Rule 29. Insurance

29.1.    Except for Pre-Need Life Plans, all the terms and conditions applicable to the insurance contract shall be segregated from the terms and conditions applicable to the Pre-Need Plan. In conformity with the full disclosure policy of the Commission, and in accordance with the requirements of the Insurance Commission, the terms and conditions of insurance benefits to be provided by the insurance company to the Planholder shall be contained in the insurance certificate accompanying the Pre-Need Plan between the Pre-Need Company and the Planholder. 

29.2.    Except for Pre-Need Life Plans, the principal insurance benefits permitted to be obtained by a Pre-Need Company from a life insurance company are: 

a.      Group Credit Life Insurance, for the unpaid installments of the Planholder;

b.      Insurance for the waiver of unpaid pre-need installments, due to Total and Permanent Disability of the Planholder; and

c.      Group Yearly Renewable Term Insurance and Accidental Death and Disability Insurance shall be allowed, subject to guidelines of the Insurance Commission and the terms and conditions of the master policy.

29.3.  Any application for registration and price increase of Pre-Need Plans with insurance riders shall be accompanied by a copy of the group insurance master contracts duly approved by the Insurance Commission covering the insurance taken with the Pre-Need plans.  A copy of the specimen individual certificates approved by the Insurance Commission corresponding to the said master contract, shall likewise be submitted.

29.4. In case of Pre-Need Life Plans, the Pre-Need Company shall obtain Group Yearly Renewable Term Insurance and Accidental Death and Disability Insurance, subject to the following conditions:

a.)    The cost of the insurance shall be built into the contract price and paid directly by the Pre-Need Company out of non-trust funds;

b.)    The Pre-Need Company is the owner and policyholder of the insurance policy but the beneficiary/ies are those named in the policy;

c.)   The Pre-Need Company shall be liable to its Planholders under the terms and conditions of the Life Plan Contract, notwithstanding the insolvency or refusal of the insurance company to pay the insurance proceeds. Provided, however, that if the claim arises during the contestability period of the Life Plan Contract, and it is established that there was concealment and mispresentation of material facts by the planholder, then the planholder and/or his beneficiaries shall not be entitle to the benefits of the Life Plan.