1
EXHIBIT 4
ZURICH LIFE INSURANCE COMPANY OF AMERICA
An Illinois stock corporation
Home Office: 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000
RIGHT TO CANCEL - FREE LOOK PROVISION - At any time within 10 days of
receiving this contract you may return it to us or to the agent through whom it
was purchased. Immediately upon our receipt, this contract will be voided as if
it had never been in force. All purchase payments allocated to the General
Account plus the Separate Account contract value computed at the end of the
valuation period following our receipt of this contract will then be refunded
within ten days.
We agree to pay an annuity to the annuitant provided the annuitant is living
and this contract is in force on the annuity date.
We further agree to pay the death benefit prior to the annuity date upon the
death of the owner or the annuitant when a death benefit is payable. Payment
will be made upon our receipt of due proof of death and the return of this
contract.
This contract is issued in consideration of the attached application and
payment of the initial purchase payment. The provisions on this cover and the
pages that follow are part of this contract.
Signed for Zurich Life Insurance Company of America at its home office in
Schaumburg, Illinois.
/s/ Xxxxxxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxxxxxx
Secretary President
FIXED AND VARIABLE DEFERRED ANNUITY
NON-PARTICIPATING
ALL BENEFITS, PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED UPON
THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT. REFER TO THE VARIABLE ACCOUNT AND ANNUITY
PERIOD PROVISIONS FOR A DETERMINATION OF ANY VARIABLE BENEFITS.
This is a legal contract between the owner and Zurich Life Insurance Company of
America.
READ YOUR CONTRACT CAREFULLY
2
Z-4700
INDEX PAGE
ANNUITY OPTION TABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . Follows Page 9
ANNUITY PERIOD PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-9
Election Of Annuity Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Annuity Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Transfers During The Annuity Period . . . . . . . . . . . . . . . . . . . . . . . 8
APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . Follows Contract Schedule
CONTRACT SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Follows Index
DEATH BENEFIT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Amount Payable Upon Death . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Payment Of Death Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ENDORSEMENTS, if any . . . . . . . . . . . . . . . . . . . . . . Follow Annuity Option Tables
GENERAL ACCOUNT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
General Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
General Account Contract Value . . . . . . . . . . . . . . . . . . . . . . . . . . 3
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2
The Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Incontestability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Premium Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
LOAN PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Loan Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Loan Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
OWNERSHIP PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Owner of Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Change of Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
PURCHASE PAYMENT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Initial Purchase Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Purchase Payment Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
TRANSFER AND WITHDRAWAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6
Transfers During The Accumulation Period . . . . . . . . . . . . . . . . . . . . . 5
Withdrawals During The Accumulation Period . . . . . . . . . . . . . . . . . . . . 5
Withdrawal Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Transfer And Withdrawal Procedures . . . . . . . . . . . . . . . . . . . . . . . . 5-6
VARIABLE ACCOUNT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-4
Separate Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Liabilities Of Separate Account . . . . . . . . . . . . . . . . . . . . . . . . . 3
Subaccounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Rights Reserved By The Company . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Accumulation Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3
CONTRACT SCHEDULE
DESCRIPTION OF PLAN: FIXED AND VARIABLE DEFERRED ANNUITY
THE OWNER(S), BENEFICIARY(IES) AND ANNUITY DATE ARE AS STATED IN THE
APPLICATION FOR THIS CONTRACT UNLESS SUBSEQUENTLY CHANGED IN ACCORDANCE WITH
THE CONTRACT PROVISIONS.
FIXED ACCUMULATION UNDER:
GENERAL ACCOUNT
VARIABLE ACCUMULATION UNDER:
XXXXXX MONEY MARKET SUBACCOUNT
XXXXXX TOTAL RETURN SUBACCOUNT
XXXXXX HIGH YIELD SUBACCOUNT
XXXXXX EQUITY SUBACCOUNT
XXXXXX GOVERNMENT SECURITIES SUBACCOUNT
XXXXXX INTERNATIONAL SUBACCOUNT
XXXXXX SMALL CAP SUBACCOUNT
JANUS GROWTH SUBACCOUNT
JANUS AGGRESSIVE GROWTH SUBACCOUNT
JANUS WORLDWIDE GROWTH SUBACCOUNT
JANUS BALANCED SUBACCOUNT
JANUS SHORT-TERM BOND SUBACCOUNT
LEXINGTON NATURAL RESOURCES SUBACCOUNT
LEXINGTON EMERGING MARKETS SUBACCOUNT
CONTRACT NUMBER: KIL00-1000 ISSUE DATE: JUNE 1, 1993
ANNUITANT: XXXX XXX
SEX: MALE
ISSUE AGE: 35
1000a-6/93
4
CONTRACT SCHEDULE
GENERAL ACCOUNT: INTEREST RATES STATED AS ANNUAL RATES
INITIAL GENERAL ACCOUNT INTEREST RATE 4.75%
THE GENERAL ACCOUNT INTEREST RATE IS GUARANTEED
THROUGH THE CONTRACT YEAR IN WHICH A PURCHASE
PAYMENT IS RECEIVED.
SUBSEQUENT GENERAL ACCOUNT GUARANTEE PERIOD -
ONE CONTRACT YEAR
MINIMUM GUARANTEED INTEREST RATE 3.00%
QUALIFIED OR NONQUALIFIED PLAN: NONQUALIFIED
INITIAL PURCHASE PAYMENT: $5,000.00
INITIAL ALLOCATION OF PURCHASE PAYMENT
FIXED ACCUMULATION UNDER:
GENERAL ACCOUNT 100.00%
1000b-3.0-12.0-6/93
5
CONTRACT SCHEDULE
RECORDS MAINTENANCE CHARGE: $36.00 ANNUAL - PAYABLE QUARTERLY
WE WILL ASSESS AN ANNUAL RECORDS MAINTENANCE CHARGE OF $36, PAYABLE QUARTERLY,
AT THE END OF EACH CALENDAR QUARTER FOR EACH CALENDAR YEAR IN WHICH YOU
PARTICIPATE IN THE SEPARATE ACCOUNT. AN EQUAL PORTION OF THE CHARGE WILL BE
ASSESSED AGAINST EACH SUBACCOUNT IN WHICH THE CONTRACT IS PARTICIPATING. WE
WILL REDEEM THE NUMBER OF ACCUMULATION UNITS SUFFICIENT TO EQUAL THE PROPER
SHARE OF THE CHARGE FROM EACH SUBACCOUNT. IF THE CONTRACT IS NOT PARTICIPATING
IN THE SEPARATE ACCOUNT AT THE TIME THE CHARGE IS ASSESSED, WE WILL DEDUCT THE
CHARGE FROM THE GENERAL ACCOUNT. THIS CHARGE WILL NOT BE ASSESSED AFTER THE
ANNUITY DATE.
MORTALITY AND EXPENSE RISK AND ADMINISTRATIVE CHARGES: 1.3% ANNUALLY
THE CHARGES WILL BE ASSESSED DAILY ON THE SEPARATE ACCOUNT CONTRACT VALUE
WITHDRAWAL CHARGE TABLE:
CONTRACT YEARS ELAPSED SINCE PURCHASE
PAYMENTS WERE RECEIVED BY THE COMPANY RATE
FIRST 6.00%
SECOND 5.00%
THIRD 4.00%
FOURTH 3.00%
FIFTH 2.00%
SIXTH 1.00%
SEVENTH & LATER 0.00%
UP TO 10% OF THE CONTRACT VALUE LESS ANY DEBT MAY BE WITHDRAWN AS A PARTIAL
FREE WITHDRAWAL EACH CONTRACT YEAR. CHARGES ARE APPLIED TO PURCHASE PAYMENTS
AND ALL RELATED ACCUMULATIONS FOR ANY WITHDRAWALS IN EXCESS OF THE 10% PARTIAL
FREE WITHDRAWAL. CHARGES START AT 6% IN THE CONTRACT YEAR IN WHICH THE PURCHASE
PAYMENT WAS RECEIVED AND REDUCE 1% EACH CONTRACT YEAR THEREAFTER.
1000c-6/93
6
CONTRACT SCHEDULE
MINIMUM GENERAL ACCOUNT VALUES FOR GENERAL ACCOUNT ALLOCATIONS
GENERAL ACCOUNT GENERAL ACCOUNT
END OF CONTRACT VALUES TERMINATION VALUES
CONTRACT PER $1,000 OF PER $1,000 OF
YEAR PURCHASE PAYMENT* PURCHASE PAYMENT*
1 $1,047.50 $1,000.00
2 $1,078.93 $1,030.37
3 $1,111.29 $1,071.29
4 $1,144.63 $1,113.73
5 $1,178.97 $1,157.75
6 $1,214.34 $1,203.41
7 $1,250.77 $1,250.77
8 $1,288.29 $1,288.29
9 $1,326.94 $1,326.94
10 $1,366.75 $1,366.75
11 $1,407.75 $1,407.75
12 $1,449.98 $1,449.98
13 $1,493.48 $1,493.48
14 $1,538.29 $1,538.29
15 $1,584.44 $1,584.44
16 $1,631.97 $1,631.97
17 $1,680.93 $1,680.93
18 $1,731.36 $1,731.36
19 $1,783.30 $1,783.30
20 $1,836.80 $1,836.80
*VALUES ARE BASED ON THE INITIAL GENERAL ACCOUNT INTEREST RATE THROUGH THE END
OF THE INITIAL GUARANTEE PERIOD. THEREAFTER, VALUES ARE BASED ON THE MINIMUM
GUARANTEED INTEREST RATE OF 3.00%. VALUES SHOWN ASSUME ALLOCATION ON THE ISSUE
DATE AND NO SUBSEQUENT WITHDRAWALS, TRANSFERS, OR LOAN.
1000d-6/93
7
DEFINITIONS
ACCUMULATION PERIOD - The period between the issue date and the annuity date.
ACCUMULATION UNIT - An accounting unit of measure used to calculate the value
of each subaccount.
AGE - The attained age of the annuitant.
ANNUITANT - The person named in the application during whose lifetime the
annuity is to be paid. Under a nonqualified plan when two people are named as
joint annuitants, the term "annuitant" means the joint annuitants or the
survivor. You may not change the person(s) named as the annuitant.
ANNUITY - A series of payments paid in accordance with this contract which
begins on the annuity date.
ANNUITY DATE - The date on which this contract matures and annuity payments
begin. The original annuity date is stated in the application. Unless otherwise
requested, the annuity date is the twentieth contract anniversary date. The
annuity date may be changed by the owner.
ANNUITY PERIOD - This is the period that starts on the annuity date.
ANNUITY UNIT - An accounting unit of measure used to calculate the amount of
variable annuity payments after the first annuity payment.
ANNUITY UNIT VALUE - The value of an annuity unit of a subaccount determined
for a valuation period according to the formula stated in this contract.
CONTRACT VALUE - The sum of the General Account Contract Value plus the
Separate Account Contract Value.
CONTRACT YEAR - A one year period of time starting on successive contract
anniversaries.
DEBT - The principal of any outstanding loan plus any loan interest due or
accrued.
FIXED ANNUITY - An annuity payment plan that does not vary as to dollar amount.
FUND - An investment company or separate series thereof, in which the
subaccounts of the Separate Account invest.
GENERAL ACCOUNT - Our assets other than those allocated to the Separate Account
or any other separate account. We guarantee a minimum rate of interest on
purchase payments allocated to the General Account.
GENERAL ACCOUNT CONTRACT VALUE - The General Account contract value is the
value of the General Account of this contract on any valuation date.
ISSUE DATE - The issue date is stated in the contract schedule. If the normal
issue date is the 29th, 30th or 31st of the month, the issue date will be the
28th day of that month.
MORTALITY AND EXPENSE RISK CHARGE - This is a charge deducted in the
calculation of the accumulation unit value and the annuity unit value. It is
for our assumption of mortality risks and expense guarantees.
NONQUALIFIED - This contract issued other than as a qualified plan.
OWNER - See "You, Your, Yours" below.
PURCHASE PAYMENTS - This is the dollar amount we receive in U.S. currency to
buy the benefits this contract provides.
QUALIFIED PLAN - This contract issued under a retirement plan which qualifies
for favorable income tax treatment under Section 401, 403, 408 or 457 of the
Internal Revenue Code as amended.
RECORDS MAINTENANCE CHARGE - This is a charge assessed against your contract as
specified in the Contract Schedule.
RECEIVED BY THE COMPANY - This means received by Zurich Life Insurance Company
of America at its home office in Schaumburg, Illinois.
SEPARATE ACCOUNT - A segregated asset account registered as a unit investment
trust with the Securities and Exchange Commission under the Investment Company
Act of 1940 known as the Zurich Life Variable Annuity Separate Account.
SEPARATE ACCOUNT CONTRACT VALUE - This is the sum of the subaccount values of
this contract on the valuation date.
SUBACCOUNTS - The Separate Account has several subaccounts. The available
subaccounts are stated in the contract schedule.
SUBACCOUNT VALUE - We will value each subaccount separately according to the
formula stated in this contract.
VALUATION DATE - Each business day that applicable law requires that we value
the assets of the Separate Account. Currently this is each day that the New
York Stock Exchange is open for trading.
VALUATION PERIOD - The period that starts at the close of a valuation date and
ends at the close of the next succeeding valuation date.
VARIABLE ANNUITY - An annuity payment plan which varies as to dollar amount
because of subaccount investment experience.
WE, OUR, US - Zurich Life Insurance Company of America, Schaumburg, Illinois.
YOU, YOUR, YOURS - The party(s) named as owner in the application unless later
changed as provided in this contract. The owner is the annuitant unless a
different owner is named in the application. Under a nonqualified plan when
more than one person is named as owner, the terms "you," "your," "yours," means
joint owners. The owner may be changed during the lifetime of the owner and the
annuitant. The owner, prior to the annuity date or any distribution of any
death benefit, has the exclusive right to exercise every option and right
conferred by this contract.
Z-4700 Page 1
8
Z-4700 Page 2
GENERAL PROVISIONS
THE CONTRACT - This contract and the attached application constitute the entire
contract between the parties. All statements made in the application are deemed
representations and not warranties. No statement will void this contract or be
used as a defense of a claim unless it is contained in the application.
MODIFICATION OF CONTRACT - Only our president, secretary and assistant
secretaries have the power to approve a change or waive any provisions of this
contract. Any such modifications must be in writing. No agent or person other
than the officers named has the authority to change or waive the provisions of
this contract.
INCONTESTABILITY - We cannot contest this contract after it has been in force
for two years from the issue date.
CHANGE OF ANNUITY DATE - You may write to us prior to distribution of a death
benefit or the first annuity payment date and request a change of the annuity
date.
ASSIGNMENT - No assignment of this contract is binding unless we receive it in
writing. We assume no responsibility for the validity or sufficiency of any
assignment. 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.
DUE PROOF OF DEATH - We must receive written proof of death within sixty days
of the death of the owner or the annuitant when a death benefit is payable. The
proof may be a certified death certificate, the written statement of a
physician, or any other proof satisfactory to us.
RESERVES, CONTRACT VALUES AND DEATH BENEFITS - All reserves are equal to or
greater than those required by statute. Any available contract value and death
benefit are not less than the minimum benefits required by the statutes of the
state in which this contract is delivered.
NON-PARTICIPATING - This contract does not pay dividends. It will not share in
our surplus or earnings.
REPORTS - At least once each contract year we will send you a statement showing
purchase payments received, interest credited, investment experience; and
charges made since the last report, as well as any other information required
by statute.
PREMIUM TAXES - We will make a deduction for state premium taxes in certain
situations. On any contract subject to premium tax, as provided under
applicable law, the tax will be deducted from: a. the purchase payments when we
receive them; b. the contract value upon total withdrawal; or c. from the total
contract value applied to an annuity option at the time annuity payments start.
QUALIFIED PLANS - If this contract is issued under a qualified plan additional
provisions may apply. The rider or amendment to this contract used to qualify
it under the applicable section of the Internal Revenue Code will indicate the
extent of change in the provisions.
OWNERSHIP PROVISIONS
OWNER OF CONTRACT - The annuitant is the original owner unless otherwise
provided in the application.
Before the annuity date or any distribution of death benefit, you have the
right to cancel or amend this contract if we agree. You may exercise every
option and right conferred by this contract including the right of assignment.
The joint owners must agree to any change if more than one owner is named.
CHANGE OF OWNERSHIP - You may change the owner by written request at any time
while the annuitant is alive. You must furnish information sufficient to
clearly identify the new owner to us. The change is subject to any existing
assignment of this contract. When we record the effective date of the change,
it will be the date the notice was signed except for action taken by us prior
to receiving the request. Any change is subject to the payment of any proceeds.
We may require you to return this contract to us for endorsement of a change.
BENEFICIARY DESIGNATION AND CHANGE OF BENEFICIARY - The application for this
contract shows the original beneficiary. You may change the beneficiary if you
send us a written change form. Changes are subject to the following:
1. The change must by filed while the annuitant is alive and prior to the
annuity date;
2. This contract must be in force at the time you file a change;
3. Such change must not be prohibited by the terms of an existing assignment,
beneficiary designation or other restriction;
4. Such change will take effect when we receive it;
5. After we receive the change, it will take effect on the date the change form
was signed. However, action taken by us before the change form was received
will remain in effect; and
6. The request for change must provide information sufficient to identify the
new beneficiary.
We may require you to return this contract for endorsement of a change.
DEATH OF BENEFICIARY - The interest of a beneficiary who dies before the
distribution of the death benefit will pass to the other beneficiaries, if
any, share and share alike, unless otherwise provided in the beneficiary
designation. If no beneficiary survives or is named, the distribution will be
made to your estate when you die; or to the estate of the annuitant upon the
death of the annuitant if you are not also the annuitant. If a beneficiary dies
within ten days of the date of your death, the death benefit will be paid as if
you had survived the beneficiary. If a beneficiary dies within ten days of the
death of the annuitant, and you are not the annuitant, we will pay the death
benefit as if the annuitant survived the beneficiary. If you, the annuitant,
and the beneficiary die simultaneously, we will pay the death benefit as if
you had survived the annuitant and the beneficiary.
9
PURCHASE PAYMENT PROVISIONS
INITIAL PURCHASE PAYMENT - The minimum initial purchase payment is $2,500 for a
nonqualified plan and $50 for a qualified plan.
PURCHASE PAYMENT LIMITATIONS - The minimum subsequent purchase payment is $500
for a nonqualified plan and $50 for a qualified plan. We will accept a
subsequent qualified plan purchase payment of less than $50 when annual
contributions from a payroll deduction or salary reduction plan equal or exceed
$600. The maximum purchase payment that may be made during a contract year
without our approval is $500,000 for a nonqualified plan; or the maximum
permitted by the Internal Revenue Code for a qualified plan. We will not accept
purchase payments more frequently than once every other week.
Initial purchase payments of less than $500 may be allocated to: 1. the General
Account; or 2. a subaccount; or 3. to the General Account and one subaccount.
Subsequent nonqualified purchase payments must first be applied to the General
Account or any subaccount whose value is less than $500. After each initial
account has been allocated at least $500, purchase payments may be allocated to
a new account.
Subsequent qualified plan contributions from a payroll deduction or salary
reduction program of $50 or more may be made to the General Account or to an
additional subaccount.
We will deduct any applicable state premium taxes from the purchase payments we
apply to the contract.
We reserve the right to waive or modify these limits.
PLACE OF PAYMENT - All purchase payments under this contract must be paid to us
at our home office or such other location as we may select. We will notify you
and any other interested parties in writing of such other locations. Purchase
payments received by an agent will begin earning interest after we receive it.
GENERAL ACCOUNT PROVISIONS
GENERAL ACCOUNT - The guaranteed benefits under this contract are provided
through the General Account.
GENERAL ACCOUNT CONTRACT VALUE - The General Account Contract Value includes 1.
your purchase payments allocated to the General Account; 2. amounts transferred
from a subaccount to the General Account at your request; and 3. the interest
credited to amounts so allocated or transferred. Transfers and withdrawals from
the General Account reduce the General Account Contract Value.
The initial General Account interest rate credited to the initial purchase
payment is in effect through the end of the guarantee period and is shown in
the contract schedule. At the beginning of each subsequent guarantee period
shown in the contract schedule, we will declare the General Account interest
rate applicable to the initial purchase payment for each such subsequent
guarantee period. We will declare the General Account interest rate with
respect to each subsequent purchase payment received. Any such purchase payment
we receive will be credited that rate through the end of the guarantee period
shown in the contract schedule. At the beginning of each subsequent guarantee
period, we will declare the General Account interest rate applicable to each
subsequent purchase payment for such guarantee period.
We reserve the right to declare the General Account current interest rate(s)
based upon: the issue date; the date we receive a purchase payment; or the date
of account transfer.
We calculate the interest credited to the General Account by compounding daily,
at daily interest rates, rates which would produce at the end of a contract
year a result identical to the one produced by applying an annual interest
rate.
The minimum guaranteed General Account interest rate is 3.00% per year.
VARIABLE ACCOUNT PROVISIONS
SEPARATE ACCOUNT - The variable benefits under this contract are provided
through the Zurich Life Variable Annuity Separate Account. This is called the
Separate Account. The Separate Account is registered with the Securities and
Exchange Commission as a unit investment trust under the Investment Company Act
of 1940. It is a separate investment account maintained by us into which a
portion of the company's assets have been allocated for this contract and may
be allocated for certain other contracts.
LIABILITIES OF SEPARATE ACCOUNT - The assets equal to the reserves and other
liabilities of the Separate Account will not be charged with liabilities
arising out of any other business we may conduct. We will value the assets of
the Separate Account on each valuation date.
SEPARATE ACCOUNT CONTRACT VALUE - On any valuation date the Separate Account
contract value is the sum of its subaccount values.
SUBACCOUNTS - The Separate Account consists of several subaccounts as shown in
the contract schedule. We may, from time to time, combine or remove subaccounts
in the Separate Account and establish additional subaccounts of the Separate
Account. In such event we may permit you to select other subaccounts under this
contract. However, the right to select any other subaccount is limited by the
terms and conditions we may impose on such transactions.
Z-4700 Page 3
10
Z-4700 Page 4
FUNDS - Each subaccount of the Separate Account will buy shares of an
investment company or a separate series of an investment company offered
as an investment alternative under the contract. The funds are registered
under the Investment Company Act of 1940 as open-end diversified management
investment companies. Each series of the funds represents a separate
investment portfolio which corresponds to one of the subaccounts of the
Separate Account.
If we establish additional subaccounts each new subaccount will invest in a new
series of the existing funds or in shares of another investment company. We may
also substitute other investment companies.
RIGHTS RESERVED BY THE COMPANY - We reserve the right, subject to compliance
with the current law or as it may be changed in the future:
1. To operate the Separate Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law;
2. To take any action necessary to comply with or obtain and continue any
exemptions from the Investment Company Act of 1940 or to comply with any other
applicable law;
3. To transfer any assets in any subaccount to another subaccount or to one or
more separate accounts, or the General Account, or to add, combine or remove
subaccounts in the Separate Account;
4. To delete the shares of any of the portfolios of the fund or any other
open-end investment company and to substitute, for the fund shares held in any
subaccount, the shares of another portfolio of the fund or the shares of
another investment company or any other investment permitted by law; and
5. To change the way we assess charges, but not to increase the aggregate
amount above that currently charged to the Separate Account and the fund in
connection with the contracts.
When required by law, we will obtain your approval of such changes and the
approval of any regulatory authority.
ACCUMULATION UNIT VALUE - Each subaccount has an accumulation unit value. When
purchase payments or other amounts are allocated to a subaccount, a number of
units are purchased based on the accumulation unit value of the subaccount at
the end of the valuation period during which the allocation is made. When
amounts are transferred out of or deducted from a subaccount, units are
redeemed in a similar manner.
The accumulation unit value for each subsequent valuation period is the
investment experience factor for that period multiplied by the accumulation
unit value for the period immediately preceding. Each valuation period has a
single accumulation unit value that is applied to each day in the period. The
number of accumulation units will not change as a result of investment
experience.
INVESTMENT EXPERIENCE FACTOR - Each subaccount has its own investment
experience factor. The investment experience of the Separate Account is
calculated by applying the investment experience factor to the cash value in
each subaccount during a valuation period.
The investment experience factor of a subaccount for a valuation period is
determined by dividing 1. by 2. and subtracting 3. from the result, where:
1. is the net result of:
a. the net asset value per share of the investment held in the subaccount
determined at the end of the current valuation period; plus
b. the per share amount of any dividend or capital gain distributions made by
the investments held in the subaccount, if the "ex- dividend" date occurs
during the current valuation period; plus or minus
c. a charge or credit for any taxes reserved for the current valuation period
which we determine resulted from the investment operations of the subaccount;
2. is the net asset value per share of the investment held in the subaccount,
determined at the end of the last valuation period;
3. is the factor representing the mortality and expense risk charge stated in
the contract schedule for the number of days in the valuation period.
11
TRANSFER AND WITHDRAWAL PROVISIONS
TRANSFERS DURING THE ACCUMULATION PERIOD - You may direct the following
transfers:
1. Once each fifteen days all or part of the Separate Account contract value
may be transferred to the General Account or to another subaccount. We will
allow the first transfer fifteen days after the issue date.
2. During the thirty days that follow a contract year anniversary or the thirty
day period that follows the date you receive an annual report, if later, all or
part of the General Account contract value, less debt, may be transferred to
one or more subaccounts.
Transfers will also be subject to the following conditions:
1. The minimum amount which may be transferred is $500 or, if smaller, the
remaining value in the General Account or a subaccount;
2. No partial transfer will be made if the remaining contract value of the
General Account or any subaccount will be less than $500 unless the
transfer will eliminate your interest in such account;
3. No transfer may be made within seven calendar days of the date on which the
first annuity payment is due;
4. You may request an additional transfer from the General Account to one or
more subaccounts during the thirty day period before the date on which the
first annuity payment is due. Such transfer must become effective no later
than the seventh calendar day before such due date;
5. When you request a transfer from the General Account Contract Value to a
subaccount, we will limit the amount that can be transferred to the amount
which exceeds debt and withdrawal charge, if any, applicable to the total
General Account Contract Value for the contract year during which the total
transfer is made.
We will transfer amounts bought by purchase payments and all related
accumulations received in a given contract year, in the chronological order we
received them.
Any transfer request must clearly specify: 1. the amount which is to be
transferred; and 2. the names of the accounts which are affected. We will only
honor a telephone transfer request if a properly executed telephone transfer
authorization is on file with us. Such request for a transfer must comply with
the conditions of the authorization.
We reserve the right at any time and without notice to any party, to terminate,
suspend, or modify these transfer rights.
WITHDRAWALS DURING THE ACCUMULATION PERIOD - During the accumulation period,
you may withdraw all or part of the contract value that remains after we
subtract any withdrawal charge, debt and applicable premium taxes. We must
receive a written request that indicates the amount of the withdrawal from the
General Account and each subaccount. You must return the contract to us if you
elect a total withdrawal.
Withdrawals are subject to the conditions that follow.
1. Each withdrawal must be at least $500 or the value that remains in the
General Account or a subaccount if smaller.
2. A minimum of $500 must remain in the account after you make a withdrawal
unless the account is eliminated by such withdrawal;
3. The maximum you may withdraw from any account is the value of the General
Account or a subaccount less the amount of any withdrawal charge. 4. Any
withdrawal amount you request will be increased by the withdrawal charge. 5.
We will limit a withdrawal from the General Account to an amount which
equals the General Account Contract Value less debt and interest on any such
loan to the end of the contract year.
WITHDRAWAL CHARGES - 1. All purchase payments in a given contract year and all
related accumulations are totaled by account and each total is used separately
in computing the withdrawal charge as stated in the Withdrawal Charge Table
shown in the contract schedule.
2. All amounts to be withdrawn and any applicable withdrawal charges will be
charged first against purchase payments and all related accumulations in
the chronological order we received such purchase payments by contract year.
3. Any amount withdrawn which is not subject to a withdrawal charge will be
considered a "partial free withdrawal."
4. In the event of a partial withdrawal, a "partial free withdrawal" is applied
against purchase payments and all related accumulations in the chronological
order we received such purchase payments by contract year even though
the purchase payments and related accumulations are no longer subject
to a withdrawal charge.
TRANSFER AND WITHDRAWAL PROCEDURES - Wewill withdraw or transfer from the
General Account as of the valuation date that follows the date we receive your
written or telephone transfer request. To process a withdrawal, the request
must contain all required information.
Z-4700 Page 5
12
Z-4700 Page 6
We will redeem the necessary number of accumulation units to achieve the dollar
amount when the withdrawal or transfer is made from a subaccount. We will
reduce the number of accumulation units credited in each subaccount by the
number of accumulation units redeemed. The reduction in the number of
accumulation units is determined on the basis of the accumulation unit value at
the end of the valuation period when we receive the request, provided the
request contains all required information. We will pay the amount within seven
calendar days after the date we receive the request, except as provided below.
DEFERMENT OF WITHDRAWAL OR TRANSFER - If the withdrawal or transfer is to be
made from a subaccount, we may suspend the right of withdrawal or transfer or
delay payment more than seven calendar days: 1. during any period when the New
York Exchange is closed other than customary weekend and holiday closings; 2.
when trading in the markets normally utilized is restricted, or an emergency
exists as determined by the Securities and Exchange Commission, so that
disposal of investments or determination of the accumulation unit value is not
practical; or 3. for such other periods as the Securities and Exchange
Commission by order may permit for protection of owners.
We may defer the payment of a withdrawal or transfer from the General Account,
for the period permitted by law. This can never be more than six months after
you send us a written request. During the period of deferral, we will continue
to credit interest, at the then current interest rate(s), to the General
Account Contract Value.
LOAN PROVISIONS
LOANS - You may request a loan any time before the annuity date. You must
assign this contract to us as security for a loan.
The maximum loan available is the General Account Contract Value minus: 1. any
withdrawal charge that applies to the total General Account Contract Value in
the year in which you make the loan; and 2. interest on the loan paid to the
end of the contract year in which you make the loan.
We may defer granting a loan for six months from the date we receive the
written loan request.
LOAN INTEREST - The loan interest is 5.50% per year compounded daily at the
daily equivalent of a 5.50% annual rate. Interest is due at the end of each
contract year. If you do not pay interest when it is due, we will add it to the
loan and it will bear interest at the same rate as the loan. We will charge
interest on a daily basis.
LOAN PAYMENT - You may repay a debt in full or in part at any time prior to the
annuity date.
If the debt equals or exceeds the General Account Contract Value, less any
withdrawal charge that applies to the total withdrawal of the General Account,
your interest in the General Account will terminate. The termination occurs
thirty-one days after we mail notice of termination to your last known address
and that of any assignee of record.
We will apply any repayment of debt: first to reduce that part of the debt that
can be attributed to interest; and second to that part of the debt that can be
attributed to purchase payments.
EFFECT OF LOANS ON INTEREST RATES - While there is a loan, the portion of the
General Account Contract Value that equals the debt will earn interest at 3.00%
per year, compounded daily at the daily equivalent of a 3.00% annual rate,
instead of the current interest rate.
DEATH BENEFIT PROVISIONS
AMOUNT PAYABLE UPON DEATH - We compute the death benefit at the end of the
valuation period following: our receipt of due proof of death; and the return
of this contract.
If death occurs prior to attaining age 75, we will pay the greater of: a. the
contract value less debt; or b. the total amount of purchase payments, less
debt and the aggregate dollar amount of all previous withdrawals. We will pay
the contract value less debt if death occurs at age 75 or later.
PAYMENT OF DEATH BENEFITS - We will pay a death benefit before the annuity date
if: the owner who is also the annuitant dies; or either the annuitant or the
owner who is not the annuitant dies.
The death benefit will be paid upon the death of a joint owner. If joint
annuitants are named and they are not the owners of this contract, we will pay
the death benefit upon the death of the surviving joint annuitant.
We will pay the death benefit to the beneficiary when we receive due proof of
death. We will then have no further obligation under this contract.
When you die, we will pay the death benefit in a lump sum. This sum may be
deferred for up to five years from the date of your death. During this time it
will continue to accrue interest.
Instead of a lump sum payment the beneficiary may elect to have the death
benefit distributed as stated in Option 1 for a period not to exceed the
beneficiary's life expectancy; or Options 2, or 3 based upon the life
expectancy of the beneficiary as prescribed by federal regulations. The
beneficiary must make this choice within sixty days of the time we receive due
proof of death.
If the beneficiary is not a natural person, the beneficiary must elect that the
entire death benefit be distributed within five years of your death.
Distribution of the death benefit must start within one year after your death.
It may start later if prescribed by federal regulations.
13
If the primary beneficiary is the surviving spouse when you die, the surviving
spouse may elect to be the successor owner of this contract. There will be no
requirement to start a distribution of death benefits.
ANNUITY PERIOD PROVISIONS
ELECTION OF ANNUITY OPTION - We must receive an election of an annuity option
in writing. You may make an election before the annuity date providing the
annuitant is alive. The annuitant may make an election on the annuity date
unless you have restricted the right to make such an election. The beneficiary
may make an election when we pay the death benefit.
An election will be revoked by: 1. a subsequent change of beneficiary; or 2. an
assignment of this contract unless the assignment provides otherwise.
Subject to the terms of the death benefit provision, the beneficiary may elect
to have the death benefit remain with us under one of the annuity options.
If an annuity option is not elected, an annuity will be paid under Option 3
for a guaranteed period of ten years and for as long thereafter as the
annuitant is alive.
If the total contract value is applied under one of the annuity options, this
contract must be surrendered to us.
An option can not be changed after the first annuity payment is made.
If, on the seventh calendar day before the first annuity payment due date, all
the contract value is allocated to the General Account, the annuity will be
paid as a fixed annuity. If all of the contract value on such date is allocated
to the Separate Account, the annuity will be paid as a variable annuity. If the
contract value on such date is allocated to both the General Account and a
subaccount, then the annuity will be paid as a combination of a fixed and
variable annuity. A fixed and variable annuity payment will reflect the
investment performance of the subaccounts in accordance with the allocation of
the contract values existing on such date. Allocations will not be changed
thereafter, except as provided in the Transfers During The Annuity Period
provision of this contract.
Payments for all options are derived from the applicable tables. Current
annuity rates will be used if they produce greater payments than those quoted
in the contract. The age in the tables is the age of the payee on the last
birthday before the first payment is due.
The option selected must result in a payment that is at least equal to our
minimum payment, according to our rules, at the time the annuity option is
chosen. If at any time the payments are less than the minimum payment, we have
the right to increase the period between payments to quarterly, semi-annual or
annual so that the payment is at least equal to the minimum payment or to make
payment in one lump sum.
OPTION 1
FIXED INSTALLMENT ANNUITY - We will make monthly payments for a fixed number of
installments. Payments must be made for at least 5 years, but not more than 30
years.
OPTION 2
LIFE ANNUITY - We will make monthly payments while the payee is alive.
OPTION 3
LIFE ANNUITY WITH INSTALLMENTS GUARANTEED - We will make monthly payments for a
guaranteed period and thereafter while the payee is alive. The guaranteed
period must be selected at the time the annuity option is chosen. The
guaranteed periods available are 5, 10, 15 and 20 years.
OPTION 4
JOINT AND SURVIVOR ANNUITY - We will pay the full monthly income while both
payees are alive. Upon the death of either payee, we will continue to pay the
surviving payee a percentage of the original monthly payment. The percentage
payable to the surviving payee must be selected at the time the annuity option
is chosen. The percentages available are 50%, 66 2/3%, 75%, and 100%.
OTHER OPTIONS
We may make other annuity options available. Payments are also available on a
quarterly, semi-annual or annual basis.
FIXED ANNUITY - The General Account Contract Value on the first day preceding
the date on which the first annuity payment is due, is first reduced by any
debt and premium taxes that apply. The value that remains will be used to
determine the fixed annuity monthly payment in accordance with the annuity
option selected.
VARIABLE ANNUITY - The Separate Account contract value, at the end of the
valuation period preceding the valuation period that includes the date on which
the first annuity payment is due, is first reduced by any premium taxes that
apply. The value that remains is used to determine the first monthly annuity
payment. The first monthly annuity payment is based upon the guaranteed annuity
option shown in the Annuity Option Table. You may elect any option available.
The dollar amount of subsequent payments may increase or decrease depending on
the investment experience of each subaccount. The number of annuity units per
payment will remain fixed for each subaccount unless a transfer is made. If a
transfer is made, the number of annuity units per payment will change.
Z-4700 Page 7
14
Z-4700 Page 8
The number of annuity units for each subaccount is calculated by dividing a. by
b. where:
a. is the amount of the monthly payment that can be attributed to that
subaccount; and
b. is the annuity unit value for that subaccount at the end of the valuation
period. The valuation period includes the date on which the payment is made.
Monthly annuity payments, after the first payment, are calculated by summing
up, for each subaccount, the product of a. times b. where:
a. is the number of annuity units per payment in each subaccount; and
b. is the annuity unit value for that subaccount at the end of the valuation
period. The valuation period includes the date on which the payment is made.
After the first payment, we guarantee that the dollar amount of each annuity
payment, will not be affected adversely by actual expenses or changes in
mortality experience from the expense and mortality assumptions on which we
based the first payment.
ANNUITY UNIT VALUE - The value of an annuity unit, for each subaccount, at the
end of any subsequent valuation period is determined by multiplying the result
of a. times b. by c. where:
a. is the annuity unit value for the immediately preceding valuation period;
and
b. is the net investment factor for the valuation period for which the annuity
unit value is being calculated; and
c. is the interest factor of .99993235 per calendar day of such subsequent
valuation period to offset the effect of the assumed rate of 2.50% per year
used in the Annuity Option Table.
The net investment factor for each subaccount for any valuation period is
determined by dividing a. by b. where:
a. is the value of an accumulation unit of the applicable subaccount as of the
end of the current valuation period plus or minus the per share charge or
credit for taxes reserved; and
b. is the value of an accumulation unit of the applicable subaccount as of the
end of the immediately preceding valuation period, plus or minus the per share
charge or credit for taxes reserved.
TRANSFERS DURING THE ANNUITY PERIOD - The payee(s) may not convert fixed
annuity payments to variable annuity payments. However, during the annuity
period, the payee(s), by sending us a written notice in a form satisfactory to
us, may: convert variable annuity payments to fixed annuity payments; or, have
variable annuity payments reflect the investment experience of other
subaccounts. A transfer may be made subject to the following:
1. Transfers from a subaccount to the General Account can be effective only on
an anniversary of the first annuity payment date. We must receive notice
of such transfer at least thirty days prior to the effective date of the
transfer;
2. Transfers from one subaccount to another subaccount will be effective during
the valuation period next succeeding the date the notice is received by us.
However, if the notice for the transfer is received within seven days
immediately preceding an annuity payment date, the transfer will be
effective during the valuation period next succeeding that annuity payment
date. No transfer to a subaccount may be made during the first year of the
annuity period. In subsequent years all transfers between subaccounts will
be made on the same day in a given year and are limited to one transfer each
year;
3. A payee may not have more than three subaccounts after any transfer; and
4. The payee's entire interest in a subaccount must be transferred.
The number of annuity units per payment attributable to a subaccount to which
transfer is made is equal to, in the case of a transfer between subaccounts,
the number of annuity units per payment in the subaccount from which transfer
is being made multiplied by the annuity unit value for that subaccount, such
amount being divided by the annuity unit value for the subaccount to which
transfer is being made.
The amount of money allocated to the General Account in the event of a transfer
from a subaccount equals the annuity reserve for the payee's interest in such
subaccount. The annuity reserve is the product of a. multiplied by b.
multiplied by c. where: a. is the number of annuity units representing the
payee's interest in such subaccount per annuity payment; b. is the annuity unit
value for such subaccount; and c. is the present value of $1.00 per payment
period using the attained age(s) of the payee(s) and any remaining guaranteed
payments that may be due at the time of the transfer. The guaranteed monthly
payments are based on an interest rate of 2.50% per year and, where mortality
is involved, the "1983 Table a" individual annuity mortality table developed by
the Society of Actuaries with a five year set back. Money allocated to the
General Account upon such transfer will be applied under the same annuity
option as originally elected. Any guaranteed period payments will be adjusted
to reflect the number of guaranteed payments already made. If all guaranteed
payments have already been made, no further payments will be guaranteed.
15
All amounts and annuity unit values are determined as of the end of the
valuation period which precedes the effective date of the transfer.
We reserve the right at any time and without notice to any party to terminate,
suspend or modify the transfer privileges.
SUPPLEMENTARY AGREEMENT - A supplementary agreement will be issued to reflect
payments that will be made under a settlement option. If payment is made as a
death benefit distribution, the effective date will be the date of death.
Otherwise the effective date will be the date chosen by the owner.
DATE OF FIRST PAYMENT - Interest, under an option, will start to accrue on the
effective date of the supplementary agreement. If the normal effective date is
the 29th, 30th, or 31st of the month, the effective date will be the 28th day
of that month.
EVIDENCE OF AGE, SEX AND SURVIVAL - We may require satisfactory evidence of the
age, sex and the continued survival of any person on whose life the income is
based.
MISSTATEMENT OF AGE OR SEX - If the age or sex of the payee has been misstated,
the amount payable under this contract will be such as the purchase payments
sent to us would have purchased at the correct age or sex. Interest not to
exceed 6% compounded each year will be charged to any overpayment or credited
to any underpayment against future payments we may make under this contract.
BASIS OF ANNUITY OPTIONS - The guaranteed monthly payments are based on an
interest rate of 2.50% per year and, where mortality is involved, the "1983
Table a" individual annuity mortality table developed by the Society of
Actuaries, with a five year set back.
DISBURSEMENT OF FUNDS UPON DEATH OF PAYEE: UNDER OPTIONS 1 or 3 - When the
payee dies, the value of any unpaid installments will be paid, in one sum, to
the estate of the payee unless otherwise provided in the supplementary
agreement. The commuted value based upon a minimum interest rate of not less
than 2.50% will be paid. The commuted value of any variable installments will be
determined by applying the annuity unit value next determined following our
receipt of due proof of death.
PROTECTION OF BENEFITS - Unless otherwise provided in the supplementary
agreement, the payee may not commute, anticipate, assign, alienate or otherwise
hinder the receipt of any payment.
CREDITORS - The proceeds of this contract and any payment under an annuity
option will be exempt from the claim of creditors and from legal process to the
extent permitted by law.
Z-4700 Page 9
16
FIXED AND VARIABLE DEFERRED ANNUITY
NON-PARTICIPATING
ALL BENEFITS, PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED UPON
THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT. REFER TO THE VARIABLE ACCOUNT AND ANNUITY
PERIOD PROVISIONS FOR A DETERMINATION OF ANY VARIABLE BENEFITS.
This is a legal contract between the Owner and Zurich Life Insurance Company of
America.
READ YOUR CONTRACT CAREFULLY
ZURICH LIFE INSURANCE COMPANY OF AMERICA
An Illinois stock corporation
0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000
Form Z-4700
