March 15, 1996
P.O. Box 1441
Minneapolis, MN 55440
Group Number: G-42326
We are pleased toenclose your Group Insurance Policy.
Please sign and returnthe duplicate of this letter, thereby acknowledging receipt of the group insurance policyindicated above and accepting policy terms including any changes made to the masterapplication. Any changes are reflected on the photocopy attached to the contract. Apostage-paid, self-addressed envelope is enclosed for your convenience.
Thank you for letting usservice your group insurance needs.
/s/Arthur F. Newman
Arthur F. Newman
The Paul Revere InsuranceCompany
We hereby acknowledgereceipt of the group insurance policy indicated above and accept policy terms.
Paul Revere InsuranceGroup, 18 Chestnut Street, Worcester, MA 01608-1528, (508) 799-4441
|G.O. # 806|
|Satellite # 719|
|THE PAUL REVERE LIFE INSURANCE COMPANY
Worcester, Massachusetts 01608
Amendment No. PD8-1
Group Policy Number: G-42326
Policyholder: GRACO INC.
Effective Date ofRevision: April 1, 1995
It is hereby understoodand agreed upon that the above group policy or policies issued by the Paul Revere LifeInsurance Company shall be amended as follows:
Said group policy withany of its amendments is deleted and the attached group policy is substituted therefore.
This amendment is herebyincorporated into and made a part of the said group policy or policies.
THE PAUL REVERE LIFEINSURANCE COMPANY
January 23, 1996
|The Paul Revere Life|
Group Policy Number: 42326
Policyholder: GRACO INC.
Effective Date: March 1,1993
State of Issue: Minnesota
Revision Date: April 1,1995
THE PAUL REVERE LIFEINSURANCE COMPANY agrees to pay the Group Insurance Benefits set forth in this Policy.This Policy provides long term disability insurance benefits for the replacement of incomeloss due to Disability. Benefits are paid to or on behalf of all Employees of thepolicyholder who become insured according to the provisions of this Policy. This Policy isbased upon yearly renewable term products. The duration of this Policy, subject toTermination and all other Policy provisions, is shown in the Duration Rider.
The premium for thebenefits provided by this Policy shall be paid by the policyholder. All premiums arecomputed according to the provisions of this Policy. The first premium is due on the datethis Policy begins. All other premiums due while this Policy is in force are to be paid inadvance monthly on the premium due date.
The provisions on thefollowing pages are part of this Policy.
Signed by the officersof The Paul Revere Life Insurance Company at Worcester, Massachusetts.
GROUP INSURANCE POLICY
POLICYHOLDERSUBSIDIARIES AND AFFILIATES APPROVED FOR COVERAGE
Application to add anaffiliate or subsidiary must be made in writing on an approved application form. Allagreements made between the policyholder and Us are binding on all Employers. The list ofapproved affiliates and/or subsidiaries is shown below.
The policyholder actsfor and on behalf of all accepted Employers. All agreements made between the policyholderand Us are binding on all Employers. No other Employer may discontinue, modify, reduce orterminate this Policy.
TABLE OF CONTENTS
|SCHEDULE OF BENEFITS||SB|
|Definitions/Employees Eligible/Waiting Period/Effective Dates/Changes in Amountsof Insurance/Policyholder Requests for Plan Changes/Termination of Employee Insurance/Leaveof Absence/Recurrent Disability|
|LONG TERM DISABILITY INCOME BENEFIT||2|
|Benefit/Rehabilitation Benefit/Period of Time Before Benefits Begin toAccrue/Calculation/Maximum Benefit Period/Return to Work Benefit/Residual Benefit/FamilySurvivor Income Benefit/Adjustable Cost of Living Benefit/Conversion Privilege|
|IntegrationMethod/Income Sources That Will Reduce Our Benefit/Estimated Social SecurityBenefits/WorkersCompensation Benefits|
|EXCLUSIONS AND LIMITATIONS||4|
|Exclusions/Pre-Existing Condition Limitation/Exception to Pre-ExistingCondition Limitation/PECL for Revisions/Other Limitations|
|Payment ofPremiums/The Grace Period/Amount of Premiums/Waiver of Premium/Charges forChanges/PremiumCredits/Simplified Accounting/Inaccurate Census and Premium/Schedule of Premium Rates|
|Notice ofClaim/Forms/Proof of Loss/Time Limits/Exams/Proof of Financial Loss/How We PayBenefits/Choice of Doctor/Legal Actions and Limitations|
|TERMINATION OF POLICY||7|
|EntireContract/Time Limits for Certain Defenses/Agency/Misstatement/Misrepresentation/Rescission/Certificates ofInsurance/Insurance Information/Changes in This Policy/Clerical Errors orDelays/Assignment of Benefits/Workers Compensation|
|DURATION AND RATE RIDER||RIDER|
|Durationof the Policy/Rate Guarantee|
SCHEDULE OF BENEFITS
Classification of EligibleEmployees:
|Class 1 ||
Corporate Officers and Executive Officers earning a minimum base salary of$105,000; Sales Directors whose base salary and on-plan bonus together total $105,000 ormore; and, other Managing Directors earning a minimum base salary of $105,000.
Amount of DisabilityIncome Benefit:
33.33% of the first$12,000.00 of Monthly Earnings and
|67% of the remainingMonthly Earnings:|
|Maximum Benefit:||$17,500.00 per month.|
|Minimum Benefit –||15% of basic monthly earnings, up to a maximum of $100.00|
Non-Evidence Limit: $16,000.00 Maximum Monthly Benefit
Maximum Benefit Period:
|Insured’s Age When
Maximum Benefit Period
|Less than Age 60||To Age 65|
|Age 60||5 Years|
|Age 61||4 Years|
|Age 62||42 Months|
|Age 63||36 Months|
|Age 64||30 Months|
|Age 65||24 Months|
|Age 66||21 Months|
|Age 67||18 Months|
|Age 68||15 Months|
|Age 69 and over||12 Months|
Elimination Period: 180Days
Here are some of theterms used in this Policy. Other terms are defined where used in this Policy. All definedterms are important in describing rights under this Policy. Please refer back to thesemeanings as you read. Defined terms are presented with capital letters to help identifythem as such. Masculine pronouns used in this Policy apply to both sexes.
|ACTIVELY AT WORK orACTIVE WORK means that an Employee|
|1.||is present at the Employers place of business or a work site other than the Employees home, as designated by the Employer, and|
|2.||is performing the duties of his job; and|
|3.||is producing the work product required by his job.|
DISABLED OR DISABILITY these terms mean either Total Disability or Residual Disability. The definitions ofthese terms are presented in the Long Term Disability Benefit (Section 2). One ormore may apply to the Employee.
DOCTOR means a person,other than the insured, who is licensed to practice the healing arts and who is practicingwithin the scope of his license. The term covers only a licensed medical practitionerwhose services are required to be covered by the law of the jurisdiction where thetreatment is rendered. See the CLAIMS section for the provision on CHOICE OF DOCTOR.
DOCTORS CARE meansthe regular and personal care of a Doctor that, under prevailing medical standards, isappropriate for the condition causing the Disability.
EARNINGS (SALESDIRECTORS) means, for purposes of determining an Employees total disability benefit,the Employees basic annual, monthly or weekly pay based on a work week of not morethan 40 hours, prior to becoming disabled and as last reported to Us in writing by theEmployer and verified by Us. It includes earnings from Incentive Bonuses, but not overtimeor other special pay. Incentive Bonuses are averaged for the lesser of the 24 month periodimmediately prior to the date disability begins or the period of employment. Earnings fromsources other than the Employer are not included in determining total disability benefits.
EARNINGS (ALL OTHEREMPLOYEES) means, for purposes of determining an Employees total disability benefit,the Employees basic annual, monthly or weekly pay based on a work week of not morethan 40 hours, prior to becoming disabled and as last reported to Us in writing by theEmployer and verified by Us. Commissions, bonuses, overtime or other special pay is notincluded. Earnings from sources other than the Employer are not included in determiningtotal disability benefits.
EMPLOYEE means anyperson who works Full-time for the Employer. An Employee must be paid by the Employer forwork done at the Employers usual place of business or some other location that isusual for the Employees particular duties.
|For the purposes of thislong term disability benefit, the term Employee does not include any person performingservices for the Employer|
|||pursuant to a contractual relationship with the Employer;|
|||subject to the terms of a leasing agreement between the Employer and a leasing organization;or|
|||who receives income which is reported by the Employer on IRS Form 1099.|
EMPLOYER means thepolicyholder or a branch or a division of the policyholder, and any company legallyaffiliated with or subsidiary to the policyholder that has been approved by Us.
A subsidiary is anentity with controlling stock ownership (51% or more) held by the Employer who is thepolicyholder.
An affiliate is acompany whose business is controlled by the policyholder through stock ownership,contract, common officers or otherwise.
EVIDENCE OF INSURABILITYmeans written proof given to Us that an Employee is insurable. This proof must be based onmedical and financial information and must be acceptable to Us.
FULL-TIME means, for anEmployee, his Employers normal work week of at least 30 hours. For Employees whosework weeks vary above and below this number, We will determine eligibility by averagingthe hours worked during weeks in the month.
IMPORTANT DUTIES means,with respect to an Employees occupation, the material and substantial duties of thatoccupation.
INCURRED DATE OFDISABILITY means the first date the Employee satisfies the required definition ofDisability. This date is determined by Us.
INJURY means accidentalbodily loss or harm incurred while insured under this Policy.
MONTHLY EARNINGS meansthe Employees annualized Earnings divided by twelve (12).
NON-EVIDENCE LIMIT meansthe greatest amount of insurance an Employee may have without providing Evidence ofInsurability.
|1.||The Employee may be eligible for more than this amount initially; or|
|2.||the amount of existing insurance may be increased to an amount in excess of any Non-EvidenceLimit; or|
|3.||the amount of insurance currently in excess of the Non-Evidence Limit may be further increased.|
In any of thesesituations, the Employee must send Us Evidence of Insurability. If We do not approve theEvidence of Insurability, the Employees insurance is limited, but in no event willthe Employees insurance be less than the lowest amount shown in the Non-EvidenceLimit provision of the Schedule of Benefits.
PERIOD OF DISABILITYmeans a continuous period of time during which an Employee is Disabled as the result ofInjury or Sickness whether from one or more causes.
PRIOR PLAN means theEmployers group long term disability insurance program in effect the day before theeffective date of this Policy. This Policy replaces that plan or a portion of it.
RETIREMENT PLAN means,for the purpose of determining benefit reductions, a plan that provides retirementbenefits to employees. It also includes any retirement plan for which the insured iseligible as a result of his job with the Employer, including any plan that is part of anyfederal, state, county, municipal or association retirement system.
|The term does notinclude:|
|1.||Profit Sharing Plans as defined in 401(a);|
|2.||Thrift plans (e.g., 401(k)s);|
|3.||Individual Retirement Accounts (IRAs);|
|4.||Tax Sheltered Annuities (TSAs); or|
|5.||StockOwnership Plans as defined in Internal Revenue Code section 4975.|
|When used in thisPolicy, the term Retirement Benefits means the following benefits payable froma Retirement Plan:|
|1.||retirement benefits payable from the Employers Retirement Planupon early or normal retirement;or|
|2.||disability benefits payable from the Employers Retirement Plan.|
SICKNESS means anillness or disease. It also includes pregnancy.
WE, US or OUR means ThePaul Revere Life Insurance Company.
BECOMING ELIGIBLE FOREMPLOYEE INSURANCE
An Employee is eligiblefor insurance if he is a member of an eligible class listed in the Schedule of Benefitsand is not excluded in the list shown below. No Employee is eligible
|1.||who is scheduled to work less than six months in any twelve month period; or|
|2.||who works less than the required number of hours as defined in the definition of Full-time;or|
|3.||who is employed as an airline pilot, co-pilot or crew member unless specifically mentioned in the Classification of Eligible Employees found on the Schedule of Benefits.|
An Employee who is not acitizen of the United States must be a permanent resident of the United States, Canada orPuerto Rico in order to be an eligible Employee. An Employee who is not a citizen isconsidered not eligible for insurance if he leaves the United States, Canada or PuertoRico for 180 or more consecutive days.
SERVICE WAITING PERIOD
The service waitingperiod is a period of active Full-time employment the Employee must complete beforebecoming eligible for insurance.
An Employee is eligiblefor insurance on the later of the Effective Date of this Policy or the date the Employeebegins work for the Employer on an active Full-time basis.
An Employee becomeseligible for insurance when he transfers from an ineligible class to an eligible class.For the purposes of this provision, he is considered to be a new Employee at that time. Weuse all past periods of Full-time work for the Employer to determine the Employeeseligibility date. Any period of part-time work does not count. An Employee cannot becomeeligible for insurance before moving into an eligible class.
A re-hired Employee istreated as a new Employee and must satisfy a new service waiting period. However, if anEmployee is re-hired within one year from the date of ineligibility for insurance, We useall past periods of Full-time work for the Employer to determine the date the Employeesatisfies the waiting period. If an Employee is re-hired after one year, any past periodsof work will not count when We determine the date the Employee satisfies the waitingperiod. An Employee cannot become eligible for insurance before the last date re-hired.
If an Employee requestsUs to reinstate insurance that terminated while he was still eligible to be insured bythis Policy, We must first approve Evidence of Insurability. Evidence must be given at theEmployees expense. The Employees insurance does not begin until the date Wespecify after approving the evidence.
EFFECTIVE DATE OF EMPLOYEEINSURANCE
The Employee must beActively At Work on the date his insurance goes into effect. If the effective date occurson a vacation, holiday or weekend, the Employee must have been Actively At Work on thelast scheduled working day. If an Employee is absent from work for any other reason,including absence due to Injury, Sickness or leave of absence, insurance does not becomeeffective until return to Full-time work.
NON-CONTRIBUTORYINSURANCE means that the Employer pays all of the cost of the insurance. All eligibleEmployees must be enrolled unless they were eligible for insurance but not covered underthe Prior Plan. Insurance will become effective on the date the Employee is eligible forinsurance and Actively At Work.
|If the amount ofinsurance exceeds the Non-Evidence Limit, the amount of an Employees insurance inexcess of the Non-Evidence Limit will become effective when:|
|1.||the Employee becomeseligible for insurance; and|
|2.||We approve the Employees Evidence of Insurability.Evidence for amounts over the Non-EvidenceLimit is submitted at Our expense.|
Application to add anaffiliate or subsidiary must be made in writing. All agreements made between thePolicyholder and Us are binding on all Employers. The list of approved affiliates and/orsubsidiaries is shown on the policy page before the Table of Contents.
If an Employer is apartnership or a sole proprietorship, a partner or proprietor must also qualify as anEmployee to be eligible for insurance. Earnings definitions for owners of such entitieswill be applied.
CHANGE IN AMOUNTS OF INSURANCE FOR INDIVIDUAL EMPLOYEES
The amount of insurancefor which an Employee is eligible is shown in the Schedule of Benefits. The benefitsoffered and the amounts of those benefits may vary by class.
Benefits may increase ordecrease due to a change in class or Earnings. The Employer must notify Us in writing ofany change in class or Earnings. This notification must be received before the Employeeceases active, Full-time employment.
Any change in anEmployees amount of insurance becomes effective on the date the Employee is eligiblefor the change.
Any amount of the changethat exceeds the Non-Evidence Limit will become effective on the later of the date Weapprove the Employees Evidence of Insurability or the date the Employee becomeseligible for the increase.
The Employee must beActively At Work on the date a change in the amount of insurance becomes effective. If theeffective date of the change occurs on a vacation, holiday or weekend, the Employee musthave been Actively At Work on the last scheduled working day. If an Employee is absentfrom work for any other reason, including absence due to Injury, Sickness or leave ofabsence, a change does not become effective until return to Full-time work.
POLICYHOLDER REQUESTS FORPLAN CHANGES
Any revisions to:
|2.||add affiliated or subsidiary employers;|
|3.||change contribution basis; or|
|4.||make other plan changes|
must be requested inwriting by the Policyholder and will not be effective before the later of:
|1.||the applicants signature date; or|
|2.||the date The Paul Revere approves the change(s).|
If this Policy isrevised to increase or decrease benefits after its effective date, an eligible Employeebecomes insured for the revised benefits on the effective date of the revision, subject tothe Actively At Work requirement and to the applicable pre-existing condition limitation.
TERMINATION OF EMPLOYEEINSURANCE
An Employeesinsurance terminates on the earliest of:
|1.||the date this Policy terminates;|
|2.||the first day for which the Employee fails or refuses to make any required premium payment;|
|3.||the first day for which premium on behalf of the Employee is not made;|
|4.||the date the Employee no longer works in an eligible class; or|
|5.||the date the Employee no longer works for the Employer.|
Termination of insurancewill not affect any claim incurred before the date of termination.
LEAVE OF ABSENCE
Coverage may becontinued when an Employee is on an unpaid leave under the Federal Family and MedicalLeave Act (FMLA) for any of the following reasons:
|1.||to provide care after the birth or adoption of a son or daughter; or|
|2.||to provide care after the placement of a foster child; or|
|3.||to provide care to a spouse, son, daughter, or parent due to serious illness.|
Upon approval by theEmployer of an Employees leave of absence for the above reasons, coverage will becontinued, subject to premium payments, for up to three (3) months from the date the leaveof absence began or, if sooner, until Employee termination. If an Employee becomesDisabled while on leave, benefits will be based upon Earnings as last reported to Usimmediately prior to the beginning of the leave.
RECURRENT DISABILITY SAME INJURY OR SICKNESS
If, after the end of aDisability, the Employee becomes Disabled from the same or related causes, We will deem ita separate Disability subject to a new Elimination Period and a new Maximum BenefitPeriod. However, if such recurrence occurs within 6 months of the end of the prior period,We will deem it a continuation of the prior Disability. However, no benefit is payable forany day the Employee is not Disabled, and no benefit period is extended by time notDisabled. The gross amount payable prior to any adjustments as outlined in this Policywould be the amount determined at the original date of Disability. A recurrent Disabilityends on the first to occur of the following dates:
|1.||the last day of 6 consecutive months during which the Employee was not Disabled by the same Sickness or Injury.|
|2.||the first day the Employee ceases to be disabled by the same Injury or Sickness, even if immediately disabled by a different Injury or Sickness.|
|3.||the date the last benefit for the Injury or Sickness becomes due.|
The recurrent Disabilityprovision applies only to Disabilities that began under this Policy. If the Employeebecomes eligible for coverage under any other group long term disability policy, thisrecurrent disability section will cease to apply to him.
If a Disability iscaused by more than one Injury or Sickness, or from both, We will pay benefits as if theDisability were caused by only one Injury or Sickness. We will not pay more than oneDisability benefit for the same period. We will pay the larger benefit.
LONG TERM DISABILITYINCOME BENEFIT
WHAT WE PAY
We pay monthlydisability benefits to an Employee who satisfies the following definitions. The maximumamount We pay is shown in the Schedule of Benefits. Benefit payments may be reduced if theEmployee receives income from other sources. When and how this occurs is described in theprovision entitled Benefit Reductions.
Own Occupation Benefitwith Residual Disability
TOTAL DISABILITY orTOTALLY DISABLED FROM THE EMPLOYEES OWN OCCUPATION means that until he reaches theend of his Maximum Benefit Period, the Employee:
|1.||is unable to perform the important duties of his own occupation on a Full-time or part-time basis because of an Injury or Sickness that started while insured under this Policy; and|
|2.||does not work at all; and|
|3.||is under Doctors Care.|
If the Employee isemployed and is earning wages or a salary, he will be considered Residually Disabled asdefined below.
RESIDUAL DISABILITY orRESIDUALLY DISABLED means, as a result of Injury or Sickness, the Employee is unable toperform the important duties of his own occupation on a Full-time basis, but:
|1.||he is able to perform one or more of the important duties of his own occupation, or any other occupation, on a Full-time or part-time basis; and|
|2.||he is earning less than 80% of his Prior Earnings.|
To qualify for the OwnOccupation Benefit with Residual Disability, the Employee:
|1.||must satisfy the Elimination Period with the required number of days of Total and/or Residual Disability as defined in this Policy; and|
|2.||must be receiving Doctors Care. We will waive the Doctors Care requirement if We receive written proof acceptable to Us that further Doctors Care would be of no benefit to the Employee.|
SPECIAL PROVISIONSRELATING TO DISABILITY
The loss of aprofessional or occupational license for any reason does not, in itself, constituteDisability.
An EmployeesDisability is determined relative to his ability or inability to work. It is notdetermined by the availability of a suitable position with his Employer.
WHEN WE PAY BENEFITS
Benefits begin to accrueon the first day after the Employee completes the Elimination Period shown in the Scheduleof Benefits. Benefits are paid monthly while the Employee is Disabled.
PARTIAL MONTH PAYMENT
For any day a Disabilitybenefit is payable in a period of less than a whole month, We pay one thirtieth of theapplicable monthly benefit.
RECOVERY OF OVERPAYMENTS
If the monthly benefitfor any month is overpaid, We have the right to recover the amount overpaid. We may deductthe amount overpaid from any future payments.
We will pay for the costof services incurred in connection with a program of vocational rehabilitation if:
|1.||We enter into a written agreement with the Employee on both the program and the services; and|
|2.||the cost of the services is not covered by another plan or program.|
Participating in such aprogram will not affect the Employees eligibility for benefits under this Policy.
PERIOD OF TIME BEFOREBENEFITS BEGIN TO ACCRUE
Before benefits begin toaccrue, the Employee must be Totally or Residually Disabled for a certain number of days.
ELIMINATION PERIOD means thelength of time that the Employee must be Totally or Residually Disabled before benefitsbegin. The length of the Employees Elimination Period is shown in the Schedule ofBenefits. The Employee must satisfy the Elimination Period before the Accumulation Periodends.
ACCUMULATION PERIODmeans the period of time from the Incurred Date of Disability during which the Employeemust satisfy the Elimination Period. The Elimination Period is shown on the Schedule ofBenefits. The Accumulation Period is equal to two times the Elimination Period. If theEmployee does not satisfy the Elimination Period within the Accumulation Period, or if theEmployee returns to work for 180 consecutive days, a new Period of Disability begins.
For purposes of theElimination Period provision, INCURRED DATE OF DISABILITY means the first date theEmployee satisfies the definition of Total or Residual Disability. This date is determinedby Us.
BENEFIT CALCULATION FORTOTAL DISABILITY
The amount of anEmployees Total Disability benefit is the least of:
|1.||the Employees Monthly Earnings multiplied by the benefit percent less allother income benefits as shown in the provision entitled Benefit Reductions; or|
|2.||the maximum monthly benefit, or|
|3.||the Non-Evidence Limit, if Evidence of Insurability has not been approved by Us for a higher maximum.|
The benefit percent, themaximum monthly benefit and the Non-Evidence Limit are shown on the Schedule of Benefits.
MAXIMUM BENEFIT PERIOD FORTOTAL DISABILITY
The maximum benefitperiod is shown in the Schedule of Benefits. It is the maximum length of time for which Wepay benefits. It applies to all Periods of Disability whether from one or more causes. Inno case do We pay benefits after the earliest of:
|1.||the date the Employee is no longer Totally Disabled; or|
|2.||the end of the Maximum Benefit Period shown in the Schedule of Benefits; or|
|3.||the date the Employee dies; or|
|4.||the date benefits would cease according to any exclusion or limitation contained in thisPolicy; or|
|5.||the date benefits equaling or exceeding the long term disability benefit become payable to the Employee under the Employers Retirement Plan.|
If the maximum benefitperiod is limited to a certain number of years or months rather than age, the full benefitperiod may be restored after the Employee has worked Full-time for six consecutive months.
RETURN TO WORK ADJUSTMENT BENEFIT FOR RESIDUAL DISABILITY
When an Employee returnsto work from any continuous Period of Disability immediately following completion of theEmployees Elimination Period but before the end of the benefit period, We pay theEmployee a monthly benefit for each whole month following return to work.
WHAT WE PAY
During the first 24months that an Employee returns to work for any employer during any continuous Period ofDisability and while continuing to meet the applicable definitions pertaining to ResidualDisability:
|1.||We will not apply the requirement that the Employees Loss of Earnings must exceed 20% for Residual Disability benefits; and|
|2.||in lieu of the Disability benefit, We will pay a special Return to Work Adjustment Benefit.|
The amount of the Returnto Work Adjustment Benefit will be the amount of the Total Disability benefit otherwisepayable after reduction for other income sources. The Return to Work Adjustment Benefitwill be further reduced to the extent that the sum of the benefit plus the Employeesearnings from any employer plus other income sources (as defined in the Benefit Reductionsection) would exceed 100% of the Employees Prior Earnings.
INDEXATION OF PRIOREARNINGS
After 12 monthlyDisability benefits have been paid, the amount of Prior Earnings used to calculate theEmployees Return to Work Adjustment Benefit will be increased by 7%. The initialPrior Earnings amount will be increased on each anniversary of the Employeescompleting the Elimination Period.
MAXIMUM BENEFIT PERIOD
The Return to WorkAdjustment Benefits are not paid beyond the first to occur of:
the date the 24th monthly Return to Work Adjustment Benefit is paid during any continuous Period of Disability; or
the date the Employee is no longer Residually Disabled; or
the end of the Maximum Benefit Period shown in the Schedule of Benefits; or
the date the Employee dies; or
the date benefits would cease according to any exclusion or limitation contained in thisPolicy; or
the date benefits become payable under any other employers group long term disability insurance plan; or
the date benefits equaling or exceeding the long term disability benefit become payable to the Employee under the Employers Retirement Plan.
BENEFIT CALCULATION FORRESIDUAL DISABILITY
The following are termsused within the Residual Disability Benefit and the Return to Work Adjustment Benefit.
INITIAL TOTAL DISABILITYBENEFIT means the benefit that would have been payable immediately following thecompletion of the Elimination Period after integration with Social Security and/or otherincome sources.
LOSS OF EARNINGS meansthe Employees Prior Earnings minus the Employees Actual Monthly ResidualEarnings for the month the benefit is due. The difference must be due to the Injury orSickness causing the Residual Disability.
ACTUAL MONTHLY RESIDUALEARNINGS means the Employees salary, wages, commissions, bonuses, fees, and incomeearned for services performed. If the Employee owns any portion of a business orprofession, it means the following:
Sole Proprietor earningsmeans the net profit of the business for federal income tax purposes. Net profit isdefined as gross business revenues less deductible operating expenses.
Partner earnings meansthe partners proportionate share of the partnership net profit as reported forfederal income tax purposes. The partnerships net profit is defined as grosspartnership revenues less deductible operating expenses.
Employee/Shareholderearnings means the total gross salary, pension/profit sharing plan contributions made onbehalf of the individual, and the proportionate share of the current year corporate netprofit.
PRIOR EARNINGS means thegreater of:
the Employees average monthly earnings from all employment for the 12 whole calendar months immediately preceding his last regular day of active Full-time work; or
the Employees highest average monthly earnings from all employment for any period of 2 successive years during the 5 year period immediately preceding his last regular day of active Full-time work.
In any continuous Periodof Disability, immediately following completion of the Employees Elimination Periodbut before the end of the benefit period, We pay the Employee a monthly ResidualDisability benefit for each whole month while the Employee is Residually Disabled, asdefined.
During the first 24months, We will pay a monthly benefit according to the Return to Work Adjustment Benefitprovisions. After the first 24 months of Residual Disability and for the remainder of anycontinuous Period of Disability, the Employees Residual Disability benefit isproportionate to his Total Disability benefit. The proportion depends on the actual amountof earnings the Employee earns from work. To determine the monthly Residual Disabilitybenefit, We use the following formula:
|Loss of Earnings||The Initial Total||The Employee’s Residual|
|Prior Earnings||X||Disability Benefit||=||Disability Benefit|
If the Loss of Earningsfor any month is 80% or more of Prior Earnings, We will pay the Total Disability benefit.However, if the Loss of Earnings is less than 20% of Prior Earnings, then no ResidualDisability benefit is payable.
INDEXATION OF PRIOREARNINGS
After 12 monthlyDisability benefits have been paid, the amount of Prior Earnings used to calculate theEmployees Residual Disability benefit will be increased by 7%. The initial PriorEarnings amount will be increased on each anniversary of the Employees completingthe Elimination Period.
MAXIMUM BENEFIT PERIOD FORRESIDUAL DISABILITY
Residual Disabilitybenefits are not paid beyond the first to occur of the following:
|1.||The date the Employee is no longer Residually Disabled; or|
|2.||The end of the Maximum Benefit Period shown in the Schedule of Benefits; or|
|3.||The date the Employee dies; or|
|4.||The date benefits become payable under any employers long term disability insurance plan; or|
|5.||The date the Employee is earning more than 80% of his indexed Prior Earnings; or|
|6.||The date benefits would cease according to any exclusion or limitation contained in this Policy; or|
The date benefits equaling or exceeding the long term disability benefit become payable to the Employee under the Employers Retirement Plan.
FAMILY SURVIVOR INCOMEBENEFIT
WHAT WE PAY
We pay a Family SurvivorIncome Benefit when We receive proof that all the following conditions have beensatisfied:
|1.||the Employee becomes Totally Disabled while insured for this benefit;|
|2.||Disability benefits have been payable to the Employee; and|
|3.||the Employee dies while Disabled and while in the maximum benefit period.|
WHOM WE PAY
Benefits are payable tothe Employees lawful spouse, if living and mentally competent. If the spouse is notliving at the time benefits are payable, they are paid in equal shares to each Child. Ifthe spouse is not mentally competent, We will pay according to applicable state law.
We decide to whompayments are made. After We make payment, We have no further liability.
CHILD means theEmployees natural born, step-child, adopted Child, and any Child for whom theEmployee is the legal guardian. Each Child must be unmarried and under the age oftwenty-one in order to be eligible to receive this benefit. Unmarried children under theage of twenty-five are also eligible if they are enrolled in a school as full-timestudents. Students who, by reason of illness, injury, or physical or mental disability asdocumented by a Doctor, are unable to carry a full-time course load will be covered,provided that the course load is at least 60% of what is considered to be full-time.
HOW WE PAY
We pay a single lump sumbenefit equal to three times the Disability benefit payable to the Employee, after benefitreduction, for the last full calendar month before the Employees death. If theEmployee dies before a full calendar months benefit has been paid, the survivorbenefit will be based on the Disability benefit that would have been paid at the end ofthe first month after satisfying the Elimination Period.
This benefit may not beassigned, attached or applied to the debts of the survivor unless required by law.
ADJUSTABLE COST OFLIVING BENEFIT
If we pay the employeetotal or residual disability benefits for 12 months in any continuous period ofdisability, and if further benefits are payable in the continuous period of disability formonths after the 12th month, we will increase further these total or residual disabilitybenefits by a cost of living factor annually to the end of the Maximum Benefit Period inwhich benefits are payable under this Adjustable Cost of Living Benefit. We FirstCalculated the employees adjusted monthly benefit, considering all benefits fromother sources, other income and any benefit adjustments other than prior cost of livingadjustments. We then increase the employees adjusted monthly total or residualdisability benefit payment by the applicable cost of living factor according to the CPI oneach Review Data as follows:
|A = the CPI for the most recent Index Month;|
|B = the CPI for the First Index Month;|
|A – B = Cost of Living Factor|
The cost of living adjustment factor used to determine the Adjusted Monthly Benefit payment will be aminimum of four percent, and a maximum of ten percent.
CPI means the ConsumerPrice Index for All Urban Consumers. It is published by the United States Departmentof Labor. If this index is discontinued or if the method for computing it ismaterially changed, We may choose another index. We will choose an index which inour opinion most accurately reflects the rate of change in the cost of living in theUnited States. CPI would then mean the index we choose.
INDEX MONTH means thecalendar month four months prior to the calendar month in which a Review Dateoccurs. However, the first Index Month will be the calendar month four months prior tothe month in which Disability payments began.
REVIEW DATE means thedate that occurs after each twelve month Period of Disability in which benefits arepayable.
An insured Employee whose insurance terminates because employment with the Employer terminates may be eligible to convert all or some of his Group Long Term Disability Insurance. Tobe eligible for conversion, the Employee:
|1.||must have been insured for Long Term Disability (LTD) benefits under the plan for at least 12 consecutive months; and|
|2.||must submit a completed conversion application and the first premium to The Paul Revere within 31 days of the date his employment terminates.|
The Employee will notbe eligible for conversion if:
|1.||employment terminates coincident with termination of this Policy; or|
|2.||the Employee is eligible to receive Total or Residual Disability benefits under this Policy; or|
|3.||the Employee is in an Elimination Period for Total or Residual Disability benefits under this Policy; or|
|4.||the Employee is not receiving benefits but is in a Period of Disability; or|
|5.||the Employee is no longer in a class of Employees eligible for conversion; or|
the Employee becomes insured for other group long term disability benefits within 31 days of the date of termination; or
|7.||the Employee retires or ceases to be actively employed; or|
|8.||the coverage would, in our opinion, result in over insurance.|
If the Employee iseligible for conversion and applies and pays the first premium within 31 days of thedate his employment terminates, We will issue him a certificate of insurance. Thecertificate:
|1.||will be effective on the day after the day his Group LTD Insurance would otherwise terminate; and|
will be on one of the standard certificate forms then being offered by The Paul Revere for the class of risk to which the Employee will belong after his employment with the Employer terminates.
The certificate will beissued without medical Evidence of Insurability.
The premium will bedetermined by:
|1.||the certificate form issued;|
|2.||the amount of insurance;|
|3.||the class of risk to which the Employee will belong after his current employment terminates; and|
|4.||the Employee’s age.|
While an Employee isDisabled, he may be eligible for benefits from other sources. If so, We reduce ourbenefit by the amount of such other benefits paid or payable.
Listed below are otherincome sources that will reduce our benefit.
Social Security benefits, including: Primary Social Security and Family Social Security benefits received by an Employee or an Employee’s dependents because of the Employee’s Disability or retirement. If an Employee fails to apply for Social Security benefits, We determine the amount he was eligible to receive, and, for the purposes of this insurance, he will be considered to receive that amount.
Any general cost of living adjustment received from the Federal Social Security Act, the Railroad Retirement Act, any Veteran’s Disability Compensation and Survivor Benefits Act, Workers Compensation or any similar federal or state law which takes effect after long term disability benefits become payable to an Employee is not used to reduce the Employee’s benefit.
|2.||Other disability benefits from:|
|a. Statutory Disability (“Cash Sickness”) Plans, where applicable;|
|b. Canadian Federal or Provincial Disability Benefits;|
|c. Railroad Retirement Act Disability Benefits;|
|d. Disability benefits with which We are required by law to integrate.|
|3.||Workers’ Compensation benefits;|
That portion of any sick pay or other salary continuation (other than vacation pay) paid to the Employee by the Employer which, when added to the amount of the Employee’s benefit, exceeds 100% of the Employee’s Earnings as reported prior to Disability and as verified by Us;
Total, residual, or partial disability benefits from another group disability plan provided by the Employer;
|6.||Group disability benefits from the following plans, but only if the plan is Employer-sponsored:|
|a. Association Plans;|
|b. Fraternal Benefit Plans; or|
|c. Union Plans.|
Employer-sponsored means a plan that is endorsed, promoted, or facilitated by the Employer. For example, if the Employer made payroll deductions for the plan, or permitted solicitation or enrollment of the plan on company premises and/or company time, We would consider the plan to be Employer-sponsored, even if the Employee pays the entire premium.
|7.||No fault disability benefits; or|
|8.||Loss of Time awards or settlements involving liability insurance or court actions; or|
|9.||Disability benefits which are part of the Employer’s Retirement Plan.|
Retirement benefits attributable to Employer contributions. For benefits that are paid or payable under an Employer’s Retirement Plan, We will end benefits under this Policy if retirement benefits are equal to or greater than our long term disability benefit.
If the Employee’s retirement benefit is a lump sum instead of a monthly benefit, We will use themonthly benefit calculated for a lifetime annuity of that lump sum amount. If the Plan requires the Employee to take the lump sum distribution instead of leaving it in theRetirement Plan and he elects to roll the sum into a Qualified vehicle such as an IRA,We will defer the integration until monthly benefits can be received by the Employee without tax penalties.
If any of thesebenefits, except a retirement benefit, is paid in other than a monthly sum, We divide the amount paid into equal monthly amounts in order to reduce the monthlybenefit. The number of monthly amounts depends on the length of time the benefit award covers. If no length of time is stated in the benefit award, We divide the amount paid into sixty equal payments. If any of these benefits is paid on aretroactive basis, We may adjust our monthly payments in order to offset any overpaymentwhich results.
Listed below are otherincome sources that will not reduce our benefit.
Individual disability insurance;
General Cost of Living increases from federal or state disability or retirement programs that become effective after benefits become payable to the Employee;
Non-Qualified Deferred Compensation plans;
Whether individually purchased or provided or sponsored by the Employer, savings and investment accounts such as:
|a. Individual Retirement Accounts (IRAs);|
|b. Internal Revenue Code Section 4975 Employee Stock Option Plans;|
|c. Thrift Plans (401k);|
|d. 401(a) Profit Sharing Plans; or|
|e. Tax Sheltered Annuities.|
Disability benefits from the following plans (including Franchise Plans), purchased as individual coverage:
|a. Association Plans;|
|b. Fraternal Benefit Plans; or|
|c. Union Plans.|
|6.||Government or military pensions; or|
|7.||Disabled veterans’ benefits; or|
|8.||Retirement benefits attributable to the Employee’s contributions.|
ESTIMATED SOCIALSECURITY BENEFITS
For the purpose ofthis section, the term Social Security benefits means unreduced disability orretirement benefits that the Employee, his spouse or any of his dependents areentitled to receive because of his disability under:
|1.||the United States Social Security Act;|
|2.||the Canada Pension Plan;|
|3.||the Quebec Pension Plan; or|
|4.||any similar law, plan or act.|
As part of an Employee’s proof of loss, We require that the Employee furnish Us evidence that hehas duly applied for all other income sources for which he is or may becomeeligible. In the case of Social Security benefits, this includes:
|1.||making due application for such benefits; and|
if the Employee’s initial application is denied, and if We so recommend, making any and all available appeals.
Until the Employee has given Us written proof that all available appeals have been exhausted, We may:
|1.||estimate the Employee’s monthly Social Security benefit; and|
|2.||reduce our monthly benefit to the Employee by that amount.|
If We reduce the Employee’s benefits on this basis, and if all of his appeals are denied, We restorethe reduced amounts to the Employee in one payment.
If the Employee signsour Social Security Reimbursement Agreement, We agree not to reduce his benefits by estimated Social Security benefits while the Employee’s appeals are pending. Inthe Social Security Reimbursement Agreement, the Employee promises to pay Us back forany overpayment of his long term disability claim that results from a retroactive awardof Social Security benefits. If the Employee does not pay Us back, We have the right torecover our overpayment from any future benefits that may be due him.
With proper authorization from the Employee and his Doctor, We will give the Employee or hislegal representative information from our claim file to assist in any appeal of deniedSocial Security benefits.
If anEmployee is disabled due to an employment-related Injury, he should file for workers’compensation benefits. Receipt of workers’ compensation benefits will reduce Disability benefits under this Policy.
As part of an Employee’s proof of loss, We require that the Employee furnish Us evidence that hehas duly applied for all other income sources for which he is or may becomeeligible. In the case of workers’ compensation benefits, this includes:
|1.||making due application for such benefits; and|
|2.||if the Employee’s initial application is denied, and if We so recommend, making any and all available appeals.|
We must receive writtenproof that all available appeals have been exhausted.
WHAT WE DO NOT PAY
We do not pay benefitsfor any disabilities that result from:
war, whether declared or not, or any act or accident of war, or armed or unarmed military or paramilitary conflict;
activeparticipation in a riot;
theEmployee’s commission or attempt to commit a felony; or
anintentionally self-inflicted injury.
We do not pay benefitsduring any period in which an Employee is incarcerated.
This Policy will notcover any Disability:
|1.||caused by, or contributed to by a Pre-Existing Condition; or|
|2.||resulting from a Pre-Existing Condition.|
PRE-EXISTING CONDITIONmeans any Injury or Sickness that causes the Employee, during the three (3) monthsjust before becoming insured under this Policy, to:
|1.||consult a doctor;|
|2.||seek diagnosis or medical advice or receive medical care or treatment;|
|3.||undergo hospital admission or doctor’s visits for testing or for diagnostic studies; or|
|4.||obtain services, supplies, prescription drugs or medicines.|
However, this Policywill cover that Disability if it begins after the insured Employee has performed theimportant duties of his own occupation:
|1.||on a Full-time basis;|
|2.||for at least twelve (12) months.|
In no event will this limitation be applied to loss incurred or disabilities commencing after the Employeehas been insured for twenty-four consecutive months, notwithstanding any othereligibility provisions to the contrary.
EXCEPTION TOPRE-EXISTING CONDITIONS LIMITATION
An Employee insured under the prior group policy on the day before the effective date of this Policy iseligible for coverage under this Policy on its effective date regardless of Actively AtWork conditions.
Benefits for aDisability caused by a Pre-Existing Condition
Benefits for aDisability classified as due to a Pre-Existing Condition may be payable to the insuredEmployee provided:
|1.||the condition would have been covered under the prior group policy had that policy remained in force; or|
on the Incurred Date of Disability the Employee has been insured and working Full-time for twelve (12) months under any combination of this Policy and the prior group policy.
If the above conditionsare met, the benefit We pay will be the lesser of:
|1.||the monthly benefit payable under this Policy; or|
the monthly benefit which would have been paid under the prior group policy, taking into consideration all provisions of the prior group policy.
Any payment We make isreduced by any payments made for the same Disability under the prior group policy.
In no event will Wemake payment beyond the first to occur of:
|1.||the date benefits cease under this Policy; or|
|2.||the date benefits would have ceased under the prior group policy.|
EXCEPTION TOPRE-EXISTING CONDITIONS LIMITATION DOES NOT APPLY TO INCREASED BENEFITS
The exception to the pre-existing conditions limitation will not apply for the amount of benefits inexcess of the benefit provided by the prior group policy on the day before this Policy became effective. The portion equal to the increased amount of benefit will besubject to the preexisting conditions limitation.
PRE-EXISTING CONDITIONSLIMITATION APPLIES TO REVISED BENEFITS
After its effective date, this Policy may be revised to increase the amount or duration of the long term disability benefit payable, to decrease the Elimination Period, or to otherwise increase the terms under which benefits are paid. In that event, benefits for aDisability due to a pre-existing condition will be paid according to the policy termsin effect prior to the effective date of the revision.
For the purposes ofthis provision, PRE-EXISTING CONDITION means any Injury or Sickness that causes theEmployee, during the three (3) months just before the revision effective date, to:
|1.||consult a doctor,|
|2.||seek diagnosis or medical advice or receive medical care or treatment;|
|3.||undergo hospital admission or doctor’s visits for testing or for diagnostic studies; or|
|4.||obtain services, supplies, prescription drugs or medicines.|
This limitation doesnot apply to Disabilities that begin after the Employee has been insured whileworking Full-time for twelve (12) months after the revision effective date.
In no event will this limitation be applied to loss incurred or disabilities commencing after the Employee has been insured for twenty-four (24) consecutive months,notwithstanding any other eligibility provisions to the contrary.
PAYMENT OF PREMIUMS
All premiums are tobe paid monthly in advance. The payment is due on or before the premium due date. Make premium payment to The Paul Revere Life Insurance Company and send it to theaddress requested by Us.
THE GRACE PERIOD
After the initial premium payment, a grace period of thirty-one days is allowed for all late premiums. This Policy automatically terminates if premium payments have not been made at the endof the grace period. Insurance is in force during this grace period, andpremiums are charged.
AMOUNT OF PREMIUMS
The premium due eachmonth is the total of the current rates for all insured Employees. The initial premium rates are shown in the Schedule of Premium Rates. We have the right to chargenew rates effective on any premium due date, unless a Rate Guarantee Rider is inforce. Before We can make a change, We must give written notice at least thirty-one days before the new rates take effect.
WAIVER OF PREMIUM
After the Employee becomes insured, premium is due for that Employee while he is Actively At Work and during his Elimination Period. Premium for the Employee is waived while benefits are payable to him during any continuous Period of Disability. Provided thisPolicy is in force when the Employee’s continuous Period of Disability ends, theEmployee will remain insured if he returns to active Full-time work in an eligible classand premium payments for the Employee resume.
PREMIUM CHARGES FORPOLICY PLAN OR BENEFIT CHANGES
When premium ratesare changed because of a change in plan or benefits on other than a premium due date, the new premiums are charged on a pro-rata basis from the effective date of the changeto the next monthly premium due date. Full monthly premiums are charged thereafter.
If We receive noticeof an Employee’s termination or decrease in amount of insurance, We allow a fullpremium credit for that Employee from the effective date of the change.
SIMPLIFIED ACCOUNTINGFOR INDIVIDUAL EMPLOYEE CHANGES
When insurance for anEmployee is added on other than a premium due date, his premium is charged beginningfrom the next monthly due date.
When insurance for anEmployee is terminated on other than a premium due date, his premium is charged up tothe next monthly premium due date. This method of charging premiums is foraccounting purposes only and will not extend insurance coverage beyond the date oftermination as described in the provision entitled Termination of Employee Insurance.
When an Employee’s insurance changes on other than a premium due date, the premium is chargedbeginning from the next monthly premium due date.
INACCURATE CENSUS ANDPREMIUM
Enrollment before theeffective date could result inadvertently in premium being paid for a person enrolledbut not Actively At Work since before the policy effective date. If this should occur,premium will be refunded as soon as We are notified of the situation.
SCHEDULE OF PREMIUMRATES
The initial premiumrates are:
Class 1 – 0.770% ofthe first $31,857 of Basic Monthly Earnings.
WE MUST BE NOTIFIED OFINTENT TO FILE A CLAIM
Written notice of aclaim for Disability must be given to Us by the Employer or claimant. The notice must be in writing and must be filed at Our Home Office in Worcester, Massachusetts. Any claim will be based on the written notice. The notice must be received by Uswithin thirty days after the end of the Elimination Period. If We do not receivenotice within thirty days, the claim may be reduced or invalidated. If it can beshown that it was not reasonably possible to submit notice within the thirty day periodand it is shown that notice was given as soon as possible, the claim will not be reduced or invalidated.
WE FURNISH PROOF OFLOSS FORMS
After We receive written notice of claim, We provide a proof of loss form. This form should befurnished within fifteen days after We receive written notice. If We fail tofurnish this form within fifteen days, the claimant can meet the time period shown belowby submitting written proof that explains the reason for the claim. Written proof should establish facts about the claim such as occurrence, nature and extent of the Disability involved. A supply of forms is included in the Employer’s administration kit.
WHEN TO FILE PROOF OFLOSS
The claimant mustfile written proof of the loss within ninety days of the end of the Elimination Period. We have the right to require additional written proof to verify thecontinuance of any Disability. We may request this additional proof as often as We feelis necessary, within reason.
If proof of loss is notsubmitted and received by Us within the required time period, the claim may be reduced or invalidated. If it can be shown that it was not reasonably possibleto submit proof within the time period and it is shown that the proof was filed as soonas possible, the claim will not be reduced or invalidated. However, proof of loss maynot be submitted more than one year after the time proof is otherwise required.
WE MAY EXTEND TIMELIMITS
If the time limit thatWe allow for giving notice of claim or for submitting proof of loss is less than thelaw permits in the state where the claimant lives, We extend Our time limit toagree with the minimum period specified by law. The law must exist at the time thisPolicy is issued.
OUR RIGHT TO REQUIREEXAMS
We have the right to require an exam of any claimant as often as it may be required reasonably. The examination may be performed by a physician or vocational expert of Our choice. Anysuch exam will be at Our own expense.
OUR RIGHT TO REQUIREPROOF OF FINANCIAL LOSS
We have the right torequire written proof of financial loss. This includes, but is not limited to:
|1.||statements of pre-disability income;|
|2.||statements of income received from all sources while disabled;|
|3.||evidence that due application has been made for all other available benefits;|
|4.||tax returns, tax statements, and accountants’ statements; and|
|5.||any other proof We reasonably may require.|
We may perform financial audits at Our own expense as often as We reasonably may require. Payment ofbenefits may be contingent upon the proof of financial loss being satisfactory to Us.
HOW WE PAY BENEFITS
Any accrued benefits payable are subject to Our receiving proof of loss. Any unpaid balance at the endof Our period of liability is paid within a reasonable length of time after Ourreceiving proof of loss.
TO WHOM WE PAY BENEFITS
In the case of death, any unpaid accrued benefits are paid, at Our option, to the Employee’s estate or to one or more of the Employee’s surviving relatives based on Our selection.
All other benefits payable under this Policy are paid to the Employee. After We have made payment, Ourobligation with respect to the amount paid ends.
CHOICE OF DOCTOR
For treatment purposes, the Employee is free to select any Doctor. For purposes of Disability certification, the Employee must select a Doctor who is not related by blood ormarriage and who is not an Employee of the policyholder.
LEGAL ACTIONS ANDLIMITATIONS
No action at law or inequity may be brought to recover under this Policy unless proof of loss has been filed according to the terms of this Policy. In addition, the claimant must wait sixty daysafter filing proof of loss before taking action. If any action is to be taken, itmust be taken within three years from the end of the sixty day time period. If anytime limit in this Policy is less than the law specifies in the state where theclaimant lives at the time this Policy is issued, We extend the time limit to agreewith the minimum period specified by such law.
This Policyautomatically terminates at the end of the 31 day grace period if premium payments havenot been made.
We have the right toterminate this Policy if:
|1.||less than one hundred percent (100%) of Employees eligible are insured for any noncontributory benefit; or|
|2.||less than seventy-five percent (75%) of the eligible Employees are insured for any contributory benefit; or|
|3.||fewer than ten (10) employees are insured; or|
|4.||the policyholder does not report all Employees who are eligible for insurance under this Policy; or|
|5.||the policyholder fails, at any time:|
|a. to furnish promptly any information We reasonably may require; or|
|b. to perform any other obligations pertaining to this Policy.|
We may specify inadvance written notice to the policyholder a date of termination. We must give thepolicyholder notice of termination at least thirty (30) days before the termination. Itis not our responsibility to notify the Employees.
The Duration Riderincludes the date this Policy terminates without renewal. If mutual agreement of renewalconditions cannot be reached, We will provide to the policyholder thirty (30) daysadvance notice.
The policyholder mayterminate the entire contract or may terminate certain affiliates and/or subsidiaries andtheir Employees at any time. In either case, the policyholder must send Us written noticeand include the date the insurance will end. However, no termination of this Policy maytake place during a period for which the premiums have been paid. The termination takeseffect on the later of:
|1.||the date given in the notice; or|
|2.||the date We receive the notice.|
The policyholder mustsend Us any unpaid premiums for any insurance We provide while this Policy was inforce,even if notice of termination had been given to Us. We determine the portion of thepremium to be paid for any period between the premium due date and the date oftermination.
The entire contract ismade up of this Policy, the application of the policyholder, applications of theParticipating Employers, and application by each Employee. A copy of the policyholder’sapplication is attached to this Policy; each Employee retains a copy of his ownapplication.
In the absence offraud, all application statements made by the policyholder or by an Employee areconsidered representations not warranties. This means that the statements are made ingood faith. No statement voids this Policy, reduces the benefits We profice or is used asdefense to claim unless it is contained in a written application and a copy is furnishedto the Employee.
TIME LIMIT FOR CERTAINDEFENSES
After two years fromthe effective date of this Policy, no misstatement made by Policyholder, except afraudulent misstatment made in the application, may be used to void this Policy. Aftertwo years from the effective date of the Employer’s participation in this Policy, nomisstatement made by the Employer, except a fraudulent misstatement made in theapplication, may be used to voide the Employer’s participation in this Policy. After two years, no misstatement or omission made by the Employee, except a fraudulentmisstatement made in an application, may be used to deny a claim for any Disability that begins after the end of the two year period.
If any time limit inthis Policy is other than that specified by the law of the state where the claimantlives, We amend the time limit to agree with the period specified by such law.
Certain amounts of insurance or increases in insurance may be subject to Evidence of Insurability.
|1.||If an Employee makes a representation on his application for such an amount; and|
|2.||if such representation or omission was material to Our approval of his application; and|
|3.||if We discover within two (2) years of the effective date of the insurance or the increase that the material fact or omission was a misrepresentation,|
then We may, at Ouroption, rescind that amount or increase. This means that the amount or increase willnever have been in effect. All premium paid for insurance that is rescinded will berefunded.
MISSTATEMENT OF FACT
If any important facts about an individual in relation to his insurance are found to be misstated, Weadjust Our premium to the correct amount. If the misstatement affects the amount ofinsurance, the true facts are used to determine the correct amount of insurance. Delayin reporting changes is not considered a misstatement.
The Employer acts onhis own behalf or as an agent of the Employees. The Employer is not an agent of ThePaul Revere.
WE PROVIDE CERTIFICATESOF INSURANCE
We issue certificates of insurance for each insured Employee. These are delivered to the Employer to begiven to the Employee. The certificate states what the insurance coverage is and towhom We pay benefits. If the terms of this Policy and the Employee’s certificatediffer, this Policy governs.
The Employer willprovide Us with the information We need to administer this insurance contract andcompute the premium.
This information willinclude:
|1.||that relative to Employees:|
|a. who newly qualify;|
|b. whose class changes;|
|c. whose Earnings amount changes;|
|d. whose insurance terminates;|
|e. who are on leaves of absence;|
|f. full census data as requested; and|
|2.||any other information about this Policy that reasonably may be requested.|
We have the right toverify this information. Employer records that may be relevant, in Our opinion, willbe open for inspection by Us at any reasonable time.
CHANGES IN THIS POLICY
We may change the terms of this Policy if We receive a written request from the policyholder. All changes that are made are stated in riders or amendments to this Policy. These documents must be signed by Our President and Secretary. The Employee’sconsent is not needed to make a policy change.
We may change this Policy if there is a change in the Federal Social Security Act that affects Our liability. The change will take effect as of the date the Federal Social SecurityAct changes. We may make other changes mandated by state or Federal law.
CLERICAL ERRORS ORDELAYS
Clerical errors or omissions do not result in the denial of insurance. If there is any delay in postingthe date of any termination of insurance, the delay does not extend any insuranceprovided by this Policy.
ASSIGNMENT OF BENEFITS
The Employee may notassign the right, title or interest of this long term disability benefit to a thirdparty.
This Policy does notaffect or take the place of Workers’ Compensation insurance.
|THE PAUL REVERE LIFE INSURANCE COMPANY
Worcester, Massachusetts 01608
DURATION AND RATEGUARANTEE RIDER
This Rider is attachedto and forms a part of Group Policy G-42326.
Effective Date of thisRider: April 1, 1995
DURATION OF THEATTACHED GROUP POLICY
Subject to theconditions set forth in the TERMINATION OF THIS POLICY provision of the attachedGroup Policy, the Group Policy and this Rider are in effect from April 1, 1995,through February 28, 1996. Shortly before the expiration date, the group will bereviewed for renewal. Mutual acceptance of renewal conditions will result in ourissuing an updated Duration and Rate Guarantee Rider.
If We decide not torenew this Policy, We will provide to the policyholder 30 days advance written notice.
The Amount of Premiumsprovision of the Group Policy to which this Rider is attached is amended as follows:
Premium rates ineffect on the effective date of this Rider will not be changed until the earliest ofthe following dates:
|1.||the date this Rider expires; or|
|2.||the date the Group Policy is amended to change eligibility provisions or benefits or to add or drop insurance on any affiliated or subsidiary Employer, or|
|3.||the date the total number of insured Employees changes by more than twenty-five percent from the number of Employees insured on the effective date of this Rider.|
If any of the eventsdescribed in 1, 2, or 3 above occur, the Rate Guarantee portion of this Riderceases to operate. Any subsequent changes in premium rates under the Group Policyare made in accordance with the section of the Group Policy entitled Premiums.
THE PAUL REVERE LIFEINSURANCE COMPANY
NOTICE CONCERNINGPOLICYHOLDER RIGHTS IN AN
INSOLVENCY UNDER THE MINNESOTA LIFE AND HEALTH
INSURANCE GUARANTY ASSOCIATION LAW
If the insurer thatissued your life, annuity, or health insurance policy becomes impaired or insolvent, youare entitled to compensation for your policy from the assets of that insurer. The amountyou recover will depend on the financial condition of the insurer.
In addition, residentsof Minnesota who purchase life insurance, annuities, or health insurance from insurancecompanies authorized to do business in Minnesota are protected, SUBJECT TO LIMITS ANDEXCLUSIONS, in the event the insurer becomes financially impaired or insolvent. Thisprotection is provided by the Minnesota Life and Health Insurance Guaranty Association.
|Minnesota Life & Health Insurance Guaranty Association
750 Norwest Center
55 East 5th Street
St.Paul, Minnesota 55101
The maximum amount theguaranty association will pay for all policies issued on one life by the same insurer islimited to $300,000. Subject to this $300,000 limit, the Guaranty Association will pay upto $300,000 in life insurance death benefits, $100,000 in net cash surrender and net cashwithdrawal values for life insurance, $300,000 in health insurance benefits, including anynet cash surrender and net cash withdrawal values, $100,000 in annuity net cash surrenderand net cash withdrawal values, $300,000 in present value of annuity benefits forannuities which are part of a structured settlement or for annuities in regard to whichperiodic annuity benefits, for a period of not less than the annuitants lifetime orfor a period certain of not less than ten years, have begun to be paid on or before thedate of impairment or insolvency, or if no coverage limit has been specified for a coveredpolicy or benefit, the coverage limit shall be $300,000 in present value. Unallocatedannuity contracts issued to retirement plans, other than defined benefit plans,established under section 401, 403(b), or 457 of the Internal Revenue Code of 1986, asamended through December 31, 1992, are covered up to $100,000 in net cash surrenderand net cash withdrawal values, for Minnesota residents covered by the plan provided,however, that the association shall not be responsible for more than $7,500,000 in claimsfrom all Minnesota residents covered by the plan. If total claims exceed $7,500,000, the$7,500,000 shall be prorated among all claimants. These are the maximum claim amounts.
Coverage by the GuarantyAssociation is also subject to other substantial limitations and exclusions and requirescontinued residency in Minnesota. If your claim exceeds the Guaranty Associationslimits, you may still recover a part or all of that amount from the proceeds of theliquidation of the insolvent insurer, if any exist. Funds to pay claims may not beimmediately available. The Guaranty Association assesses insurers licensed to sell lifeand health insurance in Minnesota after the insolvency occurs. Claims are paid from thisassessment.
THE COVERAGE PROVIDED BYTHE GUARANTY ASSOCIATION IS NOT A SUBSTITUTE FOR USING CARE IN SELECTING INSURANCECOMPANIES THAT ARE WELL MANAGED AND FINANCIALLY STABLE. IN SELECTING AN INSURANCE COMPANYOR POLICY, YOU SHOULD NOT RELY ON COVERAGE BY THE GUARANTY ASSOCIATION.
THIS NOTICE IS REQUIREDBY MINNESOTA STATE LAW TO ADVISE POLICYHOLDERS OF LIFE, ANNUITY OR HEALTH INSURANCEPOLICIES OF THEIR RIGHTS IN THE EVENT THEIR INSURANCE CARRIER BECOMES FINANCIALLYINSOLVENT. THIS NOTICE IN NO WAY IMPLIES THAT THE COMPANY CURRENTLY HAS ANY TYPE OFFINANCIAL PROBLEMS. ALL LIFE, ANNUITY AND HEALTH INSURANCE POLICIES ARE REQUIRED TOPROVIDE THIS NOTICE.