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EXHIBIT 4(a)
[ZURICH XXXXXX LOGO]
[LETTERHEAD OF XXXXXX INVESTORS LIFE INSURANCE COMPANY]
RIGHT TO CANCEL - FREE LOOK PROVISION - At any time within 10 days of receiving
this contract you may return it to us or to the agent through whom it was
purchased. Immediately upon our receipt, this contract will be voided as if it
had never been in force. All purchase payments allocated to the General Account
plus the Separate Account contract value computed at the end of the valuation
period following our receipt of this contract will then be refunded within ten
days.
We agree to pay an annuity to the Annuitant provided the Annuitant is living and
this contract is in force on the annuity date.
We further agree to pay the death benefit prior to the Annuity Date upon the
death of the Owner or the Annuitant when a death benefit is payable. Payment
will be made upon our receipt of due proof of death and the return of this
contract.
This contract is issued in consideration of the attached application and payment
of the initial purchase payment.
The provisions on this cover and the pages that follow are part of this
contract.
Signed for Xxxxxx Investors Life Insurance Company at its home office in Long
Grove, Illinois.
/s/ Xxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxx
Secretary President
FIXED AND VARIABLE DEFERRED ANNUITY
NON-PARTICIPATING
ALL BENEFITS, PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED UPON THE
INVESTMENT EXPERIENCE OF THE SUBACCOUNTS, ARE VARIABLE AND ARE NOT GUARANTEED AS
TO DOLLAR AMOUNT. REFER TO THE VARIABLE ACCOUNT AND ANNUITY PERIOD PROVISIONS
FOR A DETERMINATION OF ANY VARIABLE BENEFITS.
This is a legal contract between the owner and Xxxxxx Investors Life Insurance
Company.
READ YOUR CONTRACT CAREFULLY.
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INDEX
PAGE
ANNUITY OPTION TABLE Follows Page 7
ANNUITY PERIOD PROVISIONS 5-7
Election of Annuity Option 5-6
Annuity Options 6-7
Transfers During The Annuity Period 7
APPLICATION Follows Contract Schedule
CONTRACT SCHEDULE Follows Index
DEATH BENEFIT PROVISIONS 5
Amount Payable Upon Death 5
Payment Of Death Benefits 5
DEFINITIONS 1
ENDORSEMENTS, if any Follows Annuity Option Table
GENERAL ACCOUNT PROVISIONS 3
General Account 3
General Account Contract Value 3
GENERAL PROVISIONS 1-2
The Contract 1
Incontestability 2
Assignment 2
Reports 2
Premium Taxes 2
GUARANTEE PERIOD PROVISIONS 5
Guarantee Period Value 5
LOAN PROVISIONS 5
Loans 5
Loan Interest Rate 5
Loan Repayment 5
OWNERSHIP PROVISIONS 2
Owner of Contract 2
Change of Ownership 2
Beneficiary 2
PURCHASE PAYMENT PROVISIONS 2-3
Initial Purchase Payments 2
Purchase Payment Limitations 2-3
TRANSFER AND WITHDRAWAL PROVISIONS 4-5
Transfers During The Accumulation Period 4
Withdrawals During The Accumulation Period 4
Withdrawal Charges 4
Transfer and Withdrawal Procedures 4-5
VARIABLE ACCOUNT PROVISIONS 3-4
Separate Account 3
Liabilities Of Separate Account 3
Subaccounts 3
Rights Reserved By The Company 3
Accumulation Unit Value 3-4
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DEFINITIONS
ACCUMULATION PERIOD: The period between the
issue date and the Annuity Date.
ACCUMULATION UNIT: An accounting unit of
measure used to calculate the value of each
subaccount.
AGE: The attained age of the Annuitant.
ANNUITANT: The person named in the
application during whose lifetime the
annuity is to be paid. Under a nonqualified
plan when two people are named as Joint
Annuitants, the term "Annuitant" means the
Joint Annuitants or the survivor. You may
not change the person(s) named as the
Annuitant.
ANNUITY: A series of payments paid in
accordance with this contract which begins
on the annuity date.
ANNUITY DATE: The date on which this
Contract matures and annuity payments begin.
The original Annuity Date is stated in the
Contract Schedule. It must be at least one
year from the Issue Date and no later than
the maximum age at annuitization as stated
in the Contract Schedule. The Owner may
change the Annuity Date, but not beyond the
maximum age.
ANNUITY PERIOD: This is the period that
starts on the Annuity Date.
ANNUITY UNIT: An accounting unit of measure
used to calculate the amount of variable
annuity payments after the first annuity
payment.
ANNUITY UNIT VALUE: The value of an Annuity
Unit of a Subaccount determined for a
Valuation Period according to the formula
stated in this contract.
AUTOMATIC REBALANCING: An election you make
to have as transfer a portion of the
Separate Account Contract Value according to
a predetermined schedule. You may change the
schedule or terminate these transfers by
informing us in writing.
CONTRACT VALUE: The sum of the General
Account Contract Value plus the Separate
Account Contract Value plus the Accumulated
Guarantee Period Value.
CONTRACT YEAR: A one year period starting on
the Issue Date and successive contract
anniversaries.
DEBT: The principal of any outstanding loan
plus any loan interest due or accrued.
DOLLAR COST AVERAGING: The process of
automatically transferring funds from the
General Account Contract Value to the
Subaccounts or Guarantee Period Accounts.
FIXED ANNUITY: An annuity payment plan that
does not vary as to dollar amount.
FUND: An investment company or separate
series thereof, in which the Subaccounts of
the Separate Account invest.
GENERAL ACCOUNT: Our assets other than those
allocated to the Separate Account or any
other separate account. We guarantee a
minimum rate of interest on purchase
payments allocated to the General Account.
During the Accumulation Period, the only
funds allowed in the General Account are
subject to Dollar Cost Averaging.
GENERAL ACCOUNT CONTRACT VALUE: The General
Account Contract Value is the value of the
General Account of this contract on any
Valuation Date.
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DEFINITIONS (CONTINUED)
GUARANTEE PERIOD: A period of time during
which an amount is to be credited with a
guaranteed interest rate, subject to a
Market Value Adjustment prior to the end of
the Guarantee Period. The Guarantee Periods
initially offered are stated in the Contract
Schedule.
GUARANTEE PERIOD VALUE: The (1) Purchase
Payment allocated or amount transferred to a
Guarantee Period; plus (2) interest
credited; minus (3) withdrawals, previously
assessed withdrawal charges and transfers;
adjusted for (4) any applicable Market Value
Adjustment previously made. There is a $500
minimum on the sum of Purchase Payments and
amounts transferred to any Guarantee Period
Value.
ISSUE DATE: The Issue Date is stated in the
Contract Schedule. If the normal Issue Date
is the 29th, 30th or 31st of the month, the
Issue Date will be the 28th day of that
month. It is the date your Initial Purchase
Payment is available for use and begins to
the credited with interest and/or investment
experience.
MARKET ADJUSTED VALUE: A Guarantee Period
Value adjusted by the Market Value
Adjustment formula prior to the end of a
Guarantee Period.
MARKET VALUE ADJUSTMENT: An adjustment of
Guarantee Period Values in accordance with
the Market Value Adjustment formula prior to
the end of the Guarantee Period. The
adjustment reflects the change in the value
of the Guarantee Period Value due to changes
in interest rates since the date the
Guarantee Period commenced. The Market Value
Adjustment formula is stated in the Contract
Schedule.
MORTALITY AND EXPENSE RISK CHARGE: A charge
deducted in the calculation of the
Accumulation Unit value and the Annuity Unit
value. It is for our assumption of mortality
risks and expense guarantees.
NONQUALIFIED: This contract issued other
than as a qualified plan.
OWNER: See "You, Your, Yours" below.
PURCHASE PAYMENTS: The dollar amount we
receive in U.S. currency to buy the benefits
this contract provides.
QUALIFIED PLAN: A contract issued under a
retirement plan which qualifies for
favorable income tax treatment under Section
401, 403, 408 or 457 of the Internal Revenue
Code as amended.
RECORDS MAINTENANCE CHARGE: A charge
assessed against your contract as specified
in the Contract Schedule.
RECEIVED: Received by Xxxxxx Investors Life
Insurance Company at its home office in Long
Grove, Illinois.
SEPARATE ACCOUNT: A unit investment trust
registered with the Securities and Exchange
Commission under the Investment Act of 1940
known as the KILICO Variable Annuity
Separate Account.
SEPARATE ACCOUNT CONTRACT VALUE: The sum of
the Subaccount Values of this contract on
Valuation Date.
SUBACCOUNTS: The Separate Account has
several Subaccounts. The availability
initially are stated in the contract
schedule.
SUBACCOUNT VALUE: The value of each
Subaccount calculated separately according
to the formula stated in this contract.
VALUATION DATE: Each business day that\
applicable law requires that we value the
assets of the Separate Account. Currently
this is each day that the New York Stock
Exchange is open for trading.
VALUATION PERIOD: The period that starts at
the close of a Valuation Date and ends at
the close of the next succeeding Valuation
Date.
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DEFINITIONS (CONTINUED)
VARIABLE ANNUITY: An annuity payment plan which
varies as to dollar amount because of Subaccount
investment experience.
WE, OUR, US: Xxxxxx Investors Life Insurance
Company, Long Grove, Illinois.
YOU, YOUR, YOURS: The party(ies) named as Owner
in the application unless later changed as
provided in this contract. The Owner is the
Annuitant unless a different Owner is named in
the application. Under a nonqualified plan when
more than one person is named as Owner, the terms
"you," "your," "yours," means Joint Owners. The
Owner may be changed during the lifetime of the
Owner and the Annuitant. The Owner, prior to the
Annuity Date or any distribution of any death
benefit, has the exclusive right to exercise
every option and right conferred by this
contract.
GENERAL PROVISIONS
THE CONTRACT This contract, any attached endorsements and the
attached application constitute the entire
contract between the parties. All statements made
in the application are deemed representations and
not warranties. No statement will void this
contract or be used as a defense of a claim
unless it is contained in the application.
MODIFICATION OF CONTRACT Only our president, secretary and assistant
secretaries have the power to approve a change or
waive any provisions of this contract. Any such
modifications must be in writing. No agent or
person other than the officers named has the
authority to change or waive the provisions of
this contract.
INCONTESTABILITY We cannot contest this contract after it has been
in force for two years from the Issue Date.
CHANGE OF ANNUITY DATE You may write to us prior to distribution of a
death benefit or the first annuity payment date
and request a change of the Annuity Date.
ASSIGNMENT No assignment of this contract is binding unless
we receive it in writing. We assume no
responsibility for the validity or sufficiency of
any assignment. Once filed, the rights of the
Owner, Xxxxxxxxx and beneficiary are subject to
the assignment. Any claim is subject to proof of
interest of the assignee.
DUE PROOF OF DEATH We must receive in written proof of death within
sixty days of the death within sixty days of the
death of the Owner or the Annuitant when a death
certificate, the written statement of a
physician, or any other proof satisfactory to us.
RESERVES, CONTRACT VALUES AND All reserves are equal to or greater than those
DEATH BENEFITS required by statute. Any available Contract Value
and death benefit are not less than the minimum
benefits required by the statutes of the state in
which this contract is delivered.
NON-PARTICIPATING This contract does not pay dividends. It will not
share in our surplus or earnings.
REPORTS At least once each Contract Year we will send you
a statement showing Purchase Payments received,
interest credited, investment experience; and
charges made since the last report, as well as
any other information required by statute.
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GENERAL PROVISIONS (CONTINUED)
PREMIUM TAXES We will make a deduction for state premium taxes
in certain situations. On any contract subject to
premium tax, as provided under applicable law,
the tax will be deducted from: a. the Purchase
Payments when we receive them; b. the Contract
Value upon total withdrawal; or c. from the total
Contract Value applied to an annuity option at
the time annuity payments start.
QUALIFIED PLANS If this contract is issued under a qualified plan
additional provisions may apply. The rider or
amendment to this contract used to qualify it
under the applicable section of the Internal
Revenue Code will indicate the extent of change
in the provisions.
OWNERSHIP PROVISIONS
OWNER OF CONTRACT The Annuitant is the original Owner unless
otherwise provided in the application.
Before the Annuity Date or any distribution of
death benefit, you have the right to cancel or
amend this contract if we agree. You may exercise
every option and right conferred by this contract
including the right of assignment. The Joint
Owners must agree to any change if more than
one owner is named.
CHANGE OF OWNERSHIP You may change the Owner by written request at
any time while the Annuitant is alive. You must
furnish information sufficient to clearly
identify the new Owner to us. The change is
subject to any existing assignment of this
contract. When we record the effective date of
the change, it will be the date the notice was
signed except for action taken by us prior to
receiving the request. Any change is subject to
the payment of any proceeds. We may require you
to return this contract to us for endorsement of
a change.
BENEFICIARY DESIGNATION AND The application for this contract shown the
CHANGE OF BENEFICIARY original beneficiary. You may change the
beneficiary if you send us a written change
form. Changes are subject to the following:
1. The change must be filed while the Annuitant
is alive and prior to the annuity date;
2. This contract must be in force at the time you
file a change;
3. Such change must not be prohibited by the
terms of an existing assignment, beneficiary
designation or other restriction;
4. Such change will take effect when we
receive it;
5. After we receive the change, it will take
effect on the date the change form is signed.
However, action taken by us before the change
form was received will remain in effect; and
6. The request for change must provide
information sufficient to identify the new
beneficiary.
We may require you to return this contract for
endorsement of a change.
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OWNERSHIP PROVISIONS (CONTINUED)
DEATH OF BENEFICIARY The interest of a beneficiary who dies before the
distribution of the death benefit will pass to
the other beneficiaries, if any, share and share
alike, unless otherwise provided in the
beneficiary designation. If no beneficiary
survives or is named, the distribution will be
made to your estate when you dies; or to the
estate of the annuitant upon the death of the
annuitant if you are not also the Annuitant, if a
beneficiary dies within ten days of the date of
your death, the death benefit will be paid as if
you had survived the beneficiary. If a
beneficiary dies within ten days of the death of
the Annuitant, and you are not the Annuitant, we
will pay the death benefit as if the Annuitant
survived the beneficiary. If you, the Annuitant,
and the beneficiary die simultaneously, we will
pay the death benefit as if you had survived the
Annuitant and the beneficiary.
PURCHASE PAYMENT PROVISIONS
INITIAL PURCHASE PAYMENT The minimum initial Purchase Payment is $25,000.
PURCHASE PAYMENT LIMITATIONS The minimum subsequent Purchase Payment is $500
for a nonqualified plan and $50 for a qualified
plan. We will accept a subsequent qualified plan
purchase payment of less than $50 when annual
contributions from a payroll deduction or salary
reduction plan equals or exceeds $600. The maximum
Purchase Payment that may be made during a
Contract Year without our approval is $500,000 for
a nonqualified plan; or the maximum permitted by
the Internal Revenue Code for a qualified plan. We
will not accept Purchase Payments more frequently
than once every other week.
Subsequent nonqualified Purchase Payments must
first be applied to the General Account or any
Subaccount whose value is less than $500. After
each initial account has been allocated at least
$500, Purchase Payments may be allocated to a new
account.
Subsequent qualified plan contributions from a
payroll deduction or salary reduction program of
$50 or more may be made to the General Account or
to an additional subaccount.
We will deduct any applicable state premium taxes
from the purchase payments we apply to the
contract.
We reserve the right to waive or modify these
limits.
PLACE OF PAYMENT All Purchase Payments under this contract must be
paid to us at our home office or such other
location as we may select. We will notify you
and any other interested parties in writing of
such other locations. Purchase Payments received
by an agent will begin earning interest after we
receive it.
GENERAL ACCOUNT PROVISIONS
GENERAL ACCOUNT The guaranteed benefits under this contract are
provided through the General Account.
GENERAL ACCOUNT CONTRACT
VALUE The General Account Contract Value includes
1. your Purchase Payments allocated to the General
Account; 2. amounts transferred from a Subaccount
to the General Account at your request; and 3. the
interest credited to amounts so allocated or
transferred. Transfers and withdrawals from the
General Account reduce the General Account
Contract Value.
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GENERAL ACCOUNT PROVISIONS (CONTINUED)
The initial General Account interest rate credited
to the initial Purchase Payment is in effect
through the end of the Guarantee Period and is
shown in the Contract Schedule. At the beginning
of each subsequent Guarantee Period shown in the
Contract Schedule, we will declare the General
Account interest rate applicable to the initial
Purchase Payment for each such subsequent
Guarantee Period. We will declare the General
Account interest rate with respect to each
subsequent Purchase Payment received. Any such
Purchase Payment we receive will be credited that
rate through the end of the Guarantee Period shown
in the Contract Schedule. At the beginning of each
subsequent Guarantee Period, we will declare the
General Account interest rate applicable to each
subsequent Purchase Payment for such Guarantee
Period.
We reserve the right to declare the General
Account current interest rates based upon: the
Issue Date; the date we receive a Purchase
Payment; or the date of account transfer.
We calculate the interest credited to the General
Account by compounding daily, at daily interest
rates, rates which would produce at the end of a
Contract Year a result identical to the one
produced by applying an annual interest rate.
The minimum guaranteed General Account interest
rate is 3.00% per year.
GUARANTEE PERIOD PROVISIONS
GUARANTEE PERIOD We hold all amounts allocated to a Guarantee
Period in a non-unitized separate account. The
initial Guarantee Periods available under the
Contract are shown in the Contract Schedule.
GUARANTEE PERIOD VALUE On any Valuation Date, the Guarantee Period
value includes:
1. your Purchase Payments or transfers allocated
to the Guarantee Period Value at the beginning of
its Guarantee Period; plus
2. interest credited; minus
3. withdrawals, previously assessed withdrawal
charges and transfers; minus
4. any applicable portion of the Records
Maintenance Charge and charges for other benefits;
adjusted for
5. any applicable Market Value Adjustment
previously made.
The Guarantee Periods initially elected and the
interest rates initially credited are shown in the
Contract Schedule. The initial interest rate
credited to subsequent Purchase Payments will be
declared at the time the payment is received. At
the end of a Guarantee Period, we will declare a
guaranteed interest rate applicable for the next
subsequent Guarantee Period of the same duration.
ACCUMULATED GUARANTEE PERIOD On any Valuation Date, the Accumulated Guarantee
VALUE Period value is the sum of the Guarantee Period
Values. At any time during the Accumulation
Period, the Accumulated Guarantee Period Value may
be allocated to a maximum of forty Guarantee
Periods.
We calculate the interest credited to the
Guarantee Period Value by compounding daily, at
daily interest rates, rates which would produce
at the end of a Contract Year a result identical
to the one produced by applying an annual
interest rate.
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GUARANTEE PERIOD PROVISIONS (CONTINUED)
MARKET VALUE ADJUSTMENT The Market Value Adjustment formula is stated in
the Contract Schedule. This formula is applicable
for both an upward or downward adjustment to a
Guarantee Period Value when, prior to the end of a
Guarantee Period, such value is:
1. taken as a total or partial withdrawal;
2. applied to purchase an annuity option; or
3. transferred to another Guarantee Period, the
Fixed Account, or a Subaccount.
However, a Market Value Adjustment will not be
applied to any Guarantee Period Value transaction
effected within 30 days after the end of the
applicable Guarantee Period.
VARIABLE ACCOUNT PROVISIONS
SEPARATE ACCOUNT The variable benefits under this contract are
provided through the KILICO Variable Annuity
Separate Account. This is called the Separate
Account. The Separate Account is registered with
the Securities and Exchange Commission as a unit
investment trust under the Investment Company
Act of 1940. It is a separate investment account
maintained by us into which a portion of the
company's assets have been allocated for this
contract and may be allocated for certain other
contracts.
LIABILITIES OF SEPARATE The assets equal to the reserves and other
ACCOUNT liabilities of the Separate Account will not be
charged with liabilities arising out of any other
business we may conduct. We will value the assets
of the Separate Account no each Valuation Date.
SEPARATE ACCOUNT CONTRACT On any Valuation Date the Separate Account
VALUE Contract Value is the sum of its Subaccount
values.
SUBACCOUNTS The Separate Account consists of several
Subaccounts. The initial Subaccounts available
under this Contract are shown in the Contract
Schedule. We may, from time to time, combine or
remove Subaccounts in the Separate Account and
establish additional Subaccounts of the Separate
Account. In such event we may permit you to select
other Subaccounts under this contract. However,
the right to select any other Subaccount is
limited by the terms and conditions we may impose
on such transactions.
FUND Each Subaccount of the Separate Account will buy
shares of a separate series of a fund. Each fund
is registered under the Investment Company Act of
1940 as an open-end diversified management
investment company. Each series of a fund
represents a separate investment portfolio which
corresponds to one of the Subaccounts of the
Separate Account.
If we establish additional Subaccounts each new
Subaccount will invest in a new series of a fund
or in shares of another investment company. We may
also substitute other investment companies.
RIGHTS RESERVED BY THE We reserve the right, subject to compliance with
COMPANY the current law or as it may be changed in the
future:
1. To operate the Separate Account in any form
permitted under the Investment Company Act of 1940
or in any other form permitted by law;
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VARIABLE ACCOUNT PROVISIONS (CONTINUED)
2. To take any action necessary to comply with or
obtain and continue any exemptions from the
Investment Company Act of 1940 or to comply with
any other applicable law;
3. To transfer any assets in any Subaccount to
another Subaccount or to one or more separate
accounts, or the General Account, or to add,
combine or remove Subaccounts in the Separate
Account;
4. To delete the shares of any of the portfolios
of a fund or any other open-end investment company
and to substitute, for the fund shares held in any
Subaccount, the shares of another portfolio of a
fund or the shares of another investment company
or any other investment permitted by law; and
5. To change the way we assess charges, but not to
increase the aggregate amount above that currently
charged to the Separate Account and the funds in
connection with the contracts.
When required by law, we will obtain your approval
of such changes and the approval of any regulatory
authority.
ACCUMULATION UNIT VALUE Each Subaccount has an accumulation unit value.
When Purchase Payments or other amounts are
allocated to a Subaccount, a number of units are
purchased based on the accumulation unit value of
the Subaccount at the end of the Valuation Period
during which the allocation is made. When amounts
are transferred out of or deducted from a
Subaccount, units are redeemed in a similar manner.
The value of a Subaccount on any Valuation Date is
the number of units held in the Subaccount times
the Accumulation Unit Value on that Valuation Date.
The accumulation unit value for each subsequent
Valuation Period is the investment experience
factor for that period multiplied by the
accumulation unit value for the period immediately
preceding. Each Valuation Period has a single
accumulation unit value that is applied to each day
in the period. The number of Accumulation Units
will not change as a result of investment
experience.
INVESTMENT EXPERIENCE Each Subaccount has its own investment experience
FACTOR factor. The investment experience of the Separate
Account is calculated by applying the investment
experience factor to the value in each Subaccount
during a Valuation Period.
The investment experience factor of a Subaccount
for a Valuation Period is determined by dividing
1. by 2. and subtracting 3. from the result, where:
1. is the net result of:
a. the net asset value per share of the investment
held in the Subaccount determined at the end of the
current Valuation Period; plus
b. the per share amount of any dividend or capital
gain distributions made by the investments held in
the Subaccount, if the "exdividend" date occurs
during the current Valuation Period; plus or minus
c. a charge or credit for taxes reserved for the
current Valuation Period which we determine
resulted from the investment operations of the
Subaccount;
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VARIABLE ACCOUNT PROVISIONS (CONTINUED)
2. is the net asset value per share of the
investment held in the Subaccount, determined at
the end of the last Valuation Period;
3. is the factor representing the sum of the
Separate Account charges stated in the Contract
Schedule for the number of days in the Valuation
Period.
TRANSFER AND WITHDRAWAL PROVISIONS
TRANSFERS DURING THE You may direct the following transfers:
ACCUMULATION PERIOD
1. All or part of the Separate Account Contract
Value or a Guarantee Period Value may be
transferred to the General Account or to another
Subaccount. We will allow the first transfer
fifteen days after the Issue Date.
2. During the thirty days that follow a Contract
Year anniversary or the thirty day period that
follows the date you receive an annual report, if
later, all or part of the General Account Contract
Value, less debt, may be transferred to one or more
Subaccounts.
Transfers will also be subject to the
following conditions:
1. The minimum amount which may be transferred is
$500 or, if smaller, the remaining value in the
General Account or a Subaccount or Guarantee Period;
2. No partial transfer will be made if the remaining
Contract Value of the General Account or any
Subaccount or Guarantee period will be less than
$500 unless the transfer will eliminate your
interest in such account;
3. No transfer may be made within seven calendar
days of the date on which the first annuity payment
is due;
4. You may request an additional transfer from the
General Account to one or more Subaccounts during
the thirty day period before the date on which the
first annuity payment is due. Such transfer must
become effective no later than the seventh calendar
day before such due date;
5. When you request a transfer from the General
Account Contract Value to a Subaccount or Guarantee
Period, we will limit the amount that can be
transferred to the amount which exceeds debt, if
any, applicable to the total General Account
Contract Value for the Contract Year during which
the total transfer is made.
6. We reserve the right to charge $25 for each
transfer in excess of 12 in a Contract Year.
7. Transfers may not be made from any Subaccount or
Guarantee Period into the Fixed Account for the
six-month period following any transfer from the
Fixed Account into one or more of the Subaccounts.
Any transfer from a Guarantee Period is subject to a
Market Value Adjustment unless the transfer is
effective within thirty days after the end of the
applicable Guarantee Period.
We will transfer amounts bought by Purchase Payments
and all related accumulations received in a given
Contract Year, in the chronological order we
received them.
Any transfer request must clearly specify: 1. the
amount which is to be transferred; and 2. the names
of the accounts which are affected. We will only
honor a telephone transfer request if a properly
executed telephone transfer authorization is on file
with us. Such request for a transfer must comply
with the conditions of the authorization.
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TRANSFER AND WITHDRAWAL PROVISIONS (CONTINUED)
We reserve the right at any time and without
notice to any party, to terminate, suspend, or
modify these transfer rights.
WITHDRAWALS DURING THE During the Accumulation Period, you may withdraw
ACCUMULATION PERIOD all or part of the Contract Value reduced by any
withdrawal charge, applicable premium taxes, and
adjusted by any applicable Market Value
Adjustment. The Market Value Adjustment formula
will be applied to the applicable portion of the
total value withdrawn unless such withdrawal is
effective within thirty days after the end of the
applicable Guarantee Period. We must receive a
written request that indicates the amount of the
withdrawal from the Fixed Account and each
Subaccount and Guarantee Period. You must return
the Contract to us if you elect a total withdrawal.
Withdrawals are subject to these conditions:
1. Each withdrawal must be at least $100 or the
value that remains in the Fixed Account,
Subaccount, or Guarantee Period if smaller;
2. A minimum of $500 must remain in the account
after you make a withdrawal unless the account is
eliminated by such withdrawal;
3. The maximum you may withdraw from any account
is the value of the respective account less the
amount of any withdrawal charge;
4. Any withdrawal amount you request will be
increased by the withdrawal charge;
5. Partial withdrawals may not be taken from the
Fixed Account in the first Contract Year.
TRANSFER AND WITHDRAWAL We will withdraw or transfer from the General
PROCEDURES Account or Guarantee Periods as of the Valuation
Date that follows the date we receive your written
or telephone transfer request. To process a
withdrawal, the request must contain all required
information.
We will redeem the necessary number of Accumulation
Units to achieve the dollar amount when the
withdrawal or transfer is made from a Subaccount.
We will reduce the number of Accumulation Units
credited in each Subaccount by the number of
Accumulation Units redeemed. The reduction in the
number of Accumulation Units is determined on the
basis of the Accumulation Unit Value at the end of
the Valuation Period when we receive the request,
provided the request contains all required
information. We will pay the amount within seven
calendar days after the date we receive the
request, except as provided below.
DEFERMENT OF WITHDRAWAL OR If the withdrawal or transfer is to be made from a
TRANSFER Subaccount, we may suspend the right of withdrawal
or transfer or delay payment more than seven
calendar days: 1. during any period when the New
York Stock Exchange is closed other than customary
weekend and holiday closings; 2. when trading
markets normally utilized is restricted, or an
emergency exists as determination by the Securities
and Exchange Commission, so that disposal of
investments or determination of the Accumulation
Unit Value is not practical; or 3. for such other
periods as the Securities and Exchange Commission
by order may permit for protection of Owners.
We may defer the payment or a withdrawal or
transfer from the General Account or Guarantee
Periods, for the period permitted by law. This
can never be more than six months after you send
us a written request. During the period of
deferral, we will continue to credit interest, at
the then current interest rate(s), to the General
Account Contract Value and/or each Guarantee
Period Value.
13
LOAN PROVISIONS
LOANS You may request a loan any time before the
Annuity Date. You must assign this contract
to us as security for a loan.
The maximum loan available is the General
Account Contract Value minus: 1. any
withdrawal charge that applies to the total
General Account Contract Value in the year in
which you make the loan; and 2. interest on
the loan paid to the end of the Contract Year
in which you make the loan.
We may defer granting a loan for six months
from the date we receive the written loan
request.
LOAN INTEREST The loan interest is 5.50% per year
compounded daily at the daily equivalent of a
5.50% annual rate. Interest is due at the end
of each Contract Year. If you do not pay
interest when it is due, we will add it to
the loan and it will bear interest at the
same rate as the loan. We will charge
interest on a daily basis.
LOAN PAYMENT You may repay a debt in full or in part at
any time prior to the Annuity Date.
If the debt equals or exceeds the General
Account Contract Value, less any withdrawal
charge that applies to the total withdrawal
of the General Account, your interest in the
General Account will terminate. The
termination occurs thirty-one days after we
mail notice of termination to your last known
address and that of any assignee of record.
We will apply any repayment of debt: first to
reduce that part of the debt that can be
attributed to interest; and second to that
part of the debt that can be attributed to
Purchase Payments.
EFFECT OF LOANS ON INTEREST RATES While there is a loan, the portion of the
General Account Contract Value that equals
the debt will earn interest at 3.00% per
year, compounded daily at the daily
equivalent of a 3.00% annual rate, instead of
the current interest rate.
DEATH BENEFIT PROVISIONS
AMOUNT PAYABLE UPON DEATH We compute the death benefit at the end of
the Valuation Period following: our receipt
of due proof of death; and the return of this
contract.
If death occurs prior to attaining age 75, we
will pay the greater of: a. the Contract
Value less debt; or b. the total amount of
Purchase Payments, less any debt and the
aggregate dollar amount of all previous
withdrawals. We will pay the Contract Value
less debt if death occurs at age 75 or later
PAYMENT OF DEATH BENEFITS We will pay a death benefit before the
Annuity Date if: the Owner who is also the
Annuitant dies; or either the Annuitant or
the Owner who is not the Annuitant dies.
The death benefit will be paid upon the death
of a Joint Owner. If Joint Annuitants are
named and they are not the Owners of this
contract, we will pay the death benefit upon
the death of the surviving Joint Annuitant.
We will pay the death benefit to the
beneficiary when we receive due proof of
death. We will then have no further
obligation under this contract.
When you die, we will pay the death benefit
in a lump sum. This sum may be deferred for
up to five years from the date of your death.
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DEATH BENEFIT PROVISIONS (CONTINUED)
Instead of a lump sum payment the beneficiary
may elect to have the death benefit
distributed as stated in Option 1 for a
period not to exceed the beneficiary's life
expectancy; or Options 2, or 3 based upon the
life expectancy of the beneficiary as
prescribed by federal regulations. The
beneficiary must make this choice within
sixty days of the time we receive due proof
of death and distribution must commence
within one year of the date of death.
If the beneficiary is not a natural person,
the beneficiary must elect that the entire
death benefit be distributed within five
years of your death. Distribution of the
death benefit must start within one year
after your death. It may start later if
prescribed by federal regulations.
If the primary beneficiary is the surviving
spouse when you die, the surviving spouse may
elect to be the successor owner of this
contract. There will be no requirement to
start a distribution of death benefits.
ANNUITY PERIOD PROVISIONS
ELECTION OF ANNUITY OPTION We must receive an election of an Annuity
option in writing. You may make an election
before the Annuity Date providing the
Annuitant is alive. The Annuitant may make an
election on the Annuity Date unless you have
restricted the right to make such an
election. The beneficiary may make an
election when we pay the death benefit.
An election will be revoked by: 1. a
subsequent change of beneficiary; or 2. an
assignment of this contract unless the
assignment provides otherwise.
Subject to the terms of the death benefit
provision, the beneficiary may elect to have
the death benefit remain with us under one of
the Annuity options.
If an Annuity option is not elected, an
Annuity will be paid under Option 3 for a
guaranteed period of ten years and for as
long thereafter as the Annuitant is alive.
If the total Contract Value is applied under
one of the Annuity options, this contract
must be surrendered to us.
An option can not be changed after the first
Annuity payment is made.
If, on the seventh calendar day before the
first Annuity payment due date, all the
Contract Value is allocated to the General
Account or Guarantee Periods, the Annuity
will be paid as a fixed annuity. If all of
the Contract Value on such date is allocated
to the Separate Account, the Annuity will be
paid as a variable Annuity. If the Contract
Value on such date is allocated to both the
General Account and a subaccount, then the
Annuity will be paid as a combination of a
fixed and a variable Annuity. A fixed and
variable Annuity payment will reflect the
investment performance of the subaccounts in
accordance with the allocation of the
Contract Values existing on such date.
Allocations will not be changed thereafter,
except as provided in the Transfers During
the Annuity Period provision of this
contract.
Payments for all options are derived from the
applicable tables. Current Annuity rates will
be used if they produce greater payments than
those quoted in the contract. The age in the
tables is the age of the payee on the last
birthday before the first payment is due.
15
ANNUITY PERIOD PROVISIONS (CONTINUED)
The option selected must result in a payment
that is at least equal to our minimum
payment, according to our rules, at the time
the Annuity option is chosen. If at any time
the payments are less than the minimum
payment, we have the right to increase the
period between payments to quarterly,
semi-annual or annual so that the payment is
at least equal to the minimum payment or to
make payment in one lump sum.
OPTION 1
FIXED INSTALMENT ANNUITY We will make monthly payments for a fixed
number of instalments. Payments must be made
for at least 5 years, but not more than 30
years.
OPTION 2
LIFE ANNUITY We will make monthly payments while the payee
is alive.
OPTION 3
LIFE ANNUITY WITH INSTALMENTS We will make monthly payments for a
GUARANTEED guaranteed period and thereafter while the
payee is alive. The guaranteed period must be
selected at the time the Annuity option is
chosen. The guaranteed periods available are
5, 10, 15 and 20 years.
OPTION 4
JOINT AND SURVIVOR ANNUITY We will pay the full monthly income while
both payees are alive. Upon the death of
either payee, we will continue to pay the
surviving payee a percentage of the original
monthly payment. The percentage payable to
the surviving payee must be selected at the
time the Annuity option is chosen. The
percentages available are 50%, 66 2/3%, 75%,
and 100%.
OTHER OPTIONS We may make other Annuity options available.
Payments are also available on a quarterly,
semi-annual or annual basis.
FIXED ANNUITY The General Account Contract Value on the
first day preceding the date on which the
first annuity payment is due, is first
reduced by any debt and premium taxes that
apply. The value that remains will be used to
determine the fixed annuity monthly payment
in accordance with the Annuity option
selected.
VARIABLE ANNUITY The Separate Account Contract Value, at the
end of the Valuation Period preceding the
Valuation Period that includes the date on
which the first Annuity payment is due, is
first reduced by any annuitization charge,
Records Maintenance Charge, charges for other
benefits if any that may be added by a rider
to this Contract and any premium taxes that
apply. The value that remains is used to
determine the first monthly Annuity payment.
The first monthly Annuity payment is based
upon the guaranteed annuity option shown in
the Annuity Option Table. You may elect any
option available.
The dollar amount of subsequent payments may
increase or decrease depending on the
investment experience of each Subaccount. The
number of Annuity Units per payment will
remain fixed for each Subaccount unless a
transfer is made. If a transfer is made, the
number of Annuity Units per payment will
change.
The number of Annuity Units for each
Subaccount is calculated by dividing a. by b.
where:
16
ANNUITY PERIOD PROVISIONS (CONTINUED)
a. is the amount of the monthly payment that
can be attributed to that Xxxxxxxxxx; and
b. is the Annuity Unit Value for that
Subaccount at the end of the Valuation
Period. The Valuation Period includes the
date on which the payment is made.
Monthly Annuity payments, after the first
payment, are calculated by summing up, for
each Subaccount, the product of a. times b.
where:
a. is the number of Annuity Units per payment
in each Subaccount; and
b. is the Annuity Unit Value for that
Subaccount at the end of the Valuation
Period. The Valuation Period includes the
date on which the payment is made.
After the first payment, we guarantee that
the dollar amount of each Annuity payment,
will not be affected adversely by actual
expenses or charges in mortality experience
from the expense and mortality assumptions on
which we based the first payment.
ANNUITY UNIT VALUE The value of an Annuity Unit, for each
Subaccount, at the end of any subsequent
Valuation Period is determined by multiplying
the result of a. times b. by c. where:
a. is the Annuity Unit Value for the
immediately preceding Valuation Period; and
b. is the net investment factor for the
Valuation Period for which the Annuity Unit
Value is being calculated; and
c. is the interest factor of .99993235 per
calendar day of such subsequent Valuation
Period to offset the effect of the assumed
rate of 2.50% per year used in the Annuity
Option Table.
The net investment factor for each Subaccount
for any Valuation Period is determined by
dividing a. by b. where:
a. is the value of an Annuity Unit of the
applicable Subaccount as of the end of the
current Valuation Period plus or minus the
per share charge or credit for taxes
reserved; and
b. is the value of an Annuity Unit of the
applicable Subaccount as of the end of the
immediately preceding Valuation Period, plus
or minus the per share charge or credit for
taxes reserved.
TRANSFERS DURING THE ANNUITY During the Annuity Period, the payee(s) may
PERIOD not convert fixed Annuity payments to
variable Annuity payments. However, during
the Annuity Period, the payee(s), by sending
us a written notice in a form satisfactory to
us, may convert variable Annuity payments to
fixed Annuity payments; or have variable
Annuity payments reflect the investment
experience of other Subaccounts. A transfer
may be made subject to the following:
1. Transfers from a Subaccount to the General
Account can be effective only on an
anniversary of the first Annuity payment
date. We must receive notice of such transfer
at least thirty days prior to the effective
date of the transfer;
17
ANNUITY PERIOD PROVISIONS (CONTINUED)
2. Transfers from one Subaccount to another
Subaccount will be effective during the
Valuation Period next succeeding the date the
notice is Received by us. However, if the
notice for the transfer is received within
seven days immediately preceding an Annuity
payment date, the transfer will be effective
during the Valuation Period next succeeding
that Annuity payment date. No transfer to a
Subaccount may be made during the first year
of the Annuity period. In subsequent years
all transfers between Subaccounts will be
made on the same day in a given year and are
limited to one transfer each year;
3. A payee may not have more than three
Subaccounts after any transfer; and
4. The payee's entire interest in a
Subaccount must be transferred.
The number of Annuity Units per payment
attributable to a Subaccount to which
transfer is made is equal to, in the case of
a transfer between Subaccounts, the number of
Annuity Units per payment in the Subaccount
from which transfer is being made multiplied
by the Annuity Unit Value for that
Subaccount, such amount being divided by the
Annuity Unit Value for the Subaccount to
which transfer is being made.
The amount of money allocated to the General
Account in the event of a transfer from a
Subaccount equals the annuity reserve for the
payee's interest in such subaccount. The
annuity reserve is the product of a.
multiplied by b. multiplied by c. where: a.
is the number of Annuity Units representing
the payee's interest in such Subaccount per
Annuity payment; b. is the Annuity Unit Value
for such Subaccount; and c. is the present
value of $1.00 per payment period using the
attained age(s) of the payee(s) and any
remaining guaranteed payments that may be due
at the time of the transfer. The guaranteed
monthly payments are based on an interest
rate of 2.50% per year and, where mortality
is involved, the "1983 Table a" individual
annuity mortality table developed by the
Society of Actuaries with a five year set
back. Money allocated to the General Account
upon such transfer will be applied under the
same Annuity option as originally elected.
Any guaranteed period payments will be
adjusted to reflect the number of guaranteed
payments have already been made. If all
guaranteed payments have already been made,
no further payments will be guaranteed.
All amounts and Annuity Unit Values are
determined as of the end of the Valuation
Period which precedes the effective date of
the transfer.
We reserve the right at any time and without
notice to any party to terminate, suspend or
modify the transfer privileges.
SUPPLEMENTARY AGREEMENT A supplementary agreement will be issued to
reflect payments that will be made under a
settlement option. If payment is made as a
death benefit distribution, the effective
date will be the date of death. Otherwise the
effective date will be the date chosen by the
Owner.
DATE OF FIRST PAYMENT Interest, under an option, will start to
accrue on the effective date of the
supplementary agreement. If the normal
effective date is the 29th, 30th, or 31st of
the month, the effective date will be the
28th day of that month.
EVIDENCE OF AGE, SEX AND We may require satisfactory evidence of the
SURVIVAL age, sex and the continued survival of any
person on whose life the income is based.
18
ANNUITY PERIOD PROVISIONS (CONTINUED)
MISSTATEMENT OF AGE OR SEX If the age or sex of the payee has been
misstated, the amount payable under this
contract will be such as the Purchase
Payments sent to us would have purchased at
the correct age or sex. Interest not to
exceed 6% compounded each year will be
charged to any over payment or credited to
any underpayment against future payments we
may make under this contract.
BASIS OF ANNUITY OPTIONS The guaranteed monthly payments are based on
an interest rate of 2.50% per year and, where
mortality is involved, the "1983 Table a"
individual annuity mortality table developed
by the Society of Actuaries, with a five year
set back.
DISBURSEMENT OF FUNDS UPON When the payee dies, the value of any unpaid
DEATH OF PAYEE: UNDER installments will be paid, in one sum, to the
OPTIONS 1 OR 3 estate of the payee unless otherwise provided
in the supplementary agreement. The commuted
value based upon a minimum interest rate of
not less than 2.50% will be paid. The
commuted value of any variable installments
will be determined by applying the Annuity
Unit Value next determined by applying the
Annuity Unit Value next determined following
our receipt of due proof of death.
PROTECTION OF BENEFITS Unless otherwise provided in the
supplementary agreement, the payee may not
commute, anticipate, assign, alienate or
otherwise hinder the receipt of any payment.
CREDITORS The proceeds of this contract and any payment
under an annuity option will be exempt from
the claim of creditors and from legal process
to the extent permitted by law.
19
FIXED AND VARIABLE DEFERRED ANNUITY
NON-PARTICIPATING
ALL BENEFITS, PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED UPON THE
INVESTMENT EXPERIENCE OF THE SUBACCOUNTS, ARE VARIABLE AND ARE NOT GUARANTEED AS
TO DOLLAR AMOUNT. REFER TO THE VARIABLE ACCOUNT AND ANNUITY PERIOD PROVISIONS
FOR A DETERMINATION OF ANY VARIABLE BENEFITS.
This is a legal contract between the Owner and Xxxxxx Investors Life Insurance
Company.
READ YOUR CONTRACT CAREFULLY
XXXXXX INVESTORS LIFE INSURANCE COMPANY
A Stock Life Insurance Company
0 Xxxxxx Xxxxx, Xxxx Xxxxx, Xxxxxxxx 00000-0000
