EXHIBIT 4(c)
If this Contract is In Force on the Income Date, We will begin making annuity
payments to the Annuitant. We will make such payments subject to the terms of
this Contract.
Right to Cancel - You may return this Contract to Us (Keyport Life Insurance
Company, 000 Xxxx Xxxxxx, Xxxxxx, XX 00000) or to the agent from whom it was
purchased for cancellation. You must mail or deliver it within 45 days from the
Issue Date or 20 days after you receive it, whichever is later. The Contract
will then be treated as if We had never issued it and We will promptly refund
the Initial Premium, and any Subsequent Premium less the amount of any partial
surrenders.
This is a legal Contract between You and Us.
Read This Contract Carefully.
Signed for the Company:
Individual Deferred Annuity Contract
Flexible Premium Payment
Nonparticipating - No Dividends
VALUES GREATER THAN GUARANTEED VALUES ARE DEPENDENT UPON INCREASES AND DECREASES
IN THE INDEX, THE LENGTH OF TIME A CONTRACT IS HELD AND THE DECLARED RATE WHICH
IS ESTABLISHED EVERY MONTH AND GUARANTEED FOR THAT MONTH
DIA(1)/IND 1/97 1
Keyport Life Insurance Company
000 Xxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
(000) 000-0000
Contract Specifications
Primary Owner: Xxxx Xxx, male, 12/31/1954
Joint Owner: None
Annuitant: Xxxx Xxx, male, 12/31/1954
Contingent Annuitant: None
Contract Number: 9999999
Initial Premium: $10,000
Issue Date: 1/30/1995
Issue State: Rhode Island
IRS Plan Type: Non-Qualified
Income Date: 1/30/2045
Minimum Subsequent Premium: $1,000
Maximum Subsequent Premium: $100,000
INDEX: [Standard & Poor's 500 Composite Stock
Price Index]
INDEX Value at Start of First Term 500.
Declared Rate on Issue Date 4%
Your Initial Premium has been allocated as follows:
1. Premium 8,000
Index Sub-Account with a Term of [5] year(s), a Participation Rate of
[80%], a Floor of [0%] and a Cap of [none]
2. Premium 2,000
Interest Sub-Account
[There will never be a Cap for the [5] year Term Index Sub-Account]
[The Floor will never be less than 0%]
["S&P 500-Registered Trademark-" and "Standard & Poor's 500" are trademarks of
the XxXxxx-Xxxx Companies, Inc. and have been licensed for use by Keyport Life
Insurance Company
This annuity is not sponsored, endorsed, sold or promoted by Standard & Poor's
and Standard & Poor's makes no representation regarding the advisability of
purchasing the annuity.]
DIA(1)/IND 1/97 2
Annuitant: Xxxx Xxx Contract Number: 9999999
Table of Minimum Surrender Values*
End of Certificate Year Surrender Value End of Certificate Year Surrender Value
----------------------- --------------- ----------------------- ---------------
Issue Date $ 9,000.00 26 $19,409.32
1 9,270.00 27 19,991.60
2 9,548.10 28 20,591.35
3 9,834.54 29 21,209.09
4 10,129.58 30 21,845.36
5 10,433.47 31 22,500.72
6 10,746.47 32 23,175.74
7 11,068.86 33 23,871.01
8 11,400.93 34 24,587.14
9 11,742.96 35 25,324.76
10 12,095.25 36 26,084.50
11 12,458.10 37 26,867.04
12 12,831.85 38 27,673.05
13 13,216.80 39 28,503.24
14 13,613.31 40 29,358.34
15 14,021.71 41 30,239.09
16 14,442.36 42 31,146.26
17 14,875.63 43 32,080.65
18 15,321.90 44 33,043.07
19 15,781.55 45 34,034.36
20 16,255.00 46 35,055.39
21 16,742.65 47 36,107.05
22 17,244.93 48 37,190.26
23 17,762.28 49 38,305.97
24 18,295.15 50 39,455.15
25 18,844.00
* Values are based on the definition of Surrender Value shown on pages 15-16
and a hypothetical Initial Premium of $10,000 allocated to an Index
Sub-Account by a 40 year old Annuitant on the Issue Date with an Income Date
of age 90. Values assume that no partial surrenders or Sub-Account
Anniversary Adjustments are made after the Issue Date.
DIA(1)/IND 1/97 3
Table of Contents
Page
----
Contract Specifications......................................................2
Table of Minimum Surrender Values............................................3
Definitions..................................................................4
Contract Benefit Provisions..................................................6
Surrender Provisions.........................................................6
Death Provisions.............................................................7
Annuity Payment Provisions...................................................9
Index Sub-Account Provisions................................................13
Interest Sub-Account Provisions.............................................17
Transfers...................................................................18
General Provisions..........................................................19
Definitions
The following words have special meanings.
Annuitant - The natural person to whom any annuity payments will be made.
Contract Year, Contract Anniversary - The first Contract Year starts on the
Issue Date. Future Contract Years start on the same month and day in each
subsequent year (known as the Contract Anniversary).
In Force - The status of this Contract on or before the Income Date so long
as it is not totally surrendered and there has not been a death of the
Annuitant or any Owner that will cause the Contract to end within at most 5
years from the date of death.
Income Date - The date annuity payments will start. Unless state law requires
otherwise, the Income Date will be the Annuitant's 90th birthday.
INDEX - The published Index shown on the Contract Specifications' page that is
used to calculate Index Increases.
INDEX Value - The value of the INDEX. The INDEX Value on the Issue Date is
shown on the Contract Specifications' page.
Initial Premium - The premium payment that must be submitted with the
application for a Contract.
Issue Date - The date this Contract is issued and Your rights and benefits
begin. It is shown on the Contract Specifications page.
Cap - The maximum percentage by which an Indexed Value can increase over a
Term. The Cap
DIA(1)/IND 1/97 4
may be "none" which means that there is no Cap.
Floor - The minimum percentage by which an Indexed Value can increase over a
Term. [The Floor may be "none" or it may be less than 0%, in which case the
Floor is the maximum percentage by which an Indexed Value can decrease over a
Term].
Office - Either Our Home Office or Our Executive Office. Our Home Office is
in Providence, Rhode Island. Our Executive Office is shown on the Contract
Specifications page.
Owner - The Primary Owner and any Joint Owner collectively.
Participation Rate - A percentage used to calculate the INDEX change for a
Term. The Participation Rate determines what percentage of the Term's change
in the INDEX will be used in calculating the increase [and/or decrease] in
the Sub-Account's Indexed Value. The higher the Participation Rate, the
greater the percentage.
Person - A human being, a trust, a corporation, or any other legally
recognized entity.
Sub-Account Year, Sub-Account Anniversary - A continuous twelve-month period
commencing on the date that an Index Sub-Account is opened by allocation,
transfer or renewal, and each Anniversary thereof (known as the Sub-Account
Anniversary) including the end of any applicable Term of an Index Sub-Account.
Term - The number of complete years for which an increase [or decrease] in
Indexed Value is calculated.
We, Us, Our - Keyport Life Insurance Company.
Written Request - A request written on a form satisfactory to Us and received
at Our Office.
You, Your - The Owner.
DIA(1)/IND 1/97 5
Contract Benefit Provisions
This Contract provides for the payment of four different types of benefits
though not all will become payable. First, total and partial surrender
benefits payable to You. Second, annuity benefits payable to You if You
request that surrender benefits be paid under an annuity option instead of in
a lump sum. Third, annuity benefits payable to the Annuitant if alive on the
Income Date. Fourth, total surrender, partial surrender, and annuity benefits
payable to the "designated beneficiary" after the death of the Annuitant or
an Owner (see "Death Provisions" on page 7).
This Contract consists of a series of Sub-Accounts, including an Interest
Sub-Account and multiple Index Sub-Accounts. Premium payments can be allocated
to the various Sub-Accounts by You. Also, subject to some restrictions,
transfers are allowed among the various Sub-Accounts. All benefits and
values under this Contract are calculated by first calculating the
appropriate value of each Sub-Account and then aggregating the Sub-Account
values to get the total values of the Contract.
Surrender Provisions
Total Surrender
You may surrender this Contract while it is In Force by making a Written
Request for surrender. Surrendering this Contract will end it. We will pay
You the Surrender Value. The Surrender Value is the total of the Surrender
Value(s) of each of the Sub-Account(s) in the Contract. However, if this
Contract is surrendered during the first 5 days of any month, We will pay You
the Accumulated Value of the Interest Sub-Account. If this Contract is
surrendered during the first 45 days of an Index Sub-Account's Term, We will
pay You the greater of the Indexed Value or the Surrender Value of that
Sub-Account.
Partial Surrenders
You may partially surrender this Contract while it is In Force by making a
Written Request. The amount must be for at least $250 and the total Surrender
Value of the Contract remaining after the surrender must be at least $4,000.
Also, the remaining Surrender Value in each Index Sub-Account must be at
least $1,000.
Your Written Request may specify which Sub-Account(s) Your partial surrender
is to be taken from.
In the event You do not tell Us which Sub-Account(s) to take Your partial
surrender from, We will withdraw it from Sub-Accounts, in the following
order:
(a) Interest Sub-Account; then
(b) Any Index Sub-Account(s) where the Indexed Value is available
(See page 12), starting with the Index Sub-Account that was most
recently opened; then
(c) Any remaining Index Sub-Account(s) where the Indexed Value is not
available, starting with the Sub-Account that was most recently
opened
DIA(1)/IND 1/97 6
Payment of Surrender Benefits
For total surrenders, instead of receiving Your total payment in a lump sum,
You may request that it be paid to You under an annuity payment option.
For lump sum payments, We may delay payment for up to 6 months from the date
We receive the Written Request to surrender. This right to delay is required
by most states. We will notify You if there is to be a delay.
Minimum Values
Hypothetical minimum surrender values for the Contract are illustrated in the
Table on page 3. Values paid at surrender, death and annuitization are
guaranteed not to be less than the minimum values required by any law of the
jurisdiction where this Contract was issued.
Death Provisions
Death of Primary Owner, Joint Owner, or Certain Non-Owner Annuitant
This section applies if, before the Income Date while the Contract is In
Force, the Primary Owner or any Joint Owner dies (whether or not the decedent
is also the Annuitant) or the Annuitant dies under a Contract with a
non-natural owner such as a trust. The "designated beneficiary" will control
the Contract after such a death. This "designated beneficiary" will be the
first person among the following who is alive on the date of death: Primary
Owner; Joint Owner; primary beneficiary; contingent beneficiary; and if no
one is alive, the Primary Owner's estate.
If the decedent's surviving spouse (if any) is the sole "designated
beneficiary", the surviving spouse will automatically become the new Primary
Owner as of the date of death. If the Annuitant is the decedent, the new
Annuitant will be any living contingent annuitant, otherwise the surviving
spouse. The surviving spouse can continue the Contract until the Income
Date. If the surviving spouse surrenders the Contract, see the "Death
Benefit" section below for the conditions under which the Death Benefit value
will be paid rather than the Surrender Value. If the surviving spouse
continues the Contract and another death occurs before the Income Date, the
Contract can continue for up to five years from the date of this second
death. All of this "Death Provisions" section, except for this paragraph,
will apply to that second death. The exception in the prior sentence means
that the first four sentences of this paragraph can apply only once; they
cannot apply a second time if the surviving spouse continues the Contract,
remarries, and then dies.
In all other cases, the Contract can continue for up to five years from the
date of death. During this period, the "designated beneficiary" may exercise
all ownership rights, including the right to make partial surrenders or the
right to totally surrender the Contract for its Surrender Value. If the
"designated beneficiary" surrenders the Contract, see the "Death Benefit"
section below for the conditions under which the Death Benefit value will be
paid rather than the Surrender Value. If this Contract is continued until
the end of the five-year period, We will automatically end it then by paying
the Indexed Value for any Index Sub-Account and the Accumulated Value for
the Interest Sub-Account to the "designated beneficiary". If the
"designated beneficiary" is not alive then, We will pay any person(s) named
by the "designated beneficiary" in a Written Request;
DIA(1)/IND 1/97 7
otherwise the "designated beneficiary's" estate.
Death Benefit
This section applies only if the "covered person" dies and the Contract is
surrendered within 90 days of the date of death. The Primary Owner shall be
the "covered person" or, if there is a non-natural owner such as a trust, the
Annuitant shall be the "covered person". If the "covered person" dies, the
"designated beneficiary" may surrender this Contract within 90 days of the
date of death for the Death Benefit. For a surrender after 90 days and for a
surrender at any time after the death of a non-covered person, the Surrender
Value is payable. The total Death Benefit is the sum of the Death Benefit of
each Sub-Account in the Contract.
Payment of Benefits
The prior two sections allow the "designated beneficiary" to surrender the
Contract. If You want that person to receive annuity payments rather than a
lump sum, You may choose by Written Request an annuity payment option that
meets the following three conditions. First, the first payment to a non
spouse "designated beneficiary" must be made no later than one year after the
date of death. Second, payments must be made over the life of the non spouse
"designated beneficiary" or over a period not exceeding that person's life
expectancy. Third, any payment option that provides for payments to continue
after the death of the "designated beneficiary" will not allow the successor
payee to extend the period of time over which the remaining payments are to
be made. If You do not direct Us to make annuity payments, the "designated
beneficiary" can choose between a lump sum and an annuity payment option
meeting the above three conditions.
Death of Certain Non-Owner Annuitant
This section applies if, before the Income Date while the Contract is In
Force, (a) the Annuitant dies, (b) the Annuitant is not an Owner, and (c) the
Owner is a natural person. The Contract will continue in force after the
Annuitant's death. The new Annuitant will be any living contingent
annuitant, otherwise the Primary Owner.
DIA(1)/IND 1/97 8
Annuity Payment Provisions
Annuity Benefits
If this Contract is In Force and the Annuitant is alive on the Income Date,
payments to the Annuitant will begin under the payment option chosen. You
may choose or change a payment option by making a Written Request at least 30
days before the Income Date. Unless You choose otherwise, Option 3 with 10
years guaranteed will become automatically effective. The amount of the
payments will be determined by applying the total Income Value (defined as
the sum of the Indexed Value for the Index Sub-Accounts and the Accumulated
Value for the Interest Sub-Account, less any applicable premium taxes or
other taxes) on the Income Date in accordance with the "Payment Options"
section.
Income Date
The Income Date for the Annuitant is the date shown on the Contract
Specifications' page. If the Annuitant's death results in someone becoming
the new Annuitant, the Income Date will be based on the new Annuitant's date
of birth only if the new Annuitant is younger than the decedent.
Payment Options
You may choose any of the four payment options described below. You may also
arrange other payment options with Us.
The payee is the person who will receive the sum payable under a payment
option. If the amount available to apply under any option is less than $5,000
($2,000 if the issue state shown on page 3 is Massachusetts), We reserve the
right to pay such amount in one sum to the payee in lieu of the payment
otherwise provided for.
Payments will be made monthly unless quarterly, semi-annual, or annual
payments are chosen by Written Request. However, if any payment provided for
would be or becomes less than $100, We have the right to reduce the frequency
of payments to an interval that will result in each payment being at least
$100.
The payment amount under each option will be equal to the greater of the
amount shown in the applicable table or the amount currently offered by Us at
the time of the first payment. Under Options 2, 3 and 4 and any other life
income option, the payment amount will be based on the age of the payee(s).
The current amount may also be based on the sex of the payee(s) (except if
this is prohibited by law or if the issue state shown on page 2 is
Massachusetts or Montana).
A payee may not surrender or otherwise end a payment option after it begins.
Payments will end upon the payees death unless the option provides for
payments continuing to a successor payee.
Option 1: Income For a Fixed Number of Years
We will pay an annuity for a chosen number of years, not fewer than 5 nor
more than 30. If the payee dies before the last payment is made, We will
continue to make the remaining payments to
DIA(1)/IND 1/97 9
the successor xxxxx. Upon Written Request of the successor payee, We will
make a lump sum payment of the present value of the remaining payments,
commuted at a rate of 3% per year or at such greater rate as was used to
compute the payments.
Option 2: Life Income
We will pay an annuity for as long as the payee lives.
Option 3: Life Income with 5 or 10 Years Guaranteed
We will pay an annuity for as long as the payee lives. Payments are
guaranteed for at least the number of years chosen even if the payee dies
before then. If the payee dies before the last payment is made, We will
continue to make the remaining guaranteed payments to the successor payee.
Upon Written Request of the successor payee, We will make a lump sum payment
of the present value of the remaining guaranteed payments, commuted at a rate
of 3% per year or at such greater rate as was used to compute the payments.
Option 4: Joint and Last Survivor Income
We will pay an annuity for as long as the payee lives. Upon the payee's
death, We will continue payments to the successor payee for as long as the
successor payee lives.
Misstatement of Age or Sex
If We learn on or after the Income Date that the age or sex of the Annuitant
or any other payee is incorrect, We will compute the amount payable based on
the correct age and sex (however, if the issue state shown on page 2 is
Massachusetts or Montana, We will only correct an age). If income payments
have begun, any underpayment that may have been made will be paid in full
with the next annuity payment. Any overpayments, unless repaid to Us in one
sum, will be deducted from future annuity payments otherwise due until We are
repaid in full.
Basis of Calculation
The minimum annuity payments are based on the 1983 Individual Annuity
Valuation Tables, weighted 40% male and 60% female, with interest at 3% per
year. We will similarly calculate the amount for a payment frequency other
than monthly and the amount for any age not shown in a table. Upon request,
We will tell You any such amount.
DIA(1)/IND 1/97 10
Payment Option Tables
OPTION 1: MINIMUM MONTHLY PAYMENT PAYABLE FOR EACH $1,000 APPLIED VALUE
Years Payment Years Payment Years Payment
-----------------------------------------------------------------------
5 $17.91 14 $7.26 23 $4.99
6 15.14 15 6.87 24 4.84
7 13.16 16 6.53 25 4.71
8 11.68 17 6.23 26 4.59
9 10.53 18 5.96 27 4.47
10 9.61 19 5.73 28 4.37
11 8.86 20 5.51 29 4.27
12 8.24 21 5.32 30 4.18
DIA(1)/IND 1/97 11
OPTIONS 2 AND 3: MINIMUM MONTHLY PAYMENT PAYABLE FOR EACH $1,000 APPLIED
VALUE
Option 3- Option 3- Option 3- Option 3-
Age Option 2 5 Years 10 Years Age Option 2 5 Years 10 Years
--- -------- --------- --------- --- -------- --------- ---------
30 $3.19 $3.19 $3.19 63 $ 5.34 $ 5.31 $5.20
31 3.22 3.22 3.21 64 5.49 5.45 5.33
32 3.24 3.24 3.24 65 5.65 5.61 5.47
33 3.27 3.27 3.27 66 5.82 5.77 5.61
34 3.30 3.30 3.30 67 6.01 5.94 5.75
35 3.34 3.33 3.33 68 6.20 6.13 5.91
36 3.37 3.37 3.36 69 6.41 6.33 6.07
37 3.40 3.40 3.40 70 6.64 6.54 6.23
38 3.44 3.44 3.44 71 6.88 6.76 6.41
39 3.48 3.48 3.47 72 7.14 7.00 6.59
40 3.52 3.52 3.51 73 7.43 7.26 6.77
41 3.56 3.56 3.55 74 7.73 7.53 6.96
42 3.61 3.61 3.60 75 8.06 7.82 7.14
43 3.65 3.65 3.64 76 8.42 8.12 7.34
44 3.70 3.70 3.69 77 8.80 8.45 7.53
45 3.76 3.75 3.74 78 9.21 8.79 7.71
46 3.81 3.81 3.79 79 9.66 9.14 7.90
47 3.87 3.86 3.85 80 10.14 9.52 8.06
48 3.93 3.92 3.90 81 10.65 9.91 8.25
49 3.99 3.98 3.96 82 11.21 10.31 8.41
50 4.05 4.05 4.03 83 11.81 10.72 8.57
51 4.12 4.11 4.09 84 12.46 11.15 8.71
52 4.19 4.19 4.16 85 13.14 11.58 8.84
53 4.27 4.26 4.23 86 13.88 12.01 8.96
54 4.35 4.34 4.31 87 14.67 12.44 9.06
55 4.44 4.42 4.39 88 15.50 12.86 9.15
56 4.53 4.51 4.47 89 16.39 13.28 9.23
57 4.62 4.61 4.56 90 17.32 13.68 9.31
58 4.72 4.71 4.65 91 18.31 14.07 9.37
59 4.83 4.81 4.75 92 19.35 14.45 9.42
60 4.95 4.93 4.86 93 20.45 14.81 9.47
61 5.07 5.05 4.97 94 21.61 15.15 9.50
62 5.20 5.17 5.08 95 22.84 15.48 9.53
DIA(1)/IND 1/97 12
OPTION 4: MINIMUM MONTHLY PAYMENT PAYABLE FOR EACH $1,000 APPLIED VALUE
Combination of Ages
30 35 40 45 50 55 60 65 70 75 80 85 90 95
30 $2.99 $3.04 $3.07 $3.10 $3.13 $3.15 $3.16 $3.17 $3.18 $3.18 $3.18 $3.19 $3.19 $3.19
40 3.10 3.15 3.20 3.24 3.27 3.29 3.30 3.32 3.32 3.33 3.33 3.33 3.33
45 3.23 3.30 3.35 3.40 3.44 3.47 3.49 3.50 3.51 3.51 3.52 3.52
50 3.39 3.48 3.55 3.61 3.66 3.69 3.72 3.73 3.74 3.75 3.75
55 3.60 3.71 3.81 3.89 3.94 3.99 4.01 4.03 4.04 4.05
60 3.87 4.02 4.14 4.24 4.32 4.36 4.40 4.41 4.42
65 4.23 4.43 4.59 4.72 4.81 4.87 4.91 4.92
70 4.71 4.98 5.21 5.38 5.59 5.56 5.60
75 5.39 5.77 6.08 6.30 6.45 6.53
80 6.35 6.89 7.32 7.62 7.81
85 7.73 8.50 9.10 9.51
90 9.72 10.80 11.63
95 12.49 13.95
16.20
INDEX SUB-ACCOUNT PROVISIONS
INTRODUCTION
Multiple Index Sub-Accounts may be open at any time. Each Sub-Account that is
open will have its own Term, Participation Rate, Cap, Floor and values. All of
the descriptions below are for a single Sub-Account. All activities that are
described herein relate to activities within the specific Sub-Account (e.g. a
partial surrender is a partial surrender from the Sub-Account).
The Indexed Value, as defined below, is available only during three time
periods. First, as a surrender payable if a Sub-Account is surrendered within
45 days after the end of its term (see page 6). Second, as a Death Benefit that
is payable if the Contract is surrendered within 90 days after the date of
certain deaths or at the required distribution date (see page 7). Third, as an
amount applied on the Income Date to determine the amount of annuity payments
(see page 9). At all other times, the Surrender Value is available to You while
the Contract is In Force (see page 6).
Indexed Value
The Indexed Value at any time is guaranteed to equal:
(a) the Initial Indexed Value; plus
(b) all Index Increases; [less all Index Decreases;] plus
(c) any End-Of-Term Adjustments; less
(d) any partial surrender amounts.
DIA(1)/IND 1/97 13
If the Sub-Account is started by a premium payment, the Initial Indexed Value is
equal to the premium allocated to the Sub-Account. If the Sub-Account is
started by a transfer, then the Initial Indexed Value is the amount transferred.
The Index Increase [and/or Index Decrease] is determined on the Sub-Account
Anniversary using the INDEX Value, the Participation Rate, Floor and Cap.
Index Increases [and Index Decreases]
We will calculate the Index Increase [or Index Decreases] on each Sub-Account
Anniversary. On the first Sub-Account Anniversary in a Term, the formula used
is:
A x ((C-D)/D) x (E/F) x G
This calculation provides the proportionate credit for any change in the INDEX
from its value at the beginning of the Term to its value on the first Sub
-Account Anniversary.
For every Sub-Account Anniversary after the first in a Term, the calculation
of any Index Increase,[or Index Decrease], to be credited on the Sub-Account
Anniversary , is the sum total of two parts.
Part 1 represents the proportionate credit for any increase in the INDEX Value
from its prior highest Sub-Account Anniversary value to its value on the current
Sub-Account Anniversary. The formula for Part 1 is:
A x ((C-B)/D) x (E/F) x G
Part 2 represents the proportionate credit for any change in the INDEX Value
occurring on a prior Sub-Account Anniversary(ies). The formula for Part 2 is:
A x ((B-D)/D) x (1/F) x G
A is the Participation Rate for the Term
B is the highest INDEX Value on all Sub-Account Anniversaries but excluding
the value of the INDEX Value on the date the Sub-Account is started and the
current Sub-Account Anniversary. The value of B can never be less than the
Minimum INDEX Value nor greater than the Maximum INDEX Value. The Minimum
INDEX and the Maximum INDEX Value are defined below.
C is the INDEX Value on the current Sub-Account Anniversary, not less than B
or greater than the Maximum INDEX Value for the Term.
D is the INDEX Value at the beginning of the Term
E is the number of completed Sub-Account Years in the Term
F is the total number of Sub-Account Years in the Term
G is the smaller of the Indexed Value at the beginning of the Term and the
Indexed Value (prior to the crediting of any Index Increases [or Index
Decreases]) on any Sub-Account Anniversary in the Term, including the
current Sub-Account Anniversary
DIA(1)/IND 1/97 14
The Minimum INDEX Value and the Maximum INDEX Value are defined as follows:
Minimum INDEX Value = [(Floor/Participation Rate for Term)+1] x Beginning of
Term INDEX Value
and
Maximum INDEX Value = [(Cap/Participation Rate for Term)+1] x Beginning of Term
INDEX Value
End-of-Term Adjustment in the Indexed Value
At the end of the Term (after the Index Increase [or Index Decrease]), if the
Surrender Value exceeds the Indexed Value, the Indexed Value will be increased
to equal the Surrender Value.
INDEX, Participation Rate, Floor and Cap, Term
The INDEX shown on the Contract Specifications' page is used to calculate Index
Increases. If the INDEX is discontinued or its calculation is changed
substantially, We will substitute a suitable index and notify You. The INDEX
Value for a particular day is the value calculated at the end of that day. If
there is no INDEX Value calculated that day, then the value calculated for the
first preceding day shall apply.
We will declare for each new Term of a Sub-Account the Participation Rate, the
Floor and the Cap on a basis which does not discriminate unfairly within any
class of Contracts.
Before the end of each Term of each Sub-Account, We will declare the length(s)
available for the next Term on a basis which does not discriminate unfairly
within a class of Contracts. You may choose a Term by Written Request. You may
not choose a Term that goes beyond the Income Date or in the case of a
"designated beneficiary", You may not choose a Term that goes beyond the date
allowed by the Death Provision section. If You do not choose, the new Term
("Default Term") will be the same length as the prior Term although the
Participation Rate, Cap and Floor may be different as described above. If the
Default Term would go beyond the Income Date or the date allowed by the Death
Provision section, the Sub-Account values will be transferred to the Interest
Sub-Account.
Surrender Value
The Surrender Value at any time is equal to:
(a) the Initial Surrender Value; plus
(b) any Sub-Account Anniversary Adjustments (see below): less
(c) any partial surrender amounts; plus
(d) interest on the net amount determined by above items (a) through (c)
at the rate of 3% per year.
We will credit interest daily. 3% represents the effective annual interest rate
that will be credited when daily interest credits have compounded for a full
year.
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If the Sub-Account is started by a premium payment, the Initial Surrender Value
is equal to 90% of the premium allocated to this Sub-Account.
If the Sub-Account is started by an transfer, the Initial Surrender Value is the
Surrender Value transferred.
Sub-Account Anniversary Adjustment in Surrender Value
The Indexed Value and the Surrender Value are compared on each Sub-Account
Anniversary. If (a) the Indexed Value exceeds the Surrender Value and (b) the
total to date of all Index Increases [and Index Decreases] during the Term
exceed " all increases in the Surrender Value during the Term", then the
Surrender Value will be increased by the difference between the two amounts in
(b). "All increases in the Surrender Value during the Term" equal the total to
date during the Term of all prior Sub-Account Anniversary adjustments to the
Surrender Value and all interest credited to the Surrender Value (the interest
for each Sub-Account year equals: the Surrender Value at the end of the Sub
-Account year plus the amount of any partial surrender(s) during the Sub
-Account year, less the Surrender Value at the start of the Sub-Account year).
After the above adjustment, on each Sub-Account Anniversary within 10 years of
the Income Date, if the Indexed Value exceeds the Surrender Value, then the
Surrender Value will be increased by the lesser of (a) and (b), where:
(a) is 1% of the Indexed Value multiplied by the number of elapsed Sub
-Account Anniversaries within the 10 year period less any prior
increases made pursuant to this provision; and
(b) is the difference between the Indexed Value and the Surrender Value.
The Death Benefit
If the Floor is greater than 0%, the Death Benefit is the greater of the Indexed
Value as of the date of death less any subsequent partial surrenders, and the
Surrender Value on the date of the payment.
If death occurs in the last Year of a Term and the surrender occurs after the
end of the Term, the Death Benefit is the greater of the Indexed Value at the
end of the Term, less any partial surrenders, and the Surrender Value on the
date of the payment.
In all other situations, the Death Benefit is the greater of (a) minus (b) and
the Surrender Value on the date of the payment, where:
(a) is the Indexed Value at the start of the Sub-Account year in which
death occurs, with the applicable Index Increase (described on page 12)
recalculated as follows: "E" is equal to "F" and "(B -D)" is multiplied
by the sum of 1.0 plus the number of Sub-Account years from the
start of such year to the end of the Term; and
(b) is the sum of any partial surrenders since the start of such year.
If death occurs in the last year of a Term and the surrender occurs after the
end of the Term,
DIA(1)/IND 1/97 16
the Indexed Value at the end of such Term will be substituted for (a).
Interest Sub-Account Provisions
Introduction
The Accumulated Value is available only during three time periods. First, as a
surrender payable if all or part of the Interest Sub-Account is surrendered
within the first 5 days of any calendar month. Second, as a Death Benefit that
is payable if the Contract is surrendered within 90 days after the date of
certain deaths (see page 7). Third, as a value applied on the Income Date to
determine the amount of annuity payments (see page 9). At all other times, the
Surrender Value is available to You while the Contract is In Force (see page 6).
Accumulated Value
The Accumulated Value at any time is guaranteed to equal:
(a) the portion of the Initial Premium allocated to this Sub-Account; plus
(b) the portion of any Subsequent Premium(s) allocated to this Sub-Account;
plus
(c) any amounts transferred to this Sub-Account; less
(d) any partial surrender amounts from this Sub-Account; less
(e) any amounts transferred from this Sub-Account; plus
(f) interest on the net amount determined by the above items (a) through (e)
at the declared rate.
Interest is calculated daily, based on the declared interest rate. The declared
rate is an annual effective interest rate that will be credited when daily
interest credits have compounded for a full year. The declared rate will be
set on the first of each calendar month and will be guaranteed for the month,
and will never be less than 3%.
Surrender Value
The Surrender Value at any time is equal to:
(a) 90% of the portion of the Initial Premium allocated to this
Sub-Account; plus
(b) 90% of the portion of any Subsequent Premium(s) allocated to this
Sub-Account; plus
(c) any Surrender Values transferred to this Sub-Account; plus
(d) any excess interest as defined below; less
(e) any partial surrender amounts taken from this Sub-Account; less
(f) any amounts transferred from this Sub-Account; plus
(g) interest on the net amount determined by the above items (a) through (f)
at the rate of 3% per year. We will credit interest daily. Three percent
represents the effective annual interest rate that will be credited when
daily Interest credits have compounded for a full year.
Excess interest is the excess, if any, of interest credited to the Accumulated
Value over interest credited to the Surrender Value since the last date of
excess interest credits. Excess interest is added on the first of each calendar
month plus on any date of a transfer or surrender from this Sub-
DIA(1)/IND 1/97 17
Account.
After the Calculation of excess interest, on each Contract Anniversary within 10
years of the Income Date, if the Accumulated Value exceeds the Surrender Value,
then the Surrender Value will be increased by 1% of the Accumulated Value, but
not to an amount greater than the Accumulated Value.
The Death Benefit
The Death Benefit is the Accumulated Value as of the day before the claim is
paid if the surrender occurs within 90 days of death. Thereafter, the Death
Benefit is the Surrender Value as of the day before the claim is paid.
Transfers
Introduction
Transfers can be made at any time from the Interest Sub-Account to a new Index
Sub-Account. Transfers can also be made from an Index Sub-Account to the
Interest Sub-Account at the end of the Term. We will make a transfer when We
receive a Written Request to do so from You that meets the conditions set forth
below.
Transfers from the Interest Sub-Account to an Index Sub-Account
You can transfer all or part of the Interest Sub-Account to a new Index
Sub-Account at any time. The amount You request from the Accumulated Value
will be transferred to a new Index Sub-Account and will be the Initial
Indexed Value of the new Sub-Account. The Initial Surrender Value of the new
Index Sub-Account will be equal to the ratio of the Accumulated Value
transferred to the total Accumulated Value of the Interest Sub-Account prior
to the transfer times the Surrender Value of the Interest Sub-Account prior
to the transfer.
The remaining Accumulated Value and Surrender Value of the Interest Sub-Account
will be the values prior to the transfer less the amount transferred.
The minimum amount of any transfer from the Interest Sub-Account to a new Index
Sub-Account must be at least $1,000.
Transfers from an Index Sub-Account to the Interest Sub-Account
You can transfer the Indexed Value of an Index Sub-Account to the Interest
Sub-Account at the end of the Term of an Index Sub-Account. The Indexed Value
of the Index Sub-Account will be transferred to the Accumulated Value of the
Interest Sub-Account. The Surrender Value of the Index Sub-Account will be
transferred to the Surrender Value of the Interest Sub-Account.
DIA(1)/IND 1/97 18
General Provisions
Initial Premium
The Initial Premium is due on the Issue Date of Your Contract. It must be paid
in United States currency and deposited to a bank account of Ours in order for
this Contract to be valid. The Initial Premium is allocated to the Sub
-Account(s) based on Your instructions.
Subsequent Premiums
Subsequent premiums, subject to the minimum and maximum stated on page 2, may
be paid at any time during the first Contract Year. Thereafter, they may be
paid any time Your Contract is In Force unless the current Contract Year is
within 10 years of the Income Date. Any Subsequent Premium must be paid in
United States currency and deposited to a bank account of Ours. We will then
apply the premium to the Sub-Account You requested. Any Subsequent Premium for
an Index Sub-Account will be allocated to a new Index Sub-Account of a Term
requested by You, subject to the limitations described in this Contract. If You
do not tell Us, We will add the premium to the Interest Sub-Account. The
Company reserves the right to not allow Subsequent Premiums to this Contract.
Contract
This Contract form, any attached copy of the application, and any attached
endorsements make up the entire Contract.
Only Our President or Secretary may agree to change any of the terms of this
Contract. Any changes must be made in writing and with Your consent, unless
provided otherwise by this Contract.
So that this Contract will maintain its status as an annuity under the Internal
Revenue Code, We reserve the right to change this Contract to comply with future
changes in: the Internal Revenue Code; any regulations or rulings issued under
that code; and any requirements otherwise imposed by the Internal Revenue
Service. You will be sent a copy of any such amendment as well as a copy of the
regulatory change requiring the amendment. If the Issue State shown on page 2
is Massachusetts, New Jersey, Pennsylvania or Texas, such amendment will be
filed for approval with the state s insurance supervisory official.
Ownership Provisions
The Primary Owner and any Joint Owner are shown on page 2. They may be changed
by You. If You change an owner who is also the Annuitant, the owner being
changed will still be the Annuitant. The Primary Owner and any Joint Owner own
the Contract equally with right of survivorship.
You may exercise all the rights of this Contract while it is In Force, subject
to the rights of: (a) any assignee under an assignment filed with Us; and (b)
any irrevocably-named beneficiary.
DIA(1)/IND 1/97 19
Annuitant Provisions
The Annuitant and any contingent annuitant are shown on page 2. You can change
the contingent annuitant but not the Annuitant. If the Annuitant dies, the
"Death Provisions" sections provide that the contingent annuitant, the
Annuitant s surviving spouse, or the primary owner may become the new annuitant.
Beneficiary Provisions
Any primary beneficiary and contingent beneficiary may be changed by You unless
irrevocably named.
If You name more than one primary beneficiary and do not state otherwise, any
non-survivors will not receive any benefit, the survivors will receive equal
shares, and if there is only one survivor, that person will receive the entire
benefit. If no primary beneficiary is alive, the contingent beneficiary will
receive the benefit. If You name more than one contingent beneficiary, the
rules stated above for multiple primary beneficiaries will apply.
Designation or Change of Owner, Beneficiary, or Contingent Annuitant
While the Contract is In Force, You may by Written Request designate or change
the Primary Owner, Joint Owner, primary beneficiary, contingent beneficiary, or
contingent annuitant. An irrevocably-named person may be changed only with the
written consent of such person. After We record the request, the designation or
change will take effect as of the date You signed the request. The designation
or change will not affect any payments We make or actions We take before We
record the request.
Assignment
You may assign this Contract at any time while it is In Force. The assignment
must be in writing and a copy must be received at Our Office. Your rights and
those of any revocably-named person will be subject to the assignment. An
assignment will not affect any payments We make or actions We take before We
record it. We are not responsible for the validity of any assignment.
Incontestability
We will not contest this Contract.
Nonparticipation in Surplus
We will not pay any dividends on this Contract.
Contract Settlement
All amounts due under this Contract will be paid from Our Office in United
States currency.
DIA(1)/IND 1/97 20
Protection of Proceeds
No beneficiary or payee may commute or assign any payments under this Contract
before they are due. To the extent permitted by law, no payments shall be
subject to the debts of any beneficiary or payee or to any judicial process for
payment of those debts.
Evidence of Death, Age, Sex, or Survival
If a Contract provision relates to the death of a person, We will require proof
of death before We act under that provision. We will accept a certified death
certificate or a certified decree of a court of competent jurisdiction as to a
finding of death. We will also accept any other document which is considered
due proof of death under applicable state law. If Our action under a Contract
provision is based on the age, sex, or survival of any person, We may require
evidence of that fact before We act under that provision. However, if the issue
state shown on page 2 is Massachusetts or Montana, We will not require evidence
of the sex of any person.
Taxes
Any premium taxes or other taxes levied by any governmental authority with
respect to this Contract will be deducted upon a total surrender or on the
Income Date. We will also deduct from any amount payable under this Contract
any income taxes a governmental authority requires Us to withhold with respect
to that amount.
Reports
We will send You a report shortly after the end of each Contract Year that shows
the following values for each Index Sub-Account that was open at any time during
the Contract Year: the Surrender Value and Indexed Value at the beginning of
that year and the INDEX Value (as of the most recent Sub-Account Anniversary);
the amount of any surrenders or transfers during that year; and the Index
Increase, [Index Decrease,] Surrender Value and Indexed Value at the end of that
year. For the Interest Sub-Account We will show You the Surrender Value and
Accumulated Value at the beginning of the year, the amount of any surrenders and
transfers during the year, interest credits during the year, and any premium
payments allocated to this Sub-Account during the year, and the Surrender Value
and Accumulated Value at the end of the year. Also, at the end of the term of
each Index Sub-Account, We will give You a report that shows the length of Your
new term and Your new term's Participation Rate and Floor and Cap. We will send
any other reports that may be required by law. Also, upon Written Request, We
will provide You in a timely manner with factual information about this
Contract's benefits and provisions.
DIA(1)/IND 1/97 21
Endorsements
To be inserted only by Us.
DIA(1)/IND 1/97 22
Keyport Life Insurance Company
Flexible Premium Indexed Deferred Annuity Contract
In this Contract, Keyport Life Insurance Company is referred to as "We", "Us",
"Our", or the "Company". "You" and "Your" refer to the Owner.
The Contract, as issued to your by Us with any riders or endorsements, alone
makes up the agreement under which benefits are paid. In consideration of the
application for this Contract and the payment of the Initial Premium, We agree
to provide the benefits described in this Contract to the Owner.
If this Contract is In Force on the Income Date, We will begin making income
payments to the Annuitant. We will make such payments according to the terms of
the Contract.
RIGHT TO EXAMINE CONTRACT: your may return this Contract to Us or the agent
through whom your purchased it within 45 days after your receive it. If so
returned, We will treat the Contract as though it Were never issued. Upon
receipt We will promptly refund any premiums paid.
READ THIS CONTRACT CAREFULLY.
It is a legal Contract between You and Us.
FLEXIBLE PREMIUM INDIVIDUAL DEFERRED ANNUITY CONTRACT
NON-PARTICIPATING - NO DIVIDENDS
DIA(1)/IND 1/97 23
