We, National Life Insurance Company, agree to pay the Death Benefit to the Beneficiary, subject to the terms of this policy, when we receive at our Home Office due proof that both of the Insureds died while this policy was in force. The final section...
1
EXHIBIT 1.A.(5)(a)
We, National Life Insurance Company, agree
to pay the Death Benefit to the
Beneficiary, subject to the terms of this
policy, when we receive at our Home Office
due proof that both of the Insureds died
while this policy was in force.
The final section of this policy, General
Terms of this Policy, defines terms used
in this policy.
ROLES IN THIS POLICY
---------------------------------------------------------------------
If used, the term "estate" of any person
shall be deemed to be a designation of the
executors or administrators of that person's
estate.
OWNER
The Owner holds all rights under this
policy. The Owner may take action without
the consent and against the interest of any
revocable Beneficiary and any contingent
owner. If the Owner has waived the right to
change the Beneficiary, action may be taken
by the Owner only with the written consent
of all irrevocable Beneficiaries. These
actions may be taken only during the lives
of one or both of the Insureds.
If an instrument of trust is identified as
the Owner of this contract, ownership will
extend to such trust as amended if the trust
is amendable, or to the successor(s) in said
trust or assigns.
INSUREDS
The Death Benefit becomes payable upon the
death of the second of the Insureds to die.
The Insureds, in their role as the Insureds,
have no rights and receive no benefits under
this policy.
BENEFICIARY
The Beneficiary receives the Death Benefit.
Unless later changed, the Beneficiary shall
be as stated in the application. The
interest of any Beneficiary who predeceases
the second of the Insureds to die shall vest
in the Owner unless otherwise stated.
Where two or more Beneficiaries are
designated to take in the alternative based
on the order of the Insureds' deaths and
there is not sufficient evidence that the
Insureds died other than simultaneously, one
half of the Death Benefit shall be paid as
if the first Insured had survived the second
Insured, and one half shall be paid as if
the second Insured had survived the first
Insured. This shall not apply if the
application or the Owner has provided for a
different payment.
CHANGE OF
BENEFICIARY
The Owner has the right to change the
Beneficiary. If the Owner expressly waives
this right, no change can be made without
the written consent of the Beneficiary.
A new Beneficiary may be named during the
lives of one or both of the Insureds by
filing at our Home Office written notice in
such form as we may require. When notice is
received at our Home Office, the change
shall take effect as of the date the notice
is signed whether or not either Insured is
living at the time of receipt. We will not
be liable for any payment we make before
receipt of the written notice at our Home
Office.
--------------------------------------------------------------------------------
7461(0398)
2
TRUST
BENEFICIARY
Unless an authorized officer or registrar of
the Company explicitly agrees otherwise in
writing, the following provision shall apply
when a trust is named as Beneficiary.
In no event is the Company responsible for
the application or disposition of any
proceeds it pays to a Trust Beneficiary.
Payment to a Trust Beneficiary is a full
discharge of the liability of the Company.
If a designated trust provides for successor
trustees, the designation in this policy
includes successor trustees. Likewise, if
the trust allows amendments, the trust, if
so amended, remains as a designated
Beneficiary.
A Trust Beneficiary is considered to be a
Beneficiary who did not survive the Insureds
if:
1. the trust has been terminated; or
2. the specified testamentary trust
does not qualify as such; or
3. for any other reason a Trust
Beneficiary is not entitled to
any proceeds.
UNNAMED
BENEFICIARY
We may rely on an affidavit by any person
who in our judgment knows the facts to
identify any Beneficiary not specified by
name. All our liability shall cease when we
pay on the basis of such affidavit.
If used, the term "children" of any person
shall include only lawful children born to
or legally adopted by that person.
ASSIGNMENTS
If this contract is assigned, such
assignment shall transfer to the assignee
the interest of:
1. any Beneficiary whom the assignor
can change; and
2. any contingent owner.
If the assignee acquires a right to
proceeds, they shall be paid in one sum even
though a Payment Option may be in effect at
the time the assignment was signed. However,
if we specifically agree, an assignment may
limit the method of payment of any proceeds.
We are not responsible for the validity or
effect of any assignment of this policy. We
will not recognize any assignment until it
has been filed at our Home Office.
SPENDTHRIFT
PROVISION
If we receive at our Home Office written
request by the Owner for this Spendthrift
Provision, then, to the extent allowed by
law and by this policy:
1. only the Owner may transfer,
anticipate, commute, or encumber
the proceeds of this policy; and
2. only legal process against the
Owner may affect the proceeds of
this policy.
Any proceeds payable after this request is
withdrawn by the Owner shall not be affected
by this provision.
PREMIUMS
---------------------------------------------------------------------
--------------------------------------------------------------------------------
7461(0398)
3
POLICY PROTECTION
PERIOD
The first 60 months following the Date of
Issue during which this policy remains
continuously in force is referred to as the
Policy Protection Period.
MINIMUM INITIAL
PREMIUM
A premium at least equal to the Minimum
Initial Premium stated in the Data Section
is due on the Date of Issue. Thereafter,
premiums may be paid towards this policy,
under the circumstances described below,
until the Final Premium Acceptance Date
stated in the Data Section.
MINIMUM
MONTHLY
PREMIUM
The Minimum Monthly Premium specific to this
policy is stated in the Data Section. It is
subject to change upon Changes in Face
Amount and Death Benefit Option, and upon
adding, changing, or deleting rider
coverages on this contract.
CUMULATIVE
MINIMUM
MONTHLY
PREMIUM
The Cumulative Minimum Monthly Premium at
any time is the sum of all Minimum Monthly
Premiums in effect on this policy for all
months elapsed since the Date of Issue.
During the Policy Protection Period payment
of total accumulated premiums, in excess of
withdrawals and debt, at least equal to the
Cumulative Minimum Monthly Premium, will
keep the policy in force to the next
Monthly Policy Date. If during the Policy
Protection Period, while this Cumulative
Minimum Monthly Premium test is met, the
Cash Surrender Value is not sufficient to
cover the Monthly Deductions, Monthly
Deductions will be deducted from the
Accumulated Value until the Accumulated
Value is exhausted, and will thereafter be
forgiven until such time as this policy has
positive Accumulated Value.
This policy will always remain
in force, both during the Policy Protection
Period and beyond, as long as the Cash
Surrender Value is sufficient to provide for
Monthly Deductions.
PLANNED PERIODIC
PREMIUMS
The Planned Periodic Premiums are the
premiums the Applicant has requested be
billed. The Owner may change the amount or
frequency of Planned Periodic Premiums at
any time by sending a written notice to us
at our Home Office.
Planned Periodic Premiums, however, may not
be more frequent than quarterly, except for
policies which are part of a group or
pension plan on which premiums are
accepted monthly, or for policies on which
the premiums are automatically withdrawn
from a checking account according to the
terms of a special billing arrangement
agreed to by the Company.
In addition, we will accept unscheduled
premiums, which are premiums in addition to
the Minimum Initial, Minimum Monthly, or
Planned Periodic Premiums.
All premiums are limited by a minimum and a
maximum. The minimum is $100 per premium
payment. The maximum is any limit imposed
by the Internal Revenue Code for qualifying
the policy as "Life Insurance" for Federal
Income Tax purposes. We will
--------------------------------------------------------------------------------
7461(0398)
4
not accept any premium in excess of the
maximum. We reserve the right to return
any premium, the payment of which, through
application of the Death Benefit Standard,
increases the Death Benefit of this policy
by an amount exceeding the dollar amount of
the premium paid.
No premium will be accepted on this policy
on or after the Final Premium Acceptance
Date.
The first premium may be paid to us either
through our duly authorized agent in
exchange for a receipt signed by that agent,
or at our Home Office. All subsequent
premiums must be paid to us at our Home
Office, and will be credited and allocated
on the day we receive them.
NET PREMIUM
A Net Premium is the amount of any premium
paid after the deduction of the applicable
Premium Expense Charge associated with that
premium.
PREMIUM
EXPENSE
CHARGE
We will deduct from each premium paid
percentages for the payment of premium taxes
before allocating such premium to the
Accumulated Value. The State Premium Tax
percentage and the percentage for Taxes
Attributed to Specified Policy Acquisition
Expenses under Internal Revenue Code Section
848 deducted from the premium paid as of the
Date of Issue of the policy are stated in
the Data Section.
We will deduct from each premium paid a
Percent of Premium Charge before allocating
such premium to the Accumulated Value. The
Current Percent of Premium Charge will not
exceed the Guaranteed Maximum Percent of
Premium percentages stated in the Data
Section.
PREMIUM
ALLOCATION
The Owner has the right to designate the
allocation of net premiums among the Fixed
Account and the Sub-Accounts of the Variable
Account. The initial allocation is shown in
the Data Section. That portion of the
premium due on the Date of Issue which is
allocated to the Fixed Account will be
transferred to the Fixed Account upon
receipt. However, any portion of the premium
due on the Date of Issue which is allocated
to a Sub-Account of the Variable Account
will be held in the Money Market Fund
Sub-Account until the end of the 20th day
following the Date of Issue. It will then be
transferred to any other accounts as
designated by the Owner.
The allocation must be made in percentages.
Each percentage must be a whole number.
Each allocation made must be at least five
percent.
The Owner may change the allocation of
future premiums by notifying us in writing
at our Home Office. Any allocation made will
remain in effect until changed. We reserve
the right to restrict the number of
different Sub-Accounts to which premiums are
allocated over the life of this contract to
seventeen.
GRACE PERIOD
A Grace Period shall start:
5
- If on any Monthly Policy Date during
the Policy Protection Period,
both of the following occur:
1. the amount of Cash Surrender
Value is smaller than the amount
of the Monthly Deductions on that
date; and
2. the Cumulative Minimum Monthly
Premium is greater than a sum
equal to:
a) all premiums paid; less
b) all withdrawals made; less
c) any debt to us on this policy.
- If on any Monthly Policy Date on or
after the end of the Policy Protection
Period, the Cash Surrender Value is
smaller than the Monthly Deductions on
such date.
A Grace Period shall not be less than 61
days. During a Grace Period this policy
shall remain in force.
The premium needed to keep the policy in
force beyond a Grace Period shall be the net
premium sufficient to produce a Cash
Surrender Value equal to three times the
Monthly Deduction due on the date the Grace
Period began.
We will mail notice of the premium needed to
the Owner. If the premium needed is unpaid
on the 61st day after the notice is sent,
then the Grace Period shall end and this
policy shall terminate without value. This
policy shall then be null and void and all
rights shall cease, except as may be
provided in Reinstatement.
A Grace Period will not begin solely because
payments of Planned Periodic Premiums are
discontinued. Whether or not premiums are
paid, Charges Against the Accumulated Value
will be made.
REINSTATEMENT
If this policy terminates after the end of a
Grace Period, it may be reinstated. It must
be reinstated on a Monthly Policy Date
within five years from the start of such
Grace Period.
For Reinstatement we will require:
1. an application for Reinstatement;
and
2. proof to our satisfaction that
each Insured who was living at
the end of the Grace Period is
living and insurable; and
3. payment of a net premium which
will make the Cash Surrender
Value sufficient to provide:
a) two times the Monthly
Deduction due on the date
the Grace Period began; plus
b) three times the Monthly
Deduction due on the date of
Reinstatement.
We will send the Owner notice of the
required payment upon request.
In the event of Reinstatement, all schedules
of charges in effect on the date the Grace
Period began, except the Cost of Insurance
Charges, will resume as if uninterrupted.
The Cost of Insurance Charges will be
applied at the Attained Ages of the
Insureds.
6
DEATH BENEFIT AND POLICY CHANGES
---------------------------------------------------------------------
DEATH BENEFIT
We will pay the Death Benefit to the
Beneficiary when we receive at our Home
Office due proof that both Insureds died
while this policy was in force. We will pay
the Death Benefit in one sum unless a
Payment Option is chosen. If the Death
Benefit is paid in one sum, it shall be
increased by interest from the date we
receive proof of death of the second of the
Insureds to die to the date of payment. We
will set the rate of interest at not less
than the Minimum Interest Paid on Death
Claims percentage shown in the Data Section.
SUICIDE
LIMITATION
If either of the Insureds dies within two
years of the Date of Issue as the result of
suicide, while sane or insane, we will pay
only a sum equal to:
1. the premiums paid; less
2. any debt to us on this policy; less
3. any withdrawals made.
This policy shall immediately terminate on
the first such death by suicide. Payment
will be made to the Beneficiary.
A similar two year period shall apply to any
increase in Face Amount for which an
application is required. Such period shall
begin on the Effective Date of any such
increase. During such period if either
Insured dies as the result of suicide, we
will terminate the increase segment, and
will refund to the Owner only a sum equal to
the Cost of Insurance Charges that we have
deducted from the Accumulated Value for such
increase. However, if such increase became
effective within two years after the
Effective Date of a Reinstatement, we will
pay only the amount set forth in the next
paragraph.
7
If this policy is reinstated, a similar two
year period shall start from the Effective
Date of the Reinstatement. During such
period, if either Insured dies as the result
of suicide, while sane or insane, we will
pay only a sum equal to:
1. the premiums paid since the
Effective Date of the
Reinstatement; less
2. any debt to us on this policy;
less
3. any withdrawals made since the
Effective Date of the
Reinstatement.
NOTICE OF DEATH
AND CLAIMS
The Owner must notify us as soon as
reasonably possible of the death of each
Insured. We may require proof whether both
Insureds are living two years from the Date
of Issue. On the death of the first Insured
to die we will require the Owner to provide
us with evidence of death and proof of age
and, if the death is within two years from
the Date of Issue, the cause of death.
QUALIFICATION AS
LIFE INSURANCE
This policy will retain its qualification
as "Life Insurance" under Section 7702 of
the Internal Revenue Code according to the
requirements of the Guideline Premium and
Cash Value Corridor Test.
DEATH BENEFIT
OPTIONS
The Owner may elect either of two Death
Benefit Options, Option A or Option B, for
the period prior to the Final Premium
Acceptance Date. The Death Benefit Option in
effect on this policy is stated in the Data
Section.
OPTION A
Under Option A the Death Benefit shall be
the greater of the Death Benefit Standard or
the following:
1. the Face Amount on the date of
death of the second of the
Insureds to die; less
2. the amount of any Monthly
Deductions then due; less
3. any debt to us on this policy.
OPTION B
Under Option B the Death Benefit shall be
the greater of the Death Benefit Standard or
the following:
1. the Face Amount on the date of
death of the second of the
Insureds to die; plus
2. the Accumulated Value of this
policy on the date of death of
the second of the Insureds to
die; less
3. the amount of any Monthly
Deductions then due; less
4. any debt to us on this policy.
DEATH BENEFIT
STANDARD
The Death Benefit Standard is established in
conformance with Section 7702 of the
Internal Revenue Code, which defines "Life
Insurance" for Federal Income Tax
purposes. The Death Benefit Standard is:
1. the Death Benefit Factor
multiplied by the Accumulated
Value of the policy on the date
of death of the second of the
Insureds to die; less
2. the amount of any Monthly
Deductions then due; less
3. any debt to us on this policy.
The Death Benefit Factors for this policy
are stated in the Data Section.
CHANGES IN FACE
AMOUNT AND
8
DEATH BENEFIT
OPTION
The Face Amount is the sum of the Base
Coverage and any Additional Protection
Benefit provided through an Additional
Protection Benefit Rider attached to this
policy and all Automatic Increase Coverages
added under an Automatic Increase Rider
attached to this policy.
The Owner may request any of the following
changes. We will make a change subject to
the conditions stated. In addition, the
following conditions apply to all of these
changes:
1. These changes may be made only
after the first Policy Anniversary.
2. Any change will initiate a
redetermination of the Minimum
Monthly Premium.
We will send the Owner a revised or
additional Data Section if any of these
changes is made.
FACE AMOUNT INCREASES. A Face Amount
Increase may be made only while both
Insureds are living.
Face Amount Increases may be made in
conformance with our policy issue limits. We
will require an application from the Owner
and proof to our satisfaction that both
Insureds are then insurable. An increase in
Face Amount, and an associated
redetermination of the Minimum Monthly
Premium, shall be effective upon the Monthly
Policy Date next following our approval. Any
increase in Face Amount must be at least as
large as the Minimum Increase Amount stated
in the Data Section.
Face Amount Increases may be limited by our
condition that the Accumulated Value
immediately following the increase must be
at least equal to the sum of the Surrender
Charges associated with the original
coverage and the increase in coverage.
FACE AMOUNT DECREASES. We will require a
written request by the Owner. A decrease in
Face Amount, and an associated
redetermination of the Minimum Monthly
Premium, shall be effective upon the Monthly
Policy Date on or next following our receipt
of the request.
Decreases shall not be permitted which would
reduce the Face Amount to less than any of
the following:
- the minimum insurance
amount for which the policy
would qualify as "Life
Insurance" for Federal
Income Tax purposes under
the Internal Revenue Code; or
- the Minimum Base Coverage shown
in the Data Section; or
- 75% of the largest Face Amount
in force at any time in the
twelve policy months
immediately preceding our
receipt of the request.
A decrease in total coverage shall apply in
the following order:
- first, to any increases in Face
Amount in the reverse order in
which they were made;
- second, to the Face Amount on
the Date of Issue.
If an increase in Base Coverage, addition
of Additional Protection Benefit, and/or
addition of an Automatic Increase Coverage
were performed simultaneously, the
Automatic Increase Coverage will be removed
first, followed by the Additional
Protection Benefit, and finally any other
increases made in Base Coverage.
DEATH BENEFIT OPTION CHANGES. The Death
Benefit Option may be changed once each
Policy Year prior to the Final Premium
Acceptance Date. A Death Benefit Option
Change may be made only while both Insureds
are living. We will require a written
request from the Owner. A change will be
effective on the Monthly Policy Date on or
next following our receipt of the request.
The change will be made only if after such
9
change the policy would qualify as "Life
Insurance" for Federal Income Tax purposes
under the Internal Revenue Code.
Upon a change from Option A to Option B, the
Face Amount shall decrease by an amount
equal to the Accumulated Value of the policy
just prior to the Effective Date of the
change. However, the change may be made only
if after such change the Face Amount would
not be below the Minimum Base Coverage shown
in the Data Section. The decrease in Face
Amount will be performed in the order
described in Face Amount Decreases, above.
Upon a change from Option B to Option A, the
Face Amount shall increase by an amount
equal to the Accumulated Value just prior to
the Effective Date of the change.
INSURANCE
CONTINUATION
On the Final Premium Acceptance Date stated
in the Data Section, if this policy is still
in force, the Face Amount of this policy
will be set equal to the Accumulated Value,
and the Death Benefit Option will
automatically revert to Option A. The Death
Benefit Option may not thereafter be
changed, and no additional premium will be
accepted on this policy. All Accumulated
Value will be transferred to the Fixed
Account, and no transfers will be thereafter
allowed. All Monthly Deductions on this
policy will cease. The Owner may, however,
continue to access the Cash Surrender Value
and to make or repay Policy Loans.
INVESTMENT
---------------------------------------------------------------------
Investment of the Accumulated Value of the
policy may be made in the Fixed Account
and/or in one or more of the Sub-Accounts of
the National Variable Life Insurance Account
(herein called the "Variable Account"). The
Accumulated Value in the Variable Account is
based on the investment experience of the
chosen Sub-Account(s) of the Variable
Account, and may increase or decrease daily.
It is not guaranteed as to dollar amount.
FIXED ACCOUNT
The Fixed Account is composed of the
admitted assets of National Life Insurance
Company other than those in the Variable
Account or any other separate account.
INTEREST RATES
CREDITED TO THE
ACCUMULATED
VALUE IN THE
FIXED ACCOUNT
The rate of interest credited on any portion
of the Accumulated Value in the Fixed
Account shall never be less than the Minimum
Fixed Account Interest Rate shown in the
Data Section. We may credit interest at a
higher interest rate. Any higher interest
rate credited on Accumulated Value in the
Fixed Account shall remain in effect for at
least a one-year period.
Allocations to the Fixed Account made at
different times may be credited interest at
different rates. Each month we will declare
an interest rate to apply to amounts
allocated
10
or transferred to the Fixed Account during
that month. The rate declared on such
amounts will remain in effect for twelve
months. At the end of the twelve month
period, such amounts and accrued interest
thereon will rollover for interest crediting
at a new rate. The interest credited to such
rollover amounts may be at a different rate
than that applicable to new allocations to
the Fixed Account on that date.
Interest at different rates may be credited
to:
1. that portion which is equal to
any debt to us on this policy;
and
2. any portion in excess of any such
debt.
VARIABLE
ACCOUNT
The Variable Account is composed of assets
owned by National Life Insurance Company.
These assets are held separate and apart
from Fixed Account assets. The Variable
Account is devoted exclusively to the
investment of assets of variable life
insurance policies. Income, gains, and
losses from assets allocated to the Variable
Account, whether or not realized, are
credited to or charged against such account
without regard to our other income, gains,
or losses. The portion of the assets of the
Variable Account equal to the reserves and
other liabilities for these policies shall
not be chargeable with liabilities arising
out of any other business which we may
conduct.
We may transfer assets which exceed the
reserves and other liabilities of the
Variable Account to our Fixed 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 1940 Act").
It is also governed by applicable state law.
We may make certain changes if, in our sole
judgment, they would best serve the
interests of the owners of policies such as
this one or would be appropriate in carrying
out the purposes of such policies. Any
changes will be made only if permitted by
applicable laws and regulations. Also, when
required by law, we will obtain the approval
of policyowners of the changes and the
approval of any appropriate regulatory
authority.
For example, we may:
1. operate the Variable Account as a
management company under the 1940
Act;
2. deregister the Variable Account
under the 1940 Act if
registration is no longer
required; and
3. combine or substitute Variable
Accounts; and
4. create new Variable Accounts; and
5. transfer all or part of the
assets of the Variable Account to
another Variable Account or to
the Fixed Account; and
6. add new investment funds or
remove existing investment funds;
and
7. make any changes necessary to
comply with, or obtain and
continue any exemptions from the
1940 Act; and
8. make any other necessary
technical changes in this policy
to conform with any action this
provision permits us to take.
SUB-ACCOUNTS
The Variable Account has several
Sub-Accounts. Each Sub-Account will buy
shares of an investment fund. Each
investment fund represents a separate
investment portfolio.
11
If, in our judgment, an investment fund no
longer suits the investment goals of the
policy, or tax or marketing conditions so
warrant, we may substitute shares of another
investment fund or shares of another
investment company.
Income and realized and unrealized gains or
losses from the assets of each Sub- Account
of the Variable Account are credited to or
charged against that Sub-Account without
regard to income, gains, or losses in the
other Sub-Accounts of the Variable Account,
the Fixed Account, or any other separate
accounts. We reserve the right to credit or
charge a Sub-Account in a different manner
if required, or made appropriate, by reason
of a change in the law. We maintain records
of all purchases and redemptions of
investment fund shares by each of the
Sub-Accounts.
VALUATION
We will value the assets of each Sub-Account
of the Variable Account on each Valuation
Date.
TRANSFERS
Subject to any applicable Transfer Charges,
the Owner may transfer Accumulated Value
among the Sub-Accounts or to the Fixed
Account without limitation. However, only
one transfer from the Fixed Account to the
Variable Account may be made during any
Policy Year. The Accumulated Value
transferred from the Fixed Account in any
Policy Year may not exceed the greater of:
- 25% of the unloaned portion of the
Accumulated Value in the Fixed Account
immediately prior to the transfer; and
- $1,000.
POLICY VALUES
---------------------------------------------------------------------
ACCUMULATED
VALUE OF THE
POLICY
The Accumulated Value of the policy is equal
to the sum of the Accumulated Value in the
Fixed Account and the Accumulated Value in
the Variable Account.
ACCUMULATED
VALUE IN THE
FIXED ACCOUNT
The Accumulated Value in the Fixed Account
on any day is:
1. the Accumulated Value in the
Fixed Account on the just prior
Monthly Policy Date, if any; plus
2. interest on the Accumulated Value
in the Fixed Account on the just
prior Monthly Policy Date from
the just prior Monthly Policy
Date to such day; plus
3. the amount of all net premiums
accepted since the just prior
Monthly Policy Date which are
allocated to the Fixed Account;
plus
4. interest on item (3) from the
date of net premium allocation to
the Fixed Account to such day;
plus
5. the amount of all Accumulated
Values transferred to the Fixed
Account from a Sub-Account of the
Variable Account since the just
prior Monthly Policy Date; plus
12
6. interest on item (5) from the
date of the transfer to such day;
less
7. the amount of all Accumulated
Values transferred from the Fixed
Account to a Sub-Account of the
Variable Account since the just
prior Monthly Policy Date; less
8. interest on item (7) from
the date of transfer to such day;
less
9. the amount of all Accumulated
Values withdrawn from the Fixed
Account since the just prior
Monthly Policy Date; less
10. interest on item (9) from the
date of withdrawal to such day;
less
11. any Monthly Deduction allocated
to the Fixed Account for the
month next following the Monthly
Policy Date which is due on such
day.
ACCUMULATED
VALUE IN THE
VARIABLE
ACCOUNT
The Accumulated Value in the Variable
Account is the sum of the Accumulated Values
in each Sub-Account of the Variable Account.
On any later day which is a Valuation Date,
the policy's Accumulated Value in each
Sub-Account is the number of units in the
Sub-Account multiplied by the Unit Value on
that date.
On any date after the Date of Issue other
than a Valuation Date, the Accumulated Value
in a Sub-Account is the Accumulated Value of
such Sub-Account on the next following
Valuation Date.
UNITS IN A SUB-
ACCOUNT
Amounts allocated, transferred, or added to
a Sub-Account are used to purchase units in
that Sub-Account. Any such amount increases
the number of units credited to that
Sub-Account. The number of units credited to
the Sub-Account equals the dollar amount
directed to the Sub-Account divided by the
Unit Value for that Sub-Account for the
Valuation Date as of which the transaction
is performed.
Units are redeemed from a Sub-Account when
amounts are deducted, transferred, or
withdrawn from the Sub-Account. Any such
amount decreases the number of units
credited to that Sub-Account. The number of
units redeemed from the Sub-Account equals
the dollar amount redeemed from the
Sub-Account divided by the Unit Value for
that Sub-Account for the Valuation Date as
of which the transaction is performed.
UNIT VALUE
The Unit Value in a Sub-Account on any
Valuation Date is equal to that Unit Value
on the immediately preceding Valuation Date
multiplied by the Net Investment Factor in
effect for that Sub-Account.
NET INVESTMENT
FACTOR
Each Sub-Account of the Variable Account has
its own Net Investment Factor. The Net
Investment Factor measures the performance
of the Sub-Account for individual Valuation
Periods. The Net Investment Factor is
calculated as follows:
1. Take the net asset value per
share of the corresponding
investment fund on the current
Valuation Date.
13
2. Add the per share capital gain or
loss and dividend distribution of
the investment fund during the
current Valuation Period.
3. Divide the result of item (2) by
the net asset value per share of
the corresponding investment fund
on the just prior Valuation Date.
4. Subtract from the result of item
(3) any Tax Charge during the
current Valuation Period.
The result of item (4) is the Net Investment
Factor on the current Valuation Date.
Net asset values per share of corresponding
investment funds reflect fees and operating
expenses deducted by investment advisors.
ACCUMULATED
VALUE UPON
REINSTATEMENT
If this policy is reinstated, the
Accumulated Value on the date of
Reinstatement shall be:
1. the Accumulated Value on the date
the Grace Period began; less
2. two times the Monthly Deduction
due on the date the Grace Period
began; plus
3. the net premium paid to reinstate
the policy; less
4. the Monthly Deduction due on such
date.
CASH SURRENDER
VALUE
The Owner may, by written request to us,
surrender this policy while one or both of
the Insureds are living for its Cash
Surrender Value. We may require that the
policy be returned to us. When this policy
has been surrendered, it shall be null and
void and all rights shall cease. Proceeds
shall be paid in one lump sum unless a
Payment Option is chosen.
The Cash Surrender Value on any day shall be
equal to:
1. the Accumulated Value on such
day; less
2. any debt to us on this policy;
less
3. any Surrender Charges which apply
on such day.
SURRENDER
CHARGES
Surrender Charges, according to the schedule
presented in the Data Section, apply during
the first 120 Policy Months following the
Effective Date of any segment of coverage.
An increase in Base Coverage will be
accompanied by a New Data Section which
will present the Surrender Charge Schedule
associated with the increase.
DIVIDENDS
We may credit this policy with shares,
called dividends, from our divisible
surplus. However, it is expected that no
dividends will be credited to this policy.
Any dividends shall be set by us and shall
be credited on the policy anniversary. Any
dividends credited shall be paid in cash.
CHARGES AGAINST THE ACCUMULATED VALUE
---------------------------------------------------------------------
TAX CHARGE
14
We reserve the right to deduct any charge
for taxes or amounts set aside as a reserve
for taxes in determining the value of an
Accumulated Value Unit for each of the
Sub-Accounts in the event that such a tax is
levied on that Sub-Account in the future.
MONTHLY
DEDUCTION
The Monthly Deduction is the sum of the
Cost of Insurance Charge, the Variable
Account Charge, and the Monthly
Administrative Charge and any rider
charges. The Monthly Deduction shall be
deducted from the Accumulated Value of the
policy on the Monthly Policy Date, as
follows:
1. The Owner may elect to allocate
the Monthly Deduction entirely to
the Money Market Fund
Sub-Account, by notifying us in
writing. If the Accumulated
Value in the Money Market Fund
Sub-Account is not sufficient to
provide for the entire Monthly
Deduction on a Monthly Policy
Date, the Monthly Deduction will
be taken from the Money Market
Fund Sub-Account until that
account is exhausted, and any
additional amount necessary to
fund the full Monthly Deduction
shall be allocated among and
deducted from the unloaned
portion of the Fixed Account and
the other Sub-Accounts on a pro
rata basis.
2. If the Owner does not elect 1,
above, the Monthly Deduction
shall be allocated among and
deducted from the unloaned
portion of the Fixed Account and
the Sub-Accounts on a pro rata
basis.
COST OF
INSURANCE
CHARGE
The Cost of Insurance rate for each segment
of coverage on any day shall be based on
the issue ages and duration of each
coverage segment, the sexes and rate class
of each Insured, and any substandard rating
applied to either Insured on the Date of
Issue or upon any increase in Face Amount.
On any Monthly Policy Date, the Cost of
Insurance Charge of the policy shall be the
Cost of Insurance rates on such date
multiplied by the excess of:
1. the Death Benefit of the policy
plus any debt to us on the policy
divided by the Cost of Insurance
Divisor; over
2. the Accumulated Value of the
policy on such date before the
Cost of Insurance Charge is
deducted.
We may change the Cost of Insurance rates
from time to time based on our expectations
of future experience. Any change in the Cost
of Insurance rates shall apply to all
policies of the same duration, insuring
persons of the same sexes, Attained Ages,
and rate classes as the Insureds.
The Cost of Insurance rates applicable to
each segment of coverage shall not be
greater than the guaranteed rates set forth
in the Data Section. These rates are based
on the Mortality Table named in the Data
Section.
The rate class of the Insureds at the time
of an increase in Face Amount for which an
application is required may differ from the
rate class on the Date of Issue. For
determining the Cost of Insurance Charge:
1. the Accumulated Value is first
considered part of the Base
Coverage on the Date of Issue;
and
15
2. then, part of any Additional
Protection Benefit on the Date of
Issue; and
3. then, coverage segments are
addressed in their order of
occurrence. If more than one
segment was added on the same
day, segments are addressed in
the prioritization described in
the Changes in Face Amount and
Death Benefit Option provision
of this contract.
4. If the Death Benefit is the
Death Benefit Standard, the
excess of the Death Benefit over
the total Face Amount divided by
the Cost of Insurance Divisor is
assigned the rate class of the
Base Coverage in effect on the
Date of Issue.
VARIABLE
ACCOUNT CHARGE
The Variable Account Charge Percentage shown
in the Data Section will be applied against
Accumulated Value in the Variable Account on
the Monthly Policy Date to determine the
monthly Variable Account Charge. This
monthly charge, assessed to cover mortality
and expense risk, will never exceed that
determined using the Guaranteed Maximum
Variable Account Charge Percentage shown in
the Data Section.
MONTHLY
ADMINISTRATION
CHARGE
The Monthly Administrative Charges are shown
in the Data Section. Increases in Base
Coverage will increase the Monthly per
$1,000 Administrative Charge but this charge
will not be reduced upon a decrease in Base
Coverage.
TRANSFER CHARGE
We may charge a Transfer Charge for the
thirteenth and each subsequent requested
transfer of Accumulated Value between and
among the Fixed Account and the Sub-
Accounts occurring during any Policy Year.
Transfers to or from more than one account
at the same time shall be treated as one
transfer. The Transfer Charge may not exceed
the Maximum Transfer Charge stated in the
Data Section. Transfer Charges shall be
allocated among and deducted from the Fixed
Account and the Sub-Accounts in proportion
to the Accumulated Values to be transferred
from such accounts.
No Transfer Charge will be imposed for the
following transactions, nor will any of the
following transactions be counted against
the twelve free transfers allowed each
Policy Year:
1. the transfer of all Accumulated
Value to the Fixed Account if
during the first two Policy Years
and in one transaction; and
2. the transfer of Accumulated Value
from a Sub-Account of the
Variable Account to another
Sub-Account or to the Fixed
Account, if there has been a
material change in the investment
policy of the fund in which the
funds of that Sub- Account are
invested; and
3. the initial allocation of the
premium due on the Date of Issue
from the Money Market Fund
Sub-Account; and
4. transfers of Accumulated Value
from the Variable Account into
the Fixed Account pursuant to the
taking of a Policy Loan; and
5. allocation of the payment of any
debt to us on this policy
16
WITHDRAWALS
---------------------------------------------------------------------
After the first policy anniversary, the
Owner may make withdrawals by written
request to us. Withdrawals shall be subject
to all of the following terms.
1. The amount withdrawn may not be
less than the Minimum Withdrawal
Amount stated in the Data
Section.
2. The amount withdrawn may not
exceed the Cash Surrender Value
on the date of withdrawal less
three times the Monthly
Deduction for the most recent
Monthly Policy Date.
3. The amount withdrawn may not be
such that it reduces the Face
Amount below the Minimum Base
Coverage stated in the Data
Section.
The Accumulated Value will be reduced by the
amount of the withdrawal.
If Death Benefit Option A is in effect on
the date of the withdrawal and if the Face
Amount divided by the Death Benefit Factor
on the date of the withdrawal exceeds the
Accumulated Value of the policy just after
the withdrawal, the Face Amount shall also
be decreased. The decrease in Face Amount
shall equal the lesser of such excess or the
amount of the withdrawal. A decrease in
total insurance coverage shall apply first
to any increases in Face Amount in the
reverse order in which they were made, and
then to the Face Amount on the Date of
Issue.
If Death Benefit Option B is in effect on
the date of the withdrawal, there shall be
no decrease in the Face Amount.
WITHDRAWAL
CHARGE
We will assess a Withdrawal Charge equal to
the lesser of:
- 2% of the amount withdrawn; and
- $25.
This Withdrawal Charge will be deducted from
the amount withdrawn.
ALLOCATION OF
WITHDRAWALS
The amount withdrawn shall be allocated
among and deducted from the Accumulated
Values held in each account according to the
following prioritization:
1. first, from the Accumulated Value
held in specific Sub-Accounts as
specified by the Owner, if the
Owner so specifies; and
2. second, from the Accumulated
Value in the Sub-Accounts on a
pro rata basis; and
3. finally, from the non-loaned
Accumulated Value held in the
Fixed Account.
If the Accumulated Value in any Sub-Account
from which the Owner has requested that
withdrawals be allocated and deducted is
insufficient to cover the amount of the
withdrawal, the withdrawal will not be
processed until further instructions are
received by us from the Owner.
POLICY LOANS
---------------------------------------------------------------------
17
We will loan an amount up to the Loan Value
of this policy less the amount of any
outstanding debt, at any time after the
first Policy Year. At the time of the loan
the policy must be in force. The policy
shall be the sole security for the loan and
must be duly assigned to us.
LOAN VALUE
The Loan Value on any day is equal to:
1. the Accumulated Value on such
day; less
2. the Surrender Charges on such
day; less
3. three times the Monthly
Deduction for the most recent
Monthly Policy Date.
LOAN INTEREST
RATE
Any loan shall bear interest from the date
the loan is made. The Loan Interest Rate is
shown in the Data Section.
GENERAL LOAN
TERMS
After the loan is made, loan interest shall
be due on the next and all later Policy
Anniversaries. On the date interest is
due, it shall be added to the loan and
bear interest on the same terms.
The debt secured by this policy includes
loans, unpaid loan interest, and accrued
loan interest not otherwise due.
All or any part of the debt may be paid to
us at any time prior to:
1. the death of the second of the
Insureds to die; and
2. surrender of the policy.
However, during a Grace Period the debt may
not be repaid.
All payments made to repay debt will be used
to reduce the amount of loans. Unless the
Owner specifies, any payment to us shall
be deemed a premium payment and not a
payment of the debt. At the death of the
Insured or upon the surrender of the
policy, all debt shall become due at once.
It shall be paid from the policy values.
ALLOCATION OF
POLICY LOANS
The loaned amounts allocated to the
Sub-Accounts shall be transferred from the
Sub-Accounts and placed into the Fixed
Account. Policy Loans shall be allocated
among and transferred from the Accumulated
Values held in each account according to the
following prioritization:
1. first, from the Accumulated Value
held in specific Sub-Accounts as
specified by the Owner, if the
Owner so specifies; and
2. second, from the Accumulated
Value in the Sub-Accounts on a
pro rata basis ; and
3. finally, from the non-loaned
Accumulated Value held in the
Fixed Account.
If the Accumulated Value in any Sub-Account
from which the Owner has requested that
loaned amounts be transferred is
insufficient to cover the amount of the
loan, the loan will not be processed until
further instructions are received from the
Owner.
18
Loan repayments shall be allocated among the
Fixed Account and the Sub-Accounts in
proportion to the Premium Allocation
percentages assigned by the Owner.
Loan interest due shall be allocated
among and transferred, on the date the
interest is due, from the Accumulated
Values held in each account:
1. first, from the Accumulated
Values held in the Sub-Accounts
on a pro rata basis until those
accounts are exhausted; and
2. then from the non-loaned
Accumulated Value held in the
Fixed Account.
These amounts shall be placed in, or
segmented within, the Fixed Account.
PAYMENT OPTIONS
---------------------------------------------------------------------
In lieu of a lump sum settlement, all or
part of the proceeds of this contract may be
applied under a Payment Option. When
proceeds are applied under a Payment Option,
all other rights and benefits under this
contract shall cease.
In addition to the following options, other
payment options may be available.
OPTION EFFECTIVE
DATE
The Option Effective Date is the date the
proceeds become payable.
GENERAL PAYMENT
OPTION TERMS
If the proceeds to be placed under a Payment
Option are less than $3,500, we may pay them
in one sum to the payee who otherwise would
receive the first payment under the option.
If any payments would be less than $100, we
will change the frequency to provide
payments of at least $100.
If the proceeds are assigned on the Option
Effective Date, we will pay the assignee's
share in one sum and place only the balance
under the option. After the Option Effective
Date neither the payments nor the remaining
value may be assigned or encumbered. To the
extent the law permits, they are not subject
to any claims against the payee.
We may require proof to our satisfaction
that any payee is alive on the date any
payment is due.
CHOICE OF OPTION
Choice of an option may be made:
1. by the Owner if one or both of
the Insureds are living; or
2. by the Beneficiary if neither
Insured is living and no option
is in effect.
Equivalent payments for 12-, 6-, 3-, or
1-month intervals may be chosen. The options
are described in terms of monthly payments.
We will quote the amount of other payments
on request.
We may issue a document stating the terms of
the option.
19
CHANGE OF
PAYMENT OPTION
The right to change Payment Options exists
under Options 1, 2, and 4. At the time of
change the remaining value under the old
option shall become the proceeds to be
placed under the new option.
LUMP SUM
REMOVAL OF
PROCEEDS APPLIED
UNDER A PAYMENT
OPTION
Lump sum payments may be taken from the
remaining proceeds placed under Payment
Options 1, 2, and 4.
Under Options 1 and 4 all or any part of the
remaining value may be taken at any time,
though no more than four transactions may be
made during any calendar year.
Under Option 2 the entire remaining value
may be taken at any time.
No lump sum removal of proceeds may be made
under Options 3, 5, 6, and 7.
OPTION 1 -
PAYMENT OF
INTEREST ONLY
Interest at a rate of 3 1/2% per year shall
be paid either for:
1. the life of a chosen human being;
or
2. a chosen period.
We may pay more interest in any given year.
Upon the earlier of the death of the chosen
human being or the end of the chosen period,
any remaining value will be paid. The first
payment shall be made one month after the
Option Effective Date. If the payee is not a
human being, payments may not continue for
more than 30 years.
OPTION 2 -
PAYMENTS FOR A
STATED TIME
Equal monthly payments shall be made for a
stated number of years. The first payment
shall be made on the Option Effective Date.
The amount of each monthly payment is shown
in the table. The monthly payments are based
on an interest rate of 3 1/2% per year. We
may pay more interest in any year.
OPTION 2 TABLE
MONTHLY PAYMENTS FOR EACH $1,000 OF PROCEEDS
Stated Number of Years Monthly Payments
1 $84.65
2 43.05
3 29.19
4 22.27
5 18.12
20
6 15.35
7 13.38
8 11.90
9 10.75
10 9.83
11 9.09
12 8.46
13 7.94
14 7.49
15 7.10
16 6.76
17 6.47
18 6.20
19 5.97
20 5.75
21 5.56
22 5.39
23 5.24
24 5.09
25 4.96
26 4.84
27 4.73
28 4.63
29 4.53
30 4.45
OPTION 3 -
PAYMENTS FOR
LIFE
Equal monthly payments shall be made for any
guaranteed period chosen and thereafter
during the life of a chosen human being. The
first payment shall be made on the Option
Effective Date. The amount of each monthly
payment depends on the age and sex of the
chosen human being on the Option Effective
Date and on any guaranteed period chosen. We
may require proof to our satisfaction of
such age. We may require like proof that
such human being is alive on the date any
payment is due. The guaranteed period may be
five or ten years or a Refund period. A
Refund period extends until the sum of the
payments is equal to the proceeds placed
under the option. The monthly payments are
based on an interest rate of 3 1/2% per
year. We may pay more interest in any year
during the guaranteed period. We will quote
the amount of monthly payments for lower
ages and guaranteed periods not shown in the
Option 3 Table on request.
OPTION 3 TABLE
MONTHLY PAYMENTS FOR EACH $1,000 OF PROCEEDS
(Amounts shown are for the age nearest birthday on the Option Effective Date)
Guaranteed Period
Male Female
Age None 10 Years Refund None 10 Years Refund
50 $4.44 $4.40 $4.29 $4.10 $4.09 $4.03
51 4.52 4.47 4.35 4.16 4.14 4.08
21
52 4.59 4.54 4.42 4.22 4.20 4.13
53 4.67 4.62 4.48 4.29 4.26 4.19
54 4.76 4.70 4.55 4.35 4.33 4.24
55 4.85 4.78 4.62 4.42 4.39 4.30
56 4.94 4.86 4.70 4.50 4.47 4.37
57 5.04 4.96 4.78 4.58 4.54 4.44
58 5.15 5.05 4.86 4.66 4.62 4.51
59 5.26 5.15 4.95 4.75 4.70 4.58
60 5.38 5.26 5.04 4.85 4.79 4.66
61 5.51 5.37 5.14 4.95 4.89 4.74
62 5.65 5.49 5.24 5.06 4.99 4.83
63 5.80 5.62 5.35 5.17 5.09 4.92
64 5.96 5.75 5.47 5.30 5.20 5.02
65 6.13 5.88 5.59 5.43 5.32 5.12
66 6.31 6.03 5.71 5.57 5.44 5.23
67 6.51 6.17 5.84 5.72 5.57 5.34
68 6.72 6.33 5.98 5.88 5.71 5.47
69 6.94 6.48 6.13 6.05 5.85 5.60
70 7.18 6.65 6.28 6.24 6.01 5.73
71 7.43 6.81 6.45 6.44 6.17 5.87
72 7.70 6.98 6.61 6.66 6.34 6.03
73 7.99 7.15 6.79 6.90 6.51 6.19
74 8.29 7.33 6.99 7.16 6.69 6.37
75 8.62 7.50 7.17 7.44 6.88 6.55
76 8.98 7.67 7.38 7.74 7.07 6.74
77 9.35 7.85 7.61 8.06 7.27 6.95
78 9.76 8.02 7.84 8.41 7.46 7.16
79 10.19 8.18 8.08 8.79 7.66 7.39
80 10.66 8.34 8.35 9.20 7.86 7.65
81 11.15 8.50 8.59 9.65 8.05 7.90
82 11.68 8.65 8.88 10.13 8.24 8.16
83 12.24 8.79 9.19 10.65 8.42 8.45
84 12.83 8.91 9.47 11.21 8.59 8.74
85+ 13.46 9.04 9.81 11.82 8.74 9.09
+ Higher ages the same
OPTION 4 -
PAYMENTS OF A
STATED AMOUNT
Equal monthly payments of a stated amount
shall be made until the proceeds, with
interest at 3 1/2% per year on the unpaid
balance, are used up. The first payment
shall be made on the Option Effective Date.
The amount chosen must be at least $10 per
month for each $1,000 of proceeds placed
under this option. We may add more interest
to the unpaid balance in any year, which
will extend the number of payments. The last
payment will be for the balance only.
OPTION 5 -
LIFE ANNUITY
Equal monthly payments shall be made in the
same manner as Option 3 except:
22
1. the amount of each payment shall
be based on our current
settlement rates on the Option
Effective Date; and
2. no additional interest shall be
paid.
OPTION 6 -
JOINT AND TWO-THIRDS
ANNUITY
Equal monthly payments shall be made while
two chosen human beings are both living.
Upon the death of either, two-thirds of the
amount of such payments shall continue
during the life of the survivor. The first
payment shall be made on the Option
Effective Date. The amount of each monthly
payment depends on the ages and sexes of the
chosen human beings on the Option Effective
Date. We may require proof to our
satisfaction of their ages. We may require
like proof that any chosen human being is
alive on the date any payment conditioned on
the life of such human being is due. The
initial amount of each monthly payment is
shown in the table. We will quote the amount
of monthly payments for any other age
combination on request. The monthly payments
are based on an interest rate of 3 1/2% per
year. No additional interest shall be paid.
OPTION 6 TABLE
MONTHLY PAYMENTS FOR EACH $1,000 OF PROCEEDS
(Amounts shown are for the age nearest birthday on the Option Effective Date)
Ages of Both One Male Ages of Both One Male
and and
One Female One Female
50 $4.11 68 $5.86
51 4.17 69 6.03
52 4.23 70 6.21
53 4.29 71 6.41
54 4.35 72 6.62
55 4.42 73 6.84
56 4.50 74 7.08
57 4.58 75 7.35
58 4.66 76 7.63
59 4.75 77 7.93
60 4.84 78 8.25
61 4.94 79 8.60
62 5.05 80 8.97
63 5.16 81 9.38
64 5.29 82 9.81
65 5.42 83 10.27
66 5.55 84 10.77
67 5.70 85+ 11.31
+Higher ages the same
OPTION 7 - 50%
SURVIVOR
ANNUITY
Equal monthly payments shall be made during
the life of the chosen primary human being.
Upon the death of the chosen primary human
being, 50% of the amount of such
23
payments shall continue during the life of
the chosen secondary human being. The first
payment shall be made on the Option
Effective Date. The amount of each monthly
payment depends on the ages and sexes of the
chosen human beings on the Option Effective
Date. We may require proof to our
satisfaction of their ages. We may require
like proof that any chosen human being is
alive on the date any payment conditioned on
the life of such human being is due. The
initial amount of each monthly payment is
shown in the table. We will quote the amount
of monthly payments for any other age
combination on request. The monthly payments
are based on an interest rate of 3 1/2% per
year. No additional interest shall be paid.
OPTION 7 TABLE
MONTHLY PAYMENTS FOR EACH $1,000 OF PROCEEDS
(Amounts shown are for the age nearest birthday on the Option Effective Date)
Male Female Male Female
Ages Primary Primary Ages Primary Primary
of Female Male of Female Male
Both Secondary Secondary Both Secondary Secondary
50 $4.11 $3.96 68 $5.85 $5.51
51 4.17 4.01 69 6.02 5.66
52 4.23 4.06 70 6.20 5.82
53 4.29 4.12 71 6.39 6.00
54 4.35 4.18 72 6.59 6.18
55 4.42 4.24 73 6.81 6.39
56 4.50 4.31 74 7.05 6.60
57 4.58 4.38 75 7.30 6.84
58 4.66 4.45 76 7.57 7.09
59 4.75 4.53 77 7.86 7.36
60 4.84 4.61 78 8.17 7.66
61 4.94 4.70 79 8.51 7.97
62 5.05 4.79 80 8.86 8.32
63 5.16 4.89 81 9.25 8.68
64 5.28 5.00 82 9.66 9.08
65 5.41 5.12 83 10.10 9.51
66 5.55 5.24 84 10.56 9.97
67 5.69 5.37 85+ 11.06 10.47
+Higher ages the same
GENERAL TERMS OF THIS POLICY
---------------------------------------------------------------------
CONSIDERATION
This policy is issued in consideration of
the application and payment of at least the
Minimum Initial Premium shown in the Data
Section. We will incur no liability if no
premium is paid.
ENTIRE CONTRACT
On the Date of Issue the entire contract
between the parties is this policy and a
copy of the application and any riders and
endorsements which are attached at issue.
Any changes of this contract must be written
and may be made only by one of our
authorized
24
officers or registrars. We will send the
Owner a copy of any application for a change
which we approve. It and any additional Data
Section shall become part of this contract
on the effective date of such change.
REPRESENTATIONS
Any statement made by or for either or both
of the Insureds shall be deemed a
representation and not a warranty. Unless
such statement is in the attached
application or in any subsequent
application, it shall not be used to:
1. make this policy void; or
2. make any increase in Face Amount
void; or
3. make any Reinstatement void; or
4. defend any claim.
INCONTESTABILITY
After this policy has been in force during
the life of each Insured for two years from
the policy Date of Issue, we will not
contest it with respect to representations
made by that Insured; however:
1. we may contest any increase in
Face Amount for which an
application is required until
such increase has been in force
during the life of both Insureds
for two years from its Effective
Date; and
2. we may contest any Reinstatement
until such Reinstatement has
been in force during the life of
both Insureds for two years from
its Effective Date.
POLICY MONTHS,
YEARS AND
ANNIVERSARIES
Policy Months, Years and Anniversaries shall
be measured from the Date of Issue.
The Date of Issue is the first Monthly
Policy Date. The Monthly Policy Date shown
in the Data Section occurs on the same day
each month or on the last day of any month
having no such date.
A Contract Anniversary falls on each
successive anniversary of the Date of Issue.
The first Contract Year begins on the Date
of Issue and ends on the day before the
first Contract Anniversary. Each subsequent
Contract Year begins on a Contract
Anniversary and ends on the day before the
next Contract Anniversary.
POLICY EFFECTIVE
DATES
The Face Amount on the Date of Issue shall
become effective on the Date of Issue shown
in the Data Section.
Any increase in Face Amount for which an
application is required shall become
effective on the Monthly Policy Date on or
next following the date we approve the
application for such increase in Face
Amount.
Any increase in Face Amount for which an
application is not required shall become
effective on the Monthly Policy Date on or
next following the date we receive the
request for such increase unless otherwise
provided by the policy.
Any decrease in Face Amount requested shall
become effective on the Monthly Policy Date
on or next following the date we receive the
request for such decrease.
25
Any reinstatement of this policy shall
become effective on the Monthly Policy Date
on or next following the date we approve the
application for Reinstatement.
Any change of Death Benefit Option shall
become effective on the Monthly Policy Date
on or next following the date we receive the
request for such change.
ATTAINED AGE
The Attained Age of each Insured on any date
is that Insured's Issue Age shown in the
Data Section plus the number of full Policy
Years which have passed since the Date of
Issue.
MISSTATEMENT OF
AGE OR SEX
The Issue Ages shown in the Data Section are
the ages of the Insureds on their birthdays
nearest to the Date of Issue. These are
based on the dates of birth shown in the
application.
If the age or sex of either Insured has been
misstated, we will adjust the Accumulated
Value to be the Accumulated Value that would
have resulted had the Cost of Insurance
Charges been based on the correct ages and
sexes of the Insureds. The adjustment shall
take effect on the Monthly Policy Date on or
next following the date we have proof to our
satisfaction of such misstatement.
If both Insureds have died, we will
similarly adjust the Accumulated Value as of
the last Monthly Policy Date prior to the
death of the second of the Insureds to die.
To the extent that the recomputed, adjusted
Accumulated Value is negative, we will
deduct such negative amount from the Death
Benefit otherwise payable.
VALUATION DATE
AND VALUATION
PERIOD
A Valuation Date is each day that the New
York Stock Exchange is customarily open for
trading, except for:
1. the day following Thanksgiving in
each year; and
2. any day on which trading is
restricted by directive of the
Securities and Exchange
Commission.
A Valuation Period is the period between two
successive Valuation Dates.
INTEREST RATES
All interest rates stated in this policy are
effective annual rates.
BASIS OF VALUES
Any guaranteed values for this policy are
equal to or greater than those required by
the law of the state where this policy is
delivered. Any guaranteed values are based
on interest at the Minimum Fixed Account
Interest Rate and the Mortality Table shown
in the Data Section. A detailed statement of
the method of computing values has been
filed in the state in which this policy is
delivered.
PAYMENT OF
BENEFITS
26
We will pay all benefits under this policy
at our Home Office. Before payment of any
Death Benefit we may investigate the death.
POSTPONEMENT OF
BENEFITS
We will pay any amounts which are payable as
a result of Cash Surrender, Withdrawals, or
Policy Loans and which are allocated to the
Variable Account within seven days after we
receive written request in a form
satisfactory to us. However, determination
and payment of any amount payable from the
Variable Account may be postponed whenever:
1. the New York Stock Exchange is
closed, or trading on the New
York Stock Exchange is restricted
by directive of the Securities
and Exchange Commission; or
2. the Securities and Exchange
Commission by order permits
postponement for the protection
of policyowners; or
3. an emergency exists, as
determined by the Securities and
Exchange Commission, as a result
of which it is not reasonably
practicable to dispose of
securities or to determine the
value of the net assets of the
Variable Account.
Transfers to or from the Sub-Accounts of the
Variable Account, though normally occurring
on the same day we receive the request for
transfer, may also be postponed upon any of
the above events.
We may delay payment of any amounts which
are payable as a result of Cash Surrender,
Withdrawals, or Policy Loans and which are
allocated to the FIXED ACCOUNT for up to six
months after we receive written request in a
form satisfactory to us.
We will pay the Death Benefit within seven
days after we receive due proof satisfactory
to us of the death of the second of the
Insureds to die while this policy is in
force. We may postpone determination and
payment of any Death Benefit in excess of
the Face Amount, net of any debt to us on
this policy, upon any of the events
enumerated above.
We have the right to postpone payment which
is derived from any amount recently paid to
us by check or draft, until we are satisfied
the check or draft has been paid by the bank
or other financial institution on which it
is drawn.
NOTICES
Unless this policy provides otherwise, any
requests, changes, or notices:
1. from us to the Owner shall be
sent to the last address known to
us of the Owner; and
2. from us to an assignee shall be
sent to the last address known to
us of such assignee; and
3. from the Owner or an assignee to
us must be in writing and
received by us at our Home Office
in Montpelier, Vermont.
ANNUAL REPORT
At least once each Policy Year we will send
a report to the Owner. The report will show,
as of its date:
1. the Accumulated Value of the
policy, detailing the Accumulated
Value in the Fixed Account and
the Accumulated Value in each
Sub-Account of the Variable
Account; and
2. the Face Amount; and
3. the Cash Surrender Value; and
27
4. any debt to us on this policy;
and
5. the Death Benefit.
The report will also show a summary of
transactions of the previous year and any
information required by law or by the
supervisory insurance official of the
Insurance Department of the state in which
this policy was delivered.
PROJECTION
REPORT
The Owner may request in writing a report
which projects future values and future
Death Benefits for this policy. The report
will also show any information required by
law. The Projection Report will be based on:
1. data the Owner gives us as to
Face Amount and premiums; and
2. such assumptions as either we or
the Owner specifies.
We may charge the Owner for each Projection
Report.
