Exhibit 4(j)
RENEWAL OPTION:
ESTATE ENHANCEMENT BENEFIT RIDER
The Renewal Option: Estate Enhancement Benefit Rider is made a part of the
Contract to which it is attached (this Contract).
As used in this form: (1) the Renewal Option: Estate Enhancement Benefit Rider
will be referred to as "this Rider"; (2) the Estate Enhancement Benefit provided
by this Rider will be referred to as the Death Benefit; and (3) the Renewal
Amount will mean the account value of this Contract as of the date this Rider
becomes effective.
The Death Benefit provided by this Rider is only in effect: (1) for Non-
Qualified Contracts and Contracts sold as Individual Retirement Annuities (IRA
and Xxxx XXX) under Code Section 408(b) or 408A of the Internal Revenue Code of
1986, as amended; and (2) for Contracts where the Owner, pre-designated Joint
Owner (if applicable) and Annuitant are all under the age of 76 on the effective
date of this Rider.
This Rider is only in effect and is only applicable: (1) if the Owner of this
Contract has elected to add this Rider to this Contract; and (2) if the LNL Home
Office has approved the addition of this Rider to this Contract. This Rider will
become effective on the Valuation Date at the end of the Valuation Period during
which the addition of this Rider to this Contract is approved by the LNL Home
Office. This Rider may only be elected one time.
Right to Examine Rider. Within 10 days after the date this Rider is first
received, it may be cancelled for any reason by delivering or mailing it to the
Home Office of LNL. Upon cancellation, LNL will waive the new Contingent
Deferred Sales Charges imposed under the terms of this Rider and will re-impose
the prior Contingent Deferred Sales Charges, if any, which were waived under the
terms of this Rider. The Owner assumes all investment risk attributable to the
Variable Account during this 10 day Right to Examine Rider period.
This Rider replaces, where applicable, the "Rider" Form 25923, the "Increased
Guaranteed Minimum Death Benefit" rider Form DBA-2, the "Enhanced Guaranteed
Minimum Death Benefit (EGMDB)" rider Form DBA-5 4/97, the "Enhanced Guaranteed
Minimum Death Benefit (EGMDB) Amendment" Form DBA-5A 11/98, and the "Enhanced
Guaranteed Minimum Death Benefit (EGMDB) Amendment" Form DBA-5B 06/99 which may
have been attached to this Contract.
The following language shall replace the sixth paragraph of Section 1.04 (NET
INVESTMENT RATE AND NET INVESTMENT FACTOR) of this Contract:
The Net Investment Rate for each sub-account is equal to the Gross
Investment Rate of the Fund minus a daily charge at an annual rate of
[1.60%] for each day of the Valuation Period the Enhancement Rate described
in Section 2.13 below is greater than 0.0% or [1.40%] for each day of the
Valuation Period the Enhancement Rate is equal to 0.0%, plus or minus an
adjustment for any taxes attributable to the operation of the Variable
Account. LNL makes this deduction for administrative, mortality, and
distribution expense risk guarantees.
The following provision shall be added to ARTICLE 1 (PURCHASE PAYMENTS) of this
Contract:
1.09 RENEWAL OPTION
The following shall occur on the Valuation Date the election of this Rider
becomes effective:
1) For purposes of Section 2.11 (Surrender Option) of this Contract, the
Renewal Amount will be considered a Purchase Payment and will be
subject to a new Contingent Deferred Sales Charge according to the
terms of this Contract.
2) Contingent Deferred Sales Charges, if any, will be waived on all
Purchase Payments made to this Contract before the effective date of
this Rider.
The following language shall be added after the last sentence of the By Owner
provision in Section 2.02 (CHOICE OF ANNUITY PAYMENT OPTION) of this Contract:
In addition, before the Maturity Date the Owner may select an Annuity
Payment Option as a method of paying the Death Benefit to a Beneficiary.
The following language shall replace the third paragraph of Section 2.11
(SURRENDER OPTION) of this Contract:
The Contingent Deferred Sales Charge does not apply to:
1) Purchase Payments made to this Contract prior to the effective date of
this Rider; or
2) surrender of this Contract as a result of the total and permanent
disability of the Annuitant; or
3) surrender of this Contract as a result of the death of the Annuitant,
the Owner, or the Joint Owner (if there are two or more Joint Owners,
this means the Joint Owner pre-designated for payment of the Death
Benefit as defined in Section 2.13); or
4) annuitization of this Contract.
The following provision shall replace Section 2.13 (DEATH OF ANNUITANT) of this
Contract in its entirety:
2.13 DEATH BENEFIT
Death Before Commencement of Annuity Payments
Entitlement to Death Benefit
LNL will pay a Death Benefit for Contracts where the Owner has elected this
Rider. LNL will pay the Death Benefit upon the death of the Annuitant, the
Owner or the Joint Owner (if there are two or more Joint Owners, this means
the Joint Owner pre-designated for payment of the Death Benefit). The Death
Benefit will be paid upon approval by LNL after LNL is in receipt of: (1)
due proof, satisfactory to LNL, of the death; (2) written authorization for
payment; and (3) all required claim forms, fully completed.
Due proof of death may be: (1) a certified copy of the death certificate;
(2) a certified copy of a decree of a court of competent jurisdiction as to
the findings of death; or (3) any other proof of death acceptable to LNL.
Upon the death of the Annuitant, the Death Benefit will be paid to the
Beneficiary in accordance with the terms of Article 3.
Upon the death of the sole Owner, LNL will pay a Death Benefit to the
Contingent Owner, if any; otherwise, to the Annuitant.
If there is an Owner and no more than one Joint Owner, upon the death of
either the Owner or the Joint Owner, LNL will pay a Death Benefit to the
surviving Owner or Joint Owner.
If there is an Owner and two or more Joint Owners, the Owner may pre-
designate one of the Joint Owners upon whose death LNL will pay a Death
Benefit. If the Owner has not pre-designated a Joint Owner, in writing to
LNL, the youngest Joint Owner will be the pre-designated Joint Owner. Upon
the death of either the Owner or the pre-designated Joint Owner, LNL will
pay a Death Benefit to the surviving Owner and/or any Joint Owner(s)
equally. Upon the death of a Joint Owner who was NOT the pre-designated
Joint Owner, LNL will pay the cash surrender value to the surviving Owner
and any surviving Joint Owner(s) equally.
If the deceased Owner or Joint Owner is also the Annuitant, then the death
will be treated as the death of the Annuitant and will be subject to the
provisions of this Rider regarding death of the Annuitant.
Determination of Death Benefit Amount
The Death Benefit is equal to the greatest of the following four amounts:
1) The account value of this Contract on the Valuation Date the Death
Benefit is approved by the LNL Home Office for payment.
2) The Renewal Amount plus the sum of all Purchase Payments made to this
Contract after the effective date of this Rider and minus all
withdrawals, partial annuitizations and premium tax (if any) made,
effected or incurred on or after the effective date of this Rider.
3) The highest account value at the time of fund valuation on any
Contract Date anniversary following the effective date of this Rider
prior to the 81st birthday of the deceased individual (Owner, pre-
designated Joint Owner if applicable, or Annuitant) and prior to the
date of death of the individual (Owner, pre-designated Joint Owner, or
Annuitant) for whom a death claim is approved by the LNL Home Office
for payment. If the Enhanced Guaranteed Minimum Death Benefit was in
effect prior to the effective date of this Rider, then the highest
account value will be calculated from the effective date of the
Enhanced Guaranteed Minimum Death Benefit previously provided by this
Contract. The highest account value is
adjusted for certain transactions. It is increased by Purchase
Payments (other than the Renewal Amount) made on or after that
Contract Date anniversary on which the highest account value is
obtained. It is decreased by partial withdrawals, partial
annuitizations and premium tax (if any) made, effected or incurred on
or after that Contract Date anniversary on which the highest account
value is obtained.
4) The account value of this Contract on the Valuation Date the Death
Benefit is approved by the LNL Home Office for payment plus an amount
equal to the result of the Enhancement Rate multiplied times the
lesser of: (1) the Contract Earnings; or (2) the Covered Earnings
Limit. The Enhancement Rate, Contract Earnings and Covered Earnings
Limit are described below:
Age of Oldest Owner, pre-designated Joint Owner or
Annuitant on date when this Rider became Effective
--------------------------------------------------
Ages [0-69] Ages [70-75] Ages [76+]
Enhancement Rate equals: [40.0%] [25.0%] [0.0%]
Contract Earnings equals:
1) the account value of this Contract as of the date of death of the
individual (Owner, pre-designated Joint Owner, or Annuitant) for
whom a death claim is approved by the LNL Home Office; minus
2) the Renewal Amount; minus
3) each Purchase Payment that is made to this Contract on or after
the effective date of this Rider and prior to the date of death of
the individual (Owner, pre-designated Joint Owner, or Annuitant)
for whom a death claim is approved by the LNL Home Office; plus
4) the amount by which each withdrawal made:
a) on or after the effective date of this Rider; and
b) prior to the date of death of the individual (Owner, pre-
designated Joint Owner, or Annuitant) for whom a death claim
is approved by the LNL Home Office;
exceeded the Contract Earnings immediately prior to the
withdrawal.
Covered Earnings Limit equals [200%] of:
1) the Renewal Amount; plus
2) each Purchase Payment that is made to this Contract on or after
the effective date of this Rider and prior to both the date of
death of the individual (Owner, pre-designated Joint Owner, or
Annuitant) for whom a death claim is approved by the LNL Home
Office and the Contract Date anniversary immediately preceding the
76th birthday of the oldest of the Owner, pre-designated Joint
Owner (if applicable) or Annuitant; minus
3) the amount by which each withdrawal made:
a) on or after the effective date of this Rider; and
b) prior to the date of death of the individual (Owner, pre-
designated Joint Owner, or Annuitant) for whom a death claim
is approved by the LNL Home Office;
exceeded the Contract Earnings immediately prior to the
withdrawal.
If the recipient of the Death Benefit is the surviving spouse of the
deceased individual, the surviving spouse may elect to receive the Death
Benefit by continuing this Contract as the sole Owner and having paid into
this Contract the excess, if any, of the Death Benefit over the account
value of this Contract on the date the Death Benefit is approved by the LNL
Home Office for payment. If the surviving spouse elects to continue this
Contract as the sole Owner, this Rider will continue in effect for this
Contract and provide a subsequent Death Benefit, but with the following
three changes:
1) The Enhancement Rate used to calculate a subsequent Death Benefit will
be determined by the age of the older of the surviving spouse or the
Annuitant on the date the original Death Benefit was approved for
payment.
2) The Contract Earnings for a subsequent Death Benefit will equal:
a) the account value of this Contract as of the date of death of the
individual (Surviving spouse or Annuitant) for whom a death claim
for a subsequent Death Benefit is approved by the LNL Home Office;
minus
b) the original Death Benefit; minus
c) each Purchase Payment that is made to this Contract on or after
the date the original Death Benefit was approved for payment and
prior to the date of death of the individual (Surviving spouse or
Annuitant) for whom a death claim for a subsequent Death Benefit
is approved by the LNL Home Office; plus
d) the amount by which each withdrawal made:
1) on or after the date the original Death Benefit was approved
for payment; and
2) prior to the date of death of the individual (Surviving spouse
or Annuitant) for whom a death claim for a subsequent Death
Benefit is approved by the LNL Home Office;
exceeded the Contract Earnings immediately prior to the withdrawal.
3) The Covered Earnings Limit will equal [200%] of:
a) the original Death Benefit; plus
b) each Purchase Payment that is made to this Contract on or after
the date the original Death Benefit was approved for payment and
prior to both the date of death of the individual (Surviving
spouse or Annuitant) for whom a death claim for a subsequent Death
Benefit is approved by the LNL Home Office and the Contract Date
anniversary immediately preceding the 76th birthday of the older
of the surviving spouse or the Annuitant; minus
c) the amount by which each withdrawal made:
1) on or after the date the original Death Benefit was approved
for payment; and
2) prior to the date of death of the individual (Surviving spouse
or Annuitant) for whom a death claim for a subsequent Death
Benefit is approved by the LNL Home Office;
exceeded the Contract Earnings immediately prior to the
withdrawal.
The Death Benefit will not be paid upon the death of any Owner, pre-
designated Joint Owner or Annuitant who has been changed after the
effective date of this Rider, unless such change is a result of the
surviving spouse continuing this Contract as the sole Owner. This Rider
will terminate upon the occurrence of any of the following: (1) payment of
the original Death Benefit, unless this Contract is continued by the
surviving spouse as the sole Owner in which case this Rider will terminate
upon payment of the subsequent Death Benefit; or (2) annuitization of this
Contract; or (3) termination of this Contract.
Payment of Amounts upon Death
If the Owner is a corporation or other non-individual (non-natural person),
the death of the Annuitant will be treated as the death of the Owner.
The proceeds (either the Death Benefit or the cash surrender value) payable
upon the first death of the Owner or any Joint Owner, or payable upon the
death of the spouse who continues this Contract, will be distributed as
follows:
1) the proceeds must be completely distributed within five years of the
Owner's (or Joint Owner's) date of death; or
2) the recipient of the proceeds may elect, within the one year period
after the Owner's (or Joint Owner's) date of death, to receive the
proceeds in substantially equal installments over the life of such
recipient or over a period not extending beyond the life expectancy of
such recipient; provided that such distributions begin not later than
one year after the Owner's (or Joint Owner's) date of death.
The Death Benefit payable upon the death of the Annuitant will be
distributed to the designated Beneficiary in either the form of a lump sum
or an Annuity Payment Option. An Annuity Payment Option must be selected
within 60 days after LNL approves the death claim (see the Entitlement to
Death Benefit provision).
If a lump sum settlement is elected, the proceeds will be mailed within
seven days of approval by LNL of the claim. This payment may be postponed
as permitted by the Investment Company Act of 1940.
Notwithstanding any provision of this Contract to the contrary, no payment
of proceeds provided under this Contract will be allowed that does not
satisfy the requirements of Code Section 72(s) or 401(a)(9) as applicable,
as amended from time to time.
All payments will be subject to the laws and regulations governing death
benefits.
Death On or After the Commencement of Annuity Payments
The Death Benefit described in Section 2.13 is no longer applicable and
will terminate upon the commencement of Annuity Payments.
If upon the death of the Annuitant (or both Joint Annuitants when
applicable) any Annuity Payments remain under the Annuity Payment Option
selected, they will be paid to the Beneficiary as provided by that Annuity
Payment Option.
The following provision shall replace Section 4.02 (CONTROL) of this Contract in
its entirety:
4.02 CONTROL
The Owner is the person (or entity) who has the ability to exercise all
rights and privileges within this Contract.
If a Joint Owner(s) is named in the application, the Owner and any Joint
Owner shall be treated as having equal and undivided interests in this
Contract. The Owner and any Joint Owner, independent of the other, may
exercise any ownership rights in this Contract.
A Contingent Owner cannot exercise any ownership rights in this Contract
while the Owner or any Joint Owner is alive.
The Lincoln National Life Insurance Company
Xxxxx X. Xxxxxx, Vice President
