EXHIBIT (4)(a)
THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK
IMMEDIATE VARIABLE ANNUITY CONTRACT
THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK (the
"Company"), a stock company, issues this Immediate Variable Annuity Contract to
the Owner based on the completed Application and the payment of the Premium
Payment. The Company agrees to make Income Payments to the Payee designated by
the Owner beginning on the Income Start Date and continuing thereafter, subject
to the terms and conditions of this Contract.
This is an Immediate Variable Annuity Contract. Income Payments paid from the
Divisions are not guaranteed as to dollar amount and may increase or decrease
depending on the investment experience of the Investment Options selected by the
Owner. The Owner of the Contract may also select a fixed income investment
within this Immediate Variable Annuity Contract. The fixed Income Payment amount
will remain the same unless the Contract requires an increase or a reduction in
the payment amount or if there is a transfer from the Division into the Fixed
Account.
RIGHT TO CANCEL. If after reading this Contract, the Owner is not satisfied for
any reason, the Owner may return the Contract to the Company at its Home Office
or to any agent authorized by the Company within 10 calendar days after
receiving it (or a longer period if required by the state). If mailed in the
United States in a properly addressed envelope with first class postage, it will
be deemed to be received by the Company on the date of postmark, registration or
certification. The Company will refund either the Contract's market value or the
entire Premium Payment (depending on the Right to Cancel rules of the Contract
state) including any expenses and charges, less any prior payments made, and
this Contract will be void.
Executed for the Company on the Contract Date.
President Secretary
THIS CONTRACT IS NON-PARTICIPATING -
DIVIDENDS ARE NOT PAYABLE.
PLEASE READ THIS CONTRACT CAREFULLY.
THE CONTRACT IS IRREVOCABLE UPON THE END OF THE RIGHT TO CANCEL PERIOD.
THIS CONTRACT IS A LEGAL CONTRACT BETWEEN THE OWNER AND
THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK.
Home Office: 000 Xxxxx Xxxxxx . New York, New York . 10022
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TABLE OF CONTENTS
CONTRACT DATA PAGE..........................................................3,3A
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CONTRACT DATA PAGE
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Income Payment Option: Single Lifetime Income with a Certain Period
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Contract Number: SPECIMEN Contract Date: April 7, 2003
Modal Period: Monthly
Income Payment Date: 7th
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Premium Payment: $110,046.26 Income Start Date: April 07, 2003
Income End Date: March 07, 2018
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Mortality and Expense Risk Charge: Fixed Income Payment: $xxx.xx*
Administrative Expense Charge: Assumed Investment Return: [3.5% or 5%]
[Allocation Date:]
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Owner: XXXX XXX Annuitant: XXXX XXX
Age at Issue: 30
Xxxxx: XXXX XXX Date of Birth: February 18, 1973
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Guaranteed Payments: Payments are Income Payment Description: Single
guaranteed for certain period of [15] Lifetime Income with Certain Period
years. When the certain period ends, Payout Option provides income payments
payments are guaranteed for the life to the Payee for the longer of the
of the Annuitant. life of the Annuitant or the
designated period.
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Initial Investment Allocations:
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* The fixed Income Payment amount is based upon the amounts allocated to the
Fixed Account on the Contract Date. This amount may change if transfers are
later made to the Fixed Account.
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SECTION 1:
DEFINITIONS
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Age: Xx Xxxxxxxxx's age as set forth on the Contract Data Page. This age is used
in the calculation of Income Payments for any life contingent Payout Option.
Allocation Date: The Valuation Date the funds are transferred from the Money
Market Division into one or more of the Contract's other Divisions as set forth
on the Contract Data page.
Semi-Annual Benefit Leveling: The semi-annual adjustment to variable Income
Payments to make Income Payments made during the following six (6) months equal
in amount.
Annuitant: Any natural person named in the Application and shown on the Contract
Data Page whose life is used to determine the amount and duration of any Income
Payments made under the Contract involving life contingencies. Unless the text
clearly indicates otherwise, the term Annuitant also includes the Primary
Annuitant or Joint Annuitant. IRA Contracts: The Annuitant and Owner must be the
same person.
Annuity Starting Date: The first day of the modal period (month, quarter, half
year, year depending on whether Income Payments will be made monthly, quarterly,
semi-annually or annually) which ends on the date of the first Income Payment
Annuity Income Unit: An accounting unit of measure used to calculate variable
Income Payments.
Annuity Income Unit Value: The value of one Annuity unit.
Application: The form required by the Company to be completed by the Owner that,
along with the Premium Payment, provides the consideration for this Contract.
Assumed Investment Return (AIR): The net investment return required to maintain
level variable Income Payments. The AIR selected by the Owner is set forth on
the Contract Data Page.
Beneficiary: The natural or Non-Natural person named by the Owner. The
Beneficiary may succeed to ownership of the Contract in certain circumstances
upon the death of the Owner and Annuitant.
Code: The Internal Revenue Code of 1986, as amended. References to specific
sections of the Code will include any applicable regulations issued according to
such sections.
Common Disaster: The death of both the Owner and any successor Owner that occurs
within a period of 30 calendar days.
Contract: This written agreement between the Owner and the Company.
Contract Data Page: Page 3 (and 3A, if applicable) of this Contract which
details information about the following: 1) the Payout Option selected; 2) the
frequency of Income Payments; 3) the number of Income Payments guaranteed; 4)
the parties to this Contract; 5) the payments dates; 6) the Contract Date; 7)
the Assumed Investment Return; 8) contract charges and expenses.
Contract Date: The date the Contract is issued by the Company and becomes
effective after receiving: 1) the Premium Payment; 2) the Application; and 3)
all necessary paperwork required by it.
Company: The United States Life Insurance Company in the City of New York, the
issuer of this Contract.
Divisions: A separate and distinct division of the Separate Account to which
underlying shares of a
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Fund are allocated. The performance of the selected divisions determines the
value of variable Income Payments.
ERISA: Employee Retirement Income Security Act of 1974, as amended. References
to specific sections of ERISA will include any applicable regulations issued
according to such sections.
Fixed Account: The portion of the Premium Payment allocated to the fixed
investment that will provide fixed Income Payments.
Income Payment(s): The series of periodic annuity payments that are paid to the
Payee as selected by the Owner. Income Payments may be variable and fixed,
variable only, or fixed only based upon the investment options selected by the
Owner.
Income Payment Date: The day of the month or date that Income Payments will be
made as set forth on the Contract Data Page.
Income End Date: The date guaranteed Income Payments end as set forth on the
Contract Data Page.
Income Start Date: The date Income Payments begin. The Income Start Date must be
no later than one year from the Contract Date.
IRA Contract: A Contract issued as an Individual Retirement Annuity (IRA) as
defined under section 408(b) of the Code or as a Xxxx XXX as defined under
section 403A(b) of the Code.
Investment Options: Together, the Fixed Account and the Divisions make up the
Investment Options.
Joint Annuitant: A person other than the Primary Annuitant upon whose
continuation of life any Income Payments involving life contingencies depend. A
Joint Annuitant can be selected only if a Joint and Survivor (or Contingent)
Annuity form of Payout Option is elected.
Joint Owner: A co-owner who possesses an undivided interest in the entire
Contract with the Owner. Joint Ownership is not permitted for Qualified
Contracts or IRA Contracts.
Modal Period: The period during which an Income Payment is made. Such period is
set forth on the Contract Data Page.
Net Premium Payment: The gross Premium Payment less state premium taxes, if
applicable, and any charges or expenses.
Non-Natural Person: A corporation, trust or other non-living entity.
Non-Qualified Contract: A Contract purchased with funds not associated with a
formal retirement arrangement or plan, as provided for by provisions of the
Code.
Owner: The natural or non-natural person named in the Application to hold this
Contract and to exercise all rights and privileges under it. Qualified
Contracts: The Owner may be the Annuitant's employer, Trustee of the Plan, or
the Participant. IRA Contracts: The Owner must be the Annuitant.
Payee(s): The individual, trust, corporation or any other entity named in the
Application, or as subsequently changed by the Owner, to receive the Income
Payments under a Payout Option.
Payout Option: The settlement or income payment option selected by the Owner and
set forth on the Contract Data Page.
Plan: Pension plan as defined in ERISA section 3(2).
Primary Annuitant: The natural person on whom's life the amount and timing of
Income Payments is based
Qualified Contract: A Contract purchased with funds from a retirement Plan that
meets the requirements of Code sections 401(a), 403(a),
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403(b), or certain deferred compensation plans under Code section 457.
Required Minimum Distribution: If a Contract is purchased as an IRA Contract or
Qualified Contract, the Owner's benefits under the Contract must satisfy the
Required Minimum Distribution rules as provided for by the provisions of the
Code.
Separate Account: A segregated investment account entitled "Separate Account USL
VA-R" established by the Company to separate assets into divisions funding the
variable benefits for the class of contracts to which this Contract belongs.
Premium Payment: The amount shown on the Contract Data Page paid to the Company
for the purchase of this Contract.
Spouse: The person lawfully married to the Owner as determined under the laws
and jurisdiction of the state in which the Owner lives.
Surviving Spouse: The spouse who remains alive or who is deemed by state law to
remain alive after the death of the Owner.
Valuation Date: Each day the New York Stock Exchange is open for trading, except
for normal business holidays.
Variable Account Value: The amount allocated to one or more Divisions of the
Separate Account plus or minus investment experience minus any previous variable
Income Payments, non-periodic withdrawals and fees.
Written, In Writing: A written request or notice, signed, dated and received at
an address designated by the Company in a form the Company accepts. The Owner
may ask the Company for the forms. For certain types of written requests, the
Company reserves the right to require that the signature be notarized.
Alternatively, it can be guaranteed by a member firm of a major stock exchange
or other institution qualified to give such a guaranty.
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SECTION 2:
PARTIES INVOLVED IN THIS CONTRACT
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2.01 GENERAL
Unless otherwise provided, all references in the Contract in the singular form
will include the plural form and all references in the plural form will include
the singular form.
Several persons may play a role in this Contract. These include: 1) the Owner;
2) the Annuitant; 3) the Beneficiary; and 4) the Payee.
2.02 THE OWNER AND JOINT OWNER
Unless otherwise provided, the Owner has all the rights and duties set forth in
this Contract.
Upon application, the Owner may designate or elect:
1) An Annuitant and Joint Annuitant, if applicable;
2) A Beneficiary;
3) A Payee;
4) The income payment features to include: Modal Period, Payout Option,
and Income Start Date;
5) The initial allocation of premium to the Divisions and/or the Fixed
Account;
6) Elect Semi-Annual Benefit Leveling;
7) Elect Automatic Rebalancing.
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Note: Once elected on the Application, the Annuitant, Joint Annuitant, and
Income Payment features cannot be changed.
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On and after the Income Start Date, the Owner has the right to:
1) Name a different Owner or Joint Owner for Non-Qualified Contracts;
2) Change the Beneficiary;
3) Change the Payee for Non-Qualified Contracts;
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4) Elect, discontinue or change the Electronic Funds Transfer (EFT) of
Income Payments;
5) Modify income tax withholding from Income Payments;
6) Transfer funds to the Fixed Account and between the Divisions, subject
to the Transfer Restrictions found in section 4.03;
7) Elect or discontinue Semi-Annual Benefit Leveling;
8) Elect or discontinue Automatic Rebalancing.
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Tax Note: Any Changes in the Owner, Joint Owner or Payee could have tax
consequences. The Owner should consult a tax advisor before any changes are
requested. The Company is not responsible for the tax consequences of any
ownership or payee changes.
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Most changes the Owner makes will be legally binding on the Company and take
effect after the Company receives and acknowledges the Owner's Written request.
If the Owner makes an ownership, Beneficiary or Payee change, the change will
take effect as of the date the Owner signs the change document. The Company is
not liable, however, for any payment the Company makes or other action it takes
before receiving and acknowledging the Owner's Written request or change
document.
Nonqualified Contracts: If a Joint Owner is named, the Joint Owner will have an
undivided interest in the Contract. Unless otherwise permitted by the Company,
the exercise of any ownership right shall require a Written request by both
Owners.
Qualified Contracts: Certain Plan provisions required by the Code or ERISA or
other applicable laws may limit the Owner's rights under this Contract. The
provisions may:
1) Require consent of the Owner's Spouse before the Owner may elect to
receive Income Payments.
2) Require that the Owner's Spouse be designated as Beneficiary.
3) Require that Income Payments be made in the form of a Joint and
Survivor Annuity for the Owner and the Owner's Spouse unless both
consent to a different form of Payout Option.
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Tax Note: The Owner or Joint Owners remain liable for any and all federal tax
consequences under this Contract. This includes, but is not limited to; income
and gift tax consequences for Income Payments made to Payees other than
themselves. Unless otherwise provided, the Company will mail all tax forms to
the Owner of this Contract. The Company reserves the right to refuse to send tax
forms to someone other than the Owner, such as the Annuitant or Payee.
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2.03 THE ANNUITANT AND JOINT ANNUITANT
The Annuitant's (and any Joint Annuitant's, if applicable) life expectancy is
used to determine the amount and duration of any Income Payments made under
Payout Options involving life contingencies. Once designated, the Annuitant (and
any Joint Annuitant, if applicable) cannot be changed. Joint Annuitants are
permitted only if one of the Joint Life Payout Options is selected.
If the Payout Option shown in the Contract Data Page is the Certain Period with
no life contingencies, Income Payments are determined without regard to an
Annuitant. Any language or information in this Contract regarding an Annuitant
is therefore not applicable.
IRA Contracts: The Owner must be the Annuitant and the entire interest in the
Contract is nonforfeitable.
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Qualified Contracts: If one of the Joint Life Payout Options is elected, the
Joint Annuitant must be the Spouse of the Annuitant unless both consent
otherwise.
2.04 THE BENEFICIARY
The Beneficiary may succeed to ownership in accordance with the Rights of
Succession section of the Contract. Ownership succession may occur upon the
death of both the Owner and Annuitant. The Owner may name one or more
Beneficiaries. If more than one Beneficiary succeeds to ownership of the
Contract, each will share ownership equally unless otherwise specified.
2.05 THE PAYEE
The Owner may name more than one Xxxxx. Multiple Payees will share equally,
unless otherwise designated. If no Payee is designated on the Application, the
Annuitant will be the Payee. If a Payee dies while receiving Income Payments,
the Company will make any required Income Payments to the Owner or the successor
Owner as set forth in the Rights of Succession section, pending instructions to
make payments to a new Payee. In no event will any Payee who is not also an
Owner have any ownership rights under this Contract.
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SECTION 3:
INCOME PAYMENTS
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3.01 GENERAL
1)Income Payments; 2) Payout Option; 3) Income Payment Date; 4) Income Start
Date; 5) Modal Period; and 6) the initial investment allocation the Owner has
selected are all listed on the Contract Data Page. The Company reserves the
right to use a less frequent Payment Mode to make Income Payments at least equal
to one hundred dollars ($100.00) per Payee. All Income Payments will be made in
U.S. dollars. The Company reserves the right to refuse to send Income Payments
to an address other than a U.S. address.
The Company will not pay interest on amounts represented by uncashed Income
Payment checks if the postal service or delivery service is unable to deliver
checks to the Payee's address of record. Uncashed variable Income Payments will
not participate in the performance of the Divisions. The Owner is responsible
for keeping the Company informed of the Payee's current address of record.
3.02 LIABILITY FOR INCOME PAYMENTS
The Owner and any successor Owner assume all responsibility for claims against
the Company arising out of any Income Payments made as directed by the Owner.
The Owner agrees to indemnify, defend and hold the Company harmless for such
claims. Anyone who receives Income Payments that should not have been made will
be liable to the Company for those payments.
3.03 SEPARATE ACCOUNT
The Separate Account is established and maintained by the Company for the
purpose of investing amounts allocated to it from variable contracts issued by
the Company. The assets of the Separate Account are owned by the Company, are
held separately from other assets of the Company and are not chargeable with
liabilities arising out of any other business of the Company.
Nothing contained in this Contract shall be construed as to give the Owner any
rights, title or interest in any of the assets held by the Separate Account. The
Company has the right to transfer to the Company's General Account any assets of
the Separate Account which are in excess of the liabilities of the Separate
Account.
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3.04 DIVISIONS
The Separate Account is made up of one or more Divisions, each of which invests
in a specific underlying fund available under the Contract. The Company reserves
the right, subject to compliance with applicable law, to make additions to,
deletions from, or substitutions for the shares that are held by any Division or
that the Division may purchase. The Owner will be given notice of the company's
intention to make a substitution.
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Note: The Company does not guarantee the investment performance of the
Divisions. The Owner bears the full investment risk for amounts allocated to the
Divisions.
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The Divisions the Owner selected in the application are listed on the Contract
Data Page. Interests in a Division are purchased at their net asset value and
valued on each Valuation Date. The Owner shares in the income, gains and losses
of the Divisions for which the Net Premium Payment has been allocated.
3.05 ANNUITY UNITS
The Annuity Unit Value will vary from Valuation Date to Valuation Date with the
investment experience of the underlying funds in which the Division invests. For
each Division the Owner selects, the premium amount allocated to it is converted
into Annuity Units by dividing the premium amount on the Valuation Date by the
Annuity Unit Value for that Division.
In determining Annuity Unit Values, the Company applies a Mortality and Expense
Risk Charge and an Administrative Expense Charge against the daily value of the
assets of each Division. The amount of these charges are shown as percentages in
the Contract Data page.
3.06 INITIAL ALLOCATION OF THE NET PREMIUM PAYMENT
The Owner determines the initial allocation of the Net Premium Payment between
the Fixed Account and Separate Account Divisions. The initial allocation is
shown on the Contract Data Page and will remain in effect until changed by
written notice or by telephone authorization from the Owner. Allocations to the
Divisions must be in whole numbers, not fractions. The initial allocation cannot
be less than [10%] per Division and must be equal to 100%. The Net Premium
Payment allocated to the Fixed Account will be placed in the Company's general
account.
The Net Premium Payment initially allocated to the Separate Account will be
applied within two (2) Valuation Dates from the later of the receipt of the
Premium Payment or the date all requirements to put the contract in force are
satisfied.
If any requirements are not satisfied within five (5) Valuation Dates, the
Premium Payment and all paperwork will be returned to its source unless the
Contract Owner provides the Company with authorization to hold the paperwork
and/or the Premium Payment (in a non-interest bearing account) until all
requirements are met.
For Premium Payments in excess of [$1,000,000.00] the Company reserves the right
to restrict the Investment Options and/or allocate the Premium Payment to the
Money Market Division for a period of 15 days (or the end of the Right to Cancel
period if longer). On the Allocation Date, the Company will transfer the value
of the Money Market Division into the Investment Option(s) selected on the
Application by the Owner.
3.07 INCOME PAYMENTS
The Owner may choose all variable or a combination of fixed and variable Income
Payments. If the Owner allocates the premium to a combination of fixed and
variable Income Payments, a portion of the Income Payment will be fixed and a
portion will vary. The Company will guarantee the dollar amount of any fixed
portion of each Income Payment; however, the amount of the variable Income
Payments will depend upon the investment experience of the underlying funds and
is not guaranteed.
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3.08 FIRST VARIABLE INCOME PAYMENT
The following factors determine the amount of the first variable Income Payment:
.. The portion of the Net Premium Payment allocated to the Variable Investment
Options;
.. The variable account value [5 days] prior to the Income Start Date;
.. The Allocation Date, if applicable;
.. The age and sex of the annuitant (and joint annuitant, if any);
.. The Payout Option elected;
.. The frequency of Income Payments;
.. The Income Start Date;
.. The deduction of applicable premium taxes and fees;
.. The date the contract was issued; and
.. The Assumed Investment Return
3.09 SUBSEQUENT VARIABLE INCOME PAYMENTS
All variable Income Payments will be valued using the Valuation Date [5 days]
before the Income Payment Date. On the Income Start Date and during each Modal
Time Period thereafter, the Company will calculate the variable Income Payments
to reflect the investment performance of each Division the Owner selected. This
amount will be transferred to the General Account. The dollar amount of the
variable Income Payment is determined as follows:
1) Determine the Annuity Income Units:
The portion of the first Income Payment funded by a particular division is
divided by the Annuity Income Unit value for that division as of the
Contract Date.
2) The Annuity Income Units remain constant, subject to the following
exceptions:
a) If value is transferred from one investment option to another.
b) Upon the death of the primary Annuitant under a joint annuity contract
and after the end of the Period Certain if the Income Payments to the
joint annuitant reduce, as indicated on the Contract Data Page.
c) A withdrawal.
3) The number of Annuity Income Units for each Division is multiplied by the
Annuity Income Unit value for that Division for the Valuation Date for
which the payment is being calculated. The sum of these figures for all the
Divisions in which the Owner invests establishes the dollar amount of the
variable Income Payments.
Variable Income Payments may be more or less than the quoted Income Payment
depending on whether the net investment performance of the selected Division is
greater or less than the Assumed Investment Return (AIR). If the performance of
the applicable Divisions after all expenses is equal to the AIR, the variable
Income Payments will equal the quoted Income Payment. If the performance of the
Divisions is greater than the AIR the variable Income Payments will be greater
than the quoted Income Payment. If the performance of the Divisions is less than
the AIR, the variable Income Payments will be less than the quoted Income
Payment.
3.10 FIXED INCOME PAYMENTS
Fixed Income Payments represents obligations of the Company's General Account.
The Owner may select fixed Income Payments on the application, and if so
selected, the payment amount is shown on the Contract Data Page. At any time
thereafter, an Annuitant may elect to transfer any or all of the Contract's
variable Income Payments to fixed Income Payments. However, once amounts are
allocated for fixed Income Payments they cannot be reallocated for variable
Income Payments.
3.11 DELAY OF INCOME PAYMENTS
The Company reserves the right to suspend or postpone any type of payment or
reallocation from the Separate Account for any period when:
1. The New York Stock Exchange is closed for other than customary weekend and
holiday closings;
2. Trading on the New York Stock Exchange is restricted;
3. An emergency exists as a result of which it is not reasonable or
practicable to dispose
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of securities held in the Separate Account or determine their value; or
4. The Securities and Exchange Commission so permits delay for the protection
of the Owner.
3.12 SEMI-ANNUAL BENEFIT LEVELING
If the Owner elects Semi-Annual Benefit Leveling, variable Income Payments will
be adjusted to reflect the performance of the Investment Options once every six
(6) months, instead of with every payment. On the semi-annual benefit leveling
start date, the number of Annuity Units necessary to make the payments for the
following year will be calculated. The level payments calculated on each
subsequent Semi-Annual benefit leveling start date anniversary could be higher
or lower than the level payments for the previous semi-annual period.
An election to start Semi-Annual Benefit Leveling will take effect on the
Semi-Annual benefit leveling start date which is only on the next Income Payment
Date following receipt by the Company of the Owner's request to begin
Semi-Annual Benefit Leveling.
An election to discontinue Semi-Annual Benefit Leveling will take effect no
sooner than the end of the semi-annual benefit leveling period.
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Note: Once selected, benefit leveling will automatically renew at the end of six
(6) months. The Owner must notify the Company to before this renewal to
discontinue benefit leveling.
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During the semi-annual benefit leveling period, no withdrawals will be allowed
from any Payout Options other than Period Certain Only.
The Company reserves the right to discontinue Benefit Leveling. If this feature
is discontinued, leveled Income Payments will continue until the end of the
semi-annual benefit leveling period.
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Note: Depending upon the Payout Option selected, partial withdrawals will no be
allowed while Income Payments are levelized.
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3.13 MISSTATEMENT OF AGE OR SEX
If an Annuitant's Age or sex was misstated on the Application, Income Payments
will be adjusted to the correct amount for the true Age and sex. If this
misstatement caused the Company to make an overpayment, the Company will deduct
the amount of the overpayment from succeeding Income Payments. The Owner will be
liable to the Company for the difference between the amount of any overpayments
made and the amount of any remaining Income Payment. If the misstatement caused
the Company to make an underpayment, the Company will make up the difference
immediately. Overpayments and underpayments will not be made up with interest.
3.14 INCOME PAYMENTS TO GUARDIAN
Income Payments may be made at the Company's discretion to the Owner's or
Xxxxx's duly authorized or qualified representative. This includes without
limitation, guardian, committee or attorney-in-fact, during any period that the
Owner or Payee is incapable of executing a valid receipt for such payments. Any
payments made according to this paragraph shall completely discharge the Company
from any liability for the responsibility of making payments under this
Contract.
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SECTION 4:
INVESTMENT TRANSFERS
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4.01 TRANSFERS AMONG INVESTMENT OPTIONS
Subject to the "Transfer Restrictions" (Section 4.03), amounts allocated to
Divisions for variable Income Payments may be transferred among available
Investment Options at any time.
The Owner either in writing or over the telephone can make transfers. If the
contract is held in joint ownership, the Company will accept transfer
instructions from either owner, unless instructed otherwise. The Owner will need
to notify the Company in writing if someone other than the Owner is authorized
to make transfers.
Transfer requests by telephone will only be permitted the Owner did not either
opt out of Telephone Transfer on the application or if the Owner has on file
with the Company a Written authorization for Telephone Transfers. The Company
will honor transfers by telephone from any person who provides the correct
information. Therefore, there is a risk of possible loss to the Owner if
unauthorized persons use this service in the Owner's name. Under telephone
transfers, the Company will not be liable for any acts or omissions based upon
instructions that the Company reasonably believes to be genuine, including
losses arising from errors in the communication of telephone transfer
instructions.
Any transfer requests that are received after the close of the New York Stock
Exchange will be valued based upon the next Valuation Date.
4.02 AUTOMATIC REBALANCING
The Owner may select automatic rebalancing on the Application or at a later
date. Automatic rebalancing occurs when the Company transfers funds between the
Separate Account Divisions so the values in each Division match the percentage
allocation then in effect. Automatic rebalancing of the Separate Account
Divisions can occur quarterly, semi-annually or annually as selected by the
Owner. Automatic rebalancing will continue until we are notified by the Owner
that it is to be discontinued.
Annuity Income Units for automatic rebalancing will generally be priced as of
the date of the transaction. However, if the date of transfer falls on a
non-business day, it will be priced as of the preceding business day.
The Company reserves the right to discontinue offering Automatic Rebalancing at
any time. Certain restrictions may apply based upon the Payout Option selected,
the amount of the Net Premium Payment, and the frequency of payments.
4.03 TRANSFER RESTRICTIONS
1. The Company reserves the right to limit the number of transfers among the
Divisions to no more than [one (1) ] on any Valuation Date
2. The Company reserves the right to suspend an Owner's Transfer privilege.
3. Transfers will take effect as of the Valuation Date next following the date
on which the Company receives the transfer request.
4. The allocation of variable Income Payments after any transfer must result
in at least [the greater of $50 or 5%] of the total variable Income
Payments being derived from each of the utilized Divisions.
5. Amounts allocated for fixed Income Payments may not be reallocated for
variable Income Payments.
6. Transfers cannot be made during the Right to Cancel period while funds are
held in the Money Market Division, if applicable.
7. The Company reserves the right to charge a transfer fee [$25.00] for more
than [12] transfer per contract year.
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The Contract is not designed for professional market timing organizations or
other entities using programmed or frequent transfers involving large amounts.
We may not unilaterally terminate or discontinue transfer privileges. However,
we reserve the right to suspend such privilege indefinitely with notice to
prevent market timing efforts that could disadvantage other Owners.
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SECTION 5:
WITHDRAWALS
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5.01 WITHDRAWAL OPTIONS:
The Owner may take a partial or full withdrawal of the present value of the
premium invested in the variable Divisions, subject to the restrictions of the
following Payout Options:
Lifetime Income (including Joint life) with Period Certain Payout Options: The
Owner may take a partial withdrawal of the present value of Period Certain
portion of the contract invested in the variable Divisions. There must be at
least five (5) years of Period Certain payments remaining after the withdrawal
is taken. At no time will funds invested in the Fixed Account be available for
withdrawal.
Period Certain Only Payout Options: The Owner may take a full or partial
withdrawal from the Contract invested in the variable Divisions. For partial
withdrawals there must be at least five (5) years of Period Certain payments
remaining after the withdrawal is taken. At no time will funds invested in the
Fixed Account be available for withdrawal.
The withdrawal requests must be in Writing to the Company in a form acceptable
by the Company. The Company will pay any amounts withdrawn to the Owner within
[5] days of receipt if the Company deems the request to be complete. Withdrawals
may be requested only after the Right to Cancel period.
5.02 EFFECT OF WITHDRAWALS ON FUTURE INCOME PAYMENTS
A withdrawal involves a transfer of assets out of a division. As assets decrease
in the division, the number of Annuity Income Units in the division must also
decrease to reflect the withdrawal of those assets. A full or partial withdrawal
will reduce all remaining variable Income Payments, both the life contingent and
the period certain portions. The reduction will be an equal amount and will also
reduce the length of the period certain time period.
--------------------------------------------------------------------------------
Note: Withdrawals will reduce future variable Income Payments and will reduce
the remaining number period certain Income Payments.
--------------------------------------------------------------------------------
5.03 RESTRICTIONS ON WITHDRAWALS
1) No withdrawals are permitted for Lifetime Income Only Payout Options
(single or joint life).
2) Withdrawals are allowed only from the variable investment portion of the
Contract.
3) With exception to Period Certain Only Contracts, withdrawals are not
permitted if Semi-Annual Benefit Leveling is elected.
4) With exception to Period Certain Only Contracts, there must be at least
five (5) years of period certain payments remaining.
5.04 DETERMINING THE WITHDRAWAL AMOUNT
In determining the amount of the withdrawal, only the present value of the
variable Income Payments will be used. No fixed Income Payments will be used in
determining the partial withdrawal values.
The Company will calculate the present value of the variable Income Payments
during the Period Certain period by discounting the payments at the AIR, and
with consideration to any fees charged for a withdrawal. The future variable
Income Payment amount used in this calculation is determined by multiplying the
Annuity Income Unit value next computed after receipt of the
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withdrawal request by the current number of Annuity Units for each division.
--------------------------------------------------------------------------------
Tax Note: Non-periodic partial or full withdrawals, not including periodic
Income Payments, may not receive annuity tax treatment. Before taking a
withdrawal from this Contract a tax advisor should be consulted.
--------------------------------------------------------------------------------
5.05 WITHDRAWAL CHARGES:
Full and partial withdrawals will be assessed the following withdrawal charge:
Contract Year Charge
--------------------------------------------
1-8 1% of amount withdrawn
9-Contract End Date no charge
================================================================================
SECTION 6:
DISTRIBUTION UPON DEATH
================================================================================
6.01 RIGHTS OF OWNERSHIP SUCCESSION
Upon the death of any Owner, ownership rights, if any, under this Contract will
succeed to the following persons in the following order unless otherwise
indicated on the Application and approved by the Company:
. the surviving Owner or Joint Owner, if any.
. the Annuitant(s), if any.
. the Beneficiary(ies).
. the estate or successors of the last Owner or Joint Owner to die.
If a Common Disaster occurs, the Company will assume that the successor Owner
(as determined by the Rights of Succession section) died first. Ownership
succession will be subject to the Payout Option elected. Proceeds will be paid
on this basis unless an endorsement to this Contract provides otherwise.
6.02 NOTIFICATION OF DEATH
The death of any Owner, Annuitant or Payee must be reported to the Company
immediately. The Company will require certified proof of death in the following
form:
1. A certified copy of the death certificate; and/or
2. A certified copy of a decree from a court of competent jurisdiction as
to the finding of death.
The Company is entitled to recover any overpayments made because of failure to
notify the Company of death. The Owner or any successor Owner is liable to the
Company for any overpayments, including any overpayments made to a Payee other
than the Owner. The Company is not responsible for any mispayments that result
from failure to notify the Company immediately of such death.
6.03 DEATH OF THE OWNER PRIOR TO THE ANNUITY STARTING DATE
Death of any Owner (or holder of the Contract) who may or may not be the same as
the Annuitant(s), the market value of the Period Certain portion (the entire
interest) of this Contract must be paid by the end of the calendar year
containing the fifth anniversary of that Owner's death. However, each person who
is or becomes an Owner in accordance with the Rights of Succession section may
elect to have his or her interest paid over his or her lifetime or over a period
not exceeding his or her life expectancy. Payments are to begin on or before the
end of the calendar year immediately following the year in which the Owner or
Joint Owner died. If a life contingent Payout Option was selected, the life
contingent Income Payments will be forfeited and retained by the Company. Refer
to Section 6.08 for additional restrictions on Lifetime Only Payout Options.
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6.04 DEATH OF THE ANNUITANT PRIOR TO THE ANNUITY STARTING DATE
Death of the Annuitant who is not also the Owner, the Contract remains in force
and makes Income Payments according the Period Certain portion of the Payout
Option, if applicable, selected on the application and found on the Contract
Data Page of this Contract. The Annuitant succeeds into Ownership and has all
rights of the Owner. For a Joint Annuity Contract, the Income Payments continue
to for the longer of the life of the Joint Annuitant or Period Certain, if
applicable. If the Contract is a Lifetime Income Only Payout Option, then this
Contract terminates and no payments are made.
Upon the death of both annuitants under a Joint Annuity Contract, only the
Certain Period Income Payments are made or if there are no Certain Period Income
Payments, then the Contract terminates.
6.05 DEATH OF THE OWNER OR JOINT OWNER AFTER THE ANNUITY STARTING DATE
Any remaining Income Payments will be made as specified by the terms of the
Payout Option selected, as set forth on the Contract Data Page. Payments will be
made at least as rapidly as under the distribution method being used prior to
the death of the Owner or Joint Owner. Ownership rights under the Contract will
succeed in accordance with the Rights of Succession section.
6.06 DEATH OF THE ANNUITANT AFTER THE ANNUITY STARTING DATE
Upon the death of the Annuitant, any remaining Period Certain Income Payments,
if applicable, will be paid to the Payee. Under a Joint Annuity Payout Option,
upon the death of one Annuitant Income Payments will be paid according to the
Payout Option selected on the Application. Upon the death of all Annuitants, any
remaining Period Certain Income Payments, if applicable, will be paid to the
Payee. If no Annuitant survives and there is no Period Certain Income Payments
remaining, Income Payments will cease and this contract will end.
6.07 STATUS OF INCOME PAYMENTS UPON NOTIFICATION OF ANY DEATH
Upon notification of any death, Income Payments will be suspended until proof of
death and any other forms as may be required by the Company are received in the
Home Office. The Income Payments will remain invested in the Fixed Account
and/or Variable Investment Options as last instructed by the Owner until new
investment instructions are received by the Sucessor Owner.
6.08 LIFETIME INCOME PAYOUT OPTION
Notwithstanding anything in this Contract to the contrary, if the Payout Option
set forth on the Contract Data Page is a Lifetime Income (or Joint Lives) with
no guaranteed payments after the death of the Annuitant(s), then this Contract
will terminate if all Annuitants die prior to or after the Annuity Starting
Date. Neither the Premium Payment nor any other interest nor benefit in the
Contract will be owed or payable to any person by the Company.
================================================================================
SECTION 7:
TAXATION
================================================================================
7.01 GENERAL
The tax information contained in this Contract is intended to be general. This
Contract is not intended to give legal or tax advice. The Owner should consult
with his or her professional tax advisor concerning matters relating to:
1) Minimum Distribution Requirements;
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2) Taxation of Income Payments;
3) Income tax penalties applied to premature distributions;
4) Federal estate laws;
5) Gift tax laws;
6) State inheritance tax laws; and
7) Non-periodic withdrawals
The Company will be under no obligation for any tax or tax penalties an Owner
may owe resulting from failure to comply with the requirements imposed by the
Code or by any other applicable federal or state law, rule or regulation.
7.02 STATUS AS AN ANNUITY CONTRACT
This Contract is intended to be an "annuity contract" for federal income tax
purposes. Accordingly, all provisions of this Contract shall be interpreted and
administered in accordance with the requirements of Code section 72(s) and other
relevant Code sections. In no event shall any payment be deferred beyond the
time limits permitted by Code section 72(s). The Company reserves the right to
amend this Contract to comply with requirements set out in the Code and
regulations and rulings thereunder, as they may exist from time to time.
7.03 TAXATION ON PREMIUM PAYMENT
Some states and other government entities impose a premium tax on annuities. The
Company reserves the right to deduct charges for any state premium or other tax
that the Company determines may be applicable to this Contract.
================================================================================
SECTION 8:
GENERAL PROVISIONS
================================================================================
8.01 CONTRACT ISSUE REQUIREMENTS:
The Company will not issue a contract unless all information is received to
issue the contract; and the Company receives the entire Premium Payment Payment.
If the information needed to issue the contract is not received within five (5)
days, the Company will return the premium unless the Owner allows the Company to
keep the premium until the necessary information is received.
8.02 PREMIUM PAYMENT
The minimum premium for a contract is [$25,000.00]. Amounts less than
[$25,000.00] may be accepted with home office approval. This is a single Premium
Payment contract; no additional premiums after the Contract Date will be
accepted.
8.03 ENTIRE CONTRACT
The entire contract is made up of: 1) This Contract; 2) The Application; and 3)
Any approved endorsements added to this Contract.
The Application: The copy that is attached to this Contract at delivery
evidences the Application. The Company relies on all statements made in the
Application and the Amendment to Application, if applicable. All statements made
in the Application will be deemed representations and not warranties.
8.04 CONFORMITY WITH LAWS
To the extent the Contract conflicts with any applicable federal or state law,
regulation or ruling, the Contract shall be deemed to conform with such law,
regulation or ruling and the Contract shall be administered accordingly.
8.05 EVIDENCE OF SURVIVAL
Where any payments under this Contract depend on a person being alive on a given
date, the Company may require proof that such person is living. Such proof may
be required before making Income Payments.
8.06 VALIDITY OF A TRUST
The Company is not required to verify the validity or effect of a trust, the
scope of the trustee's authority, or a trust's use of payments according to the
terms of the trust agreement. Payment made to
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a trust will release the Company of all contractual obligations to the extent of
the payment.
8.07 TERMINATION OF THE CONTRACT
This Contract terminates:
1) For Contracts with a Payout Option that is Period Certain with no life
contingencies, the date indicated as the Income End Date on the
Contract Data Page.
2) For all other Contracts, the date that all Period Certain Income
Payments, if applicable, have been made and no Annuitant is living.
8.08 MODIFICATIONS TO THE CONTRACT
Only an Officer of the Company can change or waive any provisions of this
Contract. Any such change or waiver must be in writing. No other person can
change or waive any Contract provision. The Company may modify the Contract if
required to by state, federal or other relevant law. No change will be made that
adversely affects the Owner's rights unless law requires the change.
The Company may also find it necessary to modify this Contract in order to
maintain its status as an annuity, an IRA or Qualified Contract under the
provisions of the Code, ERISA, or to comply with state law. Such changes will be
made by endorsement that will be filed with the applicable state insurance
departments before its use. The Owner will be provided with a copy of any such
endorsement affecting this Contract.
8.09 ANNUITY IS NOT A "PLAN"
This Contract is not a "plan" as defined in ERISA section 3(3). The Company is
not a "fiduciary" under ERISA section 3(21). If any part of this Contract is
found to be invalid, the other parts will remain in effect.
8.10 INCONTESTABILITY
The Company will not contest this Contract after the Contract Date, except for
the misstatement of Age or sex as described in the Misstatement of Age or Sex
section.
8.11 NON-PARTICIPATING
This Contract is non-participating. It will not share in the distribution of any
divisible surplus of the Company. No dividends are payable.
8.12 ASSIGNMENT
Non-Qualified Contracts: The Owner may assign the Contract or an interest in the
Contract. The Company is not responsible for the validity, effect, or tax
treatment of any such assignment. No assignment will bind the Company until the
Company at its Home Office has recorded it. The Owner's rights under this
Contract may be affected by an assignment.
--------------------------------------------------------------------------------
Tax Note: Adverse federal income tax consequences may result from an assignment
of the Contract. The Owner should consult with a professional tax advisor
concerning the tax implications of assigning this annuity Contract.
--------------------------------------------------------------------------------
IRA Contracts and Qualified Contracts: The Owner may not sell, assign, or pledge
as security for a loan, or transfer his or her interest in this Contract except
as otherwise provided in the Code and other applicable law. Any attempt to do so
will be void. The offsetting of any fees, administrative, or other expenses owed
to the Company against any payments under this Contract will not be considered a
transfer or assignment.
Notwithstanding the above all or a portion of this Contract may be transferred
to the Owner's Spouse or former Spouse under a divorce or separation instrument
pursuant to Code section 71(b)(2),
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401(a)(13), 414(p), 1041, and ERISA section 206(d).
8.13 RELIANCE ON INFORMATION BY THE COMPANY
The Owner agrees to provide information to the Company at such time, in such
manner, and containing such data as may be necessary for the Company to prepare
any reports required of the Company, as insurer, or by the Code. The Company may
rely on information furnished to it by the Owner to fulfill its obligations
under this Contract and shall incur no liability for acting in reliance on such
information.
8.14 PROTECTION OF PROCEEDS
To the extent permitted by applicable law, the benefits, values and rights under
this Contract are not subject to the claims of creditors or to legal process.
8.15 NOTIFICATION
Any notification required by this Contract will be sent to the Owner by regular
mail to the address that the Owner has provided the Company, and this will
constitute effective notification. The Owner agrees to immediately notify the
Company in writing of any change in his or her name or address.
8.16 DISCLAIMER
The Company will be under no obligation for any of the following:
1) For any tax or tax penalties the Owner may owe resulting from failure
to comply with the requirements imposed by the Code or by any other
applicable federal or state law, rule or regulation;
2) To determine whether any contribution, distribution, or transfer under
the Contract
3) complies with the provisions, terms, and conditions of any Plan or
with applicable law;
4) To administer any Plan, including, without limitation, any provisions
required by ERISA; or
5) To provide any notifications or reports required to be made by an
employer or any other entity.
8.17 LIABILITY OF THE COMPANY
Action or inaction by the Company based on a reasonable interpretation of the
law as to whether the Annuitant has met the Minimum Distribution Requirements or
other distribution requirements referred to above shall create no liability on
the Company if it is subsequently determined that such interpretation is
incorrect.
8.18 INDEMNIFICATION OF THE COMPANY
The Company and its representatives will be indemnified and held harmless for
any liabilities or costs (including any legal fees incurred by them) which may
arise in the performance of the Company's duties under this Contract except for
liabilities arising from the Company's or its representatives' negligence or
willful misconduct.
8.19 REPORTS
IRA Contracts: The Company will submit annual calendar year reports concerning
the status of this Contract, if applicable.
If variable Income Payments are being made, the Company will send to the Owner,
a report showing the number of Annuity Units in each Division and the value of
each Annuity Unit at least once per year. In addition, the Owner will be sent a
confirmation statement each time there is transfer of Annuity Units among
Divisions or to the General Account.
All reports will be sent to the Owner's last known address.
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8.20 RIGHTS RESERVED BY THE COMPANY
1) Reflect a change in the Separate Account or any Division thereunder;
2) Create new separate accounts;
3) Operate the Separate Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law;
4) Transfer any assets in any Division in the Separate Account, or combine the
Separate Account with another separate account;
5) Add, combine or remove Divisions in the Separate Account, or combine the
Separate Account with another separate account;
6) Make any new Divisions available to you on a basis to be determined by the
company;
7) Substitute for the shares held in any Division the shares of another
underlying fund or the shares of another investment company or any other
investment permitted by law;
8) Make any changes as required by the Code or by any other applicable law,
regulation or interpretation in order to continue treatment of this
Contract as an annuity;
9) Make any changes to comply with the rules of any Fund.
================================================================================
SECTION 9:
EXPENSES
================================================================================
9.01 MORTALITY AND EXPENSE RISK
This charge is equal, on an annual basis, to [ ] of the average daily value of
the Contract invested in the Variable Investment Option. This charge compensates
the Company for the insurance benefits provided by the Contract.
9.02 ADMINISTRATIVE EXPENSE CHARGE
This charge is equal, on an annual basis, to [ ] of the average daily value of
the Contract invested in the Variable Investment Option. This charge is for
expenses associated with the administration of the Contract. These expenses may
include, but are not limited to, preparation of the Contract, confirmation
statements, annual statements, legal fees, and the maintenance of Contract
records.
9.03 FUND EXPENSES
There are deductions from the assets of the various funds for operating expenses
(including management fees).
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THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK
This is an Immediate Variable Annuity Contract. Important details concerning
this Immediate Variable Annuity are stated on the Contract Data Page, page 3 (or
3A, if applicable) of this Contract.
READ THIS CONTRACT CAREFULLY. This Contract explains how the annuity works, and
is a legal contract between the Owner and the Company. All Income Payments and
benefits will be payable subject to the terms of this Contract. Examine the
Contract Data Page and attached Application. If any errors or omissions are
found, immediately contact the Company.
THIS CONTRACT IS NON-PARTICIPATING -
DIVIDENDS ARE NOT PAYABLE.
PLEASE READ THIS CONTRACT CAREFULLY.
THIS CONTRACT IS A LEGAL CONTRACT BETWEEN THE OWNER AND
THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK.
================================================================================
For information, service or to make a complaint, contact your servicing agent or
the Company's Home Office at:
The United States Life Insurance Company in the City of New York
0000-X Xxxxx Xxxxxxx . P. O. Box 3018 . Houston, TX 77253-3018
Toll Free Customer Service Number
(000) 000-0000
================================================================================
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