DVA(2)/SR Page 1
EXHIBIT 4(a)
[KEYPORT LOGO]
ANNUITY CONTRACT
If this Contract is In Force on the Income Date, We will begin making
income payments to the Annuitant. We will make such payments according to
the terms of this Contract.
RIGHT TO EXAMINE CONTRACT: You may cancel this Contract within 10 days
after You receive it by mailing it to us at our Servicing Office or by
canceling the Contract through Keyport's Internet Service Center. If so
returned or canceled, We will treat the Contract as though it were never
issued. Upon receipt of the Contract or upon cancellation of the Contract
through Our Internet Service Center, We will promptly refund the Contract
Value as of the date the returned Contract is received by Us or the date it
is cancelled through Our Internet Service Center plus any charges We may
have previously deducted. During this 10-day "Free-look" period, the funds
you invest will be held in the Xxxxx Xxx Money Market Fund sub-account.
The funds you invest will not be transferred to the sub-account(s) you
select until five days after the 10-day Free-look period has ended.
This is a legal contract between You and Us.
Read This Contract Carefully.
Secretary President
Variable Annuity Contract
Flexible Purchase Payments
Deferred Income Payments
Nonparticipating - No Dividends
ANNUITY PAYMENTS AND OTHER VALUES, WHEN BASED ON THE INVESTMENT EXPERIENCE
OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR
AMOUNT. THIS IS EXPLAINED FURTHER IN PARTS 2 AND 3.
TABLE OF CONTENTS
Part
1 Contract Schedule
2 Sub-Accounts Available in the Variable Account
3 Definitions
4 Purchase Payments, Options, and Benefits
5 Annuity Payout Option Benefits
6 Beneficiary Provisions
7 General Provisions
8 Annuity Purchase Rates Under Variable Payment Options
PART I: CONTRACT SCHEDULE
CONTRACT NUMBER: XX-0123456
CONTRACT OWNER INFORMATION
Primary Joint
Contract Owner: Xxxx X. Xxxxxxxx Xxxx X. Customer
Contract Owner Address: 000 Xxxx Xxxxxx 000 Xxxx Xxxxxx
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Contract Owner SSN/TAX ID: 000-00-0000 000-00-0000
ANNUITANT INFORMATION
Annuitant: Xxxx X. Xxxxxxxx Date of Birth: 04/02/1944
Sex: Male
Joint Annuitant: Xxxx X. Xxxxxxxx Date of Birth: 01/13/1945
Sex: Female
CONTRACT INFORMATION
Type of Contract: Non-Qualified
State of Issue:
Effective Date: July 1, 1998
Income Date: April 1, 2023
Product: [Xxxxx Xxx Annuity]
Annuity Asset Charge: [0.65%]
Initial Purchase Payment: $1,500.00
Initial Purchase Payment Allocation:
[Colonial High Yield Securities 0%
Colonial Small Cap Value 0%
Colonial Strategic Income 0%
Colonial U.S. Growth & Income 0%
Liberty All-Star 25%
Newport Tiger 25%
Xxxxx Xxx Global Utilities 0%
Xxxxx Xxx Balanced 50%
Xxxxx Xxx Growth Stock 0%
Xxxxx Xxx Money Market 0%
Xxxxx Xxx Mortgage Securities 0%]
BENEFICIARY INFORMATION
Primary Beneficiary Name: Xxxxx X. Xxxxxxxx
KEYPORT LIFE INSURANCE COMPANY CONTACT INFORMATION
Service Office: Keyport Life Insurance Company
[P.O. Box 169
Leesburg, VA 20178]
Telephone: [0-000-000-0000]
Internet Address: [http:\\xxx.XxxxxxxXxx.xxx]
PART 2: SUB-ACCOUNTS AVAILABLE IN THE VARIABLE ACCOUNT
There are currently [eleven] Sub-accounts in the Variable Account available
to the Owner. The Owner may direct Purchase Payments under the Contract to
any of the available Sub-accounts, subject to limitations. The amounts
allocated to each Sub-account will be invested at net asset value in the
shares of one of the regulated investment companies (the Funds). The Funds
are:
[1. Colonial High Yield Securities Fund, Variable Series
2. Colonial Small Cap Value Fund, Variable Series
3. Colonial Strategic Income Fund, Variable Series
4. Colonial U.S. Growth & Income Fund, Variable Series
5. Liberty All-Star Equity Fund, Variable Series
6. Newport Tiger Fund, Variable Series
7. Xxxxx Xxx Global Utilities Fund, Variable Series
8. Xxxxx Xxx Balanced Fund, Variable Series
9. Xxxxx Xxx Growth Stock Fund, Variable Series
10. Xxxxx Xxx Money Market Fund, Variable Series
11. Xxxxx Xxx Mortgage Securities Fund, Variable Series]
See Section 4.03 for provisions governing any limitations, substitution or
elimination of Funds.
PART 3: DEFINITIONS
Accumulation Unit -- A unit of measure used to calculate the Contract Value
during the accumulation period and in other ancillary computations.
Annuitant -- The person upon whose life the annuity benefit payments made
after the Income Date will be based.
Annuity Payment - An amount paid at regular intervals after the Income Date
under one of several options available to the Annuitant and/or any other
payee. The amount paid may vary.
Annuity Payment Option - Any of the forms of annuity benefit payments
allowed under this Contract.
Annuity Unit -- A unit of measure, used after the Annuity Commencement
Date, to calculate the amount of variable annuity benefit payments.
Beneficiary -- The person or entity designated by the Owner to receive the
Death Benefit, if any, payable upon the death of the Owner.
Code -- The Internal Revenue Code (IRC) of 1986, as amended.
Contract -- The agreement between Keyport Life Insurance Company and the
Owner in which Keyport provides a variable annuity.
Contract Anniversary - An anniversary of the Contract Date.
Contract Date - The effective date of this contract, as shown on the
Contract Schedule.
Contract Owner -- The individual or entity who exercises rights of
ownership under this Contract.
Contract Value -- The sum of the values of all the Accumulation Units
attributable to this Contract at a given time.
Contract Year - The first Contract Year is the annual period which begins
on the Contract Date. Subsequent Contract Years begin on each Contract
Anniversary.
Death Benefit -- The amount payable to the Owner's designated Beneficiary
upon death of the Owner.
Electronic Fund Transfer (EFT) - a transfer of funds by transaction which
is not originated by a paper instrument such as a check or money order. In
the case of Purchase Payments made under this Contract by EFT, funds are
transferred from You to Us by Your financial institution through an
automated electronic transfer initiated pursuant to a prearranged plan
which You have approved.
Fund - Any of the eligible investment entities as shown in Part 2 into
which Purchase Payments may be allocated.
Income Date -- The date on which annuity payments begin. The Income Date
is shown on the Contract Schedule. On the Income Date, funds are withdrawn
to fund Annuity payments under the Annuity Payment Option selected.
Individual Retirement Annuity (IRA) -- A retirement plan qualified for
special tax treatment under the Code, including traditional IRAs under
section 408 and Xxxx IRAs under section 408A.
Internet Service Center - The Internet site Keyport maintains to provide
contract and other information to You and other current and prospective
annuity Contract Owners, and through which various transactions may be
performed. Some transactions may not be fully completed through the
Internet Service Center, but may also require a faxed or mailed signature
or other Written Request in order to be effective or executed. The internet
address for the Internet Service Center can be found on the Contract
Schedule.
Purchase Payments -- Amounts paid into this Contract.
Sub-account -- That portion of the Variable Account which invests in shares
of a particular Fund. There is a separate Subaccount that corresponds to
each Fund.
Valuation Date - Each day on which We and the New York Stock Exchange
("NYSE") are open for business, or any other day that the Securities
Exchange Commission requires that mutual funds, unit investment trusts, or
other investment portfolios be valued.
Valuation Period -- The period commencing at the close of trading on the
NYSE on a particular Valuation Date and ending at the close of trading on
the NYSE on the next succeeding Valuation Date.
Variable Account - Keyport Life Insurance Company Variable Annuity Account
A, the segregated investment account into which the Keyport Life Insurance
Company sets aside and invests the assets attributable to this variable
annuity Contract. The Variable Account is a unit investment trust variable
separate account organized in and governed by the laws of Rhode Island, Our
state of domicile, and registered with the SEC under the Investment Company
Act of 1940.
We, Us, Our - Keyport Life Insurance Company.
Written Request - A request in writing, in a form satisfactory to Us, and
received by Us at our Servicing Office.
You, Your - The Contract Owner and any Joint Contract Owners.
PART 4: PURCHASE PAYMENTS, OPTIONS, AND BENEFITS
4.01 Where Payable
All Purchase Payments must be made either to Keyport at its Servicing
Office or through the Internet Service Center. All Purchase Payments must
be made in United States Currency.
4.02 Initial and Subsequent Purchase Payments
The minimum initial Purchase Payment is $1,000. The minimum amount for
subsequent Purchase Payments to the Contract is $100.00. However, We will
reduce the minimum initial Purchase Payment to $100 in cases where the
Contract Owner establishes automatic subsequent Purchase Payments of no
less than $100 per month by Electronic Fund Transfer. If You elect an
initial Purchase Payment of less than $1,000 and do not make the required
monthly subsequent Purchase Payments by EFT, We reserve the right to cancel
this Contract and return the Contract Value to You. Any such cancellation
will be made only in accordance with the terms of the nonforfeiture law,
applicable in the state of issue shown on the Contract Schedule, for
individual deferred annuities.
This Contract will not be effective until We have accepted the initial
Purchase Payment during Your lifetime.
Purchase Payments may be made until the earliest of the Income Date, the
surrender of the Contract, or payment of any Death Benefit. Keyport
reserves the right to limit the sum of Purchase Payments made under this
Contract to $5,000,000.
4.03 Variable Account
Purchase Payments under the Contract are allocated to the Variable Account.
The Variable Account is for the exclusive benefit of persons entitled to
receive benefits under variable annuity contracts. The Variable Account
will not be charged with the liabilities arising from any other part of
Keyport's business. The Owner may direct Purchase Payments under the
Contract to any of the available Subaccounts. The amounts allocated to each
Subaccount will be invested at net asset value in the shares of the Funds
You select. The available Funds are shown in "Part 2: Sub-accounts
available in the Variable Account."
Keyport reserves the right to eliminate the shares of any Fund and
substitute the securities of a different Fund, investment company or mutual
fund if the shares of a Fund are no longer available for investment, or, if
in the judgment of Keyport, further investment in any Fund becomes
inappropriate in view of the purposes of the Contract. Keyport may add new
Sub-accounts investing in a new Fund. Keyport will give the Owner notice
of the elimination and substitution of any Fund within fifteen days after
such substitution occurs. Such notice will be posted on the Internet
Service Center, and sent to the current e-mail address which You have
provided to Us. Any such elimination, substitution or addition will be
made only in compliance with any applicable regulatory requirements.
Keyport will use each Purchase Payment You make under this Contract to buy
Accumulation Units in the Subaccount(s) You selected. The number of
Accumulation Units purchased will be determined by dividing the amount
directed to the Subaccount by the dollar value of an Accumulation Unit in
such Subaccount as of the next valuation of such Accumulation Unit
immediately following Our receipt of the Purchase Payment. The number of
Accumulation Units held for an Owner in a Subaccount will not change simply
because of a change in the dollar value of those Units.
4.04 Valuation of Accumulation Units
The Contract Value at any time prior to the Income Date equals the sum of
the values of the Accumulation Units credited in the Subaccounts under the
Contract.
The value of a Subaccount on any Valuation Date is the number of
Accumulation Units in the Subaccount multiplied by the value of an
Accumulation Unit in the Subaccount at the end of the Valuation Period.
Accumulation Units for each Subaccount are valued separately. Initially,
the value of an Accumulation Unit was arbitrarily established at the
inception of the Subaccount. It may increase or decrease from Valuation
Period to Valuation Period. The Accumulation Unit value for a Subaccount
for any later Valuation Period is determined as follows:
(1) The total value of Fund shares held in the Subaccount is calculated
by multiplying the number of Fund shares owned by the Subaccount at
the beginning of the Valuation Period by the net asset value per
share of the Fund at the end of the Valuation Period, and adding any
dividend or other distribution of the Fund if an ex-dividend date
occurs during the Valuation Period; minus
(2) The liabilities of the Subaccount at the end of the Valuation Period
(such liabilities include daily charges imposed on the Subaccount,
and may include a charge or credit with respect to any taxes paid or
reserved for by Keyport that Keyport determines are as a result of
the operations from the Variable Account); the result divided by
(3) The outstanding number of Accumulation Units in the Subaccount at
the beginning of the Valuation Period.
The daily charges imposed on a Subaccount for any Valuation Period
represent the annuity asset charge, shown on the Contract Schedule,
adjusted for the number of calendar days in the Valuation Period. The
Accumulation Unit value and Annuity Unit value may increase or decrease
the dollar value of benefits under the Contract. The dollar value of
benefits will not be adversely affected by expenses incurred by Keyport.
4.05 Transfers
Prior to the earlier of:
(1) the Income Date;
(2) surrender of the Contract; or
(3) payment of any Death Benefit;
the Owner may direct a transfer of assets from one Subaccount to another
Subaccount.
A transfer will result in the redemption of Accumulation Units in one
Subaccount and the purchase of Accumulation Units in the other Subaccount.
Such a transfer will be accomplished at relative Accumulation Unit values
as of the Valuation Date the transfer request is received.
You may make twelve (12) transfers annually without charge. Though the fee
is currently waived, Keyport reserves the right to charge $10 per transfer
for each transfer in excess of twelve (12) in any Contract Year.
Keyport reserves the right to refuse a transfer if, in a Fund's investment
advisor's judgement, the Fund would be unable to invest effectively
according to the Fund's investment objectives as a result of such a
transfer. Keyport reserves the right to revise the transfer privilege at
any time.
4.06 Withdrawal Option
The Owner may withdraw a part of the surrender value of this Contract at
any time subject to certain limitations. The withdrawal will be effective
on the Valuation Date on which We receive a request:
(1) in writing at Our Servicing Office; or
(2) through the Internet Service Center.
The minimum withdrawal is $300. Partial withdrawals will not be permitted
if they lower the Contract Value below $1,000. Keyport reserves the right
to surrender this Contract if any withdrawal reduces the total Contract
Value to a level in which this Contract may be surrendered in accordance
with the terms set forth in the nonforfeiture law, applicable in the state
of issue shown on the Contract Schedule, for individual deferred annuities.
In such cases, We will surrender the Contract for its Contract Value.
We will transmit to you by mail or, at Your request, by EFT, any amount
that You withdraw within seven days following the date of withdrawal;
however, We reserve the right to suspend or postpone payment for a
withdrawal when the Suspension or Deferral of Payments Provision is in
effect. See Section 4.10, "Suspension or Deferral of Payments."
The withdrawal option is not available after the Income Date.
4.07 Surrender Option
You may surrender this Contract for its surrender value. On surrender, this
Contract terminates. Surrender will be effective on the Valuation Date on
which We receive a Written Request at Our Servicing Office. The Contract
Surrender Value will be the total Contract Value on the Valuation Date,
less any applicable taxes.
Payment will be made within seven days after the date of surrender, subject
to the Suspension or Deferral of Payments Provision (see Section 4.10).
The surrender option is not available after the Income Date.
4.08 Death of Owner
Before the Annuity Commencement Date:
If there is a single Owner, upon the death of the Owner, Keyport will pay a
Death Benefit to the designated Beneficiary(s). If the designated
Beneficiary is the surviving spouse of the deceased Owner, the designated
Beneficiary may elect to continue the Contract as the new Owner in lieu of
receiving the Death Benefit. If there is no designated Beneficiary,
Keyport will pay a Death Benefit to the Owner's estate.
In cases where a designated Beneficiary continues the Contract as the new
Owner, We will pay a Death Benefit to the designated Benificary(s) selected
by the new Owner or, if none, We will pay the Death Benefit to the new
Owner's estate.
If there are Joint Owners, upon the death of the first Joint Owner, the
surviving Joint Owner, as the spouse of the deceased joint Owner, may
either continue the Contract as sole Owner or receive a Death Benefit.
Upon the death of the Joint Owner who continues the Contract, Keyport will
pay a Death Benefit to the designated Beneficiary(s).
The Death Benefit will be paid if Keyport is in receipt of:
(1) proof of death acceptable to Us;
(2) authorization for payment; and
(3) all claim forms, fully completed.
Proof of death may be:
(1) a certified copy of a death certificate;
(2) a certified copy of the statement of death from the attending
physician;
(3) a certified copy of a decree of a court of competent jurisdiction
as to the findings of death; or
(4) any other proof of death acceptable to Keyport.
All Death Benefit payments will be subject to the laws and regulations
governing death benefits.
Notwithstanding any provision of this Contract to the contrary, no payment
of Death Benefits provided under the Contract will be allowed that does not
satisfy the requirements of Code section 72(s) or 401(a)(9), as applicable,
and as amended from time to time. If the Owner is a corporation or other
non-individual person (non-natural person), the death of the Annuitant will
be treated as the death of the Owner.
Determination of amounts
In the case of the death of the Owner, or in the case of joint Owners, one
of the Owners; this Contract provides a Death Benefit equal to the greater
of: (1) Contract Value; (2) the sum of Purchase Payments paid into the
Contract minus all withdrawals and applicable State premium taxes.
Payment of amounts
The Death Benefit payable on the death of the Owner, or after the death of
the first joint Owner, or upon the death of the spouse who continues the
Contract, will be distributed to the designated Beneficiary(s) as follows:
(1) The Death Benefit must be completely distributed within five years
of the Owner's date of death; or
(2) The designated Beneficiary may elect, within the one year period
after the Owner's date of death, to receive the Death Benefit in
substantially equal installments over the life of such designated
Beneficiary or over a period not extending beyond the life
expectancy of such designated Beneficiary, provided that such
distributions begin not later than one year after the Owner's date
of death.
If a lump sum settlement is elected, We will pay the proceeds to You within
seven days of Our approval of the claim. This payment made be postponed
pursuant to the Suspension or Deferral of Payments Provision. See Section
4.10.
On or after the Income Date:
If the Owner dies on or after the Income Date, any remaining benefits
payable will continue to be distributed under the Annuity Payment Option
then in effect. All of the Owner's rights granted by the Contract will
pass to the Joint Owner, if any; otherwise to the designated Beneficiary.
If there is no named Beneficiary at the time of the Owner's death, then the
Owner's rights will pass to the Annuitant, if applicable. If no named
Beneficiary, Annuitant, or Joint Annuitant survives the Owner, any
remaining annuity benefit payments will continue to the Owner's estate.
4.09 Death of Annuitant
Before the Income Date:
If the Annuitant is also the Owner or a Joint Owner, then the Death Benefit
paid will be subject to the Contract provisions regarding death of the
Owner. If, based on the provisions of the Contract, the surviving spouse of
the Owner/Xxxxxxxxx assumes the Contract, then the contingent Annuitant
becomes the Annuitant. If no contingent Annuitant is named, the surviving
spouse becomes the Annuitant.
If an Annuitant who is not the Owner or Joint Owner dies, then the
contingent Annuitant, if any, becomes the Annuitant. If no contingent
Annuitant is named, the Owner (or the younger of the Joint Owners) becomes
the Annuitant.
On or After the Income Date:
On receipt of proof of death, as described in Section 4.08, of the
Annuitant or both Joint Annuitants, any remaining annuity benefit payments
under the Annuity Payment Option will be paid to the Owner, if living,
otherwise, to the Beneficiary. If there is no Beneficiary, any remaining
benefit payments will continue to the Annuitant's estate.
4.10 Suspension or Deferral of Payments
We reserve the right to suspend or postpone payments for a withdrawal,
transfer, surrender, or death benefit for any period when:
(1) the New York Stock Exchange is closed (other than customary weekend
and holiday closings); or
(2) trading of the New York Stock Exchange is restricted; or
(3) an emergency exists as a result of which valuation or disposal of
assets and securities of the Variable Account is not reasonably
practicable; or
(4) the Securities Exchange Commission, by order or pronouncement, so
permits for the protection of Contract Owners;
provided that applicable rules and regulations of the Securities Exchange
Commission govern as to whether the conditions described in (2) and (3)
above exist.
PART 5: ANNUITY PAYOUT OPTION BENEFITS
5.01 Annuity Payments
An election to receive payments under an Annuity Payment Option must be
made before the Income Date.
If an Annuity Payment Option is not chosen before the Income Date, payments
will commence to the Annuitant on the Income Date under the Annuity Payment
Option which provides a life annuity with annuity payments guaranteed for
10 years.
The Income Date may be deferred upon request (either in writing or through
the Internet Service Center) by the Owner and any Beneficiary who cannot be
changed. Purchase Payments may be made until the new Income Date.
5.02 Choice of Annuity Payment Option
By Owner -- Before the Income Date, the Owner may choose or change any
Annuity Payment Option.
By Beneficiary -- At the time proceeds are payable to a Beneficiary, the
Beneficiary may choose or change the selected Annuity Payment Option if the
change meets the requirements of Code section 72(s) or 401(a)(9) if
proceeds are available to the Beneficiary in a lump sum. The Beneficiary
then becomes the Annuitant.
A choice or change in the Annuity Payment Option must be made by Written
Request to Keyport at Our Servicing Office.
After the Income Date, the Annuity Payment Option may not be changed.
5.03 Choice of Annuitant and Income Date
If the Owner is a natural person, then prior to the earlier of:
(1) the Income Date;
(2) surrender of the contract; or
(3) payment of any Death Benefit;
the Owner may, with Our concurrence, change the Annuitant(s) or the Income
Date. However, Income Date must occur when at least one of the following
conditions continues to apply: (1) the Annuitant(s) has not exceeded age
90, or (2) the Income Date is not more than 10 years from the Contract
Date. After the Income Date, the Annuity Payment Option may not be changed.
If the Owner is a non-natural person, then prior to the earlier of:
(1) the Income Date;
(2) surrender of the contract; or
(3) payment of any Death Benefit;
the Owner may add the spouse of the Annuitant as a Joint Annuitant and may
change the Income Date. However, the Income Date must occur when at least
one of the following conditions continue to apply: (1) the Annuitant(s) has
not exceeded age 90, or (2) the Income Date is not more than 10 years from
the Contract Date. After the Income Date, the Annuity Payment Option may
not be changed.
5.04 Annuity Payment Options
(A) Income for a fixed number of years -- payments will be made for a
chosen number of years, not less than 5 nor more than 50. You may
choose a period certain longer than 30 years only if it does not
exceed the difference between age 100 and the Annuitant's age on the
date of first payment. At any time, however, the payee may elect to
receive the present value of the remaining variable annuity payments,
commuted at the 5% interest rate used to create the annuity factor
for this option.
(B) Life Income with 10 Years of Payments Guaranteed - payments will be
made for life with a 10 year period certain. If, at the death of the
payee, Annuity Payments have been made for a period less than 10
years, we will continue payments during the remainder of the period
to the successor payee; or, the successor payee may elect to receive
in a lump sum the present value of the remaining Annuity Payments,
commuted at the 5% interest rate used to create the annuity factor
for this option.
(C) Joint and Last Survivor Income - payments will be made during the
joint life of the Annuitant and a joint Annuitant of the Owner's
choice. Payments will be made for life with no period certain.
Annuity Payments will continue for as long as either the payee or a
designated second natural person is alive. The amount of Annuity
Payments will depend on the age of both persons on the Income Date
and it may also depend on each person's sex.
(D) Other Annuity payment Options We may offer from time to time.
On the Income Date, at the time an Annuity Payment Option is selected under
the provisions of this Contract, the total Contract Value (after deduction
of any applicable Premium Taxes) will be applied to provide variable
Annuity Payment benefits under the Annuity Payment Option You select. If
you do not select an Annuity Payment Option before the Income Date, We will
automatically choose Option B.
The amount of annuity payment will depend on the age and sex (except in
cases where unisex rates are required) of the Annuitant as of the Income
Date. Annuity payments will be made once each month. The Contract Value
and Annuity Unit value used to effect benefit payments will be calculated
as of the Income Date and on a monthly basis from the Income Date
thereafter. Payments will be made within fourteen days following each
monthly calculation of benefit payment, subject to the Suspension or
Deferral of Payments provision. See Section 4.10.
5.05 Determination of the Amount of the First Variable Annuity Payment
Part 8 of this Contract illustrates the minimum payment amounts and the age
adjustments that will be used to determine the first monthly payment under
a variable Annuity Payment Option. The tables show the dollar amount of the
first monthly payment that can be purchased with each $1,000 of Contract
Value, after deduction of any applicable premium taxes. Amounts shown use
the 1983 'a' individual annuity mortality table, modified, with an assumed
rate of return of 5% per year.
5.06 Determination of the Amount of Subsequent Variable Annuity Payments
The first variable annuity payment is sub-divided into components, each of
which represents the product of:
(1) the percentage elected by the Contract Owner of a specific Sub-
account; and
(2) the entire first variable annuity payment.
On the Income Date, the Contract is credited with Xxxxxxx Units for each
Sub-account. The number of Annuity Units credited is computed by dividing
the component of the first payment attributable to a specific Sub-account
by the Annuity Unit value for that Subaccount. Each component of each
variable annuity payment after the first payment attributable to a specific
Subaccount will be determined by multiplying the Annuity Unit value for
that Subaccount on the monthly anniversary of the Income Date by the number
of Annuity Units attributable to that Sub-account. The total variable
annuity payment will be the sum of the payments attributable to each Sub-
account. In the absence of transfers between Sub-accounts, the number of
Annuity Units attributable to each Sub-account remains constant, although
the Annuity Unit values will vary with the investment performance of the
Sub-accounts.
The Annuity Unit value for any Valuation Period for any Subaccount is
determined by multiplying the Annuity Unit value for the immediately
preceding Valuation Period by the product of (A) and (B), where:
(A) is 0.999866337 raised to a power equal to the number of days in the
current Valuation Period; and
(B) is the Accumulation Unit value of the same Subaccount for this
Valuation Period divided by the Accumulation Unit value of the same
Subaccount for the immediately preceding Valuation Period.
Keyport will value all assets in the Subaccount in accordance with the
provisions of applicable laws, rules, and regulations. The determination by
Keyport of the value of an Accumulation Unit or of an Annuity Unit,
consistent with the above described methodology, will be binding on the
Owner(s) and any Beneficiaries.
Keyport guarantees that the dollar amount of each payment after the first
will not be affected by variations in mortality experience from mortality
assumptions on which the first payment is based.
After the Income Date, the Owner may direct a transfer of assets from one
Subaccount to another. Such transfers will be limited to three (3) per
Contract Year.
A transfer from one Subaccount to another Subaccount will result in the
purchase of Annuity Units in one Subaccount, and the redemption of Annuity
Units in the other Subaccount. Such a transfer will be accomplished at
relative Annuity Unit values as of the Valuation Date the transfer request
is received.
5.07 Proof of Age
Payment will be subject to proof of age acceptable to Keyport, such as a
certified copy of a birth certificate.
5.08 Evidence of Survival
If payments depend upon the continuing life of an Annuitant, We may require
proof that the Annuitant is alive when each payment is due.
5.09 Change in Annuity Payment Option
The Annuity Payment Option may not be changed after the Income Date.
PART 6: BENEFICIARY
6.01 Designation
The Owner may designate a Beneficiary(s). Unless there are Joint Owners,
the designated Beneficiary(s) will receive the Death Benefit proceeds upon
the death of the Owner.
If there are Joint Owners, the surviving Joint Owner will receive the Death
Benefit proceeds upon the death of the first Joint Owner. The surviving
Joint Owner will be treated as the primary, designated Beneficiary. Any
other Beneficiary designation on record at the time of death of the first
joint Owner will be treated as a contingent Beneficiary.
If the surviving Joint Owner, as spouse of the deceased Joint Owner,
continues the Contract as the sole Owner in lieu of receiving the Death
Benefit proceeds, then the designated Beneficiary(s) will receive the Death
Benefit proceeds upon the death of the surviving spouse.
Unless otherwise stated in the Beneficiary designation, designated
Beneficiaries will share the Death Benefit equally.
6.02 Change
The Owner may change any designated Beneficiary, unless prohibited by the
previous designation. A change of Beneficiary will then revoke any
previous designation.
A change may be made by filing a Written Request at Our Servicing Office.
The change will become effective upon our receipt of the Written Request.
6.03 Death
Unless otherwise provided in the Beneficiary designation, if any
Beneficiary dies before the Owner, that Beneficiary's interest will go to
any other named Beneficiaries, according to their respective interests. If
there are no other named Beneficiaries, benefits will be paid to the
contingent Beneficiary(s), if any. Any other Beneficiary designation on
record at the time of death of the first joint Owner will be treated as a
contingent Beneficiary. Before the Income Date, if no Beneficiary or
contingent Beneficiary survives the Owner the proceeds will be paid to the
Owner's estate.
Once a Beneficiary is entitled to Death Benefit proceeds, the Beneficiary
may name his or her own Beneficiary(s) to receive any remaining benefits
due under the Contract, should the Beneficiary die prior to receipt of all
benefits. If no Beneficiary is named, or if the named Beneficiary
predeceases the original Beneficiary, any remaining benefits will continue
to the original Beneficiary's estate. This designation must be made to the
Servicing Office by Written Request.
PART 7: GENERAL PROVISIONS
7.01 The Contract
The Contract, the application, and any endorsements attached to the
Contract constitute the entire Contract. Only the president, a vice
president, or the secretary of Keyport has the power, on behalf of Keyport,
to change, modify, or waive any provisions of this Contract.
We reserve the right to unilaterally change the Contract for the purpose of
keeping the Contract in compliance with federal or state law.
Any changes, modifications, or waivers must be in writing. No
representative or person other than the above named officers has authority
to change or modify this Contract or waive any of its provisions. All terms
used in this Contract will have their usual and customary meaning except
when specifically defined.
7.02 The Internet Service Center
The Internet Service Center is maintained to provide information to current
and prospective customers and to enable various transactions. For security
the Internet Service Center may issue the Owner a PIN or password. The
Owner is responsible for any use of this PIN or password. For legal
reasons certain transactions require a Written Request with a signature
(faxed or mailed). E-mailed requests for transactions that require a
signature or Written Request will not be processed. Detailed instructions
on how to perform various transactions such as transferring funds from one
Subaccount to another Subaccount, changing the Beneficiary, or making a
withdrawal can be found at the Internet Service Center. You agree to
receive all required documents through the Internet Service Center.
Documents will be considered to be delivered to You when they are placed in
Your personal folder at the Internet Service Center.
7.03 Ownership
The Owner is the person who has the ability to exercise the rights within
this Contract.
The Owner may name only his or her spouse as a Joint Owner. Joint Owner(s)
will be treated as having equal, undivided interests in the Contract,
including rights of survivorship. Joint Owners may not exercise Ownership
rights in the Contract independently of one another, and for certain
requests or transactions, We reserve the right to require a Written Request
signed by both Joint Owners.
Before the Income Date, the Owner may, with Our concurrence, change the
Annuitant. A request for such change must be made by Written Request to
Us. The Annuitant may not be changed in a Contract owned by a non-natural
person. The Owner may also name a contingent Annuitant by Written Request
to our Servicing Office. The contingent Annuitant designation is no longer
applicable after the Income Date.
7.04 Assignments
If used with an Individual Retirement Annuity, the Contract will not be
transferable. It may not be sold, assigned, discounted or pledged as
collateral for a loan or as security for the performance of an obligation
or for any other purpose.
7.05 Incontestability
We will not contest this Contract.
7.06 Misstatement of Age and/or Sex
If the age and/or sex of the Annuitant has been misstated, the benefits
available under this Contract will be those which the Purchase Payments
would have purchased using the correct age and/or sex. Any underpayment
already made by Keyport will be made up immediately and any overpayments
already made by Keyport will be charged against the annuity payments
falling due after the correction is made.
7.07 Nonparticipating
The Contract is nonparticipating and will not share in the surplus earnings
of Keyport.
7.08 Voting Rights
We will vote the Fund shares held in the Variable Account meetings of the
various Funds. The votes will be cast according to the instructions of
Owners with interests in a Fund. An Owner may give instructions for a
number of votes equal to the Owner's percentage interest in a sub-account
multiplied by the total number of votes attributable to the sub-account;
fractional shares will be recognized.
Ownership of this Contract will not entitle any person to vote at any
meeting of shareholders of Keyport Life Insurance Co.
7.09 Ownership of the Assets
Keyport will have exclusive and absolute ownership and control of its
assets, including all assets in the Variable Account.
7.10 Premium Tax
State and local government premium tax, if applicable, will be deducted
from Purchase Payments or Contract Value when incurred by Keyport or at
another time of Keyport's choosing.
7.11 Maximum Issue Age
This Contract will not be issued to Owners or Joint Owners over the age of
90, or for Contracts issued as part of an Individual Retirement Annuity
("IRA") or other tax-qualified plan, this Contract will not be issued to
Owners or Joint Owners over the age of 75.
PART 8: ANNUITY PURCHASE RATES FOR VARIABLE PAYMENT OPTIONS
Using the Tables
Tables 2 and 3 are age-dependent. The amount of the first annuity payment
will be based on an age a specified number of years younger than the
person's then-attained age (i.e., age last birthday). This age setback is
as follows:
Date of First Payment Age Setback
1999 1 year
2000-2009 2 years
2010-2019 4 years
2020-2029 5 years
2030 or later 6 years
We will calculate the amount for a payment frequency other than monthly and
for any ages not shown in Tables 2 and 3 in accordance with the next
section. Upon request, We will tell You any such amount.
Basis of Calculation
Table 1 is based on interest at [5%]. Tables 2 and 3 are based on the 1983
Individual Annuity Valuation Tables, weighted 40% male and 60% female, with
interest at 6% (Tables 2 and 3) and 3% (Tables 5 and 6), projected
dynamically with Projection Scale G.
[TABLE 1: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION A FOR EACH
$1,000 APPLIED
Years Payment Years Payment Years Payment Years
Payment
5 $19.17 12 $9.63 19 $7.24 25 $6.32
6 16.42 13 9.12 20 7.04 26 6.21
7 14.46 14 8.69 21 6.86 27 6.11
8 13.00 15 8.31 22 6.70 28 6.02
9 11.87 16 7.99 23 6.56 29 5.94
10 10.97 17 7.71 24 6.43 30 5.87
11 10.24 18 7.46 ]
TABLE 2: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION B FOR EACH
$1,000 APPLIED
Age Payment Age Payment Age Payment Age Payment Age Payment
30 $5.09 43 $5.40 56 $6.06 69 $7.47 82 $ 9.72
31 5.11 44 5.44 57 6.13 70 7.63 83 9.87
32 5.13 45 5.47 58 6.21 71 7.79 84 10.02
33 5.14 46 5.51 59 6.30 72 7.95 85 10.15
34 5.16 47 5.55 60 6.39 73 8.12 86 10.27
35 5.18 48 5.60 61 6.48 74 8.30 87 10.38
36 5.20 49 5.64 62 6.59 75 8.48 88 10.48
37 5.23 50 5.69 63 6.69 76 8.66 89 10.57
38 5.25 51 5.74 64 6.81 77 8.84 90 10.65
39 5.28 52 5.80 65 6.93 78 9.03 91 10.72
40 5.31 53 5.86 66 7.05 79 9.21 92 10.77
41 5.34 54 5.92 67 7.19 80 9.38 93 10.82
42 5.37 55 5.99 68 7.33 81 9.55 94 10.86
95 10.89
TABLE 3: FIRST MONTHLY PAYMENT PAYABLE UNDER VARIABLE OPTION C FOR EACH
$1,000 APPLIED
COMBINATION OF AGES
30 35 40 45 50 55 60 65 70 75 80 85 90 95
30$4.97$4.99$5.00$5.02$5.04$5.05$5.06$5.07$5.08$5.09$5.09$ 5.09$ 5.10$ 5.10
35 5.01 5.04 5.07 5.09 5.11 5.13 5.15 5.16 5.17 5.18 5.18 5.19 5.19
40 5.08 5.12 5.16 5.19 5.22 5.25 5.27 5.29 5.30 5.31 5.31 5.32
45 5.18 5.23 5.29 5.34 5.38 5.41 5.44 5.46 5.48 5.49 5.49
50 5.32 5.40 5.47 5.54 5.60 5.64 5.68 5.70 5.72 5.72
55 5.51 5.62 5.73 5.85 5.90 5.96 6.00 6.02 6.04
60 5.79 5.95 6.11 6.24 6.34 6.41 6.45 6.48
65 6.20 6.44 6.66 6.84 6.97 7.05 7.10
70 6.80 7.15 7.47 7.71 7.87 7.97
75 7.69 8.22 8.66 8.99 9.20
80 9.03 9.81 10.43 10.87
85 11.02 12.11 12.98
90 13.82 15.34
95 17.66
Endorsements
To be inserted only by Us
KEYPORT LIFE INSURANCE COMPANY
A Stock Company
Boston, MA 02110
Servicing Office:
Keyport Life Insurance Co.
P.O. Box 691
Leesburg, VA 20178
