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Life InsuranceContents
What is MortgageGuard?Is an integrated insurance offering that combines lump sum benefits and income benefits as one package to help you and/or your family manage your mortgage commitments in the event of death, disability or involuntary unemployment. The following tables provide a brief summary only of the MortgageGuard features and examples of when we will and will not pay a benefit. Detailed information regarding the benefits payable and the terms and conditions applicable to each benefit are set out in the sections of this PDS from page 5 onwards. LUMP SUM BENEFITSDeath benefitPays a single lump sumamount following the death of, or diagnosis of a terminal illness for, the insured person. Total & Permanent Disablement (TPD) benefitPays a single lump sum amount if the insured person suffers an illness or injury that will prevent them from ever working again. Maximum Benefit
Income benefitsTotal & Temporary Disablement (TTD) benefit Pays a monthly amount while the insured person is unable to work and earn an income because of sickness or injury, for a maximum of three months. Involuntary unemployment benefitPays a monthly amount if the insured person becomes unemployed involuntarily, for a maximum of three months. The lesser of:
Payment scenariosLUMP SUMOnly one lump sum benefit can be paid, after which the policy ends. EventsYour death or diagnosis of a terminal illness We will pay the Death benefit as a lump sum amount on confirmation of your death or diagnosis of an illness that reduces your life expectancy to less than 12 months. Total and permanent disablement (TPD)We will pay the TPD benefit if you meet the definition of TPD relevant to your employment status immediately prior to your injury or illness. The definitions. Examples of when we won't payA Death benefit will not be paid if your death is caused by:
A TPD benefit will not be paid if your claim for TPD is caused by:
INCOME BENEFITSTotal and temporary disablement (TTD)You are eligible for the TTD benefit if you are employed and work at least 20 hours per week. We will pay the TTD benefit if you suffer an injury or illness that results in you being unable to work for longer than 60 days. The TTD benefit will start after 60 days and will be paid for the remaining period that you are unable to work, up to a maximum of 3 months. You may make multiple TTD claims over the life of your policy. Examples of when we won't payA TTD benefit will not be paid if your claim for TTD is caused by:
You will not be eligible to claim a TTD benefit if you are not employed for at least 20 hours per week or if you have not returned to work for a period of at least 6 months following a prior TTD benefit being paid. Involuntary Unemployment (IU)You are eligible for the IU benefit if you are gainfully employed but not self employed. We will start to pay the IU benefit if you remain involuntarily unemployed for longer than 60 days. The IU benefit will be paid for the period that you are involuntarily unemployed to a maximum of 3 months. To receive a benefit payment you must be actively seeking employment and be registered with a government approved job placement agency. You may claim more than one IU benefit, but payments are limited to a combined total of 6 months over the life of your policy. Examples of when we won't payAn IU benefit will not be paid if your unemployment is a result of your: .
We will not pay an IU benefit if any of the following apply:
* For TPD, this amount may be affected by any existing TPD cover that you hold. In this PDS"Lump Sum Benefits" refers to:
"Income Benefits" refers to:
Who can take out Cover?You must be a permanent Australian resident and aged between 18 and 60, inclusive of those ages, to apply for the Cover. Cover can continue until the Cover anniversary when you are aged 65. To be eligible to claim for the TTD and Involuntary Unemployment benefits, you must also be gainfully employed at the time of the event giving rise to a claim. You cannot be the insured person under two or more MortgageGuard policies if the combined insured amount exceeds the maximums for MortgageGuard as explained on page 2. Who owns the Cover?When the Cover starts, you will be the owner of the Cover. How to apply for Cover?If you want to apply for Cover, you will need to complete the application process. The application process will require you to disclose personal information and may result in Cover being offered or declined. Please note that you have a Duty of Disclosure that applies throughout the duration of the application process. This is explained on page 16 and it is important that you read and understand this duty before applying for Cover. Terms and conditionsHow much does it cost?The premium you pay is calculated by multiplying the insured amounts by a premium rate. The premium rate that applies is based on a number of factors including:
The premium rates are 'stepped', which means that, generally, each year the premium increases based on the insured person's age. Before each cover anniversary, we will notify you of the premium for the period to the next cover anniversary. You will be provided with an indicative quote as part of the application process based on your loan amount and your monthly mortgage repayment amount, subject to the maximums explained on page 2. If during the application process you choose to reduce the premium payable for affordability reasons, the insured amounts for the lump sum and income benefits will be adjusted on pro-rata basis reflecting the percentage reduction in the premium amount. The actual premium cost will be confirmed by us upon completion of the application process. The first year premium will be shown on the Certificate of Insurance. What if I change my mind?If within 21 days of being issued with Cover you decide it does not meet your needs, please write to us and we will cancel your Cover immediately and refund any premiums paid, as long as you have not made a claim during this period. This cooling off period is explained in more detail on page 15. From this page onwards, the PDS sets out the terms and conditions of the Cover. If we accept your application, we will issue a Certificate of Insurance, which together with the PDS, will be the contract between the owner and us. In some circumstances, we will not pay a benefit. These circumstances are shown for each benefit type in the section titled "When we won't pay". Words or expressions shown in italics have the meaning explained in the Glossary at the end of the PDS. Lump sum benefitsDeath benefitWhat is the Death benefit amount? The amount of Death benefit provided, known as the Death sum insured, is the amount shown in the Certificate of Insurance. The maximum you can apply for is the same amount as your mortgage at the time of application, capped at $750,000 if your mortgage is higher. When the Death benefit is payableThe Death sum insured will be paid if the insured person:
after the Cover start date shown on the Certificate of Insurance and before the Death benefit ends, explained in the section titled "When Cover starts and ends" on page 13. If we agree that a Death benefit is payable, it will be paid as a lump sum amount.
When we won't payA Death benefit claim will not be payable if death or terminal illness is directly or indirectly caused, or contributed to, by:
Total & Permanent Disablement (TPD) benefitTypes of CoverThe type of TPD Cover provided varies depending on the employment status of the insured person at the time of the event giving rise to the claim. 1. If the insured person is gainfully employed at the time of the event giving rise to the claim, the TPD benefit is provided on the basis of the any occupation definition of total and permanent disablement. 2. If the insured person is engaged in domestic duties at the time of the event giving rise to the claim, the TPD benefit is provided on the basis of the domestic duties definition of total and permanent disablement. 3. If the insured person is not gainfully employed or engaged in domestic duties at the time of the event giving rise to the claim then the TPD benefit is provided on the basis of the modified TPD definition of total and permanent disablement. What is the TPD benefit amount?The amount of TPD benefit provided, known as the TPD sum insured, is equal to the Death benefit amount. It will also be shown in the Certificate of Insurance. When the TPD benefit is payableThe TPD sum insured will be paid if the insured person suffers total and permanent disablement after the Cover start date shown on the Certificate of Insurance and before the TPD benefit ends, explained in the section titled "When Cover starts and ends" on page 13. If we agree that a TPD benefit is payable, it will be paid as a lump sum amount. When we won't payA TPD benefit claim will not be payable if TPD is directly or indirectly caused, or contributed to, by:
Income benefitsTotal & Temporary Disability (TTD) BenefitWhat is the Total & Temporary Disability benefit amount? The amount of TTD benefit provided, known as the TTD sum insured, is shown in the Certificate of Insurance. It is determined during the application process and is related to the mortgage amount. The maximum is equal to your minimum monthly mortgage repayment at the time of application capped at the lesser of:
Waiting period The TTD benefit is subject to a 60 day waiting period before the TTD sum insured becomes payable. The waiting period begins the day the insured person is totally disabled due to illness or injury and has consulted a medical practitioner. Benefit Period The benefit period is the maximum period for which a TTD benefit is payable, which for MortgageGuard is 3 months. The benefit period starts at the end of the waiting period and continues until the earlier of:
When the TTD benefit is payable The TTD sum insured is payable if, after the Cover start date shown in Certificate of Insurance and before the TTD benefit ends (explained in the section titled "When Cover starts and ends" on page 13), the insured person:
The TTD sum insured is payable monthly in arrears for each day of total disability after the end of the waiting period (1/30th of the TTD sum insured per day if the benefit is only payable for part of a month), but not beyond the end of the 3 month benefit period for that disability. Recurrent disability The insured person must return to gainful employment for a minimum of 20 hours per week for a period of 6 consecutive months before a subsequent claim for TTD can be made. Any claim arising from the same or a related cause as a previous claim within 12 months of the previous claim ending, will be treated as a continuation of the previous claim and the waiting period will be waived. Only one benefit payableOnly one Income Benefit will be paid at any one time. The Income Benefits are payable for a maximum of 6 months in any 24 month period of insurance. When we won't pay A TTD benefit will not be payable for a claim that is directly or indirectly caused, or contributed to, by:
Involuntary Unemployment BenefitWhat is the Involuntary Unemployment benefit amount? The amount of Involuntary Unemployment benefit provided, known as the Involuntary Unemployment sum insured, is equal to the TTD sum insured and is shown in the Certificate of Insurance. The Involuntary Unemployment benefit is included as part of every Cover although a benefit will only be payable if the insured person was gainfully employed, but not self-employed, immediately prior to the period of involuntary unemployment. Waiting period The Involuntary Unemployment benefit is subject to a 60 day waiting period before the Involuntary Unemployment sum insured becomes payable. The waiting period begins the day the insured person becomes involuntarily unemployed. Benefit Period The benefit period is the maximum period for which an Involuntary Unemployment benefit is payable, which for MortgageGuard is 3 months. The benefit period starts at the end of the waiting period and continues until the earlier of:
When the Involuntary Unemployment benefit is payable The Involuntary Unemployment sum insured is payable if, after the Cover start date shown in Certificate of Insurance and before the Involuntary Unemployment benefit ends (explained in the section titled "When Cover starts and ends" on page 13), the insured person has become involuntarily unemployed. The Involuntary Unemployment sum insured is payable monthly in arrears for each day of involuntary unemployment after the end of the waiting period (1/30th of the Involuntary Unemployment sum insured per day if the benefit is only payable for part of a month), but not beyond the end of the 3 month benefit period for that episode of involuntary unemployment. Recurrent Involuntary Unemployment The insured person must return to gainful employment for a period of 6 consecutive months, excluding any applicable probationary period, before a subsequent claim for involuntary unemployment can be made. A subsequent claim for Involuntary Unemployment must relate to a period of employment with an employer unrelated to your previous employer. Only one claim for the Involuntary Unemployment benefit can be made per employer. The Involuntary Unemployment benefit is payable for a maximum of 6 months during the policy term. Only one benefit payable Only one Income Benefit will be paid at any one time. The Income Benefits are payable for a maximum of 6 months in any 24 month period of insurance. When we won't payAn Involuntary Unemployment benefit will not be payable for an event giving rise to a claim that is directly or indirectly caused, or contributed to, by:
An Involuntary Unemployment benefit will also not be payable if: you have already received Involuntary Unemployment benefits for a combined period of 6 months; you have previously received Involuntary Unemployment benefits with this or a related employer; or you were aware of your impending redundancy at the time you applied for Cover. Your policyWhen Cover starts and endsCover will start on the Cover start date shown in the Certificate of Insurance and will continue until one of the following things happen:
The Cover start date is the date on which the application process is completed and accepted by us either verbally, electronically or in writing, and we have issued a Certificate of Insurance. Changes to your CoverYou can request a change in the Cover, but any change will be applied to both the Lump Sum and Income benefits on a pro-rata basis. Any change requested to a Lump Sum benefit will apply to both the Death benefit and Total & Permanent Disablement benefit included as part of your MortgageGuard policy. Any change requested to the Lump Sum benefits will result in a proportionate change to the Income Benefits e.g. if you decrease your Lump Sum benefits by 10%, your Income Benefits will also decrease by 10%. Requested IncreaseYou can apply to increase the Lump Sum benefit amounts at any time if the amount of your mortgage has also increased. The minimum increase amount that you can apply for is $50,000 and the maximum increase amount is limited to the amount of the increase in your mortgage. Any request to increase must be made in writing to us and is subject to our acceptance, which may include medical and/or financial underwriting. If your request is accepted, we will confirm this in writing and issue an updated Certificate of Insurance. Any increase in benefits will be subject to the maximum benefit caps of $750,000 for lump sum and $5,000 for income benefits. Requested DecreaseYou can request to decrease the Lump Sum benefit amounts at any time but it cannot be reduced below $50,000. Any request to decrease the benefit amount must be made in writing to us and once accepted, we will confirm this in writing. How are the premiums paid?The premium is calculated and payable on a monthly basis. Your monthly premium will be automatically deducted one month in advance from your nominated bank account or credit card each month. We will deduct your first payment on your Cover start date. What happens if premiums are not paid?If a premium payment is not received, we will notify you advising the date on which the policy will end if the amount due is not paid. If a payment sufficient to meet the amount due is not received by that date, we will cancel the policy. We will give at least 20 business days notice before the policy is cancelled because of non payment of premiums. Changes to the premium ratesWe can change the premium rates for MortgageGuard insurance, but only if we do this for a group of policy holders. Any changes to premiums will come into effect for your policy from the next Cover anniversary after we make the change. We can also pass on any government taxes and charges which may be introduced or increased during the life of your policy. If we increase premium rates we will provide 30 days notice before the increase comes into effect for your policy. Guaranteed renewableProvided you continue to pay your premiums when due, your MortgageGuard policy is guaranteed renewable until Cover ends, as explained in the section titled "When Cover starts and ends" on page 13. This means that we cannot cancel or alter the terms of the Cover because of changes in the insured person's health, occupation or pastimes. World wide coverYour policy covers the insured person 24 hours a day, anywhere in the world. Keeping us informedTo ensure that our records are kept up to date and correct, we request that you advise us in writing:
Cooling off periodIf you are accepted for Cover, we will issue you with a Certificate of Insurance. You have 21 days from the date that Cover starts to check that the Cover meets your needs; this is known as the cooling off period. As long as you do not make a claim during this period you can ask us to cancel the Cover during the cooling off period and we will refund any premiums you have paid. Your request to cancel must be in writing and your Certificate of Insurance will need to be returned to us. Making a claimNotifying us of a claim Please contact Life if you think you are eligible to make a claim, or are unsure and would like some assistance. It is important that you notify us as soon as possible after any event that may lead to a claim. If you do not notify us within 30 days of an event, we may be able to adjust the benefit payable if we have been prejudiced by the delay. We will send you a claim form and explain in detail our requirements and what the next steps are. Assessing a claimLife will pay a benefit only after all our claim requirements have been met and we admit liability. Life may require medical and occupational assessments and other information where relevant to assess or finalise payment of the claim. Where we request an examination, assessment or financial audit by a person we nominate, Life will meet these costs. Otherwise you must meet the cost of satisfying our claim requirements. Payment of a claimWe will pay the claim as soon as possible once it has been approved. All claims will be paid in Australian dollars. Your duty of disclosureBefore entering into a contract with Life Limited you have a duty, under the Insurance Contracts Act, to disclose to us every matter you know, or could reasonably be expected to know, that is relevant to our decision whether to accept the risk of the insurance and, if so, on what terms. You have the same duty to disclose those matters to us before your Cover is extended, varied or reinstated. Your duty, however, does not require disclosure of a matter:
Importantly, your duty of disclosure continues until a written contract of life insurance has been issued by Life. Non-disclosureIf you fail to comply with your duty of disclosure and we would not have entered into the contract on any terms if the failure had not occurred, we may avoid the contract within 3 years of entering into it. If your non-disclosure is fraudulent, we may avoid the contract at any time. If we have not avoided a contract of life insurance, we may, within 3 years of entering into it, reduce the amount that you have been insured for in accordance with a formula that takes into account the premium that would have been payable if you had disclosed all relevant matters to us. Information about privacyYour privacy and that of the insured person, is important to Life. This statement explains how personal information can be used or disclosed and provides information about your privacy rights. By completing the application you and the person to be insured agree to allow Life to use the personal information of you and the person to be insured to:
You and the person to be insured also agree that other companies in the Group and our external service providers (including for example, reinsurers, mailing houses and claims assessors) may access personal information when appropriate to assess your application, administer your policy or process any claims. Unless you notify Life otherwise, the personal information may be used by us or other companies in the Group to offer products or services which may be of interest to you. If you, or the person to be insured, do not supply Life with the personal information requested, Life may not be able to provide the Cover applied for. Disclosure of Personal Information and your rights.We may also disclose personal information of you and the person to be insured:
Under the Privacy Act, you may request access to your personal Information held by Life. You can contact us to make such a request one for any other reason relating to the privacy of your personal information. Contact details are shown in the section titled "Who to contact". Health informationThe references in this Privacy Statement to personal information include sensitive information such as medical and health related details of the person to be insured. If required to assess your application, administer your policy or process any claims, Life may seek further information from any medical attendant consulted by the insured person. TaxationYou will generally be unable to claim a tax deduction for any premiums you pay in respect of Lump Sum Benefits under MortgageGuard, and generally any Lump Sum Benefits you receive will not be assessable income to you. You will generally be able to claim a tax deduction for any premiums you pay in respect of Income Benefits under MortgageGuard, and generally any Income Benefits you receive will be treated as assessable income to you. We will advise you, on an annual basis, of the portion of your premium that is attributable to Income Benefits. In any case, we suggest you speak to your tax adviser who will be able to give you advice that is specific to your circumstances and answer any questions you may have regarding the tax consequences of taking out Cover under MortgageGuard. Direct Debit Service AgreementWhere you have elected to have your MortgageGuard premium deducted from your account by direct debit, you agree to the terms detailed below. 1. I/we have requested Life Limited, ABN 56 003 963 773 AFSL No. 237497, (User ID 145096) to deduct my nominated account with any amounts that become payable in relation to my MortgageGuard policy, through the BECS (Bulk Electronic Clearing System). 2. The financial institution may, in its absolute discretion, at any time by notice in writing to me terminate this request as to future debits. 3. Life may, by notifying me within 14 days, vary the timing of future debits. 4. Where the due date does not fall on a business day and I am uncertain whether sufficient cleared funds will be available to meet the direct debit, I will contact my financial institution directly and ensure that sufficient cleared funds are available. 5. I can modify or defer this regular Direct Debit Request at any time by giving Life 14 days notice. 6. I can stop or cancel the regular Direct Debit Request at any time by giving Life or my financial institution 14 days notice. 7. If at any time I feel that a direct debit against my nominated account is inappropriate or wrong it is my responsibility to notify Life or my financial institution as soon as possible. 8. If I believe there has been an error in debiting my account, I will notify Life or my financial institution and confirm that notice in writing with Life as soon as possible. 9. Direct debiting through BECS is not available on all accounts. I will check my account details against a regular statement or check with my financial institution as to whether I can request a direct debit from my account. 10. It is my responsibility to ensure that there are sufficient cleared funds in my nominated account to honour the Direct Debit Request. I understand that the Direct Debit Request will be automatically cancelled if two debit payments are dishonoured because of insufficient funds. Life will give me 14 days notice in writing if they intend to cancel my Direct Debit Request. Life will also charge the cost of dishonoured direct debits against my account. Life may cancel my MortgageGuard cover if the Direct Debit Request is cancelled because of dishonours. 11. Life may need to pass on details of my direct debit request to their sponsor bank in BECS to assist with the checking of any incorrect or wrongful debits to my nominated account. Who to contactWe are here to help with any questions you have about your Cover. The contact details for Life are: Client Services: 1300 135 313 You should be aware that all telephone conversations with you relating to your policy will be recorded. What to do if you have a complaintLife has procedures in place to properly consider and deal with your enquiries and complaints within 45 days of a complaint being made. If you have a complaint you may contact the Complaints Officer of Life on the contact details shown above. If your complaint is not resolved to your satisfaction within 90 days you may refer it to the Financial Ombudsman Service (FOS), which provides external dispute resolution for consumers and financial service providers. For more information about FOS, including how to lodge a complaint, please visit www.fos.org.au or call 1300 780 808. Glossaryactivities of daily living means: 1. bathing and showering; 2. dressing and undressing; 3. eating and drinking; 4. using the toilet to maintain personal hygiene; 5. moving from place to place by walking, wheelchair or with assistance of a walking aid or getting in and out of bed, a chair or wheelchair. any occupation means any occupation, business or employment for which the insured person is suited by education, training or experience that would generate earnings greater than 25% of the insured person's income in the most recent period of 12 months in which he or she was gainfully employed. cognitive loss means a total and permanent deterioration or loss of intellectual capacity (supported by a score of 15 or less out of 30 in a Mini Mental State Examination) that has required the insured person to be under continuous care and supervision by another person for at least three consecutive months and at the end of that three month period the insured person is likely to require ongoing continuous care and supervision by another person. domestic duties means the tasks performed by an insured person whose sole occupation is to maintain the family home. These tasks include, unassisted by another person, cleaning of the home, cooking of meals for their family, doing the family laundry, shopping for the family's groceries and taking care of dependent children (where applicable). Domestic duties do not include duties performed outside the insured person's home for remuneration or reward. gainful employment/gainfully employed means that the insured person is engaged in an occupation, business or employment for remuneration or reward, for a minimum of 20 hours per week. income means monthly income earned through personal exertion calculated:
It is based on the total remuneration package and includes salary, wages, packaged fringe benefits, regular commissions, regular bonuses, regular overtime payments and pre-tax superannuation contributions. For the self-employed it also includes that share of net income of the business directly generated by personal exertion after deduction of all business expenses but before the deduction of tax. Income does not include:
involuntary unemployment/involuntarily unemployed means a period during which the insured person is:
and where becoming unemployed was a result of:
loss of independent existence means the total and irreversible inability to perform at least two of the numbered activities of daily living without the assistance of another person. loss of limbs means the total and irreversible loss of the use of:
where 'limb' means whole hand or whole foot. medical practitioner means a doctor who is legally qualified and registered to practise in Australia (or if outside Australia, has equivalent qualifications and registration) not being you, the insured person, or a business partner or immediate family member of you or the insured person. mental illness means a condition (other than dementia and Alzheimer's disease):
mental illness for the purpose of this contract also means conditions classified as chronic fatigue syndrome, myalgic encephalomyelitis, post viral fatigue syndrome, behavioural disorders, fibromyalgia (chronic widespread pain) or physical disorders attributable to stress and/or any mental health disorder. modified TPD means the insured person has suffered:
pre-existing condition means any condition, injury, illness, disease, sickness or related condition and/or associated symptoms, whether specifically diagnosed or not:
in the 24 months immediately prior to the Cover start date or the Cover start date for any requested increase in Cover (but only in respect of that increase). self-employed means that the insured person is earning a living by working independently of an employer, either freelance or by running a business. terminal illness means that the insured person is diagnosed with an illness, which reduces life expectancy to less than 12 months from the date of claim, as confirmed by a specialist physician approved by Life. total disability/totally disabled means that the insured person is, solely as a result of injury or illness:
total and permanent disablement means that due to injury or illness: a) if the any occupation definition applies:
OR
OR
b) if the domestic duties definition applies:
OR
OR
c) if the modified TPD definition applies:
usual occupation means the occupation in which the insured person is regularly engaged, except if the insured person has been unemployed or on maternity, paternity or sabbatical leave for greater than 12 months at the time of disability, then usual occupation means any occupation which the insured person is reasonably capable of performing having regard to their education, training or experience. This document has been printed on a PEFC certified paper which is made from elemental chlorine free pulp, derived from well-managed forests and manufactured by an ISO 14001 certified mill. Where to go from here |
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