--------------------------------------------------------------------------------
EXHIBIT 4.1
FLEXIBLE PREMIUM VARIABLE ANNUITY CONTRACT, FORM LA-28
--------------------------------------------------------------------------------
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
Name of Owner Policy Number
XXXX XXX 00000001
Name of Annuitant
XXXX XXX
American United Life Insurance Company (R) (AUL) will begin an annuity on the
annuity date, in accordance with the Settlement provisions, if the annuitant and
the owner are both living. If either the annuitant or the owner dies before the
annuity date, AUL will provide benefits as described in the Death of Annuitant
or Death of Owner provisions.
10 DAY RIGHT TO EXAMINE THIS POLICY
READ YOUR POLICY CAREFULLY
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY POLICY
PARTICIPATING
Annuity will begin on annuity date
in accordance with the settlement provisions.
LA-28 7-94
This policy is a legal contract between the owner and AUL.
The owner may return this policy to AUL or to one of its agents for any reason
within 10 days after receiving it. The policy will be void from its beginning
and any premium paid will be refunded.
ALL BENEFITS, PAYMENTS, AND VALUES UNDER THIS
CONTRACT WHICH ARE BASED ON THE INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT ARE VARIABLE
AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
--------------------------------------------------------------------------------
READ YOUR POLICY CAREFULLY
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY POLICY
PARTICIPATING
Annuity will begin on annuity date
in accordance with the settlement provisions.
--------------------------------------------------------------------------------
Signed for American United Life Insurance Company(R) by
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxx
Secretary Chairman of the Board,
President, and Chief Executive Officer
LA-28
TABLE OF CONTENTS
POLICY SPECIFICATIONS........................................................ 3
PREMIUM AND ACCOUNT VALUE PROVISIONS......................................... 4
Premium, Net Purchase Payments, The Fixed Account,
The Variable Accounts, Accumulation Units, Accumulation Unit Value,
Net Investment Factor, Mortality and Expense Risk Charge,
Valuation Dates and Valuation Period, Contract Value,
Annual Fee, Transfers Between Accounts
WITHDRAWAL AND DEATH BENEFIT PROVISIONS...................................... 7
Free Withdrawal Amount, Withdrawals,
Withdrawal Deferral, Death Proceeds,
Death of the Owner, Death of the Annuitant
OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS............................. 10
Ownership, Assignment, Beneficiary,
Change of Beneficiary, Change of Annuitant
GENERAL PROVISIONS........................................................... 11
Policy, Incontestability, Annual Report, Participation
SETTLEMENT PROVISIONS........................................................ 11
Policy Proceeds, Options,
Annuity Date, Payments, Evidence of Age and Sex,
Misstatement of Age or Sex, Evidence that Annuitant is Alive,
Payee, Adjusted Age, Claims of Creditors
SETTLEMENT OPTION TABLES..................................................... 00
XX-00 0-00
POLICY SPECIFICATIONS
--------------------------------------------------------------------------------
DATE OF ISSUE AUG 01, 1994
POLICY YEARS ARE COMPUTED FROM THIS DATE
NAME OF ANNUITANT XXXX XXX
POLICY NUMBER 00000001
NAME OF OWNER XXXX XXX
PLAN FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
FORM NUMBER LA-28
INITIAL PREMIUM $2,000
ADDITIONAL $2,000
PLANNED PREMIUM ANNUAL
ANNUITY DATE AUG 01, 2024
EARLY WITHDRAWAL 10% OF THE CONTRACT VALUE IN THE FIRST YEAR
PENALTY DECREASING TO 0 IN YEAR 11 AS SHOWN ON PAGE 8.
FREE WITHDRAWAL UP TO 12% OF THE CONTRACT VALUE MAY BE WITHDRAWN
AMOUNT EACH POLICY YEAR BEFORE EARLY WITHDRAWAL PENALTIES
ARE ASSESSED.
LA-28 7-94
3
In this policy, the words you and your refer to the owner named on page 3.
Individual refers to a natural person. We, us, our, and AUL refer to American
United Life Insurance Company(R).
PREMIUM AND ACCOUNT VALUE PROVISIONS
Premium
Premiums are payable at our home office. A receipt will be given upon request.
Premium payments are flexible and can be paid at any time and in any amount
subject to the following conditions:
1. Each premium payment must be at least $50;
2. All premiums received in any one policy year may not be more than $12,000,
unless a higher amount is agreed to by us;
3. All premiums received in the first three policy years may not be less than
a cumulative total of $300 per year. AUL may terminate a policy not meeting
this condition and refund the account balance.
Net Purchase Payments
A net purchase payment is equal to the premium paid LESS any applicable state
premium tax.
Each net purchase payment will be allocated among the fixed account and the
variable accounts by the method you elect.
The Fixed Account
The fixed account is our general account.
The fixed account value equals (1) - (2) + (3) where:
(1) is net purchase payments applied to the fixed account plus any dividends
credited.
(2) is any amounts withdrawn (including early withdrawal penalty).
LA-28 7-94
4
(3) is interest earned on (1) - (2), from date of deposit to date of
withdrawal, at the rates declared by us. At the time a net purchase payment
is applied the interest rate then in effect on newly deposited money will
apply to that net purchase payment for one year from the date of deposit.
The interest rate which we will apply to that net purchase payment is
subject to change at any time after one year. However, we may not declare
an interest rate which is less than 3% per year.
The Variable Accounts
The variable accounts are separate investment accounts established and owned by
AUL. The assets of the accounts will be used to provide values and benefits
under this contract and similar contracts, but the account may not be charged
with liabilities arising from any other business in which AUL takes part.
Accumulation Units
Net purchase payments applied to the variable accounts will be allocated as
specified by you and will be credited to your account in the form of
accumulation units. The number of accumulation units to be credited is
determined by dividing:
(1) the dollar amount allocated to the particular variable account, by
(2) the accumulation unit value for the particular account at the end of the
valuation period during which the net purchase payment is received by AUL
at its home office.
Accumulation Unit Value
AUL determines the accumulation unit value for each variable account on each
valuation date. The accumulation unit value for the Money Market account was
initially set at one dollar ($1) and the value for each of the other variable
accounts was set at five dollars ($5) when operations commenced. The value for
any later valuation period is found by multiplying:
(1) the net investment factor for the particular account, by
(2) the accumulation unit value of the same account for the preceding valuation
period.
5
The accumulation unit value may increase or decrease from one valuation period
to the next.
LA-28 7-94
Net Investment Factor
The net investment factor is used to measure the investment performance of an
investment account from one valuation period to the next. For any investment
account the net investment factor for a valuation period is determined by
dividing (a) by (b) and then subtracting (C) from the result where:
(a) is equal to:
(1) the net asset value per share of the mutual fund held in the
investment account determined at the end of the current valuation
period, plus
(2) the per share amount of any dividend or capital gain distribution paid
by the mutual fund during the valuation period, plus or minus
(3) a credit or charge with respect to taxes, if any, paid or reserved for
AUL during the valuation period that are determined by AUL to be
attributable to the operation of the investment account.
(b) is the net asset value per share of the mutual fund held in the investment
account, determined at the end of the preceding valuation period.
(C) is a daily charge factor representing the mortality and expense risk charge.
Mortality and Expense Risk Charge
In calculating the net investment factor, we will deduct a daily charge from
each investment account for the mortality and expense risks assumed by AUL. The
charge is equal to an equivalent annual rate of 1.25% of the average daily net
assets over the whole year in each investment account.
Valuation Dates and Valuation Period
The valuation dates are the dates on which the variable accounts are valued. The
valuation dates currently include each business day that is also a day on which
both AUL and the New York Stock Exchange are open for business. A valuation
period begins at the close of one valuation date and ends at the close of the
next succeeding valuation date.
LA-28 7-94
6
Contract Value
The contract value at any time is the sum of: (1) the fixed account value; and
(2) the sum of the value of all variable account accumulation units credited to
this policy.
Annual Fee
We will charge an annual administrative fee of $30, or 2% of the contract value,
if less, at the end of the policy year. The fee will be charged on each policy
anniversary while the contract is in force other than under an annuity payment
settlement option. The charge is deducted proportionately from your contract
value allocated among the variable accounts and the fixed account. We will waive
the annual fee on each contract anniversary when the contract value, at the time
the charge would have otherwise been imposed, exceeds $50,000.
Transfers Between Accounts
You may make transfers of value among the variable accounts and between the
fixed account and the variable accounts. The minimum amount that may be
transferred from any account is $500, or the total amount in that account, if
less. If the amount remaining in any investment account after a transfer would
be less than $500, the remaining amount will be transferred with the amount that
has been requested. The maximum amount that may be transferred from the fixed
account to the variable accounts in any contract year is 20% of the fixed
account value at the preceding contract anniversary. Any withdrawals from the
fixed account, including exercise of the Free Withdrawal provision, will
decrease the 20% maximum transfer limit by the amount withdrawn.
Currently, there are no charges for or limitations on the number of transfers
between accounts. AUL reserves the right to change the limitation on the minimum
transfer, to limit the number and frequency of transfers, to assess transfer
charges, and to otherwise modify the transfer privilege.
WITHDRAWAL AND DEATH BENEFIT PROVISIONS
Free Withdrawal Amount
The free withdrawal amount for each policy year is equal to 12% of the contract
value at the time of that year's first withdrawal. Any transfer from the fixed
account to the variable accounts will reduce the amount available for free
withdrawal from the fixed account by the amount transferred.
LA-28 7-94
7
Withdrawals
You may withdraw all or part of your contract value at any time on or before the
annuity date. If you do not specify from which accounts the withdrawal is to be
made, the withdrawal will be made from the fixed and variable accounts in the
same proportion as their account values bear to the contract. If you withdraw
all of the contract value, you must surrender the policy.
If you withdraw less than the full contract value, you must withdraw at least
$200. To fund a withdrawal from the fixed account, premiums previously paid and
their accumulated interest will be withdrawn on a last-in, first-out basis.
Withdrawals from the variable accounts will be funded by the liquidation of an
adequate number of accumulation units.
There may be an early withdrawal penalty during the first ten policy years.
Whenever the total amount withdrawn in a policy year exceeds the free withdrawal
amount, there is an early withdrawal penalty on the excess.
The penalty will be a percentage of the excess as follows:
Early Early
Policy Withdrawal Policy Withdrawal
Year Penalty Year Penalty
1 10.0 7 4.0
2 9.0 8 3.0
3 8.0 9 2.0
4 7.0 10 1.0
5 6.0 11 and 0.0
6 5.0 thereafter
In no event will the withdrawal penalty exceed 8.5% of the total premiums paid.
There is no withdrawal penalty after the tenth policy year.
The amount you can withdraw is not less than the minimum required by the law of
the state where this policy is delivered.
Withdrawal Deferral
For withdrawals from the fixed account, we may defer payment for up to six
months. If we do, interest on the fixed account will continue to be earned at
the declared rates.
We may suspend or delay withdrawal payments from the variable account when
LA-28 7-94
8
permitted under applicable Federal laws, rules and regulations.
Death Proceeds
The death proceeds under this contract is the contract value; however, if you
die before age 76 the death proceeds will not be less than the value given by
(a)-(b)-(c)+(d) where:
(a) is the net purchase payments.
(b) is any amounts withdrawn (including any early withdrawal penalties)
prior to your death.
(c) is the annual fees assessed prior to your death.
(d) is interest earned on (a)-(b)-(c), credited at an annual effective
rate of 4%.
Death of the Owner
If you die before the annuity date and the beneficiary is your surviving spouse:
Your surviving spouse will become the new owner. The policy will continue with
its terms unchanged and your spouse will assume all rights as its owner. Within
120 days of your death, your spouse may elect to receive the death proceeds or
withdraw any of the contract value without any early withdrawal penalty.
If you die before the annuity date and the beneficiary is not your surviving
spouse:
The death proceeds will be paid to the beneficiary in a lump sum no later than
120 days after your death, unless the beneficiary elects to have this value
applied under a settlement option. If a settlement option is elected, the
beneficiary must be named the annuitant and payments must begin within one year
of your death. The option also must have payments which are payable over the
life of the beneficiary or over a period which does not extend beyond the life
expectancy of the beneficiary.
Any amount payable hereunder will not be less than the minimum required by the
law of the state where this policy is delivered.
Death of the Annuitant
LA-28 7-94
9
If the annuitant dies before the annuity date and the annuitant is not also the
owner, then:
1. if the owner is not an individual, the death proceeds will be paid to
the owner in a lump sum no later than 120 days after the annuitant's
death; or
2. if the owner is an individual, a new annuitant may be named and the
policy will continue. If a new annuitant is not named within 120 days
of the annuitant's death, the contract value, less any early
withdrawal penalty, will be paid to the owner in a lump sum.
OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS
Ownership
As the owner of this policy, you are entitled to all rights given by its terms.
You may exercise these rights without the consent of the annuitant, beneficiary,
or payee. Your rights are subject to the interests of any assignee or
irrevocable beneficiary.
Assignment
You may assign this policy, but if you do, the rights of the owner and any
beneficiary will be secondary to the interests of the assignee. We assume no
responsibility for the validity of an assignment. Any assignment will not be
binding upon AUL until received in writing at the home office.
Because an assignment may be a taxable event, you should consult competent tax
advisors as to the tax consequences resulting from such an assignment.
Beneficiary
The beneficiary is as named in the application unless later changed by you. A
beneficiary may only be named if the owner is an individual. The interests of a
beneficiary who dies before you will pass to any surviving beneficiary, unless
you specify otherwise. If no beneficiary survives, the rights to policy proceeds
will vest in your estate.
Change of Beneficiary
You may change the beneficiary of this policy by giving written notice to AUL. A
change will take effect on the date the notice is signed. However, the change
will not apply to any payments made or actions taken by us before we received
the notice. We
LA-28 7-94
10
reserve the right to require that this policy be presented for endorsement of
any change. An irrevocable beneficiary may be changed only with the written
consent of that beneficiary.
Change of Annuitant
If the owner is an individual, the annuitant may be changed by writing us any
time prior to the annuity date. The annuitant must also be an individual and
must be you, or someone chosen from among your spouse, parents, brothers,
sisters and children. Any other choice will need our consent.
If the owner is not an individual, a change in the annuitant will not be
permitted without our consent.
GENERAL PROVISIONS
Policy
The entire policy consists of:
1. the basic policy;
2. endorsements, if any; and
3. a copy of your application.
Any change in this policy must be approved by AUL's President, Vice President or
Secretary. No agent is authorized to change or waive any policy provision.
Incontestability
This policy will not be contested after it has been in force 2 years from its
date of issue.
Annual Report
We will send you an annual report which shows the current contract value,
premiums paid, interest credited, charges assessed, transfers made, and
withdrawals made since the last report.
Participation
While this policy is in force prior to the annuity date, its share of divisible
surplus, if
LA-28 7-94
11
any, will be determined each year by AUL and credited to the fixed account
value.
SETTLEMENT PROVISIONS
Policy Proceeds
If the policy is in its fifth policy year or later and you select the life
annuity or survivorship annuity option, proceeds are equal to the contract
value. Otherwise, proceeds are equal to the contract value less any applicable
early withdrawal penalty.
Options
Proceeds may be paid in one sum or according to one of the following options, or
in any other manner agreed to by us. If no option has been selected by the
annuity date, the proceeds will be applied to option 2 with 120 guaranteed
payments.
Once an annuity begins, the method of payment, the annuitant, and the selected
option cannot be changed.
1. Income for a Fixed Period. Proceeds are paid in equal monthly
installments for a specified number of years, not to exceed 20.
2. Life Annuity. Proceeds are paid in equal monthly installments for as
long as the annuitant lives. A minimum number of payments can be
guaranteed such as 120 or the number of payments required to refund
the proceeds applied.
3. Survivorship Annuity. Proceeds are paid in monthly installments for as
long as one of two named annuitants live. A minimum number of payments
equal to the initial payment can be guaranteed such as 120. A lower
monthly installment payable while only one annuitant is alive can be
specified.
Annuity Date
The annuity date is the date we will begin an annuity in accordance with the
settlement option you have chosen. The annuity date you requested in the
application is shown on page 3. If no date was indicated on the application, the
annuity date will be age 70. This date may be changed by writing us any time
prior to the annuity date. The annuity date may not be changed once payments
begin.
Payments
The settlement option tables show the guaranteed monthly payments available
under options 1, 2 and 3. The amounts shown are for exact adjusted ages. The
values for
LA-28 7-94
12
other ages and fractional ages not shown will be calculated on the same basis as
those shown and will be furnished upon request. Based on your contract value, we
will calculate the amount payable under any option.
If the monthly payment under a chosen settlement option is less than $100, we
may require that payments be made on a less frequent basis.
Evidence of Age and Sex
Evidence of age and sex for any annuitant will be required before payments
begin.
Misstatement of Age or Sex
If the stated date of birth or sex of any annuitant is not correct we will
adjust any amount payable under this policy to that based on the correct age and
sex. Any underpayment will be paid in full with the next annuity payment. Any
overpayment, unless repaid in one sum, will be deducted from future annuity
payments until totally repaid.
Evidence that Annuitant is Alive
We may ask for evidence that the annuitant(s) is still alive when any
installment is due.
Payee
Payee means the person(s) designated by the owner to receive annuity payments.
The owner may change the payee at any time by giving us 30 days written notice.
Payees may be named regardless of whether the owner is an individual.
Adjusted Age
An adjusted age is calculated as follows:
1. determine an annuitant's actual age in years and full months on the
date payments are to begin; and
2. subtract 1.5 months for each year the annuitant's year of birth
exceeds 1900.
Claims of Creditors
Settlement option payments will be exempt from the claims of creditors to the
maximum extent permitted by law.
LA-28 7-94
13
SETTLEMENT OPTION TABLES
Guaranteed Monthly Income Per $1,000 of Proceeds
OPTION 1 - Income for Fixed Period
Number Monthly Number Monthly
of Years Income of Years Income
1 $84.47 11 $8.86
2 42.86 12 8.24
3 28.99 13 7.71
4 22.06 14 7.26
5 17.91 15 6.87
6 15.14 16 6.53
7 13.16 17 6.23
8 11.68 18 5.96
9 10.53 19 5.73
10 9.61 20 5.51
Quarterly Income is 2.993 times the monthly income and annual income is 11.839
times the monthly income.
OPTION 2 - Life Annuity
The amount of income based on the adjusted age of the annuitant on the date of
the first payment
Number of Guaranteed Payments Number of Guaranteed Payments
Adjusted ------------------------------- Adjusted ----------------------------------
Age None 120 Refund* Age None 120 Refund*
------------------------------------------- --------------------------------------------
55 $4.34 $4.30 $4.17 63 $5.21 $5.10 $4.86
56 4.42 4.38 4.24 64 5.35 5.22 4.96
57 4.52 4.47 4.31 65 5.51 5.35 5.08
58 4.61 4.56 4.39 66 5.67 5.49 5.20
59 4.72 4.65 4.47 67 5.85 5.64 5.33
60 4.83 4.76 4.56 68 6.04 5.80 5.46
61 4.95 4.86 4.66 69 6.24 5.96 5.61
62 5.08 4.98 4.75 70 6.46 6.13 5.76
*The sum of all guaranteed payments will equal the amount applied under this
option.
OPTION 3 - Survivorship Annuity
The amount of income is based on the adjusted age of each of the annuitants on
the date of the first payment.
50% to Survivor 100% to Survivor
120 Guaranteed Payments 120 Guaranteed Payments
Payee #0 Xxxxx #0 Xxx Xxxxx #0 Xxxxx #0 Age
-------------------------------------------- ------------------------------------------------
#1 50 55 60 65 70 #1 50 55 60 65 70
-------------------------------------------- ------------------------------------------------
50 $3.95 $4.12 $4.31 $4.55 $4.80 50 $3.56 $3.67 $3.76 $3.83 $3.88
55 4.12 4.30 4.52 4.77 5.05 55 3.67 3.83 3.97 4.08 4.17
60 4.31 4.52 4.76 5.04 5.36 60 3.76 3.97 4.17 4.36 4.51
65 4.55 4.77 5.04 5.35 5.72 65 3.83 4.08 4.36 4.64 4.90
70 4.80 5.05 5.36 5.72 6.13 70 3.88 4.17 4.51 4.90 5.28
Income for other combinations of ages will be furnished on request.
LA-28 7-94
14
NOTICE OF ANNUAL MEETING
Since AUL is a mutual company, its policyowners are
owners of the company, and they are invited to attend
the annual policyowners' meeting at the home office
in Indianapolis, Indiana.
By-law, Art. III, Sec. 1: The regular annual meeting
of the members of this corporation shall be held at its
principal place of business on the third Thursday in
February of each year at the hour of 10:00 o'clock
a.m.; Elections for directors shall be held at such
annual meeting.
American United Life Insurance Company(R)
Indianapolis, Indiana
--------------------------------------------------------------------------------
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY POLICY
PARTICIPATING
Annuity will begin on annuity date in accordance with the
settlement provisions.
This policy is a legal contract between the owner and AUL.
LA-28 7-94
