Specimen Copy
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LINCOLN NATIONAL LIFE INSURANCE CO.
-----------------------------------
A part of LINCOLN NATIONAL CORPORATION
THE AMOUNT OF THE DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY BE
FIXED OR MAY VARY DEPENDING ON THE INVESTMENT EXPERIENCE OF THIS POLICY.
THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE
EXPERIENCE OF THIS POLICY. NO MINIMUM CASH SURRENDER VALUE IS GUARANTEED.
We agree to pay the Proceeds to the Beneficiary after receipt of due proof of
the death of the Insured while this Policy is in force and before the Maturity
Date.
We agree to pay the Proceeds to the Owner if the Insured is living on the
Maturity Date.
READ THIS POLICY CAREFULLY. This is a legal contract between the Owner and the
Lincoln National Life Insurance Company.
RIGHT TO RETURN THIS POLICY. This policy may be returned to the agent through
whom it was purchased or to our Home Office by the latest of: (1) 10 days after
its receipt, or (2) 45 days after Part 1 of the application was signed, or (3)
10 days after we mail or deliver the Notice of Withdrawal Right. Upon
cancellation this Policy will be void from the beginning. The refund will be
the total of all premiums paid for this Policy.
Signed for The Lincoln National Life Insurance Company at its Home Office in
Fort Xxxxx, Indiana.
/s/ Xxx X. Xxxxxx /s/ X. Xxxxxxx Xxxxxx
Xxx X. Xxxxxx, President X. Xxxxxxx Xxxxxx, Secretary
Flexible Premium Variable Life Insurance Policy
Net Cash Surrender Value Payable at Maturity
Death Benefit Payable at Death Prior to Maturity Date
Adjustable Death Benefit
Flexible Premiums Payable During Lifetime
of Insured to Maturity Date
Nonparticipating - No Dividends
POLICY SCHEDULE
MATURITY DATE IS THE POLICY ANNIVERSARY FOLLOWING THE INSURED'S NINETY-NINTH
BIRTHDAY. COVERAGE MANY EXPIRE PRIOR TO THE MATURITY DATE IF NO PREMIUMS ARE
PAID AFTER THE INITIAL PREMIUM OR IF SUBSEQUENT PREMIUMS ARE INSUFFICIENT TO
CONTINUE COVERAGE TO SUCH DATE. COVERAGE MAY ALSO BE AFFECTED BY A CHANGE IN
CURRENT VALUES.
POLICY NUMBER: 20 123456 POLICY DATE: NOVEMBER 1, 1995
INSURED: XXXXXXX XXXXXXX MATURITY DATE: NOVEMBER 1, 2059
SPECIFIED AMOUNT: PLANNED INITIAL PREMIUM: $16,000
$100,000 TYPE 1
INCLUDES THE POLICY VALUE ISSUE PREMIUM: $15,136
MALE AGE: 35 PLANNED PERIODIC PREMIUM:
RATING CLASS: PREFERRED AMOUNT $0.00
FREQUENCY: ANNUAL
MONTHLY ANNIVERSARY DAY: 01
PERCENT OF PREMIUM CHARGED:
MINIMUM SPECIFIED AMOUNT: $10,000 0.00% OF ALL PREMIUMS
CHARGE FOR TRANSFER: $0.00 MORTALITY AND EXPENSE RISK CHARGE RATE:
.85% FIRST 10 YEARS; .75% THEREAFTER
LOAN COLLATERAL RATE: 4%
ADMINISTRATIVE CHARGE RATE:
POLICY LOAN RATE: 6% IN ARREARS .30% FIRST 10 YEARS; .10% THEREAFTER
DEATH BENEFIT FACTOR: 1.0032737 GUARANTEED DEATH BENEFIT CHARGE RATE:
.10% FIRST 10 YEARS; .00% THEREAFTER
POLICY SCHEDULE
POLICY NUMBER: 20 123456 POLICY DATE: NOVEMBER 1, 1995
INSURED: XXXXXXX XXXXXXX
TABLE OF SURRENDER CHARGES
POLICY SURRENDER CHARGES AS A
YEAR PERCENT OF INITIAL
PREMIUM
1 9.0%
2 8.5%
3 8.0%
4 7.0%
5 6.0%
6 5.0%
7 4.0%
8 3.0%
9 2.0%
10 1.0%
POLICY SCHEDULE
LIST OF SUBACCOUNTS
POLICY NUMBER: 20 123456 POLICY DATE: NOVEMBER 1, 1995
INSURED: XXXXXXX XXXXXXX
EACH SUBACCOUNT OF THE LINCOLN NATIONAL FLEXIBLE PREMIUM VARIABLE LIFE SEPARATE
ACCOUNT F INVESTS IN A SPECIFIC FUND. LISTED BELOW ARE THE SUBACCOUNTS, THE
FUNDS, AND THE INITIAL ALLOCATION OF NET PREMIUMS.
SUBACCOUNT FUND ALLOCATION
GROWTH AMERICAN VARIABLE INSURANCE SERIES 100%
GROWTH FUND
GROWTH-INCOME AMERICAN VARIABLE INSURANCE SERIES 0%
GROWTH-INCOME FUND
HIGH-YIELD BOND AMERICAN VARIABLE INSURANCE SERIES 0%
HIGH-YIELD BOND FUND
U.S. GOVERNMENT AMERICAN VARIABLE INSURANCE SERIES 0%
GUARANTEED/AAA- U.S. GOVERNMENT/AAA-RATED SECURITIES FUND
RATED SECURITIES
CASH MANAGEMENT AMERICAN VARIABLE INSURANCE SERIES 0%
CASH MANAGEMENT FUND
ASSET ALLOCATION AMERICAN VARIABLE INSURANCE SERIES 0%
ASSET ALLOCATION FUND
INTERNATIONAL AMERICAN VARIABLE INSURANCE SERIES 0%
INTERNATIONAL FUND
BOND AMERICAN VARIABLE INSURANCE SERIES 0%
BOND FUND
TABLE OF GUARANTEED
MAXIMUM INSURANCE RATES
STANDARD RATE CLASSIFICATION
Male
Monthly Cost of Insurance
--------------------------------------------------------------------------------
Attained Rate Per Attained Rate Per
Age $1,000 Age $1,000
--------------------------------------------------------------------------------
0 $ .21838 50 $ .58367
1 .08584 51 .63540
2 .08167 52 .69465
3 .08001 53 .76141
4 .07667 54 .83486
5 .07334 55 .91417
6 .06917 56 .99850
7 .06500 57 1.08701
8 .06250 58 1.18223
9 .06084 59 1.28665
10 .06250 60 1.40196
11 .06750 61 1.53151
12 .07584 62 1.67865
13 .08917 63 1.84339
14 .10251 64 2.02576
15 .11835 65 2.22243
16 .13168 66 2.43257
17 .14335 67 2.65620
18 .15086 68 2.89586
19 .15669 69 3.15995
20 .15836 70 3.45859
21 .15836 71 3.79938
22 .15586 72 4.19082
23 .15336 73 4.63303
24 .14919 74 5.11772
25 .14585 75 5.63575
26 .14335 76 6.17962
27 .14169 77 6.74266
28 .14169 78 7.32916
29 .14252 79 7.95867
30 .14585 80 8.65171
31 .15002 81 9.42806
32 .15586 82 10.30596
33 .16253 83 11.27913
34 .17086 84 12.32677
35 .18087 85 13.42535
36 .19254 86 14.55978
37 .20754 87 15.72082
38 .22338 88 16.90865
39 .24173 89 18.13036
40 .26257 90 19.40436
41 .28508 91 20.76404
42 .30926 92 22.27016
43 .33511 93 24.07690
44 .36347 94 26.51576
45 .39432 95 30.20651
46 .42601 96 36.35803
47 .46021 97 47.20997
48 .49775 98 66.20322
49 .53779
The above rates are based on the Commissioners 1980 Male Standard Ordinary
Mortality Table, age last birthday.
Female
Monthly Cost of Insurance
--------------------------------------------------------------------------------
Attained Rate Per Attained Rate Per
Age $1,000 Age $1,000
--------------------------------------------------------------------------------
0 $ .15669 50 .42768
1 .07000 51 .45854
2 .06667 52 .49358
3 .06500 53 .53112
4 .06334 54 .57033
5 .06167 55 .61037
6 .06000 56 .64959
7 .05917 57 .68714
8 .05750 58 .72553
9 .05667 59 .76725
10 .05667 60 .81650
11 .05834 61 .87911
12 .06084 62 .95758
13 .06417 63 1.05361
14 .06834 64 1.16051
15 .07251 65 1.27496
16 .07667 66 1.39361
17 .08001 67 1.51228
18 .08251 68 1.63517
19 .08584 69 1.77147
20 .08751 70 1.93290
21 .09001 71 2.13204
22 .09168 72 2.37730
23 .09334 73 2.67296
24 .09584 74 3.01238
25 .09751 75 3.39062
26 .10001 76 3.80106
27 .10251 77 4.24041
28 .10668 78 4.71462
29 .11001 79 5.24065
30 .11418 80 5.83889
31 .11835 81 6.52817
32 .12252 82 7.32324
33 .12752 83 8.22459
34 .13418 84 9.21837
35 .14169 85 10.29491
36 .15169 86 11.44790
37 .16336 87 12.67276
38 .17670 88 13.97426
39 .19254 89 15.36072
40 .21004 90 16.85005
41 .22922 91 18.47427
42 .24756 92 20.29451
43 .26674 93 22.44349
44 .28592 94 25.22305
45 .30593 95 29.24956
46 .32677 96 35.72116
47 .34845 97 46.86829
48 .37264 98 66.09429
49 .39933
The above rates are based on the Commissioners 1980 Female Standard Ordinary
Mortality Table, age last birthday.
THE CONTRACT
THE CONTRACT. The entire contract consists of:
a. this Policy;
b. the application and any supplemental application; and
c. any amendments.
This Policy is issued in consideration of the application and payment of the
Issue Premium.
A change in this Policy will be binding on us only if the change is in writing,
and the change is made by our President, Vice President, Secretary, or Assistant
Secretary.
NONPARTICIPATION. This Policy is nonparticipating. It will not share in our
profits or surplus earnings.
REPRESENTATIONS AND CONTESTABILITY. All statements made in an application by, or
on behalf of, the Insured will, in the absence of fraud, be deemed
representations and not warranties. Statements may be used to contest a claim or
the validity of this Policy only if:
a. the statements are contained in the application for issue, reissue, or
reinstatement, or in any supplemental application; and
b. a copy of that application or supplemental application is attached to this
Policy.
This Policy will not be contestable after it has been in force for 2 years
during the lifetime of the Insured.
Any increase in coverage or any reinstatement will not be contestable after that
increase or reinstatement has been in force 2 years from its effective date
during the lifetime of the Insured. Any contest will then be based only on the
application for the increase or reinstatement and will be subject to "a" and "b"
above.
SUICIDE. If the Insured commits suicide, while sane or insane, within 2 years
from the Policy Date, our total liability under this Policy will be the premiums
paid, minus any policy loan, and minus any loan interest due.
If the Insured commits suicide, while sane and insane, within 2 years from the
effective date of any increase in insurance or any reinstatement, our total
liability with respect to such increase or reinstatement will be its Cost of
Insurance.
POLICY DATE. The Policy Date is shown on the Policy Schedule. Policy
anniversaries occur annually on the same month and day as the Policy Date.
RECORD DATE. The Record Date is the date we record this Policy on our books as
an in force policy.
EFFECTIVE DATE OF COVERAGE. The effective dates of coverage under this Policy
will be as follows:
1. For all coverage provided in the original application, the effective date
will be the Policy Date, provided this Policy has been delivered and the
Issue Premium has been paid prior to death of the Insured and prior to any
change in health of the Insured as shown in the application.
2. For any increase to coverage, the effective date will be the first Monthly
Anniversary Day on or next following the day we approve the application for
the increase.
3. For any insurance that has been reinstated, the effective date will be the
first Monthly Anniversary Day on or next following the day we approve the
application for reinstatement.
TERMINATION. All coverage under this Policy will terminate when any one of the
following occurs:
1. The grace period ends without payment of required premium.
2. This Policy is surrendered.
3. The Insured dies.
4. This Policy matures.
MATURITY DATE. The Maturity Date is the date this Policy matures. It is the last
date insurance coverage can remain in force and the date any remaining Net Cash
Surrender Value will be payable. The date is shown on the Policy Schedule.
Coverage will end prior to the Maturity Date if the premiums paid and the Net
Investment Results credited are not sufficient to continue coverage to such
date.
AGE. Age means the Insured's age last birthday on the Policy Date. Attained age
means age last birthday on the policy anniversary on or next preceding any
Monthly Anniversary Day.
INCORRECT AGE OR SEX. If there is an error in the age or sex of the Insured, the
excess of the Death Benefit over the Policy Value will be adjusted to that which
would be purchased by the most recent Cost of Insurance at the correct age and
sex.
ANNUAL REPORT. We will send a report, without charge, to the Owner at least once
each year. It will show:
a. the current Policy Value;
b. the current Net Cash Surrender Value;
c. the amount of Policy Value in each Subaccount;
d. the current Death Benefit;
e. any current policy loans; and
f. activity since the last report:
1) premium paid; and
2) all charges.
The report will also include any other data that may be required where this
contract is delivered.
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Projection of Benefits and Values. We will provide a report to the Owner which
shows projected future results. The request must be in writing on a form
suitable to us. The report will be based on assumptions in regard to:
a. the Death Benefit(s) as may be specified by the Owner;
b. planned premium payments as may be specified by the Owner; and
c. such other assumptions as are necessary and specified by us and/or the
Owner.
A reasonable fee may be charged for this report.
OWNERSHIP, BENEFICIARY, AND ASSIGNMENT
Owner. Owner means the Owner identified in the application or a successor. All
the rights of the Owner belong to the Owner while the Insured is alive. The
rights pass to the estate of the Owner if the Owner dies before the Insured.
Change of Owner. The Owner may transfer all ownership rights and privileges to a
new owner. The request must be in writing on a form suitable to us. The change
will be effective when we receive it. We will not be responsible for any payment
or other action we have taken before having recorded the transfer. A change of
ownership will not, in and of itself, affect the interest of any Beneficiary.
Beneficiary. The Beneficiary:
a. will receive the Proceeds when the Insured dies;
b. is named in the application for this Policy; and
c. may be changed by the Owner. The change is subject to the terms shown in the
Change of Beneficiary provision. The request must be in writing on a form
suitable to us. we reserve the right to require this Policy for endorsement
of a change of Beneficiary designation.
If not otherwise provided:
1. The interest of any Beneficiary who dies before the Insured will pass to any
other Beneficiaries according to their interests.
2. If no Beneficiary survives the Insured, the Proceeds will be paid in one sum
to the Owner, if living. If the Owner is not living, the Proceeds will be
paid to the Owner's estate.
Change of Beneficiary. The Owner may change the Beneficiary designation:
a. while the Insured is alive; and
b. if the prior designation does not prohibit such a change.
A change will revoke any prior designation.
Assignment. An assignment of this Policy will not be binding on us unless:
a. it is in writing on a form suitable to us; and
b. it is received by us at our Home Office.
We will not be responsible for the validity of any assignment. We reserve the
right to require this Policy for endorsement of any assignment.
PREMIUM, GRACE PERIOD, GUARANTEED DEATH BENEFIT, CONTINUATION OF INSURANCE, AND
REINSTATEMENT.
Payment of Premiums. The Issue Premium shown on the Policy Schedule is due on
the Policy Date. Additional premium payments may be made at any time prior to
the Maturity Date. The Initial Premium is the sum of all premiums paid during
the first policy year.
The amounts and frequency of planned premium payments are shown on the Policy
Schedule. Changes in frequency and increases or decreases in amount of Planned
Periodic Premium payments may be made by the Owner. Premiums may not be paid
after the Maturity Date shown on the Policy Schedule.
The Issue Premium and any other premiums will be credited to the Policy on the
later of the Policy Date or the date we receive the premium. All premiums
credited to this Policy prior to the Record Date will be allocated to the
Subaccount which invests in the Cash Management Series. When the value of the
assets is next determined, the value of the amount in the Cash Management Series
will be reallocated to the various Subaccounts in accord with the initial
allocation.
This Policy will not take effect until it has been delivered and the Issue
Premium has been paid prior to death of the Insured and prior to any change in
health of the Insured as shown in the application.
Premiums are payable at the Home Office or to any authorized agent. Receipts
will be furnished upon request.
We will send premium payment reminder notices to the Owner on written request.
The notices may be sent annually, semiannually, or quarterly.
Section 101(a) of the Internal Revenue Code of 1954, as amended, provides for
the exclusion of death benefits from gross income for life insurance contracts.
Section 7702 of the Code defines the term "life insurance contract." It provides
a maximum limitation on premiums which may not be exceeded if the
2
policy is to qualify for the exclusion. Any portion of a premium payment
received by us in excess of that limitation will be refunded, within 7 days, to
the Owner.
GRACE PERIOD. If the Net Cash Surrender Value on a Monthly Anniversary Day is
not sufficient to cover the Cost of Insurance for the month following such
Monthly Anniversary Day, a grace period will be allowed for the payment of a
premium sufficient to keep this Policy in force until the end of the grace
period. The Net Cash Surrender Value and the Cost of Insurance are described in
the Policy Values section. Notice of such premium will be mailed to the last
known address of the Owner and any assignee of record. The grace period will end
61 days after the notice is mailed. If such premium is not paid within the grace
period, all coverage under this Policy will terminate with no value at the end
of the 61 day grace period. If a claim by death during the grace period becomes
payable under this Policy, any overdue Cost of Insurance will be deducted from
the Proceeds.
GUARANTEED DEATH BENEFIT. If this Policy terminates due to the Grace Period
provision without any outstanding loan, a Death Benefit equal to the sum of the
premiums paid into the Policy will be maintained until the Maturity Date of this
Policy, payable upon the death of the Insured.
CONTINUATION OF INSURANCE. Insurance coverage under this Policy will be
continued in force until the Net Cash Surrender Value is insufficient to cover
the Cost of Insurance. This provision will not continue this Policy beyond the
Maturity Date.
REINSTATEMENT. If this Policy terminates, as provided in the Grace Period
section, it may be reinstated at any time within 5 years after the date of
termination and prior to the Maturity Date. The reinstatement is subject to:
a. receipt of evidence of insurability satisfactory to us; and
b. payment of a premium sufficient to keep this Policy in force for a minimum of
2 months.
The effective date of a reinstatement will be the first Monthly Anniversary Day
on or next following the day we approve the application for reinstatement.
If this Policy is reinstated, coverage provided by the Guaranteed Death Benefit
provision ceases.
THE ACCOUNT
THE ACCOUNT. Account, where used without qualification, refers to the Separate
Account called Lincoln National Flexible Premium Variable Life Separate Account
F. This is a unit investment trust registered with the SEC under the Investment
Company Act of 1940. It was established under and is subject to the insurance
laws of Indiana. The assets of the Account are owned by us, but are kept
separate from the assets of our general investment account.
SUBACCOUNTS. The Account has several Subaccounts. They are listed on the Policy
Schedule. Invested premium amounts will be allocated among the Subaccounts
according to the percentages listed on the Policy Schedule. No allocation may be
less than 10%, nor may any allocation be any fractional percent.
The allocation of future invested premium amounts may be changed at any time if
the policy is not in default. The request for change must be in writing on a
form suitable to us. The change will take effect on the date the request is
received in our Home Office.
THE FUNDS. The Subaccounts invest in various underlying funds, as shown on the
Policy Schedule. Each of these Funds is registered with the SEC under the
Investment Company Act of 1940 and has its own investment goals. the investment
goals of each Fund are explained in the Prospectus.
The assets of the account will be valued once daily at the close of trading on
each day the New York Stock Exchange is open. If the value of an asset is needed
on a day that it has not been valued, the value of that asset when it was most
recently valued will be used.
The assets in the Account are used to support the Investment Amounts under
policies like this one. To the extent those assets do not exceed this amount,
they are used to support those policies; those assets are not used to support
any other business conducted. The excess over this amount may be used in any
other way.
CHANGE IN INVESTMENT POLICY AND CHANGE OF FUND. A Fund might make a material
change in its investment policy. In that case, a notice of the change will be
sent to the Owner. Within 60 days after receipt of the notice, or within 60 days
after the effective date of the change, if later, this Policy may be exchanged
for a new policy of fixed benefit insurance on the Insured's life. The
conditions for exchange and the specifications for the new policy are described
under Exchange of Policy.
A Fund might, in our judgment, become unsuitable for investment by a Subaccount.
This might happen because of a change in investment policy, or a change in the
laws or regulations, or because the shares are no longer available for
investment, or for some other reason. If that occurs, we have the right to
invest in a different fund.
Any Change in Investment Policy or Change of Fund will follow approval by the
SEC and will be filed with and approved by the Insurance Commissioner of the
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State of Indiana. If required, approval of such change will also be filed with
the Insurance Department of the state where this Policy is delivered.
INVESTMENT AMOUNT
Investment Amount. The Investment Amount for this Policy is the amount of the
Policy Value allocated to the Subaccounts. It is equal to the Policy Value minus
any outstanding loan. The amount of the Investment Amount and its allocation to
the Subaccounts depend on (1) how the Owner chooses to allocate Net Premiums;
(2) whether or not there are transfer amounts among Subaccounts;(3) the
investment performance of the Subaccounts to which amounts are allocated or
transferred; (4) the amount and timing of premium payments made; and (5) the
existence of any loan. The Investment Amount exists only if the Policy is not
in default past the Grace Period.
Transfer Among Subaccounts. Amounts may be transferred among Subaccounts as
often as six times in a contract year, if the Policy is not in default. The
request to transfer amounts must be in writing on a form suitable to us. The
transfer will take effect on the date it is received at our Home Office. The
Charge for Transfer is shown on the Policy Schedule.
POLICY VALUES
Net Premium. The Net Premium equals the premium paid less the Percent of Premium
Charge shown on the Policy Schedule.
Policy Value. On each Monthly Anniversary Day the Policy Value is equal to the
sum of the following:
a. the Policy Value on the preceding day;
b. any increase due to Net Investment Results in the value of the Subaccounts
to which the Investment Amount is allocated;
c. interest at not less than the Loan Collateral Rate shown on the Policy
Schedule on any outstanding loan;
d. any invested Net Premium received.
Minus the sum of the following:
e. any decrease due to Net Investment Results in the value of the Subaccounts
to which the Investment Amount is allocated;
f. the Cost of Insurance for the following month;
g. any amount charged against the Investment Amount for federal or other
governmental income taxes.
On any day other than a Monthly Anniversary Day, the Policy Value is equal to
the sum of the following:
a. the Policy Value on the preceding day;
b. any increase due to Net Investment Results in the value of the Subaccounts
to which the Investment Amount is allocated;
c. interest at not less than the Loan Collateral Rate shown on the Policy
Schedule on any outstanding loan;
d. any invested Net Premiums received.
Minus the sum of the following:
e. any decrease due to Net Investment Results in the value of the Subaccounts
to which the Investment Amount is allocated;
f. any amount charged against the Investment Amount for federal or other
governmental income taxes.
The Policy Value on the Policy Date will be the initial Net Premium minus the
Cost of Insurance for the first month.
When the Cost of Insurance is deducted, it will be deducted in proportion to the
values of the Subaccounts, or by any other method requested by the Owner and
acceptable to us.
Cost of Insurance. The Cost of Insurance is the cost for this Policy and is
determined on a monthly basis. The cost for this Policy is equal to:
a. the Death Benefit on the Monthly Anniversary Day; divided by
b. the Death Benefit Factor shown on the Policy Schedule; minus
c. the Policy Value on the Monthly Anniversary Day without regard to the Cost
of Insurance; the result times
d. the cost of insurance rate as described below in the Cost of Insurance Rates
section.
If there have been increases in the Specified Amount, then the Policy Value will
be first considered a part of the initial Specified Amount. If the Policy Value
exceeds the initial Specified Amount, it will then be considered a part of
additional Specified Amounts resulting from increases in the order of the
increases.
Cost of Insurance Rates. The monthly cost of insurance rate is based on the sex,
attained age, and rating class of the person insured. Monthly cost of insurance
rates may be changed by us from time to time. A change in the cost of insurance
rates will apply to all persons of the same attained age, sex, and rating class
and whose pollcies have been in effect for the same length of time. The cost of
insurance rates will not exceed those shown in the Table of Guaranteed Maximum
Insurance Rates. These rates are based on the mortality Table named on the Table
of Guaranteed Maximum Insurance Rates.
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MORTALITY AND EXPENSE RISK CHARGE, ADMINISTRATIVE CHARGE, AND GUARANTEED DEATH
BENEFIT CHARGE. A Mortality and Expense Risk Charge, an Administrative Charge,
and a Guaranteed Death Benefit Charge will be deducted from the Gross Investment
Results at a daily rate equivalent to the annual rate shown on the Policy
Schedule.
GROSS INVESTMENT RESULTS. The Gross Investment Results are equal to the change
in the market value of the assets of the Account from the previous valuation day
to the current day, plus the investment income on those assets during the same
period.
NET INVESTMENT RESULTS. The Net Investment Results are the Gross Investment
Results minus asset management charges, minus the Mortality and Expense Risk
Charge, minus the Administrative Charge, and minus the Guaranteed Death Benefit
Charge.
CASH SURRENDER VALUE. The Cash Surrender Value as of any date is equal to:
a. The Policy Value; minus
b. any Surrender Charge shown on the Policy Schedule.
SURRENDER CHARGE. The Table of Surrender Charges is shown on the Policy
Schedule.
NET CASH SURRENDER VALUE. The Net Cash Surrender Value as of any date is equal
to:
a. the Cash Surrender Value; minus
b. any outstanding policy loan; minus
c. any loan interest due.
INSUFFICIENT VALUE. If the Net Cash Surrender Value on any Monthly Anniversary
Day is not sufficient to cover the Cost of Insurance for the next month, this
Policy will terminate subject to the Grace Period section.
BASIS OF COMPUTATIONS. Guaranteed values are at least equal to those required by
law. They are based on the Commissioners 1980 Standard Ordinary Mortality Table,
Age Last Birthday. Where required, a detailed statement of the method of
computation of values has been filed with the insurance department of the state
in which this Policy was delivered.
If the Net Investment Results credited to the Policy Value at all times from the
date of issue should equal 4% with premiums and benefits determined accordingly
under the terms of the Policy, then the resulting Cash Surrender Values will
never be less than the minimum cash surrender values calculated according to the
Standard Nonforfeiture Law using 4% and the Commissioners 1980 Standard Ordinary
Mortality Table, Age Last Birthday.
SURRENDER
SURRENDER. The Owner may surrender this Policy for the Net Cash Surrender Value.
The request must be in writing on a form suitable to us. It may be surrendered
at any time prior to termination of the Policy as provided in the Termination
provision.
Ordinarily, the surrender will be processed within 7 days from the date the
request for surrender is received at our Home Office.
LOANS
CASH LOANS. During the continuance of this Policy, we will grant a loan against
this Policy provided:
a. a written loan agreement is executed; and
b. this Policy is assigned to us.
This Policy will be the sole security for the loan. The amount of outstanding
loans with interest may not exceed the Cash Surrender Value as of the date of
the policy loan. Ordinarily, the loan will be processed within 7 days from the
date the request for a loan is received at our Home Office.
The amount of the loan will be deducted from the Investment Amount, but will
remain part of the Policy Value. The deduction will be made in proportion to the
value of the Subaccounts, or by any other method requested by the Owner and
acceptable to us. The loan amount will earn interest at not less than the Loan
Collateral Rate shown on the Policy Schedule.
If at any time the total policy loan plus loan interest equals or exceeds the
Cash Surrender Value, this Policy will become void, but not until 61 days after
notice has been mailed to the last known address of the Owner and any assignee
of record.
INTEREST ON POLICY LOANS. Interest on any loan will be at the Policy Loan Rate
shown on the Policy Schedule, payable annually in arrears. Interest not paid
when due will be deducted from the Investment Amount, but will remain part of
the Policy Value. It will be added to the loan and bear interest at the same
Policy Loan Rate.
LOAN REPAYMENTS. Loan repayments will be allocated to the Subaccounts in accord
with the most recent premium allocation or by any other method requested by the
Owner and acceptable to us.
DEATH BENEFIT
DEATH BENEFIT COVERAGE. Subject to the provisions of this Policy, the Insured's
Death Benefit at any time
5
Prior to the Maturity Date will be equal to the Insured's Specified Amount.
The Insured's Death Benefit, however, will never be less than the following
percentage of the Policy Value:
In the case of an insured with an attained age as of the beginning of the
contract year of:
More than: But Not More Than:
0...............................................40
40...............................................45
45...............................................50
50...............................................55
55...............................................60
60...............................................65
65...............................................70
70...............................................75
75...............................................90
90...............................................95
95...............................................99
The applicable percentage will decrease by a ratable portion for each full year:
From: To:
250%............................................250%
250%............................................215%
215%............................................185%
185%............................................150%
150%............................................130%
130%............................................120%
120%............................................115%
115%............................................105%
105%............................................105%
105%............................................100%
100%............................................100%
CHANGES
CHANGES IN AMOUNT OF INSURANCE COVERAGE. The Insured's Specified Amount may be
increased or decreased. The request for change must be from the Owner and in
writing on a form suitable to us. The change is subject to:
1. Any decrease will become effective on the first Monthly Anniversary Day on
or next following the day we receive the request. Any such decrease will
reduce insurance in the following order:
a) against insurance provided by the most recent Increase;
b) against the next most recent Increases successively; and
c) against insurance provided under the original application.
2. The Insured's Specified Amount after any requested decrease may not be less
than the Minimum Specified Amount shown on the Policy Schedule.
3. Any request for an increase must be applied for on a supplemental
application.
Such increase will be subject to:
a. evidence of insurability satisfactory to us;
b. our issue rules and limits at the time of increase; and
c. the sufficiency of the Net Cash Surrender Value to cover the next Cost
of Insurance deduction.
Any increase will become effective on the effective date shown on a supplement
to the Policy Schedule.
All rights to return or exchange the Policy will apply anew to the amount of the
increase.
EXCHANGE OF POLICY. Before the second anniversary this Policy may be exchanged
for a new policy of fixed benefit insurance on the Insured's life. The new
policy will be any Flexible Premium Adjustable Life policy offered by us,
subject to conditions normally applicable to the new policy. It will have the
same policy date and will be issued at the same rating class and issue age as
this Policy. No evidence of insurability will be required. The Net Cash
Surrender Value of the new policy will equal that of this Policy on the Date of
Exchange. Subsequently, monthly fees and surrender charges will apply if
appropriate. On the Date of Exchange, the Death Benefit will equal the Death
Benefit of this Policy, or the net amount at risk will equal the net amount at
risk of this Policy, at the Owner's option.
The request for exchange must be in writing on a form suitable to us. This
Policy must be surrendered to us, and be at our Home Office while the policy is
in force. The owner of the new policy must be the owner of this Policy.
The Date of Exchange will be the first Monthly Anniversary Day on or next
following the latest of:
a) the date the Owner requests the change to be effective;
b) the date that the request for exchange and the surrendered policy are
received at our Home Office; or
c) the date we receive payment of the cost of exchange or other amounts due, if
any.
This Policy also may be exchanged after a material change in a Fund's investment
policy. This situation is described under The Account.
PROCEEDS
PROCEEDS. Proceeds mean the amount payable on;
a. the Maturity Date; or
b. the surrender of this Policy; or
c. the death of the Insured.
The Proceeds to be paid on the death of the Insured will be:
a. the Death Benefit; minus
b. any outstanding policy loan; minus
6
c. any loan interest due.
The Proceeds to be paid on the surrender of this Policy or on the Maturity Date
will be the Net Cash Surrender Value.
PAYMENT OF PROCEEDS. Any amount to be paid at the death of the Insured or on any
other termination of this Policy will be paid in one sum unless otherwise
provided. Interest will be paid on this amount from date of death or maturity to
date of payment at a specified rate, not less than that required by law. All or
part of the sum of this amount and such interest credited to date of payment may
be applied to any Payment Option.
CLAIMS OF CREDITORS. To the extent allowed by law, Xxxxxxxx will not be subject
to any claims of a Beneficiary's creditors.
PAYMENT OPTIONS
Upon written request, we will apply all or part of the Proceeds payable under
this policy in accordance with any one of the options below. These options will
be available only with our consent if:
a. the Proceeds to be settled under any option are $2,500 or less; or
b. any installment or interest payment is $25 or less; or
c. any payee is a corporation, partnership, association, trustee, or assignee.
While the Insured is alive, the Owner may elect any Payment Option. The Owner
may change any election if that right has been reserved.
At the time Proceeds are payable, a Beneficiary may elect or change any Payment
Option if Proceeds are available to the Beneficiary in one sum.
The Option Date is any date this Policy terminates under the Termination
provision.
OPTION A: Payment for a Designated Number of Years. We will pay equal monthly
installments for the number of years elected. Payments will begin on the Option
Date. The amount of each installment will be determined from the Option A Table.
The Option A Table is based on a guaranteed interest rate of 4% per year
compounded yearly.
OPTION B: Payment of Life Income. We will pay equal monthly installments
beginning on the Option Date. Payments will continue while the payee is alive.
Payments are guaranteed for 10, 15, or 20 years, as elected, and for life
thereafter. The amount of payment will depend on the age and sex of the payee
and may be determined from the Option B Table. If the payee is not an
individual, the amount of payment will depend on the age and sex of a person
chosen by the payee and agreed to by us. Payments will continue while the chosen
person is alive. Payment will be subject to acceptable proof of age. We may
require proof that the person on whose life the payment is based is alive when
each payment is due.
OPTION C: Proceeds Left at Interest. We will retain the Proceeds while the payee
is alive and will pay interest at a rate of not less than 4% per year. The
interest may be paid monthly, quarterly, semiannually, or annually, as elected,
or may be left with us to accumulate.
OPTION D: Payment of a Designated Amount. We will pay equal monthly, quarterly,
semiannual, or annual payments until the Proceeds with any interest are
exhausted. Payments will begin on the Option Date. The payment amount must be at
least $120 per year per $1,000 of Proceeds applied. Interest will be payable at
a rate of not less than 4% per year compounded yearly.
ADDITIONAL OPTIONS. Any Proceeds payable under this Policy may also be settled
under any other method of settlement we offer on the Option Date.
ADDITIONAL INTEREST. Additional interest as we determine may be paid or credited
from time to time in addition to the payments guaranteed under a Payment Option.
PAYMENT CONTRACTS. When Proceeds become payable under a Payment Option, a
Payment Contract will be issued to the payee in exchange for this Policy. The
effective date of a Payment Contract will be the Option Date.
Payment Contracts may not be assigned.
A change in payment may be made only if it is provided for in the Payment
Contract.
WITHDRAWALS OF PROCEEDS UNDER PAYMENT CONTRACT. Proceeds may be withdrawn under
a Payment Option if provided in the Payment Contract. Under Payment for a
Designated Number of Years, the sum of the remaining guaranteed payments
discounted at an interest rate of 4% compounded annually may be withdrawn. Under
Payment of a Designated Amount and Proceeds Left at Interest, all or part of the
remaining proceeds and any interest earned but not paid may be withdrawn.
Proceeds may not be withdrawn from any of the Payment of Life Income Options. We
may postpone payment of any withdrawal for not more than 6 months from the date
we receive the written request.
DEATH OF PAYEE UNDER PAYMENT CONTRACT. If any payments remain to be paid under a
Payment Option when the payee dies, payment will be made according to the
Payment Contract.
7
Optional Methods of Settlement
Amount of Installment For Each $1,000 Of Proceeds Applied
Option A Table ------------------------ Option B Table ------------------------
For Males For Females
--------------------------- ---------------------------------------------------------------------------------
Number of Amount of Settlement Age Number of Monthly Number of Monthly
Years Monthly Of Payee Installments Installments
Payable Installment Last Birthday Certain Certain
--------------------------- ---------------------------------------------------------------------------------
120 180 240 120 180 240
-------------------------------------------------------------
1 $84.84 10* $3.56 $3.55 $3.55 $3.49 $3.49 $3.49
2 43.25 11 3.57 3.56 3.56 3.50 3.50 3.50
3 29.40 12 3.58 3.58 3.57 3.51 3.51 3.51
4 22.47 13 3.59 3.59 3.58 3.52 3.52 3.52
5 18.32 14 3.60 3.60 3.60 3.53 3.53 3.53
6 15.56 15 3.62 3.61 3.61 3.54 3.54 3.54
7 13.59 16 3.63 3.63 3.62 3.55 3.55 3.55
8 12.12 17 3.65 3.64 3.64 3.56 3.56 3.56
9 10.97 18 3.66 3.66 3.65 3.57 3.57 3.57
10 10.06 19 3.68 3.67 3.67 3.59 3.59 3.58
11 9.31 20 3.70 3.69 3.69 3.60 3.60 3.60
12 8.69 21 3.71 3.71 3.70 3.62 3.61 3.61
13 8.17 22 3.73 3.73 3.72 3.63 3.63 3.62
14 7.72 23 3.75 3.75 3.74 3.64 3.64 3.64
15 7.34 24 3.77 3.77 3.76 3.66 3.66 3.65
16 7.00 25 3.79 3.79 3.78 3.68 3.67 3.67
17 6.71 26 3.82 3.81 3.80 3.70 3.69 3.69
18 6.44 27 3.84 3.83 3.82 3.71 3.71 3.71
19 6.21 28 3.86 3.86 3.85 3.73 3.73 3.72
20 6.00 29 3.89 3.88 3.87 3.75 3.75 3.74
21 5.81 30 3.92 3.91 3.90 3.77 3.77 3.76
22 5.64 31 3.94 3.94 3.92 3.80 3.79 3.78
23 5.49 32 3.97 3.97 3.95 3.82 3.81 3.81
24 5.35 33 4.01 4.00 3.98 3.84 3.84 3.83
25 5.22 34 4.04 4.03 4.01 3.87 3.86 3.85
35 4.07 4.06 4.04 3.89 3.89 3.88
36 4.11 4.10 4.07 3.92 3.92 3.91
37 4.15 4.13 4.11 3.95 3.94 3.93
38 4.19 4.17 4.14 3.98 3.97 3.96
39 4.23 4.21 4.18 4.02 4.01 3.99
40 4.27 4.25 4.22 4.05 4.04 4.02
41 4.32 4.29 4.26 4.09 4.07 4.06
42 4.37 4.34 4.30 4.12 4.11 4.09
43 4.42 4.39 4.34 4.16 4.15 4.13
44 4.47 4.43 4.38 4.20 4.19 4.17
45 4.53 4.48 4.43 4.25 4.23 4.20
46 4.58 4.54 4.47 4.29 4.27 4.25
47 4.64 4.59 4.52 4.34 4.32 4.29
48 4.71 4.65 4.57 4.39 4.37 4.33
49 4.77 4.71 4.63 4.45 4.42 4.38
*Ages 10 and under.
----------------------Option B Table---------------------
(Continued)
For Males For Females
---------------------------------------------------------------------------
Settlement Age Number of Monthly Number of Monthly
of Payee Installments Installments
Last Birthday Certain Certain
---------------------------------------------------------------------------
120 180 240 120 180 240
----------------------------------------------------
50 $4.84 $4.77 $4.68 $4.50 $4.47 $4.43
51 4.91 4.84 4.73 4.56 4.53 4.48
52 4.99 4.91 4.79 4.62 4.59 4.53
53 5.07 4.98 4.85 4.69 4.65 4.58
54 5.15 5.05 4.91 4.76 4.71 4.64
55 5.24 5.13 4.97 4.83 4.78 4.70
56 5.33 5.21 5.03 4.91 4.85 4.76
57 5.43 5.29 5.09 4.99 4.92 4.82
58 5.54 5.37 5.15 5.08 5.00 4.88
59 5.85 5.46 5.21 5.17 5.08 4.95
60 5.76 5.55 5.27 5.27 5.16 5.01
61 5.88 5.64 5.34 5.37 5.25 5.08
62 6.01 5.74 5.40 5.48 5.34 5.15
63 6.14 5.84 5.45 5.59 5.44 5.22
64 6.28 5.93 5.51 5.71 5.53 5.29
65 6.43 6.03 5.57 5.84 5.63 5.35
66 6.58 6.13 5.62 5.97 5.74 5.42
67 6.73 6.23 5.67 6.11 5.84 5.48
68 6.89 6.32 5.71 6.26 5.95 5.54
69 7.05 6.42 5.75 6.42 6.06 5.60
70 7.22 6.51 5.79 6.58 6.17 5.66
71 7.39 6.60 5.82 6.75 6.28 5.71
72 7.57 6.68 5.85 6.93 6.38 5.76
73 7.74 6.76 5.88 7.12 6.49 5.80
74 7.91 6.83 5.90 7.31 6.59 5.83
75 8.08 6.90 5.92 7.50 6.68 5.87
76 8.25 6.96 5.94 7.70 6.77 5.89
77 8.42 7.02 5.95 7.89 6.86 5.92
78 8.58 7.07 5.97 8.09 6.93 5.94
79 8.73 7.12 5.97 8.28 7.00 5.95
80 8.88 7.16 5.98 8.47 7.06 5.96
81 9.02 7.19 5.99 8.65 7.11 5.97
82 9.15 7.22 5.99 8.82 7.15 5.98
83 9.26 7.24 6.00 8.98 7.19 5.99
84# 9.37 7.27 6.00 9.13 7.22 5.99
#Ages 84 and over.
Flexible Premium Variable Life Insurance Policy
Net Cash Surrender Value Payable at Maturity
Death Benefit Payable at Death Prior to Maturity Date
Adjustable Death Benefit
Flexible Premiums Payable During Lifetime of
Insured to Maturity Date
Nonparticipating - No Dividends
If you have any questions concerning this Policy or if
anyone suggests that you change or replace this Policy,
please contact your Lincoln National Life agent or the
Home Office of the Company.
THE LINCOLN NATIONAL
LIFE INSURANCE COMPANY
0000 Xxxxx Xxxxxxx Xxxxxx
P.O. Box 1110
Fort Xxxxx, Indiana 46801
[LINCOLN NATIONAL LOGO]
