Distribution Guide Type of Insurance Product Creditor Group Insurance Name of Insurance Product Mortgage Life Insurance Mortgage Disability Insurance Group Policy 83041 Name and Address of Insurer Sun Life Assurance Company of Canada Creditor Team 227 King Street South PO Box 638, STN Waterloo Waterloo ON Ontario N2J 4B8 Telephone: 1-877-271-8713 E-mail: [email protected] Fax: 1-866-923-8353 Name and Address of Distributor MCAP Service Corporation 1555 Peel Street, Suite 850 Montreal, QC H3A 3L8 Telephone: 1-800-265-2624 E-mail: [email protected] Fax: 1-800-922-0220 Responsibility of the Autorité des marchés financiers The Autorité des marchés financiers does not express an opinion on the quality of the product offered in this guide. The insurer alone is responsible for any discrepancies between the wording of the guide and the Policy. Table of Contents Introduction .................................................................................................................................................... 1 Definitions ...................................................................................................................................................... 1 A. Description of Life and Disability Insurance ........................................................................................ 2 Benefit ..................................................................................................................................................... 2 • Who can apply for insurance? ........................................................................................................ 2 • Life Insurance benefit ...................................................................................................................... 2 • Disability Insurance benefit ............................................................................................................ 2 • How to apply for insurance ............................................................................................................ 4 • Health questions .............................................................................................................................. 4 • When you start paying premiums ................................................................................................... 4 • Cost of insurance ............................................................................................................................. 4 • When does my insurance begin? ................................................................................................... 5 • When does my insurance end? ...................................................................................................... 6 • Lump sum prepayment ................................................................................................................... 6 • Refinancing or replacing an insured mortgage .............................................................................. 6 • Temporary accidental death protection .......................................................................................... 8 B. Exclusions, restrictions or reductions in your insurance coverage ...................................................... 9 C. Cancellation of insurance .................................................................................................................... 10 D. Claims ................................................................................................................................................... 10 E. Similar products ................................................................................................................................... 10 F. Other information ................................................................................................................................ 10 G. Referral to the Autorité des marchés financiers ................................................................................. 11 Notice of Rescission of an Insurance Contract ......................................................................................... 12 Introduction This Distribution Guide is an easy to understand explanation of the Life and Disability insurance issued by Sun Life Assurance Company of Canada (“Sun Life” or the “Insurer”) and made available to you through MCAP Service Corporation (“MCAP”). This insurance is designed to protect you in the case of unexpected death or Disability. This Distribution Guide can help you decide, without the services of an insurance advisor, if you need Life insurance or Life with Disability insurance on your mortgage. Definitions Accident means a single, sudden, unexpected violent and external event that causes death. Disabled or means that you have a medically determinable physical or mental impairment Disability due to injury or disease that prevents you from performing the regular duties of your own occupation in which you participated before becoming Disabled, are under the active and continuous care of a licensed physician or health care practitioner approved by Sun Life, and are not engaged in any occupation for wage or profit. Guarantor means the person who agrees to repay the mortgage if you do not. 1 A. Description of Life and Disability Insurance Benefit You can apply for Life insurance or Life with Disability insurance combined, if you have or are applying for an MCAP administered mortgage. The insurance is designed to reduce or pay off the mortgage balance owing MCAP in the event of death or, help maintain your regular mortgage payments in the event of Disability. Who can apply for insurance? You are eligible to apply for insurance if you are: • indebted to MCAP for a mortgage or have signed as a Guarantor for such a mortgage; • at least 18 and not yet 65 years of age at the time of application; • a Canadian resident; and For Disability insurance, provided you are approved for Life insurance, you are also: • actively at work for at least 20 hours per week at the time of application; and • not receiving Disability benefits from any source at time of application. A maximum of three eligible persons can be insured on any one mortgage. Eligible mortgages The following MCAP mortgages are eligible for coverage: • mortgages on residential properties; and • mortgages on recreational properties. Life insurance benefit At the time of your death, as long as the terms and conditions of the certificate of insurance are met, Sun Life will pay to MCAP the outstanding mortgage balance on the date of death multiplied by the percentage of coverage shown on your application plus: • accrued interest from the date of death to the date of claim payment; • any shortfall balance in the property tax account provided property tax is included with the mortgage payment; and • applicable fees and/or penalties required to discharge your mortgage. Maximum benefit Life insurance coverage under the Policy is limited to a maximum benefit of $750,000 for all insured mortgages. Disability insurance benefit If you become Disabled, as long as the terms and conditions of the certificate of insurance are met, for each mortgage payment period you remain Disabled beyond the Qualifying Period, Sun Life will pay to MCAP your mortgage payment as at the date of Disability multiplied by the percentage of coverage shown on your application. Disability insurance coverage under the Policy is limited to the following maximums: • $4,000 per month, per insured, for all mortgages combined; • 24 months Disability insurance benefits, whether paid consecutively or in the aggregate, per Disability; • a lifetime cumulative maximum benefit of 48 months for all insured mortgages. 2 What is the Qualifying Period? The Qualifying Period is the number of consecutive days your Disability must continue before benefits become payable. The Qualifying Period is 60 days and starts from the date you first become Disabled. No benefits are paid during the Qualifying Period. When do Disability benefits begin? Disability benefits are payable after the end of the Qualifying Period. On approval of your claim, benefits will be paid to MCAP on the mortgage payment due date that next follows the mortgage payment period for which you were approved for benefits. If you are not Disabled throughout an entire mortgage payment period during which benefits are payable, Sun Life will pay MCAP a pro-rated amount, based on your payment frequency and the number of days you were Disabled. When do Disability benefits end? Disability benefit payments end on the earliest of: • the date you are no longer Disabled or you return to work; • for each Disability, the date Sun Life has paid the 24-month maximum benefit, whether paid consecutively or in the aggregate; • for each person insured for Disability, the date Sun Life has paid the 48-month lifetime cumulative maximum for all insured mortgages; • the date you fail to provide Sun Life with proof that you continue to be Disabled; • the date you are no longer under the active and continuous care of a licensed physician or health care practitioner approved by Sun Life or are not following the recommended treatment prescribed by that physician; • the date you participate in any occupation for wages or profit or any educational or training program other than a rehabilitation program approved by Sun Life; • the date you refuse to submit to a medical examination at Sun Life’s request by a physician or health care professional appointed by Sun Life; • the date you