[PRUDENTIAL LOGO] Pruco Life Insurance Company
0000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
a stock Prudential Financial company
This is an annuity contract. Subject to the provisions of the Contract, and in
consideration of any Purchase Payments you make and we accept, we will make
Annuity Payments starting on the Annuity Date shown on the Contract Data pages.
Please read the Contract carefully; it is a legal contract between you and Pruco
Life Insurance Company. Expense charges applicable to the Contract are shown on
the Contract Data pages. If you have a question about the Contract, or a claim,
see your representative or contact the Annuity Service Center.
BENEFITS AND VALUES UNDER THIS CONTRACT MAY BE ON A VARIABLE BASIS. AMOUNTS
DIRECTED INTO ONE OR MORE OF THE VARIABLE INVESTMENT OPTIONS WILL REFLECT THE
INVESTMENT EXPERIENCE OF THOSE INVESTMENT OPTIONS. THEY ARE SUBJECT TO CHANGE
BOTH UP AND DOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. AMOUNTS DIRECTED
INTO A MARKET VALUE ADJUSTMENT OPTION MAY BE ADJUSTED UPWARD OR DOWNWARD BY THE
APPLICATION OF A MARKET VALUE ADJUSTMENT FORMULA. THE MARKET VALUE ADJUSTMENT
APPLIES TO WITHDRAWALS AND AMOUNTS APPLIED TO PURCHASE AN ANNUITY. HOWEVER, SUCH
PAYMENTS MADE BY US WITHIN THE 30 DAYS IMMEDIATELY FOLLOWING THE END OF A
GUARANTEED INTEREST RATE PERIOD, PAYMENT OF THE CHARGE-FREE AMOUNT, AND A DEATH
BENEFIT PAID DURING THE ACCUMULATION PHASE ARE NOT SUBJECT TO A MARKET VALUE
ADJUSTMENT. SEE THE "MARKET VALUE ADJUSTMENT (MVA) OPTION" PROVISION FOR A
DESCRIPTION OF THE FORMULA, AND THE VALUES AVAILABLE WITHOUT AN ADJUSTMENT.
RIGHT TO CANCEL CONTRACT
This Contract may be returned within 10 days (20 days in Idaho and North Dakota;
30 days in California if you are 60 years of age or older) after you receive it.
It can be mailed or delivered to either the Annuity Service Center, or the
representative who sold it to you. Return of this Contract by mail is effective
on being postmarked, properly addressed and postage prepaid. The returned
Contract will be canceled upon our receipt, and we will return your money in
accordance with applicable law. A Market Value Adjustment will not be applied to
the amount paid during the Right to Cancel period. Under certain circumstances,
we have the right to allocate Purchase Payment(s) to the Money Market Subaccount
until the expiration of the Right to Cancel period. If we so allocate Purchase
Payment(s), we will refund the Purchase Payments(s), less any withdrawals, in
the event of cancellation under the terms of this paragraph.
READ YOUR CONTRACT CAREFULLY
Signed for Pruco Life Insurance Company,
an Arizona Corporation.
/s/ Signature /s/ Signature
Secretary President
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED FIXED AND VARIABLE ANNUITY CONTRACT
NONPARTICIPATING
ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT. MVA OPTIONS ARE SUBJECT TO MARKET VALUE
ADJUSTMENTS.
TABLE OF CONTENTS
CONTRACT DATA PAGES ....................................................... [3
DEFINITIONS ............................................................... 4
PURCHASE PAYMENTS ......................................................... 8
CONTRACT VALUE ............................................................ 8
CONTRACT MAINTENANCE CHARGE ............................................... 9
VARIABLE SEPARATE ACCOUNT ................................................. 9
FIXED RATE ACCOUNT ........................................................ 10
DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION .................. 11
MARKET VALUE ADJUSTMENT (MVA) OPTION ...................................... 12
TRANSFERS ................................................................. 14
WITHDRAWALS ............................................................... 15
[CREDIT ELECTION] ......................................................... 16
GUARANTEED MINIMUM DEATH BENEFIT .......................................... 17
SPOUSAL CONTINUANCE ....................................................... 20
ANNUITY AND SETTLEMENT OPTIONS ............................................ 21
BENEFICIARY ............................................................... 22
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS ........................... 22
GENERAL PROVISIONS ........................................................ 23
VALUES AND BENEFITS ....................................................... 24
ANNUITY SETTLEMENT TABLES ................................................. 24]
2
CONTRACT DATA
OWNER: [Xxxx Xxx] SEX: [M] AGE AT ISSUE: [35]
JOINT OWNER: [Xxxx Xxx] SEX: [F] AGE AT ISSUE: [35]
ANNUITANT: [Xxxx Xxx] SEX: [M] AGE AT ISSUE: [35]
CO-ANNUITANT: [Xxxx Xxx] SEX: [F] AGE AT ISSUE: [35]
CONTRACT NUMBER: [12345] CONTRACT DATE: [May 1, 2003]
PLAN TYPE: [Non-Qualified] ANNUITY DATE: [May 1, 2063]
PURCHASE PAYMENTS:
INITIAL PURCHASE PAYMENT: [$10,000.00]
MINIMUM SUBSEQUENT PURCHASE PAYMENT: $500. A lesser Minimum Subsequent
Purchase Payment may apply to any available payroll deduction plan or
other automatic purchase plan.
ANNUAL PURCHASE PAYMENT LIMITS: The total of all Purchase Payments made
into this Contract in the first Contract Year may not exceed $20,000,000.
The total of all Purchase Payments made into this Contract in any Contract
Year after the first Contract Year may not exceed $2,000,000. Purchase
Payments of greater value may be allowed with our prior approval.
AGGREGATE PURCHASE PAYMENT LIMIT: The total of all Purchase Payments made
into this Contract may not exceed $20,000,000. Purchase Payments of
greater value may be allowed with our prior approval.
BENEFICIARY:
[As designated by Owner at Contract Date unless changed in accordance with
the Contract provisions.]
INSURANCE CHARGE:
The Insurance Charge depends on whether you have elected the Guaranteed
Minimum Death Benefit ("GMDB") feature and on the GMDB Protected Value
option that you have elected. This charge is deducted daily from the
assets in each of the Subaccounts. If you do not elect the GMDB feature,
your death benefit is equal to the base death benefit as described in the
Guaranteed Minimum Death Benefit section of the Contract.
[ ] You have not elected the GMDB feature. The daily rate is
[0.00448376%], which is equivalent to an annual rate of [1.65%].
[ ] You have elected the GMDB feature and the GMDB Protected Value option
of the GMDB Roll-Up. The daily rate is [0.00515678%], which is equivalent
to an annual rate of [1.90%].
[ ] You have elected the GMDB feature and the GMDB Protected Value option
of the GMDB Step-Up. The daily rate is [0.00515678%], which is equivalent
to an annual rate of [1.90%].
[ ] You have elected the GMDB feature and the GMDB Protected Value option
of the greater of the GMDB Roll-Up and the GMDB Step-Up. The daily rate is
[0.00542552%], which is equivalent to an annual rate of [2.00%].
3
CONTRACT MAINTENANCE CHARGE
If your Contract Value is less than [$100,000], we will charge a Contract
Maintenance Charge of the lesser of [$50] or 2% of the Contract Value. The
charge is deducted on the Contract Anniversary and when a surrender of the
Contract occurs, if the Contract Value at the time is then less than
[$100,000]. We reserve the right to raise the maximum Contract Maintenance
Charge we may charge in a Contract Year, but it will not exceed $60. We
also reserve the right to raise the Contract Value amount over which we
will waive the Contract Maintenance Charge.
VARIABLE SEPARATE ACCOUNT: [The Pruco Life Flexible Premium Variable Annuity
Account]
INTEREST RATE INVESTMENT OPTIONS:
The following interest rate investment options are currently available. We
may add other options in the future.
DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION:
MINIMUM GUARANTEED INTEREST RATE: [3%]
INITIAL INTEREST SEGMENT INTEREST RATE: [7% for the 6-month DCA Interest
Segment]
FIXED RATE ACCOUNT:
MINIMUM GUARANTEED INTEREST RATE: [2% annually on all amounts allocated or
transferred to a Fixed Rate Account interest segment prior to the tenth
Contract Anniversary; 3% annually on all amounts allocated or transferred
to a Fixed Rate Account interest segment on or after the tenth Contract
Anniversary.]
INITIAL INTEREST SEGMENT INTEREST RATE: [5%]
INITIAL BASE INTEREST CREDITING RATE: [4%]
INITIAL ADDITIONAL INTEREST CREDITING RATE: [1%]
MARKET VALUE ADJUSTMENT (MVA) OPTION:
MINIMUM GUARANTEED INTEREST RATE: [3%]
INITIAL GUARANTEED INITIAL GUARANTEED
MVA OPTION INTEREST RATE PERIOD INTEREST RATE
---------- -------------------- -------------
[[ ] 1 Year 1 Year X%
[ ] 2 Years 2 Years X%
[ ] 3 Years 3 Years X%
[ ] 4 Years 4 Years X%
[ ] 5 Years 5 Years X%
[ ] 6 Years 6 Years X%
[ ] 7 Years 7 Years X%
[ ] 8 Years 8 Years X%
[ ] 9 Years 9 Years X%
[ ] 10 Years 10 Years X%]
ALLOCATION GUIDELINES:
Currently, you may select any Allocation Option which is available at the
time the Purchase Payment or transfer is made. Allocations to the DCA
Fixed Rate Investment Option may only be made from the Initial Purchase
Payment and must be at least $2,000. Allocations to any MVA Option must be
at least $1,000. Allocations to any other Allocation Option must be at
least 1% of the Invested Purchase Payment. Allocations made pursuant to
automatic rebalancing or dollar cost averaging (not part of the DCA
Program) are not subject to these limitations. We reserve the right to
limit the availability of the Allocation Options, if necessary, in order
to comply with federal or state law.
3A
WITHDRAWALS:
[WITHDRAWAL CHARGE: The Withdrawal Charge is a percentage of the amount
withdrawn that is subject to a charge, and depends on the Contract Year in
which the withdrawal is made.
Contract Year Withdrawal Charge
------------- -----------------
[1 7%
2 7%
3 7%
4 or later 0%]]
[CHARGE-FREE AMOUNT: A certain amount (the Charge-Free Amount) may be
withdrawn during the Withdrawal Charge Period without incurring a
Withdrawal Charge. The Withdrawal Charge Period is the maximum number of
Contract Years during which a Withdrawal Charge will apply, as shown in
the above table. Prior to the first Contract Anniversary, the Charge-Free
Amount is equal to [10% of the initial Purchase Payment]. The Charge-Free
Amount available in any subsequent Contract Year during the Withdrawal
Charge Period is calculated as of the immediately preceding Contract
Anniversary date, and is equal to [10% of the sum of gross Purchase
Payments as of that Contract Anniversary date].]
MINIMUM AMOUNT WHICH MAY BE WITHDRAWN: The minimum amount which may be
withdrawn is [$250]. The minimum amount which may be withdrawn under a
systematic withdrawal plan is [$100].
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN THE CONTRACT AFTER A
WITHDRAWAL: The minimum Contract Value which must remain in the Contract
in order to keep the Contract in force after a withdrawal is [$2,000].
[CREDIT
If you elect to receive the Credit, we will add a Credit Amount to your
Contract Value. The Credit Amount is equal to [X%] of the Contract Value
on the applicable Credit Date.
If you elect to receive the Credit at your First Credit Date, we will make
this same offer again prior to your Second Credit Date. IF YOU DO NOT
ELECT TO RECEIVE THE CREDIT AT THE FIRST CREDIT DATE, WE WILL NOT MAKE
THIS OFFER AGAIN, AND ANY SUBSEQUENT CREDIT OFFERS WILL NOT BE AVAILABLE
TO YOU.
FIRST CREDIT DATE: [Third Contract Anniversary]
SECOND CREDIT DATE: [Sixth Contract Anniversary]
CREDIT ELECTION WITHDRAWAL CHARGE: A percentage of the amount withdrawn
after a Credit Date that is subject to a charge, and depends on the number
of Contract years that have elapsed since the most recent Credit Date.
Contract Years Since Credit Date Credit Election Withdrawal Charge
-------------------------------- ---------------------------------
[0 7%
1 7%
2 7%
3 0%]
The Credit is not available if the Annuitant or Co-Annuitant is age [81] or
older on the Contract Date, or if your Contract has been continued under the
"Spousal Continuance" provision.]
3B
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: You will always be allowed at least 12
transfers among Allocation Options in a Contract Year. We may allow more
transfers. If we do so, we will notify you in writing.
TRANSFER CHARGE: The Maximum Transfer Charge for each transfer after the
first 12 in a Contract Year is $30. Transfer Charges are taken pro-rata
from the Allocation Options from which the transfer is made. Transfers
made due to automatic rebalancing and dollar cost-averaging (whether or
not part of a DCA Program) will not be counted for purposes of the
Transfer Charge. Transfers from an MVA Option within 30 days after
maturity of that MVA Option will not be subject to a Transfer Charge.
MINIMUM AMOUNT TO BE TRANSFERRED: Subject to the restrictions contained in
the Contract on transfers, the minimum transfer amount is [$250] or your
entire interest in any Allocation Option, if less. This requirement is
waived if the transfer is pursuant to automatic rebalancing. The minimum
monthly transfer amount for amounts transferred pursuant to the dollar
cost averaging feature or from the DCA Fixed Rate Investment Option under
a DCA Program is [$100].
ENDORSEMENTS:
[Individual Retirement Annuity Endorsement]
ANNUITY SERVICE CENTER:
[Annuity Service Center
P.O. Box 7960
Philadelphia, PA 19101
1-888-PRU-2888]
3C
DEFINITIONS
ACCUMULATION PERIOD: The period from, and including, the Contract Date to, but
excluding, the Annuity Date.
ADDITIONAL INTEREST CREDITING RATE: A rate of interest credited to any portion
of the Initial Purchase Payment allocated to the Fixed Rate Account. The
Additional Interest Crediting Rate will only be credited for one year from the
date the allocation is made. The Additional Interest Crediting Rate will not
apply to subsequent Purchase Payments or to amounts transferred to the Fixed
Rate Account from any other Allocation Option.
ADJUSTED CONTRACT VALUE: The Contract Value as of the Annuity Date, adjusted for
any Market Value Adjustment, less any applicable Premium Tax Charge [,
Withdrawal Charge and Credit Election Withdrawal Charge]. The applicable Annuity
Table is applied to this amount to determine the initial Annuity Payment.
ALLOCATION OPTIONS: Those investment options available under the Contract as of
any given time to which Contract Value may be allocated.
ANNUITANT: The person named on the first page upon whose continuation of life
any Annuity Payment involving life contingencies depends. You may only change
the Annuitant with our prior approval. If the Annuitant dies before the Annuity
Date, the Co-Annuitant, if applicable, becomes the Annuitant, if the
requirements for changing the Annuity Date are met (see definition of Annuity
Date). If there is no surviving or eligible Co-Annuitant, and the Annuitant was
not the Owner, the Owner becomes the Annuitant. You then have 60 days from the
date we receive due proof of death of the Annuitant or Co-Annuitant to name a
new Annuitant. If no new Annuitant is named during that 60-day period, the Owner
will remain the Annuitant.
ANNUITY DATE: The date the first Annuity or Settlement Payment to the Payee is
due. The Annuity Date is shown on the original Contract Data pages. You may
change the Annuity Date only with our permission. After the first Contract Year,
any such changed Annuity Date must be earlier than the date shown on the
Contract Data pages, cannot precede the third Contract Anniversary, and must be
consistent with applicable law at the time. If there is a new Annuitant due to
the death of the Annuitant or the assignment of the Contract, and the new
Annuitant is older than the prior Annuitant, the Annuity Date will be based on
the age of the new Annuitant; however any such changed Annuity Date must be
earlier than the date shown on the Contract Data pages, cannot be later than the
Contract Anniversary next following the new Annuitant's 95th birthday and must
be consistent with applicable law at the time. The maximum annuity age is 95.
ANNUITY OR SETTLEMENT PAYMENTS: The series of payments made to you or any named
payee after the Annuity Date as described under the Annuity or Settlement Option
selected.
ANNUITY PERIOD: The period of time, beginning on the Annuity Date, during which
Annuity or Settlement Payments are made.
ANNUITY SERVICE CENTER: The office indicated on the Contract Data pages to which
notices, requests and Purchase Payments must be sent. The Annuity Service Center
address may be changed at any time. You will be notified in advance and in
writing of any change in address.
BASE INTEREST CREDITING RATE: A rate of interest credited to amounts allocated
or transferred to the Fixed Rate Account. The Base Interest Crediting Rate will
be declared on or before the date on which allocations or transfers are made.
BENEFICIARY: The person(s) or entity(ies) who has the right to receive the death
benefit upon the death of the first to die of the Owner or Joint Owner. The
Owner must be the primary Beneficiary of the Joint Owner, and the Joint Owner
must be the primary Beneficiary of the Owner.
BUSINESS DAY: Any day the New York Stock Exchange and the Company are open for
business.
[CHARGE-FREE AMOUNT: The Charge-Free Amount is a portion of the Contract Value
that may be withdrawn without incurring a Withdrawal Change.]
CO-ANNUITANT: The person shown on the Contract Data pages who becomes the
Annuitant upon the death of the Annuitant before the Annuity Date. No
Co-Annuitant may be designated if the Owner is a non-natural person.
COMPANY: Pruco Life Insurance Company, an Arizona corporation.
4
CONTRACT ANNIVERSARY: The same day and month as the Contract Date in each later
year.
CONTRACT DATE: The date shown on the Contract Data pages on which the first
Contract Year begins.
CONTRACT SURRENDER VALUE: The Contract Value, adjusted for any Market Value
Adjustment, less any applicable Premium Tax Charge, [Withdrawal Charge, Credit
Election Withdrawal Charge,] Contract Maintenance Charge, or charge for any
optional benefit added by endorsement.
CONTRACT VALUE: The dollar value as of any Business Day prior to the Annuity
Date of all amounts accumulated under this Contract.
CONTRACT YEAR: A year which starts on the Contract Date or on a Contract
Anniversary.
[CREDIT: An amount we add to your Contract Value if you elect to receive a
Credit.]
[CREDIT ELECTION: Your election to have a Credit amount added to your Contract
Value in accordance with the "Credit" provision of this Contract. At least 30
calendar days prior to the applicable Credit Date, we will notify you of your
option to make a Credit Election. In order to have the Credit amount added to
your Contract Value, we must receive your Credit Election in Good Order no later
than the applicable Credit Date.]
DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION: A portion of the
General Account into which you may allocate all or part of the Initial Purchase
Payment. It does not share in the investment experience of any Subaccount of the
Variable Separate Account.
DOLLAR COST AVERAGING (DCA) INTEREST SEGMENT: A DCA Interest Segment is a
portion of the DCA Option that is created if you allocate all or part of the
Initial Purchase Payment to the DCA Option.
DOLLAR COST AVERAGING (DCA) PROGRAM: A DCA Program permits you to allocate all
or part of the Initial Purchase Payment to the DCA Option and automatically
transfer amounts on a monthly basis from the DCA Option to selected Allocation
Options for a given period of time.
DUE PROOF OF DEATH: An original certified copy of an official death certificate,
an original certified copy of a decree of a court of competent jurisdiction as
to the finding of death, and/or any other proof of death satisfactory to us.
EARNINGS: The excess of the Contract Value over the sum of all Purchase Payments
made and not yet withdrawn.
ELIGIBLE HOSPITAL: An institution that meets either of the following
requirements:
1. It is accredited as a hospital under the Hospital Accreditation
Program of the Joint Commission on Accreditation of Healthcare
Organization; or
2. It is legally operated, has 24-hour a day supervision by a staff of
doctors, has 24-hour a day nursing service by registered graduate
nurses, and either:
(a) It mainly provides general inpatient medical care and
treatment of sick and injured persons by use of medical,
diagnostic and major surgical facilities. All such facilities
are located in it or are under its control; or
(b) It mainly provides specialized inpatient medical care and
treatment of sick or injured persons by the use of medical and
diagnostic facilities (including x-ray and laboratory). All
such facilities are located in it, are under its control, or
are available to it under a written agreement with a hospital
(as defined above) or with a specialized provider of these
facilities.
An eligible hospital is not an institution, or part of one, that: (a) furnishes
mainly homelike or custodial care, or training in the routines of daily living;
or (b) is mainly a school.
5
ELIGIBLE NURSING HOME: An institution or special nursing unit of a hospital that
meets at least one of the following requirements:
1. It is Medicare approved as a provider of skilled nursing care
services;
2. It is licensed as a skilled nursing home or as an intermediate care
facility by the state it is located in; or
3. It meets all of the following requirements:
(a) It is licensed as a nursing home by the state it is located
in;
(b) Its main function is to provided skilled, intermediate, or
custodial nursing care;
(c) It is engaged in providing continuous room and board
accommodations to 3 or more persons;
(d) It is under the supervision of a registered nurse (RN) or
licensed practical nurse (LPN);
(e) It maintains a daily medical record of each patient; and
(f) It maintains control and records for all medications
dispensed.
FIXED RATE ACCOUNT: A portion of the General Account into which you may allocate
Invested Purchase Payments or transfer Contract Value. It does not share in the
investment experience of any Subaccount of the Variable Separate Account. The
Fixed Rate Account is only available during the Accumulation Period.
GENERAL ACCOUNT: Our general investment account which contains all of our assets
with the exception of the Variable Separate Account and other segregated asset
accounts.
GOOD ORDER: Any instruction received at the Annuity Service Center, utilizing
such forms, signatures and datings as we require, that is sufficiently complete
and clear that we do not need to exercise any discretion to follow such
instructions. We will notify you if an instruction is not in Good Order.
GUARANTEED INTEREST RATE (GIR): The interest rate applicable to an amount
allocated or transferred to a Market Value Adjustment Option. The Guaranteed
Interest Rate will never be less than the Minimum Guaranteed Interest Rate for
an MVA Option, as shown on the Contract Data pages.
GUARANTEED INTEREST RATE (GIR) PERIOD: The number of years for which a
particular Guaranteed Interest Rate is applicable to an amount allocated or
transferred to an MVA Option.
INTEREST RATE INVESTMENT OPTIONS: Those interest rate option(s) available under
the Contract as of any given time. Interest Rate Investment Option(s) as of the
Contract Date are shown on the Contract Data pages.
INTEREST SEGMENT INTEREST RATE: The rate at which interest is credited to a
One-Year Interest Segment under the Fixed Rate Account. It is equal to the sum
of the Base Interest Crediting Rate and any applicable Additional Interest
Crediting Rate.
INVESTED PURCHASE PAYMENTS: The balance of each Purchase Payment after we make
any applicable deduction for: (1) Premium Tax Charge; and (2) charge for any
other type of tax (or component thereof) measured by or based upon the amount of
the Purchase Payment we receive.
JOINT OWNER: The person, if named on the Contract Data pages as the Joint Owner,
who shares ownership rights with the Owner, as defined under this Contract, and
has the right to receive a death benefit upon the death of the Owner. You may
add, change, or remove a Joint Owner, subject to our rules. The Contract may
never have more than one Joint Owner. No Joint Owner is allowed for IRAs or
other tax-qualified contracts. Unmarried persons who wish to own the Contract
jointly should consult with their tax advisor.
6
LICENSED PHYSICIAN: A person licensed in the United States to practice the
healing arts acting within the scope of his or her license in treating an injury
or illness. It does not include You, the Annuitant or an immediate family
member.
MARKET VALUE ADJUSTMENT OR MVA: The amount by which any portion of Contract
Value in an MVA Option is adjusted if withdrawn, transferred or annuitized at
any time other than the 30-day period immediately following the end of the
Guaranteed Interest Rate Period. A Market Value Adjustment can be a positive or
a negative adjustment. An MVA may be applied even if the Contract has been
continued by a surviving spouse under the "Spousal Continuance" provision.
MARKET VALUE ADJUSTMENT (MVA) OPTION: An interest rate option that credits a
declared interest rate for a stipulated period of time. Withdrawals or transfers
may be subject to a Market Value Adjustment, which can be a positive or a
negative adjustment. We may offer multiple MVA Options at any one time, each
with a different interest rate and guarantee period. Assets of MVA Options are
held in a non-unitized Separate Account. They do not share in the investment
experience of any Subaccount of the Variable Separate Account.
OWNER: The person or entity named on the Contract Data pages who has ownership
rights as defined under the Contract provided that, if a Joint Owner is named,
the Owner shares ownership rights with the Joint Owner, as defined under this
Contract, and has the right to receive a death benefit upon the death of the
Joint Owner. You may change the Owner subject to our rules. Any change of an
Owner will be effective when we process the request.
PAYEE: The person who has a right to receive Annuity or Settlement Payments
under the Annuity and Settlement Options provision of this Contract. The Payee
can be designated as revocable or irrevocable at your discretion. If you do not
designate a Payee at least 5 Business Days before the Annuity Date, the Owner
will become the Payee.
PREMIUM TAX CHARGE: A charge which may be deducted from Purchase Payments or
Contract Value for premium taxes owed by us to any governmental entity.
PURCHASE PAYMENT: A payment you make to this Contract.
SPOUSAL CONTINUANCE: A feature under the Contract that allows the surviving
spouse of a deceased Owner to continue the Contract, in lieu of receiving a
death benefit.
SUBACCOUNT: Variable Separate Account assets are divided in Subaccounts. Assets
of each Subaccount will be invested in shares of Variable Investment Options.
TERMINALLY ILL: The Owner is Terminally Ill if a condition of the Owner occurs,
beginning any time after the Contract Date, which a licensed physician certifies
will reasonably be expected to result in the death of the Owner within 6 months
or less.
VARIABLE INVESTMENT OPTION: Those investment options available under the Contact
through the Subaccounts as of any given time.
VARIABLE SEPARATE ACCOUNT: A segregated asset account maintained by us to
support this and certain other contracts. The segregated asset account(s)
available as of the Contract Date is shown on the Contract Data pages.
WE, OUR AND US: Pruco Life Insurance Company.
[WITHDRAWAL CHARGES: A charge assessed on partial or full withdrawals or upon
settlement (depending on the payout option chosen) during the Withdrawal Charge
Period. The Withdrawal Charge equals a percentage, shown on the Contract Data
pages, of the amount subject to the charge.]
[WITHDRAWAL CHARGE PERIOD: The number of Contract Years during which Withdrawal
Charges are applied to withdrawals of amounts in the Contract. The Withdrawal
Charge Period is shown on the Contract Data pages.]
YOU AND YOUR: The Owner of the Contract if there is no Joint Owner; if there is
a Joint Owner; the Owner and Joint Owner acting jointly. If we receive written
authorization from both the Owner and Joint Owner in Good Order, then, upon our
consent, we will allow either to represent the entire ownership interest in the
Contract, until that authorization has been revoked by either party. This
Contract will treat the Owner as having contributed 100% of the Purchase
Payments. Therefore, we will treat the Owner as the taxpayer with respect to all
distributions made under the Contract while he or she is the Owner, whether or
not a Joint Owner is also named.
7
PURCHASE PAYMENTS
PURCHASE PAYMENTS: The initial Purchase Payment must be paid on the Contract
Date. In general, subsequent Purchase Payments may be made at any time before
the Annuity Date. However, no Purchase Payments may be made on or after the sole
or older of the Owner's or Joint Owner's, or Annuitant's 85th birthday, and we
reserve the right to decline any Purchase Payment. The Minimum Subsequent
Purchase Payment, Annual Purchase Payment Limits and Aggregate Purchase Payment
Limit are shown on the Contract Data pages.
ALLOCATION OF PURCHASE PAYMENTS: Invested Purchase Payments are allocated to one
or more of the Allocation Options in accordance with your selection. The
allocation of the initial Invested Purchase Payment is made in accordance with
your selection made on the Contract Date. You may change the allocation of
future Invested Purchase Payments at any time. If, after the Initial Purchase
Payment, we receive a Purchase Payment without allocations instructions, we will
allocate the corresponding Invested Purchase Payment in the same proportion as
the most recent Purchase Payment you made (unless that was a Purchase Payment
you directed us to allocate on a one-time only basis.) If the only previous
Purchase Payment made under the Contract was the Initial Purchase Payment and
any part of it had been allocated to the DCA Option, then no part of the current
Purchase Payment will be allocated to the DCA Option and the proportional
allocation to the other Allocation Options will be adjusted to reflect this.
Assuming that all other requirements are received in Good Order, we reserve the
right to allocate your initial Invested Purchase Payment to the Money Market
Subaccount until we receive your allocation selection. In addition, the Company
has reserved the right to allocate the initial Invested Purchase Payment to the
Money Market Subaccount under the Right to Cancel Contract provision shown on
the cover page of this Contract. All allocations of Invested Purchase Payments
are subject to the Allocation Guidelines shown on the Contract Data pages.
Currently, you may select as many of the available Allocation Options as you
wish. However, we reserve the right to limit this in the future. If the Purchase
Payment and forms required to issue a Contract are in Good Order, the initial
Invested Purchase Payment will be credited to your Contract within two (2)
Business Days after receipt at the Annuity Service Center. Additional Invested
Purchase Payments will be credited to your Contract as of the Business Day they
are received.
CONTRACT VALUE
Your Contract Value is the total of all amounts credited to your Contract as of
any Business Day as a result of your initial Invested Purchase Payment and the
increases and decreases described below.
On the Contract Date, the Contract Value is equal to the initial Invested
Purchase Payment. After that, the Contract Value as of any Business Day is
determined by starting with the Contract Value at the end of the previous day
and adjusting it for items that increase it or decrease it.
Items that increase the Contract Value are: Invested Purchase Payments, interest
credited under any Interest Rate Investment Option, [any Credits,] positive
investment performance in a Subaccount, any positive Market Value Adjustment
associated with a transfer or withdrawal, and any Spousal Continuance
adjustment.
Items that decrease the Contract Value are: withdrawals [and the charges
associated with them], negative investment performance in a Subaccount, any
negative Market Value Adjustment associated with a transfer or withdrawal, the
Insurance Charge, and any Contract Maintenance Charge, Transfer Charge, charge
for any optional benefit added by endorsement, Premium Tax Charge or other tax
charge.
Investment results and interest credited under any Interest Rate Investment
Option are applied daily. The Insurance Charge is deducted daily. The Contract
Maintenance Charge is deducted annually as of the Contract Anniversary and upon
a total withdrawal. Other charges are assessed only if the appropriate event
occurs.
8
CONTRACT MAINTENANCE CHARGE
We deduct an annual Contract Maintenance Charge shown on the Contract Data
pages. We determine your Contract Value as of your Contract Anniversary and make
any deductions required on a pro-rata basis from all Allocation Options to which
your Contact Value is allocated. If a total withdrawal is made on other than a
Contract Anniversary, we will determine your Contract Value and make a deduction
for the Contract Maintenance Charge the same as we would if it were a Contract
Anniversary.
VARIABLE SEPARATE ACCOUNT
THE VARIABLE SEPARATE ACCOUNT: The Variable Separate Account is designated on
the Contract Data pages. It consists of assets we have set aside and have kept
separate from the rest of our assets and those of our other separate accounts.
The assets of the Variable Separate Account, equal to reserves and other
liabilities of your Contract and those of other owners, will not be charged with
liabilities arising out of any other business we may conduct.
The Variable Separate Account assets are divided into Subaccounts. The assets of
the Subaccount are allocated to Variable Investment Options. We may restructure,
eliminate or combine Subaccounts or add to or eliminate Variable Investment
Option(s). You may be permitted to transfer your Contract Value or allocate
Invested Purchase Payments to the additional Subaccount(s). However, the right
to make such transfers or allocations will be limited by any terms and
conditions we may impose.
Should the shares of any Variable Investment Option(s) become unavailable for
investment by the Variable Separate Account, we deem further investment in the
shares inappropriate, or if required for tax reasons, we may limit further
purchase of such shares or substitute shares of another Variable Investment
Option for shares already purchased.
VALUATION OF ASSETS: The value of the shares held by the Subaccounts in the
Variable Investment Options will be based on the net asset value of the
Investment Option on each Business Day.
INSURANCE CHARGE: Each Business Day, we deduct an Insurance Charge from the
Subaccounts of the Variable Separate Account. The amount of the Insurance Charge
is based on whether you have elected the GMDB feature and, if so, on the GMDB
Protected Value option that you elected.
9
FIXED RATE ACCOUNT
INTEREST RATES: The Initial Interest Segment Interest Rate applicable to the
Fixed Rate Account on the Contract Date is shown on the Contract Data page. It
is equal to the sum of the Initial Base Interest Crediting Rate and any
applicable Initial Additional Interest Crediting Rate. The Initial Base Interest
Crediting Rate and the Initial Additional Interest Crediting Rate are shown on
the Contract Data page. We will credit interest to the portion of the initial
Purchase Payment, if any, allocated to the Fixed Rate Account at the daily
equivalent of these rates.
The Base Interest Crediting Rate is credited on allocations and transfers to the
Fixed Rate Account. The rate will be declared when allocations or transfers are
made. The declared Base Interest Crediting Rate will never be less than the
Minimum Guaranteed Interest Rate for the Fixed Rate Account, as shown on the
Contract Data pages.
The Additional Interest Crediting Rate is in addition to the Base Interest
Crediting Rate we credit. The Additional Interest Crediting Rate is credited on
any portion of the Initial Purchase Payment allocated to the Fixed Rate Account.
This rate will only be credited for one year from the date such allocation is
made. We reserve the right to limit the availability of the Additional Interest
Crediting Rate. Transfers or allocations of subsequent Purchase Payments to the
Fixed Rate Account are not eligible to receive the Additional Interest Crediting
Rate.
ONE-YEAR INTEREST SEGMENT: A one-year interest segment is created whenever you
allocate or transfer an amount to the Fixed Rate Account. We credit interest to
the amount in each interest segment daily at a specific rate declared for that
interest segment until the earliest of: 1) the date it is withdrawn; 2) the date
it is transferred to another Allocation Option; 3) the maturity date of the
one-year interest segment; 4) the date as of which a death benefit is
determined; and 5) the Annuity Date.
TRANSFERS FROM FIXED RATE ACCOUNT: At the maturity date of a one-year interest
segment, you have 30 days during which you may elect to transfer the amount in
that interest segment into any other Allocation Option available on that date,
other than a DCA Option. Once you have made an election, and we have received
it, it may not be reversed.
Amounts that you withdraw or transfer into another Allocation Option during the
30-day period will receive interest from the maturity date to the date of
withdrawal or transfer at the rate that would have applied to those amounts had
you taken no action within the 30-day period. If you do not make an election to
transfer within 30 days following the maturity date of the interest segment, we
will transfer the amount in the interest segment on the maturity date to another
one-year interest segment. Amounts that are transferred to another one-year
interest segment during the 30-day period will receive the rate that is
effective as of the maturity date for that interest segment.
You may only make transfers from a one-year interest segment within the 30-day
period immediately following the maturity date of that interest segment.
However, we reserve the right to permit transfers from a one-year interest
segment prior to the maturity date of that interest segment.
TRANSFERS INTO FIXED RATE ACCOUNT: At our discretion you may make transfers from
any other Allocation Option into the Fixed Rate Account. Each transfer will
create a new one-year interest segment. We credit interest to the amount in each
interest segment daily at a specific rate declared for that interest segment.
Transfers into the Fixed Rate Account from any of the other Allocation Options
will not be eligible for an Additional Interest Crediting Rate amount.
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DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION
DCA PROGRAM: If a DCA Program is elected, you may allocate all or part of the
Initial Purchase Payment to the DCA Fixed Rate Investment Option ("DCA Option").
The DCA Program provides for a systematic transfer of the funds allocated to the
DCA Option on a monthly basis from the DCA Option to selected Allocation Options
for a given number of payments. However, you may not transfer any funds from the
DCA Option to an MVA Option, and you may not transfer any funds to the DCA
Option from the other Allocation Options.
INTEREST TO BE CREDITED: A DCA Interest Segment is a portion of the DCA Option
that is created when you allocate all or part of the Initial Purchase Payment to
the DCA Option. We credit interest to the amount in any DCA Interest Segment
daily at the daily equivalent of a specific rate declared for that DCA Interest
Segment until the earliest of: 1) the date the amount in the DCA Interest
Segment is transferred out of the DCA Interest Segment; 2) the date the amount
in the DCA Interest Segment is withdrawn; 3) the date as of which any death
benefit payable is determined, and 4) the Annuity Date. The Initial Interest
Segment Interest Rate applicable for any portion of the Initial Purchase Payment
allocated to the DCA Option on the Contract Date is shown on the Contract Data
pages. The Initial Interest Segment Interest Rate for a DCA Interest Segment
will never be less than the Minimum Guaranteed Interest Rate for the DCA Option,
as shown on the Contract Data pages.
TRANSFERS: Invested Purchase Payments allocated to the DCA Option are
transferred systematically on a monthly basis to the other Allocation Options
that you have specified. We will transfer the amount allocated in a series of
equal payments on each transfer date such that the amount of each payment
corresponds to the number of payments for the period selected for the transfers.
The final transfer includes the interest credited during the period (but see
below for the effect of withdrawals). The first monthly transfer from the DCA
Option is made as of the date of the allocation of the Initial Purchase Payment.
Subsequent transfers are made monthly on the anniversary of the first transfer.
The final transfer amount includes the interest credited during the elected
period. Once the initial transfer has been processed, the transfer period may
not be changed. The other Allocation Options to which the transfers are being
made may be changed. Transfers from the DCA Option do not count toward the
maximum number of free transfers permissible under the Contract.
EFFECT OF WITHDRAWALS ON TRANSFERS: Withdrawals from the DCA Option are
permitted. We will recalculate the monthly transfer amount to reflect the
reduction in the DCA Option caused by the withdrawal. This recalculation may
include some or all of the interest credited to the date of the next scheduled
transfer. Any interest that is not included in the recalculated transfer amount
will be paid with the final transfer amount, unless there is another subsequent
withdrawal. Deductions of the Contract Maintenance Charge, Insurance Charge, or
charges for any optional benefits are treated as withdrawals for this purpose.
If a withdrawal reduces the monthly transfer amount to below $100, the remaining
balance in the DCA Option will be transferred to the other Allocation Options
that you had most recently selected for the DCA Program on the next scheduled
transfer date. If a withdrawal request does not specify the Allocation Options
from which the withdrawal is to be made, we will take the withdrawals on a
pro-rata basis from all Allocation Options to which your Contract Value is then
allocated. Systematic withdrawals from the DCA Option are permitted.
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MARKET VALUE ADJUSTMENT (MVA) OPTION
INTEREST SEGMENT: An interest segment is created whenever you allocate or
transfer an amount to an MVA Option. Amounts allocated or transferred to a
Market Value Adjustment Option are held in the Separate Account identified on
the Contract Data pages. You may have multiple interest segments associated with
an MVA Option. We credit interest to the amount in each interest segment at the
daily equivalent of the specific rate declared for that interest segment until
the earliest of: 1) the date the Contract is surrendered; 2) the date the amount
is withdrawn; 3) the date the amount is transferred; 4) the maturity date of the
interest segment; 5) the Annuity Date; and 6) the date as of which a death
benefit is determined.
GUARANTEED INTEREST RATE (GIR) PERIOD: When you allocate or transfer an amount
to an MVA Option, the option will have a GIR Period, which is the number of
years for which the Guaranteed Interest Rate is applicable to that amount. The
Guaranteed Interest Rate will never be less than the Minimum Guaranteed Interest
Rate for an MVA Option, as shown on the Contract Data pages. The GIR Period will
be a set number of years. We reserve the right to determine what MVA Options we
will offer. You may not elect an MVA Option with a GIR Period that would mature
after the Contract's Annuity Date.
Prior to the end of a GIR Period, we will notify you, at your last known
address, of the available MVA Options, and the corresponding GIR Periods and
Guaranteed Interest Rates offered by us at that time. You have 30 days
immediately following the end of the current GIR Period to provide us a written
request in Good Order to elect one of the following options:
1. elect that the amount in the interest segment be allocated to
an MVA Option with the same or different GIR Period as your
current GIR Period, provided that we are offering a GIR Period
of that duration at that time;
2. transfer the amount to another Allocation Option; or
3. withdraw the amount from the Contract.
You may elect different options for different portions of an interest segment,
subject to the minimum amount restrictions applicable to withdrawals and
transfers. Withdrawals from a maturing interest segment during this 30-day
period will not be subject to the MVA [, but will be subject to any applicable
Withdrawal Charges]. Transfers from a maturing interest segment during this
30-day period will not be subject to Transfer Charges or the MVA.
If we do not receive a written request in Good Order during the 30-day period
immediately following the end of a GIR Period, the amount in that interest
segment will be transferred to the Money Market Subaccount at the end of the
30-day period. Amounts that you withdraw or transfer during the 30-day period
will receive interest until the date of withdrawal or transfer. The interest
rate will be the current interest rate available for an MVA Option with the same
GIR Period as the maturing interest segment. If we do not offer such a period,
the interest rate will be the current rate associated with the MVA Option with
the shortest GIR Period available at the time.
ALLOCATIONS AND TRANSFERS TO MVA OPTIONS: You may allocate up to 100% of your
Invested Purchase Payments to an MVA Option. You may transfer up to 100% of your
Contract Value to an MVA Option, except that no transfers may be made from the
DCA Option, and amounts held in the Fixed Rate Account are subject to the
restrictions on transfers set forth in the "Fixed Rate Account" provision. You
may invest in one MVA Option or a combination of MVA Options having different
GIR Periods. The minimum allocation or transfer to any one MVA Option is $1,000.
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MARKET VALUE ADJUSTMENT (MVA): Amounts withdrawn from an MVA Option (including
by transfer or annuitization), prior to the end of a GIR Period, may be subject
to a Market Value Adjustment (MVA). The MVA is applied as a positive or negative
adjustment to the applicable portion of the Contract Value by multiplying the
withdrawal amount [before deduction of any applicable Withdrawal Charge] by the
MVA factor.
The MVA factor is equal to:
[ l + i ] n/12
[-------------] -1
[l + j +.0025 ]
where: i = is the Guaranteed Interest Rate currently credited to this
interest segment at the time of the withdrawal, transfer,
annuitization, or settlement;
j = is the current credited interest rate at the time of the
withdrawal, transfer, annuitization, or settlement for an MVA
Option having a GIR Period equal to one (1) plus the number of
whole years remaining in this interest segment's GIR Period;
and
n = is the number of months remaining in this interest segment's
GIR Period (rounded up).
If we no longer offer a particular GIR Period, for the purpose of determining a
rate for use in the MVA formula, we will use linear interpolation and the
current rates of the GIR Periods closest in duration to those to be used in the
formula. If we cannot interpolate, the current crediting rate for any GIR Period
not being offered will be equal to:
1) the current Treasury spot rate for that GIR Period, plus
2) the current crediting rate for the next longer GIR Period then
being offered, minus
3) the current Treasury spot rate for that next longer GIR
Period.
If the current rate (j) in the MVA formula is higher than the guaranteed rate
(i) for an interest segment, the value of that segment will experience a
negative MVA upon withdrawal, transfer, annuitization, or settlement. If the
current rate (j) in the MVA formula is lower than the guaranteed rate (i) for an
interest segment, the value of that segment may experience a positive MVA upon
withdrawal, transfer, annuitization or settlement.
A Market Value Adjustment will not be applied to a withdrawal, transfer,
annuitization, or settlement within 30 days immediately following the end of a
GIR Period.
A Market Value Adjustment will not be applied to any cancellation of the
Contract under the "Right to Cancel Contract" provision on the cover page of the
Contract.
A Market Value Adjustment will not be applied when the death benefit is payable.
If you request a withdrawal, we will not apply a Market Value Adjustment if we
receive due proof that: (a) the Owner or Joint Owner is Terminally Ill, or has
been confined to an Eligible Nursing Home or Eligible Hospital continuously for
three months beginning after the Contract Date, and (b) such terminal illness or
confinement continues on the date we receive the withdrawal request in Good
Order.
WITHDRAWALS FROM MVA OPTIONS: A withdrawal from an interest segment associated
with an MVA Option, within 30 days immediately following the end of its GIR
Period, is not subject to the MVA. You may specify the interest segment or MVA
Option from which you would like to make a withdrawal. If you specify an MVA
Option, but not an interest segment, the withdrawal will be taken from the
interest segment associated with that MVA Option that has the least time
remaining until its maturity date. If you request a withdrawal from your
Contract, and do not provide specific instructions, we will take the withdrawal
on a pro-rata basis from all Allocation Options to which your Contract Value is
allocated. In this situation, all funds in MVA Options will be summed and
considered as one Allocation Option. The portion of the withdrawal associated
with MVA Options will be taken from the interest segments with the least amount
of time remaining until the maturity date, regardless of the GIR period. [A
withdrawal from an MVA Option may be subject to an MVA, even if the withdrawal
is not subject to a Withdrawal Charge because it is a Charge-Free Amount.]
13
TRANSFERS FROM MVA OPTIONS: A transfer from an interest segment associated with
an MVA Option is subject to an MVA unless made during the 30 days immediately
following the end of its GIR Period. You may specify the interest segment or MVA
Option from which you would like to make a transfer. If you specify an MVA
Option, but not an interest segment, the transfer will be taken from the
interest segment associated with that MVA Option that has the least time
remaining until its maturity date. Transfers from an interest segment within the
30 days immediately following the end of a GIR Period do not count toward the
maximum number of transfers which may be made under the Contract. Transfers from
an MVA Option at any other time count toward the maximum number of transfers
which may be made under the Contract and may be subject to a Transfer Charge.
Any Transfer Charge will be deducted from the unadjusted Contract Value before
any adjustment for the MVA. If a transfer is being made from more than one
interest segment or MVA Option, the applicable Transfer Charge will be
proportionally deducted from the Contract Value associated with each MVA Option
or interest segment. Any deduction for Transfer Charges will be made prior to
the transfer. If a Transfer Charge is applicable, and the full amount in an
interest segment or an MVA Option is being transferred, the Transfer Charge will
be deducted first from the Contract Value, and the remaining amount will then be
transferred. If a Transfer Charge is applicable, and the amount in an interest
segment or MVA Option is insufficient to pay the Transfer Charge and provide the
requested transfer amount, the Transfer Charge will be deducted first from the
unadjusted Contract Value, and the remaining amount will then be transferred.
TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD: A transfer is subject to the
following:
1. the maximum number of transfers which may be made, the maximum
number of transfers which are not subject to a Transfer Charge
and the minimum amount which may be transferred are shown on
the Contract Data pages;
2. a Transfer Charge is deducted if a transfer exceeds the
maximum number of free transfers. The Transfer Charge is shown
on the Contract Data pages. The Transfer Charge is deducted
from the amount which is transferred;
3. a transfer will be effected as of the end of the Business Day
when we receive a request in Good Order;
4. we are not responsible for the consequences resulting from a
transfer made in accordance with your instructions;
5. your right to make transfers is subject to modification if we
determine, in our sole opinion, that the exercise of the right
by one or more Owners is, or would be, to the disadvantage of
other Owners or if required to do so by applicable laws or
regulations. Restrictions may be applied in any manner
reasonably designed to prevent any use of the transfer right
which is considered by us to be to the disadvantage of other
Owners or to ensure compliance with such laws or regulations.
A modification could be applied to transfers to or from one or
more of the Subaccounts and could include, but not limited to:
a. the requirement of a minimum time period
between each transfer;
b. not accepting a transfer request of an agent
acting under a power of attorney on behalf
of more than one Owner;
c. limiting the dollar amount that may be
transferred among the Subaccounts by an
Owner at any one time; or
d. restricting the number of transfers per
year.
No transfers are permitted after the Annuity Date.
14
WITHDRAWALS
WITHDRAWALS: During the Accumulation Period, you may, upon a request in Good
Order, make a total or partial withdrawal of the Contract Surrender Value. An
MVA will apply if the withdrawal is made from an MVA Option at any time other
than within 30 days immediately following the end of a GIR Period. [Any
applicable Withdrawal Charge will be applied after any MVA.] You may specify the
Allocation Option(s) from which a withdrawal will be taken. If you do not
specify, we will take the withdrawal on a pro-rata basis from all Allocation
Option(s) to which your Contract Value is allocated.
We will pay the amount of any withdrawal within 7 days of receipt of request in
Good Order unless the "Suspension or Deferral of Payments or Transfers"
provision is in effect.
Each partial withdrawal must be for an amount which is not less than the amount
shown on the Contract Data pages. The minimum Contract Value which must remain
in the Contract after a partial withdrawal in order to keep the Contract inforce
is shown on the Contract Data pages. If the amount of the withdrawal requested
would reduce the Contract Value below this minimum, we will give you the maximum
amount available that, with [the Withdrawal Charge and] any applicable MVA,
would not reduce the Contract Value below such minimum. Special rules may apply
for IRAs.
[WITHDRAWAL CHARGE: A Withdrawal Charge may apply if you make a withdrawal
during the Withdrawal Charge Period. The amount of the Withdrawal Charge is a
percentage, shown on the Contract Data pages, of the amount withdrawn that is
subject to the charge. If a withdrawal is effective on the day before a Contract
Anniversary, the Withdrawal Charge percentage used will be the one as of the
following Contract Anniversary. If you request a partial withdrawal, we will
deduct an amount from the Contract Value that is sufficient to pay the
Withdrawal Charge and any negative MVA, and provide you the amount requested.
In determining the Withdrawal Charge, withdrawals of the Charge-Free Amount will
be taken first. Withdrawals in excess of the Charge-Free Amount may be subject
to a Withdrawal Charge. Once all Purchase Payments have been withdrawn, further
withdrawals will be taken from any Earnings. Earnings are not subject to
Withdrawal Charges.
Even if a withdrawal is not subject to Withdrawal Charges because the amount
withdrawn is not in excess of the Charge-Free Amount, it may be subject to an
MVA if the withdrawal is made at any time other than within the 30-day period
immediately following the end of a GIR Period.
When a withdrawal is taken from a tax-qualified Contract in order to satisfy a
mandatory distribution requirement with respect to the Contract Value in this
Contract, Withdrawal Charges will be waived on any amount that exceeds the
Charge-Free Amount.
Withdrawal Charges will never be greater than that permitted by any applicable
law or regulation. Depending on the Settlement Option selected, Withdrawal
Charges may be assessed upon settlement.]
WAIVER OF [WITHDRAWAL CHARGES AND] MVA: If you request a withdrawal, we will
waive [all Withdrawal Charges and] any MVA upon receipt of due proof that: (a)
the Owner or Joint Owner is Terminally Ill, or has been confined to an Eligible
Nursing Home or Eligible Hospital continuously for at least three months
beginning after the Contract Date, and (b) such terminal illness or confinement
continues on the date we receive the Owner's or Joint Owner's request for
withdrawal in Good Order. This waiver is not available if the Contract has been
assigned.
15
[CREDIT
At least 30 calendar days prior to your First Credit Date shown on the Contract
Data pages, we will notify you of your option to have a Credit added to your
Contract Value.
If you elect to receive a Credit, it will be allocated to the Allocation Options
in the same proportion as the Contract Value on the applicable Credit Date. If
we do not receive a Credit Election request in Good Order by your applicable
Credit Date, no Credit will be added to your Contract Value. If you do elect to
receive the Credit at your First Credit Date, we will make this same offer
again, at least 30 calendar days prior to your Second Credit Date.
If you do not elect to receive the Credit at the First Credit Date, we will not
make this offer again and any subsequent Credit offers will not be available to
you.
If you elect to receive a Credit, a new Withdrawal Charge Period will begin. You
will be subject to a Credit Election Withdrawal Charge (as shown on the Contract
Data pages) on withdrawals you make which are subject to the charge. The
Charge-Free Amount will apply to withdrawals made on or after the applicable
Credit Date, and will be calculated as described in the Contract Data pages.
Withdrawals which do not exceed the Charge-Free Amount will not be subject to a
Credit Election Withdrawal Charge, but, if applicable, will be subject to an
MVA. Credits and any applicable earnings resulting from the Credits will be
considered Earnings and are not subject to a Credit Election Withdrawal Charge.]
16
GUARANTEED MINIMUM DEATH BENEFIT
The Guaranteed Minimum Death Benefit (GMDB) is a feature providing for the
option to receive an enhanced death benefit upon the death of the sole Owner or
the first to die of the Owner or Joint Owner during the Accumulation Period. The
GMDB feature must be elected at the time you purchase your Contract. If you
elect the GMDB feature, you must elect a GMDB Protected Value option. The GMDB
Protected Value option can be equal to the GMDB Roll-Up, the GMDB Step-Up, or
the greater of the GMDB Roll-Up and the GMDB Step-Up. The Contract Data pages
indicate whether you have elected the GMDB feature and, if so, which GMDB
Protected Value option you elected. The GMDB Protected Value is calculated
daily.
GMDB ROLL-UP:
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS LESS THAN AGE 80
ON THE CONTRACT DATE, the GMDB Roll-Up is equal to the Invested Purchase
Payments made, increased daily at an effective annual interest rate of 5%
starting on the date that each Invested Purchase Payment is made. The GMDB
Roll-Up will be increased by subsequent Invested Purchase Payments and reduced
by the effect of withdrawals.
We stop increasing the GMDB Protected Value by the effective annual interest
rate on the later of: the Contract Anniversary coinciding with or next following
the sole Owner's or older Owner's 80th birthday, or the 5th Contract
Anniversary. However the GMDB Protected Value is still increased by subsequent
Invested Purchase Payments and reduced by the effect of withdrawals.
The words "reduced by the effect of withdrawals" in the preceding two paragraphs
mean that withdrawals from the Contract will first reduce the GMDB Protected
Value on a dollar for dollar basis, by the same dollar amount of the withdrawal
up to the first 5% of GMDB Protected Value calculated on the immediately
preceding Contract Anniversary (in the first Contract Year, the Contract Date).
Then we apply a proportional reduction to the GMDB Protected Value that equals
the same percent that the withdrawal amount exceeding 5% of the GMDB Protected
Value reduced the Contract Value.
To accomplish this, we will multiply the value of "A" by the value of "B" where:
A = GMDB Protected Value minus C
B = Contract Value minus withdrawal amount
Contract Value minus C
C = 5% of GMDB Protected Value
* An amount up to 5% of the GMDB Protected Value withdrawn after the year in
which the GMDB Roll-Up stops increasing, will reduce the GMDB Protected Value
proportionally.
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS AGE 80 OR MORE ON
THE CONTRACT DATE, the GMDB Roll-Up is equal to the Invested Purchase Payments
made, increased daily at an effective annual interest rate of 3% starting on the
date that each Invested Purchase Payment is made. The GMDB Roll-Up will be
increased by subsequent Invested Purchase Payments and reduced by the effect of
withdrawals.
We stop increasing the GMDB Protected Value by the effective annual interest
rate on the 5th Contract Anniversary. However the GMDB Protected Value is still
increased by subsequent Invested Purchase Payments and reduced by the effect of
withdrawals.
The words "reduced by the effect of withdrawals" in the preceding two paragraphs
mean that withdrawals from the Contract will first reduce the GMDB Protected
Value on a dollar for dollar basis, by the same dollar amount of the withdrawal
up to the first 3% of GMDB Protected Value calculated on the immediately
preceding Contract Anniversary (in the first Contract Year, the Contract Date).
Then we apply a proportional reduction to the GMDB Protected Value that equals
the same percent that the withdrawal amount exceeding 3% of the GMDB Protected
Value reduced the Contract Value.
17
To accomplish this, we will multiply the value of "A" by the value of "B" where:
A = GMDB Protected Value minus C
B = Contract Value minus withdrawal amount
Contract Value minus C
C = 3% of GMDB Protected Value
* An amount up to 3% of the GMDB Protected Value withdrawn after the year in
which the GMDB Roll-Up stops increasing will reduce the GMDB Protected Value
proportionally.
GMDB STEP-UP:
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS LESS THAN AGE 80
ON THE CONTRACT DATE, the GMDB Step-Up before the first Contract Anniversary is
the initial Invested Purchase Payment increased by subsequent Invested Purchase
Payments and proportionally reduced by the effect of withdrawals. The GMDB
Step-Up on each Contract Anniversary will be the greater of the previous GMDB
Step-Up and the Contract Value as of such Contract Anniversary. Between Contract
Anniversaries, the GMDB Step-Up will be increased by Invested Purchase Payments
and reduced by the effect of withdrawals.
We stop increasing the GMDB Protected Value by any appreciation in the Contract
Value on the later of: the Contract Anniversary coinciding with or next
following the sole or older Owner's 80th birthday, or the 5th Contract
Anniversary. However we still increase the GMDB Protected Value by subsequent
Invested Purchase Payments and reduce it by the effect of withdrawals.
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS AGE 80 OR MORE ON
THE CONTRACT DATE, the GMDB Step-Up before the third Contract Anniversary is the
sum of Invested Purchase Payments, reduced by the effect of withdrawals. On the
third Contract Anniversary the GMDB Step-Up will be adjusted to the greater of
the then current GMDB Step-Up or the Contract Value as of that Contract
Anniversary. Thereafter the GMDB Protected Value is only increased by subsequent
Invested Purchase Payments and reduced by the effect of withdrawals.
Where the words "reduced by the effect of withdrawals" are used in connection
with the GMDB Step-Up, withdrawals from the Contract will reduce the GMDB
Protected Value in the same proportion as they reduce the Contract Value. We
calculate the proportion by dividing the Contract Value after the withdrawal by
the Contract Value immediately prior to the withdrawal. The resulting percentage
is multiplied by the GMDB Protected Value (before the withdrawal) in determining
the GMDB Protected Value.
DEATH OF FIRST TO DIE OF THE OWNER AND JOINT OWNER DURING THE ACCUMULATION
PERIOD:
If you have elected the GMDB feature, and if the Owner or Joint Owner dies
before Xxxxxxx Date, upon receipt of due proof of death and any other
documentation we need, the beneficiary is entitled to receive a death benefit
equal to the greater of:
(a) the Contract Value as of the date we receive due proof of
death and any other documentation we need; and
(b) the GMDB Protected Value as of the date we receive due proof
of death and any other documentation we need.
If you do not elect the GMDB feature, and if the Owner or Joint Owner dies
before Annuity Date, upon receipt of due proof of death and any other
documentation we need, the beneficiary is entitled to receive a base death
benefit equal to the greater of:
(a) the Contract Value as of the date we receive due proof of
death and any other documentation we need; and
(b) the sum of all Invested Purchase Payments, reduced by the
effect of withdrawals.
If the ownership of the Contract changes as a result of an assignment, the value
of the death benefit will be reset to the Contract Value as of the date of the
assignment. Such value will be treated as a Purchase Payment made on that date
for purposes of computing the death benefit.
The Beneficiary may, within 60 days of providing proof of death, elect to take
the death benefit under one of the death benefit payout options listed below,
provided that any payout option shall not include a period certain that exceeds
the life expectancy of the Beneficiary. The Beneficiary will be the sole
measuring life in determining the amount of any such payout option. If no payout
option is selected within the 60 days, the death benefit will be payable as a
lump sum.
18
Spousal Continuance is available if: (1) there is only one Owner of the Contract
and there is only one Beneficiary who is the Owner's spouse, or (2) there are an
Owner and Joint Owner of the Contract and each is the other's spouse and
Beneficiary under the Contract, on the date we receive due proof of the Owner's
or Joint Owner's death. (See the "Spousal Continuance" provision of the
Contract.)
If: (1) the spouse is not the sole primary Beneficiary of the sole Owner, or (2)
the Owner and Joint Owner are not each other's spouse at the time we receive due
proof of the Owner's or Joint Owner's death, the Contract will not continue, and
the Beneficiary will be required to choose one of the death benefit payout
options described below.
The death benefit payout options are:
Choice 1 - lump sum payment of the death benefit; or
Choice 2 - the payment of the entire death benefit within a period of 5 years
from the date of death of the first to die of the Owner or Joint Owner. We will
impose an MVA on any withdrawal from an MVA Option made during the 5-year period
unless taken within the 30-day period following the end of a GIR Period. The
entire death benefit will include any increases or losses resulting from the
performance of the Allocation Options during this period. During this period the
Beneficiary may: reallocate the Contract Value among the Allocation Options;
name a Beneficiary to receive any remaining death benefit in the event of the
Beneficiary's death; and make withdrawals from the Contract Value[, in which
case, any such withdrawals will not be subject to any Withdrawal Charges].
However, the Beneficiary may not make any Purchase Payments to the Contract.
During this 5 year period, existing charges and costs will be deducted from the
death benefit as though the Contract had continued; or
Choice 3 - payment of the death benefit under an Annuity or Settlement Option
over the lifetime of the Beneficiary or over a period not extending beyond the
life expectancy of the Beneficiary with distribution beginning within one year
of the date of death of the first to die of the Owner or Joint Owner.
If the Owner and Joint Owner are spouses at the death of the first to die of the
Owner and Joint Owner, any portion of the death benefit not applied under Choice
3 within one year of the date of death of the survivor must be distributed
within 5 years of the survivor's date of death.
If the Owner and Joint Owner are not spouses at the death of the first to die of
the Owner and Joint Owner:
- the payout described in Choice 2 and the beginning of the
distribution described in Choice 3 will be based on the date of death
of the first to die of the Owner or Joint Owner, and
- any portion of the death benefit not applied under Choice 3 within
one year of the date of death of the first to die must be distributed
within 5 years of the date of death of the first to die.
Once a death benefit becomes payable, the Payee's interest in any Annuity
Benefit under the Contract will cease.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the "Suspension or
Deferral of Payments" provision is in effect.
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD: If the Annuitant dies before
the Annuity Date, the Co-Annuitant, if applicable, becomes the Annuitant. If
there is no surviving Co-Annuitant, and the Annuitant was not the Owner, the
Owner becomes the Annuitant. You have right to name a new Annuitant within 60
days. If the Owner is a non-natural person, the death of the Annuitant will be
treated as the death of the Owner, a new Annuitant may not be designated, and
the Annuitant will be the Owner for purposes of determining the death benefit.
DEATH OF ANNUITANT DURING THE ANNUITY PERIOD: If the Annuitant dies on or after
the Annuity Date, the Settlement Option then in effect will govern whether or
not we will continue to make any payments. The death of a non-Annuitant Owner or
Joint Owner has no effect on the payout during the Annuity Period.
PAYMENT OF DEATH BENEFIT: We will require due proof of death and any other
documentation we request in Good Order before any death benefit paid. All death
benefits will be paid in accordance with applicable law or regulations governing
death benefit payments.
19
TAX CONSIDERATIONS: There are tax rules that apply to IRA and other qualified
contracts during both the Accumulation Period and Annuity Period governing
distributions upon the death of the Owner. These rules are contained in
provisions in the attached endorsements and supersede any other distribution
rules contained in the Contract.
The preceding provisions regarding the death of the Owner are intended to
satisfy the distribution at death requirements of section 72(s) of the Internal
Revenue Code of 1986, as amended. We reserve the right to amend this Contract by
subsequent endorsement as necessary to comply with applicable tax requirements,
if any, which are subject to change from time to time. Such additional
endorsements, if necessary to comply with amended tax requirements, will be
mailed to you and become effective within 30 days of mailing, unless you notify
us in writing, within that time frame, that you reject the endorsement.
If the Internal Revenue Service determines that the deductions for one or more
benefits under this Contract, including, without limitation, the GMDB feature
and any optional benefit added by endorsement, are taxable withdrawals, then the
sole or surviving Owner may cancel the affected benefit(s) within 90 days after
written notice from us.
SPOUSAL CONTINUANCE
This feature is available if, on the date we receive due proof of death in Good
Order of: (1) the sole Owner, there is only one Beneficiary who is the Owner's
spouse; or (2) the first to die of the Owner and Joint Owner, each is the
other's spouse and primary Beneficiary under the Contract. In the case of (1)
and (2) above, if the Annuitant is age 95 or less on the date we receive due
proof of death, the surviving spouse will become the new sole Owner under the
Contract. The surviving spouse can elect Spousal Continuance, but must do so no
later than 60 days after furnishing due proof of death. If the surviving spouse
does not elect Spousal Continuance within the 60-day period, the Contract will
end and a lump sum death benefit will be paid.
[Under Spousal Continuance, we waive any potential Withdrawal Charges applicable
to Purchase Payments made prior to or after activation of Spousal Continuance.]
Upon activation of Spousal Continuance, the Contract Value is adjusted to equal
the amount of the death benefit to which the surviving spouse would have been
entitled. The amount of the adjustment will be prorated among the Allocation
Options to which your Contract Value is then allocated. The adjusted Contract
Value will serve as the basis for calculating any death benefit payable upon the
death of the surviving spouse.
IF YOU ELECTED THE BASE DEATH BENEFIT, then upon activation of Spousal
Continuance, we will adjust the Contract Value to equal the greater of:
1. the Contract Value plus the amount of any applicable Earnings
Appreciator Benefit, and
2. the sum of all Invested Purchase Payments (reduced by
withdrawals) plus the amount of any applicable Earnings
Appreciator Benefit.
IF YOU ELECTED THE GMDB FEATURE, we will adjust the Contract Value to equal the
greater of:
1. the Contract Value plus the amount of any applicable Earnings
Appreciator Benefit, and
2. the GMDB Protected Value originally elected plus the amount of
any applicable Earnings Appreciator Benefit.
After we have made the adjustment to Contract Value described in the preceding
paragraphs, we will continue to compute any applicable GMDB Protected Value
under the surviving spousal Owner's Contract in accordance with the "Guaranteed
Minimum Death Benefit" provisions of the Contract. The attained age of the
surviving spouse will be the basis used in determining the death benefit payable
under the Contract.
DEATH OF THE SURVIVING SPOUSAL OWNER DURING THE ACCUMULATION PERIOD AFTER
ACTIVATING SPOUSAL CONTINUANCE -- If a surviving spousal Owner dies after
activating Spousal Continuance but before the Annuity Date, a death benefit will
be payable, based on the applicable death benefit option elected under the
Contract.
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ANNUITY AND SETTLEMENT OPTIONS
GENERAL: On the Annuity Date, the Adjusted Contract Value will be applied under
the Annuity or Settlement Option you have selected. If the payment under any
option selected would be less than $20 per month, we reserve the right to pay
out the Adjusted Contract Value in a lump sum. We guarantee that the dollar
amount of each payment, once determined, will not be affected by variations in
mortality or expense experience.
SELECTION OF AN ANNUITY OR SETTLEMENT OPTION: You may select an Annuity or
Settlement Option by notifying us of the selected option in Good Order. If no
Annuity or Settlement Option is selected, or if the chosen Option is not
received in Good Order, Option 2, Life Income Annuity Option, will automatically
be applied. You may, at any time prior to the Annuity Date, by a request in Good
Order 30 days in advance, select and/or change the Annuity or Settlement Option.
ANNUITY AND SETTLEMENT OPTIONS: This Contract provides for payments under one of
the Annuity or Settlement Options described below. Any other Annuity or
Settlement Option acceptable to us may be selected.
OPTION 1 - FIXED PERIOD ANNUITY OPTION. We will make equal payments for a period
you choose up to 25 years. At your choice, we will make such payments annually,
semi-annually, quarterly, or monthly. Table 1 shows the minimum amounts we will
pay.
OPTION 2 - LIFE INCOME ANNUITY OPTION. We will make payments for as long as the
Annuitant lives, with payments certain for 120 months. At your choice, we will
make such payments annually, semi-annually, quarterly or monthly. Table 2 shows
the minimum amounts we will pay.
OPTION 3 - INTEREST PAYMENT SETTLEMENT OPTION: We will credit interest on the
Adjusted Contract Value at the rate of at least 1.5% until you request payment
of all or part of the Adjusted Contract Value. At your choice, we will pay
interest on the Adjusted Contract Value not yet withdrawn annually,
semi-annually, quarterly or monthly. You may request full or partial payment of
the Adjusted Contract Value provided, however, that if a partial payment is
requested, the amount of any Adjusted Contract Value remaining after such
requested amount is paid must be at least $1,000. This option is not available
for qualified contracts.
OTHER ANNUITY OR SETTLEMENT OPTIONS: We may offer or consent to other settlement
options, including life income annuity options with payments certain for a
period of other than 120 months. Contact the representative who sold you the
Contract or call the toll-free number listed on your quarterly statement for
information.
ANNUITY: Unless you designate another Payee, you will be the Payee of the
Annuity Payments. The Adjusted Contract Value will be applied to the applicable
Annuity Table contained in this Contract based upon the Annuity Option you have
selected. The amount of the first payment for each $1,000 of Adjusted Contact
Value is shown in the Annuity Tables. If when Annuity Payments begin we are
using tables of annuity rates for these Contracts which result in larger Annuity
Payments, we will use those tables instead. Annuity Payments will depend on the
age and sex of the Annuitant, where permitted
[WITHDRAWAL CHARGES AND] MVA: [Any amount used to provide income under Option 1
for a period of 10 years or more, or under Option 2, will be applied without a
Withdrawal Charge. Any amount used to provide income under Option 1 for a period
of less than 10 years, or under Option 3 may be subject to a Withdrawal Charge.
If you choose any other method of payment not described in this Contract, we
will tell you if it is subject to a Withdrawal Charge.] If you begin Annuity
Payments or take a Settlement Option at a time other than within the 30-day
period immediately following the end of a GIR Period, we will adjust your
Contract Value by an MVA.
21
BENEFICIARY
BENEFICIARY: The Beneficiary designation in effect on the Contract Date will
remain in effect until changed. The Beneficiary is entitled to receive the
benefits to be paid at the death of the first to die of the Owner or Joint Owner
during the Accumulation Period. The Owner must be the primary Beneficiary of the
Joint Owner, and the Joint Owner must be the primary Beneficiary of the Owner.
Other than primary Beneficiaries, Beneficiaries must be the same for both the
Owner and Joint Owner.
When a Beneficiary is designated, any relationship shown is to the Owner unless
otherwise specified.
To show priority among Beneficiaries, we will label the classes, so that the
class with first priority is called the primary class, the class with next
priority is called the secondary class, and so on. The following statements
apply to Beneficiaries unless the Contract Data pages, Contract endorsement or
any change request that we have processed specifies otherwise:
One who survives the first to die of the Owner and Joint Owner will
have the right to be paid only if no one in a prior class survives
the first to die of the Owner and Joint Owner.
One who has the right to be paid will be the only one paid if no one
else in the same class survives the first to die of the Owner and
Joint Owner.
Two or more in the same class who have the right to be paid in equal
shares.
If no one survives the sole Owner, we will pay in one sum to the
Owner's estate.
Where there is insufficient evidence to determine the order of death
then, unless state law prohibits, we will deem the Owner to be the
last survivor and make payment to the Owner's Beneficiary.
Before we make a payment, we have the right to decide what proof we
need of the identity, age or any other facts about any persons
designated as Beneficiaries. If Beneficiaries are not designated by
name and we make payment(s) based on that proof, we will not have to
make the payment(s) again.
CHANGE OF BENEFICIARY: To initiate a change of Beneficiary, call the toll-free
number listed on your statement or contact the representative who sold you
Contract. We may also ask you to send us the Contract. The change will take
effect only when we process the request. Then, any previous Beneficiary's
interest will end as of the date we receive the request in Good Order, even if
the Owner or Joint Owner is not living when we process the request. We will not
be liable for any payment made or action taken before we record the change.
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE VARIABLE INVESTMENT OPTIONS: We reserve the right to suspend or defer
payments from the Variable Investment Options for a withdrawal or transfer for
any period when:
1. the New York Stock Exchange is closed (other than customary
weekend and holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of shares
of the Variable Investment Options held in the Separate
Account is not reasonably practicable or it is not reasonably
practicable to determine the value of such shares; or
4. during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
FROM THE INTEREST RATE INVESTMENT OPTIONS: We reserve the right to suspend or
defer payments from the Interest Rate Investment Options for a withdrawal or
transfer for the period permitted by law, but for not more than six months after
a request in Good Order is received at the Annuity Service Center.
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GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of this Contract, and any attached
endorsement or riders. This Contract may be changed or altered only by our
President or Secretary. Any change, modification or waiver must be made in
writing. This Contract may not be modified by us without your consent except as
may be required by applicable law, including changes necessary to comply with
IRS requirements for annuity contracts, or as set forth in this Contract.
ASSIGNMENT OF A CONTRACT: A request in Good Order specifying the terms of an
assignment of a Contract must be provided to the Annuity Service Center. We are
under no obligation to verify the assignment's validity or sufficiency. We will
not be liable for any payment made or action taken before we record the
assignment. If any Owner is living on the Annuity Date and an assignment is in
effect on that date, we have the right to pay the Contract Surrender Value in
one lump sum to the assignee where notice in Good Order is received. Partial
assignments, collateral or otherwise, are not allowed without our approval. We
reserve the right to restrict or refuse any assignment.
An assignment which results in a change of ownership will affect the value of
the death benefit. Please see the "Guaranteed Minimum Death Benefits" provision
for more information.
We will not be responsible for the validity or tax consequence of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with our consent.
If the Contract is assigned, your rights may only be exercised with consent of
the assignee of record.
NON-PARTICIPATING IN SURPLUS: This Contract does not share in any distribution
of our profits or surplus.
INCONTESTABILITY: We will not contest this Contract. We will not contest any
statement made in the application which is used as a basis for issuing this
Contract. We consider all statements made in the application for this Contract
to be representations, not warranties.
MISSTATEMENT OF AGE OR SEX: We may require proof of age of the Annuitant before
making any life contingent Annuity Payment provided for by this Contract. If the
age or sex of the Annuitant has been misstated, the amount payable will be the
amount that the Contract Value would have provided at the true age or sex.
Once Annuity Payments have begun, any underpayments, with interest at 5% will be
made up in one sum with the next Annuity Payment, and overpayments, with
interest at 5%, will be deducted from the future Annuity Payments until the
total is repaid.
CONTRACT SETTLEMENT: This Contract must be returned to us upon any settlement.
REPORTS: We will send you a report four times each calendar year until the
Annuity Date showing your Contract Value and other relevant information about
your Contract. We will also furnish an annual report of the Separate Account.
These reports will be sent to your last known address.
TAXES: Any taxes, including any Premium Taxes and any other type of tax (or
component thereof) measured by or based upon any portion of the Purchase Payment
we receive, paid to any governmental entity will be charged against the Contract
Value, unless a deduction was made for this tax in calculating the Invested
Purchase Payment amount. We will, in our sole discretion, determine when taxes
have resulted from: the investment experience of the Separate Account; receipt
by us of the Purchase Payment(s); or commencement of Annuity Payments. We may,
at our discretion, pay taxes when due and deduct that amount from the Contract
Value at a later date. Payment at an earlier date does not waive any right we
may have to deduct amounts at a later date. We reserve the right to establish a
provision for federal income taxes if we determine, in our sole discretion, that
we will incur a tax as a result of the operation of the Separate Account. We
will deduct for any income taxes incurred by it as a result of the operation of
the Separate Account whether or not there was a provision for taxes and whether
or not it was sufficient. We will deduct any withholding taxes required by
applicable law.
EVIDENCE OF SURVIVAL: Before we make a payment, we have the right to require
proof of continued life and any other documentation we need to make a payment.
We can require this proof for any person whose life or death determines whether
or to whom we must make the payment.
PROTECTION OF PROCEEDS: No beneficiary may commute, encumber, alienate, or
assign any payments under this Contract before they are due. To the extent
permitted by law, no payments will be subject to the debts, contracts or
engagements of any Beneficiary or to any judicial process to levy upon or attach
the same for payments thereof.
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VALUES AND BENEFITS
Any cash values, paid up annuities and death benefits that may be available
under this Contract are not less than the minimum benefits required by the law
of any state in which this Contract is delivered.
ANNUITY SETTLEMENT TABLES
Tables 1 and 2 below are applied to the Adjusted Contract Value to compute the
minimum amount of the annuity payment. Table 1 is used to compute the minimum
annuity payment under Option 1 (Fixed Period Annuity Option). Table 2 is used to
compute the minimum annuity payment under Option 2 (Life Income Annuity Option).
The rates in Table 1 and 2 are applied per $1,000 of Adjusted Contract Value. We
used an interest rate of 1.5% per year in preparing Table 1, and an interest
rate of 3% per year in preparing Table 2. Table 2 assumes 120 payments certain.
The annuity payments in Table 2 are based on the Annuitant's Adjusted Age and
sex. The Adjusted Age is the Annuitant's age last birthday prior to the date on
which the first Annuity payment is due, adjusted as shown in the "Translation of
Adjusted Age" Table. When we computed the amounts shown in Table 2, we adjusted
the Annuity 2000 Mortality Table to an age last birthday basis, less two years,
with projected mortality improvements (modified Scale G).
TABLE 1
Number of Monthly Number of Monthly Number of Monthly Number of Monthly
Years Payment Years Payment Years Payment Years Payment
----- ------- ----- ------- ----- ------- ----- -------
1 $83.90 8 $11.04 14 $6.59 20 $4.81
2 42.26 9 9.89 15 6.20 21 4.62
3 28.39 10 8.96 16 5.85 22 4.44
4 21.45 11 8.21 17 5.55 23 4.28
5 17.28 12 7.58 18 5.27 24 4.13
6 14.51 13 7.05 19 5.03 25 3.99
7 12.53
In using Table 1, multiply the monthly payment by 2.996 for quarterly payments,
5.981 for semi-annual Payments, or 11.919 for annual payments
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TABLE 2
Adjusted Adjusted Adjusted
Age Male Female Age Male Female Age Male Female
--- ---- ------ --- ---- ------ --- ---- ------
41 $3.40 $3.25 61 $4.66 $4.32 81 $7.67 $7.33
42 3.44 3.29 62 4.76 4.41 82 7.85 7.53
43 3.48 3.32 63 4.87 4.50 83 8.02 7.73
44 3.53 3.35 64 4.98 4.60 84 8.18 7.93
45 3.57 3.39 65 5.10 4.71 85 8.33 8.12
46 3.62 3.43 66 5.23 4.82 86 8.48 8.29
47 3.67 3.47 67 5.36 4.94 87 8.62 8.46
48 3.72 3.51 68 5.49 5.06 88 8.75 8.61
49 3.77 3.56 69 5.64 5.19 89 8.87 8.75
50 3.83 3.61 70 5.78 5.33 90 8.98 8.88
51 3.88 3.66 71 5.94 5.48 91 9.08 8.99
52 3.95 3.71 72 6.10 5.63 92 9.16 9.09
53 4.01 3.76 73 6.26 5.79 93 9.24 9.18
54 4.08 3.82 74 6.43 5.96 94 9.32 9.26
55 4.15 3.88 75 6.60 6.14 95 9.38 9.33
56 4.22 3.94 76 6.78 6.33
57 4.30 4.01 77 6.95 6.52
58 4.38 4.08 78 7.13 6.71
59 4.47 4.16 79 7.31 6.92
60 4.56 4.24 80 7.49 7.12
Translation of Adjusted Age
Calendar Year in Which First Calendar Year in Which First
Payment Is Due Adjusted Age Payment Is Due Adjusted Age
-------------- ------------ -------------- ------------
Prior to 2010 Actual Age 2050 through 2059 Actual Age minus 5
2010 through 2019 Actual Age minus 1 2060 through 2069 Actual Age minus 6
2020 through 2029 Actual Age minus 2 2070 through 2079 Actual Age minus 7
2030 through 2039 Actual Age minus 3 2080 through 2089 Actual Age minus 8
2040 through 2049 Actual Age minus 4 2090 through 2099 Actual Age minus 9
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INDIVIDUAL FLEXIBLE PREMIUM DEFERRED FIXED AND VARIABLE ANNUITY CONTRACT.
NON-PARTICIPATING. ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN
BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE
NOT GUARANTEED AS TO DOLLAR AMOUNT. MARKET VALUE ADJUSTMENT OPTIONS SUBJECT TO
MARKET VALUE ADJUSTMENTS.
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