General Leasing Program DISTRIBUTION GUIDE Life Disability Critical Illness Insurance 2015
DISTRIBUTION GUIDE GENERAL LEASING GROUP CREDITOR INSURANCE GROUP POLICY NUMBER BGS GL E0001 1
DISTRIBUTION GUIDE Name of Insurance Product: General Leasing Program Group Creditor Insurance Type of Insurance Product: Life Insurance; Critical Illness Insurance; Total Disability Insurance; Life with Accidental Disability Name and Address of the Insurer: THE EQUITABLE LIFE INSURANCE COMPANY OF CANADA 1 Westmount Road North, Waterloo, Ontario N2J 4C7 c/o P.O. Box 15, 991 Hornby Street Vancouver, B.C. V6Z 1V3 Customer Service: Telephone: 1-888-799-2472 Fax: 1-888-799-2473 Name and Address of the Distributor: Name: Address: Telephone Number: Fax Number: Responsibility of the Autorité des marchés financiers The Autorité des marchés financiers does not express an opinion on the quality of the product offered in this Distribution Guide. The Insurer alone is responsible for any discrepancies between the wording of the Distribution Guide and the policy. 2
TABLE OF CONTENTS ABOUT US... 5 INTRODUCTION... 6 DESCRIPTION OF PRODUCT OFFERED NATURE OF THE COVERAGE... 6 What types and amounts of insurance may I apply for?... 12 SUMMARY OF THE SPECIFIC CONDITION... 13 Who may apply for this insurance?... 13 How do I apply for this coverage?... 14 Do I have to answer any medical questions?... 15 When does my insurance begin?... 15 How do I know if my application for insurance was accepted?... 15 How is my premium calculated and when do I have to pay it?... 16 Is there a waiting period in the event of a claim?... 17 May I designate a beneficiary?... 17 May I transfer my coverage to another loan?... 17 When does my coverage end?... 17 EXCLUSIONS... 18 RESTRICTIONS AND REDUCTIONS IN COVERAGE... 20 CANCELLATION... 21 How can my coverage terminate?... 21 How can I cancel this insurance?... 22 How can I get a premium refund?... 22 Who will receive the premium refund?.24 OTHER INFORMATION... 24 Are there similar products that I can purchase?... 24 3
Who can I call for additional information concerning this insurance?... 24 Who can I call for additional information concerning Equitable Life s or the Distributor s obligations?... 24 PROOF OF LOSS OR CLAIM... 25 How do I make a claim?... 25 What will happen if I submit a claim.and I am not eligible for coverage?... 28 When will Equitable Life notify me about acceptance or denial of my claim?... 28 How can I appeal Equitable Life s decision?... 28 DISTRIBUTION GUIDE DEFINITIONS... 28 DEFINITIONS... 29 NOTICE OF CANCELLATION OF AN INSURANCE CONTRACT... 37 SECTIONS 439 TO 443 OF AN ACT RESPECTING THE DISTRIBUTION OF FINANCIAL PRODUCTS AND SERVICES... 38 NOTICE OF SPECIFIC CONSENT... 40 ACKNOWLEDGEMENT OF RECEIPT... 44 4
ABOUT US Bingham Group Services Corporation is Canada s leading Third Party Administrator in the business of creating, marketing and administering group creditor insurance products. Bingham Group Services has a distribution network that stretches across the country with a substantial presence in each and every province. Bingham Group Services employs industry leading best practices standards in respect of administration and regulatory compliance. Established in 1920, Equitable Life is one of Canada s largest mutually owned life insurance companies. Through our mutual status, we are able to manage the company with a long-term focus on the future, providing the continuity and financial stability that allows us to deliver on our commitments to our customers. Working with independent advisors across Canada, we offer a wide range of products and services including individual insurance, savings and retirement, group benefits solutions and group creditor insurance. But we re not your typical financial services company. We have the knowledge, experience and ability to find solutions that work for you. We re friendly, caring and interested in helping. And we re owned by our participating policyholders, not shareholders. So we can focus on your interests and on providing you with personalized service, security and wellbeing. Equitable Life is also proud to be one of Canada s largest mutual life insurance companies. We are not driven by shareholder pressures for quarterly results. Our mutual structure allows us to manage the Company with a focus on the long term. We are able to offer continuity and stability and are dedicated to meeting our commitments to customers now and in the future. 5
In addition, our mutual status has allowed us to prepare for and succeed in difficult market conditions. We have sufficient earnings and capital to meet our future growth targets, and we continue to grow steadily. Finally, we believe that being mutual allows us to provide better levels of service than a publicly traded company. INTRODUCTION In this guide the terms you and your refer to the insured borrower. Words in this guide that are underlined are defined in the Definitions section. This distribution guide will provide you with important information about the coverage provided under Equitable Life s Group Creditor Insurance Program. It is designed to give you all the information necessary about this insurance product in a user friendly manner. This distribution guide was prepared to allow you to determine whether this insurance product meets your needs, considering that you are not in the presence of an insurance representative. This plan allows you to apply for one or more of the following coverages: Life insurance; Critical illness insurance; Total disability insurance; Life with accidental disability insurance. This guide will help you evaluate if these insurance programs meet your needs. DESCRIPTION OF THE PRODUCT OFFERED NATURE OF THE COVERAGE Equitable s Group Creditor General Leasing Insurance can pay off your loan or lease, or it can make your loan or lease payments while you are totally disabled depending on what coverages you select. On your application, you select the insurance coverages you wish to apply for. 6
There are two types of Life Insurance. If you have selected Life Insurance, you get decreasing term life insurance which covers your lease or loan payments. If you select to have your residual value insured, then in addition to covering your lease or loan payments, your life insurance also covers the remaining outstanding amount of the loan or lease at the end of the term up to the lesser of the Maximum Principal Amount Insured indicated in the application and the amount of insurance applied for and for which premiums were paid. You can add Accidental Disability insurance coverage to your life insurance coverage, in which case you have added coverage for Total Disability resulting from Accident or Injury and coverage from Loss of Use. Payments under a Loss of Use claim are the remaining monthly payments in the term and if you have selected Residual Value life insurance coverage, then a Loss of Use claim will also pay the remaining outstanding amount of the loan or lease at the end of the term up to the lesser of the Maximum Principal Amount Insured as indicated in the application and the amount of insurance applied for and for which premiums were paid. Payments under a claim for Accidental Disability are restricted to a maximum of six (6) monthly payments while totally disabled from an Accident or Injury. If you have selected Total Disability Insurance coverage, then in the event of Total Disability, your monthly loan or lease payments can be made while totally disabled. If you have added Critical Illness Insurance to the life insurance coverage, you have added coverage where payment under a claim can pay the remaining monthly payments in the event of a covered Critical Illness and if you have selected Residual Value life insurance coverage, then also the remaining outstanding amount of the loan or lease at the end of the term up to the 7
lesser of the Maximum Principal Amount Insured as indicated in the application and the amount of insurance applied for and for which premiums were paid. A Health questionnaire (forming part of the application) is required to be completed by a proposed insured when applying for an amount of insurance greater than $200,000 or when applying for critical illness insurance. LIFE INSURANCE BENEFIT If an Insured Person dies while insured with Life Insurance coverage, upon receipt of proof, satisfactory to the Insurer, that death occurred while the insurance was in force and did not result from one or more of the Exclusions, we will pay the Principal Sum. Where the Debtor and Co-Debtor are both insured with respect to the same Loan, or Lease, no more than one Principal Sum is payable. TOTAL DISABILITY INSURANCE BENEFITS If an Insured Person while insured suffers a Total Disability for more than the Waiting Period, following receipt by the Insurer of evidence satisfactory to it of the Total Disability of such Insured Person, the Insurer will pay a Total Disability Benefit to the Creditor for each day that the Insured Person was Totally Disabled. Payment will be calculated from the first day of Total Disability if RETRO has been selected or from the 31st day of Total Disability if ELIM has been selected (as shown in the application). The daily Total Disability Benefit will be equal to 1/30th of the Monthly Total Disability Benefit. The monthly payment to the Creditor for the Total Disability of an Insured Person shall not exceed the lesser of the Monthly Insured Amount for any full calendar month or the Maximum shown in the application. Total Disability benefits will cease on the earliest of the date the Total Disability ceases, the 8
date the scheduled loan payments have been made or other termination dates set out in this distribution guide, the date you fail to provide proof of total disability or the date the Creditor takes steps to enforce the loan or lease. Total Disability Benefits does not cover the amount of any Residual Value or Balloon Payment. If the Debtor and, if insured the Co-debtor, are both Totally Disabled at the same time, regardless of the coverage type, the Insurer shall only pay the Creditor one Total Disability Benefit. 30 Day RETRO or RETRO means, in regard to Total Disability benefit payment, after a Waiting Period, payments are made retroactive to the date of Total Disability. 30 Day ELIM or ELIM means, in regard to Total Disability benefit payment, after a Waiting Period, payments are made commencing on the 31st day of Total Disability. Periods of Recurrent Total Disability are not subject to a Waiting Period. ACCIDENTAL DISABILITY INSURANCE This insurance provides coverage for Loss of Use and Accidental Disability. Loss of Use Benefit If an Insured Person suffers a Loss of Use while insured, the Insurer will pay the Principal Sum to the Creditor. The Loss must have: 1. Resulted from Accident or Injury and was independent of any other causes; and 2. Occurred within 365 days of the Accident or Injury and while this Certificate was in force; and 3. Did not result from an Exclusion; and 4. Did not result in a Loss otherwise covered under the Certificate. In no event will the Loss of Use Benefit cover 9
loan or lease payments in arrears or any accrued interest therein. Coverage under this Certificate will end when the Principal Sum is paid. If you sustain more than one Loss, the Maximum payable for all such Losses will be the Principal Sum where the Debtor and Co- Debtor are both insured with respect to the same Loan. The Principal Sum is payable no more than once. Accidental Disability Benefit If an Insured Person while insured suffers an Accidental Disability for more than the Waiting Period, the Insurer will pay an Accidental Disability Benefit for each day that the Insured Person was Accidentally Disabled. Accidental Disability benefits are in the same amount as Total Disability benefits except that the Insurer will pay a maximum of six (6) monthly payments only (per occurrence) are payable retroactive to the date of Accidental Disability. CRITICAL ILLNESS INSURANCE BENEFIT If an Insured Person suffers a Covered Condition while insured, if Diagnosis of a Covered Condition on the Insured Person first occurred after the Effective Date of Insurance and if that Insured Person survives 30 days following such Diagnosis, subject to the terms, conditions, limitations and exclusions of the Certificate, the Insurer will pay the Principal Sum to the Creditor. Where the Debtor and Co-Debtor both have Critical Illness Insurance and either or both suffer from a Covered Condition for which the Principal Sum is payable, only one Principal Sum is payable. Coverage under this Certificate ends when the Principal Sum is paid. Terms used in this Critical Illness Benefit description; The following Covered Condition are covered Cancer, Heart attack, and Stroke as each of these conditions are defined below. 10
Heart Attack (Myocardial Infarction) means the death of a portion of heart muscle as a result of inadequate blood supply. The following features must be present: Confirmation by a qualified cardiologist of presence of akinesia or dyskinesia during echocardiographic examination or any other recognized method of cardiac imaging, and Together at least one of the following three conditions: Development of pathological Q wave in at least 2 EKG leads (Q>/0,04 s and Q>25% amplitude of the following R wave), Abnormal EKG changes of heart attack with characteristic dynamics of biochemical markers, i.e. CK-MB and troponin, Typical anamnesis for heart attack with characteristic dynamics of biochemical markers, i.e. CK-MB and troponin. Insurance claims will also be paid, when the above mentioned conditions are not fulfilled, if diagnosis of acute heart attack is confirmed by a cardiologist, Insured Person was treated by hospital intravenous thrombolysis or PTCA (primary coronary angioplasty) and had fulfilled indication criteria for this treatment. Stroke means the diagnosis by a physician certified as a neurologist, of the infarction of brain tissue caused by thrombosis, hemorrhage or embolism. To qualify for this insured condition, the diagnosis must also be supported by medical evidence resulting in a measurable neurological deficit, which has persisted for 30 consecutive days and is deemed to be permanent. Transient ischemic attacks (TIA) are specifically excluded. Cancer means the diagnosis by a physician certified as an oncologist of a malignant tumour, which is characterized by the uncontrolled growth and spread of malignant cells and the invasion of tissue. 11
The following cancers are not covered: (CANCER EXCLUSIONS) Stage T1A and T1B prostate cancer, as defined under the TMN Classification Non-Invasive carcinoma in situ Pre-malignant lesions or polyps Any tumour in the presence of any human immunodeficiency virus (HIV) Any skin cancer except superficial spreading melanoma (SSM) with Breslow thickness < 0.70mm and Clark level of I. The first diagnosis of Cancer, or any symptom or medical problem that initiated any investigation leading to a first diagnosis of Cancer, is made within 12-months following the Effective Date of Insurance. What types and amounts of insurance may I apply for? Our insurance coverages can provide for the payment of the outstanding balance of your loan or lease You can insure your loan or lease payments and balance to the maximums shown in the following table: Life Life with Residual Value Critical Illness Total Disability Monthly Issue Age Maximum Benefit Maximum Term of Coverage Age 18-58 $1,000,000.00 84 months Age 18-58 $1,000,000.00 84 months Age 18-58 $500,000.00 84 months Age 18-58 $6,000.00 84 months Accident Only Disability Monthly Age 18-58 $6,000.00 (maximum 6 months) 84 months 12
Life Life with Residual Value Critical Illness Total Disability Monthly Issue Age Maximum Benefit Maximum Term of Coverage Age 59-64 $1,000,000.00 To age 65 Age 59-64 $1,000,000.00 To age 65 Age 59-64 $500,000.00 To age 65 Age 59-64 $6,000.00 To age 65 Accident Only Disability Monthly Age 59-64 $6,000.00 (maximum 6 months) To age 65 SUMMARY OF THE SPECIFIC FEATURES Who may apply for this insurance? You may apply for this coverage when applying for your loan or when entering into the lease contract. You must be a Canadian resident and be able to perform the usual duties of your occupation if applying for disability insurance. The insurance may cover the borrower or the co-borrower of a loan or lease. Joint insurance is also available to cover the borrower and the co-borrower. In this guide, you and your refer to the borrower and the co-borrower, provided that you have purchased joint insurance. To apply for insurance, you must meet all of the following conditions: Be a natural person within the issue age date range shown in this guide for the particular coverage and not a corporation Be personally responsible for the repayment of the loan or lease 13
Your name must appear as the borrower, co-borrower or guarantor of the loan or lease. To apply for the disability insurance you must also meet each of the following conditions: You must be: o Gainfully employed and actively working at least 25 hours per week for the past consecutive 30 days; OR o Gainfully employed as a seasonal employee and have been so employed for 13 consecutive weeks during the 12 month period immediately preceding the Effective Date of Insurance How do I apply for this coverage? You can sign and complete the application for insurance when arranging the financing agreement for your loan or your lease. You and the co-borrower, if applicable, must sign the application for insurance. You must carefully read the application for insurance, select which coverages you want and ensure that all information is true and accurate. Please make sure that the application for insurance is properly completed before you sign it. Coverage is not in effect if one of the following conditions exists: The application for insurance indicates that the amount of premiums is 0. No premium amount is indicated for this coverage. You must apply for insurance at the same time as applying for financing. You may not apply for insurance after the loan or the lease has been approved. You can only get Residual Value life insurance coverage as an add on to Decreasing term life insurance. You can only apply for Accidental Disability Insurance if you also apply for Life insurance 14
coverage. The same people must be insured under Life and Accidental Disability Insurance. You can only apply for Critical Illness Insurance if you also apply for Life insurance coverage. The same people must be insured under Life and Accidental Disability Insurance. If you have applied for Residual Value Life Insurance, this choice affects your amount of benefit if you also apply for Accidental Disability and/or Critical Illness Insurance. In such circumstances, if you have residual value life insurance, in the event of a valid Loss of Use claim or Critical Illness claim, your residual value will also be paid by the Insurer. You can apply for Total Disability Insurance as stand alone coverage or along with any other coverage. Do I have to answer any medical questions? Yes, there are medical questions to answer when completing the application for insurance. The questions apply to loan amounts exceeding $200,000 or if applying for Critical Illness insurance. If your loan or lease amount exceeds $400,000, you will have to answer additional questions. When does my insurance begin? Your coverage, for each of the insurance products applied for, begins on the later of the date shown on your application for insurance and when premiums are paid to the insurer if no underwriting is required. How do I know if my application for insurance was accepted? Your application for insurance is accepted on the date you sign the application for insurance, provided no underwriting is required and provided that all of the following conditions are met: You are still eligible for coverage; 15
Your application for insurance was completed correctly and signed; and The required premium has been paid. In such circumstances, your application and the certificate booklet you receive together form your certificate of insurance which is your confirmation of coverage. If underwriting is required, and if your application is accepted, your coverage will begin upon you receiving a letter of confirmation of coverage from Equitable Life. If your application is not accepted, you will receive a letter from Equitable Life and any premium paid will be refunded. How is my premium calculated and when do I have to pay it? Your distributor can provide you with a list of premiums based on a combination of insurance coverages. Your premium is payable in a single payment that will be added to the amount of your loan or lease or in monthly payments to Equitable Life. Premiums are due in the amount(s) and at the time(s) set out in the Application. Where a premium, other than the initial premium, is not paid at the time it is due, the premium may be paid within a period of grace of 31 days from the date on which the premium was due. During the grace period, your insurance coverage will remain in effect. If the premium is not paid during the grace period, your insurance coverage shall be void at the end of the grace period and no insurance coverage will be in effect. The total premium amount (the cost of insurance) is indicated on your application for insurance. Premium rates are set out in the Group Policy. The premium amount is calculated using the following factors: The type(s) of insurance you applied for in the application for insurance 16
The insured amount The repayment term of your loan or lease Whether it is joint or single coverage The waiting period selected The maximum number of monthly payments Whether the residual value is insured or not. The Quebec provincial sales tax is indicated separately from the premiums on the application for insurance. Is there a waiting period in the event of a claim? There is a waiting period of 30 days for total disability claims. Benefits begin on the date that you become totally disabled for retroactive coverage or begins on the day following the waiting period for elimination coverage. There is no waiting period in the event of a recurrent total disability. May I designate a beneficiary? You may not designate a beneficiary. All benefits are paid directly to your creditor or financial institution for repayment of your loan or lease. May I transfer my coverage to another loan? Coverage is transferable to another loan, lease or revised financing agreement, subject to the insurer s written approval. When does my coverage end? Your coverage terminates on the earliest of the expiry of the original term of your loan or lease or the date the number of months of coverage applied for in your application has expired. All coverages also terminate when the Principal Sum is paid by the Insurer. Your insurance may terminate earlier as described in the Cancellation section of this guide. In such a case, you may be eligible for a premium refund. Depending on the number of months applied for in your application, the insurance coverage may expire before you repay your loan or lease in full. 17
EXCLUSIONS, RESTRICTIONS AND REDUCTIONS IN COVERAGE Exclusions: CAUTION All claims are subject to the Insurer receiving satisfactory proof of claim and the claim not being subject to one or more of the Exclusions. No benefits are payable if the Death, Total Disability, or Critical Illness of an Insured Person, if such Death, Total Disability or Critical Illness results directly or indirectly from or is contributed by: 1) War, or act of war, hostilities of any kind, or active participation in a riot, rebellion or insurrection; 2) Suicide, attempted suicide or an intentionally self-inflicted injury; 3) Abuse or ingestion of any alcohol, poison, intoxicant or narcotic; 4) Commission or attempted commission of any criminal offence or assault; 5) Flight in a non-scheduled aircraft; 6) A Pre-existing condition means: (i) for Critical Illness or for Life Insurance any sickness, disease or physical condition, whether diagnosed by a physician or not, for which symptoms first occurred, or for which Medical Treatment was recommended, required or obtained, or for which prescription drugs were prescribed or taken, within the twelve (12) months immediately preceding the Effective Date of Insurance; and (ii) for Total Disability, any sickness, disease, injury or physical condition, whether diagnosed by a physician or not, for which symptoms first occurred or for which medical treatment was recommended, required or obtained, or for which prescription drugs were prescribed or taken, within the 12 18
months immediately preceding the Effective Date of Insurance, where such Total Disability begins within 12 months following the Effective Date of Insurance. In addition to the above, in the case of Total Disability or Critical Illness of an Insured Person, no benefits shall be payable if such Total Disability or Critical Illness results directly or indirectly from or is contributed to or by: 1) Parental leave, pregnancy, abortion, miscarriage, or childbirth (except complications of pregnancy. Complications of pregnancy does not include: false labor, back pain, occasional spotting, physician-prescribed rest during the period of pregnancy, morning sickness and similar conditions which, although associated with the management of a pregnancy, are not medically classified as distinct complications of pregnancy.); 2) Cosmetic or elective surgery; or 3) Any identified or unidentified sickness, disease, bodily injury, condition or symptom for which You received medical advice, consultation or treatment during the 12 calendar months immediately preceding the effective date of insurance. 4) In addition to the above, in the case of Total Disability or Critical Illness of an Insured Person, no benefits shall be payable if the insured person does not survive the waiting period. If diagnosed or treated outside of Canada, the benefit will be payable only if all the following conditions are satisfied: a) The complete medical records are made available to the Insurer. Should a record be in a language other than English or French, the cost for translating to English will be the responsibility of the Insured Person. 19
b) Based on medical records, we are satisfied that: (i) The same diagnosis would have been made if the sickness, injury or accident had occurred in Canada; (ii) Immediate treatment would have been indicated under Canadian standards; and (iii) The same treatment, involving the particular surgical procedure, would have been advised if treatment had taken place in Canada; c) The insured person must undergo an independent medical examination by a physician appointed by us, if we make such a request; and d) The insured person does survive the waiting period. In addition to the above, in the case of a Critical Illness of an Insured Person, no benefits shall be payable if such Critical Illness results directly or indirectly from or is contributed to or by: Any symptom or medical problem that initiated any investigation leading to a first diagnosis of Cancer that is made within 12-months following the effective date of insurance. Suicide Clause If an Insured Person commits suicide, while sane or insane, within two years of the Effective Date of Insurance, the Insurer s liability will be limited to payment to the Debtor, of the premiums paid, without interest, on such Insured Person. If Insurance coverage was in effect on both the Debtor and the Co-Debtor and one of them has committed suicide, insurance will continue in effect on the survivor. RESTRICTIONS AND REDUCTIONS IN COVERAGE Total benefit payments are limited or reduced as follows in case of death, critical illness, or disability: 20
If the borrower and the co-borrower are both insured with respect to the same loan, the benefit amount is only payable once In no event will the benefits cover loan payments in arrears or any accrued interest resulting from these payments being in arrears. The total payment of benefits for all group creditor certificates issued by Equitable Life, will not exceed $1,000,000. Also, the total benefits will never exceed the amount of the loan or lease on the effective date of insurance. In case of total disability, benefit payments cease on the earliest of the following dates: The date total disability ceases The date when all scheduled loan or lease payments have been made, excluding any payments in arrears and any accrued interest on payments in arrears The date Equitable Life asks for proof that you continue to be totally disabled and if, after 31 days, such proof is not provided to Equitable Life The date Equitable Life asks you to be examined by a physician or another practitioner named by Equitable Life, if you do not submit to such an examination within 31 days The date your insurance terminates In the case of accidental disability insurance, the date 6 monthly benefit payments have been made. CANCELLATION How can my coverage terminate? Coverage under the group insurance policy automatically terminates on the earliest of the following dates: The date the loan or lease is changed, refinanced, called due or otherwise discharged by the creditor The date the security for the loan or lease is repossessed, sold or becomes the subject of a Court judgment The date your loan or lease payments are 21
90 days in arrears The date the insurance term ends, as indicated on your application for insurance The date a death or critical illness benefit becomes payable under the group policy The date your coverage has been in force for 84 consecutive months The date Equitable Life receives your written notice requesting the cancellation of your insurance; or In the case of total disability insurance, the date you retire. How can I cancel this insurance? You may request the cancellation of your coverage at any time by sending a written notice to Equitable Life at the address indicated on the front of this guide. You may also use the template on page 37. How can I get a premium refund? If a benefit is paid for death, total disability or critical illness, no premium is refunded. Your insurance will be treated as never having been in force if one of the following conditions exists: Your application for insurance is declined It is determined that you were ineligible for coverage on the date your loan or lease is entered into or on the effective date of insurance; or Your insurance is terminated within 30 days of the effective date of insurance. Calculation of your premium refund will be based on the following: DATE OF RECEIPT OF THE CANCELLATION REQUEST Between 0 and 30 days After 30 days DATE USED TO CALCULATE THE REFUND Date insurance begins Date of receipt of the cancellation request 22
The premium refund will be calculated using the Rule of 78 formula: Where: Rule of 78 Refund ((d / (t * (t+1) / 2) * 0.80) * p)-f d: is the accumulation of days while the policy is inforce to the cancellation date t: is the number of days for the full term that the policy is inforce for the applicable life Insurance per Insured Person or applicable disability Insurance per Insured Person p: is the total premium f: is the policy fee *: means multiply /: means divide A cancellation fee of $75.00 will be deducted from the premium refund and the balance will be refunded providing it exceeds $5.00. The premium refund amount is always calculated using the Rule of 78 formula. Example: (t) 1461 days = number of days in original coverage period (d) 66795 days = the number of days from the date the insurance terminated to the end of the term of insurance (p) $4672.80 = the gross insurance premium paid by the borrower ((66795 / (1461 * (1461 + 1) / 2)) * 0.80) * 4672.80) 75 = $158.80 (Amount refunded) Refunds only apply to Single Premium insurance. Formulas to be used in computing cancellation refunds and any unearned amounts shall be the Rule of 78 applied 23
to the unearned premium with the balance being nonrefundable or the refund formula required by regulation. Who will receive the premium refund? If you provide proof from the creditor that the loan was paid or that the lease interest has been released by the creditor, the premium refund will be paid directly to you. In all other cases, the premium refund will be paid to the creditor to reduce the remaining amount of your loan or lease. OTHER INFORMATION Are there similar products that I can purchase? The insurance products offered have been developed to specifically address the unique repayment structures and characteristics of your loan or lease. There are similar products on the market, but you may have to complete up to three separate insurance applications to get the full range of benefits offered by our insurance. We encourage you to make inquiries to make sure that this insurance best meets your needs. Who can I call for additional information concerning this insurance? For more information or to acquire a copy of the group insurance policy, please call one of Equitable Life s customer service representatives toll-free at 1-888- 799-2472. Who can I call for additional information concerning Equitable Life s or the Distributor s obligations? You can contact the Autorité des marchés financiers at: Autorité des marchés financiers Place de la Cité, Tour Cominar 2640, boulevard Laurier, 4th floor Sainte-Foy (Quebec) G1V 5C1 Quebec: (418) 525-0337 Montreal: 514-395-0337 Toll-free: 877-525-0337 Fax: 418-525-9512 24
Internet address: www.lautorite.qc.ca How do I make a claim? PROOF OF LOSS OR CLAIM You, or someone acting on your behalf, must notify Equitable Life within 30 days following your death, disability, or critical illness. Notification must be in writing or by telephone to our customer services toll free number at 1-888-799-2472. Equitable Life will verify the insurance coverage, the waiting period, and the claimant s address. Equitable Life will then mail a claim form, including instructions for completing the form. This form may be accompanied by a request for additional information. The claimant should review the application for insurance and the insurance certificate in this guide before returning the claim form to Equitable Life. All sections of the form must be completed. Once completed, the form must be returned to Equitable Life using the pre-addressed envelope provided. If the claimant is selfemployed, certified copies of earned/ employment income must be included. You are responsible for paying any costs incurred for having the forms completed. Failure to submit the initial proof of claim within the time specified above or to provide continuing proof of claim when requested by Equitable Life may result in a forfeiture of benefits. The borrower is responsible for all scheduled loan or lease payments. Payment of benefits for a covered period of loss will be made to the creditor by Equitable Life. The following summarizes the forms that you may be required to complete depending on what coverages you have selected in your application: 25
Form Sections Instructions Life insurance claim. Return to Equitable Life within 365 days following death. Claimant s statement and authorization Creditor s statement To be completed and signed by the estate. To be completed by the financial institution where the loan was obtained. Attending physician s statement - proof of death To be completed by the family physician or the physician who pronounced the insured person dead. 26
Form Sections Instructions Disability or critical illness Claimant s statement and authorization To be completed and signed by the claimant. Return to Equitable Life within 90 days following the date total disability begins or 365 days following the loss of use. Employer s statement Creditor s statement Attending physician s statement To be completed by the claimant s current employer or previous employer if the claimant is not currently employed. To be completed by the financial institution where the loan was obtained. To be completed by the claimant s family physician. If he/she does not have one, then the physician treating the total disability. The claimant is responsible for any costs incurred to have this statement completed. Failure to submit the initial proof of claim within the time specified or to provide continuing proof of claim when requested by Equitable Life may result in a forfeiture of benefits. 27
What will happen if I submit a claim and I am not eligible for coverage? If, while processing a claim, it is determined that you are not eligible for coverage (see the Who may apply for this insurance? section of this guide), your insurance will be treated as never having been in force. Your total premium will be refunded to your creditor to reduce the amount of your loan or lease if applicable in the case of single pay or to the debtor in the case of monthly pay. When will Equitable Life notify me about acceptance or denial of my claim? Once Equitable Life has received all the information required to evaluate your claim, Equitable Life will have 10 days to notify the claimant and the creditor of the amount of benefits payable under your insurance certificate. If the claim is approved, Equitable Life will send the benefit payment to the creditor and a notice to this effect to the claimant. If the claim is denied, Equitable Life will notify the claimant of the reason(s) for denial and the creditor will be notified that Equitable Life will not make any payments. How can I appeal Equitable Life s decision? The claimant may appeal any decision by Equitable Life about a claim. However, the claimant must appeal in writing within 30 days of the date shown on the original denial letter. Equitable Life will then review the original assessment and provide a response in writing within 30 days. You may consult with the Authorite des marches financiers or your own lawyer. DISTRIBUTION GUIDE DEFINITIONS The following definitions apply to this distribution guide, the insurance certificate and the application for insurance. The terms group insurance policy or Group Policy refer to the applicable policy issued 28
by the insurer and which bears the Group Policy Number shown on your application for insurance. The creditor is named in the application for insurance. The following terminology is used in this guide and refers to information contained in the application for insurance. Accident means a sudden, unforeseen, and fortuitous event caused purely by external, violent and accidental means that occurs while this Certificate is in force. Accidental Disability means a Total Disability suffered by an Insured Person who has elected this coverage as shown in the application, first incurred while this insurance is in force, which is caused solely by an Accident as defined herein, and not as a result of or related to or arising out of any Sickness. The maximum benefit payment period for a period of Accidental Disability is six (6) months. Borrower/Co-borrower means the person(s) who become indebted to a creditor for a loan or a lease for a specified term. Certificate or certificate of insurance means the certificate provided to an insured person which describes the features of the insurance coverage, and includes the terms, conditions, exclusions and limitations affecting the insurance coverage. Claimant means any insured debtor or their authorized representative who is applying for benefits under the Group Policy. Co-Debtor means a debtor, who is the second signatory for an obligation, if any, named on the application for insurance. Complications of Pregnancy means a condition diagnosed in North America by a physician, who is not related to the Insured Person by blood or marriage, licensed in Canada, which is distinct from pregnancy but which 29
is adversely affected or caused by pregnancy. Complications of pregnancy does not include: false labor, back pain, occasional spotting, physician prescribed rest during the period of pregnancy, morning sickness and similar conditions. Creditor means lender or lessor shown in the application who is the primary beneficiary for all benefits under the certificate of insurance. Critical Illness is defined in the critical illness benefit section at page 10. Debtor means a natural person who becomes indebted for an obligation on or after the effective date of insurance. Decreasing term life insurance is life insurance that can insure the decreasing sum of your loan or lease payments over the term of your loan or lease. It does not cover the outstanding balance/residual value remaining at the end of the term of the loan or lease. Diagnosis means a written diagnosis by a physician of a covered condition or total disability. The effective date of this diagnosis shall be the date the diagnosis is established by the physician, as supported by the Insured Person s medical records. Effective Date of Insurance or date of insurance begins means the date your application for insurance is approved by Equitable Life and the first premium is received by Equitable Life and coverage under this policy begins, as well as the date from which the certificate of insurance anniversaries, and years, and premium due dates are determined. Eligibility/Eligible means to be eligible for Life Insurance, Disability Insurance and/or Critical Illness Insurance the Debtor, and if applying for such insurance, the Co-Debtor must on the Effective Date of Insurance shown on the application: 1. Be a natural person (the directors, officers, employees and shareholders 30
of partnerships, corporations or other forms of business entities are eligible for coverage but in their specific, individual capacities, respectively); and 2. Be a resident of Canada, at least 18 years of age but not yet reached the age of 65 for Life Insurance or not have reached the age of 65 for Total Disability and/or Critical Illness Insurance; 3. Have a loan or lease that does not exceed the Maximum Principal Amount Insured shown in your application, with a repayment term of not more than 84 months (not more than 60 months if age 60 or over) for Life Insurance; 4. Have a loan or lease that does not exceed the Maximum Principal Amount Insured with a repayment term of not more than 84 months between the ages of 18-58 and for limited coverage to 65 between the ages of 59-64 for Critical Illness Insurance; 5. Have a loan or lease that does not exceed the Maximum Principal Amount Insured shown in your application, with a repayment term of not more than 84 months between the ages of 18-58 and for limited coverage to 65 between the ages of 59-64 for Disability Insurance; 6. Be physically able to perform the usual duties of his or her occupation; and 7. Be working at this occupation for at least 25 hours per week for 30 consecutive days immediately prior to the Effective Date of Insurance or gainfully employed as a seasonal employee and have been so employed for 13 consecutive weeks during the 12 month period immediately preceding the date insurance begins for Total Disability Insurance. If an Insured Person was not eligible on the Effective Date of Insurance applied for, then regardless of the payment of any premium for the insurance, the insurance shall be 31
deemed to have never been in effect and in the event of a claim, the liability of the Insurer shall be limited to repayment to the Debtor of the premium paid, without interest. If you apply for any Insurance and the amount of the Loan applied for exceeds $200,000 (including Residual Value or Balloon Payment) or if you apply for Critical Illness insurance, medical questions must be answered, or if your loan exceeds $400,000 then additional medical questions must be answered. Your application will be subject to approval by Equitable Life and the insurance you applied for will not come into effect until your application is approved in writing by Equitable Life and the first premium is received by Equitable Life. Hospital means a facility which: is operated according to law for the care and treatment of injured and sick people; has organized facilities for diagnosis and surgery on its premises or in facilities available to it on a prearranged basis and controlled by the establishment; has 24-hour nursing service by registered nurses (R.N.), on duty or on call; and is supervised by one or more Physicians. Indebtedness or indebted means either the unpaid Principal Amount under a loan made between the Creditor and the Debtor, or the remaining payments to be made under a lease agreement between the Creditor and the Debtor. Injury means any bodily injury resulting directly or indirectly from an Accident that occurs during the term of insurance. Injury does not include pregnancy or any bodily injury resulting there from. Insured Person or Insured means a Debtor and Co-Debtor who are eligible to apply for insurance in accordance with the provisions of the Group Policy, at the time he/she applied for Insurance under the 32
Group Policy who have paid the applicable insurance premium and whose insurance under the Group Policy is in effect. In no event will more than two eligible Debtors be insured with respect to the same Loan or lease premium. Joint means the insurance covering both Debtor and Co-Debtor which will pay a benefit in respect of only one Insured Person at a time. In the case of Life, Loss of Use or Critical Illness benefits coverage will terminate once a benefit has been paid. Lease means a contract between you and a creditor for the use of a vehicle, or equipment, subject to stated terms and limitations, for a specified period and at a specified payment. Loan means a loan granted to you by the creditor, over a fixed term as specified in the agreement pertaining to your loan. Loss means Loss of Use of both eyes; Loss of Use of both hands or both feet; Loss of Use of one hand and one foot. Loss of Use means Loss of Use, which is permanent, total irreversible, which is beyond remedy by surgical or other means and which has been continuous for 180 days. Medical Treatment means medical advice, consultation, care, treatment, service or diagnosis rendered by a physician or surgeon who is licensed or otherwise qualified by law to practice medicine of the type rendered. Obligation means a lease or a loan with the Creditor, covered under the Certificate of insurance. Own Occupation means the occupation in which the Insured Person, claiming the total disability benefit, is Actively Employed on the date of the Injury or Sickness. If that Insured Person was Actively Employed in more than one occupation on that date, own occupation shall be that occupation 33
in which that Insured Person was Actively Employed for the most hours during the week immediately preceding that date. Physician means a medical doctor who is qualified and duly licensed in the jurisdiction in which he/she operates in Canada and who is licensed or otherwise qualified by law to practice medicine in the area where such medical advise, consultations, care, service, or diagnosis is rendered. A Physician must be a person other than yourself, a business partner or relative. Principal Sum means the lesser of: 1. Your Loan balance on the date the Loss occurred. If Residual Value Life insurance coverage has been applied for and the appropriate premium have been paid and received by the Insurer, then in the event of a Life, Loss of Use or Critical Illness Loss, then Principal Sum also includes payment of any Balloon Payment/ Residual Value shown in the application; and 2. In the case of a Lease, the present value of your outstanding lease payments until the end of the lease term. If Residual Value Life insurance coverage has been applied for and the appropriate premium have been paid and received by the Insurer; then in the event of a Life, Loss of Use or Critical Illness Loss, then Principal Sum also includes payment of any Balloon Payment or Residual Value owing at the end of the lease term; and 3. The maximum principal amount insured shown in the application; and 4. The amount of insurance applied for and for which the appropriate premium have been paid and received by the Insurer. Psychiatrist means a Physician who is qualified and duly licensed in psychiatry. A Psychiatrist must be a person other than yourself, a business partner or relative. 34
Recurrent Total Disability means any total disability that recurs within two (2) weeks after recovering from the same or a directly related disability for which total disability benefits have been paid under the certificate of insurance. Periods of recurrent total disability are not subject to the waiting period. Residual Value or Balloon Payment means a lump sum payment due at the end of the loan or lease term. Sickness means any illness or disease of the body or mind, which first manifests itself while you are insured under the Group Policy. Sickness includes: mental, nervous, psychological, emotional or behavioural disorders, diseases or conditions. Sickness does not include pregnancy, abortion, miscarriage, childbirth or parental leave as a result thereof. Surgery means that the Insured Person actually undergoes surgery as specified for a covered impairment, performed by a Physician, in Canada. Total Disability or Totally Disabled means: 1. The inability of an Insured Person while this insurance is in force, which prevents the Insured Person during the first 12 months of Total Disability from performing the essential duties of their Own Occupation due to Injury or Sickness, independently of any other cause or contributing factor and the Insured is not in fact working or earning renumeration from that occupation for which the Insured Person is suited by reason of education, training or experience. You must also be under the regular care and attendance of a qualified physician. If you are unable to work due to mental or emotional disorder, Total Disability also means that you are under the regular care of a psychiatrist licensed in Canada, institutionalized and/or participating in ongoing counseling or 35
therapy sessions in accordance with the recommendation of your psychiatrist. 2. You will not be considered Totally Disabled, if you are employed in any other gainful occupation. 3. If Accidental Disability insurance is chosen, the Total Disability will be limited to that condition caused by an Accidental Disability as defined above and excludes Disabilities caused by Sickness. Waiting Period means Insured must be Totally Disabled for 30 days before any benefits become payable. 36
NOTICE OF CANCELLATION OF AN INSURANCE CONTRACT NOTICE GIVEN BY A DISTRIBUTOR Section 440 of the Act respecting the distribution of financial products and services (chapter D-9.2) THE ACT RESPECTING THE DISTRIBUTION OF FINANCIAL PRODUCTS AND SERVICES GIVES YOU IMPORTANT RIGHTS. The Act allows you to cancel an insurance contract you have just signed when signing another contract, without penalty, within 30 days of its signature. To do so, you must give the insurer notice by registered mail within that delay. You may use the form below for this purpose. Despite the cancellation of the insurance contract, the first contract entered into will remain in force. Caution, it is possible that you may lose advantageous conditions as a result of this insurance contract; contact your distributor or consult your contract. After expiry of the 30 day period, you may cancel the insurance at any time; however, penalties may apply. For further information, please contact the Autorité des marchés financiers Quebec City: (418) 525-0337, or Montreal: 514-395-0337 or Toll free: 1-877-525-0337. NOTICE OF CANCELLATION OF AN INSURANCE CONTRACT To : EQUITABLE LIFE OF CANADA c/o P.O. Box 15, 991 Hornby Street Vancouver, B.C. V6Z 1V3 Date : (date of sending of notice) Pursuant to section 441 of the Act respecting the distribution of financial products and services, I hereby cancel insurance contract no. : (number of contract, if indicated) Entered into on: (date of signature of contract) In: (Place of signature of the Application) (name of client) (signature of client) The distributor must first complete this 37
section. This document must be sent by registered mail or by fax. Reproduction of Sections 439 to 443 of An Act respecting the distribution of financial products and services 439. A distributor may not subordinate the making of a contract to the making of an insurance contract with the insurer specified by the distributor. The distributor may not exercise undue pressure on the client or use fraudulent tactics to induce the client to purchase a financial product or service. 440. A distributor that, at the time a contract is made, causes the client to make an insurance contract must give the client a notice, drafted in the manner prescribed by regulation, stating that the client may cancel the insurance contract within 10 days of signing it. 441. A client may cancel an insurance contract made at the same time as another contract, within 10 days of signing it, by sending notice by registered or certified mail. Where such an insurance contract is cancelled, the first contract retains all its effects. 442. No contract may contain provisions allowing its amendment in the event of cancellation or termination by the client of an insurance contract made at the same time. However, a contract may provide that the cancellation or termination of the insurance contract will entail, for the remainder of the term, the loss of the favorable conditions extended because more than one contract was made at the same time. 443. A distributor that offers financing for the purchase of goods or services and that requires the debtor to subscribe for insurance to guarantee 38
the reimbursement of the loan must give the debtor a notice, drawn up in the manner prescribed by regulation, stating that the debtor may subscribe for insurance with the insurer and representative of the debtor s choice provided that the insurance is considered satisfactory by the creditor, who may not refuse it without reasonable grounds. The distributor may not subordinate the making of the contract of credit to the making of an insurance contract with the insurer specified by the distributor. No contract of credit may stipulate that it is made subject to the condition that the insurance contract subscribed with such an insurer remain in force until the expiry of the term, or subject to the condition that the expiry of such an insurance contract will entail forfeiture of term or the reduction of the debtor s rights. The rights of the debtor under the contract of credit shall not be forfeited when the debtor cancels, terminates or withdraws from the insurance contract, provided that the debtor has subscribed for insurance with another insurer that is considered satisfactory by the creditor, who may not refuse it without reasonable grounds. 39
NOTICE OF SPECIFIC CONSENT YOU ARE FREE TO GRANT OR REFUSE THIS CONSENT Sections 92 and 437 of the Act respecting the distribution of financial products and services (chapter D-9.2) WHAT YOU MUST KNOW: At this date, we hold certain information relating to you. We require your consent to allow some of our clerks to have access to this information. These clerks will also have access to any update of the information done during the period of validity of the consent. These clerks will use the information available in order to solicit you for the purchase of new financial products and services. YOU ARE FREE TO SET THE PERIOD OF VALIDITY OF YOUR CONSENT If you grant consent for an undetermined period of time, you may at any time terminate it by revoking it. At the end of this form, you will find a new revocation notice model that you may use for this purpose or as a basis for preparing your own notice. If you wish to grant consent for a limited period of time, you may do so by determining this period yourself. This form provides, in the specific consent section, a place where you may write down the period of validity desired. THE ACT RESPECTING THE DISTRIBUTION OF FINANCIAL PRODUCTS AND SERVICES GIVES YOU IMPORTANT RIGHTS Without this specific consent, the distributor may not use this information for a purpose other than the purpose for which it was collected. The distributor cannot compel you to give your consent 40
or refuse to do business with you if you refuse to give it. Section 94 of the Act protects you. For further information, you may contact the Autorité des marchés financiers at: Quebec City: (418) 525-0337, Montreal: 514-395-0337 or Toll free: 1-877-525-0337. The information we hold pertaining to you, at this date, was collected as part of (purposes of the file): Here are the required categories of information that we would like our clerks to use and the products and services they may offer you. For a fuller description of each category, you may refer to the back of this sheet. Please authorize each category of information requested. Required information category to be assessed 1 For which products and services? 2 Client s Authorization 3 Initial4 To be filled out by the distributor To be filled out by the distributor yes no yes no yes no yes no yes no yes no 41
Instructions for the distributor (duplication not required): 1. The distributor must describe each category on the reverse side of this sheet. 2. The distributor must specify the nature of the products and services it wishes to offer the client. Each information category must be associated with a specific purpose. Where a category serves several purposes, the distributor must repeat it for each purpose. 3. The client may give his or her authorization by telephone, provided both parties can identify each other. In such case, this form shall serve as a script for the officer, who will also read the detailed description of each category to the client. The distributor must fill out this form and send it to the client within 10 days of obtaining the verbal consent. 4. If in electronic form, the initials may be replaced by a confirmation window. However, the notice of consent must be made available to the client by any means allowing the reading or printing thereof. In accordance with the Act Respecting the Protection of Personal Information in the Private Sector, you may request access to the information that we hold pertaining to you. 42
SPECIFIC CONSENT Having read the above, I, the undersigned, (name of client) consent to the use of the information held by the distributor for the purposes indicated above. This authorization will be valid until revoked or for the following period: DD/MM/YY (to be filled out by the client) I may revoke this consent at any time by sending a notice. I may use the attached model notice for this purpose or as a basis for preparing my own notice. (signature of client) (date of signature of the consent) (client identification, address, folio or contract no., etc.) I HEREBY REVOKE THE SPECIFIC CONSENT GIVEN TO THE DISTRIBUTOR BY THE FOLLOWING NOTICE To: (name of distributor) (address of distributor) On: I, the undersigned, (name of client) hereby notify you that I am canceling the specific consent authorizing the communication of my personal information for new purposes. Consent given to you on: (date of consent) (name of client) (signature of client) (client identification, address, folio or contract no., etc.) 43
ACKNOWLEDGEMENT OF RECEIPT You, the insured client, acknowledge receipt of this distribution guide when you acquired your Insurance Certificate. Certificate number: Date : (date of acknowledgement of receipt) Distributor : (name of distributor) Client : (signature of client) (name of client) (address of client) This Acknowledgement of Receipt is to be retained by the Distributor as proof that the client received a copy of the distribution guide. 44
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