health invest primer

Health Invest

Product Primer (For Advisors’ Use Only)

1

This material is for purposes of illustration only. The complete terms and conditions of the insurance coverage are found in the policy contract itself. In the event of conflict between this material and the policy, the policy will prevail.

January 2014

About the Primer

The HEALTH INVEST Primer is your reference to this new product offering. This contains the product’s description, underwriting guidelines and other salient information which can be used in the solicitation process. PRODUCT FEATURES Health Invest is a health and life insurance plan that provides financial protection from serious sickness, accidents or

loss of life. I. LIFE INSURANCE PROTECTION

The Life Insurance Benefit shall be the highest of: 1. Face Amount

The Basic Life Insurance Face Amount shall depend on the Insured’s age upon application, the corresponding Death Benefit Multiple and the amount of Basic Premium. It is equivalent to the Death Benefit Multiple multiplied to the Basic Annual Premium.

Health Invest Death Benefit Multiples

Age Pay Period (in years)

Age Pay Period (in years)

3 5 7 10 3 5 7 10

0 5 25 25 30 36 5 19 19 20

1 5 25 25 30 37 5 18 18 20

2 5 25 25 30 38 5 17 17 19

3 5 25 25 30 39 5 16 16 19

4 5 25 25 30 40 5 15 15 19

5 5 25 25 30 41 5 15 15 19

6 5 25 25 30 42 5 14 14 18

7 5 25 25 30 43 5 14 14 18

8 5 25 25 30 44 5 13 13 18

9 5 25 25 30 45 5 13 13 17

10 5 25 25 30 46 5 12 12 17

11 5 25 25 30 47 5 12 12 17

12 5 25 25 30 48 5 11 11 16

13 5 25 25 30 49 5 11 11 16

14 5 25 25 30 50 5 10 10 15

15 5 25 25 30 51 5 10 10 15

16 5 25 25 30 52 5 10 10 15

17 5 25 25 30 53 5 9 9 14

18 5 25 25 30 54 5 9 9 14

19 5 25 25 30 55 5 9 9 14

20 5 25 25 30 56 5 8 8 13

21 5 25 25 30 57 5 8 8 13

22 5 25 25 30 58 5 8 8 13

23 5 25 25 30 59 5 7 7 12

24 5 25 25 30 60 5 7 7 12

25 5 25 25 29 61 5 7 7 12

26 5 25 25 28 62 5 6 6 11

27 5 25 25 27 63 5 6 6 11

28 5 25 25 26 64 5 6 6 11

29 5 25 25 25 65 5 6 6 10

30 5 25 25 25 66 5 6 6 10

31 5 20 20 23 67 5 5 5 9

32 5 20 20 22 68 5 5 5 9

33 5 20 20 21 69 5 5 5 8

34 5 20 20 20 70 5 5 5 8

35 5 20 20 20

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2. Minimum Death Benefit

The Minimum Guaranteed Death Benefit is equal to 500% of the Basic Annual Premium, plus 125% of each Top-up, less 125% of each withdrawal. 3. Account Value

The Account Value acts as the savings portion of the policy. This increases/decreases depending on the performance of the chosen fund(s).

II. ACCIDENT COVERAGE

This plan provides comprehensive accident coverage upon accidental death, dismemberment or disability with the following attachable options: 1. Medical Reimbursement (MR) which reimburses the actual accident-related expenses of the Insured subject

to a maximum amount.

2. Weekly Income Benefit (WI) which provides an amount when then Insured becomes totally disabled as a

result of an accident and commencing within ninety (90) days from the date of accident. Weekly Income Benefit will be given for a maximum period of twenty-six (26) weeks.

III. CRITICAL ILLNESS COVERAGE

A one-time lump-sum benefit will be provided upon diagnosis of any of the covered critical illnesses which commenced at least 180 days after the effective date, prior to age sixty-five (65).*

IV. WAIVER OF PREMIUM FOR CRITICAL ILLNESS

The total premium of the policy equivalent to the sum of the Basic Premium, Regular Top-up and Special Top-up will be waived in case of diagnosis of any of the covered critical illnesses which commenced at least 180 days after the effective date, prior to age sixty (60).*

V. LONG-TERM SAVINGS

Premium payments are invested in professionally-managed mutual funds by Philam Asset Management, Inc. (PAMI) 1. PAMI Philam Bond Fund is invested in Philam Bond Fund, Inc. (PBFI) managed by Philam Asset

Management, Inc. (PAMI). This fund provides conservative investors with returns derived out of investments in peso-denominated fixed income instruments that are expected to generate higher earnings compared to traditional savings accounts and time deposits.

2. PAMI Philam Fund is invested in Philam Fund, Inc. (PFI) managed by Philam Asset Management, Inc.

(PAMI). This fund provides clients with balanced risk appetite with long-term capital growth through a mix of investments in equity securities and a portfolio of peso fixed income securities.

3. PAMI Philam Strategic Growth Fund is invested in Philam Strategic Growth Fund, Inc. (PSGF) managed

by Philam Asset Management, Inc. (PAMI). This fund provides clients comfortable with risk with long-term capital growth through investments in equity securities.

*See Appendix for the complete list of covered critical illnesses

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VI. COVERAGE PROTECTOR

The plan is guaranteed not to terminate within the first two (2) years regardless of fund performance as long as Basic Premiums, Rider Premiums and Special Top-up Premiums, if any, are continuously paid when they fall due and no withdrawals are taken.

VII. ONE-TIME LOYALTY BONUS

A one-time Loyalty Bonus will be given at the end of the 20

th policy year, provided that past Basic Premiums are

continuously paid on schedule and no withdrawals are taken. The Loyalty Bonus is equivalent to a percentage of the Basic Premium depending on the chosen pay-period variant as shown below:

Pay-period One-time Loyalty Bonus

3-Pay 25% of Basic Premium




VIII. Premium-Paying Period (PPP)

The available paying period options are 3-Pay, 5-Pay, 7-Pay and 10-Pay variants. Payment period is not guaranteed. In the future, if the Account Value becomes insufficient to pay for charges, it is possible that Top-up will be required so that the policy will remain in-force.

IX. Types of Premium

The plan will have the following types of premiums:

1. Basic Premium

The Basic Premium shall be used to pay for the plan’s basic benefits.

2. Rider Premium

The Rider Premium is an additional investment which will be used to pay for the supplementary benefits packaged in the policy.

3. Regular Top-Up Premium

The Regular Top-up Premium shall be optional additional investments to the policy which will be regularly paid together with the Basic Premium. This will be elected upon policy application only.

4. Special Top-Up Premium

The Special Top-up Premium shall be mandatory additional investments to the policy which will be regularly paid together with the Basic Premium. This is to prevent the Account Value from depleting during initial years of the policy as a result of the client’s substandard underwriting rating.

5. Ad-hoc / Lump-Sum Top-Up Premium

The Adhoc / Lump-sum Top-up Premiums shall be optional additional investments to the policy which can be made any time upon submission of a duly accomplished Investment Change Form (ICF) subject to underwriting approval. The minimum and maximum limits for these premiums are as follows:

Premium Pay-period Minimum Premium Maximum Amount

Basic Premium 3-Pay Php 100,000

Depending on capacity to pay* 5-Pay Php 50,000

7-Pay Php 50,000

10-Pay Php 20,000

Regular Top-Up Same as Basic Plan Php 1,000 per fund Depending on capacity to pay*

Special Top-Up Same as Basic Plan Not applicable Not Applicable

Adhoc/Lump-Sum Top-up One-time Php 1,000 per fund Depending on capacity to pay*

*Subject to financial underwriting and due diligence.

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UNDERWRITING AND PROCESSING GUIDELINES

I. Application Form

The existing booklet-type regular application form shall be used. The plan variant: Health Invest 3-Pay, Health Invest 5-Pay, Health Invest 7-Pay, or Health Invest 10-Pay should be indicated in the “Plan Name” portion of the application form.

If optional riders will be included: Medical Reimbursement Weekly Income

should be indicated in the “Supplementary Benefits” portion of the application form.

II. Sales Illustration

The sales illustration must be signed by the client and the soliciting advisor and should be submitted with the application form indicating the allocation of funds (in percentages). In cases where the policyowner is not the Proposed Insured, the signature of Payor-owner (not the Proposed Insured) is required on the sales illustration. Hence, sales illustrations signed only by the Payor-owner even if Proposed Insured is of legal age may be accepted.

III. Issue Ages

The acceptable issue ages are:

Issue Age

PPP Min - Max

3-Pay 18 - 55

5-Pay 18 - 55

7-Pay 18 - 53

10-Pay 18 - 50

IV. Benefit Limits

1. Accident and Health

The default Accident & Health Principal Sum for sales illustration shall be equal to the Basic Life Insurance Face Amount. Minimum Accident and Health coverage is Php 50,000 while maximum is equivalent to the Basic Life Insurance Face Amount subject to coordination of benefit limits for accident coverage currently in effect shown below:

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Coordination of Benefit Limits

Age Maximum Coverage

1-9 Php 2,000,000

10-17 Php 4,000,000

18-65 Php 75,000,000 For the Medical Reimbursement Plan, the maximum coverage is 10% of the Accident and Health Principal Sum or the next lower Medical Reimbursement Plan, whichever is less.

Accident and Health Principal Sum

Maximum Medical Reimbursement (MR)

Php 50,000 - 99,999 MR Plan A: Php 5,000

Php 100,000 - 199,999 MR Plan B: Php 10,000

Php 200,000 - 499,999 MR Plan C: Php 20,000

Php 500,000 - 999,999 MR Plan D: Php 50,000

Php 1,000,000 and above MR Plan G: Php 100,000

For Weekly Income, the maximum coverage is Php 2,000 or Php 5 for every thousand of Accident and Health Principal Sum, whichever is less. The minimum amount is equivalent to Php 250.

2. Critical Illness

The default Critical Illness Principal Sum for sales illustration shall be 50% of the Basic Life Insurance Face Amount subject to the minimum Critical Illness Principal Sum. The minimum Critical Illness Principal Sum will depend on the pay period of the Basic Plan:

Minimum Face Amount

PPP Minimum

3-pay: 2 x Basic Annual Premium



10-Pay: 10 x Basic Annual Premium Maximum Critical Illness Rider Principal Sum is equivalent to the Basic Life Insurance Face Amount subject to coordination of benefit limits below:

Maximum Coordination of Benefits for Critical Illness Rider, Lifeline Rider, Female Cancer Rider and Cancer Life Shield

Medical Rating Maximum Coverage

Standard: Php 25,000,000

Class 1 (A&B): Php 18,750,000

Class 2 (C&D): Php 12,500,000

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3. Waiver of Premium for Critical Illness

The premium to be waived is equivalent to the sum of the Basic Annual Premium, Regular Top-up and Special Top-up.

V. Payment Modes and Payment Methods

Premium payments can be done in annual, semi-annual, quarterly and monthly mode. There shall be no modal loadings to the premiums. To derive the monthly mode premium, multiply the annual premium with .0834 factor. The following payment methods are applicable: Auto-debit arrangement (ADA) is applicable to all modes. Direct payment (to accredited payment centers) is allowed for annual, semi-annual, and quarterly modes

only.

Auto-debit arrangement (ADA) is the only applicable payment method for monthly mode. Auto-charge arrangement (ACA) and over-the-counter payment through credit card shall not be accepted.

VI. Deposit Requirement

The current guidelines in effect on payment requirements for new business cases shall be followed.

VII. Medical and / or Non-medical Requirement

Health Invest may be solicited in a non-medical basis. The total non-medical insurance (applied plus in-force policies) or Underwriting Net Amount at Risk (UWNAR) of the Proposed Insured must not exceed the Company’s non-medical limit for their respective ages and/or Advisor’s Non-medical Authority. This shall be the basis in determining the amount limits for the medex and routine medical requirements. The UWNAR shall also be the basis for the following: Medex and HIV test requirements due to occupation or place of destination/work Signature/ thumbmark of juveniles Maximum amount limits for specific risks (i.e. juveniles, politicians, etc.)

If with Regular Top-up Premiums, UWNAR for the plan shall be the sum of the following: 1. UWNAR for Basic Plan = % of the Basic Premium applied (based on table prepared by Actuarial

depending on variant, age and pay period) 2. UWNAR for Regular Top-up = y * 25% of the Regular Top-up; where y is given in the following table:

3. UWNAR for Critical Illness = One-time lump sum benefit 4. UWNAR for Waiver of Premium for Critical Illness = (Basic Modal Premium + Regular Top-up

Modal Premium) * Premium Paying Period of Basic Plan * Frequency of Payment in a Year Notes: 1. Accident and Health is underwritten separately. 2. Assuming regular Top-up Premiums shall be paid once a year for the whole duration of the pay-period opted.

Pay-period Y

3-Pay 3

5-Pay 5

7-Pay 7

10-Pay 10

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Illustration: Given:

Plan Variant = Health Invest 10-pay Insured’s Age = 30 Basic Life Annual Premium applied = Php 100,000 Death Benefit Multiple = 25 Basic Life Insurance Coverage = Php 2,500,000 Critical Illness Coverage (50% of Basic Coverage) = Php 1,250,000 Payment mode = Quarterly Regular Top-up = Php 10,000

Advisor’s Non-medical authority = Php 8 Million (regular)

UNWAR of the plan is computed as follows:

UWNAR for Basic Plan = 2,490% of Basic Premium

= 24.9 x Php 100,000 = Php 2,490,000

UWNAR for Regular Top-up = 10 x (25% of Php10,000) = Php 25,000

UWNAR for Critical Illness = Php 1,250,000 UWNAR for Waiver of Premium for Critical Illness = (Php 25,000 + 2,500) x 10 x 4

= Php 1,100,000

UWNAR for the Application = UWNAR for Basic Plan + UWNAR for

Regular Top-up + UWNAR for Critical Illness + UWNAR for Waiver of Premium for Critical Illness

= Php 2,490,000 + Php 25,000 +

Php 1,250,000 + Php 1,100,000

= Php 4,865,000

Since UWNAR of Php 4,865,000 does not exceed the advisor’s non-medical limit of Php 8 Million, the application is considered non-medical.

For cases considered medical (ie. UWNAR exceeds the advisor’s non-medical limit) medical examination and other medical requirements shall be required.

VIII. Financial Underwriting

For financial underwriting, in addition to the Income Multiple Rule, the Percentage of Annual Income Rule shall also apply where annual premium (Basic plus Rider Premiums) should not be more that 30% of the Payor/ Owner’s annual income.

Table of Income Multiple

Age Life Critical Illness

(CI)

18 - 40 25 10

41 - 50 25 8

51 - 60 15 5

61 - 70 10 5

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January 2014

The Large Amount Questionnaire (LAQ) shall be called for if the initial basic FA (annual premium applied for x death benefit or FA multiple depending on age and pay-period) is above P8M. In compliance to AMLA rules, the basis for calling of the LAQ shall be the modal premium. If the application form used already reflects the sources of income/ funds to pay premium, the LAQ in compliance to AMLA rules shall no longer be required.

IX. Substandard Rating

Acceptable substandard rating for this packaged product, Health Invest, shall depend on the packaged riders. Although packaged, underwriting shall still be per component rider. If Insured shall not qualify for any of the component riders then Amendment to Application (including new proposal if another ULP product is opted) shall be required for change to a non-packaged plan (such as Family Provider with UDRs that applicant is qualified or any other alternative plan that the client opts).

1. Accident and Health

Occupational Rating

Occupation of the Proposed Insured should be such that the Accident & Health rider may be granted. Maximum acceptable occupational rating is class 4. Weekly Income as an optional disability benefit under Accident and Health can only be granted if the

Proposed Insured’s occupation is also acceptable for Waiver of Premium. Hence, for Insured who is a Minor, Housewife, Student (Not Aviation, Marine or Military Student) or Marine Student where Waiver of Premium is not allowed, Weekly Income Benefit shall not be granted.

Medical Reimbursement and Weekly Income Benefit rating shall follow the occupational class for Accident and Health Benefit.

2. Waiver of Premium for Critical Illness and Critical Illness

The Waiver for Critical Illness may be granted on a Proposed Insured up to substandard medical life rating of Class D.

Acceptability shall depend on the industry and/or occupations. Below is the list of the unacceptable/ ineligible industries and occupations:

UNACCEPTABLE/INELIGIBLE INDUSTRIES AND OCCUPATIONS

Wood and wood products including furniture and fixtures (e.g. carpenters, loggers, lumberjacks and chain sawyers); plywood mill

Chemicals, radioactive materials, pesticides, explosives, batteries, asbestos, petroleum, benzene, coal, rubber, plastics, polymers, paints, dyes, tar, pitch, bitumen, mineral oil (e.g. paraffin) and soot

Metals and other mining minerals (e.g. smelters, coke oven workers, metal workers, miners, lathe operators and foundry workers)

High levels of pollution (e.g. traffic enforcer)

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X. Effective Date

Effective Date shall be the approval date + 1 banking day. Banking days refer to Mondays thru Fridays except national/legal holidays and government holidays.

Table of Effective Dates*

Approval Date Second Banking Day

Monday Tuesday

Tuesday Wednesday

Wednesday Thursday

Thursday Friday

Friday Monday

*Applicable only for non-holidays.

Special Cases:

1. Postdating

For applications that are approved on non-business days (weekend or national/ legal/government

holiday), the Effective Date shall be two (2) banking days following the approval date. For Effective Dates that fall on the 29

th, 30

th, or 31

st of the month. The Effective Date shall be postdated

to the 1st banking day of the following month.

2. Backdating

Backdating of Effective Date is not allowed since the prices of the funds are determined daily and may vary on a given day.

XI. Policy Printing and Delivery Date

Delivery date is set as the last day of the cooling-off period, which is defaulted to twenty-five (25) calendar days

from the policy effective date. The policy contract is assumed received ten (10) calendar days from the effective date and another 15-day period is allotted for the cooling-off period. Below is an illustration of the Cooling-off Period: Approval Date: January 6, 2014 Effective Date: January 7, 2014 Policy Receipt Period: January 8-17, 2014 Last day of cancellation: February 4, 2014 * *Last day of Cooling-off period when policy cancellation can still be accepted

XII. Confirmation Letter

The advisor shall deliver the Confirmation Letter to the Proposed Insured together with the policy contract. This letter contains the complete details of the funds (i.e. fund type, fund allocation, and the current price of the NAVPU) as determined on the policy’s Effective Date. The Effective Date and last day for cancellation of policy are also included.

XIII. Policy Acknowledgement Receipt/PAR (formerly called REPLY FORM)

To determine when the Cooling-Off Period will begin and end, the Policy Acknowledgement Receipt (PAR), which is released together with advisor’s copy of the Confirmation Letter, must be signed by the Policyholder/Insured or his authorized representative upon receipt of the policy. The advisor should ensure delivery of the policy to the Policyholder and to return the PAR to any Philam Life office within ten (10) days from policy receipt.

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In the event the Policyholder/Insured is not available to receive the policy (e.g. Policyholder/Insured is out of the country), he must make a duly signed authorization letter appointing a representative to receive the policy on his behalf. Failure to return the PAR to any Philam Life Office within thirty-five (35) days from the Effective Date of the policy may subject the advisor’s VUL license to be suspended.

XIV. Cooling-off Period/Free-Look Period

The Policyholder/Insured may return his policy contract should he be not completely satisfied with the terms and conditions of this product. A written request from him shall be required within fifteen (15) days from receipt of the policy contract. The amount to be refunded is the Account Value, plus any charges that have been deducted.

XV. Policy Cancellation

1. During Cooling-Off Period

If the Policyholder/Insured would like to cancel his policy during the Cooling-Off Period, he may send or submit to any Philam Life Customer Service Center his copy of the Policy Acknowledgement Receipt (PAR) together with the policy contract. The Customer Service Center will validate if the request is filed within the Cooling-Off Period based on the PAR (validated against copy of the PAR as submitted by the advisor). The amount to be refunded is the Account Value plus initial policy charges. There is no cancellation fee if within Cooling-Off Period.

2. After Cooling-Off Period

Request for cancellation after the Cooling-Off Period shall be considered full withdrawal/redemption of existing units. If a Policyholder/Insured wants to redeem his Account Value in full after the Cooling-Off Period, he must surrender the policy contract and submit the Investment Change Form (ICF). The amount to be given is equivalent to the Account Value less applicable Surrender Charges.

XVI. Addition/Deletion of Riders

Only Medical Reimbursement and Weekly Income are allowed to be added to the policy. Addition is allowed only within the first policy year. Similarly, deletion of riders is only allowed for Medical Reimbursement and Weekly Income. Other riders namely, Accident and Health, Critical Illness, Waiver of Premium for Critical Illness cannot be deleted. Policy Change Form and Health Statement must be used in applying for deletion or addition of riders.

XVII. Increase/Decrease of Face Amount

Increase or decrease of Face Amount is not allowed for this plan.

XVIII. Change of Variant

Change of variant is not allowed for this plan.

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XIX. Pricing/Valuation Day

The valuation of assets in each Investment Fund will be done daily, under normal circumstances.* For the Basic Premiums, as well as fund switching, units will be made based on the Net Asset Value per Share (NAVPU) on the Valuation Date the corresponding creation of Units was made. For partial/full withdrawals, death claim and fund switching, redemption of units will be based on the NAVPU the corresponding redemption of units was made. * Banking days as referring to Mondays thru Fridays except national/legal holidays and government holidays.

XX. Fund Switching

The Policyholder/Insured could switch units from one fund to another fund by submitting accomplished Investment Change Form (ICF) to the Company, subject to the minimum amount of investment per fund and the minimum maintaining balance per fund as determined by the Company. The minimum amount that could be switched is currently set at Php 1,000, while the minimum remaining amount for each fund after the switching is at Php 1,000. Fund switch request will be free of charge.

XXI. Fund Allocation

The Policyholder/Insured can change the fund allocation he made at the time of application by submitting an Investment Change Form (ICF). Such change will be applicable only to succeeding premiums and Top-ups made and will take effect immediately following the date of receipt of such notice. The minimum allocation for each Investment Fund is Php 1,000. Fund allocation change will be free of charge

XXII. Withdrawals

Withdrawals from the fund can be made partially or fully from available funds at any time after the Cooling-Off Period, subject to the minimum amount and minimum maintaining balance per fund. The minimum amount of withdrawal and minimum maintaining balance per fund are both set at Php1,000. Any withdrawal will correspondingly reduce the living benefit, as well as the death benefit. A partial withdrawal may automatically terminate a policy if it: depletes the Account Value; or results in an Account Value falling below the minimum remaining balance without meeting the Coverage

Protector condition ( in this case, the Account Value will have to be fully withdrawn).

The Investment Change Form (ICF) shall be used for this request.

XXIII. Reinstatement

Premium payments may be continued at any time within three (3) years from the date when the Account Value becomes insufficient to cover the relevant policy charges. Reinstatement will be allowed only if the following are satisfied: (1) policy has not been surrendered for its Account Value; (2) submission of written application, and evidence of insurability satisfactory to the company namely Health Statement and other required medical documents that may be called for at the time of appraisal are submitted, and (3) payment of all amounts necessary to revive the policy which are total shortfall, uncollected Cost of Insurance (COI), Premium Charge, Administrative Charges, and current premium for Basic and Unit-linked Riders. Reinstatement via back-dating will not be allowed.

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January 2014

POLICY CHARGES

I. Premium Charges

Premium Charges (as a percentage of premiums) shall be deducted from Basic Annual Premiums, Rider Premiums and Top-up Premiums prior to purchasing units in the Investment Funds according to the following schedule:

Premium Charge (as % of premium)

Basic and Rider Premiums 3-Pay 5-Pay 7-Pay 10-Pay

1st policy year 20% 60% 60% 90%

2nd

policy year 5%

25% 30% 40%

3rd

policy year 0% 5% 10% 10%

Top-Up Premiums 4%

II. Premium Holiday Charges

For policies with premiums due beyond the grace period, a corresponding Premium Holiday Charge (as a percentage of Basic and Rider Premium) shall be deducted from the Account Value according to the following schedule:

Premium Holiday Charge (as % of premium)

Basic and Rider Premiums 3-Pay 5-Pay 7-Pay 10-Pay

1st policy year 20% 60% 60% 90%

2nd

policy year 5%

25% 30% 40%

3rd

policy year 0% 5% 10% 10%

III. Administrative Charge

An Administrative Charge of Php 200 per month shall be imposed for this policy through unit deductions.

During the Premium-Paying Period, if the last premium due is paid in full within the grace period (e.g. policy is not in Premium Holiday), the Administrative Charge shall be decreased to Php100 per month.

IV. Insurance Charge (Cost of Insurance or COI)

The Insurance Charge is the cost of providing insurance coverage associated with the plan. It is deducted upon receipt of the total initial premium, and monthly thereafter on the same day of the calendar month as the Effective Date by redeeming units allocated to this policy equal in value to the said charge. The charge varies depending on the age, sex or risk class of the Insured at the time of such deduction or redemption. Units to be redeemed when the Insurance Charge becomes due shall be based on the proportion of the number of units that each Investment Fund bears to the total number of units under this policy.

If after the deduction of total insurance charges the resulting Account Value falls below the minimum remaining

balance, the policy will not terminate. It will terminate only when there is no sufficient fund to pay for any of the

coverage.

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V. Fund Management Charge

The Fund Management Charge (FMC) is deducted from each Investment Fund and is built into the unit price stipulated at each fund valuation date. FMC rate shall vary by fund.

Fund Name Fund Management Charge

PAMI Philam Bond Fund 1.50%

PAMI Philam Fund 2.00%

PAMI Philam Strategic Growth Fund 2.00%

VI. Surrender Charges

Surrender Charges are applicable to units created by the Basic and Rider Premium. Units created by Top-ups, on the other hand, are not subject to Surrender Charges.

Partial or full withdrawals will first be applied against units created by Top-ups. After exhausting all units created by Top-ups, any remaining withdrawal balance will be applied against units created by Basic and Rider Premiums. A Surrender Charge of x% of the surrendered amount shall be applicable to withdrawals made against units created by Basic and Rider Premiums and the Surrender Charge shall be deducted from the amount withdrawn. The said charges are as follows:

Policy Year x% of amount withdrawn

1 75%

2 75%

3 50%

4 25%

5 15%

6 to 10 10%

COMMISSION

The commission schedule for the Basic, Rider and Top-up Premiums shall be as follows:

Pay-Period 3-Pay 5-Pay 7-Pay 10-Pay

Basic & Rider Premiums

Policy Year 1 6% 25% 25% 30%

Policy Year 2 2% 5% 5% 15%

Policy Year 3 - 5% 5% 5%

Top-up Premium (Regular, Special, Ad hoc)

2% of each Top-up Premium

Annual mode is eligible for additional Annual Premium Bonus (APB) of 5% of the Basic and Rider Premiums. 3-pay plans shall not be entitled to the 5% APB. Commission shall be based on the policy year. No commissions will be paid if there is no premium payment during the corresponding policy year (Premium Holiday).

AUTHORIZATION AND LICENSING REQUIREMENTS

Since Health Invest is a variable life product, only duly authorized, trained, and licensed (variable life license) advisors can solicit business for this product.

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APPENDIX

LIST OF COVERED CRITICAL ILLNESSES FOR WAIVER OF PREMIUM FOR CRITICAL ILLNESS/CRITICAL ILLNESS RIDER

(1) Cancer – The occurrence of a histologically confirmed invasive malignant tumor involving the spread of

malignant cells. Spread of malignant cells means spread of malignant cells to lymph nodes or distant parts of the body; but this criteria is not required if the cancer is first diagnosed after this contract has been in force for two (2) years from the Issue Date, Endorsement Date or the date of reinstatement, whichever is the latest. The following are excluded: Tumors treated by endoscopic procedures alone, tumors classified as carcinoma insitu, prostate tumors classified as T1 (TNM classification system), malignant melanomas other than those greater than 1.5 mm in depth, other skin cancers, tumors that are a recurrence or metastases of a tumor that first occurred within 90 day waiting period, Kaposi’s Sarcoma, other tumors associated with HIV infection and tumors that pose no threat to life and for which no treatment is required.

(2) Cerebrovascular Stroke – An acute neurological event caused by a cerebral or subarachnoid hemorrhage,

cerebral embolism or cerebral thrombosis, where the following conditions are met:

There is an acute onset of objective and ongoing neurological signs that are expected to be permanent, and

Findings on Magnetic Resonance Imaging, Computerized Tomography, or other reliable imaging techniques, demonstrate a lesion consistent with the acute hemorrhage, embolism or thrombosis.

Brain damage due to an accident, infection, vasculitis or an inflammatory disease is excluded.

(3) Coronary Artery Bypass Surgery – The actual undergoing of open chest coronary artery bypass grafting

surgery to one or more coronary arteries due to disease of those arteries. Angioplasty, stent insertion, laser or other intraarterial procedures, are excluded.

(4) Heart Attack – The first occurrence of an acute myocardial infarction where the following conditions are met:

A history of typical chest pain.

The occurrence of typical new acute infarction changes on the electrocardiograph.

Elevation of cardiac Troponin (T or I) to at least 3 times the upper limit of the normal reference range or an elevation in CK MB to at least 200% of the upper limit of the normal reference range.

(5) Kidney Failure – Chronic irreversible failure of both kidneys requiring either permanent renal dialysis or kidney

transplantation.

(6) Liver Cirrhosis – End stage liver disease resulting in cirrhosis and with the following features:

Permanent jaundice,

Ascites, and

Encephalopathy or hepatorenal syndrome Liver disease secondary to alcohol or drug misuse is excluded.

(7) Vital Organ Transplant – The receipt of a transplant of:

Human bone marrow using haematopoietic stem cells preceded by total bone marrow ablation, or

One of the following whole human organs: heart, lung, liver, kidney, pancreas, as a result of irreversible end stage failure of the relevant organ.

Other stem cell transplants and transplants of part of an organ are excluded.

(8) Alzheimer’s Disease – The certain diagnosis of Alzheimer's Disease or Dementia where there is an associated

neurological deficit which is solely responsible for a permanent inability to perform independently at least three of the "activities of daily living" or requiring the continuous supervision of the life insured.The coverage for the illness will cease after the age sixty five (65) or on the expiry date of the Supplementary Contract, whichever is earlier.

(9) Amyotrophic Lateral Sclerosis – The occurrence of Amyotrophic Lateral Sclerosis that results in a permanent

neurological deficit.

(10) Aplastic Anemia – The occurrence of acquired failure of blood production characterized by total and persistent

aplasia of bone marrow.

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(11) Bacterial Meningitis – Bacterial Meningitis that causes a permanent neurological deficit that results in the

permanent inability to perform at least one activity of daily living. Bacterial Meningitis occurring in the presence of HIV infection is excluded.

(12) Benign Brain Tumor – A benign intracranial tumor where the following conditions are met:

The tumor is life threatening,

It has caused damage to the brain.

It has undergone surgical removal or, if inoperable, has caused a permanent neurological deficit. The following are excluded: Cysts, Granulomas, Vascular Malformations, Haematomas, Tumors of the pituitary gland, or spine, Tumors of the acoustic nerve.

(13) Cardiomyopathy – The occurrence of a cardiomyopathy where the following conditions are met:

There is persistent impairment of left ventricular function (diastolic or systolic) for at least 6 months, despite optimal treatment.

Physical impairment to the degree of at least class 4 of the New York Heart Association Classification of cardiac impairment.

Cardiomyopathy directly related to alcohol misuse is excluded.

(14) Coma – A coma that persists for at least 96 hours where all the following conditions are met:

There is no response to external stimuli for at least 96 hours.

Life support measures are necessary to sustain life. There is brain damage that results in a permanent inability to perform one of the activities of daily living. The permanence of the brain damage must be assessed no sooner than 30 days from the onset of the coma.

(15) Encephalitis – Viral encephalitis (meaning viral infection of the brain parenchyma) resulting a permanent

neurological deficit that results in the permanent inability to perform at least one activity of daily living. Encephalitis occurring in the presence of HIV infection is excluded.

(16) Fulminant Viral Hepatitis – The occurrence of sub massive or massive necrosis of the liver caused by a

Hepatitis Virus leading to rapid liver failure.The following criteria must be met:

Necrosis involving entire lobules (where available),

Rapid decrease in liver size;

Rapid deterioration of liver functions tests; and

Deepening jaundice.

(17) Heart Valve Replacement – The undergoing of medically necessary open-heart surgery to replace or repair

a heart valve as a consequence of a heart valve defect. Balloon or catheter techniques are excluded.

(18) Loss of Hearing – Total, permanent and irreversible loss of hearing in both ears as a result of acute disease or

accident. Medical evidence in the form of an audiometry and sound-threshold test must be provided.

(19) Loss of Limbs – The complete and irrecoverable severance of two or more limbs where severance is above

the wrist or ankle joint.

(20) Loss of Sight – The total and permanent loss of sight in both eyes.

(21) Loss of Speech – Total, permanent and irreversible loss of the ability to speak which must be established for

a continuous period for 12 months. The Company will require satisfactory proof from an appropriate medical specialist that documents both the cause and permanent nature of the total speech loss. All psychiatric related causes are excluded.

(22) Major Burns – Third degree burns (full thickness skin destruction) covering at least 20% of the surface of the

Insured’s body.

(23) Motor Neuron Disease – The occurrence of Motor Neuron Disease that results in a permanent neurological

deficit.

(24) Multiple Sclerosis – The definite occurrence of Multiple Sclerosis where the following conditions are met:

Investigations unequivocally confirm the diagnosis to be multiple sclerosis.

Multiple neurological deficits have occurred over a period of at least 6 months.

There is an associated persistent neurological deficit. Other causes of neurological damage such as SLE and HIV are excluded.

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(25) Muscular Dystrophy – The occurrence of a progressive muscular dystrophy where the following conditions

are met:

The classification is either Duchenne, Becker, Limb girdle, Congenital, Myotonic, Fascioscapulo–humeral, Oculopharygeal muscular dystrophies, and

There is a permanent neurological deficit that results in a permanent inability to independently perform at least three activities of daily living.

(26) Paralysis – The total and permanent loss of the use of both arms, or both legs, or one arm and one leg, through

paralysis, except where such injury is self-inflicted.

(27) Parkinson’s Disease – The occurrence of Parkinson's Disease where there is an associated neurological deficit

that results in the permanent inability to perform independently at least three of the "activities of daily living". The coverage for the illness will cease after the age sixty five (65) or on the expiry date of the Supplementary Contract, whichever is earlier.

(28) Poliomyelitis – The occurrence of Poliomyelitis where the following conditions are met:

Poliovirus is identified as the cause,

Paralysis of the limb muscles or respiratory muscles must be present and persist for at least 3 months

(29) Primary Pulmonary Arterial Hypertension – Primary pulmonary arterial hypertension where all the following

conditions are met:

There is marked elevation of the pulmonary artery pressure,

There is evidence of right ventricular failure. Pulmonary Hypertension secondary to lung disease and other medical conditions is excluded.

(30) Progressive Bulbar Palsy – This means degenerative wasting of the muscles including the bulbar muscles as

diagnosed by a consultant neurologist that results in a permanent neurological deficit.

(31) Progressive Muscular Atrophy – This means involving the wasting of muscles and increased spasticity as

diagnosed by a consultant neurologist that result in a permanent neurological deficit.

(32) Severe Brain Damage – An accidental head injury causing brain damage that result in a permanent inability to

perform independently at least three of the "activities of daily living". Self-inflicted injuries are excluded.

(33) Surgery to Aorta – The actual undergoing of medically necessary surgery for a disease of the aorta needing

excision and surgical replacement of the diseased aorta with a graft. For the purpose of this definition aorta shall mean the thoracic and abdominal aorta but not its branches.

(34) Terminal Illness – The occurrence of a severe illness that will lead to the death of the life insured within 12

months. No benefit will be paid if any effective treatment is available Terminal illness due to AIDS is excluded.

(35) Total and Permanent Disability – Uninterrupted disability for not less than 6 months which prevents the

Insured from

engaging in any gainful occupation, employment or business for which he is fitted by education or training, or

performing three (3) or more Activities Of Daily Living as herein defined under this Supplementary Contract, if the Insured is unemployed.

The total and permanent disability must (a) result from injury sustained or sickness contracted during the effectivity of this Supplementary Contract, and (b) start while this Supplementary Contract is in force and before its anniversary nearest the 65

th birthday of the Insured.

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