AICPA Insurance Programs

Group Elite Life
Provisions and Exclusions

PLAN PROVISION

Beneficiary Provision

Term life insurance and any accidental death proceeds are paid to a beneficiary designated by the covered participant. If there is more than one beneficiary, proceeds may be divided in equal or unequal shares. Any amount for which there is no beneficiary, the insurance will be payable to your estate. (The employee's firm may not be designated as a beneficiary by the employee.)

When the Insurance Terminates

The insurance for an individual will automatically terminate when he or she is no longer actively engaged in work full-time with the contributing employer, when you are no longer a covered individual or the group policy terminates.

Coverage for a dependent terminates when: the insurance terminates on the insured proprietor, partner, firm member, or employee; the dependent no longer qualifies; the firm terminates its dependents' coverage; the firm terminates its Plan participation; or the provision in the policy for dependents' coverage terminates.

Minnesota Residents Only: If employment is terminated, either voluntarily or involuntarily, or if the individual is laid off and the group policy is still in force with the firm, coverage may be continued by the individual until coverage is obtained under another group policy or until a return to work from lay off; however, the maximum period that coverage may be continued is 18 months. Minnesota law allows the individuals to elect such coverage by the later of (a) 60 days from the date the notice of continuation is received from the firm; or (b) 60 days from the date coverage would otherwise have terminated.

Conversion Privilege

If the coverage reduces or terminates because of the attainment of an age, or because the insured is no longer an employee of the firm, the insured has the privilege of converting the amount by which the insurance was reduced or terminated to a Prudential individual life insurance policy. The insured can get this life insurance protection without taking a medical examination or answering health questions. To convert the insured must apply for the individual contract and pay the first premium according to the following rules:

If the insured has been given written notice of the conversion privilege within 15 days before or after he/she ceases to be insured for all or part of the insurance, he/she must apply for the individual contract and pay the first premium within 31 days after ceasing insurance coverage; or, If he/she has been given written notice of the conversion privilege more than 15 days but less than 90 days after he/she ceases to be insured for all or part of the insurance, he/she must apply for the individual contract and pay the first premium within 45 days after written notice has been given; or,

If he/she have not received written notice of the conversion privilege within 90 days after all or part of the insurance ceases, the time allowed for exercising the privilege ends at the end of 90 days.

If your insurance ends because all of the insurance ends for your class, the total amount of individual insurance which is obtained through this privilege will not exceed the total amount of the insurance that was terminated under the Group Contract reduced by the amount of group life insurance from any carrier for which he/she becomes eligible within 45 days. A death benefit is payable under the Group Contract, even if he/she did not apply for conversion, if he/she dies within 31 days of the termination and while still entitled to convert according to the rules described above.

This limit does not apply to Minnesota residents. No medical examination or other evidence of insurability will be required. Any individual life insurance policy then customarily issued by Prudential may be requested, except term insurance or a policy containing disability benefits. (However, preliminary term insurance for up to one year may be included.)

Conversion rights in a modified form are also available for insured dependents.

Waiver of Premium (Optional)

If a covered individual becomes totally disabled before age 60, the individual's life insurance will be extended at no cost while that individual remains totally disabled. As long as the disability remains, and periodic proof of disability is furnished, the death benefit protection will be extended at no cost from year to year. (This extension will not apply to the accidental death and dismemberment insurance.)

For more information, see "Group Elite Life, Frequently Asked Questions."

Accelerated Benefit Option

A no-cost feature of the Plan, this option allows participants who become terminally ill while covered to receive a portion of their life insurance benefit in a lump sum, generally tax-free. To receive this benefit, the insured individual must furnish satisfactory evidence, including a doctor's certification, that his or her life expectancy is six months or less. The benefit to be paid cannot be more than 75% of the coverage amount or $375,000, whichever is less.

The Accelerated Death Benefit Option is a feature that is made available to group life insurance participants. It is not a health, nursing home, or long-term care insurance benefit and is not designed to eliminate the need for those types of insurance coverage. The death benefit is reduced by the amount of the Accelerated Death Benefit paid. There is no administrative fee to accelerate benefits. Receipt of Accelerated Death Benefits may affect eligibility for public assistance and may be taxable. The federal income tax treatment of payments made under this rider depends upon whether the insured is the recipient of the benefits and is considered "terminally ill" or "chronically ill." You may wish to seek professional tax advice before exercising this option.

EXCLUSIONS AND NOTICES

Life Insurance

Payable for death from any cause, except suicide within two years after the effective date of inception of coverage, or an increase in coverage resulting from a change in schedule, a change in earnings basis, or a change in class.

Accidental Death and Dismemberment Insurance

AD&D benefits are paid when a covered loss occurs as a result of an accident while insured and within 90 days after the injury is sustained. Losses not covered are those resulting from war, act of war, suicide, attempt at suicide, sickness, whether the Loss results directly or indirectly from the sickness, medical or surgical treatment of sickness, whether the Loss results directly or indirectly from the treatment or travel in an aircraft except as a passenger without duties aboard.

Important Notice

The Certificate of Insurance that insureds receives describes the benefits and other provisions more fully. The complete terms of the Master Group Insurance Policy governs at all times.