Common use of Coverage Base Clause in Contracts

Coverage Base. (a) We use the Certificate Owner’s Coverage Base to determine the Certificate Owner’s initial Coverage Amount. On the Certificate Date, the Coverage Base is equal to the value of the Certificate Owner’s Covered Asset Pool. Thereafter, prior to the Lock-In Date, the Coverage Base is increased by any Subsequent Contributions to the Certificate Owner’s Covered Asset Pool and is adjusted for any Withdrawals. Subsequent Contributions are permitted until the Lock-In Date. After the Lock-In Date, subsequent Contributions will no longer be permitted. The sum of the initial Contribution and any Subsequent Contributions may not exceed the Maximum Total Contributions shown on the Data Pages of the Contract and Certificates without Our prior approval. Subsequent Contributions do not include dividends or other distributions reinvested in the Covered Asset Pool. (b) On each Certificate Anniversary prior to the Lock-In Date, the Certificate Owner’s Coverage Base will be the greater of: 1) the current Coverage Base; 2) the value of the Certificate Owner’s Covered Asset Pool on the Certificate Anniversary; or 3) if there have been no Excess Withdrawals during the preceding Certificate Year, the value of the Certificate Owner’s Covered Asset Pool as of any Quarterversary during the immediately preceding Certificate Year. If the Certificate Owner’s Coverage Base increases pursuant to 2 or 3, We will treat the increase as an automatic step-up. The Certificate Fee Percentages may be changed due to an automatic step-up of the Coverage Base unless the Certificate Owner rejects the automatic step-up in accordance with section 3.4(b). This feature does not require the termination of the existing Certificate. The Certificate will continue with the same Certificate Date and features. In the event a Certificate Anniversary or a Quarterversary occurs on a day that is not a Valuation Day, for purposes of the step-up calculation, We will use the applicable value of the Certificate Owner’s Covered Asset Pool on the next Valuation Day.

Coverage Base. (a) We use the Certificate Owner’s The Coverage Base is used to determine calculate the Certificate Owner’s initial Coverage Amount. The Coverage Base is also used to calculate the Certificate Fee under certain Fee Options. The Coverage Base is not available as a cash value. (a) On the Certificate Date, the initial Coverage Base is equal to the value of the Certificate Owner’s Covered Asset Pool. Thereafter, prior Value. (b) Prior to the Lock-In Date, the Coverage Base is increased by any will increase in two circumstances: a. First, each time You make a Subsequent Contributions Contribution to the Certificate Owner’s Covered Asset Pool and (up to a maximum of $1 million in aggregate Contributions unless approved by Us), Your Coverage Base is adjusted for any Withdrawals. Subsequent Contributions are permitted until immediately increased by the Lock-In Date. After the Lock-In Date, subsequent Contributions will no longer be permitted. The sum amount of the initial Contribution and any Subsequent Contributions may not exceed the Maximum Total Contributions shown on the Data Pages of the Contract and Certificates without Our prior approval. Subsequent Contributions do not include dividends or other distributions reinvested in the Covered Asset PoolContribution. (b) On b. Second, on each Certificate Anniversary prior to the Lock-In Date, the Certificate Owner’s Coverage Base will be reset to equal the greater greatest of: 1) the : i. The current Coverage Base; 2) the value of the Certificate Owner’s ; ii. The Covered Asset Pool Value on the that Certificate Anniversary; or 3) if or iii. Provided there have been no Excess Withdrawals during the preceding Certificate Year, the value of the Certificate Owner’s highest Covered Asset Pool Value as of any Quarterversary during the immediately preceding Certificate Year. If Subject to Section 3.4, if the Certificate Owner’s Coverage Base increases pursuant to 2 ii or 3iii above, We will treat the increase as an automatic stepAutomatic Step-up. The Certificate Fee Percentages may be changed due to an automatic stepUp. (c) On the Lock-up of In Date, the Coverage Base unless will be the Certificate Owner rejects greater of: a. The current Coverage Base; or b. The current Covered Asset Value. Subject to Section 3.4, if the automatic step-up in accordance with section 3.4(b). This feature does not require the termination of the existing Certificate. The Certificate will continue with the same Certificate Date and features. In the event a Certificate Anniversary or a Quarterversary occurs on a day that is not a Valuation Day, for purposes of the step-up calculationCoverage Base increases pursuant to b above, We will use treat the applicable value of increase as an Automatic Step-Up. (d) After the Lock-In Date but before the Insured Event, the Coverage Base is no longer used to calculate the Coverage Amount and is only used to calculate the Certificate Fee for those Fee Options using Coverage Base as a Fee Basis. Subject to Section 3.4, if the Certificate Owner’s Covered Asset Pool Coverage Amount increases We will treat the increase as an Automatic Step-Up and the Coverage Base will be reset to: (A / B) x C, where: A = Coverage Amount after the Automatic Step-Up; B = Coverage Amount immediately prior to the Automatic Step-Up; and C = Coverage Base prior to the Automatic Step-Up. (e) After the Insured Event and provided certain conditions are met, no Certificate Fee is charged and the Coverage Base will no longer be calculated. For Certificates issued as part of a Conversion, the Coverage Base on the next Valuation DayCertificate Date will be no less than the Coverage Base on the day prior to Certificate termination.