SECURITY BENEFIT LIFE INSURANCE COMPANY
SINGLE PREMIUM IMMEDIATE VARIABLE ANNUITY CONTRACT
THE COMPANY'S PROMISE
In consideration of the Purchase Payment and the attached Application, Security
Benefit Life Insurance Company (the "Company") will pay the benefits of this
Contract according to its provisions.
LEGAL CONTRACT
PLEASE READ THE CONTRACT CAREFULLY. It is a legal Contract between the Owner and
the Company. The Contract's table of contents is on page 2.
FREE LOOK PERIOD-RIGHT TO CANCEL
If for any reason the Owner is not satisfied with this Contract, he or she may
return it to the Company within 10 days from the date of receipt. It may be
returned by delivering or mailing it to the Company. If returned, this Contract
shall be deemed void from the Contract Date. The Company will refund any
Purchase Payment made and allocated to the Fixed Account and will refund
Separate Account Value (including any premium taxes) as of the date the returned
policy is received by the Company.
Signed for Security Benefit Life Insurance Company on the Contract Date.
XXXXX X. XXXXX XXXXXX X. XXXXXX
Secretary President
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a SINGLE PREMIUM IMMEDIATE VARIABLE ANNUITY CONTRACT.
* Annuity Payments begin on the Annuity Payout Date using the method specified
in this Contract.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. (SEE "ACCOUNT
VALUE AND EXPENSE PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
(SBL LOGO)
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
000 XX Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0001
0-000-000-0000 for Customer Service
V6027 (8-98)
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TABLE OF CONTENTS
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Page
CONTRACT SPECIFICATIONS..................................... 3
DEFINITIONS................................................. 4-7
GENERAL PROVISIONS.......................................... 7-10
The Contract.............................................. 7
Compliance................................................ 7
Misstatement of Age and Sex............................... 8
Evidence of Survival...................................... 8
Incontestability.......................................... 8
Assignment................................................ 8
Exchanges................................................. 8,9
Limits on Exchanges....................................... 9
Claims of Creditors....................................... 9
Nonforfeiture Values...................................... 9
Participation............................................. 9
Statements................................................ 10
OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS............. 10
Ownership................................................. 10
Joint Ownership........................................... 10
Annuitant................................................. 10
Primary and Secondary Beneficiaries....................... 10
Beneficiary Changes....................................... 10
PURCHASE PAYMENT PROVISIONS................................. 11
Single Purchase Payments.................................. 11
Purchase Payment Limitations.............................. 11
Purchase Payment Allocation............................... 11
Place of Payment.......................................... 11
ANNUITY PAYMENT PROVISIONS.................................. 11-18
Annuity Payout Date....................................... 11
Annuity Options........................................... 11-14
Payment Adjustment Upon Death of Joint Annuitant.......... 15
Annuity Payout Amount..................................... 15
Fixed Annuity Payments.................................... 15
Variable Annuity Payments................................. 15
Annuity Tables............................................ 16
Annuity Payments.......................................... 16
Payment Units............................................. 16,17
Payment Unit Value........................................ 18
Net Investment Factor..................................... 18
ACCOUNT VALUE AND EXPENSE PROVISIONS........................ 18-20
Account Value............................................. 18
Fixed Account Value....................................... 18,19
Fixed Account Interest Crediting.......................... 19
Separate Account Value.................................... 19
Accumulation Unit Value................................... 19
Determining Accumulation Units............................ 20
Mortality and Expense Risk Charge......................... 20
Premium Tax Expense....................................... 20
Mutual Fund Expenses...................................... 20
WITHDRAWAL PROVISIONS....................................... 20-22
Withdrawals............................................... 20,21
Withdrawal Value.......................................... 21
Withdrawal Charge......................................... 21
Payment Adjustment........................................ 21,22
Date of Request........................................... 22
Payment of Withdrawal Benefits............................ 22
DEATH BENEFIT PROVISIONS.................................... 22,23
Death Benefit............................................. 22,23
Proof of Death............................................ 23
Distribution Rules........................................ 23
AMENDMENTS OR ENDORSEMENTS, if any
V6027A (8-98)
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CONTRACT SPECIFICATIONS
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OWNER NAME: Xxxx X. Xxx CONTRACT NUMBER: Specimen
JOINT OWNER NAME: Xxxx X. Xxx CONTRACT DATE: 6-30-2023
ANNUITANT NAME: Xxxx X. Xxx ANNUITY PAYOUT DATE: 7-1-2023
ANNUITANT DATE OF BIRTH: 10-30-1953 LIQUIDITY PERIOD EXPIRATION
DATE: 6-30-2028
ANNUITANT PERIOD CERTAIN EXPIRATION
GENDER: Male DATE: 6-30-2038
JOINT ANNUITANT NAME: Xxxx X. Xxx PLAN: IRA
JOINT ANNUITANT DATE OF BIRTH: 6-5-58 ASSIGNMENT: This policy may not be
assigned. See Assignment Provision
of your Policy.
JOINT ANNUITANT GENDER: Female
PRIMARY BENEFICIARY SECONDARY BENEFICIARY
NAME: Xxxxx X. Xxx NAME: Xxxx X. Xxx, Xx.
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INITIAL PURCHASE PAYMENT.................... $25,000
MORTALITY AND EXPENSE RISK CHARGE........... 55% Annually (1.45% Annually
for Option 9)
WITHDRAWAL CHARGE (OPTION 9 ONLY)...........
Contract Year of Withdrawal* 1 2 3 4 5+
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Withdrawal Charge 5% 4% 3% 2% 1%
*Withdrawals are available only during the
Liquidity Period
GUARANTEED RATE............................. 3%
ANNUITY OPTION.............................. Life Income with Liquidity
(Option 9)
PERIOD CERTAIN 15 Years
JOINT & SURVIVOR PERCENTAGE 100%
FLOOR PAYMENT $450
BASIS OF ANNUITY TABLES..................... 1983(a) Mortality Table with
mortality improvement
using Projection Scale G
ASSUMED INTEREST RATE....................... 3.5% Annually
SEPARATE ACCOUNT............................ X. Xxxx Price Variable Annuity
Account
SUBACCOUNTS: Prime Reserve Subaccount (Not available under Option 9);
Limited-Term Bond Subaccount; Personal Strategy Balanced Subaccount; Equity
Income Subaccount; Mid-Cap Growth Subaccount; International Stock Subaccount;
New America Growth Subaccount.
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DEFINITIONS
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ACCOUNT
An Account is one of the Subaccounts or the Fixed Account.
ACCUMULATION UNIT
The Accumulation Unit is a unit of measure. It is used to compute Separate
Account Value. It is also used to compute the Variable Annuity Payments for
Annuity Options 5 through 7.
ANNUITANT
An Annuitant is a person on whose life the Annuity Payments depend for Annuity
Options 1 through 4 and 9. The Annuitant receives Annuity Payments under this
Contract. Please see "Annuitant" provisions on page 10.
ANNUITY OPTION
An Annuity Option is a set of provisions that form the basis for making Annuity
Payments. The Annuity Option is elected in the Application. Please see "Annuity
Options" on pages 11 through 14.
ANNUITY PAYMENTS
Annuity Payments are payments made according to the provisions of the Annuity
Option selected. Annuity Payments begin on the Annuity Payout Date and are made
on the same date of each month on a monthly, quarterly, semiannual or annual
basis. Please see "Annuity Payment Provisions" on pages 11 through 18.
ANNUITY PAYOUT DATE
The Annuity Payout Date is the date on which Annuity Payments begin. The Annuity
Payout Date is set forth on page 3. Please see "Annuity Payout Date" on page 11.
COMPANY
The Company is Security Benefit Life Insurance Company, 000 XX Xxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxx 00000-0000.
CONTRACT ANNIVERSARY
A Contract Anniversary is a 12-month anniversary of the Contract Date.
CONTRACT DATE
The Contract Date is the date the Contract begins. The Contract Date is set
forth on page 3.
CONTRACT YEAR
Contract Years are measured from the Contract Date.
CURRENT INTEREST
The Company may in its discretion pay Current Interest on Fixed Account Value at
a rate that exceeds the Guaranteed Rate set forth on page 3. The Company will
declare the rate of Current Interest, if any, from time to time.
DESIGNATED BENEFICIARY
Upon the death of the Annuitant or, if there are Joint Annuitants upon the death
of the last Annuitant, the Designated Beneficiary will be the first person on
the following list who is alive on the Annuitant's date of death:
1. Primary Beneficiary;
2. Secondary Beneficiary;
3. the Owner's estate if no one listed above is alive.
Under certain Xxxxxxx Options, the Designated Beneficiary receives a death
benefit upon the death of the Annuitant(s). Please see "Annuity Options" on
pages 11 through 14 and "Death Benefit Provisions" on pages 22 through 23.
EXCHANGE
An Exchange is an Exchange of Account Value or Payment Units of one Subaccount
for the equivalent dollar amount of Account Value or Payment Units of another
Subaccount(s). Under Options 5-7, an Exchange also includes Exchanges of Account
Value among the Subaccounts and the Fixed Account.
FIXED ACCOUNT
The Fixed Account is part of the Company's general account. The Company manages
the general account and guarantees that it will credit interest on Fixed Account
Value at an annual rate at least equal to the Guaranteed Rate. This Rate is set
forth on page 3.
GUARANTEE PERIOD
Current Interest, if declared, is fixed for rolling periods of one or more
years, referred to as Guarantee Periods. The Company may offer Guarantee Periods
of different durations.
The Guarantee Period that applies to any Fixed Account Value:
(1) starts on the date that such Account Value is allocated to the Fixed
Account pursuant to:
(a) a Purchase Payment Received by the Company; or
(b) an Exchange to the Fixed Account; and
(2) ends on the last day of the same month in the year in which the Guarantee
Period expires.
When any Guarantee Period expires, a new Guarantee Period shall start for such
Account Value on the date that follows such expiration date. Such new period
shall end on the immediately preceding date in the year in which the Guarantee
Period expires. For example, assuming a one-year Guarantee Period, Account
Value exchanged to the Fixed Account on June 1 would have a Guarantee Period
starting on that date and ending on June 30 of the following year. A new
Guarantee Period for such Account Value would start on July 1 of that year and
end on June 30 of the following year.
HOME OFFICE
The address of the Company's Home Office is Security Benefit Life Insurance
Company, 000 XX Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxx 00000-0000.
JOINT OWNER
The Joint Owner, if any, is named on page 3. The Joint Owner shares an undivided
interest in the entire Contract with the Owner. Please see "Joint Ownership"
provisions on page 10.
LIQUIDITY PERIOD
Under Option 9, the Liquidity Period is the period of time during which the
Owner may withdraw Account Value. The Liquidity Period begins on the Contract
Date and ends on the Valuation Date preceding the 61st Annuity Payment. The
Liquidity Period Expiration Date is set forth on page 3.
NONNATURAL PERSON
Any group or entity that is not a living person, such as a trust or corporation.
NONQUALIFIED CONTRACT
A Contract that is not a Qualified Contract.
OWNER
The Owner is the person who has all rights under the Contract. The Owner is
named on page 3. Please see "Ownership" provisions on page 9.
PAYMENT UNIT
The Payment Unit is a unit of measure used to compute Variable Annuity Payments
for Annuity Options 1 through 4, 8 and 9.
PREMIUM TAX
Any Premium Taxes levied by a state or other entity will be charged against this
Contract and will be deducted from the initial Purchase Payment.
PURCHASE PAYMENT
A Purchase Payment is money Received by the Company and applied to the Contract.
QUALIFIED CONTRACT
A Contract issued in connection with a plan qualified under Section 401, 403,
408 or a similar provision of the Internal Revenue Code.
RECEIVED BY THE COMPANY
The phrase "Received by the Company" means receipt by the Company in good order
at its Home Office, 000 XX Xxxxxxxx, Xxxxxx, Xxxxxx 00000-0000.
SEPARATE ACCOUNT
The Separate Account set forth on page 3 is a separate account established and
maintained by the Company under Kansas law. The Separate Account is registered
with the Securities and Exchange Commission (SEC) under the Investment Company
Act of 1940 as a Unit Investment Trust. It was established by the Company to
support variable annuity contracts. The Company owns the assets of the Separate
Account and maintains them apart from the assets of its general account and its
other separate accounts. The assets held in the Separate Account equal to the
reserves and other contract liabilities with respect to the Separate Account may
not be charged with liabilities arising from any other business the Company may
conduct.
Income and realized and unrealized gains and losses from assets in the Separate
Account are credited to, or charged against, the Separate Account without regard
to the income, gains or losses from the Company's general account or its other
separate accounts. The Separate Account is divided into Subaccounts set forth on
page 3. Income and realized and unrealized gains and losses from assets in each
Subaccount are credited to, or charged against, the Subaccount without regard to
income, gains or losses in the other Subaccounts. The Company has the right to
transfer to its general account any assets of the Separate Account that are in
excess of the reserves and other contract liabilities with respect to the
Separate Account. The value of the assets in the Separate Account on each
Valuation Date is determined as of the end of each Valuation Date.
SUBACCOUNTS
The Separate Account is divided into Subaccounts which invest in shares of
mutual funds. Each Subaccount may invest its assets in a separate class or
series of a designated mutual fund or funds. The Subaccounts are set forth on
page 3. Subject to the regulatory requirements then in force, the Company
reserves the right to:
1. change or add designated mutual funds or other investment vehicles;
2. add, remove or combine Subaccounts;
3. add, delete or make substitutions for securities that are held or
purchased by the Separate Account or any Subaccount;
4. operate the Separate Account as a management investment company;
5. combine the assets of the Separate Account with other separate
accounts of the Company or an affiliate thereof;
6. restrict or eliminate any voting rights of the Owner with respect to
the Separate Account; and
7. terminate and liquidate any Subaccount.
SUBACCOUNTS
If any of these changes result in a material change to the Separate Account or a
Subaccount, the Company will notify the Owner of the change. The Company will
not change the investment policy of any Subaccount in any material respect
without complying with the filing and other procedures of the insurance
regulators of the state of issue.
SUBACCOUNT NET ASSET VALUE
The Subaccount Net Asset Value is equal to:
(1) the net asset value of all shares of the underlying mutual fund held by the
Subaccount; plus
(2) any cash or other assets of the Subaccount; less
(3) all liabilities of the Subaccount.
VALUATION DATE
A Valuation Date is each day that both the New York Stock Exchange and the
Company's Home Office are open for business.
VALUATION PERIOD
A Valuation Period is the interval of time from the close of one Valuation Date
to the close of the next Valuation Date.
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GENERAL PROVISIONS
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THE CONTRACT
The entire Contract between the Owner and the Company consists of:
(1) this Contract;
(2) the attached Application; and
(3) any Amendments, Endorsements or Riders to the Contract.
All statements made in the Application will, in the absence of fraud, as ruled
by a court of competent jurisdiction, be deemed representations and not
warranties. The Company will use no statement made by or on behalf of any Owner
or Annuitant to void this Contract unless it is in the written Application. Any
change in the Contract can be made only with the written consent of the
President, a Vice President, or the Secretary of the Company.
The Purchase Payment and the Application must be acceptable to the Company under
its rules and practices. If they are not, the Company's liability shall be
limited to a return of the Purchase Payment.
COMPLIANCE
The Company reserves the right to make any change to the provisions of this
Contract to comply with or give the Owner the benefit of any federal or state
law. This includes, but is not limited to: (1) requirements for annuity
contracts under the Internal Revenue Code; or (2) the laws of any state. The
Company will provide the Owner with a copy of any such change and also will file
such a change with the insurance regulatory officials of the state in which the
Contract is delivered.
MISSTATEMENT OF AGE AND SEX
If the age or sex of any Annuitant has been misstated, Annuity Payments shall be
adjusted, when allowed by law, to the amount which would have been payable based
upon the correct age or sex. Proof of the age of an Annuitant may be required at
any time, in a form acceptable to the Company. If Annuity Payments have already
commenced and the misstatement has caused an underpayment, the full amount due
will be paid with the next scheduled Annuity Payment. If the misstatement has
caused an overpayment, the amount due will be deducted from one or more future
Annuity Payments.
EVIDENCE OF SURVIVAL
When any Annuity Payments under this Contract depend on the Annuitant being
alive on a given date, proof that the Annuitant is living may be required by the
Company. Such proof must be in a form acceptable to the Company, and may be
required prior to making the Annuity Payments.
INCONTESTABILITY
This Contract will not be contested after it has been in force for two years
from the Contract Date during the life of the Owner.
ASSIGNMENT
Please refer to page 3 to see if this Contract may be assigned. If so, no
Assignment under this Contract is binding unless Received by the Company in
writing. The Company assumes no responsibility for the validity, legality, or
tax status of any Assignment. The Assignment will be subject to any payment made
or other action taken by the Company before the Assignment is Received by the
Company. Once filed, the rights of the Owner, Annuitant and Beneficiary are
subject to the Assignment. Any claim is subject to proof of interest of the
assignee.
EXCHANGES
Certain Exchanges of Account Value or Payment Units are permitted under the
Contract. An Owner may make only six Exchanges per Contract Year. Annuity
Payments after an Exchange will reflect the new allocation of Account Value or
Payment Units among the Subaccounts and the Fixed Account.
An Exchange may be effected by submitting a written request to the Company or by
any other means permitted by the Company. The Company will effect an Exchange to
or from a Subaccount on the basis of Accumulation Unit Value (or, if applicable,
Payment Unit Value) as of the close of the Valuation Period in which all
information required to make the Exchange is Received by the Company.
Annuity Options 1 through 4 and 8 provide for fixed payments (a "Fixed Annuity")
or payments that vary according to the performance of the Subaccounts (a
"Variable Annuity"). If a Variable Annuity under one of Annuity Options 1
through 4 or 8 is elected, the Owner may Exchange Payment Units only among the
Subaccounts.
Annuity Options 5 through 7 provide for:
(1) a Fixed Annuity;
(2) a Variable Annuity; or
(3) a combination Fixed and Variable Annuity.
Account Value may be Exchanged among the Subaccounts and the Fixed Account under
Annuity Options 5 through 7. Account Value may be Exchanged from the Fixed
Account only during the calendar month in which the applicable Guarantee Period
expires.
Annuity Option 9 provides for a Variable Annuity. Account Value may be Exchanged
among the Subaccounts during the Liquidity Period under Option 9. After the
Liquidity Period, Payment Units may be Exchanged among the Subaccounts. An
Owner's Exchange of Account Value under Option 9 will automatically effect a
corresponding Exchange of Payment Units. Exchanges under Option 9 do not affect
the amount of Annuity Payments until such amount is reset as discussed under
"Payment Units" on pages 16 and 17.
LIMITS ON EXCHANGES
The Company reserves the right to:
(1) limit the amount of Account Value that may be subject to Exchanges;
(2) limit the amount of Account Value remaining in an Account after an
Exchange;
(3) waive or limit the number of Exchanges allowed each Contract Year;
(4) impose conditions on the right to Exchange; and
(5) suspend Exchanges.
Exchanges of Account Value must be at least $500 or, if less, the remaining
balance in the Fixed Account or a Subaccount.
The Company reserves the right to delay Exchanges from the Fixed Account for up
to 6 months as required by most states. The Company will inform the Owner if
there will be a delay.
CLAIMS OF CREDITORS
The Account Value and other benefits under this Contract are exempt from the
claims of creditors of the Owner to the extent allowed by law.
NONFORFEITURE VALUES
The Death Benefits, Withdrawal Values and Annuity Payout Amounts will at least
equal the minimum required by law.
PARTICIPATION
The Company may pay dividends on some of its contracts. The Company, however,
does not expect dividends to become payable on this Contract. At the end of each
Contract Year the Company will determine the Contract's dividend, if any. The
Owner may choose to have it: (1) added to the Account Value; or (2) paid in
cash. If no choice is made, any dividend will be added to Account Value.
STATEMENTS
At least once each Contract Year the Owner shall be sent a statement including
any current Account Value and any other information required by law. The Owner
may send a written request for a statement at other intervals. The Company may
charge a reasonable fee for statements at such other intervals.
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OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS
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OWNERSHIP
During the Owner's lifetime, all rights and privileges under the Contract may be
exercised only by the Owner. If the purchaser names someone other than himself
or herself as Owner, the purchaser has no rights in the Contract. No Owner may
be older than age 85 on the Contract Date. The Owner must be an Annuitant.
JOINT OWNERSHIP
If a Joint Owner is named in the application, then the Owner and Joint Owner
share an undivided interest in the entire Contract as joint tenants with rights
of survivorship. When an Owner and Joint Owner have been named, the Company will
honor only requests for changes and the exercise of other Ownership rights made
by both the Owner and Joint Owner. When a Joint Owner is named, all references
to "Owner" throughout this Contract should be construed to mean both the Owner
and Joint Owner, except for the "Statements" provision above and the "Death
Benefit Provisions" on pages 22 through 23. Joint Owners are permitted only if:
(1) the Contract is a Nonqualified Contract; and (2) the Joint Owner is a Joint
Annuitant.
ANNUITANT
The Annuitant is named on page 3. The Owner may not change the Annuitant or any
Joint Annuitant. No Annuitant may be named who is more than 85 years old on the
Contract Date.
PRIMARY AND SECONDARY BENEFICIARIES
The Primary Beneficiary and any Secondary Beneficiary are named on page 3. The
Owner may change any Beneficiary as described in "Beneficiary Changes" below. If
the Primary Beneficiary dies prior to the Owner, the Secondary Beneficiary
becomes the Primary Beneficiary. Unless the Owner directs otherwise, when there
are two or more Primary Beneficiaries, they will receive equal shares.
BENEFICIARY CHANGES
Subject to the terms of any existing Assignment, the Owner may name a new
Primary Beneficiary or a new Secondary Beneficiary. Any new choice of Primary
Beneficiary or Secondary Beneficiary will revoke any prior choice. Any change
must be made in writing and recorded at the Home Office. The change will become
effective as of the date the written request is signed, whether or not the Owner
is living at the time the change is recorded. A new choice of Primary
Beneficiary or Secondary Beneficiary will not apply to any payment made or
action taken by the Company prior to the time it was recorded. The Company may
require the Contract be returned so these changes may be made.
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PURCHASE PAYMENT PROVISIONS
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SINGLE PURCHASE PAYMENT
This is a single premium ("Purchase Payment") immediate variable annuity
contract. The Contract begins on the Contract Date when the Purchase Payment is
applied under the Contract.
PURCHASE PAYMENT LIMITATIONS
The Purchase Payment to the Contract may not be greater than $1,000,000 without
prior approval by the Company.
PURCHASE PAYMENT ALLOCATION
The Purchase Payment may be allocated either among the Subaccounts as set forth
on page 3, or to the Fixed Account. If one of Options 5, 6 or 7 is selected, the
Purchase Payment may be allocated among the Subaccounts and the Fixed Account.
The allocation to each Account must be a whole percentage. No less than 5
percent of the Purchase Payment may be allocated to any Account.
PLACE OF PAYMENT
The Purchase Payment under this Contract is to be paid to the Company at its
Home Office. The Purchase Payment is applied no later than the end of the second
Valuation Date following receipt by the Company of the Purchase Payment and an
Application containing all information necessary to issue the Contract.
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ANNUITY PAYMENT PROVISIONS
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ANNUITY PAYOUT DATE
The Annuity Payout Date is the date as of which the first Annuity Payment is
computed under one of the Annuity Options. The Owner elects the Annuity Payout
Date at the time of application. The Owner must select an Annuity Payout Date
that is within 30 calendar days of the Contract Date. If no Annuity Payout Date
is chosen, the Company will use a date one month from the Contract Date. The
Owner may not change the Annuity Payout Date.
ANNUITY OPTIONS
The Contract provides for Annuity Payments to be made under one of nine Annuity
Options. The Owner elects an Annuity Option in the Application. The Annuity
Option is set forth on page 3 and may not be changed. Options 1 through 4 and 9
generally provide for payments to be made during the life of the Annuitant or
Joint Annuitants. Under Options 5 through 8, payments are made to the Annuitant
and in the event of the Annuitant's death, to the Designated Beneficiary.
Options 1 through 4 are available as either a Fixed or Variable Annuity. Option
9 is available only as a Variable Annuity. Options 5 through 7 are also
available as a combination of Fixed and Variable Annuity. The Annuity Options
are described below.
OPTION 1
LIFE INCOME OPTION: This option provides Annuity Payments for the life of the
Annuitant. Upon the Annuitant's death, no further Annuity Payments will be made.
OPTION 2
LIFE INCOME WITH PERIOD CERTAIN OPTION: This option provides Annuity Payments
for the life of the Annuitant. A fixed period of 5, 10, 15 or 20 years may be
chosen. Annuity Payments will be made to the end of this period even if the
Annuitant dies prior to the end of the period. If the Annuitant dies before
receiving all the Annuity Payments during the fixed period, the remaining
Annuity Payments will be made to the Designated Beneficiary. Upon the
Annuitant's death after the period certain, no further Annuity Payments will be
made.
OPTION 3
LIFE INCOME WITH INSTALLMENT OR UNIT REFUND OPTION: This option provides Annuity
Payments for the life of the Annuitant, with a period certain determined by
dividing the Annuity Payout Amount (as defined on page 15) by the amount of the
first Annuity Payment. A fixed number of Annuity Payments will be made even if
the Annuitant dies. If the Annuitant dies before receiving the fixed number of
Annuity Payments, any remaining Annuity Payments will be made to the Designated
Beneficiary. If the Annuitant dies after receiving the fixed number of Annuity
Payments, no further Annuity Payments will be made.
OPTION 4
JOINT AND LAST SURVIVOR OPTION: This option provides Annuity Payments for the
lives of the Annuitant and Joint Annuitant. Annuity Payments will be made as
long as either is living. Upon the death of one Annuitant, Annuity Payments
continue to the surviving Joint Annuitant at the same or a reduced level of 75%,
66 2/3% or 50% of Annuity Payments, as elected in the Application. With respect
to Fixed Annuity Payments, the amount of the Annuity Payment, and, with respect
to Variable Annuity Payments, the number of Annuity Units used to determine the
Annuity Payment, is reduced as of the first Annuity Payment following the
Annuitant's death. The percentage elected is set forth on page 3. In the event
of the death of one Annuitant, the surviving Joint Annuitant has the right to
exercise all rights under the Contract, including the right to make Exchanges
and Beneficiary changes. Upon the death of the last Annuitant, no further
Annuity Payments will be made.
OPTION 5
FIXED PERIOD OPTION: This option provides Annuity Payments for a fixed number of
years between 5 and 20. If the Account Value is held in the Fixed Account, then
the amount of the Annuity Payments will vary as a result of the interest rate
(as adjusted periodically) credited on Fixed Account Value. This rate is
guaranteed to be no less than the Guaranteed Rate set forth on page 3. The
amount of each Fixed Annuity Payment is determined by dividing Fixed Account
Value on the Annuity Payment date by the number of remaining Annuity Payments.
If the Account Value is held in the Separate Account, then the amount of the
Annuity Payments will vary as a result of the investment performance of the
Subaccounts chosen. The amount of each Variable Annuity Payment is determined by
multiplying the Accumulation Unit Value on the Annuity Payment date by the
result of dividing total Accumulation Units by the number of remaining Annuity
Payments. If the Annuitant dies before receiving the fixed number of Annuity
Payments, any remaining Annuity Payments will be made to the Designated
Beneficiary.
OPTION 6
FIXED PAYMENT OPTION: This option provides for Annuity Payments of a fixed
amount selected by the Owner. This amount is paid until Account Value is
exhausted. If the Account Value is held in the Fixed Account, then the number of
Annuity Payments will vary as a result of the interest rate (as adjusted
periodically) credited on Fixed Account Value. This rate is guaranteed to be no
less than the Guaranteed Rate set forth on page 3. If the Account Value is held
in the Separate Account, then the number of Annuity Payments will vary as a
result of the investment performance of the Subaccounts chosen. If the Annuitant
dies before receiving all of the Annuity Payments, any remaining Annuity
Payments will be made to the Designated Beneficiary. This Option is available
only for Nonqualified Contracts.
OPTION 7
AGE RECALCULATION OPTION: This option provides for Annuity Payments based upon
the Annuitant's life expectancy, or the joint life expectancy of the Annuitant
and a beneficiary, at the Annuitant's attained age (and the Annuitant's
beneficiary's attained or adjusted age, if applicable) each year. The Annuity
Payments are computed by reference to actuarial tables prescribed by the
Treasury Secretary and in accordance with Section 401(a)(9) of the Internal
Revenue Code and rules and regulations thereunder. Annuity Payments are made
until Account Value is exhausted. If the Account Value is held in the Fixed
Account, then the amount of the Annuity Payments will vary as a result of the
interest rate (as adjusted periodically) credited on Fixed Account Value. This
rate is guaranteed to be not less than the Guaranteed Rate set forth on page 3.
If the Account Value is held in the Separate Account, then the amount of the
Annuity Payments will vary as a result of the investment performance of the
Subaccounts chosen. If the Annuitant dies before receiving the remaining Annuity
Payments, Account Value will be paid to the Designated Beneficiary.
OPTION 8
PERIOD CERTAIN OPTION: This option provides Annuity Payments for a fixed period
of 5, 10, 15 or 20 years. Annuity Payments will be made until the end of this
period. If the Annuitant dies prior to the end of the period, the remaining
Annuity Payments will be made to the Designated Beneficiary.
OPTION 9
LIFE INCOME WITH LIQUIDITY OPTION: This option provides monthly Annuity Payments
for the life of the Annuitant or the lives of the Annuitant and a Joint
Annuitant with a period certain of 15 years (or less in certain instances where
the period certain would exceed the life expectancy of the Annuitant or joint
life expectancy of the Joint Annuitants). Annuity Payments under this option are
guaranteed never to be less than 80 percent of the initial Annuity Payment
("Floor Payment"); provided that the Floor Payment is adjusted in the event of a
Withdrawal. See "Withdrawal Provisions" on pages 20 through 22. The amount of
the Annuity Payment will remain level for 12 month intervals and will reset on
each anniversary of the Annuity Payout Date as discussed under "Payment Units,"
on pages 16 and 17. Annuity Payments during the Liquidity Period are paid from
Account Value and reduce the amount of Account Value available for Withdrawal.
If Account Value allocated to a Subaccount from which Annuity Payments are being
made will be reduced to $0 by the current Annuity Payment, the Annuity Payment
will be adjusted as of the date of that payment. The amount of any shortfall in
the affected Subaccount will be deducted from the first of the Subaccounts set
forth on page 3 that has Account Value. Until the next reset of the Annuity
Payment, Annuity Payments will be made from the Subaccounts that have Account
Value in the same proportion as Account Value is allocated among the Subaccounts
on the date of the payment adjustment. Payment Units also will be adjusted as of
that date to reflect the proportion of Account Value allocated to the
Subaccounts.
If there are Joint Annuitants, upon the death of one Annuitant, Annuity Payments
continue to the surviving Joint Annuitant at the same or a reduced level of 75%,
66 2/3% or 50% of Annuity Payments as elected in the Application. The percentage
elected is set forth on page 3. The number of Payment Units used to determine
each Annuity Payment is reduced as of: (1) the Annuity Payment due on the Period
Certain Expiration Date; or (2) if later, the first Annuity Payment following
the death of the Joint Annuitant. If such death occurs during the Liquidity
Period, the Annuity Payment may be increased as discussed under "Payment
Adjustment Upon Death of Joint Annuitant," page 15.
In the event of the death of the Annuitant or, in the case of Joint Annuitants,
the last Annuitant, prior to the Period Certain Expiration Date, a death benefit
will be paid as follows. In the event of death during the period beginning on
the Annuity Payout Date and ending on the Liquidity Period Expiration Date, the
death benefit is the Account Value as of the date due proof of death and payment
instructions are Received by the Company. In the event of death during the
period beginning at the close of the Liquidity Period and ending on the Period
Certain Expiration Date, the Designated Beneficiary may elect the death benefit
as follows: (1) the present value of the remaining guaranteed Annuity Payments
as of the date due proof of death and payment instructions are Received by the
Company, commuted at the Assumed Interest Rate, and paid in a lump sum; or (2)
the remaining guaranteed Annuity Payments paid to the Designated Beneficiary on
a monthly basis until the Period Certain Expiration Date.
PAYMENT ADJUSTMENT UPON DEATH OF JOINT ANNUITANT
Under Option 9, if a Joint Annuitant dies during the Liquidity Period, the
amount of the Annuity Payment to the surviving Joint Annuitant may be increased
beginning on the date of the 61st Annuity Payment. The determination of whether
to increase the amount of the Annuity Payment is made as of the date of the 61st
Annuity Payment, as follows. An amount equal to the present value of future
Annuity Payments based on the joint lives of the Annuitants, commuted at the
Assumed Interest Rate, is divided by $1,000, and the result is multiplied by an
amount determined by reference to the Annuity Table for Option 2 with a ten year
period certain based upon the surviving Joint Annuitant's age and sex (unless
unisex rates apply). If the amount of the Annuity Payment as determined above is
greater than the Annuity Payment calculated as of the date of the 61st Annuity
Payment, the Annuity Payment will be increased as of the date of the 61st
Annuity Payment to that amount and the Floor Payment and number of Payment Units
will be increased proportionately.
ANNUITY PAYOUT AMOUNT
The Annuity Payout Amount is used to calculate Annuity Payments under Annuity
Options 1 through 4, 8 and 9.
The Annuity Payout Amount is:
(1) the initial Purchase Payment; less
(2) any Premium Taxes due or paid by the Company; less
(3) for Fixed Annuity Payments, an amount equal to 1.8% of the amount of the
initial Purchase Payment.
Annuity Payout Amount allocated to the Fixed Account is applied to purchase a
Fixed Annuity and that allocated to the Subaccounts is applied to purchase a
Variable Annuity. The Annuity Payout Amount is divided by $1,000, and the result
is multiplied by the applicable amount in the Annuity Tables to determine the
minimum guaranteed monthly Annuity Payment with respect to a Fixed Annuity or
the first monthly Annuity Payment with respect to a Variable Annuity.
FIXED ANNUITY PAYMENTS
With respect to Fixed Annuity Payments, the amount set forth in the Annuity
Tables, as adjusted for the rate of interest credited by the Company, is the
amount of each monthly Annuity Payment for Annuity Options 1 through 4 and 8.
For Options 5 through 7, Fixed Annuity Payments are based on Account Value.
VARIABLE ANNUITY PAYMENTS
With respect to Variable Annuity Payments, the amount set forth in the Annuity
Tables, as adjusted for the Assumed Interest Rate, is the amount of the FIRST
monthly Annuity Payment for Annuity Options 1 through 4, 8 and 9. The amount of
each Annuity Payment after the first for these options is computed by means of
Payment Units as set forth on pages 16 and 17. For Options 5 through 7, Variable
Annuity Payments are based on Account Value. Variable Annuity Payments will
fluctuate with the performance of the Subaccount(s).
ANNUITY TABLES
The amounts set forth in the Annuity Tables for Annuity Options 1 through 4 and
9 depend on the sex (unless unisex rates apply) and age of the Annuitant or the
Joint Annuitants on the Annuity Payout Date. The Annuity Tables are modified to
reflect (1) the Assumed Interest Rate for Variable Annuity Payments; or (2) the
rate of interest in effect on the Contract Date for Fixed Annuity Payments. The
Annuity Tables contain the amount of monthly Annuity Payment per $1,000 of
Annuity Payout Amount. The Annuity Tables state values for the exact ages shown.
The values will be interpolated based on the exact age(s) of the Annuitant or
Joint Annuitants on the Annuity Payout Date. The basis of the Annuity Tables for
Options 1 through 4 and 9, and the Assumed Interest Rate are set forth on page
3. The Annuity Tables for Option 8 are determined without reference to the age
or sex of the Annuitant and are based upon the Assumed Interest Rate. Annuity
Payments for Options 5 through 7 are computed without reference to the Annuity
Tables. The Annuity Tables are used in accordance with generally accepted
actuarial principles.
ANNUITY PAYMENTS
No Annuity Option can be selected that requires the Company to make Annuity
Payments of less than $100.00; provided that there is no minimum Annuity Payment
under Option 9. Each Annuity Option allows for making Annuity Payments annually,
semiannually, quarterly or monthly, except Option 9 for which Annuity Payments
are made monthly. Annuity Payments due on a date other than a Valuation Date,
are paid as of the end of the next following Valuation Date.
PAYMENT UNITS
On the Annuity Payout Date, the amount of the first Variable Annuity Payment is
divided by the Payment Unit Value as of that date to determine the number of
Payment Units to be used in calculating subsequent Annuity Payments. If the
initial Purchase Payment was allocated to more than one Subaccount, the first
Variable Annuity Payment will be allocated to each Subaccount in the percentage
corresponding to the initial Purchase Payment allocation. The number of Payment
Units for each Subaccount is then found by dividing the amount of the first
Variable Annuity Payment allocated to that Subaccount by the Payment Unit Value
for the Subaccount on the Annuity Payout Date. The number of Payment Units for
the Subaccount then remains constant, unless an Exchange of Payment Units or a
Withdrawal is made. After the first Variable Annuity Payment, the dollar amount
of each subsequent Annuity Payment is equal to the sum of the payment amount
determined for each Subaccount. The payment amount for each Subaccount is equal
to the number of Payment Units allocated to that Subaccount multiplied by the
Payment Unit Value on the date of the Annuity Payment. For Option 9, the amount
of each Annuity Payment is calculated as described above; provided that the
amount of the Annuity Payment is reset only once each year on the 12-month
anniversary of the Annuity Payout Date.
An example of a Variable Annuity Payment calculation for a male, age 60 is as
follows:
Annuity Payout Amount = $100,000 $100,000 = 100
-------
$1,000
Amount determined by reference in 1998 to Annuity Table for a male, age 60 under
Option 9
$4.78
First Variable Annuity Payment 100 x $4.78 = $478
PURCHASE FIRST VARIABLE PAYMENT UNIT NUMBER OF PAYMENT
PAYMENT ANNUITY VALUE ON UNITS USED TO
SUBACCOUNT ALLOCATION PAYMENT ANNUITY DETERMINE
ALLOCATION PAYOUT SUBSEQUENT PAYMENTS
DATE
Equity Income 50% $239.00 / $1.51 = 158.2781
International 50% $239.00 / $1.02 = 234.3137
Stock
An example of an annual reset under Option 9 of the Annuity Payment amount using
the assumptions above is as follows:
PAYMENT DATE PAYMENT AMOUNT
Annuity Payout Date 2/15 $478
3/15 $478
4/15 $478
5/15 $478
6/15 $478
7/15 $478
8/15 $478
9/15 $478
10/15 $478
11/15 $478
12/15 $478
1/15 $478
Annual Reset 2/15 $510.98
PAYMENT PAYMENT UNIT VALUE NEW ANNUITY
SUBACCOUNT UNITS ON ANNUAL RESET DATE PAYMENT AMOUN
Equity Income 158.2781 x $1.60 = $253.24
International Stock 234.3137 x $1.10 = $257.74
-------
$510.98
PAYMENT UNIT VALUE
The Payment Unit Value for each Subaccount was first set at $1.00. The Payment
Unit Value for any subsequent Valuation Date is equal to (a) times (b) times
(c), where:
(a) is the Payment Unit Value on the immediately preceding Valuation
Date;
(b) is the Net Investment Factor for the day;
(c) is a factor used to adjust for the Assumed Interest Rate set forth on
page 3 which is used to determine Variable Annuity Payment amounts.
NET INVESTMENT FACTOR
The Net Investment Factor for any Subaccount as of the end of any Valuation
Period is found by dividing (1) by (2) and subtracting (3) from the result,
where:
1. is equal to:
a. the net asset value per share of the mutual fund held in the
Subaccount found at the end of the current Valuation Period; plus
b. the per share amount of any dividend or capital gain distributions
paid by the Subaccount's underlying mutual fund that is not
included in the net asset value per share; plus or minus
c. a per share charge or credit for any taxes reserved for, which the
Company deems to have resulted from the operation of the Separate
Account or Subaccount; the operations of the Company with respect
to the Contract; or the payment of premium or acquisition costs
under the Contract.
2. is the net asset value per share of the Subaccount's underlying mutual
fund as found at the end of the prior Valuation Period.
3. is a daily factor representing the Mortality and Expense Risk Charge
deducted from the Separate Account.
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ACCOUNT VALUE AND EXPENSE PROVISIONS
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ACCOUNT VALUE
Account Value is determined:
(1) for all Options prior to the Annuity Payout Date;
(2) for Options 5 through 7, during the life of the Contract; and
(3) for Option 9 during the Liquidity Period.
Account Value is the sum of: (1) the Separate Account Value; and (2) the Fixed
Account Value.
FIXED ACCOUNT VALUE
On any Valuation Date, the Fixed Account Value is equal to any part of the
Purchase Payment allocated under the Contract to the Fixed Account:
PLUS:
1. any Exchanges from the Separate Account to the Fixed Account; and
2. any interest credited to the Fixed Account.
LESS:
1. any Withdrawals deducted from the Fixed Account;
2. any Exchanges from the Fixed Account to the Separate Account;
3. any Premium Taxes; and
4. any Annuity Payments made under Annuity Options 5 through 7.
FIXED ACCOUNT INTEREST CREDITING
The Company shall credit interest on Fixed Account Value at an annual rate at
least equal to the Guaranteed Rate shown on page 3. Also, the Company may in its
sole judgment credit Current Interest at a rate in excess of the Guaranteed
Rate. The rate of Current Interest, if declared, shall be fixed during the
Guarantee Period. Fixed Account Value shall earn Current Interest during each
Guarantee Period at the rate, if any, declared by the Company on the first day
of the Guarantee Period.
The Company may credit Current Interest on Account Value that was allocated or
exchanged to the Fixed Account during one period at a different rate than
amounts allocated or exchanged to the Fixed Account in another period. Also, the
Company may credit Current Interest on Fixed Account Value at different rates
based upon the length of the Guarantee Period. Therefore, at any time, portions
of Fixed Account Value may be earning Current Interest at different rates based
upon the period during which such portions were allocated or exchanged to the
Fixed Account and the length of the Guarantee Period.
SEPARATE ACCOUNT VALUE
On any Valuation Date, the Separate Account Value is the sum of the then current
value of the Accumulation Units allocated to each Subaccount for this Contract.
The number of Accumulation Units initially allocated to each Subaccount is
determined by dividing the portion of the Purchase Payment allocated to the
Subaccount on the Contract Date by the Accumulation Unit Value on the Contract
Date.
ACCUMULATION UNIT VALUE
The initial Accumulation Unit Value for each Subaccount was set at $10. The
Accumulation Unit Value for any subsequent Valuation Date is equal to (1)
multiplied by (2) where:
1. is the Accumulation Unit Value determined on the immediately preceding
Valuation Date; and
2. is the Net Investment Factor (as defined on page 17) on the Valuation
Date with respect to which the Accumulation Unit Value is being
determined.
DETERMINING ACCUMULATION UNITS
The number of Accumulation Units allocated to a Subaccount under the Contract
will not change as a result of investment experience. Events that change the
number of Accumulation Units are:
1. Purchase Payment applied to the Subaccount;
2. Account Value Exchanged into or out of the Subaccount;
3. Withdrawals deducted from the Subaccount;
4. Annuity Payments from the Subaccount under Options 5 through 7 and 9;
5. Any amounts deducted from the Subaccount to increase the amount of the
Annuity Payments under Option 9 to the amount of the Floor Payment;
and
6. Premium Taxes deducted from the Subaccount.
MORTALITY AND EXPENSE RISK CHARGE
The Company will deduct the Mortality and Expense Risk Charge shown on page 3.
This charge will be computed and deducted from each Subaccount on each Valuation
Date. This charge is factored into the Accumulation Unit and Payment Unit Values
on each Valuation Date.
PREMIUM TAX EXPENSE
The Company deducts Premium Tax from the initial Purchase Payment. The Company
reserves the right to deduct Premium Tax when due or any time thereafter.
MUTUAL FUND EXPENSES
Each Subaccount invests in shares of a mutual fund. The net asset value per
share of each underlying fund reflects the deduction of any investment advisory
and administration fees and other expenses of the fund. These fees and expenses
are not deducted from the assets of a Subaccount, but are paid by the underlying
funds. The Owner indirectly bears a pro rata share of such fees and expenses. An
underlying fund's fees and expenses are not specified or fixed under the terms
of this Contract.
--------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS
--------------------------------------------------------------------------------
WITHDRAWALS
The Owner may withdraw Account Value if one of Options 5 through 7 has been
elected. The Owner also may withdraw Account Value during the Liquidity Period
under Option 9. Under these options, a full Withdrawal of Account Value or full
or partial Withdrawal of Separate Account Value is allowed. Partial Withdrawals
of Fixed Account Value, however, are restricted as described on page 21. This
provision is subject to any federal or state Withdrawal restrictions.
A partial Withdrawal of Fixed Account Value may be made only: (1) during the
calendar month in which the applicable Guarantee Period expires; and (2) once
per Contract Year in an amount up to the greater of $5,000 or 10 percent of the
Fixed Account Value at the time of the partial Withdrawal.
The Owner also may withdraw the present value of future Annuity Payments
commuted at the Assumed Interest Rate if a Variable Annuity under Option 8 has
been elected.
Upon the Owner's request for a full Withdrawal, the Company will pay the
Withdrawal Value in a lump sum.
All Withdrawals must meet the following conditions.
1. The request for Withdrawal must be Received by the Company in writing
or under other methods allowed by the Company.
2. The Owner must request a withdrawal while this Contract is in force.
3. The amount Withdrawn must be at least $500.00 except when terminating
the Contract.
4. For Option 9, the request for Withdrawal must be Received by the
Company prior to the Liquidity Period Expiration Date set forth on
page 3.
A partial Withdrawal request must state the allocations for deducting the
Withdrawal from each Account. Withdrawals of Fixed Account Value shall be made:
(1) first from Fixed Account Value for which the Guarantee Period expires
during the calendar month in which the Withdrawal is effected;
(2) then in the order that starts with Fixed Account Value which has the
longest amount of time before its Guarantee Period expires; and
(3) ends with that which has the least amount of time before its Guarantee
Period expires.
WITHDRAWAL VALUE
The Withdrawal Value as of any Valuation Date will be:
(1) the Account Value (or for Option 8, the present value of future Annuity
Payments commuted at the Assumed Interest Rate); less
(2) any Premium Taxes due or paid by the Company; and
(3) for Option 9, the Withdrawal Charge set forth on page 3.
If Account Value after any partial Withdrawal is $10,000 or less, or with
respect to Option 8, Annuity Payments after the Withdrawal would be less than
$100, the Company reserves the right to treat such partial Withdrawal as a full
Withdrawal.
WITHDRAWAL CHARGE
If part or all of the Account Value is Withdrawn under Option 9, a Withdrawal
Charge is applied at the time of Withdrawal. The amount of the charge is based
on the Contract Year in which the Withdrawal is made. See the Withdrawal Charge
set forth on page 3. The Withdrawal Charge is applied to the amount of the
Withdrawal and is deducted from Account Value allocated to the Subaccounts in
the same proportion as the Withdrawal is allocated.
PAYMENT ADJUSTMENT
Upon a partial Withdrawal during the Liquidity Period under Option 9, the
Company will adjust the amount of the Annuity Payment and Floor Payment as
follows. The Company will reduce the amount of the Annuity Payment and Floor
Payment by a percentage determined by dividing the amount of the Withdrawal,
including the amount of the Withdrawal Charge, by Account Value on the date of
the Withdrawal. The number of Payment Units used to compute each Annuity Payment
will be reduced by the same percentage.
An example of a payment adjustment is set forth below:
SUBACCOUNTS FROM ACCOUNT VALUE
WHICH ANNUITY ON DATE OF WITHDRAWAL AMOUNT PERCENTAGE
PAYMENT IS MADE WITHDRAWAL (INCLUDING WITHDRAWAL REDUCTION
CHARGES)
Equity Income $95,000 $0 0%
International Stock $25,000 $15,000 60%
Total $120,000 $15,000 12.5%
PRIOR TO PARTIAL WITHDRAWAL AFTER PARTIAL WITHDRAWAL
SUBACCOUNTS FROM --------------------------- ------------------------
WHICH ANNUITY ANNUITY PAYMENT FLOOR ANNUITY PAYMENT FLOOR
PAYMENT IS MADE PAYMENT UNITS PAYMENT PAYMENT UNITS PAYMENT^1
Equity Income^2 $300 29.7914 N/A $300 29.7914 N/A
International Stock^3 $100 9.7847 N/A $40 3.9139 N/A
Total $400 $304 $340 $266
DATE OF REQUEST
The Company will effect a Withdrawal of Separate Account Value on the basis of
Accumulation Unit Value determined as of the end of the Valuation Period in
which all the required information is Received by the Company.
1 The Floor Payment is reduced by 12.5%, the percentage by which the partial
Withdrawal reduced Account Value.
2 The Annuity Payment and Payment Units allocated to this Subaccount are not
reduced in this example, because no amount is withdrawn from Account Value
allocated to the Equity Income Subaccount.
3 The Annuity Payment and Payment Units are reduced by 60%, the percentage by
which the partial Withdrawal reduced Account Value allocated to the
International Stock Subaccount.
PAYMENT OF WITHDRAWAL BENEFITS
The Company reserves the right to suspend an Exchange or delay payment of a
Withdrawal from the Separate Account for any period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists as a result of which:
(a) disposal of securities held in the Separate Account is not
reasonably practicable; or
(b) it is not reasonably practicable to fairly value the net assets of
the Separate Account; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits to protect owners of securities.
Rules and regulations of the Securities and Exchange Commission will govern as
to whether the conditions set forth above exist.
The Company further reserves the right to delay payment of a Withdrawal from the
Fixed Account for up to six months as required by most states. The Company will
notify the Owner if there will be a delay.
--------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
--------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
In the event the Owner dies prior to the Annuity Payout Date and there is no
Joint Annuitant, the Death Benefit will be the Account Value on the date due
proof of death and payment instructions are Received by the Company, less any
Premium Taxes due or paid by the Company, all partial Withdrawals, and any
Annuity Payments made.
In the event any Owner dies prior to the Annuity Payout Date and there is a
Joint Annuitant, the surviving Joint Annuitant may elect: (1) a new Annuity
Option; or (2) to receive the Death Benefit described above.
In the event of any Owner's death on or after the Annuity Payout Date, the Death
Benefit will be determined under the terms of the Annuity Option. Any such Death
Benefit will be paid to the Designated Beneficiary when due proof of death and
payment instructions are Received by the Company.
PROOF OF DEATH
Any of the following will serve as Proof of Death:
1. certified copy of the death certificate;
2. certified decree of a court of competent jurisdiction as to the
finding of death;
3. written statement by a medical doctor who attended the deceased Owner;
or
4. any proof accepted by the Company.
DISTRIBUTION RULES
If any Owner dies prior to the Annuity Payout Date, the entire Death Benefit
shall be paid within 5 years after the death of such Owner. If any Owner dies on
or after the Annuity Payout Date, Annuity Payments shall continue to be paid at
least as rapidly as under the method of payment being used as of the date of the
Owner's death.
If the Owner is a Nonnatural Person, the distribution rules set forth above
apply in the event of the death of, or a change in, the Annuitant. This Contract
is deemed to incorporate any provision of Section 72(s) of the Internal Revenue
Code of 1986, as amended (the "Code"), or any successor provision. This Contract
is also deemed to incorporate any other provision of the Code deemed necessary
by the Company, in its sole judgment, to qualify this Contract as an annuity.
The application of the distribution rules will be made in accordance with Code
section 72(s), or any successor provision, as interpreted by the Company in its
sole judgment.
The foregoing distribution rules do not apply to a Contract which is:
(1) provided under a plan described in Code section 401(a);
(2) described in Code section 403(b);
(3) an individual retirement annuity or provided under an individual retirement
account or annuity; or
(4) otherwise exempt from the Code section 72(s) distribution rules.
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a SINGLE PREMIUM IMMEDIATE VARIABLE ANNUITY CONTRACT
* Annuity Payments begin on the Annuity Payout Date using the method as
specified in this Contract.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. (SEE "ACCOUNT
VALUE AND EXPENSE PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
(SBL LOGO)
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
000 XX Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0000