COUNTRY INVESTORS LIFE ASSURANCE COMPANY
0000 Xxxxxxx Xxxxxx, X.X. Box 2000
Bloomington, IL 61702-2000
Phone (000) 000-0000
FLEXIBLE PREMIUM DEFERRED
VARIABLE ANNUITY
CONTRACT NUMBER
ANNUITANT
CONTRACT DATE
This contract is issued in consideration of the application
and payment of the Initial Premium. Additional premiums may
be paid as provided in the Premium Section.
The Retirement Life Income is payable monthly unless less
frequent payments are elected by the Owner. A Death Benefit
is payable as defined in Section III.
These payments and any other contractual benefits are
subject to the terms of this contract which are contained on
this and the following pages.
For service or information on this contract, contact Our
agent, agency office or Our Variable Product Service Center,
[PO Box 9239, Des Moines, Iowa 00000-0000, phone
000-000-0000, fax 000-000-0000].
NOTICE OF RIGHT TO EXAMINE CONTRACT
YOU MAY, WITHIN 30 DAYS AFTER RECEIPT OF THIS CONTRACT,
RETURN IT TO OUR VARIABLE PRODUCT SERVICE CENTER OR TO THE
AGENT WHO SOLD THIS CONTRACT. WITHIN 7 DAYS OF OUR RECEIPT
OF THE CONTRACT TOGETHER WITH YOUR WRITTEN REQUEST FOR
CANCELLATION, THE CONTRACT SHALL BE VOID FROM THE EFFECTIVE
DATE WITH YOU AND THE COMPANY BEING IN THE SAME POSITION AS
IF NO CONTRACT HAD BEEN EXECUTED, AND WE WILL REFUND AN
AMOUNT EQUAL TO THE GREATER OF THE PREMIUMS PAID OR THE SUM
OF:
1. THE ACCUMULATED VALUE OF THE CONTRACT ON THE DATE
THE CONTRACT IS RECEIVED AT OUR VARIABLE PRODUCT
SERVICE CENTER;
2. ANY ADMINISTRATIVE CHARGES WHICH WERE DEDUCTED;
AND
3. AMOUNTS APPROXIMATING DAILY CHARGES AGAINST THE
VARIABLE ACCOUNT.
Signed for COUNTRY Investors Life Assurance Company at its
Home Office in Bloomington, Illinois.
/s/ Xxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxxx
Secretary President
Retirement Life Income at Annuitization.
Premiums payable to Annuitization.
Contract is non-participating.
THE ACCUMULATED VALUE IN THE VARIABLE ACCOUNT IS BASED ON
THE INVESTMENT EXPERIENCE OF THAT ACCOUNT, AND MAY INCREASE
OR DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT.
THE VARIABLE FEATURES OF THIS CONTRACT ARE DESCRIBED IN
SECTION V.
CONTRACT SPECIFICATIONS
Contract Number [12345]
Annuitant [XXXX XXX]
Contract Date [05-01-2002]
Initial Premium [$70,000.00]
Owner(s) [XXXX XXX]
Beneficiary As stated in the
application unless
changed by
endorsement.
On Declared Interest Option:
Guaranteed Minimum Rate 3.0%
Death Benefit As stated in Section III
[Incremental Death Benefit Factor 40%]
Table of Surrender Charges:
[CONTRACT YEAR
OF WITHDRAWAL SURRENDER CHARGE PERCENTAGE (AS A PERCENT OF
ACCOUNT VALUE WITHDRAWN)
( 1 7% )
( 2 7% )
( 3 7% )
( 4 6% )
( 5 5% )
( 6 4% )
( 7 2% )
( Thereafter 0%] )
Form number CI-VFPDA-04 Page 1
CONTRACT SPECIFICATIONS
SCHEDULE OF CHARGES
Annual Administrative Charge: [$45.00 per year]
Transfer Charge: [$10.00 per transfer. This charge is guaranteed to
never exceed $25.00.]
Mortality and Expense Risk Charge: [0.0032682% of the Variable Account Value per day
(equivalent to 1.20% per year).]
[Incremental Death Benefit Rider Charge 0.20% of Account Value]
Surrender Charge Period [7 Contract Years]
SCHEDULE OF INVESTMENT OPTIONS
General Account: The general assets of COUNTRY Investors Life Assurance
Company
Separate Account: [COUNTRY Investors Variable Annuity Account]
[Subaccounts: Subaccounts at issue are listed in the application]
SCHEDULE OF FORMS
FORM NO. DESCRIPTION
--------------------- ------------------------------------------------
[CI-VPDA-04 Flexible Premium Deferred Variable Annuity]
[CI-IDB-04 Incremental Death Benefit Rider]
Form Number CI-VPDA-04
Policy Number [12345]
1A
CONTRACT CONTENTS
PAGE NO.
Introduction to Contract Cover
Contract Specifications 1
SECTION I - DEFINITIONS
Age 2
Annuitization 2
Business Day 2
Contract Anniversary 2
Contract Date 2
Contract Year 2
Declared Interest Option 2
Due Proof of Death 2
Fund 2
General Account 2
Retirement Life Income 2
SEC 2
Subaccount 2
Valuation Period 2
Variable Account 2
Variable Accumulated Value 2
We, Us, Our, and Company 2
You and Your 2
SECTION II - GENERAL PROVISIONS
This is a Contract 3
Change or Waiver of Terms 3
Misstatement of Age or Sex 3
Premium 3
Accumulated Value 3
Allocation of Premium 3
Termination 4
Assignment and Transfer 4
Owner, Annuitant, and Beneficiary 4
Annual Report 5
Basis of Computation of Contract Payments 5
SECTION III - PROCEEDS PAYABLE AT DEATH
Death Benefit Prior to Annuitization 5
Death of the Annuitant Prior to Annuitization 5
Death of Owner Prior to Annuitization 6
Deceased Owner is also the Annuitant 6
Owner is not an Individual 6
Death on or after Annuitization 6
SECTION IV - NON-PARTICIPATION
SECTION V - VARIABLE ACCOUNT
Variable Account 7
Subaccounts 7
Unit Value 7
Variable Accumulated Value 8
Declared Interest Option Accumulated Value 8
Subaccount Units 9
Fund Investment Options 9
Transfers 9
Excessive Trading Limits 10
SECTION VI - SURRENDER PROVISIONS
Cash Surrender of Accumulated Value 10
Cash Surrender Value 11
Partial Withdrawal of Accumulated Value 11
Waiver of Surrender Charge for Confinement 11
Delay of Payment 12
Tax Charges 13
SECTION VII - SETTLEMENT OPTIONS
SECTION VIII - FIXED SETTLEMENT OPTIONS
Option 1 - Interest Payment Option 14
Option 2 - Fixed Time Payment Option 14
Option 3 - Lifetime Payment Option 14
Option 4 - Fixed Amount Payment Option 16
Option 5 - Joint Lifetime Payment Option 16
SECTION IX - VARIABLE SETTLEMENT OPTIONS
Option A - Payment of Life Income 17
Option B - Payment of Joint and Survivor Life Income 17
Assumed Interest Rate and Factor 18
Annuity Unit 18
Fixed Interest Option 18
Allocation 18
Exchanges of Annuity Units 18
Commuted Value 18
Amount of Variable Payments 19
Annuity Unit Value 19
Net Investment Factor 19
SECTION X - SPENDTRHIFT
A copy of the Application for this contract and any Riders and Endorsements
follow page 20.
SECTION I
DEFINITIONS
AGE Age, as used in this contract to determine rates and
benefits, means Age on the Annuitant's last birthday.
ANNUITIZATION The date You elect to receive Retirement Life Income.
BUSINESS DAY Each day that the New York Stock Exchange is open for
trading. Assets are valued at the close of Business Day.
CONTRACT The same date in each year as the Contract Date.
ANNIVERSARY
CONTRACT DATE The date We issue the contract.
CONTRACT YEAR The 12-month period that begins on the Contract Date or on
a Contract Anniversary.
DECLARED An option in which the Accumulated Value accrues interest
INTEREST OPTION at a rate declared by the Company. The declared rate will
never be less than the guaranteed minimum rate. The Declared
Interest Option is supported by the General Account.
DUE PROOF OF Proof of death satisfactory to us. Such proof may consist
DEATH of a certified copy of the death record, a certified copy of
a court decree reciting a finding of death, or any other
proof satisfactory to us.
FUND An investment company registered with the SEC under the
Investment Company Act of 1940 as an open-end diversified
management investment company or unit investment trust in
which the Account invests.
GENERAL ACCOUNT All our assets other than those allocated to the Variable
Account or any other Separate Account. We have complete
ownership and control of the assets of the General Account.
INVESTMENT A Fund or a separate investment portfolio of a Fund in which
OPTION a Subaccount invests.
RETIREMENT LIFE Periodic annuity income benefits paid to You or someone
INCOME You elect to receive payments under the terms of this
contract.
SEC The U.S. Securities and Exchange Commission.
SUBACCOUNT A subdivision of the Variable Account, which invests its
assets exclusively in a corresponding Investment Option.
VALUATION The period between the close of business on a Business Day
PERIOD and the close of business on the next Business Day.
VARIABLE The Separate Account shown on the Contract Specification
ACCOUNT pages. It is registered with the SEC under the Investment
Company Act of 1940 as a unit investment trust.
VARIABLE The sum of the contract's Accumulated Value in each
ACCUMULATED Subaccount.
VALUE
WE, US, OUR, COUNTRY Investors Life Assurance Company.
AND COMPANY
YOU OR YOUR The Owner of this contract.
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SECTION II
GENERAL PROVISIONS
THIS IS A This is a legal contract between the Owner and the Company.
CONTRACT The entire contract includes the application and any
attached riders and endorsements.
CHANGE OR No change or waiver of any terms will be valid unless it is
WAIVER OF TERMS in writing and signed by Our President, Vice President,
Secretary, Assistant Secretary, or Actuary.
MISSTATEMENT OF Two questions in the application concern the Annuitant's
AGE OR SEX Age and sex. If either or both of the answers to these
questions are not correct, all benefits and amounts payable
under this contract would be the benefits and amounts
payable had the correct Age and sex been stated. Any
overpayment We make because of misstatement of Age or sex,
together with interest thereon at not less than the
Guaranteed Minimum Rate shown on the Contract Specifications
page, compounded annually, will be deducted from the current
or next succeeding payment or payments under this contract.
Any underpayments made will be added to the next payment
with interest at not less than the Guaranteed Minimum Rate
shown on the Contract Specifications page.
In the case of lump sum settlement, We will adjust the lump
sum to reflect the correct Age or sex at a rate not less
than the Guaranteed Minimum Rate shown on the Contract
Specifications page compounded annually.
We reserve the right to require proof of Age and sex of the
Annuitant before making or continuing annuity payments under
this contract.
PREMIUM Premiums may be paid during the lifetime of the Annuitant,
and prior to Annuitization. Each premium after the first is
payable at Our Variable Product Service Center. Additional
premium payments may be made at any time during the
continuance of this contract. We reserve the right to limit
the number/amount of additional premium payments. They may
be discontinued at any time.
ACCUMULATED The Accumulated Value of this contract will be the sum of:
VALUE
1. the Variable Accumulated Value; plus
2. the Declared Interest Option Accumulated Value.
ALLOCATION OF The Owner will determine the percentage of premium that will
PREMIUM be allocated to each Subaccount of the Variable Account and
to the Declared Interest Option. The Owner may choose to
allocate all the premium, a percentage or nothing to a
particular Subaccount or to the Declared Interest Option.
Any allocation must be for at least 10% of the individual
premium payment. A fractional percent may not be chosen.
Total allocations must equal 100% of the premium payment.
On the Contract Date, premiums will be initially allocated
to the money market Subaccount. On the 11th day following
the Contract Date, We will transfer part or all of the
Accumulated Value in the money market Subaccount to the
Subaccounts or the Declared Interest Option in accordance
with the premium allocation percentages shown in the
application. Subsequent premiums will be allocated in
accordance with the premium allocation percentages shown in
the application or the most recent written instructions of
the Owner.
The Owner may change the allocation for future premiums at
any time, subject to the following rules:
1. the contract must be in force;
2. there must be an Accumulated Value;
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3. the change must be in writing on a form acceptable to
Us;
4. the form must be signed by the Owner; and
5. the change will take effect no later than the Business
Day following the date We receive the signed form at
Our Variable Product Service Center.
A change of allocation of future premiums does not affect
current Accumulated Values.
TERMINATION
This contract ends when any of the following events occurs:
1. the Owner requests that the contract be cancelled;
2. the Annuitant dies;
3. the contract is surrendered; or
4. all of the value is applied to a fixed payment option.
We also reserve the right to terminate the contract if the
Accumulated Value is $0 on any Contract Anniversary.
ASSIGNMENT AND If this contract is part of a Qualified Plan as defined
TRANSFER under the Internal Revenue Code, it may not be sold,
assigned, transferred, discounted, or pledged as collateral
for a loan or as security for the performance of any
obligation, or for any other purpose to any person. However,
if this contract is owned by a trust or a custodian or an
employer as part of a Qualified Plan, the trustee, custodian
or employer may assign ownership of this contract to the
Annuitant. The transfer, assignment or exercise of any
ownership rights under this contract shall be made by
written notice and shall be effective only if received by
the Company at its Variable Product Service Center. When
received, such transfer, assignment or exercise of ownership
rights shall take effect as of the date such notice was
exercised.
In no event shall the Company be prejudiced by any payment
made or action taken inconsistent with this transfer,
assignment, or exercise before receipt of such notice. The
Company assumes no responsibility for the validity of any
assignment. The rights of the Owner or any Beneficiary shall
be subject to the rights of any Assignee on record at the
Variable Product Service Center of the Company.
OWNER, The Owner is the person who owns the contract as shown on
ANNUITANT AND Our records. The Annuitant is the person on whose life
BENEFICIARY Retirement Life Income payments are based. The Annuitant may
be the Owner or someone else may be the Owner.
Unless the contract is endorsed to provide otherwise, if the
Issue Age of the Annuitant is less than the age to contract
or age of majority, whichever is less, as prescribed by the
laws of the state in which this contract is issued,
ownership shall vest in the Annuitant on the Contract
Anniversary that is on or follows the Annuitant's 18th
birthday. If the Owner and all contingent owners die prior
to that anniversary, the Owner's estate shall then become
the Owner.
A Beneficiary is any person named on Our records to receive
death proceeds after the Annuitant dies. There may be
different classes of Beneficiaries such as primary and
secondary. These classes establish the order of payment.
Secondary Beneficiaries will not receive benefits if any
Primary Beneficiary is alive. There may be more than one
Beneficiary in a class. If no Beneficiary survives the
Annuitant, the Owner will be the Beneficiary, and if the
Owner is the Annuitant, the Annuitant's estate will be the
Beneficiary.
The Owner may change ownership or change any Beneficiary
while the Annuitant is living. To make a change, a written
request, satisfactory to Us, must be received at Our
Variable Product Service Center. The change will take effect
as of the date the request is signed, even if the Annuitant
dies before We receive it. Each change will be subject to
any payment We made or other action We took before receiving
the request.
ANNUAL REPORT At least once each year We will send a report, without
charge, to the Owner which shows:
1. all premiums paid and charges made since the last
report;
4
2. the current Accumulated Value including the value in
each Subaccount and the Declared Interest Option; and
3. any partial withdrawals since the last report.
An illustrative report will be sent to the Owner upon
request. A fee, not to exceed $25, may be charged for this
report.
BASIS OF The minimum payments under the Settlement Options are based
COMPUTATION OF on mortality rates from the Annuity 2000 Mortality Table.
CONTRACT For Fixed Settlement Options, the interest used is at an
PAYMENTS annual rate of 3%.
SECTION III
PROCEEDS PAYABLE AT DEATH
Notwithstanding any other provision of this contract, the
contract will be interpreted and administered in accordance
with Section 72 of the Internal Revenue Code.
DEATH BENEFIT We will pay the Death Benefit when we receive due proof of
PRIOR TO the Annuitant's death. The Death Benefit is equal to the
ANNUITIZATION greater of:
1. the sum of all premium payments less the sum of all
partial withdrawals, as of the date Due Proof of Death
is received, or
2. the Accumulated Value as of the date Due Proof of Death
is received;
For purposes of this section, a partial withdrawal is equal
to "1" times "2" divided by "3" where:
1. is the Death Benefit immediately prior to withdrawal;
2. is the amount of the partial withdrawal; and
3. is the Accumulated Value immediately prior to
withdrawal.
Prior to Annuitization, if You have not selected a payment
option by the date of death, the Beneficiary may make such
election within 60 days of the date We receive due proof of
the Annuitant's death. The Beneficiary may elect to receive
the Death Benefit as a lump sum payment or apply it to
one of the options set forth in the DEATH OF THE ANNUITANT
PRIOR TO ANNUITIZATION provision described below.
DEATH OF THE When we receive due proof that the Annuitant died before
ANNUITANT PRIOR Annuitization, we will provide the Death Benefit to the
TO Beneficiary as described below.
ANNUITIZATION
1. If the Beneficiary is the deceased Xxxxxxxxx's
surviving spouse, the Beneficiary may elect to
continue this contract as Owner and Annuitant rather
than receiving the Death Benefit. If the contract is
continued, all current applicable surrender charges
will be waived. If this Beneficiary elects to have the
death proceeds paid, the death proceeds must be
distributed:
a. by the end of 5 years after the date of the
deceased Xxxxxxxxx's death, or
b. payments must begin no later than one year
after the deceased Xxxxxxxxx's death and must
be made for a period certain or for this
Beneficiary's lifetime, so long as any period
certain does not exceed this Beneficiary's
life expectancy.
2. If the Beneficiary is not the deceased Xxxxxxxxx's
surviving spouse, the death proceeds must be
distributed as provided in 1a. or 1b. above.
3. Death proceeds which are not paid to or for the benefit
of a natural person must be distributed by the end of 5
years after the date of the deceased
5
Annuitant's death.
DEATH OF If any Owner dies prior to Annuitization and before the
OWNER PRIOR TO entire interest in the contract is distributed, the
ANNUITIZATION surviving joint Owner, if any, will become the new Owner.
If there is not a surviving joint Owner, the contingent
Owner will become the new Owner. If there is no surviving
joint Owner or contingent Owner, the Owner's estate becomes
the new Owner. The remaining portion of any interest in the
contract must be distributed to the extent provided below:
1. If the new Owner is the deceased Owner's surviving
spouse, the new Owner may elect to continue this
contract rather than receive the Cash Surrender Value.
If the contract is continued, all current applicable
surrender charges will be waived. If the new Owner
elects to receive the Cash Surrender Value, the Cash
Surrender Value must be distributed:
a. by the end of 5 years after the date of the
deceased Owner's death, or
b. payments must begin no later than one year after
the deceased Owner's death and must be made for a
period certain or for the new Owner's lifetime, so
long as any period certain does not exceed the new
Owner's life expectancy.
2. If the new Owner is not the deceased Owner's
surviving spouse, the Cash Surrender Value must be
distributed as provided in 1.a. or 1.b. above.
If there is more than one Owner, these distribution
requirements are applied at the death of the first Owner.
DECEASED OWNER If the deceased Owner is also the Annuitant, the DEATH OF
IS ALSO THE THE ANNUITANT PRIOR TO ANNUITIZATION provision described
ANNUITANT above will apply.
OWNER IS NOT AN If a corporation or other non-individual owns this contract,
INDIVIDUAL the Annuitant will be treated as this contract's Owner for
the purpose of administering the DEATH OF THE OWNER PRIOR TO
ANNUITIZATION provision above.
DEATH ON OR The death proceeds on or after Annuitization depend on the
AFTER settlement option elected. If death of any Owner or the
ANNUITIZATION Annuitant occurs on or after Annuitization, but before the
entire interest under the contract is distributed, the
remaining portion of such interest in the contract will be
distributed at least as rapidly as under the method of
distribution being used as of the date of death.
SECTION IV
NON-PARTICIPATION
This contract is non-participating, its Premiums include no
charge or consideration for participation in surplus.
SECTION V
VARIABLE ACCOUNT
VARIABLE We own the assets of the Variable Account. We will value the
ACCOUNT assets of the Variable Account each Business Day. The
assets of such account will be kept separate from the assets
of Our General Account and any of Our other Separate
Accounts. Xxxxxx and realized and unrealized gains or losses
from assets in the Variable Account will be credited to or
charged against such account without regard to Our other
income, gains or losses.
That portion of the assets of the Variable Account which
equals the reserves and other contract liabilities of the
contracts which are supported by the Variable Account will
not be charged with liabilities arising from any other
business We conduct. We have the right to transfer to Our
General Account any assets of the Variable Account which are
in excess of such reserves and other contract liabilities.
The Variable Account is registered with the SEC and thereby
subject to SEC rules and regulations. It is also subject to
the laws of the State of Illinois that regulate the
operations of insurance companies incorporated in Illinois.
6
We also reserve the right to transfer assets of the Variable
Account, which We determine to be associated with the class
of contracts to which this contract belongs, to another
Separate Account. If this type of transfer is made, the term
"Variable Account," as used in this contract, shall then
mean the Separate Account to which those assets were
transferred.
When permitted by law, We also reserve the right to:
1. deregister the Variable Account under the Investment
Company Act of 1940;
2. manage the Variable Account under the direction of a
committee;
3. restrict or eliminate any voting rights of Owners, or
other persons who have voting rights as to Variable
Account assets; and
4. combine the Variable Account with other Separate
Accounts.
SUBACCOUNTS The Variable Account is divided into Subaccounts. Subject to
obtaining any approvals or consents required by applicable
law, We reserve the right to eliminate or combine any
Subaccounts and the right to transfer the assets of one or
more Subaccounts to any other Subaccount. We also reserve
the right to add new Subaccounts and make such Subaccounts
available to any class or series of contracts as We deem
appropriate. Each new Subaccount would invest in a new
Investment Option of the Fund, or in shares of another
investment company.
UNIT VALUE The Unit Value for a Subaccount on any Business Day is
determined by dividing each Subaccount's net asset value by
the number of units outstanding at the time of calculation.
The Unit Value for each Subaccount was set initially at
$10.00 when the Subaccounts first purchased fund shares. The
Unit Value for each subsequent Valuation Period is
calculated by dividing (1) by (2), where:
(1) is:
a. the value of the net assets of the Subaccount at
the end of the preceding Valuation Period; plus
b. the investment income and capital gains, realized
or unrealized, credited to the net assets of that
Subaccount during the Valuation Period for which
the Unit Value is being determined; minus
c. the capital losses, realized or unrealized,
charged against those net assets during the
Valuation Period; minus
d. any amount charged against the Subaccount for
taxes, or any amount set aside during the
Valuation Period by the company as a provision for
taxes attributable to the operation or maintenance
of that Subaccount; minus
e. the mortality and expense risk shown on the
Contract Specifications Page; this charge may go
up or down but will never exceed 0.0038091% of the
net daily assets in that Subaccount for each day
in the Valuation Period; the maximum charge
corresponds to a charge of 1.40% per year of the
average daily net assets of the Subaccount for
mortality and expense risks.
(2) is the number of units outstanding at the end of the
preceding Valuation Period.
We will value the net assets in each Subaccount at their
fair market value in accordance with accepted accounting
practices and applicable laws and regulations.
VARIABLE The initial Variable Accumulated Value is the total amount
ACCUMULATED of premium, if any, allocated to the money market subaccount
VALUE valued no later than the Business Day following the day We
receive a completed application and the minimum initial
7
premium. After such date, the contract's Variable
Accumulated Value is equal to the sum of the contract's
Accumulated Value in each Subaccount. The value in a
Subaccount is equal to (1) multiplied by (2) where:
(1) is the current number of Subaccount Units; and
(2) is the current Unit Value.
The Variable Accumulated Value will vary from Business Day
to Business Day reflecting changes in (1) and (2) above.
8
DECLARED The Declared Interest Option Accumulated Value as of the
INTEREST OPTION 11th day following the Contract Date is the Accumulated
ACCUMULATED Value allocated to the Declared Interest Option as of that
VALUE date. Thereafter, the Declared Interest Option Accumulated
Value changes every Valuation Period. The Declared Interest
Option Accumulated Value increases when:
1. premiums are allocated to the Declared Interest Option;
or
2. transfers from the other Subaccounts are credited to
the Declared Interest Option; or
3. any interest is credited to the Declared Interest
Option.
The Declared Interest Option Accumulated Value decreases
when:
1. the Owner makes a partial withdrawal from the Declared
Interest Option; or
2. transfers are made from the Declared Interest Option to
other Subaccounts; or
3. the Annual Administrative Charge shown on the Contract
Specifications Page is deducted (the Annual
Administrative Charge will be prorated among the
Subaccounts and the Declared Interest Option).
For the purposes of the above calculation, interest accrues
on the Accumulated Value in the Declared Interest Option on
a daily basis. However, We credit interest on the
Accumulated Value no less frequently than at the end of each
Contract Year. In any Contract Year, We will not credit
interest that accrues on amounts deducted for contract
charges, surrenders, withdrawals, or transfers from the
Declared Interest Option during the Contract Year.
SUBACCOUNT When transactions are made which affect the Variable
UNITS Accumulated Value, dollar amounts are converted to
Subaccount Units. The number of Subaccount Units for a
transaction is determined by dividing the dollar amount of
the transaction by the current Unit Value. The number of
units for a Subaccount increases when:
1. premiums are allocated to that Subaccount; or
2. transfers from the Declared Interest Option or other
Subaccounts are credited to that Subaccount.
The number of units for a Subaccount decreases when:
1. the Owner makes a surrender or partial withdrawal from
that Subaccount;
2. transfers are made from that Subaccount to the Declared
Interest Option or other Subaccounts; or
3. the Annual Administrative Charge shown on the Contract
Specifications Page is deducted (the Annual
Administrative Charge will be prorated among the
Subaccounts and the Declared Interest Option).
FUND The Funds have one or more Investment Options available
INVESTMENT under the contract, each of which corresponds to one of the
OPTIONS Subaccounts of the Variable Account. The Investment Options
are listed on the Contract Specifications Page. Premiums
allocated to a Subaccount will automatically be invested in
the fund investment option associated with that Subaccount.
The Owner will share only in the income, gains or losses of
the Investment Option(s) where shares are held.
We have the right, subject to compliance with any applicable
laws, to:
1. add;
2. delete; or
9
3. substitute;
Investment Options that the Variable Account may invest in.
In the event of any substitution or change, We may, by
appropriate endorsement, make such changes in this and other
contracts as may be necessary or appropriate to reflect the
substitution or change.
TRANSFERS The Owner may transfer all or part of the Accumulated Value
among the Subaccounts of the Variable Account and between
the Subaccounts and the Declared Interest Option, subject to
the following rules:
1. the transfer request must be in writing on a form
acceptable to Us;
2. the form must be signed by the Owner;
3. the transfer will take effect as of the end of the
Valuation Period during which We receive the signed
form in good order at Our Variable Product Service
Center;
4. the Owner may transfer amounts among the Subaccounts of
the Variable Account an unlimited number of times in a
Contract Year;
5. the Owner may transfer amounts from the Declared
Interest Option to the Variable Account no more than
four times in a contract year; amounts transferred from
the Declared Interest Option are considered transferred
on a last-in-first-out basis;
6. the first 12 transfers in each Contract Year will be
made without a Transfer Charge; thereafter, each time
amounts are transferred a Transfer Charge may be
imposed. We treat all transfer requests on a Business
Day as one transfer request for purposes of determining
whether to assess the Transfer Charge. The Transfer
Charge, not to exceed $25, is shown on the Contract
Specifications Page;
7. the Accumulated Value on the date of the transfer will
not be affected by the transfer except to the extent of
the Transfer Charge that will be deducted on a pro rata
basis from the Declared Interest Option and/or the
Subaccounts to which the transfer is made;
8. the Owner must transfer at least:
a. a total of $100; or
b. the total Accumulated Value in a Subaccount or the
total Accumulated Value in the Declared Interest
Option, if the total amount transferred is less
than $100.
9. no more than 25% of the Accumulated Value in the
Declared Interest Option may be transferred at any one
time unless the balance in the Declared Interest Option
after the transfer would be less than $1,000; if the
balance in the Declared Interest Option would fall
below $1,000, the entire Accumulated Value in the
Declared Interest Option may be transferred.
EXCESSIVE We reserve the right to limit transfers in any Contract
TRADING LIMITS Year, or to refuse any transfer request for an Owner if:
1. We believe, in Our sole discretion, that excessive
trading by the Owner, or a
10
specific transfer request, or group of transfer requests,
may have a detrimental effect on:
a. other Owners;
b. the accumulation unit values of any Subaccount;
c. the share prices of any Investment Option; or
d. Our ability to effectively manage the assets of
the Declared Interest Option;
2. We are informed by one or more Funds that they intend
to restrict the purchase of portfolio shares:
a. because of excessive trading; or
b. because they believe that a specific transfer,
or group of transfers, would have a detrimental
effect on the price of portfolio shares.
We may apply the restrictions in any manner reasonably
designed to prevent transfers that We consider
disadvantageous to other Owners.
SECTION VI
SURRENDER PROVISIONS
XXXX SURRENDER At any time prior to Annuitization and before the death of
OF ACCUMULATED the Annuitant, You may elect to surrender the contract for
VALUE the total Cash Surrender Value described below.
All of the values are the same or more than the minimums set
by the laws of the state where this contract is delivered.
CASH SURRENDER The total Cash Surrender Value is equal to Your Accumulated
VALUE Value reduced by the Surrender Charge. The Surrender Charge
is a percentage of Accumulated Value and depends on the
Contract Year in which the surrender is requested. The
Surrender Charge is shown in the Table of Surrender Charges
on the Contract Specification Page.
If the Cash Surrender Value is applied under Fixed
Settlement Options 3 or 5 or determined at the time of the
Annuitant's death prior to Annuitization, then the Surrender
Charge shall be waived. If a Cash Surrender Value is applied
under any Variable Settlement Option, We will waive the
Surrender Charge. Surrender Charges will also be waived for
any amount that is required to satisfy the minimum
distribution requirements of Section 401(a)(9) of the
Internal Revenue Code.
If the Cash Surrender Value is applied under Fixed
Settlement Options 2 or 4, We will add the number of years
in the term of the settlement option to the actual Contract
Year of this contract to determine the Surrender Charge.
If the Cash Surrender Value is applied under Fixed
Settlement Option 1, the Surrender Charge at the date of
settlement shall be waived. If proceeds left under Fixed
Settlement Option 1 are subsequently withdrawn, We will
apply a Surrender Charge determined by years elapsed from
the Contract Date to the date such proceeds are withdrawn.
PARTIAL Partial withdrawals of Accumulated Value will be permitted.
WITHDRAWAL OF In the event of a partial withdrawal, the Accumulated Value
ACCUMULATED will be reduced by the amount of any partial withdrawal and
VALUE any Surrender Charge applying to such withdrawal. The Owner
may tell Us how to allocate a partial withdrawal among the
Subaccounts and the Declared Interest Option. If the Owner
does not so instruct, We will prorate the partial withdrawal
among the Subaccounts and the Declared
11
Interest Option in proportion to the Accumulated Value in
each of the Subaccounts and the Accumulated Value in the
Declared Interest Option on the date We receive the request.
Amounts withdrawn from the Declared Interest Option are
considered withdrawn on the last-in-first-out basis.
The amount of any partial withdrawal must be at least $500.
If the Cash Surrender Value after a partial withdrawal is
less than $2,000, We have the right to pay the remaining
Cash Surrender Value to the Owner as a full surrender.
After the first Contract Year, You may withdraw an amount
not greater than 10% of the Accumulated Value as of the end
of the previous Contract Year and the Surrender Charge will
be waived. Any amount withdrawn in excess of 10% will be
reduced by the Surrender Charge, and the Accumulated Value
will be further reduced by this result.
With each such withdrawal, Your written request is required.
WAIVER OF We will waive any Surrender Charge for a surrender or
SURRENDER partial withdrawal if You have been confined in an Extended
CHARGE FOR Care Facility for at least 30 consecutive days, provided the
CONFINEMENT following.
CONFINEMENT IN AN EXTENDED CARE FACILITY:
1. began after the effective date of this contract;
2. must be medically necessary and prescribed by a
Physician; and
3. is based on physical conditions that prohibit daily
living in a non-institutional environment.
If You make a partial withdrawal during confinement, We will
continue to waive Surrender Charges thereafter on partial
withdrawals or a surrender until 90 days after discharge. We
must receive a written request for surrender and Proof of
Confinement at Our Variable Product Service Center no later
than 90 days after discharge.
DEFINITIONS:
Proof of Confinement is a written statement from the
Physician or Extended Care Facility that includes the dates
of confinement.
A Physician is a licensed medical doctor (M.D.) or licensed
doctor of osteopathy (D.O.) practicing within the scope of
his or her license. Physician does not include the Owner or
Annuitant, or a spouse, child, parent, grandparent,
grandchild, sibling, or in-law of the Owner or Annuitant.
Extended Care Facility means a Skilled Nursing Facility,
Intermediate Care Facility, or Custodial Care Facility as
defined below.
Custodial Care Facility means a facility that: (a) is
licensed and operated as such in the state in which it is
located, (b) provides nursing service 24 hours a day under
the supervision of a licensed Physician, registered graduate
professional nurse or licensed practical nurse, and (c)
cares for three or more persons for a charge.
Intermediate Care Facility means a facility that (a) is
licensed and operated as such in the state in which it is
located; (b) provides nursing service 24 hours a day under
the supervision of a licensed Physician, registered graduate
professional nurse or licensed practical nurse; and (c)
maintains a daily medical record of each patient.
12
Skilled Nursing Facility means a facility that (a) is
licensed and operated as such in the state in which it is
located (b) provides nursing service 24 hours a day under
the supervision of a licensed Physician, registered graduate
professional nurse or licensed practical nurse; and (c)
maintains a daily medical record of each patient.
DELAY OF Proceeds from full surrenders and partial withdrawals will
PAYMENT usually be mailed to the Owner within 7 days after the
Owner's signed request is received in Our Variable Product
Service Center. We will usually mail any death claim
proceeds within 7 days after We receive Due Proof of Death.
We have the right to delay such payment whenever:
1. the New York Stock Exchange is closed other than on
customary weekends and any holiday closing;
2. trading on the New York Stock Exchange is restricted as
determined by the SEC;
3. the SEC, by order, permits postponement for the
protection of contract owners; or
4. as a result of an emergency, as determined by the SEC,
it is not reasonably possible to dispose of securities
or to determine the value of the net assets of the
Variable Account.
We have the right to defer payment that is derived from any
amount paid to Us by check or draft until We are satisfied
the check or draft has been paid by the bank on which it is
drawn.
We also have the right to delay payment from the Declared
Interest Option for up to 6 months from the date We receive
the Owner's request for full surrender, partial withdrawal
or transfer.
TAX CHARGES The Company may deduct state and local government premium
tax from the Accumulated Value, if such taxes are
applicable in your state. The Company may also make a charge
against the Accumulated Value of this contract for any tax
or economic burden on the Company resulting from the
application of federal, state or local tax laws that the
Company determines to be properly attributable to the
Separate Account or the contracts. The charge will be
applied by:
1. redeeming the number of Subaccount Units from the
Separate Account equal to the pro rata share of the
charge applicable to the Subaccounts; or
2. deducting from the Declared Interest Option Accumulated
Value the pro rata portion of the charge applicable to
the Declared Interest Option.
SECTION VII
SETTLEMENT OPTIONS
These are optional methods of settlement. They provide
alternate ways in which payment can be made.
To elect any settlement option, We require that a written
request, satisfactory to Us, be received at Our Variable
Product Service Center. The Owner may elect an option during
the Annuitant's lifetime. If the Death Benefit is payable in
one sum when the Annuitant dies, the Beneficiary may elect
an option with Our consent.
The effective date of a settlement option is the date the
amount is applied under that option. For a Death Benefit,
this is the date that Due Proof of Death is received at Our
Variable Product Service Center. For the Cash Surrender
Value,
13
it is the effective date of surrender.
The first payment is due on the effective date, except the
first payment under Fixed Settlement Option 1 is due one
month later. A later date for the first payment may be
requested in the payment option election. All payment dates
will fall on the same day of the month as the first one. No
payment will become due until a payment date. No partial
payment will be made for any period shorter than the time
between payment dates.
All or part of the Cash Surrender Value or Death Benefit may
be applied under any payment option. If this contract is
assigned, any amount due to the Assignee will be paid in one
sum. The balance, if any, may be applied under any payment
option.
If required by law to ignore the Annuitant's sex, the unisex
settlement option factors will apply.
If the amount to be applied under any settlement option for
any one person is less than $5,000, We may pay that amount
in one sum instead. If the payments under any option come to
less than $100 each, We have the right to make payments at
less frequent intervals.
Our payment options are described below. Any other payment
option agreed to by Us may be elected. The payment options
are described in terms of monthly payments. Annual,
semiannual, or quarterly payments may be requested instead.
The amount of these payments will be determined in a way
which is consistent with monthly payments and will be quoted
on request.
SECTION VIII
FIXED SETTLEMENT OPTIONS
FIXED The fixed settlement options are:
SETTLEMENT
OPTION CHOICES
OPTION 1. Interest Payment Option. We will hold any amount
applied under this option. Interest on the unpaid
balance will be paid each month at a rate
determined by Us. This rate will not be less than
the equivalent of 3% per year.
OPTION 2. Fixed Time Payment Option. Equal monthly payments
will be made for any period selected, up to 30
years. The amount of each payment depends on the
total amount applied, the period selected and the
monthly payment rates We are using when the first
payment is due. The rate of any payment will not
be less than shown in the Option 2 Table.
------------------------------------------------------------
OPTION 2 TABLE
Minimum Monthly Payment Rates for each $1,000 Applied
MONTHLY MONTHLY
YEARS PAYMENT YEARS PAYMENT
------- -------- ----- --------
1 $84.47 16 $6.53
2 42.86 17 6.23
3 28.99 18 5.96
4 22.06 19 5.73
5 17.91 20 5.51
6 15.14 21 5.32
7 13.16 22 5.15
14
8 11.68 23 4.99
9 10.53 24 4.84
10 9.61 25 4.71
11 8.86 26 4.59
12 8.24 27 4.47
13 7.71 28 4.37
14 7.26 29 4.27
15 6.87 30 4.18
------------------------------------------------------------
For quarterly payment multiply by 2.990. For semiannual
payment, multiply by 5.957. For annual payment, multiply by
11.829.
OPTION 3. Lifetime Payment Option. Equal monthly payments
are based on the life of a named person. Payments
will continue for the lifetime of that person.
The three variations are:
(A) Straight Life. No specific number of
payments is guaranteed. Payments stop when
the named person dies.
(B) Life Income with Refund. Payments stop when
they cumulatively equal the amount applied
or when the named person dies, whichever is
later.
(C) Life Income with Period Certain. (Payments
guaranteed for 10, 15 or 20 years.)
Payments stop at the end of the selected
guaranteed period or when the named person
dies, whichever is later.
The Option 3 Table shows the minimum monthly payment for
each $1,000 applied. The actual payments will be based on
the monthly payment rates We are using when the first
payment is due. They will not be less than shown in the
Table.
-----------------------------------------------------------
OPTION 3 TABLE
Minimum Monthly Payment Rates for each $1,000 Applied
PAYMENTS GUARANTEED FOR
-----------------------
PAYMENTS
FOR LIFE AMOUNT 10 15 20
AGE* ONLY APPLIED YEARS YEARS YEARS
----- -------- ------- ----- ----- -----
MALE
50 4.08 3.93 4.05 4.01 3.95
55 4.46 4.25 4.41 4.34 4.24
60 4.98 4.64 4.88 4.75 4.56
65 5.69 5.15 5.48 5.22 4.88
70 6.67 5.80 6.23 5.73 5.16
75 & Over 8.02 6.63 7.08 6.20 5.36
FEMALE
PAYMENTS
FOR LIFE AMOUNT 10 15 20
AGE* ONLY APPLIED YEARS YEARS YEARS
------ -------- ------- ----- ----- -----
15
50 3.83 3.74 3.81 3.79 3.76
55 4.15 4.02 4.13 4.09 4.03
60 4.59 4.38 4.54 4.46 4.35
65 5.18 4.84 5.07 4.93 4.71
70 6.01 5.45 5.78 5.47 5.05
75 & Over 7.22 6.26 6.67 6.03 5.31
UNISEX
PAYMENTS
FOR LIFE AMOUNT 10 15 20
AGE* ONLY APPLIED YEARS YEARS YEARS
------ -------- ------- ------ ----- -----
50 3.95 3.83 3.93 3.90 3.85
55 4.30 4.13 4.27 4.21 4.13
60 4.78 4.50 4.70 4.60 4.45
65 5.42 4.98 5.27 5.07 4.79
70 6.32 5.61 5.99 5.60 5.11
75 & Over 7.59 6.43 6.86 6.11 5.33
*Age on birthday preceding the due date of the first
payment. Monthly payment rates for ages not shown will be
furnished on request. Monthly payment rates for ages over 75
are the same as those for 75.
16
OPTION 4. Fixed Amount Payment Option. Each monthly payment
will be for an agreed fixed amount not to be
changed at any time after the initial amount is
chosen. The amount of each payment may not be less
than $10 for each $1,000 applied. Interest will be
credited each month on the unpaid balance
and added to it. This interest will be at a rate
determined by Us, but not less than the equivalent
of 3% per year. If interest is greater than 3%,
the period for which payments are made increases.
Payments continue until the amount We hold runs
out. The last payment will be for the balance
only.
OPTION 5. Joint Lifetime Payment Option. Equal monthly
payments are based on the lives of two named
persons. While both are living, one payment will
be made each month. When one dies, the same
payment will continue for the lifetime of the
other.
The Option 5 Table shows the minimum monthly
payment for each $1,000 applied. The actual
payments will be based on the monthly payment
rates We are using when the first payment is due.
They will not be less than shown in the Table.
OPTION 5 TABLE
Minimum Monthly Payment Rates for each $1,000 Applied
MALE PAYEE AGE*
------------------------------------
FEMALE
PAYEE AGE* 50 55 60 65 70 75
---------- ---- --- --- --- --- ----
50 3.53 3.61 3.68 3.73 3.76 3.79
55 3.65 3.77 3.88 3.97 4.04 4.08
60 3.76 3.94 4.1 4.25 4.36 4.45
65 3.86 4.08 4.32 4.55 4.74 4.9
70 3.93 4.21 4.51 4.84 5.16 5.43
75 & Over 3.98 4.3 4.68 5.11 5.57 6.02
UNISEX PAYEE AGE*
------------------------------------
UNISEX
PAYEE AGE* 50 55 60 65 70 75
---------- ---- --- --- --- --- ----
50 3.53 3.63 3.72 3.79 3.85 3.89
55 3.63 3.78 3.92 4.03 4.12 4.19
60 3.72 3.92 4.11 4.29 4.44 4.56
65 3.79 4.03 4.29 4.55 4.80 5.00
70 3.85 4.12 4.44 4.80 5.16 5.50
75 & Over 3.89 4.19 4.56 5.00 5.50 6.02
*Age on birthday preceding the due date of the first
payment. Monthly payment rates for ages not shown will be
furnished on request. Monthly payment rates for ages over 75
are the same as those for 75.
Options for any amount payable to an association,
corporation, partnership or fiduciary are available with Our
consent. However, a corporation or partnership may apply any
amount payable to it under Fixed Settlement Options 3 or 5
if the option payments are based on the life or lives of the
Annuitant, the Annuitant's
17
spouse, any child of the Annuitant, or any other person
agreed to by Us.
If provided in the payment option election, the following
rights will be available:
Under Fixed Settlement Options 1, 2, and 4, all or part
of the unpaid balance may be withdrawn or applied under
any other settlement option. The amount withdrawn or
applied will be adjusted under the terms of the
cancelled settlement agreement.
When computing the payments under Fixed Settlement Option 2,
We include interest from the effective date of the option to
the date of each payment. If future payments are withdrawn
or paid early, We must deduct the amount of interest
included for the period after withdrawal or early payment.
The commuted value of future payments is the sum of those
payments, less the interest from the date of withdrawal or
early payment to the date of each future payment. The
interest rate originally used in computing the option
payments will be the rate used to determine the commuted
value.
If the Cash Surrender Value is applied under any option, We
may delay payment of any withdrawal for up to six months.
SECTION IX
VARIABLE SETTLEMENT OPTIONS
VARIABLE The variable settlement options are:
SETTLEMENT
OPTION CHOICES
OPTION A. PAYMENT OF LIFE INCOME. Payments will continue for
the lifetime of the payee, but for not less than
the guaranteed period. The Owner or payee may
choose one of the guaranteed periods shown in the
Option A - Payment of Life Income table in this
contract.
18
Variable Settlement Option A Initial Factors
Monthly Life Income with Guaranteed Period
Original Installment Per $1,000 Proceeds
MALE FEMALE UNISEX
AGE OF 10 20 10 20 10 20
PAYEE YEARS YEARS YEARS YEARS YEARS YEARS
------- ----- ----- ----- ----- ----- -----
35 $4.38 $4.35 $4.26 $4.25 $4.32 $4.30
40 4.55 4.50 4.39 4.37 4.47 4.43
45 4.76 4.67 4.56 4.52 4.66 4.60
50 5.02 4.89 4.79 4.71 4.90 4.80
55 5.37 5.13 5.08 4.95 5.22 5.04
60 5.82 5.40 5.47 5.22 5.64 5.31
65 6.40 5.67 5.98 5.53 6.19 5.60
70 7.11 5.89 6.66 5.80 6.88 5.84
75 7.89 6.02 7.50 5.99 7.69 6.01
80 8.65 6.09 8.40 6.08 8.51 6.08
85 9.24 6.11 9.14 6.11 9.18 6.11
Option B. PAYMENT OF JOINT AND SURVIVOR LIFE INCOME.
Payments will continue as long as one or both
of two payees are alive.
Variable Settlement Option B
Joint and 100% to Survivor Monthly Life Income
Original Monthly Installment Per $1,000 Proceeds
MALE FEMALE PAYEE AGE
PAYEE
AGE 55 60 65 70 75
----- ---- ----- ----- ----- -----
55 $4.73 $4.88 $5.02 $5.15 $5.25
60 4.83 5.03 5.24 5.44 5.62
65 4.92 5.18 5.47 5.77 6.05
70 4.98 5.29 5.66 6.08 6.52
75 5.03 5.38 5.82 6.36 6.98
UNISEX UNISEX PAYEE AGE
PAYEE
AGE 55 60 65 70 75
------- ---- ----- ----- ----- -----
55 $4.73 $4.86 $4.98 $5.07 $5.15
60 4.86 5.04 5.22 5.38 5.50
65 4.98 5.22 5.48 5.72 5.94
70 5.07 5.38 5.72 6.09 6.44
75 5.15 5.50 5.94 6.44 6.98
ASSUMED The assumed interest rate in the Variable Payment Option
INTEREST RATE Tables is 5% per year. The daily assumed interest factor
AND FACTOR derived from an assumed interest rate of 5% is 0.9998663. We
may also offer other assumed interest rates and other
Variable Settlement Options from time to time, which may be
available at the time a payment option is elected.
ANNUITY UNIT An annuity unit is an accounting unit of measure used to
calculate the amount of payments.
FIXED INTEREST A fixed interest option is an option whereby payments made
OPTION are based on a guaranteed interest rate equal to the
assumed interest rate. The fixed interest option is
supported by the General Account.
ALLOCATION On the date the proceeds are applied to a Variable
Settlement Option, the payee(s) will determine the
percentage of proceeds that will be allocated to the
Subaccounts and to the Fixed Interest Option. Any allocation
must be for at least 10% of the proceeds. A fractional
percent may not be chosen.
19
EXCHANGES OF The payee(s) may exchange annuity units of one Subaccount
ANNUITY UNITS for those of another on a dollar equivalent basis.
The following rules apply to exchanges:
1. the exchange request may be by telephone or in writing
on a form acceptable to Us;
2. the exchange will take effect as of the end of the
Valuation Period during which We receive the request at
Our Variable Product Service Center; and
3. the payee(s) may exchange annuity units among the
Subaccounts an unlimited number of times in a Contract
Year.
COMMUTED VALUE The value payable at full surrender of the Variable
Settlement Option will be equal to the commuted value of
payments remaining in the guaranteed period, if any.
The interest rate used to compute the commuted value of any
unpaid payments remaining in the guaranteed period will be
the assumed interest rate. Each payment under a Variable
Settlement Option will be assumed to be equal to the number
of annuity units times the applicable annuity unit value.
AMOUNT OF The amount of the first payment under a Variable Settlement
VARIABLE Option is equal to:
PAYMENTS
1. the number of thousands of dollars of proceeds applied
to the option; TIMES
2. the factor per $1,000 for the option, from the Variable
Payment Option Tables.
The amount of each later payment is equal to the sum for
each Subaccount of the number of annuity units times the
applicable annuity unit value as of the end of the Valuation
Period on the payment date selected.
ANNUITY UNIT The number of annuity units credited under a Variable
VALUE Settlement Option for each Subaccount is equal to:
1. the amount of the first payment; TIMES
2. the initial Subaccount percentage allocation; DIVIDED BY
3. the applicable annuity unit value as of the option's
effective date.
The number of annuity units remains constant. However, if
the payee(s) exchange annuity units among the Subaccounts,
the units are exchanged on a dollar equivalent basis.
The annuity unit values depend on the assumed interest rate
and on the net investment factor. An annuity unit value is
determined for each Subaccount for each Valuation Period.
The annuity unit value of each Subaccount for its first
Valuation Period was set at $1.00. Each annuity unit value
for each later Valuation Period is equal to:
1. the annuity unit value for the immediately preceding
Valuation Period; TIMES
2. the net investment factor for that Valuation Period;
TIMES
3. the daily assumed interest factor for each day in that
Valuation Period.
20
NET INVESTMENT The net investment factor for each Subaccount for each
FACTOR Valuation Period is determined by dividing "1" by "2" and
subtracting "3" from the result, where:
1. is equal to:
a. the net asset value of the Subaccount as of
the end of the Valuation Period; PLUS
b. the amount of all investment income and
capital gains, realized or unrealized,
credited to the net assets of the Subaccount
during the Valuation Period; MINUS
c. the amount of capital losses, realized or
unrealized, charged against the net assets
during the Valuation Period;
2. is equal to the net asset value of the Subaccount for
the immediately preceding Valuation Period;
3. is a charge no greater than 0.0038091% of the net
assets in the Subaccount for each day in the Valuation
Period.
SECTION X
SPENDTHRIFT
To the extent permitted by law, no payment of principal or
interest to anyone entitled to proceeds under this contract
shall be subject in any way to the debts, contracts, or
engagements or to any judicial process to levy upon or
attach the proceeds for payment. No settlement option
payment and no amount held under a settlement option can be
commuted, anticipated, encumbered, alienated, or assigned in
advance of its payment date unless the Owner's written
consent is given before the Annuitant dies. This consent
must be received and acknowledged by Our Variable Product
Service Center.
21
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
Retirement Life Income at Annuitization. Premiums payable to Annuitization.
Contract is non-participating. The Accumulated Value in the Variable Account is
based on the investment experience of that Account, and may increase or decrease
daily. It is not guaranteed as to dollar amount. The variable features of this
contract are described in Section V.
