1
EXHIBIT 4
PROVIDENTMUTUAL LIFE AND ANNUITY COMPANY OF AMERICA
A STOCK LIFE INSURANCE COMPANY
NEWARK, DELAWARE
-------------------------------------
ANNUITANT XXXX XXX JUNE 1, 1994 CONTRACT DATE
CONTRACT NUMBER 123,456 JUNE 1, 2024 MATURITY DATE
-------------------------------------
In this Contract, Providentmutual Life and Annuity Company of America will be
referred to as "we," "us" or "our." The Owner ("you," "your") is the Annuitant,
unless another person is named in the application or later becomes the Owner as
allowed by this Contract.
We agree to pay the proceeds as described in this Contract, subject to its
provisions.
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, INCLUDING ANY DEATH
BENEFIT THAT MAY BE PAYABLE, WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE
VARIABLE ACCOUNT MAY INCREASE OR DECREASE DAILY, DEPENDING UPON THE INVESTMENT
PERFORMANCE OF THE FUND PORTFOLIOS IN WHICH YOUR CHOSEN SUBACCOUNTS ARE INVESTED
AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNTS. NO MINIMUM CONTRACT ACCOUNT
VALUE IS GUARANTEED, EXCEPT FOR ANY AMOUNTS IN THE GUARANTEED ACCOUNT.
PLEASE READ THIS CONTRACT CAREFULLY
It is a legal contract between you and us.
NOTICE OF 10 DAY RIGHT TO EXAMINE CONTRACT
PLEASE EXAMINE THIS CONTRACT CLOSELY. IF FOR ANY REASON YOU ARE NOT SATISFIED
WITH THIS CONTRACT, YOU MAY RETURN IT TO US FOR CANCELLATION BY DELIVERING OR
MAILING IT TO:
1. OUR SERVICE CENTER, 000 XXXXXXXXXXX XXXXX, XXXXXX, XXXXXXXX
00000;
2. ONE OF OUR AGENCY OFFICES; OR
3. THE AGENT THROUGH WHOM IT WAS PURCHASED.
THIS CONTRACT MUST BE RETURNED TO US NO LATER THAN 10 DAYS AFTER YOU FIRST
RECEIVE IT. UPON SUCH DELIVERY OR MAILING, THIS CONTRACT WILL BE VOID AS OF THE
DATE WE RECEIVE YOUR CONTRACT AND REQUEST. WE WILL RETURN THE GREATER OF: (i)
THE AMOUNT OF PREMIUMS YOU PAID; OR (ii) THE CONTRACT ACCOUNT VALUE PLUS ANY
CHARGES WE DEDUCTED, EXCEPT THE MORTALITY AND EXPENSE RISK CHARGE, THE
ADMINISTRATION CHARGE, AND THE ADVISORY FEES AND EXPENSES OF THE FUND.
Signed for the Company in Newark, Delaware
/s/ illegible /s/ Xxxxxx X. Xxxxx
Secretary President
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
Flexible premiums as stated in the Premiums Provision.
Contract values are variable, except for amounts in the Guaranteed Account
After the Maturity Date, Payment Options are on a guaranteed basis.
Death benefit payable upon death of Annuitant before Maturity Date.
Non-participating - Contract does not pay dividends.
[PROVIDENTMUTUAL LOGO] [PROVIDENTMUTUAL LOGO]
FOR INQUIRIES, INFORMATION AND RESOLUTION OF COMPLAINTS CALL: 0-000-000-0000
Form PL516
2
A GUIDE TO THE PROVISIONS OF THIS CONTRACT
Page
Allocations and Transfers ............................................. 9
Contract Schedule ..................................................... 3
Contract Values ....................................................... 10-11
Definitions ........................................................... 5
Description of Subaccounts ............................................ 4
General Provisions .................................................... 5-6
Guaranteed Account .................................................... 8-9
Payment Options ....................................................... 13
Payment of Proceeds ................................................... 11-13
Premiums .............................................................. 7
Variable Account ...................................................... 7-8
A COPY OF THE APPLICATION AND ANY RIDERS ARE INCLUDED AFTER PAGE 14.
ENDORSEMENTS
(To be made by the Company only)
Page 2
Form PL516
3
CONTRACT SCHEDULE
ANNUITANT XXXX XXX JUNE 1, 1994 CONTRACT DATE
CONTRACT NUMBER 123,456 JUNE 1, 2024 MATURITY DATE
Initial Premium Payment: $ 2,000
Minimum Additional Premium Amount: $ 100
[$ 50 for Qualified Contracts]
Planned Periodic Premium: $ 100 monthly
Minimum Withdrawal Amount: $ 500
Minimum Transfer Amount: $ 500
Minimum Remaining Cash Surrender Value
After Withdrawal: $ 2,000
CHARGES AND FEES
Annual Mortality and Expense Risk Charge: 1.25%
Administration Charge: Current: 0.15% of assets
Maximum: 0.25% of assets
Annual Administration Fee: Current: $30.00
Maximum: $40.00
CONTRACT YEAR CHARGE
------------- ------
Surrender Charge: * 1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8 0%
* For the first Contract Year, applies to amount withdrawn or
surrendered; after the first Contract Year, applies to amount
withdrawn or surrendered as described under the Surrender
Charge provision. In no event will the Surrender Charge exceed
8.5% of the total premiums received under the Contract.
CERTAIN RESTRICTIONS APPLY. (SEE "SURRENDER CHARGE" ON PAGE
10).
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Form PL516
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THIS PAGE INTENTIONALLY LEFT BLANK
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CONTRACT SCHEDULE
(CONTINUED)
ALLOCATION OPTIONS
SCHEDULE X-0
XXX XXXXXX XXXXXX XXXX, XXX.:
Providentmutual Variable Large Cap Growth Subaccount
Providentmutual Variable Large Cap Value Subaccount
Providentmutual Variable Small Cap Growth Subaccount
Providentmutual Variable Small Cap Value Subaccount
Providentmutual Variable Growth Subaccount
Providentmutual Variable Aggressive Growth Subaccount
Providentmutual Variable Bond Subaccount
Providentmutual Variable Managed Subaccount
Providentmutual Variable Money Market Subaccount
Providentmutual Variable International Subaccount
THE XXXXX AMERICAN FUND:
Xxxxx American Small Capitalization Subaccount
VARIABLE INSURANCE PRODUCTS FUND (VIP) OR THE
VARIABLE INSURANCE PRODUCTS FUND II (VIP II):
Fidelity Asset Manager Subaccount (VIP II)
Fidelity Contrafund Subaccount (VIP II)
Fidelity Equity-Income Subaccount (VIP)
Fidelity Growth Subaccount (VIP)
Fidelity High Income Subaccount (VIP)
Fidelity Index 500 Subaccount (VIP II)
Fidelity Investment Grade Bond Subaccount (VIP II)
Fidelity Overseas Subaccount (VIP)
Page 4
Form ASA3 (ASA3598)
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BENEFICIARY. We will pay the Beneficiary any proceeds payable on your death or
the death of the Annuitant. During the Annuitant's lifetime and before the
Maturity Date, you may change the named Beneficiary by giving us Written Notice
of such change.
We will pay the proceeds under the beneficiary designation in effect at the
date of death. The proceeds will be paid to the surviving Beneficiaries equally
unless you have indicated otherwise. If no Beneficiary is living when the
Annuitant dies, or if none has been named, the proceeds will be paid to you or
to your estate. If no Beneficiary is living when you die, any proceeds will be
paid to your estate.
CHANGE OF OWNER OR BENEFICIARY. Written Notice must be signed by you, dated, and
of a form and content acceptable to us. Your Written Notice will not be
effective until we receive and file it at our Service Center. However, the
change provided in your Written Notice will then be effective as of the date you
signed such notice:
1. subject to any payments made or other action we take before we receive and
file your Written Notice; and
2. whether or not you or the Annuitant are alive when we receive and file
your Written Notice.
ASSIGNMENT. You may assign this Contract or an interest in it at any time before
the Maturity Date during the lifetime of the Annuitant. An assignment must be in
a Written Notice acceptable to us. It will not be binding on us until we receive
and file it at our Service Center. We are not responsible for the validity or
sufficiency of any assignment. Your rights and the rights of any Beneficiary
will be affected by an assignment.
MISSTATEMENT OF AGE OR SEX. If the age or sex of the Annuitant has been
misstated, we will pay the amount which the proceeds would have purchased at the
correct age and sex.
If we make an overpayment because of an error in age or sex, the overpayment
plus interest at 3% compounded annually will be a debt against this Contract. If
the debt is not repaid, future payments will be reduced accordingly.
If we make an underpayment because of an error in age or sex, any annuity
payments will be recalculated at the correct age and sex, and future payments
will be adjusted. The underpayment with interest at 3% compounded annually will
be paid in a single sum.
PERIODIC REPORTS. We will mail you a report showing the following items:
1. the number of units credited to this Contract and the dollar value of a
unit;
2. the Contract Account Value and Cash Surrender Value;
3. any premiums paid, withdrawals, and charges made since the last report;
and
4. any other information required by law.
The information in the report will be as of a date not more than two months
before the date of the mailing. We will mail the report to you:
1. at least annually, or more often as required by law; and
2. to your last address known to us.
MODIFICATION. Upon notice to you, we may modify the Contract, but only if such
modification:
1. is necessary to make the Contract or the Variable Account comply with any
law or regulation issued by a governmental agency to which we are subject;
or
2. is necessary to assure continued qualification of the Contract under the
Internal Revenue Code or other federal or state laws relating to
retirement annuities or variable annuity contracts; or
3. is necessary to reflect a change in the operation of the Variable Account;
or
4. provides additional variable account and/or fixed accumulation options.
In the event of any such modification, we may make appropriate endorsement to
the Contract.
NON-PARTICIPATION. This Contract is non-participating and does not share in our
profits or surplus earnings.
PROTECTION OF PROCEEDS. No Beneficiary may commute, encumber or alienate any
payments under this Contract before they are due. No annuity payments shall be
subject to the debts, contract or engagements of any Beneficiary nor to any
judicial process to levy upon or attach the same for payment of such debts.
CREDITOR CLAIMS. To the extent permitted by applicable laws, no right or benefit
under this Contract shall be subject to claims of creditors, except as may be
provided by an Assignment.
DISCHARGE OF LIABILITY. We shall be discharged from all liability to the extent
of any withdrawal, surrender or death benefit paid. Any payments made by us
under any Payment Option shall discharge our liability to the extent of each
such payment.
Page 6
Form PL516
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PREMIUMS
INITIAL PREMIUM. The Initial Premium is shown in the Contract Schedule, and is
payable on or before the Contract Date.
ADDITIONAL PREMIUMS. You may make additional premium payments at any time during
the Annuitant's lifetime and before the Maturity Date.
The amount of additional premium payments may vary. The minimum additional
premium that we will accept is shown in the Contract Schedule.
NET PREMIUM. The Net Premium is the premium paid less any premium tax levied on
us relating to this Contract for the year the premium is paid.
THE VARIABLE ACCOUNT
VARIABLE ACCOUNT. We have established the Providentmutual Variable Annuity
Separate Account (the "Variable Account"). The Variable Account is registered
with the Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940. The Variable Account is also subject to the laws
of the State of Delaware.
Although we own the assets in the Variable Account, these assets are held
separately from our other assets and are not part of our General Account. The
assets in the Variable Account are used to support the operation of and provide
the variable values and benefits for this Contract and similar Contracts.
The portion of the assets of the Variable Account equal to the reserves and
other contract liabilities of the Variable Account will not be charged with
liabilities that arise from any other business that we conduct. We have the
right to transfer to our General Account any assets of the Variable Account
which are in excess of such reserves and other liabilities.
SUBACCOUNTS. The Variable Account currently consists of the Subaccounts listed
in the Contract Schedule and in the current prospectus you received. Each
Subaccount invests in shares of a corresponding series of the designated
investment fund, as shown in the Contract Schedule (referred to as the "Fund").
Shares of a series are purchased and redeemed for a Subaccount at their net
asset value. Any amounts of income, dividends and gains distributed from the
shares of a series will be reinvested in additional shares of that series at its
net asset value. The Fund prospectus you received defines the net asset value
and describes each portfolio of the Fund.
The dollar amounts of values and benefits of this Contract provided by the
Variable Account depend on the investment performance of the portfolios of the
Fund in which your selected Subaccounts are invested. We do not guarantee the
investment performance of the portfolios. You bear the full investment risk for
amounts applied to THE selected Subaccounts.
VARIABLE ACCOUNT VALUE. This Contract's Variable Account Value for any Valuation
Period before the Maturity Date is determined by multiplying:
1. the amount of units credited to this Contract for each Subaccount as of
the end of the Valuation Period; by
2. the current unit value for each Subaccount.
The sum of these amounts equals the Variable Account Value.
UNITS. We credit Net Premiums in the form of units. We will credit units for the
Initial Net Premium on the Contract Date. The number of units of each Subaccount
credited under this contract is determined by dividing:
1. the Net Premium allocated to that Subaccount; by
2. the unit value for that Subaccount at the end of the Valuation Period
during which we receive and accept the premium at our Service Center.
We will adjust the units for any transfers in or out of a Subaccount.
We will cancel the appropriate number of units based on the unit value at the
end of the Valuation Period in which any of the following events occurs:
1. the Annual Administration Fee shown in the Contract Schedule is assessed;
2. the date we receive and file your Written Notice for a withdrawal or a
cash surrender;
3. the Maturity Date occurs;
4. the date we receive due proof of the Annuitant's death; or
5. the date the Contract Account Value is distributed upon your death.
Page 7
Form PL516
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UNIT VALUE. The unit value for each Subaccount for its first Valuation Period
is set at $500. The unit value for each subsequent Valuation Period is
determined by multiplying:
1. the unit value at the end of the immediately preceding Valuation Period;
by
2. the net investment factor for the Valuation Period for which the value is
being determined.
The unit value for a Valuation Period applies to each day in that period. The
unit value may increase or decrease from one Valuation Period to the next.
NET INVESTMENT FACTOR. The Net Investment Factor is an index that measures the
investment performance of a Subaccount from one Valuation Period to the next.
Each Subaccount has a Net Investment Factor for each Valuation Period, which may
be greater than or less than one.
The Net Investment Factor for each Subaccount for a Valuation Period equals 1
plus the fraction obtained by dividing (a) by (b) where:
(a) is the net result of:
1. the investment income, dividends, and capital gains, realized or
unrealized, credited during the current Valuation Period; plus
2. any amount credited or released from reserves for taxes attributable
to the operation of the Subaccount; minus
3. the capital losses, realized or unrealized, charged during the current
Valuation Period; minus
4. any amount charged for taxes or any amount we set aside during the
Valuation Period as a reserve for taxes attributable to the operation
or maintenance of the Subaccount; minus
5. the amount charged for mortality and expense risk for that Valuation
Period as shown in the Contract Schedule; minus
6. the amount charged for administration for that Valuation Period, as
shown in the Contract Schedule; and
(b) is the value of the assets in the Subaccount at the end of the preceding
Valuation Period, adjusted for allocations and transfers to and
withdrawals and transfers from the Subaccount occurring during that
preceding Valuation Period.
RESERVED RIGHTS. When permitted by law, we reserve the right to:
1. create new variable accounts;
2. combine variable accounts, including the Variable Account;
3. remove, combine or add Subaccounts and make the new Subaccounts available
to contractowners at our discretion;
4. substitute shares of another portfolio of the Fund or shares of another
investment company for those of the Fund;
5. add new portfolios to the Fund;
6. deregister the Variable Account under the Investment Company Act of 1940
if registration is no longer required;
7. make any changes required by the Investment Company Act of 1940; and
8. operate the Variable Account as a managed investment company under the
Investment Company Act of 1940 or any other form permitted by law.
If a change is made, we will send you a revised prospectus and any notice
required by law.
CHANGE IN INVESTMENT POLICY. The investment policy of a Subaccount may not be
changed unless:
1. the change is approved, if required, by the Delaware Insurance Department;
and
2. a statement of such approval is filed, if required, with the insurance
department of the state in which this Contract is delivered.
THE GUARANTEED ACCOUNT
GUARANTEED ACCOUNT. Amounts in the Guaranteed Account are part of our General
Account. The Guaranteed Account is not part of and does not depend on the
investment performance of the Variable Account.
We credit interest to amounts in the Guaranteed Account at rates we
determine. We guarantee that the effective annual interest rate will not be less
than 3%. We may credit a higher current interest rate. For the amount in the
Guaranteed Account at the beginning of a calendar year, we will determine such
interest rates in advance of each calendar year. Such rates will apply to the
calendar year which follows the date of determination. For amounts allocated or
transferred to the Guaranteed Account during a calendar year, we will determine
interest rates applicable to such amounts in advance of the date such amount is
received or transferred. Such rates will apply to the end of the calendar year
in which the payment is received or the transfer is made.
Page 8
Form PL516
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GUARANTEED ACCOUNT VALUE. This Contract's Guaranteed Account Value for any
Valuation Period before the Maturity Date is:
1. the sum of the Net Premiums allocated to the Guaranteed Account; plus
2. any amounts transferred to the Guaranteed Account from a Subaccount of the
Variable Account; minus
3. any amounts withdrawn or transferred from the Guaranteed Account together
with any associated charges; minus
4. any Annual Administration Fee deducted from the amount in THE Guaranteed
Account; plus
5. interest we credit to the amount in the Guaranteed Account.
For the purpose of crediting interest, amounts deducted, transferred and
withdrawn from the Guaranteed Account will be accounted for on a last-in,
first-out basis.
ALLOCATIONS AND TRANSFERS
NET PREMIUM ALLOCATION. In your application you selected how you wanted your
Initial Net Premium to be allocated among the Subaccounts and the Guaranteed
Account.
We will allocate that portion of the Initial Net Premium which is to be
allocated to the Variable Account to the Money Market Subaccount for a 15-day
period. At the end of such period, we will allocate the amount in the Money
Market Subaccount to each of the chosen Subaccounts based on the proportion that
the allocation percentage for such Subaccount bears to the sum of the Subaccount
premium allocation percentages.
You may change the allocation schedule by Written Notice. Any additional Net
Premiums will be allocated in accordance with the allocation schedule in effect
when such premium is received, unless at the time of payment we receive Written
Notice to the contrary. The portion of a Net Premium to be applied to each
selected Subaccount and the Guaranteed Account must be a whole percentage.
TRANSFER PRIVILEGE. Before the Maturity Date, you may transfer all or part of
the amount in the Subaccount(s) to another Subaccount(s) or to the Guaranteed
Account, or transfer a part of the amount in the Guaranteed Account to the
Subaccount(s), subject to the availability of a Subaccount or shares of a
portfolio.
The minimum transfer amount is shown in the Contract Schedule.
If a transfer amount reduces the amount in a Subaccount or the Guaranteed
Account to less than $500, we reserve the right to treat the transfer request as
a request to transfer the entire amount in that Subaccount or Guaranteed
Account.
RESTRICTIONS ON TRANSFERS FROM GUARANTEED ACCOUNT. You may transfer a part of
the amount in the Guaranteed Account to the Subaccount(s) of the Variable
Account, subject to these additional restrictions:
1. we allow only one transfer each year and this transfer must be within the
period that is 30 days before and 30 days after the Contract Anniversary.
An unused transfer option does not carry over to the next year; and
2. the maximum transfer amount is 25% of the Contract's Guaranteed Account
Value on the date of the transfer, unless the balance after the transfer
is less than $500.
We will make the transfer on the Contract Anniversary if your Written Notice
is received prior to the Contract Anniversary; if your Written Notice is
received after the Contract Anniversary, we will make the transfer as of the
date we receive your request at our Service Center.
Page 9
Form PL516
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CONTRACT VALUES
CONTRACT ACCOUNT VALUE. The Contract Account Value is the sum of the Variable
Account Value and the Guaranteed Account Value.
CASH SURRENDER VALUE. The Cash Surrender Value is the Contract Account Value,
less any applicable Surrender Charge. The Cash Surrender Value will be
determined on the date we receive your Written Notice for surrender and this
Contract at our Service Center.
You may surrender this Contract for its Cash Surrender Value at any time
before the earlier of the death of the Annuitant or the Maturity Date. You may
elect to have the Cash Surrender Value (less any applicable deduction for
premium tax) paid in a single sum or under a Payment Option. This Contract ends
when we pay the Cash Surrender Value or apply such sum under a Payment Option.
WITHDRAWALS. You may withdraw part of the Cash Surrender Value at any time
before the earlier of the death of the Annuitant or the Maturity Date, subject
to these limits:
1. the minimum withdrawal amount is shown in the Contract Schedule;
2. the maximum withdrawal is the amount that would leave a minimum Cash
Surrender Value of the amount shown in the Contract Schedule; and
3. a withdrawal request which would reduce the amount in a Subaccount or the
Guaranteed Account below $500 will be treated as a request for a full
withdrawal of the amount in that Subaccount or Guaranteed Account.
On the date we receive your Written Notice for a withdrawal at our Service
Center we will withdraw the amount of the withdrawal from the Contract Account
Value. We will then deduct any applicable Surrender Charge from the amount
withdrawn, unless you request in advance that any applicable Surrender Charge be
deducted from the remaining Contract Account Value. In that event, the amount
that will be withdrawn from the Contract Account Value will equal the amount of
the withdrawal request plus any applicable Surrender Charge.
You may specify the amount to be withdrawn from certain Subaccounts or the
Guaranteed Account for your partial withdrawal, If you do not specify this
information to us, or the amount in the designated Subaccounts or Guaranteed
Account is inadequate to comply with your request, we will make the withdrawal
based on the proportion that your Subaccount Values and the Guaranteed Account
Value bear to the Contract Account Value prior to the withdrawal.
SURRENDER CHARGE. The applicable percentage from the Surrender Charge Table in
the Contract Schedule will be deducted upon any withdrawal or surrender and will
be applied as follows:
a. to the entire withdrawal or surrender amount if such withdrawal or
surrender occurs during the first Contract Year; or
b. to the portion of the withdrawal or surrender which is in excess of the
percentage listed in the table below for the applicable Contract Year:
% OF CONTRACT
CONTRACT YEAR ACCOUNT VALUE
------------- -------------
1 0%
2 20%
3 30%
4 40%
5 50%
6 60%
7 70%
Amounts up to the Contract Account Value percentage shown above are available
for withdrawal in the applicable Contract Year without the imposition of a
surrender charge. However, starting in Contract Year 3 and in each subsequent
Contract Year listed above, the applicable percentage for each year will be
reduced by the total percentage withdrawn without imposition of surrender charge
from the Contract Account Value in the prior years.
There is no limit on the number of withdrawals occurring in any Contract
Year.
If the Contract is being surrendered, the applicable Surrender Charge will be
deducted from the Contract Account Value in determining the Cash Surrender
Value.
For a partial withdrawal, any applicable Surrender Charge will be deducted
from the amount withdrawn, unless you request in advance that the Surrender
Charge be deducted from the remaining Contract Account Value.
In no event will the Surrender Charge exceed 8.5% of the total premiums
received under the Contract.
Page 10
Form PL516
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ANNUAL ADMINISTRATION FEE. We will assess the Annual Administration Fee shown in
the Contract Schedule:
1. for the prior Contract Year, on the Contract Anniversary; or
2. for the current Contract Year on the date this Contract is surrendered for
its Cash Surrender Value or on the Maturity Date (unless the Contract is
surrendered on a Contract Anniversary or the Maturity Date is a Contract
Anniversary and the fee is assessed under 1 above).
The fee will be assessed against the Subaccount(s) and Guaranteed Account
based on the proportion that your Subaccount Values and the Guaranteed Account
Value bear to the Contract Account Value.
If the fee is obtained from the Subaccounts, we will cancel the appropriate
number of units credited to this Contract based on the Unit Value at the end of
the Valuation Period when the fee is assessed. If the fee is obtained from the
Guaranteed Account, we will reduce this Contract's Guaranteed Account Value by
the amount of the fee.
MATURITY DATE. No Surrender Charge will be applied to the Contract Account Value
on the Maturity Date if the proceeds are applied under a Payment Option. If the
proceeds are paid in a lump sum on the Maturity Date, the proceeds will equal
the Cash Surrender Value on such date.
You may change the Maturity Date, subject to these limitations:
1. we must receive your Written Notice at our Service Center at least 30 days
before the current Maturity Date;
2. the requested Maturity Date must be a date that is at least 30 days after
we receive your Written Notice; and
3. the requested Maturity Date must be not later than the first day of the
month after the Annuitant's 90th birthday, or any earlier date required by
law.
TERMINATION. We may pay you the Cash Surrender Value and end this Contract if,
before the Maturity Date, all of these events simultaneously exist:
1. you have not paid any premiums for at least two years;
2. the Contract Account Value is less than $2,000; and
3. the total premiums paid, less any partial withdrawals, is less than
$2,000.
We will mail you a notice of our intention to end this Contract at least six
months in advance. This Contract will automatically terminate on the date
specified in the notice, unless we receive an additional premium payment before
the termination date specified in the notice. This additional premium payment
must be for at least the minimum additional premium amount specified in the
Contract Schedule.
BASIS OF VALUES. Any paid-up annuity, cash surrender or death benefits that may
be available are at least equal to the minimum required by law in the state in
which this Contract is delivered. A detailed statement of the method used to
compute the minimum values has been filed, where required, with the insurance
officials of the jurisdiction in which this Contract is delivered.
PAYMENT OF PROCEEDS
PROCEEDS. Proceeds means the amount we will pay when the first of the following
events occurs: the Maturity Date; the Contract is surrendered; or we receive due
proof of death of the Annuitant or the Owner. This Contract ends when we pay the
proceeds.
"Due Proof of Death" is proof of death that is satisfactory to us. Such proof
may consist of:
1. a certified copy of the death certificate;and/or
2. a certified copy of the decree of a court of competent jurisdiction as to
the finding of death.
We will deduct any applicable premium tax from the proceeds described below,
unless we already deducted the tax from the premiums when paid. (See the "Net
Premium" provision.)
PROCEEDS ON MATURITY DATE. If you have not elected to receive the proceeds in a
lump sum, the proceeds we will pay is the Contract Account Value, which we will
apply under a Payment Option on the Maturity Date. (See the "Maturity Date"
provision and the "Payment Options" section.) If the proceeds are paid in a lump
sum, we will pay the Cash Surrender Value.
PROCEEDS ON SURRENDER. If you surrender this Contract before the earlier of the
death of the Annuitant or the Maturity Date, the proceeds we will pay is the
Cash Surrender Value. (See the "Maturity Date" provision concerning changing the
Maturity Date and having the Contract Account Value applied under a Payment
Option.)
Page 11
Form PL516
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PROCEEDS ON DEATH OF ANNUITANT BEFORE MATURITY DATE. If the Annuitant dies
before the Maturity Date, the proceeds we will pay to the Beneficiary is the
death benefit.
If the Annuitant dies before the end of the seventh Contract Year, the death
benefit will equal the greater of:
1. the premiums paid, less any withdrawals including applicable surrender
charges; or
2. the Contract Account Value on the date we receive due proof of the
Annuitant's death.
If the Annuitant dies after the end of the seventh Contract Year, the death
benefit will equal the greatest of:
1. the Contract Account Value as of the end of the seventh Contract Year plus
any subsequent deposits less any subsequent withdrawals; or
2. the Contract Account Value on the date we receive due proof of the
Annuitant's death; or
3. the premiums paid less any withdrawals including applicable surrender
charges.
The proceeds will be paid in a lump sum or under a Payment Option. If you are
the Annuitant, the proceeds must be distributed in accordance with the rules set
forth in "Proceeds on Death of an Owner" for an Owner's death before the
Maturity Date. No death benefit is payable if this Contract is surrendered
before the Annuitant's death.
PROCEEDS ON DEATH OF AN OWNER. If any Owner dies before the Maturity Date, the
Contract Account Value (or if the deceased Owner is the Annuitant, the proceeds
payable on the Annuitant's death) must be distributed to the Beneficiary within
five years after the date of such death.
If any Owner dies on or after the Maturity Date, any remaining payments must
be distributed at least as rapidly as under the Payment Option in effect on the
date of such death.
These distribution requirements will be considered satisfied as to any
portion of the proceeds:
1. payable to or for the benefit of a designated beneficiary; and
2. which is distributed over the life (or period not exceeding the life
expectancy) of that Beneficiary, provided that such distributions begin
within one year of the Owner's death.
The designated beneficiary is the person designated by the Owner as
Beneficiary and to whom the ownership of the Contract passes by reason of an
Owner's death and must be a natural person. However, if the Owner's spouse is
the designated beneficiary, the Contract may be continued with the surviving
spouse as the new Owner. If the Contract has Joint Owners, the surviving Joint
Owner will be the designated beneficiary.
If you are not an individual, the Annuitant as determined in accordance with
section 72(s) of the Internal Revenue Code (i.e. the individual the events in
the life of whom are of primary importance in effecting the timing or amount of
the payout under the Contract) will be treated as Owner for purposes of these
distribution requirements, and any change in the Annuitant will be treated as
the death of the Owner.
PAYMENTS. We will usually pay any proceeds, withdrawals, or cash surrenders
within seven business days after:
1. we receive and file your Written Notice for a withdrawal or a cash
surrender; or
2. we receive and file due proof of death of the Owner or Annuitant.
However, we can postpone the payment of proceeds, withdrawals, or cash
surrenders or the transfer of amounts between Subaccounts if:
1. the New York Stock Exchange is closed, other than customary weekend and
holiday closings, or trading on the exchange is restricted as determined
by the Securities and Exchange Commission; or
2. the Securities and Exchange Commission permits by an order the
postponement for the protection of contractholders; or
3. the Securities and Exchange Commission determines that an emergency exists
that would make the disposal of securities held in the Variable Account or
the determination of their value not reasonably practicable; or
4. the Fund is permitted by law or regulation to postpone payment of
proceeds.
If a recent check or draft has been submitted, we have the right to defer
payment of the Contract Account Value, Cash Surrender Value or death benefit
until such check or draft has been honored.
We have the right to defer payment of any withdrawal, transfer or Cash
Surrender Value from the Guaranteed Account for up to six months from the date
we receive your Written Notice for a withdrawal or surrender.
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Form PL516
13
INTEREST ON PROCEEDS. We will pay interest on proceeds if we do not pay the
proceeds in a single sum or begin paying the proceeds under a Payment Option:
1. within 30 days after the proceeds become payable; or
2. within the time required by the applicable jurisdiction, if less than 30
days.
This interest will accrue from the date the proceeds become payable to the
date of payment, but not for more than one year, at an annual rate of 3%, or the
rate and time required by law, if greater.
CONFORMITY WITH LAWS. To the extent this Contract conflicts with any applicable
laws or the requirements of the Internal Revenue Service concerning
distributions on death, this Contract shall be considered to be amended to
conform with such requirements.
PAYMENT OPTIONS
ELECTION OF OPTION. The following options are available to you during your
lifetime. They are also available to the Beneficiary after your death, if you
have not selected an option for such Beneficiary.
You may elect to have the Cash Surrender Value, Contract Account Value or
death benefit paid in accordance with any one of the options described below or
in any other manner acceptable to us and permissible under applicable law. If no
election has been made, the automatic option shall be Option B. The amount paid
under these options is fixed and does not depend on the investment performance
of the Variable Account.
OPTION A - LIFE ANNUITY: An income payable during the lifetime of the Payee,
ceasing with the last payment due prior to the death of the Payee, according to
the Option Table, Life Only column.
OPTION B - LIFE ANNUITY WITH 10 YEARS GUARANTEED: An income payable during the
lifetime of the Payee with the guarantee that payments shall be made for a
period of not less than 10 years according to the Option Table, 10 Year Period
Certain column.
Under Option B, if any Beneficiary dies while receiving payment, the present
value of the current dollar amount on the date of death of any remaining
guaranteed payments shall be paid in one sum to the executors or administrators
of the Beneficiary unless otherwise provided in writing. Calculation of such
present value shall be at 3% which is the rate of interest assumed in computing
the amount of annuity payments.
ALTERNATE INCOME OPTION. In lieu of one of the above options you may elect to
settle the Cash Surrender Value, Contract Account Value or death benefit under
an alternate income option based on our single premium immediate annuity rates
in effect at the time of settlement. Such rates will be adjusted to a due basis
and the income thus produced will be increased by 4%. In no case will the
resulting income be less than that which would be payable if the amount were
used to purchase a single premium immediate annuity adjusted to a due basis.
GENERAL PROVISIONS. Annuity payments shall commence and continue subject to the
following provisions:
A. This Contract shall be surrendered to us at our Service Center. We shall
issue a Supplementary Contract stating the terms of payment under the
option elected.
B. Proof satisfactory to us of the identity, birth date and sex of any person
on whose life an annuity depends shall be provided to us before any
annuity payments will be made.
C. We shall make each annuity payment by check which shall be personally
endorsed by the person upon whose life the annuity depends, or other
evidence must be furnished that such person is alive.
D. No election of any option may be made under this Contract for any Payee
unless such election would produce a periodic payment of at least $50 to
that Payee. If at any time payments to be made become less than $50 each,
we shall have the right to change the frequency of payments to such
interval as shall result in the payment of at least $50. Subject to this
condition, payments may be made annually, semi-annually, quarterly or
monthly.
E. If the Payee is other than you, the election of a Payment Option shall
require our consent.
F. We shall deduct from the Cash Surrender Value or the Contract Account
Value any Premium Tax at the time income payments commence.
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Form PL516
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OPTION TABLE
GUARANTEED AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000 OF
ANNUITY VALUE APPLIED
GUARANTEED MONTHLY PAYMENTS GUARANTEED MONTHLY PAYMENTS
Age of Payee 10 Year Age of Payee 10 Year
Life Only Period Life Only Period
Male Female (Option A) Certain Male Female (Option A) Certain
(Option B) (Option B)
---- ------ ---------- ------- ---- ------ ---------- -------
5* $2.70 $2.70 45 50 $3.59 $3.58
6 2.71 2.71 46 51 3.63 3.62
7 2.72 2.72 47 52 3.68 3.67
8 2.72 2.73 48 53 3.73 3.72
9 2.73 2.73 49 54 3.78 3.76
5* 10 2.74 2.74 50 55 3.83 3.82
6 11 2.75 2.75 51 56 3.89 3.87
7 12 2.76 2.76 52 57 3.95 3.93
8 13 2.77 2.77 53 58 4.01 3.99
9 14 2.78 2.78 54 59 4.07 4.05
10 15 2.79 2.79 55 60 4.14 4.11
11 16 2.80 2.80 56 61 4.21 4.18
12 17 2.81 2.81 57 62 4.29 4.25
13 is 2.82 2.83 58 63 4.37 4.33
14 19 2.83 2.84 59 64 4.46 4.41
15 20 2.85 2.85 60 65 4.55 4.50
16 21 2.86 2.86 61 66 4.64 4.58
17 22 2.87 2.88 62 67 4.75 4.68
18 23 2.89 2.89 63 68 4.86 4.78
19 24 2.90 2.90 64 69 4.97 4.88
20 25 2.92 2.92 65 70 5.09 4.99
21 26 2.93 2.93 66 71 5.22 5.10
22 27 2.95 2.95 67 72 5.36 5.21
23 28 2.96 2.97 68 73 5.51 5.34
24 29 2.98 2.98 69 74 5.67 5.46
25 30 3.00 3.00 70 75 5.83 5.60
26 31 3.02 3.02 71 76 6.01 5.73
27 32 3.04 3.04 72 77 6.19 5.87
28 33 3.06 3.06 73 78 6.39 6.02
29 34 3.08 3.08 74 79 6.60 6.17
30 35 3.10 3.10 75 so 6.82 6.32
31 36 3.13 3.13 76 81 7.06 6.48
32 37 3.15 3.15 77 82 7.31 6.64
33 38 3.18 3.18 78 83 7.58 6.80
34 39 3.20 3.20 79 84 7.87 6.97
35 40 3.23 3.23 80 85** 8.17 7.13
36 41 3.26 3.26 81 8.49 7.29
37 42 3.29 3.29 82 8.83 7.45
38 43 3.32 3.32 83 9.19 7.61
39 44 3.35 3.35 84 9.57 7.77
40 45 3.39 3.39 85** 9.96 7.92
41 46 3.42 3.42
42 47 3.46 3.46
43 48 3.50 3.50
44 49 3.54 3.54
----------
*Payment shown applies to all younger ages.
**Payment shown applies to all older ages.
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Form PL516
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FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
Flexible premiums as stated in the Premiums Provision.
Contract values are variable, except for amounts in the Guaranteed Account.
After the Maturity Date, Payment Options are on a guaranteed basis.
Death benefit payable upon death of Annuitant before Maturity Date.
Non-participating - Contract does not pay dividends.
[PROVIDENTMUTUAL LOGO]
PROVIDENTMUTUAL LIFE AND ANNUITY COMPANY OF AMERICA
A STOCK LIFE INSURANCE COMPANY
000 Xxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000
Form PL516
