READ YOUR CONTRACT CAREFULLY
THIS IS A LEGAL CONTRACT
We promise to pay, subject to the provisions of this contract, the benefits
described by this contract.
We make this promise and issue this contract in consideration of the application
for this contract and the payment of the purchase payments.
The owner and the beneficiary are as named in the application unless they are
changed as provided for in this contract.
Minnesota Life Insurance Company is a subsidiary of Minnesota Mutual
Companies, Inc., a mutual insurance holding company. The owner is a member
of Minnesota Mutual Companies, Inc., which holds its annual meetings on the
first Tuesday in March of each year at 3 p.m. local time. The meetings are
held at 000 Xxxxxx Xxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000-0000.
Signed for Minnesota Life Insurance Company at St. Xxxx, Minnesota,
on the contract date.
/s/
President
/s/
Secretary
Registrar
NOTICE OF YOUR RIGHT TO EXAMINE THIS CONTRACT FOR 10 DAYS.
IT IS IMPORTANT TO US THAT YOU ARE SATISFIED WITH THIS CONTRACT. IF YOU ARE
NOT SATISFIED, YOU MAY RETURN THE CONTRACT TO US OR TO YOUR AGENT WITHIN 10
DAYS OF ITS RECEIPT. IF YOU EXERCISE THIS RIGHT, YOU WILL RECEIVE THE
GREATER OF (a) THE ACCUMULATION VALUE OF THIS CONTRACT OR (b) THE AMOUNT OF
PURCHASE PAYMENTS PAID UNDER THIS CONTRACT. WE WILL PAY THIS REFUND WITHIN 7
DAYS AFTER WE RECEIVE YOUR NOTICE OF CANCELLATION.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT
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[LOGO]
MINNESOTA LIFE INSURANCE COMPANY
000 Xxxxxx Xxxxxx Xxxxx
Xx. Xxxx, XX 00000-0000
FLEXIBLE PAYMENT DEFERRED
VARIABLE ANNUITY CONTRACT
FIXED OR VARIABLE ANNUITY BENEFITS
A NONPARTICIPATING CONTRACT
MHC-92-9283
CONTRACT INDEX
Alphabetical Index to the Provisions of Your Contract
Page
----
Additional Information 10
Allocation of Purchase Payments 3
Amount Payable at Death 10
Annuity Payment Options 7
Annuity Provisions 6
Assignment 10
Beneficiary 10
Contract Charges 4
Definitions 2
General Information 3
Misstatement 11
Purchase Payments 3
Transfer Provisions 5
Valuation 5
Withdrawal and Surrender 6
Your Contract Information
Annuitant: Xxxx X. Xxx
-----------
Date of Birth: October 1, 1963
---------------
Owner: Xxxx X. Xxx
-----------
Jurisdiction: Your State
----------
Contract Number: 0-000-000
---------
Contract Date: October 1, 1998
---------------
Annuity Commencement Date: November 1, 2063
----------------
Anticipated Annual Purchase Payment: $1,000.00
---------
* * * * * * * * * * * * * * * * * *
* *
* FLEXIBLE PAYMENT DEFERRED *
* VARIABLE ANNUITY CONTRACT *
* *
* FIXED OR VARIABLE ANNUITY *
* BENEFITS *
* *
* A NONPARTICIPATING CONTRACT *
* *
* * * * * * * * * * * * * * * * * *
MHC-92-9283 Minnesota Life 1
DEFINITIONS
When we use the following words, this is what we mean:
The Annuitant
The person named on page 1 who may receive lifetime benefits under this
contract. Joint annuitants will be considered a single entity.
You, Your
The owner of this contract. The owner may be the annuitant or someone else.
The owner shall be that person named as owner in the application. The owner may
be changed. Joint owners will be considered a single entity.
Joint Owner
The person designated to share equally in all rights and privileges of this
contract. Only your spouse may be named as joint owner. Both signatures will
be required to exercise your rights under this contract.
Beneficiary
The person, persons or entity designated to receive death benefits payable under
the contract.
We, Our, Us
Minnesota Life Insurance Company.
Contract Date
The effective date of this contract. It is also the date from which we
determine contract anniversaries and contract years.
Contract Anniversary
The same day and month as the contract date for each succeeding year of this
contract.
Contract Year
A period of one year beginning with the contract date or a contract anniversary.
Fund
The mutual fund or separate investment portfolio within a series mutual fund
which is designated as an eligible investment for the separate account.
Valuation Date
Any date on which a fund is valued.
Valuation Period
The period between successive valuation dates measured from the time of one
determination to the next.
MHC-92-9283
Accumulation Value
The sum of your values under this contract in the general account and/or the
separate account. In the general account, this is the general account
accumulation value. In the separate account, this is the separate account
accumulation value. The separate account portion is composed of your interest
in one or more sub-accounts of the separate account. Your interest in the sub-
accounts shall be valued separately. The total of those values will be the
separate account accumulation value.
Surrender Value
The surrender value of the separate account portion of this contract shall be
its withdrawal value.
The surrender value of the general account portion of this contract shall be the
greater of:
(a) its withdrawal value; or
(b) your total general account purchase payments, less any applicable
state annuity premium taxes and less any amounts previously withdrawn
or transferred to the separate account.
Withdrawal Value
The value of this contract which is available for withdrawal. This value equals
the accumulation value, subject to the deferred sales charge during the first
ten contract years. However, if withdrawals during the first calendar year are
equal to or less than 10% of the purchase payments made during the first year
and, if in subsequent calendar years they are equal to or less than 10% of the
accumulation value at the end of the previous calendar year, the charge will not
apply. If withdrawals in any calendar year exceed that amount, the deferred
sales charge will apply to the excess.
General Account
All assets of Minnesota Life other than those in the Variable Annuity Account or
in other separate accounts established by us.
Separate Account
A separate investment account titled Variable Annuity Account. This separate
account was established by us for this class of contract under Minnesota law.
The separate account is composed of several sub-accounts. The assets of the
separate account are ours. Those assets are not subject to claims arising
out of any other business of ours.
1940 Act
The Investment Company Act of 1940, as amended, or any similar successor federal
legislation.
Written Request
A request in writing signed by you. In the case of joint owners, the signatures
of both owners will be required. In some cases, we may provide a form for your
use. We also may require that this contract be sent in with your written
request.
MHC-92-9283 Minnesota Life 2
Purchase Payments
Amounts paid to us as consideration for the benefits provided by this contract.
Total purchase payments may not exceed $1,000,000 without our consent.
Annuity Payments
Payments made a regular intervals to the annuitant or any other payee. Annuity
payments will be due and payable only on the first day of a calendar month.
Fixed Annuity
Annuity payments of equal amounts during the payment period.
Variable Annuity
Annuity payments which increase or decrease in amount to reflect the investment
experience of the separate account and its sub-accounts.
Age
The age of a person at nearest birthday.
GENERAL INFORMATION
WHAT IS YOUR AGREEMENT WITH US?
This contract and the copy of the application attached to it contain the entire
contract between you and us. Any statements made in the application either by
you or the annuitant will, in the absence of fraud, be considered
representations and not warranties. Also, any statement made either by you or
the annuitant will not be used to avoid this contract or defend against a claim
under this contract unless the statement is contained in the application.
No change or waiver of any of the provisions of this contract will be valid
unless made in writing by us. It must also be signed by our president, a vice
president, our secretary or an assistant secretary. No agent or other person
has the authority to change or waive any provision of this contract.
Any additional agreement attached to this contract will become a part of this
contract. It will be subject to all the terms and conditions of this contract
unless we state otherwise in the agreement.
HOW DO YOU EXERCISE YOUR RIGHTS UNDER THIS CONTRACT?
You can exercise all the rights under this contract. You can do this by making
a written request to us. You have these rights during the annuitant's lifetime
and before annuity payments begin. We will deal with you, unless this contract
provides otherwise, on the basis that you have full ownership and control of
this contract.
HOW WILL YOU KNOW THE VALUE OF YOUR CONTRACT?
Each year we will send you a report. This report will summarize the year's
transactions. It will show the current accumulation value and surrender value
of this contract. It will also show the current separate account accumulation
unit values. The report will be as of date within two months of its mailing.
PURCHASE PAYMENTS
WHERE DO YOU MAKE PURCHASE PAYMENTS?
All purchase payments must be made at our home office. Our home office is at
000 Xxxxxx Xxxxxx Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000-0000.
When we receive a purchase payment from you at our home office, we will send you
a confirmation.
DO YOU CHOOSE WHEN TO MAKE PURCHASE PAYMENTS?
Yes. You may choose when to make purchase payments.
ARE THERE OTHER METHODS OF MAKING PURCHASE PAYMENTS?
Yes. It may be possible for your to arrange with your employer to make your
purchase payments by payroll deduction. Or, under some plans, your employer may
make purchase payments on your behalf. Also, your bank or other financial
institution may consent to have your purchase payments automatically withdrawn
from your account and paid directly to us.
WHAT DEDUCTIONS ARE MADE FROM PURCHASE PAYMENTS?
There are usually no deductions made from the purchase payments. However, we
do reserve the right to make a deduction from purchase payments for state
premium taxes, where applicable.
HOW ARE PURCHASE PAYMENTS ALLOCATED?
They are allocated either to the general account or to the separate account and
its sub-accounts. The allocation is made as you direct. Initially, you
indicate your allocation in the application. Later, you may change your
allocation for future purchase payments by giving us written notice. We will
allocate purchase payments received without allocation instructions to the Money
Market Account.
ARE SEPARATE ACCOUNT OPTIONS AVAILABLE?
Yes. The separate account currently is composed of the following sub-accounts:
Growth Portfolio
Bond Portfolio
Money Market Portfolio
Asset Allocation Portfolio
Mortgage Securities Portfolio
Index 500 Portfolio
Capital Appreciation Portfolio
International Stock Portfolio
Maturing Government Bond 2002 Portfolio
Maturing Government Bond 2006 Portfolio
Maturing Government Bond 2010 Portfolio
Value Stock Portfolio
Small Company Value Portfolio
Global Bond Portfolio
Index 400 Mid-Cap Portfolio
Macro-Cap Value Portfolio
Micro-Cap Growth Portfolio
Real Estate Securiites Portfolio
Purchase payments may be applied to one or more of these sub-accounts. They may
also be made to any other sub-account which may be established by us under the
separate account for contracts of this class. We reserve the right to add,
combine or remove any sub-accounts of the separate account.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
The separate account is divided into sub-accounts. For each sub-account, there
is a fund for the investment of that sub-account's assets. Purchase payments
are invested in the funds at their net asset value. The net asset
MHC-92-9283 Minnesota Life 3
value per share for each fund is determined by adding the current value of all
securities and all other assets held by such fund, subtracting liabilities, and
dividing the remainder by the number of shares outstanding.
If investment in a fund should no longer be possible or if we determine it
becomes inappropriate for contracts of this class, we may substitute another
fund. Substitution may be with respect to existing accumulation values, future
purchase payments and future annuity payments.
IS THERE A MINIMUM AMOUNT WHICH MUST BE ALLOCATED TO THE GENERAL ACCOUNT OR
SEPARATE ACCOUNT?
No.
MAY WE MAKE CHANGES TO THE SEPARATE ACCOUNT?
Yes. We reserve the right to transfer assets of the separate account to another
separate account. The transfer will be of assets associated with this class of
contracts. We will make that determination. If this type of transfer is made,
the term "separate account", as used in this contract, shall then mean the
separate account to which the assets were transferred.
We reserve the right, when permitted by law, to:
(a) deregister the separate account under the Investment Company Act of
1940;
(b) restrict or eliminate any voting rights of contract owners or other
persons who have voting rights as to the separate account; and
(c) combine the separate account with one or more other separate
accounts.
WHEN ARE PURCHASE PAYMENTS CREDITED TO THE CONTRACT?
Purchase payments are credited to the contract on the valuation date coincident
with or next following the day they are received in our home office. If they
are received on a day which is not a valuation date, those amounts will be
credited on the next valuation date.
MAY YOU STOP MAKING PURCHASE PAYMENTS?
Yes. You may stop making purchase payments at any time. If you stop making
purchase payments, the contract remains in force as a paid-up annuity according
to its terms. Its value may be applied to provide annuity payments at a later
date. You may make purchase payments again at any time before annuity payments
start unless the contract has been surrendered.
MAY WE CANCEL THE CONTRACT?
Yes. We may, in our discretion, cancel a contract if no purchase payments are
made for a period of two or more full contract years and both (a) the total
purchase payments made, less any withdrawals and associated charges, and (b) the
accumulation value of the contract, are less than $2,000. If such a
cancellation takes place, we will pay the accumulation value to you.
We will notify you of our intention to exercise these rights in our annual
report. We will act 90 days after the contract anniversary unless an additional
purchase payment is received before the end of that 90 day period.
CONTRACT CHARGES
ARE THERE CHARGES UNDER THIS CONTRACT?
Yes. There may be a deferred sales charge. Also, there are certain charges
which are made directly to the separate account.
WHAT IS THE DEFERRED SALES CHARGE?
The deferred sales charge is the charge made on contract withdrawals or
surrenders. It is made during the first ten contract years. The amount
withdrawn plus any deferred sales charge is deducted from the accumulation
value. In the separate account, accumulation units will be cancelled of a value
equal to the charge and the withdrawal.
WHAT IS THE AMOUNT OF THE DEFERRED SALES CHARGE?
The charge is indicated in the table shown below. These percentages decrease
uniformly by .075% for each of the first 120 months from the contract date. Any
amounts withdrawn from the contract may also be reduced by any applicable state
premium taxes not previously deducted.
End of
Contract Year Charge
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(Contract Date) 9.0%
1 8.1
2 7.2
3 6.3
4 5.4
5 4.5
6 3.6
7 2.7
8 1.8
9 0.9
10 -0-
In no event will the amount of deferred sales charge exceed 9% of the total
purchase payments made under this contract.
ARE THERE CHARGES ASSOCIATED WITH THE SEPARATE ACCOUNT?
Yes. There are two charges associated with the separate account. They are the
expense risk charge and the mortality risk premium charge. Both of these
charges are deducted on each valuation date from the separate account. On an
annual basis, they may be as much as 1.40% of the net asset value of the
separate account.
WHAT IS THE MORTALITY RISK PREMIUM CHARGE?
This is a premium charge to compensate us for the mortality guarantees we make
under the contract. Actual mortality results incurred by us shall not adversely
affect any payments or values under this contract. On an annual basis, it
equals .80% of the net asset value of the separate account.
WHAT IS THE EXPENSE RISK CHARGE?
This is a charge to compensate us for guaranteeing that the deferred sales
charge will not increase. It also compensates us for the guarantee that the
deductions provided in this contract will be sufficient to cover our actual
expenses. Actual expense results incurred by us shall not adversely affect
MHC-92-9283 Minnesota Life 4
any payments or values under this contract. On an annual basis it may be as
much as .60% of the net asset value of the separate account.
VALUATION
HOW IS YOUR ACCUMULATION VALUE DETERMINED?
It is determined separately for your accumulation value in the general account
and the separate account. The separate account value will include all sub-
accounts of the separate account.
For the general account, it is the sum of all purchase payments allocated to
the general account plus interest, and transfers into the general account,
less any transfers out of the general account, the deferred sales charge and
any previous withdrawals.
For each sub-account of the separate account, it is your accumulation units
multiplied by the accumulation unit value.
WHAT IS AN ACCUMULATION UNIT AND HOW IS ITS VALUE DETERMINED?
An accumulation unit is a measure of your interest in each sub-account of the
separate account. The number of accumulation units credited with respect to
each purchase payment is determined by dividing the portion of the purchase
payment allocated to each sub-account by the then current accumulation unit
value for that sub-account. This determination is made as of the valuation date
coincident with or next following the date on which we receive your purchase
payment at our home office. Once determined, the number of accumulation units
will not be affected by changes in the accumulation unit value. However, the
total number of accumulation units under this contract will be affected by
future contract transactions. In addition, the units of each sub-account will
be increased by subsequent purchase payments and transfers to that sub-accounts.
The units of each sub-account will be decreased by deductions for deferred sales
charge and for transfers or withdrawals from that sub-account.
The accumulation unit value will increase or decrease on each valuation date.
The amount of any increase or decrease will depend on the net investment
experience of the sub-account of the separate account. The value of an
accumulation unit for each sub-account was originally set at $1.00 on the first
valuation date. For any subsequent valuation date, its value is equal to its
value on the preceding valuation date multiplied by the net investment factor
for that sub-account for the valuation period ending on the subsequent valuation
date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor for a valuation period is the gross investment rate
for such valuation period, less a deduction for the charges associated with the
separate account at a rate of no more than 1.40% per annum.
The gross investment rate is equal to:
(a) the net asset value per share of a fund share held in the sub-account
of the separate account determined at the end of the current valuation
period; plus
(b) the per-share amount of any dividend or capital gain distributions by
the fund if the "ex-dividend" date occurs during the current valuation
period; divided by
(c) the net asset value per share of that fund share held in the sub-
account determined at the end of the preceding valuation period.
DOES THE CONTRACT CREDIT INTEREST ON THE GENERAL ACCOUNT?
Yes. This contract credits interest on the general account accumulation value
of this contract. Interest is credited at a rate of at least 3% per year,
compounded annually. We guarantee this rate for the life of this contract and
until an annuity begins.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GENERAL ACCOUNT?
Yes. As conditions permit, we will credit additional amounts of interest to the
general account accumulation value.
TRANSFER PROVISIONS
WHAT IS A TRANSFER?
A transfer is a reallocation of funds under this contract. It may be between
the general account and the separate account or among the sub-accounts of the
separate account.
MAY YOU MAKE TRANSFERS OF AMOUNTS UNDER THE CONTRACT?
Yes. These transfers may be made by your written request. We will make the
transfer on the basis of accumulation unit values on the valuation date
coincident with or next following the day we receive the request at our home
office.
DOES A DOLLAR AMOUNT LIMIT APPLY TO TRANSFERS?
No.
DO ANY OTHER RESTRICTIONS APPLY?
Yes. We reserve the right to limit the amount and frequency of transfers from
the general account to the separate account. Transfers from the separate
account to the general account or among sub-accounts of the separate account may
be made at any time.
MAY TRANSFERS TAKE PLACE ONCE AN ANNUITY BEGINS?
Yes. However, transfers are limited. They may be made only with respect to
any variable annuity payments. See the Annuity Payment Options section of this
contract.
MHC-92-9283 Minnesota Life 5
XXXXXXXXXX AND SURRENDER
MAY YOU WITHDRAW FUNDS FROM THIS CONTRACT?
Yes. At any time before annuity payments begin, you may request a partial
withdrawal from the accumulation value. You must make a written request for any
withdrawal. The amount of any withdrawal must be for at least $250. In the
event of a cash withdrawal, the accumulation value will be reduced by the amount
requested and by the deferred sales charge, if any.
Unless instructed otherwise by you, withdrawals will be made from your interest
in the general account and each sub-account of the separate account in the same
proportion that the value of your interest in the general account and any sub-
account bears to your total accumulation value.
Systematic withdrawal plans of a fixed amount or over a fixed period are also
available.
HOW IS THE WITHDRAWAL VALUE DETERMINED?
The withdrawal value is determined by reference to the deferred sales charge
shown in this contract. The withdrawal value is the accumulation value minus
the deferred sales charge. However, if withdrawals during the first calendar
year are equal to or less than 10% of the purchase payments and, if in
subsequent calendar years they are equal to or less than 10% of the accumulation
value at the end of the previous calendar year, the charge will not apply. If
withdrawals in any calendar year exceed 10% of that accumulation value, the
deferred sales charge will apply to the excess.
MAY YOU SURRENDER THE CONTRACT?
Yes. At any time before annuity payments begin, you may surrender this contract
for its surrender value. The surrender value will be determined as of the
valuation date coincident with or next following the date your written request
is received at our home office.
HOW IS THE SURRENDER VALUE DETERMINED?
The surrender value of the separate account portion of this contract shall be
the withdrawal value. The surrender value of the general account portion of
this contract shall be the greater of:
(a) its withdrawal value; or
(b) your total general account purchase payments, less any applicable
state annuity premium taxes and less any amounts previously withdrawn
or transferred to the separate account.
HOW WILL WITHDRAWAL OR SURRENDER BENEFITS BE PAID?
We will pay these benefits in a single sum. However, if this contract is
surrendered you may elect one of the annuity payment options. This election is
subject to the provisions of this contract.
ANNUITY PROVISIONS
WHEN DO ANNUITY PAYMENTS BEGIN?
You must notify us in writing: (a) that annuity payments are to be made to the
annuitant; (b) when these payments are to begin; (c) the form of the annuity;
and (d) what annuity payment option has been selected. We must receive this
notice at least 30 days before annuity payments are to begin. This contract
permits annuity payments to begin no later than age 85 or five years after the
date of issue of this contract, whichever is later. However, the beginning
date for annuity payments must be consistent with any restrictions applicable to
the plan under which this contract may have been purchased.
WHAT VALUE IS AVAILABLE TO BE APPLIED TO PROVIDE ANNUITY PAYMENTS?
On the date annuity payments are to begin, we will apply the accumulation value.
WHAT TYPES OF ANNUITIES ARE AVAILABLE?
Both fixed and variable annuities are available under this contract.
ARE THERE RESTRICTIONS ON ANNUITY PAYMENTS?
Yes. We require that the first monthly fixed or variable annuity payment must
be at least $20. It may be less if a payment of a smaller minimum amount is
required by law. If the first monthly fixed or variable annuity payment would
be less than that amount, we reserve the right to pay you the surrender value in
a lump sum. This payment would be in lieu of all other rights under this
contract.
MAY WE REQUIRE INFORMATION BEFORE MAKING ANNUITY PAYMENTS?
Yes. We reserve the right to require proof satisfactory to us of the age of the
annuitant and of any joint annuitant before payments begin.
We may also require proof that a person is alive before making any annuity
payment which is based on the survival of that person.
IF YOU MAKE NO ELECTION, WHEN DO ANNUITY PAYMENTS BEGIN?
If you do not elect another date, annuity payments will begin on the later of:
the first day of the month immediately following the 85th birthday of the
annuitant; or, five years after the date of issue of this contract.
IF YOU FAIL TO ELECT AN ANNUITY OPTION, IS THERE AN OPTION UNDER WHICH ANNUITY
PAYMENTS WILL BE MADE?
Yes. If you do not elect an annuity payment option, we will make monthly
payments on the basis of Option 2A, a life annuity with a period certain of 120
months.
IF YOU FAIL TO ELECT AN ANNUITY FORM, IS THERE A FORM UNDER WHICH ANNUITY
PAYMENTS WILL BE MADE?
Yes. If you do not elect an annuity payment form, we will make annuity payments
in the form of a variable annuity using the Money Market Account.
MUST AN ANNUITY PAYMENT OPTION BE ELECTED?
No. You may elect a lump sum payment instead. If you do so, you and the
annuitant shall have no further rights under this contract.
ANNUITY PAYMENT OPTIONS
WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE?
The following annuity payment options are available:
MHC-92-9283 Minnesota Life 6
Option 1 -- Life Annuity -- annuity payments payable monthly for the lifetime of
the annuitant, ending with the last payment due prior to the annuitant's death.
Option 2 -- Life Annuity with a Period Certain -- annuity payments payable
monthly for the lifetime of the annuitant; provided, if the annuitant dies
before payments have been made for the entire period certain, those remaining
certain payments will be made to the beneficiary.
The period certain may be for 120 months (Option 2A); for 180 months (Option
2B); or for 240 months (Option 2C).
Option 3 -- Joint and Last Survivor Annuity -- annuity payments payable monthly
for the joint lifetimes of the annuitant and a designated joint annuitant. The
payments end with the last payment due before the survivor's death. If this
option is elected, the contract and payments shall be the joint property of the
annuitant and the designated joint annuitant.
Option 4 -- Fixed Period Annuity -- annuity payments payable monthly for a fixed
period of from five to twenty years. If the annuitant dies before all payments
for the fixed period are received, payments will continue for the remainder of
the fixed period to the beneficiary.
ARE OTHER ANNUITY PAYMENT OPTIONS AVAILABLE?
Yes. Other options may be available. They will be as agreed upon between you
and us.
MAY THE BENEFICIARY RECEIVE A LUMP SUM PAYMENT INSTEAD OF THE REMAINING ANNUITY
PAYMENTS?
Yes. The beneficiary may elect to have the present value of the remaining
payments paid in a lump sum. This right exists under Options 2 and 4.
The lump sum payment will be the commuted value of the remaining payments. It
will be based on the then current dollar amount of one payment. We will use the
same interest rate which served as a basis for the annuity.
HOW IS THE AMOUNT OF A VARIABLE ANNUITY PAYMENT DETERMINED?
The dollar amount of the first monthly variable annuity payment is determined by
applying the available value (after deduction of any premium taxes not
previously deducted) to a rate per $1,000 which is based on the Progressive
Annuity Table with interest at the rate of 4.5% per annum, assuming births in
the year 1900 and with an age setback of six years. The amount of the first
payment depends upon the annuity payment option selected and the adjusted age of
the annuitant and any joint annuitant. The adjusted ages shall be the same as
the table illustrated in the answer showing the determination of a fixed annuity
amount. A number of annuity units is then determined by dividing this dollar
amount by the then current annuity unit value. Thereafter, the number of
annuity units remains unchanged during the period of annuity payments. This
determination is made separately for each sub-account of the separate account.
The number of annuity units is based upon the available value in each sub-
account as of the date annuity payments are to begin.
The dollar amount of the second and later variable annuity payments is equal to
the number of annuity units determined for each sub-account times the annuity
unit value for that sub-account as of the due date of the payment. This amount
may increase or decrease from month to month.
The value of an annuity unit for a sub-account is determined each month as of
the first day of the month. The value is equal to the annuity unit value for
that sub-account as of the first day of the preceding month multiplied by the
product of: (a) .996338; and (b) a sub-account investment factor. This
investment factor is the accumulation unit value for that sub-account on the
valuation date next following the fourteenth day of the preceding month divided
by the accumulation unit value for that sub-account on the valuation date next
following the fourteenth day of the second preceding month. For any date other
than the first of a month, the annuity unit value is that on the first day of
the next month.
The dollar amount determined for each sub-account will be aggregated for
purposes of making payment.
HOW IS THE AMOUNT OF A FIXED ANNUITY PAYMENT DETERMINED?
The tables shown are used to determine the amount of guaranteed fixed monthly
annuity payments. They show the dollar amount of each payment that can be
provided with each $1,000 of available value, after the deduction of a one-time
contract fee of $200 and any applicable premium taxes not previously deducted.
Amounts shown here are based on the Progressive Annuity Table with interest at
the rate of 3% per annum, assuming births in the year 1900, and with an age
setback of six years. The amount of each payment depends upon the adjusted age
of the annuitant and any joint annuitant. The adjusted age is determined from
the actual age nearest birthday at the time the first payment is due in the
following manner:
Calendar Year Adjusted Age is
of Birth is Equal to--
-------- -------------
Prior to 1900 Actual Age Plus 1
1900 - 1919 Actual Age
1920 - 1939 Actual Age Minus 1
1940 - 1959 Actual Age Minus 2
1960 - 1979 Actual Age Minus 3
1980 and Later Actual Age Minus 4
GUARANTEED MINIMUM DOLLAR AMOUNT OF FIXED MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 OF VALUE APPLIED
Adjusted Age
of Annuitant Single Life Annuities
------------ ---------------------------------------------
Option 1 Option 2A Option 2B Option 2C
-------- --------- --------- ---------
50 $3.99 $3.97 $3.94 $3.89
51 4.05 4.03 4.00 3.95
52 4.13 4.10 4.06 4.00
53 4.20 4.17 4.13 4.06
54 4.28 4.25 4.20 4.12
55 4.37 4.33 4.27 4.18
56 4.46 4.41 4.35 4.25
57 4.55 4.50 4.42 4.31
58 4.65 4.59 4.51 4.38
59 4.76 4.69 4.59 4.44
60 4.87 4.79 4.68 4.51
61 4.99 4.90 4.77 4.58
62 5.12 5.01 4.86 4.65
63 5.26 5.13 4.96 4.72
64 5.40 5.25 5.06 4.79
65 5.56 5.39 5.16 4.85
MHC-92-9283 Minnesota Life 7
66 5.72 5.52 5.27 4.92
67 5.90 5.67 5.37 4.99
68 6.09 5.82 5.48 5.05
69 6.29 5.97 5.59 5.11
70 6.51 6.13 5.69 5.16
71 6.74 6.30 5.80 5.21
72 6.99 6.48 5.90 5.26
73 7.26 6.66 6.01 5.31
74 7.54 6.84 6.11 5.34
75 7.86 7.03 6.20 5.38
Option 3 -- Joint and Last Survivor Life Annuity
Adjusted Age of
Joint Annuitant* Adjusted Age of Annuitant*
---------------- -----------------------------------------------------------
55 60 62 65 67 70 75
-- -- -- -- -- -- --
54 $3.80 $3.93 $3.98 $4.04 $4.08 $4.13 $4.19
59 3.95 4.14 4.21 4.32 4.38 4.46 4.57
61 4.00 4.22 4.31 4.43 4.50 4.61 4.75
64 4.07 4.34 4.44 4.60 4.70 4.83 5.03
66 4.12 4.41 4.53 4.71 4.82 4.99 5.23
69 4.17 4.50 4.65 4.86 5.01 5.23 5.56
74 4.25 4.64 4.81 5.09 5.29 5.60 6.11
*Dollar amounts of the monthly payments for ages not shown in this table will
be calculated on the same basis as those shown and may be obtained from us upon
request.
Options 4 -- Fixed Period Annuity
Fixed Period Dollar Amount Fixed Period Dollar Amount
Years of Payment (Years) of Payment
----- ---------- ------- ----------
5 $17.91 13 $7.71
6 15.14 14 7.26
7 13.16 15 6.87
8 11.68 16 6.53
9 10.53 17 6.23
10 9.61 18 5.96
11 8.86 19 5.73
12 8.24 20 5.51
WILL THESE TABLES ALWAYS BE USED FOR ANNUITY PURCHASES?
Not necessarily. If, when annuity payments are elected, we are using tables of
annuity purchase rates for this class of contract which would result in larger
annuity payments, we will use those tables instead.
ONCE ANNUITY PAYMENTS BEGIN, MAY A FIXED ANNUITY OPTION BE CHANGED?
No.
ONCE ANNUITY PAYMENTS BEGIN, MAY A VARIABLE ANNUITY OPTION BE CHANGED?
No.
MAY AMOUNTS BE TRANSFERRED DURING THE ANNUITY PERIOD?
MHC-92-9283 Minnesota Life 8
Yes. Amounts held as annuity reserves may be transferred among the variable
annuity sub-accounts during the annuity period. Annuity reserves may also be
transferred from a variable annuity to a fixed annuity during this time.
HOW DOES AN ANNUITANT CHANGE SUB-ACCOUNT ELECTIONS OR TRANSFER AMOUNTS TO A
FIXED ANNUITY?
The change must be made by written request. The annuitant and joint annuitant,
if any, must make such an election.
HOW WILL A TRANSFER OF VARIABLE ANNUITY SUB-ACCOUNTS BE MADE?
A transfer will be made on the basis of annuity unit values. The number of
annuity units from the sub-account being transferred will be converted to a
number of annuity units in a new sub-account. The annuity payment option will
stay the same.
When you tell us to make such a transfer it will be effective for future annuity
payments. Your transfer will be effective and funds will be actually
transferred in the middle of the month prior to the next annuity payment
affected by your request. We will use the same valuation procedures that we
describe to determine an initial variable annuity payment.
After this conversion, a number of annuity units in the new sub-account will be
payable under the elected option. The first payment after conversion will be of
the same amount as it would have been without the transfer. The number of
annuity units will be set at that number of units which are needed to pay that
same amount on the transfer date.
ARE THERE ANY RESTRICTIONS ON ANNUITY SUB-ACCOUNT TRANSFERS?
Yes. The transfer of an annuity reserve amount from any sub-account must be at
least equal to: 1) $5,000; or 2) the entire amount of the reserve remaining in
that sub-account.
In addition, annuity payments must have been in effect for a period of 12
months before a change may be made. Such transfers can be made only once every
12 months. Your written request for an annuity transfer must be received by us
more than 30 days in advance of the due date of the annuity payment subject to
the transfer.
MAY AMOUNTS HELD AS RESERVES TO PAY A VARIABLE ANNUITY BE TRANSFERRED TO A FIXED
ANNUITY?
Yes. However, the restrictions which apply to annuity sub-account transfers
will apply here as well.
When you tell us to make such a transfer it will be effective for future annuity
payments. Your transfer will be effective and funds will be actually
transferred in the middle of the month prior to the next annuity payment. We
will use the same fixed annuity pricing at the time of transfer that we describe
to determine an initial fixed annuity payment.
The amount transferred will then be applied to provide a fixed annuity amount.
This amount will be based upon the adjusted age of the annuitant and any joint
annuitant at the time of the transfer. The payment option will remain the same.
MAY AMOUNTS PAID AS A FIXED ANNUITY BE TRANSFERRED TO A VARIABLE ANNUITY?
No.
AMOUNT PAYABLE AT DEATH
WHAT AMOUNT IS PAYABLE AT DEATH?
If you die before annuity payments have started, we will pay the accumulation
value of the contract to the named beneficiary. If the owner of this contract
is other than a natural person, such as a trust or other similar entity, we will
pay a death benefit of the accumulation value to the named beneficiary on the
death of the annuitant, if it occurs prior to the date that annuity payments
have started.
The accumulation value paid as a death benefit shall always be at least equal to
the surrender value of the contract. The accumulation value will be determined
as of the valuation date coincident with or next following the day we receive
due proof of death at our home office.
If the annuitant dies after annuity payments have started, we will pay whatever
amount may be called for by the terms of the annuity payment option selected.
The remaining interest in the contract must be distributed at least as rapidly
as under the option in effect at the annuitant's death.
TO WHOM WILL WE PAY THOSE BENEFITS?
When we receive due proof of death satisfactory to us, we will pay the amount
payable at death under this contract to the beneficiary or beneficiaries. The
beneficiary will be the person or persons named in the application for this
contract unless you subsequently change the beneficiary. In that event, we will
pay the amount payable at death to the beneficiary named in your last change of
beneficiary request as provided in this contract.
HOW WILL THE AMOUNT PAYABLE AT DEATH BE PAID?
We will pay that amount in a single sum unless another form of settlement has
been requested and agreed to by us. All payments by us are payable at our home
office. Proof of any claim under this contract must be submitted in writing to
us at our home office.
WHEN MUST DEATH BENEFITS BE PAID?
If you die on or before the date on which annuity payments begin and if the
designated beneficiary is a person other than your spouse, that beneficiary may
elect an annuity option measured by a period not longer than that beneficiary's
life expectancy. Annuity payments must begin not later than one year after your
death. If there is no designated beneficiary, then the entire interest in this
contract must be distributed within five years after your death. If the
annuitant dies after annuity payments have begun, any payments received by a
non-spouse beneficiary must be distributed at least as rapidly as under the
method elected by the annuitant as of the date of death.
If any portion of the contract interest is payable to your designated
beneficiary who is your surviving spouse, that spouse shall be treated as the
contract owner for purposes of: (1) when payments must begin; and (2) the time
of distribution in the event of your spouse's death.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE?
Before annuity payments have begun, if a beneficiary dies, that beneficiary's
interest in this contract ends with that beneficiary's death. Only those
beneficiaries who survive will be eligible to share in a death benefit. If no
beneficiary survives you prior to the date an annuity begins we will pay the
accumulation value of this contract to the executors or administrators of your
estate.
MHC-92-9283 Minnesota Life 9
After annuity payments have begun, if there is no beneficiary after the death of
the annuitant, any remaining value under the annuity option will be paid to the
annuitant's estate.
CAN YOU CHANGE THE BENEFICIARY?
Yes. You can file a written request with us to change the beneficiary.
Your written request will not be effective until it is recorded in our home
office records. After it has been recorded, it will take effect as of the date
you signed the request. However, if the annuitant dies before the request has
been recorded, the request will not be effective as to those death proceeds we
have paid before the request was recorded in our home office records.
ADDITIONAL INFORMATION
CAN YOU ASSIGN THIS CONTRACT?
Unless this contract provides otherwise, you may assign all rights to this
contract during the lifetime of the annuitant. We will not be bound by any
assignment until we have recorded written notice of it at our home office. We
are not responsible for the validity of any assignment. An assignment will not
apply to any payment or action made by us before it was recorded. Any proceeds
payable to an assignee will be paid in a single sum. Any claim made by an
assignee will be subject to proof of the assignee's interest and the extent of
the assignment.
If this contract is issued pursuant to a retirement plan which receives
favorable tax treatment under the provisions of Section 401, 403, 404, 408 or
457 of the Internal Revenue Code, then, it may not be assigned, pledged or
otherwise transferred except under such conditions as may be allowed under
applicable law.
ARE THE CONTRACT BENEFITS PROTECTED?
Yes. To the extent permitted by law, no benefit provided by this contract will
be subject to any creditor's claim or process of law.
HOW WILL BENEFITS BE DETERMINED?
Any paid-up benefit, withdrawal benefit, surrender benefit, or any other benefit
described by this contract shall be calculated as of the date the provisions of
the contract are exercised. Interest credited on purchase payments made to the
contract shall be calculated on contract amounts from the date they are credited
to the contract to the date the withdrawal value or surrender value is
determined.
WILL THERE BE AN ADJUSTMENT IF A PERSON'S AGE IS MISSTATED?
Yes. If a person's age has been misstated, the amount payable under this
contract as an annuity will be that amount which would have been paid based upon
that person's correct age. In the case of an overpayment, we may either deduct
the required amount from that person's payments under this contract; or, we may
require you to pay us in cash; or we may do both until we are fully repaid. In
the case of an underpayment, we will pay the required amount with the next
payment.
MUST YOU PROVIDE ADDITIONAL INFORMATION?
Yes. You must provide any other information we need to administer this
contract. If you cannot do so, we may ask the person concerned for that
information. We shall not be liable for any payment based upon information
given to us in error or not given to us.
DO CONTRACT VALUES COMPLY WITH STATE REQUIREMENTS?
Yes. Amounts payable at death, withdrawal and surrender benefits, accumulation
values and the paid-up annuity benefit described by this contract are not less
than the minimum benefits required by any statue of the state in which this
contract is delivered.
WHAT ANNUITY RESERVES WILL WE HOLD UNDER THIS CONTRACT?
Reserves held by us for annuity payments under this contract shall not be less
than those reserves required by the law in the state in which this contract is
delivered.
MAY THIS CONTRACT BE MODIFIED?
Yes. This contract may be modified at any time by written agreement between you
and us. However, no such modification will adversely affect the rights of an
annuitant under this contract unless the modification is made to comply with a
law or government regulation. Such modification will be in writing. You will
have the right to accept or reject such a modification.
DO WE OWN THE GENERAL ACCOUNT AND THE SEPARATE ACCOUNT?
Yes. We have exclusive and absolute ownership of the assets of both the general
account and the separate account.
WHEN WILL LUMP SUM PAYMENTS BE MADE?
Usually, we will make payment within seven days after payment is called for by
the terms of the contract. However, in the case of payments from the general
account, we reserve the right to defer payment of withdrawal or surrender
benefits for up to six months. And in the case of payments from the separate
account, we reserve the right to defer payment for any period during which the
New York Stock Exchange is closed for trading (except for normal holiday
closing) or when the Securities and Exchange Commission has determined that a
state of emergency exists which may make such determination and payment
impractical.
DO YOU HAVE ADDITIONAL VOTING RIGHTS?
Yes. If you have separate account accumulation or annuity units under this
contract you may direct us with respect to the voting rights of fund shares held
by us and attributable to this contract.
MHC-92-9283 Minnesota Life 10
* * * * * * * * * * * * * * * * * *
* *
* FLEXIBLE PAYMENT DEFERRED *
* VARIABLE ANNUITY CONTRACT *
* *
* FIXED OR VARIABLE ANNUITY *
* BENEFITS *
* *
* A NONPARTICIPATING CONTRACT *
* *
* * * * * * * * * * * * * * * * * *
