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ANNUITY CONTRACT This is a group annuity contract issued to the group contractholder upon Security First Life
Insurance Company's ("Company") acceptance of the application. When issued, the Group
Contract is a legal agreement between the group contractholder and the Company. To be covered
under the Group Contract a person must complete an enrollment form and arrange for purchase
payments to be made. Each person so enrolled is called a participant.
The Company agrees to pay an annuity to the annuitant. An annuity is a series of payments. Unless
another choice is made, payments will be made monthly starting on the normal annuity date. The
payments will continue for the annuitant's lifetime but not for less than 120 months. Other payment
options may be elected.
If the annuitant dies before the annuity date, a settlement will be made in accordance with the
Settlement on Death provision. The Company may require proof that any payee is living on the
date a payment is due.
All terms on this and the following pages are a part of this Group Contract.
20 DAY RIGHT TO EXAMINE THIS CONTRACT. At any time within 20 days after receipt of this annuity
contract, it may be returned for cancellation by delivering it to the Company at its administrative
office shown herein. Such delivery or mailing of the contract shall void it from the beginning, and
the parties shall be in the same position as if it had not been issued. All purchase payments for the
contract shall be refunded.
THIS DOCUMENT IS A LEGAL CONTRACT BETWEEN THE GROUP CONTRACTHOLDER AND THE COMPANY. READ
THIS CONTRACT CAREFULLY.
Signed for the Company at its home office on the contract date.
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
President
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Secretary
ALL PAYMENTS AND VALUES UNDER THIS CONTRACT WHICH ARE BASED ON
INVESTMENT IN THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
Group Flexible Payment Annuity
Providing Fixed and Variable Benefits
Life Annuity with 10-Years Certain
Starting on the Annuity Date
Non-Participating
No Dividends
SF - 226R1
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TABLE OF CONTENTS
ARTICLE PAGE
Introduction 1
Contract Specifications 3
1 Description of Certain Terms Used in This Contract 4
2 General Terms 5
3 Participant's Account Provisions 6
4 Valuation and Nonforfeiture Provisions 7
5 Settlement 10
6 Settlement on Death 11
7 Annuity Income 12
8 Method of Calculating Annuity Income Payments 13
9 Annuity Purchase Rates 15
SECTION
4.02 Accumulated Payment Value 7
3.04 Accumulation Units 6
4.08 Administrative Fee 8
7.02 Alternate Annuity Income Rates 12
7.03 Alternate Assumed Investment Return 12
7.01 Annuity Income Options 12
4.01 Annuity Value 7
4.04 Cash Surrender 7
4.03 Cash Value 7
2.03 Change of Contract 5
Communications 3
2.01 The Contract 5
4.12 Conversion Between Series 8
3.03 Crediting Accumulation Units 6
2.08 Data Provided To The Company 5
4.07 Deferral Of Payment 8
2.07 Designation Of Beneficiary 5
8.01 Determination Of Monthly Guaranteed Minimum Fixed Dollar Annuity Payments 13
8.02 Determination Of Monthly Variable Annuity Payment For The First Year 13
8.04 Determination Of Monthly Variable Annuity Payments For The Second And Subsequent Years 13
General Account Excess Interest 3
2.10 General Account Purchase Payment Guarantee 6
Guaranteed Minimum Interest Rates 3
2.05 Incontestability 5
4.13 Limitations on Distributions 9
5.04 Minimum Amount To Payee 10
4.11 Minimum Benefits 8
2.09 Misstatement Of Age 5
2.02 Non-Participating 5
5.02 Normal Form Of Settlement 10
8.03 Number Of Annuity Units 13
5.03 Optional Annuity Date And Optional Settlement 10
2.06 Ownership And Assignment 5
4.05 Partial Surrenders 7
3.01 Participant's Account 6
Plan 3
4.10 Premium Taxes 8
3.02 Purchase Payments 6
2.11 The Separate Account 6
8.05 Separate Account Annuity Unit Values 14
5.01 Settlement Of Participant's Account 10
6.01 Settlement On Death Before The Annuity Date 11
6.02 Settlement On Death Of Payee 11
3.05 Splitting Units 6
Statement of Account 3
2.12 Substitution Of Fund Shares 6
4.06 Surrender Without Percentage Charge 7
2.04 Termination Of Contract 5
4.09 Transaction Fee 8
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CONTRACT DATA
Group Contract Number [ ]
Group Contract Date [ ]
Group Contractholder [ ]
Issued for Delivery In, and Subject to the Laws of the State of
CONTRACT SPECIFICATIONS
PLAN [The plan is a tax-deferred annuity purchase program established to meet the requirements of
Section 403(b) of the Internal Revenue Code of 1986, as amended (the "Code"). The plan is so
established by the employer so that all purchase payments which do not exceed the limitations set forth
in the Code will be excluded from the gross income of the Participant. The provisions of the Code and
any resolution or plan requirements that may have been established by the employer constitute the plan.
Except as otherwise provided in the plan, each participant will have an interest in the account
established by his or her purchase payments. This interest cannot be forfeited. Each participant may
invoke all rights as owner of his or her account except as may be prohibited by the plan. Any form
required under the plan must be submitted to the Company.
A participant may elect to receive payments under Annuity Income Options Two, Four or Five only if
annuity benefits meet the minimum distribution incidental benefit requirements under the Code.
All employees of an employer may elect to have the employer make contributions of more than $200
pursuant to a salary reduction agreement if any employee of the employer may elect to make
contributions pursuant to such agreement, except as otherwise permitted in Section 403(b)(12) of the
Code.
The mutual funds into which the assets of the separate account may be invested are the Money Market
Series, the Bond Series and the Growth and Income Series of Security First Trust. ]
GUARANTEED MINIMUM INTEREST RATES Prior to the annuity date the minimum interest rates applicable to
purchase payments allocated to the general account will be stated in accordance with the participant's
certificate, but will not be less than [__%]. Interest is compounded annually and credited daily.
GENERAL ACCOUNT EXCESS INTEREST The Company may declare and credit excess interest applicable to
purchase payments allocated to the general account at its discretion. Declaration of excess interest is
not guaranteed.
STATEMENT OF ACCOUNT Prior to the annuity date, statements of account will be provided for each
participant as of the end of each quarter in which a transaction occurred, but in no event less often
than once per year.
COMMUNICATIONS Write to the Company at its administrative office shown below:
Security First Life Insurance Company
X.X. Xxx 00000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
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ARTICLE 1 A. ACCUMULATION UNIT A measuring unit
DESCRIPTION OF CERTAIN TERMS used to determine the value of a
USED IN THIS CONTRACT participant's interest in a series
under a certificate at any time
before annuity payments commence.
B. ANNUITANT The person who is to
receive annuity payments and who is
identified as the participant.
C. ANNUITY A series of income
payments made to an annuitant for a
defined period of time.
D. ANNUITY DATE The date the series
of income payments begins under a
certificate.
E. ANNUITY UNIT A measuring unit used
to determine the amount of annuity
payments based on a series under this
contract after such payments have
commenced.
F. BENEFICIARY A person who has the
right to receive settlement on the
death of a participant.
G. CALENDAR YEAR The one year period
from January 1 to December 31.
H. CERTIFICATE The form given to
participants describing their rights
in the Contract.
I. CERTIFICATE DATE The date a
participant's certificate is issued
or the date a participant's account
is established where no certificate
is issued.
J. CERTIFICATE YEAR A one year period
starting on the certificate date and
on each anniversary thereof.
K. CONTRACT The legal agreement
between the group contractholder and
the Company covering rights of the
whole group.
L. FIXED ANNUITY An annuity providing
guaranteed level payments.
M. FUND Any registered management
investment company, or series
thereof, in which the assets of the
separate account may be invested.
N. GENERAL ACCOUNT Assets of the
Company, except those in the separate
account or any other segregated asset
account.
O. NORMAL ANNUITY DATE The earlier of
(i) the first day of the month
coincident with or immediately
preceding the date on which a
distribution must commence under the
plan or (ii) the first day of the
month coincident with or next
following the anniversary of the
certificate date nearest the
participant's 75th birthday.
P. PARTICIPANT An eligible person who
has submitted a completed enrollment
form to the Company and to whom a
certificate is issued in accordance
with the Plan.
Q. PARTICIPANT'S ACCOUNT The sum of
the values of the accumulation units
credited to a participant.
R. PAYEE The annuitant or beneficiary
receiving payment of benefits under
this contract.
S. PURCHASE PAYMENT Any amount
received by the Company for a
participant under the contract.
T. SEPARATE ACCOUNT A segregated
asset account established by the
Company under the Delaware Insurance
Code. The income or losses of the
separate account are free from any
other liabilities of the Company's
other business.
U. SERIES The accumulation unit
values and annuity unit values
maintained separately for each fund
whose securities are owned by the
separate account.
V. VALUATION DATE Any business day
used by the separate account to
determine the value of part or all of
its assets for purposes of
determining accumulation and annuity
unit values. Accumulation unit values
will be determined each business day.
There will be one valuation date in
each calendar week for annuity unit
values. The Company will establish
the valuation date at its discretion,
but until notice to the contrary is
given, that date will be the last
business day in a week.
W. VALUATION PERIOD The time from one
valuation date to the next.
X. VARIABLE ANNUITY An annuity whose
payments vary annually according to
the net investment results of a
series of the separate account.
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ARTICLE 2 2.01 THE CONTRACT The group contract
GENERAL TERMS is this document, endorsements, if
any, and the application. Only an
officer of the Company can change the
contract or waive any of the
Company's rights. These changes must
be made in writing. Any contract
terms referring to "filing" or
"receipt" of documents means filing
or receipt at the Company's
administrative office shown on page 3.
2.02 NON-PARTICIPATING This contract
does not share in the earnings of the
Company.
2.03 CHANGE OF CONTRACT The group
contractholder and the Company may
change the contract by mutual
agreement at any time. No such change
may affect any participant's account
where his or her interest is
nonforfeitable, without the written
consent of that participant. Changes
must be made in writing. Any changes
must comply with the state laws where
the contract is delivered. The
Company, by itself, may change only
the following contract terms:
(a) Terms which apply to participants
enrolling after the effective date of
the change.
(b) Terms which apply to the excess
of any purchase payments received in
a certificate year over the purchase
payments received in the first
certificate year for certificates
issued before the effective date of
the change.
(c) Terms which may be necessary to
make the contract conform to any
federal or state law, regulation or
ruling.
2.04 TERMINATION OF CONTRACT This
contract will terminate when the
Company has fulfilled all its
obligations.
2.05 INCONTESTABILITY After two years
from the date of issue, the Company
cannot void this contract due to any
misstatements on the application.
2.06 OWNERSHIP AND ASSIGNMENT This
contract belongs to the group
contractholder. A participant may
exercise ownership rights affecting
his or her account only if the
participant's interest in that
account is nonforfeitable. In the
absence of such nonforfeitable
participant's interest, individual
certificates will be issued only at
the request of the group
contractholder. A participant's
contract rights are subject to the
rights of any irrevocable beneficiary.
The Company will honor any assignment
of rights in this contract only after
it is received in writing by the
Company. The Company is not
responsible for the validity of the
assignment. Unless otherwise
permitted in the Code, if this
contract is issued to purchase
annuities for individuals under
Section 401, 403(b) or 408 of the
Code, the contract may not be
assigned to anyone except the Company.
2.07 DESIGNATION OF BENEFICIARY A
participant may name and change the
beneficiary. The request must be in
writing and made before the
participant dies. No change will take
effect unless it is received. When
received, the request will take
effect as of the date signed, subject
to payment or other action taken by
the Company before it was received.
An irrevocable beneficiary must agree
to any such change.
2.08 DATA PROVIDED TO THE COMPANY The
Company may require the group
contractholder and participant to
provide data needed to administer the
contract. Such data must be provided
upon request. The data must be in a
form satisfactory to the Company.
2.09 MISSTATEMENT OF AGE The age of a
payee may affect the amount of
annuity payments made under a
certificate. If the age is misstated,
any amount payable or benefit
accruing under the contract will be
that as the premiums would have
purchased at the correct age.
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2.10 GENERAL ACCOUNT PURCHASE PAYMENT
GUARANTEE Notwithstanding Sections
4.03, 4.04 or 4.05, the cash value of
the portion of a participant's
account attributable to the general
account will never be less than the
sum of purchase payments originally
allocated to the general account,
less purchase payments or any portion
thereof converted to a separate
account series, surrendered or
applied to an annuity income option.
2.11 THE SEPARATE ACCOUNT Security
First Life Separate Account A is a
separate account of the Company
established in 1980 under Delaware
law. It is registered under the
Investment Company Act of 1940 (the
"Act"). Its assets are invested only
in shares of one or more funds as
stated in the plan. The separate
account will vote its fund shares in
accordance with the instructions
received from group contractholders
and participants who have units in
the separate account series of that
fund. Each such person will receive
all reports and material of the funds
in which he or she owns series units,
and will receive forms in order to
instruct the separate account how to
vote.
2.12 SUBSTITUTION OF FUND SHARES The
Company may not change the fund
shares of a series unless approved as
provided by the Act. The separate
account may buy other securities for
other series or contracts or, if
requested by a participant, convert
units from one series or contract to
another.
ARTICLE 3 3.01 PARTICIPANT'S ACCOUNT The
PARTICIPANT'S ACCOUNT Company will establish a
PROVISIONS participant's account for each person
who becomes a participant. A
participant's account is the sum of
the values attributable to all
purchase payments made by or for the
participant.
3.02 PURCHASE PAYMENTS Purchase
payments for any participant must be
at least $20 each and $240 annually.
Each purchase payment must be
allocated by the participant among
the general account, and series of
the separate account.
3.03 CREDITING ACCUMULATION UNITS
Purchase payments allocated to the
separate account will be applied to
provide accumulation units. The
number of accumulation units credited
for a series is determined by
dividing the amount of the purchase
payment allocated to the series, less
any premium taxes and transaction
fees deducted, by the accumulation
unit value for the series on the day
the Company received the purchase
payment or values are converted to
the series.
3.04 ACCUMULATION UNITS The separate
account accumulation unit value for
each series was first set at $5. This
value is determined each business
day. It is equal to the value on the
prior day multiplied by a net
investment factor. The net investment
factor is:
(a) the net asset value of a fund
share at the close of the current
business day plus the per share
amount of any fund distributions less
taxes (per share), divided by
(b) the net asset value of a share at
the close of the prior business day
and less
(c) the actuarial risk fee factor of
[%] for each calendar day from the
prior business day to the current
business day.
The actuarial risk fee factor is a
Mortality, Expense and Distribution
Risk Charge that is deducted during
accumulation and during a variable
annuity income option to compensate
for increased mortality and expenses
not anticipated by the mortality,
maintenance and surrender charges
guaranteed in the contract. If this
charge is more or less than
sufficient, the Company will retain
the balance as profit or incur a loss.
3.05 SPLITTING UNITS The Company may
split the value of any units if it is
in the best interest of the group
contractholder, participants,
annuitants and the Company. If split,
strict equity will be preserved. Such
split will have no major effect upon
the benefits or provisions of this
Contract.
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ARTICLE 4 4.01 ANNUITY VALUE The annuity value
VALUATION AND of a participant's account is the
NONFORFEITURE PROVISIONS amount that can be applied to any
annuity income option under this
contract. The annuity value is the
value of the participant's separate
account accumulation units plus the
accumulation at annuity value
interest rates of: (a) purchase
payments allocated to the general
account; minus (b) amounts previously
applied to an annuity income option;
minus (c) prior administrative and
transaction fees; minus (d) premium
taxes, if any, minus; (e) amounts
deducted for partial surrenders.
4.02 ACCUMULATED PAYMENT VALUE The
accumulated payment value of a
participant's account is the amount
used to calculate the cash value. The
accumulated payment value is equal to
the value of the participant's
accumulation units in the separate
account plus the accumulation at
accumulated payment value interest
rates of: (a) purchase payments
allocated to the general account;
minus (b) amounts previously applied
to an annuity income option; minus
(c) prior administrative and
transaction fees; minus (d) premium
taxes, if any, minus; (e) amounts
previously deducted for partial
surrenders.
4.03 CASH VALUE The cash value of a
participant's account is equal to the
accumulated payment value of the
account multiplied by a percentage,
and then reduced by applicable
transaction fees. Prior to the end of
the ninth full calendar year after
the certificate date, the percentage
shall be 93% for purchase payments
received by the Company within 60
months of the date of surrender and
interest thereon and 100% for all
earlier purchase payments and
interest thereon. After the ninth
full calendar year following the
certificate date, the percentage
shall be 100% for all purchase
payments and interest thereon.
4.04 CASH SURRENDER A participant's
account may be surrendered for its
cash value before the annuity date.
Requests for surrender must be in
writing. If the participant has a
nonforfeitable interest in his or her
account such request must be signed
by the participant. The cash value
will not be paid until the
certificate is returned to the
Company.
4.05 PARTIAL SURRENDERS Partial
surrenders from the cash value of a
participant's account may be made
before the annuity date. Requests for
partial surrenders must be in
writing. If the participant has a
nonforfeitable interest in his or her
account, such request must be signed
by the participant. No partial
surrender will be allowed if it
results in the participant's interest
in the general account or any series
of the separate account having a
value after the surrender of less
than $200, unless the entire amount
in this series or general account is
surrendered.
When a partial surrender is made from
a series, the number of accumulation
units in that series will be reduced
by the number of units equal in value
to the amount withdrawn plus
transaction fees, both divided by the
applicable percentage shown in
Section 4.03.
Purchase payments allocated to the
general account and accumulation
units will be cancelled on a first-in
first-out basis. A proportionate
amount will be deducted from the
annuity value.
4.06 SURRENDER WITHOUT PERCENTAGE
CHARGE The first surrender from a
participants' account in a calendar
year will be subject to the following:
(a) For surrenders of up to 10% of
the participant's accumulated payment
value in the general account and 10%
of the participant's value of
accumulation units in the separate
account, the amount of the surrender
will be determined by applying a
percentage of 100% in the calculation
of cash value under Section 4.03,
provided that the proceeds of this
surrender are paid solely to the
participant or the beneficiary.
(b) The amount of the surrender that
is over the values described in (a)
above will be subject to Sections
4.03, 4.04 and 4.05.
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4.07 DEFERRAL OF PAYMENT Payment of
full or partial surrenders from a
separate account series may be
suspended under the following
conditions:
(a) During any period which the New
York Stock Exchange is closed (other
than customary weekend or holiday
closing) or;
(b) When the Securities and Exchange
Commission determines that trading on
such exchange is restricted or that
an emergency exists; and, as a
result, the separate account may not
reasonably dispose of its securities
or fairly value its assets; or
(c) For such other periods as the
Securities and Exchange Commission
may by order direct for the
protection of variable
contractholders and participants.
Payments of full or partial
surrenders from the general account
may be deferred for a period of not
more than six months from the date
written request is received. Interest
will continue to be credited during
the deferral period. The interest
rate(s) will be the same as if the
surrender had not been requested. A
partial surrender made without
percentage charge under Section 4.06
is not subject to deferral.
4.08 ADMINISTRATIVE FEE At the end of
each certificate year a participant's
account values will be reduced by an
administrative fee of not more than
$21.50 plus $2.50 for amounts
allocated to the general account and
for each series with accumulation
units in the separate account. The
fee will be pro-rated among the
participant's account values in the
general account and the series in the
separate account on the basis of the
relative values of each as of the
date of the deduction. Any charge to
the general account will be applied
to purchase payments and interest
thereon on a first-in first-out basis.
4.09 TRANSACTION FEE A transaction
fee of $10 shall be deducted from a
participant's account for each
allowable conversion (see Section
4.12), each full or partial surrender
and upon the start of annuity
payments (see Article 5). The charges
will be allocated on a pro rata basis
to the participant's account values
in the general account and the series
of the separate account from which
the funds are converted or withdrawn.
Any charge to the general account
will be applied to purchase payments
and interest thereon on a first-in
first-out basis.
4.10 PREMIUM TAXES The Company shall
have the right to deduct from the
participant's account any premium tax
payable by it. If a premium tax
deduction is made, it will be made on
or after the time the tax is payable
by the Company.
4.11 MINIMUM BENEFITS The value of a
paid-up annuity, cash surrender, or
settlement on death under this
contract will not be less than the
minimum required by the state laws
where the contract is delivered.
4.12 CONVERSION BETWEEN SERIES
Accumulation units in the separate
account may be converted from one
separate account series to another.
Accumulation units may also be
converted from a separate account
series to the general account and
will receive the interest rate
guarantees applicable to new purchase
payments under this contract. Amounts
accumulated in the general account
may be converted to accumulation
units in a separate account series
subject to the following restrictions:
(a) Conversions are limited to once
per certificate year;
(b) The total amount transferred from
the general account during any
certificate year cannot exceed 20% of
the accumulated payment value of the
participant's interest in the general
account on the date of the
conversion; and,
(c) The value of the participant's
interest in the general account will
be reduced by the accumulated payment
value of the amount withdrawn plus
transaction fees. Purchase payments
will be cancelled on a first-in,
first-out basis. A proportionate
amount will be deducted from the
annuity value.
The Company may, at its sole
discretion, allow amounts in excess
of 20% to be converted.
8
Conversions may be communicated by
written election, or if permitted by
the Company, by telephone. The
Company will convert the amounts on
the first valuation date after
receipt of the written election.
Conversions requested by telephone
will be effective within a reasonable
time in accordance with policies
established by the Company.
Annuity units in the separate account
may be converted from one separate
account series to another. Separate
account annuity units may not be
converted to the general account.
However, amounts in the general
account that have not been applied to
a fixed annuity may be converted to
annuity units in one or more separate
account series for application to a
variable annuity income option. Such
conversions are not subject to the
limitations described in (a) and (b)
above.
Conversions of annuity units must be
elected by written notification
signed by the participant and will be
effective on the following annuity
unit valuation date. No conversion of
units may take place within two
calendar weeks before the annuity
date or any anniversary thereof.
The minimum amount that may be
converted at any time is the lesser
of $500 or the balance of the
participant's account allocated to
the general account or to the series
to be converted.
4.13 LIMITATIONS ON DISTRIBUTIONS
Notwithstanding anything in the
contract to the contrary, and except
as provided below, a participant
shall not be entitled to receive a
distribution under the contract
(whether as annuity payments or a
surrender) on amounts attributable to
purchase payments made pursuant to a
salary reduction agreement (as
defined under Section 402(g) (3)(C)
of the Code) except under the
following circumstances:
1. The participant has attained age
59 1/2;
2. The participant separates from
service with the employer through
which the purchase payments were
made;
3. The participant dies or becomes
disabled (as defined in Section
72(m) (7) of the Code); or,
4. In the case of a hardship (as
defined in Section 403(b) (11) of
the Code).
In the event of a distribution based
on hardship, amounts distributed may
not include income earned on purchase
payments.
These limitations shall not apply to
the distribution of that portion of a
participant's account which is
attributable to assets held as of
December 31, 1988. No distribution
based on hardship will be permitted
unless all amounts excluded from
these limitations have been
distributed. Further, loans made to a
participant under the contract may
not be repaid by deduction from that
portion of the participant's account
which is subject to these
distribution limitations.
All references in this Section 4.13
to sections of the Code shall include
any successor or substitute
provisions thereto and any
regulations issued thereunder.
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ARTICLE 5 5.01 SETTLEMENT OF PARTICIPANT'S
SETTLEMENT ACCOUNT Settlement of a participant's
account means any of the following:
(a) The start of annuity income
payments to the annuitant or
beneficiary.
(b) A payment of the cash value in a
lump sum.
The amount applied under an annuity
income option is the annuity value
less any transaction fees. The first
payment under any annuity option will
be made on the annuity date. Proof of
age is required before payments start
under any of the first four options
listed in Article 7.
5.02 NORMAL FORM OF SETTLEMENT The
participant must be living on the
date annuity payments are to begin.
Unless another choice is made, the
Company will pay the annuitant a
series of payments in the form of a
life annuity with 120 monthly
payments certain, the second option
in Article 7. General account
accumulation units will provide a
fixed annuity. Separate account
accumulation units will be applied to
provide a variable annuity. These
payments will begin on the normal
annuity date.
5.03 OPTIONAL ANNUITY DATE AND
OPTIONAL SETTLEMENT Before annuity
payments begin, an optional annuity
date or a different annuity income
option may be elected in writing, if
not prohibited by the plan. The
optional annuity date may be the
first day of any month not later than
the normal annuity date. The election
must be made at least 31 days before
the optional annuity date. Any of the
annuity income options may be
elected. The account value on the
optional annuity date will be applied.
5.04 MINIMUM AMOUNT TO PAYEE Any
annuity income option payment must be
at least $50 from each series
included in the payment. If any
payment from any series is less than
$50, the Company may change the
payment interval so that payments are
greater than $50 from that series.
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ARTICLE 6 6.01 SETTLEMENT ON DEATH BEFORE THE
SETTLEMENT ON DEATH ANNUITY DATE If a participant dies
before the annuity date, the
beneficiary may elect:
1. To receive annuity income under
annuity income Options One, Two, or
Five. Election of an annuity income
option is subject to the following
conditions:
(a) Payments must begin within one
year of the participant's death.
(b) The guaranteed period under
Option Two or the designated period
under Option Five may not be longer
than the beneficiary's life
expectancy under the applicable
tables specified by the Internal
Revenue Service.
(c) The annuity value as of the date
of the first income payment will be
applied.
OR
2. To receive a lump sum settlement
equal to the cash value on the date
the payment is made. If the lump sum
settlement becomes payable because of
the death of participant prior to
attaining age 65, the lump sum
settlement will be equal to the
larger of:
(a) The purchase payments less
amounts already applied to an annuity
income option, and less any prior
partial surrenders; or
(b) The value of any separate account
accumulation units, plus 100% of the
accumulated payment value of the
participant's interest in the general
account.
If the spouse of the participant is
the beneficiary, the spouse may delay
election of an income option under 1
above, to the later of (a) one year
after the participant's death or (b)
a date no later than the date on
which the participant would have
attained age 70 1/2.
In any event, distribution under the
lump sum option above must be made
within 5 years of the death of the
participant.
Unless a participant has elected
otherwise, if there is more than one
named beneficiary living at the time
of the participant's death, each will
share in the proceeds equally.
If a participant outlives all
beneficiaries, the proceeds will be
paid to the participant's estate in a
lump sum.
No beneficiary will have the right to
assign, anticipate or commute any
future payments under any of the
options, except as provided in the
election or by law.
The rights to the proceeds will pass
as if the participant outlived the
beneficiary if the beneficiary dies
at the same time as the participant
or within 15 days of the
participant's death and prior to the
date due proof of the participant's
death is received. Due proof of death
will be a certified death
certificate, an attending physician's
statement, a decree of a court of
competent jurisdiction as to the
finding of death, or such other
documents as the Company may, at its
option, accept.
6.02 SETTLEMENT ON DEATH OF PAYEE
Upon the death of a payee, any
remaining payments certain under
Options Two, Three, or Five in
Article 7 will be paid to the named
beneficiary.
If no beneficiary is alive at the
payee's death, the payee's estate
will receive a lump sum payment. This
lump sum will be the present value of
the remaining payments certain at the
payee's death. The present value will
be computed on the basis of the
interest rate used to compute the
benefit.
If, as a result of a payee's death,
variable annuity payments are being
continued to a beneficiary, that
beneficiary may elect at any time to
receive in a lump sum the present
value of the remaining number of
payments certain.
11
LOGO
ARTICLE 7 7.01 ANNUITY INCOME OPTIONS Except as
ANNUITY INCOME may be limited by Article 6, the
annuity value can be applied to these
annuity income options.
a. OPTION ONE--LIFE ANNUITY A series
of annuity income payments made
monthly during the payee's life. The
payments will stop with the last
payment due before the death of the
payee. No further payments will be
made after the death of the payee.
b. OPTION TWO--LIFE ANNUITY WITH 120,
180, OR 240 MONTHLY PAYMENTS CERTAIN
A series of annuity income payments
made monthly for the guaranteed
period elected and thereafter during
the payee's life. The guaranteed
period may be 120, 180 or 240 months.
If the payee dies before the end of
the guaranteed period, payments for
the remainder of the guaranteed
period will be paid to the
beneficiary.
c. OPTION THREE--INSTALLMENT REFUND
LIFE ANNUITY A series of annuity
income payments made monthly during
the payee's life. If the payee dies
before receiving the "minimum number"
of payments, payments will continue
to the beneficiary. The "minimum
number" of payments is equal to the
amount applied under this option
divided by the first monthly payment.
Any payments made after the death of
the payee will stop when the Company
has paid out a total number of
payments equal to the "minimum
number" of payments.
d. OPTION FOUR--JOINT AND FULL TO
SURVIVOR ANNUITY A series of annuity
income payments made monthly during
the lifetime of both of two payees.
If one of the payees dies, the
payments will end with the last
payment due before the death of the
remaining payee.
e. OPTION FIVE--DESIGNATED PERIOD
ANNUITY--FIXED DOLLAR ONLY A series
of fixed annuity income payments made
monthly for a period of years. Any
number of years from 5 through 30 may
be chosen. Payments will be made to
the payee or beneficiary even if the
payee dies. Payments stop at the end
of the period selected. This option
is only available for fixed annuities.
f. Other options may be available as
agreed upon by the Company.
7.02 ALTERNATE ANNUITY INCOME RATES
If settlement is made under any fixed
annuity income option, payment will
be based on the larger of the
following:
(a) The Company's current annuity
settlement option rates applicable to
this contract.
(b) The annuity purchase rates found
in Article 9.
7.03 ALTERNATE ASSUMED INVESTMENT
RETURN If allowed by the laws of the
state in which this contract is
issued, a participant may elect
variable annuity benefits determined
on an assumed investment return of
[%] or [%] in lieu of the [%] return
assumed in the contract.
12
ARTICLE 8 8.01 DETERMINATION OF MONTHLY
METHOD OF CALCULATING GUARANTEED MINIMUM FIXED DOLLAR
ANNUITY INCOME PAYMENTS ANNUITY PAYMENTS Except as provided
in Section 7.02, the payment amounts
shown in Tables 1 and 2 in Article 9
will be used to determine the monthly
payments under a fixed payment
option. The tables show the dollar
amount of the monthly payments which
can be purchased with each $1,000 of
the general account's annuity value,
after deduction of any applicable
premium taxes. Amounts shown use the
1983 Table "a" Individual Annuity
Mortality, modified, with an interest
rate of [%] per year.
8.02 DETERMINATION OF MONTHLY
VARIABLE ANNUITY PAYMENT FOR THE
FIRST YEAR Variable annuity payment
amounts will be determined at the
annuity date, and will remain the
same for one year from that date.
Amounts may vary each year thereafter.
The age of the payees born after 1915
must be adjusted using the following
Table. Adjusted ages for payees born
after 1995 are available from the
Company. The payee's actual age will
be based on the birthday nearest the
time the first payment is due.
CALENDAR YEAR OF BIRTH
ADJUSTED
AGE
1915 or
Prior Actual
Age
1916--1935
Actual
Age Minus 1
1936--1955
Actual
Age Minus 2
1956--1975
Actual
Age Minus 3
1976--1995
Actual
Age Minus 4
THESE ADJUSTMENTS APPLY ONLY TO
TABLES 3 AND 4 SHOWN ON THE NEXT
PAGES. THESE AGE ADJUSTMENTS DO NOT
APPLY TO ANY OTHER ANNUITY INCOME
RATES UNLESS SO SPECIFIED BY THE
COMPANY.
Tables 3 and 4 show the factors used
to determine variable annuity income
payments based on an assumed
investment return of [%]. They are
based on the Modified Select Security
First Annuity Mortality Table
projected to the year 2000 in the
projection scale C modified and then
[%] interest, reduced for the first
10 years of any period certain by [%].
The monthly payment for the first
year is determined by:
(a) dividing the separate account
annuity value by $1,000.
(b) multiplying the result from (a)
by the annuity premium rate shown in
column 1 of Table 3 or 4 for the
option elected for the adjusted age
of payee, and
(c) multiplying the result of (b) by
the monthly payment factor in column
2 of Table 3 or 4.
If there are value in more than one
series, determine the monthly payment
for each series as above.
8.03 NUMBER OF ANNUITY UNITS The
number of annuity units for any
series is determined by dividing the
first year monthly payment by the
separate account annuity value for
that series for the valuation period
that includes the settlement date.
The number of annuity units thus
determined will not change unless the
owner transfers annuity units from
one separate account series to
another. Such annuity units
transferred will be based on the same
assumed investment return.
8.04 DETERMINATION OF MONTHLY
VARIABLE ANNUITY PAYMENTS FOR THE
SECOND AND SUBSEQUENT YEARS The
amounts of the second and subsequent
years' monthly variable annuity
payments are not pre-determined, and
may change from year to year, based
on the variations in the annuity unit
value. The annuity unit value varies
with the variations of net investment
results above and below the assumed
investment rate.
13
As of each anniversary of the
settlement date, the Company will
determine the amount of monthly
payments for each series of the year
then beginning. It will be determined
by multiplying the number of separate
account annuity units for that series
by the annuity unit value for the
same series for the valuation period
in which the first payment for that
year is due.
The Company guarantees that the
amount of each variable annuity
payment will not be affected by
variations in the mortality
experience of payees nor by expenses
incurred by the Company in the
administration of such benefits.
8.05 SEPARATE ACCOUNT ANNUITY UNIT
VALUES The separate account annuity
unit value for each series was
originally established at $5. This
value for any subsequent valuation
period is determined for each series
by:
(a) multiplying the annuity unit
value of the series for the
immediately preceding valuation
period by
(b) the annuity change factor for the
second preceding valuation period.
The annuity change factor for any
valuation period is determined for
each series by dividing:
(a) the accumulation unit value at
the end of the valuation period by
(b) the accumulation unit value at
the end of the previous valuation
period, and multiplying the result by
(c) the interest neutralization
factor.
For weekly valuation periods and a
[%] assumed net investment rate, the
interest neutralization factor is [%].
14
ARTICLE 9
ANNUITY PURCHASE RATES
GUARANTEED DOLLAR AMOUNT OF MONTHLY PAYMENT WHICH
IS PURCHASED WITH EACH $1,000 APPLIED
LIFE ANNUITIES--FIXED DOLLAR
TABLE 1
JOINT AND FULL TO
SINGLE LIFE ANNUITIES SURVIVOR
------------------------------------------- -----------------
NO 120 180 240
PERIOD MONTHS MONTHS MONTHS INSTALLMENT BOTH MONTHLY
AGE CERTAIN CERTAIN CERTAIN CERTAIN REFUND AGE PAYMENT
--- ------- ------- ------- ------- ----------- ---- -------
60.. $5.58 $5.47 $5.32 $5.12 $5.30 60 $4.82
61.. 5.71 5.58 5.41 5.19 5.39 61 4.90
62.. 5.84 5.69 5.50 5.25 5.50 62 4.99
63.. 5.98 5.81 5.60 5.31 5.60 63 5.09
64.. 6.14 5.94 5.70 5.38 5.72 64 5.19
65.. 6.30 6.07 5.79 5.44 5.84 65 5.30
66.. 6.48 6.21 5.90 5.50 5.97 66 5.42
67.. 6.66 6.36 6.00 5.56 6.10 67 5.55
68.. 6.86 6.51 6.10 5.61 6.25 68 5.68
69.. 7.08 6.67 6.20 5.66 6.40 69 5.83
70.. 7.31 6.83 6.30 5.71 6.56 70 5.98
71.. 7.56 7.00 6.40 5.75 6.73 71 6.15
72.. 7.83 7.17 6.50 5.79 6.91 72 6.33
73.. 8.12 7.35 6.59 5.83 7.10 73 6.52
74.. 8.43 7.53 6.68 5.86 7.30 74 6.73
75.. 8.77 7.72 6.76 5.89 7.51 75 6.95
Monthly payments for ages not shown will be furnished by the Company on request
and will be calculated on the same actuarial basis.
TABLE 2
DESIGNATED PERIOD ANNUITIES--FIXED DOLLAR
-----------------------------------------
AMOUNT OF AMOUNT OF AMOUNT OF
YEARS OF MONTHLY YEARS OF MONTHLY YEARS OF MONTHLY
PAYMENTS PAYMENT PAYMENTS PAYMENT PAYMENTS PAYMENT
-------- --------- -------- --------- -------- ---------
5...... $18.12 14 $7.49 23 $5.24
6...... 15.35 15 7.10 24 5.09
7...... 13.38 16 6.76 25 4.96
8...... 11.90 17 6.47 26 4.84
9...... 10.75 18 6.20 27 4.73
10..... 9.83 19 5.97 28 4.63
11..... 9.09 20 5.75 29 4.53
12..... 8.46 21 5.56 30 4.45
13..... 7.94 22 5.39
15
ANNUITY PREMIUM RATES PER $1,000 OF VALUE APPLIED (COLUMN (1)) AND
MONTHLY PAYMENT FACTORS (COLUMN (2))
TABLE 3 SINGLE LIFE ANNUITIES--VARIABLE
MONTHLY PAYMENTS CERTAIN
-------------------------------------------------------
ADJUSTED NONE 120 180 240
AGE OF ------------- ------------- ------------- -------------
PAYEE (1) (2) (1) (2) (1) (2) (1) (2)
-------- ------ ------ ------ ------ ------ ------ ------ ------
60..... 62.596 .08946 61.992 .08713 60.305 .08611 58.126 .08539
61..... 63.710 .08975 63.123 .08723 61.294 .08614 58.873 .08538
62..... 64.922 .09003 64.340 .08730 62.333 .08614 59.628 .08535
63..... 66.252 .09028 65.653 .08736 63.424 .08613 60.387 .08532
64..... 67.715 .09049 67.068 .08739 64.564 .08611 61.142 .08527
65..... 69.298 .09072 68.578 .08741 65.743 .08607 61.884 .08523
66..... 71.005 .09101 70.199 .08742 66.959 .08603 62.606 .08518
67..... 72.817 .09137 71.905 .08744 68.191 .08599 63.294 .08513
68..... 74.732 .09180 73.692 .08747 69.430 .08595 63.941 .08508
69..... 76.751 .09231 75.557 .08751 70.665 .08590 64.539 .08503
70..... 78.880 .09290 77.496 .08755 71.886 .08586 65.082 .08499
71..... 81.010 .09372 79.469 .08763 73.069 .08583 65.563 .08495
72..... 83.231 .09465 81.498 .08770 74.214 .08579 65.984 .08491
73..... 85.539 .09570 83.575 .08777 75.309 .08574 66.347 .08487
74..... 87.982 .09683 85.701 .08781 76.345 .08568 66.657 .08483
75..... 90.293 .09833 87.805 .08788 77.293 .08563 66.912 .08480
TABLE 4 JOINT AND FULL TO SURVIVOR--VARIABLE
ADJUSTED NO PAYMENTS CERTAIN
AGE OF -------------------
BOTH PAYEES (1) (2)
----------- ------ ------
60...... 57.810 .08526
61...... 58.742 .08535
62...... 59.741 .08545
63...... 60.817 .08554
64...... 61.976 .08564
65...... 63.220 .08575
66...... 64.548 .08594
67...... 65.961 .08616
68...... 67.460 .08643
69...... 69.049 .08674
70...... 70.732 .08711
71...... 72.468 .08758
72...... 74.294 .08813
73...... 76.208 .08875
74...... 78.229 .08943
75...... 80.243 .09032
Factors for adjusted ages not shown will be furnished by the Company on request
and will be calculated on the same actuarial basis.
16
--------------------------------------------------------------------------------
ANNUITY CONTRACT
GROUP FLEXIBLE PAYMENT ANNUITY
PROVIDING FIXED AND VARIABLE BENEFITS
LIFE ANNUITY WITH 10 YEARS CERTAIN
STARTING ON THE ANNUITY DATE
NON-PARTICIPATING
NO DIVIDENDS
LOGO
COMMUNICATIONS
Write to the Company at its Administrative Office shown below:
Security First Life Insurance Company
X.X. Xxx 00000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
SECURITY FIRST LIFE INSURANCE COMPANY
1300 DELAWARE TRUST BUILDING, X.X. XXX 00000, XXXXXXXXXX, XXXXXXXX 00000
--------------------------------------------------------------------------------
LOGO
ANNUITY PURCHASE RATE BONUS RIDER
This rider applies to Policy Forms SF 225R1 and SF 226R1.
In the event that the participant or beneficiary settles the participant's
account by applying the entire annuity value of the account to a fixed annuity
income option at any time after the ninth full calendar year following the
certificate date, the Company will increase its current annuity settlement
option rates described in Section 7.02 by [%].
/s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
President
LOGO
GENERAL ACCOUNT EXCESS INTEREST RIDER
Notwithstanding anything in the contract to the contrary, upon the expiration
of initial interest rate guarantees in excess of the minimum guaranteed
interest rate of [%], the Company agrees that it will declare from time to time
excess interest over this minimum guaranteed interest rate on Purchase Payments
allocated to the general account, and that each such declaration shall be for a
period of not less than one year.
Signed for the Company at Wilmington, Delaware
/s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
President
