Allianz [Logo]
Allianz Life Insurance Company of North America
0000 Xxxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000-0000
A Stock Company
(Herein Called the Company)
This is a legal Contract between you (referred to in this Contract as you and
your) and Allianz Life Insurance Company of North America (herein referred to as
we, us and our). We will pay benefits to you, the Annuitant or Joint Annuitant,
if any, if either of you are living on the Income Date. The manner in which the
dollar amounts of Annuity Payments are determined as described in this Contract.
The first Annuity Payment will be paid on the Income Date and subsequent
payments will be made on the corresponding day of each month (or other agreed
intervals) thereafter in accordance with the Annuity Options selected.
This Contract is issued in consideration of the payment of the single Purchase
Payment.
READ YOUR CONTRACT CAREFULLY
RIGHT TO EXAMINE
This Contract may be returned within 10 days after you receive it ("free-look
period"). It can be mailed or delivered to either us or the agent who sold it.
Return of this Contract by mail is effective on being postmarked, properly
addressed and postage prepaid. The returned Contract will be treated as if we
had never issued it. We will promptly refund the net amount allocated to the
Variable Account modified for investment experience plus any Taxes deducted less
any benefits paid in states where permitted. This may be more or less than the
single Purchase Payment. We have the right to allocate the single Purchase
Payment to the Money Market Investment Option until the expiration of the
free-look period. If we so allocate the Purchase Payment, we will refund the
single Purchase Payment, less any benefits paid.
Benefits available under this Contract are not less than those required by
statute of the state in which this Contract is delivered.
This is a Variable Annuity Contract with Annuity Payments and other annuity
benefits increasing or decreasing depending on the experience of the Variable
Account which is set forth in the Contract Schedule.
Signed for Allianz Life Insurance Company of North America by:
[Xxxxxxx Xxxxx] [Xxxxxxx Xxxxxxxx]
Xxxxxxx X. Xxxxx Xxxxxxx Xxxxxxxx
Senior Vice President, Secretary President and Chief Marketing Officer
and Chief Legal Officer
INDIVIDUAL IMMEDIATE VARIABLE ANNUITY
NON-PARTICIPATING
CONTRACT SCHEDULE
CONTRACT OWNER: [Xxxx Xxx] CONTRACT NUMBER: [??687456]
JOINT OWNER: [Xxxx Xxx] ISSUE DATE: [04/15/02]
ANNUITANT: [Xxxx Xxx] INCOME DATE: [04/15/15]
PURCHASE PAYMENT: [$35,000]; additional payments cannot be made
to this Contract.
If you purchase more than one Contract,
the single Purchase Payment does not need
to be [$35,000] if the average Purchase
Payment for each Contract is [$35,000] or
more.
MAXIMUM TOTAL
PURCHASE PAYMENT: [$1 million; a higher amount may be accepted
with our prior approval]
ALLOCATION GUIDELINES:
[1. Currently, you can select up to 10 of the Investment Options and
/or the Fixed Account.
2. If allocations are made in percentages, whole numbers must be used.]
INVESTMENT OPTIONS:
VARIABLE ACCOUNT: [Allianz Life Variable Account B]
-
[XXXXX VA FINANCIAL]
[XXXXX VA VALUE]
[DREYFUS SMALL CAP STOCK INDEX]
[DREYFUS STOCK INDEX]
[FRANKLIN GLOBAL COMMUNICATIONS SECURITIES]
[FRANKLIN GROWTH AND INCOME SECURITIES]
[FRANKLIN HIGH INCOME]
[FRANKLIN INCOME SECURITIES]
[FRANKLIN LARGE CAP GROWTH SECURITIES]
[FRANKLIN REAL ESTATE]
[FRANKLIN RISING DIVIDENDS SECURITIES]
[FRANKLIN SMALL CAP]
[FRANKLIN SMALL CAP VALUE SECURITIES]
[FRANKLIN U.S. GOVERNMENT]
[FRANKLIN ZERO COUPON - 2005]
[FRANKLIN ZERO COUPON - 2010]
[XXXXXXXX 20/20 FOCUS]
[MUTUAL DISCOVERY SECURITIES]
[MUTUAL SHARES SECURITIES]
[XXXXXXXXXXX GLOBAL SECURITIES/VA]
[XXXXXXXXXXX HIGH INCOME/VA]
[XXXXXXXXXXX MAIN STREET GROWTH & INCOME/VA]
[PIMCO VIT HIGH YIELD]
[PIMCO VIT STOCKSPLUS GROWTH AND INCOME]
[PIMCO VIT TOTAL RETURN]
[XXXXXXXX SMALL-CAP VALUE]
[XX XXXXXXXX INTERNATIONAL GROWTH]
[SP STRATEGIC PARTNERS FOCUSED GROWTH]
[XXXXXXXXX DEVELOPING MARKETS SECURITIES]
[XXXXXXXXX FOREIGN SECURITIES]
[XXXXXXXXX GROWTH SECURITIES]
[USAZ AIM BASIC VALUE]
[USAZ AIM BLUE CHIP]
[USAZ AIM DENT DEMOGRAPHIC TRENDS]
[USAZ AIM INTERNATIONAL EQUITY]
[USAZ ALLIANCE CAPITAL GROWTH AND INCOME]
[USAZ ALLIANCE CAPITAL LARGE CAP GROWTH]
[USAZ ALLIANCE CAPITAL TECHNOLOGY]
[USAZ MONEY MARKET]
[USAZ XXXXXXXXXXX EMERGING GROWTH]
[USAZ PIMCO GROWTH AND INCOME]
[USAZ PIMCO RENAISSANCE]
[USAZ PIMCO VALUE]
[USAZ XXXXXXXXX DEVELOPED MARKETS]
[USAZ XXX XXXXXX AGGRESSIVE GROWTH]
[USAZ XXX XXXXXX XXXXXXXX]
[USAZ XXX XXXXXX EMERGING GROWTH]
[USAZ XXX XXXXXX GROWTH AND INCOME]
[USAZ XXX XXXXXX GROWTH]
[ALLIANZ LIFE GENERAL ACCOUNT]:
[ALLIANZ LIFE FIXED ACCOUNT]
[LIMITED INVESTMENT OPTIONS: There are limits on your ability to invest in the
Limited Investment Options. Up to [25%] of the Payment Contract Value can be
invested in the Limited Investment Options if you chose an AIR of [3.5%]. The
maximum percentage of Payment Contract Value invested in the Limited Investment
Options is 10% if you chose an AIR of [5%].
The Limited Investment Options are listed as follows: USAZ Money Market,
Franklin High Income, Franklin Income Securities, Franklin Real Estate, Franklin
U.S. Government, Franklin Zero Coupon 2005, Franklin Zero Coupon 2010,
Xxxxxxxxxxx High Income/VA, PIMCO VIT High Yield, and the PIMCO VIT Total
Return.]
MORTALITY AND EXPENSE RISK CHARGE: The mortality and expense risk charge is
equal on an annual basis to [1.40%] of the average daily net assets of the
Variable Account. The mortality and expense risk charge increases by 1% if you
choose a lifetime income Annuity Option (Annuity Options 1-5) and the bonus
feature.
TRANSFERS:
NUMBER OF FREE TRANSFERS PERMITTED: Currently, there are no limits on
the number of transfers that can be made. We reserve the right to
change this, but you will always be allowed at least 12 free transfers
in any Contract Year. Currently, you are allowed [12] free transfers
each Contract Year. This applies to transfers prior to and after the
Income Date.
TRANSFER FEE: For each transfer in excess of the free transfers
permitted, the transfer fee is [$25]. Transfers made at the end of the
Right to Examine period by us, any transfers made pursuant to a
regularly scheduled transfer or other transfers under programs
specifically waiving the transfer fee will not be counted in
determining the application of the transfer fee.
WITHDRAWALS:
WITHDRAWAL CHARGES: You may make full or partial withdrawals as
specified below. The withdrawal charges is equal to the difference
between (a) the present value of remaining Supportable Payments,
calculated using the Assumed Investment Return (AIR) as the discount
rate plus the present value of remaining fixed Base Annuity Payments
calculated using the Current Rate and (b) the Withdrawal Values
provided under the Contract.
PARTIAL WITHDRAWALS: Partial withdrawals have the effect of reducing
the amount of future Annuity Payments. The Base Annuity Payment will
be reduced by a percentage equal to the amount of the partial
withdrawal divided by the full Payment Withdrawal Value at that time.
For Annuity Payments in the Investment Options, this is accomplished
through a proportional reduction in the number of Annuity Units.
PARTIAL WITHDRAWALS ARE NOT AVAILABLE UNDER ANNUITY OPTION 1, 3 OR 5.
WITHDRAWAL VALUES UNDER ANNUITY OPTIONS 1, 2, 3, 4, AND 5: The amount
of the Withdrawal Value will be equal to the equal to the
Stabilization Account Value plus a Payment Withdrawal Value that
currently is equal to [4 times] the annualized sum of the current
amount of the Supportable Payment and of any fixed payment. We reserve
the right to change this Payment Withdrawal Value, but it will never
be less than [2 times] the sum of the current amount of the
Supportable Payment and of any fixed payment.
WITHDRAWAL VALUES UNDER ANNUITY OPTION 6: The withdrawal charge, equal
to the difference between the present value of remaining payments
using the Assumed Investment Return (AIR) and the actual Payment
Withdrawal Value, is capped at [9%] of the Purchase Payment.
STABILIZATION PROCESS: STABILIZATION PAYMENTS AND GUARANTEED MINIMUM INCOME:
Also, from one Income Year to the next, the Stabilized Payment will not change
by more than [10%] except due to any of the Income Change Factors or to an
increase due to the Stabilization Account reaching its cap at [80%] if the
Purchase Payment.
STABILIZATION ACCOUNT: [capped at 80% of the Purchase Payment].
STABILIZED PAYMENT: The Stabilized Payment is equal to this adjusted
sum and then adjusted again such that:
a. The Stabilized Payment cannot be greater than [110%] of the previous
year's Stabilized Payment;
b. The Stabilized Payment cannot be less than [90%] of the previous
year's Stabilized Payment;
c. The Stabilized Payment cannot be less than the guaranteed minimum
income payment described above.
BONUS UNDER LIFE INCOME PLANS (ANNUITY OPTIONS 1 THROUGH 5): The increased
amount would be [10%] of the first Base Annuity Payment for Ages up through 70
and [5%] if the Annuitant's Age on the Income Date is 71 to 74.
ASSUMED INVESTMENT RETURN: [3.5%, 5%]
ASSUMED INVESTMENT RETURN AVAILABLE UNDER ANNUITY OPTION 6: [5%]
[FIXED ACCOUNT GUARANTEED INTEREST RATE: [3%]
We guarantee that the annual interest rate credited on amounts in the Fixed
Account will be at least this rate. Interest rates are guaranteed for at
least one year from receipt of the Purchase Payment.]
RIDERS:
[Group Pension Plan Death Benefit Endorsement] [Individual Retirement
Annuity Endorsement] [Fixed Account with a Market Value Adjustment
Endorsement] [Pension Plan and Profit Sharing Plan Endorsement] [Xxxx
Individual Retirement Annuity Endorsement] [Unisex Endorsement]
SERVICE OFFICE: [USALLIANZ] SERVICE CENTER
[000 Xxxxxx Xxxx
X.X. Box 3031
Berwyn, PA 19312-0031
000-000-0000]
TABLE OF CONTENTS
RIGHT TO EXAMINE..............................................................1
CONTRACT SCHEDULE...........................................................i-v
DEFINITIONS...................................................................4
PURCHASE PAYMENT..............................................................7
PURCHASE PAYMENT.........................................................7
NO DEFAULT...............................................................7
ALLOCATION OF PURCHASE PAYMENT...........................................7
VARIABLE ACCOUNT..............................................................7
THE VARIABLE ACCOUNT.....................................................7
VALUATION OF ASSETS......................................................7
ACCUMULATION UNITS.......................................................7
ACCUMULATION UNIT VALUE..................................................8
MORTALITY AND EXPENSE RISK CHARGE.......................................8
MORTALITY AND EXPENSE GUARANTEE..........................................8
CONTRACT VALUE................................................................8
TRANSFERS.....................................................................8
WITHDRAWAL PROVISIONS........................................................9
WITHDRAWALS..............................................................9
WITHDRAWAL CHARGE.......................................................10
PROCEEDS PAYABLE ON DEATH....................................................10
DEATH OF CONTRACT OWNER BEFORE THE INCOME DATE..........................10
DEATH OF ANNUITANT BEFORE THE INCOME DATE...............................10
DEATH OF THE ANNUITANT ON OR AFTER THE INCOME DATE......................10
PAYMENT OF DEATH BENEFIT................................................11
BENEFICIARY.............................................................11
CHANGE OF BENEFICIARY...................................................11
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION.................................11
CONTRACT OWNER, ANNUITANT, ASSIGNMENT PROVISIONS.............................12
CONTRACT OWNER..........................................................12
JOINT OWNER.............................................................12
ANNUITANT...............................................................12
ASSIGNMENT OF A CONTRACT................................................12
ANNUITY PROVISIONS...........................................................12
GENERAL.................................................................12
VARIABLE ANNUITY PAYOUT.................................................13
SUPPORTABLE PAYMENTS....................................................14
STABILIZATION PROCESS: STABILIZAATION PAYMENTS AND GUARANTEED
MINIMUM INCOME..........................................................15
INCOME DATE.............................................................16
BONUS...................................................................16
SELECTION OF AN ANNUITY OPTION..........................................16
ANNUITY OPTIONS.........................................................16
OPTION 1 - LIFE ANNUITY.............................................16
DEATH BENEFIT UNDER ANNUITY OPTION 1................................16
WITHDRAWAL VALUES UNDER ANNUITY OPTION 1............................17
OPTION 2 - LIFE ANNUITY WITH DEATH BENEFIT..........................17
DEATH BENEFIT UNDER ANNUITY OPTION 2................................17
WITHDRAWAL VALUES UNDER ANNUITY OPTION 2............................18
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY..........................19
DEATH BENEFIT UNDER ANNUITY OPTION 3................................19
WITHDRAWAL VALUES UNDER ANNUITY OPTION 3............................19
OPTION 4 - JOINT AND LAST SURVIVOR ANNUITY WITH DEATH BENEFIT.......20
DEATH BENEFIT UNDER ANNUITY OPTION 4............................... 20
WITHDRAWAL VALUES UNDER ANNUITY OPTION 4............................20
OPTION 5 - REFUND LIFE ANNUITY......................................21
WITHDRAWAL VALUES UNDER ANNUITY OPTION 5............................22
OPTION 6 - SPECIFIED PERIOD CERTAIN ANNUITY.........................23
WITHDRAWAL VALUES UNDER ANNUITY OPTION 6............................23
GENERAL PROVISIONS...........................................................23
THE CONTRACT............................................................23
NON-PARTICIPATING IN SURPLUS............................................23
INCONTESTABILITY........................................................23
MISSTATEMENT OF AGE OR SEX..............................................23
CONTRACT SETTLEMENT.....................................................24
REPORTS.................................................................24
TAXES...................................................................24
EVIDENCE OF SURVIVAL....................................................24
PROTECTION OF PROCEEDS..................................................24
MODIFICATION OF CONTRACT................................................24
DEFINITIONS
ACCUMULATION UNIT: The units into which we convert the portion of your Purchase
Payment invested in Investment Options and which, before the Annuity Calculation
Date, we use to calculate your Contract Value invested in the Investment
Options.
ACCUMULATION UNIT VALUE: The price of Accumulation Units on any Valuation Day.
ADJUSTED CONTRACT VALUE: The Contract Value less any applicable Premium Tax.
AGE: The age of the Annuitants (or, in the case of Joint Annuitants, the age of
the older Annuitant) as of his or her last birthday.
ANNUITANT(S): The natural person(s) upon whose continuation of life any Annuity
Payment involving life contingencies depends. You may change the Annuitant(s) at
any time prior to the Income Date unless the Contract Owner is a non-individual.
ANNUITY CALCULATION DATE: The date we calculate your first Annuity Payment. This
date will be no more than 10 Business Days before the Income Date.
ANNUITY OPTION: An arrangement under which Annuity Payments are made under this
Contract.
ANNUITY PAYMENTS: The series of payments made to you or any named payee after
the Income Date under the Annuity Option selected.
ANNUITY PHASE: The period of time beginning on the Income Date during which
Annuity Payments are made.
ANNUITY RESERVE: The assets which support the Annuity Option you have selected
during the Annuity Phase.
ANNUITY UNIT: The units into which we convert amounts invested in the Investment
Options during the Annuity Phase.
ASSUMED INVESTMENT RETURN: The investment return upon which the variable Annuity
Payments in the Contract are based.
AUTHORIZED REQUEST: A request, in a form satisfactory to the Company, which is
received by the Service Center.
BASE ANNUITY PAYMENT: The fixed Annuity Payment or Supportable Annuity Payment
without any bonus amounts and prior to reflection of any rider charges.
BENEFICIARY: The person(s) or entity(ies) who will receive any death benefit
payable under this Contract.
BUSINESS DAY: Each day the New York Stock Exchange is open for trading.
COMPANY: Allianz Life Insurance Company of North America.
CONTRACT ANNIVERSARY: An anniversary of the Issue Date of this Contract.
CONTRACT DATE: The date the Contract becomes effective.
CONTRACT OWNER: The person(s) or entity(ies) entitled to the ownership rights
stated in this Contract. If Joint Owners are named, all references to Contract
Owner shall mean the Joint Owners.
CONTRACT VALUE: (Before the Annuity Calculation Date) - The Contract Value for
any Valuation Period is equal to the total dollar value accumulated under this
Contract in all of the Investment Options.
CONTRACT YEAR: Any period of twelve (12) months commencing with the Issue Date
and each Contract Anniversary thereafter.
CURRENT RATE: The interest rate underlying new fixed Annuity Payments
established on the date that we receive your withdrawal request at the Service
Center.
GENERAL ACCOUNT: Our general investment account which contains all the assets of
the Company with the exception of the Variable Account and other segregated
asset accounts.
INCOME CHANGE FACTORS: The factors that change the minimum income guarantee and
the stabilization guarantee on future income payments from the Investment
Options. The factors are any partial withdrawals, any change in death benefits,
Life Expectancy Adjustment, and the death of one of the Annuitants under Annuity
Options 3 and 4 when you had selected a lower income payment for the surviving
Annuitant.
INCOME DATE: The date on which you elect to begin receiving Annuity Payments
under the Contract. The Income Date must be the first or the fifteenth of a
calendar month and must be no later than 60 days from the Contract Date.
INCOME DATE ANNIVERSARY: The start of each subsequent Income Year after the
first year.
INCOME DATE MONTHLY ANNIVERSARY: The date having the same day as the Income Date
on each subsequent month following the Income Date. If the monthly anniversary
date falls on a date other than a Business Day, the monthly anniversary date
will be on the next Valuation Date.
INCOME YEAR: A year that starts from the Income Date or an Income Date
Anniversary. Each Income Year starts on the same month and day in each
subsequent year as the Income Date.
INVESTMENT OPTION(S): The investment choices available under the Variable
Account. The Investment Options are shown in the Contract Schedule.
ISSUE DATE: The date shown on the Contract Schedule on which the first Contract
Year begins. Contract Anniversaries and Contract Years are measured from the
Issue Date.
JOINT OWNER: If there is more than one Contract Owner, each Contract Owner shall
be a Joint Owner of the Contract. Joint Owners have equal ownership rights and
must both authorize any exercising of those ownership rights unless otherwise
allowed by us. Any Joint Owner must be the spouse of the other Contract Owner,
unless limited by state law.
LIFE EXPECTANCY ADJUSTMENT: The adjustment made to the Annuity Payments after
the Life Expectancy Period defined in the Contract. This adjustment reduces the
number of Annuity Units in the Investment Options.
LIFE EXPECTANCY PERIOD: The number of years covering the life expectancy of the
Annuitants as of the Income Date. This is specified in the Contract.
LIMITED INVESTMENT OPTIONS: The Investment Options where only a limited
percentage of the total Payment Contract Value in the Investment Options can be
invested. These limitations are specified in the Contract Schedule.
NET ASSET VALUE: The value of a share of the underlying Investment Options, less
any investment management and portfolio administration fees and expenses, as of
the close of trading on a Valuation Date.
PAYMENT WITHDRAWAL VALUE: The amount available for withdrawal which is a
function of the Supportable Payments. This does not
include the Stabilization Account Value.
PREMIUM TAX: Any premium taxes owed to any governmental entity and assessed
against the Purchase Payment or Contract Value.
PURCHASE PAYMENT: A payment made toward this Contract.
SERVICE CENTER: The office indicated on the Contract Schedule of this Contract
to which notices, requests and Purchase Payments must be sent.
STABILIZATION ACCOUNT: An account that increases with the excess of the
Supportable Payment over the Stabilized Payment and decreases with the excess of
the Stabilized Payment over the Supportable Payment. The Stabilization Account,
when positive, is credited with the investment gains or losses of the Investment
Options chosen by Contract Owner. The Stabilization Account is used to stabilize
income payments. It is paid out at death or at full withdrawal.
STABILIZED PAYMENT: The variable Annuity Payment the Payee receives from the
Investment Options. Stabilized Payments are determined annually on the Income
Date Anniversary, and are paid according to the Annuity Payment frequency you
chose.
SUPPORTABLE PAYMENT: The amount equal to the Annuity Units in each Investment
Option times the corresponding Annuity Unit values, summed over all the
Investment Options. Supportable Payments reflect actual investment performance
of the Investment Options.
VALUATION DATE: The Variable Account will be valued each day that the New York
Stock Exchange is open for trading.
VALUATION PERIOD: The period commencing at the close of business of the New York
Stock Exchange on each Valuation Date and ending at the close of business for
the next succeeding Valuation Date.
VARIABLE ACCOUNT: A separate account maintained by us in which a portion of our
assets has been allocated for this and certain other contracts. It has been
designated on the Contract Schedule.
WITHDRAWAL VALUE: The amount available to you if you make a full or partial
withdrawal.
PURCHASE PAYMENT
PURCHASE PAYMENT: The single Purchase Payment is due on the Issue Date. We
reserve the right to decline any Purchase Payment.
NO DEFAULT: Unless a full withdrawal is made, this Contract remains in force and
will not be in default.
ALLOCATION OF THE PURCHASE PAYMENT: The single Purchase Payment is allocated to
one or more of the Investment Options in accordance with your selection. The
allocation of the Purchase Payment is made in accordance with your selection
made at the Issue Date. However, the Company has reserved the right to allocate
the Purchase Payment to the Money Market Investment Option until the expiration
of the Right to Examine period. All allocations of the Purchase Payment are
subject to the Allocation Guidelines shown on the Contract Schedule. We
guarantee that you will be allowed to select at least five Investment Options
for such allocations.
VARIABLE ACCOUNT
THE VARIABLE ACCOUNT: The Variable Account is designated on the Contract
Schedule. It consists of assets we have set aside and have kept separate from
the rest of our assets and those of our other separate accounts. The assets of
the Variable Account, equal to reserves and other liabilities of your Contract
and those of other Contract Owners, will not be charged with liabilities arising
out of any other business we may conduct.
The Variable Account assets are divided into Investment Options as shown on the
Contract Schedule. We may add additional Investment Options to those shown. You
may be permitted to transfer your Contract Value or allocate the Purchase
Payment to the additional Investment Options. However, the right to make such
transfers or allocations will be limited by any terms and conditions we may
impose.
We may limit further purchase of such shares of an Investment Option or
substitute shares of another Investment Option for shares already purchased,
subject to the requirements of applicable law.
VALUATION OF ASSETS: Assets of each Investment Option will be valued at its Net
Asset Value on each Valuation Date.
ACCUMULATION UNITS: Accumulation Units shall be used to account for all amounts
allocated to or withdrawn from the Investment Options of the Variable Account as
a result of the Purchase Payment, withdrawals, transfers, or fees and charges.
We will determine the number of Accumulation Units of an Investment Option
purchased or canceled. This will be done by dividing the amount allocated to (or
the amount withdrawn from) the Investment Option by the dollar value of one
Accumulation Unit of the Investment Option as of the end of the Valuation Period
during which the transaction is processed at the Service Center. The Purchase
Payment, withdrawals and transfers from or to an Investment Option will result
in the addition of or the cancellation of Accumulation Units in an Investment
Option.
ACCUMULATION UNIT VALUE: The Accumulation Unit value for each Investment Option
was initially arbitrarily set. Subsequent Accumulation Unit values for each
Investment Option are determined by multiplying the Accumulation Unit value for
the immediately preceding Valuation Period by the net investment factor for the
Investment Option for the current period.
The Accumulation Unit value may increase or decrease from Valuation Period to
Valuation Period.
MORTALITY AND EXPENSE RISK CHARGE: Each Valuation Period, we deduct a mortality
and expense risk charge from the Contract Value in the Investment Options which
is equal, on an annual basis, to the amount shown on the Contract Schedule. The
mortality and expense risk charge compensates the Company for assuming the
mortality and expense risks under this Contract.
MORTALITY AND EXPENSE GUARANTEE: We guarantee that the dollar amount of each
Annuity Payment after the first will not be affected by variations in mortality
or expense experience.
CONTRACT VALUE
The Contract Value for any Valuation Period is equal to the total dollar value
accumulated under this Contract in all of the Investment Options. The Contract
Value in an Investment Option of the Variable Account is determined by
multiplying the number of Accumulation Units by the Accumulation Unit value.
TRANSFERS
You may transfer all or a part of your interest in an Investment Option to
another Investment Option. We reserve the right to charge for transfers if there
are more than the number of free transfers shown on the Contract Schedule. All
transfers are subject to the following:
1. The deduction of any transfer fee that may be imposed as shown on the
Contract Schedule. The transfer fee will be deducted from the Investment
Option from which the transfer is made. If the entire amount in the
Investment Option is transferred, then the transfer fee will be deducted
from the amount transferred. If there are multiple source Investment
Options, it will be treated as a single transfer. Any transfer fee will be
deducted proportionally from the source Investment Options if less than the
entire amount in the Investment Option is transferred.
2. We reserve the right to limit transfers until the expiration of the Right
to Examine period.
3. The minimum amount that can be transferred is shown on the Contract
Schedule.
4. No transfer will be effective within seven calendar days prior to the date
on which the first Annuity Payment is due.
5. Any transfer direction must clearly specify:
a. the amount which is to be transferred; and
b. the Investment Options which are to be affected.
6. After the Income Date, transfers may not be made from a fixed Annuity
Option to a variable Annuity Option.
7. After the Income Date, you can make transfers from a variable Annuity
Option to a fixed Annuity Option. The number of Annuity Units canceled from
the variable Annuity Option will be equal in value to the amount of the
Annuity Reserve transferred out of the Variable Account. The amount
transferred will purchase fixed Annuity Payments under the Annuity Option
in effect and based on the Age and sex of the Annuitant, where allowed, at
the time of the transfer.
8. Transfers of the Payment Contract Value to the Limited Investment Options
are subject to the maximum percentage that can be in those Investment
Options.
9. Your right to make transfers is subject to modification if we determine in
our sole opinion, that the exercise of the right by one or more Contract
Owners is, or would be, to the disadvantage of other Contract Owners.
Restrictions may be applied in any manner reasonably designed to prevent
any use of the transfer right which we consider to be to the disadvantage
of other Contract Owners. A modification could be applied to transfers to
or from one or more of the Investment Options, and could include, but is
not limited to:
a. the requirement of a minimum time period between each transfer;
b. not accepting a transfer request from an agent acting on behalf of
more than one Contract Owner; or
c. limiting the dollar amount that may be transferred between the
Investment Options by a Contract Owner at any one time; or
d. not accepting telephone transfer instructions.
10. We reserve the right at any time and without prior notice to any party to
modify the transfer provisions described above. However, if we do modify
these provisions, we guarantee that they will not be any more restrictive
than the above.
If you elect to use this transfer privilege, we will not be liable for transfers
made in accordance with your instructions. All amounts and Accumulation Units
will be determined as of the end of the Valuation Period during which the
request for transfer is received at the Service Center.
WITHDRAWAL PROVISIONS
WITHDRAWALS: You may, upon Authorized Request, make a full or partial withdrawal
of the Contract Value. Withdrawals will result in the cancellation of
Accumulation Units from each Investment Option in the ratio that the value of
each Investment Option bears to the total Contract Value. You must specify, by
Authorized Request, which Accumulation Units are to be canceled if other than
the above mentioned method of cancellation is desired.
The Company will pay the amount of any withdrawal from the Variable Account
within seven (7) days of receipt of a request in good order unless the
Suspension or Deferral of Payments Provision is in effect.
WITHDRAWAL CHARGE: Upon a full or partial withdrawal of this Contract, a
withdrawal charge as set forth on the Contract Schedule may be assessed. Under
certain circumstances, we allow withdrawals without the withdrawal charge as set
forth on the Contract Schedule. Purchase Payments withdrawn under the partial
withdrawal privilege are still subject to applicable withdrawal charges upon
full withdrawal of the Contract.
PROCEEDS PAYABLE ON DEATH
Any part of the death benefit amount that had been invested in the Variable
Account remains in the Variable Account until distribution begins. From the time
the death benefit is determined until complete distribution is made, any amount
in the Variable Account will be subject to investment risk, which is borne by
the Beneficiary.
Any portion of the death benefit not applied under any Annuity Option within one
year of the date of the Contract Owner's death must be distributed within five
years of the date of death.
If a lump sum payment is requested, the amount from the Variable Account will be
paid within seven (7) days of receipt of proof of death and the valid election,
including any required governmental forms, unless the Suspension or Deferral of
Payments Provision is in effect.
Payment to the Beneficiary, other than in a lump sum, may only be elected during
the sixty-day period after the day on which such lump sum first became payable
by the Company.
DEATH OF THE CONTRACT OWNER BEFORE THE INCOME DATE: If any Contract Owner dies
before the Income Date and there is no Joint Owner, we will return the Contract
Value in a lump sum. However, if there are Joint Owners and the surviving Joint
Owner is the deceased Joint Owner's spouse, then the Contract will be continued
with the surviving spouse as the sole Owner of the Contract.
DEATH OF THE ANNUITANT BEFORE THE INCOME DATE: If you have chosen an Annuity
Option with a Joint Annuitant and one of the Joint Annuitants (who is not an
Owner) dies before the Income Date, the Annuity Option will be changed to the
corresponding single life Annuity Option.
DEATH OF THE ANNUITANT ON OR AFTER THE INCOME DATE: If an Annuitant (who is not
an Owner) dies on or after the Income Date, the death benefit, if any, will be
paid to the Beneficiary under the Annuity Option selected.
If a nonnatural person is named as an Owner, then the primary Annuitant, shall
be treated as an Owner. The entire interest in the Contract will be distributed
in a lump sum upon the primary Xxxxxxxxx's death, if such Annuitant dies before
the Income Date.
PAYMENT OF DEATH BENEFIT: The Company will require due proof of death and
payment election and any required governmental forms before any death benefit is
paid. Due proof of death will be:
1. a certified death certificate; or
2. a certified decree of a court of competent jurisdiction as to the finding
of death; or
3. any other proof satisfactory to the Company.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
BENEFICIARY: The Beneficiary designation in effect on the Issue Date will remain
in effect until changed. The Beneficiary is entitled to receive the benefits to
be paid at your death.
Unless you provide otherwise, the death benefit will be paid in equal shares to
the survivor(s) as follows:
1. to the primary Beneficiary(ies) who survive your death and/or the
Annuitant's death, as applicable; or if there are none;
2. to the contingent Beneficiary(ies) who survive your death and/or the
Annuitant's death, as applicable; or if there are none
3. to your estate.
CHANGE OF BENEFICIARY: Subject to the rights of any irrevocable
Beneficiary(ies), you may change the primary Beneficiary(ies) or contingent
Beneficiary(ies). A change may be made by Authorized Request. The change will
take effect as of the date the Authorized Request is signed. If the Authorized
Request reaches our Service Center after the Contract Owner dies but before any
payment is made, the change will be valid. The Company will not be liable for
any payment made or action taken before it records the change.
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION
The Company reserves the right to suspend or postpone payments from the Variable
Account for a withdrawal or transfer for any period when:
1. the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of the Investment Option
shares is not reasonably practicable or we cannot reasonably value the
Investment Option shares; or
4. during any other period when the Securities and Exchange Commission, by
order, so permits for the protection of Contract Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
CONTRACT OWNER, ANNUITANT, ASSIGNMENT PROVISIONS
CONTRACT OWNER: As the Contract Owner, you have all the interest and rights
under this Contract. The Contract Owner is the person designated as such on the
Issue Date, unless changed.
You may change owners of the Contract at any time by Authorized Request subject
to our underwriting rules then in effect. A change of Contract Owner will
automatically revoke any prior designation of Contract Owner. The change will
become effective as of the date the Authorized Request is signed. We will not be
liable for any payment made or action taken before the change is recorded. We
will not be responsible for any tax consequences of any such change.
JOINT OWNER: A Contract may be owned by Joint Owners. If Joint Owners are named,
any Joint Owner must be the spouse of the other Contract Owner, unless otherwise
provided by state law. Upon the death of either Contract Owner, the surviving
Joint Owner will be the primary Beneficiary. Any other Beneficiary designation
will be treated as a contingent Beneficiary unless otherwise indicated in an
Authorized Request.
ANNUITANT: The Annuitant is the person on whose life Annuity Payments are based.
The Annuitant is the person designated by you subject to our underwriting rules
then in effect. The Annuitant may not be changed in a Contract that is owned by
a non-individual.
ASSIGNMENT OF A CONTRACT: An Authorized Request specifying the terms of an
assignment of a Contract must be provided to the Service Center. We will not be
liable for any payment made or action taken before we record the assignment.
We will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with our consent.
If the Contract is assigned, your rights may only be exercised with the consent
of the assignee of record.
ANNUITY PROVISIONS
GENERAL: You may elect to have the amount available for Annuity Payments applied
to provide a fixed annuity, a variable annuity or a combination fixed and
variable annuity. If a combination is elected, you must specify what part of the
amount available for Annuity Payments is to be applied to the fixed and variable
Annuity Options. If you select a fixed annuity, the amount available for Annuity
Payments is allocated to the General Account and the annuity is paid as a fixed
annuity.
If you select a variable annuity, the amount available for Annuity Payments will
be allocated to the Investment Options of the Variable Account in accordance
with your selection, subject to the stabilization process. The stabilization
process is designed to keep your Annuity Payments equal during an Income Year
and to limit the variation in your Annuity Payments from Income Year to Income
Year. Unless you designate another payee, you will be the payee of the Annuity
Payments. The amount available for Annuity Payments will be applied to the
applicable annuity rate based upon the Annuity Option you have selected. We may
offer more favorable rates than those guaranteed here at the time your first
Annuity Payment is calculated. Annuity Payments will depend on the Age and,
where permitted, sex of the Annuitant.
VARIABLE ANNUITY PAYOUT: You may elect to have the amount available for Annuity
Payments applied to provide a variable annuity. A variable annuity is an annuity
with payments which:
(1) are not predetermined as to dollar amount; and
(2) will generally vary in amount with the net investment results of the
applicable Investment Options.
Base Annuity Payments also depend on:
(1) The Contract Value (less any applicable Premium Taxes);
(2) The Annuitant's (and Joint Annuitant's, if any) Age and sex;
(3) The Annuity Option you select;
(4) The frequency of the payments you select;
(5) The Assumed Investment Return (AIR);
(6) The Income Date; and
(7) The annuity unit value of the subaccount corresponding to each Investment
Option you select.
The first Base Annuity Payment is equal to the Contract Value on the Income Date
allocated to the Separate Account divided first by $1,000 and then multiplied by
the appropriate Annuity Payment amount for each $1,000 of value for the Annuity
Option selected. In each Investment Option, the fixed number of Annuity Units
equals the amount of the initial Base Annuity Payment determined for each
Investment Option divided by the Annuity Unit value on the Annuity Calculation
Date. Thereafter, unless the Contract Owner elects to transfer between
Investment Options, makes a withdrawal, or elects to change a death benefit, the
number of Annuity Units in each subaccount corresponding to an Investment Option
remains unchanged until the end of the Life Expectancy Period or the Specified
Period Certain, as applicable. All calculations will appropriately reflect the
annuity payment frequency selected.
The Base Annuity Payments are also the Supportable Payments.
For each subaccount corresponding to an Investment Option, the value of an
Annuity Unit was initially established at $1.00. On each subsequent Valuation
Date, the value of an Annuity Unit is determined in the following way:
First: The Net Investment Factor for each subaccount corresponding to an
Investment Option is determined by dividing A by B and multiplying (1-C) where:
A is (i) the Net Asset Value per share of the Investment Option at
the end of the current Valuation Period, plus
(ii) any dividend or capital gains per share declared on behalf
of such Investment Option that has an ex-dividend date
within the current Valuation Period.
B is the Net Asset Value per share of the Investment Option for
the immediately preceding Valuation Period.
C is (i) the Valuation Period equivalent of the mortality and expense
risk charge, plus
(ii) a charge factor, if any, for any taxes or any tax reserve we
have established as a result of the operation or maintenance
of the Investment Option.
The Net Investment Factor may be more or less than one.
Second: The value of an Annuity Unit for a Valuation Date is equal to:
a. the value of the Annuity Unit on the immediately preceding Valuation Date;
b. multiplied by the Net Investment Factor for the Valuation Period ending on
the current Valuation Date;
c. divided by the Assumed Net Investment Factor (see below) for the Valuation
Period.
The Assumed Net Investment Factor is equal to one plus the Assumed Investment
Return which is used in determining the basis for the purchase of an Annuity,
adjusted to reflect the length of the particular Valuation Period. The Assumed
Investment Return that we will use is shown on the Contract Schedule. However,
we may agree with you to use a different value. The Assumed Investment Return
will never exceed 7%.
The Assumed Investment Return is the investment return upon which Annuity
Payments are based. If payments were not subject to stabilization, income will
increase from one annuity payment date to the next if the annualized net
investment performance during that time is greater than the Assumed Investment
Return and will decrease if the annualized net investment performance is less
than the Assumed Investment Return.
Annuity Payments from Investment Options are stabilized. They are kept constant
during any Income Year. They will not change by more than the amount specified
in the Contract Schedule each year except by the Income Change Factors or
through the Stabilization Account cap as specified in the Contract Schedule.
SUPPORTABLE PAYMENTS: The Supportable Payment is the variable Annuity Payment
the Payee would have received from the Investment Options if there were no
stabilization process. To calculate the Supportable Payment, we begin with the
Base Annuity Payment. The first variable Base Annuity Payment is calculated on
the Annuity Calculation Date, based on your Contract Value allocated to the
Investment Options, minus any application Premium Taxes; the Annuitant's (and
Joint Annuitant's if any) Age and sex; the Annuity Option you select, the
frequency of payments you select; the AIR; and the Income Date.
Once we have calculated the first variable Base Annuity Payment, we credit your
Contract with a fixed number of Annuity Units in each Investment Option you
select. We do this by allocating the first variable Base Annuity Payment amount
among the Investment Options according to your instructions, and dividing the
amount allocated to each Investment Option by the Annuity Unit Value for that
Investment Option on the Annuity Calculation Date. The number of Annuity Units
in your Contract remains the same unless changed by any of the Income Change
Factors or by transfers among the Investment Options. The amount of the
Supportable Annuity Payment is equal to the Annuity Units in each Investment
Option multiplied by the corresponding Annuity Unit Values, summed over all the
Investment Options. The Supportable Payment in the Investment Options will
change based on the change in the value of the Annuity Units credited to your
Contract. The amount of each change will depend on how the Annuity Units in your
Contract perform as compared to your AIR. If the performance of the Annuity
Units exceeds the AIR, the Supportable Payments will increase. If the
performance of the Annuity Units is less than the AIR, the Supportable Payments
will decrease.
STABILIZATION PROCESS: STABILIZATION PAYMENTS AND GUARANTEED MINIMUM INCOME:
The Payee will receive Stabilized Payments. These payments are held constant
during each Income Year instead of moving up or down to reflect actual
investment performance. Also, from one Income Year to the next, the Stabilized
Payment will not change by more than the percentage specified in the Contract
Schedule except due to any of the Income Change Factors or to an increase due to
the Stabilization Account reaching its cap as specified in the Contract
Schedule.
The stabilization process provides you with a guaranteed minimum income. If you
change your death benefit selection or make a partial withdrawal, the minimum
guarantee is proportionately adjusted on the next Annuity Payment date after the
change. The new guarantee is the previous guarantee times the ratio of the new
Supportable Payment to the Supportable Payment if such change did not occur.
After the Life Expectancy Period, the Stabilized Payment is guaranteed to be a
least the guaranteed minimum income at that time multiplied by Life Expectancy
Adjustment.
During the first Income Year, each Stabilized Payment will equal the first
variable Base Annuity Payment. On each Income Date Anniversary, a new Stabilized
Payment is determined based on the performance of the Eligible Investment
Options in which your Purchase Payment is allocated. You will be notified of the
new amount for the next Contract Year.
The calculation of the new Stabilized Payment at the beginning of each Income
Year starts with the Supportable Payment. The Supportable Payment in each
Investment Option is equal to the Annuity Units multiplied by the Annuity Unit
Values. The Supportable Payment is the sum of the Supportable Payments in all of
the Investment Options. The Supportable Payment in the Investment Options will
change based on the change in value of the Annuity Units credited to your
Contract. The amount of each change will depend on how the Annuity Units in your
Contract perform as compared to your AIR. If the performance of the Annuity
Units exceeds the AIR, the Supportable Payments will increase. If the
performance of the Annuity Units is less than the AIR, the Supportable Payments
will decrease.
We then add the Stabilization Account Value (as calculated below) to the
Supportable Payment. We make adjustments to this sum such that the sum cannot be
greater than the previous year's Stabilized Payment if the annualized return in
the underlying Investment Options is less than the AIR. The annualized return is
equal to the weighted average annualized return of all Investment Options.
If the annualized return is greater than or equal to the AIR, the sum of the
Stabilization Account Value and the Supportable payment cannot be less than the
previous year's Stabilized Payment and cannot be greater than the previous
year's Stabilized Payment multiplied by the ratio of a. to b. where:
a. is 1 + the annualized return;
b. 1 + the AIR.
The Stabilized Payment is equal to this adjusted sum and then adjusted again
such that:
a. The Stabilized Payment cannot be greater than the percentage shown in the
Contract Schedule.
b. The Stabilized Payment cannot be less than percentage shown in the Contract
Schedule.
c. The Stabilized Payment cannot be less than the guaranteed minimum income
payment described above.
The amount of the Stabilization Account is calculated as follows:
On the Income Date, the Stabilization Account is equal to zero. During the
Income Year, the Stabilization Account increases with the excess of the
Supportable Payment over the Stabilized Payment and decreases with the excess of
the Stabilized Payment over the Supportable Payment. An increase to the
Stabilization Account is allocated among the Investment Options pro-rata based
on the Stabilization Account Values in the Investment Options you have selected.
The Stabilization Account, when positive, is credited with the daily investment
gains or losses of the underlying Investment Options. The Stabilization Account,
when negative, does not get charged with any daily investment gains or losses.
When the value of the Stabilization Account exceeds 80% of the Purchase Payment,
any excess determined at the next Annuity Payment date will be paid to the Payee
along with the Annuity Payment.
INCOME DATE: Your Income Date is shown in the Contract Schedule. You may make an
Authorized Request for a different date, however any such request is subject to
Company approval. The Income Date must always be the first or fifteenth day of a
calendar month and must not be later than 60 days from the day we first allocate
the Purchase Payment.
BONUS: Under the life income plans (Annuity Options 1 through 5), if the
Annuitant is under Age 75 on the Income Date, you can choose to include a bonus
which will increase the Annuity Payments in the first 10 Income Years. The
increased amount is specified in the Contract Schedule. The Annuity Payments
will include the bonus amount. However, your Annuity Payments after the tenth
year will be lower than what they would have been if you did not choose the
bonus.
SELECTION OF AN ANNUITY OPTION: You can select an Annuity Option by Authorized
Request. You may, by Authorized Request, at least 30 days prior to the Income
Date, select and/or change the Annuity Option.
ANNUITY OPTIONS: This Contract provides for Annuity Payments under one of the
Annuity Options described below. The Company may make available other payment
options.
OPTION 1 - LIFE ANNUITY. We will make periodic Annuity Payments during the life
of the Annuitant. We will cease making Annuity Payments effective on the date
the Annuitant dies. Any payments made after the death of the Annuitant will be
refunded. You can make a full withdrawal as specified below. As of the date the
Company receives due proof of the Annuitant's death and a payment election form
at the Service Center, any positive amount in the Stabilization Account will be
paid to the Beneficiary in a lump sum.
DEATH BENEFIT UNDER ANNUITY OPTION 1: If the Annuitant is younger than Age 75 on
the Income Date, you can add the same death benefit available under Annuity
Options 2 and 4 within 30 days of the tenth Income Year Anniversary. If you do,
the Payment Withdrawal Value component of the death benefit as of the tenth
Income Year Anniversary is equal to the amount available at that time if you did
not add the death benefit. Your Annuity Units and your fixed Base Annuity
Payments will decrease such that the underlying value of the Contract remains
the same.
WITHDRAWAL VALUES UNDER ANNUITY OPTION 1:
If the Annuity is under Age 75 on the Income Date, then you can make a full
withdrawal:
A. Within 30 days before or after the tenth Income Date Anniversary:
The amount will be equal to the Stabilization Account Value plus the
Payment Withdrawal Value. The variable Payment Withdrawal Value is equal to
the current amount of the Supportable Payment multiplied by a factor
specified in the Contract. The factors will differ by the AIR, the Age on
the Income Date and gender of the Annuitant(s), and the Annuity Option
chosen.
B. Within 30 days before or after the end of the Life Expectancy Period:
The amount will be equal to the Stabilization Account Value plus a Payment
Withdrawal Value that currently is equal to the amount specified in the
Contract Schedule. We reserve the right to change this Payment Withdrawal
Value, but it will never be less than the amount specified in the Contract
Schedule. If we do change the available Payment Withdrawal Value, we will
give you notice with the next Annuity Payment.
If you choose to add a death benefit under Options 1or 3, the amount of the
Withdrawal Values available will continue to be the amounts under the
corresponding Annuity Option without the death benefit. You can make a full
withdrawal within 30 days before or after the end of the Life Expectancy Period:
1. If the Annuitant is Age 75 to 80 on the Income Date, currently you can
withdraw the Stabilization Account Value plus the Payment Withdrawal Value
equal to the amount specified in the Contract Schedule. We reserve the
right to change this Payment Withdrawal Value, but it will never be less
than the amount specified in the Contract Schedule. If we do change the
available Payment Withdrawal Value, we will give you notice with the next
Annuity Payment.
2. If the Annuitant is Age 81 to 90 on the Income Date, you can withdraw the
Stabilization Account Value plus the Payment Withdrawal Value equal to the
amount specified in the Contract Schedule.
OPTION 2 - LIFE ANNUITY WITH DEATH BENEFIT. We will make periodic Annuity
Payments during the life of the Annuitant. After the Annuitant dies we will
cease making Annuity Payments. You can make a full or partial withdrawal anytime
until 30 days after the end of the Life Expectancy Period. The Beneficiary will
receive the death benefit in a lump sum upon the Annuitant's death. Death
benefits are calculated as of the date the proof of the Annuitant's death and a
payment election form is received at the Service Center.
DEATH BENEFIT UNDER ANNUITY OPTION 2: The death benefit under Annuity Option 2
is equal to the Withdrawal Values except that only positive Stabilization
Account Values are included.
Within 30 days of each Income Year Anniversary when a Payment Withdrawal Value
is available, you can request cancellation of the death benefit. If you do, your
payments will increase to reflect the elimination of the death benefit. Your
Annuity Units and your fixed Based Annuity Payments will increase such that the
underlying value of the Contract remains the same. Any bonus amount does not
change.
WITHDRAWAL VALUES UNDER ANNUITY OPTION 2:
If the Annuity is under Age 75 on the Income Date, then you can make a full
withdrawal:
A. Anytime on or before the tenth Income Date Anniversary:
The Withdrawal Value is equal to the Stabilization Account Value plus the
Payment Withdrawal Value. The variable Payment Withdrawal Value is equal to
the current amount of the Supportable Payment multiplied by a factor
specified in the Contract.
B. Within 30 days after the end of the Life Expectancy Period:
The Withdrawal Value currently is equal to the Stabilization Account Value
plus a Payment Withdrawal Value equal to the amount specified in the
Contract Schedule. We reserve the right to change this Payment Withdrawal
Value, but it will never be less than than the amount specified in the
Contract Schedule. If we do change the available Payment Withdrawal Value,
we will give you notice with the next Annuity Payment.
Anytime between the tenth Income Date Anniversary and the end of the Life
Expectancy Period:
The Withdrawal Value is equal to the Stabilization Account Value and the
Payment Withdrawal Value at the end of the tenth Income Anniversary,
decreasing on each Annuity Payment date (starting with the Annuity Payment
in the beginning of the eleventh Income Year), grading down linearly to the
Payment Withdrawal Value at the end of the Life Expectancy Period.
If you change the death benefit, Withdrawal Values will thereafter only be
available as provided under the corresponding Annuity Option without the death
benefit. You can make a full withdrawal within 30 days before or after the end
of the Life Expectancy Period:
If the Annuitant is Age 75 to 80 on the Income Date, the Withdrawal Value
currently is equal to the Stabilization Account Value plus the Payment
Withdrawal Value equal to the amount specified in the Contract Schedule. We
reserve the right to change this Payment Withdrawal Value, but it will
never be less than the amount specified in the Contract Schedule. If we do
change the available Payment Withdrawal Value, we will give you notice with
the next Annuity Payment.
If the Annuitant is Age 81 to 90 on the Income Date, the Withdrawal Value
is equal to the Stabilization Account Value plus the Payment Withdrawal
Value specified in the Contract Schedule.
Additional Withdrawal Values are also available before the periods
described above if an Annuitant is older than Age 75. The Withdrawal Value
immediately after the first Annuity Payment is equal to the sum of the
Stabilization Account Value and the Payment Withdrawal Value equal to a
factor specified in the Contract times the current amount of the
Supportable Payment. Thereafter, the Withdrawal Value is equal to the sum
of the Stabilization Account Value plus the Payment Withdrawal Value as of
the date immediately after the first Annuity Payment, decreasing on each
Annuity Payment date (starting with the second Annuity Payment), grading
linearly to the Payment Withdrawal Value at the end of the Life Expectancy
Period.
You can make a partial withdrawal anytime up to the Withdrawal less any
positive Stabilization Account Value.
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY. We will make monthly Annuity
Payments during the joint lifetime of the Annuitant and the Joint Annuitant.
Upon the death of the Annuitant, if the Joint Annuitant is then living, Annuity
Payments will continue to be paid during the remaining lifetime of the Joint
Annuitant at a level of 100%, 75% or 50% of the previous level, as selected. You
can make a full withdrawal as specified below. As of the date the Company
receives proof of death of the last surviving Annuitant and the payment election
form at the Service Center, any positive amount of the Stabilization Account
will be paid to the Beneficiary in a lump sum. The Annuity Payments will cease
as of the date the last surviving Annuitant dies. Any payments made after the
death of the last surviving Annuitant will be refunded.
DEATH BENEFIT UNDER ANNUITY OPTION 3: If the Annuitant is younger than Age 75 on
the Income Date, you can add the same death benefit that is available under
Annuity Options 2 and 4 within 30 days of the tenth Income Year Anniversary. If
you do, the Payment Withdrawal Value component of the death benefit as of the
tenth Income Year Anniversary is equal to the amount available at that time if
you did not add the death benefit. Your Annuity Units and your fixed Base
Annuity Payments will decrease such that the underlying value of the Contract
remains the same.
WITHDRAWAL VALUES UNDER ANNUITY OPTION 3:
If the Annuity is under Age 75 on the Income Date, then you can make a full
withdrawal:
A. Within 30 days before or after the tenth Income Date Anniversary:
The amount will be equal to the Stabilization Account Value plus the
Payment Withdrawal Value. The variable Payment Withdrawal Value is equal to
the current amount of the Supportable Payment multiplied by a factor
specified in the Contract. The factors will differ by the AIR, the Age on
the Income Date and gender of the Annuitant(s), and the Annuity Option
chosen.
B. Within 30 days before or after the end of the Life Expectancy Period:
The amount will be equal to the Stabilization Account Value plus a Payment
Withdrawal Value that currently is equal to the amount specified in the
Contract Schedule. We reserve the right to change this Payment Withdrawal
Value, but it will never be less than the amount specified in the Contract
Schedule. If we do change the available Payment Withdrawal Value, we will
give you notice with the next Annuity Payment.
If you choose to add a death benefit under Options 1or 3, the amount of the
Withdrawal Values available will continue to be the amounts under the
corresponding Annuity Option without the death benefit. You can make a full
withdrawal within 30 days before or after the end of the Life Expectancy
Period:
If the Annuitant is Age 75 to 80 on the Income Date, currently you can
withdraw the Stabilization Account Value plus the Payment Withdrawal Value
equal to the amount specified in the Contract Schedule. We reserve the
right to change this Payment Withdrawal Value, but it will never be less
than the amount specified in the Contract Schedule. If we do change the
available Payment Withdrawal Value, we will give you notice with the next
Annuity Payment.
If the Annuitant is Age 81 to 90 on the Income Date, you can withdraw the
Stabilization Account Value plus the Payment Withdrawal Value equal to the
amount specified in the Contract Schedule.
OPTION 4 - JOINT AND LAST SURVIVOR ANNUITY WITH DEATH BENEFIT. We will make
periodic Annuity Payments during the joint lifetime of the Annuitant and the
Joint Annuitant. When one of the Annuitants dies, we will continue to make
Annuity Payments during the life of the surviving Annuitant. The amount of the
Annuity Payments we will make to the Joint Annuitant can be equal 100%, 75%, or
50% of the amount that was being paid when both Annuitants were alive. You can
make a full or partial withdrawal anytime until 30 days after the end of the
Life Expectancy Period as described below. The Beneficiary will receive the
death benefit in a lump sum upon the last Annuitant's death. Death benefits are
calculated as of the date the Company receives proof of death of the last
Annuitant and a payment election form at the Service Center.
DEATH BENEFIT UNDER ANNUITY OPTION 4: The death benefit under Annuity Option 2
is equal to the Withdrawal Values except that only positive Stabilization
Account Values are included.
Within 30 days of each Income Year Anniversary when a Payment Withdrawal Value
is available, you can request cancellation of the death benefit. If you do, your
payments will increase to reflect the elimination of the death benefit. Your
Annuity Units and your fixed Based Annuity Payments will increase such that the
underlying value of the Contract remains the same. Any bonus amount does not
change.
WITHDRAWAL VALUES UNDER ANNUITY OPTION 4:
If the Annuity is under Age 75 on the Income Date, then you can make a full
withdrawal:
A. Anytime on or before the tenth Income Date Anniversary:
The Withdrawal Value is equal to the Stabilization Account Value plus the
Payment Withdrawal Value. The variable Payment Withdrawal Value is equal to
the current amount of the Supportable Payment multiplied by a factor
specified in the Contract.
B. Within 30 days after the end of the Life Expectancy Period:
The Withdrawal Value currently is equal to the Stabilization Account Value
plus a Payment Withdrawal Value equal to the amount specified in the
Contract Schedule. We reserve the right to change this Payment Withdrawal
Value, but it will never be less than the amount specified in the Contract
Schedule. If we do change the available Payment Withdrawal Value, we will
give you notice with the next Annuity Payment.
Anytime between the tenth Income Date Anniversary and the end of the Life
Expectancy Period:
The Withdrawal Value is equal to the Stabilization Account Value and the
Payment Withdrawal Value at the end of the tenth Income Anniversary,
decreasing on each Annuity Payment date (starting with the Annuity Payment
in the beginning of the eleventh Income Year), grading down linearly to the
Payment Withdrawal Value at the end of the Life Expectancy Period.
If you change the death benefit, Withdrawal Values will thereafter only be
available as provided under the corresponding Annuity Option without the
death benefit. You can make a full withdrawal within 30 days before or
after the end of the Life Expectancy Period:
If the Annuitant is Age 75 to 80 on the Income Date, the Withdrawal Value
currently is equal to the Stabilization Account Value plus the Payment
Withdrawal Value equal to the amount specified in the Contract Schedule. We
reserve the right to change this Payment Withdrawal Value, but it will
never be less than the amount specified in the Contract Schedule. If we do
change the available Payment Withdrawal Value, we will give you notice with
the next Annuity Payment.
If the Annuitant is Age 81 to 90 on the Income Date, the Withdrawal Value
is equal to the Stabilization Account Value plus the Payment Withdrawal
Value of the amount specified in the Contract Schedule.
Additional Withdrawal Values are also available before the periods
described above if an Annuitant is older than Age 75. The Withdrawal Value
immediately after the first Annuity Payment is equal to the sum of the
Stabilization Account Value and the Payment Withdrawal Value equal to a
factor specified in the Contract times the current amount of the
Supportable Payment. Thereafter, the Withdrawal Value is equal to the sum
of the Stabilization Account Value plus the Payment Withdrawal Value as of
the date immediately after the first Annuity Payment, decreasing on each
Annuity Payment date (starting with the second Annuity Payment), grading
linearly to the Payment Withdrawal Value at the end of the Life Expectancy
Period.
You can make a partial withdrawal anytime up to the Withdrawal less any
positive Stabilization Account Value.
OPTION 5 - REFUND LIFE ANNUITY. We will make periodic Annuity Payments during
the lifetime of the Annuitant ceasing with the last Annuity Payment due prior to
the Annuitant's death. At the Annuitant's death, you may receive a refund. If
the value of the Annuity Payments made is less than the value applied to the
Annuity Option, then the Beneficiary will receive a lump sum refund plus any
positive Stabilization Account Value. For a fixed Annuity Option, the amount of
the refund will be any excess of the value applied under this Option over the
total of all fixed Base Annuity Payments made under this Option. For a variable
Annuity Option, the amount of the refund will depend on the current Investment
Option allocation and will be the sum of refund amounts attributable to each
Investment Option. The refund amount for a given Investment Option is calculated
using the following formula:
(1) x {[(2) x (3) x (4)/(5) - [(4) x (6)]}
where:
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(1) = Annuity Unit value of that given Investment Option when claim requirements
are received.
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(2) = The Contract Value (minus any applicable Premium Taxes) allocated to the
Investment Options on the Annuity Calculation Date.
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(3) = Allocation percentage in that given Investment Option (in decimal form)
when claim requirements are received.
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(4) = Current number of Annuity Units used in determining each Base Annuity
Payment attributable to that given Investment Option.
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(5) = Dollar value of first Base Annuity Payment.
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(6) = Number of Annuity Payments made since the Income Date.
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This calculation will be based upon the allocation of Annuity Units actually
in-force at the time claim requirements are received at the Service Center.
There will be no refund paid if the total refund determined using the above
calculations is less than or equal to zero.
You can make a full withdrawal at certain times as specified under the
provisions below.
WITHDRAWAL VALUES UNDER ANNUITY OPTION 5:
If the Annuity is under Age 75 on the Income Date, then you can make a full
withdrawal:
A. Within 30 days before or after the tenth Income Date Anniversary:
The amount will be equal to the Stabilization Account Value plus the Payment
Withdrawal Value.
The variable Payment Withdrawal Value is equal to the current amount of the
Supportable Payment multiplied by a factor specified in the Contract. The
factors will differ by the AIR, the Age on the Income Date and gender of the
Annuitant(s), and the Annuity Option chosen.
B. Within 30 days before or after the end of the Life Expectancy Period:
The amount will be equal to the Stabilization Account Value plus a Payment
Withdrawal Value that currently is equal to the amount specified in the
Contract Schedule. We reserve the right to change this Payment Withdrawal
Value, but it will never be less than the amount specified in the Contract
Schedule. If we do change the available Payment Withdrawal Value, we will
give you notice with the next Annuity Payment.
If you choose to add a death benefit under Options 1or 3, the amount of the
Withdrawal Values available will continue to be the amounts under the
corresponding Annuity Option without the death benefit. You can make a full
withdrawal within 30 days before or after the end of the Life Expectancy Period:
If the Annuitant is Age 75 to 80 on the Income Date, currently you can withdraw
the Stabilization Account Value plus the Payment Withdrawal Value equal to the
amount specified in the Contract Schedule. We reserve the right to change this
Payment Withdrawal Value, but it will never be less than the amount specified in
the Contract Schedule. If we do change the available Payment Withdrawal Value,
we will give you notice with the next Annuity Payment.
If the Annuitant is Age 81 to 90 on the Income Date, you can withdraw the
Stabilization Account Value plus the Payment Withdrawal Value equal to the
amount specified in the Contract Schedule.
OPTION 6 - SPECIFIED PERIOD CERTAIN ANNUITY. Periodic Annuity Payments are paid
for a specified period of time. The Specified Period Certain is elected by the
Contract Owner and must be specified as a whole number of years with a minimum
of 10 years. If at the time of the last death of all Annuitants have died, the
Annuity Payments actually made have been for less than the Specified Period
Certain, then Annuity Payments will be continued thereafter to the Beneficiary
for the remainder of the Specified Period Certain. The Beneficiary can elect to
take a lump sum in lieu of continuing the payments. The lump sum is equal to the
Withdrawal Value except that only positive Stabilization Account Values are
included. The death benefit, is as of the date the Company receives proof of
death of the Annuitant and a payment election form at the Service Center.
This Annuity Option is only available with the AIR specified in the Contract
Schedule under Annuity Option 6.
WITHDRAWAL VALUES UNDER ANNUITY OPTION 6:
At any time, you can make a full withdrawal of the Withdrawal Value. The
Withdrawal Value is equal to the sum of the Stabilization Account Value and the
Payment Withdrawal Value. The variable Payment Withdrawal Value is equal to the
current amount of the Supportable Payment multiplied by a factor specified in
the Contract, which varies by Income Year.
The withdrawal charge, equal to the difference between the present value of
remaining payments using the Assumed Investment Return (AIR) and the actual
Payment Withdrawal Value, is capped at a percentage as specified in the Contract
Schedule.
You can make a partial withdrawal anytime up to the Withdrawal Value less any
positive Stabilization Account Value.
GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of this Contract, the Application,
and any attached endorsements or riders. This Contract may be changed or altered
only by our President or Secretary. Any change, modification or waiver must be
made in writing.
NON-PARTICIPATING IN SURPLUS: This Contract does not share in any distribution
of our profits or surplus.
INCONTESTABILITY: We will not contest this Contract from its Issue Date.
MISSTATEMENT OF AGE OR SEX: We may require proof of Age of the Annuitant before
making any life contingent Annuity Payment provided for by this Contract. If the
Age or sex of the Annuitant has been misstated, the amount payable will be the
amount that the amount available for Annuity Payments would have provided at the
true Age or sex.
Once Annuity Payments have begun, any underpayments will be made up in one sum
with the next Annuity Payment, and overpayments will be deducted from the future
Annuity Payments until the total is repaid.
CONTRACT SETTLEMENT: This Contract must be returned to us upon any settlement.
Prior to any settlement as a death claim, due proof of death must be submitted
to us. Any paid-up annuity, cash withdrawal or death benefits that may be
available are not less than the minimum benefits required by statute.
REPORTS: We will furnish you with a report showing the Contract Value at least
once each calendar year. This report will be sent to your last known address.
TAXES: Any taxes paid to any governmental entity will be charged against the
Contract Value. We will, in our sole discretion, determine when taxes have
resulted from: the investment experience of the Variable Account; receipt by us
of the Purchase Payment(s); or commencement of Annuity Payments. We may, at our
discretion, pay taxes when due and deduct that amount from the Contract Value at
a later date. Payment at an earlier date does not waive any right we may have to
deduct amounts at a later date. We reserve the right to establish a provision
for federal income taxes if we determine, in our sole discretion, that we will
incur a tax as a result of the operation of the Variable Account. We will deduct
for any income taxes incurred by it as a result of the operation of the Variable
Account whether or not there was a provision for taxes and whether or not it was
sufficient. We will deduct any withholding taxes required by applicable law.
EVIDENCE OF SURVIVAL: Where any benefits under this Contract are contingent upon
the recipient being alive on a given date, we may require proof satisfactory to
us that the condition has been met.
PROTECTION OF PROCEEDS: No Beneficiary may commute, encumber, alienate or assign
any payments under this Contract before they are due. To the extent permitted by
law, no payments will be subject to the debts, contracts or engagements of any
Beneficiary or to any judicial process to levy upon or attach the same for
payment thereof.
MODIFICATION OF CONTRACT: This Contract may be modified by us in order to
maintain compliance with state and federal law. This Contract may be changed or
altered only by our President or our Secretary. A change or alteration will be
made in writing.
INDIVIDUAL IMMEDIATE VARIABLE ANNUITY
NON-PARTICIPATING
