (Kidney) Failure End Stage Renal (Kidney) Failure means chronic irreversible failure of the function of both kidneys such that the covered person must undergo at least weekly hemodialysis or peritoneal dialysis. Heart Attack (Myocardial Infarction) A Heart Attack (Myocardial Infarction) means the ischemic death of a portion of heart muscle as a result of obstruction of one or more of the coronary arteries. A positive diagnosis must be supported by three or more of the following: (a) Atypical chest pain; (b) Electrocardiographic (EKG) changes indicative of myocardial infarctions; in the case of myocardial infarction associated with percutaneous coronary intervention (balloon angioplasty, stent implantation, and related procedures to increase the flow of blood through the coronary arteries), evolving ST elevations or new Q wave changes must be documented and included as one of the criteria in establishing a diagnosis; (c) Elevation of biochemical markers of myocardial necrosis; and (d) Confirmatory imaging studies. In the event of death, an autopsy, medical examiner s confirmation or death certificate identifying Heart Attack (Myocardial Infarction) as the cause of death will be accepted. A Heart Attack (Myocardial Infarction) is not congestive heart failure, atherosclerotic heart disease, angina, coronary artery disease, cardiac arrest, or any other dysfunction of the cardiovascular system. Major Organ Failure Major Organ Failure means diagnosis of major organ failure of heart, kidney, liver, lung, or pancreas resulting in the covered person being placed on the UNOS (United Network for Organ Sharing) list for a transplant. 23

30 Occupational Infectious HIV or Occupational Infectious Hepatitis B, C or D Occupational Infectious HIV or Occupational Hepatitis B, C or D means diagnosis of Human Immunodeficiency Virus (HIV) infection or Hepatitis B, C or D resulting from exposure to HIV-contaminated or Hepatitis B-, C- or D-contaminated body fluids as the result of a covered accident during the normal course of performing an occupation for which remuneration is earned. We will pay this benefit if: Within five days of the covered accident, it is reported and recorded by the appropriate person according to the legislation, regulations, standards or guidelines that apply to the covered person s occupation or profession; The covered accident is investigated and a written investigation report is provided to us by the covered person s employer; A confirmatory antibody HIV or Hepatitis B, C or D test is taken within five days of the covered accident and HIV or Hepatitis B, C or D is not present; All HIV or Hepatitis B, C or D tests are performed by a state certified and licensed laboratory; and A follow-up confirmatory antibody HIV or Hepatitis B, C or D test is taken between 90 days and 180 days after the covered accident, and the result is positive. Occupational Infectious HIV or Occupational Infectious Hepatitis B, C or D excludes: HIV or Hepatitis B, C or D infection as the result of IV drug use; HIV or Hepatitis B, C or D infection as the result of sexual transmission; and HIV or Hepatitis B, C or D infection determined not to have been the result of a covered accident. Pathologist Pathologist means a doctor who is licensed to practice medicine and who is also licensed to practice pathologic anatomy by the American Board of Pathology. A pathologist also means an osteopathic pathologist who is certified by the Osteopathic Board of Pathology. Permanent Paralysis due to a Covered Accident Permanent Paralysis due to a Covered Accident means the complete and permanent loss of the use of two or more limbs through paralysis as the result of a covered accident as defined in the policy for a continuous period of 180 days, as confirmed by a doctor. Loss of use of two or more limbs through paralysis as the result of a stroke will not be construed as permanent paralysis due to a covered accident for purposes of this policy. 24

31 Policy Anniversary Date Policy Anniversary Date occurs annually on the same date and in the same month as the date for which we first received premium. Pre-existing Condition Pre-existing Condition means having a sickness or physical condition for which any covered person was treated, had medical testing, received medical advice or had taken medication within 12 months before the Policy Coverage Effective Date of this policy. Specified Critical Illness Specified Critical Illness means one of the specified critical illnesses shown on the policy schedule. Spouse A Spouse means the person married to the insured on the day Colonial Life issues the policy. Stroke Stroke means an acute or subacute cerebrovascular incident, including infarction of brain tissue, cerebral and subarachnoid hemorrhage, cerebral embolism and cerebral thrombosis. The diagnosis must be supported by: Evidence of persistent neurological deficits confirmed by a neurologist at least 30 days after the event; and Confirmatory neuroimaging studies consistent with the diagnosis of a new Stroke. The following are not to be construed as a Stroke for purposes of this policy: Transient ischemic attack; Brain injury related to trauma or infection; Brain injury associated with hypoxia/anoxia or hypotension; Vascular disease affecting the eye or optic nerve; and Ischemic disorders of the vestibular system. In the event of death, an autopsy confirmation identifying Stroke as the cause of death will be accepted. Waiting Period (Applies to select states where pre-existing conditions are not allowed.) Waiting Period means the first 30 days following the effective date of the policy. No benefits are payable during this period. 25

32 Plan Options Because of state regulations, certain product benefits vary. For exact details on product provisions, refer to the policy, outline of coverage, and product brochures for your state. Critical Illness 1.0 provides the following plan options: Critical Illness only Critical Illness + Health Screening Critical Illness + Subsequent Diagnosis Critical Illness + Health Screening + Subsequent Diagnosis Critical Illness + Health Screening + Subsequent Diagnosis (HSA-compliant Option) The five plan options are employer choices. The Cancer option, available on all plans, is an employee choice. Only one plan option is allowed per account. If the employer chooses the HSA-compliant plan option, this will be the only plan option for that account, even if some employees are not enrolled in the HSA. All plans are available for employees, spouses and dependent children. Heart Attack (Myocardial Infarction) Stroke Major Organ Failure End Stage Renal (Kidney) Failure Permanent Paralysis due to Covered Accident Coma Blindness Occupational infectious HIV/ Hepatitis Coronary Artery Bypass Surgery (Not applicable to HSA-compliant plan) Coronary Artery Disease (HSA-compliant plan only) Optional Cancer Benefits (Employee Option) Optional Health Screening Benefit (Employer Option) % of face amount 25% of face amount 25% of face amount Cancer (payable once per covered person 100% of face amount) Carcinoma in Situ (25% of face amount, payable once per covered person) $50 Cancer Vaccine Benefit (payable once per covered person per lifetime) $50 payable once per year per covered person

33 Covered Specified Critical Illnesses Critical Illness 1.0 is supplemental insurance that pays a lump-sum benefit per covered life upon the diagnosis of a covered Specified Critical Illness. Face amounts (in $1,000 units) are available as follows: Employee (named insured): $5,000-$100,000.* *Amounts of $76,000-$100,000: Are available for the employee only as named insured (no family coverage allowed); and Require prior approval from your Underwriting Risk Manager; and Are available at an account level only. Spouse (if named insured): $5,000-$40,000. Spouse/dependent child: If covered by the employee s plan, spouse coverage is 50% of named insured s face amount and dependent child coverage is 25% of named insured s face amount. Review the following chart to see the covered specified critical illnesses payable by this plan, along with the face amount percentage for each illness. For this illness We will pay this percentage of the face amount: Cancer 100% Heart Attack (Myocardial Infarction) 100% Stroke 100% Major Organ Failure 100% End Stage Renal (Kidney) Failure 100% Permanent Paralysis due to a Covered Accident 100% Coma 100% Blindness 100% Occupational Infectious HIV or Occupational Infectious 100% Hepatitis B, C or D Coronary Artery Bypass Graft Surgery* (Not applicable 25% to the HSA-compliant plan) Coronary Artery Disease* (HSA-compliant plans only) 25% Carcinoma In Situ* 25% *If the insured receives the 25 percent benefit for Coronary Artery Bypass Graft Surgery/Coronary Artery Disease and/or Carcinoma in Situ and is later diagnosed with a different covered Specified Critical Illness, Colonial Life will pay the face amount less the amount(s) the insured received for Coronary Artery Bypass Surgery/Coronary Artery Disease and/or Carcinoma in Situ, up to the Maximum Benefit Amount. 27

34 Benefits for Cancer, Carcinoma in Situ, and Cancer Vaccine are available only with the plan options that include Cancer coverage. Benefit Reduction In most states, the face amount and the Maximum Benefit Amount for Specified Critical Illness will reduce by 50 percent on the first Policy Anniversary Date after the named insured attains age 75. All Specified Critical Illness benefits payable after that date will be based on the reduced face amount and the reduced Maximum Benefit Amount. Maximum Benefit Amount Plans with Subsequent Diagnosis The Maximum Benefit Amount for these plans is three times the face amount for the named insured for all covered persons combined. The policy will terminate when the Maximum Benefit Amount for specified critical illness has been paid. Plans without Subsequent Diagnosis The Maximum Benefit Amount for these plans is 100 percent of the face amount for each covered person. We will not pay more than 100 percent of the face amount for each covered person, for all specified critical illnesses combined. The policy will terminate when the Maximum Benefit Amount for specified critical illness has been paid. 28

35 Additional Benefits Subsequent Diagnosis Benefit The Subsequent Diagnosis Benefit allows Colonial Life to pay for subsequent diagnoses of Specified Critical Illnesses that meet the policy guidelines. Guidelines vary based on whether a subsequent diagnosis is the result of a new or previous Specified Critical Illness. Subsequent Diagnosis of a DIFFERENT Specified Critical Illness If the covered person receives a benefit for a Specified Critical Illness, and is later diagnosed with a different Specified Critical Illness, we will pay the percentage of the face amount for the Specified Critical Illness diagnosed, up to the Maximum Benefit Amount payable. Dates of Diagnoses of Specified Critical Illnesses must be separated by at least 180 days. Example #1 (Employee or spouse as named insured): Named insured has a $40,000 face amount with a $120,000 Maximum Benefit Amount. He suffers a Heart Attack (Myocardial Infarction) on January 5th, He receives $40,000, the face amount listed in the policy for this Specified Critical Illness (100% of $40,000). He has a Stroke on August 5th, 2010 (more than 180 days since he suffered a Heart Attack). He receives $40,000, the face amount listed in the policy for this Specified Critical Illness. There is now $40,000 left on the policy before the Maximum Benefit Amount is reached. Example #2 (Employee or spouse as named insured): Named insured has a $40,000 face amount with a $120,000 Maximum Benefit Amount. He suffers a Heart Attack (Myocardial Infarction) on January 5th, He receives $40,000, the face amount listed in the policy for this Specified Critical Illness (100% of $40,000). He has Coronary Artery Bypass Graft Surgery on August 5th, 2010 (more than 180 days since he suffered a Heart Attack). He receives $10,000 the face amount listed in the policy for this Specified Critical Illness (25% of $40,000). There is now $70,000 left on the policy before the Maximum Benefit Amount is reached. 29

36 Example #3 (Employee with family coverage): Named insured (employee) has a $40,000 face amount with a $120,000 Maximum Benefit Amount. Spouse suffers a Heart Attack (Myocardial Infarction) on February 14th, She receives $20,000, the face amount listed in the policy for this Specified Critical Illness (50% of $40,000). Spouse suffers a Stroke on September 30th, 2010 (more than 180 days since she suffered a Heart Attack). She receives $20,000, the face amount listed in the policy for this Specified Critical Illness (50% of $40,000). Dependent child is diagnosed with Leukemia He receives $10,000, the face amount listed in the policy for this Specified Critical Illness (25% of $40,000). There is now $70,000 left on the policy before the Maximum Benefit Amount is reached. Subsequent Diagnosis of the SAME Specified Critical Illness If a covered person receives a benefit for a Specified Critical Illness, and later he is diagnosed with the same Specified Critical Illness (except those listed below), we will pay 25 percent of the face amount, up to the Maximum Benefit Amount payable. Specified Critical Illnesses that do not qualify include: Coronary Artery Bypass Graft Surgery/Coronary Artery Disease. Occupational Infectious HIV or Occupational Infectious Hepatitis B, C or D. Cancer. Carcinoma in Situ. Dates of diagnoses of Specified Critical Illnesses must be separated by at least 180 days. The covered person must not have received treatment during the 180 days between the dates of diagnosis for the same Specified Critical Illness. Treatment does not include medications and follow-up visits to the covered person s doctor. Example #1 (Employee or spouse as named insured): Named insured has a $40,000 face amount with a $120,000 Maximum Benefit Amount. He suffers a Stroke on February 17th, He receives $40,000, the face amount listed in the policy for this Specified Critical Illness (100% of $40,000). 30

37 He has a second Stroke on September 1st, 2010 (more than 180 days since his first stroke). He receives $10,000, which equals 25% of the face amount for this Specified Critical Illness (25% of $40,000 face amount). There is now $70,000 left on the policy before the Maximum Benefit Amount is reached. Example #2 (Employee with family coverage): Named insured (employee) has a $40,000 face amount with a $120,000 Maximum Benefit Amount. Spouse suffers a Stroke on February 17th, She receives $20,000 (50% of the employee s $40,000 face amount). She has a second Stroke on September 30th, 2010 (more than 180 days since her first stroke). She receives $5,000 (25% of $20,000). There is now $95,000 left on the policy before the Maximum Benefit Amount is reached. Cancer Vaccine Benefit (Available with the Cancer option.) This $50 benefit is payable if a covered person incurs a charge for and receives any Cancer Vaccine that is approved by the Food and Drug Administration (FDA) for the prevention of cancer. The vaccine must be administered by licensed medical personnel while the policy is in force. The benefit is limited to one payment per covered person, per lifetime. Payment of this benefit will not reduce the Maximum Benefit Amount payable by the policy for a Specified Critical Illness. Health Screening Benefit Early detection and treatment can greatly improve an individual s chances of recovering from and surviving a serious illness. Critical Illness 1.0 encourages this type of prevention by paying a $50 benefit if the covered person incurs a charge for and has one of the following health screening tests performed while the policy is in force. The benefit is payable once per calendar year for each covered person. There is no lifetime limit. Payment of this benefit will not reduce the Maximum Benefit Amount payable by the policy for a Specified Critical Illness. 31

38 Covered Tests Stress test on a bicycle or treadmill Fasting blood glucose test Blood test for triglycerides Serum cholesterol test to determine levels of HDL and LDL Bone marrow testing Carotid doppler Electrocardiogram (EKG, ECG) Echocardiogram (ECHO) Skin cancer biopsy Breast ultrasound CA 15-3 (blood test for breast cancer) CA 125 (blood test for ovarian cancer) CEA (blood test for colon cancer) Chest x-ray Colonoscopy Flexible sigmoidoscopy Hemocult stool analysis Mammography Pap smear PSA (blood test for prostate cancer) Serum protein electrophoresis (blood test for myeloma) Thermography ThinPrep pap test Virtual colonscopy Colonial Life will no longer allow the sale of more than one optional Health Screening Rider per covered insured. Customers who have Colonial Life products (cancer, critical illness, or hospital confinement) with health screening benefits imbedded in them can purchase one optional health screening rider per covered insured. 32

39 Policy Exclusions (Exclusions vary by state. See the policy or outline of coverage for your state for exact exclusions.) Colonial Life will not pay benefits for a Specified Critical Illness that occurs as the result of a covered person s: Alcoholism or Drug Addiction Felonies or Illegal Occupations Intoxicants and Narcotics Pre-existing Condition Psychiatric or Psychological Condition Suicide or Selfinflicted Injuries War or Armed Conflict Addiction to alcohol or drugs, except for drugs administered on the advice of the insured s doctor. Committing or attempting to commit a felony or engaging in an illegal occupation. Being intoxicated or under the influence of any narcotic unless administered on the advice of the insured s doctor. Having a pre-existing condition as defined in the policy and limited by the Time Limits on Certain Defenses provision of the policy. Having a psychiatric or psychological condition, including but not limited to affective disorders, neuroses, anxiety, stress and adjustment reactions. However, Alzheimer s Disease and other organic senile dementias are covered under the policy. Committing or trying to commit suicide or his injuring himself intentionally, while the insured is sane or not. Being exposed to war or any act of war, declared or undeclared, or serving in the armed forces of any country or authority. Losses as a result of acts of terrorism or nuclear release committed by individuals or groups will not be excluded from coverage unless the covered person who suffered the loss committed the act of terrorism or nuclear release. 33

40 Eligibility Guidelines Account The account eligibility guidelines are as follows: Coverage is marketable to regular or special markets accounts, as listed in the New Account Manual (form 8690). Coverage is available to both payroll deduction and individual-pay group (IPG) accounts, following normal new account guidelines. Non-payroll sales are not allowed (those outside of the group account setting). Employee An employee is eligible for Critical Illness 1.0 coverage if he/she: Is actively at work at the time of application (working at least 20 hours per week). Meets the issue age requirements of (in most states). Has been employed by his/her current employer at least 90 days. A oneyear employment guideline applies for special market accounts. (Refer to the New Account Manual for a listing of special market accounts.) Spouse A spouse is eligible for this coverage if he/she: Is the spouse of an employee. Meets the issue age requirements of (in most states). A spouse may be covered as a named insured or may have coverage under the employee s policy. If the spouse is the named insured, the spouse policy is separate from the employee s policy. The spouse, if the named insured, is always the owner of the separate spouse policy, not the employee. 34

41 Dependent Children A dependent child is eligible for this coverage if he/she: Is the dependent child of an employee. Meets the definition of a dependent child. Dependent children means any natural children, step-children, legally adopted children, foster children or children placed into the insured s custody for adoption who are: Unmarried; Chiefly dependent on the insured or his/her spouse for support; and Younger than age 26. (Definition varies by state. See the outline of coverage or policy for your state for an exact definition.) Children born to dependent children of the named insured or the named insured s spouse are not covered by the Critical Illness 1.0 policy. Coverage on the main insured s newborn children begins from the moment of live birth. Coverage for adopted children begins with the date of placement into the insured s custody for adoption. If the policy covers a named insured or named insured and spouse, the coverage on a newborn or newly adopted child will end 31 days later if the insured does not notify us in writing of the birth, adoption or placement into his/her custody for adoption and pay any additional premium during that time. After the Policy Coverage Effective Date, if any members of the insured s family are added to the policy, including a new spouse or child, he/she must: Notify us that he/she wishes to add a person to his/her coverage; Complete the required application form; and Pay any additional premium for him/her. 35

42 Underwriting Guidelines Underwriting Levels One of the following underwriting options may be offered in an account: Standard Underwriting Simplified Issue (SI) Simplified Issue (SI) Level 1 Post Enrollment Guaranteed Issue (PEGI) Available in most states Pre-existing conditions apply The underwriting requirements for each option may vary by state. For state-specific underwriting guidelines, refer to the proposals for your state on ProducerNet. Rate Structure Critical Illness 1.0 coverage is not risk rated. There are separate rates for tobacco and nontobacco users. Premiums are unisex and age-banded, and the bands are: (in most states) There are no income requirements for this coverage. Six coverage options are available for employees and their families: Employee only (named insured) Spouse only (named insured) Employee and spouse Employee and dependent children (named insured and dependent children) Spouse and dependent children (named insured and dependent children) Employee, spouse and dependent children (named insured, spouse and dependent children) 36

43 Sample Premiums (varies by state) Plan Option: Critical Illness with Health Screening Issue Age Non-Tobacco Tobacco $0.24 $ Health Screening Benefit $2.15 The Harmony enrollment system performs the calculation in automated enrollments. Here are instructions for manually calculating monthly premium. 1. Multiply the unit premium amount by the number of units (one unit equals $1,000 face amount) of Critical Illness 1.0 coverage purchased. 2. Always add the flat amount for the Health Screening Benefit. It is not optional for this plan. The Health Screening Benefit must be included in every premium if the benefit is included in the plan option being purchased. Example: Applicant age purchasing $25,000 Critical Illness 1.0 without Cancer option. Units of coverage: 25 Unit premium: X $0.39 Total: 9.75 Health Screening flat amount: Monthly premium: $

44 Application Guidelines (Application Applicant s Name to: Colonial (First, questions MI, Life Last) & Accident and numbers Insurance Employee Company vary by Gender state. Use Birthdate PO Box the (mm/dd/yyyy) 1365 correct Columbia, application SC Applicant Section Spouse M for the state in which you are writing business.) Use the AccHlth Application for all Critical Illness 1.0 sales. Standard Payroll Deduction underwriting Employer Name is available Employer Week Address through (Street-City-State-Zip) Salary Simplified Issue Business Section/Dept. (SI) Phone or Simplified No. Billing Section No. Issue Payer Payroll or (SI) Deduction Owner Level if other Employer 1. than Coverage Applicant Name (Name, may Employer also Address, Address be Social available (Street-City-State-Zip) Security No.) on a Post Enrollment Payer Section/Dept. Owner Both No. Guaranteed Issue (PEGI) basis, in most states. Spouse and Dependent Section F No. The following two eligibility questions are always asked, regardless of the Employer s Name of Spouse Name (First, for Spouse MI, Last) Date Gender Employed M Occupation / Job Title Hours Worked/ underwriting level: F Week Salary No. Product Plan If Section this question Type Coverage is answered Type of Policy yes, Units/ the proposed Rider Rider insured Rider is Rider eligible Tax for Monthly Indicate Type of Change (N) New (T) Change Transfer Plan or (R) Rider Amount Addition. Plan/ Plan/ Plan Plan Status Premium Product coverage. Type Coverage Type of Code Policy Units/ Units Rider Units Rider Code Rider Code Rider Tax Accident Change Plan Amount Plan/ Plan/ Plan Plan P Status If answered no for the proposed Code insured, Units the Units proposed Code insured Code A is not Hospital Accident P Confinement eligible for coverage. A Cancer Hospital P Confinement If applying for Employee and Spouse coverage or Employee, A Spouse Int. Cancer Care P and Dependent Children coverage, and the spouse answers the A Actively Critical Int. at Care Work question no, then a subsequent question must be answered. P Illness A Disability Critical This question Elim/Benefit states, period If no, is the spouse disabled or unable to P work? If Illness / A the answer to this question is yes, the spouse is not eligible for coverage. antibodies, If this or question received medical is answered advice or sought yes, treatment the for Acquired proposed Immune insured needs to provide Deficiency Syndrome (AIDS) or AIDS-related complex (ARC)? No No No 5. Have the you carrier s previously purchased name, disability type of coverage coverage, that will remain and in policy force which, number. when combined Yes back, neck, knee, joint or muscle? Simplified Issue (SI) Following Heart 7. Within Attack the (MI) past are 12 the months, simplified Blood have Pressure you received issue Reading medical guidelines of 160/100 advice or Above sought for treatment this product: Hepatitis (including B, C Stroke Heart Surgery Diabetes Kidney Disease Diagnosed except Prior Stones age 40 Leukemia Cirrhosis Minimum account size is 3+ eligible employees. Transient Congestive Ischemic Heart Failure Attack Cancer Insulin Other Dependent than Skin Diabetes Cancer Hodgkin s Disease Stroke Diabetes Diagnosed Prior to age 40 Leukemia Dependent Transient No underwriting Ischemic Health Section Attack - Cancer Hospital approval Other Confinement than required. Skin Cancer cystic Dependent Employee/spouse fibrosis, Health diabetes, Section heart - condition, Hospital issue Confinement cancer ages: (other 17-59; than skin $5,000-$30,000 cancer) or seizures? If yes, face provide amount. details. 38 Application to: Colonial Life & Accident Insurance Company PO Box 1365 Columbia, SC Applicant Section Social Security No. Applicant s Name (First, MI, Last) Dependent Employee F Gender Birthdate (mm/dd/yyyy) Social Security No. Home Address Street City Spouse State M Zip Code State of Employee ID/Payroll No. Dependent F Birth Date Home Employed Address Street Occupation/ Job Title City Hrs. Worked/ State Annual Zip Base Code Home State Phone of No. Employee ID/Payroll No. Week Salary Business Birth Phone No. Billing Date Employed Section Occupation/ Job Title Hrs. Worked/ Annual Base Home Phone No. Employee Class Spouse Payer or and Owner Dependent if other than Section Applicant (Name, Address, Social Security No.) Payer Owner Both Name of Spouse (First, MI, Last) Gender M Birthdate (mm/dd/yyyy) Relationship Social Security Birthdate (mm/dd/yyyy) Relationship Annual Social Base Security 1. Employer s Are there any Name eligible for Spouse dependent children applying Date Employed for coverage? Occupation / Job Title Yes Hours No Worked/ Number Annual Base Deps: Week Salary Complete 1. Are there Question any eligible 2 for dependent all Products children applying for coverage? Yes Applicant No Number Spouse Deps: 2.A. Are you actively working? Yes No Yes No 2.B. Complete If No, Question is your spouse 2 for all disabled Products or unable to work? Applicant Yes Spouse No 2.A. Are you actively working? Yes No Yes No Plan 2.B. Section If No, is your spouse disabled or unable to work? Yes No Indicate Type of Change (N) New (T) Transfer or (R) Rider Addition. Indicate Tax Status (P) for pre-tax or (A) for after tax Disability Elim/Benefit period Total Monthly Premium P $ / A Replacement Section Complete for all Products Total Monthly Premium $ 3. Will any health insurance, with this or any other company, be modified or discontinued if the coverage applied for is Replacement issued? If yes, Section provide details. Complete for all Products Yes No 3. Will any health Insured s insurance, Name with this or any other company, Insurance be Company modified or discontinued Type if the of coverage Coverage applied Policy for Number Yes is issued? If yes, provide details. No Insured s Name Insurance Company Type of Coverage Policy Number AIDS Section Complete for all Products Applicant Spouse Dependent 4. Have you tested positive for the Human Immunodeficiency Virus (HIV) or its antibodies, AIDS Section or received Complete medical for advice all Products or sought treatment for Acquired Immune Deficiency 4. Have you Syndrome tested positive (AIDS) for the AIDS-related Human Immunodeficiency complex (ARC)? Virus (HIV) or its Yes Applicant No Yes Yes Spouse No Yes Yes Dependent No Yes Simplified Issue Section Disability and Hospital Confinement Applicant Spouse Yes with Simplified the coverage Issue you Section are applying Disability for, will and exceed Hospital 70% Confinement of your gross annual income? This does not Applicant No Spouse No include 5. Have employer you previously paid group purchased disability disability coverage. coverage that will remain in force which, when combined Yes Yes 6. with Within the coverage the past 12 you months, are applying other than for, will colds, exceed flu or 70% normal of your pregnancy, gross annual have you income? been This off work does not No No (vacation include employer or sick leave) paid group for 10 disability or more consecutive coverage. work days due to an illness or injury, including Yes Yes 6. Within the past 12 months, other than colds, flu or normal pregnancy, have you been off work No No 7. (vacation Within the or past sick leave) 12 months, for 10 have or more you consecutive received medical work advice days due or sought to an illness treatment or injury, (including including Yes Yes medication) back, neck, for: knee, joint or muscle? No No Yes Yes Heart medication) Surgery for: Kidney Disease except Stones Cirrhosis Congestive Heart Attack Heart (MI) Failure Insulin Blood Dependent Pressure Reading Diabetes of 160/100 or Above Hodgkin s Hepatitis B, Disease C No Yes No Yes 8. Within the past 12 months, has any dependent been hospitalized for respiratory disorders, including asthma, Employee Class Indicate Tax Status (P) for pre-tax or (A) for after tax Monthly Premium Yes Any 8. Within dependent the past listed 12 months, will not has be any covered dependent under been the Hospital hospitalized Confinement for respiratory policy disorders, to which including a copy asthma, of the No Yes application cystic fibrosis, is attached. diabetes, heart condition, cancer (other than skin cancer) or seizures? If yes, provide details. Name Any dependent (First, MI, Last) listed will not be covered under the Relationship Hospital Confinement Birthdate policy (mm/dd/yyyy) to which a copy Social of the Security No. application is attached. Name (First, MI, Last) Relationship Birthdate (mm/dd/yyyy) Social Security No. No No

45 / A Total Monthly Premium $ Replacement Section Complete for all Products 3. Will any health insurance, with this or any other company, be modified or discontinued if the coverage applied for Pre-existing conditions will apply (12/12 pre-existing in most states). Yes is issued? If yes, provide details. No Insured s Name Insurance Company Type of Coverage Policy Number Only three health questions are required: AIDS Section Complete for all Products Applicant Spouse Dependent 4. Have you tested positive for the Human Immunodeficiency Virus (HIV) or its antibodies, or received medical advice or sought treatment for Acquired Immune Deficiency Simplified Syndrome Issue Section (AIDS) - Critical or AIDS-related Illness and complex Intensive (ARC)? Care Yes Applicant No Yes Spouse No Yes Dependent No Simplified 9. Within the Issue past Section 10 years, have Disability you received and Hospital medical Confinement advice or sought treatment Applicant Spouse 5. (including Have you medication) previously for: purchased disability coverage that will remain in force which, when combined Yes Yes with Heart Simplified the Attack Issue coverage (MI) Section - Critical you are applying Hepatitis Illness for, will B, and exceed C Intensive Care Applicant 70% of your gross annual income? This does Yes Spouse not Yes No Dependent Yes No include Heart 9. Within Surgery employer the past paid 10 years, group have disability Blood you received coverage. Pressure medical Reading advice of 160/100 or sought or Above treatment 6. Heart (including Within Disease medication) for: the past 12 months, other Kidney than Disease colds, flu except or normal Stones pregnancy, have you been off work No No No (vacation Emphysema Heart Attack or sick (MI) leave) for 10 or Chronic Hepatitis more consecutive Obstructive B, C work Pulmonary days due Disease Yes Yes Yes to an illness or injury, including Yes Yes back, Organ Heart neck, Surgery Transplant knee, joint or muscle? Cirrhosis Blood Pressure or Liver Reading Disease of 160/100 or Above No No 7. Congestive Heart Disease Within the Heart past 12 Failure months, have Transient Kidney Disease you received Ischemic except medical Attack Stones No No No advice or sought treatment (including medication) Diabetes Emphysema for: Cancer Chronic Other Obstructive than Skin Pulmonary Cancer Disease Heart Stroke Organ Transplant Attack (MI) Blood Abnormal Cirrhosis or Pressure Catherization Liver Disease Reading of 160/100 or Above Hepatitis B, C Yes Yes Congestive Heart Failure Transient Ischemic Attack Heart If yes Surgery to question 9 for any dependent, Kidney Disease please except provide Stones details. Cirrhosis Diabetes Cancer Other than Skin Cancer Congestive Any dependent Heart listed Failure will not Insulin be covered Dependent under Diabetes the Intensive Care policy to which Hodgkin s a copy Disease of the application No is No Stroke Abnormal Catherization Stroke attached. Diabetes Diagnosed Prior to age 40 Leukemia If yes to question 9 for any dependent, please provide details. Transient Name (First, Ischemic MI, Last) Attack Cancer Other than Skin Cancer Relationship Birthdate (mm/dd/yyyy) Social Security No. Any dependent listed will not be covered under the Intensive Care policy to which a copy of the application is attached. Dependent 10. Within the Health past 12 Section months, - Hospital have you Confinement used any tobacco products (cigarettes, cigars, Yes Name (First, MI, Last) Relationship Birthdate (mm/dd/yyyy) Social Security No. 8. snuff, Within dip, the chew, past pipe) 12 months, and/or any has nicotine any dependent delivery been systems? hospitalized for respiratory disorders, No including asthma, Yes cystic fibrosis, diabetes, heart condition, cancer (other than skin cancer) or seizures? If yes, provide details. Any Cancer 10. Within dependent Section the past listed 12 months, will not have be covered you used under any tobacco the Hospital products Confinement (cigarettes, policy cigars, to which Applicant Yes a copy Spouse of the Dependent No application 11. snuff, Have dip, you chew, is ever attached. pipe) been and/or diagnosed any nicotine with, or delivery treated systems? for, Cancer of any type or form? Yes No Yes Yes Name If yes, please Knock-out (First, MI, answer Last) questions 12 and 13. underwriting applies. Relationship (Coverage will Birthdate be (mm/dd/yyyy) No No declined if Social the Security No AIDS No. or 12. In the past 5 years, have you received medical advice or sought treatment for Yes Yes Yes cancer, 11. Have 10-year other you than ever skin been health cancer; diagnosed question or, in with, the past or treated is 12 answered months for, Cancer have you of yes. ) any received type or preventive form? Yes Yes Yes Cancer Section Applicant Spouse Dependent Hormonal If yes, please Therapy? answer If questions yes, you are 12 not and eligible 13. for coverage. If no, please complete the No No No Cancer 12. In the History past 5 form. years, have you received medical advice or sought treatment for Yes Yes Yes AccHlth If cancer, yes to These other question than questions 12 skin for cancer; any dependent, or, are in the considered please past 12 provide months details. have knock-out you received preventive questions. If the AIDS Any Hormonal dependent Therapy? listed If yes, will you not are be covered not eligible under for coverage. the Cancer If no, policy please to which complete a copy the of the No application No is attached. No Cancer question History form. or 10-year health question is answered yes by the proposed Name (First, MI, Last) Relationship(s) Birthdate (mm/dd/yyyy) Social Security No. If yes to question 12 for any dependent, please provide details. Any dependent insured listed will spouse, not be covered they under are not the Cancer eligible policy for to which coverage. a copy of the If the application application is attached. is 13. Within the past 5 years, have you received medical advice or sought treatment for Yes Yes Yes Name submitted, (First, MI, Last) it will be declined Relationship(s) immediately and Birthdate the (mm/dd/yyyy) proposed Social insured Security will No. Skin Cancer, including basal cell carcinoma, squamous cell carcinoma, or melanoma of Clark s receive level I or a II? letter explaining that the application has been No denied No based No 13. Within the past 5 years, have you received medical advice or sought treatment for Yes Yes Yes Other Skin Cancer, Section on the including Complete information basal cell all carcinoma, Products provided squamous except Disability on cell the carcinoma, application. or melanoma We will not pursue 14. of Clark s Are you level Medicare I or II? eligible? No No Yes No No additional information on these applicants, as they do not qualify for 15. Has the Important Notice to Persons on Medicare been provided? Yes No Other coverage. Section Complete for all Products except Disability Applicant s 14. Are you Medicare Beneficiary eligible? Information Complete for all Products Yes No Beneficiary s 15. Has the Important Name (First, Notice MI, to Last) Persons on Primary Medicare been Age provided? Benefit % Relationship to Applicant Social Yes Security No No. If the employee applies Contingent for an Employee and Spouse plan or an Employee, Spouse Contingent and Dependent Children plan and is not Contingent eligible because of health reasons, but the spouse is eligible, we can issue coverage to Contingent the eligible spouse through the employee s payroll-deduction. Height The spouse becomes Weight the proposed (Named) insured and dependent children would be covered under the spouse plan. Beneficiary s Applicant s Beneficiary Name (First, Information MI, Last) Complete Primary for all Products Age Benefit % Relationship to Applicant Social Security No. Beneficiary s Name (First, MI, Last) Primary Age Benefit % Relationship to Applicant Social Security No. Height Beneficiary s and Weight Name (First, Section MI, Last) Complete Primary for all products at Age Simplified Benefit Issue % Relationship Level 1 amounts to Applicant Social Security No. Indicate Applicant s Current: Height Weight Indicate Height and Spouse s Weight Current: Section Complete for all products at Simplified Issue Level 1 amounts Indicate Applicant s Current: Height Weight Medication Section - Complete for all products at Simplified Issue Level 1 amounts Applicant Spouse Indicate Spouse s Current: Height Weight M1. Are you currently prescribed any medication? If yes, provide details in the Health Details Section. Yes Yes No No The Medication following Section - Complete should for occur all products in this at Simplified situation: Issue Level 1 amounts Applicant Spouse Simplified M1. Are you Issue currently Level prescribed 1 Section any Disability medication? If yes, provide details in the Health Details Section. Yes Applicant Yes D1. Within A manual the past 5 years, handwritten have you received application medical advice for sought Individual treatment for any or cancer, Employee other than No and Yes No skin cancer? No D2. Simplified Within Dependent the Issue past Level 5 years, 1 Children Section have you Disability received coverage medical advice should or sought be treatment submitted (including listing medication) the for: spouse Applicant as D1. Within the past 5 years, have you received medical advice or sought treatment for any cancer, other than Yes Heart the proposed (Named) insured. skin cancer? Attack (MI) Transient Ischemic Attack Multiple Sclerosis Yes No Heart D2. Within Surgery the past 5 years, have End you Stage received Kidney medical (Renal) advice Disease sought treatment Neurological (including medication) Disorder for: Heart Disease A Supplemental Emphysema Health Statement (form Chronic in most Fatigue states, Syndrome or No Congestive Heart Attack Heart (MI) Failure Cirrhosis Transient or Ischemic Liver Disease Attack Fibromyalgia Multiple Sclerosis Yes Stroke Heart Surgery in FL, and Chronic End in Stage LA) Obstructive must Kidney (Renal) accompany Pulmonary Disease Disease the application Neurological Disorder listing the D3. Heart Within Disease the past 5 years, have Emphysema you received medical advice or sought treatment Chronic (including Fatigue medication) Syndrome for: specific health condition that excludes the employee from coverage. No If Congestive yes, provide Heart details Failure in the Health Cirrhosis Details or Section. Liver Disease Fibromyalgia Back Stroke Injury or Illness Joint Chronic Injury Obstructive or Illness Pulmonary Disease Diabetes Knee D3. Within Injury the or Illness past 5 years, have Muscular you received Injury medical or Illness advice or Hepatitis sought treatment B, C (including medication) for: Neck If yes, Injury provide or Illness details in the Health Carpal Details Tunnel Section. Syndrome Blood Pressure Reading of 140/90 or Above D4. Back Within Injury the or Illness past 5 years, have Joint you Injury received or Illness medical advice, sought Diabetes treatment, or had surgery or an abnormal diagnostic Knee Injury test or Illness for any disease, mental Muscular or physical Injury or disorder Illness (other Hepatitis than lacerations B, C or broken bones not related to a Neck health Injury condition) or Illness not listed on this Carpal application? Tunnel Syndrome If yes, provide details Blood in Pressure the Health Reading Details of Section. 140/90 or Above Yes 39 No Yes No No

46 9. Within the past 10 years, have you received medical advice or sought treatment (including medication) for: Heart Attack (MI) Hepatitis B, C Heart Surgery Blood Pressure Reading of 160/100 or Above Kidney Disease except Stones Chronic Obstructive Pulmonary Disease Organ Transplant Cirrhosis or Liver Disease Heart Disease Dependent Emphysema Coverage If Congestive the proposed Heart Failure insured Transient applies Ischemic for Attack Employee and Dependent Children Diabetes Cancer Other than Skin Cancer or Stroke Employee, Spouse Abnormal and Catherization Dependent Children coverage, he is required If yes to question 9 for any dependent, please provide details. to Any answer dependent the listed AIDS will not question be covered under or 10-year the Intensive health Care policy question to which a copy for his of the dependent application is attached. children Name (First, MI, in Last) order to qualify them for Relationship coverage. If Birthdate either (mm/dd/yyyy) of these questions Social Security No. is answered yes for any dependent, that dependent will not be covered. 10. Within the past 12 months, have you used any tobacco products (cigarettes, cigars, Yes The snuff, dip, name chew, pipe) of the and/or child, any nicotine relationship delivery systems? to the proposed insured, No date of birth and Social Security number must be listed on the application. Dependent children 11. Have you ever who been are diagnosed listed with, by or treated name for, Cancer on the of any application type or form? will Yes NOT Yes be covered Yes If yes, please answer questions 12 and 13. No No No 9. Within the past 10 years, have you received medical advice or sought treatment under 12. In the past the 5 years, policy. have you received medical advice or sought treatment for Yes Yes Yes Diabetes Simplified issue level Cancer 1 guidelines Other than Skin are Cancer as follows: Stroke 13. Within the past 5 years, have Abnormal you received Catherization medical advice or sought treatment for Yes Yes Yes If Skin yes Cancer, to Minimum question including 9 for any basal account dependent, cell carcinoma, size please is squamous provide 3+ eligible details. cell carcinoma, employees. or melanoma Any of Clark s dependent level I or listed II? will not be covered under the Intensive Care policy to which a copy No of the application No is No attached. Name Other Section No (First, underwriting MI, Complete Last) for all approval Products except required. Disability Relationship Birthdate (mm/dd/yyyy) Social Security No. 14. Are you Medicare eligible? Yes No Within Has Ages the the Important past 60-70, 12 Notice months, all to face have Persons you amounts, on used Medicare any tobacco been and provided? products ages (cigarettes, 17-59, $31,000-$100,000 cigars, Yes Yes face No snuff, dip, chew, pipe) and/or any nicotine delivery systems? No Applicant s amount Beneficiary for Information employees Complete only for (named all Products insured) and 17-59, $31,000-$40,000 Beneficiary s Name (First, MI, Last) Primary Age Benefit % Relationship to Applicant Social Security No. Cancer face Section amount for spouse Contingent only (as named insured). Applicant Spouse Dependent 11. Have you ever been diagnosed with, or treated for, Cancer of any type or form? Yes Yes Yes Beneficiary s Name (First, MI, Last) Primary Age Benefit % Relationship to Applicant Social Security No. If yes, please answer questions 12 and 13. No No No Simplified issue health Contingent questions apply, as well as Medication, 5-year 12. In the past 5 years, have you received medical advice or sought treatment for Yes Yes Yes cancer, Height health and other Weight than history, skin Section cancer; and Complete or, in the Ever past for Been all 12 products months Diagnosed have at Simplified you received questions. Issue preventive Level 1 amounts Height and weight are Hormonal Therapy? If yes, you are not eligible for coverage. If no, please complete the No No No Cancer required. History form. Insurance Knock-out Company underwriting Monthly Disability applies. Amount (If the weight Elimination Period/Benefit of the applicant Policy No is Number greater Simplified than Issue the Level maximum 1 Section Disability weight knockout amount for his or her height, D1. Within the past 5 years, have you received medical advice or sought treatment for any cancer, other than Yes skin cancer? coverage will be declined. In addition, coverage may be declined based No D2. Within the past 5 years, have you received medical advice or sought treatment (including medication) for: on health history we receive in the Health Details section.) Heart Attack (MI) Transient Ischemic Attack Multiple Sclerosis Additional Data Section Yes Heart Surgery End Stage Kidney (Renal) Disease Neurological Disorder AccHlth Heart Disease Emphysema Chronic Fatigue Syndrome No Congestive Heart Failure Cirrhosis or Liver Disease Fibromyalgia Stroke Chronic Obstructive Pulmonary Disease D3. Within the past 5 years, have you received medical advice or sought treatment (including medication) for: If yes, provide details in the Health Details Section. Agreement Section 40 Yes No Yes No Yes Cancer Section Applicant Spouse Dependent Simplified Issue Section - Critical Illness and Intensive Care Applicant Spouse Dependent (including medication) for: cancer, other than skin cancer; or, in the past 12 months have you received preventive Heart Attack (MI) Hepatitis B, C Yes Yes Yes Hormonal Therapy? If yes, you are not eligible for coverage. If no, please complete the No No No Heart Surgery Blood Pressure Reading of 160/100 or Above Cancer History form. Heart Disease Kidney Disease except Stones No No No If yes to question 12 for any dependent, please provide details. Emphysema Chronic Obstructive Pulmonary Disease Simplified Any dependent listed will Issue not be covered Level under 1 the (SI1) Cancer policy to which a copy of the application is attached. Organ Transplant Cirrhosis or Liver Disease Congestive Name (First, Heart MI, Last) Failure Transient Ischemic Attack Relationship(s) Birthdate (mm/dd/yyyy) Social Security No. Indicate Applicant s Current: Height Weight If Indicate yes to question Spouse s 12 Current: for any dependent, Height please provide details. Weight Any dependent listed will not be covered under the Cancer policy to which a copy of the application is attached. Name Simplified (First, Issue MI, Last) Level 1 Section - Hospital Confinement Relationship(s) Birthdate (mm/dd/yyyy) Applicant Social Security Spouse No. H1. Medication Within the Section past 5 - years, Complete have for you all received products medical at Simplified advice, sought Issue Level treatment, 1 amounts or had surgery or Applicant Yes Spouse Yes an M1. abnormal Are you currently diagnostic prescribed test for any any disease, medication? mental If yes, or physical provide disorder details in (other the Health than lacerations Details Section. or Yes Yes 13. Within the past 5 years, have you received medical advice or sought treatment for Yes Yes No Yes No broken bones not related to a health condition) not listed on this application? If yes, provide details in No No Skin Cancer, including basal cell carcinoma, squamous cell carcinoma, or melanoma the Health Details Section. of Simplified Clark s level Issue I or Level II? 1 Section Disability No No Applicant No Simplified D1. Within the Issue past Level 5 years, 1 Section have you - Critical received Illness medical advice or sought treatment for any cancer, other than Applicant Yes Other skin cancer? Section Complete for all Products except Disability C1. Within the past 5 years, have you received medical advice, sought treatment, or had surgery or an abnormal No 14. D2. Are Within you the Medicare past 5 years, eligible? have you received medical advice or sought treatment (including medication) for: Yes No diagnostic test for any disease or physical disorder (other than lacerations or broken bones not related to a Yes 15. health Has Heart Attack condition) the Important (MI) not listed Notice on to this Persons Transient application? on Medicare Ischemic If yes, Attack provide been provided? details in the Health Multiple Details Sclerosis Section. Yes No No C2. Yes Heart Have Surgery you ever received medical End advice Stage Kidney or sought (Renal) treatment Disease for: Applicant s Beneficiary Information Complete for all Products Neurological Disorder Heart Disease Lung Disease Emphysema Kidney Disease Cirrhosis or Liver Chronic Disease Fatigue Syndrome Yes Beneficiary s Name (First, MI, Last) Primary Age Benefit % Relationship to Applicant Social Security No No. Hepatitis Congestive B, Heart C Circulatory Failure Disease Cirrhosis Respiratory Liver Disease Disease Blood Pressure Fibromyalgia Reading of 140/90 or Above No Contingent If Stroke yes, provide details in the Health Chronic Details Obstructive Section. Pulmonary Disease Beneficiary s Name (First, MI, Last) Primary Age Benefit % Relationship to Applicant Social Security No. D3. Within the past 5 years, have you received medical advice or sought treatment (including medication) for: If Health yes, provide Details details Section Contingent in the Health Details Section. Back For yes Injury answer, or Illness provide details below. Height Joint Injury or Illness Diabetes Yes Knee For prescribed and Weight Injury or Illness medication, Section indicate Complete Muscular the condition for all products Injury or it Illness was prescribed at Simplified Hepatitis for, medication Issue Level B, C name, 1 amounts dosage and date of onset. Neck Condition Injury or Name Illness Medication Carpal Name/ Tunnel Date Syndrome of Onset Doctor/Hospital Blood Pressure Reading Name, of 140/90 Date of or Above Type Treatment No Indicate Applicant s Current: D4. Within the past 5 years, have Dosage Height you received and medical Recovery Weight advice, sought Address treatment, & Phone or had # surgery Treatment or an abnormal Received Indicate Spouse s Current: Height Weight Yes diagnostic test for any disease, mental or physical disorder (other than lacerations or broken bones not related to No a health condition) not listed on this application? If yes, provide details in the Health Details Section. Medication D5. Do you have Section any - individual Complete or for group all products disability insurance at Simplified now Issue in force Level with 1 any amounts company, including Colonial Applicant Yes Spouse M1. Life Are & Accident you currently Insurance prescribed Company? medication? If yes, provide If yes, details. provide details in the Health Details Section. Yes No Yes No No Applicant

47 Amounts of $76,000-$100,000: Are available for the employee only as named insured (no family coverage allowed); and Require prior approval from your Underwriting Risk Manager; and Are available at an account level only. Named Insured and Spouse Coverage For named insured and spouse coverage, simplified issue level 1 underwriting requires the completion of: The simplified issue questions (AIDS, 10-year health, and tobacco usage) apply. The Medication, 5-year health, and Ever Been Diagnosed questions must be asked. Height and weight are required. Knock-out underwriting applies. (Coverage may be declined based on the health information we receive.) For face amounts over $30,000, a prescription check is ordered on the named insured as part of the simplified issue level 1 underwriting review. Post Enrollment Guaranteed Issue (PEGI) Following are the PEGI underwriting guidelines for Critical Illness 1.0. Minimum account size is 50+ lives: 50 approved applications or 50 percent participation, whichever is greater. Available in most states. $5,000 face amount. SI health questions apply. If participation is met, policies will be issued regardless of health. If participation is not met, policies will be issued or declined based on answers to health questions. PEGI underwriting is applicable to the following coverage options only: Employee only (named insured). Employee and spouse. Employee and dependent children (named insured and dependent children). Employee, spouse and dependent (named insured, spouse and dependent children). 41

48 PEGI underwriting is not applicable to these coverage options: Spouse only (named insured). Spouse and dependent children (named insured and dependent children). Dependent children are always underwritten and are not eligible for PEGI. Spouse only (named insured) and spouse and dependent children (named insured and dependent children) policies will not count toward PEGI participation. Knock-back underwriting applies. (If applicant does not meet health requirements under PEGI limits for face amounts in excess of $5,000, coverage will be issued at the PEGI limit of $5,000.) Buy up face amount with underwriting. If applicant does not qualify based on health, and PEGI participation has been met, the $5,000 face amount will be issued. Underwriting Coverage Chart The following chart illustrates the face amounts by underwriting level, signature requirements, and coverage limits. Named Insured (Employee) Named Insured (Spouse) & 1-Parent Family (spouse) Employee / Spouse & 2-Parent Family 1-Parent Family (Employee) Face Amount $5,000 - $75,000 $5,000 - $40,000 $5,000 - $75,000 $5,000 - $75,000 SI $5,000 - $30,000 $5,000 - $30,000 $5,000 - $30,000 $5,000 - $30,000 SI Level 1 $31,000 - $75,000 Employee Signature Required Spouse Signature Required Spouse Coverage Dependent Coverage $31,000 - $40,000 $31,000 - $75,000 $31,000 - $75,000 YES YES YES YES N/A Yes No N/A N/A $5,000 - $40,000 N/A 25% of face $1,250 - $10,000 50% of face $2,500 - $37,500 25% of face $1,250 - $18,750 N/A 25% of face $1,250 - $18,750 42

49 Height and Weight Chart Following is a height and weight chart used for underwriting of Critical Illness 1.0. If the weight of the applicant is greater than the maximum weight knock-out for his or her height, coverage will be declined. Height (Ft. In.) Maximum Weight Knock-Out

50 Underwriting Authorization In 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPAA). A portion of HIPAA, known as the Privacy Rule, requires a covered entity to have written authorization from an individual before it can use or disclose the individual s protected health information. As part of doing business, we obtain protected health information to underwrite policies and we get protected health information from other covered entities, such as health care providers. Because of this, we must make our authorizations compliant with the HIPAA Privacy Rule. Colonial Life has a HIPAA-compliant underwriting authorization, form 57646, which is a separate document from our applications. You must submit one of these authorizations with each completed application, and the authorization must be completed in addition to the signature on the application. An authorization is required with each application, regardless of whether or not the product is covered under the Privacy Rule. (Applications will still have the former authorization on them until we file and receive approval for HIPAA-compliant applications.) To learn more about HIPAA guidelines, logon to ProducerNet and key in HIPAA in the Search field. 44

51 Harmony Enrollment Tips Account Set-up Benefit Setup: Colonial Benefits: Critical Illness Product Setup: General Product Configuration: Benefit Eligibility: Select Colonial Benefits. Select Critical Illness Insurance. Until Critical Illness 2001 is removed, both Critical Illness and Critical Illness 1.0 will display on the product setup page. If both products are set up, Critical Illness 1.0 will be offered in states where it is approved, and Critical Illness 2001 will be offered in the remaining states where that product is approved. There will be three tax options available for this product, and at least one must be selected. Post tax will be the default option. This section allows you to indicate the requirements an employee must meet for the product to be available on their Benefit Menu. Min Hours/Week: An employee must work at least this many hours per week in order for this coverage to be available to them on their Benefit Menu. The minimum hours per week is defaulted to 20. You must have Underwriting approval to lower this number below 20. New Hire Waiting Period (days): This field can be used to restrict new hires from enrolling in this benefit. If the number of days between the employee s date of hire and the account s coverage effective date (CED) is less that this New Hire Waiting Period, the employee is not eligible. The new hire waiting period is defaulted to 0. This can be used, based on the account s request, and does not require Underwriting approval. 45

52 Product Level Underwriting Exceptions: HSA Options: Employer/Account Options: Plans: Defaults: There are two options available: None and Post Enrollment Guaranteed Issue (PEGI). None: The normal Underwriting edits will apply (i.e., if a simplified issue question is answered Yes, then the quoting process is ended and a message will display indicating that the applicant is not eligible for coverage). PEGI: Knock-out rules will not apply (i.e., if a simplified issue question is answered Yes, then the quoting process is continued). The default is None. Note that PEGI rules will only apply to persons 59 years of age or younger and only when the benefit amount selected is exactly $5,000. Underwriting approval is NOT required to use PEGI. Provides the ability to control whether HSA-compliant plans are offered to the group. The answer to this question is defaulted to No. Provides the ability to select if the Subsequent Diagnosis and/or Health Screening Benefit is offered to the account. If either benefit is selected, everyone who enrolls in this product will receive the selected benefit. Both benefits are defaulted to a Yes answer. If an HSA plan is offered, then the options for the Subsequent Diagnosis coverage and Health Screening Benefit are no longer optional. These benefits will be automatically selected and grayed-out as these are benefits that are included in the HSA plan. There are two plan options available: Critical Illness and Critical Illness with Cancer. One or both plan options may be selected. If both are selected in set up, the applicant will make his/her plan selection in enrollment. Both plans are pre-selected. All coverage levels, benefit options, minimum/ maximum benefit amounts, and plans are pre-selected in the enrollment system. If you choose not to offer a specific coverage level, benefit option, or plan it will be necessary to de-select that option so that it does not appear during the enrollment process. A red asterisk indicates that a selection is required. 46

53 Enrollment Benefit Menu: Coverage Types: On the Benefit Menu, select Critical Illness. The following coverage types will be available in enrollment if they are selected in Account Setup. Employee as Primary Insured: Employee Employee and Spouse Employee and Dependent Child(ren) Employee, Spouse and Dependent Child(ren) Spouse as Primary Insured: Spouse Add Spouse Button: Primary Coverage: Spouse and Dependent Child(ren) Click this button to enter the spouse s name, date of birth, and relationship. The system will display the valid coverage types based on this information. Any plans configured in Account Settings will display in this section. If only one plan was configured, the user will not need to make a plan selection. The labels above the slider will display the face amount selected and the underwriting level applicable to the benefit amount selected on the slider. The green activated portion of the slider will indicate the amounts of coverage for which the applicant is eligible. 47

54 Service Guidelines Service for Individual Policies Handling Transfers Transfers from any Specified Critical Illness coverage to other products, such as a Cancer policy, are not allowed. If there is existing Specified Critical Illness coverage without Cancer coverage in force, the insured may apply for a Cancer plan. If there is existing Specified Critical Illness with Cancer coverage in force, the insured may not apply for a Cancer plan. The insured must request cancellation of the existing Specified Critical Illness policy with Cancer coverage to apply for an individual Cancer plan. This will not be considered a transfer of coverage. If there is existing Cancer coverage in force, and the insured is applying for Critical Illness 1.0 with Cancer, this will not be considered a transfer of coverage. In the rare instance that an insured with existing Cancer coverage wishes to purchase Critical Illness 1.0 with Cancer and cancel his existing Cancer coverage, be sure he is aware of loss of benefits like family coverage, treatment benefits, or progressive payment. Allowable transfers include: A Specified Critical Illness policy with Cancer to a Specified Critical Illness policy without Cancer. (A new application is required and a new policy is issued, but there will be no additional underwriting.) Upgrade of an existing Specified Critical Illness policy in order to raise the benefit level. (A new application is required and a new policy is issued. The new face amount will be underwritten for eligibility based on the insured s age at the time of the coverage upgrade. Pre-existing conditions will apply to the new increased face amount. If a condition is pre-existing and cannot be paid for under the new increased face amount, we will pay the benefit under the original policy at the original face amount, as long as the benefits would otherwise be payable under the original policy.) Moving from one coverage option to another. For example, transferring from an employee only (named insured) option to an employee and spouse option. (A new application is required, a new policy is issued, and underwriting applies only to the new spouse and dependent who have been added to the policy. Pre-existing conditions apply to the new policy. An application is not required for a downgrade in coverage, such as transferring from a $50,000 Critical Illness 1.0 policy to one with a face amount of $25,000.) 48

55 Changing from a tobacco to a non-tobacco policy. (A new application is required, a new policy is issued, underwriting and pre-existing conditions apply.) Moving from Group Critical Illness to Critical Illness 1.0 coverage is not considered an allowable transfer. The Group Critical Illness master policy/ certificates must be cancelled if you will be offering Critical Illness 1.0. (A new application is required, a new policy is issued, and underwriting and pre-existing conditions apply.) Any internal replacement requires the completion of an Internal Replacement Form (69558). Form number varies by state. Stacking Coverage Stacking of critical illness coverage (owning multiple policies) is not allowed, except with Colonial Health Advantage sm (the optional embedded critical illness benefit). Reinstating Lapsed Coverage To reinstate coverage within 30 days of lapsing, individuals must complete another AccHlth App. They are not required to answer any health questions. We do not require evidence of insurability and reinstated individuals do not have to re-satisfy any waiting period and/or pre-existing condition period. If the policy has lapsed by more than 30 days and up to a year (12 months) from policy termination, individuals must complete an AccHlth App and answer all applicable health questions. Reinstatement Guidelines If we accept an insured s reinstatement application, we do not require the individual to pay premiums from the time the coverage was terminated. The policy is designed to pay up to the Maximum Benefit Amount. A reinstated policy will cover: Specified critical illnesses that have a date of diagnosis more than 10 days after the reinstatement date; and. Health Screening benefit (if this plan option was selected) and the Cancer Vaccine benefit (if the cancer plan option was selected) more than 10 days after the reinstatement date. Full Benefit Payout If a policy is terminated because the Maximum Benefit Amount has been paid, the policy will not be reinstated. 49

56 Service for Claims Claim Filing Procedures For this coverage, individuals must give us written proof of loss within 90 days after the covered loss begins. Written proof of loss, provided at the covered person s expense and in English or Spanish, must include: Documentation furnished by a doctor and supported by one or more of the following: clinical, radiological, histological, pathological, and/or laboratory evidence of the Specified Critical Illness. For the Health Screening Benefit or Cancer Vaccine Benefit, written proof of loss may include one or more of these: An attending doctor s statement. A doctor s bill or a hospital bill. We may also require the covered person s statement, Worker s Compensation records, and/or his employer s statement. If the covered person is not able to give us written proof of loss within 90 days, it will not have a bearing on the claim if proof is given to us as soon as is reasonably possible. In any event, proof must be given no later than one year from the time stated unless the covered person is unable to do so. Any additional proof that we require, such as medical records, will be at our expense. We also reserve the right to have the covered person interviewed by an authorized company representative. Taxability of Claim Payments Critical Illness 1.0 is an indemnity product. Indemnity benefits are defined as lump-sum benefits paid without regard to actual medical expenses incurred by the insured. If premiums are employer-paid or employee-paid with pretax dollars (as through a flexible benefits plan), the Internal Revenue Service may consider any claim payments the insured receives as subject to federal income taxes. In addition, we report the total payout of the benefit as taxable income to the insured on a 1099MISC. If premiums are paid with after-tax dollars, claim payments are not subject to taxes, whether or not the benefits are expense-incurred or indemnity. 50

57 We strongly recommend that covered persons pay premiums for Critical Illness 1.0 coverage on an after-tax basis. If you do sell a Critical Illness 1.0 policy on a pretax basis, covered persons must sign a Pretax Disclosure Form (form 64389) stating that they understand the potential tax liability associated with pretaxing the premiums. Indemnity Benefits If indemnity benefits are taxable; that is, if premiums are paid with pre-tax dollars, they are taxable only to the extent that the total of the insurance benefits exceed the insured s medical expenses. For individuals who receive a total of more than $600 from all indemnity benefits payable during the calendar year, we file a Form 1099 for them to use in completing their personal tax returns. A Form 1099-MISC is not required for benefits amounts of $600 or less, but those lesser amounts may still be taxable as income to the covered person if premiums are paid with pretax dollars. 51

58 52 Index AccHlth Application, 6, 13, 38, 49 Accident (definition), 19 after-tax, premiums, 50, 51 age bands, 5, 36 application guidelines, benefit reduction, 28 blindness, 4, 12, 22, 26, 27 definition, 19 Breslow measurement, 19 calendar year (definition), 19 cancer, 2, 3, 4, 8, 22, 26, 27 carcinoma in situ, 4, 11, 19, 20, 22, 26, 27, 30 coverage (existing), 48 definition, 19 statistics, 2 vaccine benefit, 4, 9, 12, 14, 26, 31, 49, 50 cancer vaccine benefit, 4, 9, 12, 14, 26, 31, 49, 50 carcinoma in situ, 4, 11, 19, 20, 22, 26, 27, 30 definition, 20 cardiologist (definition), 20 claims, Clark s levels, 19 COBRA, 7 coma, 4, 12, 21, 26, 27 definition, 20 coronary artery bypass surgery, 4, 12, 22, 27, 29, 30 definition, 21 coronary artery disease, 4, 12, 22, 23, 26, 27, 30 definition, 21 covered accident (definition), 20 covered critical illnesses, covered sickness (definition), 21 date of diagnosis, 19, 21-22, 49 definitions, 21 dependent children, 3, 5, 26, 35, 36, 39, 40, 41, 42 definition, 22 doctor or physician (definition), 23 eligibility, 4, account, 4-5, 34 dependent, 35 employee, 34 spouse, 34 end stage renal (kidney) failure, 4, 21, 26, 27 definition, 23

59 exclusions, 16, 33 family coverage options, 5, 36 Harmony enrollment system, 18, 37, Health Insurance Portability and Accountability Act (HIPAA), 44 health screening benefit, 4, 26, 32, 37, 46, 49, 50 heart attack (myocardial infarction), 1, 4, 11, 21, 26, 27 definition, 23 HSA-compliant plan option, 3, 4, 10, 12, 21, 26, 27, 46 indemnity benefits, 50, 51 issue-age rated premiums, 9 lapses, 49 major organ failure, 4, 11, 21, 26, 27 definition, 23 market conduct issues, melanoma, 19 occupational infectious HIV or occupational infectious Hepatitis B, C or D, 4, 12, 22, 27, 30 definition, 24 pathologist (definition), 24 permanent paralysis due to covered accident, 4, 12, 21, 26, 27 definition, 24 plan options, 3, 9, 26 policy anniversary date (definition), 25 portability, 7 pre-existing condition (definition), 25 premiums, 5, 7, 9, 22, 25, 35, 36, 37, 50, 51 product testing procedures, proof of loss, 50 rates, 5, 36, 37 sample premiums, 37 reinstatements, 49 renewability, 7, 9, 12 sales support materials, specified critical illness (definition), 25 spouse, 3, 5, 6, 12, 22, 26, 29, 34 coverage, 3, 5, 9, 27, 34, 36, 38 definition, 25 stacking, 7, 15, 49 stroke, 1, 4, 11, 21, 24, 26, 27 definition, 25 subsequent diagnosis benefit, 3, 4, 7, 10, 11, 12, 26, 28, 29-31, 46 taxability of claim payments, terminating coverage, 49 transfers, 7, 15, underwriting guidelines, 6, waiting period (definition), 25 53

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63 COLONIAL LIFE COLLEGE BUILDING CONFIDENCE Colonial Life 1200 Colonial Life Boulevard Columbia, South Carolina coloniallife.com 07/09 - T Colonial Life & Accident Insurance Company. Colonial Life products are underwritten by Colonial Life & Accident Insurance Company, for which Colonial Life is the marketing brand.