Sun Critical Illness Insurance

Sun Critical illness insurance (Sun CII) provides a lump sum benefit to help clients respond to the financial impacts of the insured person being diagnosed with, and surviving one of the covered illnesses.

Sun CII protects the client, their family and their business. It can protect debt and savings plans in the short term or employment and retirement income for the long-term.

Sun CII can be customized to fit the current and future needs of clients. The product features and various optional benefits, such as Long term care conversion option, Return of premium options, Total disability waiver and Owner waiver benefits, can be used in combination to create flexible and affordable coverage to follow a client through every life stage.

Overview

Product details

Sun CII provides a lump sum benefit that helps the clients respond to a critical illness in their own way.

Sun Life Financial offers the following standalone plan designs for single lives:

  • Term 10 (T10) - Guaranteed renewable premiums every 10 years until the policy ends at the policy anniversary nearest the insured person's 75th birthday.
  • Term 75 (T75) - Guaranteed level premiums until the policy anniversary nearest the insured person's 75th birthday, at which time the policy ends.
  • Term 75 (T75) Payable for 15 years - Guaranteed level premiums for 15 policy years at which time the policy is paid up and coverage continues until the policy ends at the policy anniversary nearest the insured person's 75th birthday.
  • Lifetime (T100) - Guaranteed level premiums until the policy anniversary nearest the insured person's 100th birthday at which time the policy is paid up and coverage continues.
  • Lifetime (T100) Payable for 10 years - Guaranteed level premiums for 10 policy years at which time the policy is paid up and coverage continues.
  • Lifetime (T100) Payable for 15 years - Guaranteed level premiums for 15 policy years at which time the policy is paid up and coverage continues.

For all plans above, coverage will end when a claim is paid for a full payout illness, or when the insured person dies or when the policy is cancelled.

Base plan issue ages

Adult: 18 - 65
Child: 30 days - 17

Issue ages are based on the insured person's insurance age, or their age at their nearest birthday. For example, if your client is 48 years and 7 months, their insurance age will be 49.

Issue limits

Adult: $25,000 - $2,500,0001
Child: $25,000 - $1,000,0002

1 Amounts over $2,000,000 require a special illustration.
2 Amounts over $250,000 require a special illustration.

Premium details
Premium rate bands for all plan types:

 

Band 1

Band 2

Band 3

Band 4

Band 5

Child plans

$25,000 - $49,999

$50,000 - $99,999

$100,000 - $250,000

n/a

n/a

Adult plans

$25,000 - $49,999

$50,000 - $99,999

$100,000 - $249,999

$250,000 - $499,999

$500,000 and over

The annual policy fee for Sun CII is $45.00. All premiums must be paid in Canadian funds and drawn from an account at a Canadian financial institution.

Risk classes
  • Male non-smoker
  • Male smoker
  • Female non-smoker
  • Female smoker
Definition: Non smoker

No use of tobacco or product containing nicotine for the past 12 months.

Note: we may offer non-smoker rates for a new application where the proposed insured is an occasional large cigar smoker and had a negative cotinine test (when testing is required).

Ratings

Adult plans

The base plan and the optional Total disability waiver benefit can be rated.

The minimum rating is +25 (125%)

The maximum rating is +150 (250%)

Ratings do not apply to any premium paid for a return of premium benefit.

The Long-term care conversion option is not available on rated or modified plans and therefore can only be issued standard.

The Owner waiver benefit cannot be rated.

Child plans

Children will only be accepted if they qualify as a standard risk, otherwise they will be declined.

Plans with a +25 rating will be considered a standard risk and will not be declined.

Premium frequency - monthly or annually

Depending on the premium frequency chosen by the client, payments can be made on a monthly basis through our pre-authorized chequing (PAC) process or annually by cheque.

If PAC is chosen, monthly payments are deducted automatically from the payor's account. Monthly premiums are calculated by multiplying the annual premium (including a $45 policy fee) by 0.09 (the modal factor).

For example, consider a 45 year old client (male, non-smoker), purchasing a Sun CII T75 policy with a CII benefit amount of $100,000.

The annual premium for this policy is $1576. If the client chooses to pay monthly, the monthly premium would be $141.84 (annual premium* 0.09). Over a 1 year period, the client would pay $126.08 less in premiums if they decide to pay annually instead of  monthly.

If the client chooses to pay annually by cheque, payments can be remitted to our head office before the policy anniversary date. An annual statement is sent to the owner approximately three weeks before the policy anniversary, reminding them that their annual premium is due.

Premium payment periods

Limited premium payment periods are available on both Sun CII T75 and T100 plans, providing the client with the opportunity to fully pay for their policy premiums in a shorter period of time instead of having to pay for the life of the policy. The options are:

  • Sun CII T75: 15 year limited premium payment option, for issue ages 30 days to 59 years
  • Sun CII T100: choose either 10 year or 15 year premium payment options

Limited premium payment periods may be suited for:

  • clients who don't want the expense of paying premiums during retirement years
  • parents/guardians who want to avoid paying premiums while financing their children's post secondary education
  • clients who want to potentially pay less total premiums for their coverage over their lifetime
  • employers who want to protect their key person while limiting premium payments 

While most features of our regular pay Sun CII plans remain the same when a limited premium payment option is selected, there are 4 exceptions you should be aware of.

  • Return of premium on cancellation or expiry - ROPC/E - age 65 and the Return of premium on cancellation or expiry - ROPC/E - age 75  are not available.
  • The Advanced return of premium on cancellation or expiry - Advanced ROPC/E for child plans is not available. Instead, child plans with a limited premium payment option may select the Return of premium on cancellation or expiry  - ROPC/E age 35 for T75 and T100 plans.
  • The long-term care conversion option is not available.
  • The Total disability waiver for child plans is not available.
When premiums exceed the critical illness insurance benefit amount

In some CII policies, the premiums paid may exceed the critical illness insurance benefit amount of the policy. Here are some factors that may result in a client paying more in premium than the face amount of the plan:

  • Rated policies
  • An older insured at the time of issue
  • Limited pay policy
  • Smoker status
  • ROPC/E added to the policy

The below scenarios show what will be paid out for Sun CII policies sold after September 17, 2012

Scenario

Claim for full benefit payout

At cancellation

At death

CII without any ROP benefit

CII benefit amount

$0

$0

CII with ROPD

CII benefit amount

$0

Total returnable premium amount, even if this exceeds the CII benefit amount

CII with ROPC/E (before maturity date)1

CII benefit amount

$0

$0

CII with ROPC/E (after maturity date)1

Total returnable premium amount or the CII benefit amount, whichever is higher

Total returnable premium amount, even if this exceeds the CII benefit amount

$0

CII with both ROPD and ROPC/E
(before maturity date)1

CII benefit amount

$0

Total returnable premium amount, even if this exceeds the CII benefit amount

CII with both ROPD and ROPC/E
(after maturity date)1

Total returnable premium amount or CII benefit amount, whichever is higher

Total returnable premium amount, even if this exceeds the CII benefit amount

Total returnable premium amount, even if this exceeds the CII benefit amount

1 Maturity dates will vary depending on the type of ROPC/E selected.

Covered illnesses

This guide to critical illness definitions will help you understand the illnesses and procedures covered by the critical illness insurance policy. This is for your reference only, and does not replace the policy. Please review the policy carefully.

Illnesses eligible for full benefit payout

If the insured is diagnosed with one of these 26 critical illnesses and meets the survival period, the client will receive a lump sum payment of their coverage amount and the policy will end. We refer to this list of illnesses as Group 1.

Childhood illnesses eligible for full benefit payout

Sun CII includes coverage for 5 additional illnesses when the insured is between ages 0 and 17 years. If the child is diagnosed with and survives one of these critical illnesses, the client will receive a lump sum payment of their coverage amount and the policy will end. Coverage for these conditions ends on the child's 24th bithday.

Illnesses eligible for partial benefit payout

If the insured person is diagnosed with and survives one of these 5 illnesses, the client will receive a partial lump sum benefit. We refer to this list of illnesses as Group 2. The partial lump sum payment will be equal to 15% of the critical illness insurance benefit amount to a maximum of $50,000 per condition. The client can make one claim per partial payout illness, to a maximum of four partial payments. The policy will not end, and the client must continue to pay premiums for coverage to continue. The critical illness benefit amount will not be reduced and the coverage will be available for any future claims.

* If an insured child is diagnosed with LOIE before the policy anniversary nearest their 18th birthday, a claim may be submitted at the policy anniversary nearest their 18th birthday and no later than the policy anniversary nearest their 19th birthday.

Optional benefits
Optional benefits - Availability at a glance

 

 

Issue ages (age nearest)

T10

T75

T100

ADULT

Long-term care conversion option1

18 - 50

X

X

X

Total disability waiver

18 - 55

X

X

X

Owner waiver disability benefit

Owner is 18 - 55

X

X

X

Owner waiver death benefit

Owner is 18 - 60

X

X

X

Owner waiver death and disability benefit

Owner is 18 - 55

X

X

X

ROPD

18 - 65

X

X

X

ROPC/E - 15 years

18 - 60

 

X

 X

ROPC/E - age 652

18 - 50

X

X

 X

ROPC/E - age 752

18 - 60

 X

X

CHILD

Long-term care conversion option1

May apply to add at policy anniversary nearest the insured's 18th birthday

X

X

X

Total disability waiver2

0 - 17

X

X

X

Owner waiver disability benefit

Owner is 18-55

X

X

X

Owner waiver death benefit

Owner is 18-60

X

X

X

Owner waiver death and disability benefit

Owner is 18-55

X

X

X

ROPD

0 - 17

X

X

X

Advanced ROPC/E2

0 - 17

X

X

 X

ROPC/E - age 353

0 - 17

 

X

1 Not available on limited pay plans. Available for standard risks only.
2 Not available on plans with a '10 years' or '15 years' payment period.
3 Only available on plans with a '10 years' or '15 years' payment period.

Long-term care conversion option

Adult plans: Optional benefit for issue ages 18 - 50

Child plans: The owner may apply for this option between the policy anniversary nearest the insured person's 18th birthday and the policy anniversary nearest their 19th birthday, with evidence of insurability.
This option is available only if the insured person is a standard risk. It is not available on plans with limited premium payments (10, 15 years).

If this option is included in the policy, the owner may apply once to convert a portion or the entire critical illness insurance benefit to a long-term care insurance (LTCI) policy on the insured person without evidence of insurability.

The application to convert to long term care insurance may be made during the 5 policy years that start on the policy anniversary nearest the insured person's 60th birthday.

  • We determine the type of LTCI available for conversion.
  • We guarantee that one of the benefit period options will be an unlimited benefit period
  • The weekly benefit amount will be calculated by dividing the critical illness insurance amount being converted by 200 and rounded to the nearest dollar. Minimums may apply depending on the LTCI product that is available for conversion.
    For example: $150,000 (CII benefit amount)
    200
    = $750 (weekly LTCI benefit amount)
  • The maximum critical illness insurance amount that may be converted is $250,000 per insured person for a weekly LTCI benefit amount of $1,250.
  • Premiums for the new LTCI policy will be the attained age rates we charge for the new insurance at the time the application for the new policy is signed.
  • If a return of premium on cancellation or expiry (ROPC/E) benefit is included in the CII policy and the policy has been in effect long enough for the owner to receive the returnable premium amount if they cancelled the policy, then on conversion to LTCI, we transfer the returnable premium amount to the LTCI withdrawable premium fund.
  • If a return of premium on death (ROPD) benefit is available for LTCI at the time of conversion, it may be included in the converted policy if the CII policy included an ROPD benefit. At conversion, the ROPD returnable premium amount (after any ROPC/E benefit payment if applicable) is carried over from the CII policy to the new LTCI policy.

NOTE: If a policy includes the Long-term care conversion option (LTCCO) and the Return of premium on cancellation or expiry - age 75 (ROPC/E - age 75), the use of these benefit will be limited. The client can choose to:

  • convert the total CII benefit to long-term care insurance between ages 60 and 65; the policy  will end and no returnof premium benefit will be payable
  • convert a portion of the CII benefit to long-term care insurance between age 60 and 65 and have the remaining ROP benefit prorated to align with the remaining CII coverage. The adjusted ROP benefit will be payable at age 75, or
  • retain the full CII benefit until age 75 to gain access to the full ROP benefit but forfeit the opportunity to convert to long-term care insurance
Total disability waiver

This optional benefit maintains coverage if the insured person becomes totally disabled and is unable to earn an income. With Total disability waiver the premiums will be waived if the insured person becomes disabled.

Issue ages

  • Ages 0 - 55
  • For issue ages 0 - 17, premiums and coverage for this benefit begin at age 18.

Availability

  • Not available after issue.
  • Not available if the insured is between 0-17 years and the payment period is '10 years' or '15 years'.

Coverage period for this benefit

  • Until the policy anniversary nearest the insured person's 60th birthday.

Length of time premiums will be waived for

  • For the duration of disability of the insured person, even if disability extends past age 60, provided that the disability began before age 60.

Waiting period

  • Six months of continuous disability.

Maximum amount Sun Life will waive under this benefit

  • $50,000 annual premium across all Sun Life policies.

Exclusions

Premiums won't be waived if the total disability:

  • continues for less than six months,
  • is the result of self-inflicted injuries, or
  • is the result of committing a criminal offence.

Please refer to the policy for other  exclusions.

Making a claim

For clients to make a claim:

  • notice must be given to Sun Life during total disability and before the policy anniversary nearest the insured person's 60th birthday.
  • proof of disability must be provided within six months of notice, and then periodically as required.
  • payments under this benefit won't be made for any period earlier than one year before notice of total disability is received.

Definition of total disability An insured person must be completely unable, as a result of injury or disease, during the first two years following the date of their disability, to carry on with the essential duties of their own occupation, and thereafter to carry on any occupation. The total disability must be continuous.

  • Disabled while a student – If the insured person becomes disabled while they are a student, Sun Life considers them to be disabled if they are completely unable to attend or participate as a student in an education program or perform the duties of any occupation within their education, training or experience.
  • Disabled while unemployed – If the insured person becomes disabled while unemployed, and isn't profiting from any occupation, Sun Life considers them to be disabled if they're completely unable to perform the duties of any occupation within their education, training or experience.
Owner waiver disability benefit

This is an optional benefit that maintains coverage if the owner of the policy becomes totally disabled between the policy anniversary nearest their 18th and 60th birthdays. Premiums for the insurance amount and any optional benefits in the policy, along with the policy fee, are waived if the owner insured under this benefit becomes disabled.

Issue ages

  • Owner is 18 - 55

Availability

  • Only one owner can be covered per policy.
  • The owner must be different than the insured.
  • Not available when the policy is owned by a corporation.
  • Not available on rated policies.

Coverage period for this benefit

  • Insured ages 18 - 55: Policy anniversary nearest the owner's 60th birthday.
  • Insured ages 0 - 17: Earlier of the policy anniversary nearest the insured's 25th birthday or the policy anniversary nearest the owner's 60th birthday.

Length of time premiums will be waived for

  • For the duration of disability of the owner insured under this benefit.

Waiting period

  • Six months of continuous disability.

Maximum amount Sun Life will waive under this benefit

  • $50,000 annual premium across all Sun Life policies.

Exclusions

Premiums won't be waived if the total disability:

  • continues for less than six months,
  • is the result of self-inflicted injuries, or
  • is the result of committing a criminal offence.

Please refer to the policy for other  exclusions.

Making a claim

For clients to make a claim:

  • notice must be given to Sun Life during total disability and before the policy anniversary nearest the insured person's 60th birthday.
  • proof of disability must be provided within six months of notice, and then periodically as required, and
  • payments under this benefit won't be made for any period earlier than one year before notice of total disability is received.

If there are multiple owners on one policy, the Owner waiver benefit cannot be transferred between owners. If ownership of this policy is transferred, the benefits under this option aren't transferrable and therefore the new owner won't qualify for the Owner waiver on death benefit.

Definition of total disability – The insured person must be completely unable, as a result of injury or disease, during the first two years following the date of their disability, to carry on with the essential duties of their own occupation, and thereafter to carry on any occupation. The total disability must be continuous.

  • Disabled while a student – If the insured person becomes disabled while they are a student, Sun Life considers them to be disabled if they are completely unable to attend or participate as a student in an education program or perform the duties of any occupation within their education, training or experience.
  • Disabled while unemployed – If the insured person becomes disabled while unemployed, and isn't profiting from any occupation, Sun Life considers them to be disabled if they're completely unable to perform the duties of any occupation within their education, training or experience.

If ownership of this policy is transferred, the benefits under this option aren't transferrable and therefore the new owner won't qualify for the owner waiver on disability benefit. In cases where the owner dies while disabled and premiums are being waived, those costs resume.

Owner waiver death benefit

This is an optional benefit that maintains coverage if the owner of the policy dies between the policy anniversary nearest their 18th and 70th birthdays. Premiums will be waived if the policy owner insured under this benefit dies.

Issue ages

  • Owner is 18 - 60

Availability

  • Only one owner can be covered per policy.
  • The owner must be different than the insured.
  • Not available when the policy is owned by a corporation.
  • Not available after issue or for substandard risk.

Coverage period for this benefit

  • Insured ages 18 - 60: Policy anniversary nearest the owner's 70th birthday.
  • Insured ages 0 - 17: Earlier of the policy anniversary nearest the base insured's 25th birthday or the policy anniversary nearest the owner's 70th birthday.

Length of time premiums will be waived for

  • For as long as premiums are charged

Maximum amount Sun Life will waive under this benefit

  • $50,000 annual premium across all critical illness insurance policies issued by Sun Life.

Exclusions

Premiums won't be waived if death is the result of:

  • self-inflicted injuries, or
  • committing a criminal offence.

Please refer to the policy for other  exclusions.

If ownership of this policy is transferred, the benefits under this option aren't transferrable and therefore the new owner won't qualify for the Owner waiver on death benefit.

If there are multiple owners on one policy, the Owner waiver benefit cannot be transferred between owners.

Owner waiver death and disability benefit

This is an optional benefit that combines the coverages provided by the Owner waiver death and Owner waiver disability benefits. When both benefits are purchased, a discount is applied to the benefit premium.

The issue age for this combined benefit is 18 to 55. All other features and provisions for the separate Owner waiver death and Owner waiver disability benefits remain the same.

Return of premium on death (ROPD) - All plans

Issue ages: 30 days - 65 years

We will pay the returnable premiums (described below) to the ROPD beneficiary if the insured person dies while the policy is in effect and a critical illness benefit is not payable.

Definition:  Returnable premium amount

This definition applies to all return of premium benefits - ROPD, ROPC/E and Advanced ROPC/E.

The returnable premium amount is the sum of all premiums paid, including rated premiums, minus:

  • Any advanced return of premium amount we have paid,
  • Any premiums paid for the Long-term care conversion option, if included in the policy,
  • Any unpaid premiums plus interest.

The returnable premium amount is not reduced by any payments made for partial payout illnesses and may be greater than the CII benefit amount.  We will pay either a return of premium benefit or a CII benefit, but not both.

Return of premium on cancellation or expiry (ROPC/E)

Summary

 

Sun CII Adult Plans

Sun CII Child Plans

ROPC/E - 15 years

ROPC/E - age 65

ROPC/E - age 75

Advanced ROPC/E

ROPC/E - age 35

T10

 

X

X

X

 

T75 (lifetime pay plans)

X

X

X

X

 

T75 (10-pay or 15-pay plans)

X

 

 

 

X

T100 (lifetime pay plans)

X

X

X

X

 

T100 (10-pay or 15-pay plans)

X

 

 

 

X

Adult options:

Return of premium on cancellation or expiry - ROPC/E - 15  years
Issue ages: 18 - 60
Plan types: T75 or T100. It is also available on plans with limited premium payment periods.

If a CII benefit is not payable, we will pay the owner of this benefit the returnable premiums (described below) if they cancel the policy on or after the 15th policy anniversary as long as a CII benefit is not payable.

For T75 plans, we will pay the returnable premiums (described below) to the owner of this benefit if the policy has not been cancelled and therefore expires (ends) and a CII benefit is not payable. These policies expire on the policy anniversary nearest the insured person's 75th birthday.

This benefit has no value prior to its maturity at the 15th policy anniversary.

Return of premium on cancellation or expiry - ROPC/E - age 65
Issue ages: 18 - 50
Plan types: T10, T75 or T100. It is not available on plans with limited premium payment periods.

If a CII benefit is not payable, we will pay the owner of this benefit the returnable premiums (described below) if they cancel the policy on or after the policy anniversary nearest the insured person's 65th birthday.

For T10 and T75 plans, we will pay the returnable premiums (described below) to the owner of this benefit if the policy has not been cancelled and therefore expires (ends) and a CII benefit is not payable. These policies expire on the policy anniversary nearest the insured person's 75th birthday.

This benefit has no value prior to its maturity at age 65.

Return of premium on cancellation or expiry - ROPC/E - age 75
Issue ages: 18 - 60
Plan types: T10, T75 or T100. It is not available on plans with limited premium payment periods.

If a CII benefit is not payable, we will pay the owner of this benefit the returnable premiums (described below) if they cancel the policy on or after the policy anniversary nearest the insured person's 75th birthday.

For T10 and T75 plans, we will pay the returnable premiums (described below) to the owner of this benefit if the policy has expires (ends) and a CII benefit is not payable. These policies expire on the policy anniversary nearest the insured person's 75th birthday.

This benefit has no value prior to its maturity at age 75.

Child options:

Advanced return of premium on cancellation or expiry - Advanced ROPC/E
Issue ages: 30 days - 17 years
Plan types: T10, T75 or T100. It is not available on plans with limited premium payment periods.

If a CII benefit is not payable, we will automatically pay the owner 75% of the returnable premiums (described below) on the 15th policy anniversary or the policy anniversary nearest the insured person's 25th birthday, whichever is later, and coverage continues.

If a CII benefit is not payable, we will pay the owner the remainder of the returnable premiums if they cancel the policy on or after the 30th policy anniversary or the policy anniversary nearest the insured person's 40th birthday, whichever is later. This benefit has no value prior to these maturity dates.

For T10 and T75 plans, we will pay the returnable premiums (described below) to the owner if the policy has not been cancelled and therefore expires (ends) and a CII benefit is not payable. These policies expire on the policy anniversary nearest the insured person's 75th  birthday.

Return of premium on cancellation or expiry - ROPC/E - age 35
Issue ages: 30 days - 17 years
Plan types: T75 or T100 plans with limited premium payment payment periods.

If a CII benefit is not payable, we will pay the owner the returnable premiums (described below) if they cancel the policy on or after the policy anniversary nearest the insured person's 35th birthday.

For T75 plans with a 15-year limited payment period, we will pay the returnable premiums (described below) to the owner if the policy has not been cancelled and therefore expires (ends) and a CII benefit is not payable. These policies expire on the policy anniversary nearest the insured person's 75th birthday.

This benefit has no value prior to its maturity at age 35.
Note: ROPD and ROPC/E cannot be added after issue except in certain cases of internal replacement.

Definition:  Returnable premium amount

This definition applies to all return of premium benefits - ROPD, ROPC/E and Advanced ROPC/E.

The returnable premium amount is the sum of all premiums paid, including rated premiums, minus:

  • Any advanced return of premium amount we have paid,
  • Any premiums paid for the Long-term care conversion option, if included in the policy,
  • Any unpaid premiums plus interest.

The returnable premium amount is not reduced by any payments made for partial payout illnesses and may be greater than the CII benefit amount. We will pay either a return of premium benefit or a CII benefit, but not both.

Child critical illness insurance
Secure a child's future

The benefit from critical illness insurance when a child is seriously ill can help a family cope financially at a very stressful time. But more than that, choosing to put critical illness insurance in place when a child is young can mean affordable, guaranteed coverage for life. Sun CII has unique benefits designed just for kids that can contribute financially to their futures even if they don't suffer an illness in childhood. A Sun CII policy can be a great gift for parents or grandparents to give a child or young adult.

Key features

A smart plan that grows with the child that can be converted to LTCI coverage later.

The optional Advanced return of premium on cancellation or expiry benefit gives the client the opportunity to get 75% of premiums back and keep their coverage.

The optional Owner waiver benefits provide an additional coverage for parents, ensuring that premiums are waived if the owner dies or becomes disabled.

The child gets their own policy and does not need to re-apply as an adult.

Tax and the critical illness insurance benefit

There are no specific tax laws governing critical illness insurance (CII) policies.

Based on current tax laws and guidance from the Canada Revenue Agency, we expect that:

  • Premiums paid for a CII policy owned by an individual or individuals will not be tax deductible, nor can they be used towards a claim for the medical expense tax credit.
  • Any cash benefits paid from a CII policy will be tax free when the policy owner and benefit payee are the same.

If the policy is owned by a corporation, different tax laws may apply to some circumstances:

  • Premiums paid for a CII policy owned by a corporation will not be tax deductible, except in strictly limited circumstances that are beyond the scope of this guide.
  • Any cash benefits paid from a CII policy will be tax free when the policy owner and benefit payee are the same.
  • Since CII is not life insurance, no part of the CII benefit that a corporation receives can be credited to the corporation's capital dividend account.
  • If the corporation transfers ownership of a CII policy to one of its shareholders or employees, there may be tax consequences for the recipient.

This is only a general summary. A tax professional should be consulted for more information.

Education and training

Sample policy pages

The following policy wording is provided solely for your convenience and reference. It is incomplete and reflects only some of the general provisions that may be found in some of our insurance policies. We periodically make changes to policy wording and therefore this incomplete sample may not duplicate the wording of any actual issued policy. It is not to be construed or interpreted in any manner as a contract or an offer to contract. The actual policy issued to any given client will govern that relationship.

Policy ownership

Policy ownership rules

Critical illness insurance can be owned by an individual or a corporation. In most cases, the owner, the insured, and the payee will be the same person.

But there are some special circumstances where the owner, insured, or payee differ.

  1. Different owner than insured
    • If the owner of the policy dies and the policy is still in force, the ownership of the policy goes to the estate (depending on the directions in the deceased's will, the estate has authority to transfer ownership).
    • You should urge the client to include specific instructions in their will about transferring ownership of their policy when they die.
  2. Juvenile policies (where owner is different than the insured)
    • If the owner of the policy dies and the policy is still in force, the ownership of the policy goes to the estate (depending on the directions in the deceased's will, the estate has authority to transfer ownership).
    • You should urge the client to include specific instructions in their will about transferring ownership of their policy when they die.
  3. Corporate ownership with corporate benefit payee
    • The critical illness benefit should be received tax free if the corporation is the payee.
    • Since critical illness insurance is accident and sickness insurance, the benefit cannot flow through the capital dividend account to the company's shareholders.
    • For detailed tax information, clients should consult their tax advisor.
  4. Corporate ownership, not part of a “grouped plan”, with the insured or another individual as the payee
    • The income tax implications of this type of arrangement are complex and depend on the type of CI policy, the presence or absence of ROP benefits, and the applicable provincial law (which varies considerably). We recommend that you contact a tax expert for more information.
  5. Shared ownership works when 2 or more parties agree to share a single asset. This way each party only pays for benefits they want.
    • Shared ownership using critical illness insurance allows a business to cover the risk of losing a key employees or to fund a buyout under a buy-sell agreement. The strategy also allows an employee to potentially collect the return of total premiums.
What needs to be done to change ownership of an in-force critical illness insurance policy to shared ownership?

The following forms must be completed:

  • E82 - Transfer of ownership
    and clear notes on the form about who will own what portion of the policy (CII benefit, return of premium on death benefit, return of premium on cancellation or expiry benefit)
    • a benefit payee
    • a return of premium on death benefit payee, if applicable, and
    • a return of premium on cancellation or expiry payee, if applicable
  • Premium payment arrangements by PAC
    • Usually with a shared ownership arrangement, there is a shared PAC arrangement. We require a new signed Pre-authorized chequing (PAC) authorization (E75)
      form for each PAC payor with their banking information and direction as to what premiums for the applicable coverage will be paid.

Plan changes, conversions, internal replacements

Plan changes

The following plan changes are allowed:

1. Changing from a smoker to a non smoker
If the insured person is under age 17 at the time of issue:
  • Smoker rates will be charged beginning the policy anniversary nearest the insured person’s 18th birthday. The owner may apply for non-smoker rates on or after the policy anniversary following the insured person’s 17th birthday.
  • If the request for non-smoker rates is made between the policy anniversary nearest the insured person’s 17th birthday and the policy anniversary nearest their 19th birthday, form Juvenile declaration of smoking status - E3331
    is required. This form is sent to the client with the policyholder statement.
  • If the request for non-smoker rates is made on or after the policy anniversary nearest the insured person’s 19th birthday, form Declaration of smoking status (for changes on existing policies only) - E18
    is required. Faxes will be accepted. A urinalysis must also be submitted if the insurance amount of the policy is $100,000 or greater.
If the insured person is age 17 or older at time of issue:
  • Form Declaration of smoking status (for changes on existing policies only) - E18
    is required. Faxes will be accepted. A urinalysis must also be submitted if the insurance amount of the policy is $100,000 or greater.
  • If we approve the request, the insured person will be classified as a non-smoker. The premiums will be determined according to the rate that was in effect for a non-smoker with the same sex and age of the insured person on the policy date.
2. Decreasing the benefit amount -
We determine the minimum amount that must remain in effect.
  • If Additional Group 1 covered critical illnesses are included in the policy, when the critical illness insurance benefit is decreased, the Additional Group 1 covered critical illnesses benefit will also be decreased.
  • If a long-term care conversion option is included in the policy, when the critical illness insurance benefit is decreased, the long-term care conversion option will also be decreased unless the decrease does not reduce the base benefit below $250,000 (the maximum that may be converted to long term care insurance).
If a return of premium on cancellation or expiry benefit is included in the policy, when the critical illness insurance benefit is decreased, the amount we pay on cancellation or expiry is reduced as follows:
  • Decrease occurs before the policy has been in effect long enough for the owner to receive the returnable premium amount if they cancelled the policy
  • The return of premium benefit amount we pay on cancellation or expiry is reduced. The amount we pay on cancellation or expiry is calculated based on the premiums that would have been paid if the critical illness benefit amount was the lowered amount from the policy date. Premiums paid based on the difference between the original benefit amount and the lowered benefit amount are forfeited.
  • The return of premium on death benefit amount and any automatic return of premium amount we paid, if applicable to the policy, are not affected.
  • Decrease occurs after the policy has been in effect long enough for the owner to receive the returnable premium amount if they cancelled the policy
  • The return of premium benefit amount we pay on cancellation or expiry is reduced. The amount we pay on cancellation or expiry is calculated based on the premiums that would have been paid if the critical illness benefit amount was the lowered amount from the policy date. However, premiums paid are not forfeited. We transfer the premiums paid for the difference between the original critical illness insurance benefit amount and the lowered critical illness insurance benefit amount to the withdrawable premium fund. We will not transfer the portion of this difference we paid for an automatic return of premium, if applicable to the policy.
  • The return of premium on death benefit amount is reduced by the premiums transferred to the withdrawable premium fund.
3. Decreasing the automatic increase benefit (AIB) from 50% to 25% (pre-Series 2009) -
4. Terminating an optional benefit -
use Application for change to an existing critical illness policy - E328

If the request is to terminate the Additional Group 1 covered critical illnesses benefit and the policy also includes the long-term care conversion option, the long-term care conversion option will also be terminated.
5. Adding the long-term care conversion option - child plans -
  • A request to add the long-term care conversion option to a child plan prior to series 2012 may be made between the policy anniversary following the insured person's 18th birthday and the policy anniversary following their 19th birthday.
  • For series 2012 and 2017, the benefit can be added between the policy anniversary nearest age 18 and the policy anniversary nearest age 19.
  • Evidence of insurability is required.
  • If we approve the request, the long-term care conversion option will be added to the policy.
  • Premiums will be calculated based on the attained age of the insured person.
Conversions and internal replacements
Conversions

A Sun CII T10 policy may be converted to a Sun CII T75 policy (and T100 for policies issued after January 26, 2009) up to the policy anniversary following or nearest the insured person's 65th birthday. This is a contractual right. Evidence is not required.

  • All conversions must meet current product minimums and are subject to the terms and conditions of the policy being converted and our administrative rules.
  • We do not pay any ROPC/E when a policy is converted to another CII policy
  • A client can choose to convert only a partial amount of their existing policy to a new policy and keep the existing amount in force as long as the new policy meets minimums and the existing decreased policy still meets minimums.
  • We determine the type of policy available for conversion and the terms and conditions of that policy. The new policy is issued on the same basis as the original policy (i.e. smoker or special class basis). If benefits or features are applied for on the new policy that did not exist on the original policy, evidence may be required.
  • Premiums for the new policy will be the attained age rates we charge for the new insurance at the time of application for the new policy.
See full details on Sun T10 conversion rules
. Links to Sun CII T10 conversion at a glance PDF
Administrative details for a conversion

Note: Advisors in Quebec must submit a Replacement disclosure form for partial conversions when the portion not being converted is being cancelled/terminated.

  • Conversions and partial conversions don't need evidence of insurability if:
    • the amount at risk is not increased,
    • there is no change in the number of covered illnesses, and
    • there is no change in risk class (smoker/non-smoker).
  • The policy must be in force and not in a lapsed condition (premiums outstanding no more than 40 days) to be converted.
  • A request to 'round up' a face amount requires full underwriting evidence including age and amount requirements.
  • The original policy cannot have a bankruptcy notice on it. Until the bankruptcy is released the policy cannot be converted.
Internal replacements

This is the description we use to describe when we allow a plan change outside of the contractual right. Evidence must always be submitted for internal replacements. A benefit of the internal replacement is that it may allow an accumulated ROPC/E benefit to be paid out. Because this is not a contractual right, we may change these rules from time to time.

  • If an ROPC/E benefit is included in the policy and the policy has been in effect long enough for the owner to receive a returnable premium amount if they cancel the policy, the applicable return of premium amount will be paid to the owner. Otherwise, it is forfeited.
  • Any return of premium on death (ROPD) value from the existing policy will be forfeited.
  • If the existing policy does not have an ROPC/E or ROPD benefit, the owner may apply to have one added to the new policy, if available at the time of internal replacement, based on attained age.
  • Advisors in Quebec must submit a disclosure form for all internal replacements.
Determining if plan is eligible for a conversion or an internal replacement

Below is a grid to help you determine if a plan is eligible for a conversion or an internal replacement.

FROM EXISTING POLICY TO NEW POLICY
Plan Name Sun CII T10 Sun CII T75 Sun CII T100 (Lifetime)
Sun Critical Illness Term 10 (pre 2009) Internal replacement Conversion Internal replacement
Sun Critical Illness Term 10 (series 2009, 2012 and 2017) Internal replacement Conversion Conversion
Sun Critical Illness Term 75 Internal replacement
Sun Critical Illness T100 (Lifetime) Internal replacement

Note:

  • All conversions must be made on or before the policy anniversary following (or nearest for series 2012 and 2017) the insured's 65th birthday
  • The policy wording should be reviewed whenever possible. The policy wording determines the terms and conditions of the owner's contractual rights and will always be used to make a final decision on any type of transaction.
Determining when the 90-day exclusion period for cancer and benign brain tumour begins
Scenario Start date for the 90-day exclusion period

Internal replacements and conversions with no increase in benefit amount and no additional covered critical illness condition(s)

For example:

  • Converting a T10 26 illness plan (+ 6 partials) with $100,000 benefit amount to a T75 26 illness plan (+6 partials) with $100,000 benefit
  • Replacing a T75 26 illness plan (+ 6 partials) with $100,000 benefit amount to a T100 26 illness plan (+6 partials) with $100,000 benefit
Effective date of original policy. The 90-day exclusion period will not restart.

Any time there is an increase in the CII benefit amount on the replaced policy*

For example:

  • Replacing a T10 26 illness plan (+ 6 partials) with $100,000 benefit amount to a T75 26 illness plan (+6 partials) with $150,000 benefit

* Please note that this applies only to specific requests for increasing a policy's benefit amount and does not apply to increases resulting from the automatic increase benefit.

Effective date of the increase. The 90-day exclusion period will restart for the increased benefit amount.

For example:

  • In the examples to the left, the 90-day exclusion period would only restart for the $50,000 increase.

Any time there is an increase in the eligible Group 2 illnesses (partial payout) amount on the replaced policy

For example:

  • Replacing a T10 24 illness plan (+ 4 partials @ 10%) with $100,000 benefit amount to a T75 26 illness plan (+6 partials @ 15%) with $100,000 benefit
  • Replacing a T75 24 illness plan (+ 4 partials @ 10%) with $100,000 benefit amount to a T100 26 illness plan (+6 partials @ 15%) with $150,000 benefit

Effective date of the increase. The 90-day exclusion period will restart for the increased Group 2 illnesses (partial payout) amount.

For example:

  • In the example to the left, the 90-day exclusion period would only restart for the 5% increase on the partial payout amount.
  • In the example to the left, the 90-day exclusion period would only restart for the 5% increase on the partial payout amount and the $50,000 increase.
Any time an additional covered critical illness condition is added to the replaced policy and that condition has a 90-day exclusion period Effective date the covered critical illness condition is added. The 90-day exclusion period will restart for the new covered critical illness condition with the 90-day exclusion period.
Reinstatements Effective date of reinstatement
Replacing an external company’s CII policy with a Sun CII policy Effective date of the new Sun CII policy
Determining when the 1-year exclusion period for Parkinson's disease and specified atypical parkinsonian disorders starts

Scenario

Start date for the 1 year exclusion period for Parkinson's disease and specified atypical parkinsonian disorders

Converting or replacing a pre series 2017 Sun CII policy with a series 2017 Sun CII policy

The 1-year exclusion period does not apply

Converting or replacing a series 2017 Sun CII policy with a series 2017 Sun CII policy

Effective date of the original policy - The 1-year exclusion period will not restart

Replacing an external company's CII policy with  a Sun CII policy

Effective date of the new Sun CII policy

Claims

How to make a claim
Step 1: Completion of the claim forms

When an insured person has an eligible illness as defined in the critical illness policy, a claim should be submitted immediately1. A claim must be sent to us while the policy is in effect and within 1 year of the date the insured person has a covered critical illness.

Please contact the Individual Claims Services department directly for the appropriate critical illness claim forms. You can call Individual Claims Services toll free by dialing 1 800-800-4SUN (1 800 800-4786).

The person making the claim must complete the form and give us the information we need to assess the claim.

The form and information must be sent to this address:

  • Individual Claims Services
    Sun Life Assurance Company of Canada
    227 King St S, PO BOX 1601 Stn Waterloo
    Waterloo ON N2J 4C5

Physicians may charge a fee to complete certain forms. The person making the claim is responsible for any fees for this information.

1Child plans: The first date a claim for Loss of independent existence may be made is the policy anniversary nearest the insured person's 18th birthday. If the insured person would have qualified for a Loss of independent existence before this date, you may still make a claim. However, you must submit the claim to us no later than the policy anniversary nearest the insured person's 19th birthday.

Note: No benefit is payable if the illness is cancer or benign brain tumour where signs or symptoms began in the first 90 days following the later of:

  • the date the application for the policy was signed,
  • the policy date,
  • the underwriting decision date if included in the policy, or
  • the most recent date this policy was put back into effect (reinstatement),
If this is the case, the client still has a responsibility to report the cancer or benign brain tumor. Form Responsibility to report cancer or benign brain tumour - E277

will need to be completed. You can print the form here or call the underwriting department toll free by dialing 1 800-800-4SUN (1 800 800-4786) for a copy of this form.

If this information is not provided within 6 months of the date of diagnosis, we have the right to deny any claim for cancer or benign brain tumor or any critical illness caused by any cancer or benign brain tumor or their treatment.

This form E277 will need to be forwarded to:

  • Sun Life Assurance Company of Canada
    Document Centre, Underwriting and Issue
    227 King St S
    PO Box 1601 Station Waterloo
    Waterloo ON N2J 4C5

Note: No benefit will be payable for Parkinson's disease or specified atypical parkinsonian disorders if, within 1 year following the later of:

  • the date the application for this policy was signed
  • the underwriting decision date, but only if shown under the heading, Amendments to this policy
  • the policy date, shown on the Policy summary, or
  • the most recent date this policy was put back into effect (reinstatement)

the insured person has any of the following:

  • signs, symptoms or investigations that lead to a diagnosis of Parkinson's disease, a specified atypical parkinsonian disorder or any other type of parkinsonism, regardless of when the diagnosis is made, or
  • a diagnosis of Parkinson's disease, a specified atypical parkinsonian disorder or any other type of parkinsonism.
If this is the case, the client still has a responsibility to notify us about Parkinson's disease or specified atypical parkinsonian disorders.  Form Responsibility to report Parkinson's Disease and Specified Atypical Parkinsonian Disorders
will need to be completed. You can print the form here or call the underwriting department toll free by dialing 1 800-800-4SUN (1 800 800-4786) for a copy of this form.

This form 4860-E will need to be forwarded to:

  • Sun Life Assurance Company of Canada
    Document Centre, Underwriting and Issue
    227 King St S
    PO Box 1601 Station Waterloo
    Waterloo ON N2J 4C5
    Sun Code 300B25

Step 2: Collection of medical information

Once we receive the forms, we will assess the insured person's eligibility for benefits. Written requests for additional medical information may be sent directly to the physician by Individual Claims Services as we may require additional medical information to assess the claim. If the policy was issued within the last five years, be sure to advise the client that these additional reports will be requested by Individual Claims Services to complete the assessment of the claim.

Step 3: Making the claims decision

Once we receive all information we require, Individual Claims Services assesses the information and makes its decision. We communicate the decision to the advisor. We send payment cheques to the advisor for delivery. If we deny a claim, we send a letter explaining the decision to the owner. If the owner and insured person are not the same person, we send two decline letters. We send one letter to the insured person fully explaining our decision. We send a separate letter to the owner confirming our denial of the claim but no medical information is given to the owner for privacy reasons.

To contact the Individual Claims Services department, you have the following options:

Critical illness occurring or diagnosed while in Canada

The person making a claim for a covered critical illness that occurs or is diagnosed in Canada must give us all information we need to assess the claim, including:

  • proof that they have the right to receive a critical illness insurance benefit
  • proof that the insured person suffered a critical illness while this policy was in effect
  • a written diagnosis which describes the conditions and the cause of the illness, and
  • the complete medical records of the insured person.
The written diagnosis must:
  • include appropriate information to assess the illness, and
  • be prepared and signed by a specialist licensed and practicing in Canada or by another physician acceptable to us.

A specialist is a licensed medical practitioner who has been trained in the specific area of medicine relevant to the critical illness for which a benefit is being claimed, and who has been certified by a specialty examining board. In the absence or unavailability of a specialist, a condition may be diagnosed by another qualified medical practitioner as approved by us.

Please refer to the sample policy pages for more details.

Critical illness occurring or diagnosed while outside of Canada

A claim can be made for a critical illness insurance benefit if a covered critical illness develops or is diagnosed while outside of Canada. The person making the claim will be required to provide us with all of the information described above. If the medical records of the insured person are not in French or English, the original records must be provided along with a translation2 of the records in either French or English. The person making the claim is responsible for any cost associated with providing the translation.

2The translator may not be the owner, any person insured under this policy, anyone entitled to make a claim under this policy, or any relative or business associate of these people.
Based on the medical records we require, we must be satisfied that the same diagnosis would have been made if the illness developed in Canada.

Tips for speeding up the claims process

Ensure the person making the claim completes all the information and fields on the claims forms and signs and dates the form.

The most common missing information is:

  • Signatures: if the insured person is incapable of signing the claim form (incapacitated) ensure the CI claim form is signed by the Power of Attorney and submit the Power of Attorney papers with the signed claim form.
  • Physician contact information: the full address, including postal code and phone number, of all doctors the insured person has consulted. Include all names of regular attending physicians and specialists.

If the claim is approved, the CII benefit is issued once the eligibility period has been satisfied subject to the definition outlined in the policy.