Manulife Par Sample contract
- Single-life with Cash dividend option
This sample policy contract is provided for your information only.
It is not a valid contract or an offer of insurance.
Sample
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1 DividendsYour policy is a participating policy and may receive a dividend each year. Dividends are not guaranteed.
Your policy can’t receive a dividend while the policy is in the grace period. For details on the grace period, see the section called If you don’t pay your premium.
Once a year we decide on the dividend amount, if any. On your policy anniversary, we credit any dividend, based on your dividend option. You can change your option as long as the change meets our administrative rules and underwriting approval.
You have two dividend options to choose from:
Paid-up insurance Your dividends received for your guaranteed amount of insurance automatically buy paid-up insurance.
Once your dividends buy paid-up insurance, you make no further payments to keep this insurance. Paid-up insurance has cash value, and may receive dividends which will buy more paid-up insurance. We may change the cost to buy paid-up insurance from time to time.
Cash We pay any dividends your policy receives directly to you.
2 Paying your premiumYou must pay your premium in Canadian dollars. Your payments must be drawn from an account at a Canadian financial institution.
You must pay your premium when it is due to maintain your policy.
Deposit option paymentsDeposit option payments are optional payments, in addition to your premium. You can make deposit option payments to your policy at any time, subject to our administrative rules.
We reserve the right to limit or refuse deposit option payments.
Your deposit option payments buy additional insurance called deposit option insurance. Like paid-up insurance, once it's bought, you make no further payments to keep that insurance. We may change the cost to buy deposit option insurance from time to time. Deposit option insurance has cash value, and may receive dividends; if your dividend option is paid-up insurance, those dividends will buy more deposit option insurance.
If you select cash as your dividend option, you can't make deposit option payments.
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If you don't pay your premiumAfter you have paid your first premium, we allow a 31-day grace period for a missed premium. If we receive the required premium before the grace period ends, your policy continues.
If the insured person dies during the grace period, we reduce the death benefit by the amount of the missed premium.
If we have not received the required premium by the end of the grace period:
l and your policy is in its first year, your policy ends.l and your policy has passed its first policy anniversary, we automatically grant a policy continuation
loan if your policy has enough cash value to pay the required premium. If your policy doesn't haveenough cash value to pay the required premium, your policy ends. See the section called Borrowingmoney from your policy for more information about policy continuation loans.
If your policy ends, we pay you any cancellation cash value that was in your policy at the start of the grace period. We also return any payments that we received during the grace period.
Reinstating your policy You can ask us to reinstate your policy up to 2 years after the day it ends because you missed a premium payment if:
l all the people insured under the policy, who were alive on the day the policy ended, are still alive,and
l you pay the reinstatement amount.
If you ask us to reinstate your policy:
l within 30 days of the policy ending, we reinstate it without asking for additional information.l between the 31st day and 2 years after the policy ends, you must:
l complete and submit an application for reinstatement, andl give us any information we need to make a decision on whether, and under what conditions, we
will reinstate the policy.
If we approve your request and receive the reinstatement amount and any other information we need from you, we reinstate your policy and send you new Policy details.
The reinstatement amount
The reinstatement amount is:
l the total of all premiums due on the day your policy went into the grace period,
plus l all premiums due from the day after your policy went into the grace period untilthe day we reinstate your policy,
plus l any outstanding policy loan balance as of the first day of the grace period,
plus l interest on these amounts, as we describe in our administrative rules,
plus l any cancellation cash value we paid you when the policy ended.
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3 Death benefitThe death benefit is the amount we pay when the insured person dies.
How we calculate the death benefitWe determine the death benefit using this calculation:
The value, on the day the insured person dies, of:
l the guaranteed amount of insurance,
minus l any outstanding policy loans, including interest,
minus l any missed premium due.
Under certain conditions we may adjust the death benefit. In some cases we won’t pay a death benefit or we pay a restricted amount. See the sections called Your exclusions and How we respond to misrepresentation or nondisclosure.
We adjust the death benefit if the age or sex of the insured person has been stated incorrectly. The adjustment may be an increase or a decrease. We base the adjustment on the most recent premium for the policy, whether it was paid or waived. Then we pay the death benefit that the premium would have purchased if the insured person's age or sex had been stated correctly.
Your exclusionsExclusions tell you about when and why we won't pay the death benefit that we describe in the section called How we calculate the death benefit. We add these exclusions to any policy that your insurance or rider is changed or converted to.
Suicide
If the insured person commits suicide within 2 years of the day we issued your policy, or last reinstated your policy, whichever is later, we cancel the policy and pay the restricted amount to the beneficiary.
The restricted amount
The restricted amount equals:
l the premiums paid for the policy, including riders, for each month since the policydate,
minus l any dividends paid out as cash since the policy date,
minus l any outstanding policy loans, including interest,
minus l any withdrawals made since the policy date.
Additional exclusions
If there are additional exclusions for your policy, we include them in the amendments to this policy.
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4 Changes to your insurance policyYou can ask us to:
l decrease the guaranteed amount of insurance. If you decrease your guaranteed amount ofinsurance, we reduce the guaranteed cash value of your insurance proportionately, and refund anyguaranteed cash value that may be released.
l change from smoker to non-smoker. We ask you to give us any information we need to make adecision on whether, and under what conditions, we will change the smoking status of the insuredperson.
Any change must meet our administrative rules and we must approve your request for any change. We will ask you for any information we need to decide whether, and under what conditions, we will make any change to your policy. A change takes effect on the monthly processing day on or after the day we approve the change.
5 When your insurance policy endsYour insurance policy ends on the earliest of the following dates:
l the business day on which we receive your written request to cancel the policy. If you cancel yourpolicy, we pay you the cancellation cash value,
l 31 days after your policy enters the grace period if you have not paid your missed premium in fullbefore this day, and your policy doesn't have enough total cash value to give you a policycontinuation loan,
l 31 days after your policy's cancellation cash value becomes less than $0, if you haven't made apayment before this day that is enough to make your policy's cancellation cash value $0 or more,
l the day the insured person on this policy dies, orl the day we cancel or deny the insurance policy or rider, or deny a claim, subject to provincial laws.
See the section called How we respond to misrepresentation or nondisclosure for more information.
6 Using your policy’s value
Withdrawing money You can ask us to withdraw money from your policy’s cash value as long as your policy is not in the grace period. Withdrawals reduce your policy’s total cash value and your death benefit. Your withdrawal must meet our administrative rules.
Borrowing money from your policyThere are 2 kinds of policy loans: cash loans and policy continuation loans. We maintain 1 policy loan balance that includes all cash loans and policy continuation loans. We charge interest on all loans at a rate we set. At the end of each policy year, we add any unpaid interest to the loan.
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If you have a policy loan and your policy’s cancellation cash value is less than $0, we give you 31 days to repay all or a portion of the policy loan. If you do not make a payment within the 31-day period that is enough to make your policy's cancellation cash value $0 or more, your policy ends.
Cash loans
You may request a cash loan, subject to our administrative rules, if the policy is not in the grace period. The maximum amount you may borrow is 90% of the total cash value minus the balance of any outstanding policy loan. We may ask you to complete a loan agreement.
Policy continuation loans
After the first policy year, if you have not paid your premium and your policy has enough total cash value to pay the missed premium, we automatically grant a policy continuation loan at the end of the grace period. See the section called If you don’t pay your premium for more information about the grace period.
7 Disability benefitIf the insured person becomes disabled, you can ask us to pay a disability benefit. Any payment must meet our eligibility, notice, and claim requirements. We describe the requirements below. The amount of disability benefit you can request must also meet our administrative rules.
We withdraw your disability benefit from your total cash value, which reduces your death benefit. We administer the disability benefit payment based on our administrative rules.
How we define disabilityIn this section and the sections called Total disability and Catastrophic disability the terms you and your mean the insured person.
You are considered to be disabled or to have a disability if you are either totally or catastrophically disabled. We describe what we mean by those conditions below in the sections called Total disability and Catastrophic disability.
Total disability
You are totally disabled if, due to injury or sickness:
l you are not able to perform:
l the substantial duties of your regular occupation,or
l the regular substantial activities you were engaged in prior to the onset of injury or sickness ifyou were not engaged in a gainful occupation when your disability began,
and
l you are under the regular care of a physician and following the recommended appropriate treatment.
You are not totally disabled if you are engaged in any gainful occupation, even if you are injured or sick.
Any total disability must occur on or after the policy anniversary that is nearest the insured person’s 18th birthday. It also must occur on or before the policy anniversary nearest the insured person’s 65th birthday.
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Catastrophic disability
You are catastrophically disabled if:
a you satisfy the minimum criteria in one of the four categories listed below, b you are under the regular care of a physician and following the recommended appropriate treatment,
andc you are not engaged in any gainful occupation.
If we determine that your condition is permanent, based on the information you give us, you are considered catastrophically disabled based only on 'a' above.
Any catastrophic disability must occur on or after the policy anniversary nearest the insured person’s 18th birthday.
The four categories of catastrophic disability are:
1 Assumed disability means the total and permanent loss of one of the following:
l sight of both eyes, orl hearing in both ears, orl speech, orl the use of both hands or both feet, or a hand and a foot.
2 Loss of independence means you cannot do one of the following activities:
l Feeding – eat prepared food without help.l Bathing – take a bath or shower or otherwise maintain adequate personal cleanliness.l Dressing – put on and take off all garments, braces or artificial limbs, and secure and unfasten the
garments or devices.l Transferring – move in and out of a chair, including a wheelchair, or bed.l Toileting – get to and from the toilet, get on and off the toilet and maintain a reasonable level of
personal hygiene.l Continence – control bowel and bladder function and perform personal hygiene, including care of
catheter or colostomy bag.
3 Cognitive loss means you need substantial supervision because of a severe loss in cognitive function. The loss in cognitive function must be confirmed by clinical evidence and standardized tests. The evidence and tests must show a severe impairment in:
l short or long-term memory,l orientation to person, place and time, andl deductive or abstract reasoning.
4 Terminal illness means you are diagnosed as being terminally ill with a life expectancy of less than 1 year. We determine if you qualify based on the medical information we receive.
How to claim a disability benefit
You may claim only one disability benefit payment during any 12 month period. The insured person must be disabled when you make the claim.
To claim a disability benefit the insured person who has become disabled must remain disabled for at least 30 consecutive days. We ask you to give us any information we need to decide if the insured person is disabled according to our definitions in this policy. Contact your advisor or us directly for the forms you need.
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We must receive information about the disability while the insured person is living and disabled, and before the first anniversary of the day the disability occurred.
Disability benefit claim exclusions
We won’t pay a disability benefit if the insured person’s disability is caused:
l by intentionally self-inflicted injury,l while committing or trying to commit an assault or a criminal offence, orl by normal pregnancy or childbirth.
8 More information about this policy
Your beneficiariesA beneficiary is the person you name who receives all or part of the death benefit when the insured person dies. If you do not name a beneficiary, we pay any death benefit payable to you or your estate.
You can decide how any death benefit is to be divided among your beneficiaries. You may change your beneficiaries at any time before the insured person’s death, as long as the change is allowed by law. However, if you have named an irrevocable beneficiary, you can’t make a change without that beneficiary’s consent.
If you have used this policy as security for a loan, the rights of a collateral assignee or, under the Quebec Civil Code, a hypothecary creditor, may take precedence over the rights of your beneficiaries.
How we respond to misrepresentation or nondisclosureWe rely on you to be truthful and tell us every fact that might have affected our decision to issue any insurance or any rider under the policy, and the terms under which we issued the insurance, or rider. The information we rely on includes but is not limited to any applications, any medical examinations, and any written or verbal statements or answers provided as satisfactory proof that the insured person is eligible for the insurance.
We use this information to make our decision, but if you or the insured person didn’t provide us with full and truthful information, then our decision was based on false information. If we determine that our decision was based on false information, we will deny any claim, as described below.
Misrepresentation or nondisclosure of a material fact
During the contestability period, we will determine that the contract is not valid if you or the insured person:
l didn’t disclose a material fact, orl stated a material fact incorrectly or in a way that was misleading.
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Within the period permitted by law, we will determine that the contract is not valid if you or the insured person:
l didn’t correctly state the insured person’s age, andl we wouldn’t have issued the insurance because the correct age didn’t meet our minimum and
maximum age requirements.
Fraudulent misrepresentation
At any time, we will determine that the contract is not valid if you or the insured person made an untrue or misleading statement that the person making the statement didn’t honestly believe was true when they made the statement. These untrue or misleading statements include any omission or selective answer that leaves out important facts. This behaviour is called fraudulent misrepresentation.
Your rights as a policy ownerYour rights as a policy owner include the right to:
l name and change your beneficiaries,l cancel your policy or a rider,l transfer ownership of your policy,l name a successor owner, called a subrogated policy owner in Quebec,l vary the frequency of your premium payments, as long as the payments meet our administrative
rules, andl use your policy as security for a loan.
You must follow the terms and conditions of this policy when you exercise your rights. Your rights may also be limited by any laws that apply to your policy. If you want to exercise any of these rights, you must write to our Canadian head office. Contact your advisor or us directly for the forms you need.
If there is more than one policy owner, all policy owners must act unanimously to exercise their rights and options.
You need to start any legal action against us within the time limit set out in the Insurance Act. Every action or proceeding against an insurer for the recovery of insurance money payable under the contract is absolutely barred unless commenced within the time set out in the Insurance Act or other applicable legislation.
Tax law and your policyIn this policy, when we refer to the Income Tax Act, we mean any Canadian federal or provincial tax legislation, rules and regulations that apply to your policy.
Your policy has exempt status under the Income Tax Act.
We may, in our sole discretion, make adjustments we consider appropriate, needed, and allowed by law to maintain your policy's exempt status under the Income Tax Act. These adjustments include, but are not limited to, reducing your deposit option insurance and/or paid-up insurance which reduces the cash value of your policy. We will use any cash released by the reduction to:
l pay outstanding policy loans, and/orl pay amounts to you.
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If your policy would not have exempt status at any time, your policy is deemed to be adjusted immediately before it would otherwise lose its exempt status. The adjustment is deemed to be made in a manner and amount sufficient to maintain exempt status, by deeming:
1 your deposit option insurance and/or paid-up insurance to be reduced which reduces the cash value of your policy, and
2 using the cash value released by the reduction to:l pay outstanding policy loans, and/orl pay any remaining balance to you.
We show any adjustments made to maintain your policy's exempt status in your future policy statements.
Although your policy has exempt status, some changes, transactions, events and circumstances (including exercise of certain provisions within this policy) may have tax implications such as increasing your taxable income. Examples include but are not limited to:
l adjustments made to maintain your policy’s exempt statusl withdrawal of money from your policyl reducing your amount of insurancel receiving a disability benefitl cancellation of your policyl borrowing money from your policy either as a policy continuation loan or a cash loanl transfer of ownership of your policyl a change in your country of residence
If your status as a Canadian resident changesIf you do not reside in Canada or if you become a resident of a country other than Canada, non-resident tax rules under the Income Tax Act apply. You must notify us if you change your country of residence.
Using this policy as security for a loanYou can use your policy as security for a loan by assigning it to a lender. This type of security is called a collateral assignment or, under the Quebec Civil Code, a hypothec. The entire policy must be assigned or hypothecated. After you have collaterally assigned or hypothecated the policy, you may need the consent of the lender to make policy changes or cancel the policy. We are not bound by the assignment or hypothec until we receive a copy of it at our Canadian head office. We are not responsible for making sure that an assignment or hypothec is valid. The lender’s rights may take precedence over the rights of any other person claiming a death benefit.
Transferring policy ownershipYou can transfer ownership of your policy to another person. This type of transfer is called an absolute assignment. The entire policy must be assigned. We are not bound by the assignment until we receive a copy of it at our Canadian head office. We are not responsible for making sure that an assignment is valid.
Protection against creditors This contract and the benefits payable under it are exempt from seizure and the claims of your creditors, so far as the law allows.
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Our right to delay the effective date of transactions We have the right to delay the effective date of the following transactions:
l processing of withdrawal requests, andl processing of cash loan requests for your policy,
for up to seven days after we receive the request.
We also have the right to refuse to process transactions that are not permitted under the laws of the jurisdiction in which the owner lives.
These rights take priority over any other information in your policy that describes effective dates.
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9 DefinitionsThis section defines some of the words and phrases we use in your policy.
Canadian head office is our office at 500 King Street North, PO Box 1602, STN Waterloo, Waterloo, ON N2J 4C6.
cancellation cash value on any specific day is the amount of money you would receive from us on that day if you cancelled your policy. We calculate your policy’s cancellation cash value as follows:
l the total cash value, plusl any unused premium, minusl any outstanding loan, including interest, minusl any missed premium due.
contestability period is the period of time when we have the right to question the validity of a policy or a rider because a material fact was misrepresented or not disclosed.
For your insurance, the contestability period is two years starting from the later of:
l your policy issue date,l the date your policy was last reinstated,l the date a change you made took effect, if you had to give us the information we needed to make a
decision on whether the insured person was eligible for the change.
For your riders, the contestability period is two years starting from the later of:
l your rider's issue date,l the date your policy was last reinstated,l the date a change you made took effect, if you had to send us information we needed to decide if
the insured person was eligible for the change.
conversion expiry date is the last day you can convert your term insurance rider (TIR) to new permanent life insurance.
exempt status refers to a policy that meets the requirements of the Income Tax Act to be exempt from accrual taxation.
gainful occupation means employment that would generate pay or profit whether or not the insured person received any payment.
guaranteed cash value is the guaranteed portion of your cash value. We show the guaranteed cash value in your Policy details.
insurance rating is used in the calculation of the policy premium. We rate each insured person based largely on their health, personal and family medical history and recreational or employment activities. Our standard rating is 100%. This percentage increases for people we consider to be more of a risk to insure. The higher the percentage, the higher the premium. We may also apply a rating that increases the premium by a flat dollar amount. The insurance rating for the insured person appears in your Policy details.
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material fact is a fact that, if disclosed, would:
l influence our decision to issue the insurance or rider(s) orl affect the conditions under which we would be willing to provide the insurance or rider(s). These
conditions could include limiting the insurance or rider, or charging higher premiums.
monthly processing day is the day that most policy changes take effect on your policy. The first monthly processing day is on the policy date and subsequent ones are on the same day of each month that follows.
regular occupation means the gainful occupations the insured person was engaged in at the onset of their disability.
riders are optional benefits you can buy in addition to your insurance.
total cash value is the total dollar value of the guaranteed cash value for the insurance on the policy.
unused premium is a premium that you paid for the insurance and any riders for the period following the date an insured person dies or the date your policy or a rider is cancelled or changed, and until the start of the next premium payment period.
underwriting is the process we use to review any information we receive about the insured person to decide whether, or under what conditions, we would insure the insured person, or make a change to the policy.
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