Manulife Financial
From the Institute Member's Plans Resource Centre New Member
From the Institute Members' Plans Resource Centre New Member Offer


Glossary of Insurance Terms
Here is a list of some of the frequently used insurance terms found throughout the pages of this Web site. All definitions provided are examples. Consult your certificate for the terms that apply to your coverage.



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Accident Insurance

Provides benefits if the person insured is injured as a direct result of an accident, and not by any other cause.

Age

Depending on the policy, either your actual age or your age as of a specified date (i.e., the policy anniversary date) may be used when determining your eligibility for coverage, your premiums or your termination date.

Application

A signed document of personal and health-related information supplied by a person applying for insurance. An insurer uses the information on the application (and sometimes additional information the insurer requests) to decide whether or not to provide coverage to that person.

Association Group

A group formed of members of an association, who are eligible to apply for group insurance under one insurance contract between the association and an insurer.


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Beneficiary

The person, other than the insured or the insured's estate, to whom or for whose benefit insurance money is made payable by contract or designation.

Benefits

The amounts paid to a claimant or beneficiary under the coverage of a policy.


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Cancellation

The termination of coverage when, at the request of the insured or by the right of the insurer, the insurance coverage is made void before its normal expiration date.

Certificate

A document issued to a group member insured under a group insurance policy.

Claim

A request for benefit payment under the terms of an insurance policy.

Claimant

The person(s) making a request for payment of benefits under the terms of an insurance policy.

Coverage

Another term for the protection offered under an insurance policy. Coverage is used interchangeably with the terms insurance or protection.


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Death Benefit

The amount of money paid to a beneficiary when a person insured under a life insurance policy dies.

Death Claim

A request for payment under the terms of a life insurance policy when an insured person dies.


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Earned Income

For Income Protection Insurance, Earned Income is measured after business expenses, but before deduction of any income or personal or corporate taxes payable on it.

Earned Income for a month means all income earned by the Insured in respect of employment, profession, or services in the month, whether paid:

  • directly to the Insured,
  • to a business or firm in which the Insured is a partner, or
  • to a corporation or business entity effectively owned by or controlled by:
    • the Insured,
    • the Insured and the Insured’s partners and/or shareholders, or
    • the Insured and relatives of the Insured, and
  • in the form of salary, wages, bonus, commission, fee, or honorarium, and any contribution made to a pension or profit sharing plan on behalf of the Insured.
For the purpose of determining Earned Income for a month, any bonus, commission, fee, or honorarium received, and any pension or profit sharing contributions made on behalf of the Insured, will be deemed to have been earned equally over the period of time during which the service resulting in the payment was provided.

Earned Income does not, however, include income from investments, rents, royalties, pensions, annuities, deferred compensation, dividends from investment or any other income that does not depend on the Insured’s ability to engage in any occupation.

Effective Date

The date when insurance coverage begins.

Exclusions

Specific causes of death, circumstances and health-related conditions or any other losses for which an insurance policy does not provide benefits.

Extended Health and Dental Insurance

Health and dental benefits provided under an insurance policy. Benefits may include prescription drugs, vision care and optional dental care and treatment.


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Face Amount

The dollar amount of the coverage in force. This amount is often shown on the first page of a policy or certificate. In a life insurance policy or certificate, this is the amount payable to a beneficiary when an insured person dies.

Firm

Firm means:
  • a firm, including a Limited Liability Partnership, a professional corporation or sole proprietorship carrying on full-time the practice of public accounting or management consulting with at least one employee (including, as applicable, the proprietor or partner or the shareholder(s), officer(s) and director(s)) eligible for insurance and that is registered with the Institute as a firm in accordance with current ICAO By-law 307 (or as revised from time to time) or is a member in good standing and has a practice in management consulting as defined in current ICAO By-law 103(19) or as a firm with the Institutes of Prince Edward Island, Nova Scotia or Newfoundland, New Brunswick and Bermuda, and its related Bylaws, provided that:
    1. the practice was not created, nor partners, shareholders, officers, directors or employees admitted, hired or retained solely for the purpose of participating in this insurance;
    2. the Firm is engaged, in the practice of public accounting as defined in the By-laws or Rules of Professional Conduct of an Institute (as revised from time to time) or in management consulting; and
    3. “Full-time” means that the proprietors, partners, shareholders, officers and directors of and staff employed by a firm, do during normal business hours of the profession, diligently attend to the business of the firm and devote their time and attention thereto, but not necessarily that proprietors, partners and shareholders, officers and directors be engaged full-time with the practice.

  • a related business or practice, as defined in ICAO By-law 311 and which meets the requirements of Rule 407 of the Rules of Professional Conduct, or such Rule or By-law as revised from time to time.


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Grace Period

A period of time which acts as a cushion to ensure coverage is not cancelled if a payment is missed. If a payment is not received within this period of time (or grace period) from the date a payment is due, the insurance policy is cancelled.

Group Insurance

A single policy which has been issued to a group or association, whereby members of the group can apply for coverage under the group policy.



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Insured

A person and/or other parties covered under the terms of an insurance policy.

Insurer

The company providing the insurance coverage (e.g., Manulife).






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Member

Member means a member of a participating body, including a member whose rights and privileges have been suspended, or a suspended member.

To be Eligible for coverage, a member at the time a written application is received by Manulife must be:
- a resident in Canada or Bermuda; and
- under Age 65.*

A member must continue to qualify as a member to maintain CPA Select coverage.

* Some coverage options are not available to 65. Please see specific product information pages for details.


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Net Monthly Earned Income

The Insured’s Earned Income during the month in the performance of the Insured’s Regular Occupation, and any other occupation for which the Insured is remunerated, after the deduction from such income of business expenses but before deduction of any personal or corporate taxes payable on such income.
    If the Insured is a partner or shareholder in a firm, the percentage that may be deducted as business expenses from the Insured’s gross billings may not exceed the percentage of gross fees the firm deducted from its gross billings as business expenses except where a partnership or shareholder agreement of the firm existing at the commencement of the Insured’s Total Disability requires such deductions.
      For the purpose of determining Net Monthly Earned Income, business expenses shall mean usual and customary business expenses, which:
        • the business incurs on a regular basis; and
        • are essential to the business operation; and
        • are deductible for income tax purposes.

      Expenses which are not considered to be usual and customary business expenses include, but are not limited to: salaries, benefits and other forms of remuneration payable to members of the Insured’s immediate family, unless such expenses are consistent and reasonable in relation to expenses incurred before the Insured’s Disability commenced.

      A business expense may only be deducted to the extent it is not otherwise indemnified by any business expense or office overhead expense insurance.

      For the purpose of determining the amount of any Partial Disability benefit, business expenses that may be deducted from the Insured’s Earned Income will be limited to those items of expenditure which were deducted to determine the Insured’s Pre-Disability Average Net Monthly Earned Income and will exclude new or additional expenses other than any that are directly attributable to the Insured’s Disability.



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      Policy

      The legal document issued by an insurance company to a policyholder, which outlines the conditions and terms of the insurance.

      Policyowner or Policyholder

      The person who owns the insurance policy.

      Pre-Disability Average Net Monthly Earned Income

      The greatest of the Insured’s average Net Monthly Earned Income:
        • in the 24 months immediately preceding the date the Insured’s Disability commenced; or
        • in the best 12 consecutive months within the 24 months immediately preceding the date the Insured’s Disability commenced; or
        • in the two (2) taxation years immediately preceding the date the Insured’s Disability commenced; or
        • for such lesser period of time immediately preceding the date the Insured’s Disability commenced as may apply, where the Insured does not have earnings for 24 months or for two (2) taxation years.
      Where the Insured’s Net Monthly Earned Income changes by more than 25% as a result of:
        • a deliberate change in employment, profession, or services; or
        • a business transaction,
      which is expected to result in an immediate change in the Insured’s income of more than 25%, and such event is concluded prior to the commencement of the Insured’s Disability, Pre-Disability Average Net Monthly Earned Income shall mean the Insured’s average Net Monthly Earned Income for the period immediately preceding the date the Insured’s Disability commenced, but for the period following such event.
        At the time of a claim, the Insured will be required to furnish financial documents as deemed appropriate by the Company, for review by its financial consultant, in order to determine the Insured’s Pre-Disability Average Net Monthly Earned Income and, if applicable, business expenses, in accordance with the policy provisions. The financial evidence must support the benefit amount and substantiate the loss of Earned Income and ongoing liability for business expenses, if applicable. The exact form of documentation required will be specified at time of claim. Documentation can be expected to include, but is not limited to:
          • copies of the Insured’s personal tax returns and notices of assessment;
          • for an Insured who is a self-employed professional, if applicable:
            • copies of corporate tax returns and notices of assessment; and
            • financial statements for any entity from which the Insured derived or continues to derive Earned Income;
          • for an Insured who is an Employee, a statement from the employer that includes details of the Insured’s earnings.


        Premium

        The cost of insurance coverage. A premium can be paid monthly or annually.

        Protection

        The insurance provided under the terms of an insurance policy. Also referred to as coverage.



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        Rider

        An addition to an insurance policy providing further rights and responsibilities.


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        Spouse

        Spouse means a person who is legally married to the member; or who resides with the member, and is named by the member in a written request for Spouse Term Life Insurance or Personal Accident Insurance and has resided in a conjugal relationship with the member for a continuous period of not less than two years; but does not include any person who is:
        • insured under this Policy by any other member; or
        • insured as a member under the Policy.

        Spouse, at the option of the member, shall also mean former spouse if the following circumstances apply:
        • such former spouse no longer qualifies as a spouse due to: divorce; or separation after at least two years of continuous cohabitation in a conjugal relationship with the member; and
        • such former spouse was insured under the Policy as a spouse, prior to divorce or separation.

        A member cannot have more than one spouse insured under the Policy at one time.

        Eligible spouse means a spouse who at the time a written application is received by the Company:
        • is resident in Canada or Bermuda; and
        • is under age 65.


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        Term Life Insurance

        A life insurance plan that provides coverage for a specified number of years. For instance, an individual can purchase a 10-year term life insurance plan and pay the same premium amount each year for the duration of the term. After 10 years, the coverage can be renewed at a higher price or cancelled. If the insured survives the stated period, the insurance policy expires without any value.


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        Underwriter

        The person or company which decides the risk level of a potential insured applying for insurance protection. Also, the person or company that ensures money is available to pay for claims under the insurance policy. Manulife is the underwriter of the insurance plans described on this Web site.

        Underwriting Requirements

        The requirements used to assess whether an insured is eligible for insurance coverage. A person’s age, the amount of coverage requested, medical records and physical examinations are generally used to decide if an insured will pass the underwriting requirements necessary for the insurance coverage and amount they have applied for.






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        CPA Select Insurance Plans are sponsored by the Chartered Professional Accountants of Ontario
        and underwritten by The Manufacturers Life Insurance Company (Manulife).
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