Disability benefit improvements: More flexibility for SunUniversal Life II Clients
We've made important enhancements to the disability benefit feature for SunUniversal Life II policies issued in 2017 and later. This contractual provision allows the insured to access their policy fund when disabled, ill or injured as defined in their contract.
What's changing?
We're making it easier and faster for Clients to access their policy funds.
Enhancement highlights:
Current provision
- Single tax-free withdrawal per disability
- 60-day waiting period
- Claim assessment fee applies
New provision
- One tax-free withdrawal every 12 months while they continue to qualify
- 30-day waiting period
- No claim assessment fee
Changes to “Accessing the policy fund when disabled, ill or injured” policy provision on SunUniversal Life II policies (2017 and later)
From |
To |
|---|---|
Maximum of one tax-free withdrawal each time an insured person becomes disabled, ill or injured. |
Multiple tax-free withdrawals when an insured person becomes disabled, ill or injured.
|
Each disability must continue for at least 60 consecutive days. |
Each disability must continue for at least 30 consecutive days. |
We reduce the maximum amount by any surrender charge that may apply on the date of withdrawal. |
We’ll no longer apply a surrender charge to the maximum withdrawal amount. |
When the insured person is occupationally disabled
From |
To |
|---|---|
If the insured person is partially disabled and they experienced a loss of income of at least 50% over 60 consecutive days compared to what they earned 60 days immediately before the day they become disabled. |
If the insured person is partially disabled and they experienced a loss of income of at least 50% over 30 consecutive days compared to what they earned 30 days immediately before the day they become disabled. |
Making a claim for this benefit
From |
To |
|---|---|
Clients must pay a claim assessment fee. |
We’ve eliminated claim assessment fees. |
Clients may not make a withdrawal under this provision if the insured was rated substandard risk for medical reasons and continue to be rated on the date they became disabled. |
We’ve eliminated this restriction. |
This benefit allows tax-free withdrawals when the insured meets the eligibility criteria of a disability as defined in the policy, even if the withdrawal exceeds the adjusted cost benefit (ACB). Policy definitions for disabilities remain unchanged (occupationally disabled, critically disabled due to illness or injury, critically disabled due to deteriorated mental ability and critically disabled - terminal illness).
As a reminder, withdrawing funds from a UL policy may affect how long the policy stays in effect. It's important to review UL policies annually.
Benefit to Clients
This change provides Clients with more flexible access to their policy funds during critical times. We’ve made these improvements based on your feedback and remain committed to enhancing our universal life insurance solutions.
Key dates
March 16
- All new policies will include these changes, including back-dated policies.
- This change also applies to in-force policies issued on or after January 1, 2017. In-force Clients who submit a withdrawal request will receive a policy amendment outlining the updated provision, letting them know they can withdraw again in 12 months. The servicing advisor will receive a copy of the Client’s amendment.
- Updated sample policies and marketing materials posted to Suncentral.
April 12
- Updated illustration reports available in Sun Life Illustrations.
Resources
Visit the SunUniversal Life II page to review the updated marketing materials, including: