Products: Conversion — Income Protection During the Transition

We understand the challenges employees often face when transitioning from one job to another, and the consequences they may face for failing to maintain disability coverage. We developed our LTD conversion insurance product to meet the needs of these employees and their families. Our LTD conversion insurance offering is available to our client companies and their customers.

What is Conversion?

Conversion insurance allows an employee who terminates employment in specific situations, to convert their group LTD coverage, provided by their former employer, to a 'new' conversion coverage plan. LTD conversion coverage is intended to be a "transition" LTD plan for terminating employees who have no other LTD coverage option at the time of termination. The LTD conversion plan coverage lasts for up to one (1) year.

Why the Need for LTD Conversion Insurance?

By offering the conversion privilege you are providing your policyholders' covered employees the option of maintaining some level of long-term disability coverage in the event employment terminates. It is an especially valuable benefit for those employees who wish to take some time in transitioning from one employer to another. As long as employees meet the eligibility requirements and apply within thirty-one (31) days of terminating coverage under the group LTD policy, the Conversion application cannot be declined.

ELIGIBILITY — Who Can Convert?

Employees are eligible to apply for Reliance Standard Life's conversion plan if employment ended due to termination of employment, other than retirement.

In addition, employees must meet the following requirements:

• Have been covered for at least twelve (12) consecutive months prior to termination of coverage under the group LTD policy from which they're converting. The twelve (12) months can be a combination of coverage under the employer's group LTD policy and a prior plan of group LTD coverage provided by that employer.
• Apply for conversion within thirty-one (31) days after the termination of coverage under the Group LTD Policy.

Insurance Coverage & Administration

Reliance Standard Life Insurance Company (RSL) provides the insurance coverage, and administers the plan including issuing the certificate of insurance, premium collection, and claims administration. CDS provides conversion service support to its clients, their policyholders and covered employees. Our support include distribution of conversion enrollment kits to clients, screening initial applications, answering questions from clients and their policyholders and employees about the conversion offering, and coordinating with RSL as needed.

Benefits and amounts of insurance under the LTD Conversion coverage may differ from those under the former employer's group LTD policy.

Employees are responsible for payment of all LTD Conversion coverage premiums under this plan.

Summary of Benefits

Your Benefits would begin:

Following 180 consecutive days of Total Disability. You must submit written proof of claim within 90 days after the Elimination Period begins.

Your Monthly Benefit would be:

60% of your covered monthly earnings at the time of termination, subject to a maximum monthly benefit of $3,500, less benefits from other income.

If your benefit percentage and/or maximum monthly benefit under the former plan are less than the above, your coverage under this conversion policy will be calculated based on the former plan's benefit percentage and/or maximum monthly benefit.

Your Benefits will be reduced from other income you may receive or are eligible to receive:

Your Maximum Benefit will be reduced by Other Income Benefits you receive or are eligible to receive (such as Family Social Security benefits, Workers Compensation benefits, or wages).

Your Minimum Benefit will be:

The greater of:

• $50; or
• 10% of the Monthly Benefit prior to any Other Income Benefit reductions.

Your Minimum Benefit will be:

Age at Disablement

Duration of Benefits

61 or less

To age 65

62

3.5 years

63

3 years

64

2.5 years

65

2 years

66

1.75 years

67

1.5 years

68

1.25 years

69 or older

1 year

Survivor Benefits – Your eligible survivors may be eligible for the following benefits if you die while receiving benefits under this plan:

3 times your last Monthly Benefit, payable to surviving spouse or children under 25.

Definition of Disability:

Each and every material duty of any occupation your education, training, or experience will allow.

Exclusions – Not covered under the plan includes:

• Commission of a felony;
• Active participation in a riot or violent disorder;
• Intentionally self-inflicted injury;
• War, declared or undeclared; or
• Injury or sickness occurring while confined in a penal or correctional institution.

Limitations – disabilities due to:

• Mental or Nervous Disorders – twelve (12) month limit unless hospital confined at the end of the 12 months;
• Substance Abuse – 24-month limit. No benefit payable unless you are participating in rehabilitation program approved by us.

When Conversion Insurance Ends:

LTD conversion coverage will terminate on the first of the following to occur:

• The end of the period for which your last premium has been paid;
• Twelve (12) months from your effective date;
• The date you retire;
• The date you die;
• The date you become covered under another group Long Term Disability policy; or
• The date the Conversion policy terminates.