EXHIBIT 1A5(a)
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LUTHERAN BROTHERHOOD
VARIABLE INSURANCE
PRODUCTS COMPANY
A Stock Life Insurance Company FLEXIBLE PREMIUM
Xxxxxxxxxxx, Xxxxxxxxx 00000 VARIABLE LIFE INSURANCE
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This is a legal contract between the contract owner and Lutheran Brotherhood
Variable Insurance Products Company. We issue this contract based on the
Application signed by the applicant and the payment of the initial premium.
We will pay you the Maturity Proceeds if the Insured is living on the
Maturity Date (see page 3). We will pay the Death Proceeds (see Section
2.3) to the beneficiary upon receiving proof that the death of the Insured
occurred before the Maturity Date. Maturity Proceeds and Death Proceeds
will be paid according to the provisions of this contract.
THE AMOUNT OR DURATION OF THE DEATH BENEFIT MAY VARY WITH THE ACCUMULATED
VALUE. AS LONG AS THIS CONTRACT REMAINS IN FORCE AND THERE IS NO DEBT OR
UNPAID MONTHLY DEDUCTIONS, THE DEATH PROCEEDS WILL ALWAYS BE A LEAST EQUAL
TO THE FACE AMOUNT. IF YOU MEET THE DEATH BENEFIT GUARANTEE REQUIREMENT
(SEE SECTION 4.6), THIS CONTRACT WILL REMAIN IN FORCE AT LEAST UNTIL THE
DEATH BENEFIT GUARANTEE TERMINATION AGE SHOWN ON PAGE 3.
THE ACCUMULATED VALUE MAY INCREASE OR DECREASE DAILY BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT.
RIGHT TO CANCEL. PLEASE READ THIS CONTRACT CAREFULLY. We want you to be
satisfied with your contract. If you are not satisfied, you may cancel the
contract before midnight of the latest of: (1) The 10th day after you first
receive it; (2) The 45th day after you complete Part I of the Application;
and (3) The 10th day after a notice of withdrawal right is mailed or
delivered to you. Do this by (1) sending a telegram or mailing or
delivering written notice to Lutheran Brotherhood Variable Insurance
Products Company, 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, XX 00000 or to the
representative through whom you bought it, and (2) returning the contract.
Notice given by mail and return of the contract by mail are effective on
being postmarked, properly addressed and postage prepaid. If you cancel the
contract, it will be deemed void from the beginning. Within 7 days after we
receive notice of cancellation and the returned contract, we will refund the
sum of: (1) The Accumulated Value on the day the contract is first received
by us or our representative; (2) The Premium Payment Charges and Percent of
Premium Charges deducted; (3) The Monthly Deductions made; and (4) The
amount attributable to this contract for the risk charges and taxes, if any,
deducted from the Variable Account and for advisory fees charged against the
net asset value in the Fund portfolios.
Death Proceeds payable at death prior to Maturity Date.
Adjustable death benefit.
Flexible premiums.
Return on investments reflected in contract benefits.
Nonparticipating.
Settlement options to provide retirement income.
Signed for the Company at Minneapolis, Minnesota
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President /s/Xxxxxx X. Xxxxxxx [The word-SAMPLE-is stamped over signature]
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Secretary /s/XXXXX X. XXXXXX [The word-SAMPLE-is stamped over signature]
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INSURED: XXXX XXX AGE: 35 SEX: MALE
CONTRACT NUMBER: V1234567 DATE OF ISSUE: JULY 1, 1991
FACE AMOUNT: $50,000
Contract Number: v1234567
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TABLE OF CONTENTS
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Cover Page
Index
Contract Schedule, Contract Data
Section 1 Definitions
Section 2 General Provisions
Section 3 Ownership and Beneficiary
Section 4 Premiums and Reinstatement
Section 5 Insurance Coverage
Section 6 Accumulated Value and Surrender Provisions
Section 7 Monthly Deduction
Section 8 Loans
Section 9 Variable Account and Unit Value
Section 10 Exchange of Contract
Section 11 Settlement Provisions
Additional Benefits, Amendments Application
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INDEX
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Section
Accumulated Value ....................................................... 6
Allocation of Net Premiums .............................................. 9
Annual Report ........................................................... 2
Assignment .............................................................. 3
Beneficiary ............................................................. 3
Cash Surrender Value .................................................... 6
Change of Death Benefit Option .......................................... 5
Change of Investment Policy ............................................. 9
Continuation of Insurance ............................................... 6
Cost of Insurance ....................................................... 7
Death Benefit ........................................................... 5
Death Benefit Guarantee ................................................. 4
Death Benefit Guarantee Premium ......................................... 4
Death Benefit Guarantee Requirement ..................................... 4
Death Proceeds .......................................................... 2
Decrease Charge ......................................................... 7
Decrease in Face Amount ................................................. 5
Deferment ............................................................... 2
Entire Contract ......................................................... 2
Exchange Privilege ...................................................... 10
Grace Period ............................................................ 4
Incontestability ........................................................ 2
Increase in Face Amount ................................................. 5
Loan Account ............................................................ 8
Loans ................................................................... 8
Maturity Proceeds ....................................................... 2
Misstatement of Age or Sex .............................................. 2
Monthly Deduction ....................................................... 7
Net Premium ............................................................. 4
Ownership ............................................................... 3
Premium in Default and Grace Period ..................................... 4
Premiums ................................................................ 4
Reinstatement ........................................................... 4
Settlement Options ...................................................... 11
Suicide ................................................................. 2
Surrender ............................................................... 6
Cash Surrender Value ................................................. 6
Partial Surrender .................................................... 6
Full Surrender ....................................................... 6
Termination ............................................................. 2
Transfers Among Subaccounts ............................................. 9
Unit Value .............................................................. 9
Variable Account ........................................................ 9
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LUTHERAN BROTHERHOOD For information about this contract,
VARIABLE INSURANCE consult your Lutheran Brotherhood
PRODUCTS COMPANY Variable Insurance Products Company
000 Xxxxxx Xxxxxx Xxxxx Representative or write to us at our
Xxxxxxxxxxx, Xxxxxxxxx 00000 Home Office.
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CONTRACT SCHEDULE PLANNED
ANNUAL
PREMIUM
BASIC BENEFIT
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE $1,000.00
PREMIUMS PAYABLE TO THE CONTRACT ANNIVERSARY AFTER AGE 96
MATURITY DATE: JULY 1, 2052
PREMIUM CLASS: NONSMOKER
COVERAGE MAY TERMINATE PRIOR TO MATURITY DATE. ACCUMULATED VALUES DEPEND ON
INVESTMENT PERFORMANCE OF THE VARIABLE ACCOUNT AND, EXCEPT AS PROVIDED IN
SECTION 4.6, COVERAGE WILL TERMINATE IF THE CASH SURRENDER VALUE IS LESS
THAN THE MONTHLY DEDUCTION REQUIRED. INVESTMENT PERFORMANCE OR PAYMENT OF
PLANNED ANNUAL PREMIUMS MAY NOT BE SUFFICIENT TO CONTINUE COVERAGE TO
MATURITY DATE.
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DEATH BENEFIT OPTION B (SEE SECTION 5.1)
LOAN INTEREST RATE 7.4% PER YEAR PAYABLE IN ADVANCE
DEATH BENEFIT GUARANTEE PREMIUM $35.03 PER MONTH (SEE SECTION 4.6)
AND TERMINATION AGE CONTRACT ANNIVERSARY AFTER AGE 71
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INSURED: XXXX XXX AGE: 35 SEX: MALE
CONTRACT NUMBER: V1234567 DATE OF ISSUE: JULY 1, 1991
INITIAL FACE AMOUNT: $50,000
Date of Issue: JULY 1, 1991 Contract Number: V1234567
INSURED: XXXX XXX
AGE: 35 SEX: MALE FLEXIBLE PREMIUM
INITIAL FACE AMOUNT: $50,000 VARIABLE LIFE INSURANCE
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CONTRACT CHARGES
MONTHLY ADMINISTRATIVE CHARGES
BASIC CHARGE $4.00 PER MONTH
INITIAL CHARGE $ .04 PER $1,000 OF FACE AMOUNT, CHARGED
IN FIRST 120 MONTHLY DEDUCTIONS ONLY
PARTIAL SURRENDER CHARGE $25.00 OR 2% OF AMOUNT SURRENDERED, IF LESS
PERCENT OF PREMIUM CHARGE 5.0% OF EACH PREMIUM
CURRENT CHARGE MAXIMUM CHARGE
PREMIUM PROCESSING CHARGE
AUTOMATIC PAYMENT PLANS $ .50 PER PAYMENT $ 1.00 PER PAYMENT
ALL OTHER PAYMENTS $ 1.00 PER PAYMENT $ 2.00 PER PAYMENT
TRANSFER CHARGE $10.00 PER TRANSFER $20.00 PER TRANSFER
(FOR EACH TRANSFER IN EXCESS
OF TWO IN A CONTRACT YEAR)
CURRENT PREMIUM PROCESSING CHARGES AND TRANSFER CHARGES ARE SUBJECT TO
CHANGE. HOWEVER, THESE CHARGES WILL NEVER EXCEED THE MAXIMUM CHARGES SHOWN
ABOVE. YOU WILL BE NOTIFIED OF ANY CHANGE IN CURRENT CHARGES.
DECREASE CHARGE #
MAXIMUM
BEGINNING OF DEFERRED CONTINGENT
CONTRACT ADMINISTRATIVE DEFERRED
YEAR CHARGE SALES CHARGE
1 $ 238.00 $ 90.00
2 214.00 90.00
3 190.00 90.00
4 166.00 90.00
5 142.00 90.00
6 118.00 88.50
7 94.00 70.50
8 70.00 52.50
9 46.00 34.50
10 22.00 16.50
THEREAFTER 0.00 0.00
# DECREASE CHARGE IF THE INITIAL FACE AMOUNT IS DECREASED. DEFERRED
ADMINISTRATIVE CHARGE REDUCES BY $2.00 ON EACH MONTHLY ANNIVERSARY THAT THE
CONTRACT IS IN FORCE. BEGINNING IN CONTRACT YEAR 6, THE MAXIMUM CONTINGENT
DEFERRED SALES CHARGE REDUCES ON EACH MONTHLY ANNIVERSARY THAT THE CONTRACT
IS IN FORCE. ADDITIONAL DECREASE CHARGES WILL APPLY TO INCREASES IN FACE
AMOUNT.
Date of Issue: JULY 1, 1991 Contract Number: V1234567
INSURED: XXXX XXX
AGE: 35 SEX: MALE FLEXIBLE PREMIUM
INITIAL FACE AMOUNT: $50,000 VARIABLE LIFE INSURANCE
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INITIAL MONTHLY
BEGINNING COST OF ADMINISTRATIVE
ON CONTRACT ATTAINED INSURANCE CHARGE FOR
ANNIVERSARY AGE RATE* INCREASES#
JUL 1,
1991 35 $ 0.14 $ 0.04
1992 36 0.15 0.04
1993 37 0.16 0.04
1994 38 0.17 0.04
1995 39 0.18 0.04
1996 40 0.19 0.05
1997 41 0.21 0.05
1998 42 0.22 0.05
1999 43 0.24 0.05
2000 44 0.26 0.05
2001 45 0.28 0.05
2002 46 0.31 0.05
2003 47 0.33 0.05
2004 48 0.36 0.05
2005 49 0.39 0.05
2006 50 0.42 0.06
2007 51 0.46 0.06
2008 52 0.51 0.06
2009 53 0.56 0.06
2010 54 0.62 0.06
2011 55 0.68 0.06
2012 56 0.75 0.06
2013 57 0.82 0.06
2014 58 0.91 0.06
2015 59 1.00 0.06
2016 60 1.10 0.07
2017 61 1.22 0.07
2018 62 1.35 0.07
2019 63 1.50 0.07
2020 64 1.67 0.07
2021 65 1.85 0.07
2022 66 2.05 0.07
2023 67 2.26 0.07
2024 68 2.49 0.07
2025 69 2.74 0.07
2026 70 3.03 0.07
2027 71 3.36 0.07
2028 72 3.74 0.07
2029 73 4.17 0.07
2030 74 4.64 0.07
2031 75 5.15 0.07
2032 76 5.68 0.07
2033 77 6.24 0.07
2034 78 6.82 0.07
2035 79 7.46 0.07
2036 80 8.15 0.07
2037 81 8.93
2038 82 9.81
2039 83 10.79
2040 84 11.84
2041 85 12.95
2042 86 14.09
2043 87 15.26
2044 88 16.44
2045 89 17.65
2046 90 18.92
2047 91 20.26
2048 92 21.73
2049 93 23.47
2050 94 25.81
2051 95 29.32
* MAXIMUM MONTHLY COST PER $1,000 INSURANCE FOR NONSMOKER PREMIUM
CLASS, BASED ON COMMISSIONERS 1980 STANDARD ORDINARY MORTALITY TABLE
FOR NONSMOKERS.
# MONTHLY CHARGE PER $1,000 OF INCREASE IN FACE AMOUNT UNDER SECTION 5.3 OR
UNDER ANY GUARANTEED INCREASE OPTION BENEFIT RIDER, CHARGED ONLY IN THE
FIRST 120 MONTHLY DEDUCTIONS ON OR AFTER THE EFFECTIVE DATE OF THE
INCREASE.
Date of Issue: JULY 1, 1991 Contract Number: V1234567
INSURED: XXXX XXX
AGE: 35 SEX: MALE FLEXIBLE PREMIUM
INITIAL FACE AMOUNT: $50,000 VARIABLE LIFE INSURANCE
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VARIABLE ACCOUNT INFORMATION
Investment Company -- LBVIP Series Fund, Inc.
Variable Account -- LBVIP Variable Insurance Account
Each subaccount of the LBVIP Variable Insurance Account invests in a
specific portfolio of the LBVIP Series Fund, Inc. Subaccounts of the
Variable Account and the portfolios in which they invest are as follows:
GROWTH SUBACCOUNT -- Amounts credited to this subaccount are
invested in the Growth Portfolio. This
portfolio invests primarily in equity
securities.
HIGH YIELD SUBACCOUNT -- Amounts credited to this subaccount are
invested in the High Yield Portfolio.
This portfolio invests primarily in
high yield securities.
INCOME SUBACCOUNT -- Amounts credited to this subaccount are
invested in the Income Portfolio. This
portfolio invests primarily in fixed
income securities.
MONEY MARKET SUBACCOUNT -- Amounts credited to this subaccount are
invested in the Money Market Portfolio.
This portfolio invests primarily in
money market instruments.
The LBVIP Series Fund, Inc. receives investment advice for each
portfolio from Lutheran Brotherhood Research Corp. As investment
advisor, Lutheran Brotherhood Research Corp. charges the LBVIP Series
Fund, Inc. a daily investment advisory fee equal to an annual rate
of 0.4% of the aggregate average daily net assets of the LBVIP Series
Fund, Inc.
For a complete description of the Variable Account and the designated
portfolios, please refer to the current prospectus for the LBVIP Series
Fund, Inc.
Contract Number: V1234567
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1. DEFINITIONS
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APPLICATION. The application(s) and all amendments and supplements.
ATTAINED AGE. Attained Age on any day is the age last birthday of the
Insured on the Contract Anniversary on or immediately prior to that day.
CONTRACT ANNIVERSARY. The Date of Issue on page 3 and the same month and
day for years after issue as in the Date of Issue.
CONTRACT DATE. The latest of (1) The Date of Issue; (2) The date we
receive at our Home Office the first premium payment on this contract; and
(3) Any other date agreed upon by you and us.
CONTRACT MONTH. The period from one Monthly Anniversary to the next
Monthly Anniversary.
CONTRACT YEAR. The first Contract Year begins on the Date of Issue and
continues until the end of the period for which the 12th Monthly Deduction
is made. Thereafter, Contract Years are successive periods during which 12
Monthly Deductions are made, each year beginning at the end of the prior
Contract Year and continuing to the end of the period for which the 12th
deduction is made.
DEBT. All unpaid contract loans less any unearned interest.
INCREASE YEAR. An Increase Year begins on the effective date of each
increase in Face Amount according to Section 5.3 and continues until the end
of the period for which the 12th Monthly Deduction on or after the effective
date of the increase is made. Thereafter, Increase Years are successive
periods during which 12 Monthly Deductions are made, each year beginning at
the end of the prior Increase Year and continuing to the end of the period
for which the 12th deduction is made.
INSURED. The person named as Insured on page 3.
MONTHLY ANNIVERSARY. The same day for months after issue as in the Date of
Issue.
SEC. Securities and Exchange Commission.
VALUATION DAY. Any day, except the day after Thanksgiving Day and the day
before Christmas Day, that the New York Stock Exchange is open for trading
or there is sufficient trading in a Fund portfolio's securities to affect
the Unit Value of the corresponding subaccount of the Variable Account.
VALUATION PERIOD. The period of time from the end of one Valuation Day to
the end of the next Valuation Day.
WE, OUR, US. Lutheran Brotherhood Variable Insurance Products Company.
WRITTEN NOTICE. A written request signed by you and received by us at our
Home Office in Minneapolis, Minnesota.
YOU, YOUR, YOURS. The owner of this contract.
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2. GENERAL PROVISIONS
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2.1 ENTIRE CONTRACT. The Entire Contract consists of:
1) This contract including any attached riders or amendments; and
2) The Application attached to this contract.
No change in this contract is valid unless it is made in writing and
signed by our President and Secretary.
2.2 MATURITY PROCEEDS. The amount payable if the Insured is living on
the Maturity Date will be the Accumulated Value less the sum of:
1) Any Debt; and
2) The amount, if any, needed to cover Monthly Deductions through
the Maturity Date.
2.3 DEATH PROCEEDS. The amount payable on the Insured's death before the
Maturity Date will be the sum, on the date of death, of:
1) The Death Benefit (see Section 5.1); and
2) Any insurance on the Insured's life provided by Additional
Benefits in this contract;
Less the sum of:
3) Any Debt; and
4) The amount, if any, needed to cover Monthly Deductions through
the month of death.
2.4 STATEMENTS IN THE APPLICATION. We will not use any statement to
contest a claim or to have this contract declared invalid unless the
statement is contained in the Application. All statements made in the
Application are representations, not warranties.
2.5 INCONTESTABILITY. We will not contest the validity of this contract
after it has been in force during the Insured's lifetime for two years
from the Date of Issue except for any provisions granting benefits in
the event of total disability.
If the Face Amount is increased according to Section 5.3, this
provision will apply to the increase from its effective date with
regard to statements made in the application for the increase. This
provision will apply from the date this contract is reinstated with
regard to statements made in the application for reinstatement.
2.6 MISSTATEMENT OF AGE OR SEX. If the Insured's age or sex has been
misstated, any contract values will be adjusted using the most recent
Cost of Insurance Rates to the amounts that would have been provided
based on the correct age and sex.
2.7 EXCLUSION: SUICIDE. If the Insured dies by suicide, while sane or
insane, within two years after the Date of Issue, the Death Proceeds
of this contract are limited to premiums paid less the sum of:
1) Any Debt; and
2) Any Partial Surrenders.
If the Insured dies by suicide, while sane or insane, within two years
after the effective date of an increase in Face Amount according to
Section 5.3, the Death Proceeds with respect to the increase are
limited to the Cost of Insurance for the increase (see Section 7.2)
plus the Initial Monthly Administrative Charge for the increase
included in any Monthly Deduction(s) made.
2.8 EXEMPTIONS FROM CLAIMS OF CREDITORS. To the extent permitted by
law, the proceeds of this contract and any payments under it will not
be subject to the claims of creditors or to any legal proceedings.
2.9 DEFERMENT. Death Proceeds will normally be paid within 7 days after
we receive at our Home Office due proof of the Insured's death and all
other requirements necessary for us to make payment. Maturity
Proceeds will normally be paid within 7 days of the Maturity Date.
The Cash Surrender Value, Partial Surrenders and contract loans will
normally be paid within 7 days after we receive Written Notice of
surrender or loan. However, we may defer payment of Maturity
Proceeds, any loan or surrender and any portion of the Death Benefit
in excess of the Face Amount while:
1) The New York Stock Exchange is closed for trading; or
2) The SEC requires that trading be restricted or declares an
emergency.
2.10 ANNUAL REPORT. We will mail you a statement of the value of this
contract within 30 days after each Contract Anniversary. The report
will show the Accumulated Value, Cash Surrender Value, Death Benefit,
all payments and deductions since the last report and any outstanding
Debt. Any further information required by law will also be given to
you.
2.11 PROJECTION OF VALUES. In any year that you so request, we will give
you one projection of the illustrated future values under the
contract.
2.12 RESERVATION OF RIGHTS. To the extend permitted or required by law
(including SEC rules under the Investment Company Act of 1940), we
reserve the right to eliminate or modify:
1) The withdrawal rights provided in the Right to Cancel provision
(page 1) and in Section 5.4; and
2) The exchange rights provided in Sections 10.1 and 10.2.
2.13 TERMINATION. This contract will terminate on the earliest of:
1) The date of death of the Insured;
2) The Maturity Date;
3) The end of the grace period if the premium required to keep this
contract in force has not been paid;
4) The date you surrender this contract; and
5) The date this contract terminates from excess loan under
Section 8.5.
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3. OWNERSHIP AND BENEFICIARY
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3.1 OWNERSHIP. The Insured is the owner unless another person is named
as the owner in the Application. Ownership may be changed through
assignment. While the Insured is living, the owner may exercise all
rights set out in this contract.
3.2 ASSIGNMENT. You may assign this contract. We are not bound by the
assignment unless it is in writing and filed at our Home Office. We
are not responsible for the validity or effect of any assignment. Any
Debt on this contract will have prior claim over any assignment.
3.3 BENEFICIARY. The beneficiary is named in the Application. You may
change the beneficiary by giving Written Notice. The change will
become effective if:
1) We receive Written Notice; and
2) We acknowledge the change.
The effective date of the change will be the date the notice was
signed. We will not be liable for any payment made or action taken by
us before we receive the notice.
3.4 SUCCESSION OF BENEFICIARIES. You may designate one or more
beneficiaries to receive the Death Proceeds. You will classify each
beneficiary as primary or contingent. Upon the Insured's death, we
will pay the Death Proceeds to the primary beneficiaries who survive
the Insured. If none survive, the Proceeds will be paid to the
surviving contingent beneficiaries. In the event no beneficiary
survives the Insured, proceeds will be paid to the Insured's estate.
Other designations or successions of beneficiaries may be arranged
with us.
3.5 SHARE OF PROCEEDS. Unless you specify otherwise, each beneficiary
receiving proceeds will have an equal share in any Death Proceeds
payable.
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4. PREMIUMS AND REINSTATEMENT
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4.1 PREMIUM PAYMENTS. The amount of the Planned Annual Premium is shown
on page 3. The initial premium is due and payable on the Date of
Issue.
You may pay more or less than the Planned Annual Premium in any
Contract Year. However, except as provided in Section 4.6, to
continue the contract in force on each Monthly Anniversary the Cash
Surrender Value must be sufficient to cover the Monthly Deduction.
Premiums may be paid at any time before the Maturity Date and in any
amount.
Premiums are payable at our Home Office. Upon request we will give
you a receipt, signed by an officer of the company, for the premium
paid.
4.2 NET PREMIUM. The Net Premium is the portion of each premium which is
applied to the subaccounts of the Variable Account. The Net Premium
is equal to the premium paid less the sum of:
1) The Percent of Premium Charge applied to the premium paid. The
Percent of Premium Charge is shown on page 4; and
2) The Premium Processing Charge. We reserve the right to change
the amount of this charge. However, the Premium Processing
Charge will never exceed the maximum charge shown on page 4.
4.3 CUMULATIVE PREMIUM LIMIT. The Internal Revenue Code provides for
exclusion of the Death Benefit from gross income. To qualify for the
exclusion, total premium payments must not exceed the limit stated in
the Code. The portion of any premiums paid in excess of that limit
will be refunded to you.
4.4 PREMIUM BILLING. We will send premium xxxxxxxx based on the amount
and frequency of premium payments which you request. You may change
the amount and, subject to our published rules, the frequency or
method billing by giving Written Notice. If we do not receive any
premium payments for 24 consecutive months, we will stop xxxxxxxx.
4.5 PREMIUM IN DEFAULT AND GRACE PERIOD. If the Death Benefit Guarantee
is not in effect under Section 4.6, a premium is in default on a
Monthly Anniversary if the Cash Surrender Value is less than the
Monthly Deduction to be made on that day. Notice of the premium
required to keep this contract in force will be mailed to you at the
address last known to us. You will have a grace period of 61 days
after the date we mail the notice in which to pay the premium
required. This contract will remain in force during the grace period,
but not beyond the Maturity Date. Any accumulated value in the
subaccounts for this contract will be transferred to the general
account until we receive the required premium. If the required
premium is paid within the grace period, any accumulated value for
this contract in the general account but not in the Loan Account will
be transferred back to the subaccounts and we will deduct any Monthly
Deductions not made while a premium was in default. Otherwise, this
contract will terminate without value at the end of the grace period.
4.6 DEATH BENEFIT GUARANTEE. The Death Benefit Guarantee protects
against premium default due to investment experience. If, on a
Monthly Anniversary:
1) The Death Benefit Guarantee Requirement is met; and
2) The Death Benefit Guarantee has not terminated;
then no premium will be in default even if the Cash Surrender Value is
less than the Monthly Deduction to be made on that day. If the Cash
Surrender Value is less than the Monthly Deduction, the deduction made
will not exceed the Accumulated Value less any Debt and we will pay
the balance of the Monthly Deduction.
4.6a DEATH BENEFIT GUARANTEE REQUIREMENT. On any Monthly Anniversary, the
Death Benefit Guarantee Requirement is met if the sum of premiums paid
less any Partial Surrenders and any unpaid contract loans is greater
than or equal to the sum of Death Benefit Guarantee Premiums from the
Date of Issue through that Monthly Anniversary.
However, if the Death Benefit Guarantee Requirement is not met on a
Monthly Anniversary but the Cash Surrender Value less any unearned
interest is greater than or equal to the sum of Death Benefit
Guarantee Premiums from the Date of Issue through that Monthly
Anniversary, then the sum of premiums paid as used above will be
deemed to increase to the amount necessary to meet the Death Benefit
Guarantee Requirement.
In addition, a portion of any Partial Surrender or contract loan may
be excluded when determining if the Death Benefit Guarantee
Requirement is met. The amount excluded is calculated on the date of
the Partial Surrender or contract loan and is equal to the lesser of:
1) The amount of Partial Surrender or unpaid contract loan; and
2) The excess, if any, of the Cash Surrender Value less unearned
interest on any unpaid contract loans over the greater
of (a) and (b) where:
a) Is the sum of premiums paid less the amount of any Partial
Surrenders and unpaid contract loans not previously excluded
when determining if the Death Benefit Guarantee Requirement
was met; and
b) Is the sum of Death Benefit Guarantee Premiums from the Date
of Issue through the Monthly Anniversary on or next after the
date of Partial Surrender or contract loan.
4.6b DEATH BENEFIT GUARANTEE PREMIUM. The Death Benefit Guarantee Premium
on the Date of Issue is shown on page 3. If the Death Benefit
Guarantee has not terminated, a new Death Benefit Guarantee Premium
will be determined whenever:
1) The Death Benefit Option is changed;
2) The Face Amount is increased or decreased (An increase in Face
Amount according to Section 5.3 may also result in a new Death
Benefit Guarantee Termination Age.);
3) The Premium Class is changed; or
4) Additional Benefits are increased, decreased, or added to or
deleted from this contract.
The new Death Benefit Guarantee Premium will be shown on the
supplemental contract schedule that we will mail to you. For purposes
of the Death Benefit Guarantee Requirement, the Death Benefit
Guarantee Premium will be zero for any Monthly Anniversary that a
premium is credited to this contract under a disability waiver benefit
rider.
4.6c TERMINATION OF DEATH BENEFIT GUARANTEE. The Death Benefit Guarantee
will terminate on the earlier of:
1) Any Monthly Anniversary that the Death Benefit Guarantee
Requirement is not met; and
2) The Death Benefit Guarantee Termination Age shown on page 3.
In the event of termination under (1), we will mail to you at the
address last known to us a notice of the premium needed to meet the
Death Benefit Guarantee Requirement and reinstate the Death Benefit
Guarantee. If this amount is not received at our Home Office within
31 days after the date we mail the notice, the Death Benefit Guarantee
cannot be reinstated.
4.7 REINSTATEMENT. This contract may be reinstated within five years
after the end of the grace period but before the Maturity Date, unless
it has been surrendered. To reinstate we require:
1) Evidence of insurability which meets our standards;
2) Payment to cover the Monthly Deductions that were not made
during the grace period;
3) Payment of an amount to keep the contract in force for at least
two months, based on unit values on the date of reinstatement;
and
4) Payment or reinstatement of all Debt existing at the end of the
grace period.
The effective date of a reinstatement is the date the application for
reinstatement is approved by us. The Accumulated Value on that date
will be the sum of:
1) The accumulated values for this contract which were transferred
to the general account at the time of premium default (see
Section 4.5);
2) The accumulated value for this contract in the Loan Account; and
3) The accumulated values provided by the payment made to
reinstate;
Less the sum of:
4) Monthly Deductions that were not made during the grace period;
and
5) The Monthly Deduction made on the date of reinstatement.
Section 2.5 Incontestability will apply from the date the contract is
reinstated with regard to statements made in the application for
reinstatement. The Death Benefit Guarantee cannot be reinstated under
this provision.
Contract Number: V1234567
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5. INSURANCE COVERAGE
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5.1 DEATH BENEFIT. We will pay the Death Benefit to the beneficiary upon
receiving proof that the death of the Insured occurred before the
Maturity Date. It is payable as part of the Death Proceeds. The
benefit is determined as follows:
1) OPTION A. The Death Benefit on any day is the greater of:
a) The sum of the Face Amount and the Accumulated Value; and
b) The Accumulated Value multiplied by the Factor for the
Attained Age on that day (see Table of Factors)
2) OPTION B. The Death Benefit on any day is the greater of:
a) The Face Amount; and
b) The Accumulated Value multiplied by the Factor for the
Attained Age on that day (see Table of Factors).
The Death Benefit Option at issue of this contract is shown on page 3.
TABLE OF FACTORS
Attained Age Factor Attained Age Factor
------------ ------ ------------ ------
40 or less 2.50 61 1.28
41 2.43 62 1.26
42 2.36 63 1.24
43 2.29 64 1.22
44 2.22 65 1.20
45 2.15 66 1.19
46 2.09 67 1.18
47 2.03 68 1.17
48 1.97 69 1.16
49 1.91 70 1.15
50 1.85 71 1.13
51 1.78 72 1.11
52 1.71 73 1.09
53 1.64 74 1.07
54 1.57 75 to 90 1.05
55 1.50 91 1.04
56 1.46 92 1.03
57 1.42 93 1.02
58 1.38 94 1.01
59 1.34 95 1.00
60 1.30
5.2 CHANGE OF DEATH BENEFIT OPTION. You may change the Death Benefit
Option at any time except when the Death Benefit is a multiple of the
Accumulated Value according to Section 5.1(1)(b) or 5.1(2)(b). The
change is subject to the following:
1) You must give Written Notice.
2) If you change from Option B to Option A, the Death Benefit will
not change and the Face Amount will be decreased by the
Accumulated Value on the effective date of the change. The
decrease in Face Amount will be applied in the order specified
in Section 5.5(2). However, this change may not be made if it
would reduce the Face Amount to less than $5,000.
3) If you change from Option A to Option B, the Face Amount will
not change and the Death Benefit will be decreased by the
Accumulated Value on the effective date of the change.
4) The change may not be made if it would cause total premium
payments already made to exceed the Cumulative Premium Limit of
the Internal Revenue Code.
5) The effective date of the change will be the Monthly
Anniversary on or next after the date we receive Written
Notice.
5.3 INCREASE IN FACE AMOUNT. You may increase the Face Amount any time
before the Contract Anniversary on or next after the Insured's 80th
birthday. The increase is subject to the following:
1) You must make written application to us at our Home Office.
2) We will require evidence of insurability which meets our
standards.
3) The increase must be at least $10,000.
4) The Cash Surrender Value must not be less than the Monthly
Deduction on the effective date of the increase (unless the
Death Benefit Guarantee is in force).
5) The Initial Monthly Administrative Charge for the increase (see
Section 7.1(3)) will be charged on the effective date of the
increase and then on each Monthly Anniversary until 120 charges
have been made.
6) A new schedule of Decrease Charges will apply to the increase in
Face Amount.
7) The effective date of the increase will be the date shown on the
supplemental contract schedule that we will mail to you.
Section 2.5 Incontestability will apply to the increase from its
effective date with regard to statements made in the application for
the increase in Face Amount. Section 2.7 Exclusion: Suicide will
apply to the increase from its effective date.
5.4 RIGHT TO CANCEL INCREASE IN FACE AMOUNT. You may cancel any increase
in Face Amount by notifying your representative or giving Written
Notice before the latest of:
1) 10 days after you receive the supplemental contract schedule
showing the increase;
2) 45 days after you complete the application for the increase in
Face Amount; and
3) 10 days after a notice of withdrawal right is mailed or
delivered to you.
If you cancel any increase in Face Amount under this provision, the
portion of any Monthly Deduction(s) made which is due to the increase
will be applied as a Net Premium or, if you request, refunded to you.
5.5 DECREASE IN FACE AMOUNT. You may decrease the Face Amount at any
time. The decrease is subject to the following:
1) You must give Written Notice.
2) The decrease and Decrease Charge (see Section 7.3) will be
applied, in successive order, against:
a) The most recent increase in Face Amount;
b) The next most recent increase(s); then
c) The Initial Face Amount.
3) The decrease may not be made if the Accumulated Value less Debt
on the effective date of the decrease is less than the Decrease
Charge for the decrease.
4) The Face Amount after the decrease must not be less than the
minimum required. That minimum is $50,000 for decreases
made before the Contract Anniversary after the Insured's
50th birthday and $25,000 for decreases made after that date.
5) The decrease may not be made if it would cause total premium
payments already made to exceed the Cumulative Premium Limit of
the Internal Revenue Code.
6) The effective date of the decrease will be the Monthly
Anniversary on or next after the date we receive Written Notice.
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6. ACCUMULATED VALUE AND SURRENDER PROVISIONS
============================================================================
6.1 ACCUMULATED VALUE. On the Contract Date, the Accumulated Value is
equal to the Net Premium(s)received plus any interest earned on
premiums for this contract held in the general account less the
Monthly Deduction(s) made on that date. On any later date that this
contract is not in the grace period, the Accumulated Value of this
contract is equal to the sum of the accumulated values for this
contract in the subaccounts and the Loan Account (see Section 8.3).
The accumulated value in any subaccount on a Valuation Day is equal
to:
1) The number of units for this contract in that subaccount (see
Section 9.4); multiplied by
2) The unit value for that subaccount (see Section 9.5).
The accumulated value in the Loan Account on any date is the sum of:
1) Any Debt;
2) Any interest on loans on this contract payable in advance to the
next Contract Anniversary, provided that interest has not been
applied to pay any Monthly Deductions; and
3) Any interest accrued in the Loan Account on loans on this
contract.
The accumulated value for any day that is not a Valuation Day will be
determined on the next Valuation Day. During the grace period, the
Accumulated Value of this contract is equal to the sum of any
accumulated value for this contract transferred to the general account
at the time of premium default plus any accumulated value for this
contract in the Loan Account.
6.2 FULL SURRENDER. You may surrender this contract for its Cash
Surrender Value by giving Written Notice before the Maturity Date and
while the Insured is alive. The surrender will be effective on the
later of:
1) The date we receive Written Notice; and
2) The date you specify.
Insurance coverage ceases on the effective date of the surrender.
6.3 CASH SURRENDER VALUE. The Cash Surrender Value on any date is equal
to the Accumulated Value less the sum of:
1) Any Debt; and
2) The Decrease Charges, if any, applied on that date to the Face
Amount and to any prior decreases in Face Amount due to Partial
Surrender or change of Death Benefit Option.
6.4 PARTIAL SURRENDER. You may surrender a portion of the Accumulated
Value by giving Written Notice before the Maturity Date and while the
Insured is alive. We will deduct a Partial Surrender Charge from
every Partial Surrender. The amount of this charge is shown on
page 4.
A Partial Surrender;
1) Must be at least $500;
2) May be made only once each Contract Month;
3) Will reduce the Accumulated Value by the amount of the Partial
Surrender. The reduction will be applied against each
subaccount of the Variable Account according to the ratio for
this contract of the accumulated value in the subaccount to the
sum of the accumulated values in all the subaccounts. With our
approval, you may choose other allocations to the subaccounts;
4) Must not reduce the remaining Cash Surrender Value to less
than $500;
5) If the Death Benefit Option is B, will affect the Face Amount as
follows:
a) If the Death Benefit on the effective date of the Partial
Surrender is equal to the Face Amount, then the surrender
will reduce the Face Amount by the amount of the Partial
Surrender.
b) If the Death Benefit on the effective date of the Partial
Surrender is a multiple of the Accumulated Value according to
Section 5.1(2)(b), then the Face Amount will be reduced only
if, on that day, the amount of the surrender multiplied by
the Factor for the Attained Age on that day (see Table of
Factors on page 12) exceeds the Death Benefit minus the Face
Amount. In that case, the Face Amount will be reduced by:
i) The amount of the Partial Surrender; less
ii) The Death Benefit less the Face Amount prior to the
surrender, divided by the Factor applied.
Any decrease in Face Amount will be applied in the order
specified in Section 5.5(2). The Face Amount may not be reduced
to less than $5,000; and
6) Will be effective on the date we receive Written Notice.
A Partial Surrender may cause the Death Benefit Guarantee to
terminate.
6.5 CONTINUATION OF INSURANCE COVERAGE. If you stop premium payments,
this contract will remain in force until the earliest of:
1) The date of death of the Insured;
2) The Maturity Date;
3) The end of the grace period if the premium required to keep this
contract in force has not been paid;
4) The date you surrender this contract; and
5) The date this contract terminates from excess loan under
Section 8.5.
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7. MONTHLY DEDUCTION
============================================================================
7.1 MONTHLY DEDUCTION. The Monthly Deduction is made on the Contract Date
and on each subsequent Monthly Anniversary. If any Monthly
Anniversary occurs prior to the Contract Date, the deduction(s) for
such day(s) will also be made on the Contract Date. The Monthly
Deduction made from the subaccounts of the Variable Account is the
sum of:
1) The Cost of Insurance (see Section 7.2);
2) The Monthly Administrative Charge. This charge is the sum of:
a) The Basic Monthly Administrative Charge shown on page 4; and
b) Any Initial Monthly Administrative Charge. This is a charge
per $1,000 of Initial Face Amount. However, if the Initial
Face Amount is decreased according to Section 5.5, the charge
will be based on the Face Amount remaining after the
decrease. The charge is made on the Contract Date and then
on each Monthly Anniversary until 120 charges have been made.
The charge per $1,000 is shown on page 4;
3) Any Initial Monthly Administrative Charge for increases. This
is a charge per $1,000 of increase in Face Amount. However, if
the increased Face Amount is later decreased according to
Section 5.5, the charge will be based on the amount of the
increased Face Amount remaining after the decrease. The charge
is made on the effective date of each increase according to
Section 5.3 and then on each Monthly Anniversary until
120 charges have been made. The charge is based on Attained Age
on the date of the increase. The charge per $1,000 is shown on
page 5;
4) Any Decrease Charge which results from a decrease in Face Amount
according to Section 5.5; and
5) The monthly cost of any Additional Benefits.
However, if the Monthly Deduction is greater than the Cash Surrender
Value and the requirements of the Death Benefit Guarantee are met, the
deduction made will not exceed the Accumulated Value less any Debt.
We will pay the balance of the Monthly Deduction.
The Monthly Deduction is taken from each subaccount according to the
ratio for this contract of the accumulated value in the subaccount to
the sum of the accumulated values in all the subaccounts. With our
approval, you may choose other allocations of the Monthly Deduction.
7.2 COST OF INSURANCE. The Cost of Insurance is determined on the
Contract Date and on each Monthly Anniversary. It is equal to the
Cost of Insurance Rate multiplied by the Risk Amount.
7.2a COST OF INSURANCE RATE. We will determine the Cost of Insurance
Rate monthly. The rate is based on the Insured's Premium Class, sex,
Initial Face Amount and Attained Age.
The Premium Class for the Initial Face Amount is shown on page 3. The
Premium Class for any increase in Face Amount according to Section 5.3
will be determined on the effective date of the increase. If the
Death Benefit is a multiple of the Accumulated Value according to
Section 5.1(1)(b) or 5.1(2)(b), the Premium Class of the resulting
increase in Death Benefit will be the Premium Class shown on page 3.
The Cost of Insurance Rate for the Initial Face Amount and for any
increase in Face Amount with the same Premium Class as shown on page 3
will not exceed the rates shown on page 5. For any Face Amount with
Premium Class other than "standard," "smoker" or "nonsmoker," the
maximum cost is increased in one or both of the following ways as
specified in the contract schedule pages:
1) The maximum Cost of Insurance Rate is multiplied by a percentage
rating.
2) An extra monthly premium is added to the Cost of Insurance.
We may charge less than the maximum rate. Any change in Cost of
Insurance Rates will apply to all insureds of the same Premium Class,
sex, Initial Face Amount and Attained Age.
7.2b RISK AMOUNT. The Risk Amount is equal to:
1) The Death Benefit divided by 1.0040741;
Less
2) The Accumulated Value (before the Cost of Insurance and the cost
of the disability waiver benefit, if any, is deducted).
If the Death Benefit Option is B and the Initial Face Amount has been
increased, the Accumulated Value will be considered part of the
Initial Face Amount. If the Accumulated Value is greater than the
Initial Face Amount, the excess will be considered to be part of
successive increases in Face Amount starting with the first increase.
7.3 DECREASE CHARGE. The Decrease Charge is charged on:
1) The effective date of each decrease in Face Amount you make
according to Section 5.5; and
2) Termination of this contract other than by death or maturity
(Face Amount decreases to zero).
The Decrease Charge is applied as in Section 5.5(2).
If the Initial Face Amount is decreased, the Decrease Charge is the
product of:
1) The ratio of the decrease in Face Amount to the Initial Face
Amount; and
2) The sum of:
a) The Deferred Administrative Charge; and
b) The lesser of:
i) The Maximum Contingent Deferred Sales Charge; and
ii) 25% of premiums paid in the first Contract Year.
The Deferred Administrative Charge and the Maximum Contingent Deferred
Sales Charge are shown on page 4.
If an increase in Face Amount is decreased, the Decrease Charge is the
product of:
1) The ratio of the amount of the increase being decreased to the
initial amount of the increase in Face Amount; and
2) The sum of:
a) The Deferred Administrative Charge for the increase in Face
Amount; and
b) The lesser of
i) The Maximum Contingent Deferred Sales Charge for the
increase in Face Amount; and
ii) 25% of the premium attributable to the increase in Face
Amount which is decreased (see Section 7.4).
For any increase in Face Amount, the Deferred Administrative Charge
and the Maximum Contingent Deferred Sales Charge will be shown on
supplemental schedule pages that we will mail to you.
7.4 ATTRIBUTABLE PREMIUM. For purposes of the Contingent Deferred Sales
Charge, the premium attributable to an increase in Face Amount is
equal to (1) multiplied by (2 + 3) where:
1) Is the ratio of the increase in Face Amount to the total Face
Amount including that increase;
2) Is the Cash Surrender Value on the effective date of the
increase; and
3) Is premiums paid during the Increase Year which begins on the
effective date of the increase.
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8. LOANS
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8.1 CONTRACT LOANS. After the first Contract Year, you may obtain a loan
from us with this contract as sole security if:
1) You give Written Notice;
2) The loan with interest does not increase the total loan to more
than 90% of the excess of the Accumulated Value over any
Decrease Charge on the date of the loan; and
3) The amount of the loan is at least $100.
Accumulated value equal to the amount of the loan will be transferred
from the subaccounts to the Loan Account. The amount taken from each
subaccount will be according to the ratio for this contract of the
accumulated value in the subaccount to the sum of the accumulated
values in all the subaccounts. With our approval, you may choose
other allocations from the subaccounts. Contract loans may cause the
Death Benefit Guarantee to terminate.
8.2 LOAN INTEREST. The loan interest rate is 7.4% per year. Interest on
any loan will be charged at that rate. It is payable in advance on
the date of the loan and on each Contract Anniversary. Interest is
computed to the next Contract Anniversary. If interest is not paid
when due, it will be added to the loan and bear interest at the same
rate.
8.3 LOAN ACCOUNT. The Loan Account is an account of the company. Assets
from the Variable Account are transferred to the Loan Account in
amounts equal to contract loans on this and similar contracts.
Interest will be credited to this account at the rate of 0.48676% per
month. This is an effective rate of 6.0% per year. Loans on this
contract will be credited with interest while this contract is in
force. Interest credited will be transferred to the subaccounts on
each Monthly Anniversary and on the date the entire Debt is repaid in
full. The amount transferred to each subaccount will be according to
the ratio for this contract of the accumulated value in the subaccount
to the sum of the accumulated values in all the subaccounts.
8.4 REPAYMENT OF DEBT. All or part of the Debt may be repaid at any time
before the Maturity Date and while the Insured is alive. Each
repayment must be at least $25. You must notify us if a payment to us
is a repayment of Debt. Otherwise, it will be considered a premium
payment. No charges are deducted from Debt repayments. Repayments of
Debt, and any unearned loan interest that was paid in advance on that
portion of the Debt, will be deducted from the Loan Account and
transferred to each subaccount of the Variable Account according to
the ratio for this contract of the accumulated value in the subaccount
to the sum of the accumulated values in all the subaccounts at the
time of repayment or, if that sum is zero, according to the Premium
Allocation Percentages. With our approval, you may choose other
allocations to the subaccounts.
8.5 TERMINATION FROM EXCESS LOAN. If the Death Benefit Guarantee is not
in force, this contract will terminate when:
1) The Debt exceeds the Accumulated Value less the Decrease Charge
applied to the Face Amount and to any decreases in Face Amount
due to Partial Surrender or change of Death Benefit Option; and
2) 61 days have elapsed since we mailed a notice to you at the
address last known to us.
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9. VARIABLE ACCOUNT AND UNIT VALUE
============================================================================
9.1 VARIABLE ACCOUNT. We have established the Variable Account shown on
page 6 as a separate investment account according to Minnesota laws.
The Variable Account is registered with the SEC as a unit investment
trust under the Investment Company Act of 1940.
The Variable Account has subaccounts which invest in shares of the
LBVIP Series Fund, Inc. (the Fund). The Fund is registered with the
SEC under the Investment Company Act of 1940 as a diversified open-end
management investment company. Each subaccount purchases shares in a
specified portfolio of the Fund. Amounts allocated to each subaccount
buy shares of the portfolio for that subaccount at net asset value.
The portfolios and subaccounts are shown on page 6. We may add
additional subaccounts to invest in a new portfolio of the Fund or in
a different investment company.
We own the assets of the Variable Account. Assets equal to the
reserves and other liabilities of the Variable Account may not be
charged with liabilities from any other business we conduct. However,
we may transfer assets of the Variable Account in excess of account
reserves and liabilities to our general account. (The general account
includes all assets we own that are not in the Variable Account.)
Income and realized and unrealized gains and losses from each
subaccount of the Variable Account are credited to or charged against
that subaccount. The value of the assets in the Variable Account is
determined at the end of each Valuation Day.
9.2 ALLOCATION OF NET PREMIUMS. Any premiums received before the
Contract Date are applied entirely to the general account. On the
Contract Date, the amount in that account equal to the premium
payments received will be applied as a premium payment. Any balance
remaining for this contract will be applied as a Net Premium on that
date. After the Contract Date, payments are applied on the date we
receive them.
Each Net Premium will be applied to the subaccounts of the Variable
Account according to the Premium Allocation Percentages for this
contract. The Premium Allocation Percentages are specified in the
Application. You may change these percentages by giving Written
Notice. The change will be effective for each premium received with
or after your notice. The sum of the Premium Allocation Percentages
must be 100%, and each Premium Allocation Percentage must be a whole
number not more than 100%. We reserve the right to adjust your
allocation to eliminate fractional percentages.
9.3 TRANSFERS AMONG SUBACCOUNTS. You may transfer some or all of the
accumulated values among the subaccounts of the Variable Account. You
do this by giving Written Notice. The transfer of accumulated value
is subject to the following:
1) The total amount transferred cannot be less than the smaller of:
a) $500; and
b) The accumulated value in the subaccount(s) from which the
transfer is being made.
2) The transfer will occur at the end of the day on which we
receive Written Notice.
3) After you have made two transfers in a Contract Year, a Transfer
Charge will be deducted from each subsequent amount you transfer
during the remainder of that Contract Year. The charge will be
deducted from the total amount transferred in proportion to the
amounts transferred from each subaccount. We reserve the right
to change the amount of this charge or to waive the charge for
transfers made under an automatic transfer plan. However, the
Transfer Charge will never exceed the maximum charge shown on
page 4.
We may defer making transfers subject to the same conditions as in
Section 2.9 Deferment.
9.4 NUMBER OF UNITS. On the Contract Date, the number of units for this
contract in any subaccount is equal to:
1) The accumulated value for this contract in that subaccount;
divided by
2) The unit value for that subaccount.
The number of units for this contract in any subaccount may increase
or decrease at the end of each Valuation Period. The number of units
increases when, during the period:
1) Net Premiums are allocated to the subaccount;
2) Accumulated value is transferred to the subaccount from another
subaccount or from the general account;
3) Repayments of Debt are transferred to the subaccount; or
4) Interest is transferred from the Loan Account to the subaccount.
The number of units decreases when, during the Valuation Period:
1) Monthly Deductions are taken from the subaccount;
2) Accumulated value is transferred from the subaccount to another
subaccount or to the general account;
3) Partial Surrenders are applied against the subaccount; or
4) Contract loans are transferred from the subaccount.
The increase or decrease in the number of units for this contract in
any subaccount is equal to:
1) The dollar amount allocated or transferred to or from that
subaccount; divided by
2) The unit value for that subaccount at the end of the Valuation
Period during which the amounts are allocated or transferred.
9.5 UNIT VALUE. The unit value for a subaccount is equal to (1) divided
by (2) where:
1) Is the sum of:
a) The net asset value of the corresponding portfolio of the
subaccount at the end of the current Valuation Period; plus
b) The amount of any dividend or capital gain distribution made
by the portfolio if the "ex-dividend" date occurs during the
Valuation Period; plus or minus
c) A charge or credit for any taxes reserved for which we
determine to be a result of the investment operation of the
portfolio;
Less
d) The risk charge we deduct for each day in the Valuation
Period. This charge for mortality and expense risks is
guaranteed not to exceed, on an annual basis, 0.75% of the
daily value of the subaccount.
2) Is the number of units of that subaccount for all contracts.
Unit values are determined at the end of each Valuation Day before the
transfer or allocation of any amounts to or from the subaccounts. The
unit values may increase or decrease on each Valuation Day.
9.6 CHANGE OF INVESTMENT POLICY. The investment policy for the Variable
Account is described on page 6. We may change the investment policy
of the Variable Account with the approval of the insurance supervisory
officials of the State of Minnesota. The approval process has been
filed with the insurance department of the state in which this
contract is delivered. We will notify you if there is a material
change in investment policy.
9.7 CHANGE OF PORTFOLIO. We may determine that a portfolio has become
unsuitable for investment by a subaccount or shares of a portfolio may
cease to be available for investment. In such event, we may
substitute another portfolio of the investment company or invest in a
different investment company. This change would not be made unless
approved by:
1) The SEC; and
2) If required, the insurance supervisory officials in the state
where this contract is delivered.
============================================================================
10. EXCHANGE CONTRACT
============================================================================
10.1 EXCHANGE PRIVILEGE. Within 24 months after the Date of Issue, you
may exchange this contract for any fixed benefit permanent life
insurance contract issued by Lutheran Brotherhood. The new contract
will be on the Insured's life with no evidence of insurability
required. The exchange is subject to the following:
1) You must make written application to us at our Home Office and
surrender this contract.
2) The exchange must be made while this contract is in force.
3) The issue age and date of issue of the new contract are the same
as the issue age and Date of Issue for this contract. Premiums
will be based on rates in effect on the Date of Issue.
4) The new contract will be issued in the same Premium Class as the
Initial Face Amount for this contract. The Premium Class for
amounts in excess of the Initial Face Amount will be according
to Section 10.2(5). If this contract has an exclusion rider,
the new contract will also have such an exclusion rider.
5) The new contract will have, at your election, either:
a) A death benefit equal to the Death Benefit of this contract
on the effective date of the exchange; or
b) A net amount at risk equal to the Death Benefit of this
contract on the effective date of the exchange less the
Accumulated Value on that date.
6) The new contract may include a disability waiver benefit rider
if:
a) This contract has a disability waiver benefit rider;
b) Exchange is made before the Contract Anniversary after the
Insured's 65th birthday; and
c) The new contract has premiums payable to at least age 85.
7) Any outstanding Debt on this contract must be repaid.
8) The effective date of the exchange will be the date we receive
this contract and your written application.
10.2 EXCHANGE OF INCREASE IN FACE AMOUNT. Within 24 months after the
effective date of any increase in Face Amount according to
Section 5.3, you may exchange the increase in Face Amount for any
fixed benefit permanent life insurance contract issued by Lutheran
Brotherhood. The new contract will be on the Insured's life with no
evidence of insurability required. The exchange is subject to the
following:
1) You must make written application to us at our Home Office.
2) The exchange must be made while this contract is in force.
3) No premium may be in default at the time of the exchange.
4) The issue age and date of issue of the new contract are the same
as the attained age and effective date for the increase in Face
Amount. Premiums will be based on rates in effect on the
effective date of the increase.
5) The new contract will be issued in the same Premium Class as the
increase in Face Amount. If this contract has an exclusion
rider, the new contract will also have such an exclusion rider.
6) The new contract will have, at your election, either:
a) A death benefit equal to the amount of the increase in Face
Amount; or
b) A net amount at risk equal to the increase in Face Amount
less the Accumulated Value of this contract on the effective
date of the exchange which is considered to be part of the
increase in Face Amount (see Section 7.2).
7) The new contract may include a disability waiver benefit rider
if:
a) This contract has a disability waiver benefit rider;
b) Exchange is made before the Contract Anniversary after the
Insured's 65th birthday; and
c) The new contract has premiums payable to at least age 85.
8) The effective date of the exchange will be the date we receive
your written application.
10.3 CASH ADJUSTMENT ON EXCHANGE. Upon exchange, a cash adjustment may be
necessary to reflect differences between the accumulated values of
this contract and the new contract. The adjustment will be determined
as of the date we receive at our Home Office your written application
for exchange. If the cash adjustment is to be paid to you, we will
make the payment when the new contract is issued. If the adjustment
is to be paid by you to us, we will mail you notice of the amount due.
If this amount is not paid within 31 days of the date we mail the
notice, the exchanged coverage will terminate.
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11. SETTLEMENT PROVISIONS
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11.1 PAYMENT OF PROCEEDS. Proceeds from death, maturity or surrender are
payable in a lump sum unless otherwise provided. On Death Proceeds,
we will pay interest at the rate payable in Option 1 - Interest Income
or, if greater, the rate required by law. Interest is payable from
the date of death until the date of settlement. Instead of a lump
sum, proceeds of $2,000 or more may be paid under any settlement
option in Section 11.2 by means of a supplementary contract which we
will issue.
11.2 OPTIONAL PLANS OF SETTLEMENT.
OPTION 1 - INTEREST INCOME. The proceeds may be left on deposit. We
will pay interest at a rate of not less than 3% per year. These
proceeds may be withdrawn upon request.
OPTION 2 - INCOME OF A FIXED AMOUNT. We will pay an income of a
fixed amount at agreed upon intervals. This income is subject to
these conditions:
1) Income per year must not be less than 6% of the proceeds.
2) Income is paid until the proceeds, with interest credited at the
rate of 3 1/2% per year on the unpaid balance, are paid in full.
This income may be increased by the crediting of additional
interest.
OPTION 3 - INCOME FOR A FIXED PERIOD. We will pay an income for a
fixed number of years, not to exceed 30. The income will not be less
than the amounts shown in the table for this option below.
OPTION 4 - LIFE INCOME WITH GUARANTEED PERIOD. We will pay an income
for the lifetime of the payee. If the payee dies during the
guaranteed period, payments will be continued to the end of that
period. A period of 10 or 20 years may be elected. The income will
not be less than the amounts shown in the table for this option on
page 24. After the first payment is made, this option may not be
revoked or changed.
OPTION 5 - OTHER OPTIONS. The proceeds may be paid under any other
settlement option agreeable to us.
11.3 ELECTION OF AN OPTION. You may elect an option by Written Notice
during the Insured's lifetime. The option must be elected before
proceeds become payable. Assignees and third-party owners may elect
an option only with our consent. Election of Option 4 may be made
only if the payee is a natural person who is the Insured or a
beneficiary.
If Death Proceeds are payable, the beneficiary may elect a settlement
option within one year from the date of death provided that:
1) The manner of settlement has not been restricted before the
Insured's death; and
2) The Death Proceeds have not been paid.
Election of an option is subject to these conditions:
1) Payments must not be less than $25;
2) Payments are made only at annual, semiannual, quarterly or
monthly intervals; and
3) The first payment, except under Option 1 - Interest Income, is
payable as of the date the option becomes effective. Under
Option 1, interest is payable at the end of the first payment
interval.
Contract Number: V1234567
OPTION 3
GUARANTEED MONTHLY PAYMENTS FOR EACH $1,000 OF PROCEEDS
========================================================================================================================
Years Monthly Years Monthly Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment Payable Payment Payable Payment
------------------------------------------------------------------------------------------------------------------------
1 84.65 7 13.37 13 7.93 19 5.96 25 4.96
2 43.05 8 11.89 14 7.48 20 5.75 26 4.84
3 29.19 9 10.75 15 7.10 21 5.56 27 4.73
4 22.26 10 9.83 16 6.76 22 5.39 28 4.62
5 18.11 11 9.08 17 6.46 23 5.23 29 4.53
6 15.34 12 8.46 18 6.20 24 5.09 30 4.44
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Annual, Semiannual or Quarterly payments are 11.813, 5.957 and 2.991 respectively, times the Monthly payments.
========================================================================================================================
Contract Number: V1234567
OPTION 4
MALE PAYEE - MONTHLY LIFE INCOME
========================================================================================================================
GUARANTEED MONTHLY LIFE INCOME FOR EACH $1,000 OF PROCEEDS
========================================================================================================================
Payments Payments Payments Payments Payments Payments
Age of Payee Guaranteed Guaranteed Age of Payee Guaranteed Guaranteed Age of Payee Guaranteed Guaranteed
on Date of for for on Date of for for on Date of for for
First Payment 10 years 20 years First Payment 10 years 20 years First Payment 10 years 20 years
------------------------------------------------------------------------------------------------------------------------
40 3.94 3.89 65 6.08 5.28 75 7.75 5.65
45 4.20 4.11 66 6.23 5.33 76 7.92 5.65
67 6.38 5.38 77 8.09 5.65
50 4.51 4.36 68 6.54 5.43 78 8.26 5.65
55 4.91 4.66 69 6.71 5.48 79 8.42 5.65
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60 5.42 4.97 70 6.87 5.52 80 8.57 5.65
61 5.54 5.04 71 7.05 5.55 85 9.20 5.65
62 5.67 5.10 72 7.22 5.59
63 5.80 5.16 73 7.40 5.62 90 9.59 5.65
64 5.94 5.22 74 7.57 5.64 95 9.73 5.65
========================================================================================================================
Contract Number: V1234567
OPTION 4
FEMALE PAYEE - MONTHLY LIFE INCOME
========================================================================================================================
GUARANTEED MONTHLY LIFE INCOME FOR EACH $1,000 OF PROCEEDS
========================================================================================================================
Payments Payments Payments Payments Payments Payments
Age of Payee Guaranteed Guaranteed Age of Payee Guaranteed Guaranteed Age of Payee Guaranteed Guaranteed
on Date of for for on Date of for for on Date of for for
First Payment 10 years 20 years First Payment 10 years 20 years First Payment 10 years 20 years
------------------------------------------------------------------------------------------------------------------------
40 3.72 3.70 65 5.50 5.05 75 7.14 5.60
45 3.92 3.88 66 5.63 5.12 76 7.34 5.63
67 5.77 5.19 77 7.54 5.65
50 4.18 4.11 68 5.91 5.25 78 7.74 5.65
55 4.51 4.38 69 6.07 5.32 79 7.94 5.65
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60 4.93 4.70 70 6.23 5.37 80 8.13 5.65
61 5.03 4.77 71 6.40 5.43 85 8.97 5.65
62 5.14 4.84 72 6.58 5.48
63 5.25 4.91 73 6.76 5.52 90 9.48 5.65
64 5.37 4.98 74 6.95 5.57 95 9.73 5.65
========================================================================================================================
LUTHERAN BROTHERHOOD
[LOGO] VARIABLE INSURANCE
PRODUCTS COMPANY
A Stock Life Insurance Company FLEXIBLE PREMIUM
Xxxxxxxxxxx, Xxxxxxxxx 00000 VARIABLE LIFE INSURANCE
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Death Proceeds payable at death prior to Maturity Date.
Adjustable death benefit.
Flexible premiums.
Return on investments reflected in contract benefits.
Nonparticipating.
Settlement options to provide retirement income.
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AMENDATORY AGREEMENT
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PAGE 1
On page 1 of this contract, the sentence:
IF YOU PAY PREMIUMS SUFFICIENT TO MEET THE DEATH BENEFIT GUARANTEE
PREMIUM REQUIREMENT, THIS CONTRACT WILL REMAIN IN FORCE AT LEAST UNTIL
THE DEATH BENEFIT GUARANTEE TERMINATION AGE SHOWN ON PAGE 3.
Is amended to read:
IF YOU MEET THE DEATH BENEFIT GUARANTEE PREMIUM REQUIREMENT (SEE
SECTION 4.6), THIS CONTRACT WILL REMAIN IN FORCE AT LEAST UNTIL THE
DEATH BENEFIT GUARANTEE TERMINATION AGE SHOWN ON PAGE 3.
4.2 NET PREMIUM
In Section 4.2 NET PREMIUM, the sentence:
The Percent of Premium Charge is shown on page 4;
Is amended to read:
The Percent of Premium Charge is 5.0% of each premium;
4.6 DEATH BENEFIT GUARANTEE AND DEATH BENEFIT GUARANTEE PREMIUM.
In Section 4.6 DEATH BENEFIT GUARANTEE AND DEATH BENEFIT GUARANTEE
PREMIUM, paragraph (1) is amended to read as follows:
1) The Death Benefit Guarantee Premium Requirement is met. On any
Monthly Anniversary, this requirement is met if the sum of premiums
paid less any Partial Surrenders and any unpaid contract loans is
greater than or equal to the sum of Death Benefit Guarantee
Premiums from the Date of Issue through that Monthly Anniversary.
However, if the Death Benefit Guarantee Premium Requirement is not
met on a Monthly Anniversary but the Cash Surrender Value less any
unearned interest is greater than or equal to the sum of Death
Benefit Guarantee Premiums from the Date of Issue through that
Monthly Anniversary, then the sum of premiums paid as used above
will be deemed to increase to the amount necessary to meet the
Death Benefit Guarantee Premium Requirement.
In addition, a portion of any Partial Surrender or contract loan
may be excluded when determining if the Death Benefit Guarantee
Premium Requirement is met. The amount excluded is calculated on
the date of the Partial Surrender or contract loan and is equal to
the lesser of:
a) The amount of Partial Surrender or unpaid contract loan; and
b) The excess, if any, of the Cash Surrender Value less unearned
interest on any unpaid contract loans over the greater of (i)
and (ii) where:
i) Is the sum of premiums paid less the amount of any Partial
Surrenders and unpaid contract loans not previously
excluded when determining if the Death Benefit Guarantee
Premium Requirement was met; and
ii) Is the sum of Death Benefit Guarantee Premiums from the
Date of Issue through the Monthly Anniversary on or next
after the date of Partial Surrender or contract loan.
5.2 CHANGE OF DEATH BENEFIT OPTION.
In Section 5.2 CHANGE OF DEATH BENEFIT OPTION, the sentence:
However, this change may not be made if it would reduce the Face
Amount to less than the Minimum Face Amount shown on page 3.
Is amended to read:
However, this change may not be made if it would reduce the Face
Amount to less than $5,000.
5.3 INCREASE IN FACE AMOUNT.
In Section 5.3 INCREASE IN FACE AMOUNT, the sentence:
You may increase the Face Amount any time before the Contract
Anniversary on or next after the Insured's 75th birthday.
Is amended to read:
You may increase the Face Amount any time before the Contract
Anniversary on or next after the Insured's 80th birthday.
6.4 PARTIAL SURRENDER.
In Section 6.4 PARTIAL SURRENDER, the sentence:
The Face Amount may not be reduced to less than the Minimum Face
Amount;
Is amended to read:
The Face Amount may not be reduced to less than $5,000;
INCREASE IN SPOUSE TERM INSURANCE.
If a Spouse Adjustable Term Insurance Benefit is attached to this
contract, then in Paragraph 4 INCREASE IN SPOUSE TERM INSURANCE, the
sentence:
You may increase the amount of Spouse Term Insurance any time before
the Rider Anniversary next after the Spouse's 75th birthday.
Is amended to read:
You may increase the amount of Spouse Term Insurance any time before
the Rider Anniversary next after the Spouse's 80th birthday.
Signed for Lutheran Brotherhood Variable Insurance Products Company
at Minneapolis, Minnesota
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President /s/Xxxxxx X. Xxxxxxx [The word-SAMPLE-is stamped over signature]
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Secretary /s/Xxxxx X. Xxxxxx [The word-SAMPLE-is stamped over signature]
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