Exhibit 1.A.5(a)
NEV-9
New England Variable Life
Insurance Company
Variable Life Policy
Name of Insured
XXXX XXXXX
Policy Number
Specimen
Plan
Flexible Premium Adjustable Variable Life
New England Variable Life Insurance Company Agrees to pay the Death Benefit of
this Policy to the Beneficiary on receipt of proof that the death of the Insured
occurred before the maturity Date; or to pay the Net Cash Value of the Policy to
the Owner if the Insured is living on the Maturity Date; and to provide the
other rights and benefits of the Policy.
These agreements are subject to all of the provisions of the Policy.
Signed on the Date of Issue for the Company at its Administrative Office, 000
Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000
Xxxxxx X. Xxxxxx
/s/
President
X. Xxxxx Xxxxxx
/s/
Secretary
Flexible Premium Adjustable Variable Life Policy
. The Death Proceeds are payable at the death of the Insured, if the Insured
dies before the Maturity Date and the Policy is in force.
. The Net Cash Value, if any, is payable on the Maturity Date, if the
Insured is still living and the Policy is in force.
. The Policy can be adjusted by increasing or decreasing the Face Amount.
. The amount and frequency of premium payments can be changed.
. The Policy does not share in dividends.
THE DEATH BENEFIT ON THE POLICY DATE WILL BE EQUAL TO THE FACE AMOUNT SHOWN IN
SECTION 1. THEREAFTER, THE DEATH BENEFIT CAN VARY FROM DAY TO DAY. IT CAN
INCREASE OR DECREASE, DEPENDING ON SEPARATE INVESTMENT ACCOUNT PERFORMANCE AND
ON FIXED ACCOUNT INTEREST; BUT IT WILL NOT BE LESS THAN THE FACE AMOUNT. SEE
SECTION 10.
THE CASH VALUE OF THIS POLICY CAN VARY FROM DAY TODAY. IT CAN INCREASE OR
DECREASE, DEPENDING ON SEPARATE INVESTMENT ACCOUNT PERFORMANCE AND ON FIXED
ACCOUNT INTEREST. SEE SECTION 14.
Please Read Your Policy Carefully. This Policy is a legal Contract between you
and the Company.
RIGHT TO RETURN THE POLICY
When this Policy is issued or when you receive an Increase in Face Amount, you
should examine it. You can return the Policy or the increase in Face Amount (See
Section 16) to the Company or its Agent for any reason within the latest of: (a)
10 days after you receive it from the Company; (b) 45 days after Part I of the
Application for that coverage is signed; and (c) 10 days after the Company mails
the separate Notice of Withdrawal Right for that coverage. If you return an
increase in Face Amount any Monthly Deduction and any Administrative Charge for
the increase in Face Amount will then be credited to the Policy; and the
increase in Face Amount will be cancelled from the start Otherwise, if you
return the Policy an amount equal to any premium paid plus any unscheduled
payment made will be refunded to you; and the Policy will be cancelled from the
start.
Policy Provisions Alphabetical Guide
Section Section
1 Policy Schedule 6 Accounts
2 Table of Guaranteed 16 Adjustment
Maximum Cost of Insurance 1, 7 Adjustment Date
Rates per $1,000 1, 7 Age of Insured
3 Surrender Charge 12 Amount at Risk
4 Table of Guaranteed 18 Assignments
Minimum Death Benefit A 18 Beneficiary
Premiums Accumulated at 19 Benefits, Payment of
4% 14 Cash Value
5 Table of Guaranteed 7 Claims of Creditors
Minimum Death Benefit B 7 Contestable
Premiums Accumulated at 7 Contract
4% 1, 7 Date of Issue
6 Accounts Available on Date 1, 7 Date, Policy
of Issue 10 Death Benefit
7 Contract 16 Decrease in Face Amount
8 The Variable Account 1 Face Amount
9 The Fixed Account 9 Fixed Account
10 Death Benefit 12 Grace Period
11 Premiums 16 Increase in Face Amount
12 Monthly Deduction 2 Insurance Rates
13 Reinstatement After Lapse 14 Investment Return
14 Cash Value of the Policy 19, 20 Life Income Options
15 Policy Loans 21 Life Income Tables
16 Adjustments 1 Loan Interest Rate
17 24 Months Conversion Right 15 Loans, Policy
18 Owner and Beneficiary 1 Maturity Date
19 Payment of Benefits 12 Minimum Guaranteed Death Benefit
20 Payment Options 12 Monthly Deduction
21 Life Income Tables 12 Monthly Minimum Premium
. Riders, if any 14 Net Cash Value
. Amendments and 18 Owner
Endorsements 16 Partial Surrender
. Copy of the Application 20 Payment Options
. Adjustment Attachments 7 Periodic Reports
15 Policy Loan Balance
7 Postponement of Payments
11 Premiums
13 Reinstatement
1 Schedule, Policy
8 Sub-Accounts
7 Suicide
3 Surrender Charge
3, 14 Surrender of the Policy
17 24 Months Conversion Right
8 Variable Account
New England Variable Life
Insurance Company
1. Policy Schedule
Owner and Beneficiary
As named in the Application or as later changed. See the Owner and Beneficiary
Section of the Policy.
Policy Number Age Sex
Specimen 35 Male
Policy Date Maturity Date*
April 1, 1995 April 1, 2060
Policy Loan Interest Rate
5.5%
THIS POLICY IS ADJUSTABLE. IF IT IS ADJUSTED, THIS SECTION 1 WILL BE CHANGED.
SEE SECTION 16.
Schedule of Benefits
Flexible Premium Adjustable Variable Life
Death Benefit Option: 1
Face Amount Date of Issue
$250,000 April 1, 1995
Maximum Monthly Policy Fee $7.00
Maximum Face Amount Increase Administrative Charge
.0025 times Face Amount Increase
Maximum Monthly Administrative Charge:
Year 1 $22.50
Thereafter 12.50
Schedule of Premiums
Planned Annual Premium: $ 1,755.00**
Guaranteed Death Benefit A Premium: $4,188.66
Guaranteed Death Benefit B Premium: $3,900.40
Monthly Minimum Premium: $1,413.40
Maximum Premium Expense Charge: 7.5%
*This coverage may expire prior to the Maturity Date if premiums paid are
insufficient to continue the coverage to that date. There may be little or no
Cash Value on that date.
**If the Planned Annual Premium is paid on the first day of each policy year,
and the Actual Investment Return is 4% and the guaranteed maximum charges apply
in all years, this Policy will terminate in policy year 20 unless additional
premium is paid.
Home Office: Wilmington, Delaware
X. Xxxxx Xxxxxx
/s/
Secretary
New England Variable Life
Insurance Company
2. Table of Guaranteed Maximum Cost of Insurance Rates per $1,000
Based on the 1980 CSO Smoker Table
Policy Number
Specimen
THIS POLICY IS ADJUSTABLE. IF IT IS ADJUSTED, THIS SECTION 2 WILL BE CHANGED.
SEE SECTION 16.
Policy Year Monthly Rate Policy Year Monthly Rate
1 $.2192 34 $ 3.8792
2 .2342 35 4.1933
3 .2533 36 4.5400
4 .2750 37 4.9242
5 .3000 38 5.3608
6 .3283 39 5.8525
7 .3617 40 6.3883
8 .3958 41 6.9808
9 .4350 42 7.5917
10 .4758 43 8.2100
11 .5225 44 8.8258
12 .5692 45 9.4575
13 .6200 46 10.1325
14 .6733 47 10.8675
15 .7333 48 11.6833
16 .7967 49 12.5858
17 .8700 50 13.5408
18 .9517 51 14.5167
19 1.0450 52 15.4817
20 1.1500 53 16.4217
21 1.2617 54 17.4475
22 1.3825 55 18.4600
23 1.5075 56 19.4742
24 1.6408 57 20.5100
25 1.7792 58 21.6108
26 1.9325 59 23.0250
27 2.1050 60 24.8458
28 2.2992 61 27.4967
29 2.5192 62 32.0458
30 2.7617 63 40.0167
31 3.0242 64 54.8317
32 3.2975 65 83.3333
33 3.5842
X. Xxxxx Xxxxxx
/s/
Secretary
New England Variable Life
Insurance Company
3. Surrender Charge
Policy Number
Specimen
THIS POLICY IS ADJUSTABLE. IF IT IS ADJUSTED, THIS SECTION 3 WILL BE CHANGED.
SEE SECTION 16.
A Surrender Charge will be deducted from full surrender, decrease in Face
Amount, lapse and most partial surrender transactions during the Surrender
Charge Period of the initial Face Amount and any increase in Face Amount. For
the initial Face Amount, the Surrender Charge Period is measured from the Policy
Date. For each increase in Face Amount, the Surrender Charge Period is measured
from the Adjustment Date of the increase. The Surrender Charge for the Policy is
equal to: the Deferred Sales Charge for the initial Face Amount and each
increase in Face Amount; plus the Deferred Administrative Charge for the initial
Face Amount and each increase in Face Amount.
X. Xxxxx Xxxxxx
/s/
Secretary
(continued)
New England Variable Life
Insurance Company
3. Surrender Charge
Policy Number Face Amount Date of Issue
Specimen $250,000 April 1, 1995
The Surrender Charge Period of the initial Face Amount is 11 years.
The Maximum Deferred Sales Charges for the first 5 years are shown below. The
Maximum Deferred Sales Charges for the last policy month of each of the
remaining years of the Period are shown below; the Maximum Charges for other
months will reflect the number of completed months of the Period in the year of
surrender, lapse or decrease in Face Amount.
The Deferred Administrative Charge is level throughout the first year of the
Period and is shown below. The Charge for the last policy month of each of the
remaining years of the Period is shown below; the Charge for other months will
reflect the number of completed months of the Period in the year of surrender,
lapse or decrease in Face Amount.
Year of
Surrender Maximum Deferred
Charge Deferred Administrative
Period Sales Charge Charge
1 $ 438.75 $625.00
2 526.50 562.50
3 1,263.60 500.00
4 1,263.60 437.50
5 1,263.60 375.00
6 1,053.00 312.50
7 842.40 250.00
8 631.80 187.50
9 421.20 125.00
10 210.60 62.50
11 0.00 0.00
X. Xxxxx Xxxxxx
/s/
Secretary
New England Variable Life
Insurance Company
4. Table of Guaranteed Minimum Death Benefit A
Premiums Accumulated at 4%
Policy Number
Specimen
THIS POLICY IS ADJUSTABLE. IF IT IS ADJUSTED, THIS SECTION 4 WILL BE CHANGED.
SEE SECTION 16.
The amounts shown are used to determine if the Minimum Guaranteed Death Benefit
A is in effect. (See Section 12). The amounts shown assume that the Guaranteed
Death Benefit A Premium is paid on the first day of each policy year and is
accumulated at 4%.
End of End of
Year Year
1 $ 4,188.66 36 $ 325,032.95
2 8,544.87 37 342,222.93
3 13,075.32 38 360,100.51
4 17,786.99 39 378,693.19
5 22,687.13 40 398,029.58
6 27,783.28 41 418,139.42
7 33,083.27 42 439,053.66
8 38,595.26 43 460,804.46
9 44,327.73 44 483,425.30
10 50,289.50 45 506,950.97
11 56,489.74 46 531,417.67
12 62,937.99 47 556,863.04
13 69,644.17 48 583,326.22
14 76,618.60 49 610,847.93
15 83,872.00 50 639,470.51
16 91,415.54 51 669,237.99
17 99,260.82 52 700,196.17
18 107,419.92 53 732,392.67
19 115,905.37 54 765,877.04
20 124,730.25 55 800,700.78
21 133,908.12 56 836,917.47
22 143,453.10 57 874,582.83
23 153,379.89 58 913,754.80
24 163,703.74 59 954,493.66
25 174,440.55 60 996,862.06
26 185,606.83 61 1,040,925.21
27 197,219.77 62 1,086,750.87
28 209,297.22 63 1,134,409.57
29 221,857.76 64 1,183,974.61
30 234,920.74 65 1,235,522.26
31 248,506.22
32 262,635.13
33 277,329.20
34 292,611.03
35 308,504.13
X. Xxxxx Xxxxxx
/s/
Secretary
New England Variable Life
Insurance Company
5. Table of Guaranteed Minimum Death Benefit B
Premiums Accumulated at 4%
Policy Number
Specimen
THIS POLICY IS ADJUSTABLE. IF IT IS ADJUSTED, THIS SECTION 5 WILL BE CHANGED.
SEE SECTION 16.
The amounts shown are used to determine if the Minimum Guaranteed Death Benefit
B is in effect. (See Section 12.) The amounts shown assume that the Guaranteed
Death Benefit B Premium is paid on the first day of each policy year and is
accumulated at 4%.
End of End of
Year Year
1 $ 3,900.40 26 172,833.53
2 7,956.82 27 183,647.27
3 12,175.49 28 194,893.56
4 16,562.91 29 206,589.70
5 21,125.82 30 218,753.69
6 25,871.26 31 231,404.24
7 30,806.51 32 244,560.81
8 35,939.17 33 258,243.64
9 41,277.13 34 272,473.79
10 46,828.62 35 287,273.14
11 52,602.17 36 302,664.46
12 58,606.65 37 318,671.44
13 64,851.32 38 335,318.70
14 71,345.77 39 352,631.85
15 78,100.00 40 370,637.52
16 85,124.40 41 389,363.42
17 92,429.78 42 408,838.36
18 100,027.37 43 429,092.29
19 107,928.86 44 450,156.39
20 116,146.42 45 472,063.04
21 124,692.67
22 133,580.78
23 142,824.41
24 152,437.79
25 162,435.70
X. Xxxxx Xxxxxx
/s/
Secretary
6. Accounts Available on the Date of Issue
. Variable
Capital Growth Sub-account
Money Market Sub-account
Bond Income Sub-account
Stock Index Sub-account
Managed Sub-account
Avanti Growth Sub-account
Value Growth Sub-account
Equity-Income Sub-account
Overseas Sub-account
Small Cap sub-account
High Income Sub-account
Asset Manager Sub-account
. Fixed
7. Contract
The Contract
This Policy is a legal contract between the Owner of the Policy (called "you")
and New England Variable Life Insurance Company, a Delaware corporation, (called
"the Company"). The Policy, which includes the attached Application and any
Application for adjustment of the Policy, is the entire contract between you and
the Company. All riders are listed in Section 1. A change in or waiver of the
provisions of the Policy must be signed by the President or the Secretary of the
Company to be valid.
Payments Under the Contract
All contract amounts are in dollars of the United States of America. Payments by
the Company under the contract will be made at the Administrative Office of the
Company. The obligations of the Company are subject to all payments made and
actions taken by the Company under the Policy before receipt by the Company at
its Administrative Office of proof of death of the Insured.
Dates
Policy years. months and anniversaries are all measured from the Policy Date.
Contestable and suicide periods start on the Date of Issue and on the Adjustment
Date for each increase in Face Amount. The Policy Date, the Date of Issue and
each Adjustment Date are all shown in Section 1.
Not Contestable After Two Years
Insurance is issued by the Company in reliance on the statements made in the
Application for the insurance. Those statements are representations; they are
not warranties. No statement can be used to contest or rescind insurance or to
defend against a claim unless contained in the Application for the insurance.
The insurance issued under this Policy will not be contestable after it has been
in force during the life of the Insured:
. With respect to the amount of Death Benefit which results from other than
payments for which proof of insurability is required, for two years from
the Date of Issue; and
. With respect to any amount of Death Benefit which results from a payment
for which proof of insurability is required, for two years from the date
that payment is received; and
. With respect to the amount of the Death Benefit associated with each
increase in Face Amount, for two years from the Adjustment Date for that
increase.
Suicide Within Two Years
If the Insured dies by suicide while sane or insane within two years from the
Date of Issue, the Death Benefit will be limited to: the amount of the premiums
paid; less any Policy Loan Balance on the date of death; and less any partial
surrenders.
If the Insured dies by suicide while sane or insane more than two years after
the Date of Issue but within two years from the Adjustment Date for an increase
in Face Amount, the Death Benefit for that increase in Face Amount will be
limited to the Monthly Deductions and any Face Amount increase Administrative
Charge made to pay for that increase.
Age of Insured
The age of the Insured on the Policy Date and on each policy anniversary means
the age at the nearest birthday of the Insured. For an increase in Face Amount
during a policy year, age means age at the start of that policy year.
If the age or sex of the Insured has not been correctly stated in the
Application, the Death Benefit will be the amount that the most recent Monthly
Deduction which was made would have provided for the correct age and sex.
Claims of Creditors
The Policy and payments under it are exempt from the claims of creditors to the
extent allowed by law.
Basis of Values
"1980 CSO" means Commissioners 1980 Standard Ordinary; it is used to describe
mortality tables. Minimum Cash Values, Reserves and Guaranteed Insurance Factors
are based on the mortality table shown in Section 2. Interest is compounded
daily at the effective rate of 4% per year. A detailed statement of the method
of computing values has been filed, where required, with the Insurance
Department of the state in which the Policy is delivered. All values are equal
to or in excess of the minimum values required by the law of that state.
Periodic Reports
The Company will send you all reports required by law and regulation. Such
reports will be sent once each year or more often if required by law or
regulation. The annual report will include, as of the date for which the report
is made: the Death Benefit; the Cash Value; any Policy Loan Balance; and any
other information required by law or regulation.
Policy Illustration of Benefits and Values
Upon written request the Company will send you a policy illustration which will
illustrate benefits and values under the Policy.
Postponement of Variable Benefits
Except for a Policy Loan that will be used to pay premiums on policies issued by
the Company, the Company can postpone the determination of and the payment or
transfer of amounts based on separate investment account performance if:
. The New York Stock Exchange is closed for trading (except for normal
weekend and holiday closing) or when trading is restricted; or
. The Securities and Exchange Commission determines that a state of emergency
exists which may make payment or transfer impractical; or
. The Securities and Exchange Commission orders the Variable Account or
orders the New England Zenith Fund or its successor or any other investment
company in which the Variable Account is invested to postpone payment or
transfer of variable benefits.
Postponement of Surrenders, Transfers and Loans From The Fixed Account
The Company can postpone the payment of the portion of the Policy's Net Cash
Value which is in the Fixed Account for not more than six months after
surrender. If payment is postponed for more than 30 days, it will be credited
with interest from the date of surrender. The rate of interest will be set each
year by the Company; but the rate will not be less than 3 1/2% per year.
The Company can postpone transfers from the Fixed Account for not more than six
months from the date of the request. The effective date of the transfer is the
date on which values are transferred from the Fixed Account.
The Company can postpone the making of any Policy Loan and any partial surrender
from the Fixed Account for not more than six months from the day you apply,
except Loans or partial surrenders to pay premiums on policies issued by the
Company.
8. The Variable Account
The Variable Account
The Variable Account (called "the Account") is a separate investment account
established by the Company in accordance with Delaware law. The assets of the
Account are owned by the Company. The assets of the Account will be used to
provide values and benefits under this Policy and similar policies. The portion
of the Account assets equal to the reserves plus other policy liabilities of the
Account is not chargeable with liabilities arising out of any other business the
Company may conduct. The Company reserves the right to transfer to its general
account Variable Account assets which exceed the total of reserves and other
liabilities of the Account. Xxxxxx and realized and unrealized capital gains and
losses of the Account are credited to the Account without regard to any of the
Company's other income or capital gains and losses.
Sub-Accounts
The Account consists of sub-accounts, each of which is invested in shares of one
portfolio of the New England Zenith fund or its successor or any other
investment company in which the Account is invested. Shares of a portfolio are
purchased for a sub-account at their net asset value.
The Policy's first investment is made in the Money Market sub-account as of the
latest of:
. The Policy Date;
. The date of the Part II of the Application for the initial Face Amount, if
any is required; and
. The date the first premium is received by the Company.
The Policy's Cash Value will be transferred, based on your choice, to the sub-
accounts and the Fixed Account as of the later of: 45 days after Part I of the
Application for the initial Face Amount is signed; and 10 days after the Company
mails the separate Notice of Withdrawal Right for the initial Face Amount.
Before this transfer, the values and benefits of the Policy will depend on the
net investment performance of the Money Market sub-account. After this transfer
each net premium allocated to the Account and each net unscheduled payment
allocated to the Account will be invested in the sub-accounts you chose as of
the date it is received by the Company at its Administrative Office.
Each distribution of income, dividends and capital gains from a portfolio to a
sub-account will be reinvested for the benefit of
the owners of the policies in that sub-account at net asset value in shares of
the portfolio which made the distribution.
The Cash Value of the Policy at any time cannot be allocated among more than 10
sub-accounts, except with the consent of the Company; and the Fixed Account will
be counted in the limit of 10.
The values and benefits of a policy depend on:
the investment performance of the portfolios in which the sub-accounts are
invested; and the interest credited to the Fixed Account. The Company does not
guarantee the investment performance of the portfolios of the sub-accounts. You
bear the investment risk for amounts invested in the sub-accounts for your
Policy.
Choice of Sub-Accounts
You choose the sub-accounts in which net premiums and net unscheduled payments
are to be invested. You can change the choice for future premiums and future
unscheduled payments at any time by notice to the Company. The change will be
effective as of the date the request is received by the Company at its
Administrative Office. The portion of the net premium and the net unscheduled
payment to be applied to each sub-account chosen must be a whole percent not
less than 10.
The portfolios as of the Date of Issue are listed in the then current prospectus
for the Account and in Section 6.
Change in Portfolios
The Company can add or remove portfolios as sub-account investments as permitted
by law. When a change is made, the Company will send you: a revised prospectus
for the Account which will describe all of the portfolios then available in the
New England Zenith Fund or its successor or any other investment company in
which the Account is invested; and any notice required by law.
When a portfolio is removed, the Company has the right to substitute a different
portfolio in which the sub-account will then invest:
. The value of the removed portfolio; and
. Future net premiums and future net unscheduled payments applied to that
sub-account.
Transfer Option
After the Right to Return the Policy period you can transfer all or a portion of
the Policy's existing share of a sub-account to
another sub-account or to the Fixed Account. (See Restriction of New Amounts
Applied to the Fixed Account provision.) Requests for transfers can be made in
writing or by telephone. The Company is not responsible for determining the
authenticity of transfer instructions received by telephone. Transfers will be
subject to a limit of 4 in each policy year, except with the consent of the
Company. A transfer out of the Fixed Account will not count against this limit.
Change of Investment Policy
The investment policy of the Account will not be changed unless: (a) the change
has been approved by the Insurance Commissioner of the state of Delaware; and
(b) a statement of the approval process has been filed with the Insurance
Department of the state in which this Policy is delivered. If the investment
policy of the Account is changed, the Company will give you written notice of
the change. You can then choose to convert this Policy to fixed benefit
coverage. The conversion will be on the same basis as that described in the 24
Months Conversion Right section. (See Section 17.) Your request to convert this
Policy must be made within 60 days of the later of: (a) the effective date of
the investment policy change; or (b) the date you receive the notice of the
change.
Rights Reserved by the Company
The Company reserves the right to take certain actions subject to compliance
with law including, if required, the approval of the owners of the policies.
These actions are: (a) to create new investment accounts; (b) to combine any two
or more separate investment accounts, including the Account; (c) to invest some
or all of the assets of the Account other than in the New England Zenith Fund;
(d) to invest some or all of the assets of the Account in any other investment
company chosen by New England Variable Life Insurance Company; (e) to remove a
portfolio in which the sub-account is invested or to substitute a different
portfolio; (f) to operate the Account as a management investment company and to
charge investment advisory fees under the Investment Company Act of 1940 or to
operate the Account in any other form permitted by law; and (g) to deregister
the Account under the Investment Company Act of 1940 if registration is no
longer required.
9. The Fixed Account
The Fixed Account
The Fixed Account is a segmented fund within the general account of the Company.
If you choose the Fixed Account, the first date on which money is applied to the
Fixed Account for the Policy is the latest of:
. 45 days after Part I of the Application for the initial Face Amount is
signed;
. 10 days after the Company mails the separate Notice of Withdrawal Right
for the initial Face Amount; and
. The effective date of the choice of the Fixed Account.
Before this date, the value of the portion of the net premium and any net
Unscheduled Payment allocated to the Fixed Account will depend on the net
investment performance of the Money Market sub-account of the Variable Account.
After this date each net premium allocated to the Fixed Account and each net
unscheduled payment allocated to the Fixed Account will be applied as of the
date it is received by the Company at its Administrative Office. Each transfer
to the Fixed Account will be applied as of the transfer date.
Fixed Account Interest
Except as noted in the Repayment of Loans provision of Section 15, the rate of
interest for each amount applied to the Fixed Account: will be the rate set by
the Company in advance for the date the amount is applied to the Fixed Account;
and will not be less than a rate equivalent to an annual effective rate of 4%.
The effective interest rate used on the Policy will be the weighted average of
all such rates for the Policy.
Each year, on the policy anniversary, the Company will determine a portion, if
any, of the Policy's portion of the Fixed Account which will be reinvested at
the rate effective on that date.
Interest will be credited to the Fixed Account on a daily basis.
Restriction of New Amounts Applied to the Fixed Account
The Company reserves the right to restrict new amounts applied to the Fixed
Account if the rate of interest that would be used for the new amount is a rate
equivalent to an annual effective rate of 4%.
Transfers Out of the Fixed Account
You can transfer a limited amount of the Policy's portion of the Fixed Account
to the sub-accounts once within 30 days after each policy anniversary. The
transfer will be limited to the greater of: 25% of the Policy's portion of the
Fixed Account on the transfer date; and the amount of the Policy's portion of
the Fixed Account transferred to the sub-accounts the prior year. However, if
less than $100.00 would remain in the Fixed Account after the transfer, you
can transfer the remainder to the sub-accounts. Requests for transfers can be
made in writing or by
telephone. The Company is not responsible for determining the authenticity of
transfer instructions received by telephone.
Choice of the Fixed Account
You can choose to have net premiums and net unscheduled payments applied to the
Fixed Account. You can change the choice for future net premiums and future net
unscheduled payments at any time by notice to the Company in writing. (See the
Restriction of New Amounts Applied to the Fixed Account provision.) The portion
of the net premium and net unscheduled payment to be applied to the Fixed
Account must be a whole percent not less than 10.
10. Death Benefit
Death Benefit
If the Insured dies before the Maturity Date, the Company will pay a Death
Benefit to the Beneficiary. The amount of the Death Benefit will depend on the
Death Benefit Option in effect on the date of death. The amount payable will be
reduced by any Policy Loan Balance on the date of death. If the Insured dies
during the grace period, an amount will be deducted from the policy proceeds to
cover Monthly Deductions to the date of death. The policy proceeds will be paid
in one sum unless all or part of the proceeds is applied to a Payment Option.
(See Payment of Benefits, Section 19.)
Death Benefit Options
This Policy provides two Death Benefit Options. The Death Benefit Option will be
as chosen in the Application or as later changed. The Death Benefit Option is
shown in Section 1. If Option 1 is chosen the Death Benefit on the date of death
is equal to the greater of (a) and (c) and if Option 2 is chosen the Death
Benefit on the date of death is equal to the greater of (b) and (c), where:
(a) is equal to the Face Amount shown in Section 1;
(b) is equal to the Face Amount shown in Section 1 plus the Cash Value; and
(c) is equal to the Death Benefit which will allow the Policy to continue to
qualify as a flexible premium adjustable life insurance contract under the
Internal Revenue Code and any interpretive regulation or rulings by the
Internal Revenue Service.
The Company will calculate (c) as the Applicable Percent of: the Cash Value of
the Policy plus the pro rata portion of any monthly deduction made for a period
beyond the date of death. The percent used will be based on the age of the
Insured at the beginning of
the policy year as shown in the Table of Applicable Percentages below.
Table of Applicable Percentages
Applicable Applicable
Age Percentage Age Percentage
0 through 40 250 61 128
41 243 62 126
42 236 63 124
43 229 64 122
44 222 65 120
45 215
46 209 66 119
47 203 67 118
48 197 68 117
49 191 69 116
50 185 70 115
51 178 71 113
52 171 72 111
53 164 73 109
54 157 74 107
55 150 75 through 90 105
56 146 91 104
57 142 92 103
58 138 93 102
59 134 94 through 99 101
60 130 100 100
Changing the Death Benefit Option
After the first policy year you can change the Death Benefit Option by written
application to the Company. A change in Death Benefit Option will be effective
on the Adjustment Date shown in the new Policy Schedule.
Except with the consent of the Company, a change from Option 1 to Option 2 can
be made only if the Face Amount after the change is at least $250.000. If you
change from Option 1 to Option 2:
. The Face Amount will be decreased by the amount of the Cash Value;
. A decrease in Face Amount will be applied to reduce the initial Face
Amount and each increase in Face Amount on a pro rata basis; and
. No surrender charge will apply.
A decrease in Face Amount may require a decrease in the amounts provided by
riders attached to this Policy.
If you change from Option 2 to Option 1:
. The Face Amount will be increased by the amount of the Cash Value; and
. This increase in Face Amount will be applied to the initial Face Amount and
to each prior increase in Face Amount on a pro rata basis.
The requirements in the Increase in Face Amount provision of Section 16 do not
apply to a change from Option 2 to Option 1.
11. Premiums
Payment
Premiums are payments made to the Company to pay for the Policy. The Policy will
not be in force until the first premium is paid. After the first premium is
paid, premiums can be paid: at any time; and in any amount, subject to the
Limits on Premiums below. Payments can be made at the Administrative Office of
the Company or at any Agency of the Company. A receipt for payment signed by the
Secretary of the Company will be given on request. Unless you request otherwise
in writing to the Company, any payment received by the Company when a Policy
Loan exists on the Policy will be used: first, as a planned premium; second, as
payment of the loan interest due; third, as a repayment of the Policy Loan; and
fourth, as an unscheduled payment.
Amount and Frequency
Planned annual premiums are shown in Section 1. Payments and Planned Premium
Dates can be annual, semi-annual or quarterly or can be at any frequency agreed
to by the Company. (See Limits on Premiums below.)
Unscheduled payments can be made at any time prior to the Maturity Date. (See
Limits on Premiums below.)
Cash Values and Death Benefits will be permanently affected by the amount and
frequency of planned and unscheduled payments.
Limits on Premiums
Payments are subject to these limits:
. No payment can be less than $25; and
. Total planned and unscheduled payments will be limited to the Company's
published maximum; and
. No unscheduled payment can be made if it increases the Death Benefit by
more than it increases the Cash Value, except with evidence of insurability
and the consent of the Company; and
. No planned premium can be increased except with the consent of the Company.
This Policy is intended to qualify as a flexible premium adjustable life
insurance contract under the Internal Revenue Code and any interpretive
regulation or rulings by the Internal Revenue Service. To that end, premiums on
this Policy are limited to an amount no greater than that allowing the Policy to
continue to qualify.
Net Payments
Each net premium and each net unscheduled payment is equal to: the payment; less
no more than the Maximum Premium Expense Charge at the rate shown in Section 1.
12. Monthly Deduction
Monthly Deduction
On the first day of each policy month, whether or not premiums are paid, the
Company will make a Monthly Deduction for that policy month from the Cash Value
of this Policy. The amount of the Monthly Deduction for a policy month is equal
to:
. The cost of insurance and the cost of any riders for the policy month;
PLUS
. An amount not greater than the Maximum Monthly Policy Fee shown in
Section 1;
PLUS
. An amount not greater than the Maximum Monthly Administrative Charge shown
in Section 1.
If either Minimum Guaranteed Death Benefit is in effect or if the Policy meets
the Monthly Minimum Premium test, whether or not premiums are paid, the Monthly
Deduction will be made, until the Cash Value equals zero. Otherwise, the Monthly
Deduction will be made, as long as the Net Cash Value is sufficient to cover the
entire Monthly Deduction. This provision will not continue the Policy beyond the
Maturity Date; nor will it continue any rider beyond the termination date as
provided in the rider.
The Monthly Deduction will be deducted in the same proportion as
the Cash Value of the Policy is in the sub-accounts and the Fixed Account.
Cost of Insurance
The monthly cost of insurance for the Policy is equal to: the amount at risk;
times the cost of insurance rate per $1,000 for that month divided by 1,000. The
amount at risk is equal to:
. The Death Benefit on the first day of the policy month discounted at
.3273745%, the monthly equivalent of 4% per year;
LESS
. The Cash Value on the first day of the policy month after the Monthly
Deduction has been processed.
Cost of Insurance Rates
The cost of insurance rates will be set by the Company each year on the policy
anniversary, based on the expectations of the Company as to future experience.
The rates are guaranteed for one year.
The Table of Guaranteed Maximum Cost of Insurance Rates per $1,000 (see Section
2) shows the maximum guaranteed rate for each policy month which starts on the
Policy Date or a policy anniversary. The rates between anniversaries vary
monthly based on the assumption of uniform distribution of deaths throughout the
policy year. The cost of insurance rates for each policy year for the initial
Face Amount and for each increase in Face Amount are based on: the sex of the
Insured; the underwriting class of the Insured; and the age of the Insured on
the first day of the policy year.
Monthly Deduction Adjustment At Death
The portion of any Month Deduction made for a period beyond the date of death
will be added to the policy proceeds unless this amount has already been
included in the Death Benefit as described in (c) in Section 10. If the Insured
dies during the grace period, an amount will be deducted from the policy
proceeds to cover Monthly Deductions to the date of death.
Grace Period
Unless either Minimum Guaranteed Death Benefit is in effect or the Policy meets
the Monthly Minimum Premium test, if the Net Cash Value on the first day of a
policy month is not enough to cover the Monthly Deduction for that month, the
Company will mail a premium notice to you and any assignee at the addresses on
record with the Company. There is a grace period of 62 days from the date when
the Monthly Deduction was due in which to pay a premium large enough to permit
the Monthly Deduction to be made.
The insurance remains in force during the grace period. If the premium remains
unpaid at the end of its 62-day grace period, the Policy will lapse without
value. Any riders will also lapse without value unless otherwise stated in the
rider.
Monthly Minimum Premium
The Company will do the following comparison on the first day of each policy
month during the first three policy years unless: the Face Amount has been
increased; or the Policy has been lapsed; or this Policy is the result of the
exercising of a Change to a New Insured rider.
The Company will compare (a) to (b), where: (a) equals the total of the Monthly
Minimum Premiums for the Policy from the Policy Date to that policy month; and
(b) equals the total premiums paid to date less all partial surrenders and any
Policy Loan Balance at that time. If (b) is greater than or equal to (a), the
Policy will not be lapsed if the Net Cash Value on the first day of the policy
month is not enough to cover the Monthly Deduction due for that month.
The Monthly Minimum Premium is shown in the Policy Schedule. (See Section 1.)
This Premium will be recalculated when: the Face Amount is decreased; the amount
provided by riders attached to this Policy is changed; a partial surrender is
made which results in a decrease in Face Amount; or the underwriting class of
this Policy and its riders is changed to a more favorable underwriting class.
Minimum Guaranteed Death Benefits
This Policy provides two Minimum Guaranteed Death Benefits: Benefit A; and
Benefit B. On the first day of each policy month the Company will determine if
either Benefit is in effect unless: "NOT ELIGIBLE" is shown for the Guaranteed
Death Benefit Premiums in Section 1 (see below); or a Policy Loan exists. If
either Benefit is in effect, the Policy will not be lapsed even if the Net Cash
Value on the first day of the policy month is not enough to cover the full
Monthly Deduction due for that month. If the Insured dies while either Benefit
is in effect, the Death Benefit of the Policy will be based on the Death Benefit
Option in effect on the date of death.
The Guaranteed Death Benefit A Premium and the Guaranteed Death Benefit B
Premium are shown in the Policy Schedule. These Premiums will be recalculated
when: the Face Amount is increased or decreased; the amount provided by riders
attached to this Policy is increased or decreased: a partial surrender which
results in a decrease in Face Amount is made; or the underwriting class of this
Policy and its riders is changed to a more favorable underwriting class.
Recalculation of the Premiums will
affect the Tables shown in Sections 4 and 5. When the Company recalculates the
Premiums, it will determine if this Policy is still eligible for the Minimum
Guaranteed Death Benefits.
The Policy will become ineligible for the Guaranteed Death Benefits if, in order
to allow the Policy to continue to qualify as a life insurance contract under
the Internal Revenue Code either recalculated Premium is less than zero. If the
Policy is ineligible for these Benefits, the words "NOT ELIGIBLE" will appear in
the Policy Schedule for the Guaranteed Death Benefit A and B Premiums and in the
Tables shown in Section 4 and 5.
Benefit A
If you pay the Guaranteed Death Benefit A Premium for the Policy in each policy
year (any premiums paid within 20 days prior to a policy anniversary are treated
as if paid in the next policy year). Benefit A is in effect unless: a Policy
Loan exists; a partial surrender was made; or "NOT ELIGIBLE" is shown for the
Guaranteed Death Benefit A Premium in Section 1.
Unless a Policy Loan exists or "NOT ELIGIBLE" is shown for the Guaranteed Death
Benefit A Premium, if you pay an amount different from the Guaranteed Death
Benefit A Premium in any policy year, or if you make a partial surrender,
Benefit A will be in effect if (a) plus (b) is equal to or greater than (c),
where:(a) is equal to: the total of the premiums paid in each prior policy year
accumulated at 4% from the first day of the year of payment to the most recent
policy anniversary (except premiums paid within 20 days prior to the policy
anniversary are treated as if paid in the next policy year); less every partial
surrender made in each prior policy year accumulated at 4% from the date of
surrender to the most recent policy anniversary; and (b) is equal to the total
of the premiums paid in the then current policy year (except premiums paid
within 20 days prior to a policy anniversary are treated as if paid in the next
policy year); less every partial surrender made in that policy year; and (c) is
equal to: the amount shown in the Table of Guaranteed Minimum Death Benefit A
Premiums Accumulated at 4% (see Section 4) for the prior policy year; plus 1/12
of the Benefit A Premium times 1 plus the number of completed policy months of
the then current year.
Benefit B
If you pay the Guaranteed Death Benefit B Premium for the Policy in each policy
year (any premiums paid within 20 days prior to a policy anniversary are treated
as if paid in the next policy year), Benefit B is in effect unless: a Policy
Loan exists; a partial surrender was made; or "NOT ELIGIBLE" is shown for the
Guaranteed Death Benefit B Premium in Section 1.
Unless a Policy Loan exists or "NOT ELIGIBLE" is shown for the Guaranteed Death
Benefit B Premium, if you pay an amount different from the Guaranteed Death
Benefit B Premium in any policy year, or if you make a partial surrender,
Benefit B will be in effect if (a) plus (b) is equal to or greater than (c),
where: (a) is equal to: the total of the premiums paid in each prior policy year
accumulated at 4% from the first day of the year of payment to the most recent
policy anniversary (except premiums paid within 20 days prior to the policy
anniversary are treated as if paid in the next policy year); less every partial
surrender made in each prior policy year accumulated at 4% from the date of
surrender to the most recent policy anniversary; and (b) is equal to the total
of the premiums paid in the then current policy year (except premiums paid
within 20 days prior to a policy anniversary are treated as if paid in the next
policy year); less every partial surrender made in that policy year; and (c) is
equal to: the amount shown in the Table of Guaranteed Minimum Death Benefit B
Premiums Accumulated at 4% (see Section 5) for the prior policy year; plus 1/12
of the Benefit B Premium times 1 plus the number of completed policy months of
the then current year.
Benefit B cannot be in effect beyond the later of: attained age 80 of the
Insured; and 20 years from the Policy Date, or the Maturity Date if earlier.
13. Reinstatement After Lapse
Reinstatement
If the Policy lapses, the Policy and riders can be reinstated. (See Limitations
on Reinstatement below.) Reinstatement is subject to:
. Written application to reinstate; and
. Proof that the Insured is insurable; and
. Payment of a premium large enough to keep the Policy and any riders in
force for at least two months; and
. Payment or reinstatement of any Policy Loan Balance which existed on the
date when the Policy lapsed.
Limitations on Reinstatement
The Policy and riders cannot be reinstated. except with the consent of the
Company, if more than seven years have passed since the date of lapse.
Any rider which provides life or disability insurance on a person other than the
Insured can be reinstated only as stated in the rider.
Effective Date of Reinstatement
Reinstatement will take effect: only if the application for reinstatement is
approved by the Company; and only when the premium for reinstatement has been
paid, provided that at the time of payment there has been no change in
insurability as represented in the application for reinstatement.
Surrender Charge At and After Reinstatement
A Surrender Charge was applied when the Policy lapsed. If the Policy is later
reinstated, the Surrender Charge will be credited to the Cash Value of the
Policy. The Surrender Charge on the date of reinstatement will be the same as it
was on the date of lapse. For the purpose of determining the Surrender Charge on
any date after reinstatement, the period the Policy was lapsed will not count.
Maximum Monthly Administrative Charge After Reinstatement
For the purpose of determining the Maximum Monthly Administrative Charge on any
date after reinstatement, the period the Policy was lapsed will not count.
14. Cash Value of the Policy
Cash Value
The first net premium will be credited to the Policy as of the latest of:
. The Policy Date;
. The date of the last Part II of the Application for the initial Face
Amount; and
. The date the first premium is received by the Company.
Each future net premium will be credited to the Cash Value as of the date it is
received by the Company.
The Cash Value of the Policy will depend on the net investment performance of
the Money Market sub-account until the later of: 45 days after Part I of the
Application for the initial Face Amount is signed; and 10 days after the Company
mails the separate Notice of Withdrawal Right for the initial Face Amount.
Thereafter, the Cash Value of the Policy is equal to: the Policy's share of the
chosen sub-accounts; plus the Policy's portion of the Fixed Account; plus the
amount of any assets transferred to the general account of the Company because
of Policy Loans. (See Section 15.) The amount of the Cash Value depends on: the
frequency and amount of net planned premiums; the frequency and amount of net
unscheduled payments; investment performance of the chosen sub-accounts;
interest credited to the Policy's portion of the Fixed Account; Monthly
Deductions; all chosen Death Benefit Options; partial surrenders; increases and
decreases in Face Amount; transfers among sub-accounts and the Fixed Account;
and Policy Loans. The Cash Value can increase or decrease on a daily basis,
depending on: the actual investment performance of the chosen sub-accounts; and
the interest credited to the Policy's portion of the Fixed Account. (See Actual
Investment Return below.)
The Cash Value of the Policy is not increased by the cash value of any rider,
unless stated in the rider.
Net Cash Value
The Net Cash Value is equal to:
. The Cash Value of the Policy;
LESS
. Any Policy Loan Balance;
LESS
. The Surrender Charge that would apply upon surrender, whether or not there
is a surrender. (See Section 3.)
Surrender of the Policy
You can surrender the Policy for its Net Cash Value at any time before the
Maturity Date by notice to the Company in writing. Upon surrender, the Policy
will be canceled. The Net Cash Value will be paid to you in one sum, unless you
choose in writing to apply all or part to a Payment Option. (See Payment of
Benefits, Section 19.) If you surrender the Policy during the grace period, an
amount will be deducted from the Net Cash Value to cover the Monthly Deduction
to the date of surrender.
Monthly Cost of Insurance Adjustment At Surrender or Partial Surrender
The pro rata portion of any monthly cost of insurance deduction made for a
period beyond the date of surrender or partial surrender (See Section 16) will
be added to the surrender proceeds.
Actual Investment Return
The Policy has an Actual Investment Return for each Valuation Period for its
share of each chosen sub-account and for its portion of the Fixed Account. The
Policy's Actual Investment Return for each sub-account for each Valuation Period
is equal to (a) minus (b); where:
. (a) is equal to the Policy's share of the sub-account as of the end of the
Valuation Period:
PLUS
. the monthly charges deducted in the Valuation Period;
LESS
. any net planned premium and net unscheduled payment credited during the
Valuation Period;
PLUS
. the total of the partial surrenders made during the Valuation Period;
PLUS
. the interest credited during the Valuation Period to any borrowed portion
of the Policy's Cash Value;
PLUS or LESS
a charge or credit for the Policy's share of any reserve for taxes which
the Company determines to apply to the sub-account; and
. (b) is equal to the Policy's share of the sub-account as of the end of the
most recent Valuation Period;
PLUS or LESS
a charge or credit for the Policy's share of any reserve for taxes which
the Company determines to apply to the sub-account.
The Actual Investment Return for the Fixed Account for each Valuation Period is
equal to (a) minus (b); where:
. (a) is equal to the Policy's portion of the Fixed Account as of the end of
the Valuation Period;
PLUS
the monthly charges deducted in the Valuation Period;
LESS
any net planned premium and net unscheduled payment credited during the
Valuation Period;
PLUS
the total of the partial surrenders made during the Valuation Period;
PLUS
the interest credited during the Valuation Period to any borrowed portion
of the Policy's Cash Value; and
. (b) is equal to the Policy's portion of the Fixed Account as of the end of
the most recent Valuation Period.
There is a daily charge for mortality risk and expense risk against the Policy's
share of the sub-accounts. This charge will not be greater than: .002465753425%
which is a rate equivalent to .90% per year divided by 365.
Valuation Periods and Valuation Dates
A Valuation Period for each sub-account is a period:
. Which starts on a Valuation Date; and
. Which ends on the next succeeding Valuation Date.
Each day the New York Stock Exchange is open for trading is a
Valuation Date.
15. Policy Loans
Policy Loans
After the Right to Return the Policy period you can borrow all or part of the
Loan Value of the Policy by written request to the Company. Policy Loans are
made on the sole security of the Policy. The amount you can borrow at any time
is equal to the Loan Value less any Policy Loan Balance at that time.
Unless you request otherwise, Policy Loans will reduce first, the Policy's share
of the sub-accounts proportionately and second, the Policy's portion of the
Fixed Account, except as noted below in the Interest on Loans; Policy Loan
Balance provision. Assets equal to the amount of the Loan:
. Will be transferred to the general account of the Company; and
. Will earn interest at the effective rate per year of not less than: the
Policy Loan Interest Rate; less 1.5%
Policy Loans, whether or not repaid, can have a permanent effect on Cash Values
and Death Benefits.
While a Policy Loan exists, neither Minimum Guaranteed Death Benefit will be in
effect.
Loan Value
The Loan Value of the Policy on the date the Loan is made is equal to:
. 90% of the Cash Value of the Policy projected to the next policy
anniversary or, if earlier, to the next Planned Premium Date;
LESS
. The Surrender Charge that would apply upon surrender (whether or not there
will be a surrender) on the next Planned Premium Date or, if greater, on
the date the loan is made;
LESS
. Loan interest to the next loan interest due date.
The Cash Value will be projected with interest at the effective rate per year of
1.5% less than the Policy Loan Interest Rate.
Interest on Loans; Policy Loan Balance
Interest will be charged on Policy Loans at the Policy Loan Interest Rate shown
in Section 1. Interest accrues daily. The Policy Loan Balance at any time means
Policy Loans outstanding plus interest accrued to date. Loan interest is due on
the policy anniversary each year. Loan interest not paid when due will be added
to the Loan and interest will be charged on it; when loan interest is added to
the Loan, the Policy's share of the sub-accounts and the Policy's portion of the
Fixed Account will be reduced proportionately.
Repayment of Loans
Policy Loans can be repaid to the Company at any time in whole or in part. Loan
repayments will be allocated: first, to repay the Loans made against the Fixed
Account; and second, unless you request otherwise, to repay the Loans made
against the sub-accounts in the same proportion as the Policy is invested in the
sub-accounts.
The rate of interest for each loan repayment allocated to the Fixed Account will
be the lesser of: the rate set by the Company in advance for the date the loan
repayment is allocated to the Fixed Account; and the effective interest rate
(see Fixed Account Interest) for the Policy on the date of the repayment.
A Policy Xxxx is a charge against the Policy. The proceeds of the Policy will be
reduced by any Policy Loan Balance on the date of death of the Insured. If the
Policy Loan Balance at any time exceeds the Cash Value of the Policy less the
Surrender Charge on the next loan interest due date or, if greater, on the
current Valuation Date (called "excess Policy Loan"), the Company will mail a
notice to you and to any assignee. The notice will be mailed to the addresses on
record with the Company. If the excess amount is not paid to the Company within
62 days after the mailing of the notice, the Policy will lapse without value.
Unless you request otherwise, any payment received by the Company when a Policy
Loan exists on the Policy will be used: first, as a planned premium; second, as
payment of the loan interest due; third, as a repayment of the Policy Loan; and
fourth, as an unscheduled payment.
16. Adjustment
Increase in Face Amount
After the first policy year. the Face Amount can be increased on the first day
of any policy month. (See Limit on Adjustments below.) An increase in Face
Amount is subject to:
. Written application to increase the Face Amount;
. Proof that the Insured is insurable;
. New insurance for the amount of the increase on the same plan at the age of
the Insured on the Adjustment Date being allowed under the underwriting
rules of the Company;
. The amount of the increase being at least $10,000, except with the consent
of the Company;
. A Monthly Deduction for the increase. (See Monthly Deduction, Section 12.);
and
. A Face Amount Increase Administrative Charge not greater than the Maximum
stated in Section 1, unless the increase is not medically underwritten, to
be deducted from the Cash Value in the same proportion as the Cash Value of
the Policy is in the sub-accounts and the Fixed Account.
There is a new Surrender Charge Period associated with an increase in Face
Amount. (See Section 3).
The amount of any rider which is attached to the Policy can be increased only as
stated in the rider.
The Application to increase the Face Amount must be signed by the Insured and by
you. An increase will be effective on the Adjustment Date shown in the new
Policy Schedule.
Decrease in Face Amount
The Face Amount may be decreased by written application to the Company; but only
if the Face Amount which will remain after a decrease is at least $250,000:
except with the consent of the Company. No portion of the Cash Value will be
paid to you. A Surrender Charge may apply to a decrease in Face Amount. (See
Section 3.) Any Surrender Charge applied will be based on the amount of the
decrease. Thereafter, any Surrender Charges will be proportional to the
remaining Face Amount. Any decrease in Face Amount will be applied to reduce the
initial Face Amount and each increase in Face Amount on a pro rata basis, except
with the consent of the Company. The Cash Value after the decrease in Face
Amount will be equal to: the Cash Value just prior to the decrease; less any
Surrender Charge for the decrease. The Death Benefit will be recalculated based
on the new Face Amount and the Cash Value after the decrease. A decrease in Face
Amount will be effective on the Adjustment Date shown in the new Policy
Schedule. A decrease in Face Amount may require a decrease in the amounts
provided by riders attached to this Policy.
Partial Surrender
After the Right to Return the Policy Period, you can make a partial surrender by
written request to the Company. A portion of the Cash Value will be paid to you.
A Surrender Charge may apply if you make a partial surrender. (See Section 3.)
Any Surrender Charge applied will be based on the amount of the decrease in Face
Amount. (See below). Thereafter, any Surrender Charge will be proportional to
the remaining Face Amount. In each policy year, partial surrenders will be
limited, except with the consent of the Company, to: 20% of the Net Cash Value
on the day the first partial surrender is made for the policy year; or, if less,
the Loan Value minus any Policy Loan Balance. The amount of the partial
surrender will be deducted from the Cash Value. The Death Benefit of the Policy
will be based on the Face Amount after the partial surrender and the reduced
Cash Value. The Face Amount of the Policy will be reduced, if necessary, so the
amount at risk after the partial surrender is not greater than the amount at
risk before the partial surrender. (See Cost of Insurance, Section 12). Any
decrease in Face Amount will be applied to reduce the initial Face Amount and
each increase in Face Amount on a pro rata basis, except with the consent of the
Company. The Face Amount which will remain after the partial surrender must be
at least $250,000, except with the consent of the Company. A decrease in Face
Amount may require a decrease in the amounts provided by riders attached to this
Policy.
Unless you request otherwise. a partial surrender will reduce: first, the
Policy's portion of the sub-accounts proportionately; and second, the Policy's
portion of the Fixed Account.
Limit on Adjustments
On an Adjustment Date you can have only one increase in Face Amount. Therefore,
if this Policy includes a Level Term Insurance Rider and you request both an
exchange of term insurance for an increase in Face Amount and an additional
increase in Face Amount for this Policy:
. If the two increases will be on the same underwriting class, the two
requests will be combined and processed as one adjustment; otherwise
. The additional increase in Face Amount will be processed first and the
exchange of term insurance will be processed one month later.
Adjustment of the Policy
The Policy Schedule and Sections 2 through 5, must be changed to reflect an
increase or a decrease in the Face Amount. The Policy Schedule must be changed
also to reflect a change in the Death Benefit Option. The changed Policy
Schedule and the changed
Sections 2 through 5, if any, and the Application for the adjustment will be
made part of the Policy by adjusting the Policy. The Company can, at its option,
adjust the Policy:
. By sending you a new Policy Schedule, and new Sections 2 through 5, if any,
and a copy of the Application for the adjustment for you to attach to the
Policy; or
. By requiring that the Policy be returned to have the new Policy Schedule
and new Sections 2 through 5. if any, and a copy of the Application for the
adjustment attached to the Policy by the Company; or
. By sending you an adjusted policy to take the place of this Policy.
Upon adjustment the Policy will be in force only as adjusted.
17. 24 Months Conversion Right
24 Months Conversion Right
The 24 Months Conversion Right allows you to convert all or a portion of this
Policy, subject to the terms of this Section, to fixed benefit coverage: by
transferring value to the Fixed Account; and by allocating future premiums and
future net unscheduled payments to the Fixed Account.
A request to exercise the 24 Months Conversion Right must be in written form
satisfactory to the Company. The 24 Months Conversion Right can be exercised:
. Once within 24 months after the Date of Issue of the Policy;
. Once within 24 months after the Adjustment Date of an increase in Face
Amount; and
. Even if the Company is restricting new amounts applied to the Fixed
Account. (See Restriction of New Amounts Applied to the Fixed Account
provision of Section 9.)
If the Company is not restricting amounts applied to the Fixed Account: you can
transfer to the Fixed Account all or part of the Policy's Cash Value in the sub-
accounts; and you can allocate all or part of future net premiums and net
unscheduled payments to the Fixed Account. However, at any time in the future if
the Company is restricting new amounts applied to the Fixed Account, the Company
reserves the right to limit the allocation of future net premiums and net
unscheduled payments to the Fixed Account to the Policy's lowest Fixed Account
allocation percentage since the
most recent date when this Right was exercised. The Policy's share of the sub-
accounts will be reduced proportionately when Cash Value is transferred under
this Right.
If the Company is restricting amounts applied to the Fixed Account: you can
transfer to the Fixed Account the portion of the Policy's Cash Value in the sub-
accounts which is attributable to the coverage for which this Right is being
exercised; and you can allocate future net premiums and net unscheduled payments
to the Fixed Account based on the Company's published rules. The Policy's share
of the sub-accounts will be reduced proportionately when Cash Value is
transferred under this Right.
Transfers to the Fixed Account resulting from the exercise of the 24 Months
Conversion Right are not counted in the limit of 4. (See Transfer Option
provision of Section 8.)
18. Owner and Beneficiary
Owner
The Owner of the Policy is named in the Application (see copy attached); but,
the Owner can be changed. The new Owner will succeed to all rights of the Owner,
including the right to make a further change of Owner. At the death of the
Owner, his or her estate will be the Owner, unless a successor Owner has been
named. In this Policy "you" means the Owner, whether the Owner is a person, a
partnership, a corporation, a fiduciary or any other legal entity. The rights of
the Owner will end at the death of the Insured, except for Payment of Benefits.
(See Section 19.)
Beneficiary
The Beneficiary is named in the Application (see copy attached); but, the
Beneficiary can be changed before the death of the insured. The Beneficiary can
be a person, a corporation, a partnership, a fiduciary or any other legal
entity. A person must survive the Insured to qualify as Beneficiary. If none
survives, the proceeds will be paid to the Owner.
Change of Owner or Beneficiary
A change of Owner or Beneficiary must be in written form satisfactory to the
Company, and must be dated and signed by the Owner who is making the change. The
change will be subject to all payments made and actions taken by the Company
under the Policy before the signed change form is received by the Company at its
Administrative Office.
Assignments
An absolute assignment of the Policy by the Owner is a change of Owner and
Beneficiary to the assignee. A collateral assignment of the Policy by the Owner
is not a change of Owner or Beneficiary;
but their rights will be subject to the terms of the assignment. Assignments
will be subject to all payments made and actions taken by the Company before a
signed copy of the assignment form is received by the Company at its
Administrative Office. The Company will not be responsible for determining
whether or not an assignment is valid.
Designation of Owner and Beneficiary
A numbered sequence can be used to name successive Owners or Beneficiaries. Co-
Beneficiaries will receive equal shares unless otherwise stated.
In naming Owners or Beneficiaries, unless otherwise stated:
. "Child" includes an adopted or posthumous child;
. "Provision for issue" means that if a Beneficiary does not survive the
Insured, the share of that Beneficiary will be taken by his or her living
issue by right of representation; and
. A family relation such as "wife", "husband" or "child" means the relation
to the Insured.
At the time for payment of benefits the Company can rely on an affidavit of any
Owner or other responsible person to determine family relations or members of a
class.
19. Payment of Benefits
Payment
The policy proceeds will be paid in one sum, unless all or part of the proceeds
is applied to a Payment Option. (See Section 20.) The Company will pay interest
on the death and maturity proceeds from the date the proceeds become payable to
the date of payment in one sum, or to the Option Date. The rate of interest will
be set each year by the Company. The rate will not be less than: that required
by law; or 3 1/2% per year. The interest payable on surrender proceeds is
described in Section 7.
Selection of Payment Options; Option Date
The selection of a Payment Option and the naming of the Payee must be in written
form satisfactory to the Company. You can make or change or revoke the selection
before death of the Insured. The Option Date is the effective date of the
Payment Option, as stated in the selection form.
Payee
The Payee is a person, a corporation, a partnership, a fiduciary
or any other legal entity entitled to receive payment in one sum or under a
Payment Option.
Selection by Payees
Any proceeds payable in one sum at the death of the Insured, or upon surrender
or maturity of the Policy, can be applied to any Payment Option chosen by the
Payee. Further, with the consent of the Company, any Payee who is entitled to
receive proceeds in one sum when a Payment Option ends, or at the death of a
prior Payee, or when proceeds are withdrawn, can choose to apply the proceeds to
a Payment Option.
Rights of Payees
In the selection of a Payment Option the right can be given to the Payee:
. To withdraw principal and interest under the Fourth or Fifth Option; or
. To withdraw the commuted value of payments certain under the First, Second,
or Sixth Option.
Under the Life Income Options only payments certain can be commuted. No Payee
can assign, commute or withdraw the payments under any Payment Option, unless
the right is reserved in the selection of the Option.
Limitations
If installments under an Option would be less than $20, proceeds can be applied
to a Payment Option only with the consent of the Company.
Life Income Options
Guaranteed Life Income Options are based on the age of the Payee on the Payee's
birthday nearest the Option Date. The Company will require proof of age. The
Life Income payments will be based: on the rates shown in the Life Income Tables
(Section 21); or, if they are greater, on the Payment Option rates of the
Company on the Option Date. If the rates at a given age are the same for
different periods certain, the longest period certain will be used.
Purchase of Increased Payment Option Benefits
On the Option Date, a one sum purchase payment can be made to the Company to be
added to the proceeds being applied to any Payment Option. The portion of Life
Income payments purchased in this way will be based on the Payment Option rates
of the Company on the Option Date, which may not be the rates shown in the Life
Income Tables (Section 21). The purchase payment will be limited to the
Company's published maximum for single premium immediate
annuities on the Option Date. A portion of the purchase payment may be used by
the Company to pay premium taxes on the purchase payment.
Death of Payee
If a Payee under a Life Income Option dies within 30 days after the Option Date,
the amount applied to the Option, less any payments made, will be paid in one
sum, unless a Payment Option is chosen by the successor Xxxxx. Otherwise,
amounts to be paid after the death of a Payee under a Payment Option will be
paid as due to the successor Xxxxx. If there is no successor Xxxxx, amounts to
be paid in one sum, or the commuted value of any unpaid payments certain, will
be paid in one sum to the estate of the last Payee to die.
Commutation Rate
The interest rate used to compute the commuted value of any unpaid payments
certain:
. Under the First Option will be 3 1/2% per year; and
. Under the Life Income Options will be the rate used by the Company in
computing the amount of the monthly payments.
20. Payment Options
Payment Options
All or part of the policy proceeds can be applied to any one of the following
Options, subject to Section 19, Payment of Benefits:
First Option: Income for a Specified Number of Years
The Company will make monthly payments which will include both principal and
interest. Payments will start on the Option Date and will continue for the
number of years chosen. The number of years chosen cannot be more than 30.
Interest is at the rate of 3 1/2% per year compounded yearly. Additional
interest paid by the Company for any year will be added to the monthly payments
for that year.
Guaranteed monthly payments per $1,000 of proceeds applied to the First Option
are shown below:
Number of Number of Number of
Years Years Years
1 $84.65 11 $9.09 21 $5.56
2 43.05 12 8.46 22 5.39
3 29.19 13 7.94 23 5.24
4 22.27 14 7.49 24 5.09
5 18.12 15 7.10 25 4.96
6 15.35 16 6.76 26 4.84
7 13.38 17 6.47 27 4.73
8 11.90 18 6.20 28 4.63
9 10.75 19 5.97 29 4.53
10 9.83 20 5.75 30 4.45
Second Option: Life Income
The Company will make equal monthly payments. Payments will start on the Option
Date and will continue:
. During the life of the Payee, with no further payment after the death of the
Payee, called "Life Income, No Refund"; or
. During the life of the Payee, but for at least 10 years, called "Life
Income, 10 Years Certain"; or
. During the life of the Payee, but for at least 20 years, called "Life
Income, 20 Years Certain".
Third Option: Life Income with Refund
The Company will make equal monthly payments. Payments will start on the Option
Date and will continue during the life of the Payee. At the death of the Payee,
if the total payments made are less than the total proceeds applied to the
Option, then:
. The difference will be paid in one sum, called "Life Income, Cash Refund";
or
. The equal monthly payments will continue until the total payments are equal
to the total proceeds applied to the Option, called "Life Income,
Instalment Refund".
Fourth Option: Interest
The Company will hold the proceeds at interest during the life of the Payee or
for any other period agreed to by the Company. Interest on the proceeds:
. Will be paid each month to the Payee starting one month after the Option
Date; or
. Will be added to the principal amount each year and will earn interest.
At the death of the Payee, or at the end of the period agreed to, the balance of
principal and any accrued interest will be paid in one sum. The rate of interest
will be set each year by the Company; but the rate will not be less than 3 1/2%
per year.
Fifth Option: Specified Amount of Income
The Company will make monthly payments which will include both principal and
interest. Payments will be in the amount chosen. Payments can be quarterly or at
any other frequency chosen, and payments can be for different amounts, all
subject to the consent of the Company. Payments will start on the Option Date
and will continue until the balance is fully paid out. At the death of the Payee
any unpaid balance and accrued interest will be paid in one sum. The rate of
interest will be set each year by the Company; but the rate will not be less
than 3 1/2% per year. Interest will be added each year to the principal and will
earn interest.
Sixth Option: Life Income for Two Lives
The Company will make monthly payments. Payments will start on the Option Date
and will continue:
. While either of two Payees is living, called "Joint and Survivor Life
Income"; or
. While either of two Payees is living, but for at least 10 years, called
"Joint and Survivor Life Income, 10 Years Certain"; or
. While two Payees are living, and after the death of one Payee, two-thirds
of the monthly amount while the other Payee is living, called "Joint and
2/3 to Survivor Life Income".
21. Life Income Tables
Life Income Tables
Guaranteed monthly payments per $1,000 of amounts applied to the Life Income
Options are shown below:
-------------------------------------------------------------------------
Second and Third Options: Life Income
-------------------------------------------------------------------------
Age of No 10 Years 20 Years Cash Instalment
Payee Refund Certain Certain Refund Refund
*15 $3.19 $3.19 3.19 3.18 3.19
16 3.21 3.20 3.20 3.19 3.20
17 3.22 3.22 3.21 3.21 3.21
18 3.23 3.23 3.23 3.22 3.22
19 3.25 3.24 3.24 3.23 3.24
20 3.26 3.26 3.25 3.25 3.25
21 3.27 3.27 3.27 3.26 3.26
22 3.29 3.29 3.28 3.28 3.28
23 3.31 3.30 3.30 3.29 3.29
24 3.32 3.32 3.31 3.31 3.31
25 3.34 3.34 3.33 3.32 3.33
26 3.36 3.36 3.35 3.34 3.35
27 3.38 3.37 3.37 3.36 3.36
28 3.40 3.39 3.39 3.38 3.38
29 3.42 3.41 3.41 3.40 3.40
30 3.44 3.44 3.43 3.42 3.42
31 3.46 3.46 3.45 3.44 3.44
32 3.49 3.48 3.47 3.46 3.47
33 3.51 3.51 3.50 3.49 3.49
34 3.54 3.53 3.52 3.51 3.52
35 3.56 3.56 3.55 3.54 3.54
36 3.59 3.59 3.58 3.56 3.57
37 3.62 3.62 3.60 3.59 3.60
38 3.66 3.65 3.63 3.62 3.63
39 3.69 3.69 3.67 3.65 3.66
40 3.73 3.72 3.70 3.68 3.69
41 3.76 3.76 3.73 3.71 3.72
42 3.80 3.79 3.77 3.75 3.76
43 3.84 3.84 3.80 3.78 3.79
44 3.89 3.88 3.84 3.82 3.83
45 3.93 3.92 3.88 3.86 3.87
46 3.98 3.97 3.92 3.90 3.91
47 4.03 4.02 3.97 3.94 3.96
48 4.08 4.07 4.01 3.99 4.00
49 4.14 4.12 4.06 4.03 4.05
50 4.20 4.18 4.11 4.08 4.10
51 4.26 4.23 4.16 4.13 4.15
52 4.32 4.30 4.21 4.19 4.21
53 4.39 4.36 4.26 4.24 4.27
54 4.46 4.43 4.32 4.30 4.33
55 4.54 4.50 4.37 4.36 4.39
56 4.62 4.58 4.43 4.43 4.46
57 4.70 4.65 4.49 4.49 4.53
58 4.79 4.74 4.56 4.57 4.60
59 4.89 4.83 4.62 4.54 4.68
60 4.99 4.92 4.68 4.72 4.76
61 5.10 5.02 4.75 4.80 4.85
62 5.22 5.12 4.82 4.89 4.94
63 5.34 5.23 4.88 4.98 5.03
64 5.47 5.35 4.95 5.07 5.13
65 5.61 5.47 5.02 5.17 5.24
66 5.76 5.60 5.08 5.28 5.35
67 5.92 5.73 5.15 5.39 5.47
68 6.10 5.87 5.21 5.51 5.59
69 6.28 6.02 5.27 5.63 5.72
--------------------------------------------------------------------------------
Age of No 10 Years 20 Years Cash Instalment
Payee Refund Certain Certain Refund Refund
70 6.48 6.17 5.33 5.76 5.86
71 6.70 6.33 5.38 5.89 6.00
72 6.92 6.49 5.43 6.04 6.16
73 7.17 6.66 5.48 6.19 6.32
74 7.43 6.84 5.52 6.34 6.49
75 7.71 7.02 5.56 6.52 6.67
76 8.02 7.20 5.60 6.69 6.86
77 8.34 7.38 5.63 6.87 7.06
78 8.69 7.56 5.66 7.07 7.27
79 9.07 7.75 5.68 7.27 7.50
80 9.47 7.93 5.70 7.49 7.74
81 9.90 8.11 5.71 7.73 7.99
82 10.36 8.28 5.73 7.96 8.25
83 10.86 8.45 5.73 8.21 8.53
84 11.39 8.62 5.74 8.50 8.83
**85 11.96 8.77 5.75 8.78 9.14
--------------------------------------------------------------------------------
*and under **and over
--------------------------------------------------------------------------------
Sixth Option: Life Income for Two Lives
--------------------------------------------------------------------------------
Age of One Age of Other Payee
Payee
55 60 65 70 75
Joint and Survivor
55 $4.04 $4.17 $4.28 $4.37 $4.43
60 4.17 4.36 4.53 4.68 4.79
65 4.28 4.53 4.79 5.02 5.22
70 4.37 4.68 5.02 5.38 5.71
75 4 43 4.79 5.22 5.71 6.22
80 4 47 4.87 5.37 5.98 6.68
--------------------------------------------------------------------------------
Joint and Survivor, 10 Years Certain
55 $3.96 $4.09 $4.20 $4.36 $4.42
60 4.09 4.27 4.44 4.59 4.77
65 4.20 4.44 4.69 4.91 5.09
70 4.36 4.59 4.91 5.22 5.50
75 4.42 4.77 5.09 5.50 5.88
80 4.46 4.85 5.33 5.72 6.21
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Joint and 2/3 to Survivor
55 $4.37 $4.56 $4.76 $4.99 $5.23
60 4.56 4.78 5.02 5.30 5.59
65 4.76 5.02 5.33 5.67 6.03
70 4.99 5.30 5.67 6.10 6.57
75 5.23 5.59 6.03 6.57 7.18
80 5.48 5.89 6.41 7.06 7.84
--------------------------------------------------------------------------------
Payments for other ages will be quoted by the Company on request.
The rates shown above are based on an interest rate of 3 1/2% per year; and on
mortality: using a 60/40 male/female weighting; based on the Individual
Annuitant Mortality Table for 1983; and with projection on Scale G to the year
2000 and then on Scale B Modified to year 2010.
------------------------------------------------------------
Amendments and Endorsements (To be made only by the Company)
Please notify the Company of any change in your name or address. The Company
will communicate with you at your address on record with the Company.
New England Variable Life
Insurance company
Administrative Office:
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Flexible Premium Adjustable Variable Life Policy
. The Death Proceeds are payable at the death of the Insured, if the Insured
dies before the Maturity Date and the Policy is in force.
. The Net Cash Value, if any, is payable on the Maturity Date, if the Insured
is still living and the Policy is in force.
. The Policy can be adjusted by increasing or decreasing the Face Amount.
. The amount and frequency of premium payments can be changed.
. The Policy does not share in dividends.
