Allianz Life Insurance Company of North America
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
A Stock Company
This is a legal Contract between the Contract Owner (referred to in this
Contract as you and your) and Allianz Life Insurance Company of North America
(herein referred to as we, us and our). We will make Annuity Payments as set
forth in this Contract beginning on the Income Date.
This Contract is issued in consideration of the payment of the initial Purchase
Payment.
READ YOUR CONTRACT CAREFULLY
RIGHT TO EXAMINE: This Contract may be returned within 10 days after you receive
it. It can be mailed or delivered to either us or the agent who sold it. Return
of this Contract by mail is effective on being postmarked, properly addressed
and postage prepaid. The returned Contract will be treated as if we had never
issued it. We will promptly refund the Contract Value in states where permitted.
This may be more or less than the Purchase Payments. We have the right to
allocate payments to the Money Market Fund until the expiration of the Right to
Examine period. If we so allocate payments, we will refund the greater of the
Purchase Payments, less any withdrawals, or the Contract Value.
Benefits available under this Contract are not less than those required by
statute of the state in which this Contract is delivered.
This is a Variable Annuity Contract with Annuity Payments and Contract Values
increasing or decreasing depending on the experience of the Variable Account
which is set forth in the Contract Schedule.
Signed for Allianz Life Insurance Company of North America by:
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
Secretary President
INDIVIDUAL FLEXIBLE PAYMENT VARIABLE ANNUITY
NON-PARTICIPATING
L30800
TABLE OF CONTENTS
RIGHT TO EXAMINE..................................................................................................1
CONTRACT SCHEDULE..............................................................................................i -v
DEFINITIONS.......................................................................................................2
PURCHASE PAYMENTS.................................................................................................4
PURCHASE PAYMENTS........................................................................................4
CHANGE IN PURCHASE PAYMENTS..............................................................................4
NO DEFAULT...............................................................................................4
ALLOCATION OF PURCHASE PAYMENTS..........................................................................4
VARIABLE ACCOUNT..................................................................................................4
THE VARIABLE ACCOUNT.....................................................................................4
VALUATION OF ASSETS......................................................................................5
ACCUMULATION UNITS.......................................................................................5
ACCUMULATION UNIT VALUE..................................................................................5
NET INVESTMENT FACTOR....................................................................................5
MORTALITY AND EXPENSE RISK CHARGE........................................................................6
ADMINISTRATIVE CHARGE....................................................................................6
DISTRIBUTION EXPENSE CHARGE..............................................................................6
MORTALITY AND EXPENSE GUARANTEE..........................................................................6
CONTRACT VALUE....................................................................................................6
CONTRACT MAINTENANCE CHARGE.......................................................................................6
TRANSFERS.........................................................................................................6
WITHDRAWAL PROVISIONS.............................................................................................8
WITHDRAWALS..............................................................................................8
CONTINGENT DEFERRED SALES CHARGE.........................................................................8
PROCEEDS PAYABLE ON DEATH.........................................................................................8
DEATH OF CONTRACT OWNER DURING THE ACCUMULATION PERIOD...................................................8
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD......................................................8
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD.....................................................8
DEATH OF CONTRACT OWNER DURING THE ANNUITY PERIOD........................................................9
DEATH OF ANNUITANT.......................................................................................9
PAYMENT OF DEATH BENEFIT.................................................................................9
BENEFICIARY.............................................................................................10
CHANGE OF BENEFICIARY...................................................................................10
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION.....................................................................10
CONTRACT OWNER, ANNUITANT, ASSIGNMENT PROVISIONS.................................................................11
CONTRACT OWNER...........................................................................................11
JOINT OWNER..............................................................................................11
ANNUITANT................................................................................................11
ASSIGNMENT OF A CONTRACT.................................................................................11
ANNUITY PROVISIONS...............................................................................................11
GENERAL.................................................................................................11
INCOME DATE.............................................................................................11
SELECTION OF AN ANNUITY OPTION..........................................................................12
ANNUITY OPTIONS.........................................................................................12
OPTION 1 - LIFE ANNUITY...........................................................................12
OPTION 2 - LIFE ANNUITY WITH MONTHLY PAYMENTS OVER 5, 10, 15,
OR 20 YEARS GUARANTEED............................................................................12
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY........................................................12
OPTION 4 - JOINT AND LAST SURVIVOR ANNUITY WITH MONTHLY
PAYMENTS OVER 5, 10, 15, OR 20 YEARS GUARANTEED..................................................13
OPTION 5 - REFUND LIFE ANNUITY...................................................................13
OPTION 6 - SPECIFIED PERIOD CERTAIN ANNUITY.............................................................14
ANNUITY..........................................................................................................14
FIXED ANNUITY...........................................................................................14
VARIABLE ANNUITY........................................................................................14
GENERAL PROVISIONS...............................................................................................15
THE CONTRACT............................................................................................15
NON-PARTICIPATING IN SURPLUS............................................................................15
MISSTATEMENT OF AGE OR SEX..............................................................................15
CONTRACT SETTLEMENT.....................................................................................16
REPORTS.................................................................................................16
TAXES...................................................................................................16
EVIDENCE OF SURVIVAL....................................................................................16
PROTECTION OF PROCEEDS..................................................................................16
MODIFICATION OF CONTRACT................................................................................16
15
L30800
v
S40010
CONTRACT SCHEDULE
CONTRACT OWNER: [Xxxx Xxx] CONTRACT NUMBER: [??687456]
JOINT OWNER: [Xxxx Xxx] ISSUE DATE: [04/15/99]
ANNUITANT: [Xxxx Xxx] INCOME DATE: [04/15/09]
PURCHASE PAYMENTS:
INITIAL PURCHASE PAYMENT: [$5,000]
MINIMUM SUBSEQUENT
PURCHASE PAYMENT: [$250 or $100 if you have selected AIP]
MAXIMUM TOTAL
PURCHASE PAYMENTS: [$1 million; higher amounts may be accepted with our prior
approval]
ALLOCATION GUIDELINES:
[1. Currently, you can select up to 10 of the Funds and the Fixed Account.
2. If allocations are made in percentages, whole numbers must be used.]
VARIABLE ACCOUNT: [Allianz Life Variable Account B]
ELIGIBLE INVESTMENTS:
[Investment Options]
[AIM V.I. CAPITAL APPRECIATION]
[AIM V.I. GROWTH]
[AIM V.I. INTERNATIONAL EQUITY]
[AIM V.I. VALUE]
[XXXXX AMERICAN GROWTH]
[XXXXX AMERICAN LEVERAGED ALLCAP]
[XXXXX AMERICAN MIDCAP GROWTH]
[XXXXX AMERICAN SMALL CAPITALIZATION]
[XXXXX FINANCIAL]
[XXXXX REAL ESTATE]
[XXXXX VALUE]
[FRANKLIN GROWTH AND INCOME]
[FRANKLIN RISING DIVIDENDS]
[FRANKLIN SMALL CAP]
[FRANKLIN U.S. GOVERNMENT SECURITIES]
[X.X. XXXXXX INTERNATIONAL OPPORTUNITIES]
[X.X. XXXXXX U.S. DISCIPLINED EQUITY]
[MUTUAL DISCOVERY SECURITIES]
[MUTUAL SHARES SECURITIES]
[XXXXXXXXXXX GLOBAL SECURITIES]
[XXXXXXXXXXX HIGH INCOME]
[XXXXXXXXXXX MAIN STREET GROWTH & INCOME]
[PIMCO HIGH YIELD BOND]
[PIMCO STOCKS PLUS GROWTH AND INCOME]
[PIMCO TOTAL RETURN BOND]
[XXXXXXXX XXXXXXXXX GLOBAL TECHNOLOGY]
[XXXXXXXX SMALL-CAP VALUE]
[XXXXXXXXX DEVELOPING MARKETS EQUITY]
[XXXXXXXXX GLOBAL GROWTH]
[XXXXXXXXX PACIFIC GROWTH]
[USALLIANZ VIP DIVERSIFIED ASSETS]
[USALLIANZ VIP FIXED INCOME]
[USALLIANZ VIP GLOBAL OPPORTUNITIES]
[USALLIANZ VIP GROWTH]
[USALLIANZ VIP MONEY MARKET]
[XXX XXXXXX LIT ENTERPRISE]
[XXX XXXXXX LIT GROWTH & INCOME]
[Allianz Life General Account]
[ALLIANZ LIFE FIXED ACCOUNT]
MORTALITY AND EXPENSE RISK CHARGE: During the Accumulation Period, the Mortality
and Expense Risk Charge is equal on an annual basis to [1.25%] of the average
daily net asset value of the Variable Account. During the Annuity Period, the
Mortality and Expense Risk Charge is equal on an annual basis to [1.25%] of the
average daily net asset value of the Variable Account. We may decrease this
charge, but we may not increase it.
ADMINISTRATIVE CHARGE: Equal on an annual basis to [.15%] of the average daily
net asset value of the Variable Account.
DISTRIBUTION EXPENSE CHARGE: [None]
CONTRACT MAINTENANCE CHARGE: The Contract Maintenance Charge is currently
[$40.00] each Contract Year. The Contract Maintenance Charge will be deducted
from the Contract Value the day before each Contract Anniversary while this
Contract is in force. However, during the Accumulation Period, if your Contract
Value on a Contract Anniversary is at least [$100,000], then no Contract
Maintenance Charge is deducted. If a total withdrawal is made on a date other
than a Contract Anniversary and your Contract Value for the Valuation Period
during which the total withdrawal is made is less than [$100,000]; the full
Contract Maintenance Charge will be deducted at the time of the total
withdrawal. The Contract Maintenance Charge will be deducted from the Funds [and
the Fixed Account] in the same proportion that the amount of the Contract Value
in each Fund [and/or Fixed Account] bears to the total Contract Value. During
the Annuity Period, the Contract Maintenance Charge will be collected pro rata
from each Annuity Payment. In the event you own more than one Contract, we will
determine the total Contract Value for all of the Contracts. If the total
Contract Value is at least [$100,000], we will not assess the Contract
Maintenance Charge. If the Contract Owner is not a natural person, we will look
to the Annuitant in determining the foregoing.
COMMUTATION FEE APPLICABLE TO ANNUITY OPTIONS 2, 4 AND 6:
[Years Since Income Date Commutation Factor
------------------------ ------------------
0 - 1 5%
1 - 2 4%
2 - 3 3%
3 - 4 2%
Over 4 1%]
MAXIMUM CUMULATIVE PERCENTAGE FOR PARTIAL LIQUIDATION FOR ANNUITY OPTIONS 2 AND
4:
[75%] of the Total Liquidation Value less any previously liquidated amounts.
TRANSFERS:
NUMBER OF FREE TRANSFERS PERMITTED: Currently, there are no limits on the
number of transfers that can be made. We reserve the right to change this,
but you will always be allowed at least 12 free transfers in any Contract
Year. Currently, you are allowed [12] free transfers each Contract Year.
This applies to transfers prior to and after the Income Date.
TRANSFER FEE: For each transfer in excess of the free transfers permitted,
the Transfer Fee is [$25]. Transfers made at the end of the Right to
Examine period by us and any transfers made pursuant to a regularly
scheduled transfer will not be counted in determining the application of
the Transfer Fee.
MINIMUM AMOUNT TO BE TRANSFERRED: [$1,000 (from any Fund or the Fixed
Account) or your entire interest in the Fund or the Fixed Account, if
less.] This requirement is waived if the transfer is pursuant to a
pre-scheduled transfer.
WITHDRAWALS:
CONTINGENT DEFERRED SALES CHARGE: A Contingent Deferred Sales Charge is
assessed against Purchase Payments withdrawn. The charge is calculated at
the time of each withdrawal. For partial withdrawals, the charge is
deducted from the remaining Contract Value and is deducted from the Funds
[and the Fixed Account] in the same proportion that the amount of
withdrawal from the Fund [or Fixed Account] bears to the total of the
partial withdrawal. The Contingent Deferred Sales Charge is based upon the
length of the time from receipt of the Purchase Payment. Withdrawals are
deemed to have come from the oldest Purchase Payments first. Each Purchase
Payment is tracked as to its date of receipt and the Contingent Deferred
Sales Charges are determined in accordance with the following.
[CONTINGENT DEFERRED SALES CHARGE
Number of Complete Contract
Years from Receipt Charge
------------------ ------
0 7%
1 6%
2 5%
3 4%
4 3%
5 years or more 0%]
PARTIAL WITHDRAWAL PRIVILEGE: [Each Contract Year, on a cumulative basis,
you can withdraw up to 10% of Purchase Payments (minus any previous
withdrawals taken which were not subject to a Contingent Deferred Sales
Charge) without incurring a Contingent Deferred Sales Charge. Complete
withdrawals are assessed a Contingent Deferred Sales Charge on the full
Contingent Deferred Sales Charge Basis Amount with no reductions for the
Partial Withdrawal Privilege.]
[If your Contract Value is $25,000 or more you can elect the Systematic
Withdrawal Option. The total of systematic withdrawals in a Contract Year
which can be made without incurring a Contingent Deferred Sales Charge is
limited to not more than 10% of Purchase Payments. There is no limit to the
amount or percentage of the systematic withdrawal if all your Purchase
Payments are no longer subject to a Contingent Deferred Sales Charge. If
you have elected the Systematic Withdrawal Option, any additional
withdrawals will be subject to any applicable Contingent Deferred Sales
Charge. We reserve the right to modify the eligibility rules at any time,
without notice.]
[If you have a Qualified Contract, you can elect the Minimum Distribution
Program with respect to your Contract. Withdrawals will not be subject to a
Contingent Deferred Sales Charge. Such payments will be designed to meet
the applicable minimum distribution requirements imposed by the Internal
Revenue Code on Qualified Contracts. Withdrawals from your Qualified
Contract pursuant to the Minimum Distribution Program are in lieu of the
Free Withdrawal Privilege described above. If you have elected the Minimum
Distribution Program, any additional withdrawals will be subject to any
applicable Contingent Deferred Sales Charge.]
MINIMUM PARTIAL WITHDRAWAL: [$500]
MINIMUM CONTRACT VALUE THAT MUST REMAIN IN THE CONTRACT AFTER A PARTIAL
WITHDRAWAL: [$2,000]
FIXED ACCOUNT INITIAL RATE: [3%]
We guarantee this rate for one year from the Issue Date.
RIDERS:
[Individual Retirement Annuity Endorsement]
[Xxxx Individual Retirement Annuity Endorsement]
[403 (b) Endorsement]
[Unisex Endorsement]
[Group Pension Plan Death Benefit Endorsement]
[Pension Plan and Profit Sharing Plan Endorsement]
[Declared Interest Rate Fixed Account Endorsement]
[Charitable Remainder Trust Endorsement]
[Waiver of Contingent Deferred Sales Charge Endorsement]
[Traditional Death Benefit Endorsement]
[Enhanced Death Benefit Endorsement]
[Traditional Guaranteed Minimum Income Benefit Endorsement]
[Enhanced Guaranteed Minimum Income Benefit Endorsement]
SERVICE OFFICE: [USALLIANZ] SERVICE CENTER
[300 Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
000-000-0000]
DEFINITIONS
ACCUMULATION UNIT: An accounting unit of measure used to calculate the Contract
Value prior to the Income Date.
ACCUMULATION PERIOD: The period prior to the Income Date during which you can
make Purchase Payments.
ADJUSTED CONTRACT VALUE: The Contract Value less any applicable Premium Tax.
This amount is used to determine the death benefit or the initial Annuity
Payment.
AGE: Age on last birthday unless otherwise specified.
ANNUITANT(S): The natural person upon whose continuation of life any Annuity
Payment involving life contingencies depends. You may change the Annuitant at
any time prior to the Income Date unless the Contract Owner is a non-individual.
ANNUITY CALCULATION DATE: The date on which the first Annuity Payment is
calculated which will be no more than ten (10) business days prior to the Income
Date.
ANNUITY OPTION: An arrangement under which Annuity Payments are made under this
Contract.
ANNUITY PAYMENTS: The series of payments made to you or any named payee after
the Income Date under the Annuity Option selected.
ANNUITY PERIOD: The period of time beginning on the Income Date during which
Annuity Payments are made.
ANNUITY RESERVE: The assets which support the Annuity Option you have selected
during the Annuity Period.
ANNUITY UNIT: An accounting unit of measure used to calculate Annuity Payments
after the Income Date.
ASSUMED INVESTMENT RETURN: The investment return upon which the Annuity Payments
in the Contract are based.
AUTHORIZED REQUEST: A request, in a form satisfactory to the Company, which is
received by the [Service Center].
BENEFICIARY: The person(s) or entity(ies) who will receive any death benefit
payable under this Contract during the Accumulation Period.
COMMUTATION FEE: A fee assessed by the Company equal to the percentage of the
amount liquidated as shown on the Contract Schedule.
COMPANY: Allianz Life Insurance Company of North America.
CONTINGENT DEFERRED SALES CHARGE BASIS AMOUNT: The amount which may be subject
to Contingent Deferred Sales Charges upon withdrawal.
CONTRACT ANNIVERSARY: An anniversary of the Issue Date of this Contract.
CONTRACT OWNER: The person(s) or entity(ies) entitled to the ownership rights
stated in this Contract. If Joint Owners are named, all references to Contract
Owner shall mean the Joint Owners.
CONTRACT SURRENDER VALUE: The Contract Value less any applicable Premium Tax,
less any Contingent Deferred Sales Charge and less any applicable Contract
Maintenance Charge.
CONTRACT VALUE: The dollar value as of any Valuation Date of all amounts
accumulated under this Contract.
CONTRACT YEAR: Any period of twelve (12) months commencing with the Issue Date
and each Contract Anniversary thereafter.
ELIGIBLE INVESTMENT(S): Those investments available under the Contract. Current
Eligible Investments are shown on the Contract Schedule.
FUND: A segment of an Eligible Investment which constitutes a separate and
distinct class of interests under an Eligible Investment.
GENERAL ACCOUNT: Our general investment account which contains all the assets of
the Company with the exception of the Variable Account and other segregated
asset accounts.
INCOME DATE: The date on which Annuity Payments are to begin.
ISSUE DATE: The date shown on the Contract Schedule on which the first Contract
Year begins.
JOINT OWNER: If there is more than one Contract Owner, each Contract Owner shall
be a Joint Owner of the Contract. Joint Owners have equal ownership rights and
must both authorize any exercising of those ownership rights unless otherwise
allowed by us. Any Joint Owner must be the spouse of the other Contract Owner.
PREMIUM TAX: Any premium taxes owed to any governmental entity and assessed
against Purchase Payments or Contract Value.
PURCHASE PAYMENT: A payment made toward this Contract.
SUB-ACCOUNT: Variable Account assets are divided into Sub-Accounts. Assets of
each Sub-Account will be invested in shares of an Eligible Investment or Fund.
In this Contract, "Fund" may also refer to the Sub-Accounts from which the Fund
investment is made.
TOTAL LIQUIDATION VALUE: The present value of any remaining guaranteed variable
Annuity Payments after the Income Date.
VALUATION DATE: The Variable Account will be valued each day that the New York
Stock Exchange is open for trading.
VALUATION PERIOD: The period commencing at the close of business of the New York
Stock Exchange on each Valuation Date and ending at the close of business for
the next succeeding Valuation Date.
[SERVICE CENTER]: The office indicated on the Contract Schedule of this Contract
to which notices, requests and Purchase Payments must be sent.
VARIABLE ACCOUNT: A separate account maintained by us in which a portion of our
assets has been allocated for this and certain other contracts. It has been
designated on the Contract Schedule.
PURCHASE PAYMENTS
PURCHASE PAYMENTS: Purchase Payments are payable according to the frequency and
in the amount selected by you. The initial Purchase Payment is due on the Issue
Date. We reserve the right to decline any Purchase Payment. The Minimum
Subsequent Purchase Payment and the Maximum Total Purchase Payments allowed are
shown on the Contract Schedule.
CHANGE IN PURCHASE PAYMENTS: You may elect to increase or decrease or to change
the frequency of Purchase Payments.
NO DEFAULT: Unless surrendered, this Contract remains in force and will not be
in default if no additional Purchase Payments are made.
ALLOCATION OF PURCHASE PAYMENTS: Purchase Payments are allocated to one or more
of the Funds of the Variable Account [or the Fixed Account] in accordance with
your selection. The allocation of the initial Purchase Payment is made in
accordance with your selection made at the Issue Date. Unless you inform us
otherwise, subsequent Purchase Payments are allocated in the same manner as the
initial Purchase Payment. However, the Company has reserved the right to
allocate the initial Purchase Payment to the Money Market Fund until the
expiration of the Right to Examine period. All allocations of Purchase Payments
are subject to the Allocation Guidelines shown on the Contract Schedule. We
guarantee that you will be allowed to select at least five Funds [or the Fixed
Account] for allocation of Purchase Payments.
VARIABLE ACCOUNT
THE VARIABLE ACCOUNT: The Variable Account is designated on the Contract
Schedule. 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 Account, equal to reserves and other liabilities of your Contract
and those of other Contract Owners, will not be charged with liabilities arising
out of any other business we may conduct.
The Variable Account assets are divided into Funds. The Funds which are
available under this Contract are listed on the Contract Schedule. The assets of
the Fund are allocated to the Eligible Investments (and/or the Funds, if any,
within an Eligible Investment) shown on the Contract Schedule. We may add
additional Eligible Investments or Funds to those shown. You may be permitted to
transfer your Contract Value or allocate Purchase Payments to the additional
Fund(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 Eligible Investment(s), or any Fund(s) within an
Eligible Investment, become unavailable for investment by the Variable Account,
or our Board of Directors deems further investment in the shares inappropriate,
we may limit further purchase of such shares or substitute shares of another
Eligible Investment or Fund for shares already purchased.
VALUATION OF ASSETS: Assets of Eligible Investments within each Fund will be
valued at their net asset value on each Valuation Date.
ACCUMULATION UNITS: Accumulation Units shall be used to account for all amounts
allocated to or withdrawn from the Funds of the Variable Account as a result of
Purchase Payments, withdrawals, transfers, or fees and charges. We will
determine the number of Accumulation Units of a Sub-Account purchased or
canceled. This will be done by dividing the amount allocated to (or the amount
withdrawn from) the Sub-Account by the dollar value of one Accumulation Unit of
the Sub-Account as of the end of the Valuation Period during which the
transaction is processed at the [Service Center].
ACCUMULATION UNIT VALUE: The Accumulation Unit Value for each Fund was
arbitrarily set initially at $10. Subsequent Accumulation Unit Values for each
Fund are determined by multiplying the Accumulation Unit Value for the
immediately preceding Valuation Period by the Net Investment Factor for the Fund
for the current period.
The Accumulation Unit value may increase or decrease from Valuation Period to
Valuation Period.
NET INVESTMENT FACTOR: The Net Investment Factor for each Fund is determined by
dividing A by B and multiplying by (1 - C) where:
A is (i) the net asset value per share of the Eligible Investment or the
Fund of an Eligible Investment held by the Fund at the end of the
current Valuation Period; plus
(ii) any dividend or capital gains per share declared on behalf of
such Eligible Investment or Fund that has an ex-dividend date
within the current Valuation Period.
B is the net asset value per share of the Eligible Investment or Fund
held by the Fund for the immediately preceding Valuation Period.
C is (i) the Valuation Period equivalent of the daily Mortality and
Expense Risk Charge, for the Administrative Charge and for the
Distribution Expense Charge, if any, which are shown on the Contract
Schedule; plus
(ii) a charge factor, if any, for any taxes or any tax reserve we have
established as a result of the operation or maintenance of the
Fund.
MORTALITY AND EXPENSE RISK CHARGE: Each Valuation Period, we deduct a Mortality
and Expense Risk Charge from the Variable Account which is equal, on an annual
basis, to the amount shown on the Contract Schedule. The Mortality and Expense
Risk Charge compensates us for assuming the mortality and expense risks under
this Contract.
ADMINISTRATIVE CHARGE: Each Valuation Period, we deduct an Administrative Charge
from the Variable Account which is equal, on an annual basis, to the amount
shown on the Contract Schedule. The Administrative Charge compensates us for the
costs associated with the administration of this Contract and the Variable
Account.
DISTRIBUTION EXPENSE CHARGE: Each Valuation Period, we deduct a Distribution
Expense Charge from the Separate Account which is equal, on an annual basis, to
the amount shown on the Contract Schedule. The Distribution Expense Charge
compensates the Company for costs associated with the distribution of Contracts.
MORTALITY AND EXPENSE GUARANTEE: We guarantee that the dollar amount of each
annuity payment after the first will not be affected by variations in mortality
or expense experience.
CONTRACT VALUE
The Contract Value for any Valuation Period is equal to the total dollar value
accumulated under this Contract in any of the Funds of the Variable Account or
the Fixed Account. The Contract Value in a Fund of the Variable Account is
determined by multiplying the number of Accumulation Units allocated to the
Contract Value for the Fund by the Accumulation Unit Value. Purchase Payments,
withdrawals and transfers from or to a Fund will result in the addition of or
the cancellation of Accumulation Units in a Fund.
CONTRACT MAINTENANCE CHARGE
We deduct an annual Contract Maintenance Charge shown on the Contract Schedule.
Prior to the Income Date, this will be deducted from the Contract Value. The
number of Accumulation Units to be canceled from each applicable Fund is in the
ratio that the value of each Fund bears to the total Contract Value.
TRANSFERS
You may transfer all or a part of your interest in an Eligible Investment to
another Eligible Investment. We reserve the right to charge for transfers if
there are more than the number of free transfers shown on the Contract Schedule.
All transfers are subject to the following:
1. The deduction of any Transfer Fee that may be imposed as shown on the
Contract Schedule. The Transfer Fee will be deducted from the Eligible
Investment from which the transfer is made. If the entire amount in the
Eligible Investment is transferred, then the Transfer Fee will be deducted
from the amount transferred. If there are multiple source Eligible
Investments, it will be treated as a single transfer. Any Transfer Fee will
be deducted proportionally from the source Eligible Investment if less than
the entire amount in the Eligible Investment is transferred.
2. We reserve the right to limit transfers until the expiration of the Right
to Examine period.
3. The minimum amount which can be transferred is shown on the Contract
Schedule.
4. No transfer will be effective within seven calendar days prior to the date
on which the first Annuity Payment is due.
5. Any transfer direction must clearly specify:
a. the amount which is to be transferred; and
b. the Eligible Investments which are to be affected.
6. After the Income Date, transfers may not be made from a fixed annuity
option to a variable annuity option.
7. After the Income Date, you can make at least one transfer from a variable
annuity option to a fixed annuity option. The number of Annuity Units
canceled from the variable annuity option will be equal in value to the
amount of the annuity reserve transferred out of the Variable Account. The
amount transferred will purchase fixed annuity payments under the Annuity
Option in effect and based on the age and sex of the Annuitant at the time
of the transfer where allowed.
8. 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 Contract
Owners is, or would be, to the disadvantage of other Contract Owners.
Restrictions may be applied in any manner reasonably designed to prevent
any use of the transfer right which we consider to be to the disadvantage
of other Contract Owners. A modification could be applied to transfers to
or from one or more of the Funds, and could include, but is not limited to:
a. the requirement of a minimum time period between each transfer;
b. not accepting a transfer request from an agent acting under a power of
attorney on behalf of more than one Contract Owner; or
c. limiting the dollar amount that may be transferred between the Funds
by a Contract Owner at any one time;
9. We reserve the right at any time and without prior notice to any party to
modify the transfer provisions described above. However, if we do modify
these provisions we guarantee that they will not be any more restrictive
than the above.
If you elect to use this transfer privilege, we will not be liable for transfers
made in accordance with your instructions. All amounts and Accumulation Units
will be determined as of the end of the Valuation Period during which the
request for transfer is received at the [Service Center].
WITHDRAWAL PROVISIONS
WITHDRAWALS: During the Accumulation Period, you may, upon Authorized Request,
make a total or partial withdrawal of the Contract Surrender Value. Withdrawals
will result in the cancellation of Accumulation Units from each Eligible
Investment or a reduction in the Fixed Account Contract Value in the ratio that
the value of each Eligible Investment bears to the total Contract Value. You
must specify, by Authorized Request, which Accumulation Units are to be canceled
if other than the above mentioned method of cancellation is desired.
The Company will pay the amount of any withdrawal from the Variable Account
within seven (7) days of receipt of a request in good order unless the
Suspension or Deferral of Payments Provision is in effect.
Each partial withdrawal must be for an amount which is not less than the amount
shown on the Contract Schedule. The minimum Contract Value which must remain in
the Contract after a partial withdrawal is shown on the Contract Schedule.
CONTINGENT DEFERRED SALES CHARGE: Upon a withdrawal of Contract Value a
Contingent Deferred Sales Charge as set forth on the Contract Schedule may be
assessed. Under certain circumstances, we allow withdrawals without the
Contingent Deferred Sales Charge as set forth on the Contract Schedule.
PROCEEDS PAYABLE ON DEATH
DEATH OF CONTRACT OWNER DURING THE ACCUMULATION PERIOD: Upon the death of the
Contract Owner, or any Joint Owner, during the Accumulation Period, the death
benefit will be paid to the Beneficiary(ies) designated by the Contract Owner.
Upon the death of a Joint Owner, the surviving Joint Owner, if any, will be
treated as the primary Beneficiary. Any other Beneficiary designation on record
at the time of death will be treated as a contingent Beneficiary.
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD: The death benefit will be
the Adjusted Contract Value determined as of the end of the Valuation Period
during which the Company receives both due proof of death and an election for
the payment method.
Any part of the Death Benefit Amount that had been invested in the separate
account remains in the separate account until distribution begins. From the time
the Death Benefit is determined until complete distribution is made, any amount
in the separate account will be subject to investment risk which is borne by the
Beneficiary.
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD: If the Owner has not
previously designated a Death Benefit Option, a Beneficiary must request that
the death benefit be paid under one of the Death Benefit Options below. In
addition, if the Beneficiary is the spouse of the Contract Owner, he or she may
elect to continue the Contract in his or her own name and exercise all the
Contract Owner's rights under the Contract. In this event, the Contract Value
for the Valuation Period during which this election is implemented will be
adjusted to equal the death benefit. On each Contract Anniversary the full
Contract Maintenance Charge will be deducted.
Option A - lump sum payment of the death benefit. (The Contract Maintenance
Charge will not be deducted at the time of a complete withdrawal if the
distribution is due to death.); or
Option B - the payment of the entire death benefit within 5 years of the
date of the death of the Contract Owner or any Joint Owner. The Contract
Maintenance Charge is assessed to each Beneficiary on each Contract
Anniversary; or
Option C - payment of the death benefit under an Annuity 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 Contract Owner or any Joint Owner. The Contract
Maintenance Charge will continue to be assessed to each Beneficiary's share
pro rata over the annual payment.
Any portion of the death benefit not applied under Option C within one year of
the date of the Contract Owner's death, must be distributed within five years of
the date of death.
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.
Payment to the Beneficiary, other than in a lump sum, may only be elected during
the sixty-day period after the day on which such lump sum first became payable
by the Company.
DEATH OF CONTRACT OWNER DURING THE ANNUITY PERIOD: If you, or any Joint Owner,
dies during the Annuity Period, and you are not an Annuitant, any remaining
payments under the Annuity Option elected will continue at least as rapidly as
under the method of distribution in effect at such Contract Owner's death. Upon
your death during the Annuity Period, the Beneficiary becomes the Contract
Owner.
DEATH OF ANNUITANT: Upon the death of an Annuitant, who is not the Contract
Owner, during the Accumulation Period, you may designate a new Annuitant,
subject to our underwriting rules then in effect. If no designation is made
within 30 days of the death of the Annuitant, you will become the Annuitant. If
the Contract Owner is a non-individual, the death of the Annuitant will be
treated as the death of the Contract Owner and a new Annuitant may not be
designated.
Upon the death of the Annuitant during the Annuity Period, the death benefit, if
any, will be as specified in the Annuity Option elected. Death benefits will be
paid at least as rapidly as under the method of distribution in effect at the
Annuitant's death.
PAYMENT OF DEATH BENEFIT: The Company will require due proof of death and
payment election before any death benefit is paid. Due proof of death will be:
1. a certified death certificate; or
2. a certified decree of a court of competent jurisdiction as to the
finding of death; or
3. any other proof satisfactory to the Company.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
BENEFICIARY: The Beneficiary designation in effect on the Issue Date will remain
in effect until changed. The Beneficiary is entitled to receive the benefits to
be paid at your death.
Unless you provide otherwise, the death benefit will be paid in equal shares to
the survivor(s) as follows:
1. to the primary Beneficiary(ies) who survive you and/or the Annuitant's
death, as applicable; or if there are none;
2. to the contingent Beneficiary(ies) who survive you and/or the Annuitant's
death, as applicable; or if there are none;
3. to your estate.
CHANGE OF BENEFICIARY: Subject to the rights of any irrevocable
Beneficiary(ies), you may change the primary Beneficiary(ies) or contingent
Beneficiary(ies). A change may be made by Authorized Request. The change will
take effect as of the date the Authorized Request is signed. The Company will
not be liable for any payment made or action taken before it records the change.
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION
The Company reserves the right to suspend or postpone payments from the Variable
Account 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 securities held
in the Variable Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the Variable
Account's net assets; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Contract 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.
CONTRACT OWNER, ANNUITANT, ASSIGNMENT PROVISIONS
CONTRACT OWNER: As the Contract Owner you have all the interest and rights under
this Contract. The Contract Owner is the person designated as such on the Issue
Date, unless changed.
You may change owners of the Contract at any time by Authorized Request. A
change of Contract Owner will automatically revoke any prior designation of
Contract Owner. The change will become effective as of the date the Authorized
Request is signed. We will not be liable for any payment made or action taken
before the change is recorded.
JOINT OWNER: A Contract may be owned by Joint Owners. If Joint Owners are named,
any Joint Owner must be the spouse of the other Contract Owner. Upon the death
of either Contract Owner, the surviving spouse will be the primary Beneficiary.
Any other Beneficiary designation will be treated as a contingent Beneficiary
unless otherwise indicated in an Authorized Request.
ANNUITANT: The Annuitant is the person on whose life Annuity Payments are based.
The Annuitant is the person designated by you subject to our underwriting rules
then in effect. The Annuitant may not be changed in a Contract which is owned by
a non-individual.
ASSIGNMENT OF A CONTRACT: An Authorized Request specifying the terms of an
assignment of a Contract must be provided to the Service Center. We will not be
liable for any payment made or action taken before we record the assignment.
We will not be responsible for the validity or tax consequences 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 the consent
of the assignee of record.
ANNUITY PROVISIONS
GENERAL: On the Income Date, the Adjusted Contract Value will be applied under
the Annuity Option you have selected. You may elect to have the Adjusted
Contract Value applied to provide a Fixed Annuity, a Variable Annuity or a
combination Fixed and Variable Annuity. If a combination is elected, you must
specify what part of the Adjusted Contract Value is to be applied to the Fixed
and Variable Annuity Options.
INCOME DATE: You select an Income Date at the time of issue. The Income Date
must always be the first day of a calendar month. The earliest Income Date you
can select is two years after the Issue Date. The latest Income Date you can
select is the later of the first day of the first calendar month following the
Annuitant's 90th birthday or 10 years from the Issue Date, or the maximum date
permitted under state law. You may, at any time prior to the Income Date, change
the Income Date by Authorized Request 30 days in advance.
SELECTION OF AN ANNUITY OPTION: You can select an Annuity Option by Authorized
Request. If no Annuity Option is selected, Option 2, with 60 Monthly Payments
Guaranteed, will automatically be applied. You may, at any time prior to the
Income Date, by Authorized Request 30 days in advance, select and/or change the
Annuity Option.
ANNUITY OPTIONS: This Contract provides for Annuity Payments under one of the
Annuity Options described below. Any other Annuity Option acceptable to us may
be selected.
OPTION 1 - LIFE ANNUITY. We will make monthly Annuity Payments during the life
of the Annuitant and ceasing with the last Annuity Payment due prior to the
Annuitant's death.
OPTION 2 - LIFE ANNUITY WITH MONTHLY PAYMENTS OVER 5, 10, 15 OR 20 YEARS
GUARANTEED. We will make monthly Annuity Payments during the life of the
Annuitant with a guarantee that if at the Annuitant's death there have been less
than 60, 120, 180 or 240 monthly Annuity Payments made as selected, monthly
Annuity Payments will continue for the remainder of the guaranteed period.
Alternatively, the Contract Owner may elect to receive a lump-sum payment equal
to the present value of the guaranteed monthly Annuity Payments remaining, as of
the date the notice of the Annuitant's death is received at the [Service
Center], commuted at an appropriate rate. Proof of the Annuitant's death and
return of the Contract are required prior to the payment of any commuted values.
For a fixed annuitization, the commutation rate will be the Statutory Calendar
Year Interest Rate based on the NAIC Standard Valuation Law for Single Premium
Immediate Annuities corresponding to the Income Date. For a variable
annuitization, the commutation rate will be the Assumed Investment Return.
During the lifetime of the Annuitant and while the number of Annuity Payments
made is less than the guaranteed number of payments elected, the Contract Owner
electing variable annuitization may request a withdrawal representing a partial
liquidation of up to the percentage shown on the Contract Schedule of the Total
Liquidation Value. The Total Liquidation Value is equal to the present value of
the remaining guaranteed Annuity Payments, to the end of the period certain,
commuted at the AIR, less a Commutation Fee. The Commutation Fee is a charge
collected by the Company equal to a percentage of the amount liquidated as shown
on the Contract Schedule. The Company guarantees to make this provision
available to the Contract Owner at least once per Contract Year. Partial
liquidations will be processed on the next Annuity Calculation Date following
your written request. The minimum allowable partial liquidation will be the
lesser of $500 or the remaining portion of the Total Liquidation Value
available.
After a partial liquidation, the subsequent monthly Annuity Payments during the
guaranteed period certain will be reduced by the percentage of the Total
Liquidation Value liquidated, including the Commutation Fee. After the
guaranteed number of payments has been made, the number of Annuity Units used in
calculating the monthly payments will be restored to their original values as if
no liquidations had taken place.
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY. We will make monthly Annuity
Payments during the joint lifetime of the Annuitant and the Joint Annuitant.
Upon the death of the Annuitant, if the Joint Annuitant is then living, Annuity
Payments will continue to be paid during the remaining lifetime of the Joint
Annuitant at a level of 100%, 75% or 50% of the previous level, as selected.
Monthly Annuity Payments cease with the final Annuity Payment due prior to the
last survivor's death.
OPTION 4 - JOINT AND LAST SURVIVOR ANNUITY WITH MONTHLY PAYMENTS OVER 5, 10, 15,
OR 20 YEARS GUARANTEED. We will make monthly Annuity Payments during the joint
lifetime of the Annuitant and the Joint Annuitant. Monthly Annuity Payments will
continue to be paid during the remaining lifetime of the Joint Annuitant at 100%
of the previous level, as selected. The Company guarantees that if at the last
death of the Annuitant and the Joint Annuitant, there have been less than 60,
120, 180, or 240 monthly Annuity Payments made as selected, monthly Annuity
Payments will continue to be made for the remainder of the guaranteed period.
Alternatively, the Contract Owner may elect to receive a lump-sum payment equal
to the present value of the guaranteed monthly Annuity Payments remaining, as of
the date the notice of the Annuitant's and Joint Annuitant's death is received
at the [Service Center], commuted at an appropriate rate. Proof of death of the
Annuitant and Joint Annuitant and return of this Contract are required prior to
the payment of any commuted values. For a fixed annuitization, the commutation
rate will be the Statutory Calendar Year Interest Rate based on the NAIC
Standard Valuation Law for Single Premium Immediate Annuities corresponding to
the Income Date. For a variable annuitization, the commutation rate will be the
Assumed Investment Return.
During the lifetime of the Annuitant and Joint Annuitant and while the number of
Annuity Payments made is less than the guaranteed number of payments elected,
the Contract Owner electing variable annuitization may request a withdrawal
representing a partial liquidation of up to the percentage shown on the Contract
Schedule of the Total Liquidation Value. The Total Liquidation Value is equal to
the present value of the remaining guaranteed Annuity Payments, to the end of
the period certain, commuted at the AIR, less a Commutation Fee. The Commutation
Fee is a charge collected by the Company equal to a percentage of the amount
liquidated as shown on the Contract Schedule. The Company guarantees to make
this provision available to the Contract Owner at least once per Contract Year.
Partial liquidations will be processed on the next Annuity Calculation Date
following your written request. The minimum allowable partial liquidation will
be the lesser of $500 or the remaining portion of the Total Liquidation Value
available.
After a partial liquidation, the subsequent monthly Annuity Payments during the
guaranteed period certain will be reduced by the percentage of the Total
Liquidation Value liquidated, including the Commutation Fee. After the
guaranteed number of payments has been made, the number of Annuity Units used in
calculating the monthly payments will be restored to their original values as if
no liquidations had taken place.
OPTION 5 - REFUND LIFE ANNUITY. We will make monthly Annuity Payments during the
lifetime of the Annuitant ceasing with the last Annuity Payment due prior to the
Annuitant's death with a guarantee that at the Annuitant's death, you will
receive a refund. For a Fixed Annuity the amount of the refund will be any
excess of the amount of the Adjusted Contract Value applied under this Option
over the total of all Annuity Payments made under this Option. For a Variable
Annuity the amount of the refund will be the then dollar value of the number of
Annuity Units equal to (1) the Adjusted Contract Value applied to this Option
divided by the Annuity Unit value used to determine the first Annuity Payment,
minus (2) the product of the number of the Annuity Units represented by each
monthly Annuity Payment and the number of payments made. This calculation will
be based upon the assumption that the allocation of Annuity Units actually
in-force at the time of the Annuitant's death had been the allocation of Annuity
Units at issue and at all times thereafter. If the refund calculated above is
not greater than zero there will be no refund paid.
OPTION 6: SPECIFIED PERIOD CERTAIN ANNUITY: Monthly Annuity Payments are paid
for a specified period of time. The Specified Period Certain is elected by the
Contract Owner and must be specified as a whole number of years from 5 to 30. If
at the time of the last death of the Annuitant and any Joint Annuitant, the
Annuity Payments actually made have been for less than the Specified Period
Certain, then Annuity Payments will be continued thereafter to the Contract
Owner for the remainder of the Specified Period Certain. If you have selected a
variable payment option, a liquidation may be made at least once per Contract
Year up to 100% of the Total Liquidation Value in the Contract. The Total
Liquidation Value is equal to the present value of the remaining Annuity
Payments, to the end of the Specified Period Certain, commuted at the Assumed
Investment Return less a Commutation Fee. The Commutation Fee is a percentage of
the amount withdrawn as shown on the Contract Schedule. Partial liquidation will
be processed on the next Annuity Calculation Date following your written
request. The Company will require the return of the Contract prior to the
payment of the entire commuted value.
ANNUITY: If you select a Fixed Annuity, the Adjusted Contract Value is allocated
to the General Account and the Annuity is paid as a Fixed Annuity. If you select
a Variable Annuity, the Adjusted Contract Value will be allocated to the Funds
of the Variable Account in accordance with your selection, and the Annuity will
be paid as a Variable 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 rate based upon the Annuity Option you have selected.
We may offer more favorable rates than those guaranteed here at the time your
first Annuity Payment is calculated. Where permitted, Annuity Payments will
depend on the Age and sex of the Annuitant.
FIXED ANNUITY: You may elect to have the Adjusted Contract Value applied to
provide a Fixed Annuity. The dollar amount of each Fixed Annuity Payment is
guaranteed to be at least an amount equal to the Adjusted Contract Value,
divided first by $1000 and then multiplied by the appropriate Annuity Payment
amount for each $1000 of value for the Annuity Option selected. The guaranteed
rates are based on an interest rate of 2 1/2% per year and the 1983(a)
Individual Annuity Mortality Table with mortality improvement projected 30 years
using Mortality Projection Scale G.
VARIABLE ANNUITY: You may elect to have the Adjusted Contract Value applied to
provide a Variable Annuity. Variable Annuity Payments reflect the investment
performance of the Variable Account in accordance with the allocation of the
Adjusted Contract Value to the Funds during the Annuity Period. Variable Annuity
Payments are not guaranteed as to dollar amount. On the Income Date a fixed
number of Annuity Units will be purchased as follows:
The first Annuity Payment is equal to the Adjusted Contract Value, divided first
by $1000 and then multiplied by the appropriate Annuity Payment amount for each
$1000 of value for the Annuity Option selected. In each Fund the fixed number of
Annuity Units is determined by dividing the amount of the initial Annuity
Payment determined for each Fund by the Annuity Unit value on the Income Date.
Thereafter, the number of Annuity Units in each Fund remains unchanged unless
you elect to transfer between Funds. All calculations will appropriately reflect
the Annuity Payment frequency selected.
On each subsequent Annuity Payment date, the total Annuity Payment is the sum of
the Annuity Payments for each Fund. The Annuity Payment in each Fund is
determined by multiplying the number of Annuity Units then allocated to such
Fund by the Annuity Unit value for that Fund.
On each subsequent Valuation Date, the value of an Annuity Unit is determined in
the following way:
First: The Net Investment Factor is determined as described under "Variable
Account - Net Investment Factor" above.
Second: The value of an Annuity Unit for a Valuation Period is equal to:
a. the value of the Annuity Unit for the immediately preceding Valuation
Period;
b. multiplied by the Net Investment Factor for the current Valuation
Period;
c. divided by the Assumed Net Investment Factor (see below) for the
Valuation Period.
The Assumed Net Investment Factor is equal to one plus the Assumed Investment
Return which is used in determining the basis for the purchase of an Annuity,
adjusted to reflect the particular Valuation Period. The Assumed Investment
Return that we will use is 5%. However, we may agree with you to use a different
value. The Assumed Investment Return will never exceed 7%.
L30800 17
GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of this Contract, and any attached
application, endorsements 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.
NON-PARTICIPATING IN SURPLUS: This Contract does not share in any distribution
of our profits or surplus.
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 will be made up in one sum
with the next Annuity Payment, and overpayments 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.
Prior to any settlement as a death claim, due proof of death must be submitted
to us. Any paid-up annuity, cash surrender or death benefits that may be
available are not less than the minimum benefits required by statute.
REPORTS: We will furnish you with a report showing the Contract Value at least
once each calendar year. This report will be sent to your last known address.
TAXES: Any taxes paid to any governmental entity will be charged against the
Contract Value. We will, in our sole discretion, determine when taxes have
resulted from: the investment experience of the Variable 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 Variable Account. We will deduct
for any income taxes incurred by it as a result of the operation of the Variable
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: Where any benefits under this Contract are contingent upon
the recipient being alive on a given date, we may require proof satisfactory to
us that the condition has been met.
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
payment thereof.
MODIFICATION OF CONTRACT: This Contract may be modified by us in order to
maintain compliance with state and federal law. This Contract may be changed or
altered only by our President or our Secretary. A change or alteration will be
made in writing.
INDIVIDUAL FLEXIBLE PAYMENT VARIABLE ANNUITY
NON-PARTICIPATING
