1

Family income

A policy under which:

(a)   an amount is payable (the basic sum insured ) on the death of the life insured; and

(b)   an additional amount of life insurance benefits ( the additional benefits ) is payable if the death of the life insured occurs within the term specified in the policy.

1.1   For the purposes of subsection 209 (3) of the Act, the amount payable under the paid‑up policy is taken to be calculated under the relevant actuarial standard according to the following formula:

where:

PUVB is the amount of the paid‑up policy in respect of the basic sum insured.

PUVA is the amount of the paid‑up policy in respect of the additional benefits calculated according to subsection 3.04 (2) of the relevant actuarial standard, as if, for the purposes of that subsection, the additional benefits were a policy that will not participate in future profits.

ADJ is calculated according to the following formula:

where

AA is the present value, as at the attained age, of $1 of sum insured according to the contingencies upon which the additional benefits are payable.

AB is the present value, as at the attained age, of $1 of sum insured according to the contingencies upon which the basic sum insured is payable.

2

Additional benefits

A policy under which an amount of additional life insurance benefits ( the additional benefits ) are payable:

(a)    for accidental death; or

2.1   For the purposes of subsection 209 (3) of the Act, in calculating the amount payable under the paid‑up policy according to the relevant actuarial standard:

(b)    for death by an illness specified in the policy; or

(c)    in an event other than survival or death.

(a)    the additional benefits are taken not to be part of the calculation; and

(b)    the paid‑up policy is taken not to provide any part of an additional benefit.

3

Option

A policy ( the original policy ) under which the contract of insurance may be varied at the option of the policy owner:

(a)    on a date specified in the policy; or

(b)    on the happening of an event specified in the policy.

3.1   For the purposes of subsection 209 (3) of the Act, in calculating the amount payable under the paid‑up policy according to the relevant actuarial standard, if the policy owner makes a request under subsection 209 (1) of the Act before the option is exercised, the paid‑up policy is taken to be the paid‑up policy that would have applied if the original policy had not included the option.

4

Altered ordinary

An ordinary policy under which the contract of insurance ( the original contract ) is varied, at the request of the policy owner, by a change to:

(a)   the date on which the sum insured is payable; or

(b)   the term during which premiums are payable.

4.1   For the purposes of subsection 209 (3) of the Act, the amount payable under the paid‑up policy is taken to be calculated under the relevant actuarial standard according to the following formula:

where:

APUV is the amount of the adjusted paid‑up policy at the date of variation, being an amount calculated as follows:

where:

PUV is the value of the paid‑up policy under the original contract, calculated according to Part 3 of the relevant actuarial standard, as at the day before the date of variation.

AO is the present value, as at the attained age, of $1 of sum insured according to the contingencies upon which the sum insured under the original contract was payable.

AA is the present value, as at the attained age, of $1 of sum insured according to the contingencies upon which the sum insured under the original contract, as varied, on the day after the date of variation, is payable.

PBPUV is the amount of the paid‑up policy on the day the calculation is made for the purposes of subsection 209 (3) of the Act, calculated according to the relevant actuarial standard, as if:

(a)   the policy came into effect on the date of variation; and

(b)   the sum insured under the policy is the premium bearing sum insured ( PBSI ) calculated as the total sum insured under the original contract, as varied, on the day after the date of variation, less APUV ; and

(c)   PBSI is payable on the same contingencies upon which the total sum insured under the original contract, as varied, on the day after the date of variation, is payable.

4.2   For the purposes only of:

(a)    subsection 209 (1) of the Act; and

(b)    the definition of Factor in subsection 3.04 (1) of the relevant actuarial standard; the period for which premiums have been paid under the policy is taken to have started on the date of the original contract.

4.3   For the purposes of subitem 4.1, the date of variation means the date on which the first premium is payable under the original contract, as varied.

5

Increased ordinary

An ordinary policy under which the contract of insurance ( the original contract ) is varied, at the request of the policy owner, by increasing:

(a)    both the amount of the sum insured and the amount of each premium; or

(b)    if additional amounts of premium are paid -- the amount of the sum insured.

5.1   For the purposes of subsection 209 (3) of the Act, the amount payable under the paid‑up policy is taken to be calculated under the relevant actuarial standard according to the following formula:

where:

PUV is the amount of the paid‑up policy under the original contract, calculated according to Part 3 of the relevant actuarial standard.

INCPUV is the total of the amounts of the paid‑up policy, in respect of each increase of the original contract, calculated according to Part 3 of the relevant actuarial standard as if, for the purposes of that Part, each increase was a policy:

(a)    that was effected on the date of the increase; and

(b)    under which the sum insured is the amount of the increase; and

(c)    under which the period for which premiums have been paid started on the date of the increase.

5.2   For the purposes of subsection 207 (4) of the Act, the surrender value of the policy is taken to be calculated under the relevant actuarial standard according to the following formula:

where:

SV is the surrender value under the original contract, calculated according to Part 4 of the relevant actuarial standard.

INCSV is the total of the amounts of the surrender value, in respect of each increase of the original contract, calculated according to Part 4 of the relevant actuarial standard as if, for the purposes of that Part, each increase was a policy:

(a)    that was effected on the date of the increase; and

(b)    under which the sum insured is the amount of the increase; and

(c)    under which the period for which premiums have been paid started on the date of the increase.

5.3   Section 210 of the Act is taken to apply to an increase of the original contract as if the increase was a policy:

(a)   that was effected on the date of the increase; and

(b)   under which the sum insured is the amount of the increase; and

(c)   under which the period for which premiums have been paid started on the date of the increase.

6

Special endow‑
ment insurance

A policy under which:

(a)    the sum insured is payable by instalments at the times specified in the policy; and

(a)    the premiums under the policy are payable at a level rate until the total sum insured is paid; and

(b)    in the case of the death of the life insured -- the balance of the sum insured is payable.

6.1   For the purposes of subsection 209 (3) of the Act, the amount payable under the policy is taken to be the amount calculated according to subsection 3.04 (2) of the relevant actuarial standard.

7

Paid‑up

A paid‑up policy under section 209 of the Act.

7.1   Subject to subitem 7.2, for the purposes of subsection 207 (4) of the Act, the surrender value of the policy is taken to be the surrender value calculated according to Part 4 of the relevant actuarial standard.

7.2 For the purposes of the calculation, the paid‑up value of the policy at the date of surrender is taken to be the actual amount of the paid‑up policy.

8

Industrial

A policy that, immediately before the commencement of the Act, was an industrial policy within the meaning of subsection 4 (1) of the Life Insurance Act 1945 and that is treated as ordinary business under the Act.

8.1   In spite of section 210 of the Act, section 101 of the Life Insurance Act 1945 , as in force immediately before the commencement of the Act, continues to apply to policies to which that section applied at that time.