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Disability Income Insurance Customer Information Brochure and Policy Document • Disability Income Insurance and/or • Business Expenses Insurance You should read this brochure carefully, especially the key features sections. These contain the important information you should know about the policy. Issue Date: 1st March 2002 EXPIRY DATE: 28th February 2003 Traditional Values ~ Innovative Ideas ABN 20 000 017 194

Transcript of Disability Income Insurance - Riskinforiskinfo.com.au/resource-centre/files/2008/09/... ·...

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Disability IncomeInsurance

Customer Information Brochureand

Policy Document

• Disability Income Insurance and/or• Business Expenses Insurance

You should read this brochure carefully, especially the key features sections.

These contain the important informationyou should know about the policy.

Issue Date: 1st March 2002 EXPIRY DATE: 28th February 2003

Traditional Values ~ Innovative Ideas

ABN 20 000 017 194

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• Customer Information Brochure Disabil i ty Income Insurance

This Key Feature Statement follows guidelines setdown by the Australian Securities and InvestmentsCommission. It will help you to:

• decide whether this product will meet your needs;and

• compare this product with others you may beconsidering

� THE PRODUCT

Disability Income Insurance provides financial protection inthe event of Total Disability caused by illness or injury.It allows you to insure up to 75% of your Earned Incomesubject to the following limits:

• 75% of the first $300,000 of Earned Income; and

• 50% of Earned Income in excess of $300,000.

The maximum initial sum insured under this policy is$240,000 per annum.

Earned Income is defined at paragraph 2.4 of the PolicyDocument (see page 13).

Total Disability means that due to suffering an illness orinjury the Life Insured:

(i) Is unable to perform at least one important incomeproducing duty of his/her regular occupation; and

(ii) is not currently working in any gainful occupation,and

(iii) is under the care and following the advice of a medical practitioner.

Guaranteed Renewal of CoverLumley Life guarantees to offer renewal of the Policy eachyear irrespective of how many claims are made andregardless of the changes in health or occupation.

Guaranteed Non-CancellableProvided you have complied with the Duty of Disclosureand pay premiums when due, Lumley Life cannot cancelyour Policy.This guarantee applies regardless of any changein your health or personal circumstances.

� THE PREMIUMSPremiums depend on the type of insurance cover selected(i.e. Platinum or Gold), the benefit period, age, sex,occupation, pastimes, smoking habits and state of health.Premiums are payable yearly in advance (or more frequentlyby instalments as agreed with Lumley Life).There arestepped and level premium options. Stepped premiums arebased on the then current age next birthday of the LifeInsured.This means that on each renewal of cover, thepremium will increase as the age of the Life Insuredincreases.

Level premiums are based on the age of the Life Insured atthe time that the Policy commences and are guaranteeduntil the expiry of the Policy.

Both stepped and level premium options will attract annualincreases automatically to reflect increases in the AnnualBenefit based on the rate of inflation.The Policyowner maydecline these automatic increases.

Where a premium is not paid when it is due, then theprotection provided by the Policy will lapse after a statutoryperiod. Lumley Life will provide written notice before thePolicy lapses.

No individual policy can be singled out for an increase inpremium rates because of an adverse change in the healthor circumstances of the Life Insured.Lumley Life may increase the stepped premium rates afterproviding three months notice in writing.Lumley Life guarantees not to increase level premium ratesapplying to this Policy during its currency.Lumley Life reserves the right to alter the frequencyloadings which apply to premiums paid more frequentlythan yearly and to increase premium rates as a result ofGovernment charges.Three months written notificationwill be provided before the new charges prevail.

(NB: Tables of premium rates for each type of benefit are availableon request.)

This is not a savings plan.The primary purpose of thispolicy is to provide a benefit in the event of disability.If you terminate this policy after the cooling offperiod, you will not receive any money back.

KEY FEATURE STATEMENTDISABILITY INCOME INSURANCE

IMPORTANT NOTICE

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� THE BENEFITS

The benefits provide a regular income calculated on a dailybasis and paid monthly in arrears. Benefits start to accruefrom the end of the Waiting Period selected unless theAccident Benefit Option has been selected.All benefits willbe paid in Australian currency.

Disability arising from the following events is not coveredunder the Policy:

• intentionally self-inflicted act or injury;

• uncomplicated pregnancy;

• war or acts of war whether declared or not; and

• any other specific event or cause agreed betweenLumley Life and the Policyowner. (These specific eventswill be noted in the Policy by endorsement.)

� Guaranteed BenefitsThe following benefits are included under the DisabilityIncome Policy. Please refer to the Policy Document at theback of this booklet for the full description of each benefit.

Benefit Page Paragraph

• Total Disability Benefit 14 3.1

• Partial Disability Benefit 15 3.3

• Family Member Support Benefit 15 3.4

• Nursing Care Benefit 15 3.5

• Rehabilitation Benefit 16 3.6

• Recovery Support Benefit 16 3.7

• Waiver of Premium 16 3.8

• Death Benefit 16 3.9

• Recurring Claim Benefit 16 3.10

• Waiver of Waiting Period 16 3.11

• Unemployment Benefit 16 3.13

• Specific Injury Benefit 16 3.14

• Elective Surgery Benefit 17 3.15

� Benefits Which Are OptionalFor the payment of an additional premium the followingbenefits may be added to the Guaranteed Benefits above.Please refer to the Policy Document at the back of thisbooklet for a full description of each option.

Benefit Page

• Increasing Claim Option 17• Accident Benefit Option 17• Medical Catastrophe Benefit 18

� IMMEDIATE COVER IN THE EVENTOF AN ACCIDENT (See page 5)

Provided the premium has been received and theApplication is not replacing an existing Lumley Life Policy,the cover applies immediately in respect of Total Disabilitycaused by an accident for a period of sixty days for thelesser of the Benefit applied for, or $10,000 per month (onany one life).

Cover does not apply if Total Disability arises from:

• intentionally self-inflicted act or injury;

• any medical or physical condition of the LifeInsured existing at the Commencement Date;

• engaging in any sport, pastime or occupation for whichLumley Life would not offer cover at standard rates; and

• war, or acts of war whether declared or not.

� WHAT ARE THE CHARGES?

All the charges of the Policy are fully described inthis section. Lumley Life undertakes not to applyany other charges without your specific consent.

All fees and charges associated with the issue andmanagement of the Policy are included in the premiumsyou pay.There are no additional fees.

However, where premiums are paid more frequently thanyearly a frequency loading will be applied to offset the costsof the additional transactions.

Frequency % Loading

Monthly 8%

Half Yearly 6%

Any increase to these loadings will be advised to thePolicyowner in writing at least three months prior to theincrease taking place.

� TAXATION

� PremiumsPremiums for Disability Income Insurance are generallydeductible when calculating assessable income.

� BenefitsBenefits payable under Disability Income Insurance aregenerally treated as income and therefore would beassessable for income tax.

You should consult your taxation or financial adviser forinformation relevant to your own personal situation.

� “COOLING OFF” PERIOD

If for any reason you are dissatisfied with the Policy once itis issued, or if you feel it does not meet your needs, youmay return it to Lumley Life within twenty-eight days fromthe day you receive your Policy Information Statement andSchedule and receive a full refund of premium(s) promptly.Your request should be in writing.

� ADDITIONAL INFORMATION ABOUT YOUR POLICY BENEFITS

You can effect different types of cover at varying cost,namely: Platinum and Gold.Benefits and options may differ under the types of coverselected. Please refer to your Policy Schedule and to thePolicy Document to check how each one applies to you.

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This Key Feature Statement follows guidelines setdown by the Australian Securities and InvestmentsCommission. It will help you to:

• decide whether this product will meet your needs;and

• compare this product with others you may beconsidering

� THE PRODUCT

Business Expenses Insurance provides financial protection inthe event of Total Disability caused by illness or injury.TotalDisability is defined as the inability of the Life Insured toperform at least one important income producing duty ofhis or her regular occupation, the Life Insured not workingin any gainful occupation and being under the care andfollowing the advice of a medical practitioner.

• Guaranteed Renewal of CoverLumley Life guarantees to offer renewal of the Policyeach year irrespective of how many claims are made andregardless of the changes in health or occupation.

• Guaranteed Non-CancellableProvided you have complied with the Duty ofDisclosure and pay premiums when due, Lumley Lifecannot cancel your Policy.This guarantee appliesregardless of any change in your health or personalcircumstances.

� THE PREMIUMS

Premiums depend on the type of insurance cover selected(i.e. Platinum or Gold), age, sex, occupation, pastimes,smoking habits and state of health.Premiums are payable yearly in advance (or morefrequently by instalments as agreed with Lumley Life).The premiums are based on the then current age nextbirthday of the Life Insured.This means that on eachrenewal of cover, the premium will increase as the age ofthe Life Insured increases.

The premiums will attract annual increases automatically toreflect increases in the Annual Benefit based on the rate ofinflation.The Policyowner may decline these automaticincreases.

Where a premium is not paid when it is due, then theprotection provided by the Policy will lapse after a statutoryperiod. Lumley Life will provide written notice before thePolicy lapses.

No one individual policy can be singled out for an increasein premium rates because of an adverse change in thehealth or circumstances of the Life Insured.Lumley Life may increase the premium rates after providingthree months notice in writing.Lumley Life reserves the right to alter the frequencyloadings which apply to premiums paid more frequentlythan yearly and to increase premium rates as a result ofGovernment charges.Three months written notificationwill be provided before the new charges prevail.

(NB: Tables of premium rates for each type of benefit are availableon request.)

� THE BENEFITS

The benefits provide a regular payment calculated on adaily basis and paid monthly in arrears. Benefits start toaccrue from the end of the Waiting Period selected unlessthe Accident Benefit Option has been selected.All benefitswill be paid in Australian currency.

Disability arising from the following events is not coveredunder the Policy:

• intentionally self-inflicted act or injury;

• uncomplicated pregnancy;

• war or acts of war whether declared or not; and

• any other specific event or cause agreed betweenLumley Life and the Policyowner. (These specific eventswill be noted in the Policy by endorsement.)

KEY FEATURE STATEMENTBUSINESS EXPENSES INSURANCE

This is not a savings plan.The primary purpose of thispolicy is to provide a benefit in the event of disability.If you terminate this policy after the cooling offperiod, you will not receive any money back.

IMPORTANT NOTICE

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� Guaranteed BenefitsThe following benefits are included under the BusinessExpenses Policy. Please refer to the Policy Document at theback of this booklet for a full description of each benefit.

Benefit Page Paragraph

• Total Disability Benefit 23 3.1• Partial Disability Benefit 23 3.2• Waiver of Premium 24 3.3• Recurring Claim Benefit 24 3.4• Waiver of Waiting Period 24 3.5• Elective Surgery Benefit 24 3.6

� Benefits Which Are OptionalFor the payment of an additional premium the followingbenefits may be added to the Guaranteed Benefits above.Please refer to the Policy Document at the back of thisbooklet for a full description of each option.

Benefit Page

• Accident Benefit Option 24• Leasepay Benefit Option 24

� IMMEDIATE COVER IN THE EVENTOF AN ACCIDENT (See page 5)

Provided the premium has been received and theApplication is not replacing an existing Lumley Life Policy,the cover applies immediately in respect of Total Disabilitycaused by an accident for a period of sixty days for thelesser of the Benefit applied for, or $10,000 per month (onany one life).

Cover does not apply if Total Disability arises from:

• intentionally self-inflicted act or injury;

• any medical or physical condition of the LifeInsured existing at the Commencement Date;

• engaging in any sport, pastime or occupation forwhich Lumley Life would not offer cover at standardrates; or

• war or acts of war whether declared or not.

� WHAT ARE THE CHARGES?

All the charges of the Policy are fully described inthis section. Lumley Life undertakes not to applyany other charges without your specific consent.

All fees and charges associated with the issue andmanagement of the Policy are included in the premiumsyou pay.There are no additional fees.

However, where premiums are paid more frequently thanyearly a frequency loading will be applied to offset the costsof the additional transactions.

Frequency % Loading

Monthly 8%

Half Yearly 6%

Any increases to these loadings will be advised to thePolicyowner in writing at least three months prior to theincrease taking place.

� TAXATION

� PremiumsPremiums for Business Expenses are generally taxdeductible.

� BenefitsBenefits payable are generally treated as income andtherefore would be assessable for income tax.

This information is based on the continuance of presentlaws and their interpretation.

You should consult your taxation or financial adviser forinformation relevant to your own personal situation.

� “COOLING OFF” PERIOD

If for any reason you are dissatisfied with the Policy once itis issued, or if you feel it does not meet your needs, youmay return it to Lumley Life within twenty-eight days fromthe day you receive your Policy Information Statement andSchedule and receive a full refund of premium(s) promptly.Your request should be in writing.

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ACCIDENTAL TOTAL DISABILITY

INTERIM CERTIFICATE OF INSURANCE

No Cost Accident Cover on the following terms is hereby given by Lumley Life to the person from whom it receives a fully completed application and personal statement for Disability Income Insurance or Business Expenses Insurance (the Application) and payment of the first premium or instalment premium (the Premium).The first premium or instalment premium is deemed to have been paid ifLumley Life has received an authorisation to collect the first premium from a financial institution.

� The Cover

• An accidental event which causes Total Disability of the Life Insured prior to age 60,

• The Benefit applied for, or $10,000 per month, for a period of six months, whichever is the lesser amount. (This is the maximum cover applicable on any one Life Insured irrespective of the number of applications received.)

� Duration of the Cover

• Commences when Lumley Life receives the Application and the Premium (the Commencement Date)

• Terminates

• When Lumley Life accepts or declines the Application or cancels the cover,

• If the Life Insured dies or leaves Australia,

• 60 days from the Commencement Date

whichever happens first.

� Exclusions

Cover will not apply if Total Disability is caused by or results from:

• Intentionally self-inflicted act or injury,

• Any medical or physical condition of the Life Insured existing at the Commencement Date,

• Engaging in any sport, pastime or occupation for which Lumley Life would not offer cover atstandard rates,

• War, or acts of war whether declared or not.

Lumley Life Limited, Lumley House309 Kent Street, Sydney NSW 2000

Telephone (02) 9248 1255 Facsimile (02) 9248 1266Freecall 1800 221 142

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� CLAIMS PHILOSOPHY

It is the desire of Lumley Life to work in partnership withyou and the Life Insured during a period of claim byoffering Recovery Support Benefits augmented byrehabilitation support facilities and programs whereverpossible. Regular contact including home visits (withconsent) allows you and the Life Insured input to thecontinued management of the claim.This allows yourquestions to be answered and keeps us fully informed ofissues arising that may impact on the Life Insured’s abilityto recover from injury or illness. Communication is theessence of this philosophy.

� ENQUIRIES & COMPLAINTS

Lumley Life will always seek to resolve complaints quicklyand efficiently and with the fairest possible result. If youhave any queries, please telephone Lumley Life on 1800221 142 or write to the Complaints Officer, Lumley LifeLtd, 309 Kent Street, Sydney, NSW, 2000. Every effort willbe made to assist you. However if you are not satisfied youmay then refer a complaint to the Manager of the FinancialIndustry Complaints Service Limited, PO Box 579, CollinsStreet West, Melbourne 8007 or Telephone (03) 9629 7050.(Toll free on 1800 335 405, outside the MelbourneMetropolitan area.) (Facsimile (03) 9621 2291.)

The Financial Industry Complaints Service Limited is anindependent and impartial company sponsored by theindustry and has been set up to advise and assistpolicyholders to resolve complaints with their life insurancecompany. Before seeking to use the Service, apolicyholder must try to resolve the complaintdirectly.

Lumley Life will always seek to upgrade existing policieswith future developments and improvements to benefits.When improvements to benefits are made to new policieswithout increasing the premium rates then thoseimprovements will be offered to existing policyholderswherever possible. Should a situation arise where apolicyholder is disadvantaged in any way as a result of animprovement, then the previous conditions will prevail.

COMMITMENT TO UP-GRADE POLICIES

GENERAL INFORMATION

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PRIVACY STATEMENT

At Lumley Life Limited* your right to privacy has alwaysbeen important to us.This document explains why wecollect your personal information and how we may use ordisclose that information.

We collect information about you to provide our insuranceproducts and services to you.We usually collect personalinformation such as name, age, contact details, paymentdetails, occupation, family and medical history, andemployment information.The full details of the types ofpersonal information we collect can be found in thequestions we ask and/or in the forms we ask you tocomplete.

In some situations we may collect your personalinformation from a third party such as your insurancerepresentative, medical practitioner or health professional,accountant or employer.We will only do so with yourconsent.

If you do not provide information sought by Lumley fromtime to time, it may affect Lumley’s ability to provide youwith and administer our products or services.You arerequired by insurance law to disclose all relevantinformation to us when you apply for insurance. Pleaserefer to your application form for further details of thisduty, and the consequences of not complying with thisduty.

We use your personal information to manage andadminister all products and services we provide to you,including to assess and process your application forinsurance, process and investigate claims made against yourinsurance, provide you with information about otherproducts or services that may be of benefit to you; and toensure our internal business operations are runningsmoothly (which may include fulfilling regulatory and legalrequirements and confidential system testing).

Depending on the type of product or service we provideto you, we may need to disclose your information tocertain third parties. If we do this we require these partiesto protect your information in the same way we do.Thetypes of organisations we may need to disclose yourpersonal information to (as necessary only) include:

• external service providers that provide financial, legal,administrative or other services in connection with theoperation of our business (for example our reinsurers,auditors, claims investigators, compliance consultants ormailing/archiving services for document mailingservices and secure storage);

• medical practitioners or health professionals for thepurpose of assessing your application or claim;

• government agencies (as part of our regulatory orstatutory obligations);

• where we collect your information from someone elseor another entity (such as a superannuation fund oremployer), then we may disclose your personalinformation to that person or entity; and

• your insurance representative with your consent.

Your health or medical information will only be disclosed(as necessary only) to service providers or authorisedpersonnel who are directly involved in the assessment oradministration of your application or claim.

Your personal information will not be used or disclosed forany purpose without your consent, except where requiredby law.

By completing an application form or any other form, youconsent to Lumley collecting, using, disclosing andhandling your personal information as set out in thisdocument.

You can request access to the personal information wehold about you. You may ask us at any time to correct thisinformation where you believe it is incorrect or out ofdate.

There will be no fee for requesting access to yourinformation, however we may charge you the reasonablecost of processing your request.To access personalinformation we hold about you, or to obtain moreinformation about your rights or our Privacy Policy, pleasecontact Lumley’s Privacy Officer at:

Lumley Life LimitedLevel 3309 Kent StreetSydney NSW 2000Phone (02) 9248 1255 orFax (02) 9248 1101

* Includes Security and General Nominees Pty Limited as trustee forLumley Life Limited Personal Superannuation Fund.

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Disability IncomeInsurance

Policy Document

• Disability Income Insurance and/or

• Business Expenses Insurance

This policy Document sets out the Terms and Conditions

of the contract between the Policyowner and Lumley Life.

Following acceptance of the application and the payment

of the first premium you will be issued with additional

documentation which will evidence that insurance cover exists.

This additional documentation should be placed

with this booklet.

Important Note

ABN 20 000 017 194

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INTRODUCTION

THE DOCUMENTOnce insurance cover commences, this Policy Documentbecomes your evidence of a contract of Life Insurancebetween you and Lumley Life Ltd. It is an importantdocument and should be kept in a safe place.Please read the document carefully including the PolicyInformation Statement and Schedule which details the typeand amount of cover and the premium payable in the firstyear.The document is divided into separate sections detailing theconditions and definitions applying to different types ofinsurance cover. Some or all of these conditions may apply toyou. Please check your Policy Information Statement andSchedule to identify them.

TWENTY-EIGHT DAY

“COOLING OFF” PERIODWe want you to be completely satisfied with your Policy. Ifyou are not satisfied, then return it to Lumley Life forcancellation within twenty-eight days from the day youreceive the Policy Information Statement and Schedule andyour premium will be promptly refunded in full.

COMMITMENT TO UP-GRADE POLICIESLumley Life will always seek to upgrade existing policies withfuture developments and improvements to benefits.Whenimprovements to benefits are made to new policies withoutincreasing the premium rates then those improvements will beoffered to existing policyholders wherever possible. Should asituation arise where a policyholder is disadvantaged in any wayas a result of an improvement, then the previous conditions willprevail.

DUTY OF DISCLOSUREBefore you enter into a contract of life insurance with aninsurer, you have a duty under the Insurance Contracts Act1984, to disclose to the insurer every matter that you know, orcould reasonably be expected to know, is relevant to the insurer’sdecision whether to accept the risk of insurance and, if so, onwhat terms.You have the same duty to disclose those matters tothe insurer before you extend, vary or reinstate a contract of lifeinsurance.Your duty, however, does not require disclosure of amatter:• that diminishes the risk to be taken by the insurer;• that is of common knowledge;• that your insurer knows or, in the ordinary course of his

business, ought to know;• disclosure of which is waived by the insurer.

NON-DISCLOSUREIf you fail to comply with your duty of disclosure and theinsurer would not have entered into the contract on any terms ifthe failure had not occurred, the insurer may avoid the contractwithin three years of entering into it. If your non-disclosure isfraudulent, the insurer may avoid the contract at any time.Aninsurer who is entitled to avoid a contract of life insurance maywithin three years of entering into it, elect not to avoid it, but toreduce the sum that you have been insured for in accordancewith a formula that takes into account the premium that wouldhave been payable if you had disclosed all relevant matters to theinsurer.

P O L I C Y D O C U M E N TCONTENTS PAGE

Introduction 8

COOLING OFF PERIOD................................ 8

COMMITMENT TO UP-GRADE ........................ 8

DUTY OF DISCLOSURE .............................. 8

General Provisions & Conditions 9

INTERPRETATION ...................................... 9

COVERAGE ............................................ 9

SPECIAL PROVISIONS ................................ 9

AUSTRALIAN CURRENCY.............................. 9

SURRENDER VALUE .................................. 9

NON-PARTICIPATING POLICY.......................... 9

LEGAL INTERPRETATION .............................. 9

PREMIUM PAYMENTS ................................ 9

PREMIUM RATE GUARANTEE ........................ 9

AUTOMATIC INFLATION PROOFING ..................10

GUARANTEED RENEWAL OF COVER ................10

GUARANTEED NON CANCELLABLE ..................10

MIS-STATEMENT OF AGE ............................10

SMOKER/NON-SMOKER RATES ....................10

EXPIRY OF COVER ....................................10

CLAIMS ................................................10

Disability Income Insurance ........................12

DEFINITIONS ..........................................12

BENEFITS ..............................................13

OPTIONAL BENEFITS ..................................16

MEDICAL CATASTROPHE DEFINITIONS ..............17

Business Expenses Insurance ......................21

DEFINITIONS ..........................................21

BENEFITS ..............................................22

OPTIONAL BENEFITS ..................................23

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INTERPRETATIONHeadings have been included to assist you in reading thedocument but do not change the interpretation of theactual wordings of the document.Any wordings indicatingthe singular can also be taken to mean the plural and viceversa.

We, us and ours means Lumley Life Limited. You and Yoursrefers to the Policyowner who may also be the Life Insured.

COVERAGEThe Policy provides insurance cover 24 hours a day worldwide.

SPECIAL PROVISIONSWhere special provisions are shown in the PolicyInformation Statement and Schedule or are attached to thedocument they should be read carefully and understoodbecause they alter the standard provisions elsewhere in thedocument.

AUSTRALIAN CURRENCYAll benefits payable under the Policy will be paid inAustralian currency.

SURRENDER VALUEPremiums paid are used to cover the risks and expensesincurred in managing the Policy and consequently there isno surrender or cash value.

NON PARTICIPATING POLICYThe Policy is issued under Lumley Life’s No 1 StatutoryFund and is a non participating policy.This means it doesnot participate in any surplus arising within the StatutoryFund.

LEGAL INTERPRETATIONThe Policy will be interpreted under the Laws of the Stateof New South Wales.

PREMIUM PAYMENTSThe premiums shown in the Policy Information Statementand Schedule are due and payable in advance on eachanniversary of the Policy commencement date (theRenewal Date).A period of grace beyond the anniversarydate will be allowed for payment, without interest, of eachpremium and during this period the Policy shall remain inforce. In the event that premiums have not been paid allcover shall cease at 4.00 o’clock in the afternoon of thetwentieth business day after written notice has been givenby Lumley Life.

With the agreement of Lumley Life, premiums may be paidby instalment subject to a frequency of payment loadingand a method of payment acceptable to Lumley Life.

Disability Income Insurance offers stepped and levelpremium options. Business Expenses Insurance offersstepped premiums.

Stepped premiums are based on the then current age nextbirthday of the Life Insured.This means that on eachrenewal of cover, the premium will increase as the age ofthe Life Insured increases.

Level premiums are based on the age of the Life Insured atthe time that the Policy commences and are guaranteeduntil the expiry of the Policy.

PREMIUM RATE GUARANTEENo one individual policy can be singled out for an increasein premium rates because of an adverse change in the healthor circumstances of the Life Insured.

• Stepped Premium RatesLumley Life reserves the right to increase stepped premiumrates after providing three months notice in writing.

• Level Premium RatesLumley Life guarantees not to increase level premium ratesapplying to this Policy during its currency.

GENERAL PROVISIONS AND CONDITIONS

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AUTOMATIC INFLATION PROOFINGUnless otherwise stated in the Policy Information Statementand Schedule, Lumley Life will, on each Renewal Date,increase the annual benefit at an annual rate determined byLumley Life based on the Consumer Price Index publishedby the Australian Statistician from time to time (or suchother index as Lumley Life considers appropriate) providedthat the Life Insured has not attained the age of sixty fiveyears.

The Policyowner shall have the option of not effecting anyincrease provided such option is exercised in writing.

GUARANTEED RENEWAL OF COVERLumley Life guarantees to offer renewal of the cover eachyear up to the expiry of the Policy.

GUARANTEED NON CANCELLABLEProvided you have complied with the Duty of Disclosureand pay the premiums when due, Lumley Life cannotcancel your Policy.This guarantee applies regardless of anychange in the Life Insured’s health or personalcircumstances.

MIS-STATEMENT OF AGEIn the event that the age of the Life Insured has been mis-stated then the annual benefit, or the premium payable, shallbe adjusted, and the Policy varied, in accordance with theapplicable legislative provisions.

SMOKER/NON-SMOKER RATESIf the Policy has been issued using non-smoker premiumrates then those premium rates have been based on the LifeInsured’s statement that he or she has not smoked anysubstance in the twelve months prior to thecommencement date. If this statement is found to be untruethen the annual benefit will be adjusted having regard tothe premium rates that would have been payable had fullinformation been known.

EXPIRY OF COVERCover will terminate on the occurrence of the earliest ofthe following:

• Attaining the age stated in the Policy InformationStatement and Schedule;

• The date the Life Insured retires from gainful occupation(with no intention of returning to gainful occupation)

other than as a result of Total Disability or PartialDisability;

• When the Policy is lapsed due to non-payment of apremium;

• Upon the death of the Life Insured; and

• At the end of the Benefit Period stated in the PolicyInformation Statement and Schedule.

RENEWABLE PERIOD

Disability Income

Business Expenses

CLAIMS

Notification of ClaimLumley Life must be notified immediately in writing if youbecome Disabled.

Lodgement of Claim FormClaim forms must be completed and lodged within thirtydays of the commencement of any period of Disability.

Extension of TimeIf it can be shown that it was not possible to meet the timerequirement for notification of claim then it must beprovided as soon as possible. Lumley Life will not considerany claim submitted more than one year after the Disabilitybegan, except in the case of certified absence of legalcapacity.

Claim InformationIn the event of a claim the policyowner agrees at theirexpense to provide to Lumley Life:

a) any medical report from a Medical Practitioner or anyother person who has been or is treating the life insured;and

b) copies of personal and business tax returns, assessmentnotices, financial statements and any other financialevidence reasonably required to confirm or calculate theLife Insured’s Earned Income, Prior Earnings orearnings; and

Benefit Period

2, 5 years, to age 65

To age 70 years

To age 60 years

Renewal Period

To age 65

To age 70

To age 60

Benefit Period

1 year

Renewal Period

To age 65 or 70

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c) any other information required by Lumley Life.

Payment of a benefit is subject to proof of the Policyowner’sentitlement in such a manner as Lumley Life mayreasonably request. Lumley Life has the right to requirefrom time to time proof of the Policyowner’s continuingentitlement to any benefit and to reduce or terminatepayment if the Policyowner is no longer entitled to thebenefit under this Policy.

You agree with Lumley Life to assist in the ongoingmanagement of a claim.This may include participation inrecovery and rehabilitation support programmes wheneverpossible and include home visits (with your consent).

Medical InformationThe Life Insured must undergo at Lumley Life’s expenseany medical examination or examinations which LumleyLife may require.

Proof of AgeNo benefit will be payable under this Policy without proofof age of the Life Insured being submitted in the form of abirth certificate or such documentation as Lumley Life shallrequire.

If the age has been understated, the Monthly Benefits underthe Policy will be those that the premium you paid wouldhave purchased at the correct age.

� Medical Advice and TreatmentNo benefit is payable unless the Life Insured seeks adviceand undertakes treatment from a medical practitioner, andcontinues to do so during the currency of any period ofDisability. Lumley Life may reduce or decline to paybenefits during any period or periods of Disability whichare caused by failure to seek and follow medical advice ortreatment. Lumley Life will waive this provision if in theopinion of the medical practitioner, continued or futuretreatment would be of no benefit.

� ExclusionsLumley Life will not pay benefits under this Policy for anyillness or injury in connection with:

• intentionally self-inflicted act or injury;

• uncomplicated pregnancy;

• war or acts of war whether declared or not; or

• any other specific event or cause agreed betweenLumley Life and the Policyowner. (These specific eventswill be noted in the Policy by endorsement.)

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1 INTRODUCTIONDisability Income Insurance provides for the payment ofa benefit in the form of a monthly income in the eventthat the Life Insured suffers Total Disability.

Benefits start to accrue from the end of the WaitingPeriod selected and benefit entitlements are payablemonthly in arrears.

2 DEFINITIONS2.1 Interpretations

We, us and ours means Lumley Life Limited.You and Yours refers to the Policyowner, who mayalso be the Life Insured.

2.2 Annual BenefitIs the amount shown in the Policy InformationStatement and Schedule plus any indexationincreases and less any deductions which mayapply in accordance with the policy. It is paid atthe rate of 1/365th of the Benefit for every dayof Total Disability commencing on the first dayafter the waiting period.

2.3 Benefit PeriodIs the maximum period of time for whichbenefits will be paid as specified in the PolicyInformation Statement and Schedule.

2.4 Earned IncomeFor a self employed person, a working director orpartner in a partnership, Earned Income means:

• total annual income earned in the conduct ofthe business or profession due to the LifeInsured’s personal exertion less their share ofbusiness expenses necessarily incurred in theconduct of the business or profession.

From any other source of employment,Earned Income means:

• annual salary, fees, commissions, bonuses andany other income considered part of the LifeInsured’s remuneration package, earned byhim/her for services performed.

In either case, income does not include: anyincome which is not generated by the LifeInsured’s personal or vocational activities. Incomepaid from other disability income policies,retirement plans, lump sum disability payments,rental income and investment income are some

examples of income we would not consider aspart of the total income.

2.5 Loss or DisabilityIs Total (or Partial) Disability for which a benefitis payable under this Policy.

2.6 Medical PractitionerMeans a medical practitioner legally qualified andregistered to practice in Australia and is a personother than the Life Insured or the Policyowner ortheir relatives, business partners, shareholders oremployees.Where the practice is outsideAustralia, the medical practitioner must havequalifications equivalent to Australian standards.

2.7 Partial Disability and Partially Disabled(see also Condition 3.3)

Means that due to suffering an illness or injurythe Life Insured:

(i) suffers a partial loss of Earned Income;

(ii) cannot work full time, or is unable toperform at least one important incomeproducing duty of his/her regularoccupation; and

(iii) is under the care and following the advice of a medical practitioner.

Benefits do not begin to accrue until the expiryof the Waiting Period (unless the Waiting Periodis waived under the Accident Benefit option).

IMPORTANT NOTES:

PLATINUM COVER

Where the Life Insured is aged less than 55 years,there is no requirement for the Life Insured tosuffer a period of Total Disability beforequalifying as Partially Disabled.

Where the Life Insured is aged 55 years or more,Partial Disability must follow a period of TotalDisability of at least seven continuous daysduration.

Where the Life Insured is aged 60 years or more,Partial Disability must follow a period of TotalDisability of at least ten continuous daysduration.

GOLD COVER

Partial Disability must follow a period of TotalDisability of at least fourteen continuous daysduration irrespective of the Life Insured’s age.

DISABILITY INCOME INSURANCE

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2.8 Pre Existing ConditionsAs long as the Policyowner and Life Insured havefully satisfied the “Duty of Disclosure”, which isdescribed in the application, the Policyowner willbe paid benefits for any claim arising from a pre-existing sickness or disability provided it has notbeen specifically excluded in the specialprovisions of this Policy.

2.9 Receipt of Other Monies

Workers Compensation or Social Securitypayments in respect of lost income will be takeninto account when calculating the benefit.(However, any pain or suffering component ofsuch a payment will be ignored for thesepurposes.) This will reduce the Annual Benefit sothat the Annual Benefit together with theaggregate of the annual equivalent of those OtherMonies shall not exceed seventy-five (75)% ofPrior Earnings.

In the situation where the occupation of the LifeInsured is rated as Class One Professional, none ofthese payments will be taken into account.

Where any of the amounts mentioned above arepaid in a lump sum, Lumley Life shall treat themas if they had been paid in the form of anequivalent annual amount calculated by ourAppointed Actuary by reference to thecircumstances in which the payments were made.

When the Life Insured elects not to receive anypayments due of Other Monies, Lumley Life willnot reduce any benefits payable under the Policy.

If benefits are reduced in accordance with thisprovision, a proportionate refund of premiumspaid will be made.The refund will be calculatedby multiplying the percentage reduction inmonthly benefit by the average monthly premiumduring the period of Disablement and by thenumber of months for which the reductionapplies.

Insured lump sum total and permanentdisablement benefits, lump sum ‘Trauma Diagnosisstyle’ or any superannuation benefits will notcause the monthly benefit to be reduced.

2.10 Total Disability and Totally DisabledMeans that due to suffering an illness or injurythe Life Insured:

(i) is unable to perform at least one importantincome producing duty of his/her regularoccupation; and

(ii) is not currently working in any gainfuloccupation; and

(iii) is under the care and following the advice of a medical practitioner.

Benefits do not begin to accrue until the expiryof the Waiting Period (unless the Waiting Periodis waived under the Accident Benefit Option).

2.11 Waiting PeriodIs the number of days shown on the PolicyInformation Statement and Schedule startingfrom the day you are Totally Disabled. It may vary subject to:

• Return to work during the Waiting Period(condition 2.12);

• Partial Disability (condition 2.7);

• Recurring Claim Benefit (condition 3.10);

• Waiver of Waiting Period (condition 3.11);

• Specific Injury Benefit (condition 3.14); and

• Accident Benefit Option (condition 4.2).

2.12 Return to Work During the Waiting PeriodIf, during the Waiting Period, the Life Insuredreturns to gainful employment for:

• 5 days or less for a Waiting Period of less than60 days; or

• 10 days or less for a Waiting Period of greaterthan 59 days

then those days for which the Life Insured wasgainfully employed will be added to the WaitingPeriod.

If, during the Waiting Period, the Life Insuredreturned to gainful employment for more than:

• 5 days for a Waiting Period of less than 60days; or

• 10 days for a Waiting Period greater than 59days

then the Waiting Period will recommence.

3 BENEFITS3.1 Total Disability Benefit

When the Life Insured has a continuous periodof Total Disability for longer than the WaitingPeriod, the Annual Benefit shall be payable inaccordance with the Policy.

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3.2 Benefits Expiring Age 70Where the Benefit Period is stated in the PolicyInformation Statement and Schedule as “TOAGE 70” and if the period of Total Disabilitycommences prior to the Life Insured’s 65thbirthday, then the full benefit will be payable untilthe expiry date. If the period of the TotalDisability commences after the 65th birthdaythen the monthly benefit is reduced according tothe following table:

3.3 Partial Disability BenefitIf the Life Insured suffers Partial Disability priorto his/her 65th birthday Lumley Life will paybenefits for the Benefit Period, or for six monthsif the Life Insured suffers Partial Disability afterhis/her 65th birthday.

The amount of the Partial Disability Benefitequals: A–B x the Annual Benefit

A

‘A’ is Prior Earnings and

‘B’ is earnings for the month the benefit ispayable.

Prior Earnings means the Life Insured’s highestaverage monthly earnings (based on thedefinition of Earned Income) for any twelveconsecutive months in the five years immediatelypreceding the Risk Commencement Date or inthe five years immediately preceding any periodof Total Disability, whichever is the greater, andwill automatically be increased by the IndexationFactor during any period of Loss.

Note: If there is a delay between earnings beinggenerated and being received then with theagreement of the Policyowner ‘B’ will becalculated taking this into account. One threehundred and sixty fifth of the Partial DisabilityAnnual Benefit shall be payable for each day ofPartial Disability.

If you are Partially Disabled, and no work isavailable to you, Lumley Life will substitute for‘B’ an amount calculated by Lumley Life as yourcapacity to earn.

If the percentage loss of Earned Income is 75%or more, Lumley Life will deem the loss to be100%.

Your Prior Earnings will be increased by theIndexation Factor.The increase will occur aftereach consecutive twelve months during whichyou remain Partially Disabled.

3.4 Family Member Support BenefitThis benefit is payable when all of the followingcircumstances apply, namely:

• the definition of Total Disability is satisfied;

• the Life Insured is confined to bed;

• a Medical Practitioner certifies that full timecare is required; and

• the income of one immediate family memberceases as a result of that person providing care.

The Family Member Support Benefit is equal toan additional one half of the Annual Benefit butwill not exceed the maximum payment of $3,000per month (with an overall maximum of thesalary foregone by the immediate familymember) and will be paid for a maximum ofthree months.This Benefit will be paid once onlyin respect of the Life Insured and any amountspayable under the Nursing Care Benefit will bededucted when calculating the Benefit amount.

*NOTE: Immediate family member is defined asspouse, de facto spouse, son or daughter.

3.5 Nursing Care BenefitThis Benefit will be paid at the rate of one threehundred and sixty fifth of the Annual benefit foreach day that nursing care is required if on theadvice of a registered medical practitioner, theLife Insured must:

• be under the care of a registered nurse visitingat least once a day;

• remain in or near a bed for a substantial partof each day; and

• for at least 72 hours.

A maximum benefit applies of one quarter (1/4)of the Annual Benefit. If the Life Insured qualifiesfor this benefit it is back paid to the first hour ofTotal Disability.This benefit is only payableduring the Waiting Period or up to 90 days,whichever is the lesser.

Age Next Percentage of Annual Benefit

66 80%

67 60%

68 40%

69 20%

70 Nil

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3.6 Rehabilitation BenefitWhere the Life Insured is receiving TotalDisability Benefits for longer than the WaitingPeriod and takes part in a rehabilitation programapproved by Lumley Life for the purpose of re-training or re-education in order to seek a newvocation, then an additional 50% of the monthlybenefit will be paid to the Policyowner.Thisadditional benefit is payable for a maximumperiod of twelve months and only while the LifeInsured remains Totally Disabled and fullyparticipates in the program. Payments commenceafter the expiration of the Waiting Period and arepaid monthly in arrears.

The Rehabilitation Benefit is paid INADDITION to the Annual Benefit.

3.7 Recovery Support BenefitWhilst the Life Insured is receiving benefits underthis Policy, and participating in a rehabilitationprogram with our written approval, we will paythe costs of the rehabilitation program.

The costs can include (but are not limited to)wheelchairs, artificial limbs, prosthetic devices,travelling and education expenses, and house andcare modifications.The amount payable will notexceed one half (1/2) of the Annual Benefit.

The Recovery Support Benefit is paid INADDITION to the Annual Benefit.

3.8 Waiver of PremiumIf the Life Insured suffers Total Disability forlonger than the Waiting Period, Lumley Life willrefund premiums paid in that period and willcontinue to waive premiums until the LifeInsured is no longer disabled. Premium paymentswill recommence from the date disablementceases.

3.9 Death BenefitIf the Life Insured dies whilst receiving benefitsunder this Policy, then Lumley Life will pay anadditional amount equal to one quarter (1/4) ofthe Annual Benefit to his/her legal personalrepresentative.

3.10 Recurring Claim BenefitA new Waiting Period will not apply to any claimprovided that the claim resulted from a relapse or recurrence of the same or related illness or injury that caused Total or Partial Disability, within twelve months of returning to work.

The Life Insured has the option of applying the Waiting Period.

3.11 Waiver of Waiting PeriodLumley Life will waive the Waiting Period on anew claim resulting from an illness or injuryunrelated to a previous claim provided that:

• a Waiting Period applied to the previous claim(or was waived under the Accident BenefitOption) and

• the new claim occurs within twelve months ofreturning to work from the previous claimand

• the new claim was for a continuous period of30 days or more.

Benefits will then accrue from the first day of thenew claim.

The Life Insured has the option of applying theWaiting Period.

3.12 Concurrent DisabilityWhen the Life Insured is disabled at any time as aresult of separate and distinct injuries orsicknesses, the benefit will be calculated accordingto the cause which maximises the claim.

3.13 Unemployment BenefitWhere the Life Insured suffers Total Disabilitywithin the first twelve months followingunemployment or maternity leave, the benefitswill be paid under the normal Terms andConditions of the Policy.

If the Life Insured has been on maternity leave orunemployed for twelve months or moreimmediately before suffering Total Disabilityhe/she will only be considered to be totallydisabled if, solely because of sickness or injuryhe/she is:

• unable to perform any occupation for whichhe/she is reasonably suited by education,training or experience;

• not working in any gainful occupation; and

• under the care and following the advice of amedical practitioner.

Long service or sabbatical leave is not consideredas unemployment.

3.14 Specific Injury BenefitUpon the occurrence of a Specific Injury, theBenefit will be paid for the Payment Periodshown in the following table, whether or not theLife Insured is working.

• The Specific Injury Benefit starts to accrue when the specific injury is suffered and is paid monthly in advance; and

• will only stop when the Payment Period expires.

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However, if the Benefit Period or the Policy itselfexpires before the end of the Payment Period, theSpecific Injury Benefit will cease on that earlierdate.

If more than one listed injury is suffered duringthe Payment Period, the injury that provides thegreatest benefit will be paid.The Specific InjuryBenefit is paid instead of any other disabilitybenefit. If the Life Insured is still disabled at theend of the payment period, any further disabilitypayments will be determined in accordance withthe terms of this policy.

Where:

Fracture means any fracture resulting from anaccident requiring fixation, immobilisation orplaster cast treatment of the affected area within48 hours of the accident.

Loss means the total and permanent:

i. loss of the use of the hand from the wrist orthe foot from the ankle joint;

ii. loss of the use of the arm from the elbow orleg from the knee joint;

iii. complete severance of the thumb and indexfinger from the first phalangeal joint;

or

iv. irrecoverable total loss of an eye or sight inthe eye.

3.15 Elective Surgery BenefitIn the situation where Total Disability arises as aresult of cosmetic or other elective surgery or as aresult of surgery to transplant a body organ intothe body of another person, then the TotalDisability Benefit is payable.(Provided always that such surgery took placemore than six months from the commencementdate of the policy or its reinstatement).

4 OPTIONAL BENEFITSThe following optional benefits apply if they appear inthe Policy Information Statement and Schedule andthe appropriate additional premium has been paid.

4.1 Increasing Claim OptionWhilst receiving Total or Partial DisabilityBenefits under this Policy, all Monthly Benefitsshall be increased at three monthly intervalsfollowing the date of Total Disability by anindexation factor divided by four.The indexationfactor will be based on the Consumer PriceIndex published by the Australian Statisticianfrom time to time (or such other index asLumley Life considers appropriate).

Increases to the Monthly Benefit under thisadditional option will cease when the first of thefollowing occurs:

(i) the date your Disability ceases;

(ii) the end of the Benefit Period; or

(iii) the date your Policy terminates.

From the date Disability ceases, or the BenefitPeriod ends, the Annual Benefit will be the lastpayment of the Monthly Benefit prior to thedate Disability ceases multiplied by 12.

4.2 Accident Benefit OptionIf you become Totally Disabled due to anaccident Lumley Life will waive the WaitingPeriod provided you are Totally Disabled for atleast seventy two (72) hours immediatelyfollowing the accident.

One three hundred and sixty fifth of the AnnualBenefit will then become payable to you for eachday of Total Disability from the first hour ofTotal Disability until the expiration of theWaiting Period.

Specific Injury Means The Payment Period

Paralysis (Diplegia, Hemiplegia,Paraplegia, Quadriplegia) 60 months

Loss of:(i) Both feet or both hands

or sight of both eyes; 24 months

(ii) Any combination of two:a hand, a foot,sight in one eye; 24 months

(iii) One leg or arm; 18 months

(iv) One foot or one handor sight in one eye 12 months

(v) Thumb and index fingerof the same hand 6 months

Fracture of:(i) Leg above the knee (femur), pelvis 90 days

(ii) Leg below the knee (tibia or fibula) 60 days

(iii) Ankle, heel 60 days

(iv) Kneecap 60 days

(v) Vertebrae 60 days

(vi) Upper arm (humerus),shoulder bone (scapula), elbow 60 days

(vii) Wrist 45 days

(viii) Forearm (radius or ulna),collarbone (clavicle) 30 days

(ix) Skull, jaw 30 days

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4.3 Medical Catastrophe BenefitIf the Life Insured suffers a Medical Catastrophe,he/she will be paid an additional benefit equal toone quarter of the Annual Benefit, provided theMedical Catastrophe is diagnosed by a MedicalPractitioner and is supported by appropriateclinical, histological and laboratory evidence. Ifdeath occurs within three months of the MedicalCatastrophe, Lumley Life will pay the greater of:

• the balance of the Medical CatastropheBenefit; and

• the Death Benefit described under theheading ‘Benefits’.

The Medical Catastrophe Benefit is paid inadvance as a lump sum and in addition to anyother disability benefit under the policy.

Medical Catastrophe Conditions

• Alzheimer’s Disease

• Angioplasty

• Aplastic Anaemia

• Benign Brain Tumor

• Cancer

• Cardiomyopathy

• Cerebrovascular Accident (Stroke)

• Chronic Liver Failure

• Chronic Lung Failure

• Chronic Renal Failure (Kidney Failure)

• Coma

• Dementia

• Encephalitis

• Loss of Independent Existence

• Loss of Speech

• Major Abdominal Aortic Surgery

• Major Head Trauma

• Major Organ Transplant

• Motor Neurone Disease

• Multiple Sclerosis

• Muscular Dystrophy

• Myocardial Infarction (Heart Attack)

• Occupationally Acquired HIV

• Open Chest Surgery to correct:

� Coronary artery

� Valve

• Paralysis:

� Diplegia

� Hemiplegia

� Paraplegia

� Quadriplegia

� Tetraplegia

• Parkinson’s Disease

• Primary Pulmonary Hypertension

• Severe Burns

• Total Blindness

• Total Deafness

Full definitions of these terms are as follows:

Alzheimer’s DiseaseMeans the diagnosis of Alzheimer’s Disease by aconsultant neurologist confirming dementia dueto failure of the brain function with significantcognitive impairment for which no otherrecognisable cause has been identified. Significantcognitive impairment is defined as a deteriorationor loss of intellectual capacity as measured byclinical evidence and standardised testing, andwhich results in a requirement for continualsupervision to protect you or others.

AngioplastyMeans the undergoing of angioplasty, insertion ofa stent or keyhole cardiac surgery to the coronaryarteries that is considered necessary by acardiologist to correct or treat coronary arterydisease.

Aplastic AnaemiaMeans bone marrow failure which results inanaemia, neutropenia and thrombocytopeniarequiring treatment, with at least one of thefollowing:

• bone marrow transfusions

• marrow stimulating agents

• immunosuppressive agents

• bone marrow transplantation

Benign Brain TumourMeans a life threatening non-cancerous tumourin the brain which gives rise to characteristicsymptoms of intracranial pressure such aspapilledema, mental symptoms, seizures andsensory impairement resulting in at least 25%permanent impairment of whole person function.The presence of the underlying tumour must beconfirmed by imaging studies such as CT scan orMRI (Magnetic Resonance Imaging). Excludedare acoustic neuromas cysts, granulomas andmalformations in or of the arteries or veins of thebrain, haematomas and tumours on the pituitarygland or spine.

CancerMeans the presence of one or more malignanttumours, including leukaemia, malignant bone

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marrow disorders and malignant lymphomas.Thefollowing tumours are excluded:

• tumours showing the malignant changes of“carcinoma-in-situ” (including cervicaldysplasia, CIN1, CIN2 and CIN3) unlessleading to radical surgery or tumours whichare histologically described as premalignant;

• malignant melanomas of Clark Level 1 or 2depth of invasion which are less than 1.5mmin thickness, as determined by histologicalexamination;

• all hyperkeratoses or basal cell carcinomas ofthe skin; and

• all squamous cell carcinomas of the skin unlessthey have spread to other organs.

Cardiomyopathy

Means impaired ventricular function of variableaetiology, resulting in physical impairments to thedegree of at least class 3 of the New York HeartAssociation Classification of cardiac impairment.

Cardiomyopathy directly related to alcohol abuseis excluded.

Cerebrovascular Accident (Stroke)

Means any cerebrovascular incident producingneurological sequelae, including infarction ofbrain tissue, intracranial or subarachnoidhaemorrhage, embolisation from an intracranialsource, but excluding transient ischaemic attacks,migraine and reversible ischaemic neurologicaldeficits.

Chronic Liver Failure

Means end stage liver failure.The diagnosis mustbe based on the following criteria:

• a rapidly decreasing liver size;

• necrosis involving entire lobules;

• rapid degeneration of liver function tests; and

• deepening jaundice.

Liver disease secondary to alcohol usage orintravenous drug use is excluded.

Chronic Lung Failure

Means end stage lung disease requiringpermanent oxygen therapy.The diagnosis willinclude an FEV1 test result of less than one litre.

Chronic Renal Failure

Means end stage renal failure presenting aschronic irreversible failure of both kidneys tofunction, as a result of which regular renal dialysisis instituted.

ComaMeans total failure of cerebral functioncharacterised by total unarousableunresponsiveness to all external stimuli, persistingcontinuously with the use of a life support systemfor a period of at least four days. Coma directlyrelated to alcohol abuse is excluded.

DementiaMeans the clinical confirmation of dementia(including Alzheimer’s Disease) due to failingbrain functions, resulting in the need forcontinual assistance in the activities of daily living,as confirmed by a medical practitioner specialisingin neurology, psychogeriatrics, psychiatry orgeriatrics. Dementia directly related to alcoholabuse is excluded.

EncephalitisMeans severe inflammation of brain substancewhich results in significant and permanentneurological sequelae as certified by a consultantneurologist.

Loss of Independent ExistenceMeans a condition as a result of a disease, illnessor injury whereby you are totally and irreversiblyunable to perform at least two of the followingfive ‘Activities of Daily Living’:

• bathing or showering;

• dressing and undressing;

• eating and drinking;

• using a toilet; and

• moving from place to place by walking,wheelchair or with the assistance of a walkingaid.

Loss of SpeechMeans the total and permanent loss of the abilityto produce intelligible speech as a result ofpermanent damage to the larynx or its nervesupply, or to the speech centres of the brainwhether caused by injury, tumour or sickness.Theabove must be certified by two appropriatemedical specialists not less than ninety days afterthe ability to speak was first lost.

Major Abdominal Aortic SurgeryMeans the actual undergoing of surgery via athoracotomy or laparotomy to repair or correctan aortic aneurysm, an obstruction of the aorta ora coarctation of the aorta. For the purpose of thisdefinition aorta shall mean the thoracic andabdominal aorta but not its branches. Surgeryperformed using catheter techniques only arespecifically excluded.

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Major Head TraumaMeans neurological deficit resulting from trauma,causing at least 25% impairment of whole personfunction lasting more than three weeks from thedate of the trauma, and likely to persist, ascertified by a consultant neurologist.

Major Organ TransplantMeans the tranplant to the Life Insured of one ormore of the following organs:

• kidney

• heart

• lung

• liver

• pancreas

• the transplantation of bone marrow.

Motor Neurone DiseaseMeans amyotrophic lateral sclerosis withsignificant persistent neurological deficit resultingin at least 25% permanent impairment of wholeperson function as certified by a consultantneurologist.

Multiple SclerosisMeans demyelination of nervous tissue.Thediagnosis has to be made by a consultantneurologist confirming more than one episode ofwell defined neurological deficit with persistingpermanent neurological abnormalities and withat least 25% impairment of whole personfunction (but not necessarily confined to awheelchair).The diagnosis will be based onconfirmatory neurological investigations eg.lumbar puncture, evoked visual responses, evokedauditory responses and NMR (Nuclear MagneticResonance) evidence of lesions of the centralnervous system.

Muscular DystrophyMeans the unequivocal diagnosis of musculardystrophy by a consultant neurologist resulting ina permanent impairment of whole body functionof at least 25%.

Myocardial Infarction (Heart Attack)Means death of a portion of heart muscle as aresult of inadequate blood supply to the relevantarea.The basis for diagnosis shall include:

• electrocardiographic changes associated withMyocardial Infarction

• elevation of cardiac enzymes consistent with aMyocardial Infarction

If ECG or enzyme evidence of infarction are

unavailable or inconclusive, then Lumley Life willconsider any other test results provided in supportof the diagnosis.

Occupationally Acquired HIVMeans infection by the HumanImmunodeficiency Virus (HIV), acquired only viablood transfusion or accidental means during thecourse of carrying out the Life Insured’s normaloccupation with sero-conversion to HIVinfection occurring within six months of theaccident.Any accident giving rise to a potentialclaim must be reported to the Company withinthirty days of the incident and be supported by anegative HIV antibody test within seven days ofthe incident.Transmission via any form of sexualactivity or deliberate injection of a drug notprescribed by a medical practitioner is specificallyexcluded.

Open Chest SurgeryIn respect of any of the following:

• coronary artery, being open chest surgery tocorrect or treat coronary artery disease.Angioplasty, intra-arterial procedures andother non-surgical techniques are excluded.

• repair or replacement of valves, being openchest surgery to replace or repair cardiacvalves as a consequence of heart valve defectsor abnormalities.

Paralysis

• Diplegia

Means the permanent and total loss offunction of both sides of the body due toinjury or disease.

• Hemiplegia

Means the permanent and total loss offunction of one side of the body due toinjury or disease.

• Paraplegia

Means the permanent and total loss of use ofboth legs resulting from injury or disease.

• Quadriplegia

Means the permanent and total loss of use ofboth arms and both legs resulting from injuryor disease.

• Tetraplegia

Means the permanent and total loss of use ofboth arms and legs resulting from injury ordisease.

Parkinson’s DiseaseMeans fully developed, moderately disabling

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disease of the extrapyramidal system clinicallyconfirmed by a consultant neurologist, andrequiring continual assistance in the activities ofdaily living.

Idiopathic Parkinson’s, supranuclear palsy andcortico-basal degeneration are included.Iatrogenic parkinsonism and parkinsonismsecondary to infection or trauma are excluded.

Primary Pulmonary Hypertension.Means primary pulmonary hypertension withright ventricular enlargement established byinvestigations including cardiac catheterisation.

Severe BurnsMeans tissue injury caused by thermal, electricalor chemical agents causing third degree burns to20% or more of the Body Surface Area asmeasured by the ‘rule of 9’ of the Lund andBrowder Body Surface Chart.

Total BlindnessMeans the complete and irrecoverable loss ofsight in both eyes as currently defined by theRoyal Blind Society and confirmed by anophthalmologist.

Total DeafnessMeans total, irreversible and irreparable loss ofhearing both natural and assisted, in both ears as aresult of injury or disease.

4.4 Limitation on Optional BenefitsBenefits under the Accident Benefit Option andthe Medical Catastrophe Option cease to bepayable at age 65, notwithstanding that the Policymay continue in some cases to age 70.

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1 INTRODUCTIONBusiness Expenses Insurance provides for thereimbursement of the normal day to day runningexpenses of a business during a period of TotalDisability.

2 DEFINITIONS2.1 Annual Benefit

Is the amount shown in the Policy InformationStatement and Schedule less other moniesreceived in accordance with 2.7. It is paid at therate of one three hundred and sixty fifth of theAnnual Benefit for every day of Total Disability.

2.2 Benefit PeriodThe Benefit is payable for a period of up to oneyear, while you remain disabled. If at the end ofthis year, you remain disabled and the totalbenefit paid is less than the Annual Benefit, then cover will continue untilthe earliest of:

• the payment of the Annual Benefit;

• the expiry of a further twelve months; and

• the Expiry of Cover.

2.3 Business ExpensesAre the normal day-to-day running expenses ofthe Life Insured’s business:

Business Expenses include but are not limited tothe following:

• Accounting and audit fees

• Advertising costs

• Bank charges, interest on loans

• Depreciation of equipment, plant

• Electricity, gas, heating, water, telephone,cleaning and laundry costs, postage andhandling

• Property rates and taxes

• Publications and subscriptions to professionalassociations

• Leasing costs of plant and equipment

• Business related insurance premiums but notincluding premiums for this policy

• Rent

• Salaries and other related costs (eg: payroll tax,superannuation contributions, FBT) for non-income generating employees of your business.

• Motor vehicle costs

• Couriers

• Net cost of a locum ie: a direct replacementof the Life Insured from a source outside yourbusiness less the business earnings generatedby the locum.

Prepaid or accrued business expenses will beapportioned over the period to which they relate.

Where income is generated while the LifeInsured is Totally Disabled, the Benefit will belimited to the net business expenses, ie. businessexpenses less net business income. Net businessincome is business income less wages paid toincome generating staff.

Where more than one person is responsible forgenerating income then Lumley Life willapportion the expenses equally between the LifeInsured and the other person(s) unless otherwiseagreed between the Life Insured and LumleyLife.

Business Expenses not covered by this policy:

• Salaries and other related costs (eg. payroll,tax, superannuation, FBT) for the Life Insuredand income generating employees of yourbusiness other than a locum.

• Any of your relatives unless that person wasemployed for at least sixty consecutive daysprior to the Insured’s Disability.

• Commissions or bonuses payable to the LifeInsured.

• Repayments of principal of any loan or otherfinance agreement.

• Any costs of a capital nature including thecost of any books, equipment, fittings, fixtures,furniture, goods, implements, merchandise orstock.

• Depreciation on real estate.

• Losses on investments.

• Taxes levied pursuant to the Income TaxAssessment Act.

2.4 Loss or Disability

Is Total Disability for which a benefit is payableunder this Policy.

2.5 Medical PractitionerMeans a medical practitioner legally qualified andregistered to practice in Australia and is a personother than the Life Insured or the Policyowner ortheir relatives, business partners, shareholders oremployees.Where the practice is outsideAustralia, the medical practitioner must havequalifications equivalent to Australian standards.

BUSINESS EXPENSES INSURANCE

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2.6 Pre-Existing ConditionsAs long as the Policyowner and Life Insured havefully satisfied the “Duty of Disclosure”, which isdescribed in the application, the Policyowner willbe paid benefits for any claim arising from a pre-existing sickness or disability not excluded in thespecial provisions of this Policy.

2.7 Receipt of Other MoniesIf other benefits are received from other insurancepolicies providing Business Expenses cover, thenthe Business Expenses used in the calculation ofthe Benefit will be reduced by the monthlyamount of those other benefits.

2.8 Total DisabilityTotal Disability means that due to suffering anillness or injury the Life Insured:

(i) is unable to perform at least one importantincome producing duty of his/her regularoccupation; and

(ii) is not currently working in any gainfuloccupation, and

(iii) is under the care and following the adviceof a medical practitioner.

2.9 Waiting PeriodIs the number of days shown on the PolicyInformation Statement and Schedule startingfrom the day you are Totally Disabled. It may vary subject to:

• Return to work during the Waiting Period(condition 2.10)

• Partial Disability (condition 3.2)

• Recurring Claim Benefit (condition 3.4)

• Waiver of Waiting Period (condition 3.5)

• Accident Benefit Option (condition 4.1)

2.10 Return to Work During The Waiting PeriodIf, during the Waiting Period, the Life Insuredreturns to gainful employment for five days orless, then those days for which the Life Insuredwas gainfully employed will be added to theWaiting Period.

If, during the Waiting Period, the Life Insuredreturned to gainful employment for more thanfive days, then the Waiting Period willrecommence.

2.11 Partial Disability(see also Condition 3.2)

Means that due to suffering an illness or injurythe Life Insured:

(i) suffers a partial loss of business turnoverfollowing a period of Total Disability of atleast 14 continuous days duration;

(ii) cannot work full time, or is unable toperform at least one important incomeproducing duty of his/her regularoccupation; and

(iii) is under the care and following the adviceof a medical practitioner.

Benefits do not begin to accrue until theexpiry of the Waiting Period (unless the WaitingPeriod is waived under the Accident Benefitoption).

IMPORTANT NOTES:

PLATINUM COVER

Where the Life Insured is aged less than 55 years,there is no requirement for the Life Insured tosuffer a period of Total Disability beforequalifying as Partially Disabled.

Where the Life Insured is aged 55 years ormore, Partial Disability must follow a periodof Total Disability of at least seven continuousdays duration.

Where the Life Insured is aged 60 years ormore, Partial Disability must follow a period ofTotal Disability of at least ten continuous daysduration.

GOLD COVER

Partial Disability must follow a period of TotalDisability of at least fourteen continuous daysduration irrespective of the Life Insured’s age.

3 BENEFITS3.1 Total Disability Benefit

When the Life Insured has a continuous periodof Total Disability for longer than the WaitingPeriod, the Total Disability benefit shall be thelesser of the Annual Benefit and the actualBusiness Expenses incurred.

3.2 Partial Disability BenefitThe amount paid, which is determined on a dailybasis, will be the lesser of:

• (A – B) x the Annual Benefit andA

• (A – B) x your annualised share of the A Business Expenses that relate to

the period of Partial Disability

A = Your share of the business turnover in the12 month period prior to yourdisablement.

B = Your annualised share of the currentmonth’s business turnover for the month inwhich Partial Disability is claimed.

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When you are Partially Disabled and you are notworking, then Lumley Life will calculate “currentmonth’s business turnover” as the turnover youcould reasonably be expected to generate if youwere working.

The Partial Disability Benefit starts to accruefrom the latter of:

• the day after you are no longer TotallyDisabled; and

• the day after the end of the waiting periodprovided you were Totally Disabled for at least14 consecutive days.

3.3 Waiver of PremiumAfter the Life Insured has been disabled forlonger than the Waiting Period, Lumley Life willrefund premiums paid in that period and willcontinue to waive premiums until the LifeInsured is no longer disabled. Premium paymentswill recommence from the date disablementceases.

3.4 Recurring Claim BenefitA new Waiting Period will not apply to any claimprovided that the claim resulted from a relapse orrecurrence of the same or related illness or injurythat caused Total or Partial Disability, within 12months of returning to work.

3.5 Waiver of Waiting PeriodLumley Life will waive the Waiting Period on anew claim resulting from an illness or injuryunrelated to a previous claim povided that:

• a Waiting Period applied to the previousclaim;

• the new claim occurs within 12 months ofreturning to work from the previous claim;and

• the new claim was for a continuous period of30 days or more.

Benefits will then accrue from the first day of thenew claim.

3.6 Elective Surgery BenefitIn the situation where Total Disability arises as aresult of cosmetic or other elective surgery or as aresult of surgery to transplant a body organ intothe body of another person, then the TotalDisability Benefit is payable.(Provided always that such surgery took placemore than six months from the commencementdate of the policy, its reinstatement or date ofalteration/increase.)

3.7 Concurrent DisabilityWhen the Life Insured is disabled at any time as aresult of separate and distinct injuries orsicknesses, the benefit will be calculatedaccording to the cause which maximises theclaim.

4 OPTIONAL BENEFITSThe following optional benefits apply if they appear inthe Policy Information Statement and Schedule and theappropriate additional premium has been paid.

4.1 Accident Benefit OptionIf you become Totally Disabled due to anaccident Lumley Life will waive the WaitingPeriod provided you are Totally Disabled for atleast seventy two hours immediately followingthe accident. One three hundred and sixty fifth ofthe Annual Benefit will then become payable toyou for each day of Total Disability from the firsthour until the expiration of the Waiting Period.

4.2 Leasepay Benefit OptionThe Life Insured must be in receipt of Benefitsunder this Policy for a continuous period oftwelve months to qualify for Leasepay Benefits.(Receipt of Partial Disability or other benefits donot qualify.)

Where the Life Insured has been receiving TotalDisability Benefits under the Business ExpensesPolicy for a continuous period of twelve monthsand is Totally disabled under the Policy, then theLeasepay Benefit will commence.This Benefitwill pay the Life Insured’s lease commitments onthe principal commercial premises of thebusiness. It will be calculated on a daily basis, paidmonthly and will continue to be paid until theearliest of the following:

(i) the date on which the Life Insured ceases to be Totally Disabled under the Policy;

(ii) the date on which the Leasepay Benefit isexhausted;

(iii) the date on which the lease commitment isextinguished; and

(iv) the date of the Life Insured’s death.

On the occurrence of any of the above, all coverwill cease under this Option.

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L U M L E Y

The Lumley Group is a financial services group specialising inthe design, marketing, underwriting, and management of lifeinsurance and general insurance products, for a select networkof quality financial intermediaries. Over the past 80 years inAustralia, the Lumley Group has evolved from an insurancebroking firm to a highly specialised insurance underwriter thatoperates in all states of Australia and in New Zealand. One ofthe largest privately-owned financial services groups operatingin Australia, the Group currently provides a wide range of services on four continents, but its main focus has always beenthe needs of the Australian customer base. It is a combinationof the Group’s historical origination and involvement with theAustralian insurance industry, the recognition of its customer’sneeds and the development of services to meet these needs thathas resulted in the Lumley name being synonymous with Traditional Values and Innovative Ideas.

The Lumley Group of Companies in Australia is 100 per centowned by Edward Lumley Holdings Limited which is incorporated in the United Kingdom. Lumley Life Limited was originally established in 1926 as Commonwealth Life(Amalgamated) Assurance Limited. In 1961, the name waschanged to Security Life, and in December of that year, theCompany acquired the life assurance business of the Citizens & Graziers Life Assurance Company Limited.In October 1986, the Company name was changed to Lumley Life.

The Lumley Commitment

By combining Traditional Values and Innovative Ideas, Lumley Lifewill continue to provide value and security for clients, whilemaintaining our uncompromising emphasis on service, soundinvestment and cost effectiveness.

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ABN 20 000 017 194

Lumley Life Limited, Lumley House, 309 Kent Street, Sydney NSW 2000 PO Box Q340, Queen Victoria Building, Sydney NSW 1230Telephone (02) 9248 1255 Facsimile (02) 9248 1266

FEB 2002