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INCOME PROTECTION POLICY DOCUMENT
For
Employees
(as Voluntary Insured Members)
Participating Employer (Universities of NZ)
(the employer)
Administered by Marsh
(the policy owner)
Insured by
Sovereign Assurance Company Limited
74 Taharoto Road
Takapuna
North Shore City 0622
Private Bag Sovereign
Victoria Street West
Auckland 1142
UnIP 05/11
Contents
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
11.0
12.0
13.0
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THIS POLICY................................................................................................................... 3
INTERPRETATION........................................................................................................... 3
MEMBERSHIP ................................................................................................................. 6
Minimum Policy Terms ...................................................................................................... 6
Eligibility........................................................................................................................... 6
Automatic Acceptance Limit............................................................................................... 6
Underwriting Terms........................................................................................................... 7
Sovereign’s Ongoing Membership Requirements ................................................................ 7
TAKEOVER TERMS......................................................................................................... 8
START OF COVER .......................................................................................................... 8
PREMIUMS ...................................................................................................................... 9
Payment of Premiums ....................................................................................................... 9
Guarantee of Standard Premium Rates .............................................................................. 9
Variation of Members’ Premiums........................................................................................ 9
BENEFITS ..................................................................................................................... 10
General .......................................................................................................................... 10
Deduction of Tax ............................................................................................................. 11
What are the Benefits? .................................................................................................... 11
Total Disability Benefit ..................................................................................................... 11
Partial Disability Benefit ................................................................................................... 12
Vocational Retraining Benefit ........................................................................................... 13
Rehabilitation Expense Benefit ........................................................................................ 13
Bed Confinement Benefit................................................................................................. 13
Bereavement Support Benefit .......................................................................................... 14
Waiver of Waiting Period for Recurring Disability............................................................... 14
Indexation of Monthly Benefit ........................................................................................... 14
Spouse Benefit ............................................................................................................... 14
OTHER COVER ............................................................................................................. 15
Cover During Unpaid Leave............................................................................................. 15
Worldwide Cover ............................................................................................................ 15
EXCLUSIONS ................................................................................................................ 16
Member Exclusions ......................................................................................................... 16
CLAIMS ......................................................................................................................... 16
When a Benefit Is Payable............................................................................................... 16
Claim Criteria.................................................................................................................. 16
Payment of Benefit.......................................................................................................... 18
Reduction of Benefit ........................................................................................................ 18
Non-Payment of Benefit .................................................................................................. 19
Regular Assessments ..................................................................................................... 19
TERMINATION............................................................................................................... 20
Termination of this Policy................................................................................................. 20
Termination of Membership ............................................................................................. 20
When Can Sovereign Cancel Your Membership? .............................................................. 21
CONTINUATION OPTION............................................................................................... 21
GENERAL...................................................................................................................... 23
Incorrect or Incomplete Information .................................................................................. 23
Term Insurance............................................................................................................... 23
Records ......................................................................................................................... 23
Notices ........................................................................................................................... 23
Payments ....................................................................................................................... 23
Privacy ........................................................................................................................... 23
Variation......................................................................................................................... 24
Non Assignment of Policy................................................................................................ 24
Governing Law ............................................................................................................... 24
Free Look ....................................................................................................................... 24
Page 2
CONDITIONS
1.0
2.0
THIS POLICY
1.1
This policy document, its Schedules, the proposal documents and any
declarations make up this policy, issued by Sovereign.
1.2
This policy is a voluntary workplace policy which provides insurance cover for
more than one person under a group master policy. Such persons are referred
to as members.
1.3
Under this policy, Sovereign will pay a benefit for the reason(s) set out in
condition 7.
INTERPRETATION
2.1.
Italicised words and phrases in the policy have the meanings specified herein.
2.1.1
accident means bodily injury to the member caused by visible, violent
and external means in relation to the member.
2.1.2
actively employed means the person is not prevented by accident or
sickness from properly performing his/her normal duties of paid
permanent employment. For the sake of clarity, permanent
employment means the person has an individual agreement of either
indefinite duration, or for a fixed term, with the employer requiring the
person to perform identifiable duties for a regular number of hours of
no less than 15 hours each week.
2.1.3
annual salary (if benefits are salary related) means the yearly rate of
base salary or wages applicable to the member as notified to
Sovereign by the Policy Owner when membership commences, and
subsequently at each policy anniversary date.
2.1.4
automatic acceptance limit has the meaning assigned to it in
Schedule 1 or such other amount Sovereign may advise the Policy
Owner in writing from time to time by giving at least 90 days’ written
notice. The automatic acceptance limit is only available to those
employees who qualify for the automatic acceptance limit. Automatic
acceptance limits do not apply to spouse applicants.
2.1.5
bed confinement benefit, if applicable, has the meaning assigned to it
in conditions 7.19 and 7.20.
2.1.6
benefit, subject to the provisions of this policy, means any or all of
the following benefits in respect of a member that are payable prior to
the benefit expiry date or the termination of a member’s membership:
a)
b)
c)
d)
e)
f)
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total disability benefit;
partial disability benefit;
vocational retraining benefit;
rehabilitation expense benefit;
bed confinement benefit;
bereavement support benefit.
2.1.7
benefit expiry date has the meaning assigned to it in Schedule 1.
2.1.8
benefit payment period has the meaning assigned to it in Schedule 1.
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2.1.9
bereavement support benefit has the meaning assigned to it in
condition 7.21.
2.1.10
business day means a day, other than Saturday or Sunday or a
public holiday observed in New Zealand (including any provincial
anniversary day).
2.1.11
conditions means these conditions contained in the policy, other than
special conditions contained in Schedule 1.
2.1.12
CPI means the latest annual Consumer Price Index (All Groups)
published by Statistics New Zealand as at the effective date of the
relevant calculation under this policy. If the CPI is no longer
published, Sovereign will use a similar index.
2.1.13
date of disablement means the later of the date of an accident or
sickness giving rise to a disability under this policy, and the last day
the member is actively employed with the employer.
2.1.14
disability means a total disability or partial disability under this policy,
whichever is applicable from the context. Disabled has a
corresponding meaning.
2.1.15
eligibility criteria has the meaning assigned to it in Schedule 1.
2.1.16
employer has the meaning assigned to it in Schedule 1.
2.1.17
fraudulent and fraudulently means in respect of a statement
fraudulently made by a person, that the person making it makes it:
•
Knowing it is incorrect; or
•
Without belief in its correctness; or
•
Recklessly, without caring whether it is correct or not.
2.1.18
guarantee date has the meaning assigned to it in Schedule 1.
2.1.19
indexation of benefit, if applicable, has the meaning assigned to it in
condition 7.23.
2.1.20
initial period means the period of time set out in Schedule 1.
2.1.21
insured income has the meaning assigned to it in Schedule 1.
2.1.22
material has the meaning that a statement or fact is material only if
that statement or fact would have influenced the judgement of a
prudent insurer in fixing the premium or in determining whether
he/she would have taken or continued the risk upon substantially the
same terms.
2.1.23
maximum benefit has the meaning assigned to it in Schedule 1.
2.1.24
medical practitioner means a legally qualified and registered medical
practitioner acceptable to Sovereign other than the insured member,
the partner, the child or other family member, business partner or
associates of either the member or his/her employer.
2.1.25
member means an employee of the employer who has fulfilled the
eligibility criteria, and who continues to satisfy the conditions of
membership as set out in this policy. Member shall include a spouse
member unless otherwise stated.
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2.1.26
membership means a member or spouse member that has been
accepted for and is covered for benefits under the terms and
conditions of the policy.
2.1.27
partial disability benefit means the benefit calculated in accordance
with condition 7.13.
2.1.28
partially disabled refers to a member who:
a)
b)
c)
d)
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Immediately after at least an initial period of total disability,
returns to work; and
Solely because of the continuation of the sickness or
accident which caused the total disability, is working in a
reduced capacity, or is capable of working in a reduced
capacity; and
Earns a monthly income that is less than 75% of his/her
monthly pre-disability income; and
Is under the regular care of, and following the advice of, a
medical practitioner.
2.1.29
partial disability has a corresponding meaning.
2.1.30
policy means this Workplace Income Protection Policy and the
Schedules attached to it, as amended from time to time by
Sovereign.
2.1.31
policy anniversary date has the meaning assigned to it in Schedule 1.
2.1.32
policy commencement date has the meaning assigned to it in
Schedule 1.
2.1.33
Policy Owner has the meaning assigned to it in Schedule 1.
2.1.34
policy year means 12 months from the policy anniversary date and
each 12 months thereafter.
2.1.35
pre-disability income means the member’s annual salary as
disclosed at the last policy anniversary date, or what was accepted
upon application, whichever is later, or such other amount as notified
and agreed to in writing by Sovereign.
2.1.36
premium due dates has the meaning assigned to it in Schedule 1.
2.1.37
rehabilitation expense benefit has the meaning assigned to it in
condition 7.18.
2.1.38
sickness means any illness, disease or disorder contracted by the
member.
2.1.39
Sovereign means Sovereign Assurance Company Limited, a
registered company at Auckland, New Zealand.
2.1.40
specified occupation means the occupation of the member
immediately prior to the date of disablement.
2.1.41
spouse means the person to whom the member is currently married
and with whom the member is living, and also includes any person
with whom, in the opinion of the Policy Owner, the member is living in
a relationship in the nature of a marriage, irrespective of gender.
2.1.42
spouse benefit has the meaning assigned to it under conditions 7.24
to 7.30 inclusive.
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3.0
2.1.43
spouse member means a spouse who has been accepted for
membership under this policy and who continues to satisfy the
conditions of membership as set out in this policy.
2.1.44
term life insurance policy means a policy as defined in Regulation 45
of the Securities Regulations 2009 that is not a security or a life
insurance policy for the purposes of the Securities Act 1978.
2.1.45
total disability has the meaning assigned to it in Schedule 1.
2.1.46
total disability benefit has the meaning assigned to it in Schedule 1.
2.1.47
unpaid leave means leave without pay to undertake travel, full time
study, maternity leave, paternity leave, parental leave,
compassionate leave, sabbatical leave, sick leave or other such
leave agreed to by Sovereign.
2.1.48
vocational retraining benefit has the meaning assigned to it in
conditions 7.16 and 7.17.
2.1.49
waiting period has the meaning assigned to it in Schedule 1.
2.2
The headings are for convenience only and are not relevant to the
interpretation of the conditions.
2.3
Expressions referred to in Schedule 1 have the same meanings within the
policy document.
2.4
Singular includes plural.
MEMBERSHIP
Minimum Policy Terms
Eligibility
3.1
Any employee (who is not a spouse) who meets the eligibility criteria, and who
qualifies for an automatic acceptance limit, will be eligible to be insured for the
benefits specified in Schedule 1 from the date the application is accepted by
Sovereign, or at some other time Sovereign agrees in writing with the Policy
Owner.
3.2
Any employee (who is not a spouse), who does not qualify for an automatic
acceptance limit, on satisfying the eligibility criteria, may be accepted for
insurance under this policy subject to the provision of underwriting in
accordance with condition 3.7 to 3.9 inclusive.
3.3
A spouse applicant of an accepted member, on submitting an application, may
be accepted for insurance under this policy subject to the provision of
underwriting in accordance with condition 3.7 to 3.9 inclusive.
Automatic Acceptance Limit
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3.4
The automatic acceptance limit is only available to those employees who
qualify for the automatic acceptance limit as shown in Schedule 1. Applicants
that are not eligible for the automatic acceptance limit will be underwritten in
accordance with conditions 3.7 to 3. 9 inclusive.
3.5.
Spouse applicants are not eligible for any automatic acceptance limits.
3.6
The automatic acceptance limits in place at any time are reviewable at each
annual policy anniversary date.
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Underwriting Terms
3.7
For those persons:
a)
Who do not meet the eligibility criteria; or
b)
Where the amount of the benefit applied for is in excess of the automatic
acceptance limit; or
c)
Where the amount of the benefit, as a result of an increase in the benefit,
is in excess of the automatic acceptance limit or any previously agreed
variation to the automatic acceptance limit; or
d)
Where the automatic acceptance limit is nil, does not apply, or is outside
of any automatic acceptance limit offers; or
e)
Who are spouses applying for a spouse benefit;
cover (or where applicable, the cover that is in excess of the automatic
acceptance limit), will be subject to underwriting terms set out in condition 3.8.
3.8
3.9
Underwriting means that Sovereign will only agree to provide the benefit, or an
increase in the benefit, for a member or spouse member, if the following
conditions are met:
a)
The Policy Owner and member provide any information (including, but
not limited to, medical information) Sovereign requires for assessment.
Sovereign will notify the Policy Owner what information is required; and
b)
Sovereign approves the benefit, or increase in benefit, as the case may
be.
Sovereign will notify the Policy Owner of its decision where a non-standard
premium applies, or if the insurance is declined. Sovereign will also notify the
Policy Owner when the cover or the increase to the cover will commence.
Sovereign will advise any special restrictions or exclusions applicable to the
member’s cover directly to the member.
Sovereign’s Ongoing Membership Requirements
3.10 Within 30 days (or such extended period agreed by Sovereign) of each policy
anniversary date, the Policy Owner will provide Sovereign with a certificate
and/or schedule showing:
a)
The name, gender, date of birth, annual salary (if benefits are salary
related), hours of work per week, employer, location of employment (if
outside of New Zealand) of all members at the policy anniversary date;
and
b)
Such other information in respect of all members as Sovereign, by written
notice, advises the Policy Owner it requires.
3.11 From time to time, the Policy Owner will provide Sovereign with any information
Sovereign advises is necessary for the purposes of the policy, including but not
limited to the payment of any claims.
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4.0
5.0
TAKEOVER TERMS
4.1
If this policy is taken out to replace an existing income protection policy
(“Previous Policy”) providing the same or substantially similar benefits, as
indicated in Schedule 1, and Sovereign is satisfied with the underwriting
standards applied by the insurer to the Previous Policy, Sovereign may offer
takeover terms as indicated in Schedule 1. The applying member will need to
provide any relevant information requested by Sovereign in relation to the
Previous Policy, including but not limited to its operation, terms and claims
history.
4.2
Sovereign will advise the Policy Owner of its decision in writing, including any
conditions or special terms relating to the takeover of the Previous Policy.
4.3
Takeover terms will be subject to the following requirements:
The applying member meets the eligibility criteria; and
b)
Where the amount of the benefit under this policy is higher than any
benefit under the Previous Policy, underwriting terms in accordance with
conditions 3.7 to 3.9 inclusive will apply to that part of the cover which is
in excess of the automatic acceptance limit (if the applicant qualifies for
the automatic acceptance limit); and
c)
Sovereign may apply any equivalent restrictions, conditions or limitations
which the previous insurer applied under the Previous Policy; and
d)
The Previous Policy must have been fully underwritten by the previous
insurer within the last 5 years; and
e)
The applying member must be aged 55 years or under; and
f)
The Previous Policy must be an Indemnity benefit; and
g)
The employee must be a permanent employee working regular hours of
at least 30 hours per week; and
h)
No claim has been submitted, notified or paid in relation to the Previous
Policy; and
i)
The benefits on the Previous Policy provide the same or substantially
similar benefits to the cover applicable under this policy; and
j)
A maximum takeover amount will apply as shown in Schedule 1.
START OF COVER
5.1
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a)
Cover for any applied benefits will commence upon acceptance of the
application by Sovereign, or at some other time Sovereign notifies the Policy
Owner. This will occur upon, but not limited to, Sovereign being satisfied that
the eligibility criteria and any applicable underwriting requirements or takeover
terms have been met and accepted by Sovereign.
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6.0
PREMIUMS
Payment of Premiums
6.1
While the policy is in force a policy premium, being the total of all premiums
charged in respect of all members, is collected and payable by the Employer to
the Policy Owner, and from the Policy Owner to Sovereign, on or before the
premium due dates, or as otherwise agreed.
6.2
Subject to conditions 6.7 to 6.14 inclusive, the premium charged in respect of
each member will be as calculated in accordance with the Premium Rate
Schedule, or such other amount notified by Sovereign to the Policy Owner from
time to time.
6.3
If Sovereign does not receive the full premium within 30 days after a premium
due date, or any premium adjustment amount owing within 30 days of the due
date (or such extended period allowed by Sovereign), Sovereign may terminate
the policy (with effect from the premium due date) by written notice to the
member and/or Policy Owner.
6.4
If an insured event happens before the policy is terminated, whilst premiums
are still owing, Sovereign will pay any benefits a member is entitled to once that
member has paid Sovereign all premiums which are due and owing.
6.5
The members employer, on written notice to the Policy Owner, may discontinue
to collect premium payments at any time for particular members. If the
employer fails to pay the premium for particular members within the period of
grace of 30 days (or such extended period allowed by Sovereign) following the
relevant premium due date, the employer will be deemed to have discontinued
premium payments and the policy will terminate in respect of the relevant
members with effect from the said premium due date.
6.6
The Policy Owner on written instruction from the employer may discontinue to
on-pay future premium payments at any time for all members. If the Policy
Owner fails to pay the premium for all members within 30 days (or such
extended period allowed by Sovereign) following the relevant premium due
date, the Policy Owner will be deemed to have discontinued premium
payments and the policy will terminate with effect from the said premium due
date.
Guarantee of Standard Premium Rates
6.7
Subject to conditions 6.8 to 6.14 inclusive, the standard premium rates referred
to in Schedule 2 are guaranteed by Sovereign until the guarantee date
specified in Schedule 1.
Variation of Members’ Premiums
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6.8
Sovereign reserves the right to vary the standard premium rates set out in
Schedule 2 after the guarantee date by giving at least 90 days’ written notice to
the Policy Owner.
6.9
If a member’s age or smoking status is incorrectly advised to Sovereign, the
difference between the total premium paid in respect of that member and that
which would have been payable if the member’s age or smoking status had
been correctly stated, will be paid by the member to Sovereign or repaid by
Sovereign to the member, as appropriate, if considered material by Sovereign.
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6.10 Sovereign may vary the standard premium rates referred to in Schedule 2 at
any time in the event of war (whether declared or undeclared) in which New
Zealand is involved, or the armed invasion of New Zealand.
6.11 Sovereign may vary the standard premium rates referred to in Schedule 2 at
any time if there is a change either in the number of members covered by the
policy or the total aggregate benefits for all members of 25% or more in any
one policy year.
6.12 Sovereign may give notice to vary the premium rates at a policy renewal if the
occupational profile of the employees of the employer undergoes a significant
change from the current occupational profile upon which the plan was
assessed for premium rating purposes.
6.13 This policy was prepared on the basis of the legislation and taxation regime
applicable at the date of execution of this policy. Sovereign reserves the right
to adjust the premium rates in Schedule 2, at any time, in response to
alterations to the legislative or taxation environment. 30 days’ written notice will
be given to the Policy Owner of any such changes.
6.14 If Sovereign becomes aware of any occupational, claims or other information or
data material to its assessment of premium rates and which has not been
previously advised to it by the Policy Owner, or becomes aware of any material
errors in any such data, Sovereign may immediately vary the standard premium
rates referred to in Schedule 2 or adjust the benefit payable in respect of a
member or members, as it considers appropriate. Sovereign may also charge
such additional amount as it determines necessary to restore it to the position
in which it would have been in respect of the policy, had the data been properly
advised to Sovereign by the Policy Owner in accordance with this policy. Any
such additional amount so calculated may include recompense for underpaid
premiums, any overpaid benefits, or other losses attributable to the
misstatement or non-disclosure and will be payable by the Policy Owner upon
demand in writing being made by Sovereign.
7.0
BENEFITS
General
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7.1
In consideration of the premiums paid under condition 6, Sovereign will provide
to members the benefits set out in Schedule 1.
7.2
Sovereign will only pay one total disability benefit or partial disability benefit in
respect of a member at a time. Accordingly, if a member is disabled due to
more than one accident or sickness, or both, then Sovereign will pay only one
total disability benefit or partial disability benefit for either an accident or
sickness, even if they are related. In the event there is more than one accident
or sickness in relation to a disability, Sovereign, in its sole discretion, will
determine what benefit is payable.
7.3
All claims resulting from the same or related cause will be considered to be part
of the same claim in respect of the benefit payment period.
7.4
If a benefit is payable in respect of a member under the policy, cover in respect
of such member will be considered to continue while the benefit is payable
irrespective of the member having ceased employment with the employer.
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Deduction of Tax
7.5
In the event that Sovereign is by law required to pay tax on any benefit,
Sovereign will deduct such tax before any benefit is paid to any member and
forward it to the relevant authority. For avoidance of doubt, Sovereign will not
deduct any tax from a benefit it pays where the payment of such tax is the
responsibility of the recipient of the benefit.
What are the Benefits?
Total Disability Benefit
7.6
Sovereign will pay a total disability benefit if the member at any time while the
policy is in force, becomes totally disabled and remains so for a continuous
period of at least the waiting period. Such payment is subject to the terms of
this policy, including any exclusions set out in condition 9.
7.7
The member will provide such medical evidence as Sovereign may reasonably
require to determine whether a member has a total disability. Diagnosis must
be made by a specialist acceptable to Sovereign.
7.8
The benefit is in the form of a monthly payment, which Sovereign pays monthly
in arrears from the end of the waiting period until the member ceases to be
entitled to a benefit in accordance with condition 7.9.
7.9
Sovereign will cease paying a total disability benefit when:
a)
The member returns to any work, part or full time with the employer or
any other employer, or as a contractor; or
b)
Sovereign in its sole discretion determines that the member is no longer
totally disabled; or
c)
The member reaches the benefit expiry date; or
d)
The benefit payment period expires in relation to the member; or
e)
The member, or any person on behalf of the member, makes a false,
dishonest or fraudulent statement in respect of a claim or supports any
claim with false evidence; or
f)
The member dies.
7.10 In addition, no total disability benefit will be payable for any period in which the
member:
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a)
Is imprisoned or otherwise detained as a result of a criminal act; or
b)
Does not undertake treatment and/or rehabilitation which in Sovereign’s
sole opinion, is likely to allow them to return to work; or
c)
Fails to make available to Sovereign any medical, financial or other
evidence required to initially assess the claim or to assess the ongoing
payment of the claim, which Sovereign has requested in writing.
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Partial Disability Benefit
7.11 Sovereign will pay a partial disability benefit if the member becomes partially
disabled and remains so for a continuous period of at least the waiting period.
Such payment is subject to the terms of this policy including any offsets set out
in conditions 10.16 to 10.18 inclusive or exclusions detailed in condition 9.
7.12 The member will provide such medical evidence as Sovereign reasonably
requires for Sovereign to determine whether a member has a partial disability.
Diagnosis must be made by a specialist acceptable to Sovereign.
7.13 The amount of the partial disability benefit is determined from the following
formula:
partial disability benefit
=
th
(D – P) × 1/12 of the total disability benefit
D
where;
D
Is the member’s monthly pre disability income; and
P
Is the actual monthly earnings of the member from personal exertion,
or, in Sovereign’s opinion, the monthly earnings which the member is
capable of generating from personal exertion, while partially disabled.
7.14 Sovereign will cease paying a partial disability benefit when:
a)
The member’s earnings from personal exertion exceeds 75% of predisability income; or
b)
Sovereign in its sole discretion, determines that the member is no longer
partially disabled; or
c)
The member reaches the benefit expiry date; or
d)
The expiry of the benefit payment period in relation to the member; or
e)
The member, or any person on behalf of the member, makes a false,
dishonest or fraudulent statement in respect of a claim or supports any
claim with false evidence; or
f)
The member dies.
7.15 In addition, no partial disability benefit will be payable for any period in which
the member:
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a)
Is imprisoned or otherwise detained as a result of a criminal act; or
b)
Does not undertake treatment and/or rehabilitation which in Sovereign’s
sole opinion, is likely to allow them to return to any form of work; or
c)
Fails to make available to Sovereign any medical, financial or other
evidence required to assess the claim, which Sovereign has requested in
writing.
Page 12
Vocational Retraining Benefit
7.16 Sovereign may agree to pay a member a vocational retraining benefit. The
benefit payable will be the cost of a programme of vocational training for the
member provided:
a)
The programme is approved in advance by Sovereign and reviewed
regularly by Sovereign; and
b)
The sole purpose of the programme is to assist the member to return to
gainful employment at an earlier date than would otherwise have been
possible; and
c)
The member actively participates in the programme; and
d)
The cost of the programme is limited to the fee charged by the institution
providing the programme and does not include the cost of text books,
equipment, stationery, accommodation or transport costs; and
e)
The vocational retraining takes place within New Zealand, or the country
in which the member was residing for 6 months before becoming
disabled; and
f)
The member is receiving a total disability benefit when the programme
begins.
7.17 The total amount which Sovereign will pay as a vocational retraining benefit is
limited to 12 times the monthly total disability benefit. In addition, any benefit
which Sovereign may agree to pay is to be reduced by any costs the member
recovers or could recover from any source, including any offset detailed in
conditions 10.17 and 10.18.
Rehabilitation Expense Benefit
7.18 Sovereign may agree to pay a member an additional lump-sum payment of up
to 6 times the monthly total disability benefit. This payment is to cover the
costs of buying specialised equipment or completing home alterations that have
become necessary because of the member’s disability. The member must
seek prior approval from Sovereign before incurring these costs. Any
rehabilitation expense benefit that Sovereign may agree to pay for the
specialised equipment or home alterations will be reduced by any costs the
member recovers or could recover from any other source, including any offset
detailed in conditions 10.17 and 10.18.
Bed Confinement Benefit
7.19 If Schedule 1 provides for a bed confinement benefit, and during the waiting
period the member is confined to bed under the daily supervision of a medical
practitioner for more than 3 days, then Sovereign will pay a bed confinement
benefit for each complete 24-hour period after the first 72 hours of bed
confinement. The benefit is payable as a lump sum at the expiry of the waiting
period and is equal to 1/365th of the member’s annual total disability benefit for
each complete day of care in excess of 3 days during the period of continuous
care within the waiting period.
7.20 The maximum number of complete days of care that qualify for a bed
confinement benefit shall be the lesser of:
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a)
The waiting period less 3 days; or
b)
90 days.
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Bereavement Support Benefit
7.21
If Schedule 1 provides for a bereavement support benefit, then if the member
dies while either a total disability benefit or partial disability benefit is being
paid, that benefit will cease and a bereavement support benefit equal to a
lump sum of $5,000 is payable to the Policy Owner.
Waiver of Waiting Period for Recurring Disability
7.22
Provided the policy has not terminated under condition 11, the waiting period
will be waived by Sovereign if a member becomes totally disabled again from
the same or a related cause not later than 6 months after the original benefit
ceased. Accordingly, all claims resulting from the same or a related cause will
be considered to be the same claim in respect of the benefit payment period.
Indexation of Monthly Benefit
7.23
Where indexation of benefit applies as stated in Schedule 1, the benefit
payable per year in respect of a member will be increased, effective from
each anniversary of the commencement of the payment of the benefit by the
lesser of:
a)
the percentage movement in the CPI for the 12 months immediately
preceding the relevant anniversary of the commencement of the
payment of the benefit; and
b)
5% per annum.
Spouse Benefit
7.24 If Sovereign has agreed in writing in Schedule 1, Sovereign may offer a spouse
benefit.
7.25 Automatic acceptance limits are not available to spouse members.
7.26 Acceptance of a person for a spouse benefit by Sovereign will be subject to
underwriting terms as set out in conditions 3.7 to 3.9 inclusive.
7.27 A spouse member’s membership will be considered terminated when the
membership of his/her spouse is terminated for any reason. At such time, the
ex-spouse member may apply for a continuation option subject to meeting the
requirements of condition 12.
7.28 A spouse member’s membership will also be considered to be terminated if
his/her spouse’s membership is terminated under condition 11. At such time,
the ex-spouse member may apply for a continuation option subject to meeting
the requirements of condition 12. The ex-spouse member may reapply for
membership on terms advised by Sovereign, if his/her spouse resumes his/her
membership in accordance with condition 11.7 and the ex-spouse member has
not exercised his/her continuation option.
7.29 Only one spouse member will be accepted per member.
7.30 A spouse applicant must be in permanent employment, working no less than 15
hours per week, to be eligible to apply for this benefit.
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8.0
OTHER COVER
Cover During Unpaid Leave
8.1
A member (who is not a spouse member) who takes unpaid leave can continue
to be insured for a period of up to 12 months after the date such unpaid leave
commences provided the following requirements are met:
a)
The member is actively employed before he/she goes on unpaid leave
(except where unpaid leave is due to sickness or accident leading to a
disability under this policy); and
b)
The employer approves the period of unpaid leave in writing before the
member goes on unpaid leave; and
c)
The member applies at least 14 days in advance of their intended leave
start date to Sovereign; and
d)
Premiums for the member continue to be paid in full while the member is
on unpaid leave.
8.2
Subject to earlier termination under condition 12, cover will cease for a member
on unpaid leave on the date 12 months from the date such unpaid leave
commences (unless the member is in receipt of a benefit). At such time, the
person may apply for a continuation option subject to meeting the requirements
of condition 13.
8.3
Where a member on unpaid leave becomes entitled to a benefit, such benefit,
will be based on the member’s annual salary as advised at the last policy
anniversary date prior to the commencement of the unpaid leave.
Worldwide Cover
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8.4
Subject to conditions 8.5 to 8.7 inclusive, members will have worldwide cover.
8.5
If Sovereign agrees in writing, it will cover a permanent resident of New
Zealand under this policy while he/she is employed overseas. However, no
continuation option will be available for a person living outside New Zealand
who remains outside New Zealand after his/her membership is terminated,
regardless of whether he/she is a permanent resident or not.
8.6
If a member is not a permanent resident of New Zealand but Sovereign has
agreed to insure such member, cover for the member is not available outside
New Zealand at any time, unless Sovereign agrees otherwise in writing.
8.7
Unless Sovereign has otherwise agreed in writing with the Policy Owner prior to
the member’s departure, the benefit payment period may be reduced to 6
months in respect of a member while the member continues to live or reside
outside New Zealand. In addition, Sovereign at its sole discretion may adjust
any benefit payable if the taxation applicable in the country where the member
resides would result (in Sovereign’s opinion) in an overpayment of the benefit.
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9.0
EXCLUSIONS
Member Exclusions
9.1
Sovereign will not pay a benefit where the disability (in the opinion of
Sovereign) was directly or indirectly caused by, resulting from, in connection
with war (whether declared or undeclared), invasion, act of foreign enemy,
hostilities or warlike operations, civil war, military rising, insurrection, rebellion,
revolution, military or usurped power, or participation in any armed forces or
peace keeping activities.
9.2
A benefit shall not be payable where any of the following (and in each case
either directly or indirectly) causes or contributes to the total disability:
9.3
10.0
a)
The member deliberately taking or using non-prescribed drugs, other
than for proper therapeutic or medical purposes and in accordance with
the manufacturer’s directions for use or the deliberate misuse by the
member of prescribed drugs; or
b)
The member deliberately injuring himself or herself, or attempting to do
so, whether the member is sane or insane; or
c)
The member participating in any criminal act.
Sovereign will not pay a benefit where the member does not comply with
treatment prescribed by the attending treatment providers.
CLAIMS
When a Benefit Is Payable
10.1 Subject to the terms of this policy, Sovereign will pay a benefit in the event of a
member’s:
a)
Total disability; or
b)
Partial disability.
10.2 Sovereign will not pay immediately upon the member suffering a disability. The
member must wait for the waiting period to expire. The waiting period
commences from the date of disablement. No benefit is payable if the member
ceases to be totally disabled during the waiting period and is not partially
disabled, or entitled to a bed confinement benefit.
Claim Criteria
10.3 The member and/or the employer must notify the Policy Owner of any event
giving rise to a claim for the payment of a benefit within 30 days or as soon as
is reasonably possible after the disability commences.
10.4 The Policy Owner and/or the member must notify Sovereign of any event giving
rise to a claim for the payment of a benefit within 30 days or as soon as is
reasonably possible after the disability commences.
10.5 The Policy Owner will provide such evidence of entitlement to the benefit as
Sovereign may reasonably require to properly assess the claim. Such
information may include:
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a)
The circumstances of the claim;
b)
The medical history of the member;
c)
The medical condition of the member;
d)
The member’s financial affairs;
e)
For accident related claims, a declaration that a claim has been lodged
with the Accident Compensation Corporation and the details and
outcome of that claim;
f)
Details of any work being completed, whether remunerated or not;
g)
Any other relevant matter such as job responsibilities, work history,
qualifications.
10.6 Where a claim is made in relation to a member who is overseas (whether
residing or travelling), Sovereign may, at its discretion, require such member to
either:
a)
Return to New Zealand for assessment (medical or otherwise). Any
costs relating to the member’s return to New Zealand will be borne by the
member; or
b)
Provide a medical assessment (or other such relevant information) to be
carried out by an elected representative approved by Sovereign in the
country where the member is situated.
10.7 Sovereign has the right to have the member provide medical evidence at
Sovereign's expense when and as Sovereign may reasonably require after the
member has submitted a claim under this policy.
10.8 The Policy Owner will also provide such other evidence of entitlement to the
benefit as Sovereign may reasonably require to properly assess the claim.
Such information may include, but is not limited to the medical history of the
member and any other relevant matter.
10.9 Sovereign is under no obligation to consider a claim unless all of the
information requested is provided. Furthermore, Sovereign is under no
obligation to assess or pay a claim prior to receiving notification.
10.10 Sovereign may also ask the member to undergo further medical examinations
(where applicable) throughout the life of any claim. Any requests made by
Sovereign will be at Sovereign’s expense.
10.11 If a claim is submitted by a person who became a member during a policy year,
and prior to the policy owner providing Sovereign with the information required
in accordance with condition 3.10, Sovereign will not be liable to pay any
benefit claimed until it is satisfied that the member has continued to meet the
eligibility criteria required to remain in the scheme.
10.12 For any benefit payable whose value is based on a member’s salary, the
amount payable will be that value which was accepted upon application, or at
the last annual anniversary as per condition 3.10, whichever is later, unless an
alternative salary has been advised and agreed to in writing during the policy
year.
10.13 Sovereign will not be liable to pay a benefit in respect of a member if
Sovereign becomes aware that the member did not meet the eligibility criteria
and the requirements in condition 3 prior to becoming a member, and any
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Page 17
benefit paid in respect of such shall be reimbursed to Sovereign by the member
or payment recipient upon demand.
Payment of Benefit
10.14 A benefit payable under this policy will be paid by Sovereign to the Policy
Owner. The receipt of the benefit by the Policy Owner, or such recipient as
they direct in writing, will be an absolute discharge to Sovereign.
10.15 The maximum amount payable in respect of any claim arising from the
insurance under this policy in respect of any one member shall not exceed the
lesser of the benefit or the maximum benefit.
Reduction of Benefit
10.16 The total disability benefit or partial disability benefit will be reduced by the
amount of any other regular payments received by the member or payments
that the member is entitled to receive in Sovereign’s opinion in respect of the
accident or sickness giving rise to the disability:
a)
Under any entitlements under the Holidays Act 2003 or any other
statutory enactment relating to leave provisions of the employer
b)
Under any additional sick leave or annual leave entitlements of the
employer in excess of the statutory requirements; or
c)
Under any superannuation or retirement scheme in which the member
participates; or
d)
Entitlements under the Injury Prevention, Rehabilitation, and
Compensation Act 2001 or any other statutory enactment relating to
compensation for accident or sickness; or
e)
Under any other insurance cover against disability, accident or sickness
whether underwritten by Sovereign or any other insurance company; or
f)
Under common law as compensation for loss of future income or loss of
earning capacity; or
g)
Any income the member receives or is entitled to receive from the
employer or the member’s business partnership, family trust or company
subsequent to the date of disablement, other than unearned income such
as investment or rental income; or
h)
If the member receives or is entitled to receive income from Work and
Income New Zealand (“WINZ”), the member is obliged to inform WINZ of
any payments from Sovereign.
10.17 Where a lump sum form of compensation is received by a member from any
source in lieu of regular payments of compensation, any benefit payable will be
equal to the difference between the monthly equivalent of the weekly rate
payable by the Accident Compensation Corporation (whether or not a member
is entitled to compensation) at the date of the lump-sum compensation and the
benefit due. Such offset will be made against subsequent benefit payments
until the total offset equals the amount of the lump-sum compensation received.
For avoidance of doubt, lump-sum benefits received by the member from any
superannuation or retirement scheme will not reduce the benefits payable
under this policy. If the trustees of the superannuation or retirement scheme
choose to pay benefits as a regular income, these benefits will be treated as
unearned income and will not be offset from the benefit payable under this
policy.
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10.18 If the member receives any offset amount or becomes entitled to receive any
offset amount as set out in conditions 10.16 and 10.17, the member must
provide Sovereign with the full details of such offset amount in writing as soon
as practicable. Sovereign may then reduce the benefit payable or recover any
overpayment of benefit from the Policy Owner or the member, where the
benefit was paid directly to the member at the request of the Policy Owner.
Non-Payment of Benefit
10.19 If a claim is made by a person who became a member during a policy year, and
prior to the Policy Owner providing Sovereign with a certificate in accordance
with condition 3.10, Sovereign will not be liable to pay any benefit claimed until
it is satisfied that the person met the eligibility criteria at the time he/she
became a member.
10.20 To the extent permitted by law, if the Policy Owner knowingly delays notifying
Sovereign of a claim and, as a result, Sovereign’s interests are prejudiced,
Sovereign may not pay the claim or may reduce the benefit.
10.21 The Policy Owner acknowledges that Sovereign relies on correct information
being provided to it to assess whether to pay a benefit. Accordingly, if
information provided is not correct or if a member or the Policy Owner has not
complied with their duty of disclosure, Sovereign may be legally entitled not to
pay a benefit in accordance with condition 13.2.
Regular Assessments
10.22 For ongoing claims Sovereign will require proof on a regular basis of:
a)
The member’s continuing disability; and
b)
Any monthly earnings the member receives during the benefit payment
period; and
c)
Any work the member completes whether remunerated or nonremunerated; and
d)
Any income received from other sources.
10.23 The member’s medical practitioner will be required to complete a monthly claim
report (at the member’s expense). Sovereign will normally send this claim
report with the payment letter for the previous month’s benefit.
10.24 Sovereign may also request that the member:
a)
Undergo any medical and/or surgical treatment (including any operation
or vocational, medical and/or social rehabilitation programme) at the
member’s expense which the member’s medical practitioner or a
registered medical practitioner approved by Sovereign consider
necessary; and
b)
Undergo any medical examination Sovereign requires at Sovereign’s
expense.
10.25 If the member fails to comply with conditions 10.22 – 10.24 inclusive within a
reasonable timeframe as requested by Sovereign, the member shall cease to
be considered disabled from the date of that failure.
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11.0
TERMINATION
Termination of this Policy
11.1 This policy may be terminated by the Policy Owner by giving at least 90 days’
notice in writing to Sovereign, or such lesser period as Sovereign may agree.
All premiums due under this policy must be paid up to and including the date of
termination.
11.2 After the guarantee date, Sovereign may terminate this policy for any reason
from a policy anniversary date by giving at least 90 days’ prior notice in writing
to the Policy Owner and member.
11.3 No benefits will be payable under the policy on or after the date of termination
except in respect of a member who is totally disabled or partially disabled if that
members date of disablement for such disability occurred prior to the date of
termination.
11.4 If this policy is terminated and a refund of premium is due then Sovereign will
refund to the Policy Owner the appropriate amount. The amount refunded may
be reduced by any reasonable expenses incurred by Sovereign in terminating
this policy.
11.5 If this policy is terminated by either the Policy Owner or Sovereign, then current
and eligible members are entitled to apply for a continuation option under
condition 12, unless the policy is terminated by any party for the purpose of
transferring the policy, and the members, to an alternative provider other than
Sovereign.
Termination of Membership
11.6 A member’s membership will be considered to be terminated if, though
genuinely retained in the service of the employer, he/she has ceased to be
actively employed in any one or more of his/her employment duties because of:
a)
Sickness or accident for a period exceeding 24 consecutive months; or
b)
Any other cause for a period exceeding 12 consecutive months.
11.7 A member whose membership is considered to be terminated under condition
11.6 may, if he/she resumes active employment with the employer, resume
membership on the terms advised by Sovereign at the time of the member’s
resumption.
11.8 A member’s benefit under this policy will terminate immediately on the earliest
occurrence of the following:
UniIP 0511
a)
The payment of premiums or any part of them is discontinued in respect
of the member within 30 days of the premium due date, notwithstanding a
genuine error by the employer, Policy Owner or Sovereign as assessed
by Sovereign; or
b)
The member ceasing to be employed by the employer (where such
member is not in receipt of a benefit or in a waiting period when this
occurs); or
c)
Where the member is no longer in receipt of a benefit and has ceased to
be employed by the employer; or
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d)
The member no longer meeting the eligibility criteria as at the next plan
anniversary date or earlier if requested by the member; or
e)
The member reaching the benefit expiry date; or
f)
The date this policy is terminated in accordance with condition 11.
When Can Sovereign Cancel Your Membership?
11.9 If the member has:
a)
Failed to disclose all material information to us prior to inception, variation
or re-instatement of the membership; or
b)
Made a statement on the faith of which the membership was accepted,
renewed, varied or reinstated, that was, in terms of the Insurance Law
Reform Act 1977:
• material, and
• substantially incorrect,
Sovereign may, at its complete discretion, either:
•
•
•
•
12.0
Avoid from inception your membership (this means the cover is
deemed never to have existed); or
Avoid from inception any individual benefits provided by your
membership (this means the individual benefit(s) are deemed never
to have existed); or
Alter the terms upon which cover is provided under your
membership. If we choose to alter the terms of your membership we
may do so effective from the risk commencement date; or
Remove from inception any life assured from this policy (and for the
avoidance of doubt this policy will remain in force for the remaining
lives assured if applicable).
11.10
If the membership or any benefit provided by the membership is avoided
from inception, or any life assured is removed from this policy, you will
forfeit and we will be entitled to retain all premiums paid in relation to the
benefit, membership or life assured.
11.11
Sovereign can cancel the membership and decline liability in respect of
any claim made under the policy if you, a life assured or anyone acting
on your behalf, makes a claim under the membership that is false or
fraudulent in any respect. In the event that a false or fraudulent claim is
established after payment of the claim all amounts paid in relation to the
false or fraudulent claim must be repaid.
CONTINUATION OPTION
12.1 On the termination of a member’s membership while this policy is current and
th
prior to the attainment of the earlier of the member’s 65 birthday or the benefit
expiry date then, within 45 days of the date of termination:
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a)
The member may request Sovereign to issue him/her an individual policy
for the same or substantially similar cover for an amount not exceeding
the member’s benefit under this policy as at the date membership
terminated; and
b)
Sovereign will issue an individual policy without further evidence of health
at the rate of premium then in use by Sovereign for such policy having
regard to any conditions of membership under this policy, the age,
gender and smoking status of the member, the new occupation of the
member, the type of insurance selected and any particular hazard
attributable to circumstances other than health,
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provided that the conditions set out in condition 12.2 are met.
12.2 The following conditions must be met where a person wishes to take up a
continuation option:
a)
The person ceases to be a member under the policy because he/she has
terminated employment with the employer; and
b)
No benefit has been paid for the person under the policy; and
c)
The person’s new occupation is an occupation classified by Sovereign as
being of no greater risk category than the occupation insured under this
policy (unless Sovereign agrees otherwise) and is an occupation
Sovereign usually insures under an individual policy; and
d)
The minimum policy requirements of the replacement individual policy
are met. Minimum policy requirements include but are not limited to
residency status, location and minimum premium requirements; and
e)
The person must have been employed on a permanent basis for at least
15 hours per week immediately prior to date of termination; and
f)
The premium payable in respect of the person’s cover under the policy is
not overdue at the time his/her cover ceased under the policy.
12.3 If the person’s benefit under this policy (at the time membership ceased) does
not meet Sovereign’s minimum premium requirement under the individual
policy, the person may request additional cover to be added to the individual
policy. If Sovereign agrees to any additional cover, such cover will be subject
to underwriting terms as set out in conditions 3.7 to 3.9 inclusive.
12.4 If the person’s insured benefit exceeds the amount of his/her benefit under this
policy at the date membership terminated then such additional cover will be
subject to underwriting terms as set out in conditions 3.7 to 3.9 inclusive.
12.5 If a person purchases an individual policy pursuant to conditions 12.1 and 12.2,
he/she will not be eligible to resume their membership under this policy without
the consent of Sovereign.
12.6 If a person who is eligible to exercise the continuation option, becomes totally
disabled as a result of an accident within 45 days of the 60 day period provided
under condition 12.1 without having exercised such option then, provided
Sovereign is notified within 30 days from the date of the ex-member’s total
disability, Sovereign will, subject to conditions 12.7-12.9 inclusive, pay to the
person a monthly total disability benefit as if the person was still a member in
accordance with the terms of this policy, including any offsets set out in
conditions 10.17 and 10.18 or exclusions detailed in condition 9.
12.7 The total disability benefit payable under condition 12.6 will be equal to the
benefit as at the date of termination of membership and will be payable
following the expiry of the waiting period for a maximum payment period of 12
months.
12.8 No payment will be made under condition 12.6 if any policy or member-specific
exclusions would have applied if the person suffered the accident while a
member under the policy.
12.9 The extended cover available under condition 12.6 will cease on the earliest of:
•
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45 days following the termination of the person’s membership under
the policy; or
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•
•
13.0
Cover commencing under a replacement individual policy in
accordance with condition 12.1; or
The person commencing employment with a new employer.
GENERAL
Incorrect or Incomplete Information
13.1 At the request of Sovereign, the Policy Owner and any member must supply
Sovereign with any information, which Sovereign may reasonably require for
the purposes of the policy, including but not limited to claims. This includes,
but is not limited to, having a member medically examined by one or more
suitably qualified medical practitioners nominated by Sovereign.
13.2 Information supplied by members and the Policy Owner to Sovereign must be
given in the utmost good faith as Sovereign can be expected to rely prima facie
on this information. If the Policy Owner or any member gives Sovereign any
incorrect information or does not provide complete and relevant information,
Sovereign may:
a)
Retrospectively adjust the terms of this policy to accommodate any
information that is inaccurate or misleading; and/or
b)
Be entitled to not pay, or to delay payment of, a benefit.
Term Insurance
13.3 This policy is a term life insurance policy. Accordingly, this policy will not
participate in the profits of Sovereign, nor will any surrender value be attributed
or payable in respect of it, unless otherwise agreed in writing by Sovereign.
Records
13.4 The Policy Owner must keep accurate records necessary for the effective
operation of the policy as Sovereign may require from time to time.
13.5 Sovereign may conduct an audit from time to time of any records the Policy
Owner has in connection with the policy. Sovereign will provide reasonable
notice to the Policy Owner if it proposes to conduct an audit and will only do so
in normal business hours.
Notices
13.6 All notices under this policy will be in writing. Notices to the Policy Owner will
be sent to the contact details in New Zealand last notified by the Policy Owner
to Sovereign. A notice to Sovereign will be sent to the contact details shown in
Schedule 1 or such other contact details as Sovereign may advise from time to
time.
Payments
13.7 All payments made in connection with the policy will be made to or from
Sovereign’s contact details shown in Schedule 1 or such other address as
Sovereign may advise from time to time.
13.8 All payments made in connection with the policy, whether to Sovereign or from
Sovereign, must be made in New Zealand and in New Zealand currency.
Privacy
13.9 Where the Policy Owner collects personal information in respect of a person for
the purpose of this policy, it must advise the relevant person:
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a)
That the information will be disclosed to Sovereign; and
b)
The purpose for which the information will be used; and
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c)
The entities that Sovereign may disclose the information to; and
d)
That he/she is entitled to request reasonable access to information and
request correction of any information Sovereign has about them.
Variation
13.10 The Policy Owner and Sovereign may agree in writing at any time to vary any
of the provisions of this policy or the attached Schedules.
13.11 Subject to condition 6.7, Sovereign may vary any of the provisions of the policy
or the attached Schedules upon giving at least 90 days’ notice to the Policy
Owner.
Non Assignment of Policy
13.12 This policy may not be assigned without the written agreement of Sovereign.
Governing Law
13.13 This policy will be governed by the laws of New Zealand. In any action or
proceedings concerning this policy, Sovereign will abide by a decision of the
Courts of New Zealand.
Free Look
13.14 If for any reason the member or Policy Owner is dissatisfied with this policy, the
member or Policy Owner may return the policy to Sovereign within 15 days
from the date received. The member or Policy Owner is considered to have
received this policy on the third business day after the date of its execution. If
the policy is cancelled at this time, any premiums paid will be refunded and the
insurance will be cancelled from inception.
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