Aetna Life Insurance and Annuity Company
Home Office: 000 Xxxxxxxxxx Xxx.
Hartford, Connecticut 06156
(000) 000-0000
Aetna Life Insurance and Annuity Company, herein called Aetna,
agrees to pay the benefits stated in this Contract.
Specifications
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Plan
MARATHON PLUS
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Type of Plan
INDIVIDUAL RETIREMENT ANNUITY ROLLOVER ACCOUNT
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Contract Holder
XXXX X. XXXXX
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Contract No.
SPECIMEN
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Effective Date
XXXXXXX XX, 1995
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This Contract is Delivered in YOUR STATE and is Subject to the Laws
of that Jurisdiction
THE VARIABLE FEATURES OF THE GROUP CONTRACT ARE DESCRIBED IN PARTS III AND IV.
Right to Cancel
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The Contract Holder may cancel this Contract within 10 days of receiving it, by
sending a written notice to Aetna at the above address or to the agent from whom
it was purchased. Aetna will return all payments made for this Contract within 7
days after it receives the notice of cancellation and this Contract at its Home
Office.
This page, the following pages, and the application make up the entire Contract.
Signed at the Home Office on the Effective Date.
/s/ Xxx Xxxxxxx /s/ Xxxxx X. Xxxxxxxxx
President Secretary
G-CDA-IC (IR)
Group Variable, Fixed, or Combination Annuity Contract
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR
DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT
APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
2
Specifications
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Guaranteed Interest Rate There is a guaranteed interest rate for Purchase
Payment(s) held in the AG Account. (See Contract
Schedule I).
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Deductions from the There will be deductions for mortality and expense
Separate Account risks and administrative fees (See Contract Schedule
I and II).
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Deduction from Purchase Purchase Payment(s) are subject to a deduction for
Payment(s) premium taxes, if any (See 3.01.)
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Surrender Fee There will be a charge deducted upon surrender.
(See Contract Schedule I).
This Contract is a legal contract and constitutes the entire legal relationship
between Aetna and the Contract Holder.
READ THIS CONTRACT CAREFULLY. This Contract sets forth, in detail, all of the
rights and obligations of both you and Aetna. IT IS THEREFORE IMPORTANT THAT YOU
READ THIS CONTRACT CAREFULLY.
3
Contract Schedule I
Accumulation Period
Separate Account
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Separate Account: Variable Annuity Account B
Charges to Separate A daily charge is deducted from any portion of the
Account: Current Value allocated to the Separate Account. The
deduction is the daily equivalent of the
annual effective percentages shown in the
following chart:
Administrative Charge 0.15%
Mortality Risk Charge 0.35%
Expense Risk Charge 0.90%
----
Total Separate Account
Charges 1.40%
ALIAC Guaranteed Account (AG Account)
-------------------------------------------------------------------------------
Minimum Guaranteed Interest Rate (effective annual
rate of return): 3.0%.
Separate Account and AG Account
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Transfers: An unlimited number of Transfers may be made during
the Accumulation Period. Aetna allows 12 free
Transfers in any calendar year. Thereafter, Aetna
reserves the right to charge $10 for each subsequent
Transfer.
Maintenance Fee: The annual Maintenance Fee is $30. If the Account's
Current Value is $50,000 or more on the date the
Maintenance Fee is to be deducted, the Maintenance
Fee is $0.
4
Contract Schedule I (Continued)
Accumulation Period
Separate Account and AG Account (Cont'd)
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Surrender Fee: For each surrender, the surrender fee will be
determined as follows:
Surrender Fee
(as percentage of
Length of Time from Deposit of Net Net Purchase
Purchase Payment (Years) Payment)
Less than 2 years 7%
2 or more but less than 4 years 6%
4 or more but less than 5 years 5%
5 or more but less than 6 years 4%
6 or more but less than 7 years 3%
7 years or more 0%
Systematic Withdrawal The specified payment or specified percentage may
Option (SWO): not be greater than 10% of the Account's Current
Value at time of election.
See I. GENERAL DEFINITIONS for explanations.
5
Contract Schedule II
Annuity Period
Separate Account
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Charges to A daily charge at an annual effective rate of 1.25%
Separate Account: for Annuity mortality and expense risks. The
administrative charge is stablished upon election of
an Annuity option. This charge will not exceed 0.25%.
Variable Annuity If a Variable Annuity is chosen, an assumed annual
Assumed Annual net return rate of 5.0% may be elected. If 5.0% is
Net Return Rate: not elected, Aetna will use an assumed annual net
return rate of 3.5%.
The assumed annual net return rate factor for 3.5%
per year is 0.9999058.
The assumed annual net return rate factor for 5.0%
per year is 0.9998663.
If the portion of a Variable Annuity payment for any
Fund is not to decrease, the Annuity return factor
under the Separate Account for that Fund must be:
(a) 4.75% on an annual basis plus an annual return of
up to 0.25% to offset the administrative charge
set at the time Annuity payments commence if an
assumed annual net return rate of 3.5% is chosen;
or
(b) 6.25% on an annual basis plus an annual return of
up to 0.25% to offset the administrative charge
set at the time Annuity payments commence, if an
assumed annual net return rate of 5% is chosen.
Xxxxx Xxxxxxx
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Minimum Guaranteed Interest Rate (effective annual
rate of return): 3.0%
See I. GENERAL DEFINITIONS for explanations.
6
TABLE OF CONTENTS
Page
I. GENERAL DEFINITIONS
1.01 Account......................................................9
1.02 Accumulation Period..........................................9
1.03 Adjusted Current Value.......................................9
1.04 Annuitant....................................................9
1.05 Annuity......................................................9
1.06 Beneficiary..................................................9
1.07 Certificate Holder...........................................9
1.08 Code.........................................................9
1.09 Contract.....................................................9
1.10 Contract Holder.............................................10
1.11 Current Value...............................................10
1.12 Deposit Period..............................................10
1.13 Fixed Annuity...............................................10
1.14 Fund(s).....................................................10
1.15 General Account.............................................10
1.16 Guaranteed Rates - AG Account...............................11
1.17 Guaranteed Term.............................................11
1.18 Guaranteed Term(s) Groups...................................11
1.19 Maintenance Fee.............................................11
1.20 ALIAC Guaranteed Account (AG Account).......................12
1.21 Market Value Adjustment (MVA)...............................12
1.22 Matured Term Value..........................................12
1.23 Matured Term Value Transfer.................................12
1.24 Maturity Date...............................................12
1.25 Net Purchase Payment........................................12
1.26 Nonunitized Separate Account................................12
1.27 Purchase Payment............................................13
1.28 Reinvestment................................................13
1.29 Separate Account............................................13
1.30 Surrender Value.............................................13
1.31 Transfers...................................................14
1.32 Valuation Period (Period)...................................14
1.33 Variable Annuity............................................14
II. GENERAL PROVISIONS
2.01 Change of Contract..........................................14
2.02 Change of Fund(s)...........................................15
2.03 Nonparticipating Contract...................................16
2.04 Payments and Elections......................................16
2.05 State Laws..................................................16
2.06 Control of Contract.........................................16
7
2.07 Designation of Beneficiary..................................17
2.08 Misstatements and Adjustments...............................17
2.09 Incontestability............................................17
2.10 Grace Period................................................17
2.11 Individual Certificates.....................................17
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
3.01 Net Purchase Payment........................................17
3.02 Certificate Holder's Account................................17
3.03 Fund(s) Record Units -- Separate Account....................18
3.04 Net Return Factor(s) -- Separate Account....................18
3.05 Fund Record Unit Value -- Separate Account..................18
3.06 Market Value Adjustment.....................................19
3.07 Transfer of Current Value from the Funds or AG Account......20
3.08 Reports.....................................................21
3.09 Notice to the Certificate Holder............................21
3.10 Loans.......................................................21
3.11 Distribution Options........................................21
3.12 Death Benefit Amount........................................26
3.13 Death Benefit Options available to Beneficiary..............27
3.14 Required Distribution to Certificate Holder/Beneficiary.....29
3.15 Liquidation of Surrender Value..............................30
3.16 Surrender Fee...............................................30
3.17 Payment of Surrender Value..................................31
3.18 Reinstatement...............................................31
3.19 Payment of Adjusted Current Value...........................32
IV. ANNUITY PROVISIONS
4.01 Choices to be Made..........................................32
4.02 Annuity Payments to Certificate Holder......................33
4.03 Annuity Payments to Beneficiary.............................33
4.04 Terms of Annuity Options....................................34
4.05 Death of Annuitant/ Beneficiary.............................35
4.06 Fund(s) Annuity Units -- Separate Account...................36
4.07 Fund(s) Annuity Unit Value -- Separate Account..............36
4.08 Annuity Net Return Factor(s) -- Separate Account............37
4.09 Annuity Options.............................................38
8
I. GENERAL DEFINITIONS
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1.01 Account: A record established for each Certificate Holder to
maintain the value of the Net Purchase Payments held
on his/her behalf during the Accumulation Period.
1.02 Accumulation Period: The period during which the Net Purchase Payment is
applied to an Account to provide future Annuity
payment(s).
1.03 Adjusted Current The Current Value of an Account plus or minus any
Value: aggregate AG Account MVA, if applicable. (See 1.21)
1.04 Annuitant: The person whose life is measured for purposes of the
guaranteed death benefit and the duration of Xxxxxxx
payments under an Account. The Certificate Holder and
Annuitant must be the same person under an Account.
1.05 Annuity: Payment of an income:
(a) For the life of one or two persons; (b) For a
stated period; or (c) For some combination of (a) and
(b).
1.06 Beneficiary: The individual or estate entitled to receive any
payment from an Account upon the death of the
Annuitant.
1.07 Certificate Holder: A person who purchases an interest in this Contract
as evidenced by a certificate.
1.08 Code: The Internal Revenue Code of 1986, as it may be
amended from time to time.
1.09 Contract: This agreement between Aetna and the Contract Holder
to provide annuities which qualify as Individual
Retirement Annuities under Code Section 408(b) for
the exclusive benefit of the Certificate Holder(s) or
their Beneficiaries.
9
1.10 Contract Holder: The entity to which the Contract is issued. The
Contract is offered to:
(a) National Association of Securities Dealers, Inc.
("NASD") member broker-dealers selected by Aetna,
who have a minimum net capital of $250,000 or
more, including broker-dealer subsidiaries of
banks and savings and loan associations, to
provide Individual Retirement Annuities under
Code Section 408 to their customers; and
(b) Employers who sponsor Individual Retirement
Annuity plans under Code Section 408 for their
employees.
1.11 Current Value: As of the most recent Valuation Period, the Net
Purchase Payment and any additional amount deposited
pursuant to 3.12 plus any interest added to the
portion allocated to the AG Account; and plus or
minus the investment experience of the portion
allocated to the Funds since deposit; less all
Maintenance Fees deducted, any amounts surrendered
and any amounts applied to an Annuity.
1.12 Deposit Period: A calendar week, a calendar month, a calendar
quarter, or any other period of time specified by
Aetna during which the Net Purchase Payment,
Transfers and Reinvestments are accepted into the
AG Account for one or more Guaranteed Terms. Aetna
reserves the right to extend the Deposit Period.
1.13 Fixed Annuity: An Annuity with payments that do not vary in amount.
1.14 Fund(s): The open-end management investment companies
(mutual funds) in which the Separate Account invests.
1.15 General Account: The Account holding the assets of Aetna, other than
those assets held in Aetna's separate accounts.
10
1.16 Guaranteed Rates - Aetna will declare the interest rate(s) applicable to
AG Account: a specific Guaranteed Term at the start of the
Deposit Period for that Guaranteed Term. The rate(s)
are guaranteed by Aetna for that Deposit Period and
the ensuing Guaranteed Term. The Guaranteed Rates are
annual effective yields. That is, interest is
credited daily at a rate that will produce the
Guaranteed Rate over the period of a year. No
Guaranteed Rate will ever be less than the Minimum
Guaranteed Rate shown on Contract Schedule I.
For Guaranteed Terms of one year or less, one
Guaranteed Rate is credited for the full Guaranteed
Term. For longer Guaranteed Terms, an initial
Guaranteed Rate is credited from the date of deposit
to the end of a specified period within the
Guaranteed Term. There may be different Guaranteed
Rate(s) declared for subsequent specified time
intervals throughout the Guaranteed Term.
1.17 Guaranteed Term: The period of time for which AG Account Guaranteed
Rates are guaranteed on Net Purchase Payments,
Transfers and Reinvestments made into a current
Deposit Period for the AG Account. Such period begins
on the day following the close of the Deposit Period
and ends on the designated Maturity Date. Guaranteed
Terms are offered at Aetna's discretion for various
lengths of time ranging up to and including ten
years.
During a Deposit Period, Aetna may make available any
number of Guaranteed Terms. The Certificate Holder
may allocate Net Purchase Payment and Transfers into
any or all of the available Guaranteed Terms.
1.18 Guaranteed Term(s) All AG Account Guaranteed Term(s) with the same
Groups: length of time from the close of the Deposit Period
until the designated Maturity Date.
1.19 Maintenance Fee: The Maintenance Fee (see Contract Schedule I) will be
deducted during the Accumulation Period from the
Current Value on each anniversary of the date the
Account is established and upon surrender of the
entire Account.
11
1.20 ALIAC Guaranteed An accumulation option where Aetna guarantees
Account (AG Account): stipulated rate(s) of interest for specified periods
of time. All assets of Aetna, including amounts in
the Nonunitized Separate Account, are available to
meet the guarantees under the AG Account.
1.21 Market Value An adjustment to the amount withdrawn or transferred
Adjustment (MVA): from an AG Account Guaranteed Term prior to the end
of that Guaranteed Term. The adjustment reflects the
change in the value of the investment due to changes
in interest rates since the date of deposit and is
computed using the formula given in 3.06. The
adjustment is expressed as a percentage of each
dollar being withdrawn.
1.22 Matured Term Value: The amount payable on an AG Account Guaranteed Term's
Maturity Date.
1.23 Matured Term Value During the calendar month following an AG Account
Transfer: Maturity Date, the Certificate Holder may notify
Aetna's Home Office in writing to Transfer or
surrender all or part of the Matured Term Value, plus
interest at the new Guaranteed Rate accrued thereon,
from the AG Account without an MVA. This provision
only applies to the first such written request
received from the Certificate Holder during this
period for any Matured Term Value.
1.24 Maturity Date: The last day of an AG Account Guaranteed Term.
1.25 Net Purchase The Purchase Payment less premium taxes, as
Payment: applicable.
1.26 Nonunitized A separate account set up by Aetna under Title 38,
Separate Account: Section 38a-433, of the Connecticut General Statutes,
that holds assets for AG Account Terms. There are no
discrete units for this Account. The Certificate
Holder does not participate in the investment gain or
loss from the assets held in the Nonunitized Separate
Account. Such gain or loss is borne entirely by
Aetna. These assets may be chargeable with
liabilities arising out of any other business of
Aetna.
12
1.27 Purchase Payment: A cash payment accepted by Aetna at its Home Office
which is a rollover amount under Code Section 402(c),
403(a), 403(b)(8), or 408(d)(3). Aetna may require
verification that a rollover amount qualifies as such
under the Code. Payments to Simplified Employee
Pension plans and annual deductible and nondeductible
contributions to Individual Retirement Annuities are
not accepted under this Contract.
Aetna reserves the right to refuse to accept any
Purchase Payment at any time for any reason. No
advance notice will be given to the Contract Holder
or Certificate Holder.
1.28 Reinvestment: Aetna will mail a notice to the Certificate Holder at
least 18 calendar days before a Guaranteed Term's
Maturity Date. This notice will contain the Terms
available during current Deposit Periods with their
Guaranteed Rate(s) and projected Matured Term Value.
If no specific direction is given by the Certificate
Holder prior to the Maturity Date, each Matured Term
Value will be reinvested in the current Deposit
Period for a Guaranteed Term of the same duration. If
a Guaranteed Term of the same duration is
unavailable, each Matured Term Value will
automatically be reinvested in the current Deposit
Period for the next shortest Guaranteed Term
available. If no shorter Guaranteed Term is
available, the next longer Guaranteed Term will be
used. Aetna will mail a confirmation statement to the
Certificate Holder the next business day after the
Maturity Date. This notice will state the Guaranteed
Term and Guaranteed Rate(s) which will apply to the
reinvested Matured Term Value.
1.29 Separate Account: A separate account that buys and holds shares of the
Fund(s). Income, gains or losses, realized or
unrealized, are credited or charged to the Separate
Account without regard to other income, gains or
losses of Aetna. Aetna owns the assets held in the
Separate Account and is not a trustee as to such
amounts. This Separate Account generally is not
guaranteed and is held at market value. The assets of
the Separate Account, to the extent of reserves and
other contract liabilities of the Account, shall not
be charged with other Aetna liabilities.
1.30 Surrender Value: The amount payable by Aetna upon the surrender of any
portion of an Account.
13
1.31 Transfers: The movement of invested amounts among the available
Fund(s) and the AG Account under this Contract during
the Accumulation Period.
1.32 Valuation Period The period of time for which a Fund determines its
(Period): net asset value, usually from 4:15 p.m. Eastern time
each day the New York Stock Exchange is open until
4:15 p.m. the next such day, or such other day that
one or more of the Funds determines its net asset
value.
1.33 Variable Annuity: An Annuity with payments that vary with the net
investment results of one or more of the Funds under
the Separate Account.
II. GENERAL PROVISIONS
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2.01 Change of Contract: Only an authorized officer of Aetna may change
the terms of this Contract. Aetna will notify the
Contract Holder in writing at least 30 days before
the effective date of any change. Any change will not
affect the amount or terms of any Annuity which
begins before the change.
Aetna reserves the right to refuse to accept any
Purchase Payment at any time for any reason. No
advance notice will be given to the Contract Holder
or Certificate Holder.
Aetna may make any change that affects the AG Account
Market Value Adjustment (3.06) with at least 30 days'
advance written notice to the Contract Holder and the
Certificate Holder. Any such change shall become
effective for any new Term and will apply to all
present and future Accounts.
Aetna reserves the right to change the terms of the
distribution option (3.11) for future elections and
discontinue the availability of these options after
proper notification.
Any change that affects any of the following under
this Contract will not apply to Accounts in existence
before the effective date of the change:
14
(a) Net Purchase Payment (1.25)
(b) AG Account Guaranteed Rate (1.16)
(c) Net Return Factor(s) -- Separate Account (3.04)
(d) Current Value (1.11)
(e) Surrender Value (1.30)
(f) Fund(s) Annuity Unit Value -- Separate Account
(4.05)
(g) Annuity options (4.09)
(h) Fixed Annuity Interest Rates (4.01)
(i) Transfers (1.31).
Any change that affects the Annuity options and the
tables for the options may be made:
(a) No earlier than 12 months after the effective
date of this Contract; and
(b) No earlier than 12 months after the effective
date of any prior change.
2.01 Change of Contract Any Account established on or after the effective
(Cont'd): date of any change will be subject to the change. If
the Contract Holder does not agree to any change
under this provision, no new Accounts may be
established under this Contract. This Contract may
also be changed as deemed necessary by Aetna to
comply with federal or state law.
2.02 Change of Fund(s): Aetna, or the Separate Account, may:
(a) Change the Fund(s) which may be invested in by
the Separate Account; and
(b) Replace the shares of any Fund(s) held in the
Separate Account with shares of any other
Fund(s).
Changes must be:
(a) Approved by a majority vote in the Separate
Account with respect to the Fund(s) whose shares
are to be replaced; or
(b) Deemed necessary by Aetna under the Investment
Company Act of 1940; or
(c) Deemed necessary by Aetna to accomplish the
purpose of the Separate Account.
Aetna will notify the Contract Holder and the
Certificate Holder of any change.
15
2.03 Nonparticipating The Contract Holder, Certificate Holders or
Contract: Beneficiaries will not have a right to share in the
earnings of Aetna.
2.04 Payments and While the Certificate Holder is living, Aetna will
Elections: pay the Certificate Holder any Annuity payments as
and when due. After the Certificate Xxxxxx's death,
any Annuity payments required to be made will be paid
in accordance with 4.05. Aetna will determine other
payments and/or elections as of the end of the
Valuation Period in which the request is received at
its Home Office. Such payments will be made within 7
calendar days of receipt at its Home Office of a
written claim for payment which is in good order,
except as provided in 3.17.
2.05 State Laws: The Contract and the Certificates comply with the
laws of the state in which they are delivered. Any
surrender, death, or Annuity payments are equal to or
greater than the minimum required by such laws.
Annuity tables for legal reserve valuation shall be
as required by state law. Such tables may be
different from Annuity tables used to determine
Annuity payments.
2.06 Control of Contract: This is a Contract between the Contract Holder and
Aetna. The Contract Holder has itle to the Contract.
Contract Holder rights are limited to accepting or
rejecting Contract modifications.
Each Certificate Holder has a nonforfeitable right to
all amounts held in his or her Account. Each
Certificate Holder may make any choices allowed by
this Contract for his or her Account. choices made
under this Contract must be in writing. Until receipt
of such choices at Aetna's Home Office, Aetna may
rely on any previous choices made.
The Contract is not subject to the claims of any
creditors of the Contract Holder or the Certificate
Holder except to the extent permitted by law.
The Account may not be attached, alienated, or
subject to the claims of any creditors of the
Certificate Holder except to the extent permitted by
law. The Account is nontransferable by the
Certificate Holder. The Certificate Holder may not
assign, transfer, pledge or use as collateral his or
her rights under the Contract.
16
2.07 Designation of Each Certificate Holder shall name his or her
Beneficiary: Beneficiary. The Beneficiary may be changed at any
time. Changes to a Beneficiary must be submitted to
Aetna's Home Office in writing and will not be
effective until accepted by Aetna.
2.08 Misstatements If Aetna finds the age of any Annuitant to be
and Adjustments: misstated, the correct facts will be used to adjust
payments.
2.09 Incontestability: Aetna cannot cancel this Contract because of any
error of fact on the application. Aetna cannot cancel
an Account because of any error of fact on the
enrollment form.
2.10 Grace Period: This Contract will remain in effect except as
provided in the Payment of Adjusted Current Value
provision (see 3.19).
2.11 Individual Aetna shall issue a certificate to each Certificate
Certificates: Holder. The certificate will summarize certain
provisions of the Contract. Certificates are for
information only and are not a part of the Contract.
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
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3.01 Net Purchase Payment: This amount is the actual Purchase Payment less any
premium tax. Aetna will generally deduct the premium
tax when Annuity benefits are elected (see Part IV).
If Aetna determines that under applicable state law,
it must pay a premium tax when the Purchase Payment
is received or at any other time, it will deduct the
tax at that time.
The Net Purchase Payment will be credited among:
(a) The current Deposit Period(s) for Guaranteed
Terms under the AG Account; and
(b) The Fund(s) in which the Separate Account
invests.
The Certificate Holder shall tell Aetna the
allocation percentage to be applied to the current
Deposit Period for each of the available Guaranteed
Terms in the AG Account and/or each Fund.
3.02 Certificate Aetna will maintain an Account for each Certificate
Holder's Account: Holder.
17
Aetna will declare from time to time the
acceptability and the minimum amount for a Purchase
Payment.
3.03 Fund(s) Record The portion of the Net Purchase Payment applied to
Units -- Separate each Fund under the Separate Account will determine
Account: the number of Fund record units for that Fund. This
number is equal to the portion of the Net Purchase
Payment applied to each Fund divided by the Fund
record unit value (see 3.05) for the Valuation Period
in which the Purchase Payment is received in good
order at Aetna's Home Office.
3.04 Net Return The net return factor(s) are used to compute all
Factor(s) -- Separate Account record units for any Fund.
Separate Account:
The net return factor(s) for each Fund is equal to
1.0000000 plus the net return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held by the
Separate Account at the end of the Valuation
Period; minus
(b) The value of the shares of the Fund held by the
Separate Account at the start of the Valuation
Period; plus or minus
(c) Taxes (or reserves for taxes) on the Separate
Account (if any); divided by
(d) The total value of the Fund(s) record units and
Fund(s) annuity units of the Separate Account at
the start of the Valuation Period; minus
(e) A daily Separate Account charge at an annual rate
as shown on Contract Schedule I for mortality and
expense risks, which may include profit; and a
daily administrative charge.
A net return rate may be more or less than 0%. The
value of a share of the Fund is equal to the net
assets of the Fund divided by the number of shares
outstanding.
3.05 Fund(s) Record Unit A Fund record unit value is computed by multiplying
Value -- Separate the net return factors for the current Valuation
Account: Period by the Fund record unit value for the previous
Period. The dollar value of a Fund record units,
Separate Account assets, and Variable Annuity
payments may go up or down due to investment gain or
loss.
18
3.06 Market Value There will be an MVA for a withdrawal from the AG
Adjustment: Account before the end of a Guaranteed Term when the
withdrawal is due to:
(a) A Transfer: except as specified in AG Account
Matured Term Value Transfer;
(b) A full or partial surrender, including a 10% free
withdrawal under 3.16; or
(c) An election of Annuity option 2 (see 4.09).
3.06 Market Value Full and partial surrenders and Transfers made within
Adjustment six months after the date of the Annuitant's death
(Cont'd): will be the greater of:
(a) The aggregate MVA amount which is the sum of all
market value adjusted amounts calculated due to a
withdrawal of amounts. This total may be greater
or less than the Current Value of those amounts;
or
(b) The applicable portion of the Current Value in
the AG Account.
After the six-month period, the surrender or Transfer
will be the aggregate MVA amount, which may be
greater or less than the Current Value of those
amounts.
The greater of the aggregate MVA amount or the
applicable portion of the Current Value applies to
amounts withdrawn from the AG Account on account of
an election of Annuity options 3 or 4 (see 4.09).
Market value adjusted amounts will be equal to the
amount withdrawn multiplied by the following ratio:
x
---
365
(1 + i)
--------
x
---
365
(1 + j)
19
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days
remaining, (computed from
Wednesday of the week of
withdrawal) in the Guaranteed
Term.
3.06 Market Value The Deposit Period Yield will be determined as
Adjustment follows:
(Cont'd):
(a) At the close of the last business day of each
week of the Deposit Period, a yield will be
computed as the average of the yields on that day
of U.S. Treasury Notes which mature in the last
three months of the Guaranteed Term.
(b) The Deposit Period Yield is the average of those
yields for the Deposit Period. If withdrawal is
made before the close of the Deposit Period, it
is the average of those yields on each week
preceding withdrawal.
The Current Yield is the average of the yields on the
last business day of the week preceding withdrawal on
the same U.S. Treasury Notes included in the Deposit
Period Yield.
In the event that no U.S. Treasury Notes which mature
in the last three months of the Guaranteed Term
exist, Aetna reserves the right to use the U.S.
Treasury Notes that mature in the following quarter.
3.07 Transfer of Before an Annuity option is elected, all or any
Current Value portion of the Adjusted Current Value of the
from the Funds Certificate Holder's Account may be transferred from
or AG Account any Fund or Guaranteed Term of the AG Account:
(a) To any other Fund; or
(b) To any Guaranteed Term of the AG Account
available in the current Deposit Period.
Transfer requests can be submitted as a percentage or
as a dollar amount. Aetna may establish a minimum
transfer amount. Within a Guaranteed Term Group, the
amount to be surrendered or transferred will be
withdrawn first from the oldest Deposit Period, then
from the next oldest, and so on until the amount
requested is satisfied.
20
The Certificate Holder may make an unlimited number
of Transfers during the Accumulation Period. The
number of free Transfers allowed by Aetna is shown on
Contract Schedule I. Additional Transfers may be
subject to a Transfer fee as shown on Contract
Schedule I. Transfers from the AG Account of a
Matured Term Value on or within one calendar month of
a Term's Maturity Date do not count against the
annual Transfer limit.
3.07 Transfer of Current Amounts applied to Guaranteed Terms of the AG Account
Value from the Funds may not be transferred to the Funds or to another
or AG Account Guaranteed Term during the Deposit Period or for 90
(cont'd): days after the close of the Deposit Period except for
Matured Term Value(s) during the calendar month
following the Term's Maturity Date.
Transfers from Guaranteed Terms of the AG Account are
subject to the MVA provisions of 3.06.
3.08 Reports: Aetna, as issuer of the Contract, will make any
reports required of it by federal law. Aetna will
furnish annual calendar year reports concerning the
status of the annuity.
3.09 Notice to the The Certificate Holder will receive quarterly
Certificate Holder: statements from Aetna of:
(a) The value of any amounts held in:
(1) The AG Account; and (2) The Fund(s) under the
Separate Account.
(b) The number of any Fund(s) record units; and
(c) The Fund(s) record unit value.
Such number or values will be as of a specific date
no more than 60 days before the date of the notice.
3.10 Loans: Loans are not available under this Contract.
3.11 Distribution The following distribution options may be elected by
Options: the Certificate Holder during the Accumulation
Period.
21
3.11 Distribution (a) Estate Conservation Option (ECO) - A distribution
Options: option under which a portion of the Account's
Current Value will automatically be surrendered
and distributed each year. ECO payments will be
calculated based on the Account's full Current
Value. The distributed amount will be withdrawn
pro rata from each investment option used under
the Account. A Surrender Fee will not be deducted
from any portion of the Adjusted Current Value
which is paid as a distribution under ECO.
Certificate Holders should consult their tax
adviser prior to requesting this distribution
option. Aetna will not be responsible for any
adverse tax consequences due to receiving ECO
payments.
3.11 Distribution (1) Amount of Distribution: Each year that ECO is
Options (Cont'd): in effect, Aetna will calculate and
distribute an amount equal to the minimum
required distribution under the Code. The
annual distribution will be determined by
dividing the Current Value as of December 31
of the year prior to the payment year, by a
life expectancy factor.
The Certificate Holder, or spouse Beneficiary
if ECO is elected after the Certificate
Holder's death, shall elect either single
life expectancy or joint life expectancy.
Life expectancy is computed by use of the
expected return multiples in Table V and VI
of section 1.72-9 of the Income Tax
Regulations.
Joint life expectancy can only be elected
based on the joint life expectancy of the
Certificate Holder and his or her
Beneficiary. If the Certificate Holder makes
any changes in the Beneficiary designation
under the Certificate, ECO distributions
after the change will be recalculated as
required by IRS regulations.
22
Life expectancies shall be recalculated
annually. If the joint life expectancy is
elected with a non-spouse Beneficiary, the
life expectancy of the non-spouse Beneficiary
may not recalculated. Instead, the life
expectancy will be calculated using the
attained age of the Beneficiary during the
calendar year in which the Certificate Holder
attains age 70 1/2, and payments for
subsequent years shall be recalculated based
on such life expectancy reduced by one for
each calendar year which has elapsed since
the calendar year life expectancy was first
calculated.
If joint life expectancy is elected with a
spouse Beneficiary, at the death of either,
the payments can continue and will be
calculated based solely on the survivor's
life expectancy. If joint life expectancy is
elected with a non-spouse Beneficiary and the
non-spouse Beneficiary dies first, payments
will continue based on the joint life
expectancy.
3.11 Distribution If a single life expectancy is elected and
Options (Cont'd): the Certificate Holder dies, or if a joint
life expectancy is elected and the survivor
dies, the death benefits determined under
Section 3.12 will be paid to the Beneficiary
in a lump sum not later than December 31
following the year of death.
(2) Minimum Initial Current Value: At its
discretion, Aetna may require a minimum
initial Account Current Value for election of
this option. If after election of this
option, the Current Value is insufficient to
make a scheduled ECO payment, Aetna will
distribute the entire Account balance.
(3) Date of Distribution: Distribution will be
made annually on the 15th of any month or
such other date Aetna may designate or allow.
The Certificate Holder shall specify an
initial distribution month, not earlier than
the calendar date in which the Certificate
Holder attains age 70 1/2, or such later time
when distributions must commence as specified
under the Code, whichever is appropriate. For
a spouse Beneficiary, the earliest date is
the date of the Certificate Holder's death.
23
(4) Election and Revocation: ECO may be elected
by the Certificate Holder by submitting a
written request to Aetna at its Home Office.
Once elected, this option may be revoked by the
Certificate Holder, or spouse Beneficiary if
elected after the Certificate Holder's death, by
submitting a written request to Aetna at its Home
Office. Any revocation will apply only to amounts
not yet paid. The Certificate Holder assumes
responsibility for compliance with minimum
distribution rules under the Code. XXX may be
elected only once by the Certificate Holder or by
a spouse Beneficiary.
3.11 Distribution (b) Systematic Withdrawal Option (SWO): A
Options (Cont'd): distribution option under which a portion of the
Account's Current Value will automatically be
surrendered and distributed each year. SWO
payments will be calculated based on the
Account's Current Value. The distributed amount
will be withdrawn pro rata from each investment
option used under the Account. A Surrender Fee
will not be deducted from any portion of the
Adjusted Current Value which is paid as a
distribution under SWO. Certificate Holders
should consult their tax adviser prior to
requesting this distribution option. Aetna will
not be responsible for any adverse tax
consequences due to receiving SWO payments.
(1) Amount of Distribution: The Certificate
Holder may elect one of the three payment
methods described below.
(i) Specified Payment: Payments of a
designated dollar amount. The annual
amount may not be greater than the
percentage of the Current Value at time
of election as shown on Contract
Schedule I. This annual dollar amount
will remain constant. At its
discretion, Aetna may require a minimum
initial payment amount; or
24
(ii) Specified Period: Payments made over a
period of time of at least 10 years.
The maximum specified period shall be
determined under the Code minimum
distribution rules. The annual amount
paid each year is calculated by
dividing the Account's Current Value as
of December 31 of the prior year by the
number of payment years remaining; or
3.11 Distribution (iii) Specified Percentage: Payment of a
Options (Cont'd): designated percentage which cannot be
greater than the percentage of the
Current Value at the time of election
as shown on Contract Schedule I. The
percentage may be changed by written
request. Aetna reserves the right to
limit the number of times the
percentage may be changed. The annual
amount is calculated by multiplying the
Current Value as of December 31 of the
year prior to the payment year by the
designated percentage.
Payments will be made until the year
the Certificate Holder attains age
70-1/2 or, if elected by the spouse
Beneficiary, the year the Certificate
Holder would have attained age 70-1/2.
Under both the Specified Payment and
Specified Period payment methods, a higher
amount shall be paid in any year if required
under the Code minimum distribution rules.
For purposes of this determination, life
expectancy for the initial distribution year
shall be calculated based on single life
expectancy Table V of Section 1.72-9 of the
Income Tax Regulations. With each subsequent
year, the life expectancy will be the life
expectancy for the previous year reduced by
one.
Payments upon the Certificate Xxxxxx's death
will be made to the Beneficiary in the manner
described in 3.13.
25
(2) Minimum Initial Current Value: At its
discretion, Aetna may require a minimum
initial Current Value for election of this
option. If after election of this option the
Current Value is insufficient to make a
scheduled SWO payment, Aetna will distribute
the entire Account balance.
3.11 Distribution (3) Date of Distribution: The Certificate Holder
Options (Cont'd): shall specify the initial distribution date.
The earliest date for distribution is the
first date on which the Certificate Holder
attains age 59 1/2. As elected by the
Certificate Holder, SWO payments will be made
on a monthly, quarterly, semi-annual or
annual basis. If SWO payments are to be made
more frequently than annually, the designated
annual amount is divided by the number of
payments due each year. Subsequent
distributions will be made on the 15th of any
month or such other date Aetna may designate
or allow.
(4) Election and Revocation: SWO may be elected
by the Certificate Holder, or spouse
Beneficiary if elected after the Certificate
Xxxxxx's death, by submitting a completed and
signed election form to Aetna's Home Office.
Once elected, this option may be revoked by
the Certificate Holder, or spouse Beneficiary
if elected after the Certificate Holder's
death, by submitting a written request to
Aetna at its Home Office. Any revocation will
apply only to amounts not yet paid. SWO may
be elected only once by the Certificate
Holder or by the spouse Beneficiary.
3.12 Death Benefit If the Certificate Holder/Annuitant dies before
Amount: Annuity payments start, the beneficiary is entitled
to a death benefit under the Account. The claim date
is the date when proof of death and the Beneficiary's
claim are received in good order at Aetna's Home
Office. The amount of the death benefit is determined
as follows:
(a) Death of Certificate Holder/Annuitant less than
75 years of age: The guaranteed death benefit is
the greatest of:
(1) The net Purchase Payment made to the Account
minus the sum of all amounts surrendered,
applied to an Annuity, or deducted from the
Account;
26
3.12 Death Benefit (2) The step up value as of the date of death
Amount (Cont'd): minus the total of all partial surrenders,
amounts applied to an Annuity and deductions
made from the Account since determination of
the step up value. The step up value is the
Current Value on the most recent seventh year
anniversary of the date the first Net
Purchase Payment is applied to the Account;
(3) The Account's Current Value as of the date of
death.
The excess, if any, of the guaranteed death
benefit value over the Account's Current Value is
determined as of the date of death. Any excess
amount will be deposited to the Account and
allocated to Aetna Variable Encore Fund as of the
claim date. The Current Value on the claim date
plus any excess amount deposited becomes the
Account's Current Value.
(b) Death of Certificate Holder/Annuitant age 75 or
greater: The death benefit amount is the Account
Current Value on the claim date.
3.13 Death Benefit Prior to any election, or until amounts must be
Options Available otherwise distributed under this section, the Current
to Beneficiary: Value of the Account will be retained in the Account.
The Beneficiary has the right under the Account to
allocate or reallocate any amount to any of the
available investment options (subject to an MVA, as
applicable). The following options are available to
the Beneficiary:
(a) If the Beneficiary is the Certificate Holder's
surviving spouse, the surviving spouse may
exercise all rights under the Contract and
continue in the Accumulation Period, or may elect
(1), (2), or (3) below. Under the Code,
distributions from the Account are not required
until December 31st of the year in which the
original Certificate Holder would have attained
age 70-1/2. The Beneficiary may elect to:
(1) Apply some or all of the Adjusted Current
Value of the Account to Annuity option 2, 3
or 4 (See 4.09);
(2) Apply some or all of the Adjusted Current
Value of the Account to Annuity option 1 (see
4.09); or
27
3.13 Death Benefit (3) Receive, at any time, a lump sum payment
Options Available equal to the Adjusted Current Value of the
to Beneficiary Account.
(Cont'd):
If ECO is in effect on the Certificate Holder's
date of death, the surviving spouse can elect to
continue receiving ECO payments if a joint life
expectancy was chosen. Otherwise, the surviving
spouse must receive a lump sum payment equal to
the Adjusted Current Value.
If SWO is in effect and the Certificate Holder
dies before the required beginning date for
minimum distributions (see 3.14), SWO payments
will cease and the surviving spouse may claim the
death benefit in accordance with the terms of
this section.
If SWO is in effect and the Certificate Holder
dies after the required beginning date for
minimum distributions, the surviving spouse may
elect to continue receiving the SWO payments.
Otherwise, the surviving spouse must elect to
receive a lump sum payment equal to the Adjusted
Current Value.
(b) If the Beneficiary is other than the Certificate
Holder's surviving spouse, then options (1), (2),
or (3) under (a) above apply. Any portion of the
Adjusted Current Value of the Account that is not
applied to Annuity option 2, 3 or 4 by December
31st of the year following the year of the
Certificate Holder's death must be distributed by
December 31st of the year containing the fifth
anniversary of the Certificate Holder's date of
death.
If ECO or SWO is in effect on the Certificate
Holder's date of death, the Beneficiary must
receive an automatic and immediate lump sum
payment equal to the Adjusted Current Value.
(c) If no Beneficiary exists, a lump sum payment
equal to the Adjusted Current Value will be made
to the Certificate Holder's estate.
28
3.14 Required Distribution (a) Certificate Holder: The entire interest of the
to Certificate Certificate Holder will be distributed or begin
Holder/Beneficiary: to be distributed no later than April 1 following
the calendar year in which the Certificate Holder
attains age 70-1/2 (required beginning date),
over (a) the life of the Certificate Holder, or
the lives of the Certificate Holder and his or
her designated Beneficiary, or (b) a period
certain not extending beyond the life expectancy
of the Certificate Holder, or the joint and last
survivor expectancy of the Certificate Holder and
his or her designated Beneficiary. Payments must
be made in periodic payments at intervals no
longer than one year. In addition, payments must
be either nonincreasing or they may increase only
as provided in Q&A F-3 of section 1.401(a)(9)-1
of the Proposed Income Tax Regulations.
All distributions made hereunder shall be made in
accordance with the requirements of section
401(a)(9) of the Code, and the regulations
thereunder, including the minimum distribution
incidental benefit requirement of section
1.401(a)(9)-2 of the Proposed Income Tax
Regulations.
Distribution may be an Annuity as set forth in
Sections 4.01 through 4.04, payments under ECO or
SWO as defined in Section 3.11, or a lump sum
payment.
(b) Beneficiary: If the Certificate holder dies after
distribution of his or her interest has begun,
the remaining portion of such interest will
continue to be distributed at least as rapidly as
under the method of distribution being used prior
to the Certificate Xxxxxx's death.
Distributions are considered to have begun if
distributions are made on account of the
Certificate Holder's reaching his or her required
beginning date or if prior to the required
beginning date distributions irrevocably commence
to the Certificate Holder over a period permitted
and in an Annuity form acceptable under section
1.401(a)(9) of the Income Tax Regulations.
29
3.15 Liquidation All or any portion of the Account's Adjusted Current
of Surrender Value may be surrendered at any time. Surrender
Value: requests can be submitted as a percentage of the
Account value or as a specific dollar amount. The Net
Purchase Payment amount is withdrawn first, and then
the excess value, if any. Amounts are withdrawn on a
pro rata basis from the Fund(s) and/or the Guaranteed
Term(s) Groups of the AG Account in which the Current
Value is invested. Within a Guaranteed Term Group,
the amount to be surrendered or transferred will be
withdrawn first from the oldest Deposit Period, then
from the next oldest, and so on until the amount
requested is satisfied.
After deduction of the Maintenance Fee, if
applicable, the surrendered amount shall be reduced
by a Surrender Fee, if applicable.
3.16 Surrender Fee: The Surrender Fee only applies to the Net Purchase
Payment portion surrendered and varies according to
the elapsed time since deposit (see Contract
Schedule I).
No Surrender Fee is deducted from any portion of the
Current Value which is paid:
(a) To a Beneficiary due to the Certificate Xxxxxx's
death before Annuity payments start;
(b) As a premium for an Annuity option 2, 3 or 4
under this Contract (see 4.09);
(c) As a distribution under the ECO or SWO provision
(see 3.11);
(d) At least 12 months after the date of the first
Purchase Payment to the Account, in an amount
equal to or less than 10% of the Current Value.
This applies to the first surrender request,
partial or full, in a calendar year. The Current
Value is calculated as of the date the surrender
request is received in good order at Aetna's Home
Office. This waiver is not available to the
Certificate Holder while SWO is in effect;
30
3.16 Surrender Fee (e) For a full surrender of the Account where the
(Cont'd): Current Value of the Account is $2,500 or less
and no surrenders have been taken from the
Account within the prior 12 months;
(f) By Aetna under 3.19; or
(g) If the Certificate Holder has spent at least 45
consecutive days in a licensed nursing care
facility and each of the following conditions are
met:
(1) more than one calendar year has elapsed since
the date the certificate was issued; and
(2) the surrender is requested within 3 years of
admission to a licensed nursing care
facility.
This waiver does not apply if the Certificate
Holder was in a nursing care facility at the time
the certificate was issued.
3.17 Payment of Under certain emergency conditions, Aetna may defer
Surrender Value: payment:
(a) For a period of up to 6 months (unless not
allowed by state law); or
(b) As provided by federal law.
3.18 Reinstatement: All or a portion of the proceeds of a full surrender
of an Account may be reinvested within 30 days after
the surrender. Any Maintenance Fee and Surrender Fee
charged at the time of surrender on the amount being
reinvested will be included in the reinstatement. Any
Market Value Adjustment(s) deducted from surrenders
will not be included in the reinstatement.
31
3.18 Reinstatement Amounts will be reinstated among the AG Account and
(Cont'd): the Funds in the Separate Account in the same
proportion as they were at the time of surrender. Any
amounts reinstated to the AG Account will be credited
to the available Guaranteed Terms of the current
Deposit Period in the same proportion as they were at
the time of surrender. In the event that a Guaranteed
Term of the same duration is unavailable, amounts
will be reinvested in the next shortest Guaranteed
Term available in the current Deposit Period. If no
shorter Guaranteed Term is available, the next longer
Guaranteed Term will be used. The number of Fund(s)
record units reinstated will be based on the record
unit value(s) next computed after receipt at Aetna's
Home Office of the reinstatement request and the
amount to be reinstated. Any Maintenance Fee which
falls due after the surrender and before the
reinstatement will be deducted from the amount
reinstated.
Any Account(s) surrendered because the Current Value
was less than $2,500 immediately following any
partial surrender may not be reinstated (see 3.19).
Reinstatement of an Account is permitted only once.
3.19 Payment of Upon 90 days' written notice to the Certificate
Adjusted Current Holder, Aetna will terminate any Account if the
Value: Current Value becomes less than $2,500 immediately
following any partial surrender. Aetna does not
intend to exercise this right in cases where an
Account Current Value is reduced to $2,500 or less
solely due to investment performance. A Surrender Fee
will not be deducted from the Adjusted Current Value.
This terminated Adjusted Current Value of an Account
may not be reinstated.
IV. ANNUITY PROVISIONS
--------------------------------------------------------------------------------
4.01 Choices to be Made: The Certificate Holder may tell Aetna to apply any
portion of the Adjusted Current Value (minus any
premium tax) for an Annuity under option 2, 3, or 4
(see 4.09). The first Annuity payment may not be
earlier than one calendar year after the Purchase
Payment nor later than the later of:
32
4.01 Choices to (a) The first day of the month following the
be Made (Cont'd): Xxxxxxxxx's 85th birthday; or
(b) The tenth anniversary of the last Purchase
Payment. In lieu of the election of an Annuity,
the Certificate Holder may tell Aetna to make a
lump sum payment.
When an Annuity Option is chosen, Aetna must also be
told if payments are to be made other than monthly
and whether to pay:
(a) A Fixed Annuity using the General Account;
(b) A Variable Annuity using any of the Fund(s)
available under this Contract for Annuity
purposes; or
(c) A combination of (a) and (b).
If a Fixed Annuity is chosen, the Annuity purchase
rate for the option chosen reflects the Minimum
Guaranteed Interest Rate (see Contract Schedule II),
but may reflect higher interest rates. If a Variable
Annuity is chosen, the initial Annuity payment for
the option chosen reflects the assumed annual return
rate elected. (see Contract Schedule II).
4.02 Annuity Payments In no event may any payments under an Annuity option
to Certificate extend beyond:
Holder:
(a) The life of the Certificate Holder;
(b) The lives of the Certificate Holder and
Beneficiary;
(c) Any certain period greater than the Certificate
Holder's life expectancy according to regulations
under Code Section 401(a)(9), determined as of
the date payments are to begin; or
(d) A period greater than the joint and last survivor
life expectancies of the Certificate Holder and
the Certificate Holder's Beneficiary according to
regulations under Code Section 401(a)(9),
determined as of the date payments are to begin.
4.03 Annuity Payments In no event may payments to the Beneficiary under an
to Beneficiary: Annuity option extend beyond:
(a) The life of the Beneficiary; or
(b) Any certain period greater than the Beneficiary's
life expectancy as determined by regulations
under Code Section 401(a)(9).
33
4.04 Terms of Annuity (a) When payments start, the age of the Annuitant
Options: plus the number of years for which payments are
guaranteed must not exceed 95.
(b) An Annuity option may not be elected if the first
payment would be less than $50 or if the total
payments in a year would be less than $250 (less
if required by state law). Aetna reserves the
right to increase the minimum first Annuity
payment amount and the annual minimum Annuity
payment amount based upon increases reflected in
the Consumer Price Index-Urban, (CPI-U) since
July 1, 1993.
(c) If a Fixed Annuity under option 2, 3 or 4 is
chosen and a larger payment would result from
applying the Surrender Value to a current Aetna
single premium immediate Annuity, Aetna will make
the larger payment.
(d) For purposes of calculating the guaranteed first
payment of a Variable Annuity or the payments for
a Fixed Annuity, the Annuitant's and second
Annuitant's adjusted age will be used. The
Annuitant's and second Xxxxxxxxx's adjusted age
is his or her age as of the birthday closest to
the Annuity commencement date reduced by one year
for Annuity commencement dates occurring during
the period of time from July 1, 1993 through
December 31, 1999. The Annuitant's and second
Xxxxxxxxx's age will be reduced by two years for
Annuity commencement dates occurring during the
period of time from January 1, 2000 through
December 31, 2009. The Annuitant's and second
Annuitant's age will be reduced by one additional
year for Annuity commencement dates occurring in
each succeeding decade.
34
4.04 Terms of The Annuity rates for options 3 and 4 are based on
Annuity Options mortality from 1983 Table a.
(Cont'd):
(e) Assumed Annual Net Return Rate is the interest
rate used to determine the amount of the first
Annuity payment under a Variable Annuity as shown
on Contract Schedule II. The Separate Account
must earn this rate plus enough to cover the
mortality and expense risks charges (which may
include profit) and administrative charges if
future Variable Annuity Payments are to remain
level, (see Annuity return factor under Variable
Annuity Assumed Annual Net Return Rate on
Contract Schedule II).
(f) Once elected, Annuity payments cannot be commuted
to a lump sum except for Variable Annuity
payments under option 2 (see 4.09). The life
expectancy of the Certificate Holder or
Certificate Holder and second Annuitant shall be
irrevocable upon the election of an Annuity
option.
4.05 Death of (a) When the Annuitant dies under option 2 or 3, or
Annuitant/Beneficiary: both the Annuitant and the second Annuitant die
under option 4(d), the present value of any
remaining guaranteed payments will be paid in one
sum to the Beneficiary, or upon election by the
Beneficiary, any remaining payments will continue
to the Beneficiary. If option 4 has been elected
and the Annuitant dies, the remaining payments
will continue to the second Annuitant as
successor payee.
(b) If there is no Beneficiary under options 2, 3 or
4, the present value of any remaining payments
will be paid in one sum to the Certificate
Holder's estate.
(c) If the Beneficiary designated under option 1
dies, the amount held plus accrued interest will
be paid in one sum to a successor Beneficiary, if
any, named by the designated Beneficiary. If
there is no successor Beneficiary, the lump sum
will be paid to the designated Beneficiary's
estate.
35
4.05 Death of (d) If the Beneficiary dies while receiving Xxxxxxx
Xxxxxxxxx/Beneficiary payments, the present value of any remaining
(Cont'd): guaranteed payments will be paid in one sum to
the successor Beneficiary, or upon election by
the successor Beneficiary, may remaining payments
will continue to the successor Beneficiary. If no
successor Beneficiary has been designated, the
present value of any remaining guaranteed
payments will be paid in one sum to the
Beneficiary's estate.
(e) The present value will be determined as of the
Valuation Period in which proof of death
acceptable to Aetna and a request for payment is
received at Aetna's Home Office. The interest
rate used to determine the first payment will be
used to calculate the present value.
4.06 Fund(s) Annuity The number of each Fund's Annuity Units is based on
Units -- Separate the amount of the first Variable Annuity payment
Account: which is equal to:
(a) The portion of the Current Value applied to pay a
Variable Annuity (minus any premium tax); divided
by
(b) 1,000; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion, of the variable payment will
be divided by the appropriate Fund Annuity unit value
(see 4.07) on the tenth Valuation Period before the
due date of the first payment to determine the number
of each Fund Annuity units. The number of each Fund
Annuity units remains fixed. Each future payment is
equal to the sum of the products of each Fund Annuity
unit value multiplied by the appropriate number of
units. The Fund Annuity unit value on the tenth
Valuation Period prior to the due date of the payment
is used.
4.07 Fund(s) Annuity For any Valuation Period, a Fund Annuity unit value
Unit Value -- is equal to:
Separate Account:
(a) The value for the previous Period; multiplied by
(b) The Annuity net return factor(s) (see 4.08 below)
for the Period: multiplied by
(c) A factor to reflect the assumed annual net return
rate (see Contract Schedule II).
36
The dollar value of a Fund(s) Annuity unit values and
Annuity payments may go up or down due to investment
gain or loss.
4.08 Annuity Net The Annuity not return factor(s) are used to compute
Return Factor(s) -- all Separate Account Annuity Payments for any Fund.
Separate Account:
The Annuity net return factor(s) for each Fund is
equal to 1.0000000 plus the net return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund held by the
Separate Account at the end of a Valuation
Period; minus
(b) The value of the shares of the Fund held by the
Separate Account at the start of the Valuation
Period; plus or minus
(c) Taxes (or reserves for taxes) on the Separate
Account (if any); divided by
(d) The total value of the Fund(s) Record Units and
Fund(s) Annuity Units of the Separate Account at
the start of the Valuation Period; minus
(e) A daily charge for Annuity mortality and expense
risks, which may include profit, and a daily
administrative charge (at the annual rate as
shown on Contract Schedule II).
A net return rate may be more or less than 0%.
The value of a share of the Fund is equal to the net
assets of the Fund divided by the number of shares
outstanding.
Payments shall not be changed due to changes in the
mortality or expense results or administrative
charges.
37
4.09 Annuity Options: Option 1 -- Payment of Interest on Sum Left with
Aetna -- This option may be used only by the
Beneficiary when the Certificate Holder dies before
Aetna has started paying an Annuity. A portion or all
of the sum paid upon death may be held under this
option add will be held in the General Account of
Aetna at interest (see 4.01). The Beneficiary may
later tell Aetna to:
(a) Pay a portion or all of the sum held by Aetna; or
(b) Apply a portion or all of the sum held by Aetna
to any Annuity option below.
4.09 Annuity If a nonspouse Beneficiary elects that some or all of
Options (Cont'd): the Account is to be held under this option, the
Beneficiary must tell Aetna to pay the full sum held
under this option by December 31st of the year
containing the fifth anniversary of the Certificate
Holder's date of death.
Option 2 -- Payments for a Stated Period of Time --
An Annuity will be paid for the number of years
chosen. The number of years must be at least 5 and
not more than 30.
If payments for this option are made under a Variable
Annuity, the present value of any remaining payments
may be withdrawn at any time. If a withdrawal is
requested within 3 years after the start of payments,
it will be treated as a surrender and any applicable
Surrender Fee will be applied (see 3.16).
Option 3 -- Life Income -- An Annuity will be paid
for the life of the Annuitant. If also chosen, Aetna
will guarantee payments for 60, 120, 180, or 240
months.
Option 4 -- Life Income Based upon the Lives of Two
Annuitants -- An Annuity will be paid during the
lives of the Annuitant and a second Annuitant.
Payments will continue until both Annuitants have
died. When this option is chosen, a choice must be
made of:
(a) 100% of the payment to continue after the first
death;
(b) 66-2/3% of the payment to continue after the
first death;
(c) 50% of the payment to continue after the first
death;
(d) Payments for a minimum of 120 months with 100% of
the payment to continue after the first death; or
38
(e) 100% of the payment to continue at the death of
the second Annuitant and 50% of the payment to
continue at the death of the Annuitant.
Other Options -- Aetna may make other options
available as allowed by the laws of the state in
which this Contract and the Certificate is delivered.
39
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
----------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
----------------------------------------------------------------------
3 3.00% $28.99 $86.76 $172.88 $343.23
4 3.00% 22.06 66.02 131.56 261.19
5 3.00% 17.91 53.59 106.78 211.99
6 3.00% 15.14 45.30 90.27 179.22
7 3.00% 13.16 39.39 78.49 155.83
8 3.00% 11.68 34.96 69.66 138.31
9 3.00% 10.53 31.52 62.81 124.69
10 3.00% 9.61 28.77 57.33 113.82
11 3.00% 8.86 26.52 52.85 104.93
12 3.00% 8.24 24.65 49.13 97.54
13 3.00% 7.71 23.08 45.98 91.29
14 3.00% 7.26 21.73 43.29 85.95
15 3.00% 6.87 20.56 40.96 81.33
16 3.00% 6.53 19.54 38.93 77.29
17 3.00% 6.23 18.64 37.14 73.74
18 3.00% 5.96 17.84 35.56 70.59
19 3.00% 5.73 17.13 34.14 67.78
20 3.00% 5.51 16.50 32.87 65.26
21 3.00% 5.32 15.92 31.72 62.98
22 3.00% 5.15 15.40 30.68 60.92
23 3.00% 4.99 14.92 29.74 59.04
24 3.00% 4.84 14.49 28.88 57.33
25 3.00% 4.71 14.09 28.08 55.76
26 3.00% 4.59 13.73 27.36 54.31
27 3.00% 4.47 13.39 26.68 52.97
28 3.00% 4.37 13.08 26.06 51.74
29 3.00% 4.27 12.79 25.49 50.60
30 3.00% 4.18 12.52 24.95 49.53
----------------------------------------------------------------------
40
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge For Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Months
-----------------------------------------------------------------
Adjusted
Age of Annuitant None 60 120 180 240
-----------------------------------------------------------------
50 $ 4.05 $ 4.05 $ 4.03 $ 3.99 $ 3.93
51 4.12 4.11 4.09 4.05 3.99
52 4.19 4.19 4.16 4.11 4.04
53 4.27 4.26 4.23 4.18 4.10
54 4.35 4.34 4.31 4.25 4.16
55 4.44 4.42 4.39 4.32 4.22
56 4.53 4.51 4.47 4.40 4.29
57 4.62 4.61 4.56 4.48 4.35
58 4.72 4.71 4.65 4.56 4.42
59 4.83 4.81 4.75 4.64 4.49
60 4.95 4.93 4.86 4.73 4.55
61 5.07 5.05 4.97 4.83 4.62
62 5.20 5.17 5.08 4.92 4.69
63 5.34 5.31 5.20 5.02 4.76
64 5.49 5.45 5.33 5.12 4.83
65 5.65 5.61 5.47 5.22 4.89
66 5.82 5.77 5.61 5.33 4.96
67 6.01 5.94 5.75 5.44 5.02
68 6.20 6.13 5.91 5.54 5.08
69 6.41 6.33 6.07 5.65 5.14
70 6.64 6.54 6.23 5.76 5.19
71 6.88 6.76 6.41 5.86 5.24
72 7.14 7.00 6.59 5.97 5.28
73 7.43 7.26 6.77 6.06 5.32
74 7.73 7.53 6.96 6.16 5.35
41
75 8.06 7.82 7.14 6.25 5.38
-----------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
42
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
--------------------------------------------------------------------------------
Adjusted Ages
--------------------
Second
Xxxxxxxxx Xxxxxxxxx Option 4a Option 4b Option 4c Option 4d Option 4e
--------------------------------------------------------------------------------
55 50 $ 3.69 $ 4.05 $ 4.27 $ 3.69 $ 4.03
55 55 3.88 4.25 4.47 3.87 4.14
55 60 3.99 4.44 4.71 3.98 4.42
60 55 3.99 4.44 4.71 3.98 4.42
60 60 4.24 4.71 4.99 4.23 4.57
60 65 4.38 4.97 5.32 4.38 4.93
65 60 4.38 4.97 5.32 4.38 4.93
65 65 4.72 5.33 5.70 4.71 5.14
65 70 4.93 5.68 6.15 4.91 5.66
70 65 4.93 5.68 6.15 4.91 5.66
70 70 5.40 6.21 6.70 5.36 5.96
70 75 5.69 6.68 7.32 5.62 6.67
75 70 5.69 6.68 7.32 5.62 6.67
75 75 6.37 7.45 8.15 6.23 7.12
75 80 6.78 8.11 8.99 6.54 8.13
--------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
43
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
--------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
--------------------------------------------------------------------------
3 3.50% $ 29.19 $ 87.33 $ 173.91 $ 344.86
4 3.50% 22.27 66.61 132.65 263.04
5 3.50% 18.12 54.19 107.92 213.99
6 3.50% 15.35 45.92 91.44 181.32
7 3.50% 13.38 40.01 79.69 158.01
8 3.50% 11.90 35.59 70.88 140.56
9 3.50% 10.75 32.16 64.05 127.00
10 3.50% 9.83 29.42 58.59 116.18
11 3.50% 9.09 27.18 54.13 107.34
12 3.50% 8.46 25.32 50.42 99.98
13 3.50% 7.94 23.75 47.29 93.78
14 3.50% 7.49 22.40 44.62 88.47
15 3.50% 7.10 21.24 42.31 83.89
16 3.50% 6.76 20.23 40.29 79.89
17 3.50% 6.47 19.34 38.51 76.37
18 3.50% 6.20 18.55 36.94 73.25
19 3.50% 5.97 17.85 35.54 70.47
20 3.50% 5.75 17.22 34.28 67.98
21 3.50% 5.56 16.65 33.15 65.74
22 3.50% 5.39 16.13 32.13 63.70
23 3.50% 5.24 15.66 31.19 61.85
24 3.50% 5.09 15.24 30.34 60.17
25 3.50% 4.96 14.85 29.56 58.62
26 3.50% 4.84 14.49 28.85 57.20
27 3.50% 4.73 14.15 28.19 55.90
28 3.50% 4.63 13.85 27.58 54.69
29 3.50% 4.53 13.57 27.02 53.57
30 3.50% 4.45 13.30 26.49 52.53
--------------------------------------------------------------------------
44
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
--------------------------------------------------------------------------
Guaranteed Monthly Quarterly Semi-Annual Annual
Years Rate Payment Payment Payment Payment
--------------------------------------------------------------------------
3 5.00% $ 29.80 $ 89.04 $ 176.99 $ 349.72
4 5.00% 22.89 68.38 135.93 268.58
5 5.00% 18.74 56.00 111.33 219.98
6 5.00% 15.99 47.77 94.96 187.64
7 5.00% 14.02 41.90 83.30 164.59
8 5.00% 12.56 37.52 74.58 147.35
9 5.00% 11.42 34.11 67.81 133.99
10 5.00% 10.51 31.40 62.42 123.34
11 5.00% 9.77 29.19 58.03 114.66
12 5.00% 9.16 27.36 54.38 107.45
13 5.00% 8.64 25.81 51.31 101.39
14 5.00% 8.20 24.50 48.69 96.21
15 5.00% 7.82 23.36 46.44 91.75
16 5.00% 7.49 22.37 44.47 87.88
17 5.00% 7.20 21.51 42.75 84.48
18 5.00% 6.94 20.74 41.23 81.47
19 5.00% 6.71 20.06 39.88 78.80
20 5.00% 6.51 19.46 38.68 76.42
21 5.00% 6.33 18.91 37.59 74.28
22 5.00% 6.17 18.42 36.62 72.35
23 5.00% 6.02 17.98 35.73 70.61
24 5.00% 5.88 17.57 34.93 69.02
25 5.00% 5.76 17.20 34.20 67.57
26 5.00% 5.65 16.87 33.53 66.25
27 5.00% 5.54 16.56 32.92 65.04
28 5.00% 5.45 16.28 32.35 63.93
29 5.00% 5.36 16.01 31.83 62.90
30 5.00% 5.28 15.77 31.35 61.95
--------------------------------------------------------------------------
45
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Months
-----------------------------------------------------------------------
Adjusted
Age of Annuitant None 60 120 180 240
-----------------------------------------------------------------------
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
46
75 8.35 8.08 7.38 6.48 5.62
-----------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
47
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Months
-----------------------------------------------------------------------
Adjusted
Age of Annuitant None 60 120 180 240
-----------------------------------------------------------------------
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 6.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
48
75 9.23 8.93 8.16 7.23 6.38
-----------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
49
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
----------------------------------------------------------------------------
Adjusted Ages
--------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
----------------------------------------------------------------------------
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $ 4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
--------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
50
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
--------------------------------------------------------------------------------
Adjusted Ages
-------------------
Second
Xxxxxxxxx Xxxxxxxxx Option 4a Option 4b Option 4c Option 4d Option 4e
--------------------------------------------------------------------------------
55 50 $ 4.88 $ 5.26 $ 5.48 $ 4.88 $ 5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
--------------------------------------------------------------------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
51
--------------------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 000 Xxxxxxxxxx Xxx.
Hartford, Connecticut 06156
(000) 000-0000
Group Variable, Fixed, or Combination Annuity Contract
Nonparticipating
--------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE GROUP CONTRACT, WHEN BASED ON
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE
ADJUSTMENT FORMULA. APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN
EITHER AN INCREASE OR DECREASE IN THE CURRENT VALUE. THE MARKET VALUE
ADJUSTMENT FORMULA DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS
MATURITY.
52
