Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) Subject to this section, a continuous disability policy is a contract of insurance:
(a) that is, by its terms, to be of more than 3 years' duration; and
(b) under which a benefit is payable in the event of:
(i) the death, by accident or by some other cause stated in the contract, of the person whose life is insured (the insured ); or
(ii) injury to, or disability of, the insured as a result of accident or sickness; or
(iii) the insured being found to have a stated condition or disease.
(2) A contract of insurance that is, by its terms, to be of a duration of not more than 3 years is taken to comply with paragraph (1)(a) if:
(a) contracts of insurance of the same kind as the contract are usually of more than 3 years' duration; and
(b) the contract is of a lesser duration only because of the age of the owner of the policy at the time when it was entered into.
(3) A contract of insurance is not a continuous disability policy if the terms of the contract permit alteration, at the instance of the life company concerned, of the benefits provided for by the contract or the premiums payable under the contract.
(4) A contract of insurance the terms of which permit alteration, at the instance of the life company concerned, of the benefits provided for by the contract is not thereby excluded by subsection (3) from being a continuous disability policy if, by those terms, the only alterations that are permitted to be made are alterations that improve the benefits and are made following an offer made by the life company and accepted by the owner of the policy.
(5) A contract of insurance the terms of which permit alteration, at the instance of the life company concerned, of the premiums payable under the contract is not thereby excluded by subsection (3) from being a continuous disability policy if the terms of all contracts of the same kind as the contract only permit such alterations if they are made on a simultaneous and consistent basis.
(6) A contract of consumer credit insurance within the meaning of the Insurance Contracts Act 1984 is not a continuous disability policy.
(7) A contract of insurance entered into in the course of carrying on health insurance business is not a continuous disability policy.