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EXHIBIT 4
[SECURITY FIRST LOGO]
LIFE INSURANCE
COMPANY
ANNUITY CONTRACT
This is a flexible payment variable annuity contract providing variable and
fixed annuity income benefits. This contract describes the rights and benefits
of the owner.
Security First Life Insurance Company ("Company") has received a purchase
payment made for the owner. The Company will make a series of monthly payments
to the person named as the annuitant, starting on the annuity date. These
annuity payments, will be made while the annuitant is alive, but not for less
than 120 months. A different form of annuity option or optional annuity date may
be selected by the owner. The amount of the monthly payments will be determined
in the manner set forth in this contract.
If the annuitant or owner dies before payments start, a settlement on death will
be made in accordance with the Settlement on Death provision.
10-DAY RIGHT to EXAMINE THIS CONTRACT
AT ANY TIME WITHIN 10 DAYS AFTER RECEIPT OF THIS ANNUITY CONTRACT, IT MAY BE
RETURNED FOR CANCELLATION BY DELIVERING IT TO THE COMPANY AT ITS ADMINISTRATIVE
OFFICE SHOWN HEREIN. SUCH DELIVERY OR MAILING OF THE CONTRACT SHALL VOID IT FROM
THE BEGINNING, AND THE PARTIES SHALL BE IN THE SAME POSITION AS IF IT HAD NOT
BEEN ISSUED. ALL PURCHASE PAYMENTS FOR THE CONTRACT SHALL BE REFUNDED.
/s/ XXXXXXX X. XXXXXXX
----------------------
President
[SIG]
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Secretary
ALL PAYMENTS AND VALUES UNDER THIS CONTRACT WHICH ARE BASED ON INVESTMENT IN THE
SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
THIS POLICY IS A LEGAL CONTRACT BETWEEN THE POLICYOWNER AND THE INSURER. PLEASE
READ THIS POLICY CAREFULLY.
FLEXIBLE PAYMENT DEFERRED
ANNUITY PROVIDING FIXED AND
VARIABLE BENEFITS 10 YEAR
CERTAIN LIFE ANNUITY STARTING
ON THE ANNUITY DATE
NON-PARTICIPATING NO DIVIDENDS
SF-135-R2V
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TABLE OF CONTENTS
ARTICLE PAGE
Contract Specifications 3
1. Description of Certain Terms Used in This Certificate 4
2. General Terms 5
3. Owner's Account 5
4 Rights of Owner 7
5. Settlement 8
6. Settlement on Death 8
7 Annuity Income 10
8. Method of Calculating Annuity Income Payments 10
9. Annuity Purchase Rates 13
ALPHABETICAL GUIDE
SECTION
3.08 Account value 6
3.05 Accumulation Units 6
3.10 Administration Fee 6
7.02 Alternate Annuity Income Rates 10
7.03 Alternate Assumed Investment Returns 10
7.01 Annuity income Options 10
4.03 Cash Surrender 7
3.09 Cash Value 6
2.03 Change of Contract 5
Communications 3
4.06 Conversion Between Series 8
3.04 Crediting Accumulation Units 6
2.04 Data Provided to the Company 5
4.05 Deferral of Payment 7
3.02 Description of owner's Account 5
4.02 Designation of Beneficiary 7
8.01 Determination of Monthly Guaranteed. Minimum Fixed Dollar
Annuity Payments 10
8.02 Determination of Monthly Variable Annuity Payments For
the First Year 11
8.04 Determination of Monthly Variable Annuity Payments
For the Second and Subsequent Years 11
2.08 Incontestability 5
5.04 minimum Amount to Payee 8
4.07 Minimum Benefits 8
2.05 Misstatement of Age or Sex 5
2.02 Non-Participating 5
5.02 Normal Form of Settlement 8
8.03 Number of Annuity Units 11
5.03 Optional Annuity Date and Optional Settlement 8
4.01 Ownership and Assignment 7
4.04 Partial Surrenders 7
3.11 Premium Taxes 7
3.01 Purchase Payments 5
2.07 Reserve Basis 5
8.05 Separate Account Annuity Unit Values 12
5.01 Settlement of Owner's Account 8
6.01 Settlement on Death of the Annuitant Before The Annuity Date 8
6.02 Settlement on Death of the Owner Before the Annuity Date 8
6.03 Settlement on Death of a Payee After the Annuity Date 9
3.07 Splitting Units 6
3.12 Statements of Account 7
3.06 Substitution of Fund Shares 6
2.06 Termination of Contract 5
2.01 The Contract 5
3.03 The Separate Account 6
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[SECURITY FIRST LIFE INSURANCE COMPANY LETTERHEAD]
CONTRACT SCHEDULE
CONTRACT OWNER(S) CONTRACT NUMBER
XXXX XXX 136A0000
ANNUITANT CONTRACT DATE
XXXX XXX 06/01/1998
NORMAL ANNUITY DATE PURCHASE PAYMENT
FEBRUARY 1, 2036 $100,000.00
ALLOCATED
SECURITY FIRST TRUST FUNDS:
GROWTH AND INCOME SERIES .0%
FIDELITY INSURANCE PRODUCTS FUNDS (VIP & VIPII):
MONEY MARKET PORTFOLIO .0%
TOTAL SEPARATE ACCOUNT: .0%
ENDORSEMENTS
THE FOLLOWING ENDORSEMENTS HAVE BEEN ATTACHED TO AND MADE A PART OF THIS
CONTRACT. THEY HAVE BEEN INCLUDED FOLLOWING THE LAST PRINTED PAGE OF THE
CONTRACT.
XXXXXX OF SURRENDER CHARGE ENDORSEMENT SF-1554
COMMUNICATIONS
WRITE TO THE COMPANY AT ITS ADMINISTRATIVE OFFICE AS SHOWN BELOW:
SECURITY FIRST LIFE INSURANCE COMPANY
P.O. BOX 92193
LOS ANGELES, CALIFORNIA 90009
(000) 000-0000
[SIG]
President
SF-135-R2VS-3
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ARTICLE 1 DESCRIPTION OF CERTAIN TERMS USED IN THIS CONTRACT
ACCUMULATION UNIT- A measuring unit used to determine the value of the owner's
interest in a separate account series under this contract at any time before
annuity payments commence.
ANNUITANT- The person who is to receive annuity payments.
ANNUITY- A series of income payments made to the annuitant for a defined period
of time.
ANNUITY DATE- The date annuity payments begin under this contract.
ANNUITY UNIT- A measuring unit used to determine the amount of variable annuity
payments base on a separate account series under this contract after such
payments have commenced.
BENEFICIARY- Except as otherwise provided in Section 4.02, the person named on
the application who has the right to receive settlement on the death of the
owner.
CONTRACT- The legal agreement between the owner and the Company covering rights
of the owner.
CONTRACT YEAR- A twelve month period starting on the date this contract is
issued and on each anniversary.
FIXED ANNUITY- An annuity providing guaranteed level payments.
FUND- Any registered management investment company or series thereof (mutual
fund) specified in the contract in which the assets of the separate account may
be invested.
GENERAL ACCOUNT- Assets of the Company except those in the separate account or
segregated asset accounts.
NORMAL ANNUITY DATE- The first day of the month coincident with or next
following the anniversary of the contract date nearest the annuitant's 85th
birthday, or the 10th anniversary, if later.
OWNER- The person who has submitted the completed application to the Company
with a purchase payment, and to whom this contract was issued.
PAYEE- The annuitant or beneficiary receiving payment of benefits under this
contract.
PURCHASE PAYMENT- Any amount received by the Company for the owner.
SEPARATE ACCOUNT- The Security First Life Separate Account A was established by
the Company under the Delaware Insurance Code. The income or losses of the
separate account are free from any other liabilities of the Company. The
separate account is registered as a unit investment trust under the Investment
Company Act of 1940.
SERIES- The accumulation unit values and annuity unit values maintained
separately for each fund whose securities are owned by the separate account.
VALUATION DATE- Any business day used by the separate account to determine the
value of part or all of its assets for purposes of determining accumulation and
annuity unit values for the contract. Accumulation unit values will be
determined each business day. There will be one valuation date in each calendar
week for annuity unit values; The Company will establish the valuation date at
its discretion, but until notice to the contrary is given, that date will be the
last business day in a week.
VALUATION PERIOD- The time from one valuation date to the next.
VARIABLE ANNUITY- An annuity with payments that vary annually according to the
net investment results of a series.
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ARTICLE 2 GENERAL TERMS
2.01 THE CONTRACT
The contract is this document, any endorsements and the application. Only an
officer of the Company can change the contract or waive any of the Company's
rights. These changes must be made in writing. Any contract terms referring to
"filing" or "receipt" of documents means filing or receipt at the Company's
administrative office shown on page 3.
2.02 NON-PARTICIPATING
This contract does not share in the earnings of the Company.
2.03 CHANGE OF CONTRACT
The owner and the Company may change the contract by mutual agreement at any
time. Change must be made in writing. Any changes must comply with the state
laws where the contract is delivered. The Company, by itself, may change only
the following contract terms:
- Terms that apply to any purchase payment received by the Company as a tax-free
exchange under the provisions of the Internal Revenue Code but only if such
payment is received after the effective date of the change of contract.
- Terms that apply to benefits and values provided by purchase payments received
after the effective date of the change of contract to the extent that such
purchase payments in any contract year exceed the first year's purchase
payments.
- Terms that may be necessary to make the contract conform to any federal or
state law, regulation or ruling.
2.04 DATA PROVIDED TO THE COMPANY
The Company may request the owner and/or annuitant to provide data needed to
administer the contract. Such data must be provided upon request. The data must
be in a form satisfactory to the Company.
2.05 MISSTATEMENT OF AGE OR SEX
The age or sex of a payee may affect the amount of annuity payments made under
the contract. If either is misstated, future payments under the contract will be
adjusted.
2.06 TERMINATION OF CONTRACT
This contract will terminate when the Company has fulfilled all its obligations.
2.07 RESERVE BASIS
The reserve for annuity income options in the general account will be calculated
by the Commissioner's Annuity Reserve Valuation Method, the 1983 Table "a"
Individual Annuity Mortality Table, and an interest rate no greater than that
allowed in the Standard Valuation Law of the state in which the contract is
delivered. The reserve will equal or exceed the reserve required by the Standard
Valuation Law.
2.08 INCONTESTABILITY
After two years from the date of issue during the lifetime of the insured, the
Company cannot void this contract due to any misstatements on the application.
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ARTICLE 3 OWNER'S ACCOUNT
3.01 PURCHASE PAYMENTS
A purchase payment is any amount received by the Company for the owner. The
minimum initial purchase payment is $100,000, and each additional purchase
payment must be at least $25,000. Each purchase payment must be allocated by the
owner to the series of the separate account.
3.02 DESCRIPTION OF OWNER'S ACCOUNT
On the contract date the Company will establish the owner's account with the
purchase payment shown on page 3. The owner's account consists of accumulation
units in the separate account that have not been applied to an annuity income
option.
3.03 THE SEPARATE ACCOUNT
The separate account was established by the Company in 1980 under Delaware law.
It is registered as a unit investment trust under the Investment Company Act of
1940 (the "Act"). Its assets are invested only in shares of one or more of the
funds. The separate account will vote its fund shares according to instructions
received from the owners who have units in the separate account series of that
fund.
Each such person will receive all reports and material of the funds in which
they own accumulation or annuity units, and forms to instruct the separate
account how to vote.
3.04 CREDITING ACCUMULATION UNITS
The number of accumulation units credited to any series in the separate account
is determined by dividing the amounts credited, less administration fees and
premium taxes deducted, if any, by the account accumulation unit value for that
series on the day the Company receives or transfers the amount.
3.05 ACCUMULATION UNITS
The separate account accumulation unit value of each series was first set at $5.
This value is determined each business day. It is equal to the value on the
prior day multiplied by a net investment factor. The net investment factor is:
(A) the net asset value of a fund share at the close of business plus the
per share amount of any fund distributions less taxes (per share),
divided by
(B) the net asset value of a fund share at the close of the prior business
day, less
(C) the actuarial risk fee factor of .001753% for each calendar day from
the prior business day to the current business day.
3.06 SUBSTITUTION OF FUND SHARES
The separate account may not change the fund shares of a series unless approved
by a vote of a majority of the units entitled to vote and as provided by the
Act. The separate account may buy other securities for other series or
contracts, or convert units from one series or contract to another, if requested
by an owner.
3.07 SPLITTING UNITS
The Company may split the value of any units in the best interest of the owners,
annuitants and the Company. If split, strict equity will be preserved. Such
split will have no major effect upon the benefits or provisions of this
contract.
3.08 ACCOUNT VALUE
The account value is the sum of the values of the separate account accumulation
units less amounts deducted for prior surrenders or applied to provide annuity
income payments, or deducted for prior or current administration fees and
premium taxes. The account value is the amount that can be applied to any
annuity income option allowed by this contract.
3.09 CASH VALUE
Except as otherwise provided respecting the free withdrawal amount (See Section
3.10), the cash value of the owner's account equals the aggregate of the
following percentages of each purchase payment or portion thereof which has not
been previously surrendered or committed to an annuity income option, as
increased or decreased by gains or losses earned with respect to such purchase
payment and reduced by applicable administration fees and premium taxes. The
percentage is determined based on the period of time (expressed in years)
between the date of receipt of each purchase payment and the surrender date. The
percentages are:
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(a) 93% for purchase payments received during the first year before the
surrender;
(b) 94% for purchase payments received in the second year before the
surrender;
(c) 95% for purchase payments received in the third year before the
surrender;
(d) 96% for purchase payments received in the fourth year before the
surrender;
(e) 97% for purchase payments received in the fifth year before the
surrender;
(f) 98% for purchase payments received in the sixth year before the
surrender;
(g) 99% for purchase payments received in the seventh year before the
surrender;
(h) 100% for all earlier purchase payments.
3.10 FREE WITHDRAWAL AMOUNT
In regard to the first surrender in any contract year, the cash value of amounts
surrendered up to 10% of the owner's account value will be determined without
deduction of the percentage charges described in section 3.09 (the "free
withdrawal amount"). Xxxxxxx surrendered later or in excess of this amount will
be subject to such percentage charges.
3.11 ADMINISTRATION FEE
The Company will deduct from the values of the owner in the separate account a
daily administration fee equal to .00% of the values of the separate account
accumulation units for the prior calendar day.
3.12 PREMIUM TAXES
The Company may deduct from the owner's account any premium tax payable by it.
The premium tax will be deducted from the owner's account on or after it is
incurred by the Company.
3.13 STATEMENTS OF ACCOUNT
Prior to the annuity date, statements of account will be provided at least once
per contract year.
ARTICLE 4 RIGHTS OF OWNER
4.01 OWNERSHIP AND ASSIGNMENT
Unless otherwise restricted, the owner may exercise the contract rights that
relate to his or her annuity. The owner's contract rights are subject to the
rights of any assignee or irrevocable beneficiary.
Unless otherwise restricted, the owner may assign his or her contract rights
under this contract. The assignment must be in writing and received by the
Company. This assignment takes effect on the date it is signed. It is subject to
any action taken before the assignment is received. Any such assignment will not
change a named beneficiary unless the assignment also includes such a change.
The Company is not responsible for the validity of the assignment.
If the owner dies before the annuity date, settlement will be made in accordance
with Article 6.
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4.02 DESIGNATION OF BENEFICIARY
The owner may name and change the beneficiary. The request must be in writing
and made before the owner dies. No change will take effect unless it is
received. When received, the request will take effect as of the date signed,
subject to payment or other action taken by the Company before it was received.
An irrevocable beneficiary must agree to any such change. If there are joint
owners, the surviving joint owner shall become the beneficiary upon the death of
one of the owners unless otherwise designated in writing by the joint owners.
4.03 CASH SURRENDER
This contract may be surrendered for its cash value before the annuity date.
Requests for surrender must be in writing and signed by the owner. The cash
value will not be paid until the contract is returned.
4.04 PARTIAL SURRENDERS
Partial surrenders from the contract may be made before the annuity date.
Requests for partial surrenders must be in writing and signed by the owner. No
partial surrender will be allowed if it results in any series the owner's
account having a value, after the surrender, of less than $500, unless the
entire amount in that series is being surrendered.
The amount of a partial surrender will be deducted from the series on a first-in
first-out basis by purchase payment. The amount deducted will be determined by
dividing (A) the amount received by the owner with respect to each purchase
payment by (B) the applicable percentage shown in Section 3.09, provided however
that the percentage shall be 100% with respect to the free withdrawal amount
(see Section 3.10).
4.05 DEFERRAL OF PAYMENT
Payments of full or partial surrenders from a separate account series may be
suspended under the following conditions:
(a) During any period in which the New York Stock Exchange is closed (other than
customary weekend or holiday closing); or
(b) When the Securities and Exchange Commission determines that trading on such
exchange is restricted or that an emergency exists and, as a result, the
separate account may not reasonably dispose of its securities or fairly value
its assets; or
(c) For such other periods as the Securities and Exchange Commission may
designate for the protection of variable contractholders.
4.06 CONVERSION BETWEEN SERIES
Accumulation units in the separate account may be converted from one series to
another. Conversions may be communicated by written election or, if permitted by
the Company, by telephone. The Company will convert the amounts on the first
valuation date after receipt of the written election. Conversions requested by
telephone will be effective within a reasonable time in accordance with policies
established by the Company.
Annuity units in the separate account may be converted from one series to
another at any time. Such conversions may be elected by written notification
signed by the owner and will be effective on the following annuity unit
valuation date.
The minimum amount that may be converted at any time is $500. No conversion can
be made if it results in a series having a value after conversion of less than
$500.
4.07 MINIMUM BENEFITS
The value of a paid-up annuity, cash surrender, or settlement on death under
this contract will not be less than the minimum required by the state laws where
the contract is delivered.
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ARTICLE 5 SETTLEMENT
5.01 SETTLEMENT OF THE OWNER'S ACCOUNT
Settlement of the owner's account means any of the following:
(a) The start of annuity income payments to the annuitant.
(b) The issuance of a supplementary contract to the beneficiary for payment of
annuity income.
(c) A payment of the cash value in a lump sum.
The amount applied under an annuity income option is the account value. The
first payment under any annuity income option will be made on the annuity date.
Proof of age is required before payments start under any of the first four
options listed in Article 7.
5.02 NORMAL FORM OF SETTLEMENT
The owner must be living on the date annuity payments are to begin. Unless
another choice is made, the Company will pay the annuitant a series of payments
in the form of a life annuity with 120 monthly payments certain, the second
option in Article 7. These payments will begin on the normal annuity date.
5.03 OPTIONAL ANNUITY DATE AND OPTIONAL SETTLEMENT
Before annuity payments begin, an optional annuity date or a different annuity
income option may be elected by the owner. The optional annuity date may be the
first day of any month not later than the normal annuity date. The election must
be made at least 31 days before the optional annuity date. Any of the annuity
income options may be elected provided that an annuity elected under Option Five
in Article 7 may only be a fixed annuity. The account value on the optional
annuity date will be applied.
5.04 MINIMUM AMOUNT TO PAYEE
If any annuity income payment from any separate account series is less than $50,
the Company may change the payment interval so that the payment is greater than
$50.
ARTICLE 6 SETTLEMENT ON DEATH
6.01 SETTLEMENT ON DEATH OF THE ANNUITANT BEFORE THE ANNUITY DATE
If the annuitant who is also the owner dies before the annuity date, settlement
will be made in accordance with Section 6.02.
If the annuitant who is not the owner dies before the annuity date:
1. If the owner is a natural person, the owner will become the annuitant.
2. If the owner is not a natural person, a) the cash value will be paid in a
lump sum to the owner; or b) the contract will be transferred to a natural
person in accordance with the owner's written instructions. In such case, the
transferee shall become the owner and the annuitant.
6.02 SETTLEMENT ON DEATH OF THE OWNER BEFORE THE ANNUITY DATE
If there are joint owners, the death of any of the owners shall be considered
the death of the owner and cause the settlement under this section.
If the owner dies before the annuity date and the beneficiary is the owner's
spouse, the spouse shall be deemed to be the owner and succeed to all rights
under this contract.
If the owner dies before the annuity date and the beneficiary is not the spouse
of the owner, the beneficiary may elect:
1. To receive annuity income under Annuity Income Options One, Two, or Five
described in Article 7. Election of an annuity income option is subject to the
following conditions:
a. Annuity payments must begin within one year of the owner's death;
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b. The guaranteed period under Option Two or the designated period under Option
Five may not be longer than the beneficiary's life expectancy under the
applicable tables specified by the Internal Revenue Service; and
c. The account value as of the date of the first annuity income payment will be
applied. OR
2. To receive a lump sum settlement equal to the cash value on the date the
payment is made. The lump sum settlement will be equal to the larger of:
a. The purchase payments less amounts already applied to produce annuity income,
and less any prior partial surrenders; or
b. The account value.
In any event, distribution under the lump sum option above must be made within 5
years of the death of the owner.
If there is more than one named beneficiary living at the time of the owner's
death, each will share in the proceeds equally, unless the owner has elected
otherwise.
If the owner outlives all beneficiaries, the contract proceeds will be paid to
the owner's estate in a lump sum.
No beneficiary will have the right to assign, anticipate or commute any future
payments under any of the options, except as provided in the election or by law.
The rights to the proceeds will pass as if the owner outlived the beneficiary
if:
a. The beneficiary dies at the same time as the owner; or
b. The beneficiary dies within 15 days of the owner's death and prior to the
date due proof of the owner's death is received. Due proof of death will be a
certified death certificate, an attending physician's statement, a decree of a
court of competent jurisdiction as to the finding of death, or such other
documents as the Company may, at its option, accept.
6.03 SETTLEMENT ON DEATH OF A PAYEE AFTER THE ANNUITY DATE
Upon the death of a payee, any remaining payments certain under Options Two,
Three or Five in Article 7 will be paid to the named beneficiary.
If no beneficiary is alive at the payee's death, the payee's estate will receive
a lump sum payment. This lump sum will be the present value of the remaining
payments certain at the payee's death.
If, as the result of a payee's death, variable life annuity payments are being
continued to a beneficiary, that beneficiary may elect at any time to receive in
a lump sum the present value of the remaining number of payments certain.
All present values will be computed on the basis of the interest rates used to
compute the benefit.
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ARTICLE 7 ANNUITY INCOME
7.01 ANNUITY INCOME OPTIONS
Except as may be limited by Articles 5 and 6, the account value can be applied
to these annuity income options.
a. Option One-Life Annuity
A series of annuity income payments made monthly during the payee's life. The
payments will stop with the last payment due before the death of the payee. No
further payments will be made after the death of the payee.
b. Option Two-Life Annuity with 120, 180 and 240 Monthly Payments Certain
A series of annuity income payments made monthly for the guaranteed period
elected and thereafter during the payee's life. The guaranteed period may be
120, 180 and 240 months. If the payee dies before the end of the guaranteed
period, payments for the remainder of the guaranteed period will be paid to the
beneficiary.
C. Option Three-Installment Refund Life Annuity
A series of annuity income payments made monthly during the payee's life. If the
payee dies before receiving the "minimum number" of payments, payments will
continue to the beneficiary. The "minimum number" of payments is equal to the
amount applied under this option divided by the first monthly payment. Any
payments made after the death of the payee will stop when the Company has paid
out a total number of payments equal to the "minimum number" of payments.
d. Option Four-Joint and Full to Survivor Annuity
A series of annuity income payments made monthly during the lifetime of both of
two payees. If one of the payees dies, the payments will continue to the other.
The payments will end with the last payment due before the death of the
remaining payee.
e. Option Five-Designated Period Annuity-Fixed Dollar Only
A series of fixed annuity income payments made monthly for a period of years.
Any number of years from 5 through 30 may be chosen. Payments will be made to
the payee or beneficiary even if the payee dies. Payments will stop at the end
of the period selected.
f. Other options may be available as agreed to by the Company.
7.02 ALTERNATE ANNUITY INCOME RATES
If settlement is made under any annuity income option, payment will be based on
the larger of the following:
(a) The Company's current annuity settlement option rates applicable to this
contract.
(b) The annuity purchase rates shown in Article 9.
7.03 ALTERNATE ASSUMED INVESTMENT RETURNS
If allowed by the laws of the state in which this contract is issued, the owner
may elect variable annuity benefits determined on an assumed investment return
of 3.50%, 5%, Or 6%, in lieu of the 4.25% return assumed in the contract.
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ARTICLE 8 METHOD OF CALCULATING ANNUITY INCOME PAYMENTS
8.01 DETERMINATION OF MONTHLY GUARANTEED MINIMUM FIXED DOLLAR
ANNUITY PAYMENTS
The payment amounts shown in Tables 1 and 2 in Article 9 will be used to
determine the monthly payments under a fixed payment option. The tables show
the dollar amount of the monthly payments that can be purchased with each
$1,000 of the general account's annuity value, after deduction of any
applicable premium taxes. Amounts shown use the 1983 Table "a" Individual
Annuity Mortality Table modified, with an interest rate of 3% per year.
8.02 DETERMINATION OF MONTHLY VARIABLE ANNUITY PAYMENTS FOR THE FIRST YEAR
Variable annuity payments will be determined on the last valuation date of the
second calendar week preceding the annuity date, and will remain the same for
one year from that date. Amounts may vary each year thereafter.
The age of payees born after 1915 must be adjusted using the following Table.
Adjusted ages for payees born after 1995 are available from the Company. The
payee's actual age will be based on the birthday nearest the time the first
payment is due.
Calendar Year
of Birth Adjusted Age
1915 or Prior........................ Actual Age
1916-1935............................ Actual Age Minus 1
1936-1955............................ Actual Age Minus 2
1956-1975............................ Actual Age Minus 3
1976-1995............................ Actual Age Minus 4
THESE ADJUSTMENTS APPLY ONLY TO TABLES 3 AND 4 SHOWN ON THE NEXT PAGES. THESE
AGE ADJUSTMENTS DO NOT APPLY TO ANY OTHER ANNUITY INCOME RATES UNLESS SO
SPECIFIED BY THE COMPANY.
Tables 3 and 4 show the factors used to determine variable annuity income
payments based on a 4.25% assumed investment return. They are based on the
Modified Select Security First Annuity Mortality Table projected to the year
2000 on projection scale C (modified) and 4.25% interest, reduced for the first
10 years of any period certain by 1%.
The monthly payment for the first year is determined by:
(a) dividing the separate account annuity value by $1,000.
(b) multiplying the result from (a) by the annuity premium rate shown in
column 1 of Table 3 or 4 for the option elected for the adjusted age of the
payee, and
(c) multiplying the result of (b) by the monthly payment factor in column 2
of Table 3 or 4.
If there are values in more than one separate account series, the Company will
determine the monthly payment for each series as described above.
8.03 NUMBER OF ANNUITY UNITS
The number of annuity units for any series is determined by dividing the first
year monthly payment by the separate account annuity unit value for that series
for the valuation period that includes the settlement date. The number of
annuity units thus determined will not change unless the owner transfers
annuity units from one separate account to another. Such annuity units
transferred will be based on the same assumed investment return.
8.04 DETERMINATION OF MONTHLY VARIABLE ANNUITY PAYMENTS FOR THE SECOND
AND SUBSEQUENT YEARS
The amounts of the second and subsequent years monthly variable annuity
payments are not predetermined, and may change from year to year, based on the
variations in the annuity unit value. The annuity unit value varies with the
variations of net investment results above and below the assumed investment
return.
SF-135-R2V-12
12
13
As of each anniversary of the settlement date, the Company will determine the
amount of monthly payments for each series for the year then beginning. This
will be determined by multiplying the number of separate account annuity units
for that series by the annuity unit value for the same series for the valuation
period in which the first payment for that year is due.
The Company guarantees that the amount of each variable annuity payment will not
be affected by variations in the mortality experience of payees nor by expenses
incurred by the Company in the administration of such benefits.
8.05 SEPARATE ACCOUNT ANNUITY UNIT VALUES
The separate account annuity unit value for each series was originally
established at $5. This value for any subsequent valuation period is determined
for each series by:
(a) multiplying the annuity unit value of the series for the immediately
preceding valuation period by
(b) the annuity change factor for the second preceding valuation period.
The annuity change factor for any valuation period is determined for each series
by dividing:
(a) the accumulation unit value at the end of the valuation period by
(b) the accumulation unit value at the end of the previous valuation period, and
multiplying the result by
(c) the interest neutralization factor.
For a weekly valuation period and a 4.25% assumed investment return, the
interest neutralization factor is 0.9991999.
13
14
ARTICLE 9
ANNUITY PURCHASE RATES
GUARANTEED DOLLAR AMOUNT OF MONTHLY PAYMENT THAT
IS PURCHASED WITH EACH $1,000 APPLIED
Table 1 LIFE ANNUITIES -- Fixed Dollar
---------------------------------------------------------------------------------------------------------------------------------
SINGLE LIFE ANNUITIES JOINT AND FULL TO SURVIVOR
---------------------------------------------------------------------------------------------------------------------------------
No 120 180 240
Period Months Months Months Installment Both Monthly
Age Certain Certain Certain Certain Refund Age Payment
---------------------------------------------------------------------------------------------------------------------------------
60 $ 5.00 $ 4.90 $ 4.77 $ 4.58 $ 4.67 60 $ 4.26
61 5.13 5.02 4.87 4.65 4.77 61 4.34
62 5.26 5.13 4.96 4.72 4.87 62 4.44
63 5.41 5.26 5.06 4.79 4.97 63 4.53
64 5.56 5.39 5.16 4.85 5.08 64 4.64
65 5.73 5.52 5.26 4.92 5.20 65 4.75
66 5.90 5.67 5.37 4.98 5.32 66 4.86
67 6.09 5.81 5.48 5.04 5.45 67 4.99
68 6.29 5.97 5.58 5.10 5.59 68 5.12
69 6.50 6.13 5.69 5.15 5.73 69 5.27
70 6.74 6.30 5.79 5.20 5.89 70 5.42
71 6.98 6.47 5.90 5.25 6.05 71 5.59
72 7.25 6.65 6.00 5.29 6.22 72 5.76
73 7.54 6.83 6.09 5.33 6.40 73 5.95
74 7.85 7.02 6.19 5.36 6.59 74 6.15
75 8.18 7.20 6.27 5.39 6.79 75 6.37
---------------------------------------------------------------------------------------------------------------------------------
Any payee who is over age 85 at the date annuity payments are due will be
considered as actual age 85 on that date. Monthly payments for ages not shown
will be furnished by the Company on request.
Table 2
---------------------------------------------------------------------------------------------------------
DESIGNATED PERIOD ANNUITIES -- Fixed Dollar
---------------------------------------------------------------------------------------------------------
Years of Amount of Years of Amount of Years of Amount of
Payments Monthly Payment Payments Monthly Payment Payments Monthly Payment
---------------------------------------------------------------------------------------------------------
5 $17.91 14 $ 7.26 23 $ 4.99
6 15.14 15 6.87 24 4.84
7 13.16 16 6.53 25 4.71
8 11.68 17 6.23 26 4.59
9 10.53 18 5.96 27 4.47
10 9.61 19 5.73 28 4.37
11 8.86 20 5.51 29 4.27
12 8.24 21 5.32 30 4.18
13 7.71 22 5.15
---------------------------------------------------------------------------------------------------------
SF-135-R2V-14
14
15
ANNUITY PREMIUM RATES PER $ 1,000 OF VALUE APPLIED (Column (1) AND
MONTHLY PAYMENT FACTORS (Column (2))
Table 3 SINGLE LIFE ANNUITIES-VARIABLE
-------------------------------------------------------------------------------------------------------------------------------
MONTHLY PAYMENTS CERTAIN
-------------------------------------------------------------------------------------------------------------------------------
Adjusted None 120 180 240
Age of
Payee (1) (2) (1) (2) (1) (2) (1) (2)
-------------------------------------------------------------------------------------------------------------------------------
60 62.596 .08946 61.992 .08713 60.305 .08611 58.126 .08539
61 63.710 .08975 63.123 .08723 61.294 .08614 58.873 .08538
62 64.922 .09003 64.340 .08730 62.333 .08614 59.628 .08535
63 66.252 .09028 65.653 .08736 63.424 .08613 60.387 .08532
64 67.715 .09049 67.068 .08739 64.564 .08611 61.142 .08527
65 69.298 .09072 68.578 .08741 65.743 .08607 61.884 .08523
66 71.005 .09101 70.199 .08742 66.959 .08603 62.606 .08518
67 72.817 .09137 71.905 .08744 68.191 .08599 63.294 .08513
68 74.732 .09180 73.692 .08747 69.430 .08595 63.941 .08508
69 76.751 .09231 75,557 .08751 70.665 .08590 64.539 .08503
70 78.880 .09290 77.496 .08755 71.886 .08586 65.082 .08499
71 81.010 .09372 79.469 .08763 73.069 .08583 65.563 .08495
72 83.231 .09465 81.498 .08770 74.214 .08579 65.984 .08491
73 85.539 .09570 83.575 .08777 75.309 .08574 66.347 .08487
74 87.982 .09683 85.701 .08781 76.345 .08568 66.657 .08483
75 90.293 .09833 87.805 .08788 77.293 .08563 66.912 .08480
-------------------------------------------------------------------------------------------------------------------------------
Table 4 JOINT AND FULL TO SURVIVOR-VARIABLE
--------------------------------------------------------------------------------
Adjusted NO PAYMENTS CERTAIN
Age of
Both Payees (1) (2)
--------------------------------------------------------------------------------
60 57.810 .08526
61 58.742 .08535
62 59.741 .08545
63 60.817 .08554
64 61.976 .08564
65 63.220 .08575
66 64.548 .08594
67 65.961 .08616
68 67.460 .08643
69 69.049 .08674
70 70.732 .08711
71 72.468 .08758
72 74.294 .08813
73 76.208 .08875
74 78.229 .08943
75 80.243 .09032
Any Payee who over age 85 at the date annuity payments are due will be
considered as actual age 85 on that date.
Factors for adjusted ages not shown will be furnished by the Company on request.
15
16
[SECURITY FIRST LOGO]
LIFE INSURANCE
COMPANY
XXXXXX OF SURRENDER CHARGE ENDORSEMENT
This endorsement is attached to and made a part of Policy Form SF-135R2V.
The Contract is amended as follows:
l. Section 3.09, Cash Value, is amended by deleting the last sentence of the
Section and inserting the following:
"The percentage is 100% for all purchase payments."
2. Section 3.10, Free Withdrawal Amount, is deleted in its entirety.
Any Section(s) referencing Sections 3.09 and 3.10 are also amended as described
above.
/s/ XXXXXXX X. XXXXXXX
----------------------
Xxxxxxx X. Xxxxxxx
President
SF-1554
17
ANNUITY
CONTRACT
Flexible Payment Deferred Annuity
Providing Fixed and Variable Benefits
10-Year Certain Life Annuity
Starting on the Annuity Date
Non-Participating
No Dividends
[SECURITY FIRST LOGO]
LIFE INSURANCE
COMPANY
SECURITY FIRST
LIFE INSURANCE COMPANY
1300 Delaware Trust Building
P.O. Box 25130
Wilmington, Delaware 19899
18
[SECURITY FIRST LIFE INSURANCE COMPANY LOGO]
DEATH BENEFIT RIDER
Effective as of the Contract Date of this Contract, Section 6.02 is amended to
read as follows:
6.02 SETTLEMENT ON DEATH OF THE OWNER BEFORE THE ANNUITY DATE
If there are joint owners, the death of any of the owners shall be considered
the death of the owner and cause settlement under this section.
Except as otherwise provided below, upon the death of the owner prior to the
annuity date the Company will pay a death benefit to the beneficiary as
settlement of the Contract. If the owner (or the oldest of the joint owners) is
age 75 or younger on the contract date, the death benefit shall equal the
greater of:
a. The amount of purchase payments received under the contract, reduced by
amounts already applied to produce annuity income payments or for any prior
partial surrenders; or
b. The account value at the time of settlement.
If the owner (or the oldest of any joint owners) is age 76 or older on the
contract date, the death benefit shall equal the account value at the time of
settlement.
The beneficiary may elect to receive the death benefit as either:
a. Annuity income under Annuity Income Options One, Two, or Five described in
Article 7, provided that an election of an annuity income option is subject to
the following conditions: (1) annuity payments must begin within one year of
the date of death of the owner; (2) the guaranteed period under Option Two or
the designated period under Option Five may not be longer than the
beneficiary's life expectancy under the applicable tables specified by the
Internal Revenue Service; and (3) the account value as of the date of the first
annuity income payment will be used to determine the amount of the death
benefit to be applied; or
b. A lump sum payment, provided that this payment shall be made within
five (5) years of the date of death of the owner.
If the sole beneficiary is the spouse of the owner, the spouse may elect prior
to settlement to succeed to all rights of the owner under this contract.
If there is more than one beneficiary living at the time of the owner's death,
each will share in the proceeds of the death benefit equally, unless the owner
has elected otherwise. If the owner outlives all beneficiaries, the death
benefit will be paid to the owner's estate in a lump sum. No beneficiary shall
have the right to assign, anticipate or commute any future payments under any
of the options, except as provided in the election or by law.
Rights to the death benefit will pass as if the owner outlived the beneficiary
if:
a. The beneficiary dies at the same time as the owner; or
b. The beneficiary dies within 15 days of the owner's death and prior to
the date due proof of the owner's death is received.
Due proof of death will be a certified death certificate, an attending
physician's statement, a decree of a court of competent jurisdiction as to the
finding of death, or such other documents as the Company may, at its option,
accept.
/s/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx
President
