Advisor product guide - Sun Life Financial · PDF fileA Sun UL policy is available from issue...

Advisor product guide as of February 1, 2008

Advisor reference only

TABLE OF CONTENTS

Product at a glance.......................................................................................................................... 5

SunUniversalLife.............................................................................................................................. 7

SunUniversalLife MAX..................................................................................................................... 7

Minimum and maximum insurance amount..................................................................................... 7

Issue ages and rate classes ............................................................................................................ 7

Payment options.............................................................................................................................. 7

Minimum payments ......................................................................................................................... 8

Activity account................................................................................................................................ 8

Cost of insurance (COI) options ...................................................................................................... 8

Guaranteed yearly renewable term COI (YRT) ............................................................................... 8

Guaranteed level COI...................................................................................................................... 9

Comparison of COI options ............................................................................................................. 9

Banded COI ................................................................................................................................... 10

Discounted COI ............................................................................................................................. 10

Funding ratio discount table (%).................................................................................................... 10

Provincial premium tax .................................................................................................................. 11

Payments less premium tax .......................................................................................................... 11

Death benefit options..................................................................................................................... 12

Level insurance amount ................................................................................................................ 12

Insurance amount plus fund .......................................................................................................... 13

Fund builder................................................................................................................................... 13

Indexed insurance amount ............................................................................................................ 14

Indexing methods .......................................................................................................................... 14

Changes to death benefit options.................................................................................................. 15

Joint life basic insurance benefit.................................................................................................... 15

Early death benefit......................................................................................................................... 15

Adding or removing a life – joint .................................................................................................... 16

Multiple lives coverage .................................................................................................................. 16

Adding or removing a life – multiple coverage .............................................................................. 16

Split of policy fund value................................................................................................................ 17

Policy fund value proportional to insurance amount...................................................................... 17

Policy fund value payable on death claim ..................................................................................... 17

Fund investment accounts............................................................................................................. 17

Daily interest account (DIA)........................................................................................................... 18

Guaranteed interest accounts (GIA).............................................................................................. 18

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Market value adjustment (MVA) .................................................................................................... 18

MVA formula .................................................................................................................................. 18

Accounts based on the performance of indices ............................................................................ 19

Interest guarantees........................................................................................................................ 19

FPX Income Index Account ........................................................................................................... 19

FPX Balanced Index Account........................................................................................................ 19

FPX Growth Index Account ........................................................................................................... 20

Canadian Equity Index Account .................................................................................................... 20

American Equity Index Account..................................................................................................... 20

Foreign Equity Index Account........................................................................................................ 20

European Equity Index Account .................................................................................................... 20

Pacific Equity Index Account ......................................................................................................... 20

Japanese Equity Index Account .................................................................................................... 20

American Technology Index Account............................................................................................ 20

Canadian Bond Index Account ...................................................................................................... 20

Accounts based on the performance of managed funds............................................................... 20

Minimum investment amounts....................................................................................................... 21

Investment account asset class and management fee ................................................................. 22

Investment bonus .......................................................................................................................... 25

Taxation ......................................................................................................................................... 25

Maintaining the exempt status by insurance amount adjustments................................................ 25

Non-exempt policy fund adjustments ............................................................................................ 26

Service account ............................................................................................................................. 26

Withdrawals ................................................................................................................................... 26

Order of investment account withdrawals and transfers ............................................................... 27

Surrender charges......................................................................................................................... 28

Policy loans.................................................................................................................................... 29

Lapse ............................................................................................................................................. 29

Transaction fees ............................................................................................................................ 29

Accessing the policy fund when disabled, ill or injured ................................................................. 30

Living benefits................................................................................................................................ 31

Conversions................................................................................................................................... 31

Additional benefits ......................................................................................................................... 32

Total disability benefit (TDB) – protection or savings.................................................................... 32

Term insurance benefits for the insured and any additional persons............................................ 33

Accidental death benefit (ADB) ..................................................................................................... 33

Guaranteed insurability benefit (GIB) ............................................................................................ 33

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Executive GIB................................................................................................................................ 33

Coverage death benefit (CDB) – Protection or Savings for Joint last-to-die................................. 34

Owner death benefit – protection or savings................................................................................. 34

Owner disability benefit – protection or savings ............................................................................ 34

Optional additional benefits summary ........................................................................................... 36

General definitions......................................................................................................................... 38

Appendix A - Investment Bonus (for policies issued prior to Novemember 18 2005)................... 44

Appendix B .................................................................................................................................... 45

Sample SunUniversalLife Policy (with Bonus and COI Discount) ................................................ 46

Appendix C .................................................................................................................................... 73

Sample SunUniversalLife Policy (no Bonus and no COI Discount) .............................................. 74

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Product at a glance Features

Basic insurance benefit options

Single life Joint first-to-die: up to 5 lives per basic insurance benefit Joint last-to-die: up to 2 lives per basic insurance benefit Multiple life: up to 5 single lives or 4 single lives and 1 joint life (maximum 9 lives per policy)

Cost of insurance (COI) options

Guaranteed yearly renewable term (YRT) Guaranteed level

Issue ages YRT COI: 0 to 64 Level COI: 16 to 80 Joint life: 16 to 80 Indexed face amount: 0 to 70

Bands

$100,000 to $249,999 $250,000 to $499,999 $500,000 to $999,999 $1,000,000+

Note: Rate band for under $100,000 is available for conversion only

Underwriting classes Smoker Non-smoker

Death benefit options

Level insurance amount Insurance amount plus fund Fund builder Indexed insurance amount (Consumer Price Index or fixed index to maximum of 8%)

Administration/policy fee None Benefits Access to the policy fund when disabled

Included on all policies; no additional cost of insurance applies

Early death benefit Available for joint last-to-die coverage; no additional cost of insurance applies

Description Issue ages 5-, 10-, and 20-year renewable and convertible term insurance benefit – available on the insured and one other additional person

renewable to age 80, convertible to age 70

5-year term: 18 to 70 10-year term: 18 to 70 20-year term: 18 to 60

Total disability benefit – protection and savings options

0 to 55

Owner death benefit – protection and savings options

16 to 60

Owner disability benefit – protection and savings options

16 to 55

Accidental death benefit (available for single life only)

0 to 65

Guaranteed insurability benefit (available for single life only)

0 to 50

Executive guaranteed insurability benefit (available for single life only)

25 to 60

Optional benefits

Coverage death benefit – protection and savings options (available for joint last-to-die only)

16 to 75

Benefits (continued)

Policy loans Minimum: $500 Maximum: depends on factors such as policy fund value, market value adjustment, surrender charges, etc.

Interest rate: daily interest + 2%

Withdrawals Minimum: $500 Maximum: up to the cash surrender value, if available Transaction fees may apply

Surrender charges

Applicable for 10 years for each coverage (based on a multiple of the insurance factor1)

Higher on SunUniversalLife MAX for the first 5 policy years

Transaction fees Up to 2 free transactions per policy year The maximum fee charged at any time is $100 per transaction

Withdrawal order

Standard order

Daily interest account (DIA) FPX portfolio index accounts Accounts based on the performance of indices Accounts based on the performance of managed funds (proportional) Guaranteed interest account (GIA)

Alternate order

DIA GIAs FPX portfolio index accounts Accounts based on the performance of indices Accounts based on the performance of managed funds (proportional)

Proportional withdrawal order (default)

Proportional from each account (DIA, index, managed) based on thecurrent balance in each account at the time of withdrawal

“No” investment bonus option

“No” investment bonus option

Must be chosen at time of sale COI discount not available Results in lower management fees for all accounts based on the performance of indices, accounts based on performance of managed funds, and higher credited interest rates for the GIA and DIA

Investment bonus and COI discount

Investment bonus

Must be chosen at time of sale Bonus starts at the end of year 2 and credits 0.40% annually on the policy anniversary

Bonus is paid annually at the end of the policy year based on the average of the monthly average policy fund value in the preceding 12 months (net of loans and interest accrued on loans)

Higher management fees than for “no” bonus option Added to the activity account

COI discount

Available only for policies with an investment bonus Reduces the COI based on the funding ratio2 and the insured person’s age when they purchase the policy (refer to the discount table in the Advisor product guide)

For discount calculation purposes, the funding ratio is vested at the end of the 9th year for the life of the policy

1 Insurance factor for non-rated cases is equal to 100% of the level COI rate based on the issue age and the insurance amount.

2 Funding ratio is the net insurance payments (total payments minus the insurance charges for the optional benefits, withdrawals and market value adjustments) divided by the insurance factor accumulated over completed years.

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SunUniversalLife SunUniversalLife is a permanent life insurance policy that includes insurance benefits on one or more insureds with several investment options available to your clients.

Rather than purchase a new policy, the insurance amount of a Sun UL policy can be increased by adding another basic insurance benefit on an attained age basis. Any increase in the insurance amount will require the insured person to provide the appropriate evidence of insurability, unless a Guaranteed insurability benefit or Executive GIB is elected.

The insurance amount of the policy can also be easily decreased. The reduced insurance amount, however, cannot drop below Sun UL’s minimum insurance amount requirement.

SunUniversalLife MAX SunUniversalLife MAX (Sun UL MAX) builds on the strengths of SunUniversalLife (Sun UL) and is suited for the very affluent clients who want to maximize their fund values. Sun UL MAX offers more funding capacity than Sun UL in the early years.

Minimum and maximum insurance amount The minimum insurance amount for Sun UL is $100,000.

There is no maximum insurance amount specific to Sun UL, but our current retention limits apply. The illustration software is restricted to $15 million for issue ages up to 70 and $10 million for issue ages over 70. Special quotes can be requested through the Sales and marketing resource team at our Head Office.

Minimum insurance amount changes In order to minimize administrative expenses, the minimum insurance amount increase allowed is $25,000. For similar reasons, the minimum insurance amount reduction permitted is $10,000.

Issue ages and rate classes A Sun UL policy is available from issue ages 0 through 80 on smoker (regular) and non-smoker (preferred) rate classes. For joint life basic insurance benefit, however, each insured person must be between ages 16 and 80.

For juveniles under age 15 (0 through 15), the guaranteed yearly renewable term COI option is available and issued on a regular rate class basis. From age 16 onward, a juvenile insured person can convert to the guaranteed level COI option on an attained age basis. The rate applicable will be based on the rates in effect at the time of conversion.

On all non-juvenile policies, an insured person can change from the smoker (regular) rate class to the non-smoker (preferred) rate class by completing a Request for Change in Premium Rate Basis form.

Payment options Sun UL allows for monthly or annual payments. Any additional payments will be considered lump sum payments and can be made at any time. The effective date of payment will be the date that funds are received at our Head Office. Policy owners not set up on Pre-Authorized Chequing (PAC) can elect to receive a payment notice on an annual basis.

Payments can stop at any time, provided the policy fund value is sufficient to keep the policy in force. Additional payments of any amount (subject to minimum payment requirements) can resume at any point in the future. The policy owner’s choice of payment amount will be influenced by his/her goals with respect to:

i. policy fund accumulation, ii. death benefit option, and iii. preferred duration of payment period.

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We reserve the right to refuse cash payments.

Minimum payments The minimum lump sum requirement is $250.

The minimum PAC payment is the monthly cost of insurance plus applicable provincial premium tax:

Where: monthly cost = monthly cost of insurance * + cost of term Insurance benefit / 12 + cost of additional benefits / 12

*Monthly cost of insurance = (A x B) x (1 – insurance discount) / 12 A = the annual cost per $1,000 of insurance B = the insurance amount divided by 1,000.

Activity account When we receive a payment to the SunUniversalLife policy, the applicable provincial premium tax is deducted. The money is then added to the activity account. From this account, money is transferred to pay the cost of insurance for all basic insurance benefits and additional benefits on a monthly basis. When the activity account balance reaches a minimum of $250 for each of the chosen investment accounts, the money will be transferred out of this account in accordance with the chosen investment mix. Interest calculation and guarantee

Interest is calculated daily and credited daily. The minimum guaranteed interest rate will never be less than 90% of the yield on a 30-

day Government of Canada Treasury Bill issued that day, less 1.75%. Under no circumstances will the rate be less than 0%.

Cost of insurance (COI) options Cost of Insurance is deducted from a Sun UL policy on a monthly basis. The cost is determined by multiplying the COI rate per $1,000 by the net insurance amount, and dividing the result by 12.

Two COI options are available – guaranteed yearly renewable term and guaranteed level. Both are guaranteed for the life of the coverage. Additional insurance purchased via the indexed death benefit option or to keep the policy tax-exempt will be issued on an attained age basis, at the COI rates in effect at the time of purchase.

Guaranteed yearly renewable term COI (YRT) The more traditional universal life COI basis is guaranteed yearly renewable term. Each year, the COI is based on the insured person’s attained age and, as such, will increase as the insured gets older.

YRT COI will provide the best growth in short to mid-term policy fund value, but longer-term values will be very sensitive to policy fund value investment return rates.

Conversion to level The insurance amount can be converted from yearly renewable term to level COI after the first policy year on an attained age basis, on or after the insured person’s 16th birthday and before age 81; provided the conversion occurs on the policy’s anniversary date. The level COI rate will be based on the rates in effect at the time of conversion.

YRT COI is not available on issue ages over 64. YRT COI rates vary by attained age, sex, and rate class.

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Related topic: Comparison of COI options.

Guaranteed level COI This option is based on the insured person’s issue age (not available before age 16) and, as such, will not change over the life of the coverage.

Level rates will be higher than YRT rates for the first several years. This means that short to mid-term policy fund values will grow more slowly under level than under yearly renewable term COI.

Conversion to yearly renewable term Level COI cannot be changed to yearly renewable term COI.

Level COI rates vary by issue age, sex and rate class, and are fully guaranteed for each basic insurance benefit.

Related topic: Comparison of COI options.

Comparison of COI options This graph compares yearly renewable term and level COI for a male preferred non-smoker, age 35. In this example, the YRT COI begins to exceed the level COI 21 years into the policy.

Certain criteria should be considered when choosing the appropriate COI option for your client, such as:

a client looking for greater short-term policy fund value would be best served by initially choosing the YRT COI option.

a client looking for longer-term values may be best advised to choose the level COI option at issue, to benefit from locking into a fully guaranteed rate at a younger age.

Run several different illustrations to determine which scenario best suits your client’s goals.

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Banded COI The COI rates (under both COI options) vary by face amount band. Volume discounts permit reductions in the COI as the insurance amount increases. Sun UL offers five COI rate bands:

Band Insurance amount

1* $50,000 to $99,999 (available for conversion only)

2 $100,000 to $249,999

3 $250,000 to $499,999

4 $500,000 to $999,999

5 $1,000,000+

* The Sun UL minimum issue insurance amount is $100,000. Band 1 is available for conversion only and is not available for new business.

If the insurance amount is increased after issue, causing the total insurance amount to move to a higher band, the cost of insurance applicable to the increase will be based on those for the new band.

Discounted COI This feature is unique to Sun UL, and is included on all policies issued prior to November 18, 2005. For policies issued after November 18, 2005, the discount COI feature is only available on policies with an investment bonus. The discount on COI rewards those policy owners who achieve a certain funding level.

The discount in any policy year is based on the insured person’s age (issue age for Level and attained age for Yearly Term) and Funding Ratio. The discount given will also increase as the funding ratio of the Sun UL policy increases.

The discount factors are guaranteed and the current factors, at some sample ages, are shown in the chart below. Discounts are interpolated on a “straight line” basis between points.

Funding ratio discount table (%) Funding ratio Age 1.00 1.50 2.00 2.50 3.00+

0-50 0 5 10 15 20

55 0 3.75 7.5 11.25 15

60 0 2.5 5 7.5 10

65 0 1.25 2.5 3.75 5

70+ 0 0 0 0 0

Insurance discount for each basic insurance benefit is calculated by the following formula:

Up to age 50: (Funding ratio - 1) times 10%.

Age 51 and up: Reduce percentage by 0.5 per year.

Maximum funding ratios used in the insurance discount calculation is 3.0.

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For each basic insurance benefit, the funding ratio used to calculate the discount is fully vested after the 9th anniversary of that basic insurance benefit. From the 10th anniversary onward, the funding ratio used to calculate the discount will never be less than the funding ratio achieved on the 9th basic insurance anniversary.

Provincial premium tax Applicable provincial premium tax is deducted from every payment made into a Sun UL policy*. The provincial premium tax is determined by government legislation and subject to change at any time. Current as of January 2008.

The percentage that is deducted is as follows:

Province/Territory Tax Rate (%)

Newfoundland 4.00

Northwest Territories 3.00

Nova Scotia 3.00

Nunavut 3.00

Prince Edward Island 3.50

Saskatchewan 3.00

Quebec 2.35

All others 2.00

* No premium tax will be deducted from money transferred directly into the service account. However, premium tax will be deducted from monies being transferred from the service account into the policy.

Payments less premium tax Provincial premium tax will be deducted from payments made into Sun UL policy. Money is then added to the activity account. Percentages selected for each investment account must be in multiples of 5%. After any applicable insurance COI is deducted, the balance can then be allocated to the client’s desired investment accounts, provided there is at least $250 for each investment account in the investment mix. (See also: Minimum investment amounts.) The entire investment mix can be changed at any time, but the change cannot be made retroactive. A transaction fee may apply.

Special direction of a payment The policy owner can also direct the funds or a specific payment in a different way than specified in the investment mix, if a written request is sent to us.

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Death benefit options Another example of Sun UL’s flexibility is the ability of the policy owner to choose from the four different death benefit options.

1. Level insurance amount

2. Insurance amount plus fund

3. Fund builder

4. Indexed insurance amount

The following examples assume increasing policy fund values to demonstrate the difference in death benefit options.

Level insurance amount Under the Level insurance amount option, the death benefit is the greater of the basic insurance benefit amount and policy fund value. The calculation of the cost of insurance is based on net insurance amount at risk defined as the insurance amount less the policy fund value. Those clients that do not have an increasing insurance need would be best served by this option.

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Insurance amount plus fund For those looking for increasing insurance protection, the Insurance amount plus fund option will be more appropriate than the Level face amount option. Under this option, the policy fund value is paid upon death, in addition to the insurance amount. The net insurance amount at risk for this option remains constant.

Fund builder Fund builder is an Insurance amount plus fund death benefit type that is designed to maximize your policy fund value. The tax exempt maintenance method for this death benefit is: increase insurance amount and reduce below initial basic insurance benefit. This allows the net insurance amount at risk to be reduced to as low as $10,000 and minimize the cost of insurance. Reduction(s) to the insurance amount can start as early as year 5. A yearly renewable term cost of insurance is required with this death benefit type. Under this option the policy fund value is paid on death, in addition to the net insurance amount at risk. The insurance amount will be adjusted upwards to keep policy funds exempt and then reduced when possible.

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Indexed insurance amount The Indexed insurance amount option permits the basic insurance amount to be indexed from 1 to 8% annually or at the CPI rate; and is available at issue ages 0 through 70. The net insurance amount at risk – the difference between the indexed basic insurance amount and the policy fund value – will therefore not be level, as shown below. Depending on the growth rate of the policy fund value and the index rate chosen, the net insurance amount at risk could be increasing or decreasing.

Indexing methods The policy owner can choose between two different indexing methods:

Consumer price index (CPI) Starting on the first policy anniversary, the insurance amount will be indexed in proportion to the annual change in the CPI. With this option, the policy owner is assured that the ultimate amount paid at death will retain the same purchasing power as the insurance amount did at issue.

Fixed rate Starting on the first policy anniversary, the insurance amount will be indexed by a fixed rate chosen by the policy owner at issue.

The policy owner can also change between the fixed rate and the CPI method; however, evidence of insurability may be required.

Minimum indexing rates The minimum annual index rate is 0.00% under the CPI method and 1.00% under the fixed rate method. The fixed rate must be a multiple of 0.25%.

Maximum indexing rates Under both indexing methods, the maximum annual index rate is 8.00%. The maximum indexed insurance amount permitted is four times the initial insurance amount.

Period of indexing The policy owner cannot decline a particular annual increase but can request to decline all future increases. Unless the index option is canceled, the indexing will continue until the policy anniversary following each insured person’s 85th birthday.

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Changes to death benefit options A policy owner can change death benefit options or the index rate at any time, but the insured person will be asked to provide evidence of insurability if the insurance amount or index rate is increased. Voluntary increases to the insurance amount are subject to a minimum of $25,000. The minimum voluntary insurance amount reduction is $10,000; however, the basic insurance benefit cannot be reduced below the minimum insurance amount allowed.

Joint life basic insurance benefit Sun UL offers Joint first-to-die, Joint last-to-die, and Joint last-to-die with an Early death benefit options.

Joint first-to-die Joint first-to-die basic insurance benefit is available on up to five lives. Upon the first death of an insured person, a death benefit is paid to a beneficiary and the basic insurance benefit expires Each survivor of the joint basic insurance benefit will be provided with 31 days of free, convertible term insurance for an insurance amount equal to the insurance amount of the original joint basic insurance benefit.

Joint last-to-die Joint last-to-die basic insurance benefit is available on two lives only.

Joint last-to-die with an Early death benefit Early death benefit is available when a joint last-to-die basic insurance benefit with an Insurance amount plus fund or Fund builder death benefit option is chosen.

Early death benefit The policy fund value of a Joint last-to-die basic insurance benefit is payable to the beneficiary(s) on the first death when the Insurance amount plus fund or Fund builder death benefit option is selected. All Joint last-to-die policies issued on or after April 3, 2002 are eligible for the Early death benefit (EDB), however, the percentage is initially set to zero at issue. The owner can change the percentage (in multiples of 5%, up to 100% maximum) at any time prior to the first death by submitting written notification or the Early death benefit beneficiary election and/or the policy change form.

The total amount of the EDB payout on first death will be equal to the result of this formula, calculated as of the date of notification:

(A) x (B – C)

where: A – is the Early death benefit percentage as specified by the owner for the deceased insured person B – is the policy fund value C – Is the policy loans with interest

The EDB for a basic insurance benefit will remain in effect as long as: i) the insured person is not covered as a single life under the same multiple life policy, and ii) the Joint last-to-die basic insurance benefit with which this benefit was issued remains

in-force, and iii) the death benefit option is and remains Insurance amount plus fund or Fund builder

A separate percentage of EDB payout and beneficiary can be selected for each insured person.

Each insured person must be age 80 or lower at issue, and we reserve the right to exclude EDB on Joint last-to-die policies where one or both insured persons are high substandard risks.

No surrender charges or market value adjustment (MVA) will be applied to the payout.

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No EDB is payable on simultaneous deaths of the insured persons covered under the joint last-to-die basic insurance benefit.

The service account will not form a part of the EDB payout.

EDB payouts are subject to taxation legislation at the time of payment. Any election change after issue is subject to our then current rules and practices.

When EDB is used on a joint basic insurance benefit in a multiple life policy, this benefit will override any other policy fund allocation specified for the same insured person in the policy. The benefit payable at the death of the insured person will be reduced by the amount of EDB payout. If a claim is made for the EDB and a basic insurance benefit and it is impossible to determine which of the insured persons under the policy died first, the oldest of the insured persons will be deemed to have died first.

Adding or removing a life – joint An insured person can be added to any first-to-die basic insurance benefit, provided that the required evidence of insurability is met. An insured person can be removed or substituted on any joint basic insurance benefit, provided that the policy is not under a waiver and that any new insured person provides the appropriate evidence of insurability. When a joint basic insurance benefit in a multiple lives policy is dropped, the insurance factor does not change and all surrender charges of that joint basic insurance benefit remain in effect. The equivalent joint age of the new joint basic insurance benefit will be based on the attained ages of the insured persons involved on the date of the substitution, addition or removal. In some cases, this could be considered a disposition of the policy and could result in tax implications.

Multiple lives coverage This feature allows more than one person to be insured under the same policy.

Coverage and options Currently, up to five basic insurance benefits can be combined into one Sun UL policy, and one of them can be a joint basic insurance benefit. The policy owner(s) can assign a separate beneficiary to each death benefit in the policy. An insured person could be covered by both a single and a joint basic insurance benefit within the multiple lives coverage.

Under a Sun UL policy, each insured person must satisfy the minimum insurance amount requirement. All insured persons must choose the same death benefit option but each can choose their own COI option.

Upon the death of any insured person, his or her death benefit will be paid to the beneficiary and the policy will continue with the remaining insured persons.

Calculation of insurance factor Each basic insurance benefit has an associated insurance factor and it is the sum of all insurance factors that is used to calculate the COI discount for each basic insurance benefit and the investment bonus for the policy.

Conversion to separate policies Each insured person of a multiple lives policy can convert the insurance amount to a separate policy on an attained age basis, prior to the policy anniversary following age 65. In some cases, this would be considered a disposition of the policy and could result in tax implications.

Adding or removing a life – multiple coverage An insured person may be removed, added or substituted on any multiple lives policy, provided the new insured person submits the appropriate evidence of insurability. When an insured person is dropped, the insurance factor does not change and all surrender charges of that insured person remain. When a life is added, a new insurance factor is determined for that insured

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person, along with a new schedule of surrender charges and commissions. In some cases, this could be considered a disposition of the policy and could result in tax implications.

Split of policy fund value In the case of multiple lives policies with the death benefit option Insurance amount plus fund, the policy owner must choose an allocation method for the policy fund value at issue; this method can be changed after issue for a fee. In addition, the policy fund value must be allocated to the insured persons for the calculation of the net insurance amount.

Three types of policy fund value allocations are possible:

1. proportional to the insurance amount, 2. payable on the first death claim, or 3. payable on the last death claim.

For policies issued on or after April 3rd, 2002: When the full or partial fund value is included in a death claim settlement, withdrawals are made and valued as of the end of the date of notification. It would be imperative to give notice in a timely fashion because the growth in the fund value portion of the death benefit, between the date of death and date of notification, can be subject to taxation.

If there is an Early death benefit payable at the time of death claim settlement, the policy fund value will be reduced accordingly.

Policy fund value proportional to insurance amount Under this option, each insured person will have an allocated policy fund value proportionate to the insurance amount. This allocation method is available on any death benefit option. The net insurance amount for each insured person, under the Level insurance amount and Indexed insurance amount options, is the difference between the basic insurance benefit amount and the allocated policy fund value.

If an insured person is substituted or added to the policy, the policy fund value would be re-allocated in proportion to the new insurance amount. If an insured person is removed, the policy fund value will be re-allocated to the remaining insured persons.

Policy fund value payable on death claim Policy fund payable on the first death claim Under this option (which is only available on the Insurance amount plus fund death benefit option), the entire policy fund value is paid out on the first death claim of an insured person. An additional payment may be required to pay for monthly cost of insurance and to cover remaining surrender charges.

Policy fund payable on the last death claim This option is only available on the Insurance amount plus fund death benefit option. It pays out the entire policy fund value on the last death claim of the insured persons. Fund investment accounts Perhaps the most unique and attractive feature of a universal life product is the ability of the policy owner to choose the type of vehicle in which the policy fund value will be invested. This is particularly attractive for those who want to control the investment mix, rather than have the insurance company decide on the investment mix, as is offered with the more traditional participating life insurance products.

With Sun UL, the policy owner can invest the policy fund value in any combination of a daily interest account (DIA), a variety of guaranteed interest accounts (GIAs), several accounts based on the performance of indices and a number of accounts based on the performance of managed

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funds. The choice of investment accounts will depend upon the policy owner’s level of risk tolerance. The Sun UL Investor Profile Questionnaire will help clients determine the appropriate investment mix to meet their goals.

Daily interest account (DIA) This daily interest account is an investment option selected by the client. It operates the same as any of the other investment accounts and requires a minimum amount of $250 to open.

Interest calculation and guarantee Interest is calculated daily and credited daily. The minimum guaranteed interest rate will never be less than 90% of the yield on a 30-

day Government of Canada Treasury Bill issued that day, less 1.75%. The absolute minimum interest rate for the DIA is 0% per annum.

Guaranteed interest accounts (GIA) Guaranteed interest accounts (GIAs) are available for 1-, 3-, 5-, 10- and 20-year terms to meet policy owner’s short-medium-and long-term savings needs. At a GIA’s maturity, the balance is rolled into the activity account, unless the policy owner requests to have it rollover to a new account of the same term. Interest is credited daily and compounded annually.

Interest calculation and guarantee The minimum guaranteed interest rate will never be less than 90% of the effective annual

yield on Government of Canada Bonds with the same term and effective date as the GIA, less 1.75% per annum.

The policy owner is also guaranteed that they can never lose their principal in a GIA. The absolute minimum guaranteed interest rates are 0% for the 1-year term, 1% for the 3-year term, 2% for the 5-year term, and 3% for the 10- and 20-year terms in Canada.

Market value adjustment (MVA) If funds are withdrawn from the GIAs, an MVA may apply. Generally, if a GIA is redeemed prior to its maturity and current interest rates for the particular term account have increased, an MVA will apply. An MVA does not apply to amounts taken from the index accounts or on transfers into the policy from the service account.

The MVA applies to withdrawals, policy loans, or transfers from a GIA, except on transfers required to pay for monthly cost of insurance or to maintain the policy’s tax-exempt status. Withdrawals from the GIAs will start with the account closest to maturity. An MVA will not apply to the payment of the policy fund value upon the death of the insured person.

The MVA formula can only result in a decrease in the value of the withdrawal, i.e. no credits will be given.

MVA formula The MVA formula for Guaranteed interest account (GIA):

The MVA = W x { 1 - the lesser of 1 and [ (1 + J)D ÷ (1 + K)D ] }

where: W = amount withdrawn or transferred from the GIA layer D = number of days to maturity in the existing GIA layer divided by 365

J = actual interest rate for the existing GIA layer, excluding any investment bonus K = current interest rate for a new GIA layer with the same term as the existing GIA

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Accounts based on the performance of indices Interest for each account is calculated daily and credited daily. These accounts reflect the performance of the indices on which they are based. Since the underlying indices can increase or decrease, the applicable interest rate can be positive or negative.

When clients select these accounts, they do not acquire an interest in the designated market index or purchase any units or legal interest in any security.

We will maintain the index accounts which are based on the Canadian and American equity markets and the Canadian bond market and we will maintain the management fees for those accounts as outlined unless after the policy date there is a material change in:

the investment environment for monitoring and replicating an index account, or the legislation that applies to life insurance policies that have accounts based on the

performance of indices.

Available Index Accounts American Equity American Technology Canadian Bond Canadian Equity European Equity Foreign Equity Japanese Equity Pacific Equity FPX* Balanced FPX* Growth FPX* Income

See account fact sheets for further information on the underlying indices and historical performance rates of return.

*FPX is a trademark of The National Post Company. SunUniversalLife is not endorsed, sold or promoted by the National Post Company.

Interest guarantees The management fee varies depending on the investment option selected and will vary depending on whether the investment bonus was selected. The management fee for each Index account used in the interest guarantee calculations outlined below is shown in the Investment bonus and the investment account management fees and interest rates sections. Interest rates can be negative.

The daily interest rate that applies to each of the index accounts will be:

FPX Income Index Account 100% of percentage daily change in the FPX Income Total Return Index (a Financial Post index) minus a Management Fee.

FPX Balanced Index Account 100% of percentage daily change in the FPX Balanced Total Return Index (a Financial Post index) minus a Management Fee.

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FPX Growth Index Account 100% of percentage daily change in the FPX Growth Total Return Index (a Financial Post index) minus a Management Fee.

Canadian Equity Index Account 100% of the percentage daily change in the Standard & Poor’s Toronto Stock Exchange (S&P/TSX60) Total Return Index, minus a Management Fee.

American Equity Index Account 100% of the percentage daily change in the Canadian dollar value of the Standard & Poor’s 500 (S&P 500) Total Return Index, minus a Management Fee.

Foreign Equity Index Account 100% of the percentage daily change in the Canadian dollar value of the Morgan Stanley Capital International Europe Australasia and Far East (MSCI EAFE) Free Price Index (excluding dividends), minus a Management Fee.

European Equity Index Account 100% of the percentage daily change in the Canadian dollar value of the Morgan Stanley Capital International (MSCI) Europe Price Index (excluding dividends), minus a Management Fee.

Pacific Equity Index Account 100% of the percentage daily change in the Canadian dollar value of the Morgan Stanley Capital International (MSCI) Pacific Free Price Index (excluding dividends), minus a Management Fee.

Japanese Equity Index Account 100% of the percentage daily change in the Canadian dollar value of the Nikkei 225 Index (including the dividends paid on the underlying stocks), minus a Management Fee.

American Technology Index Account 100% of the percentage daily change in the Canadian dollar value of the NASDAQ 100 Index (including the dividends paid on the underlying stocks), minus a Management Fee.

Canadian Bond Index Account 100% of the percentage daily change in the Scotia Capital Universe Bond Total Return Index, minus a Management Fee.

Accounts based on the performance of managed funds Interest for each managed account is calculated daily based on the performance of the mutual fund the account is linked to. Performance fluctuates and interest can be positive or negative. All managed accounts are affected by both the performance of its designated fund and fluctuations in the value of the Canadian dollar compared to the appropriate foreign currency, where applicable.

When clients select these accounts, they do not acquire an interest in the designated fund or purchase any units or legal interest in any security.

The daily interest rate that applies to each managed account will be:

the percentage daily change in the Canadian dollar value of its designated fund, minus the SunUniversalLife management fee for that account.

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The management fee will be different depending on whether the customer chose to have an investment bonus or not.

Managed accounts allow your clients to diversify their investments inside their SunUniversalLife policy. These mutual funds and their industry leading managers have been chosen based on a broad selection of management styles and asset classes: Bonds/Income, Canadian Equity, Canadian Balanced, US Equity, International/Global Equity, as well as asset allocation or portfolio funds.

With the managed account options your client can choose to build their own portfolio or, if preferred, choose accounts based on mutual funds with asset allocation and portfolio selections designed and monitored by investment professionals.

SunUniversalLife also offers managed accounts with interest based on the performance of mutual funds managed by institutional fund managers. The investment required to access these institutional funds means most investors would not have access to these fund managers on an individual basis.

Managed account options CI Canadian Investment CI Global CI Harbour CI Harbour Growth & Income CI Portfolio Series Balanced CI Portfolio Series Balanced Growth CI Portfolio Series Conservative CI Portfolio Series Conservative

Balanced CI Signature High Income CI Signature Income & Growth CI Value Trust Corporate Class Fidelity Global Fidelity Growth America

Fidelity NorthStar Fidelity True North Mackenzie Cundill Canadian

Balanced Mackenzie Cundill Value Mackenzie Ivy Foreign Equity McLean Budden American Equity McLean Budden Balanced Growth McLean Budden Canadian Equity

Value PHN Balanced PHN Bond PHN Canadian Equity PHN Dividend Income

More information on the managed account options, asset class and management style as well as the guaranteed interest accounts and index accounts is available on the SunUniversalLife Investment account fact sheets, and the Investment account options booklet.

We may need to rename, merge or withdraw a managed account. This may occur because of changes in the underlying mutual fund or its management.

If we withdraw an account in which your client has a balance, we will provide information on other accounts available into which account balances may be directed.

Minimum investment amounts An important feature to remember with Sun UL is the minimum transfer threshold. Currently, the minimum transfer threshold, other than the activity account, is $250. If the investment mix contains more than one investment account, the payment must be large enough so that each investment mix percentage equates to at least $250. Once that minimum amount is reached, the policy funds will automatically be dispersed in accordance with the investment mix.

For example, if a policy owner wishes to place 5% in any particular account, a Net Payment of $5,000 ($250/5%) will be required before the new account can be opened. If the minimum opening balance is not met for each and every investment account, all of the policy funds will be left in the activity account until each minimum balance has been achieved.

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Small percentages should be avoided if the payments are not substantial, to refrain from keeping funds in the activity account for long periods of time.

Investment account asset class and management fee The management fee, and associated minimum interest rate used in the interest guarantee calculation for a particular investment account is dependent on whether the policy owner has selected to have an investment bonus on the policy or chosen not to have the bonus.

The asset class, management style, management fees and guaranteed minimum interest rates (if applicable) for each investment account are shown on the pages that follow.

Fixed Income Options

Daily interest account (DIA) • Interest earned based on 90% of 30-day Government of Canada T- Bills

• ‘No’ investment bonus option currently provides an interest rate increase of 0.40% to the credited rate. This interest rate increase may change.

Guaranteed interest accounts (GIAs)

• Interest earned based on 90% of Government of Canada bonds of the same duration

• ‘No’ investment bonus option currently provides an interest rate increase of 0.40% to the credited rate. This interest rate increase may change.

• Guaranteed minimum interest rates of: –1-year GIA: 0% – 3-year GIA: 1% – 5-year GIA: 2% – 10-year GIA: 3% – 20-year GIA: 3%

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Index account options1

Asset class Management style

Sun UL management fee with bonus

Sun UL management fee with no bonus

American Equity

US Equity N/A 3.00 2.00

American Technology US Equity N/A 3.00 2.00

Canadian Bond Bond/ Income

N/A 3.00 2.00

Canadian Equity Canadian Equity

N/A 2.75 1.75

European Equity International/Global Equity

N/A 2.00 1.00

Foreign Equity International/Global Equity

N/A 2.00 1.00

Japanese Equity International/Global Equity

N/A 3.25 2.25

Pacific Equity International/Global Equity

N/A 3.00 2.00

FPX Balanced Canadian Balanced Equity

N/A 3.20 2.20

FPX Growth Canadian Balanced Equity

N/A 3.40 2.40

FPX Income Bond/Income N/A 2.80 1.80

Managed account options 2

Asset class Management style

Sun UL management fee with bonus


CI Portfolio Series Balanced Asset Allocation

Asset Allocation

1.00 0.00

CI Portfolio Series Conservative Asset Allocation

Asset Allocation

1.00 0.00

CI Canadian Investment Canadian Equity

Value 1.00 0.00

CI Global International/Global Equity

Growth 1.00 0.00

CI Portfolio Series Balanced Growth

Asset Allocation

Asset Allocation

1.00 0.00

CI Portfolio Series Conservative Balanced

Asset Allocation

Asset Allocation

1.00 0.00

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Managed account options 2 Asset class Management

style Sun UL management fee with bonus


CI Harbour Canadian Equity

Blend 1.00 0.00

CI Harbour Growth & Income Canadian Balanced

Blend 1.00 0.00

CI Signature High Income Bond/Income Blend 1.25 0.25

CI Signature Income & Growth Canadian Balanced

Blend 1.00 0.00

CI Value Trust Corporate Class US Equity Blend 1.00 0.00

Fidelity Growth America US Equity Blend 1.00 0.00

Fidelity Global International/Global Equity

Blend 1.00 0.00

Fidelity NorthStar International/Global Equity

Blend 1.00 0.00

Fidelity True North Canadian Equity

Blend 1.00 0.00

Mackenzie Cundill Canadian Balanced

Canadian Balanced

Value 1.00 0.00

Mackenzie Cundill Value International/Global Equity

Value 1.00 0.00

Mackenzie Ivy Foreign Equity International/Global Equity

Blend 1.00 0.00

McLean Budden American Equity

US Equity Blend 2.15 1.15

McLean Budden Balanced Growth

Canadian Balanced

Growth 2.15 1.15

McLean Budden Canadian Equity Value

Canadian Equity

Value 2.15 1.15

PHN Balanced Canadian Balanced

Growth at a reasonable price (GARP)

2.15 1.15

PHN Bond Bonds/ Income

Bond 2.15 1.15

PHN Canadian Equity Canadian Equity


2.15 1.15

PHN Dividend Income Canadian Equity


2.15 1.15

1 Minimum rate of return is based on Canadian dollar values of the indices, and the contractual guaranteed

minimums stated apply to Canadian policies only.

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2 Initially available on policies issued November 18, 2005 or later.

Investment bonus (policies issued November 18, 2005 or later) The policy owner has to choose at the time of sale whether to have an investment bonus or not. This cannot be changed within the same policy after issue. The choice influences the policy owner’s long-term investment and wealth management.

Choosing to have a bonus rewards policy owner for:

keeping policy in effect and making additional payments into the policy

If a bonus is chosen, the policy owner will also receive the COI discount – see Discounted COI on page 10.

Beginning in year 2, the bonus pays 0.40% annually on the policy anniversary, based on the average of the monthly average total policy fund value in the preceding 12 months. The total policy fund value is net of loans and accrued loan interest. The bonus does not apply to service account value. The bonus is added to the activity account.

If the policy owner chooses not to have an investment bonus, there are lower management fees on the index and managed accounts and higher credited interest rates for the guaranteed interest accounts. This results in a higher credited rate of interest and more immediate growth in the value of the accounts. This is an option that is appealing to policy owners who like to keep management fees to a minimum.

Choosing not to have an investment bonus means the policy is also not eligible for the COI discount. Please see the Investment account asset class and management fee section on the previous page for the management fees that apply to investment accounts when the investment bonus is selected.

*Please see Appendix A for the Investment Bonus description for policies issued prior to November 18 2005.

Taxation Taxation of the Sun UL insurance policy and various features offered within the policy are based on the tax rules in the Income Tax Act (Canada) as they relate to life insurance policies. These rules may change at any time, and administration of the policy and its features will change where required based on those rules.

Sun UL is a tax-exempt, non-registered, life insurance policy. The maximum payment permitted to a Sun UL policy has been set to ensure that the policy retains its exempt status. In addition to testing each payment to the maximum permitted, testing will be performed at each anniversary to see if the Sun UL policy remains exempt. If a Sun UL policy is about to become non-exempt due to an excessive policy fund value in relation to the death benefit, the policy owner will have the following options available to keep the policy exempt. Each policy owner, at issue, must choose both an exempt insurance amount adjustment and an exempt policy fund adjustment.

Maintaining the exempt status by insurance amount adjustments At each policy anniversary, a comparison of the policy fund value is made to the tax-exempt limit. If the policy fund value exceeds the tax-exempt limit, we make an adjustment to your client’s policy, according to the method selected.

Four types of insurance amount adjustments are available:

i) retain the insurance amount (death benefit is not automatically increased); ii) increase the death benefit by up to 8.0%* (the default option); iii) increase the death benefit by up to 8.0%* and then reverse, when possible, to the initial

insurance amount at issue; or iv) increase the death benefit by up to 8.0%* and then reverse, when possible, to below the initial

insurance amount at issue. This will optimize the growth of the policy fund value. This option is only available with a Fund builder death benefit.

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*The maximum death benefit is the lesser of:

a) 4 times the initial insurance amount and b) our retention limit.

COI for the increased death benefit are determined on an attained age basis (or attained equivalent joint age for joint life basic insurance benefit) and the current rate series in effect. However, in no event, will the resulting annual cost per $1,000 of insurance exceed 125% of that which was charged at inception of the insurance amount that is being increased.

Non-exempt policy fund adjustments Any non-exempt policy funds accruing under a Sun UL policy can be directed as follows:

i) automatically directed to the service account (the default option), or ii) paid in cash to the policy owner

These transactions are considered dispositions and may result in taxable income to the policy owner.

Service account The service account is a non-exempt side fund attached to a Sun UL policy. At issue, the policy owner can choose whether to invest any future service account balance in the DIA, a range of GIAs, one of 11 accounts based on performance of indices or one of 25 accounts based on the performance of managed funds.

As room becomes available within the tax exempt portion of a Sun UL policy, funds in the service account will automatically be transferred into the policy, to the maximum extent possible. These transfers are done without any MVAs.

On the termination of a Sun UL policy, the balance in the service account, if any, will be paid to the policy owner (or estate, if termination is due to death). Service account funds are not paid tax-free to the beneficiary.

No premium tax will be deducted from money transferred directly into the service account. However, premium tax will be deducted from monies being transferred from the service account into the policy. The minimum payment a policy owner can make into the service account of the policy is $250. However, transfers between the service account and the policy fund value (for tax-exempt purpose) are not subject to any minimum.

For income tax purposes, the interest earned on the service account each policy year, will be reported to the policy owner at the end of each calendar year.

Withdrawals Easy access to the policy fund value is another attractive feature of a Sun UL policy.

A withdrawal refers to a policy owner’s request for funds. This does not include payment of monthly cost of insurance from the policy fund. A withdrawal will be considered a partial disposition of the policy and may result in taxable income to the policy owner.

The minimum withdrawal amount is $500 and the maximum is the Cash Surrender Value (CSV). A withdrawal will cause a reduction in the death benefit by the amount of the withdrawal. For the Level insurance amount and Indexed insurance amount, a withdrawal will decrease the most recent insurance amount purchased. Surrender charges will apply to the amount withdrawn only if the resulting CSV drops to zero. Market value adjustments could also apply.

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Order of investment account withdrawals and transfers The policy owner must choose one of three withdrawal order options at issue (on the application). Once an order has been chosen, it cannot be changed. The ability to choose where withdrawals are made will allow the policy owner to concentrate investments in his/her preferred investment option. If the main focus lies with equity based investment accounts due to potential for higher rates of return in a given period, the policy owner may want to place enough money into GIAs to cover insurance costs and select the alternate withdrawal order option. This could leave policy funds in equity-based index and managed accounts to grow undisturbed by monthly cost of insurance until all GIAs have been exhausted. If the client’s preference is to keep investments in GIAs untouched until required to pay for the cost of insurance, the standard order may be the answer.

The proportional order allows the client to more closely keep the investment mix between accounts constant by taking a portion from each account on withdrawal.

Note: unless selected otherwise, the proportional order is the default. Reminder, the withdrawal order cannot be changed after policy issue.

Standard Alternate Proportional (default)

DIA DIA DIA

FPX Income Index GIA 1-,3-,5-,10- & 20-year (Closest to Maturity)

FPX Balance Index FPX Income Index

FPX Growth Index FPX Balance Index

Canadian Equity Index FPX Growth Index

Proportional from GIA 1-, 3-, 5-,10- & 20-year, from Index accounts and from Managed accounts – based on account value in each at time of withdrawal

American Equity Index Canadian Equity Index

Foreign Equity Index American Equity Index

European Equity Index Foreign Equity Index

Pacific Equity Index European Equity Index

Japanese Equity Index Pacific Equity Index

American Technology Index Japanese Equity Index

Canadian Bond Index American Technology Index

Managed accounts – proportional based on account value

Canadian Bond Index

GIA 1-,3-,5-,10- & 20-year (Closest to maturity)

Managed accounts – proportional based on account value

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Surrender charges A surrender charge for a particular basic insurance benefit under a SunUniversalLife policy will continue to apply until the earlier of the 10th anniversary of that basic insurance benefit, whether or not that basic insurance benefit remains in effect, and the termination of the policy.

The surrender charge is a multiple of the basic insurance benefit’s insurance factor and can never exceed the policy fund value available. The surrender charge multiples for each policy year are illustrated in the chart below.

Surrender charge multiple Number of years in-force SunUniversalLife SunUniversalLife MAX

1 1 2

2 2 4

3 3 4

4 3 4

5 3 4

6 – 8 3 3

9 2 2

10 1 1

11+ 0 0

The following example shows the CSV of SunUniversalLife, if the insurance factor is $200. The example assumes there are no MVAs or policy loans.

Policy year Policy fund value - Surrender charge = CSV

1 100 200 0

2 400 400 0

3 900 600 300

4 1,500 600 900

5 2,200 600 1,600

6 3,400 600 2,800

7 4,100 600 3,500

8 5,500 600 4,900

9 7,100 400 6,700

10 9,100 200 8,900

11 12,200 0 12,200

During the first policy year the surrender charge multiple will always be one for SunUniversalLife and two for SunUniversalLife MAX. On a date other than a policy anniversary, the surrender charge multiple will be a pro-rata value based on the number of whole months in-force between policy anniversaries. This

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interpolation will apply between the first and 10th policy years. For example, if the client surrenders the policy at policy year nine plus six months, the surrender charge in the above example would be $300.

Except for increases resulting from an Indexed insurance amount option or for tax-exempt maintenance purposes, each increase in insurance amount has its own associated surrender charge.

Policy loans Policy loans from the policy fund value are permitted on a Sun UL policy after the first policy year. The minimum amount that can be borrowed is $500 and the maximum is the (policy fund value, less any MVAs and surrender charges) multiplied by (1 – policy loan interest rate) minus existing policy loans with interest.

The amount to be borrowed will be transferred to the activity account, following any applicable MVA and will be credited with the activity account interest rate. We set the interest rate and may change it at any time. The current loan interest rate will be the prevailing activity account interest rate plus 2%.

Upon the death of the insured person, the death benefit will be reduced by any outstanding policy loans plus interest.

A policy loan is considered a disposition. Any amount received in excess of the policy’s adjusted cost basis will be taxable income to the policy owner.

Lapse A Sun UL policy will lapse if, on a monthly anniversary date, the policy fund value less outstanding policy loans is zero or negative.

When a policy is in a lapse situation, we will send the policy owner a Shortage notice to pay the outstanding cost of insurance within a grace period of 31 days.

Transaction fees The policy owner is allowed two free transactions per year (the first two), otherwise the following charges apply and must be paid upfront. The maximum fee charged at any time is $100 per transaction.

$50 per policy for the following transactions:

removing and adding an insured person (multiple lives policy) change in death benefit option change in COI (YRT to Level) increase in insurance amount add term insurance benefit (5-, 10- or 20-year renewable term) investment account mix change policy loan or cash withdrawal decrease in amount of insurance removing an insured person changes in policy fund allocations on death change in specified percentage on Early death benefit delete a benefit change to preferred non-smoker rates

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However, the following changes are excluded in the two free transactions, and fees are required to be paid up-front:

$25 charge for any returned PAC payments $50 to reissue a contract $50 for accounting history for 2 years and over

We may charge a fee for policy transactions or policy changes that are not listed.

Accessing the policy fund when disabled, ill or injured The policy owner may make one withdrawal from the policy fund each time an insured person becomes disabled as described below. Each disability must continue for 60 consecutive days. Disability for this benefit means occupationally disabled or critically disabled (due to illness, due to deteriorated mental ability and terminal illness). Please see the policy contract for definitions of occupationally disabled and critically disabled.

According to tax rules in effect as of the policy date, the policy owner may make this withdrawal without incurring a taxable disposition. The tax rules may change at any time, without notice. The tax rules in effect on the date of the withdrawal will apply.

Withdrawing funds under this benefit When an insured person qualifies under this benefit the policy owner may make a single withdrawal from the policy fund.

The maximum withdrawal amount from the policy fund is:

the balance in the activity account plus the total of your investment accounts including accumulated interest up to the date of

the withdrawal minus any surrender charge that may apply on the date of the withdrawal minus any loan against the policy fund, including interest minus any market value adjustment that may apply to GIAs minus an amount equal to the cost of insurance for the next 12 months minus a claim assessment fee.

If this amount is less than $500, the policy owner may not make a withdrawal. We will credit interest up to the date of withdrawal.

Unless the policy owner tells us otherwise, we will withdraw money from the activity account and then if necessary according to the withdrawal order. When money is withdrawn from a GIA it will be taken from the layer closest to maturity.

The policy owner may not make any withdrawal under this provision if:

we rated the insured person as a substandard risk for medical reasons and they continue to be rated on the date they become disabled, or

this policy came into effect as the result of a conversion from another life insurance policy while the insured person was disabled.

The policy owner must pay a claim assessment fee each time a claim is submitted to access the policy fund when disabled and any other fee associated with supplying proof of the disability.

Withdrawals will reduce the total death benefit by the amount of the withdrawal.

The policy owner does not qualify for this benefit if the disability is directly or indirectly caused by or associated with the insured person committing or attempting to commit a criminal offence.

Making a claim for this benefit Before we approve the claim, the age of the insured person must be verified. If the insured person is disabled when the policy owner makes a claim for this benefit, we must receive proof of their disability after it continued for more than 60 consecutive days.

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If the insured person is no longer disabled when the policy owner makes a claim for this benefit, we must receive proof:

that the disability continued for more than 60 consecutive days, and of the disability within 1 year of the date the insured person is no longer disabled.

Living benefits A SunUniversalLife policy owner may be eligible for the Living Benefits program. At our discretion, we allow policy owners to “draw” on their insurance amount, provided the insured person is terminally ill and still living.

The Living benefits program was developed as a humane response to consumer needs and is offered on a compassionate and discretionary basis. The program provides for a maximum of 50% of the insurance amount to be paid to a maximum of $100,000.

Any claim is subject to our rules on the Living benefits program at the time the request is made.

How the Living benefits program works Living benefits provides a one-time benefit of up to 50% (maximum $100,000) of the basic insurance benefit where the insured person is not expected to live beyond 12 months. The benefit is a non-commercial loan.

Before calculating the amount of the benefit available under a policy, any outstanding policy loans will be deducted from the basic insurance amount.

The benefit will be charged interest at a comparable rate to interest paid on a death claim settlement.

To protect all those concerned, agreement to the Living benefits payment has to be obtained from all primary beneficiaries. As well, those parties and the insured person will be required to effect a Loan Agreement which will contain an assignment of the insured person’s interest in the policy in favour of the Company to the extent of the loan plus accumulating interest.

The Living benefits program may apply when: the insured person is terminally ill and not expected to live beyond 12 months; and a life plan policy contains a Disability waiver of premium benefit provision (TDB).

Ultimately, the final assessment lies in the hands of our medical office as to whether or not an insured person’s prognosis meets the requirements of the program.

Conversions Any convertible term plan or benefit can be converted, without evidence of insurability, to a Sun

UL policy (except to an Indexed insurance amount death benefit option). If any term plan being converted to Sun UL has a conversion credit, the credit amount will be

transferred into activity account. No permanent plan is convertible to a Sun UL policy. The insurance amount under a yearly renewable term COI can be converted prior to age 81 to

the level COI option. However, the level COI option cannot be converted to the yearly renewable term COI option.

A joint basic insurance benefit is convertible to another joint permanent plan.

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Additional benefits Several attractive additional benefits are available on a Sun UL policy:

Total disability benefit (TDB) – protection or savings

Term insurance benefit for the insured and any additional person

Accidental death benefit (ADB)

Guaranteed insurability benefit (GIB)

Executive GIB

Coverage death benefit (CDB) on joint last to die - protection or savings

Owner death benefit – protection or savings

Owner disability benefit – protection or savings

Total disability benefit (TDB) – protection or savings A choice between two forms of TDB is available on a Sun UL policy. In both cases, the issue ages are 0 through 55, and the premium payment is based on each $100 of benefit. The insured person is also able to choose the benefit period.

With TDB (protection), the monthly cost of insurance for the basic insurance benefit and additional benefits of the insured person will be waived if they become disabled.

With TDB (savings), the insured person chooses a savings amount which can vary between 0 and 2 times the insurance factor of the policy. Upon the disability of the insured person, the savings amount will be paid into the activity account on a monthly basis. The cost of insurance is then deducted from the policy fund. Note: Since the savings amount is level, it may eventually be insufficient to cover the monthly cost of insurance if the yearly renewable term COI option is used, so exercise caution when choosing it.

Definition of total disability The insured person must be completely unable, during the first two years, to carry on own occupation and, thereafter, to carry on any occupation. Total disability must be continuous.

Exclusions Total disability:

i) continues for less than six months, ii) from self-inflicted injuries, or iii) from committing a criminal offence

Please see policy contract for other exclusions.

Making a claim Notice must be given to us:

i) during total disability, and ii) before the insured person’s 61st birthday.

Proof Proof must be given to us:

i) within six months of notice, and ii) then, from time to time as required by us.

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Limitations Payments under this benefit will not be made for any period earlier than one year before a notice of total disability is received by us. The total amount paid by us under Total Disability (Savings), Owner Death (Savings), Owner Disability (Savings), and Coverage Death (Savings) Benefits for this policy must not exceed an amount equal to five times the sum of the insurance factors for the policy.

Term insurance benefits for the insured and any additional persons Five-, ten- and 20 renewable and convertible term insurance benefits provide additional protection that the insured person may require on a temporary basis. Each insured person with a basic insurance benefit can include a term insurance benefit on another person such as a spouse, family member or business partner. This benefit can also be purchased after policy issue on an attained age basis, with the required evidence of insurability. This benefit is guaranteed renewable at the end of each term period, without evidence of insurability, to age 80. Renewal costs are based on the insured person’s attained age at the start of the next renewal period. Insured persons under a single, multi-life, joint first-or last-to-die basic insurance benefit could elect this benefit on a single-life basis only. This benefit can be converted prior to the insured person’s 70th birthday to an additional UL coverage or any eligible life plan offered by us.

Accidental death benefit (ADB) The ADB option pays out an additional death benefit to the beneficiary if the insured person’s death was due to an accident.

This benefit is available at issue ages 0 through 65 and the benefit ceases on the policy anniversary following the insured person’s reaching age 70.

The minimum ADB insurance amount is $10,000. The maximum ADB insurance amount is the policy face amount and is subject to the following issue and participation limits:

Issue Age Issue Limit Participation Limit**

0 to 14* $100,000 $150,000

15 to 24 $250,000 $400,000

25 to 65 $500,000 $750,000

* ADB is not payable if death occurs before age 5 ** Maximum of all ADB insurance amounts with us.

Guaranteed insurability benefit (GIB) GIB allows the policy owner to purchase additional insurance protection, on an attained age basis, without providing any evidence of insurability. Sun UL offers two forms of this benefit - GIB and Executive GIB. Additional Sun UL coverage purchased via a GIB election must be purchased with one of two death benefit options - the Level insurance amount or the Insurance amount plus fund option. The policy owner can also purchase any other life insurance product offered by us, at the time of election.

GIB With GIB, the policy owner has the option to purchase additional coverage every three years, or on family dates (marriage, birth or adoption of a child). This benefit is available at issue age 0 through 50, and the amount purchased must be at least $25,000. The maximum amount of GIB coverage is the lesser of:

i) the original insurance amount and ii) $250,000.

A maximum of eight elections are permitted and the maximum will be reduced by any GIB amount on other policies issued by us covering the designated insured person.

The first GIB election is available when the designated insured person reaches age 24. The benefit ceases on the policy anniversary following age 55.

Executive GIB

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Executive GIB is available on Sun UL coverage where the minimum insurance amount is $250,000. Although the Executive GIB benefit is similar to GIB, the details are quite different. At issue, the insured person can choose how many elections are required, exactly when they will be required, and the insurance amount of each election.

Executive GIB is available at issue ages 25 through 60; the latest election date available is the policy anniversary following age 65.

The minimum insurance amount for each Executive GIB election is $250,000. The lifetime maximum of all GIB elections must be the lesser of:

i) 4 times the original insurance amount, and ii) $4 million.

There is a maximum of five elections available and the first election must be at least three years from the date of issue.

Coverage death benefit (CDB) – Protection or savings for joint last-to-die Two forms of CDB are available on a Sun UL policy. This benefit ensures that coverage continues for the surviving insured person. In both cases, the issue ages are 16 through 75 and the premium payment is based on each $100 of benefit. The insured person is able to choose the benefit period. This feature is only available on joint last-to-die basic insurance benefits.

With CDB (Protection), the monthly cost of insurance will be waived for the chosen benefit period, upon the death of the insured person.

With CDB (Savings), the insured person chooses a savings amount which can vary between 0 and 2 times the insurance factor of the policy. Upon the death of the insured person, we pay the savings amount each month into the activity for the chosen benefit period. Cost of insurance will still be deducted monthly. Note: Since the savings amount is level, it may eventually be insufficient to cover the monthly cost of insurance if the yearly renewable term COI option is used, so exercise caution when choosing it.

Owner death benefit – protection or savings Two forms of Owner death benefit are available on a Sun UL policy. This benefit is the same as Total disability benefit, except that the benefit is paid upon the death (rather than the disability) of the policy owner. Both Owner death benefit (protection) and (savings) are available.

The maximum Owner death benefit (savings) that is available is the greater of:

i) 2 times the insurance factor and ii) $1,500.

Owner disability benefit – protection or savings Two forms of Owner disability benefit are available on a Sun UL policy. This benefit is exactly the same as TDB (protection) and TDB (savings), except that it applies to the named policy owner (rather than the insured person) and is paid upon the disability of the policy owner.

The maximum Owner disability benefit (savings) that is available is the greater of:

i) 2 times the insurance factor and

ii) $1,500.

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Definition of total disability The insured person must be completely unable, during the first two years, to carry on with own occupation and, thereafter, to carry on any occupation. Total disability must be continuous.

Exclusions Total disability:

i. continues for less than six months,

ii. from self-inflicted injuries, or

iii. from committing a criminal offence

Please see policy contract for other exclusions.

Making a claim Notice must be given to us:

i. during total disability, and

ii. before the insured person’s 61st birthday.

Proof Proof must be given to us:

i. within six months of notice, and

ii. from time to time as required by us.

Limitations Payments under this benefit will not be made for any period earlier than one year before we receive a notice of total disability. The total amount paid by us under Total Disability (savings), Owner death (savings), Owner disability (savings), and Coverage death (savings) benefits for this policy must not exceed an amount equal to five times the sum of the of the policy.

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Optional additional benefits summary

Benefit Issue age

Age benefit terminates

Minimum insurance amount

Maximum insurance amount

Total disability benefit (Protection) or (Savings)

0 to 55 To the insured’s person’s 60th birthday or end of the benefit period, if earlier

Chosen by the client – minimum 6 years, maximum to the insured person’s 100th birthday

5-, 10- & 20-year Term insurance benefit

18 to 70 5- and 10-year term 18 to 60 20-year term

80 $100,000 Addition of a renewable and convertible term insurance benefit reduces the remaining amount of total insurance available for the insured person, subject to our retention limits.

ADB 0 to 65 70 $10,000 Policy insurance amount, subject to our current issue and participation limits

GIB 0 to 50 55 $25,000 Maximum per election: lesser of: i) the original insurance

amount and ii) $250,000 lifetime

maximum of 8 elections

Executive GIB 25 to 60 65 $250,000 No maximum per election A lifetime maximum: lesser of: i) 4 times the original

insurance amount and ii) $4 million lifetime

maximum of 5 elections.

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Optional additional benefits summary (continued)

Benefit Issue age Payment and coverage period

Benefit

Coverage death benefit (Protection) or (Savings)

16 to 75 The benefit period Chosen by the client *** – minimum 6 years, maximum to the insured person’s 100th birthday

Owner disability benefit (Protection) or (Savings)*

16 to 55 To the policy owner’s 60th birthday or end of the benefit period, if earlier

Chosen by the client minimum 6 years, maximum to the policy owner’s age 70

Owner death benefit (Protection) or (Savings)*

16 to 60** To the policy owner’s 70th birthday or end of the benefit period, if earlier

Chosen by the client – minimum 6 years, maximum to the policy owner’s 70th birthday

* Maximum savings amount is 2 times the insurance factor or $1,500, whichever is greater.

** 55 if the Disability and death benefit options are both chosen

*** If both lives choose death benefit coverage, they must elect the same benefit period.

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General definitions In this product guide, references to “us and we” mean Sun Life Assurance Company of Canada, a member of the Sun Life Financial group of companies.

Accounts based on performance of indices (Index account) An investment option where the value in the account increases and decreases in proportion to the daily change in an external index. These accounts earn daily interest.

Acknowledgement of variability This is the section of the illustration that advises the policy owner of the variability of the values.

Additional amount with application This is an amount that the client has elected to “dump in” to the UL policy, in addition to the planned periodic payments.

American Equity Index Account Earns a daily rate of return based on the performance of the S&P 500 Total Return Index.

Asset allocation The process of dividing an investment among major asset categories such as bonds, stocks or cash. The purpose of asset allocation is to reduce risk by diversifying the investment.

Assumed interest rate/marginal tax-rate assumption This is a rate selected by the advisor and the client, and will be the basis for most of the illustrations in the presentation. The maximum rate permitted is 10% for the Assumed Interest Rate and 53% for the Marginal Tax Rate.

Canadian Bond Index Account Earns a daily return based on the performance of the Scotia Capital Universe Bond Index.

Canadian Equity Index Account Earns a daily rate of return based on the performance of the S&P/TSX 60 Total Return Index.

Coverage death benefit / protection This additional benefit is available on Joint last-to-die policies and ensures that coverage continues for the surviving insured person by waiving the cost of insurance for a specified period of time.

Coverage death benefit / savings This additional benefit is available on Joint last-to-die policies and ensures that a specified amount will be paid into the activity account on a monthly basis for the surviving insured person.

Death benefit The total amount paid out to the beneficiary upon the death of an insured person.

Death benefit option Defines the death benefit option for the policy, as well as the options to maintain the policy’s tax-exempt status.

Equivalent joint age The equivalent joint age is a single age associated with a Joint first-to-die or Joint last-to-die basic insurance benefit. It is determined on the date the benefit takes effect, using the age, smoking status and sex of each of the insured persons for the joint benefit.

Executive guaranteed insurability benefit (EGIB) This option guarantees the policy owner the right to purchase additional insurance at times and amounts specified by the policy owner, regardless of health.

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Family dates A family date occurs upon the birth of a living child, adoption of a child or marriage of the insured person.

Foreign Equity Index Account Earns a daily return based on the performance of the Morgan Stanley Capital International Europe Australasia and Far East (MSCI EAFE) Free Price Index (excluding dividends).

Fund builder Fund builder is an Insurance amount plus fund death benefit type that is designed to maximize your policy fund value. This death benefit incorporates the exempt maintenance method of Increase insurance amount and reduce below initial. This allows the insurance amount to be reduced to $10,000 and minimizes the cost of insurance. A yearly renewable term cost of insurance is required with this death benefit type. Under this option the policy fund value is paid on death, in addition to the insurance amount. The insurance amount will be adjusted upwards to keep policy funds exempt and will then be reduced when possible.

Funding ratio The funding ratio is determined by dividing A by B where:

A = sum of the net payments and B = sum of the insurance factors, reduced by the insurance factors for the additional benefits and term insurance benefits, multiplied by the number of completed years that their respective coverages have been in effect.

The net payments consists of all payments made to date, decreased by costs for the additional benefits, term insurance benefits and any transaction fees, MVA or withdrawals.

Grace period A grace period of 31 days is allowed for the payment of each monthly cost of insurance, except the first.

Growth The manager chooses stocks for the portfolio based on an assessment of a company’s ability to grow its business profitably. If the manager is right, the company’s stock will increase in price as the company achieves business and earnings growth.

Growth at a reasonable price - GARP The manager looks for the stocks of growth companies that they can buy for a reasonable price. This is a combination of value and growth investing.

Guaranteed insurability benefit (GIB) Guarantees the policy owner the right to purchase additional insurance on each insured person every three years or on family dates, regardless of health.

Guaranteed interest account (GIA) An investment option where the interest and the repayment of principal are guaranteed after a certain term in years e.g. 3 Year GIA.

Guaranteed level Level is one of the two available COI options. With level, the COI remains level and is guaranteed for the life of the coverage.

Guaranteed yearly renewable term (YRT) YRT is one of the two COI options available. With YRT, the COI increases each year as the insured person ages. The rates are guaranteed for the life of the coverage.

Historical average A section of the illustration provides historical average rates for the accounts selected in the illustration.

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Indexed insurance amount This is one of the four available death benefit options. The death benefit is the greater of the Indexed insurance amount and the policy fund value, less allocated outstanding policy loans with interest. The total insurance amount of the coverage will increase annually from the initial insurance amount, by a predetermined rate.

Insurance amount The amount stated in the policy that is payable upon the death of the insured person.

Insurance amount plus fund This is one of the four available death benefit options. Upon death, the policy fund value is paid in addition to the insurance amount. Insurance discount This is the COI discount earned from the funding ratio calculation. The funding ratio is described under the Investment bonus provision.

Insurance factor The insurance factor is equal to 100% of the level COI, plus any multiple-ratings charged at the actual COI (Level or YRT as the case may be). This definition applies even if the yearly renewable term COI option is selected. The insurance factor is determined at the policy’s issue date.

Investment bonus For policies issued on or after November 18, 2005, when a bonus has been chosen, the bonus pays a guaranteed % to the policy fund value based on the average monthly account value in the previous 12 months. The amount of the bonus and the year in which it starts varies by the type of policy coverage purchased and the number of years the coverage is held. For policies issued prior to November 18, 2005, the bonus is paid 10 years after the policy effective date and every fifth policy anniversary thereafter.

Investment options A section of the illustration that demonstrates historical and guaranteed rates for each of the investment accounts selected in the illustration as well as an explanation of these rates.

Investment mix The combination of all investment accounts selected by a SunUniversalLife policy owner, including the activity account, GIAs, accounts based on the performance of indices and accounts based on the performance of managed funds. The mix is expressed in terms of percentages that are multiples of 5%.

Level insurance amount This is one of the four available death benefit options. The total death benefit will be the greater of: i) the insurance amount, and ii) the policy fund value. Less allocated outstanding policy loans with interest.

Living benefits This allows policy owners, at our discretion, to “draw” on their life insurance provided that the insured person is terminally ill and still living.

Management fee The management fee is deducted from interest earned on the index accounts or on the managed accounts. The management fee helps cover the expenses required by us to manage the universal life policy and related investments. Account management fees may change.

Market value adjustment (MVA) A reduction in the value of policy funds withdrawn from a GIA, prior to maturity. This occurs only if the prevailing interest rate (at the time of withdrawal) is higher than that being paid on a new GIA of the same initial term. The MVA applies to withdrawals, policy loans, or transfers from a GIA, except on transfers required to pay for monthly cost of insurance or to maintain the policy’s tax-exempt status.

Minimum amount required with the application

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This is the minimum payment that will be required for the plan. This amount may change over time. The minimum lump sum requirement is $250. The minimum PAC payment is the monthly cost of insurance plus applicable provincial premium tax.

Monthly anniversary date The day of the month the policy went into effect. For example, a policy date of August 2nd will have a monthly anniversary on the second day of each month.

Monthly activity account minimum The monthly activity account minimum is calculated by adding the monthly cost of insurance (mortality charges plus the cost of any additional benefits). The activity account minimum is only used for reinstatements.

Multiple lives coverage Currently, up to nine lives in a family or business can be covered under one policy.

Net cost of insurance The COI less the insurance discount.

Net cost of pure insurance (NCPI) An annual cost of insurance, prescribed by Canada Revenue Agency, that is used in the calculation of a policy’s adjusted cost basis.

Net payment Payments net of applicable provincial premium tax.

Net insurance amount at risk The difference between a coverage’s basic insurance amount and the policy fund value.

Owner death benefit / Protection This option ensures that the policy’s cost of insurance is waived for a specified period of time should the policy owner die.

Owner death benefit / Savings This option ensures that a specified amount be paid into the activity account on a monthly basis should the policy owner die.

Owner disability benefit / Protection This option ensures that the policy’s cost of insurance is waived for a specified period of time, should the policy owner become totally disabled.

Owner disability benefits / Savings This option ensures that a specified amount be paid into the activity account on a monthly basis should the policy owner become totally disabled.

Payment This is a payment made at any time into a SunUniversalLife policy.

Payments/Withdrawals column A column on the illustration that contains the selected planned payments on an annual basis. The withdrawal section illustrates selected planned withdrawals on an annual basis.

Planned periodic payment The amount chosen by the policy owner to pay into the policy at specified time periods.

Policy fund value The total value of all investment accounts.

Policy loans A means of accessing the policy fund. A loan up to the policy’s adjusted cost basis can be received without taxation. Any amount in excess of the adjusted cost basis is taxable income to the policy owner. The amount of any outstanding policy loans plus interest will reduce the death benefit. The amount of the policy loan is moved into the activity account. The activity account will continue to earn interest on the

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amount, and the interest you pay on the policy loan will be 2% higher than what you earned in the activity account. No policy loans are allowed in the first policy year.

Policy taxation summary This section of the illustration outlines the taxable interest generated on a SunUniversalLife policy when interest is earned by the service account and when there is a partial withdrawal or a full surrender of the policy’s fund value.

Reinstatement We will put the policy back in force within two years of termination, subject to insurability, if the policy owner repays all the outstanding monthly cost of insurance with interest.

Sensitivity analysis A page in the illustration that shows cash surrender value (CSV) and death benefits at three different interest rates so that the policy owner fully understands the effect of illustrated rates and lapse sensitivity.

Service account All non-exempt funds are transferred into the service account, and the interest earned is reported as taxable investment income to the policy owner. Service account funds can be invested in any one of the available GIAs, index accounts, managed accounts or the DIA.

Service account balance column If the service account option is selected, the balance at the end of each policy year will appear in this column.

Surrender charges A charge that applies to the policy fund value if the policy is cancelled in the first 10 years of coverage.

Tax on service account If a service account exists, an annual tax will be payable on the interest earned in this account.

Tax on surrender This is the tax payable on full surrender of the policy fund value.

Tax on withdrawals This column illustrates any tax payable as a result of the withdrawals. The tax is based on the policy owner’s assumed marginal tax rate.

Term insurance benefit This benefit allows the insured person to purchase, prior to age 70 for the 5- and 10-year and age 60 for the 20-year term, additional protection until age 80. The benefit is guaranteed to be renewable at the end of each term period, without evidence of insurability. This benefit can be converted prior to the insured person’s 70th birthday to an additional UL coverage or any eligible life plan offered by us.

Total disability benefit / Protection (TDB Protection) This ensures that the monthly cost of insurance for the insurance be waived for a specified period of time, should the insured person become totally disabled.

Total disability benefit / Savings (TDB Savings) This ensures that a specified amount will be paid to the activity account on a monthly basis should the insured person become totally disabled.

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Value The manager chooses stocks that are inexpensive based on an analysis of the company’s current strengths and future prospects. If the manager is right, the company’s stock will increase in price as others in the market recognize the true value of the stock.

Withdrawals After the first policy year, the maximum amount available for withdrawal is equal to the CSV of the policy.

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Appendix A Investment Bonus (for policies issued prior to November 18 2005) A Sun UL policy will pay an investment bonus equal to a given percentage times the interest earned in the various policy fund accounts, over the 60 months immediately preceding the bonus payout. This bonus is paid on the tenth policy anniversary and reoccurs on every fifth anniversary thereafter. The bonus interest will be added to the activity account.

The investment bonus percentage is 10% if the corresponding funding ratio is less than 2.0 and 20% for a funding ratio equal to or exceeding 2.0.

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Appendix B Sample SunUniversalLife Policy (with Bonus and COI Discount)

SunUniversalLife • one insured person • investment bonus is included • death benefit option: insurance amount plus the policy fund • guaranteed level rates • proportional withdrawal order Policy number: LI-1234,567-8 Owner: John Doe 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.

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Policy summary In this document, you and your mean the owner of this policy. We, us, our, and the company mean Sun Life Assurance Company of Canada. Your policy is issued and underwritten by Sun Life Assurance Company of Canada, a member of the Sun Life Financial group of companies. Please read this policy carefully. It describes the benefits payable and exclusions and reductions of coverage. SunUniversalLife Your policy number is: LI-1234,567-8 Your policy effective date is: February 4, 2008 Monthly anniversary day: the 4th of every month Owner: John Doe born on May 5, 1961 Insured person(s): John Doe born on May 5, 1961 Beneficiary: is named on your application, unless you make a change in writing. Transfers and withdrawals are processed in the proportional withdrawal order, which may not be changed. This is not a participating policy. You are not eligible to receive policyholder dividends. To help you understand insurance terms, refer to the explanations described under the General provisions section under the heading, Definitions.

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Schedule of benefits and cost of insurance Basic insurance benefit Insured person: John Doe A death benefit is payable when the insured person dies. Death benefit option: Insurance amount plus the policy fund Insurance amount: $100,000 Risk classification: Non-smoker Cost of insurance type: Guaranteed level rates Cost of insurance table: T100ULC08 The cost of insurance for the basic insurance benefit is payable on February 4, 2008 and on each monthly anniversary day that is before February 4, 2062. The guaranteed annual cost per $1,000 for this basic insurance benefit is $XXX.XX. The calculation for the monthly cost of insurance is shown in the Insurance provisions section. An insurance factor for this basic insurance benefit is $XXX.XX. The insurance factor is used to calculate the insurance discount and the surrender charge.

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E00001#J If you change your mind within 10 days You may send us a written request to cancel your policy within: • 10 days of receiving it from us, or • 60 days after the policy is issued, whichever date is earlier. When we receive your written request we'll refund any amount paid. This is called rescission. You are considered to have received your policy 5 days after it's mailed from our office, or on the date your advisor delivers it to you. Your decision to cancel your policy is your personal right. The cancellation is binding on you and any beneficiaries you’ve named, whether the beneficiaries are revocable or irrevocable. All of our obligations and liabilities under this policy will end immediately when we receive your request to cancel it. To cancel your policy, send your request in writing to:

Sun Life Assurance Company of Canada 227 King St. S. PO Box 1601, Stn. Waterloo Waterloo ON Canada N2J 4C5

E01010#A About your SunUniversalLife policy SunUniversalLife is a permanent life insurance policy that includes insurance benefits on one or more persons with several investment options available to you. Payments must be made to Sun Life Assurance Company of Canada to keep your policy in effect and are subject to a minimum and maximum limit that we determine. We reserve the right to refuse cash payments. Any payment we receive at our head office before the Toronto Stock Exchange is closed for the day is applied to your policy effective that day. Any payment we receive at our head office after the Toronto Stock Exchange is closed is applied to your policy effective on the following business day. Any request for transfer, withdrawal, policy loan or policy cancellation that we receive at our head office before the Toronto Stock Exchange is closed for the day is effective that day but processed the following business day. If money is moved to or from an investment account, we reserve the right to delay the effective date of the transaction for up to 5 business days from the day we receive your request or the day we receive funds. Payments we receive are held in our general fund. When you invest in any investment account you do not: • acquire any ownership interest in the designated fund or index • purchase units, or • have any legal interest in any security.

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Section 1: Insurance provisions Your policy includes the insurance benefits you have selected as well as the policy fund. This fund includes the activity account (which is used to pay the cost of insurance) and the investment accounts. Activity account and provincial premium tax When we receive a payment, money is added to the activity account as long as the total of the payments made during the policy year is below the annual maximum amount for that year to keep the policy tax-exempt. The applicable provincial premium tax is deducted from the amount that is added to the activity account. This tax differs by province and is determined by government legislation. It is subject to change at any time. This account earns daily interest at the rate we set. The interest rate is subject to change at any time. The guaranteed minimum interest rate will be at least 90% of the Government of Canada 30-day Treasury Bill rate in effect on the day we set the interest rate, less a management fee of 1.75 percentage points. Under no circumstances will the rate be less than 0%. E01020#A Paying for the cost of insurance Each monthly anniversary day, we deduct money from the activity account to pay for the cost of insurance for all basic insurance benefits and additional benefits in this policy. The amounts we deduct are according to the Schedule of benefits and cost of insurance. If there is not enough money in the activity account to pay for the cost of insurance, we will transfer money from your investment accounts according to the withdrawal order you selected. The order may not be changed.

Proportional withdrawal order Proportional order means money is transferred in proportion to the value of your investment accounts on the day of the transfer.

If we transfer money from a GIA layer to pay for the cost of insurance, there is no market value adjustment. Money will be taken from the GIA layer closest to maturity and interest will be credited up to the date of the transfer. If there is not enough money in the activity account and investment accounts, we will transfer money from the service account, if included in this policy, to pay for the cost of insurance. If you have money in an index account or an account based on the performance of managed funds, and the rate of return negatively impacts your policy fund value, then you may need to make additional payments to ensure there is enough money in the policy fund to pay the required cost of insurance and provincial premium tax. E01060#A Calculating the monthly cost of insurance The monthly cost of insurance is determined by a number of factors such as an insured person’s age, sex, health and the cost of insurance type you selected. There are two types of guaranteed rates available for each basic insurance benefit. You may select either: • guaranteed yearly renewable term rates which increase each year, or • guaranteed level rates that remain constant from year to year.

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The guaranteed annual cost of insurance per $1,000 for each basic insurance benefit is shown on the Schedule of benefits and cost of insurance.

The monthly cost of insurance for a basic insurance benefit is: (A × B) × ( 1 - cost of insurance discount) 12

where: A = the annual cost per $1,000 of net insurance amount at risk B = the net insurance amount at risk divided by 1,000.

If the death benefit option is Insurance amount plus fund or Fund builder, the net insurance amount at risk is the basic insurance amount. If the death benefit option is Level insurance amount, the net insurance amount at risk is: • the basic insurance amount • minus the allocated policy fund value. If the death benefit option is Indexed insurance amount, the net insurance amount at risk is: • the indexed insurance amount • minus the allocated policy fund value. Allocated policy fund value is described in the Investment provisions section. The net insurance amount at risk is never less than zero for Level insurance amount and Indexed insurance amount. Cost of insurance discount We calculate a cost of insurance discount for each basic insurance benefit every policy anniversary. The cost of insurance discount is used to reduce the monthly cost of insurance for the basic insurance benefit for the next policy year.

The cost of insurance discount for each basic insurance benefit is: (the funding ratio - 1) × (the discount factor)

Funding ratio The funding ratio is A over B, where:

A = the sum of all net payments into the policy fund B = the sum across all basic insurance benefits of the following value:

(each basic insurance benefit's insurance factor) x (the number of completed years that each benefit has been in effect)

Net payments are equal to all payments made, including transfers from the service account to the policy fund, minus: • any cost of insurance for additional benefits, and • any withdrawals, including transfers from the policy fund to service account, and any fee or MVA we

charged to the policy fund. The funding ratio will never be less than 0 or more than 3. The funding ratio after the ninth anniversary of a basic insurance benefit will never be less than the funding ratio for the ninth anniversary for that benefit.

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Discount factor We determine the discount factor for each basic insurance benefit according to age and the factor shown in the chart below. If the cost of insurance for a basic insurance benefit is determined by: • guaranteed yearly renewable term rates, we use the attained age of the insured person (or attained

equivalent joint age) • guaranteed level rates, we use the age of the insured person (or equivalent joint age) on the date the

rates for that benefit became level.

Age

Discount factor

Age

Discount factor

Age

Discount factor

0 - 50 0.100 57 0.065 64 0.030 51 0.095 58 0.060 65 0.025 52 0.090 59 0.055 66 0.020 53 0.085 60 0.050 67 0.015 54 0.080 61 0.045 68 0.010 55 0.075 62 0.040 69 0.005 56 0.070

63 0.035

70 or older

0.000

E01075#A Death benefit option The death benefit option you selected for each basic insurance benefit in this policy is shown on the Schedule of benefits and cost of insurance and described below. Insurance amount plus fund The death benefit is: • the basic insurance benefit amount • plus the allocated policy fund value • minus any allocated policy loans including interest. If this policy has one basic insurance benefit the entire policy fund and any policy loans are allocated to that benefit. If this policy has more than one basic insurance benefit we allocate a portion of the policy fund value and any policy loans to each of those benefits, as described in the Investment provisions section.

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E01090#C Paying a death benefit - insured person’s death When a death benefit is payable, we make a payment to the named beneficiary for that insured person’s insurance benefit(s). The amount of the death benefit is determined on the date we receive written notification that the insured person died. We also pay to the beneficiary an amount equal to the cost of insurance deducted for that insured person from the date of their death to the date we receive written notification that they died. If there is a basic insurance benefit on one insured person, that benefit ends when the insured person for that benefit dies. If there is a Joint first-to-die basic insurance benefit, that benefit ends when one of the insured persons for that joint benefit dies. If there is a Joint last-to-die basic insurance benefit, that benefit ends when all of the insured persons for that joint benefit die. This policy ends on the date all basic insurance benefits in this policy end. We pay any amount in the service account on that date to the owner or the estate of the owner. When we will not pay a death benefit (exclusions and reductions in coverage) We will not pay a death benefit if the insured person dies before reaching the age of 15 days. We will not pay any death benefit* if an insured person takes their own life, while sane or insane, within 2 years of the later of: • the date the application for their basic insurance benefit was signed, or • the most recent date this policy was put back into effect, if your policy has been reinstated. The basic insurance benefit ends and instead of paying a death benefit we pay the beneficiary: • the allocated policy fund value on the date we receive written notification that the insured person has

died • plus the total cost of insurance we deducted for that insured person’s benefits • minus any allocated policy loan, including interest. If the policy has been put back into effect, we’ll refund only the cost of insurance that was deducted for that insured person since the most recent date the policy was reinstated. If an insured person takes their own life, while sane or insane, within 2 years of any increase in their basic insurance benefit that you applied for, we will not pay the amount of the increase. Instead, if the basic insurance benefit has been continuously in effect for at least 2 years at the time the insured person dies, we will pay the following amount to the named beneficiary: • the death benefit we would have paid before the increase • plus the allocated policy fund value on the date we receive written notification that the insured person

has died • plus an amount equal to the cost of insurance deducted for the increase in the basic insurance death

benefit • minus any allocated policy loan, including interest.

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If this policy is the result of a replacement of insurance *If any death benefit is the result of a replacement of life insurance that was issued by us, we determine the amount payable for the part that is a replacement based on the effective date or dates of your previous insurance and any additional benefits. Policy fund value on death If all or part of the policy fund value is payable when an insured person dies, withdrawals are made and valued as of the date we receive written notification the insured person has died. The funds are withdrawn from the activity account first, and then according to your withdrawal order. Making a claim for the death benefit To make a claim, contact us at the toll free phone number shown at the beginning of this policy. We will then send the appropriate form to be completed. The person making the claim must complete the form and give us the information we need to assess the claim, including proof that the insured person died while this policy was in effect. The form and information must be sent to this address:

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

There may be a fee from a physician to complete certain forms. The person making the claim is responsible for any fee for this information. Before we pay the death benefit, the age of the insured person must be verified. If the age given on the application is incorrect, we adjust the amount we pay to reflect the insured person's correct age.

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Section 2: Investment provisions Policy fund value Your policy fund value is the total amount in the activity account plus the total of your investment accounts including accumulated interest. Allocated policy fund value and allocated policy loans If this policy has one basic insurance benefit, the entire policy fund value is allocated to that benefit. If this policy has more than one basic insurance benefit, we allocate a portion of the policy fund value to each basic insurance benefit. Proportional allocation of the policy fund value applies to basic insurance benefits unless you selected an alternate allocation method for a death benefit option that is Insurance amount plus fund or Fund builder. Proportional allocation For proportional allocation, the allocated policy fund value is a percentage of the reduced policy fund value. For each basic insurance benefit, the percentage is the proportion of that benefit amount to the total of all basic insurance benefit amounts. The reduced policy fund value is the policy fund value decreased by the monthly cost of insurance for these additional benefits, if included in this policy: • Total disability benefit (savings) • Term insurance benefit • Term insurance benefit on an additional insured person • Accidental death benefit • Guaranteed insurability benefit • Executive guaranteed insurability benefit • Coverage death benefit (savings) • Owner disability benefit (savings) • Owner death benefit (savings) Alternate allocation Alternate allocation methods are available if the death benefit option is Insurance amount plus fund or Fund builder. These methods are the payment of the entire policy fund value when: • the first death benefit is payable, or • the last death benefit is payable. If more than one insured person dies at the same time the policy fund value will be divided into amounts that are proportional to the amount of each basic insurance benefit when a death benefit is payable. Re-allocation of the policy fund value If an insured person is removed or added to this policy, we will re-allocate the policy fund value in proportion to the resulting basic insurance benefit amounts. Allocated policy loans If this policy has more than one basic insurance benefit, we allocate a portion of any policy loans to each benefit. If this policy has one basic insurance benefit, the entire policy loan is allocated to that benefit. The allocated policy loan with interest is in the same proportion as the allocated policy fund value. E01110#C

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Investment accounts Several investment accounts are included in your policy: daily interest account (DIA), guaranteed interest accounts (GIAs), accounts based on the performance of indices and accounts based on the performance of managed funds. Your investment mix is the investment accounts and the percentages you selected for those accounts. You may change the accounts or percentages or both at any time by sending us your request to change. A transaction fee may be charged for this change. Each of your investment accounts must have a minimum amount of $250. All subsequent transfers to each account must also be at least $250. Transfers to your investment accounts Provided the cost of insurance has been paid, money will be transferred from the activity account after the minimum amount for all selected accounts is met according to your investment mix. Transfers are also processed on a monthly anniversary day if the minimum amount for all accounts is met.

Example 1: assume the investment mix is American Equity 50% and Canadian Bond 50% · A minimum of $500 must be in the activity account to meet the minimum required amount for

this investment mix before a transfer can be made to the two selected investment accounts. · Once $500 is in the activity account, then $250 (50% of $500) will be transferred to the

American Equity account and $250 (50% of $500) will be transferred to the Canadian Bond account.

Example 2: assume the investment mix is American Equity 10% and Canadian Bond 90% · A minimum of $2,500 must be in the activity account to meet the minimum required amount for

this investment mix before a transfer can be made to the two selected investment accounts. · Once $2,500 is in the activity account, then $250 (10% of $2,500) will be transferred to the

American Equity account and $2,250 (90% of $2,500) will be transferred to the Canadian Bond account.

· If $2,490 was in the activity account, money would not be transferred from the activity account to the selected accounts. With the investment mix of American Equity 10% and Canadian Bond 90% there is only $249 (10% of $2,490) available to be transferred to the American Equity account and that does not meet the minimum requirement of $250 for all selected accounts.

Daily interest account (DIA) This account earns daily interest at the rate we determine. The interest rate is subject to change at any time. The guaranteed minimum interest rate will be at least 90% of the Government of Canada 30-day Treasury Bill rate in effect on the day we set the interest rate, less a management fee of 1.75 percentage points. Under no circumstances will the rate be less than 0%. Guaranteed interest accounts (GIAs) Guaranteed interest accounts are available in terms of 1, 3, 5, 10 and 20 years. Each time money is transferred to a GIA, we establish a new layer for that amount with a specific maturity date and interest rate. The interest rate remains in effect for the full term of that account and interest is credited daily. Interest is compounded annually. For each GIA, the guaranteed minimum interest rate will be at least 90% of the Government of Canada Bond rate with the same term, less a management fee of 1.75 percentage points. Under no circumstances will the rate be less than the guaranteed minimum interest rate shown in the table below. If Government of Canada Bonds with the same term are not available, we will use our best estimate to determine what the rate would be if a bond with the same term were available.

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GIA accounts

Guaranteed minimum interest rate

1-year term account 0 % 3-year term account 1 % 5-year term account 2 %

10-year term account 3 % 20-year term account 3 %

When a GIA layer matures we follow your instructions: • we apply the balance of the GIA layer to a new GIA account for the same term, or • we transfer the value including interest at the maturity date to the activity account. Money will be

transferred from the activity account after the $250 minimum amount for all your investment accounts is met according to your investment mix.

We may change GIA accounts available to you at any time. If you have money in a discontinued account we’ll notify you. We will continue to follow your investment instructions except that money that would otherwise be transferred to a discontinued GIA account will be transferred to a GIA account with the next shortest term. We will always offer a GIA account with a 2% guaranteed minimum interest rate and one with a 3% guaranteed minimum interest rate. Accounts based on the performance of indices You may put money into one or more index accounts shown in the table below. These accounts reflect the performance of the indices on which they are based. Each business day we subtract a daily management fee. The daily management fee is equal to the annual management fee divided by the expected number of business days within the current calendar year. The annual management fee is shown in the table below. Index accounts

Indices they are based on

Annual management fee

FPX Income FPX Income 2.80% FPX Balanced FPX Balanced 3.20% FPX Growth FPX Growth 3.40% Canadian Equity S&P /TSX 60 Total Return 2.75% * American Equity S&P 500 Total Return 3.00% * Foreign Equity MSCI EAFE Free Price Index 2.00% European Equity MSCI Europe Price Index 2.00% Pacific Equity MSCI Pacific Free Price Index 3.00% Japanese Equity Nikkei 225 Total Index 3.25% * American Technology Nasdaq-100 Total Index 3.00% * Canadian Bond Scotia Capital Universe Bond Index 3.00%

*These fees are guaranteed not to increase before the fifth policy anniversary. After the fifth anniversary, the management fee may be increased by a maximum of .25%. MSCI means Morgan Stanley Capital International EAFE means Europe Australasia and Far East FPX means Financial Post Index

FPX Income Index, FPX Growth Index and FPX Balanced Index are trademarks of The National Post Company.

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Standard and Poor’s, S&P and S&P 500 are trademarks of The McGraw-Hill Companies, Inc. TSX is a trademark of The Toronto Stock Exchange.

Morgan Stanley Capital International (MSCI) EAFE Free Price Index, Europe Price Index and Pacific Free Price Index are trade-marks of Morgan Stanley Capital International Inc.

The Nikkei 225 Index is the intellectual property of Nihon Keisal Shimbun Sha.

The NASDAQ 100 Index is a trademark of Nasdaq Stock Market Inc.

The Scotia Capital Universe Bond Index is a trademark of The Bank of Nova Scotia.

SunUniversalLife policies are not endorsed, sold or promoted by any of the above mentioned organizations and/or trademark owners.

Each business day we determine the percentage change in the value of each index for the previous business day. On days when an index on which one of your investment accounts is based gains or loses value, the percentage change in the value of the index for that day will be either positive or negative. Money will be added to or deducted from that account according to the change in the value of the index. On a day other than a business day, the percentage change is zero. The daily value of the index is the latest value available to us. As part of the above calculation, any index that is not valued in Canadian dollars is converted to an equivalent Canadian dollar value daily. This means that changes in exchange rates will affect the total amount in your index accounts. We may change the index accounts or the indices on which they are based at any time. If we discontinue any of the investment choices, we’ll notify you in advance and provide information about other accounts that are available. If you do not reply within the time specified in the notice, then the amount of any discontinued account will be transferred to either an account with a similar investment objective or to the activity account if there is no account with a similar investment objective. If money is transferred to the activity account and the $250 minimum amount is met for all remaining selected accounts, the money will then be transferred according to your investment mix. We will maintain the index accounts which are based on the Canadian and American equity markets and the Canadian bond market, and we will maintain the management fees for those accounts as described above unless after the policy date there is a material change in: • the investment environment for monitoring and replicating an index account, or • the legislation that applies to life insurance policies that have accounts based on the performance of

indices. Accounts based on the performance of managed funds The accounts offer returns based on the performance of designated funds managed by a third party (fund manager) that we select. Account balances will be adjusted daily. Each daily adjustment may increase or decrease the balance of the account, depending on the rate of return. We may change, merge, or withdraw accounts at any time. If we change or merge accounts in which you have a balance, we will tell you. If we withdraw an account in which you have a balance, we will transfer the balance for that account to another account with similar investment objectives and notify you. If there are no accounts with similar investment objectives, a transfer will be made to the activity account and your funds will be invested based on your then current investment mix.

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The daily rate of return for this account on a business day is: • the Canadian dollar rate of return on the designated fund, which reflects the fund manager’s expenses

and fund distributions • minus, if applicable, an additional annual management fee we charge, divided by the number of

expected business days within the calendar year. This additional management fee may change from time to time.

The rate of return is not guaranteed and may be positive or negative. We reserve the right to revise or correct any rate of return that was based on incorrect information provided by the fund manager. On a day other than a business day, the daily rate of return is 0%. E00115#A Investment bonus On the second policy anniversary and each anniversary after that, we determine if an investment bonus is payable. Any investment bonus payable on the policy anniversary is added to the activity account and then transferred as described in the Investment provisions section. The investment bonus is 0.40% of: • the average policy fund value for the previous policy year • minus the average policy loan amount including accrued interest for the previous policy year. The average policy fund value for the previous policy year is the total of the monthly average policy fund values in the 12 months before the policy anniversary, divided by 12. Each monthly average policy fund value is the total of the policy fund values on the current and prior monthly anniversary day, divided by 2. The average policy loan amount for the previous policy year is the total of the monthly average policy loan amounts in the 12 months before the policy anniversary, divided by 12. Each monthly average policy loan amount is the total of the policy loan amounts on the current and prior monthly anniversary day, divided by 2. E01120#A Maintaining the tax-exempt status of your policy According to current Canadian tax law, the money in your policy fund is not taxed if it is below the tax-exempt limit and it remains in your policy fund. This limit changes annually on the policy anniversary. If a payment would cause your policy fund value to exceed the tax-exempt limit then, depending on the method you chose to maintain your policy’s tax-exempt status the excess amount of that payment will be: • refunded to you immediately, or • transferred to the service account. Provincial premium tax is not deducted from excess amounts

transferred to the service account. At each policy anniversary, we compare the policy fund value to the tax-exempt limit. If the policy fund value exceeds the tax-exempt limit, we make an adjustment to your policy, according to the method you requested. You applied for one of the following methods to maintain the tax-exempt status of your policy: • retain the amount of all basic insurance benefits

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• increase any basic insurance amount by the percentage required. The maximum increase is 8% of the cumulative basic insurance amount, including any increase under the indexed death benefit option, or

• increase and reverse: increase any basic insurance amount by the percentage required. The maximum increase is 8% of the cumulative basic insurance amount, including any increase under the indexed death benefit option. We reverse these increases at each future policy anniversary as long as the policy will not lose its exempt status.

After an increase, the total amount for all basic insurance benefits is subject to a maximum we set that will never be more than 4 times the total of all basic insurance benefits in this policy before the increase. Depending on the method you chose to maintain the tax-exempt status of your policy, any excess funds still remaining in the policy fund at the policy anniversary date will be: • refunded to you immediately, or • transferred to the service account. We withdraw excess funds from the investment accounts first from the activity account and then, if required, according to your withdrawal order. When an insurance amount is increased, we establish a new basic insurance benefit for the increased amount. The cost of insurance rates per $1,000 for the increase in the insurance amount are based on: • the attained age of the insured person (or attained equivalent joint age), and • the rates in effect at the time of the increase. The rates per $1,000 will not be greater than 125% of the rates in effect when the basic insurance benefit being increased was initially established, using the attained age described above. The limit does not include any ratings or adjustments to the cost of insurance. Service account This account earns interest according to the investment option you selected for the service account. Interest earned on the service account is taxable. We may set a maximum amount you may have in the service account. A transaction fee may be charged for withdrawals. At each policy anniversary the tax-exempt limit for your policy may increase. At that time, we will transfer as much money as the tax-exempt limit allows from the service account to the activity account. This minimizes the tax you pay on the service account. Provincial premium tax is deducted from the amount transferred from the service account to the activity account. The service account is not part of the policy fund value. Market value adjustment (MVA) for guaranteed interest accounts There is no MVA when money is transferred from: • any investment account to the activity account to pay for the cost of insurance • any investment account to the service account, or • the service account to the activity account. We may deduct an MVA when you: • withdraw money from this policy • borrow money from the policy fund, or • transfer money between investment accounts.

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For these transactions, we deduct an MVA if: • money is withdrawn or transferred from a GIA layer before it matures, and • the current interest rate for a new GIA layer with the same term is greater than the interest rate of the

existing GIA layer. Guaranteed interest account (GIA)

The MVA = W × { 1 - the lesser of 1 and [ (1 + J)D ÷ (1 + K)D ] }

where: W = amount withdrawn or transferred from the GIA layer D = number of days to maturity in the existing GIA layer divided by 365 J = actual interest rate for the existing GIA layer, excluding any investment bonus K = current interest rate for a new GIA layer with the same term as the existing GIA

Withdrawing money from your policy You may withdraw money from your policy at any time. The minimum withdrawal amount is $500. We may charge a transaction fee for withdrawals. Unless you tell us otherwise, we withdraw money from the service account, if included in this policy, then from the activity account and then if necessary according to your withdrawal order. When money is withdrawn from a GIA it will be taken from the layer closest to maturity. Any withdrawal from GIAs may be subject to a market value adjustment. In the first policy year, the maximum amount you may withdraw from the policy fund is: • the total of all payments made into the policy fund • minus the applicable provincial premium tax • minus the total of all insurance factors for this policy After the first policy year, the maximum amount you may withdraw is the cash surrender value, which is: • the policy fund value • minus any policy loans, including interest • minus any market value adjustment that may apply to GIAs • minus the amount of any surrender charge • plus any amount in the service account, if included in this policy. You may have to pay tax on withdrawals from your policy fund. How withdrawals may affect a death benefit A withdrawal from your policy will reduce the death benefit that is payable. If the death benefit option for a basic insurance benefit is Level insurance amount or Indexed insurance amount, we will reduce the insurance amount according to the allocated policy fund value for each basic insurance benefit. E01130#B Borrowing money from your policy (policy loans) After the first policy year, you may borrow money from your policy fund. The minimum amount you may borrow is $500. We may charge a transaction fee. The maximum amount you may borrow is:

[ (100% - loan interest rate) × (policy fund value - market value adjustments - surrender charge) ]

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- (all outstanding policy loans including interest) If the amount you borrow, or the outstanding policy loan, is greater than the amount in the activity account, we will transfer money from your investment accounts to the activity account, according to the withdrawal order you selected. We will transfer enough money until the amount of the activity account equals the policy loan amount including interest. When money is withdrawn from a GIA it will be taken from the layer closest to maturity. Any transfers from GIAs may be subject to a market value adjustment. We charge interest on the loans each day. The interest accumulates and we add it to the balance of the loans each monthly anniversary day. We set the interest rate and may change it at any time. You may repay your policy loan(s) at any time. When you make a loan payment, we transfer an amount equal to the repayment amount from the activity account to your investment accounts as described in the Investment provisions section under the heading, Transfers to your investment accounts. If a loan is outstanding at the time a death benefit is payable, the loan plus interest will be deducted from the amount we pay to the beneficiary. E01140#C Accessing the policy fund when disabled, ill or injured You may make one withdrawal from your policy fund each time an insured person becomes disabled by illness or injury as defined below. The minimum and maximum amount you may withdraw is described under the heading, The Amount you may withdraw. According to tax rules in effect as of the policy date you may make this withdrawal without incurring a taxable disposition. The tax rules may change at any time, without notice. The tax rules in effect on the date you request a withdrawal will apply. Defining disabled Each disability must continue for at least 60 consecutive days. To be considered disabled in any of the four disabled categories (occupationally disabled, critically disabled due to illness or injury, critically disabled due to deteriorated mental ability and critically disabled - terminal illness) set out below, the insured person must be: • under the active, continuous and medically appropriate care of a physician, or other health care

practitioner acceptable to us • following the treatment prescribed and any other recommendations made by a physician or health

care practitioner, and • occupationally disabled or critically disabled as defined below. Occupationally disabled To be considered occupationally disabled under this provision, the insured person must as a result of illness or injury, qualify under one of the following: If employed • if the insured person is unable to perform the substantial duties of their regular occupation, and is not

engaged in any gainful occupation, or • if the insured person is employed in a gainful occupation but they have experienced at least a 50%

loss of income over 60 consecutive days compared to the earned income from their regular occupation during the 60 days immediately before the day they became disabled.

If unemployed or retired • if the insured person is unemployed or retired at the time of claim, the insured person is unable to

perform the essential duties of their regular occupation from which they were last employed.

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If employed in the home • if the insured person is responsible for maintaining their home or caring for immediate family

members, the insured person is unable to perform all of the essential duties of maintaining that home or caring for those individuals.

If the insured person is a student age 16 or older at the time they become disabled, we consider them to be occupationally disabled if they are unable to attend or participate as a student, or perform any occupation for remuneration or profit within their education, training or experience, during the entire time they are disabled. If the insured person is under age 16, we consider them to be disabled if, as a result of illness or injury, they require the presence of an adult attendee. Critically disabled - due to illness or injury Critically disabled means the insured person, as a result of illness or injury, is unable to perform any of the activities described below. The activities are: Bathing Bathing means washing oneself: • in a bathtub or shower, including getting in and out of the bathtub or shower, or • by sponge bath. Dressing Dressing means putting on, taking off, fastening and unfastening: • clothing, and • medically necessary braces or artificial limbs. An insured person is not dependent for dressing if reasonable alterations to or changes in the clothing they usually wear would enable them to dress without substantial physical assistance. Feeding Feeding means the insured person’s ability to get food into their body: • through the mouth, or • by a feeding tube. Feeding does not include cooking or preparing a meal. Toileting Toileting means getting to and from and on and off the toilet, and performing associated personal hygiene. Transferring Transferring means moving into or out of a bed, chair or wheelchair. This does not include getting into or out of the bathtub or shower, as we include this in bathing. Continence Continence means the ability to control both bowel and bladder functions, or maintain a reasonable level of personal hygiene (including caring for catheter or colostomy bag) when not able to control either bowel or bladder functions or both. Critically disabled - due to deteriorated mental ability

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We consider the insured person critically disabled if they have deteriorated mental ability and need continual supervision by another person for protection from threats to their physical health and safety as the result of deterioration in or a loss of: • short-term or long-term memory • orientation as it relates to people, place and time • reasoning, or • judgment, as it relates to safety awareness. Deteriorated mental ability must result from an organic brain disorder such as Alzheimer’s disease, irreversible dementia, or brain injury. Deteriorated mental ability is also known as cognitive impairment. Deteriorated mental ability is determined by a neurologist licensed and practising in Canada or the United States, based on clinical observation, radiological studies and psychological testing. Critically disabled - terminal illness We consider the insured person critically disabled if they have a condition which has been diagnosed as terminal by a physician, and the prognosis for living is less than 24 months. The amount you may withdraw The maximum amount you may withdraw from your policy fund is: • the balance in the activity account • plus the total of your investment accounts including accumulated interest up to the date of

withdrawal • minus any surrender charge that may apply on the date of the withdrawal • minus any loan against the policy fund, including interest • minus any market value adjustment that may apply to GIAs • minus an amount equal to the cost of insurance for the next 12 months • minus a claim assessment fee. The minimum amount you may withdraw is $500. The company will credit interest up to the date of withdrawal as described above. Unless you tell us otherwise we withdraw money from the activity account and then if necessary according to your withdrawal order. When money is withdrawn from a GIA it will be taken from the layer closest to maturity. The total death benefit will be reduced by the amount of your withdrawal. Making a claim for this benefit To make a claim for this benefit, contact us at the toll free phone number shown at the beginning of this policy for the appropriate form. You must pay a claim assessment fee each time you submit a claim to access your policy fund when disabled. You may not make any withdrawal under this provision if: • we rated the insured person as a substandard risk for medical reasons and they continue to be rated on

the date they become disabled, or • this policy came into effect as the result of a conversion from another life insurance policy while the

insured person was disabled. Before we approve the claim, the age of the insured person must be verified. If the insured person is disabled when you make a claim for this benefit, we must receive proof of their disability after it continued for more than 60 consecutive days.

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If the insured person is no longer disabled when you make a claim for this benefit, we must receive proof: • that the disability continued for more than 60 consecutive days, and • of the disability within 1 year of the date the insured person is no longer disabled. In addition to the claim assessment fee, you must pay any cost associated with supplying proof of the disability. We may also require the insured person to authorize us to gather and use additional information from other insurers or government agencies. When you do not qualify for this benefit (exclusions and reductions of coverage) You do not qualify for this benefit if the disability is directly or indirectly caused by or associated with the insured person committing or attempting to commit a criminal offence.

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E01150#B Section 3: General provisions When your policy will end (lapse) Your policy will end 31 days after a monthly anniversary day if on that day the policy fund value, minus any loans including interest, is not enough to pay the cost of insurance for the next month. To prevent your policy from ending we must receive the required payment before the end of the 31st day. We will tell you the amount you are required to pay to keep the policy from ending. Putting your policy back into effect (reinstatement) If your policy ended because it lapsed, you may apply to put it back into effect if all the insured persons are alive on the date the policy lapses. This process is called reinstatement. If you want to put your policy back into effect, you must: • apply within 2 years of the policy ending • give us new evidence of insurability that we consider satisfactory on each insured person • pay the cost of insurance owing on the date the policy ended, plus the cost of insurance from the date

the policy ended to the date of reinstatement, plus interest on these amounts • pay an amount equal to the monthly cost of insurance on the date of reinstatement multiplied by 2 if

you pay monthly, or multiplied by 12 if you pay annually, and • pay any applicable provincial premium tax. If we don’t approve your application, we’ll refund the amount you paid when you applied to put your policy back into effect. Transaction fees We may charge a fee for policy transactions and policy changes. We do not charge for the first two of either policy transactions or policy changes, in each policy year. If we charge a fee, it will never be more than $100. Applying for changes to your policy This provision describes policy changes that you may request. A transaction fee may apply. Death benefit option changes The death benefit options are shown below. We determine which option is available to you. If you apply to change the death benefit option, you may be required to provide evidence of insurability we consider satisfactory. All basic insurance benefits in this policy must have the same death benefit option.

Level insurance amount The death benefit is the greater of: • the basic insurance benefit amount, or • the allocated policy fund value. Any allocated policy loans including interest are then deducted from the death benefit amount payable.

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Insurance amount plus fund • The death benefit is: • the basic insurance benefit amount • plus the allocated policy fund value • minus any allocated policy loans including interest.

Fund builder The death benefit is: • the basic insurance benefit amount* • plus the allocated policy fund value • minus any allocated policy loans including interest.

*The basic insurance benefit amount may be reduced on the date you select or on any policy anniversary after that date provided the policy does not lose its exempt status. We will not reduce the basic insurance benefit amount below the minimum amount you selected.

Indexed insurance amount The death benefit is the greater of: • the basic insurance benefit amount, and • the allocated policy fund value. Any allocated policy loans including interest are then deducted from the death benefit amount payable.

The basic insurance benefit amount increases each year by the percentage you selected. The increases occur on the first anniversary of the benefit and on each anniversary after that until the anniversary following the insured person’s 85th birthday (or equivalent 85th birthday for a joint basic insurance benefit). The percentage for the increase is according to: • the Consumer Price Index for Canada (CPI), or • a fixed percentage.

If CPI is selected, we use the CPI rate on the date we last reviewed it, rounded to two decimal places and subject to a minimum rate of 0% and a maximum rate of 8% annually. We review these rates at least once a month.

When an insurance amount is increased, we establish a new basic insurance benefit for the increased amount. The cost of insurance for the new insurance amount is based on the attained age of the insured person (or attained equivalent joint age), and the rates in effect at the time of the increase.

There is a limit on the annual cost per $1,000 of insurance that we will charge for the increase in the basic insurance benefit. The limit does not include any ratings or adjustments to the cost of insurance. The limit will never be more than 125% of the rates in effect when the basic insurance benefit being increased was initially established.

After an increase, the total amount for all basic insurance benefits is subject to a maximum set by us that will never be more than 4 times the total of all basic insurance benefits before the increase.

Changing your policy fund allocation If there is more than one basic insurance benefit in this policy and the death benefit option is either Insurance amount plus fund or Fund builder, you may apply in writing to change the policy fund allocation to one of the alternate allocation methods. These methods are the payment of the entire policy fund value when: • the first death benefit is payable, or • the last death benefit is payable.

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Changing the type of cost of insurance After the first policy anniversary, you may change the type of cost of insurance from guaranteed yearly renewable term rates to guaranteed level rates, depending on our rules about the age of the insured person and amount of insurance. The new cost of insurance rates for a basic insurance benefit will be based on the attained age of the insured person (or attained equivalent joint age), and the rates in effect at the time of the change. Insurance amount increases You may increase the amount of a basic insurance benefit by a minimum of $25,000 and a maximum amount that we determine. You must provide evidence of insurability that we consider satisfactory. Any new cost of insurance for the increase in the insurance amount is based on the attained age of the insured person (or attained equivalent joint age) and the rates in effect at that time. Insurance amount decreases You may decrease the amount of a basic insurance benefit provided the minimum amount we determine for the benefit remains in effect. If an insured person has more than one basic insurance benefit, we decrease the benefit with the most recent effective date. The insurance factor does not change when the basic insurance benefit amount is decreased. A decrease is not available in the first 12 months a basic insurance benefit is in effect. Method of indexing for an Indexed insurance amount If an Indexed insurance amount increases by a fixed percentage, you may change the percentage amount. You may also change the method of indexing from fixed percentage to Consumer Price Index (CPI) or vice versa. You may need to provide evidence of insurability we consider satisfactory. Adding an insured person You may apply to add an insured person to this policy if you provide evidence of insurability we consider satisfactory. The rates for the basic insurance benefit and the additional insurance factor for the new insured person are determined by us at the time the new benefit comes into effect. For a joint basic insurance benefit, if you substitute one of the insured persons for another insured person, we recalculate the attained equivalent joint age using the attained age of each insured person. If we’ve approved a claim for total disability benefits for the owner of this policy, you may not apply to make these changes. Removing an insured person You may remove an insured person from the policy. The insurance factor for the insured person’s basic insurance benefit remains in effect if the insured person for that benefit is removed. Applying for non-smoker classification On the policy anniversary immediately following an insured person’s 16th birthday, the risk classification for that insured person’s basic insurance benefit will be the smoker classification. You may apply for non-smoker classification for that insured person as described below. If you apply between the insured person’s 16th and 18th birthdays, we require a non-smoker declaration signed by the insured person and you. If you apply after the insured person’s 18th birthday, we require a policy change form and new evidence of insurability signed by the insured person and you. If we approve your request, the risk classification for that insured person will be non-smoker. The cost of insurance will then 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.

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Your right to convert a basic insurance benefit You may convert a basic insurance benefit in this policy to another eligible permanent life insurance policy on the life of the insured person(s) for that benefit, without giving us new evidence of insurability. If you are converting a basic insurance benefit with one insured person, you must apply after their 16th birthday and before the policy anniversary immediately following their 65th birthday. If you are converting a Joint first-to-die or Joint last-to-die basic insurance benefit, you must apply before the policy anniversary immediately following attained equivalent joint age 65. The equivalent joint age is shown on the Schedule of benefits and cost of insurance. The new life insurance policy We determine the type of permanent life insurance policy you may convert to and the terms and conditions of that policy. The new policy we offer to you will: • be determined by the information about the insured person(s) in the application for the basic

insurance benefit being converted • depend on our rules about the age of the insured person(s) and the amount of insurance • have a death benefit that is not greater than the amount of the basic insurance benefit being converted,

on the day you apply to convert, and • not include any additional benefits, except, in the circumstances described below, a Total disability

benefit. Paying for the new policy The amount you will be required to pay for the new policy will be based on: • the same evidence of insurability we used to determine the cost of insurance for the benefit that is

converted • the rates we charge for new insurance at the time you apply for the new policy, and • the age of the insured person(s) on the date the new policy takes effect. If this policy includes a Total disability benefit If this policy includes a Total disability benefit on an insured person, the new policy may also have a disability benefit. The disability benefit in the new policy may not be the same as the disability benefit in this policy. The terms and conditions of the disability benefit in the new policy will be what we offer at the time you convert the basic insurance benefit. If the insured person is totally disabled and we are paying a benefit under a Total disability benefit in this policy, you cannot apply to convert. Your right to cancel this policy (surrender) You may cancel this policy at any time. Your policy will end on the date we receive your request or any later date you indicate in your request. All of our obligations and liabilities under this policy end on that date. The cancellation is binding on you and any beneficiaries you’ve named, whether the beneficiaries are revocable or irrevocable. To cancel your policy, send your request in writing to:

Sun Life Assurance Company of Canada 227 King St. S. PO Box 1601, Stn. Waterloo Waterloo ON N2J 4C5

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If you cancel your policy within the first 10 days of receiving it from us, we will treat this as a rescission. This is described earlier in your policy under the heading, If you change your mind within 10 days. Cash surrender value If you cancel your policy after the 10th day of receiving it from us, we’ll pay the cash surrender value to you. The amount we pay is: • the policy fund value • plus any amount in the service account, if included in this policy • minus any market value adjustment that may apply to GIAs • minus the amount of any policy loan, including interest • minus the amount of any surrender charge. The amount we pay is determined on the business day following the day we receive your request or any later date you indicate. Surrender charge A surrender charge may apply if you cancel this policy. It is the total of the surrender charge for each basic insurance benefit in this policy. The surrender charge for each basic insurance benefit is:

(A × B) where: A = the insurance factor for the basic insurance benefit B = the surrender charge multiple for that basic insurance benefit

Number of policy years the

basic insurance benefit is in effect Surrender charge multiple

for the basic insurance benefit 0 - 1 1

2 2 3 - 8 3

9 2 10 1

11 or more 0 After the first policy year, if you apply to cancel this policy on a date that is not a policy anniversary, the surrender charge multiple will be pro-rated based on the number of whole months the policy has been in effect between policy anniversaries. A surrender charge for each basic insurance benefit applies until the tenth anniversary of that benefit, whether or not that benefit remains in effect. There is no surrender charge for a basic insurance benefit that ended because the insured person died. Other information about your policy Information about our contract with you Once your policy is in effect, the following documents make up our entire contract with you: • your application for insurance, including any evidence of insurability, and • this policy. All of our obligations to you are contained in the documents described above. Any other document or oral statement does not form part of this contract. This policy or any part of this policy may not be amended or waived except by a written amendment signed by two authorized signing officers of the company.

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Currency of this policy All amounts of money referred to in this policy are in Canadian dollars. Transferring your policy (assignment) You may be able to transfer your rights under this policy to someone else by assigning the policy. We are not responsible for ensuring that the assignment of your policy is legally valid. If you transfer this policy, send a notice of the assignment to:

Sun Life Assurance Company of Canada 227 King St. S. PO Box 1601, Stn. Waterloo Waterloo (Ontario) Canada N2J 4C5

Definitions The following explanations describe insurance terms that apply if the terms appear in this policy. Attained age The attained age is the insured person’s age on the date a benefit takes effect plus the number of complete years from that date to the most recent policy anniversary.

Equivalent joint age The equivalent joint age is a single age associated with a joint first-to-die or joint last-to-die basic insurance benefit. It is determined on the date the benefit takes effect, using the age, smoking status and sex of each of the insured persons for the joint benefit.

Attained equivalent joint age The attained equivalent joint age is the equivalent joint age plus the number of complete years from the date the joint first-to-die or joint last-to-die basic insurance benefit takes effect to the most recent policy anniversary.

Beneficiary The person or persons you name in writing to receive the death benefit. Benefits These benefits may be included in your policy: • a basic insurance benefit that insures an insured person; you may apply for several of these benefits

on one or more insured persons • a joint first-to-die basic insurance benefit • a joint last-to-die basic insurance benefit • additional benefits may be included on each insured person; an example is the Total disability benefit

(protection) • additional benefits may be included on the owner of this policy; an example is Owner disability

benefit (protection). Business day For the purposes of this policy, a business day is a day when our administrative offices are open for business and the Toronto Stock Exchange (or other stock exchange or securities market that we may designate) is open for business. Contingent owner The person or persons you name in writing to take ownership of this policy if you die before the date this policy ends.

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What happens if no contingent owner is named when a policy owner dies? • If there is only one policy owner at the time of death, then the policy owner's estate becomes the new

policy owner. • If there are two or more policy owners at the time of death, then the deceased policy owner's estate

along with the surviving policy owner(s) own the policy. Cost of insurance This is the amount you pay to cover the cost of insurance for all basic insurance benefits and any additional benefits included in the policy. Evidence of insurability This may include medical, financial, lifestyle, and family medical history information and other personal history information needed to approve your application for life insurance. Policy effective date This is the start date of your insurance policy. This date is shown at the beginning of your policy under the heading, Policy summary.

Monthly anniversary day This is the day each month on which policy transactions described in this policy may be processed. This date is shown at the beginning of your policy under the heading, Policy summary.

Policy anniversary The month and day every year that is the same as your policy effective date.

Policy year The 12-month period that runs from one policy anniversary to the next policy anniversary.

Policy transaction Examples of policy transactions are payments, withdrawals, policy loans and transfers of money between accounts. Permanent insurance A type of insurance that provides protection for the entire lifetime of the insured person.

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Appendix C Sample SunUniversalLife Policy (no Bonus and no COI Discount)

SunUniversalLife • one insured person • NO investment bonus • death benefit option: level insurance amount • guaranteed level rates • alternate withdrawal order Policy number: LI-1234,567-8 Owner: John Doe 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.

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Policy summary In this document, you and your mean the owner of this policy. We, us, our, and the company mean Sun Life Assurance Company of Canada. Your policy is issued and underwritten by Sun Life Assurance Company of Canada, a member of the Sun Life Financial group of companies. Please read this policy carefully. It describes the benefits payable and exclusions and reductions of coverage. SunUniversalLife Your policy number is: LI-1234,567-8 Your policy effective date is: February 4, 2008 Monthly anniversary day: the 4th of every month Owner: John Doe born on May 5, 1961 Insured person(s): John Doe born on May 5, 1961 Beneficiary: is named on your application, unless you make a change in writing. Transfers and withdrawals are processed in the alternate withdrawal order, which may not be changed. This is not a participating policy. You are not eligible to receive policyholder dividends. To help you understand insurance terms, refer to the explanations described under the General provisions section under the heading, Definitions.

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Schedule of benefits and cost of insurance Basic insurance benefit Insured person: John Doe A death benefit is payable when the insured person dies. Death benefit option: Level insurance amount Insurance amount: $100,000 Risk classification: Non-smoker Cost of insurance type: Guaranteed level rates Cost of insurance table: T100ULC08 The cost of insurance for the basic insurance benefit is payable on February 4, 2008 and on each monthly anniversary day that is before February 4, 2062. The guaranteed annual cost per $1,000 for this basic insurance benefit is $XXX.XX. The calculation for the monthly cost of insurance is shown in the Insurance provisions section. An insurance factor for this basic insurance benefit is $XXX.XX. The insurance factor is used to calculate the insurance discount and the surrender charge.

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E00001#J If you change your mind within 10 days You may send us a written request to cancel your policy within: • 10 days of receiving it from us, or • 60 days after the policy is issued, whichever date is earlier. When we receive your written request we'll refund any amount paid. This is called rescission. You are considered to have received your policy 5 days after it's mailed from our office, or on the date your advisor delivers it to you. Your decision to cancel your policy is your personal right. The cancellation is binding on you and any beneficiaries you’ve named, whether the beneficiaries are revocable or irrevocable. All of our obligations and liabilities under this policy will end immediately when we receive your request to cancel it. To cancel your policy, send your request in writing to:

Sun Life Assurance Company of Canada 227 King St. S. PO Box 1601, Stn. Waterloo Waterloo ON Canada N2J 4C5

E01010#A About your SunUniversalLife policy SunUniversalLife is a permanent life insurance policy that includes insurance benefits on one or more persons with several investment options available to you. Payments must be made to Sun Life Assurance Company of Canada to keep your policy in effect and are subject to a minimum and maximum limit that we determine. We reserve the right to refuse cash payments. Any payment we receive at our head office before the Toronto Stock Exchange is closed for the day is applied to your policy effective that day. Any payment we receive at our head office after the Toronto Stock Exchange is closed is applied to your policy effective on the following business day. Any request for transfer, withdrawal, policy loan or policy cancellation that we receive at our head office before the Toronto Stock Exchange is closed for the day is effective that day but processed the following business day. If money is moved to or from an investment account, we reserve the right to delay the effective date of the transaction for up to 5 business days from the day we receive your request or the day we receive funds. Payments we receive are held in our general fund. When you invest in any investment account you do not: • acquire any ownership interest in the designated fund or index • purchase units, or • have any legal interest in any security.

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Section 1: Insurance provisions Your policy includes the insurance benefits you have selected as well as the policy fund. This fund includes the activity account (which is used to pay the cost of insurance) and the investment accounts. Activity account and provincial premium tax When we receive a payment, money is added to the activity account as long as the total of the payments made during the policy year is below the annual maximum amount for that year to keep the policy tax-exempt. The applicable provincial premium tax is deducted from the amount that is added to the activity account. This tax differs by province and is determined by government legislation. It is subject to change at any time. This account earns daily interest at the rate we set. The interest rate is subject to change at any time. The guaranteed minimum interest rate will be at least 90% of the Government of Canada 30-day Treasury Bill rate in effect on the day we set the interest rate, less a management fee of 1.75 percentage points. Under no circumstances will the rate be less than 0%. E01030#A Paying for the cost of insurance Each monthly anniversary day, we deduct money from the activity account to pay for the cost of insurance for all basic insurance benefits and additional benefits in this policy. The amounts we deduct are according to the Schedule of benefits and cost of insurance. If there is not enough money in the activity account to pay for the cost of insurance, we will transfer money from your investment accounts according to the withdrawal order you selected. The order may not be changed.

Alternate withdrawal order • daily interest account (DIA) • guaranteed interest accounts (GIAs) • accounts based on the performance of indices, in this order:

FPX Income, FPX Balanced, FPX Growth, Canadian Equity, American Equity, Foreign Equity, European Equity, Pacific Equity, Japanese Equity, American Technology, Canadian Bond

• accounts based on the performance of managed funds in proportion to the balance of each of those accounts

• and, if necessary, from the service account. If there is insufficient money in the first account we will take money from the next account until the cost of insurance is paid. If we transfer money from a GIA layer to pay for the cost of insurance, there is no market value adjustment. Money will be taken from the GIA layer closest to maturity and interest will be credited up to the date of the transfer. If there is not enough money in the activity account and investment accounts, we will transfer money from the service account, if included in this policy, to pay for the cost of insurance. If you have money in an index account or an account based on the performance of managed funds, and the rate of return negatively impacts your policy fund value, then you may need to make additional payments to ensure there is enough money in the policy fund to pay the required cost of insurance and provincial premium tax. E01050#A

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Calculating the monthly cost of insurance The monthly cost of insurance is determined by a number of factors such as an insured person’s age, sex, health and the cost of insurance type you selected. There are two types of guaranteed rates available for each basic insurance benefit. You may select either: • guaranteed yearly renewable term rates which increase each year, or • guaranteed level rates that remain constant from year to year. The guaranteed annual cost of insurance per $1,000 for each basic insurance benefit is shown on the Schedule of benefits and cost of insurance.

The monthly cost of insurance for a basic insurance benefit is: (A × B) 12

where: A = the annual cost per $1,000 of net insurance amount at risk B = the net insurance amount at risk divided by 1,000.

If the death benefit option is Insurance amount plus fund or Fund builder, the net insurance amount at risk is the basic insurance amount. If the death benefit option is Level insurance amount, the net insurance amount at risk is: • the basic insurance amount • minus the allocated policy fund value. If the death benefit option is Indexed insurance amount, the net insurance amount at risk is: • the indexed insurance amount • minus the allocated policy fund value. Allocated policy fund value is described in the Investment provisions section. The net insurance amount at risk is never less than zero for Level insurance amount and Indexed insurance amount. E01070#A Death benefit option The death benefit option you selected for each basic insurance benefit in this policy is shown on the Schedule of benefits and cost of insurance and described below. Level insurance amount The death benefit is the greater of: • the basic insurance benefit amount, or • the allocated policy fund value. Any allocated policy loans including interest are then deducted from the death benefit amount payable. If this policy has one basic insurance benefit the entire policy fund and any policy loans are allocated to that benefit. If this policy has more than one basic insurance benefit we allocate a portion of the policy fund value and any policy loans to each of those benefits, as described in the Investment provisions section.

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E01090#C Paying a death benefit - insured person’s death When a death benefit is payable, we make a payment to the named beneficiary for that insured person’s insurance benefit(s). The amount of the death benefit is determined on the date we receive written notification that the insured person died. We also pay to the beneficiary an amount equal to the cost of insurance deducted for that insured person from the date of their death to the date we receive written notification that they died. If there is a basic insurance benefit on one insured person, that benefit ends when the insured person for that benefit dies. If there is a Joint first-to-die basic insurance benefit, that benefit ends when one of the insured persons for that joint benefit dies. If there is a Joint last-to-die basic insurance benefit, that benefit ends when all of the insured persons for that joint benefit die. This policy ends on the date all basic insurance benefits in this policy end. We pay any amount in the service account on that date to the owner or the estate of the owner. When we will not pay a death benefit (exclusions and reductions in coverage) We will not pay a death benefit if the insured person dies before reaching the age of 15 days. We will not pay any death benefit* if an insured person takes their own life, while sane or insane, within 2 years of the later of: • the date the application for their basic insurance benefit was signed, or • the most recent date this policy was put back into effect, if your policy has been reinstated. The basic insurance benefit ends and instead of paying a death benefit we pay the beneficiary: • the allocated policy fund value on the date we receive written notification that the insured person has

died • plus the total cost of insurance we deducted for that insured person’s benefits • minus any allocated policy loan, including interest. If the policy has been put back into effect, we’ll refund only the cost of insurance that was deducted for that insured person since the most recent date the policy was reinstated. If an insured person takes their own life, while sane or insane, within 2 years of any increase in their basic insurance benefit that you applied for, we will not pay the amount of the increase. Instead, if the basic insurance benefit has been continuously in effect for at least 2 years at the time the insured person dies, we will pay the following amount to the named beneficiary: • the death benefit we would have paid before the increase • plus the allocated policy fund value on the date we receive written notification that the insured person

has died • plus an amount equal to the cost of insurance deducted for the increase in the basic insurance death

benefit • minus any allocated policy loan, including interest.

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If this policy is the result of a replacement of insurance *If any death benefit is the result of a replacement of life insurance that was issued by us, we determine the amount payable for the part that is a replacement based on the effective date or dates of your previous insurance and any additional benefits. Policy fund value on death If all or part of the policy fund value is payable when an insured person dies, withdrawals are made and valued as of the date we receive written notification the insured person has died. The funds are withdrawn from the activity account first, and then according to your withdrawal order. Making a claim for the death benefit To make a claim, contact us at the toll free phone number shown at the beginning of this policy. We will then send the appropriate form to be completed. The person making the claim must complete the form and give us the information we need to assess the claim, including proof that the insured person died while this policy was in effect. The form and information must be sent to this address:

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

There may be a fee from a physician to complete certain forms. The person making the claim is responsible for any fee for this information. Before we pay the death benefit, the age of the insured person must be verified. If the age given on the application is incorrect, we adjust the amount we pay to reflect the insured person's correct age.

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Section 2: Investment provisions Policy fund value Your policy fund value is the total amount in the activity account plus the total of your investment accounts including accumulated interest. Allocated policy fund value and allocated policy loans If this policy has one basic insurance benefit, the entire policy fund value is allocated to that benefit. If this policy has more than one basic insurance benefit, we allocate a portion of the policy fund value to each basic insurance benefit. Proportional allocation of the policy fund value applies to basic insurance benefits unless you selected an alternate allocation method for a death benefit option that is Insurance amount plus fund or Fund builder. Proportional allocation For proportional allocation, the allocated policy fund value is a percentage of the reduced policy fund value. For each basic insurance benefit, the percentage is the proportion of that benefit amount to the total of all basic insurance benefit amounts. The reduced policy fund value is the policy fund value decreased by the monthly cost of insurance for these additional benefits, if included in this policy: • Total disability benefit (savings) • Term insurance benefit • Term insurance benefit on an additional insured person • Accidental death benefit • Guaranteed insurability benefit • Executive guaranteed insurability benefit • Coverage death benefit (savings) • Owner disability benefit (savings) • Owner death benefit (savings) Alternate allocation Alternate allocation methods are available if the death benefit option is Insurance amount plus fund or Fund builder. These methods are the payment of the entire policy fund value when: • the first death benefit is payable, or • the last death benefit is payable. If more than one insured person dies at the same time the policy fund value will be divided into amounts that are proportional to the amount of each basic insurance benefit when a death benefit is payable. Re-allocation of the policy fund value If an insured person is removed or added to this policy, we will re-allocate the policy fund value in proportion to the resulting basic insurance benefit amounts. Allocated policy loans If this policy has more than one basic insurance benefit, we allocate a portion of any policy loans to each benefit. If this policy has one basic insurance benefit, the entire policy loan is allocated to that benefit. The allocated policy loan with interest is in the same proportion as the allocated policy fund value. E01100#C

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Investment accounts Several investment accounts are included in your policy: daily interest account (DIA), guaranteed interest accounts (GIAs), accounts based on the performance of indices and accounts based on the performance of managed funds. Your investment mix is the investment accounts and the percentages you selected for those accounts. You may change the accounts or percentages or both at any time by sending us your request to change. A transaction fee may be charged for this change. Each of your investment accounts must have a minimum amount of $250. All subsequent transfers to each account must also be at least $250. Transfers to your investment accounts Provided the cost of insurance has been paid, money will be transferred from the activity account after the minimum amount for all selected accounts is met according to your investment mix. Transfers are also processed on a monthly anniversary day if the minimum amount for all accounts is met.

Example 1: assume the investment mix is American Equity 50% and Canadian Bond 50% · A minimum of $500 must be in the activity account to meet the minimum required amount for

this investment mix before a transfer can be made to the two selected investment accounts. · Once $500 is in the activity account, then $250 (50% of $500) will be transferred to the

American Equity account and $250 (50% of $500) will be transferred to the Canadian Bond account.

Example 2: assume the investment mix is American Equity 10% and Canadian Bond 90% · A minimum of $2,500 must be in the activity account to meet the minimum required amount for

this investment mix before a transfer can be made to the two selected investment accounts. · Once $2,500 is in the activity account, then $250 (10% of $2,500) will be transferred to the

American Equity account and $2,250 (90% of $2,500) will be transferred to the Canadian Bond account.

· If $2,490 was in the activity account, money would not be transferred from the activity account to the selected accounts. With the investment mix of American Equity 10% and Canadian Bond 90% there is only $249 (10% of $2,490) available to be transferred to the American Equity account and that does not meet the minimum requirement of $250 for all selected accounts.

Daily interest account (DIA) This account earns daily interest at the rate we determine. The interest rate is subject to change at any time. The guaranteed minimum interest rate will be at least 90% of the Government of Canada 30-day Treasury Bill rate in effect on the day we set the interest rate, less a management fee of 1.75 percentage points. Under no circumstances will the rate be less than 0%. Guaranteed interest accounts (GIAs) Guaranteed interest accounts are available in terms of 1, 3, 5, 10 and 20 years. Each time money is transferred to a GIA, we establish a new layer for that amount with a specific maturity date and interest rate. The interest rate remains in effect for the full term of that account and interest is credited daily. Interest is compounded annually. For each GIA, the guaranteed minimum interest rate will be at least 90% of the Government of Canada Bond rate with the same term, less a management fee of 1.75 percentage points. Under no circumstances will the rate be less than the guaranteed minimum interest rate shown in the table below. If Government of Canada Bonds with the same term are not available, we will use our best estimate to determine what the rate would be if a bond with the same term were available.

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GIA accounts

Guaranteed minimum interest rate

1-year term account 0 % 3-year term account 1 % 5-year term account 2 %

10-year term account 3 % 20-year term account 3 %

When a GIA layer matures we follow your instructions: • we apply the balance of the GIA layer to a new GIA account for the same term, or • we transfer the value including interest at the maturity date to the activity account. Money will be

transferred from the activity account after the $250 minimum amount for all your investment accounts is met according to your investment mix.

We may change GIA accounts available to you at any time. If you have money in a discontinued account we’ll notify you. We will continue to follow your investment instructions except that money that would otherwise be transferred to a discontinued GIA account will be transferred to a GIA account with the next shortest term. We will always offer a GIA account with a 2% guaranteed minimum interest rate and one with a 3% guaranteed minimum interest rate. Accounts based on the performance of indices You may put money into one or more index accounts shown in the table below. These accounts reflect the performance of the indices on which they are based. Each business day we subtract a daily management fee. The daily management fee is equal to the annual management fee divided by the expected number of business days within the current calendar year. The annual management fee is shown in the table below. Index accounts

Indices they are based on

Annual management fee

FPX Income FPX Income 1.80% FPX Balanced FPX Balanced 2.20% FPX Growth FPX Growth 2.40% Canadian Equity S&P /TSX 60 Total Return 1.75% * American Equity S&P 500 Total Return 2.00% * Foreign Equity MSCI EAFE Free Price Index 1.00% European Equity MSCI Europe Price Index 1.00% Pacific Equity MSCI Pacific Free Price Index 2.00% Japanese Equity Nikkei 225 Total Index 2.25% * American Technology Nasdaq-100 Total Index 2.00% * Canadian Bond Scotia Capital Universe Bond Index 2.00%

*These fees are guaranteed not to increase before the fifth policy anniversary. After the fifth anniversary, the management fee may be increased by a maximum of .25%. MSCI means Morgan Stanley Capital International EAFE means Europe Australasia and Far East FPX means Financial Post Index

FPX Income Index, FPX Growth Index and FPX Balanced Index are trademarks of The National Post Company. Standard and Poor’s, S&P and S&P 500 are trademarks of The McGraw-Hill Companies, Inc. TSX is a trademark of The Toronto Stock Exchange.

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Morgan Stanley Capital International (MSCI) EAFE Free Price Index, Europe Price Index and Pacific Free Price Index are trade-marks of Morgan Stanley Capital International Inc.

The Nikkei 225 Index is the intellectual property of Nihon Keisal Shimbun Sha.

The NASDAQ 100 Index is a trademark of Nasdaq Stock Market Inc.

The Scotia Capital Universe Bond Index is a trademark of The Bank of Nova Scotia.

SunUniversalLife policies are not endorsed, sold or promoted by any of the above mentioned organizations and/or trademark owners.

Each business day we determine the percentage change in the value of each index for the previous business day. On days when an index on which one of your investment accounts is based gains or loses value, the percentage change in the value of the index for that day will be either positive or negative. Money will be added to or deducted from that account according to the change in the value of the index. On a day other than a business day, the percentage change is zero. The daily value of the index is the latest value available to us. As part of the above calculation, any index that is not valued in Canadian dollars is converted to an equivalent Canadian dollar value daily. This means that changes in exchange rates will affect the total amount in your index accounts. We may change the index accounts or the indices on which they are based at any time. If we discontinue any of the investment choices, we’ll notify you in advance and provide information about other accounts that are available. If you do not reply within the time specified in the notice, then the amount of any discontinued account will be transferred to either an account with a similar investment objective or to the activity account if there is no account with a similar investment objective. If money is transferred to the activity account and the $250 minimum amount is met for all remaining selected accounts, the money will then be transferred according to your investment mix. We will maintain the index accounts which are based on the Canadian and American equity markets and the Canadian bond market, and we will maintain the management fees for those accounts as described above unless after the policy date there is a material change in: • the investment environment for monitoring and replicating an index account, or • the legislation that applies to life insurance policies that have accounts based on the performance of

indices. Accounts based on the performance of managed funds The accounts offer returns based on the performance of designated funds managed by a third party (fund manager) that we select. Account balances will be adjusted daily. Each daily adjustment may increase or decrease the balance of the account, depending on the rate of return. We may change, merge, or withdraw accounts at any time. If we change or merge accounts in which you have a balance, we will tell you. If we withdraw an account in which you have a balance, we will transfer the balance for that account to another account with similar investment objectives and notify you. If there are no accounts with similar investment objectives, a transfer will be made to the activity account and your funds will be invested based on your then current investment mix. The daily rate of return for this account on a business day is: • the Canadian dollar rate of return on the designated fund, which reflects the fund manager’s expenses

and fund distributions

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• minus, if applicable, an additional annual management fee we charge, divided by the number of expected business days within the calendar year. This additional management fee may change from time to time.

The rate of return is not guaranteed and may be positive or negative. We reserve the right to revise or correct any rate of return that was based on incorrect information provided by the fund manager. On a day other than a business day, the daily rate of return is 0%. E01120#A Maintaining the tax-exempt status of your policy According to current Canadian tax law, the money in your policy fund is not taxed if it is below the tax-exempt limit and it remains in your policy fund. This limit changes annually on the policy anniversary. If a payment would cause your policy fund value to exceed the tax-exempt limit then, depending on the method you chose to maintain your policy’s tax-exempt status the excess amount of that payment will be: • refunded to you immediately, or • transferred to the service account. Provincial premium tax is not deducted from excess amounts

transferred to the service account. At each policy anniversary, we compare the policy fund value to the tax-exempt limit. If the policy fund value exceeds the tax-exempt limit, we make an adjustment to your policy, according to the method you requested. You applied for one of the following methods to maintain the tax-exempt status of your policy: • retain the amount of all basic insurance benefits • increase any basic insurance amount by the percentage required. The maximum increase is 8% of

the cumulative basic insurance amount, including any increase under the indexed death benefit option, or

• increase and reverse: increase any basic insurance amount by the percentage required. The maximum increase is 8% of the cumulative basic insurance amount, including any increase under the indexed death benefit option. We reverse these increases at each future policy anniversary as long as the policy will not lose its exempt status.

After an increase, the total amount for all basic insurance benefits is subject to a maximum we set that will never be more than 4 times the total of all basic insurance benefits in this policy before the increase. Depending on the method you chose to maintain the tax-exempt status of your policy, any excess funds still remaining in the policy fund at the policy anniversary date will be: • refunded to you immediately, or • transferred to the service account. We withdraw excess funds from the investment accounts first from the activity account and then, if required, according to your withdrawal order. When an insurance amount is increased, we establish a new basic insurance benefit for the increased amount. The cost of insurance rates per $1,000 for the increase in the insurance amount are based on: • the attained age of the insured person (or attained equivalent joint age), and • the rates in effect at the time of the increase. The rates per $1,000 will not be greater than 125% of the rates in effect when the basic insurance benefit being increased was initially established, using the attained age described above. The limit does not include any ratings or adjustments to the cost of insurance.

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Service account This account earns interest according to the investment option you selected for the service account. Interest earned on the service account is taxable. We may set a maximum amount you may have in the service account. A transaction fee may be charged for withdrawals. At each policy anniversary the tax-exempt limit for your policy may increase. At that time, we will transfer as much money as the tax-exempt limit allows from the service account to the activity account. This minimizes the tax you pay on the service account. Provincial premium tax is deducted from the amount transferred from the service account to the activity account. The service account is not part of the policy fund value. Market value adjustment (MVA) for guaranteed interest accounts There is no MVA when money is transferred from: • any investment account to the activity account to pay for the cost of insurance • any investment account to the service account, or • the service account to the activity account. We may deduct an MVA when you: • withdraw money from this policy • borrow money from the policy fund, or • transfer money between investment accounts. For these transactions, we deduct an MVA if: • money is withdrawn or transferred from a GIA layer before it matures, and • the current interest rate for a new GIA layer with the same term is greater than the interest rate of the

existing GIA layer. Guaranteed interest account (GIA)

The MVA = W × { 1 - the lesser of 1 and [ (1 + J)D ÷ (1 + K)D ] }

where: W = amount withdrawn or transferred from the GIA layer D = number of days to maturity in the existing GIA layer divided by 365 J = actual interest rate for the existing GIA layer, excluding any investment bonus K = current interest rate for a new GIA layer with the same term as the existing GIA

Withdrawing money from your policy You may withdraw money from your policy at any time. The minimum withdrawal amount is $500. We may charge a transaction fee for withdrawals. Unless you tell us otherwise, we withdraw money from the service account, if included in this policy, then from the activity account and then if necessary according to your withdrawal order. When money is withdrawn from a GIA it will be taken from the layer closest to maturity. Any withdrawal from GIAs may be subject to a market value adjustment. In the first policy year, the maximum amount you may withdraw from the policy fund is: • the total of all payments made into the policy fund • minus the applicable provincial premium tax • minus the total of all insurance factors for this policy

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After the first policy year, the maximum amount you may withdraw is the cash surrender value, which is: • the policy fund value • minus any policy loans, including interest • minus any market value adjustment that may apply to GIAs • minus the amount of any surrender charge • plus any amount in the service account, if included in this policy. You may have to pay tax on withdrawals from your policy fund. How withdrawals may affect a death benefit A withdrawal from your policy will reduce the death benefit that is payable. If the death benefit option for a basic insurance benefit is Level insurance amount or Indexed insurance amount, we will reduce the insurance amount according to the allocated policy fund value for each basic insurance benefit. E01130#B Borrowing money from your policy (policy loans) After the first policy year, you may borrow money from your policy fund. The minimum amount you may borrow is $500. We may charge a transaction fee. The maximum amount you may borrow is:

[ (100% - loan interest rate) × (policy fund value - market value adjustments - surrender charge) ] - (all outstanding policy loans including interest)

If the amount you borrow, or the outstanding policy loan, is greater than the amount in the activity account, we will transfer money from your investment accounts to the activity account, according to the withdrawal order you selected. We will transfer enough money until the amount of the activity account equals the policy loan amount including interest. When money is withdrawn from a GIA it will be taken from the layer closest to maturity. Any transfers from GIAs may be subject to a market value adjustment. We charge interest on the loans each day. The interest accumulates and we add it to the balance of the loans each monthly anniversary day. We set the interest rate and may change it at any time. You may repay your policy loan(s) at any time. When you make a loan payment, we transfer an amount equal to the repayment amount from the activity account to your investment accounts as described in the Investment provisions section under the heading, Transfers to your investment accounts. If a loan is outstanding at the time a death benefit is payable, the loan plus interest will be deducted from the amount we pay to the beneficiary.

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E01140#C Accessing the policy fund when disabled, ill or injured You may make one withdrawal from your policy fund each time an insured person becomes disabled by illness or injury as defined below. The minimum and maximum amount you may withdraw is described under the heading, The Amount you may withdraw. According to tax rules in effect as of the policy date you may make this withdrawal without incurring a taxable disposition. The tax rules may change at any time, without notice. The tax rules in effect on the date you request a withdrawal will apply. Defining disabled Each disability must continue for at least 60 consecutive days. To be considered disabled in any of the four disabled categories (occupationally disabled, critically disabled due to illness or injury, critically disabled due to deteriorated mental ability and critically disabled - terminal illness) set out below, the insured person must be: • under the active, continuous and medically appropriate care of a physician, or other health care

practitioner acceptable to us • following the treatment prescribed and any other recommendations made by a physician or health

care practitioner, and • occupationally disabled or critically disabled as defined below. Occupationally disabled To be considered occupationally disabled under this provision, the insured person must as a result of illness or injury, qualify under one of the following: If employed • if the insured person is unable to perform the substantial duties of their regular occupation, and is not

engaged in any gainful occupation, or • if the insured person is employed in a gainful occupation but they have experienced at least a 50%

loss of income over 60 consecutive days compared to the earned income from their regular occupation during the 60 days immediately before the day they became disabled.

If unemployed or retired • if the insured person is unemployed or retired at the time of claim, the insured person is unable to

perform the essential duties of their regular occupation from which they were last employed. If employed in the home • if the insured person is responsible for maintaining their home or caring for immediate family

members, the insured person is unable to perform all of the essential duties of maintaining that home or caring for those individuals.

If the insured person is a student age 16 or older at the time they become disabled, we consider them to be occupationally disabled if they are unable to attend or participate as a student, or perform any occupation for remuneration or profit within their education, training or experience, during the entire time they are disabled. If the insured person is under age 16, we consider them to be disabled if, as a result of illness or injury, they require the presence of an adult attendee. Critically disabled - due to illness or injury Critically disabled means the insured person, as a result of illness or injury, is unable to perform any of the activities described below. The activities are: Bathing

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Bathing means washing oneself: • in a bathtub or shower, including getting in and out of the bathtub or shower, or • by sponge bath. Dressing Dressing means putting on, taking off, fastening and unfastening: • clothing, and • medically necessary braces or artificial limbs. An insured person is not dependent for dressing if reasonable alterations to or changes in the clothing they usually wear would enable them to dress without substantial physical assistance. Feeding Feeding means the insured person’s ability to get food into their body: • through the mouth, or • by a feeding tube. Feeding does not include cooking or preparing a meal. Toileting Toileting means getting to and from and on and off the toilet, and performing associated personal hygiene. Transferring Transferring means moving into or out of a bed, chair or wheelchair. This does not include getting into or out of the bathtub or shower, as we include this in bathing. Continence Continence means the ability to control both bowel and bladder functions, or maintain a reasonable level of personal hygiene (including caring for catheter or colostomy bag) when not able to control either bowel or bladder functions or both. Critically disabled - due to deteriorated mental ability We consider the insured person critically disabled if they have deteriorated mental ability and need continual supervision by another person for protection from threats to their physical health and safety as the result of deterioration in or a loss of: • short-term or long-term memory • orientation as it relates to people, place and time • reasoning, or • judgment, as it relates to safety awareness. Deteriorated mental ability must result from an organic brain disorder such as Alzheimer’s disease, irreversible dementia, or brain injury. Deteriorated mental ability is also known as cognitive impairment. Deteriorated mental ability is determined by a neurologist licensed and practising in Canada or the United States, based on clinical observation, radiological studies and psychological testing. Critically disabled - terminal illness We consider the insured person critically disabled if they have a condition which has been diagnosed as terminal by a physician, and the prognosis for living is less than 24 months. The amount you may withdraw The maximum amount you may withdraw from your policy fund is: • the balance in the activity account

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• plus the total of your investment accounts including accumulated interest up to the date of withdrawal

• minus any surrender charge that may apply on the date of the withdrawal • minus any loan against the policy fund, including interest • minus any market value adjustment that may apply to GIAs • minus an amount equal to the cost of insurance for the next 12 months • minus a claim assessment fee. The minimum amount you may withdraw is $500. The company will credit interest up to the date of withdrawal as described above. Unless you tell us otherwise we withdraw money from the activity account and then if necessary according to your withdrawal order. When money is withdrawn from a GIA it will be taken from the layer closest to maturity. The total death benefit will be reduced by the amount of your withdrawal. Making a claim for this benefit To make a claim for this benefit, contact us at the toll free phone number shown at the beginning of this policy for the appropriate form. You must pay a claim assessment fee each time you submit a claim to access your policy fund when disabled. You may not make any withdrawal under this provision if: • we rated the insured person as a substandard risk for medical reasons and they continue to be rated on

the date they become disabled, or • this policy came into effect as the result of a conversion from another life insurance policy while the

insured person was disabled. Before we approve the claim, the age of the insured person must be verified. If the insured person is disabled when you make a claim for this benefit, we must receive proof of their disability after it continued for more than 60 consecutive days. If the insured person is no longer disabled when you make a claim for this benefit, we must receive proof: • that the disability continued for more than 60 consecutive days, and • of the disability within 1 year of the date the insured person is no longer disabled. In addition to the claim assessment fee, you must pay any cost associated with supplying proof of the disability. We may also require the insured person to authorize us to gather and use additional information from other insurers or government agencies. When you do not qualify for this benefit (exclusions and reductions of coverage) You do not qualify for this benefit if the disability is directly or indirectly caused by or associated with the insured person committing or attempting to commit a criminal offence.

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E01150#B Section 3: General provisions When your policy will end (lapse) Your policy will end 31 days after a monthly anniversary day if on that day the policy fund value, minus any loans including interest, is not enough to pay the cost of insurance for the next month. To prevent your policy from ending we must receive the required payment before the end of the 31st day. We will tell you the amount you are required to pay to keep the policy from ending. Putting your policy back into effect (reinstatement) If your policy ended because it lapsed, you may apply to put it back into effect if all the insured persons are alive on the date the policy lapses. This process is called reinstatement. If you want to put your policy back into effect, you must: • apply within 2 years of the policy ending • give us new evidence of insurability that we consider satisfactory on each insured person • pay the cost of insurance owing on the date the policy ended, plus the cost of insurance from the date

the policy ended to the date of reinstatement, plus interest on these amounts • pay an amount equal to the monthly cost of insurance on the date of reinstatement multiplied by 2 if

you pay monthly, or multiplied by 12 if you pay annually, and • pay any applicable provincial premium tax. If we don’t approve your application, we’ll refund the amount you paid when you applied to put your policy back into effect. Transaction fees We may charge a fee for policy transactions and policy changes. We do not charge for the first two of either policy transactions or policy changes, in each policy year. If we charge a fee, it will never be more than $100. Applying for changes to your policy This provision describes policy changes that you may request. A transaction fee may apply. Death benefit option changes The death benefit options are shown below. We determine which option is available to you. If you apply to change the death benefit option, you may be required to provide evidence of insurability we consider satisfactory. All basic insurance benefits in this policy must have the same death benefit option.

Level insurance amount The death benefit is the greater of: • the basic insurance benefit amount, or • the allocated policy fund value. Any allocated policy loans including interest are then deducted from the death benefit amount payable.

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Insurance amount plus fund • The death benefit is: • the basic insurance benefit amount • plus the allocated policy fund value • minus any allocated policy loans including interest.

Fund builder The death benefit is: • the basic insurance benefit amount* • plus the allocated policy fund value • minus any allocated policy loans including interest.

*The basic insurance benefit amount may be reduced on the date you select or on any policy anniversary after that date provided the policy does not lose its exempt status. We will not reduce the basic insurance benefit amount below the minimum amount you selected.

Indexed insurance amount The death benefit is the greater of: • the basic insurance benefit amount, and • the allocated policy fund value. Any allocated policy loans including interest are then deducted from the death benefit amount payable.

The basic insurance benefit amount increases each year by the percentage you selected. The increases occur on the first anniversary of the benefit and on each anniversary after that until the anniversary following the insured person’s 85th birthday (or equivalent 85th birthday for a joint basic insurance benefit). The percentage for the increase is according to: • the Consumer Price Index for Canada (CPI), or • a fixed percentage.

If CPI is selected, we use the CPI rate on the date we last reviewed it, rounded to two decimal places and subject to a minimum rate of 0% and a maximum rate of 8% annually. We review these rates at least once a month.

When an insurance amount is increased, we establish a new basic insurance benefit for the increased amount. The cost of insurance for the new insurance amount is based on the attained age of the insured person (or attained equivalent joint age), and the rates in effect at the time of the increase.

There is a limit on the annual cost per $1,000 of insurance that we will charge for the increase in the basic insurance benefit. The limit does not include any ratings or adjustments to the cost of insurance. The limit will never be more than 125% of the rates in effect when the basic insurance benefit being increased was initially established.

After an increase, the total amount for all basic insurance benefits is subject to a maximum set by us that will never be more than 4 times the total of all basic insurance benefits before the increase.

Changing your policy fund allocation If there is more than one basic insurance benefit in this policy and the death benefit option is either Insurance amount plus fund or Fund builder, you may apply in writing to change the policy fund allocation to one of the alternate allocation methods. These methods are the payment of the entire policy fund value when: • the first death benefit is payable, or • the last death benefit is payable.

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Changing the type of cost of insurance After the first policy anniversary, you may change the type of cost of insurance from guaranteed yearly renewable term rates to guaranteed level rates, depending on our rules about the age of the insured person and amount of insurance. The new cost of insurance rates for a basic insurance benefit will be based on the attained age of the insured person (or attained equivalent joint age), and the rates in effect at the time of the change. Insurance amount increases You may increase the amount of a basic insurance benefit by a minimum of $25,000 and a maximum amount that we determine. You must provide evidence of insurability that we consider satisfactory. Any new cost of insurance for the increase in the insurance amount is based on the attained age of the insured person (or attained equivalent joint age) and the rates in effect at that time. Insurance amount decreases You may decrease the amount of a basic insurance benefit provided the minimum amount we determine for the benefit remains in effect. If an insured person has more than one basic insurance benefit, we decrease the benefit with the most recent effective date. The insurance factor does not change when the basic insurance benefit amount is decreased. A decrease is not available in the first 12 months a basic insurance benefit is in effect. Method of indexing for an Indexed insurance amount If an Indexed insurance amount increases by a fixed percentage, you may change the percentage amount. You may also change the method of indexing from fixed percentage to Consumer Price Index (CPI) or vice versa. You may need to provide evidence of insurability we consider satisfactory. Adding an insured person You may apply to add an insured person to this policy if you provide evidence of insurability we consider satisfactory. The rates for the basic insurance benefit and the additional insurance factor for the new insured person are determined by us at the time the new benefit comes into effect. For a joint basic insurance benefit, if you substitute one of the insured persons for another insured person, we recalculate the attained equivalent joint age using the attained age of each insured person. If we’ve approved a claim for total disability benefits for the owner of this policy, you may not apply to make these changes. Removing an insured person You may remove an insured person from the policy. The insurance factor for the insured person’s basic insurance benefit remains in effect if the insured person for that benefit is removed. Applying for non-smoker classification On the policy anniversary immediately following an insured person’s 16th birthday, the risk classification for that insured person’s basic insurance benefit will be the smoker classification. You may apply for non-smoker classification for that insured person as described below. If you apply between the insured person’s 16th and 18th birthdays, we require a non-smoker declaration signed by the insured person and you. If you apply after the insured person’s 18th birthday, we require a policy change form and new evidence of insurability signed by the insured person and you. If we approve your request, the risk classification for that insured person will be non-smoker. The cost of insurance will then 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.

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Your right to convert a basic insurance benefit You may convert a basic insurance benefit in this policy to another eligible permanent life insurance policy on the life of the insured person(s) for that benefit, without giving us new evidence of insurability. If you are converting a basic insurance benefit with one insured person, you must apply after their 16th birthday and before the policy anniversary immediately following their 65th birthday. If you are converting a Joint first-to-die or Joint last-to-die basic insurance benefit, you must apply before the policy anniversary immediately following attained equivalent joint age 65. The equivalent joint age is shown on the Schedule of benefits and cost of insurance. The new life insurance policy We determine the type of permanent life insurance policy you may convert to and the terms and conditions of that policy. The new policy we offer to you will: • be determined by the information about the insured person(s) in the application for the basic

insurance benefit being converted • depend on our rules about the age of the insured person(s) and the amount of insurance • have a death benefit that is not greater than the amount of the basic insurance benefit being converted,

on the day you apply to convert, and • not include any additional benefits, except, in the circumstances described below, a Total disability

benefit. Paying for the new policy The amount you will be required to pay for the new policy will be based on: • the same evidence of insurability we used to determine the cost of insurance for the benefit that is

converted • the rates we charge for new insurance at the time you apply for the new policy, and • the age of the insured person(s) on the date the new policy takes effect. If this policy includes a Total disability benefit If this policy includes a Total disability benefit on an insured person, the new policy may also have a disability benefit. The disability benefit in the new policy may not be the same as the disability benefit in this policy. The terms and conditions of the disability benefit in the new policy will be what we offer at the time you convert the basic insurance benefit. If the insured person is totally disabled and we are paying a benefit under a Total disability benefit in this policy, you cannot apply to convert. Your right to cancel this policy (surrender) You may cancel this policy at any time. Your policy will end on the date we receive your request or any later date you indicate in your request. All of our obligations and liabilities under this policy end on that date. The cancellation is binding on you and any beneficiaries you’ve named, whether the beneficiaries are revocable or irrevocable. To cancel your policy, send your request in writing to:

Sun Life Assurance Company of Canada 227 King St. S. PO Box 1601, Stn. Waterloo Waterloo ON N2J 4C5

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If you cancel your policy within the first 10 days of receiving it from us, we will treat this as a rescission. This is described earlier in your policy under the heading, If you change your mind within 10 days. Cash surrender value If you cancel your policy after the 10th day of receiving it from us, we’ll pay the cash surrender value to you. The amount we pay is: • the policy fund value • plus any amount in the service account, if included in this policy • minus any market value adjustment that may apply to GIAs • minus the amount of any policy loan, including interest • minus the amount of any surrender charge. The amount we pay is determined on the business day following the day we receive your request or any later date you indicate. Surrender charge A surrender charge may apply if you cancel this policy. It is the total of the surrender charge for each basic insurance benefit in this policy. The surrender charge for each basic insurance benefit is:

(A × B) where: A = the insurance factor for the basic insurance benefit B = the surrender charge multiple for that basic insurance benefit

Number of policy years the

basic insurance benefit is in effect Surrender charge multiple

for the basic insurance benefit 0 - 1 1

2 2 3 - 8 3

9 2 10 1

11 or more 0 After the first policy year, if you apply to cancel this policy on a date that is not a policy anniversary, the surrender charge multiple will be pro-rated based on the number of whole months the policy has been in effect between policy anniversaries. A surrender charge for each basic insurance benefit applies until the tenth anniversary of that benefit, whether or not that benefit remains in effect. There is no surrender charge for a basic insurance benefit that ended because the insured person died. Other information about your policy Information about our contract with you Once your policy is in effect, the following documents make up our entire contract with you: • your application for insurance, including any evidence of insurability, and • this policy.

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All of our obligations to you are contained in the documents described above. Any other document or oral statement does not form part of this contract. This policy or any part of this policy may not be amended or waived except by a written amendment signed by two authorized signing officers of the company. Currency of this policy All amounts of money referred to in this policy are in Canadian dollars. Transferring your policy (assignment) You may be able to transfer your rights under this policy to someone else by assigning the policy. We are not responsible for ensuring that the assignment of your policy is legally valid. If you transfer this policy, send a notice of the assignment to:

Sun Life Assurance Company of Canada 227 King St. S. PO Box 1601, Stn. Waterloo Waterloo (Ontario) Canada N2J 4C5

Definitions The following explanations describe insurance terms that apply if the terms appear in this policy. Attained age The attained age is the insured person’s age on the date a benefit takes effect plus the number of complete years from that date to the most recent policy anniversary.

Equivalent joint age The equivalent joint age is a single age associated with a joint first-to-die or joint last-to-die basic insurance benefit. It is determined on the date the benefit takes effect, using the age, smoking status and sex of each of the insured persons for the joint benefit.

Attained equivalent joint age The attained equivalent joint age is the equivalent joint age plus the number of complete years from the date the joint first-to-die or joint last-to-die basic insurance benefit takes effect to the most recent policy anniversary.

Beneficiary The person or persons you name in writing to receive the death benefit. Benefits These benefits may be included in your policy: • a basic insurance benefit that insures an insured person; you may apply for several of these benefits

on one or more insured persons • a joint first-to-die basic insurance benefit • a joint last-to-die basic insurance benefit • additional benefits may be included on each insured person; an example is the Total disability benefit

(protection) • additional benefits may be included on the owner of this policy; an example is Owner disability

benefit (protection). Business day For the purposes of this policy, a business day is a day when our administrative offices are open for business and the Toronto Stock Exchange (or other stock exchange or securities market that we may designate) is open for business.

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Contingent owner The person or persons you name in writing to take ownership of this policy if you die before the date this policy ends. What happens if no contingent owner is named when a policy owner dies? • If there is only one policy owner at the time of death, then the policy owner's estate becomes the new

policy owner. • If there are two or more policy owners at the time of death, then the deceased policy owner's estate

along with the surviving policy owner(s) own the policy. Cost of insurance This is the amount you pay to cover the cost of insurance for all basic insurance benefits and any additional benefits included in the policy. Evidence of insurability This may include medical, financial, lifestyle, and family medical history information and other personal history information needed to approve your application for life insurance. Policy effective date This is the start date of your insurance policy. This date is shown at the beginning of your policy under the heading, Policy summary.

Monthly anniversary day This is the day each month on which policy transactions described in this policy may be processed. This date is shown at the beginning of your policy under the heading, Policy summary.

Policy anniversary The month and day every year that is the same as your policy effective date.

Policy year The 12-month period that runs from one policy anniversary to the next policy anniversary.

Policy transaction Examples of policy transactions are payments, withdrawals, policy loans and transfers of money between accounts. Permanent insurance A type of insurance that provides protection for the entire lifetime of the insured person.

Advisor product guide - Sun Life Financial · PDF fileA Sun UL policy is available from issue...

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Transcript of Advisor product guide - Sun Life Financial · PDF fileA Sun UL policy is available from issue...