2007 Term Life Return of Premiums -Sept.08

The CBIA Board of Directors has approved a return of premiums for Term Life certificate owners. Approximately $3.7 million will be distributed to over 21,000 customers. The details are as follows:

• Where the total of all Term certificates combined on a life is $1,250,000 or less, a cheque will be issued in an amount equal to 25% of paid 2007 policy year (December 1, 2006 to November 30, 2007) premiums to the certificate owner(s).

• Only certificates that were in-force and had premiums paid during the 2007 policy year and continue to be in-force on September 1, 2008 qualify for a return of premium.

• Certificate owners that did not pay premiums during the 2007 policy year due to a waiver of premium benefit claim, do not qualify for this offer.

• As a result of the current financial arrangements with our insurers, paid premiums for amounts above $1,250,000 do not qualify for a return of premium.

• In cases where the amount of coverage from all certificates combined exceeds $1,250,000, a pro-rated return of premium amount will apply.

An example is as follows:

		2007 Refund Example (total coverage exceeds $1.25 million)
		Total Term Life coverage for life insured		$2,000,000
		Total paid Term Life renewal year 2007 premium		$1,095
		Maximum coverage limit for refund		$1,250,000
		Portion of total coverage that is eligible for refund		$1,250,000 / $2,000,000 = 62.5%
		Portion of total premium that is eligible for refund		$1,095 x 62.5% = $684.38
		Refund percent		25%
		Total amount payable		$684.38 x 25% = $171.10

• In cases where there is more than one certificate owner on an insured life, each will receive a separate cheque for 25% of their portion of the total paid 2007 policy year premiums (subject to the $1,250,000 face amount maximum).

• In cases where there is more than one certificate owner on an insured life and the total amount of coverage from all certificates combined (on a single insured) exceeds $1,250,000, each owner will receive a pro-rated cheque amount based on the percentage owned of the first $1,250,000 of coverage.

An example is as follows:

		2007 Refund Example (total coverage exceeds $1.25 million) Multiple Owners
		Total Term Life coverage for life insured		$2,000,000
		Amount owned by A		$1,500,000 (75% of total)
		Amount owned by B		$500,000 (25% of total)
		Total paid Term Life renewal year 2007 premium		$1,095
		Maximum combined coverage limit for refund		$1,250,000
		Portion of total coverage that is eligible for refund		$1,250,000 / $2,000,000 = 62.5%
		Portion of total premium that is eligible for refund		$1,095 x 62.5% = $684.38
		Refund percent		25%
		Total amount payable		$684.38 x 25% = $171.10
		Total amount payable to owner A		$128.32 (75% of total)
		Total amount payable to owner B		$42.78 (25% of total)

Reason for this Return of Premium

Our rates are set with a goal to break-even and this requires that we take a long term approach to plan performance. However, better than anticipated financial experience can generate financial results that exceed our predicted long term requirements. Such is the case with the $3.7 million now being returned to our customers.

While we cannot guarantee our future performance, for over the past decade tens of thousands of CBIA clients have benefited from our financial success through improved contractual benefits, increased face amounts, lower rates, waived premiums and return of premium cheques. We are not aware of any insurance provider that can make this claim.

If you have not already done so, now is a great opportunity to re-evaluate your insurance needs as you may qualify for recently improved rates and new plan features. Call your Authorized CBIA Representative for more information.