NATIONAL LIFE LOGO OMITTED NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT
--------------------------------------------------------------------------------
AGREEMENT dated as of ______________________, 20__, by and among National Life
Insurance Company ("NLIC"), a Vermont insurance corporation, Equity Services,
Inc. ("ESI"), a Vermont corporation that is registered as a broker-dealer with
the Securities and Exchange Commission ("SEC") under the Securities Exchange Act
of 1934 ("1934 Act") and a member of the National Association of Securities
Dealers, Inc. ("NASD"), and _______________________, a corporation that is
registered as a broker-dealer with the SEC under the 1934 Act and a member of
the NASD ("Broker Dealer") and licensed as an insurance agent as and to the
extent required under the laws of the states in which it does variable insurance
business.
RECITALS
NLIC is in the business of selling insurance and annuity policies, including the
variable life insurance and variable annuity policies set forth on Schedule A
(the "Policies"); and
ESI has been appointed as the principal underwriter of the Policies; and
NLIC and ESI desire to appoint Broker Dealer to solicit applications for the
Policies, and Broker Dealer desires to accept such appointment.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1. AUTHORIZATION TO SELL AND SERVICE.
Subject to the terms and conditions of this Agreement, NLIC and ESI appoint
and authorize Broker Dealer to solicit sales of and provide service with
respect to the Policies, on a non-exclusive basis, provided that there is
an effective Registration Statement relating to such Policies under the
Securities Act of 1933 ("1933 Act"). Broker Dealer hereby accepts such
appointment. Broker Dealer agrees that ESI may amend Schedule A to add
additional variable life insurance or annuity products as Policies
hereunder from time to time by written notice to Broker Dealer, which
notice will specify the compensation payable to Broker Dealer relating to
such additional product. The amendment will become effective on the earlier
of Broker Dealer's submission of an application for such new product or
after 30 days from the sending of the written notice, unless Broker Dealer
notifies ESI in writing that it does not wish to include such additional
products as Policies hereunder.
2. REPRESENTATIVES.
The agents or representatives of Broker Dealer that will be soliciting
applications for the Policies ("Representatives") will be NASD registered
representatives of Broker Dealer, will possess all licenses necessary or
appropriate to sell life insurance and/or annuity policies, as applicable,
in the state in which applications for Policies are being solicited or
signed and will have an appropriate appointment or license by NLIC.
3. SALES OF POLICIES.
Broker Dealer shall submit applications for Policies only on application
forms authorized by NLIC, shall review all applications for completeness
and accuracy, and shall take other reasonable measures to assure that
applications for Policies submitted hereunder are accurate and complete.
All applications are subject to acceptance or rejection by NLIC in its sole
discretion. In the event an application is rejected, all payments will be
returned to the purchaser, and Broker Dealer will be notified of such
action. NLIC may at any time discontinue issuing any or all of the Policies
or change the form and content of new Policies to be issued.
--------------------------------------------------------------------------------
NATlONAL LIFE VARIABLE CONTRACTS DISTRIBUTED BY EQUITY SERVICES, INC. o
BROKER-DEALER SUBSIDIARY OF NATIONAL LIFE INSURANCE COMPANY
ONE NATIONAL LIFE DRIVE o MONTPELIER, VERMONT 05604 o TEL: (000) 000-0000
9495(1102) Page 1 of 6
Cat. No. 48542
NATIONAL LIFE VARIABLE PRODUCTS SELLING AGREEMENT - Continued
--------------------------------------------------------------------------------
4. COMMISSIONS.
As compensation for the sale of each of the Policies by the
Representatives, ESI shall pay to Broker Dealer, either directly or through
NLIC acting on ESI's behalf, the commissions and expense allowance payments
set forth on Schedule B attached hereto and incorporated herein by
reference (the "Commissions"). The Commissions shall be subject to
chargeback in accordance with the terms and conditions set forth on such
Schedule B. ESI reserves the unconditional right, upon written notice, to
change the Commissions payable for Policies issued, renewed, converted,
exchanged or otherwise modified on or after the effective date of such
change, as set forth in the notice of change. No Commissions will be due
and payable for any surrendered or canceled Policies which are subsequently
reinstated or rewritten through efforts of representatives of ESI or NLIC
other than the Representatives. Broker Dealer shall be solely responsible
for the payment of any Commissions, expense allowance and other payments or
other considerations of any kind whatsoever to the Representatives in
connection with the sale of the Policies (hereinafter referred to as
"Representatives Compensation"). Broker Dealer shall also be responsible
for all tax reporting with respect to commissions paid to the
Representatives.
5. TERM OF AGREEMENT.
This Agreement shall continue in force indefinitely until terminated as
provided below. This Agreement shall be terminated immediately if Broker
Dealer breaches this Agreement. Any party may terminate this Agreement at
any time, without cause, upon ten (10) days written notice to the other
party. Upon termination of this Agreement, all authorizations, rights and
obligations shall cease except that Sections 6(h), 10, and 11 of this
Agreement shall survive the termination of this Agreement and Broker Dealer
shall settle all accounts with ESI and shall continue to be responsible for
all applicable chargebacks.
6. BROKER DEALER'S OBLIGATIONS.
In addition to other obligations assumed by Broker Dealer under this
Agreement:
a. Broker Dealer shall have all Representatives who solicit sales of and
provide service with respect to the Policies, insurance licensed and
appointed by NUC. All insurance licenses and appointments will be
processed in accordance with NUC procedures. NLIC may, in its sole
discretion, refuse, terminate or non-renew any such license and
appointment, without cause, and if NLIC provides written notice to
Broker Dealer of any such refusal, termination, or non-renewal, Broker
Dealer shall cause the affected Representative to cease all
solicitations of applications for Policies.
b. Broker Dealer shall only pay Representatives Compensation to
Representatives who are properly insurance licensed and appointed with
NLIC and registered with the NASD.
c. Broker Dealer shall service the Policies in accordance with any written
administrative procedures established by ESI or NLIC from time to time.
d. Broker Dealer shall ensure that the Representatives shall use their best
efforts to keep the Policies in force.
e. Broker Dealer shall ensure that the Representatives shall only recommend
the purchase of the Policies upon reasonable grounds to believe that
such purchase is suitable to the applicant.
f. Broker Dealer agrees that no sales promotion or other advertising
materials relating to the Policies shall be used unless provided or
approved in writing by ESI prior to such use. No representations in
connection with the sales of the Policies other than those contained in
the currently effective registration statements and prospectuses for the
Policies filed with the SEC, or in the aforesaid approved sales
promotion or other advertising materials, shall be made by Broker Dealer
or any of the Representatives. Broker Dealer and the Representatives
shall solicit applications for the Policies only in states where such
Policies have been approved by state authorities.
g. Broker Dealer shall maintain or shall cause to have maintained the
records of the Representatives as required by applicable laws and
regulations. The books, accounts and records of Broker Dealer relating
to the sale of Policies shall be maintained so as to clearly and
accurately disclose the nature and details of all of the transactions.
All such records relating specifically to the sale of the Policies shall
be subject to inspection and duplication by NLIC or ESI at any time
while this Agreement is in force.
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9495(1102) Page 2 of 6
NATIONAL LIFE VARIABLE PRODUCTS SELLING AGREEMENT - Continued
--------------------------------------------------------------------------------
h. Broker Dealer shall keep confidential all information obtained pursuant
to this Agreement (including, without limitation, names of the
purchasers of the Policies) and shall disclose such information only if
ESI has authorized such disclosure in writing or if such disclosure is
expressly required by applicable federal or state regulatory
authorities.
i. Broker Dealer shall maintain its registration under the 1934 Act and
shall always be a member in good standing of the NASD and shall, either
directly or through an affiliate, maintain its license as an insurance
agent pursuant to the laws of each state in which Representatives
solicit sales of the Policies and in which such license is required by
applicable insurance laws and regulations for sale of the Policies.
j. Broker Dealer will be responsible for training, supervision, and control
of the Representatives selling the Policies. Broker Dealer shall ensure
that all Representatives who will be soliciting and servicing the
Policies are duly registered with the NASD.
k. Broker Dealer shall ensure that all Representatives who will be
soliciting and servicing the Policies are duly licensed in those states
in which such license is required by the applicable insurance laws and
regulations for sale of the Policies.
l. Xxxxxx Dealer agrees that it will not take any steps to cause
Representative Compensation to be paid which would be in excess of that
permitted under the insurance laws of the State of New York.
m. Broker Dealer agrees that it will maintain E&O insurance on all its
registered representatives who are licensed to sell the Policies, with
carriers and in amounts subject to NLIC's reasonable satisfaction.
n. Upon request by ESI, Xxxxxx Dealer agrees that it shall furnish such
records as are necessary to establish that the terms of this paragraph 6
are satisfied.
7. NLIC'S AND ESI'S OBLIGATIONS.
In addition to other obligations assumed by NLIC or ESI under this
Agreement:
a. NLIC shall use its best efforts to maintain effectiveness of Policies'
Registration Statements with the SEC and any state securities
commissions where blue-sky laws require registration of the Policies and
to maintain the appropriate insurance regulatory approvals in each state
where Policies are to be sold. ESI shall keep Broker Deafer advised of
any changes in the status of the Registration Statements for the
Policies.
b. ESI shall furnish Broker Dealer with information regarding the states in
which the Policies may be sold.
c. ESI, or its agent, shall furnish Broker Dealer with promotional material
for use at point of sale, applications, prospectuses and policy forms. A
reasonable charge established by ESI may be made for such materials.
8. COMPLIANCE WITH STATE AND FEDERAL LAW.
Broker Dealer and the Representatives shall comply with all requirements of
the NASD, the 1933 Act, the 1934 Act and all other federal and/or state
laws applicable to the solicitation and service of the Policies or the
operation of Broker Dealer including, without limitation, the NASD Rules of
Fair Practice, Section 15(b)(4)(E) of the 1934 Act and all insurance
replacement regulations and regulations prohibiting the rebating of
commissions.
9. INVESTIGATIONS: CUSTOMER COMPLAINTS.
Broker Dealer agrees to cooperate fully in any insurance, securities or
other regulatory or judicial investigation or proceeding arising in
connection with the Policies, Broker Dealer, and/or any of the
Representatives. Broker Dealer shall permit applicable federal and state
insurance and other regulatory authorities to audit its records and shall
furnish the foregoing authorities with any information which such
authorities may request in order to ascertain whether Broker Dealer is
complying with all applicable laws and/or regulations. Broker Dealer agrees
to cooperate with ESI and NLIC in resolving all customer complaints with
respect to the Policies, Broker Dealer, and/or the Representatives. Broker
Dealer shall promptly notify NLIC and ESI of any allegation that Broker
Dealer or any Representative has violated any law, regulation or rule in
soliciting applications for or servicing Policies, and provide full details
of such allegation.
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9495(1102) Page 3 of 6
NATIONAL LIFE VARIABLE PRODUCTS SELLING AGREEMENT - Continued
--------------------------------------------------------------------------------
10. INDEMNIFICATION.
a. Each of NLIC and ESI hereby agrees to indemnify and hold harmless Broker
Dealer and each of its affiliates, officers or directors against any
losses, expenses (including reasonable attorneys fees), claims, damages
or liabilities to which Broker Dealer or such affiliates, officers or
directors become subject, under the 1933 Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon NLIC's or ESI's performance,
non-performance or breach of this Agreement, or are based upon any
material misstatement or omission contained in any Registration
Statement (or any post effective amendment thereof) or in the Prospectus
or any amendment or supplement to the Prospectus for the Policies.
b. Broker Dealer hereby agrees to indemnify and hold harmless ESI and NLIC
and each of their current and former affiliates, directors, officers and
each person, if any, who controls or has controlled ESI or NLIC within
the meaning of the 1933 Act or the 1934 Act, against any losses,
expenses (including reasonable attorneys fees), claims, (including, but
not limited to, claims for commissions or other compensation), damages
or liabilities to which ESI and NLIC and any such affiliates, directors,
officers or controlling persons may become subject, under the 1933 Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon Broker
Dealer's and/or its Representatives' performance, non-performance or
breach of this Agreement including, but not limited to, any unauthorized
use of sales materials, any oral or written misrepresentations, or any
unlawful sales practices concerning the Policies.
c. Within 30 days after receipt by either party of notice of the
commencement of any action, such party shall, if a claim in respect
thereof is to be made, notify the other party in writing of the
commencement thereof; but the omission to so notify shall not relieve
the indemnifying party from any liability which it might otherwise have.
11. MISCELLANEOUS PROVISIONS.
a. All money payable in connection with the Policies is NLIC's exclusive
property, shall be drawn payable to "National Life Insurance Company"
and shall be transmitted to NLIC within two days of receipt along with
applications and other documents in accordance with the administrative
procedures of NLIC (as developed and amended from time to time by NLIC)
without any deduction or offset for any reason, except in the case of a
deduction which is made under the terms of a "Net Commission Agreement"
which may be described on Schedule B attached hereto.
b. Broker Dealer agrees to make appropriate arrangements for delivery to
the applicant of the Policy accompanied by any additional appropriate
documents. Broker Dealer or the Representative will obtain, upon
delivery of the Policy to applicant, the required signature on NLIC's
policy delivery receipt and any application amendments and immediately
forward such to NLIC.
c. Broker Dealer agrees that for a period of two years from the termination
of the Agreement it shall not and shall cause the Representatives not to
directly or indirectly contact policyholders of NLIC for the purpose of
inducing or attempting to induce such policyholders to cancel, lapse or
fail to renew such Policies with NLIC, to discourage or attempt to
discourage such policyholders from paying any additional premiums under
such policies, or encouraging market timing activity.
d. Broker Dealer and its Representatives are independent contractors with
respect to ESI and NLIC and (i) shall not have the right to accept risks
or incur indebtedness on behalf of ESI or NLIC nor hold themselves out
as employees of ESI or NLIC in connection with the solicitation of the
Policies or otherwise and (ii) shall not have the authority to make,
alter, waive or discharge any provisions(s) of the Policies, to waive
any forfeiture or to grant, permit, or to extend the time of making any
payments, or to alter or substitute the forms which NLIC may prescribe,
or enter into any proceeding in a court of law or before a regulatory
agency in the name of or on behalf of ESI or NLIC.
e. Broker Dealer represents that all of its directors, officers, and
Representatives are and shall be covered by blanket fidelity bonds,
including coverage for larceny and embezzlement, issued by a reputable
bonding company. These bonds shall be maintained at Broker Dealer's
expense and shall be, at least, of the form, type and amount required
under the NASD Rules of Fair Practice. ESI may require evidence
satisfactory to it that such coverage is in force and Broker Dealer
shall give prompt written notice to ESI of any notice of cancellation or
change of coverage.
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9495(1102) Page 4 of 6
NATIONAL LIFE VARIABLE PRODUCTS SELLING AGREEMENT - Continued
--------------------------------------------------------------------------------
f. Each party represents to the others that it has full power and authority
to enter into this Agreement.
g. This Agreement shall be binding on and shall inure to the benefit of the
parties hereto and their respective successors and assigns provided that
no party may assign this Agreement without the prior written consent of
each of the others.
h. All notices or communications shall be sent to the addresses set forth
below or to such other address as any party may request by giving
written notice to the other parties.
TO NLIC: National Life Insurance Company
Xxx Xxxxxxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Law Department
TO ESI: Equity Services, Inc.
One National Life Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Director of Compliance
TO BROKER DEALER: ---------------------------
---------------------------
---------------------------
---------------------------
i. This Agreement shall be governed by the laws of the State of Vermont and
constitutes the entire agreement and understanding between the parties
hereto with respect to the Policies. ESI reserves the unconditional
right to amend this Agreement and the Schedules attached hereto and any
of the Policies or suspend the sales of any of the Policies at any time
without prior notice. The submission of an application by any
Representative after notice of any such amendment has been sent to
Broker Dealer shall constitute Broker Dealer's agreement to any such
amendment.
j. Notwithstanding the foregoing subparagraph (i), any future insurance
products issued by NLIC may be covered by this Agreement only as agreed
by the parties in writing.
k. Failure of any party to insist upon strict compliance with any of the
conditions of this Agreement shall not be construed as its waiver of
such conditions and no waiver of any of the provisions of this Agreement
shall be deemed a waiver of any other provisions.
l. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
m. This Agreement supersedes any previous agreement between the parties
relating to the distribution of NLIC's variable life insurance and
annuity products.
12. PRIVACY POLICY.
You and National Life Insurance Company ("NLIC") agree that all facts or
information received by any party related to a policyholder or a
policyholder's account shall remain confidential, unless such facts or
information are required to be disclosed by any regulatory or regulatory
authority or court of competent jurisdiction. You and NLIC will establish
procedures to protect the security and confidentiality of such information.
Nonpublic personal financial information shall mean any financial
information that identifies an individual personally and is not available
to the public. Such information shall include, but not be limited to, a
customer's name or other identifying information, income, net worth,
information related to his, her, or its policy, credit history, etc. Each
of you, your representatives, and NLIC agrees to use and disclose personal
financial information only to carry out the purposes for which it was
disclosed to him, her, or it and will not use or disclose personal
financial information if prohibited by applicable law, including, without
limitation, statutes and regulations enacted pursuant to the
Xxxxx-Xxxxx-Xxxxxx Act. If you, your representatives, or NLIC outsources
services to a third party, such third party will agree in writing to
maintain the security and confidentiality of any information shared with
it.
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9495(1102) Page 5 of 6
NATIONAL LIFE VARIABLE PRODUCTS SELLING AGREEMENT - Continued
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed as of the day and year first above written.
NATIONAL LIFE INSURANCE COMPANY
By:
-----------------------------------------------(SEAL)
Its:-----------------------------------------------
EQUITY SERVICES, INC.
By:
-----------------------------------------------(SEAL)
Its:-----------------------------------------------
BROKER DEALER:
By:
-----------------------------------------------(SEAL)
Its:-----------------------------------------------
Print Name:
---------------------------------------
Its:-----------------------------------------------
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9495(1102) Page 6 of 6
NATIONAL LIFE LOGO OMITTED NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULES
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Schedule A
1) Sentinel Advantage Variable Annuity
2) VariTrak Variable Universal Life
3) Sentinel Estate Provider Survivorship Variable Universal Life
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NATIONAL LIFE VARIABLE CONTRACTS DISTRIBUTED BY EQUITY SERVICES, INC. o
BROKER-DEALER SUBSIDIARY OF NATIONAL LIFE INSURANCE COMPANY
ONE NATIONAL LIFE DRIVE o MONTPELIER, VERMONT 05604 TEL: (000) 000-0000
9511 (1102) Page 1 of 6
Cat. No. 48583 (85% Schedule)
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - Continued
--------------------------------------------------------------------------------
SCHEDULE B
SENTINEL ADVANTAGE VARIABLE ANNUITY
I. COMPENSATION FOLLOWS 1 OF 4 SCHEDULES:
Schedule 1:
Issue Age Commission Rate Expense Allowance Total
0-79 3.50% 3.00% 6.50%
80-85 3.50% 0.00% 3.50%
Schedule 2:
Issue Age Commission Rate Expense Allowance Total
0-79 3.50% 1.75% 5.25%
80-85 2.75% 0.00% 2.75%
Trail 0.25%
Schedule 3:
Issue Age Commission Rate Expense Allowance Total
0-79 3.50% 0.00% 3.50%
80-85 1.75% 0.00% 1.75%
Trail 0.50%
Schedule 4:
Issue Age Commission Rate Expense Allowance Total
0-79 1.00% 0.00% 1.00%
80-85 1.00% 0.00% 1.00%
Trail 1.00%
II. CHARGEBACKS.
Commissions and expense allowances will be charged back for surrenders and
withdrawals in the first contract year. The chargeback will be as follows:
Surrender Month Chargeback
0 - 6 Months 100% of compensation
7 - 12 Months 50% of compensation
III. INTERNAL REPLACEMENTS:
In the event that the funds for the Sentinel Advantage Variable Annuity are
coming, directly or indirectly, in whole or in part from the surrender of,
or withdrawals or loans from, any other annuity contract issued by National
Life Insurance Company or Life Insurance Company of the Southwest,
including without limitation any fixed, equity-indexed or variable annuity
contract:
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9511(1102) Page 2 of 6
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - Continued
--------------------------------------------------------------------------------
(i) the normal commission provided for above in this Schedule B will be
paid on premium paid into the Sentinel Advantage Variable Annuity which did
not come directly or indirectly from the other annuity contract;
(ii) 80% of the normal commission provided for above in this Schedule B
will be paid on premium paid into the Sentinel Advantage Variable Annuity
which is being directly or indirectly transferred from the other annuity
contract and which represents earnings on the other annuity contract; and
(iii) 50% of the normal commission provided for above in this Schedule B
will be paid on premium paid into the Sentinel Advantage Variable Annuity
which is being directly or indirectly transferred from the other annuity
contract and which represents the amount remaining in the other variable
annuity contract after deducting the earnings on such contract.
In the event that the funds for the Sentinel Advantage Variable Annuity are
coming, directly or indirectly, in whole or in part from the surrender of,
or withdrawals or loans from, any life insurance policy issued by National
Life Insurance Company or Life Insurance Company of the Southwest,
including without limitation any whole life, universal, equity-indexed or
variable life insurance policy, 50% of the normal commission provided for
above in this Schedule B will be paid on premium paid into the Sentinel
Advantage Variable Annuity which is being directly or indirectly
transferred from such life insurance policy.
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9511(1102) Page 3 of 6
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - Continued
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VARITRAK VARIABLE UNIVERSAL LIFE INSURANCE
X. XXXXX DEALER CONCESSION.
A. Initial Insurance Segment
UP to CTP EXCESS OF CTP
Year Commission ERA OVERRIDE TOTAL AMOUNT
----- ----------------------------------------------- -------------
1 50.0% 35.00% -0- 85.00% 4.00%
2-10 4.00% -0- -0- 4.00% 4.00%
11+ 1.50% -0- -0- 1.50% 1.50%
RIDERS: Premiums paid on riders are totaled with other premiums and
compensated according to the above schedule with the exception of the
following riders when taken in Wisconsin.
Wisconsin Chronic Care Protection Rider (CCP) and Accelerated Care Rider
(ACR)
Policy Year 1 Policy Years 2-6 Policy Years 7+
------------- ---------------- ---------------
Commission 35.00% 20.00% 0.00%
ERA 35.00% 0.00% 0.00%
B. Increases in Face Amount
1. For the purposes of determining additional first year compensation on
increases, renewal premiums will be allocated to segments by attributing
all premiums in a given year to the original segment up to the CTP for
that segment. Then premium is allocated to the next oldest segment up to
its CTP, and so on. Any premium remaining after all CTP's have been
satisfied is compensated as excess premium. Any premium that has been
allocated to the CTP for the current increase segment will receive
additional first year compensation on the following schedule:
Commission Percent
------------------
50%
2. For increases within 12 months of a decrease, compensation is as
described in above only for the excess of the new face amount over the
highest previous face amount.
II. COMMISSION CHARGEBACKS.
For the purposes of chargebacks of commission, the term "terminations"
includes all terminations of the policy except death. There will be no
chargebacks of commission for decreases in Face Amount or withdrawals of
Account Value.
A. There will be a chargeback of unearned commissions for terminations when
commissions have been annualized, if applicable.
B. In addition, there will be a chargeback of earned commissions for
terminations during the first policy year. The charge back applies to
commissions, ERA, and overrides paid in the first year. The chargeback
percents applied to earned commissions are as follows:
Date of Termination Chargeback Percent
------------------- ------------------
Issue through 6 months 100% of commissions, ERA, & overrides
paid less 100% of the Deferred Sales
Charge, but not less than zero.
7 through 12 months 70% of commissions, ERA, & overrides
paid less 70% of the Deferred Sales
Charge, but not less than zero.
If for any reason the surrender charge has been waived, then the Deferred
Sales Charge used in the above calculation would be zero.
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9511(1102) Page 4 of 6
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - Continued
--------------------------------------------------------------------------------
C. Chargebacks will be returned to the broker/dealer for reinstated
contracts approved for reinstatement within 6 months of lapse.
D. In addition, there will be a chargeback of earned commissions for lapse
or surrender at a No Lapse Guarantee Rider (NLGR) where the underlying
policy remains in force during the first two policy years. The
chargeback applies to commissions, ERA and overrides paid in the first
year. The chargeback will apply to the CRP difference of a policy with
the NLGR and a policy without the NLGR. The chargeback rate applied to
the CTP difference will be the difference of the first year target and
excess rates.
III. INTERNAL REPLACEMENTS.
In the event that the funds for the new variable life insurance policy are
coming, directly or indirectly, in whole or in part from the surrender of,
withdrawals or loans from, reductions in premiums on, or reductions in the
amount or period of coverage on, any life insurance policy issued by
National Life Insurance Company or Life Insurance Company of the Southwest,
including without limitation any whole life, universal, equity-indexed or
variable life insurance policy, the normal commission and ERA provided for
above in this Schedule B will be paid, except that the commissionable
target premium (CTP) will be set equal to the amount by which the CTP for
the new variable life insurance policy exceeds the target premium for the
other insurance policy, not less than zero.
SENTINEL ESTATE PROVIDER SURVIVORSHIP VARIABLE UNIVERSAL LIFE INSURANCE
X. XXXXX DEALER CONCESSION.
A. Initial Insurance Segment
Up to CTP EXCESS OF CTP
YEAR COMMISSION ERA Override TOTAL AMOUNT
--------------------------------------------------------------------------------
1 50.00% 35.00% -0- 85.00% 4.00%
2-10 4.00% -0- -0- 4.00% 4.00%
11 + 1.50% -0- -0- 1.50% 1.50%
B. Increases in Face Amount
1. For the purposes of determining additional first year compensation on
increases, renewal premiums will be allocated to segments by attributing
all premiums in a given year to the original segment up to the CTP for
that segment. Then premium is allocated to the next oldest segment up to
its CTP, and so on. Any premium remaining after all CTP's have been
satisfied is compensated as excess premium. Any premium that has been
allocated to the CTP for the current increase segment will receive
additional first year compensation on the following schedule:
Commission Percent
------------------
50%
2. For increases within 12 months of a decrease, compensation is as
described in above only for the excess of the new face amount over the
highest previous face amount.
II. COMMISSION CHARGEBACKS.
For the purposes of chargebacks of commission, the term "terminations"
includes all terminations except death. There will be no chargebacks of
commission for decreases in Face Amount or withdrawals of Account Value.
A. There will be a chargeback of unearned commissions for terminations when
commissions have been annualized, if applicable.
B. In addition, there will be a chargeback of earned compensation for
terminations during the first policy year. The chargeback percents
applied to earned compensation will be 100% in the first policy month
and will decrease 1/12th for each complete policy month that the policy
is in force.
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9511(1102) Page 5 of 6
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - Continued
--------------------------------------------------------------------------------
C. Chargebacks will be returned to the broker/dealer for reinstated
contracts approved for reinstatement within 6 months of lapse.
III. Internal Replacements.
In the event that the funds for the new variable life insurance policy are
coming, directly or indirectly, in whole or in part from the surrender of,
withdrawals or loans from, reductions in premiums on, or reductions in the
amount or period of coverage on, any life insurance policy issued by
National Life Insurance Company or Life Insurance Company of the Southwest,
including without limitation any whole life, universal, equity-indexed or
variable life insurance policy, the normal commission and ERA provided for
above in this Schedule 8 will be paid, except that the commissionable
target premium (CTP) will be set equal to the amount by which the CTP for
the new variable life insurance policy exceeds the target premium for the
other insurance policy, not less than zero.
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9511(1102) Page 6 of 6
NATIONAL LIFE LOGO OMITTED NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE
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SCHEDULE B
1) Sentinel Advantage Variable Annuity
2) VariTrak Variable Universal Life
3) Sentinel Estate Provider Survivorship Variable Universal Life
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NATIONAL LIFE VARIABLE CONTRACTS DISTRIBUTED BY EQUITY SERVICES, INC o
BROKER-DEALER SUBSIDIARY OF NATIONAL LIFE INSURANCE COMPANY
ONE NATIONAL LIFE DRIVE o MONTPELIER, VERMONT 05604 TEL: (000) 000-0000
9519 (1202) Page 1 of 6
Cat. No. 48617 (90% Schedule)
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - Continued
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SCHEDULE B
SENTINEL ADVANTAGE VARIABLE ANNUITY
I. COMPENSATION FOLLOWS 1 OF 4 SCHEDULES;
Schedule 1:
Issue Age Commission Rate Expense Allowance Total
0-79 3.50% 3.00% 6.50%
80-85 3.50% 0.00% 3.50%
Schedule 2:
Issue Age Commission Rate Expense Allowance Total
0-79 3.50% 1.75% 5.25%
80-85 2.75% 0.00% 2.75%
Trail 0.25%
Schedule 3:
Issue Age Commission Rate Expense Allowance Total
0-79 3.50% 0.00% 3.50%
80-85 1.75% 0.00% 1.75%
Trail 0.50%
Schedule 4:
Issue Age Commission Rate Expense Allowance Total
0-79 1.00% 0.00% 1.00%
80-85 1.00% 0.00% 1.00%
Trail 1.00%
II. CHARGEBACKS.
Commissions and expense allowances will be charged back for surrenders and
withdrawals in the first contract year. The chargeback will be as follows:
Surrender Month Chargeback
0 - 6 Months 100% of compensation
7 - 12 Months 50% of compensation
III. INTERNAL REPLACEMENTS.
In the event that the funds for the Sentinel Advantage Variable Annuity are
coming, directly or indirectly, in whole or in part from the surrender of,
or withdrawals or loans from, any other annuity contract issued by National
Life Insurance Company or Life Insurance Company of the Southwest,
including without limitation any fixed, equity-indexed or variable annuity
contract:
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9519(1202) Page 2 of 6
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - CONTINUED
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(i) the normal commission provided for above in this Schedule B will be
paid on premium paid into the Sentinel Advantage Variable Annuity which did
not come directly or indirectly from the other annuity contract;
(ii) 80% of the normal commission provided for above in this Schedule B
will be paid on premium paid into the Sentinel Advantage Variable Annuity
which is being directly or indirectly transferred from the other annuity
contract and which represents earnings on the other annuity contract; and
(iii) 50% of the normal commission provided for above in this Schedule B
will be paid on premium paid into the Sentinel Advantage Variable Annuity
which is being directly or indirectly transferred from the other annuity
contract and which represents the amount remaining in the other variable
annuity contract after deducting the earnings on such contract.
In the event that the funds for the Sentinel Advantage Variable Annuity are
coming, directly or indirectly, in whole or in part from the surrender of,
or withdrawals or loans from, any life insurance policy issued by National
Life Insurance Company or Life Insurance Company of the Southwest,
including without limitation any whole life, universal, equity-indexed or
variable life insurance policy, 50% of the normal commission provided for
above in this Schedule B will be paid on premium paid into the Sentinel
Advantage Variable Annuity which is being directly or indirectly
transferred from such life insurance policy.
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9519(1202) Page 3 of 6
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - CONTINUED
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VARITRAK VARIABLE UNIVERSAL LIFE INSURANCE
X. XXXXX DEALER CONCESSION.
A. Initial Insurance Segment
Up to CTP EXCESS OF CTP
Year Commission ERA Override TOTAL AMOUNT
---- ---------- --- -------- ----- ------
1 55.0% 35.00% -0- 90.00% 4.00%
2-10 4.00% -0- -0- 4.00% 4.00%
11+ 1.50% -0- -0- 1.50% 1.50%
RIDERS: Premiums paid on riders are totaled with other premiums and
compensated according to the above schedule with the exception of the
following riders when taken in Wisconsin.
Wisconsin Chronic Care Protection Rider (CCP) and Accelerated Care Rider
(ACR)
POLICY YEAR 1 POLICY YEARS 2-6 POLICY YEARS 7+
------------- ---------------- ---------------
Commission 35.00% 20.00% 0.00%
ERA 35.00% 0.00% 0.00%
B. Increases in Face Amount
1. For the purposes of determining additional first year compensation
on increases, renewal premiums will be allocated to segments by
attributing all premiums in a given year to the original segment up
to the CTP. for that segment. Then premium is allocated to the next
oldest segment up to its CTP, and so on. Any premium remaining after
all CTP's have been satisfied is compensated as excess premium. Any
premium that has been allocated to the CTP for the current increase
segment will receive additional first year compensation on the
following schedule:
Policy Years Commission Percent
------------ ------------------
2-10 55.00% and ERA of 31.00%
11 and after 55.00% and ERA of 33.50%
2. For increases within 12 months of a decrease, compensation is as
described in above only for the excess of the new face amount over the
highest previous face amount.
II. COMMISSION CHARGEBACKS.
For the purposes of chargebacks of commission, the term "terminations"
includes all terminations of the policy except death. There will be no
chargebacks of commission for decreases in Face Amount or withdrawals of
Account Value.
A. There will be a chargeback of unearned commissions for terminations when
commissions have been annualized, if applicable.
B. In addition, there will be a chargeback of earned commissions for
terminations during the first policy year. The chargeback applies to
commissions, ERA, and overrides paid in the first year. The chargeback
percents applied to earned commissions are as follows:
Date of Termination Chargeback Percent
------------------- ------------------
Issue through 6 months 100% of commissions, ERA, & overrides
paid less 100% of the Deferred Sales
Charge, but not less than zero.
7 through 12 months 70% of commissions, ERA, & overrides
paid less 70% of the Deferred Sales
Charge, but not less than zero.
If for any reason the surrender charge has been waived, then the Deferred Sales
Charge used in the above calculation would be zero.
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9519(1202) Page 4 of 6
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - CONTINUED
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C. Chargebacks will be returned to the broker/dealer for reinstated
contracts approved for reinstatement within 6 months of lapse.
D. In addition, there will be a chargeback of earned commissions for lapse
or surrender of a No Lapse Guarantee Rider (NLGR) where the underlying
policy remains in force during the first two policy years. The
chargeback applies to commissions, ERA and overrides paid in the first
year. The chargeback will apply to the CTP difference of a policy with
the NLGR and a policy without the NLGR. The chargeback rate applied to
the CTP difference xxxx be the difference of the first year target and
excess rates.
III. INTERNAL REPLACEMENTS.
In the event that the funds for the new variable life insurance policy are
coming, directly or indirectly, in whole or in part from the surrender of,
withdrawals or loans from, reductions in premiums on, or reductions in the
amount or period of coverage on, any life insurance policy issued by
National Life Insurance Company or Life Insurance Company of the Southwest,
including without limitation any whole life, universal, equity-indexed or
variable life insurance policy, the normal commission and ERA provided for
above in this Schedule B will be paid, except that the commissionable
target premium (CTP) will be set equal to the amount by which the CTP for
the new variable life insurance policy exceeds the target premium for the
other insurance policy, not less than zero.
Sentinel Estate Provider Survivorship Variable Universal Life Insurance
X. Xxxxx Dealer Concession. A. Initial Insurance Segment
UP TO CTP EXCESS OF CTP
Year Commission ERA Override TOTAL AMOUNT
---- ---------- --- -------- ----- ------
1 55.0% 35.00% -0- 90.00% 4.00%
2-10 4.00% -0- -0- 4.00% 4.00%
11+ 1.50% -0- -0- 1.50% 1.50%
B. Increases in Face Amount
1. For the purposes of determining additional first year compensation on
increases, renewal premiums will be allocated to segments by attributing
all premiums in a given year to the original segment up to the CTP for
that segment. Then premium is allocated to the next oldest segment up to
its CTP, and so on. Any premium remaining after all CTP's have been
satisfied is compensated as excess premium. Any premium that has been
allocated to the CTP for the current increase segment will receive
additional first year compensation on the following schedule:
Policy Years Commission Percent
------------ ------------------
2-10 55.00% and ERA of 31.00%
11 and after 55.00% and ERA of 33.50%
2. For increases within 12 months of a decrease, compensation is as
described in above only for the excess of the new face amount over the
highest previous face amount.
II. COMMISSION CHARGEBACKS.
For the purposes of chargebacks of commission, the term "terminations"
includes all terminations except death. There will be no chargebacks of
commission for decreases in Face Amount or withdrawals of Account Value.
A. There will be a chargeback of unearned commissions for terminations when
commissions have been annualized, if applicable.
B. In addition, there will be a chargeback of earned compensation for
terminations during the first policy year. The chargeback percents
applied to earned compensation will be 100% in the first policy month
and will decrease 1/12th for each complete policy month that the policy
is in force.
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9519(1202) Page 5 of 6
NATIONAL LIFE VARIABLE PRODUCTS
SELLING AGREEMENT SCHEDULE - CONTINUED
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National Life Variable Products
Selling Agreement Schedule -D Continued
C. Chargebacks will be returned to the broker/dealer for reinstated
contracts approved for reinstatement within 6 months of lapse.
III. INTERNAL REPLACEMENTS.
In the event that the funds for the new variable life insurance policy are
coming, directly or indirectly, in whole or in part from the surrender at,
withdrawals or loans from, reductions in premiums on, or reductions in the
amount or period of coverage on, any life insurance policy issued by
National Life Insurance Company or Life Insurance Company of the Southwest,
including without limitation any whole life, universal, equity-indexed or
variable life insurance policy, the normal commission and ERA provided for
above in this Schedule B will be paid, except that the commissionable
target premium (CTP) will be set equal to the amount by which the CTP for
the new variable life insurance policy exceeds the target premium for the
other insurance policy, not less than zero.
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9519(1202) Page 6 of 6
