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EXHIBIT (4)(a)
Pruco Life Insurance Company of New Jersey
Newark, NJ 07102
A Stock Company Subsidiary of
The Prudential Insurance Company of America
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED VARIABLE
ANNUITY CONTRACT
Nonparticipating
ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT.
This is an annuity contract. Subject to the provisions of the Contract, and in
consideration of any Purchase Payments you make and we accept, we will make
Annuity Payments starting on the Annuity Date shown on the Contract Data pages.
Please read the Contract carefully; it is a legal contract between you and
Pruco Life Insurance Company. Expense charges applicable to the Contract are
shown on the Contract Data pages. If you have a question about the Contract, or
a claim, see your representative or contact the Annuity Service Center.
Right to Cancel Contract
This Contract may be returned within 10 days after you receive it. It can be
mailed or delivered to either us, at the Annuity Service Center, or the
representative who sold it to you. Return of this Contract by mail is effective
on being postmarked, properly addressed and postage prepaid. The returned
Contract will be cancelled upon our receipt, and we will return an amount equal
to the sum of (i) the difference between Purchase Payments received, including
any fees or other charges, and the amount(s) allocated to the Allocation
Options under the Contract, and (ii) the Contract Value as of the date the
Contract is mailed or delivered to us or the representative who sold it to you.
If you exercise your Right to Cancel the Contract, the entire Credit will be
recaptured.
READ YOUR CONTRACT CAREFULLY
TABLE OF CONTENTS
CONTRACT DATA PAGES
DEFINITIONS
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PURCHASE PAYMENTS
CREDITS
CONTRACT VALUE
VARIABLE SEPARATE ACCOUNT
CONTRACT MAINTENANCE CHARGE
TRANSFERS
WITHDRAWALS
PROTECTED VALUE
GUARANTEED MINIMUM DEATH BENEFIT
ANNUITY AND SETTLEMENT OPTIONS
BENEFICIARY
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS FROM THE
SEPARATE ACCOUNT
GENERAL PROVISIONS
VALUES AND BENEFITS
ANNUITY SETTLEMENT TABLES
CONTRACT DATA
PURCHASE PAYMENTS:
Initial Purchase Payment:
Minimum Subsequent Purchase Payment: $1,000. For IRA contracts, the
Minimum Subsequent Purchase Payment is $1,000. The Minimum Subsequent Purchase
Payment for automatic purchase plans, if available, is $100.
Annual Purchase Payment Limits: The total of all Purchase Payments (net of
Purchase Payments withdrawn) made into this Contract in the first Contract Year
may not exceed $7,000,000. The total of all Purchase Payments (net of Purchase
Payments withdrawn) made into this Contract in any Contract
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Year after the first Contract Year may not exceed $2,000,000. Purchase Payments
of greater value may be allowed with our prior approval.
Aggregate Purchase Payment Limit: The total of all Purchase Payments (net of
Purchase Payments withdrawn) made into this Contract may not exceed $7,000,000.
Purchase Payments of greater value may be allowed with our prior approval.
CREDIT PAYMENT:
4% of Initial Purchase Payment.
BENEFICIARY:
As designated by Owner at Contract Date unless changed in accordance with the
Contract provisions.
CONTRACT MAINTENANCE CHARGE:
If your Contract Value is less than $50,000, we will charge a Contract
Maintenance Charge of the lesser of $30 or 2% of the Contract Value. This
charge is deducted on the Contract Anniversary and when a surrender of the
Contract occurs, if the Contract Value at the time is then less than $50,000.
The Contract Maintenance Charge will be deducted on a pro-rata basis from all
Allocation Options to which your Contract Value is allocated. During the
Annuity Period, we reserve the right to assess an annual Contract Maintenance
Charge of $30. The decision to assess this charge may depend on the Annuity or
Settlement Option selected. We reserve the right to increase the Contract
Maintenance Charge, but it will not exceed $60 per Contract Year, and to raise
the Contract Value amount over which we will waive the Contract Maintenance
Charge.
INSURANCE CHARGE:
This charge depends on whether you have elected the Guaranteed Minimum Death
Benefit ("GMDB") feature. This charge is deducted daily from the assets in each
of the Subaccounts. If you do not elect the GMDB feature, you do not elect a
GMDB Protected Value option either, and your death benefit is equal to the base
death benefit as described in the GMDB section of the contract.
[ ] You have not elected the GMDB
feature. Therefore, the daily rate is 0.00380909%, which is equivalent to an
annual rate of 1.40%.
[ ] You have elected the GMDB feature and the GMDB
Protected Value option of the Step-Up. Therefore, the daily rate is 0.00434896%,
which is equivalent to an annual rate of 1.60%.
ALLOCATION OPTIONS:
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VARIABLE INVESTMENT OPTIONS:
The following variable investment options are available through allocation to
subaccounts of the Pruco Life of New Jersey Flexible Premium Variable Annuity
Account. We reserve the right to limit the availability of the below options,
if necessary, in order to comply with federal, state or local law.
[The Prudential Series Fund, Inc.
Prudential Global Portfolio
Prudential ▇▇▇▇▇▇▇▇ Portfolio
Prudential Money Market Portfolio
Prudential Stock Index Portfolio
SP Aggressive Growth Asset Allocation Portfolio
SP AIM Aggressive Growth Portfolio
SP AIM Growth and Income Portfolio
SP Alliance Large Cap Growth Portfolio
SP Alliance Technology Portfolio
SP Balanced Asset Allocation Portfolio
SP Conservative Asset Allocation Portfolio
▇▇ ▇▇▇▇▇ Value Portfolio
SP Deutche International Equity Portfolio
SP Growth Asset Allocation Portfolio
SP INVESCO Small Company Growth Portfolio
▇▇ ▇▇▇▇▇▇▇▇ International Growth Portfolio
SP Large Cap Value Portfolio
SP MFS Capital Opportunities Portfolio
SP MFS Mid Cap Growth Portfolio
SP PIMCO High Yield Portfolio
SP PIMCO Total Return Portfolio
SP Prudential U.S. Emerging Growth Portfolio
SP Small/Mid Cap Value Portfolio
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SP Strategic Partners Focused Growth Portfolio
▇▇▇▇▇ ▇▇▇▇▇ Series
Janus Aspen Series Growth Portfolio - Service Shares]
ALLOCATION GUIDELINES:
Currently, you may select any Allocation Option which is available at the time
the Purchase Payment or transfer is made. However, an amount of at least 1% of
the Invested Purchase Payment must be allocated to any Allocation Option.
Allocations made pursuant to automatic rebalancing or dollar cost-averaging are
not subject to these limitations. We reserve the right to limit the availability
of the above Allocation Options, if necessary, in order to comply with federal,
state or local law.
TRANSFERS:
Number of Transfers Permitted: Currently, there are no limits on the number of
transfers that can be made among Subaccounts. We reserve the right to change
this, but the Owner will always be allowed at least 12 transfers among
Subaccounts in a Contract Year.
Transfer Charge: The Transfer Charge for each transfer after the first 12 in a
Contract Year is $25. The charge is taken pro-rata from the Allocation Options
from which the transfer is made. Transfers made due to automatic rebalancing or
dollar cost-averaging will not be counted for purposes of the Transfer Charge.
Minimum Amount to be Transferred: Subject to the restrictions contained in the
Contract on transfers, the minimum transfer amount is $250 or your entire
interest in any Allocation Option, if less. This requirement is waived if the
transfer is pursuant to automatic rebalancing or dollar cost-averaging.
WITHDRAWALS:
Withdrawal Charge: The Withdrawal Charge is a percentage of the amount withdrawn
that is subject to a charge, and depends on the number of Contract Anniversaries
that have elapsed since a Purchase Payment was made.
Charge-Free Amount: A certain amount (the Charge-Free Amount) may be withdrawn
without incurring a Withdrawal Charge. The Charge-Free Amount available in any
current Contract Year is calculated as of the Contract Anniversary date and is
equal to 10% of the sum of all Purchase Payments received in excess of all
Purchase Payments withdrawn and is applied on a first-in, first-out basis.
Minimum Amount Which May Be Withdrawn: The minimum amount which may be withdrawn
is $250. The minimum amount which may be withdrawn under a systematic withdrawal
plan is $100.
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Minimum Contract Value Which Must Remain in the Contract After a Withdrawal: The
minimum Contract Value which must remain in the Contract in order to keep the
Contract inforce after a withdrawal is $2,000.
ENDORSEMENTS:
Individual Retirement Annuity Endorsement
ANNUITY SERVICE CENTER:
Annuity Service Center
P.O. Box 14215
New Brunswick, NJ 08906-4215
DEFINITIONS
ACCUMULATION PERIOD: The period from, and including, the Contract Date to, but
excluding, the Annuity Date.
ADJUSTED CONTRACT VALUE: The Contract Value
as of the Annuity Date less any applicable charges for any type of tax (or
component thereof) measured by or based on the amount of Purchase Payment we
receive, and less any Credit subject to recapture under the vesting schedule
shown on the Contract Data pages. The Applicable Annuity Table is applied to
this amount to determine the initial Annuity Payment.
ALLOCATION OPTIONS: Those investment options
available under the Contract as of any given time to which Contract Value may be
allocated. Allocation Options as of the Contract Date are shown on the Contract
Data pages.
ANNUITANT: The person named on the first
page upon whose continuation of life any Annuity Payment involving life
contingencies depends. If the Annuitant dies before the Annuity Date, the
Co-Annuitant, if applicable, becomes the Annuitant, if the requirements for
changing Annuity Date are met (see definition of Annuity Date). If there is no
surviving or eligible Co-Annuitant, and the Annuitant was not the Owner, the
Owner becomes the Annuitant. You then have 60 days from the date we receive due
proof of death of the Annuitant or Co-Annuitant to name a new Annuitant. If no
new Annuitant is named during that 60 day period, the Owner will remain the
Annuitant. You may not change an Annuitant or Co-Annuitant and may add or
remove an Annuitant or Co-Annuitant only with our prior approval.
ANNUITY DATE: The date the first Annuity or
Settlement Payment to the Payee is due. The Annuity Date is shown on the
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original Contract Data pages. You must have our permission to change the Annuity
Date. The maximum annuity age is age 90. If there is a new Annuitant due to the
death of the Annuitant, and the new Annuitant is older than the prior Annuitant,
the Annuity Date will be based on the age of the new Annuitant; however any such
changed Annuity Date must be at least one year after the Contract Date, must be
earlier than the date shown on the Contract Data pages, cannot be later than the
Contract Anniversary next following the new Annuitant's 90th birthday and must
be consistent with applicable law at the time.
ANNUITY OR SETTLEMENT PAYMENTS: The series of
payments made to you or any named payee after the Annuity Date as described
under the Annuity or Settlement Option selected.
ANNUITY PERIOD: The period of time, beginning
on the Annuity Date, during which Annuity or Settlement Payments are made.
ANNUITY SERVICE CENTER: The office indicated on
the Contract Data pages to which notices, requests and Purchase Payments must be
sent. All sums payable to us under the Contract must be sent to the Annuity
Service Center. The Annuity Service Center address may be changed at any time.
You will be notified in advance and in writing of any change in address.
BENEFICIARY: The person(s) or entity(ies) who
has the right to receive the death benefit when the Owner dies.
BUSINESS DAY: Any day the New York Stock
Exchange and the Company are open for business.
CHARGE-FREE AMOUNT: The Charge-Free Amount is a
portion of the Contract Value that may be withdrawn without incurring a
Withdrawal Charge.
CO-ANNUITANT: The person shown on the Contract Data
pages who becomes the Annuitant upon the death of the Annuitant before the
Annuity Date. No Co-Annuitant may be designated if the Owner is a non-natural
person.
COMPANY: Pruco Life Insurance Company of New
Jersey, a New Jersey corporation.
CONTRACT ANNIVERSARY: The same day and month as
the Contract Date in each later year.
CONTRACT DATE: The date shown on the Contract
Data pages on which the first Contract Year begins.
CONTRACT SURRENDER VALUE: The Contract Value less
any applicable Withdrawal Charge, Credit recapture, Contract Maintenance Charge
or charge for any type of tax (or component thereof) measured by or based on the
amount of Purchase Payment we receive.
CONTRACT VALUE: The dollar value as of any Business
Day prior to the Annuity Date of all amounts accumulated under this Contract.
CONTRACT YEAR: A year which starts on the Contract
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Date or on a Contract Anniversary.
CREDIT: An amount we add to your Contract Value at
the time an Invested Purchase Payment is credited to the Contract Value.
EARNINGS: The excess of the Contract Value over the
sum of Pall Purchase Payments made and not yet withdrawn and non-vested Credits
not yet recaptured.
GOOD ORDER: An instruction received at the Annuity
Service Center, utilizing such forms, signatures and datings as we require, that
is sufficiently complete and clear that we do not need to exercise any
discretion to follow such instructions. We will notify you if an instruction is
not in Good Order.
INVESTED PURCHASE PAYMENTS: The balance of each
Purchase Payment after we make any applicable deduction for charges for any type
of tax (or component thereof) measured by or based on the amount of Purchase
Payment we receive.
OWNER: The person or entity named on the Contract Data pages who has ownership
rights as defined under the Contract. You may change the Owner subject to our
underwriting rules. Any change of an Owner will be effective when we process the
request.
PAYEE: The person who has a right to receive Annuity
or Settlement Payments under the Annuity and Settlement Options provision of
this Contract. The Payee can be designated as revocable or irrevocable at your
discretion. If you do not designate a Payee at least 5 Business Days before the
Annuity Date, the Owner will become the Payee.
PURCHASE PAYMENT: A payment you make to this
Contract.
SUBACCOUNT: Variable Separate Account assets are
divided into Subaccounts. Assets of each Subaccount will be invested in shares
of a Variable Investment Option.
VARIABLE INVESTMENT OPTION: Those investment
options available under the Contract through the Subaccounts as of any given
time. Variable Investment Options as of the Contract Date are shown on the
Contract Data pages.
VARIABLE SEPARATE ACCOUNT: A segregated asset
account maintained by us to support this and certain other contracts. The
segregated asset account(s) available as of the Contract Date is shown on the
Contract Data pages.
WE, OUR AND US: Pruco Life Insurance Company of New Jersey.
WITHDRAWAL CHARGE: A charge assessed on partial
or full withdrawals during the Withdrawal Charge Period. The Withdrawal Charge
equals a
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percentage, shown on the Contract Data pages, of the amount subject to
the charge.
WITHDRAWAL CHARGE PERIOD: The number of Contract
Anniversaries since each Purchase Payment during which Withdrawal Charges are
applied to withdrawals of amounts in the Contract. The Withdrawal Charge Period
is shown on the Contract Data pages.
YOU AND YOUR: The Owner of the Contract.
PURCHASE PAYMENTS
PURCHASE PAYMENTS: The initial Purchase Payment
must be paid on the Contract Date. In general, subsequent Purchase Payments may
be made at any time before the Annuity Date. However, no Purchase Payments may
be made on or after the Owner's or Annuitant's 80th birthday. The Minimum
Subsequent Purchase Payment, Annual Purchase Payment Limits and Aggregate
Purchase Payment Limit are shown on the Contract Data pages.
ALLOCATION OF PURCHASE PAYMENTS: Invested
Purchase Payments are allocated to one or more of the Allocation Options in
accordance with your selection. The allocation of the initial Invested Purchase
Payment is made in accordance with your selection made on the Contract Date. You
may change the allocation of future Invested Purchase Payments at any time. If,
after the Initial Purchase Payment, we receive a Purchase Payment without
allocation instructions, we will allocate the corresponding Invested Purchase
Payment in the same proportion as the most recent Purchase Payment you made
(unless that was a Purchase Payment you directed us to allocate on a
one-time-only basis.) Assuming that all other requirements are received in Good
Order, we reserve the right to allocate your initial Invested Purchase Payment
to the Money Market Subaccount until we receive your allocation selection. All
allocations of Invested Purchase Payments are subject to the Allocation
Guidelines shown on the Contract Data pages.
Currently, you may select as many of the available Allocation Options as you
wish. However, we reserve the right to limit this in the future. If the Purchase
Payment and forms required to issue a Contract are in Good Order, the initial
Invested Purchase Payment will be credited to your Contract within two (2)
Business Days after receipt at the Annuity Service Center. Additional Invested
Purchase Payments will be credited to your Contract as of the Business Day they
are received.
CREDITS
We add a Credit amount to your Contract Value with each Invested Purchase
Payment. Each Credit amount is allocated to the Contract Value when the
applicable Invested Purchase Payment is credited to your Contract Value. The
Credit is allocated to the Variable Investment Options in the same percentages
as the Invested Purchase Payment to which it relates.
The Credit percentage may be determined
by the amount of the Purchase Payment. The Credit percentage for your
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initial Purchase Payment is shown on the Contract Data pages. The Credit
percentage on subsequent Purchase Payments will vary, but is guaranteed to be
at least 3% of the Purchase Payment.
Each Credit is subject to its own vesting schedule which is shown on the
Contract Data pages. If you make a withdrawal of all or part of a Purchase
Payment, the non-vested portion of the Credit attributable to that Purchase
Payment will be recaptured in accordance with the vesting schedule. Withdrawals
of Purchase Payments are taken on a first-in, first-out basis. The Credit
recapture is in addition to any Withdrawal Charges that may be applicable.
If you exercise your Right to Cancel the Contract, the entire Credit will be
recaptured.
CONTRACT VALUE
Your Contract Value is the total of all amounts credited to your Contract as of
any Business Day as a result of your initial Invested Purchase Payment and the
increases and decreases described below.
On the Contract Date, the Contract Value is equal to the initial Invested
Purchase Payment and the Credit amount. After that, the Contract Value as of any
Business Day is determined by starting with the Contract Value at the end of the
previous day and adjusting it for items that increase it or decrease it.
Items that increase the Contract Value are: Invested Purchase Payments, Credit
amounts and positive investment performance in a Subaccount.
Items that decrease the Contract Value are: withdrawals and the charges and
credit recaptures associated with them; negative investment performance in a
Subaccount; Insurance Charge; Contract Maintenance Charge; if applicable;
Transfer Charge; and charges for any type of tax (or component thereof) measured
by or based on the amount of Purchase Payment we receive.
Investment results are credited daily and the Insurance Charge is deducted
daily. The Contract Maintenance charge is deducted annually as of the Contract
Anniversary and upon a total withdrawal. Other charges are assessed only if the
appropriate event occurs.
To determine the value of your Contract, we use a unit of measure called an
accumulation unit. Each day we determine the value of an accumulation unit for
each of the Variable Investment Options. We do this by: (1) adding up the total
amount of money allocated to a specific investment option; (2) subtracting from
that amount insurance charges and any other applicable charges, such as for
taxes; and (3) dividing this amount by the number of outstanding accumulation
units.
When you make a Purchase Payment, we credit your contract with accumulation
units of the subaccount or subaccounts selected. The number of accumulation
units credited to your Contract is determined by dividing the amount of the
Purchase Payment allocated to an investment option by the unit price of the
accumulation unit for that investment option. We calculate the unit price for
each investment option after the New York Stock Exchange closes each day and
then credit your Contract. The value of the accumulation
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units can increase, decrease, or remain the same from day to day.
VARIABLE SEPARATE ACCOUNT
THE VARIABLE SEPARATE ACCOUNT: The Variable
Separate Account is designated on the Contract Data pages. It consists of assets
we have set aside and have kept separate from the rest of our assets and those
of our other separate accounts. The assets of the Variable Separate Account,
equal to reserves and other liabilities of your Contract and those of other
owners, will not be charged with liabilities arising out of any other business
we may conduct. The operation of the Variable Separate Account is subject to the
laws of the state in which the Contract is delivered.
The Variable Separate Account assets are divided into Subaccounts. The assets of
the Subaccount are allocated to the Variable Investment Option(s) shown on the
Contract Data pages. We may restructure, eliminate or combine Subaccounts or add
to or eliminate Variable Investment Option(s) from those shown. You may be
permitted to transfer your Contract Value or allocate Invested Purchase Payments
to the additional Subaccount(s). However, the right to make such transfers or
allocations will be limited by any terms and conditions we may impose.
Should the shares of any Variable Investment Option(s) become unavailable for
investment by the Variable Separate Account, we deem further investment in the
shares inappropriate, or if required for tax reasons, we may limit further
purchase of such shares or substitute shares of another Variable Investment
Option for shares already purchased.
VALUATION OF ASSETS: The value of the shares
held by the Subaccounts in the Variable Investment Options will be based on the
net asset value of the Investment Option on each Business Day.
INSURANCE CHARGE: Each Business Day, we deduct
an Insurance Charge from the Subaccounts of the Variable Separate Account which
is equivalent, on an annual basis, to the amount shown on the Contract Data
pages. The amount of the Insurance Charge is based on whether you have elected
the GMDB.
CONTRACT MAINTENANCE CHARGE
We deduct an annual Contract Maintenance Charge shown on the Contract Data
pages. We determine your Contract Value as of your Contract Anniversary and make
any deductions required on a pro-rata basis from all Allocation Options to which
your Contract Value is allocated. If a total withdrawal is made on other than a
Contract Anniversary, we will determine your Contract Value and make a deduction
for the Contract Maintenance Charge the same as we would if it were a Contract
Anniversary.
TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD: A
transfer is subject to the following:
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the maximum number of transfers which may be made, the maximum number of
transfers which are not subject to a Transfer Charge and the minimum amount
which may be transferred are shown on the Contract Data pages;
a Transfer Charge is deducted if a transfer exceeds the maximum
number of free transfers. The Transfer Charge is shown on the Contract Data
pages. The Transfer Charge is deducted from the amount which is transferred;
a transfer will be effected as of the end of the Business Day
when we receive a request in Good Order;
we are not responsible for the consequences resulting from a transfer made in
accordance with your instructions.
No transfers are permitted after the Annuity Date.
WITHDRAWALS
WITHDRAWALS: During the Accumulation Period, you
may, upon a request in Good Order, make a total or partial withdrawal of the
Contract Surrender Value. You may specify the Allocation Option(s) from which a
withdrawal will be taken. If you do not so specify, we will take the withdrawal
on a pro-rata basis from all Allocation Option(s) to which your Contract Value
is allocated.
We will pay the amount of any withdrawal within 7 days of receipt of request in
Good Order unless the "Suspension or Deferral of Payments Provision" is in
effect. If we postpone payment of a withdrawal for more than 7 days after we
receive your withdrawal request, we will pay interest. The interest will be
calculated daily from the date we receive your request, at the effective annual
rate of 3%. No interest will be paid if the amount of interest calculated is
less than $25.
Each partial withdrawal must be for an amount which is not less than the amount
shown on the Contract Data pages. The minimum Contract Value which must remain
in the Contract after a partial withdrawal in order to keep the Contract inforce
is shown on the Contract Data pages. If the amount of the withdrawal requested
would reduce the Contract Value below this minimum, we will give you the maximum
amount available that, with the Withdrawal Charge, would not reduce the Contract
Value below such minimum. Special rules may apply for IRAs.
WITHDRAWAL CHARGE: A Withdrawal Charge may apply
if you make a withdrawal during the Withdrawal Charge Period for a Purchase
Payment. The amount of the Withdrawal Charge varies with the number of Contract
Anniversaries that have elapsed since each Purchase Payment was made, and is a
percentage, shown on the Contract Data pages, of the amount withdrawn that is
subject to the charge. If a withdrawal is effective on the day before a Contract
Anniversary, the Withdrawal Charge percentage used will be the one as of the
following Contract Anniversary. If you request a partial withdrawal, we will
deduct an amount from the Contract Value that is sufficient to pay the
Withdrawal Charge, and recapture any Credit subject to recapture under the
vesting schedule, and provide you the amount requested.
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For purposes of determining the Withdrawal Charge, withdrawals of the
Charge-Free Amount will be taken first from Purchase Payments, on a first-in,
first-out basis. Withdrawals in excess of the Charge-Free Amount will come first
from Purchase Payments, also on a first-in, first-out basis, and will be subject
to Withdrawal Charges, if applicable, even if Earnings are available on that
date. Once all Purchase Payments have been withdrawn, further withdrawals will
be taken from any remaining Earnings. Earnings are not subject to Withdrawal
Charges.
Withdrawal Charges will never be greater than that permitted by any applicable
law or regulation.
PROTECTED VALUE
The Protected Value is the amount which is applied to provide a Guaranteed
Minimum Death Benefit ("GMDB") for your beneficiaries.
If you elect the GMDB feature, as shown on the Contract Data pages, the GMDB
Protected Value is calculated daily and is equal to the "Step-Up". Before the
first Contract Anniversary, the Step-Up is the initial Invested Purchase Payment
increased by subsequent Invested Purchase Payments and proportionally reduced by
the effect of withdrawals. The Step-Up on each Contract Anniversary will be
reset to the greater of the previous Step-Up and the Contract Value as of such
Contract Anniversary. Between Contract Anniversaries, the Step-Up will be
increased by Invested Purchase Payments and proportionally reduced by the effect
of withdrawals. If the calculation of the GMDB is to be done at a time when any
Credit applied to a Purchase Payment has been applied either within one year
prior to the date of death or after the date of death, the Step-Up will first be
adjusted to recapture the portion of that Credit that is not vested. If the
calculation of the GMDB is to be done at a time when any Credit applied to a
Purchase Payment has been applied one year or more before the date of death, the
Step-Up will not be adjusted to recapture that Credit.
After the Contract Anniversary coinciding with or next following the Owner's
80th birthday, we stop increasing the GMDB Protected Value, except by subsequent
Invested Purchase Payments made on or after such Contract Anniversary. This
means that we do not increase the Step-Up by any appreciation in the Contract
Value. But when you make a withdrawal on or after such Contract Anniversary, we
still reduce the GMDB Protected Value proportionally by the effect of that
withdrawal.
Where the words "proportionally reduced by the effect of withdrawals" are used,
the withdrawal reduces those values in the same proportion as it reduces the
Contract Value. We calculate the proportion by dividing the Contract Value after
the withdrawal (including Withdrawal Charges) by the Contract Value immediately
prior to the withdrawal. The resulting percentage is multiplied by the
applicable values (before the withdrawal) in determining the GMDB Protected
Value.
GUARANTEED MINIMUM DEATH BENEFIT
The GMDB is a feature providing for the option to receive an enhanced death
benefit upon the death of the Owner during the
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Accumulation Period. If available at that time, the GMDB feature must be
elected when you purchase your Contract. The amount of the GMDB is based on the
GMDB Protected Value (see Protected Value section above). If the calculation of
the death benefit is to be done at a time when any Credit applied to a Purchase
Payment has been applied within one year of the date of death, the Contract
Value will first be adjusted to recapture the portion of that Credit that is
not vested. If the calculation of the death benefit is to be done at a time
when any Credit applied to a Purchase Payment has been applied one year or more
from the date of death, the Contract Value will not be adjusted to recapture
that Credit.
If you have elected the GMDB feature, and if the Owner dies before the Annuity
Date, the death benefit payable to your beneficiary will be as described below:
Upon receipt of due proof of death and any other documentation we need, the
beneficiary is entitled to receive a death benefit equal to the greater of:
the Contract Value, adjusted as described above, as of the date
we receive due proof of death and any other documentation we need; and
the GMDB Protected Value as of the date we receive due proof of death and any
other documentation we need.
If you do not elect the GMDB feature, upon receipt of due proof of death and any
other documentation we need, the beneficiary is entitled to receive a base death
benefit equal to the greater of:
the Contract Value, adjusted as described above, as of the date
we receive due proof of death and any other documentation we need; and
the initial Invested Purchase Payment increased by subsequent Invested Purchase
Payments and reduced by the effect of withdrawals.
If the ownership of the Contract changes as a result of an assignment, the value
of the death benefit will be reset to the Contract Value as of the date of the
assignment. Such value will be treated as a Purchase Payment made on that date
for purposes of computing the death benefit.
The Beneficiary may, within 60 days of providing proof of death, elect to take
the death benefit under one of the death benefit payout options listed below,
provided that any payout option shall not include a period certain that exceeds
the life expectancy of the Beneficiary. The Beneficiary will be the sole
measuring life in determining the amount of any such payout option. If no payout
option is selected within the 60 days, the death benefit will be payable as a
lump sum.
If a Beneficiary of the Owner having priority to be paid a death benefit is the
spouse of the Owner at the time of the Owner's death, the Contract will continue
and the spouse will become the Owner. The spouse may, within
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60 calendar days of providing proof of death, elect to take the death benefit
under any of the payout options available under this Contract. If the contract
continues, and the new Annuitant is older than the prior Annuitant, the Annuity
Date will be based on the age of the new Annuitant.
The death benefit payout options are:
Choice 1 lump sum payment of
the death benefit; or
Choice 2 the payment of the
entire death benefit within 5 years of the Owner's date of death; or
Choice 3 payment of the death
benefit under an Annuity or Settlement Option over the lifetime of the
Beneficiary or over a period not extending beyond the life expectancy of the
Beneficiary with distribution beginning within one year of the Owner's date of
death.
Any portion of the death benefit not applied under Choice 3 within one year
of the Owner's date of death must be distributed within five years of the
Owner's date of death.
Once a death benefit becomes payable, the Payee's interest in any Annuity
Benefit under the Contract will cease.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments Provision is in effect.
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD: If
the Annuitant dies before the Annuity Date, the Co-Annuitant, if applicable,
becomes the Annuitant. If there is no surviving Co-Annuitant, and the Annuitant
was not the Owner, the Owner becomes the Annuitant. You have the right to name a
new Annuitant within 60 days. If the Owner is a non-natural person, the death of
the Annuitant will be treated as the death of the Owner, a new Annuitant may not
be designated, and the Annuitant will be deemed to be the Owner for purposes of
determining the death benefit.
DEATH OF ANNUITANT DURING THE ANNUITY PERIOD: If the
Annuitant dies on or after the Annuity Date, the Settlement Option then in
effect will govern whether or not we will continue to make any payments. The
death of a non-Annuitant Owner has no effect on the payout during the Annuity
Period.
PAYMENT OF DEATH BENEFIT: We will require due
proof of death and any other documentation we request in Good Order before any
death benefit is paid. All death benefits will be paid in accordance with
applicable law or regulations governing death benefit payments.
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SPECIAL TAX CONSIDERATIONS: There are special
tax rules that apply to IRA and other qualified contracts during both the
Accumulation Period and Annuity Period governing distributions upon the death of
the Owner. These rules are contained in provisions in the attached endorsements
and supersede any other distribution rules contained in the Contract.
The preceding provisions regarding the death of the Owner are intended to
satisfy the distribution at death requirements of section 72(s) of the Internal
Revenue Code of 1986, as amended. We reserve the right to amend this Contract by
subsequent endorsement as necessary to comply with applicable tax requirements,
if any, which are subject to change from time to time. Such additional
endorsements, if necessary to comply with amended tax requirements, will be
mailed to you and become effective within 30 days of mailing, unless you notify
us in writing, within that time frame, that you reject the endorsement.
ANNUITY AND SETTLEMENT OPTIONS
GENERAL: On the Annuity Date, the Adjusted Contract
Value will be applied under the Annuity or Settlement Option you have selected.
If the Adjusted Contract Value is less than $2,000, or if the payment under any
option selected would be less than $20 per month, we reserve the right to pay
out the Adjusted Contract Value in a lump sum. We guarantee that the dollar
amount of each payment, once determined, will not be affected by variations in
mortality or expense experience.
SELECTION OF AN ANNUITY OR SETTLEMENT OPTION: You
may select an Annuity or Settlement Option by notifying us of the selected
option in Good Order. If no Annuity or Settlement Option is selected, or if the
chosen Option is not received in Good Order, Option 2, Life Income Annuity
Option, will automatically be applied. You may, at any time prior to the Annuity
Date, by a request in Good Order 30 days in advance, select and/or change the
Annuity or Settlement Option.
If an annuity option is selected, the payment amount will be calculated using
the Annuity Settlement Tables shown on Page 15. This payment amount will never
be less than what the amount of your Contract Value would purchase under any
comparable single premium immediate annuity we are then offering for sale to a
similar class of annuitants.
ANNUITY AND SETTLEMENT OPTIONS: This Contract
provides for payments under one of the Annuity or Settlement Options described
below. Any other Annuity or Settlement Option acceptable to us may be selected.
OPTION 1 - FIXED PERIOD ANNUITY OPTION. We will
make equal payments for a period you choose, from 5 years up to 25 years. At
your choice, we will make such payments annually, semi-annually, quarterly or
monthly. The Option 1 Table shows the minimum amounts we will pay.
OPTION 2 - LIFE INCOME ANNUITY OPTION. We will
make payments for as long as the Annuitant lives, with payments certain for 120
months. At your choice, we will make such payments annually, semi-annually,
quarterly or monthly. Table 2 shows the minimum amounts we will pay.
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OTHER ANNUITY OR SETTLEMENT OPTIONS: We may offer
or consent to other settlement options, including life income annuity options
with payments certain for a period of other than 120 months. Contact the
representative who sold you the Contract or call the toll-free number listed on
your quarterly statement for information.
ANNUITY: Unless you designate another Payee, you will
be the Payee of the Annuity Payments. The Adjusted Contract Value will be
applied to the applicable Annuity Table contained in this Contract based upon
the Annuity Option you have selected. The amount of the first payment for each
$1,000 of Adjusted Contract Value is shown in the Annuity Tables. If when
Annuity Payments begin we are using tables of annuity rates for these Contracts
which result in larger Annuity Payments, we will use those tables instead.
Annuity Payments will depend on the age and sex of the Annuitant, where
permitted.
ANNUITY BENEFITS NOT SUBJECT TO WITHDRAWAL CHARGES: The
Annuity Benefit will not be subject to a Withdrawal Charge if you choose Option
1 or Option 2. In addition to the methods of payment described in this Contract,
you may choose from other methods of payment which are not subject to a
Withdrawal Charge.
BENEFICIARY
BENEFICIARY: The Beneficiary designation in effect
on the Contract Date will remain in effect until changed. The Beneficiary is
entitled to receive the benefits to be paid at the death of the Owner during the
Accumulation Period.
When a Beneficiary is designated, any relationship shown is to the Owner unless
otherwise specified.
To show priority among Beneficiaries, we will label the classes, so that the
class with first priority is called the primary class, the class with next
priority is called the secondary class, and so on. The following statements
apply to Beneficiaries unless the Contract Data pages, Contract endorsement or
any change request that we have processed specifies otherwise:
One who survives the Owner
will have the right to be paid only if no one in a prior class survives
the Owner.
One who has the right to be paid will be the only one paid if no one else in the
same class survives the Owner.
Two or more in the same class who have the right to be paid will be paid in
equal shares.
If no one survives the Owner, we will pay in one sum to the Owner's estate.
Unless you notify us otherwise in writing received in Good Order, when there is
insufficient evidence to determine the order of death, we will deem the Owner to
be the last survivor and make payment to the Owner's Beneficiary.
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Before we make a payment, we have the right to decide what reasonable proof we
need of the identity, age or any other facts about any persons designated as
Beneficiaries. If Beneficiaries are not designated by name and we make
payment(s) based on that proof, we will not have to make the payment(s) again.
CHANGE OF BENEFICIARY: To initiate a change of
Beneficiary, call the toll-free number listed on your statement or contact the
representative who sold you the Contract. We will send you a change request
form. We may also ask you to send us the Contract. The change of beneficiary
will take effect on the date you sign the change request form, provided such
request is received in Good Order. Then, any previous Beneficiary's interest
will end as of the date the change request is signed and we receive it in Good
Order, even if the Owner is not living when we process the change request.
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE SEPARATE ACCOUNT
We reserve the right to suspend or postpone payments from the Separate Account
for a withdrawal or transfer for any period when:
the New York Stock Exchange is closed (other than customary
weekend and holiday closings);
trading on the New York Stock Exchange is restricted;
an emergency exists as a result of which disposal of shares of the Investment
Options held in the Separate Account is not reasonably practicable or it is not
reasonably practicable to determine the value of such shares; or
during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of
this Contract, and any attached application, endorsements or riders. This
Contract may be changed or altered only by our President or Secretary. Any
change, modification or waiver must be made in writing. This Contract may not be
modified by us without your consent except as may be required by applicable law,
including changes necessary to comply with IRS requirements for annuity
contracts, or as set forth in this Contract.
ASSIGNMENT OF A CONTRACT: A request in Good
Order specifying the terms of an assignment of a Contract must be provided to
the Annuity Service Center. We are under no obligation to verify the
assignment's validity or sufficiency. We will not be liable for any payment made
or action taken before we record the assignment. If any Owner is living
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on the Annuity Date and an assignment is in effect on that date, we have the
right to pay the Contract Surrender Value in one lump sum to the assignee where
notice in Good Order is received. Partial assignments, collateral or otherwise,
are not allowed without our approval. We reserve the right to restrict or
refuse any assignment.
An assignment which results in a change of ownership will affect the value of
the death benefit. Please see the section of the Contract entitled, "Guaranteed
Minimum Death Benefit," for more information.
We will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with our consent.
If the Contract is assigned, your rights may only be exercised with the consent
of the assignee of record.
NON-PARTICIPATING IN SURPLUS: This Contract
does not share in any distribution of our profits or surplus.
INCONTESTABILITY: We will not contest this
Contract. We consider all statements made in the application for this
Contract to be representations, not warranties.
MISSTATEMENT OF AGE OR SEX: We may require
proof of age of the Annuitant before making any life contingent Annuity Payment
provided for by this Contract. If the age or sex of the Annuitant has been
misstated, the amount payable will be the amount that the Contract Value would
have provided at the true age or sex.
Once Annuity Payments have begun, any underpayments, with interest at 5%, will
be made up in one sum with the next Annuity Payment, and overpayments, with
interest at 5%, will be deducted from the future Annuity Payments until the
total is repaid.
CONTRACT SETTLEMENT: This Contract
must be returned to us upon any settlement.
REPORTS: We will send you a report four
times each calendar year until the Annuity Date showing your Contract Value and
other relevant information about your Contract. We will also furnish an annual
report of the Separate Account. These reports will be sent to your last known
address.
TAXES: Any taxes, including any
type of tax (or component thereof) measured by or
based upon any portion of the Purchase Payment we receive, paid to any
governmental entity will be charged against the Contract Value, unless a
deduction was made for this tax in calculating the Invested Purchase Payment
amount. We will, in our sole discretion, determine when taxes have resulted
from: the investment experience of the Separate Account; receipt by us of the
Purchase Payment(s); or commencement of Annuity Payments. We may, at our
discretion, pay taxes when due and deduct that amount from the Contract Value at
a later date. Payment at an earlier date does not waive any right we may have to
deduct amounts at a later
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date. We reserve the right to establish a provision for federal income taxes if
we determine, in our sole discretion, that we will incur a tax as a result of
the operation of the Separate Account. We will deduct for any income taxes
incurred by it as a result of the operation of the Separate Account whether or
not there was a provision for taxes and whether or not it was sufficient. We
will deduct any withholding taxes required by applicable law.
EVIDENCE OF SURVIVAL: Before we make a
payment, we have the right to require reasonable proof of continued life and any
other documentation we need to make a payment. We can require this proof for any
person whose life or death determines whether or to whom we must make the
payment.
PROTECTION OF PROCEEDS: No Beneficiary
may commute, encumber, alienate or assign any payments under this Contract
before they are due. To the extent permitted by law, no payments will be subject
to the debts, contracts or engagements of any Beneficiary or to any judicial
process to levy upon or attach the same for payment thereof.
VALUES AND BENEFITS
Any cash values, paid up annuities and death benefits that may be available
under this Contract are not less than the minimum benefits required by the law
of any state in which this Contract is delivered.
ANNUITY SETTLEMENT TABLES
Tables 1 and 2 below are applied to the Adjusted Contract Value to compute the
minimum amount of the annuity payment. Table 1 is used to compute the minimum
annuity payment under Option 1 (Fixed Period Annuity Option). Table 2 is used to
compute the minimum annuity payment under Option 2 (Life Income Annuity Option).
The rates in Tables 1 and 2 are applied per $1000 of Adjusted Contract Value.
The annuity payments in Table 2 are based on the Annuitant's Adjusted Age and
sex. The Adjusted Age is the Annuitant's age last birthday prior to the date on
which the first Annuity payment is due, adjusted as shown in the "Translation of
Adjusted Age" Table.
When we computed the amounts shown in Table 2, we adjusted the Annuity 2000
Mortality Table to an age last birthday basis, less two years, with projected
mortality improvements (modified Scale G), and an interest rate of 3% per year.
We will calculate annuities for other certain periods using the same interest
and mortality assumptions as in Table 2.
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
CONTRACT. NON-PARTICIPATING. ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS
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CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE
VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
