Exhibit 1.A (5)(a)(iii)
SECURITY LIFE OF DENVER
INSURANCE COMPANY
INSURED: XXXX XXX
POLICY DATE: May 27, 1997
POLICY NUMBER: 60000001
STATED DEATH BENEFIT: $150,000.00
WE AGREE TO PAY the death benefit to the Beneficiary upon the death of the
Insured while this Policy is in force.
WE AGREE TO PAY your Net Account Value to you as of the Maturity Date if the
Insured is living on that date.
WE ALSO AGREE to provide the other rights and benefits of the Policy. These
agreements are subject to the provisions of the Policy.
RIGHT TO EXAMINE POLICY PERIOD. You have the right to examine and return this
Policy within 10 days after receipt. The policy will be deemed to have been
received by you 5 days after the policy is mailed from our Customer Service
Center.
The Policy may be returned by delivering or mailing it to us at our Customer
Service Center. Immediately upon return it will be deemed void as of the Policy
Date. Upon return of the Policy to us, we will refund all premiums paid.
In this Policy "you" and "your" refer to the Owner of the Policy. "We", "us"
and "our" refer to Security Life of Denver Insurance Company.
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxxxxxx
Secretary President
THIS POLICY IS A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY.
DISCLOSURE OF GUARANTY FUND NONPARTICIPATION.
DEATH BENEFITS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE. THESE VALUES MAY
INCREASE OR DECREASE BASED ON INVESTMENT EXPERIENCE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. DEATH BENEFITS ARE PAYABLE BY US UPON THE DEATH OF THE
INSURED PRIOR TO THE MATURITY DATE. YOUR NET ACCOUNT VALUE, IF ANY, IS PAYABLE
BY US IF THE INSURED IS LIVING AS OF THE MATURITY DATE. FLEXIBLE PREMIUMS ARE
PAYABLE BY YOU DURING THE LIFETIME OF THE INSURED UNTIL THE MATURITY DATE.
SECURITY LIFE OF DENVER INSURANCE COMPANY
A Stock Company
Customer Service Center
[P.O. Box 173763, Denver, Colorado 80217-3763
Toll Free Number: 0(000)000-0000]
Form 1197 (VUL) - TX - 5/97
IMPORTANT NOTICE
To obtain information or make a complaint:
1. You may contact your Client Service Representative 0-000-000-0000.
2. You may call Security Life of Denver's toll-free telephone number for
information or to make a complaint at:
0-000-000-0000
3. You may also write to Security Life of Denver at:
P.O. box 173763
Denver, CO 00000-0000
4. You may contact the Texas Department of Insurance to obtain information on
companies, coverages, rights or complaints at:
0-000-000-0000
5. You may write the Texas Department of Insurance
P.O. Box 149104
Austin, TX 00000-0000
FAX# (000) 000-0000
6. PREMIUM OR CLAIM DISPUTES:
Should you have a dispute concerning your premium or about a claim you
should contact Security Life of Denver first. If the dispute is not
resolved, you may contact the Texas Department of Insurance.
7. ATTACH THIS NOTICE TO YOUR POLICY: This notice is for information only and
does not become a part or condition of the attached document.
AVISO IMPORTANTE
Para obtener informacion o para someter una xxxxx:
1. Puede comunicarse con su Client Service Representative al 0-000-000-0000.
2. Usted puede llamar al numero de telefono gratis de Security Life of
Denver's para informacion o para someter una xxxxx al
0-000-000-0000
3. Usted tambien puede escribir a
Security Life of Denver
P.O. Box 173763
Denver, CO 80217-3763
4. Puede comunicarse con el Departamento de Seguros de Texas para obtener
informacion acerca de companias, coberturas, derechos oquejas al
0-000-000-0000
5. Puede escribir al Departamento de Seguros de Texas
P.O. Box 149104
Austin, TX 00000-0000
FAX# (000) 000-0000
6. DISPUTAS SOBRE XXXXXX O RECLAMOS: Si tiene una disputa concernmiente a su
prima o a un reclamo, debe comunicarse con el Security Life of Denver
primero. Si no se resuelve la disputa, puede entonces comunicarse con el
departamento (TDI).
7. UNA ESTE AVISO A SU POLIZA: Este aviso es solo para proposito de
informacion y no se convierteen parte o condicion del documents adjunto.
E-1294-TX
TABLE OF CONTENTS
SCHEDULE...................................................................
DEFINITION OF TERMS........................................................ 5
INSURANCE COVERAGE PROVISIONS.............................................. 6
INITIAL PREMIUM ALLOCATION............................................ 7
VALUATION DATE........................................................ 7
VALUATION PERIOD...................................................... 7
EFFECTIVE DATE OF COVERAGE............................................ 7
PAYOUT OF PROCEEDS.................................................... 7
BASE DEATH BENEFIT.................................................... 8
CHANGE IN REQUESTED INSURANCE COVERAGE................................ 8
Requested Increases in Coverage.................................. 9
Requested Decreases in Coverage.................................. 9
Death Benefit Option Changes..................................... 9
PREMIUM PROVISIONS......................................................... 10
SCHEDULED PREMIUMS.................................................... 10
UNSCHEDULED PREMIUMS.................................................. 10
PREMIUM LIMITATION.................................................... 11
PREMIUM ALLOCATION.................................................... 11
VARIABLE ACCOUNT PROVISIONS................................................ 11
THE VARIABLE ACCOUNT.................................................. 11
VARIABLE ACCOUNT DIVISIONS............................................ 11
CHANGES WITHIN THE VARIABLE ACCOUNT................................... 11
GENERAL ACCOUNT PROVISIONS................................................. 12
THE GENERAL ACCOUNT................................................... 13
GUARANTEED INTEREST DIVISION.......................................... 13
LOAN DIVISION......................................................... 13
................................................................... 13
Form 1197 (VUL)
Page 2
TRANSFER PROVISIONS........................................................ 13
TRANSFERS TO OR FROM THE GUARANTEED INTEREST DIVISION................. 13
EXCESS TRANSFER CHARGE................................................ 14
DOLLAR COST AVERAGING................................................. 14
AUTOMATIC REBALANCING................................................. 15
ACCOUNT VALUE PROVISIONS................................................... 15
NET PREMIUM........................................................... 16
ACCOUNT VALUES ON THE INVESTMENT DATE................................. 16
ACCUMULATION UNIT VALUE............................................... 16
ACCUMULATION EXPERIENCE FACTOR........................................ 16
ACCOUNT VALUE OF THE DIVISIONS OF THE VARIABLE ACCOUNT................ 17
ACCOUNT VALUE OF THE GUARANTEED INTEREST DIVISION..................... 17
ACCOUNT VALUE OF THE LOAN DIVISION.................................... 17
MONTHLY DEDUCTION AND REFUND............................................... 18
MONTHLY DEDUCTION..................................................... 18
COST OF INSURANCE..................................................... 18
PERSISTENCY REFUND.................................................... 19
LOAN PROVISIONS............................................................ 19
POLICY LOANS.......................................................... 19
LOAN INTEREST......................................................... 19
LOAN DIVISION......................................................... 20
PARTIAL WITHDRAWAL PROVISIONS.............................................. 20
SURRENDER PROVISIONS....................................................... 21
SURRENDER VALUE....................................................... 21
SURRENDER CHARGES..................................................... 21
BASIS OF COMPUTATIONS................................................. 22
FULL SURRENDERS....................................................... 22
GRACE PERIOD, TERMINATION AND REINSTATEMENT PROVISIONS..................... 22
GRACE PERIOD.......................................................... 22
THREE YEAR CONTINUATION PERIOD........................................ 23
Form 1197 (VUL) - TX
Page 3
TERMINATION........................................................... 23
REINSTATEMENT......................................................... 23
DEFERRAL OF PAYMENT................................................... 24
GENERAL POLICY PROVISIONS.................................................. 24
THE POLICY............................................................ 24
AGE................................................................... 24
PROCEDURES............................................................ 24
OWNERSHIP............................................................. 25
BENEFICIARIES......................................................... 25
EXCHANGE RIGHT........................................................ 25
COLLATERAL ASSIGNMENT................................................. 25
INCONTESTABILITY...................................................... 25
MISSTATEMENT OF AGE OR SEX............................................ 26
SUICIDE EXCLUSION..................................................... 26
PERIODIC REPORTS...................................................... 26
ILLUSTRATION OF BENEFITS AND VALUES................................... 26
NONPARTICIPATING...................................................... 26
CUSTOMER SERVICE CENTER............................................... 26
PAYOUTS OTHER THAN AS ONE SUM.............................................. 26
ELECTION.............................................................. 26
PAYOUT OPTIONS........................................................ 27
CHANGE AND XXXXXXXXXX................................................. 27
EXCESS INTEREST....................................................... 28
MINIMUM AMOUNTS....................................................... 28
SUPPLEMENTARY POLICY.................................................. 28
INCOME PROTECTION..................................................... 28
DEATH OF PRIMARY PAYEE................................................ 28
PAYMENTS OTHER THAN MONTHLY........................................... 28
SETTLEMENT OPTION TABLES I................................................. 29
SETTLEMENT OPTION TABLES II ............................................... 30
Additional benefits or riders, if any, will be listed in the Schedule. The
additional provisions will be inserted in the Policy.
Form 1197 (VUL)
Page 4
SCHEDULE
(Effective Date: May 1, 1995)
POLICY INFORMATION
Policy Number 61000001 Minimum Stated Death Benefit $50,000.00
Insured XXXX XXX
Death Benefit Option OPTION 1: GP/CVC
LEVEL DB
Three Year Continuation Period
Ending Date May, 1998
Age And Sex 35, Male Three-Year Continuation Period
Minimum Annual Premium $529
Premium Class High Band Non-Smoker
Policy Date May 1, 1995 Scheduled Premium $1,600
Maturity Date May 1, 2060
Definition of Life Insurance Test: Guideline Premium
CUSTOMER SERVICE CENTER: [P.O. Box 173763, Denver, Colorado 80217-3763]
Coverage will expire prior to the Maturity Date if the Account Value is
insufficient to continue coverage and the Three-Year Continuation Period has
ended. Coverage will also be affected by Partial Withdrawals, Policy Loans,
changes in the current cost of insurance rates, the actual credited interest
rate for the Guaranteed Interest Division and the investment experience of the
Variable Account.
Form 1197 (VUL) - TX
Page 5
SCHEDULE (CONTINUED)
BENEFIT PROFILE
------------------------------------------------------------------------------------------------------------------------------------
Initial Segment Guideline
Benefit Issue Age At Effective Annual Target
Description Amount Age Maturity Date Date Premium Premium
------------------------------------------------------------------------------------------------------------------------------------
Stated Death Benefit (Segment #1) $100,000.00 35 100 May 1, 1995 $1,288.02 $800.00
------------------------------------------------------------------------------------------------------------------------------------
Form 1197 (VUL)
Page 5A
SCHEDULE (CONTINUED)
ALLOCATION OF INITIAL PREMIUM AS SHOWN ON APPLICATION
[Xxxxxxxxx & Xxxxxx Limited Maturity Bond] 0%
[Xxxxxxxxx & Xxxxxx Growth ] 0%
[Xxxxxxxxx & Xxxxxx Government Income ] 25%
[Xxxxxxxxx & Xxxxxx Partners] 25%
[Xxxxx American Growth Division] 0%
[Xxxxx American Leveraged All Cap Division] 25%
[Xxxxx American MidCap Growth] 0%
[Xxxxx American Small Capital] 0%
[Fidelity Asset Manager ] 0%
[Fidelity Growth ] 25%
[Fidelity Overseas ] 0%
[Fidelity Money Market ] 0%
[Fidelity Index 500 ] 0%
[INVESCO Total Return ] 0%
[INVESCO Industrial Income ] 0%
[INVESCO High Yield ] 0%
[INVESCO Utilities ] 0%
[Xxx Xxx Worldwide Balanced ] 0%
[Xxx Xxx Gold and Natural Resources ] 0%
Guaranteed Interest Division 0%
If you elect to invest in a particular Division, at least 1% of your Net Premium
must be allocated to that Division provided that the allocation to each Division
selected is at least $100. All percentage allocations must be in whole numbers.
Form 1197 (VUL)
Page 5B
SCHEDULE (CONTINUED)
EXPENSE CHARGES
PREMIUM EXPENSE CHARGES (As a Percent of all Premiums):
Sales Load:
Segment Issue Age Sales Load
0 - 49 2.25%
50 - 59 3.25%
60+ 4.25%
State and Local Taxes: 2.5%
Federal Deferred Acquisition Cost Charge: 1.5%
We reserve the right to increase or decrease the Premium Expense
Charges for taxes due to any change in tax law. We further reserve the
right to increase or decrease the Premium Expense Charges for Federal
deferred acquisition costs due to any change in the cost to us.
MONTHLY EXPENSE CHARGES:
$13.00 per Policy month for the first 36 months
$3.00 per Policy month thereafter; plus
$.0125 per thousand of Stated Death Benefit (or Target Death Benefit,
if greater), all years. The per thousand charge is limited to
$15.00 per Policy month.
ANNUAL MORTALITY AND EXPENSE RISK CHARGE (Based on the percentage of assets in
each Variable Account Division)
Mortality And Expense Risk Charge 0.75%
Form 1197 (VUL) - TX
Page 5C
SCHEDULE (CONTINUED)
SURRENDER CHARGES
The maximum Surrender Charges which pertain to the insurance coverages
shown in the Schedule are shown in the following table. This table may change
upon any increases and/or decreases in the Policy's Stated Death Benefit.
--------------------------------------------
SURRENDERS
DURING THE
POLICY YEAR TOTAL MAXIMUM
ENDING SURRENDER CHARGE
--------------------------------------------
1996 $650.00
----------------------------------------------
1997 $650.00
----------------------------------------------
1998 $650.00
----------------------------------------------
1999 $650.00
----------------------------------------------
2000 $650.00
----------------------------------------------
2001 $650.00
----------------------------------------------
2002 $650.00
----------------------------------------------
2003 $568.75
----------------------------------------------
2004 $487.50
----------------------------------------------
2005 $406.25
----------------------------------------------
2006 $325.00
----------------------------------------------
2007 $243.75
----------------------------------------------
2008 $162.50
----------------------------------------------
2009 $ 81.25
----------------------------------------------
2010 0
----------------------------------------------
ADMINISTRATIVE SURRENDER CHARGE TABLE
------------------------------------------------------------
ADMINISTRATIVE SURRENDER
SEGMENT CHARGE PER THOUSAND OF
ISSUE AGE STATED DEATH BENEFIT
------------------------------------------------------------
------------------------------------------------------------
0 - 39 $2.50
------------------------------------------------------------
40 - 49 $3.50
------------------------------------------------------------
50 - 59 $4.50
------------------------------------------------------------
60 - 69 $5.50
------------------------------------------------------------
70 and above $6.50
------------------------------------------------------------
This charge is reduced by 12.5% per year starting 7 Policy years after the
segment's Effective Date until it reaches zero at the beginning of the 15th
Policy year following that segment's Effective Date or the Policy year in which
the insured reaches age 98, whichever is earlier.
Form 1197 (VUL)
Page 5D
SCHEDULE (CONTINUED)
POLICYHOLDER TRANSACTION CHARGES
Requests for Sales Illustrations: $25
Premium Allocation Changes: $25 for each change over 5 per Policy year
Excess Transfer Charge: See the Transfer Provisions section
Partial Withdrawal Service Fee: See below
POLICY LOANS
Policy Loan Interest Rate: 3.75% per year
Guaranteed Interest Rate Credited to Loan Division: 3.00% per year
Minimum Loan Amount: $100
Maximum Loan Amount: See the Loan Provisions
section.
PARTIAL WITHDRAWALS
Minimum Partial Withdrawal Amount: $100
Maximum Partial Withdrawal Amount: Amount which will leave
$500 as the net Cash
Surrender Value
Partial Withdrawal Service Fee: The lesser of $25 or
2% of the amount
withdrawn
Limit on Partial Withdrawals: One per Policy year
GUARANTEED INTEREST DIVISION
Guaranteed Interest Rate For Guaranteed Interest Division: 3.00% per year
SCHEDULE (CONTINUED)
DEFINITION OF LIFE INSURANCE
DEATH BENEFIT FACTORS
ATTAINED FACTOR ATTAINED FACTOR ATTAINED FACTOR ATTAINED FACTOR
AGE AGE AGE AGE
------------------------------------------------------------------------
0-40 2.50
------------------------------------------------------------------------
------------------------------------------------------------------------
41 2.43 56 1.46 71 1.13 86 1.05
------------------------------------------------------------------------
42 2.36 57 1.42 72 1.11 87 1.05
------------------------------------------------------------------------
43 2.29 58 1.38 73 1.09 88 1.05
------------------------------------------------------------------------
44 2.22 59 1.34 74 1.07 89 1.05
------------------------------------------------------------------------
45 2.15
------------------------------------------------------------------------
60 1.30 75 1.05 90 1.05
------------------------------------------------------------------------
46 2.09 61 1.28 76 1.05 91 1.04
------------------------------------------------------------------------
47 2.03 62 1.26 77 1.05 92 1.03
------------------------------------------------------------------------
48 1.97 63 1.24 78 1.05 93 1.02
------------------------------------------------------------------------
49 1.91 64 1.22 79 1.05 94 1.01
------------------------------------------------------------------------
50 1.85
------------------------------------------------------------------------
65 1.20 80 1.05 95 1.01
------------------------------------------------------------------------
51 1.78 66 1.19 81 1.05 96 1.01
------------------------------------------------------------------------
52 1.71 67 1.18 82 1.05 97 1.01
------------------------------------------------------------------------
53 1.64 68 1.17 83 1.05 98 1.01
------------------------------------------------------------------------
54 1.57 69 1.16 84 1.05 99 1.01
------------------------------------------------------------------------
55 1.50 70 1.15 85 1.05 100 1.00
------------------------------------------------------------------------
------------------------------------------------------------------------
The Base Death Benefit at any time will be at least equal to your Account Value
multiplied by the appropriate factor from this table.
Form 1197 (VUL)
Page 5F
TARGET DEATH BENEFIT SCHEDULE
TABLE OF TARGET DEATH BENEFITS AND
GUARANTEED MAXIMUM COST OF INSURANCE RATES FOR THE ADJUSTABLE TERM INSURANCE
RIDER
----------------------------------------------------------------------------------------------------------------
POLICY TARGET DEATH GUARANTEED POLICY TARGET DEATH GUARANTEED POLICY TARGET DEATH GUARANTEED
YEAR BENEFIT RATES YEAR BENEFIT RATES YEAR BENEFIT RATES
----------------------------------------------------------------------------------------------------------------
1 $150,000.00 0.14083 25 $150,000.00 0.95583 49 $150,000.00 10.31583
2 $150,000.00 0.14750 26 $150,000.00 1.05333 50 $150,000.00 11.34250
3 $150,000.00 0.15667 27 $150,000.00 1.16167 51 $150,000.00 12.43333
4 $150,000.00 0.16667 28 $150,000.00 1.28500 52 $150,000.00 13.56667
5 $150,000.00 0.17833 29 $150,000.00 1.42583 53 $150,000.00 14.73250
----------------------------------------------------------------------------------------------------------------
6 $150,000.00 0.19083 30 $150,000.00 1.58500 81 $150,000.00 15.90750
7 $150,000.00 0.20583 31 $150,000.00 1.76083 55 $150,000.00 17.10750
8 $150,000.00 0.22083 32 $150,000.00 1.95000 56 $150,000.00 18.34917
9 $150,000.00 0.23833 33 $150,000.00 2.15500 57 $150,000.00 19.65333
10 $150,000.00 0.25583 34 $150,000.00 2.37500 58 $150,000.00 21.06250
----------------------------------------------------------------------------------------------------------------
11 $150,000.00 0.27667 35 $150,000.00 2.61500 59 $150,000.00 22.63583
12 $150,000.00 0.29917 36 $150,000.00 2.88583 60 $150,000.00 24.63750
13 $150,000.00 0.32333 37 $150,000.00 3.24250 61 $150,000.00 27.49667
14 $150,000.00 0.34917 38 $150,000.00 3.54667 62 $150,000.00 32.04583
15 $150,000.00 0.37833 39 $150,000.00 3.95333 63 $150,000.00 40.01667
----------------------------------------------------------------------------------------------------------------
16 $150,000.00 0.40917 40 $150,000.00 4.41000 64 $150,000.00 54.83167
17 $150,000.00 0.44583 41 $150,000.00 4.90000 65 $150,000.00 83.33333
18 $150,000.00 0.48833 42 $150,000.00 5.42167
19 $150,000.00 0.53583 43 $150,000.00 5.97000
20 $150,000.00 0.59083 44 $150,000.00 6.53917
----------------------------------------------------------------------------------------------------------------
21 $150,000.00 0.65167 45 $150,000.00 7.14333
22 $150,000.00 0.71917 46 $150,000.00 7.80583
23 $150,000.00 0.79083 47 $150,000.00 8.54333
24 $150,000.00 0.86833 48 $150,000.00 9.37667
----------------------------------------------------------------------------------------------------------------
The Adjustable Term Insurance Rider Death Benefit is the difference between the
Target Death Benefit and the Base Death Benefit provided by the Policy. In no
event will the Adjustable Term Insurance Rider Death Benefit be less than zero.
Refer to your Adjustable Term Insurance Rider for more information.
The guaranteed rates shown FOR THE ADJUSTABLE TERM INSURANCE RIDER are for a
standard rate class. If the Adjustable Term Rider is based on a special rate
class (other than standard), the guaranteed rates will be adjusted using the
rating factor shown in the Schedule for the special class. If the special rate
class is a stated percentage increase, the guaranteed rates will be determined
by multiplying the rates for a standard rate class shown above by the rating
factor shown in the Schedule. If the special rate class is a flat amount per
$1,000, the guaranteed rates will be determined by adding the flat amount per
$1,000 shown in the Schedule to the rate per $1,000 for the standard rate class
shown above. The rates shown above are based on the 1980 Commissioners' Standard
Ordinary Mortality Table, age nearest birthday.
SCHEDULE (CONTINUED)
TABLE OF GUARANTEED RATES
Guaranteed Maximum Cost of Insurance Rates Per $1000
(Basic Policy and Additional Insured Rider)
--------------------------------------------------------------------------------------------------------------------------------
Attained Monthly Cost of Attained Monthly Cost of Attained Monthly Cost of Attained Monthly Cost of
Age Insurance Rate Age Insurance Rate Age Insurance Rate Age Insurance Rate
--------------------------------------------------------------------------------------------------------------------------------
0 0.34900 26 0.12342 51 0.44693 76 5.59039
--------------------------------------------------------------------------------------------------------------------------------
1 0.08921 27 0.12175 52 0.48965 77 6.17549
--------------------------------------------------------------------------------------------------------------------------------
2 0.08254 28 0.12008 53 0.53742 78 6.78686
--------------------------------------------------------------------------------------------------------------------------------
3 0.08170 29 0.12008 54 0.59276 79 7.44038
--------------------------------------------------------------------------------------------------------------------------------
4 0.07920 30 0.12008 55 0.65401 80 8.16249
--------------------------------------------------------------------------------------------------------------------------------
5 0.07503 31 0.12258 56 0.72203 81 8.97320
--------------------------------------------------------------------------------------------------------------------------------
6 0.07169 32 0.12509 57 0.79429 82 9.89813
--------------------------------------------------------------------------------------------------------------------------------
7 0.06869 33 0.12926 58 0.87251 83 10.95204
--------------------------------------------------------------------------------------------------------------------------------
8 0.06338 34 0.13427 59 0.96090 84 12.11846
--------------------------------------------------------------------------------------------------------------------------------
9 0.06169 35 0.14094 60 1.05949 85 13.37460
--------------------------------------------------------------------------------------------------------------------------------
10 0.06085 36 0.14762 61 1.16916 86 14.69860
--------------------------------------------------------------------------------------------------------------------------------
11 0.06419 37 0.15680 62 1.29417 87 16.08129
--------------------------------------------------------------------------------------------------------------------------------
12 0.07086 38 0.16682 63 1.43714 88 17.49682
--------------------------------------------------------------------------------------------------------------------------------
13 0.08254 39 0.17851 64 1.59899 89 18.96601
--------------------------------------------------------------------------------------------------------------------------------
14 0.09588 40 0.19103 65 1.77812 90 20.51212
--------------------------------------------------------------------------------------------------------------------------------
15 0.10756 41 0.20607 66 1.97123 91 22.16549
--------------------------------------------------------------------------------------------------------------------------------
16 0.11924 42 0.22110 67 2.18097 92 23.98724
--------------------------------------------------------------------------------------------------------------------------------
17 0.12842 43 0.23865 68 2.40660 93 26.06643
--------------------------------------------------------------------------------------------------------------------------------
18 0.13343 44 0.25619 69 2.65338 94 28.78427
--------------------------------------------------------------------------------------------------------------------------------
19 0.13844 45 0.27709 70 2.93268 95 32.81758
--------------------------------------------------------------------------------------------------------------------------------
20 0.14011 46 0.29966 71 3.30181 96 39.64294
--------------------------------------------------------------------------------------------------------------------------------
21 0.13927 47 0.32391 72 3.61779 97 53.06605
--------------------------------------------------------------------------------------------------------------------------------
22 0.13677 48 0.34984 73 4.04199 98 83.33333
--------------------------------------------------------------------------------------------------------------------------------
23 0.13427 49 0.37912 74 4.52073 99 83.33333
--------------------------------------------------------------------------------------------------------------------------------
24 0.13093 50 0.41009 75 5.03724
--------------------------------------------------------------------------------------------------------------------------------
25 0.12675
--------------------------------------------------------------------------------------------------------------------------------
The rates shown are for a standard rate class. If the Policy is based on a
special rate class (other than standard), the maximum cost of insurance rates
will be adjusted using the rating factor shown in the Schedule for the special
class. If the special rate class is a stated percentage increase, the maximum
cost of insurance rates will be determined by multiplying the rates for a
standard rate class shown above by the rating factor shown in the Schedule. If
the special rate class is a flat amount per $1,000, the maximum cost of
insurance rates will be determined by adding the flat amount per $1,000 shown in
the Schedule to the rate per $1,000 for the standard rate class shown above.
The rates shown above are based on the 1980 Commissioners' Standard Ordinary
Nonsmoker Mortality Table, age nearest birthday.
DEFINITION OF TERMS
ACCOUNT VALUE - The sum of the amounts allocated to the Divisions of the
Variable Account and to the Guaranteed Interest Division, as well as any amount
set aside in the Loan Division to secure a Policy Loan.
ACCUMULATION UNIT VALUE - The value of the Accumulation Units of each Division
of the Variable Account. The Accumulation Unit Value is determined as of each
Valuation Date.
BASE DEATH BENEFIT - Initially this is the Stated Death Benefit under the
Policy. The Base Death Benefit may be greater than the Stated Death Benefit
depending on which death benefit option and which test for the Federal income
tax law definition of life insurance you choose.
CASH SURRENDER VALUE - The amount of your Account Value minus the Surrender
Charge, if any.
CUSTOMER SERVICE CENTER - Our administrative office at [P.O. Box 173763, Denver,
CO 80217-3763].
DIVISION(S) OF THE VARIABLE ACCOUNT - The investment options available, each of
which invests in shares of one of the Portfolios.
GENERAL ACCOUNT - The account which contains all of our assets other than those
held in the Variable Account or our other separate accounts.
GENERAL INTEREST DIVISION - Part of our General Account to which a portion of
the Account Value may be allocated and which provides guarantees of principal
and interest.
INVESTMENT DATE - The date on which the initial Net Premium we receive will be
allocated to your Policy. We will not allocate funds to your Policy until we
receive at least one quarter of the Minimum Annual Premium as shown in the
Schedule attached to your Policy and we have approved your Policy for issue.
LOAN DIVISION - Part of our General Account in which funds are set aside to
secure any outstanding Policy Loan and accrued loan interest when due.
MATURITY DATE - The date the Policy matures. This is the Policy anniversary on
which the Insured's Age is 100.
MONTHLY PROCESSING DATE - The date each month on which the monthly deductions
from the Account Value are due. The first Monthly Processing Date will be the
Policy Date or the Investment Date, if later. Subsequent Monthly Processing
Dates will be the same date as the Policy Date each month unless this is not a
Valuation Date, in which case the Monthly Processing Date occurs on the next
Valuation Date.
NET ACCOUNT VALUE - The amount of the Account Value minus any Policy Loan and
accrued loan interest.
NET CASH SURRENDER VALUE - The amount of the Cash Surrender Value minus any
Policy Loan and accrued loan interest.
NET PREMIUM - Premium amounts paid less the sales and tax charges. These
charges are deducted from the premiums before the premium is applied to your
Account Value.
PARTIAL WITHDRAWAL - The withdrawal of a portion of your Net Cash Surrender
Value from the Policy. The Partial Withdrawal may cause you to incur a Surrender
Charge, and it may reduce the amount of Death Proceeds in force.
POLICY LOAN - The sum of amounts you have borrowed from your Policy, increased
by any Policy Loan interest capitalized when due, and reduced by any Policy Loan
repayments.
RIGHT TO EXAMINE POLICY PERIOD - The period of time within which the Owner may
examine the Policy and return it for a refund.
SCHEDULED PREMIUM - The premium amount which you specify on the application as
the amount you intend to pay at fixed intervals over a specified period of time.
We will send you premium reminder notices for the amount of the Scheduled
Premium on a quarterly, semiannual, or annual basis, as you determine; you need
not pay the Scheduled Premium, and you may change it at any time. Also, within
limits, you may pay less or more than the Scheduled Premium.
STATED DEATH BENEFIT - The initial amount of Base Death Benefit under the
Policy. The Stated Death Benefit amount will not vary unless you change it.
SURRENDER CHARGE - The charge made against your Account Value in the event of
surrender, Policy lapse, requested reductions in the Stated Death Benefit, or
certain Partial Withdrawals. The Surrender Charge consists of the administrative
Surrender Charge and the sales Surrender Change.
VALUATION PERIOD - The period which begins at 4:00 p.m. Eastern Time on a
Valuation Date and ends at 4:00 p.m. Eastern Time on the next succeeding
Valuation Date.
INSURANCE COVERAGE PROVISIONS
INITIAL PREMIUM ALLOCATION
We will not allocate funds to your Policy until we receive at least one quarter
of the Minimum Annual Premium. The Minimum Annual Premium is listed in the
Schedule. The Valuation Date on which we receive this amount and have approved
your Policy for issue is the Investment Date. As of the Investment Date, the
amount you have asked to be invested in the Divisions of the Variable Account
will be allocated to the [Fidelity Investments Money Market Division]. Any
amount you have designated for allocation to the Guaranteed Interest Division
will be allocated to that Division. The amount allocated to the [Fidelity
Investments Money Market Division] will remain there until the end of the Right
to Examine Policy Period, at which time the balance will be transferred to the
other Divisions of the Variable Account according to the allocations shown in
the Schedule.
VALUATION DATE
A Valuation Date is any day:
a) The New York Stock Exchange ("NYSE") is open for trading and on which
Security Life's Customer Service Center is open for business; or
b) As may be required by law.
VALUATION PERIOD
A Valuation Period begins at 4 p.m. Eastern time on a Valuation Date and ends at
4 p.m. Eastern time on the next succeeding Valuation Date.
All Policy processing for a Valuation Period takes place as of the end of the
Valuation Period.
EFFECTIVE DATE OF COVERAGE
The Policy date shown in the Schedule is the Effective Date for all coverage
provided in the original application. The Effective Date is subject to the
payment of at least one quarter of the Minimum Annual Premium and the acceptance
of the Policy by you during the continued insurability of all persons insured by
this Policy and any riders attached. The Policy date is the date from which we
measure Policy years and determine the Monthly Processing Date. The first
Monthly Processing Date is the Investment Date. Future Monthly Processing Dates
are the same calendar day of each month as the Policy date unless this is not a
Valuation Date in which case the Monthly Processing Date occurs on the next
Valuation Date. A Policy anniversary occurs each year on the same month and day
as the Policy date unless this is not a Valuation Date in which case the Policy
anniversary occurs on the next Valuation Date. If the Policy date is February
29th, the Policy anniversary will be February 28th in years in which there is
not a February 29th. The Effective Date for increases and additional benefits
is shown in the Schedule.
Form 1197(VUL)
Page 7
PAYOUT OF PROCEEDS
The Payout of Proceeds is the amount we will pay:
a) as of the Maturity Date,
b) upon surrender of the Policy before the Maturity Date, or
c) upon the death of the Insured before the Maturity Date.
The Payout of Proceeds as of the Maturity Date will be your Net Account Value.
The Payout of Proceeds upon surrender of this Policy prior to the Maturity Date
will be the net Cash Surrender Value. The Maturity Date is the Policy
anniversary on which the Insured's Age is 100. The Insured's Age is the Age
listed in the Schedule increased by the number of completed Policy years since
the Policy date. The Payout of Proceeds upon the death of the Insured will be
the Base Death Benefit; plus any amounts payable from any additional benefits
provided by rider; minus any outstanding Policy Loan including accrued but
unpaid interest; minus any unpaid monthly deductions incurred prior to the date
of death.
We will determine the amount of proceeds payable upon the death of the Insured
when we have received due proof of death and any other information which is
necessary to process the claim. Any proceeds we pay are subject to adjustments
as provided in the Misstatement of Age or Sex, Suicide Exclusion and
Incontestability provisions.
We will pay Proceeds in one sum unless you request an alternate form of payment.
There are many possible methods of payment. The available Payout Options are
described in the Payouts Other Than As One Sum provision. Contact us or your
agent for additional information. Interest will be paid on the one sum death
Proceeds from the date we determine the death Proceeds to the date of payment,
or until a Payout Option is selected. Interest will be at the rate we declare,
or at any higher rate required by law.
BASE DEATH BENEFIT
The total Stated Death Benefit is the sum of the Stated Death Benefit for all
coverage segments. The Stated Death Benefit for each coverage segment and the
death benefit option are shown in the Schedule. The Base Death Benefit is
determined by the death benefit option which you select as follows:
Option 1 The Base Death Benefit equals the total Stated Death Benefit.
Option 2 The Base Death Benefit equals the total Stated Death Benefit,
plus your Account Value.
Option 3 The Base Death Benefit equals the total Stated Death Benefit,
plus the sum of Premiums paid minus Partial Withdrawals taken.
The Base Death Benefit at any time will be at least equal to your Account Value
multiplied by the appropriate factor from the Definition of Life Insurance
Factors table as shown in the Schedule.
This Policy is designed to qualify as a life insurance contract under the
Internal Revenue Code. All terms and provisions of the Policy shall be
construed in a manner consistent with that design. The amount of insurance in
force at any time shall not be less than the amount of insurance necessary to
achieve such qualification under the applicable provisions of the Internal
Revenue Code in existence at the time the Policy is issued. We reserve the
right to amend the Policy or adjust the amount of insurance when required. We
will send you a copy of any Policy amendment.
CHANGE IN REQUESTED INSURANCE COVERAGE
At least 30 days prior to a Policy Anniversary, you may request that the
insurance coverage be increased or decreased. You may not increase coverage
after the Insured is Age 86. You may change the coverage only once each Policy
year on the Policy anniversary. The change in coverage may not be for an amount
less than $1,000. The Effective Date of the change will be the Policy
anniversary next following the date the written application is approved by us.
After any change to the Stated Death Benefit, you will receive a new Schedule
which will include the Stated Death Benefit, the benefit under any riders, if
applicable, the Guaranteed Cost of Insurance rates, the Guideline Annual
Premium, the new Target Premium and the new Surrender Charge.
REQUESTED INCREASES IN COVERAGE
At least 30 days prior to a Policy anniversary, you may request an increase in
the Stated Death Benefit. An increase will become effective as of the Policy
anniversary after we have approved your application for increase. You must
provide evidence satisfactory to us that the Insured is insurable according to
our normal rules of underwriting for this type of Policy. This evidence will
include an application and may include required medical information. An
increase will consist of a new coverage segment of Stated Death Benefit subject
to our limits.
You will have the right to cancel an increase in the death benefit within the
later of:
a) 45 days after you sign the application for the increase,
b) 20 days after you have received the new Schedule, or
c) 10 days after we mail you the Notice of Withdrawal Right.
The new Schedule will be deemed to have been received by you 15 days after it is
mailed from our Customer Service Center. You may cancel an increase by sending
notice in a form acceptable to us to our Customer Service Center. During this
period, we will allocate the Premiums you pay related to the increase to the
[Fidelity Investments Money Market Division] of the Variable Account. At the
end of this period, the amount of the Premium remaining in the [Fidelity
Investments Money Market Division] will be transferred to the Division of the
Variable Account according to your most recent written allocation instruction.
If you cancel an increase we will refund to you any charges attributable to the
increase.
An increase in the Stated Death Benefit will result in a new Sales Load.
Premium allocated to an increase in coverage will be subject to a new Sales
Load.
REQUESTED DECREASES IN COVERAGE
At least 30 days prior to a Policy anniversary, you may request a decrease in
the Stated Death Benefit. A decrease will be effective as of the Policy
anniversary. You may decrease the Stated Death Benefit if the Effective Date of
the decrease will occur after the later of 2 years from the Policy date or 2
years after the most recent increase was made. A requested decrease will first
reduce Adjustable Term Insurance Rider coverage segments, if any are attached to
your Policy, beginning with the most recently added, and will then reduce each
of the Stated Death Benefit segments in the same proportion as the total Stated
Death Benefit is reduced. A Surrender Change will apply if the Stated Death
Benefit is decreased and the decrease occurs during the 14 years following the
Policy date or the date of the prior increase. If a Surrender Charge applies, it
will be deducted from your Account Value and future Surrender Charges will be
reduced.
The sum of the Stated Death Benefit for all coverage segments after any change
may not be less than the minimum Stated Death Benefit shown in the Schedule
DEATH BENEFIT OPTION CHANGES
At least 30 days prior to a Policy anniversary, you may request a change to the
death benefit option. This change will be effective as of the Policy
anniversary. A death benefit option change applies to the entire Stated Death
Benefit. For us to approve a change to the death benefit option from Option 1
to Option 2, or from Option 1 to Option 3, you must submit evidence to us that
the Insured is insurable according to our normal rules of underwriting for that
class of policy. We may not allow any change if it would reduce the Stated
Death Benefit below the minimum we require to issue this Policy at the time of
reduction. After the Effective Date of the change, the Stated Death Benefit
will be changed according to the following table:
OPTION CHANGE
FROM TO STATED DEATH BENEFIT FOLLOWING CHANGE EQUALS:
Option 1 Option 2 Stated Death Benefit prior to such change minus
your Account Value as of the Effective Date of
the change.
Option 2 Option 1 Stated Death Benefit prior to such change plus
your Account Value as of the Effective Date of
the change.
Option 1 Option 3 Stated Death Benefit prior to such change minus
the sum of the Premiums paid minus Partial
Withdrawals taken as of the Effective Date of the
change.
Option 3 Option 1 Stated Death Benefit prior to such change plus
the sum of the Premiums paid minus Partial
Withdrawals taken as of the Effective Date of the
change.
Option 2 Option 3 Stated Death Benefit prior to such change plus i)
your Account Value as of the Effective Date of
the change, minus ii) the sum of the Premiums
paid minus Partial Withdrawals taken as of the
Effective Date of the change.
Option 3 Option 2 Stated Death Benefit prior to such change plus i)
the sum of the Premiums paid minus Partial
Withdrawals taken as of the Effective Date of the
change, minus ii) your Account Value as of the
Effective Date of the change.
For purposes of death benefit option changes, your Account Value will be
allocated to each coverage segment in the same proportion that the Stated
Death Benefit of that segment bears to the sum of all Stated Death Benefit
segments as of the Effective Date of change.
PREMIUM PROVISIONS
SCHEDULED PREMIUMS
The Scheduled Premium as shown in the Schedule may be paid while this Policy is
in force during the Insured's lifetime. You may increase or decrease the amount
of the Scheduled Premium, subject to limits we may set and provisions in the
Premium Limitation Section. Under conditions provided in the Grace Period
provision and the Guarantee Period, you may be required to make Premium payments
to keep the Policy in force.
We will send reminder notices to you for the Scheduled Premium amount and
frequency that you have selected. You may select to receive notices either
annually, semiannually or quarterly. You may also arrange for payment of
Premiums on a monthly basis through an authorized special payment facility. All
payment modes are subject to our minimum requirements for the payment mode
selected.
UNSCHEDULED PREMIUMS
You may make unscheduled Premium payments at any time the Policy is in force
during the Insured's lifetime. The unscheduled Premium payment must be at least
$100. We may change this minimum if we give you 90 days written notice. Unless
you tell us otherwise, these Premium payments will first be applied to reduce or
pay off any existing Policy Loan and, as such, Premium Expense Charges will not
be deducted. We may limit the amount of such unscheduled Premium payments if the
payment would result in an increase in the Base Death Benefit. If the net amount
at risk is increased as a result of an unscheduled Premium, we will require
evidence of insurability satisfactory to us that the Insured is insurable
according to our normal rules of underwriting for this type of Policy. The net
amount at risk is the difference between the Base Death Benefit and your Account
Value.
PREMIUM LIMITATION
If the Definition of Life Insurance test used for your Policy is the Guideline
Premium Test, we will not accept any Premium that causes your Policy not to
qualify as a life insurance policy under the Internal Revenue Code.
PREMIUM ALLOCATION
During the Right to Examine Policy Period, the portion of your Net Premium which
you have elected to invest in a Division of the Variable Account will be
invested in the [Fidelity Investments Money Market Division]. After the Right
to Examine Policy Period, the balance of your funds in the [Fidelity Investments
Money Market Division] will be reallocated as you directed in your Premium
allocation shown in the Schedule.
After the Right to Examine Policy Period, each Net Premium will be allocated to
the Divisions of the Variable Account and the Guaranteed Interest Division as
you directed in the application or as otherwise requested. You may change the
allocation for subsequent Premiums by sending us written notice at our Customer
Service Center. If you change your Premium allocation more than 5 times per
Policy year, we will deduct a charge from the Divisions of the Variable Account
and the Guaranteed Interest Division in the same proportion that your Account
Value of each Division bears to your net Account Value. The amount of this
charge is shown in the Schedule. Premium allocation percentages may be in any
whole number from 1% to 100% provided that at least $100 is allocated to each
Division selected.
VARIABLE ACCOUNT PROVISIONS
THE VARIABLE ACCOUNT
The Variable Account is an account established by us, pursuant to the laws of
the State of Colorado, to separate the assets funding the benefits for the class
of policies to which this Policy belongs from the other assets of Security Life
of Denver.
The Variable Account is registered as a unit investment trust under the
Investment Company Act of 1940. All income, gains and losses, whether or not
realized, from assets allocated to the Variable Account are credited to or
charged against the Variable Account without regard to income, gains or losses
of our General Account. The assets of the Variable Account are our property but
are separate from our General Account and our other Variable Accounts. That
portion of the assets of the Variable Account which is equal to the reserves and
other Policy liabilities with respect to the Variable Account is not subject to
creditor claims against us.
VARIABLE ACCOUNT DIVISIONS
The Variable Account is divided into Divisions, each of which invests in a
series fund Portfolio designed to meet the objectives of the Division. The
current eligible Divisions are shown in the Schedule. We may, from time to
time, add additional Divisions. If we do, you may be permitted to select from
these other Divisions subject to the terms and conditions we may impose on those
allocations.
CHANGES WITHIN THE VARIABLE ACCOUNT
When permitted by law, and subject to any required notice to you and approval of
the Securities and Exchange Commission ("SEC"), state regulatory authorities or
Policy Owners, we may from time to time make the following changes to the
Variable Account:
. Make additional Divisions available. These Divisions will invest in
investment Portfolios we find suitable for the Policy.
. Eliminate Divisions from the Variable Account, combine 2 or more Divisions,
or substitute a new Portfolio for the Portfolio in which a Division
invests. A substitution may become necessary if, in our judgment, a
Portfolio no longer suits the purposes of the Policy. This may happen due
to a change in laws or regulations, or a change in a Portfolio's investment
objectives or restrictions. This may also happen if the Portfolio is no
longer available for investment, or for some other reason, such as a
declining asset base.
. Transfer assets of the Variable Account, which we determine to be
associated with the class of Policies to which your Policy belongs, to
another Variable Account.
. Withdraw the Variable Account from registration under the Investment
Company Act of 1940.
. Operate the Variable Account as a management investment company under the
Investment Company Act of 1940.
. Cause one or more Divisions to invest in a mutual fund other than or in
addition to the Portfolios.
. Discontinue the sale of Policies and certificates.
. Terminate any employer or plan trustee agreement with us pursuant to its
terms.
. Restrict or eliminate any voting rights as to the Variable Account.
. Make any changes required by the Investment Company Act of 1940 or the
rules or regulations thereunder.
Form 1197 (VUL)- TX
Page 12
GENERAL ACCOUNT PROVISIONS
THE GENERAL ACCOUNT
The General Account holds all of our assets other than those held in the
Variable Account or our other separate accounts. The Guaranteed Interest
Division is a part of our General Account.
GUARANTEED INTEREST DIVISION
The Guaranteed Interest Division is another Division to which you may allocate
Premiums or make transfers. The Account Value of the Guaranteed Interest
Division is equal to the Net Premium allocated to this Division plus any earned
interest minus deductions taken from this Division. Interest is credited at the
guaranteed rate shown in the schedule or may be credited at a higher rate. Any
higher rate is guaranteed to be in effect for at least 12 months.
LOAN DIVISION
The Loan Division is the account which is set aside to secure the Policy Loan,
if any. See the Loan Provision section for information.
TRANSFER PROVISIONS
After the Right to Examine Policy Period, your Account Value in each Division
may be transferred to any other Division of the Variable Account upon written
request. Transfers from the Guaranteed Interest Division are subject to the
limitations as described in the Guaranteed Interest Division provision. The
number of free transfers permitted in any one Policy year without an Excess
Transfer Charge, the total number of transfers permitted and the Excess Transfer
Charge are shown in the table below. Any transfers made due to the operation of
the Automatic Rebalancing Feature or Dollar Cost Averaging will not count toward
the transfers allowed free of charge. The minimum amount that may be
transferred from each Division is the lesser of $100 or the balance of a
Division.
The following table summarizes the number of transfers available and the
associated charges during any Policy year.
-----------------------------------------------------------------------------------------------------
Free Transfers 12
-----------------------------------------------------------------------------------------------------
Total Number of Transfers Permitted Unlimited
-----------------------------------------------------------------------------------------------------
Excess Transfer Charge $25 for each transfer in excess of 12 during
any Policy year.
-----------------------------------------------------------------------------------------------------
TRANSFERS TO OR FROM THE GUARANTEED INTEREST DIVISION
Once during the first 30 days of each Policy year, you may transfer amounts from
the Guaranteed Interest Division. Transfer requests received within 30 days
prior to the Policy anniversary will be deemed to occur as of the Policy
anniversary. Transfer requests received on the Policy anniversary or within the
following 30 days will be processed; transfer requests received at any other
time will not be processed. Transfers of your Account Value to the Guaranteed
Interest Division are not limited to this 30-day period.
The maximum transfer amount from the Guaranteed Interest Division in any Policy
year is the greatest of:
Form 1197 (VUL)
Page 13
a) 25% of your Account Value in the Guaranteed Interest Division at the
time of the first transfer or withdrawal in a Policy year;
b) The minimum transfer amount; or
c) The sum of the amounts transferred and withdrawn from the Guaranteed
Interest Division in the prior Policy year.
For purposes of calculating the maximum transfer from the Guaranteed
Interest Division, all Partial Withdrawals and transfers from the
Guaranteed Interest Division in a Policy year are summed.
EXCESS TRANSFER CHARGE
If you exceed the number of free transfers allowed, you will be assessed an
Excess Transfer Charge. This charge will be deducted from each of the Divisions
in which you are invested in the same proportion that the amount of Account
Value in that Division bears to the net Account Value immediately after the
transfer.
DOLLAR COST AVERAGING
If you have at least $10,000 of Account Value in either the [Fidelity
Investments Money Market Division] or the [Xxxxxxxxx & Xxxxxx Limited Maturity
Bond Division], you may choose to transfer a specified dollar amount each month
from one of these Divisions to other Divisions of the Variable Account. Dollar
Cost Averaging transfers may not be made to the Guaranteed Interest Division.
The minimum amount that you may elect to transfer each month is $100. The
maximum amount that you may transfer is equal to your Account Value in the
Division from which the transfer is taken when the election is made, divided by
12.
Dollar Cost Averaging may be elected to end on a specified date or when a
specific balance remains in the [Fidelity Investments Money Market Division] or
the [Xxxxxxxxx & Xxxxxx Limited Maturity Bond Division].
Percentage allocations of the transfer amount must be designated as whole number
percentages; no specific dollar designation may be made to the Divisions of the
Variable Account. If you elect to transfer to a particular Division, the
minimum percentage that may be transferred to that Division is 1% of the total
amount transferred provided that the allocation is at least $100. The
transfer date will be the same calendar day each month as the Monthly Processing
Date. If this calendar day is not a Valuation Date, the next Valuation Date
will be used. If, on any transfer date, your Account Value in the chosen
Division is equal to or less than the amount you have elected to have
transferred, the entire amount will be transferred, and this option will end.
Dollar Cost Averaging may not begin until the Monthly Processing Date following
the end of the Right to Examine Policy Period.
You may change the transfer amount or the Divisions to which transfers are to be
made once each Policy year. You may cancel this election by sending us written
notice at our Customer Service Center at least 7 days before the next transfer
date. Any transfer under this option will not be included for purposes of the
Excess Transfer Charge.
If you elect both Dollar Cost Averaging and Automatic Rebalancing, Dollar Cost
Averaging will occur first. On the first Valuation Date of the next calendar
quarter after Dollar Cost Averaging has terminated, Automatic Rebalancing will
begin.
Form 1197 (VUL)
Page 14
AUTOMATIC REBALANCING
Automatic Rebalancing allows you to match your Account Value in each Division to
your allocation percentage for new Premiums. Automatic Rebalancing can be
elected in your application or by completing the Automatic Rebalancing form and
returning it to our Customer Service Center. As of the first Valuation Date of
each calendar quarter thereafter we will reallocate your Net Account Value so
that the amount in each Division matches your Premium allocation. Automatic
Rebalancing may not begin until the of the Right to Examine Policy Period.
While this feature is in effect, we require that you allocate no more than 35%
of your Premiums to any one Division, and you must allocate your Premiums to at
least 5 Divisions. If at any time during the operation of the Automatic
Rebalancing feature you request a change in Premium allocation which does not
meet these requirements, we will notify you that your allocation must be
changed. We will not process such a request unless you also request that the
Automatic Rebalancing feature be discontinued.
When you request a change in Premium allocation that meets these requirements,
your Net Account Value will be reallocated as of the Valuation Date that we
receive your written allocation instructions. Amounts will be transferred among
the Divisions to match the allocation for new Premiums.
During the operation of Automatic Rebalancing, you may not change your
allocation percentage to the Guaranteed Interest Division by more than 25% of
the percentage previously allocated to the Guaranteed Interest Division.
If you change your Premium allocation more than five times per Policy year,
there will be a $25 charge taken from your Account Value. This charge will be
deducted from each of the Divisions of the Variable Account and the Guaranteed
Interest Division in the same proportion that your Account Value of each
Division bears to your net Account Value as of the Valuation Date the allocation
change is effective.
Any transfer as a result of the operation of Automatic Rebalancing will not be
included in determining if the Excess Transfer Charge will apply. You may not
transfer among Divisions while the Automatic Rebalancing feature is in effect.
If you elect both Dollar Cost Averaging and Automatic Rebalancing, Dollar Cost
Averaging will occur first. On the first Valuation Date of the next calendar
quarter after Dollar Cost Averaging has terminated, Automatic Rebalancing will
begin.
ACCOUNT VALUE PROVISIONS
The Account Value is the sum of the current amounts allocated to the Divisions
of the Variable Account and to the Guaranteed Interest Division
plus your balance in the Loan Division.
The Account Value is based on the amount and number of Premiums paid, Policy and
rider charges assessed, loans and withdrawals taken, monthly deductions, Premium
Expense Charges, transaction charges, any Surrender Charges and the investment
experience or credited interest of the Division to which your Account Value is
allocated.
Your net Account Value is equal to your Account Value minus any Policy Loan and
accrued but unpaid loan interest.
Form 1197 (VUL)
Page 15
NET PREMIUM
The Net Premium equals the Premium paid minus the Premium Expense Charges for
taxes and the appropriate Sales Load shown in the Schedule. Premiums allocated
to an increase in coverage will be subject to a new Sales Load. Premiums are
allocated in the same proportion that the Guideline Annual Premium of each
segment bears to the sum of the Guideline Annual Premiums of all segments. The
Guideline Annual Premium for each coverage segment is shown in the Schedule.
ACCOUNT VALUES ON THE INVESTMENT DATE
The Account Value of each Division of the Variable Account and the Guaranteed
Interest Division as of the Investment Date is equal to:
a) The allocation to that Division of the first Net Premium paid (as
determined by you); minus
b) The portion of any monthly deductions due on the Investment Date
allocated to that Division.
The Account Value of the Loan Division as of the Investment Date is equal to
zero.
ACCUMULATION UNIT VALUE
The investment experience of a Division of the Variable Account is determined as
of each Valuation Date. We use an Accumulation Unit Value to measure the
experience of each of the Variable Account Divisions during a Valuation Period.
We set the Accumulation Unit Value at $10 on the Valuation Date when the first
investments in each Division of the Variable Account are made. The Accumulation
Unit Value for a Valuation Period equals the Accumulation Unit Value for the
preceding Valuation Period multiplied by the Accumulation Experience Factor for
the Valuation Period.
The number of units for a given transaction related to a Division of the
Variable Account as of a Valuation Date is determined by dividing the dollar
value of that transaction by that Division's Accumulation Unit Value for that
date.
ACCUMULATION EXPERIENCE FACTOR
For each Division of the Variable Account, the Accumulation Experience Factor
reflects the investment experience of the Portfolio in which that Division
invests and the charges assessed against that Division for a Valuation Period.
The Accumulation Experience Factor is calculated as follows:
a) The net asset value of the Portfolio in which that Division invests as
of the end of the current Valuation Period; plus
b) The amount of any dividend or capital gains distribution declared and
reinvested in the Portfolio in which that Division invests during the
current Valuation Period; minus
c) A charge for taxes, if any.
d) The result of (a), (b) and (c) divided by the net asset value of the
Portfolio in which that Division invests as of the end of the
preceding Valuation Period; minus
e) The daily equivalent of the Annual Mortality and Expense Risk Charge
shown in the Schedule for each day in the current Valuation Period.
Form 1197 (VUL)
Page 16
ACCOUNT VALUE OF THE DIVISIONS OF THE VARIABLE ACCOUNT
On subsequent Valuation Dates after the Investment Date, your Account Value of
each Division of the Variable Account is calculated as follows:
a) The number of Accumulation Units in that Division as of the beginning
of the current Valuation Period multiplied by that Division's
Accumulation Unit Value for the current Valuation Period; plus
b) Any additional Net Premiums allocated to that Division during the
current Valuation Period; plus
c) Any Account Value transferred to or minus any Account Value
transferred from the Variable Division during the current Valuation
Period (including the applicable portion of any transfer fee); minus
d) Any Partial Withdrawals allocated to that Division and any applicable
withdrawal service fees which are allocated to the Variable Division
during the current Valuation Period; plus
e) Any amounts released from the Loan Division as a result of a loan or
loan interest payment, or minus amounts transferred to the Loan
Division as of a result of any loans which are allocated to the
Variable Division during the current Valuation Period; minus
f) The portion of any Surrender Charge resulting from a decrease in
Stated Death Benefit allocated to the Division; minus
g) The portion of the monthly deduction allocated to the Variable
Division, if a Monthly Processing Date occurs during the current
Valuation Period.
ACCOUNT VALUE OF THE GUARANTEED INTEREST DIVISION
On Valuation Dates after the Investment Date, your Account Value of the
Guaranteed Interest Division is calculated as follows:
a) The Account Value of the Guaranteed Interest Division at the end of
the preceding Valuation Period plus interest at the declared rate
credited during the current Valuation Period; plus
b) Any additional Net Premiums allocated to the Guaranteed Interest
Division plus interest credited to these Premiums during the current
Valuation Period; plus
c) Any account Value transferred to or minus any Account Value
transferred from the Guaranteed Interest Division during the current
Valuation Period (including the applicable portion of any transfer
fee); minus
d) Any Partial Withdrawals taken and any applicable withdrawal service
fees which are allocated to the Guaranteed Interest Division during
the current Valuation Period; plus
e) Any amounts released from the Loan Division as a result of a loan or
loan interest payment, or minus amounts transferred to the Loan
Division as of a result of any loans which are allocated to the
Guaranteed Interest Division during the current Valuation Period;
minus
f) The portion of any Surrender Charge resulting from a decrease in
Stated Death Benefit allocated to the Guaranteed Interest Division,
minus
g) The portion of the monthly deduction allocated to the Division, if a
Monthly Processing Date occurs during the current Valuation Period.
ACCOUNT VALUE OF THE LOAN DIVISION
On Valuation Dates after the Investment Date, your Account Value of the Loan
Division is equal to:
a) The Account Value of the Loan Division on the prior Valuation Date;
plus
b) Any interest credited to the Loan Division during the Valuation
Period; plus
c) An amount equal to any additional loans since the prior Valuation
Date; minus
d) Any loan repayments, including payment of loan interest in cash; plus
Form 1197 (VUL)
Page 17
e) The amount of accrued loan interest if the Valuation Date is a Policy
anniversary; minus
f) The amount of interest credited to the Loan Division during the year
if the Valuation Date is a Policy anniversary.
On Policy anniversaries, any amount of interest credited to the Loan Division
during the year is transferred from the Loan Division to the Variable Account
and Guaranteed Interest Divisions in the same proportion that your Account Value
in each Variable Division and the Guaranteed Interest Division bears to your net
Account Value as of the Policy anniversary.
MONTHLY DEDUCTION AND REFUND
MONTHLY DEDUCTION
The monthly deduction is equal to:
a) the cost of insurance charges for this Policy; plus
b) the monthly charges for any other additional benefits provided by
rider; plus
c) the monthly expense charges shown in the Schedule.
The monthly deductions allocated to the Divisions of the Variable Account and
Guaranteed Interest Division in the same proportion that your Account Value in
the Division bears to your net Account Value as of the Monthly Processing Date.
This deduction is taken from your Account Value as of the Monthly Processing
Date.
COST OF INSURANCE
The cost of insurance is determined on a monthly basis for each coverage
segment. Such cost is the monthly cost of insurance rate for the Insured's
Premium Class multiplied by the net amount at risk. The net amount at risk is
(a) minus (b) where:
a) is the Base Death Benefit for all coverage segments as of the Monthly
Processing Date after the monthly deductions (other than cost of
insurance charges for the Base Death Benefit, any Adjustable Term
Insurance Rider and any Waiver of Monthly Deductions Rider), divided
by 1 plus the monthly equivalent of the Guaranteed Interest Rate for
the Guaranteed Interest Division as shown in the Schedule; and
b) is your Account Value as of the Monthly Processing Date after the
monthly deductions (other than the cost of insurance for the Base
Death Benefit, any Adjustable Term Insurance Rider and any Waiver of
Monthly Deduction Rider).
The cost of insurance rates will be determined by us from time to time. They
will be based on the sex and Age as of the Effective Date of coverage, the
duration since the coverage began and the Premium Class. Any change in rates
will apply to all individuals of the same Premium Class and whose policies have
been in effect for the same length of time. The rates will never exceed those
rates shown in the Table of Guaranteed Rates in the Schedule as adjusted for any
special Premium Class.
Each time there is a new coverage segment of Stated Death Benefit due to a
requested increase, the net amount at risk will be allocated to each coverage
segment in the same proportion that the Stated Death Benefit of that segment
bears to the total Policy Stated Death Benefit. Different rates will apply to
each segment depending upon the Premium Class, the Age as of the Effective Date
of the increase and the duration since the Effective Date of the increase.
Form 1197 (VUL)
Page 18
PERSISTENCY REFUND
Each month your Policy or a coverage segment of Stated Death Benefit remains in
force after its tenth Policy anniversary, we will credit your Account Value with
a refund equivalent to 0.5% of your Account Value on an annual basis for that
segment (0.04167% monthly). Your Account Value will be allocated to each
coverage segment based upon the number of completed Policy years the segment has
been in force and the size of the Guideline Annual Premium for the segment as
shown in the Schedule.
The persistency refund will be added to the Divisions of the Variable Account
and the Guaranteed Interest Division in the same proportion that your Account
Value in each Division bears to your net Account Value as of the Monthly
Processing Date.
LOAN PROVISIONS
POLICY LOANS
You may obtain a Policy Loan after the first Policy anniversary. The maximum
amount you may borrow at any time equals (a) minus (b) where (a) is equal to:
1. Account Value minus (12 times the current monthly deduction);
2. Multiplied by (1 + Policy Loan Interest Rate);
3. Divided by (1 + Guaranteed Interest Rate credited to Loan Division);
and where (b) is equal to any outstanding Policy Loan and accrued loan interest.
However, at no time will the Policy Loan amount be less than 90% of the Cash
Surrender Value; minus any outstanding Policy Loan and accrued but unpaid
interest.
The Policy Loan is a first lien on your Policy. The minimum amount you may
borrow is shown in the Schedule.
The outstanding Policy Loan amount is equal to the loan amount as of the
beginning of the Policy year plus new loans and minus loan repayments.
LOAN INTEREST
The annual Policy Loan interest rate is shown in the Schedule. If a loan is
made, interest is due and payable at the end of the Policy year. Thereafter,
interest on the loan amount is due annually at the end of each Policy year until
the loan is repaid. If interest is not paid when due, it is added to the Policy
Loan.
If the Policy Loan amount plus any accrued interest equals or exceeds the Cash
Surrender Value, a Premium sufficient to keep this Policy in force must be paid
as provided in the Grace Period provision.
Form 1197 (VUL)
Page 19
LOAN DIVISION
When a Policy Loan is taken or when interest is not paid in cash when due, an
amount equal to the loan is transferred from the Divisions of the Variable
Account and the Guaranteed Interest Division to the Loan Division to secure the
loan. This amount will be deducted from the Divisions of the Variable Account
and the Guaranteed Interest Division in the same proportion that your Account
Value in each Division bears to your net Account Value as of the date the
transfer is effective. Your Account Value in the Loan Division will be credited
with interest at the interest rate for the Loan Division shown in the Schedule.
When a loan repayment is made an amount equal to the repayment is transferred
from the Loan Division to the Guaranteed Interest Division and the Divisions of
the Variable Account in the same proportion as your current Premium allocation
unless you request a different allocation.
PARTIAL WITHDRAWAL PROVISIONS
You may apply for a Partial Withdrawal of your Account Value on any Monthly
Processing Date after the first Policy anniversary by writing to us at our
Customer Service Center. The minimum and maximum Partial Withdrawal amounts are
shown in the Schedule. When a Partial Withdrawal is made, the amount of the
withdrawal plus a service fee is deducted from your Account Value. The amount
of the service fee is shown in the Schedule. We limit the number of Partial
Withdrawals in a Policy year and this number is shown in the Schedule.
The Stated Death Benefit is not reduced by a Partial Withdrawal taken when the
Base Death Benefit has been increased to qualify your Policy as life insurance
under the Federal income tax laws and the amount withdrawn is no greater than
that which reduces your Account Value to the level which no longer requires the
Base Death Benefit to be increased for Federal income tax law purposes.
For a Policy under an Option 1 death benefit, the Stated Death Benefit is not
reduced by a Partial Withdrawal in the circumstances described above. In
addition, if no more than 16 years have elapsed since the Policy date and the
Insured is not yet Age 81, a Partial Withdrawal of an amount up to 10% of your
Account Value or, if greater, 5% of the Stated Death Benefit, calculated
immediately before the Partial Withdrawal is taken will not reduce the State
Death Benefit. Any additional amount withdrawn reduces your Stated Death
Benefit by that additional amount.
For a Policy under an Option 2 death benefit, a Partial Withdrawal does not
reduce your Stated Death Benefit. For a Policy under an Option 3 death benefit,
your Stated Death Benefit will be reduced by any amount of the Partial
Withdrawal in excess of Premiums paid to the date of the Partial Withdrawal.
Any reduction in death benefit or Account Value will occur as of the date the
Partial Withdrawal occurs. No Partial Withdrawal will be allowed if the Stated
Death Benefit remaining in force after any such Partial Withdrawal would be
reduced below the minimum Stated Death Benefit shown in the Schedule.
For a Policy under an Option 2 or Option 3 death benefit, a Partial Withdrawal
reduces the Base Death Benefit by the amount of the withdrawal. Under any death
benefit option, if the Base Death Benefit has been increased in order to qualify
your Policy as a life insurance contract under the Federal income tax laws, the
Partial Withdrawal reduces the Base Death Benefit by an amount greater than the
withdrawal.
Form 1197 (VUL)
Page 20
If the Stated Death Benefit is reduced during the first 7 years of a coverage
segment, a new Target Premium will be calculated and future maximum Surrender
Charges will be reduced. If the Stated Death Benefit is reduced after the first
7 years of a coverage segment, the Surrender Charge is reduced in the same
proportion that the Stated Death Benefit is reduced.
You may specify how much of the withdrawal you wish taken from each Division of
the Variable Account or from the Guaranteed Interest Division. You may not
withdraw from the Guaranteed Interest Division more than the total withdrawal
times the ratio of your Account Value in the Guaranteed Interest Division to
your Net Account Value immediately prior to the withdrawal. Unless you indicate
otherwise, we will make the withdrawal from the amounts in the Guaranteed
Interest Division and the Divisions of the Variable Account in the same
proportion that your Account Value in each Division bears to your Net Account
Value immediately prior to the withdrawal. The withdrawal service fee and any
Surrender Charge deducted from your Account Value is deducted from each Variable
Division and the Guaranteed Interest Division in the same proportion that your
Account Value of each division bears to your Net Account Value immediately after
the withdrawal.
We may send you a new Schedule to reflect the effect of the withdrawal,
including any change to the Stated Death Benefit. We may ask you to return
your Policy to our Customer Service Center to make this change. The withdrawal
and the reductions in death benefits will be effective as of the Valuation Date
after we received your request.
SURRENDER PROVISIONS
SURRENDER VALUE
The net Cash Surrender Value on any date will be your Account Value minus any
applicable Surrender Charge and minus any Policy Loan including accrued but
unpaid loan interest.
SURRENDER CHARGES
A separate Surrender Charge will apply to each Stated Death Benefit coverage
segment. The Surrender Charge for this Policy is the sum of the Surrender
Charge for each coverage segment of Stated Death Benefit. The Surrender Charge
will not exceed the total maximum Surrender Charge shown in the Schedule. For
purposes of calculating the Surrender Charge for a coverage segment, Premiums
are allocated to a segment in the same proportion that the Guideline Annual
Premium of each segment bears to the sum of the Guideline Annual Premiums of all
segments. The Guideline Annual Premium for each coverage segment is shown in the
Schedule.
For each segment, the Surrender Charge consists of an administrative Surrender
Charge and a sales Surrender Charge.
The administrative Surrender Charge for each segment is determined from the
administrative Surrender Charge table in the Schedule. It depends on the
segment's Issue Age, Effective Date and initial Stated Death Benefit which are
in the Schedule.
For the first 7 Policy years following the Effective Date of a segment, the
sales Surrender Charge is the lesser of: 50% of the target Premium for the
segment; or 25% of the sum of all Premiums paid up to the target Premium for the
segment plus 5% of the sum of all Premiums paid in excess of the target Premium
for the segment. Thereafter, the sales Surrender Charge for the segment
decreases at the beginning of each year following the 7th Policy year from the
Effective Date of the segment by 12.5% of the sales Surrender Charge in effect
at the end of the 7th Policy Year until it reaches zero at the beginning of the
15th Policy year following the segment's Effective Date or the Policy year the
Insured reaches age 98, whichever is sooner.
Form 1195 (VUL)
Page 21
During the first 14 Policy years or within 14 years of the Effective Date of an
increase in the Stated Death Benefit segment, if you request a decrease to the
Stated Death Benefit or take a Partial Withdrawal which causes the Stated Death
Benefit to decrease, the administrative Surrender Charge will decrease in the
same proportion that the Stated Death Benefit decreases.
Upon a decrease in the Stated Death Benefit, a portion of the Surrender Charge
will be deducted from your Account Value. The amount of the Surrender Charge
which will be deducted from your Account Value will equal the Surrender Charge
in effect before the decrease minus the Surrender charge in effect after the
decrease. If a decrease to the Stated Death Benefit occurs after the first 7
years of a coverage segment, the maximum Surrender Charges for the remaining
Policy will be reduced by the percentage that the Stated Death Benefit is
decreased. If a decrease occurs during the first 7 years of a coverage segment,
the Target Premium will be recalculated; future maximum Surrender Charges for
that coverage segment will be reduced. A Surrender Charge is not deducted from
your Account Value if the Stated Death Benefit is decreased because the death
benefit option is changed.
BASIS OF COMPUTATIONS
The Cash Surrender Value under the Policy is not less than the minimums required
as of the Policy date by the state in which your Policy was delivered. A
detailed statement of the method of computation of Policy values under the
Policy has been filed with the insurance department of the state in which the
Policy was delivered, if required.
FULL SURRENDERS
You may surrender your Policy after the Right to Examine Policy Period or at any
time during the lifetime of the Insured and receive the net Cash Surrender
Value. We will compute the net Cash Surrender Value as of the next Valuation
Date after we receive both your request and the Policy at our Customer Service
Center. This Policy will be canceled as of the date we receive your request, and
there will be no further benefits under this Policy.
GRACE PERIOD, TERMINATION AND REINSTATEMENT PROVISIONS
GRACE PERIOD
If the following conditions occur on a Monthly Processing Date, the Policy will
enter into the 61 day Grace Period:
a) The net Cash Surrender Value is zero or less; and
b) The Guarantee Period shown in the Schedule and described below has
expired or been terminated, and
c) The three year continuation period described below has expired or the
required Premium for the three year continuation period has not been
paid.
We will give you a 61 day Grace Period from this Monthly Processing Date to make
the required Premium payment. The required Premium payment then due must be
paid to keep the Policy in force. If this amount is not received in full by the
end of the Grace Period, the Policy will lapse without value. The required
Premium payment will be equal to past due charges plus an amount we expect to be
sufficient to keep the Policy and any riders in force for 2 months following the
receipt of the required Premium payment. If we receive at least the required
Premium payment during the Grace Period we will make deductions from the Net
Premium payment for the past due amounts and apply any remaining amounts as
Premium to the Policy.
Form 1197 (VUL)
Page 22
Notice of the amount of the required Premium payment will be mailed to you or
any assignee at the last known address at least 30 days before the end of the
Grace Period. If the Insured dies during the Grace Period, we will deduct any
overdue monthly deductions from the death Proceeds of the Policy.
THREE YEAR CONTINUATION PERIOD
During the first 3 Policy years, if at all times the sum of your Premiums paid
minus the sum of your Partial Withdrawals, Policy Loans taken and accrued but
unpaid interest, is greater than or equal to: one-twelfth of the Minimum Annual
Premium multiplied by the number of complete months your Policy has been in
force, your Policy will remain in force regardless of the net Cash Surrender
Value. The Minimum Annual Premium is shown in the Schedule. If you increase the
Stated Death Benefit during the first 3 Policy years, the new Schedule will show
a revised Minimum Annual Premium which will be used for future tests to
determine if your Policy will remain in force under this provision.
TERMINATION
All coverage provided by this Policy will end as of the earliest of:
a) The date the Policy is surrendered;
b) The date of death of the Insured;
c) The Maturity Date of the Policy; or
d) The date the Grace Period ends without payment of the required
Premium.
REINSTATEMENT
The Policy may be reinstated within five years after the beginning of the Grace
Period. The reinstatement will be effective as of the Monthly Processing Date
on or next following the date we approve your written application.
We will reinstate the Policy and any riders if the following conditions are met:
a) You have not surrendered the Policy for its net Cash Surrender
Value;
b) You submit evidence satisfactory to us that the Insured and those
insured under any riders are still insurable according to our normal
rules of underwriting for this type of Policy; and
c) We receive payment of the amount of Premium sufficient to keep the
Policy and any riders in force from the beginning of the Grace Period
to the end of the expired Grace Period and for 2 months after the date
of reinstatement. We will let you know, at the time you request
reinstatement, the amount of Premium needed for this purpose.
The Surrender Charge as of the date of reinstatement will equal the Surrender
Charge as of the beginning of the Grace Period.
We will reinstate any Policy Loan, with accrued loan interest to the end of the
Grace Period, which existed when coverage ended.
Upon reinstatement, the Net Premium received minus past due amounts will be
allocated to the Divisions of the Variable Account and the Guaranteed Interest
Division according to the Premium allocation percentages in effect at the start
of the Grace Period or as directed by you in writing at the time of
reinstatement.
Form 1197 (VUL) - TX
Page 23
DEFERRAL OF PAYMENT
Requests for transfers, withdrawals, payment of proceeds on the Maturity Date or
a full surrender will be processed within 7 days of receipt of the request in a
form acceptable to us. However, we may postpone the processing of any such
Variable Account transactions for any of the following reasons:
a) The NYSE is closed, other than customary weekend and holiday closings.
b) Trading on the NYSE is restricted by the SEC.
c) The SEC declares that an emergency exists as a result of which
disposal of securities in the Variable Account is not reasonably
practicable to determine your Account Value in the Divisions.
d) A governmental body having jurisdiction over the Variable Account by
order permits such suspension.
Rules and regulations of the SEC, if any, are applicable and will govern as to
whether conditions described in (b), (c), or (d) exist.
Death proceeds will be paid within 7 days of determination of the proceeds and
are not subject to deferment. We may defer for up to 6 months payment of any
surrender proceeds, withdrawal or loan amounts from the Guaranteed Interest
Division.
GENERAL POLICY PROVISIONS
THE POLICY
The Policy, including the original application and applications for an increase,
riders, endorsements, any Schedule pages, and any reinstatement applications
make up the entire contract between you and us. A copy of the original
application will be attached to the Policy at issue. A copy of any application
as well as a new Schedule will be attached or furnished to you for attachment to
the Policy at the time of any change in coverage. In the absence of fraud, all
statements made in any application will be considered representations and not
warranties. No statement will be used to deny a claim unless it is in an
application.
AGE
The Policy is issued at the Age shown in the Schedule. This is the Insured's Age
nearest birthday on the Policy date. The Insured's Age at any time is the Age
shown in the Schedule increased by the number of completed Policy years.
PROCEDURES
We must receive any election, designation, assignment or any other change
request you make in writing, except those specified on the application. It must
be in a form acceptable to us. We may require a return of the Policy for any
change or for a full surrender. We are not liable for any action we take before
we receive and record the written request at our Customer Service Center.
In the event of the death of the Insured before the Maturity Date, please let us
or our agent know as soon as possible. Claim procedure instructions will be
sent to the Beneficiary immediately. We may require proof of Age and a
certified copy of the death certificate. We may require the Beneficiary and
next of kin to sign authorizations as part of due proof. These authorization
forms allow us to obtain information about the Insured, including, but not
limited to, medical records of physicians and hospitals used by the Insured.
Form 1197 (VUL
Page 24
