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Product Profile – Sun Life Child Critical IllnessPosted in Product Profile, Sun Life · · (permalink)
Underwriting CI applications can be a challenge. What better way to get a policy issued than applying for it when your child is still young and healthy. Sun Life will now issue a CI policy on children as young as 30 days.
Coverage: From the date of issue the child plan includes the standard 24 covered group one conditions, and the usual partial benefits for Ductal Carcinoma in situ of the breast, Stage A Prostrate Cancer, Stage 1A Malignant Melanoma and Coronary Angioplasty (15% to a maximum of $50,000). The policy will also cover 2 additional group one conditions starting at age 18 with no additional charge; Acquired Brain Injury and Loss of Independent Existence.
The childhood diseases which are covered until the child’s 24th birthday are Type 1 Diabetes, Congenital Heart Disease, Cerebral Palsy, Cystic Fibrosis and Muscular Dystrophy.
The riders available are Return of Premium on Death (ROPD) and Return of Premium on Cancellation or Expiry (ROPC/E). The return of premium on death is straight forward, but it is the return of premium on cancellation or expiry that makes this an interesting policy.
Assuming there is no claim for a group one condition, the ROPC/E will automatically refund 75% of the returnable premium on the later of the 15th policy anniversary or the policy anniversary following the insured’s 25th birthday. The client can continue to maintain the policy following the refund, including the ROPC/E rider.
Should the client subsequently cancel the policy at any time on or after the later of the 30th policy anniversary or the policy anniversary following the insured’s 40th birthday 100% of the returnable premium will be paid to the policy owner. The returnable premium is defined as all premiums paid minus any automatic return of premium amount paid.
Example: If your client purchased a $250,000 T75 policy on their son at age one and included ROPD and ROPC/E the annual premium would be $1,537.50. The automatic ROP at the anniversary following the child’s 25th birthday would be $27,675, just in time to pay off his student loans (to the government or his parents!).
If the client decided to surrender the policy at any time after age 40, 100% of paid premiums, minus the automatically refunded amount, will be returned. If the policy was held to expiry, the refund at expiry would be $86,100.