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VARIABLE
SETTLEMENT
AGREEMENT
EquiTrust Life Insurance Company, referred to in this
agreement as "we, our, us or the Company", will pay the benefits of this
agreement subject to all of its terms.
This agreement supplements the original policy. Unless otherwise stated, terms
used in this agreement have the same meaning as such terms when used in the
original policy.
The provisions on the following pages are a part of this agreement.
PAYMENTS MADE FROM FUNDS ALLOCATED TO THE SEPARATE ACCOUNT ARE BASED ON THE
INVESTMENT EXPERIENCE OF THAT ACCOUNT AND MAY INCREASE OR DECREASE DAILY. THESE
PAYMENTS ARE NOT GUARANTEED AS TO DOLLAR AMOUNTS.
EquiTrust
Life Insurance Company
0000 Xxxxxxxxxx Xxxxxx
Xxxx Xxx Xxxxxx, Xxxx 00000-0000 [LOGO]
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EquiTrust
Life Insurance Company
West Des Moines, Iowa [LOGO]
NAME OF PRIMARY PAYEE SOC. SEC. NO.: BIRTH DATE
/ / / ------------------------------- ---------------
---- ----- ----
JOINT PAYEE (IF APPLICABLE) SOC. SEC. NO.: BIRTH DATE
/ / / ------------------------- ---------------
---- ---- ----
PAYMENT DATES:
1. If from an existing Variable Annuity, enter date here _____________.
(Payments cannot be made on the 29th, 30th or 31st of the month.)
2. If from a new Variable Annuity, payments will begin 30 days from
the issue date of the Variable Annuity, unless this day is the 29th,
30th or 31st of the month, in which case payments will begin on the
first business day of the following month. If you want a date later
than indicated above you may enter a specific payment date here
_______. (Payments cannot be made on the 29th, 30th or 31st.)
SETTLEMENT ELECTION FOR POLICY NO. AS FOLLOWS:
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/ / OPTION 3 LIFE WITH PERIOD CERTAIN - Payments are made for the lifetime of the Primary
Payee, but not less than the specified period of time chosen. Pay in ____________
(annual, semi-annual, quarterly, monthly) installments with payments for _____
years certain. The assumed interest rate is 5.00%.
/ / OPTION 7 JOINT AND 100% TO SURVIVOR - Payments are made at 100% while either payee is
living. Payments cease at the death of the last payee. Monthly is the only payment
frequency available. The assumed interest rate is 5.00%.
CONTINGENT PAYEES: (THIS AREA TO BE COMPLETED ONLY IF DIFFERENT THAN BENEFICIARIES LISTED IN
POLICY)
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Final Payee shall be the executors, administrators or assigns of the last Payee to die.
ALLOCATION OF INITIAL PROCEEDS
The amount is to be allocated to the appropriate subaccount or fixed interest
option as follows:
EquiTrust - Blue Chip ____% X. Xxxx Price - New America Growth ____%
EquiTrust - Value Growth ____% X. Xxxx Price - Pers. Strategy Bal. ____%
EquiTrust - High Grade Bond ____% Dreyfus - Cap. Apprec. ____%
EquiTrust - High Yield Bond ____% Dreyfus -Disc. Stock ____%
EquiTrust - Money Market ____% Dreyfus -Growth & Inc. ____%
X. Xxxx Price - Intl. Stock ____% Dreyfus -Int'l Equity ____%
X. Xxxx Price - Mid-Cap Growth ____% Dreyfus - Small Cap ____%
X. Xxxx Price - Equity Income ____% Fixed Interest Option ____%
If any portion is to be allocated to a particular subaccount or fixed interest option, that
portion must be at least 10%. All percentage allocations must be in whole numbers and not
fractions.
EquiTrust Life Insurance Company agrees to retain the proceeds, which are now payable under
the policy, and apply such proceeds in the manner described in the agreement. Payments to the
Payee(s) named herein will be subject to all the provisions of the agreement and the policy.
EXCEPT FOR ANY AMOUNTS ALLOCATED TO THE FIXED INTEREST OPTION, SUBSEQUENT PAYMENTS ARE BASED ON
THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT WHICH MAY INCREASE OR DECREASE DAILY.
SUBSEQUENT PAYMENTS ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
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TRANSFER BETWEEN PORTFOLIOS Yes No
I authorize transfers between the subaccounts upon instruction from / / / /
any person by telephone. If neither box is checked, the telephone
privilege will be provided.
Once payments begin, no part of the proceeds in the subaccounts may be transferred to or from
the Fixed Interest Option.
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FEDERAL TAX WITHHOLDING
IRS regulations may require that we withhold income taxes from your payments unless you instruct
us not to. Certain states also require that we withhold state income tax when federal income tax
is being withheld. Please select one of the following options:
/ / I elect NOT to have federal income tax withheld from my payments. I understand that I am
liable for any federal income tax on these payments and that penalties for insufficient
withholding could apply.
/ / I elect that you withhold $___________, or ______ % each month.
/ / I elect to have federal income tax withheld from my payments using the number of allowances
and marital status entered below:
Number of Allowances____ Marital Status: / / Married / / Single
If this calculation indicates no withholding, please withhold the amount of $______________.
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PAYMENT ARRANGEMENTS--SELECT ONLY ONE OF THE FOLLOWING:
/ / Check to Owner
/ / Check to Payee, if different from owner
/ / Check to Special Payee
/ / Automatic Deposit (if this arrangement is elected, please complete authorization below)
I hereby authorize EquiTrust Life Insurance Company to make deposits to my account and for
the Financial Institution named below to accept those deposits. I also authorize EquiTrust
Life Insurance Company to make withdrawals from my account, if necessary, to correct an
incorrect deposit amount, and for the Financial Institution to accept such withdrawals.
EquiTrust will complete account Number and ABA Transit Numbers from the voided check attached
below. This authority is to remain in full force until EquiTrust has written notification
from me of its termination in such time and in such manner as to afford EquiTrust a
reasonable opportunity to act on it.
ACCOUNT INFORMATION: / / Checking / / Savings Account
Number___________________________________
Financial Institution Name:________________________________________________________________
Address________________________________________ City____________________State______________
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PLEASE ATTACH VOIDED CHECK HERE
ACKNOWLEDGEMENT
PLEASE REVIEW THE FOLLOWING INFORMATION AND SIGN BELOW.
I understand that I may not make partial withdrawals from the contract at any time.
I understand that the only money I will receive from the contract is the annuity income payments
or, if surrendered, any payments remaining in the term certain, subject to the terms of the
contract.
I understand that the annuity income payments will fluctuate, increasing or decreasing,
depending upon the performance of the investment options I have chosen.
A Company registered representative has asked about my financial situation, investment
objectives, risk tolerance, health and my income needs.
I (We) certify that ALL of the above are true.
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Primary Payee (Please Print) Signature Date
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Joint Payee/Spouse, if applicable (Please Print) Signature Date
Submitted by
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Other Required Signature, if applicable Agent Name Agent Number
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FOR HOME OFFICE USE ONLY - PLEASE DO NOT WRITE HERE
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This agreement is a legal contract between the owner and EquiTrust Life
Insurance Company.
READ THIS CONTRACT CAREFULLY
INDEX OF MAJOR CONTRACT PROVISIONS
VARIABLE SETTLEMENT ELECTION FORM........................................Page 3
SECTION 1 - DEFINITIONS..................................................Page 5
1.1 Annuity Unit; 1.2 Effective Date; 1.3 Fixed Interest Option; 1.4
Fund; 1.5 General Account; 1.6 Owner; 1.7 Payee(s), You or Your; 1.8
Proceeds; 1.9 SEC; 1.10 Variable Account; 1.11 Our, Us, We or the
Company.
SECTION 2 - THE CONTRACT.................................................Page 5
2.1 Settlement Contract; 2.2 Modification; 2.3 Misstatement of Age or
Sex; 2.4 Assignment; 2.5 Payments During Minority; 2.6 Payments to
Trustee; 2.7 Claims of Creditors; 2.8 Non-Segregation of Funds.
SECTION 3 - SETTLEMENT AND PAYMENT OF PROCEEDS...........................Page 6
3.1 Payment Options; 3.2 Allocation; 3.3 Exchanges of Annuity Units;
3.4 Surrender; 3.5 Surrender Value; 3.6 Delay of Payment; 3.7 Amount
of Variable Payments; 3.8 Annuity Unit Value; 3.9 Net Investment
Factor; 3.10 Settlement Benefit; 3.11 Minimum Amounts.
SECTION 4 - VARIABLE ACCOUNT.............................................Page 9
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SECTION 1 - DEFINITIONS
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The following section defines certain terms used in this agreement. Please refer
to your original policy for definitions of other terms.
1.1 ANNUITY UNIT
is an accounting unit of measure used to calculate the amount of payments.
1.2 EFFECTIVE DATE
means the date as of which the proceeds are applied to a payment option.
1.3 FIXED INTEREST OPTION
means an option whereby payments made are based on a guaranteed interest rate
equal to the assumed interest rate. The fixed interest option is supported by
the general account.
1.4 FUND
means the investment options shown on page 3 of this agreement. The
corresponding funds are registered with the SEC under the Investment Company Act
of 1940 as open-end diversified management investment companies or unit
investment trusts.
1.5 GENERAL ACCOUNT
means all our assets other than those allocated to the variable account or any
other separate account. We have complete ownership and control of the general
account.
1.6 OWNER
The person (or persons) who own(s) the original policy and the agreement and who
is entitled to exercise all rights and privileges provided in the original
policy and the agreement. The original owner(s) is shown on page 3 of this
agreement.
1.7 PAYEE(S), YOU OR YOUR
means the primary payee(s), as named on page 3 of this agreement. Upon the death
of the primary payee or the last survivor in a class of payees, it means any
contingent payees who become payees under this agreement. The interest of any
payee in a class who dies before you will pass to any survivors of the class,
share and share alike, unless otherwise provided on page 3 of this agreement. If
no payee in a class survives, we will pay the proceeds to the next contingent
payee(s). If no contingent payee survives, we will pay the proceeds to the
estate of the last payee to die.
1.8 PROCEEDS
on the effective date of this agreement means the total amount you apply to a
fixed or variable payment option.
1.9 SEC
means the Securities and Exchange Commission, a U.S. government agency.
1.10 VARIABLE ACCOUNT
means the Separate Account shown on page 3 of this agreement. It is the same
variable account and is subject to the same provisions as described in the
original policy. It is a unit investment trust registered with the SEC under the
Investment Company Act of 1940.
1.11 OUR, US, WE OR THE COMPANY
means EquiTrust Life Insurance Company.
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SECTION 2 - THE CONTRACT
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2.1 SETTLEMENT CONTRACT
This agreement, also referred to herein as the contract, the original policy and
other attached papers, if any, which by this reference are made a part of this
agreement, form the entire agreement.
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2.2 MODIFICATION
No one can change any part of this agreement except you and one of our officers.
Both must agree to a change, and it must be in writing. No agent may change this
agreement or waive any of its provisions.
2.3 MISSTATEMENT OF AGE OR SEX
We have the right to reduce future payments for misstated age or sex. The total
payments will never exceed the total of all payments which would have been paid
had your age and sex been stated correctly.
2.4 ASSIGNMENT
Neither the payee nor the owner can assign the proceeds or the payments of this
agreement to another party.
2.5 PAYMENTS DURING MINORITY
Except as provided by statute, any payments due a minor payee shall be paid to
the legal guardian of such minor. Any privilege of a minor payee to withdraw or
change this agreement may be exercised only through the legal guardian of such
minor payee.
2.6 PAYMENTS TO TRUSTEE
Any payment made to a trustee(s) will be subject to the following:
a) Evidence of qualification of the trust must be furnished to us within 90
days of the effective date such payment is due.
b) Such payment will be made to the executor or administrator of the estate of
the deceased payee if evidence of qualification is not provided within such
90 days or if such trustee(s) disclaim all right to receive such payment.
It is understood and agreed that the Company is not a party to or bound by the
conditions of the trust. Payment to such trustee(s), or to the executor or
administrator, if for any reason such trustee(s) does not qualify as provided
herein, will be a complete discharge of the Company's obligations hereunder to
the extent of the payments made. The Company will be under no further obligation
to oversee administration of such payments.
2.7 CLAIMS OF CREDITORS
Payments to any payee(s) will be exempt from the claims of creditors to the
maximum extent allowed by law.
2.8 NON-SEGREGATION OF FUNDS
Any proceeds held by us in the fixed interest option of this agreement may be
mingled with the general funds of the Company. We will not be under any duty or
requirement to segregate or separately invest the proceeds of the fixed account.
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SECTION 3 - SETTLEMENT AND PAYMENT OF PROCEEDS
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3.1 PAYMENT OPTIONS
The payment option the owner has chosen is listed on page 3 of this agreement.
Under this option, payments may be made on a fixed dollar basis, a variable
basis, or a combination of both.
3.2 ALLOCATION
On the effective date, the owner will determine the percentage of proceeds that
will be allocated to the fixed interest option and the subaccounts. Any
allocation must be for at least 10% of the proceeds. A fractional percent may
not be chosen.
3.3 EXCHANGES OF ANNUITY UNITS
The owner may exchange annuity units of one subaccount for those of another on a
dollar equivalent basis. However, no annuity units in the subaccounts may be
exchanged for annuity units in the fixed interest option. In addition, no
annuity units in the fixed interest option may be exchanged for annuity units in
the subaccounts.
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The following rules apply to exchanges:
a) The exchange request may be by telephone or in writing on a form acceptable
to us;
b) The exchange will take effect as of the end of the valuation period during
which we receive the request at our office;
c) The owner may exchange annuity units among the subaccounts an unlimited
number of times in a contract year.
3.4 SURRENDER
The owner may make a full surrender under this agreement and receive the
surrender value, if any, subject to the following rules:
a) The owner must send a written request to us along with such information or
evidence as may be required by law or as may be needed to process the
request;
b) We have the right to defer payment of a surrender from the fixed interest
option for up to 6 months;
c) Upon surrender, the contract will terminate.
The owner may not make a partial withdrawal.
3.5 SURRENDER VALUE
The value payable at full surrender will be equal to:
a) the commuted value of remaining term certain payments;
MINUS
b) a commutation fee varying by contract year since the effective date of the
agreement:
Contract Year Commutation Fee
of Payment Option (as a percent of
original proceeds)
---------------------------------------------
1 6%
2 5
3 4
4 3
5 2
6 1
Thereafter 0
The interest rate used to compute the commuted value of any unpaid payments
certain will be the assumed interest rate. Each payment under a variable payment
option will be assumed to be equal to the number of annuity units times the
applicable annuity unit value.
3.6 DELAY OF PAYMENT
Proceeds from surrenders will usually be mailed to the owner within 7 business
days after the owner's signed request is received in our home office. We have
the right to delay such payment whenever:
a) the New York Stock Exchange is closed other than on customary weekends and
any holiday closing;
b) trading on the New York Stock Exchange is restricted as determined by the
SEC;
c) the SEC, by order, permits postponement for the protection of contract
owners;
d) as a result of an emergency, as determined by the SEC, it is not reasonably
possible to dispose of securities or to determine the value of the net assets
of the variable account.
3.7 AMOUNT OF VARIABLE PAYMENTS
The amount of the first payment under a variable payment option is equal to:
a) the number of thousands of dollars of proceeds applied to the option;
7
TIMES
b) the factor per $1,000 for the option, from the "Variable Payment Option"
tables.
The amount of each later payment is equal to the number of annuity units times
the applicable annuity unit value as of the end of the valuation period on the
payment date selected.
3.8 ANNUITY UNIT VALUE
The number of annuity units credited under a variable payment option is equal
to:
a) the amount of the first payment;
DIVIDED BY
b) the applicable annuity unit value as of the option's effective date.
The number of annuity units remains constant. However, if you exchange annuity
units among the subaccounts, the units are exchanged on a dollar equivalent
basis.
The annuity unit values depend on the assumed interest rate and on the net
investment factor. An annuity unit value is determined for each subaccount for
each valuation period. The annuity unit value of each subaccount for its first
valuation period was set at $1.00. Each annuity unit value for each later
valuation period is equal to:
a) the annuity unit value for the immediately preceding valuation period;
TIMES
b) the net investment factor for that valuation period;
TIMES
c) the daily assumed interest factor for each day in that valuation period.
3.9 NET INVESTMENT FACTOR
The net investment factor for each subaccount for each valuation period is
determined by dividing a) by b) and subtracting c) from the result, where:
a) is equal to the net asset value of the subaccount as of the end of the
valuation period;
PLUS
the amount of all investment income and capital gains, realized or
unrealized, credited to the net assets of the subaccount during the
valuation period;
MINUS
the amount of capital losses, realized or unrealized, charged against the net
assets during the valuation period;
MINUS
the amount charged against the subaccount for taxes, or any amount set aside
during the valuation period by the company as a provision for taxes
attributable to the operation or maintenance of the subaccount;
b) is equal to the net asset value of the subaccount for the immediately
preceding valuation period;
MINUS
the amount charged against the subaccount for taxes, or any amount set aside
during the valuation period by the company as a provision for taxes
attributable to the operation or maintenance of the subaccount;
c) is a charge no greater than 0.0034035% of the daily net assets in the
subaccount for each day in the valuation period.
The assumed interest rate in the Variable Option Tables is 5.00% per year. The
daily assumed interest factor derived from an assumed interest rate of 5.00% is
0.9998663. We may also offer other assumed interest rates and other variable
payment options from time to time, which may be available at the time you elect
your option.
3.10 SETTLEMENT BENEFIT
While you live, we will pay you an income beginning on the effective date. If
you die before all guaranteed payments have been
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made, any remaining amounts
will be paid as shown on page 3 of this agreement.
3.11 MINIMUM AMOUNTS
We reserve the right:
a) to refuse to accept or retain an amount of proceeds of less than $5,000;
b) to refuse to make payments of less than $50 each: or
c) if payments as provided in this agreement will be less than $50 each, to make
payments at less frequent intervals.
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SECTION 4 - VARIABLE ACCOUNT
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The variable account under this agreement is the same as the variable account
under the original policy. We own the assets of the variable account. We will
value the assets of the variable account each business day. The variable account
is divided into subaccounts. The subaccounts are listed on page 3 of this
agreement. The payee will determine the percentage of proceeds that will be
allocated to each subaccount. The fund has several investment options each of
which corresponds to one of the subaccounts of the variable account. The
investment options are listed on page 3 of this agreement. Amounts allocated to
a subaccount will automatically be invested in the fund investment option
associated with that subaccount. The payee will share only in the income, gains
or losses of the investment option(s) where shares are held.
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VARIABLE
SETTLEMENT
AGREEMENT
If you have any questions concerning this agreement or if anyone
suggests that you change or replace this agreement, please contact
your EquiTrust agent or our home office.
(515-225-5400)
EquiTrust
Life Insurance Company
0000 Xxxxxxxxxx Xxxxxx
Xxxx Xxx Xxxxxx, Xxxx 00000-0000 [LOGO]
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