Policy Form CNM (R82)

Policy Form CNM (R82) Cancer Policy Technical Explanation

Note: An Examination on this Technical Explanation is available on AG-1709. Order as many as may be needed. An Answer Guide to the Examination is available on AG-1710. Order one to an agency office. BRIEF EXPLANATION

This policy is a hospital, hospital-related and surgical cost only coverage for the treatment of cancer only.

There are 10 BASE BENEFITS and an Extended Benefits coverage. The 10 Base Benefits are:

A. Hospital Confinement F. Ambulance B. Attending Physician G. Radiation Therapy & Chemotherapy C. Private Nurse In Hospital H. Transportation D. Blood & Plasma I. Government Hospital Confinement E. Anesthesia J. Surgical

These benefits are found on page 4 of the policy. They are also identified on policy page 3 (reproduced on the last page of this booklet) where the Basic Amount (dollar amounts) and Lifetime Maximum (in terms of dollars) for each benefit are shown. Observe that page now. The dollar value of benefits is dependent upon the number of plan units purchased.

Lifetime maximum limits for each Covered Family Member are established for each of the 10 base benefits except that there is no limit for blood and plasma used for the treatment of leukemia only. Most benefits (not all) are limited to a per-day maximum charge, as identified in the reproduction of policy page 3 herein.

The Extended Benefits coverage is described on policy page 4. The Basic Amount (dollar value) per month of the coverage is indicated on policy page 3. Refer again to the last page of this booklet. Under this coverage, if the Insured or a Covered Family Member is hospital confined for the treatment of cancer for 91 straight (consecutive) days or more, then beginning with the 91st day of such confinement, the policy will pay ALL HOSPITAL CHARGES (100% of such charges) up to the Basic Amount Per Month shown for the Extended Benefits coverage on policy page 3. For a 10 Unit policy the hospital charges would be limited to $6,000 per month ($200 per day); 5 Units, $3,000 per month ($100 per day). There is no lifetime maximum on this coverage. Remember, that this coverage is for hospital charges ONLY and they would all be lumped together as a single coverage. The coverage is in addition, however, to benefits for which the hospital does not charge (such as Attending Physician, Surgery, etc.). This coverage is not payable for confinement in a government hospital. Policy benefits are NOT available to anyone who has ever had cancer, NOR to anyone whose cancer is positively first diagnosed within 60 days following the policy date. Coverage is only for cancer which is first diagnosed on or after the 61st policy day. If cancer is first diagnosed within 60 days following the policy date, no benefit is allowed neither then nor in the future.

RENEWAL PROVISIONS

The policy is guaranteed Renewable for the lifetime of the Insured but the company may increase the premium for all policies in the state in which the Insured resides. As will be indicated later, however, coverage for most insured children will terminate on certain dates, but coverage continues for the lifetime of the Adult Insured(s).

AG-1708 EXCLUSIONS & LIMITATIONS

No person is eligible for coverage who has ever had cancer diagnosed. Even skin cancer prevents coverage. If an Insured or Covered Family Member has cancer diagnosed within 60 days of the Policy Date there is no coverage for that person.

An Insured or Covered Family Member is eligible for policy benefits 61 days AFTER his or her coverage under the policy PROVIDED cancer is “pathologically diagnosed” at such time and as that term is defined in the Definitions section of the policy on policy page 6. The only exception to pathological disgnosis of cancer is “when medical judgment prohibits such procedure and other conclusive evidence is given.” [See Exclusions & Limitations, policy page 1]. When the pathological diagnosis (or other conclusive evidence) is given, prior benefits are allowed only for the 30 days before the required diagnosis. However, if cancer is first diagnosed by autopsy, benefits will be payable for treatment received up to 45 days before death.

The policy pays only for loss resulting from cancer. It does not cover other sicknesses even if they are caused by cancer or worsened by cancer. Diagnostic work to check for the recurrence of cancer is not covered UNLESS it is found that cancer is present at that time. Cosmetic repair (correcting disfigurement of the body by surgery or otherwise) is not covered. Prosthetic devices (artificial body pieces) are not covered.

BENEFITS

The policy’s 10 Base Benefits are found on policy page 4. This page contains a definitive description of the benefits. These benefits are also briefly identified on policy page 3 (the computer print-out page) under the heading Description of Benefit and appearing opposite each benefit is the Basic Amount of each benefit (dollars per day, per month, etc.) plus the maximum lifetime dollar amount (if any) which will be paid.

Policy page 3 (under the heading Schedule of Policy) will identify whether one or two adults are covered and whether children’s coverage is also provided.

A. HOSPITAL CONFINEMENT BENEFIT. This amount (the dollar amount indicated on page 3) will be paid for hospital room and board and all other goods and services provided by the hospital during a covered confinement. A specified dollar amount per day is paid for the first 12 days of hospital confinement, which reduces to one-half of that amount after 12 days. These dollar amounts are shown on policy page 3 opposite the Hospital Confinement Benefit. A 10 Unit plan provides $100 per day for the first 12 days of hospital confinement and $50 per day thereafter, not to exceed a Lifetime Maximum of $37,100. A 5 Unit plan provides $50 per day the first 12 days and $25 per day thereafter with a Lifetime Maximum of $18,550. Two or more confinements less than 30 days apart will be considered one confinement. Examples follow. If a covered person under a 10 Unit plan enters the hospital, is discharged on the 15 th day but is readmitted 29 days later, this is considered one confinement for payment purposes. Having already used up his 12 days of $100 per day benefits, his readmission confinement period in this case would be at the benefit rate of $50 per day. However, if his readmission had been 30 days or longer following discharge, a new benefit period exists at the rate of $100 per day the first 12 days and $50 per day thereafter.

B. ATTENDING PHYSICIAN BENEFIT. This amount is paid for the visits of a physician during a covered hospital confinement. No home or doctor’s office visits are covered. Also, the benefit is not payable for a surgeon’s hospital visit following surgery.

C. PRIVATE NURSE IN HOSPITAL. This benefit is for full-time private care by an R.N. (Registered Nurse), L.V.N. (Licensed Vocational Nurse), or L.P.N. (Licensed Practical Nurse) during hospital confinement only (it’s not a home nursing benefit). The nurse must be required and ordered by the attending physician for the benefit to be covered.

D. BLOOD AND PLASMA BENEFIT. This benefit is for blood and plasma only. It is for blood transfusions. It does not cover charges for administration of blood or plasma. It does not cover laboratory tests. The benefit is not payable if blood is replaced by donors.

AG-1708 E. ANESTHESIA BENEFIT. This benefit is for the services of an anesthesiologist during a covered surgical operation.

F. AMBULANCE BENEFIT. This benefit is for transportation by a licensed ambulance service to or from a hospital.

G. RADIATION THERAPY AND CHEMOTHERAPY BENEFIT. This benefit is for radiation therapy or chemotherapy or both. Radiation therapy is defined on page 6 as radiation or radioactive material and its administration to kill or retard the growth of cancer cells. Chemotherapy is defined as cancer-killing drugs and their administration which, to be covered, must be prescribed by a licensed Doctor of Medicine or Osteopath.

H. TRANSPORTATION BENEFIT. This benefit is for travel by common carrier (a fee-charging passenger vehicle, air or land, licensed to operate over an established route) from a covered person’s home to the nearest hospital that provides a type of treatment that is not locally available. To be covered, the travel must be advised by the attending physician.

I. GOVERNMENT HOSPITAL CONFINEMENT BENEFIT. This is a benefit payable for confinement in a hospital run by or for the U.S. Government. It is a daily benefit payable in the same manner as the above A. Hospital Confinement Benefit; that is, the specified dollar amount per day for the first 12 days, which reduces to one-half that amount thereafter. No other policy benefit is payable during confinement in a government hospital.

J. SURGICAL BENEFIT. This benefit is for surgical operations for the treatment of cancer that has been pathologically diagnosed. No benefit is payable for surgical procedures that are performed for diagnostic purposes only; cancer must be conclusively established in order to qualify for this Surgical Benefit. A Schedule of Operations for this Surgical Benefit is found on policy page 5. Each operation listed in the Schedule has a dollar Unit Value. On policy page 3 beside the Surgery Benefit is shown a Conversion Factor under the Basic Amount column. The Conversion Factor will be the same as the number of Plan Units. To calculate the actual dollar amount for a particular operation, multiply the operation’s Unit Value by the Surgery Conversion Factor indicated on policy page 3. For example, the Unit Value under the Schedule of Operations for a Colostomy (under the Abdomen section) is $30.0. Therefore, for a Conversion Factor (or Plan Unit) of 10.00 the actual dollar amount coverage for a Colostomy would be 10 x $30 or $300. A 5 Unit plan would allow $150 for a Colostomy – 5 x $30 = $150. The highest Unit Value available is $75 (for two of the listed operations). For unlisted operations, a benefit will be paid based on the relative difficulty of the operation. Two or more surgical operations performed within 24 hours of each other will be considered one operation. The benefit that will be paid will be based on the operation which has the highest Unit Value.

WHAT CANCER IS & ITS DIAGNOSIS

The policy covers the disease of cancer only. In the policy cancer is defined as “a disease characterized by the presence of a malignant tumor with the uncontrolled growth and spread of malignant cells and/or invasion of tissue. This includes leukemia.” [See Definitions, policy page 6] The Exclusions & Limitations section of the policy [policy page 1] states that ”Pathological diagnosis is required to establish a claim.” In the definitions section of the policy “pathological diagnosed” is defined as follows: “diagnosed by a licensed Doctor of Medicine certified by the American Board of Pathology or by an Osteopathic Pathologist. This diagnosis must be based on a microscopic study of body tissue or fluid. Criteria for malignancy are those accepted by the American Board of Pathology or the Osteopathic Board of Pathology.” As stated earlier in this technical explanation, the only time pathological disgnosis is not required is when “medical judgment prohibits such procedure and other conclusive evidence is given.” [See Exclusions & Limitations on policy page 1]

HOSPITAL

Hospital confinement claims will be allowed only for a hospital which is “a licensed institution with an operating room and X-ray equipment on its premises which provides overnight resident care and 24-hour nursing service and maintains written medical records on its patients. This does NOT include an institution or a division or section of an institution for rehabilitation or convalescnet care. It does NOT include nursing homes. It does NOT include Government hospitals, but the policy’s limited Government Hospital Confinement Benefit is available- that is, the benefit for daily confinement in a Government Hospital, but no other policy benefit. AG-1708 COVERED FAMILY MEMBER

Any family member who has had cancer is NOT covered, of course. Otherwise- The spouse of the Insured and all unmarried children of the Insured who are not 19 years of age or older will be covered on the Policy Date PROVIDED they are named in the application. The insured’s stepchildren and legally adopted children (under age 19) can be included, if listed in the application. Children born of the Insured after the Policy Date are automatically covered for 31 days only. If the Insured notifies the company of after-born children and pays the required premium (if any) within 31 days, such children will be covered thereafter without evidence of insurability. If the Insured does not comply with these 31 day requirements, application must be made for such children and they must not have or have had cancer.

Dependents acquired after the Policy Date are required to apply for coverage and coverage is not automatic but is subject to each such dependent’s insurability. Examples of such dependents would be stepchildren and legally adopted children acquired after the Policy Date. Covered Family Member (as above described) is defined on policy page 6.

TERMINATION OF INSURANCE

As long as policy premiums are paid within the policy’s 31 day grace period, insurance on adult insureds is guaranteed as long as they live. Children’s insurance, however, WILL terminate (1) on the policy anniversary following their 21st birthday, OR (2) when they marry – whichever occurs first. There are two exceptions to children’s insurance termination. They are – (a) insurance on an unmarried insured child will continue and terminate at age 23 if such child is a full-time student, and (b) insurance on an unmarried insured child will continue if such child is still dependent on the Insured due to a physical or mental handicap, insurance terminating only if such child is no longer dependent on the Insured due to his handicap.

Proof of (a) or (b) must be furnished to the company.

Termination of children’s insurance is described in the policy’s Definitions section on policy page 6 under the heading Covered Family Member.

AG-1708