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00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
ANNUITY CONTRACT
This is a flexible payment fixed and variable annuity contract providing fixed
and variable annuity income benefits. This contract describes the rights and
benefits of the owner.
Security First Life Insurance Company ("Company") has received a purchase
payment made for the owner. The Company will make a series of monthly payments
to the person named as the annuitant, starting on the annuity date. These
annuity payments will be made while the annuitant is alive, but not for less
than 120 months. A different form of annuity option or optional annuity date may
be selected by the owner. The amount of the monthly payments will be determined
in the manner set forth in this contract.
If the annuitant or owner dies before payments start, a settlement on death will
be made in accordance with the Settlement on Death provision.
10-Day Right to Examine this Contract
At any time within 10 days after receipt of this annuity contract, it may be
returned for cancellation by delivering it to the Company at its administrative
office shown herein. Such delivery or mailing of the contract shall void it from
the beginning, and the parties shall be in the same position as if it had not
been issued. All purchase payments for the contract shall be refunded.
President
Secretary
ALL PAYMENTS AND VALUES UNDER THIS CONTRACT WHICH ARE BASED ON INVESTMENT IN
THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR
AMOUNT.
THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE INSURER.
PLEASE READ THIS POLICY CAREFULLY.
FLEXIBLE PAYMENT DEFERRED ANNUITY
PROVIDING FIXED AND VARIABLE BENEFITS
10 YEAR CERTAIN LIFE ANNUITY
STARTING ON THE ANNUITY DATE
NON-PARTICIPATING
NO DIVIDENDS
SF-137
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CONTRACT SCHEDULE
CONTRACT OWNER(S) CONTRACT NUMBER
Xxxx Xxx A000000
ANNUITANT CONTRACT DATE
Xxxx Xxx February 1, 1999
NORMAL ANNUITY DATE PURCHASE PAYMENT
February 1, 2035 $5,000.00
GENERAL ACCOUNT OPTIONS
FIXED ACCOUNT I
The company will credit ____% for 1 contract year to the initial amount
allocated to Fixed Account I before annuity income payments commence.
A new interest rate will be established at the end of each 1 year guarantee
period and will be guaranteed for an additional 12 months.
FIXED ACCOUNT II
The company will credit ____% for 7 contract years to the initial amount
allocated to Fixed Account II before annuity income payments commence.
Interest adjustment factor: if a total or partial withdrawal or transfer is
made from Fixed Account II other than at the end of the guarantee period, an
interest adjustment will be made to the Fixed Account II account value. The
interest adjustment factor is:
( ( G - C ) ( m ) )
( (_______) * (____) )
( ( 2 ) ( 12 ) )
Where:
G: Guaranteed rate for the period
C: Current Fixed Account II guaranteed rate applied to new contracts
being issued.
m: Number of months remaining in the current seven year guarantee period.
The amount of the interest adjustment with respect to the purchase payment is
equal to the interest adjustment factor multiplied by the amount of the
withdrawal or transfer.
If the interest adjustment is a negative value, the value is subtracted from
the account value. If the interest adjustment is a positive value, the
interest adjustment is added to the account value.
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The company guarantees that the adjustment will never result in the Company
crediting less than 3% on amounts allocated and remaining in Fixed Account II.
GENERAL ACCOUNT -- FIXED ACCOUNT I AND II
For the term of this contract, the company guarantees that interest rates
credited to the initial amount allocated to the general account will never be
less than 3.00%.
Interest is compounded annually and credited daily.
EXCESS INTEREST
The company may declare and credit excess interest to amounts allocated to the
general account. Declaration of excess interest is not guaranteed.
ALLOCATION
GENERAL ACCOUNT
Fixed Account I %
Fixed Account II %
SEPARATE ACCOUNT
Federated Insurance Series %
High Income Bond Fund II %
Equity Income Fund II %
American Leaders Fund II %
AIM Variable Insurance Funds
Balanced Fund %
Capital Appreciation Fund %
Value Fund %
International Equity Fund %
Xxxxxxxxxxx Variable Accounts Funds
Bond Fund/VA %
Strategic Bond Fund/VA %
Main Street Growth & Income Fund/VA %
Money Fund/VA %
MFS Variable Insurance Trust
Research Series %
New Discovery Series %
Growth with Income Series %
Xxx Xxxxxx Life Investment Trust
Emerging Growth Portfolio %
Enterprise Portfolio %
Strategic Stock Portfolio %
TOTAL SEPARATE ACCOUNT %
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ENDORSEMENTS
THE FOLLOWING ENDORSEMENTS HAVE BEEN ATTACHED TO AND MADE A PART OF THIS
CONTRACT. THEY HAVE BEEN INCLUDED FOLLOWING THE LAST PRINTED PAGE OF THE
CONTRACT.
TERMINAL ILLNESS RIDER SF-1559
COMMUNICATIONS
WRITE TO THE COMPANY AT ITS ADMINISTRATIVE OFFICE AS SHOWN BELOW:
SECURITY FIRST LIFE INSURANCE COMPANY
P. O. XXX 00000
XXX XXXXXXX, XXXXXXXXXX 00000
(000)000-0000
SF-137-3A 3A
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ARTICLE 1 DESCRIPTION OF CERTAIN TERMS USED IN THIS CONTRACT
ACCUMULATION UNIT -- A measuring unit used to determine the value of the owner's
interest in a separate account series under this contract at any time before
annuity payments commence.
ANNUITANT -- The person who is to receive annuity payments.
ANNUITY -- A series of income payments made to the annuitant for a defined
period of time.
ANNUITY DATE -- The date annuity payments begin under this contract.
ANNUITY UNIT -- A measuring unit used to determine the amount of variable
annuity payments based on a separate account series under this contract after
such payments have commenced.
BENEFICIARY -- Except as otherwise provided in Section 4.02, the person named on
the application who has the right to receive settlement on the death of the
owner.
CONTRACT -- The legal agreement between the owner and the Company covering
rights of the owner.
CONTRACT YEAR -- A twelve month period starting on the date this contract is
issued and on each anniversary.
FIXED ANNUITY -- An annuity providing guaranteed level payments.
FUND -- Any registered management investment company or series thereof (mutual
fund) specified in the contract in which the assets of the separate account may
be invested.
GENERAL ACCOUNT -- Assets of the Company except those in the separate account or
segregated asset accounts.
NORMAL ANNUITY DATE -- The first day of the month coincident with or next
following the anniversary of the contract date nearest the annuitant's 100th
birthday, or the 10th anniversary, if later.
OWNER -- The person who has submitted the completed application to the Company
with a purchase payment and to whom this contract was issued.
PAYEE -- The annuitant or beneficiary receiving payment of benefits under this
contract.
PURCHASE PAYMENT -- Any amount received by the Company for the owner.
SEPARATE ACCOUNT -- The Security First Life Separate Account A was established
by the Company under the Delaware Insurance Code. The income or losses of the
separate account are free from any other liabilities of the Company. The
separate account is registered as a unit investment trust under the Investment
Company Act of 1940.
SERIES -- The accumulation unit values and annuity unit values maintained
separately for each fund whose securities are owned by the separate account.
VALUATION DATE -- Any business day used by the separate account to determine the
value of part or all of its assets for purposes of determining accumulation and
annuity unit values for the contract. Accumulation unit values will be
determined each business day. There will be one valuation date in each calendar
week for annuity unit values. The Company will establish the valuation date at
its discretion, but until notice to the contrary is given, that date will be the
last business day in a week.
VALUATION PERIOD -- The time from one valuation date to the next.
VARIABLE ANNUITY -- An annuity with payments that vary annually according to the
net investment results of a series.
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ARTICLE 2 GENERAL TERMS
2.01 THE CONTRACT
The contract is this document, any endorsements and the application. Only an
officer of the Company can change the contract or waive any of the Company's
rights. These changes must be made in writing. Any contract terms referring to
"filing" or "receipt" of documents means filing or receipt at the Company's
administrative office shown on page 3A.
2.02 NON-PARTICIPATING
This contract does not share in the earnings of the Company.
2.03 CHANGE OF CONTRACT
The owner and the Company may change the contract by mutual agreement at any
time. Changes must be made in writing. Any changes must comply with the state
laws where the contract is delivered. The Company, by itself, may change only
the following contract terms:
- Terms that apply to any purchase payment received by the Company as a tax-free
exchange under the provisions of the Internal Revenue Code but only if such
payment is received after the effective date of the change of contract.
- Terms that apply to benefits and values provided by purchase payments received
after the effective date of the change of contract to the extent that such
purchase payments in any contract year exceed the first year's purchase
payments.
- Terms that may be necessary to make the contract conform to any federal or
state law, regulation or ruling.
2.04 DATA PROVIDED TO THE COMPANY
The Company may request the owner and/or annuitant to provide data needed to
administer the contract. Such data must be provided upon request. The data must
be in a form satisfactory to the Company.
2.05 MISSTATEMENT OF AGE OR SEX
The age or sex of a payee may affect the amount of annuity payments made under
the contract. If either is misstated, future payments under the contract will be
adjusted.
If the Company shall make or has made any underpayment or underpayments, or any
overpayment or overpayments, on account of any such misstatement, the amount
thereof, with interest at the rate of six percent per annum, shall, in the case
of underpayment, be paid immediately to the insured or, in the case of
overpayment, may be charged against the current or next succeeding payment or
payments to be made by the Company under the policy.
2.06 TERMINATION OF CONTRACT
This contract will terminate when the Company has fulfilled all its obligations.
2.07 RESERVE BASIS
The reserve for owner's interest in the general account will be calculated by
the Commissioner's Annuity Reserve Valuation Method, the Annuity 2000 Mortality
Table, at an interest rate no greater than that allowed in the Standard
Valuation Law of the state in which the contract is delivered. The reserve will
equal or exceed the reserve required by the Standard Valuation Law.
2.08 NON CONTESTABLE
This contract is not contestable.
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ARTICLE 3 OWNER'S ACCOUNT
3.01 PURCHASE PAYMENTS
A purchase payment is any amount received by the Company for the owner. The
minimum initial purchase payment is $5,000. Additional purchase payments are
subject to acceptance by the Company, and, if accepted, must be at least $500.
Each purchase payment must be allocated by the owner between the general account
and the separate account. However, only initial purchase payments may be
directed into Fixed Account II.
3.02 DESCRIPTION OF OWNER'S ACCOUNT
On the contract date the Company established the owner's account with the
purchase payment shown on page 3. The owner's account consists of accumulation
units in the separate account and amounts allocated to the general account that
have not been applied to an annuity income option.
3.03 THE GENERAL ACCOUNT
Amounts in the general account that have not been applied to annuity income
options will earn interest as declared by the Company. Amounts in the General
Account do not share in the investment experience of any series in the Separate
Account. Interest is compounded annually and credited daily. Fixed Account I and
Fixed Account II are part of the Company's general account.
3.04 FIXED ACCOUNT I
The declared interest rate for amounts received and directed into Fixed Account
I will be guaranteed for a one year period separately for each payment. During
the accumulation period the owner can convert funds to Fixed Account I, subject
to the contract's conversion provision.
3.05 FIXED ACCOUNT II
The declared interest rate will be guaranteed for a seven year period for the
initial payment received and directed into Fixed Account II. The initial
interest rate for the initial guarantee period of Fixed Account II is shown on
page 3. After the initial seven year period, the current interest rate for any
subsequent seven year period may change. During the thirty (30) days prior to
the end of any current period, the owner may elect in writing to keep the
accumulated value in Fixed Account II for another seven year guarantee period or
to convert all or a portion of the accumulated value in Fixed Account II to
Fixed Account I or one or more series in the Separate Account. Such conversion
will be made as of the last business day of a current seven year guarantee
period and will not be subject to any interest adjustment. If the owner does not
elect to keep the funds in Fixed Account II, and provides no other election, the
funds will be transferred to Fixed Account I.
3.06 THE SEPARATE ACCOUNT
The separate account was established by the Company in 1980 under Delaware law.
It is registered as a unit investment trust under the Investment Company Act of
1940 (the "Act"). Its assets are invested only in shares of one or more of the
funds. The separate account will vote its fund shares according to instructions
received from the owners who have units in the separate account series of that
fund. Each such person will receive all reports and materials of the funds in
which they own accumulation or annuity units, and forms to instruct the separate
account how to vote.
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3.07 CREDITING ACCUMULATION UNITS
The number of accumulation units credited to any series in the separate
account is determined by dividing the amounts credited, less administration
fees and premium taxes deducted, if any, by the account accumulation unit
value for that series on the day the Company receives or transfers the amount.
3.08 ACCUMULATION UNITS
The separate account accumulation unit value of each series was first set at $5.
This value is determined each business day. It is equal to the value on the
prior day multiplied by a net investment factor. The net investment factor is:
(A) the net asset value of a fund share at the close of business plus the per
share amount of any fund distributions less taxes (per share), divided by
(B) the net asset value of a fund share at the close of the prior business day,
less
(C) the actuarial risk fee factor of .003425% for each calendar day from the
prior business day to the current business day.
3.09 SUBSTITUTION OF FUND SHARES
The separate account may not change the fund shares of a series unless approved
as provided by the Act. The separate account may buy other securities for other
series or contracts, or convert units from one series or contract to another, if
requested by an owner.
3.10 SPLITTING UNITS
The Company may split the value of any units in the best interest of the owners,
annuitants and the Company. If split, strict equity will be preserved. Such
split will have no major effect upon the benefits or provisions of this
contract.
3.11 ACCOUNT VALUE
The account value is the sum of the values of the separate account accumulation
units and the amounts allocated to the general account plus interest credited,
less amounts deducted for prior surrenders or applied to provide annuity income
payments, or deducted for prior or current administration fees or premium taxes.
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3.12 CASH VALUE
Except as otherwise provided respecting the free withdrawal amount (See Section
3.13), the cash value of the owner's account equals the aggregate of the
following percentages of each purchase payment or portion thereof which has not
been previously surrendered or committed to an annuity income option, as
increased or decreased by interest, gains or losses earned with respect to such
purchase payment and reduced by applicable administration fees and premium
taxes. The percentage is determined based on the period of time (expressed in
years) between the date of receipt of each purchase payment and the surrender or
annuity date. The percentages are:
(a) 93% for purchase payments received during the first year before the
surrender or annuity date;
(b) 93% for purchase payments received in the second year before the surrender
or annuity date;
(c) 94% for purchase payments received in the third year before the surrender
or annuity date;
(d) 94% for purchase payments received in the fourth year before the surrender
or annuity date;
(e) 95% for purchase payments received in the fifth year before the surrender
or annuity date;
(f) 96% for purchase payments received in the sixth year before the surrender
or annuity date;
(g) 97% for purchase payments received in the seventh year before the surrender
or annuity date;
(h) 100% for all earlier purchase payments.
The difference between the cash value and the account value is a termination
charge.
3.13 FREE WITHDRAWAL AMOUNT
After the first contract year, in regard to the first surrender in any contract
year, the cash value (as described in Section 3.12) of amounts surrendered up to
10% of the owner's interest in Fixed Account I, up to 10% of the owner's
interest in Fixed Account II and up to 10% of the owner's interest in the
separate account will be determined without a termination charge(the "free
withdrawal amount"). Amounts surrendered later or in excess of this free
withdrawal amount will be subject to termination charges as provided in Section
3.12.
3.14 ADMINISTRATION FEE
The Company will deduct from the values of the owner in the separate account a
daily administration fee equal to .000411% of the values of the separate account
accumulation units for the prior calendar day.
3.15 ANNUAL POLICY FEE
The Company will deduct an annual fee of $35 charged at the contract anniversary
date. If the contract is settled prior to the contract anniversary date, the
administrative fee will be charged on the settlement date.
3.16 PREMIUM TAXES
The Company may deduct from the owner's account any premium tax payable by it.
The premium tax will be deducted from the owner's account on or after the date
when the tax is incurred by the Company.
3.17 STATEMENTS OF ACCOUNT
Prior to the annuity date, statements of account will be provided at least once
per contract year.
ARTICLE 4 RIGHTS OF OWNER
4.01 OWNERSHIP AND ASSIGNMENT
Unless otherwise restricted, the owner may exercise the contract rights that
relate to his or her annuity. The owner's contract rights are subject to the
rights of any assignee or irrevocable beneficiary.
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Unless otherwise restricted, the owner may assign his or her contract rights
under this contract. The assignment must be in writing and received by the
Company. This assignment takes effect on the date it is signed. It is subject to
any action taken before the assignment is received. Any such assignment will not
change a named beneficiary unless the assignment also includes such a change.
The Company is not responsible for the validity of the assignment.
If the owner dies before the annuity date, settlement will be made in accordance
with Article 6.
4.02 DESIGNATION OF BENEFICIARY
The owner may name and change the beneficiary. The request must be in writing
and made before the owner dies. No change will take effect unless it is
received. When received, the request will take effect as of the date signed,
subject to payment or other action taken by the Company before it was received.
An irrevocable beneficiary must agree to any such change. If there are joint
owners, the surviving joint owner shall become the beneficiary upon the death of
one of the owners unless otherwise designated in writing by the joint owners.
4.03 CASH SURRENDER
This contract may be surrendered for its cash value before the annuity date.
Requests for surrender must be in writing and signed by the owner. The cash
value will not be paid until the contract is returned, unless such return is
waived by the Company.
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4.04 PARTIAL SURRENDERS
Partial surrenders from the contract may be made before the annuity date.
Requests for partial surrenders may be communicated by written direction or, if
permitted by the Company, by telephone. No partial surrender will be allowed if
it results in the owner's interest in the general account or in any series
having a value, after the surrender, of less than $2,000, unless the entire
amount in the general account or the series is surrendered.
The amount of a partial surrender will be deducted from the series or the
general account on a first-in first-out basis by purchase payment. The amount
deducted will be determined by dividing (A) the amount received by the owner
with respect to each purchase payment by (B) the applicable percentage shown in
Section 3.10, provided however that the percentage shall be 100% with respect to
the free withdrawal amount (see Section 3.13).
4.05 DEFERRAL OF PAYMENT
Payments of full or partial surrenders from a separate account series may be
suspended under the following conditions:
(a) During any period in which the New York Stock Exchange is closed (other
than customary weekend or holiday closing); or
(b) When the Securities and Exchange Commission determines that trading on such
exchange is restricted or that an emergency exists and, as a result, the
separate account may not reasonably dispose of its securities or fairly value
its assets; or
(c) For such other periods as the Securities and Exchange Commission may
designate for the protection of variable contractholders.
Payments of full or partial surrenders from the general account may be deferred
for a period of not more than six months from the date written request is
received. Interest will continue to be credited during the deferral period. The
interest rate(s) will be the same as if the surrender had not been requested. A
partial surrender less than or equal to the free withdrawal amount is not
subject to deferral.
4.06 HOSPITAL OR NURSING HOME FACILITY
The Company will waive any termination charge in the event of a surrender
payable to the owner if, after the purchase of this contract, the owner is
confined to a hospital for a minimum of 30 consecutive days or a skilled nursing
home for a minimum of 90 consecutive days. In this event, the cash value will be
100% of the account value.
The request for a surrender qualifying under this provision must be made to the
company no later than 60 days after the termination of the confinement.
4.07 CONVERSION BETWEEN SERIES AND THE GENERAL ACCOUNT
Accumulation units in the separate account may be converted from one series to
another. Accumulation units may also be converted from a separate account series
to Fixed Account I in the general account. No conversions to the Fixed Account
II are permitted. In addition, no conversion from the general account to
accumulation units in the separate account is permitted. Conversions may be
communicated by written election or, if permitted by the Company, by telephone.
The Company will convert the amounts on the first valuation date after receipt
of the written election. Conversions requested by telephone will be effective
within a reasonable time in accordance with policies established by the Company.
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Annuity units in the separate account may be converted from one series to
another at any time. Separate account annuity units may not be converted to the
general account. However, amounts in the general account that have not been
applied to a fixed annuity income option may be converted to annuity units in
one or more separate account series for application to a variable annuity income
option. Such conversions may be elected by written notification signed by the
owner and will be effective on the following annuity unit valuation date.
The minimum amount that may be converted at any time is $500. No conversion can
be made if it results in the general account or a series having a value after
conversion of less than $500.
4.08 MINIMUM BENEFITS
The value of a paid-up annuity, cash surrender, or settlement on death under
this contract will not be less than the minimum required by the state laws where
the contract is delivered.
ARTICLE 5 SETTLEMENT
5.01 SETTLEMENT OF THE OWNER'S ACCOUNT
Settlement of the owner's account means any of the following:
(a) The start of annuity income payments to the annuitant;
(b) The issuance of a supplementary contract to the beneficiary for payment of
annuity income; or
(c) A payment of the cash value in a lump sum.
The amount applied under an annuity income option is the cash value, unless the
annuity income option elected begins five or more years after the receipt of the
purchase payment; then the amount applied will be the account value of the
purchase payment.
The first payment under any annuity income option will be made on the annuity
date. Proof of age is required before payments start.
5.02 NORMAL FORM OF SETTLEMENT
The owner must be living on the date annuity payments are to begin. Unless
another choice is made, the Company will pay the annuitant a series of payments
in the form of a life annuity with 120 monthly payments certain. These payments
will begin on the normal annuity date.
5.03 OPTIONAL ANNUITY DATE
Before annuity payments begin, an optional annuity date may be elected by the
owner. The optional annuity date may be the first day of any month not later
than the normal annuity date. The election must be made at least 31 days before
the optional annuity date.
5.04 MINIMUM AMOUNT TO PAYEE
If any annuity income payment from any separate account series or general
account is less than $100, the Company may change the payment interval so that
the payment is greater than $100.
ARTICLE 6 SETTLEMENT ON DEATH
6.01 SETTLEMENT ON DEATH OF THE ANNUITANT BEFORE THE ANNUITY DATE
If the annuitant who is also the owner dies before the annuity date,
settlement will be made in accordance with Section 6.02. If the annuitant who
is not the owner dies before the annuity date:
1. If the owner is a natural person, the owner will become the annuitant.
2. If the owner is not a natural person, a) the cash value will be paid in a
lump sum to the owner; or b) the contract will be transferred to a natural
person in accordance with the owner's written instructions. In such case, the
transferee shall become the owner and the annuitant.
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6.02 SETTLEMENT ON DEATH OF THE OWNER BEFORE THE ANNUITY DATE
If there are joint owners, the death of any of the owners shall be considered
the death of the owner and cause settlement under this section.
Except as otherwise provided below, upon the death of the owner prior to the
annuity date the Company will pay a death benefit to the beneficiary as
settlement of the Contract.
The death benefit shall be the greater of:
a. The account value at the time of settlement;
b. The amount of purchase payments received under the contract, reduced by
amounts already applied to produce annuity income payments or for any prior
partial surrenders;
or
If the contract was issued on or before oldest of the owner's 70th birthday, the
greatest of a) or b) above or
c) The minimum guaranteed death benefit.
On the date the first purchase payment for the contract is received, the minimum
guaranteed death benefit is equal to the purchase payment. Thereafter, the
minimum guaranteed death benefit will be: increased by any purchase payment
made; and decreased by the percentage of any contract value surrendered. Also,
on the first contract anniversary and every anniversary thereafter, except as
noted below, the minimum guaranteed death benefit will be recalculated. On each
of these days the minimum guaranteed death benefit is equal to the greater of:
The minimum guaranteed death benefit before the recalculation; and the contract
value on the date of recalculation. The minimum guaranteed death benefit will be
calculated on each anniversary until the owner or the oldest of joint owners
attains age 70. After that it will continue to be increased by any purchase
payment made and decreased by the percentage of any contract value surrendered
If the owner is not a person, the minimum guaranteed death benefit will be
recalculated until the annuitant is age 70.
6.03 DEATH VALUATION DATE
The death valuation date is the later of:
1) the date on which the Company receives at its administrative office
notification of death of that owner; and
2) the date on which the Company receives at its administrative office
election of continuation of the contract or of payment in one sum or under a
payment option. If no election has been received by the end of the 90th day
after the date notification of death was received, the Company will deem the
following to have been elected on the 90th day: spousal continuation, if the
surviving spouse qualifies for this right; beneficiary continuation, if the
beneficiary qualifies for this right; or otherwise, payment in one sum.
6.04 CONTINUATION OF THE CONTRACT
The Company offers two types of Continuation rights: spousal continuation and
beneficiary continuation.
The company must receive written notice of the election of one of these
continuation rights by the end of the 90th day after it received notification of
death. If the surviving spouse qualifies for spousal continuation and has not
elected a method of payment for the death proceeds by the end of the 90 day
period, election of spousal continuation will be deemed to have been elected on
the 90th day. If a beneficiary who does not qualify for Spousal continuation but
does qualify for beneficiary continuation, has not elected a method of payment
for the death proceeds by the end of the 90 day period; election of beneficiary
continuation will be deemed to have been elected on the 90th day; and the
contract will be continued for that beneficiary; and the continued contract must
be settled within five years of the owner's death.
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6.05 SPOUSAL CONTINUATION
The Contract can be continued under spousal continuation if the surviving spouse
is less than the maximum age allowed by the Company and if:
(a) the joint owners are married to each other,
one of the joint owners dies before an annuity option is elected and there are
no other joint owners; or
(b) the Owner dies; and the Owner's spouse is the only named primary
Beneficiary on the Owner's date of death.
If the Contract is continued under Spousal Continuation the Death Proceeds will
not be paid. The surviving spouse will become the new owner and annuitant if the
deceased Owner had been the Annuitant.
6.06 BENEFICIARY CONTINUATION
When the death benefit becomes payable, the beneficiary can elect:
a) a lump sum payment of the death benefit; or
b) the continuance of the contract with a settlement date equal to the fifth
anniversary of the owner's death (see below); or
c) an available payment option. Payments under the payment option: must be
payable for the life of the beneficiary or for a term which is not longer than
the life expectancy of the beneficiary and must start within one year after the
death of the owner.
The contract can be continued under beneficiary continuation by a beneficiary
whose share of the death benefit is at least equal to the company's published
minimum account value for this right.
If the contract is continued under beneficiary continuation the death benefit
will not be paid to the beneficiary continuing his/her share of the proceeds.
The death benefit continued in the contract will be allocated in the same
proportion as the contract value was allocated to the series and general account
on the death valuation date. If there is a single beneficiary, he or she will
have the right to make transfers and partial and full surrenders. The settlement
date will be the fifth anniversary of the owner's death and cannot be changed.
No additional purchase payments can be made; no surrender charges will apply to
the contract; an annual policy fee will be deducted. The death benefit during
the period of continuation for the beneficiary will be equal to the account
value on the date of settlement. The Death Benefit payable at the beneficiary's
death will be paid in a lump sum payment.
On the settlement date each living beneficiary will receive his/her share of the
account value in a lump sum payment and the contract will terminate.
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6.07 RIGHTS OF BENEFICIARY
If there is more than one beneficiary living at the time of the owner's death,
each will share in the proceeds of the death benefit equally, unless the owner
has elected otherwise. In the event of multiple beneficiaries, no conversions or
partial surrenders will be permitted during contract continuation, but any
beneficiary may surrender 100% of his/her share of the contract proceeds prior
to the contract settlement date.
If the owner outlives all beneficiaries, the death benefit will be paid to the
owner's estate in a lump sum. No beneficiary shall have the right to assign,
anticipate or commute any future payments under any of the options, except as
provided in the election or by law.
Rights to the death benefit will pass as if the owner outlived the beneficiary
if:
a. The beneficiary dies at the same time as the owner; or
b. The beneficiary dies within 15 days of the owner's death and prior to the
date due proof of the owner's death is received. Due proof of death will be a
certified death certificate, an attending physician's statement a decree of a
court of competent jurisdiction as to the finding of death, or such other
documents as the Company may, at its option, accept.
6.03 SETTLEMENT ON DEATH OF A PAYEE AFTER THE ANNUITY DATE
Upon the death of a payee, any remaining payments certain will be paid to the
named beneficiary. If no beneficiary is alive at the payee's death, the payee's
estate will receive a lump sum payment. This lump sum will be the present value
of the remaining payments certain at the payee's death. If, as the result of a
payee's death, variable life annuity payments are being continued to a
beneficiary, that beneficiary may elect at any time to receive in a lump sum the
present value of the remaining number of payments certain. All present values
will be computed on the basis of the interest rates used to compute the benefit.
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ARTICLE 7 ANNUITY INCOME
Except as may be limited by Articles 5 and 6, the contract can be settled by
applying the amounts described in Section 5.01 to the current annuity income
options offered by the Company.
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TERMINAL ILLNESS RIDER
After the first contract year, and if the age of the owner or owners at the
contract date was less than 75, the owner may make one surrender of up to 50% of
the account value without a termination charge, if a licensed medical doctor
certifies in writing that the Owner suffers from a terminal illness and that the
owner's life expectancy is six months or less. The amount of the surrender which
is above 50% will be subject to a termination charge as described in Article 3.
SF-1559
