EXHIBIT 99.1(5)(a)
Flexible Premium Variable
Life Insurance Policy
[LOGO OF PACIFIC LIFE]
INSURANCE COMPANY
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
===============================================================================
FLEXIBLE READ YOUR POLICY CAREFULLY. This is a legal
PREMIUM contract between you, the Owner, and us, Pacific
VARIABLE LIFE Life Insurance Company, a stock insurance company.
INSURANCE We agree to pay the benefits of this policy
POLICY according to its provisions. The consideration for
this policy is the application for it, a copy of
which is attached, and payment of the premiums.
Variable Account Cash Surrender Values may increase
or decrease depending upon Variable Account
Investment experience, subject to any minimum
guarantees. There is no guaranteed Variable Account
Cash Surrender Value. Policy loan value is less
than one hundred percent (100%) of the policy's
cash surrender value.
The amount and duration of the death benefit may be
fixed or variable depending upon investment
experience of the Variable Accounts.
Free Look Right--You may return this policy within
10 days after you receive it. To do so, deliver or
mail it to us or to our agent. This policy will
then be deemed void from the beginning and we will
refund the premiums paid.
Signed at our Home Office, 000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
. Adjustable Face Amount Pacific Life Insurance Company
. Benefits Vary Based on
. Investment Experience /s/ XXXXXX X. XXXXXX /s/ XXXXXX X. XXXXX
. Non-Participating Chairman and Chief Secretary
Executive Officer
POLICY NUMBER: VP99999990 OWNER(S): XXXXXX XXXXXXXX
POLICY DATE: JAN 10, 1998 INSURED: XXXXXX XXXXXXXX
RISK CLASSIFICATION: MALE SELECT NONSMOKER AGE ON POLICY DATE: 35
MONTHLY PAYMENT DATE IS THE 10th INITIAL FACE AMOUNT: $50,000
DAY OF EACH MONTH
NOTE: IT IS POSSIBLE THAT COVERAGE WILL LAPSE IF THE ACCUMULATED VALUE IS
INSUFFICIENT TO PAY THE CHARGES ASSESSED ON A MONTHLY PAYMENT DATE. BECAUSE THE
ACCUMULATED VALUE MAY BE BASED ON THE INVESTMENT RESULTS OF THE SEPARATE
ACCOUNT, THE PAYMENT OF INITIAL AND PLANNED PREMIUMS MAY NOT BE ADEQUATE TO
GUARANTEE THAT THE POLICY WILL REMAIN IN FORCE. IF THE POLICY DOES NOT REMAIN
IN FORCE, THERE WILL BE NO DEATH BENEFIT OR ACCUMULATED VALUE.
P98-52M (P)
GUIDE TO POLICY PROVISIONS
POLICY SPECIFICATIONS................ 3
DEFINITIONS.......................... 5
PREMIUMS............................. 6
DEATH BENEFIT........................ 7
ACCUMULATED VALUE.................... 10
TRANSFERS............................ 13
SURRENDER AND WITHDRAWAL OF VALUES... 14
TIMING OF PAYMENTS AND TRANSFERS..... 15
INCOME BENEFITS...................... 15
POLICY LOANS......................... 16
SEPARATE ACCOUNT PROVISIONS.......... 17
SUBSTITUTION OF INSURED.............. 18
GENERAL PROVISIONS................... 18
INDEX................................ 20
POLICY NUMBER: VP99999990
POLICY SPECIFICATIONS
BASIC POLICY: FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
PREMIUMS: PLANNED PERIODIC PREMIUM PAYMENT = $ 2,792.98
GUIDELINE SINGLE PREMIUM = $31,286.18
GUIDELINE LEVEL PREMIUM = $ 2,792.98
DEATH BENEFIT QUALIFICATION TEST: GUIDELINE PREMIUM TEST
(THIS ELECTION IS IRREVOCABLE FOR THE LIFE OF THE CONTRACT)
DEATH BENEFIT OPTION: A
ACCOUNT ALLOCATIONS AVAILABLE:
[MONEY MARKET] [MULTI-STRATEGY] [GROWTH]
[MANAGED BOND] [INTERNATIONAL] [EQUITY INCOME]
[HIGH YIELD BOND] [GOVERNMENT SECURITIES] [EQUITY INDEX]
[GROWTH LT] [FIXED] [AGGRESSIVE EQUITY]
[EMERGING MARKETS] [FIXED LT] [BOND AND INCOME]
[VAR AC I--INT EQY] [VAR XX XX--CORE GRW] [VAR AC III--CAP APPR]
[VAR XX XX--ENHNC EQY] [EQUITY]
INTEREST ON THE FIXED OPTIONS IS GUARANTEED TO BE NOT LESS THAN 3.00% ANNUALLY.
IN ADDITION, ANY EXCESS INTEREST DECLARED BY US WILL BE GUARANTEED FOR ONE YEAR.
PREMIUM LOAD: FOR EACH PREMIUM PAID THERE IS A PREMIUM LOAD THAT CONSISTS OF A
SALES LOAD OF 3.50% PLUS A CHARGE OF 2.35% FOR CERTAIN STATE AND LOCAL PREMIUM
TAXES PLUS A CHARGE OF 1.50% FOR CERTAIN FEDERAL TAXES. REFER TO CONTRACT FOR
DETAILS.
ADMINISTRATIVE CHARGE: $7.50 PER MONTH TO AGE 100; $0 THEREAFTER.
INITIAL SURRENDER CHARGE: $55.50
M&E RISK FACE AMOUNT CHARGE: $9.55 PER MONTH FOR POLICY YEARS 1 TO 10; $0
THEREAFTER. REFER TO CONTRACT FOR DETAILS.
POLICY NUMBER: VP99999990 OWNER(S): XXXXXX XXXXXXXX
POLICY DATE: JAN 10, 1998 INSURED: XXXXXX XXXXXXXX
RISK CLASSIFICATION: MALE SELECT NONSMOKER AGE ON POLICY DATE: 35
MONTHLY PAYMENT DATE IS THE 10th INITIAL FACE AMOUNT: $50,000
DAY OF EACH MONTH
NOTE: IT IS POSSIBLE THAT COVERAGE WILL LAPSE IF THE ACCUMULATED VALUE IS
INSUFFICIENT TO PAY THE CHARGES ASSESSED ON A MONTHLY PAYMENT DATE. BECAUSE THE
ACCUMULATED VALUE MAY BE BASED ON THE INVESTMENT RESULTS OF THE SEPARATE
ACCOUNT, THE PAYMENT OF INITIAL AND PLANNED PREMIUMS MAY NOT BE ADEQUATE TO
GUARANTEE THAT THE POLICY WILL REMAIN IN FORCE. IF THE POLICY DOES NOT REMAIN
IN FORCE, THERE WILL BE NO DEATH BENEFIT OR ACCUMULATED VALUE.
Page 3.0
POLICY NUMBER VP99999990
POLICY SPECIFICATIONS
SUMMARY OF COVERAGES EFFECTIVE ON THE POLICY DATE
P98-52: BASIC COVERAGE
FACE AMOUNT: $50,000.00
AGE AT ISSUE: 35
RISK CLASSIFICATION: MALE SELECT NONSMOKER
COVERED PERSON: XXXXXX XXXXXXXX
________________________________________________________________________________
R98-ABR: ACCOUNTING BENEFIT RIDER
FACE AMOUNT: $50,000.00
AGE AT ISSUE: 35
RISK CLASSIFICATION: MALE SELECT NONSMOKER
COVERED PERSON: XXXXXX XXXXXXXX
________________________________________________________________________________
R98-ART: ANNUAL RENEWABLE TERM RIDER
INITIAL FACE AMOUNT: $50,000.00
AGE AT ISSUE: 35
RISK CLASSIFICATION: MALE SELECT NONSMOKER
COVERED PERSON: XXXXXX XXXXXXXX
________________________________________________________________________________
R98-SPT: ANNUAL RENEWABLE AND CONVERTIBLE TERM RIDER
INITIAL FACE AMOUNT: $50,000.00
AGE AT ISSUE: 35
RISK CLASSIFICATION: FEMALE NONSMOKER
COVERED PERSON: XXXX XXXXXXXX
________________________________________________________________________________
Page 3.1
POLICY NUMBER: VP99999990
POLICY SPECIFICATIONS
SUMMARY OF COVERAGES EFFECTIVE ON THE POLICY DATE
ANNUAL RENEWABLE TERM RIDER
VARYING SCHEDULE
FACE AMOUNT: $50,000.00
AGE AT ISSUE: 35
RISK CLASSIFICATION: MALE SELECT NONSMOKER
PERSON COVERED: XXXXXX XXXXXXXX
ATTAINED FACE ATTAINED FACE ATTAINED FACE
AGE AMOUNT AGE AMOUNT AGE AMOUNT
-------------------------------------------------------------------
35 $ 50,000 70 $100,000
36 50,000 71 100,000
37 50,000 72 100,000
38 50,000 73 100,000
39 100,000 74 100,000
40 100,000 75 100,000
41 100,000 76 100,000
42 100,000 77 100,000
43 100,000 78 100,000
44 100,000 79 100,000
45 100,000 80 100,000
46 100,000 81 100,000
47 100,000 82 100,000
48 100,000 83 100,000
49 100,000 84 100,000
50 100,000 85 100,000
51 100,000 86 100,000
52 100,000 87 100,000
53 100,000 88 100,000
54 100,000 89 100,000
55 100,000 90 100,000
56 100,000 91 100,000
57 100,000 92 100,000
58 100,000 93 100,000
59 100,000 94 100,000
60 100,000 95 100,000
61 100,000 96 100,000
62 100,000 97 100,000
63 100,000 98 100,000
64 100,000 99+ 100,000
65 100,000
66 100,000
67 100,000
68 100,000
69 100,000
Page 3.2
POLICY NUMBER: VP99999990
POLICY SPECIFICATIONS
TABLE OF INSURANCE CHARGES - BASIC POLICY
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1.00 OF COVERAGE
APPLICABLE TO BASIC POLICY COVERING XXXXXX XXXXXXXX. THE RATES BELOW INCLUDE A
5-YEAR GUARANTEE OF OUR CURRENT RATES AS OF THE ISSUE DATE.
MONTHLY MONTHLY MONTHLY MONTHLY
AGE RATE AGE RATE AGE RATE AGE RATE
------------------------------------------------------------------------------------------------------------------------
35 0.00017600 60 0.00134998 85 0.01373773
36 0.00018686 61 0.00147355 86 0.01502185
37 0.00020022 62 0.00161341 87 0.01635661
38 0.00021526 63 0.00177217 88 0.01773798
39 0.00023280 64 0.00194909 89 0.01917199
40 0.00025202 65 0.00214342 90 0.02067766
41 0.00027458 66 0.00235100 91 0.02228714
42 0.00029715 67 0.00257276 92 0.02406347
43 0.00032307 68 0.00280882 93 0.02611993
44 0.00034984 69 0.00306532 94 0.02881300
45 0.00037996 70 0.00335367 95 0.03281758
46 0.00041093 71 0.00368199 96 0.03964295
47 0.00044442 72 0.00406029 97 0.05306605
48 0.00047960 73 0.00449620 98 0.08333300
49 0.00051898 74 0.00498352 99 0.08333300
50 0.00056089 75 0.00551331 100 0.00000000
51 0.00061038 76 0.00607653
52 0.00066577 77 0.00666569
53 0.00072875 78 0.00727588
54 0.00080018 79 0.00792387
55 0.00087672 80 0.00863521
56 0.00096005 81 0.00943078
57 0.00104684 82 0.01033895
58 0.00113962 83 0.01137350
59 0.00123925 84 0.01251385
Page 4.0
POLICY SPECIFICATIONS
TABLE OF INSURANCE CHARGES--ACCOUNTING BENEFIT RIDER
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1.00 OF COVERAGE
APPLICABLE TO THE ACCOUNTING BENEFIT RIDER COVERING XXXXXX XXXXXXXX. THE RATES
BELOW INCLUDE A 5-YEAR GUARANTEE OF OUR CURRENT RATES AS OF THE ISSUE DATE.
MONTHLY MONTHLY MONTHLY MONTHLY
AGE RATE AGE RATE AGE RATE AGE RATE
--------------------------------------------------------------------------------
35 0.00017600 60 0.00134998 85 0.01373773
36 0.00018686 61 0.00147355 86 0.01502185
37 0.00020022 62 0.00161341 87 0.01635661
38 0.00021526 63 0.00177217 88 0.01773798
39 0.00023280 64 0.00194909 89 0.01917199
40 0.00025202 65 0.00214342 90 0.02067766
41 0.00027458 66 0.00235100 91 0.02228714
42 0.00029715 67 0.00257276 92 0.02406347
43 0.00032307 68 0.00280882 93 0.02611993
44 0.00034984 69 0.00306532 94 0.02881300
45 0.00037996 70 0.00335367 95 0.03281758
46 0.00041093 71 0.00368199 96 0.03964295
47 0.00044442 72 0.00406029 97 0.05306605
48 0.00047960 73 0.00449620 98 0.08333300
49 0.00051898 74 0.00498352 99 0.08333300
50 0.00056089 75 0.00551331 100 0.00000000
51 0.00061038 76 0.00607653
52 0.00066577 77 0.00666569
53 0.00072875 78 0.00727588
54 0.00080018 79 0.00792387
55 0.00087672 80 0.00863521
56 0.00096005 81 0.00943078
57 0.00104684 82 0.01033895
58 0.00113962 83 0.01137350
59 0.00123925 84 0.01251385
Page 4.1
POLICY NUMBER: VP99999990
POLICY SPECIFICATIONS
TABLE OF M&E RISK FACE AMOUNT CHARGES--ACCOUNTING BENEFIT RIDER
---------------------------------------------------------------
M&E RISK FACE AMOUNT CHARGE APPLICABLE TO THE ACCOUNTING BENEFIT RIDER: MONTHLY
CHARGE EQUAL TO THE AMOUNTS SHOWN BELOW. REFER TO THE CONTRACT FOR DETAILS.
POLICY M&E RISK
YEAR FACE AMOUNT CHARGE
--------------------------------------
1 $ 0.00
2 3.40
3 6.80
4 10.20
5 13.60
6 17.00
7 20.40
8 23.80
9 27.20
10 30.60
11+ 0.00
Page 4.2
POLICY NUMBER: VP99999990
POLICY SPECIFICATIONS
TABLE OF INSURANCE CHARGES - ANNUAL RENEWABLE TERM RIDER
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1.00 OF COVERAGE
APPLICABLE TO THE ANNUAL RENEWABLE TERM RIDER COVERING XXXXXX XXXXXXXX.
MONTHLY MONTHLY MONTHLY
AGE RATE AGE RATE AGE RATE
------------------------------------------------------------------------------------------
35 0.00017600 60 0.00134998 85 0.01373773
36 0.00018686 61 0.00147355 86 0.01502185
37 0.00020022 62 0.00161341 87 0.01635661
38 0.00021526 63 0.00177217 88 0.01773798
39 0.00023280 64 0.00194909 89 0.01917199
40 0.00025202 65 0.00214342 90 0.02067766
41 0.00027458 66 0.00235100 91 0.02228714
42 0.00029715 67 0.00257276 92 0.02406347
43 0.00032307 68 0.00280882 93 0.02611993
44 0.00034984 69 0.00306532 94 0.02881300
45 0.00037996 70 0.00335367 95 0.03281758
46 0.00041093 71 0.00368199 96 0.03964295
47 0.00044442 72 0.00406029 97 0.05306605
48 0.00047960 73 0.00449620 98 0.08333300
49 0.00051898 74 0.00498352 99 0.08333300
50 0.00056089 75 0.00551331 100 0.00000000
51 0.00061038 76 0.00607653
52 0.00066577 77 0.00666569
53 0.00072875 78 0.00727588
54 0.00080018 79 0.00792387
55 0.00087672 80 0.00863521
56 0.00096005 81 0.00943078
57 0.00104684 82 0.01033895
58 0.00113962 83 0.01137350
59 0.00123925 84 0.01251385
Page 4.3
POLICY NUMBER: VP99999990
POLICY SPECIFICATIONS
TABLE OF GUARANTEED MAXIMUM M&E RISK FACE AMOUNT CHARGES
ANNUAL RENEWABLE TERM RIDER
M&E RISK FACE AMOUNT CHARGE APPLICABLE TO THE ANNUAL RENEWABLE TERM RIDER:
MONTHLY CHARGE EQUAL TO THE AMOUNTS SHOWN BELOW. REFER TO THE CONTRACT FOR
DETAILS.
ATTAINED M&E RISK ATTAINED M&E RISK
AGE CHARGE AGE CHARGE
---------------------------------------------------------------------
35 9.55 70 21.75
36 9.55 71 21.75
37 9.55 72 21.75
38 9.55 73 21.75
39 21.75 74 21.75
40 21.75 75 21.75
41 21.75 76 21.75
42 21.75 77 21.75
43 21.75 78 21.75
44 21.75 79 21.75
45 21.75 80 21.75
46 21.75 81 21.75
47 21.75 82 21.75
48 21.75 83 21.75
49 21.75 84 21.75
50 21.75 85 21.75
51 21.75 86 21.75
52 21.75 87 21.75
53 21.75 88 21.75
54 21.75 89 21.75
55 21.75 90 21.75
56 21.75 91 21.75
57 21.75 92 21.75
58 21.75 93 21.75
59 21.75 94 21.75
60 21.75 95 21.75
61 21.75 96 21.75
62 21.75 97 21.75
63 21.75 98 21.75
64 21.75 99 21.75
65 21.75 100+ 0.00
66 21.75
67 21.75
68 21.75
69 21.75
Page 4.4
POLICY NUMBER: VP99999990
POLICY SPECIFICATIONS
TABLE OF INSURANCE CHARGES - ANNUAL RENEWABLE AND CONVERTIBLE TERM RIDER
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1.00 OF COVERAGE
APPLICABLE TO THE ANNUAL RENEWABLE AND CONVERTIBLE TERM RIDER COVERING XXXX
XXXXXXXX.
MONTHLY MONTHLY MONTHLY
AGE RATE AGE RATE AGE RATE
------------------------------------------------------------------------------------------
35 0.00013760 60 0.00079261 85 0.01023158
36 0.00014679 61 0.00084811 86 0.01147089
37 0.00015764 62 0.00091795 87 0.01280817
38 0.00017016 63 0.00100723 88 0.01424663
39 0.00018519 64 0.00111093 89 0.01579787
40 0.00020189 65 0.00122404 90 0.01748266
41 0.00022027 66 0.00134321 91 0.01933505
42 0.00023948 67 0.00146424 92 0.02141899
43 0.00025787 68 0.00158372 93 0.02385238
44 0.00027709 69 0.00171271 94 0.02692636
45 0.00029715 70 0.00186144 95 0.03131012
46 0.00031722 71 0.00204194 96 0.03850479
47 0.00033813 72 0.00226723 97 0.05227571
48 0.00036155 73 0.00254448 98 0.08333300
49 0.00038666 74 0.00287245 99 0.08333300
50 0.00041428 75 0.00324392
51 0.00044358 76 0.00365336
52 0.00047625 77 0.00409428
53 0.00051395 78 0.00456716
54 0.00055251 79 0.00508570
55 0.00059276 80 0.00567286
56 0.00063303 81 0.00635051
57 0.00067164 82 0.00714053
58 0.00070859 83 0.00805859
59 0.00074807 84 0.00909199
Page 4.5
DEFINITIONS
In this section, we define certain terms used throughout this policy. Other
terms may be defined in other parts of the policy. Defined terms are usually
capitalized to provide emphasis.
Age - means the Insured's Age to the nearest birthday as of the Policy Date,
increased by the number of complete policy years elapsed.
Code - is the U.S. Internal Revenue Code, and the rules and regulations issued
thereunder.
Evidence of Insurability - is information, including medical information,
satisfactory to us that is used to determine insurability and the Insured's risk
class.
Face Amount - is used in determining the death benefit under this policy,
including any increases or decreases. The Face Amount is shown in the Policy
Specifications.
Fixed Options - consist of the Fixed Account and the Fixed LT Account.
[Free Look Transfer Date (for Return of Premium states only): - is 15 days after
the policy is issued, or if later, the date all requirements necessary to place
the policy in force are delivered to the Home Office.]
Home Office - means our Client Services Department located at 000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
Insured - is the person insured under this policy. The Insured is shown in the
Policy Specifications as the Covered Person.
Investment Options - consist of the Variable Accounts and the Fixed Options.
Monthly Payment Date - is the day each month on which certain policy charges are
deducted from the Accumulated Value. This day is shown on page 3. The first
Monthly Payment Date is the Policy Date.
Net Premium - is the premium we receive reduced by any Premium Load.
PL, we, our, ours, us and the Company - refers to Pacific Life Insurance
Company.
Policy Date - is shown on page 3. Policy months, years and anniversaries are
measured from this date.
Policy Debt - is the Loan Account plus Loan Interest.
Separate Account - is the Pacific Select Exec Separate Account, which is a
separate account of ours that consists of subaccounts, also called Variable
Accounts. Each Variable Account may invest its assets in a separate class of
shares of a designated investment company or companies.
Valuation Date - is each day required by applicable law and currently includes
each day the New York Stock Exchange is open for trading and our Home Office is
open.
Valuation Period - is the period of time between successive Valuation Dates.
Variable Account - is a separate account of ours or a subaccount of a separate
account of ours in which assets are segregated from assets in our general
account or our other separate accounts. Premiums and Accumulated Value under
this policy may be allocated to a Variable Account for variable accumulation.
Page 5
Written Request - is a request in writing, signed by you, and accepted by us at
our Home Office.
You, your or Owner - refers to the Owner of this policy.
OWNER AND BENEFICIARY
Owner - The Owner of this policy is as shown in the Policy Specifications or in
a later Written Request. If there are two or more Owners, they will own this
contract as joint tenants with right of survivorship.
Assignment - You may assign this policy by Written Request. An assignment will
take place only when recorded at our Home Office. When recorded, the assignment
will take effect as of the date the Written Request was signed. Any rights
created by the assignment will be subject to any payments made or actions taken
by us before the change is recorded. We will not be responsible for the
validity of any assignment.
Beneficiary - The beneficiary is named by you in the application to receive the
death benefit proceeds. The interest of any beneficiary will be subject to any
assignment.
You may make a change of beneficiary by Written Request on a form provided by us
while the Insured is living. The change will take place as of the date the
request is signed. Any rights created by the change will be subject to any
payments made or actions taken by us before the Written Request is received.
You may designate a permanent beneficiary whose rights under the policy cannot
be changed without his or her consent.
The interest of a beneficiary who does not survive to receive payment will pass
to the surviving beneficiaries in proportion to their share in the proceeds,
unless otherwise provided. If no beneficiaries survive to receive payment, the
death proceeds will pass to the Owner, or the Owner's estate if the Owner does
not survive to receive payment.
PREMIUMS
Premiums - This policy will not be in force until the initial premium is paid.
The initial premium is payable either at our Home Office or to our agent.
Additional premiums, if any, are payable at our Home Office. At your request, a
premium receipt signed by one of our officers will be given to you. No premium
may be less than $50. Premiums may be paid at any time before the Insured
attains Age 100, subject to the premium limitations below.
Premium Allocation, Before the Free Look Transfer Date - Any Net Premium
received before the Free Look Transfer Date will be allocated to the Money
Market Variable Account on the issue date or, if later, the date the premium is
received and accepted by us. On the Free Look Transfer Date, the Accumulated
Value in the Money Market Variable Account will be allocated to the Investment
Options according to the premium allocation specified in the application or your
most recent instructions received by us, if any.
Premium Allocation, On or After the Free Look Transfer Date - Any Net Premium
received by us on or after the Free Look Transfer Date will be allocated to the
Investment Options according to the premium allocation specified in the
application or your most recent instructions received by us, if any.
Upon Written Request, you may change the premium allocation. Subsequently, Net
Premiums will be allocated to the Investment Options according to your most
recent instructions.
Page 6
Premium Limitation - We reserve the right to require evidence of insurability,
satisfactory to us, for any premium payment that would result in an immediate
increase in the difference between the death benefit and the Accumulated Value.
Guideline Premium Limitation - This subsection applies only if you have elected
the Guideline Premium Test as the Death Benefit Qualification Test. In order
for this policy to be treated as life insurance under the Code, the sum of the
premiums paid less a portion of any withdrawals, as defined in the Code, may not
exceed the greater of:
. The Guideline Single Premium; or
. The sum of the Guideline Level Premiums to the date of payment.
The amounts of the Guideline Premiums are shown on the Policy Specification
pages. The Guideline Premiums will change whenever there is a change in the
Face Amount of insurance or in other policy benefits. Such Guideline Premium
change will be shown in the supplemental schedule of benefits and premiums.
The Guideline Premiums are determined according to the rules applicable to this
policy set forth in the Code. The Guideline Premiums will be adjusted to
conform to any changes in the Code. In the event that a premium payment would
exceed these limits, we reserve the right to refund the excess payment to the
Owner. Further, we reserve the right to make distributions from the policy to
the extent we deem it necessary to continue to qualify this policy as life
insurance under the Code.
Modified Endowment Contract (MEC) Premium Limitation - In order for this policy
to avoid being treated as a MEC, the sum of premiums paid less a portion of any
withdrawals may not exceed the 7-Pay limit as defined in the Code. In the event
that a premium payment would exceed the 7-Pay limit, we reserve the right to
refund the excess payment to you, unless you have previously notified us in
writing that such payments may be accepted by us and applied to the policy.
DEATH BENEFIT
Death Benefit - This policy provides a death benefit on the death of the
Insured. The death benefit, Death Benefit Option and the two Death Benefit
Qualification Tests are described in this section. On the date of death, the
death benefit is calculated as the larger of:
. The Guideline Minimum Death Benefit calculated under the Death Benefit
Qualification Test elected; and
. The death benefit as calculated under the Death Benefit Option in effect.
Death Benefit Qualification Test - Unless you have elected otherwise, the Death
Benefit Qualification Test for this policy is the Guideline Premium Test. The
Death Benefit Qualification Test for this policy appears in the Policy
Specifications section. The Death Benefit Qualification Test may not be changed
for the life of the contract. The two Death Benefit Qualification Tests are
explained in this subsection.
1. Cash Value Accumulation Test - The Guideline Minimum Death Benefit will be
greater of the amount required for this policy to be deemed "life
insurance" according to the Code or 101% of the Accumulated Value. Such
required amount will be determined based on the Accumulated Value and the
Cash Value Accumulation Test defined in Code Section 7702(b).
2. Guideline Premium Test - The Guideline Minimum Death Benefit at any time is
the Accumulated Value multiplied by the death benefit Percentage shown in
the following table:
Page 7
Death Benefit Death Benefit Death Benefit Death Benefit
Age Percentage Age Percentage Age Percentage Age Percentage
-------------------------------------------------------------------------------------------------
0-40 250% 50 185% 60 130% 70 115%
41 243 51 178 61 128 71 113
42 236 52 171 62 126 72 111
43 229 53 164 63 124 73 109
44 222 54 157 64 122 74 107
45 215 55 150 65 120 75-90 105
46 209 56 146 66 119 91 104
47 203 57 142 67 118 92 103
48 197 58 138 68 117 93 102
49 191 59 134 69 116 Over 93 101
We reserve the right to reduce the Guideline Minimum Death Benefit by requiring
withdrawals be made in order to maintain the Net Amount at Risk at a level that
will not exceed three times the death benefit on the Policy Date.
This policy is intended to qualify as a life insurance contract under the Code
for Federal Tax purposes, and the death benefit under this policy is intended to
qualify for income tax exclusion under the Code. To that end, the provisions of
this policy, including any other rider, benefit or endorsement, are to be
interpreted to ensure such tax qualification, notwithstanding any other
provisions to the contrary. If at any time the premiums paid under this policy
exceed the amount allowable for such tax qualification, such excess amount shall
be removed from the policy as of the date of its payment and any appropriate
adjustment in the death benefit shall be made as of such date. This excess
amount shall be refunded to you no later than 60 days after the end of the
applicable contract year. We shall adjust the excess amount refunded for
interest from the date of its payment and for changes in Accumulated Value
attributable to the excess amount. If the excess amount is not refunded by
then, the death benefit under this policy shall be increased retroactively and
prospectively so that at no time is this death benefit ever less than the amount
needed to ensure such tax qualification. To the extent that the death benefit as
of any time is increased by this provision, appropriate adjustments shall be
made retroactively in any cost of insurance or supplemental benefits as of such
time that are consistent with such an increase.
MEC Rules - Unless specified otherwise by you in writing, it is intended that
this policy will not be treated as a MEC under the Code. To that end, the
provisions of this policy, including any other rider, benefit or endorsement,
are to be interpreted to prevent the policy from being subject to such
treatment, notwithstanding any other provisions to the contrary.
If at any time the premiums or other amounts paid under the policy exceed the
limit for avoiding such MEC treatment, unless otherwise specified in writing by
you that such MEC treatment is acceptable, such excess amount shall be removed
from the policy as of the date of its payment, and any appropriate adjustment in
the policy's death benefit shall be made as of such date. This excess amount
shall be refunded to you no later than 60 days after the end of the applicable
contract year. We shall adjust the excess amount refunded for interest from the
date of its payment and for changes in Accumulated Value attributable to the
excess amount. If this excess amount is not refunded by then, the death benefit
under the policy shall be increased retroactively and prospectively to the
minimum amount necessary (e.g., to the end of any test period) so that at no
time is this death benefit every less than the amount needed to avoid such MEC
treatment. To the extent that the death benefit as of any time is increased by
this provision, appropriate adjustments shall be made retroactively or
otherwise, in any cost of insurance or supplemental benefits as of such time
that are consistent with such an increase.
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Death Benefit Options--There are three Death Benefit Options, as described in
this subsection. You have elected the Death Benefit Option in the application.
The Death Benefit Option for this policy appears in the Policy Specifications.
. Option A--The death benefit equals the Face Amount. The death benefit is
never less than the Face Amount.
. Option B--The death benefit equals the Face Amount plus the Accumulated
Value on the date of death. The death benefit is never less than the Face
Amount.
. Option C--The death benefit is the Face Amount plus the sum of the premiums
paid minus the sum of any withdrawals taken and any other distribution of
the Accumulated Value to the date of death. If the sum of the withdrawals
is greater than the sum of the premiums paid, then the death benefit will
be less than the Face Amount.
The Death Benefit Option may be changed to Option A or B upon Written Request at
a maximum of once per year. Changes to Option C are not permitted. After any
such change, the Face Amount will be that amount which results in the death
benefit after the change being equal to the death benefit before the change.
The change will be effective on the Monthly Payment Date on or next following
the day we receive your Written Request at our Home Office.
Unless specified otherwise by you in writing, any request for a Death Benefit
Option change will not be processed if the option change would cause the policy
to be treated as a MEC under the Code.
Death Benefit Proceeds--The death benefit proceeds are the actual amount payable
if the Insured dies while this policy is in force. The death benefit proceeds
are equal to the death benefit, as of the date of the Insured's death, less any
Policy Debt and less any due and unpaid monthly deductions occurring during a
grace period.
We will pay the death benefit proceeds to the beneficiary after we receive, at
our Home Office, proof satisfactory to us of the Insured's death and such other
information as we may reasonably require. The death benefit proceeds paid are
subject to the conditions and adjustments defined in other policy provisions,
such as General Provisions, Withdrawals and Policy Loans.
Face Amount Change--Subject to our approval, the Owner may change the Face
Amount if such request is made:
. during the lifetime of the Insured;
. no more often than once in any policy year; and
. on your Written Request while this policy is in force.
Face Amount Increase--The effective date of the increased Face Amount will be
the first Monthly Payment Date on or following the date all applicable
conditions are met. A supplemental schedule of benefits and premiums will be
issued. This schedule will include:
. the risk class;
. the effective date;
. the M&E Risk Charges;
. the Surrender Charges;
. the guaranteed Cost of Insurance Rates;
. the amount of the increase and the total Face Amount after the increase;
and
. if the Guideline Premium Test is used, the new Guideline Premiums.
An increase in Face Amount will be allowed only if it results in a death benefit
increase no less than our minimum limit in effect on the date of the request.
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We reserve the right to charge a fee not to exceed $100 for each increase. Any
such fee will be deducted from the Accumulated Value of the Fixed and the
Variable Accounts in the proportion that each bears to the Accumulated Value
less Policy Debt on the effective date of the increase.
Face Amount Decrease--The effective date of the decreased Face Amount will be
the first Monthly Payment Date on or following the date we receive the Written
Request. Existing insurance will be decreased or eliminated in the following
order:
. first, the most recent increase;
. second, the next most recent increases successively; and
. finally, the original Face Amount.
A supplemental schedule of benefits and premiums will be issued. This schedule
will include the following information:
. the effective date of the decreased Face Amount;
. the amount of the decrease and the decreased Face Amount; and
. if the Death Benefit Qualification is the Guideline Premium Test, the new
Guideline Premiums.
If the Guideline Premium Test has been elected as the Death Benefit
Qualification Test, the request for a decrease in the Face Amount will be
subject to the Guideline Premiums Limitation as defined in the Code. This may
result in a refund of premiums and/or the distribution of Accumulated Value in
order to maintain compliance with such limitations. Such request will not be
allowed if the resulting Guideline Premiums could cause an amount greater than
the Net Cash Surrender Value to be distributed from the policy.
Unless specified otherwise by you in writing, no request for a face amount
decrease will be processed if the decrease would cause the policy to be treated
as a MEC under the Code.
ACCUMULATED VALUE
Accumulated Value--is the sum of the Fixed Accumulated Value plus the Variable
Accumulated Value plus the Loan Account and any interest credited to it.
Fixed Accumulated Value--The Fixed Accumulated Value is the sum of the
Accumulated Value in each Fixed Option as of the last Valuation Period.
This subsection describes how we calculate the Accumulated Value in each Fixed
Option. We credit interest on a daily basis using a 365-day year and at a rate
not less than an annual effective rate of 3.00%. At our discretion, we may
credit a higher rate of interest. The Accumulated Value for each Fixed Option
on any date is the following, including interest on each:
. the Accumulated Value for the Fixed Option on the prior Monthly Payment
Date;
. plus the amount of any Net Premium received and allocated to the Fixed
Option since the last Monthly Payment Date;
. plus the amount of any transfer to the Fixed Option, including transfers
from the Loan Account, since the last Monthly Payment Date;
. minus the monthly deduction and other deductions due, if any, and assessed
against the Fixed Option; and
. minus the amount of any withdrawals, or transfers from the Fixed Option,
including transfers to the Loan Account, since the last Monthly Payment
Date.
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Variable Accumulated Value--The Variable Accumulated Value is the sum of the
Accumulated Value in each Variable Account.
This subsection describes how we calculate the Accumulated Value in each of the
Variable Accounts. Assets in each Variable Account are divided into
Accumulation Units, which are a measure of value used for bookkeeping purposes.
We credit your policy with Accumulation Units in each Variable Account as a
result of:
. the amount of any Net Premium received and allocated to the Variable
Account; and
. transfers of Accumulated Value to the Variable Account, including transfers
from the Loan Account.
We debit Accumulation Units in each Variable Account as a result of:
. transfers from the Variable Account, including transfers to the Loan
Account;
. Surrenders and withdrawals from the Variable Account; and
. the monthly deduction and other deductions due, if any, and assessed
against the Variable Account.
To determine the number of Accumulation Units debited or credited for a
transaction, we divide the dollar amount of the transaction by the Unit Value of
the affected Variable Account.
To determine your Accumulated Value in each Variable Account, we multiply the
number of Accumulation Units in the Variable Account by the Unit Value of the
Variable Account. The number of Accumulation Units in each Variable Account will
not change because of subsequent changes in Unit Value.
The Unit Value of each Variable Account initially was $10. The Unit Value of
each Variable Account is determined on each Valuation Date. To calculate the
Unit Value of a Variable Account on any Valuation Date, we adjust the Unit Value
from the previous Valuation Date for a number of factors, including:
. any dividends or distributions paid to the Variable Account;
. the investment performance of the Variable Account, which is based on the
investment performance of the corresponding portfolio and includes expenses
related to the portfolio's management;
. charges, if any, that may be assessed by us for income taxes attributable
to the operation of the Variable Account.
Loan Account--The Loan Account is the amount set aside to secure Policy Debt.
The amount in the Loan Account on any date is the following, including interest
on each:
. the amount in the Loan Account on the prior anniversary;
. plus any loan taken since the prior anniversary; and
. minus any loan amount repaid since the prior anniversary.
We will credit interest to the Loan Account on a daily basis using a 365-day
year and at a rate equivalent to an annual effective rate of 3.00%. On each
policy anniversary, any interest earned and held in the Loan Account will be
transferred to the Investment Options in accordance with your most recent
premium allocation instructions.
Monthly Deduction--A Monthly Deduction for a policy month is due on each Monthly
Payment Date and is equal to the sum of the following items:
. the monthly Cost of Insurance Charge;
Page 11
. the M&E Risk Charge;
. the Administrative Charge, if any; and
. rider charges, if any.
Unless you have made a Written Request to the contrary, the Monthly Deduction
will be charged proportionately to the Accumulated Value in each Variable
Account and each Fixed Option on the Monthly Payment Date.
Cost of Insurance Charge--Beginning on the Policy Date and monthly thereafter,
there will be a charge equal to the Cost of Insurance applicable to the
following:
. the initial Face Amount; plus
. each increase in the Face Amount.
The monthly Cost of Insurance Charge for the death benefit payable under this
policy, is (1) multiplied by (2), where:
(1) is the applicable monthly Cost of Insurance Rate; and
(2) is the Net Amount at Risk.
Net Amount at Risk--The Net Amount at Risk is equal to the death benefit as of
the most recent Monthly Payment Date divided by 1.002466, then reduced by the
Accumulated Value at the beginning of the policy month before the Monthly
Deduction is due.
If there have been increases of Face Amount, then the Net Amount at Risk will be
proportionately allocated to each increase according to the Face Amount of each
increase in force as of the Monthly Payment Date.
Cost of Insurance Rates--The Cost of Insurance Rates are based on a number of
factors, including the Insured's Age, Risk Classification and the policy
duration. The current monthly Cost of Insurance Rates will be determined by us.
These rates will not exceed the Guaranteed Maximum Monthly Cost of Insurance
Rates shown in the Policy Specifications. Any changes in the Cost of Insurance
Rates will apply uniformly to all members of the same class.
M&E Risk Charge--The Mortality and Expense Risk Charge (M&E Risk Charge) is to
compensate us for the risk we assume that mortality, expenses and other costs of
providing your policy will be greater than estimated. Beginning on the Policy
Date and monthly thereafter, the M&E Risk Charge will be the sum of the M&E Risk
Asset Charge and the M&E Risk Face Amount Charge. These are calculated as
follows:
The M&E Risk Asset Charge is applied to the unloaned Accumulated Value as of the
Monthly Payment Date, but only until the Insured's Age 100, as follows: A charge
of 0.000375 (0.45% annually) applied to the first $25,000 of unloaned
Accumulated Value plus a charge of 0.000042 (0.05% annually) applied to the
unloaned Accumulated Value above $25,000.
The M&E Risk Face Amount Charge is the amount shown in the Policy
Specifications, and is based on the Face Amount at policy issue. If there have
been increases in the Face Amount, each increase will have a corresponding M&E
Risk Face Amount Charge related to the amount of the increase. These charges
will be specified in the supplemental schedule of benefits at the time of the
increase.
Administrative Charge--Beginning on the Policy Date and monthly thereafter,
there will be an Administrative Charge against the Accumulated Value. The
amount of this charge will equal the amount shown in the Policy Specifications.
Premium Load--A Premium Load will be charged each time that a premium is paid to
cover certain state premium and Federal tax and certain sales and distribution
costs. The Premium Load will equal
Page 12
the premium paid multiplied by the Premium Load rate shown in the Policy
Specifications. The Premium Load associated with each premium will be
immediately deducted from the premium paid. We reserve the right to increase the
Premium Load with respect to the charge for state premium tax and/or for Federal
tax. We will only increase the Premium Load if the effective tax paid by us
increases. We will notify you of any such change.
Other Taxes--In addition to the charges imposed under Premium Load and
elsewhere, we reserve the right to make a charge for Federal, state or local
taxes that may be attributable to the Variable Accounts or to our operations
with respect to this policy if we incur any such taxes.
Grace Period and Lapse--If the Accumulated Value less Policy Debt on a Monthly
Payment Date is not sufficient to cover the current monthly deduction, a grace
period of 61 days will be allowed for the payment of sufficient premium to keep
your policy in force.
At the start of the grace period, we will send notice to you at your last known
address and to any assignee of record. The grace period will end 61 days after
we mail you the notice. The notice will state the due date and the amount of
premium required for your policy to remain in force. A minimum of three times
the monthly deduction due when the insufficiency occurred, plus Premium Load,
must be paid. Premiums we receive during the grace period will be applied to
your policy according to your most recent premium allocation instructions.
There is no penalty for paying a premium during the grace period. Your policy
will remain in force during the grace period. If sufficient premium is not paid
by the end of the grace period, a lapse will occur. We will send you and any
assignee of record a notice 30 days prior to lapse. Upon lapse, the policy will
terminate with no value.
Reinstatement--If it has not been surrendered, this policy may be reinstated not
more than five years after the end of the grace period. To reinstate this
policy you must provide us with the following:
. a written application;
. evidence of insurability satisfactory to us;
. payment of sufficient premium to cover all monthly deductions that were due
and unpaid during the grace period; plus
. payment of sufficient premium to keep the policy in force for three months
after the date of reinstatement.
The effective date of the reinstated policy will be the first Monthly Payment
Date on or following the date we approve your reinstatement application. When
this policy is reinstated, the Accumulated Value will be equal to the
Accumulated Value on the date of lapse subject to the following. If the policy
is reinstated after the first Monthly Payment Date following lapse, the
Accumulated Value will be reduced by the amount of any Policy Debt on the date
of reinstatement. If the policy is reinstated on the first Monthly Payment Date
following lapse, any Policy Debt on the date of lapse will also be reinstated,
with the corresponding portion of the Accumulated Value allocated to the Loan
Account as described in the Policy Loan provision.
TRANSFERS
Transfers--After your initial Net Premium has been allocated according to your
instructions and while your policy is in force, you may, upon Written Request,
transfer your Accumulated Value, or a part of it, among the Investment Options
as provided in this section. No transfer may be made if the policy is in a
grace period and the required premium has not been paid.
Transfers from the Variable Accounts to the Fixed Options may be made only
during the policy month preceding each policy anniversary.
Page 13
Transfers from the Fixed Account: One transfer from the Fixed Account may be
made in any twelve-month period. Transfers from the Fixed Account will be
limited to the greater of $5,000 or 25% of the Accumulated Value in the Fixed
Account.
Transfers from the Fixed LT Account: One transfer from the Fixed LT Account may
be made in any twelve month period. Transfers from the Fixed LT Account will be
limited to the greater of $5,000 or 10% of the Accumulated Value in the Fixed LT
Account.
Allocations into the Fixed LT Account: We reserve the right to limit the amount
allocated to the Fixed LT Account to $1,000,000 during the most recent 12 months
for all policies owned by you. Allocations include Net Premium payments,
transfers and loan repayments. Any excess over $1,000,000 will be transferred
to your other Investment Options relative to your most recent instructions. We
may increase the $1,000,000 limit at any time at our sole discretion. You may
contact us to find out if a higher limit is in effect.
No charges are currently imposed upon a transfer. We reserve the right to limit
the size of transfers to an amount to be at least $500; to limit the frequency
of transfers, but not less than once per quarter; to limit the remaining balance
in any account to be at least $500; and to assess a charge for transfers not to
exceed $50 per transfer.
SURRENDER AND WITHDRAWAL OF VALUES
Surrender--Upon Written Request while the Insured is living you may surrender
this policy for its Net Cash Surrender Value. The policy will terminate on the
date the request is received.
Net Cash Surrender Value--The Net Cash Surrender Value is the Cash Surrender
Value less any Policy Debt.
Cash Surrender Value--The Cash Surrender Value is the Accumulated Value less any
Surrender Charge.
Surrender Charges--A Surrender Charge will be deducted from the Accumulated
Value upon surrender of the policy. The Surrender Charge is needed to help pay
for costs such as underwriting, policy issue and sales and distribution costs.
The initial Surrender Charge is equal to the amount shown on the policy
specification pages. This will remain level for the first policy month and then
will decrease by 0.8403% per month to zero at the 120th month.
If there have been increases in the Face Amount, each increase will have a
corresponding Surrender Charge related to the amount of the increase. These
charges will be specified in the supplemental schedule of benefits at the time
of the increase. If there have been decreases in the Face Amount, including
decreases in Face Amount due to withdrawals, the Surrender Charges as provided
in the preceding paragraph will be unchanged.
Withdrawals--Upon Written Request on or after the first policy anniversary while
the Insured is living, you may withdraw a portion of the Net Cash Surrender
Value of this policy. We will deduct a withdrawal fee of $25 from the
Accumulated Value for each withdrawal. The withdrawal fee will be deducted from
the Investment Options in the same proportion as the withdrawal.
Withdrawals will be subject to the following conditions: The amount of each
withdrawal must be at least $200 and the Net Cash Surrender Value remaining
after each withdrawal must be at least $500. Also, if there is any Policy Debt
at the time of each withdrawal, the amount of the withdrawal is limited to the
excess, if any, of the Cash Surrender Value immediately prior to the withdrawal
over the result of the Policy Debt divided by 90%.
Page 14
The amount of each withdrawal will be allocated proportionately to the
Accumulated Value in the Investment Options unless you request otherwise. If
the Insured dies after the request for a withdrawal is sent to us and prior to
the withdrawal being effected, the amount of the withdrawal will be deducted
from the death benefit proceeds, which will be determined without taking the
withdrawal into account. Unless you request otherwise, no withdrawal will be
processed if the withdrawal would cause the policy to be treated as a MEC.
A withdrawal will affect death benefit, depending on the Death Benefit Option
you have chosen: If your policy's death benefit is greater than the Guideline
Minimum Death Benefit, then the withdrawal will reduce the death benefit by the
amount of the withdrawal. However, if your policy's death benefit is equal to
the Guideline Minimum Death Benefit, the withdrawal may cause the death benefit
to decrease by an amount greater than the amount of the withdrawal. For Death
Benefit Option C, if the sum of the withdrawals and other distributions from the
policy is greater than the premiums, the death benefit will be less than the
Face Amount.
Withdrawals may also affect the Face Amount. A withdrawal will reduce the Face
Amount, but only for policies having Death Benefit Option A. In such case, a
withdrawal in excess of the difference between the Guideline Minimum Death
Benefit and the Face Amount will reduce the Face Amount by the amount of the
excess. However, for the first withdrawal from a Death Benefit Option A policy
in each of the first 15 policy years, the Face Amount will be reduced only to
the extent that the withdrawal exceeds 10% of the premiums paid.
TIMING OF PAYMENTS AND TRANSFERS
Variable Accounts--We will pay death benefit proceeds, Net Cash Surrender Value
on surrender, withdrawals, and loans based on allocations made to the Variable
Accounts, and will effect a transfer between Variable Accounts or from a
Variable Account to a Fixed Option within seven days after we receive all the
information needed to process the payment.
However, we may postpone the calculation, payment or transfer of any amounts
that are based on the investment performance of the Variable Accounts, if:
. the New York Stock Exchange is closed on other than normal weekend and
holiday closings; or
. trading on the New York Stock Exchange is restricted as determined by the
Securities and Exchange Commission (SEC); or
. an emergency exists, as determined by the SEC, as a result of which it is
not reasonably practicable to determine the value of the Account assets or
to dispose of Account securities; or
. The SEC by order permits postponement for the protection of securities
owners.
Fixed Options--We may defer payment of any Net Cash Surrender Value, withdrawals
or loan amounts or defer transfers from either Fixed Option for up to six months
after we receive your request. We will allow interest, at a rate of at least 3%
annually, on any Net Cash Surrender Value or withdrawal benefit derived from a
Fixed Option if we defer payment for 30 days or more.
INCOME BENEFITS
Income Benefits--Surrender or withdrawal benefits may be used to buy a lifetime
monthly income as long as the monthly income is at least $100. Death benefits
may be used to buy a monthly income for the lifetime of the beneficiary. The
monthly income will automatically be guaranteed to continue for at least ten
years, unless another form of payment is requested. Under the automatic form of
payment, if the income recipient dies before the end of the ten-year period,
payments will continue to the end of the ten-year period to a person designated
by the income recipient in writing.
Page 15
The purchase rates for the monthly income will be set periodically by the
Company. However, under the automatic form, the monthly income bought by each
$1,000 of benefit amount will always be at least as large as that shown below.
Monthly Monthly Monthly Monthly Monthly
Age Income Age Income Age Income Age Income Age Income
0-30 3.09 40 3.37 50 3.81 60 4.54 70 5.78
32 3.14 42 3.44 52 3.93 62 4.73 72 6.11
34 3.19 44 3.52 54 4.06 64 4.95 74 6.48
36 3.24 46 3.61 56 4.20 66 5.20 75+ 6.67
38 3.30 48 3.71 58 4.36 68 5.47
Monthly income amount for ages not shown are halfway between the two amounts for
the nearest two ages that are shown. Amounts shown are based on the Annuity
2000 table with interest at 3.00%. This benefit is not available if the income
would be less than $100 a month. We may require evidence of survival for
incomes that last more than ten years.
Other Income Options--Surrender, withdrawal or death benefits may be used under
any other payment plans that we make available at that time.
POLICY LOANS
Policy Loans--You may obtain loans by Written Request after the Free Look
Period, on the sole security of the Loan Account of this policy.
Loan Amount Available--The amount available for a loan is equal to 90% of
Accumulated Value less any Policy Debt and also less any Surrender Charges that
would be imposed if the policy were surrendered on the date the loan is taken
or, if greater, the Accumulated Value less Policy Debt less 12 times the most
recent monthly deduction. The amount of a loan must be at least $200.
Loan Interest--Interest will accrue daily and is payable in arrears at the
annual rate of 3.25%. Interest not paid when due will be added to the loan
principal and bear interest at the same rate of interest.
Loan Account--When a loan is taken, an amount equal to the loan is transferred
out of the Accumulated Value in the Investment Options into the Loan Account to
secure the loan. Unless you request otherwise, loan amounts will be deducted
from the Variable Accounts and the Fixed Options on a pro rata basis, up to the
amount available. We will credit interest to the Loan Account as described in
the Accumulated Value section.
On each policy anniversary, if the amount in the Loan Account exceeds Policy
Debt, the excess will be transferred from the Loan Account to the Investment
Options according to your most recent instructions. If Policy Debt exceeds the
amount in the Loan Account, an amount equal to such excess will be transferred
from the Investment Options on a proportionate basis to the Loan Account.
Loan Repayment--Loans may be repaid at any time prior to lapse of this policy.
An amount equal to the portion of any loan repaid, but not more than the amount
in the Loan Account, will be transferred from the Loan Account to the Investment
Options according to your most recent instructions. We reserve the right to
first transfer repayments from the Loan Account to each Fixed Option up to the
amount that was originally borrowed. Any excess over such amount will be
transferred to the Variable Accounts relative to your most recent instructions.
Any payment we receive from you while you have a loan will be first considered a
loan repayment, unless you tell us in writing it is a premium payment.
Page 16
SEPARATE ACCOUNT PROVISIONS
Separate Account--We established the Separate Account and maintain it under the
laws of California. The Separate Account is divided into subaccounts, called
Variable Accounts. Realized and unrealized gains and losses from the assets of
each Variable Account are credited or charged against it without regard to our
other income, gains, or losses. Assets may be put in our Separate Account to
support this policy and other variable life policies. Assets may be put in our
Separate Account for other purposes, but not to support contracts or policies
other than variable life contracts or policies.
The assets of our Separate Account are our property. The portion of its assets
equal to the reserves and other policy liabilities with respect to our Separate
Account will not be chargeable with liabilities arising out of any other
business we conduct. We may transfer assets of a Variable Account in excess of
the reserves and other liabilities with respect to that Variable Account to
another Variable Account or to our general account. All obligations arising
under the policy are general corporate obligations of ours. We do not hold
ourselves out to be trustees of the Separate Account assets.
Variable Accounts--Each Variable Account may invest its assets in a separate
class of shares of a designated investment company or companies. The Variable
Accounts of our Separate Account that were available for your initial
allocations, are shown in the Policy Specifications. From time to time, we may
make other Variable Accounts available to you. We will provide you with written
notice of all material details including investment objectives and all charges.
We reserve the right, subject to compliance with the law then in effect, to:
. change or add designated investment companies;
. add, remove or combine Variable Accounts;
. add, delete or make substitutions for the securities that are held or
purchased by the Separate Account or any Variable Account;
. register or deregister any Variable Account under the Investment Company
Act of 1940;
. change the classification of any Variable Account;
. operate any Variable Account as a managed investment company or as a unit-
investment trust;
. combine the assets of any Variable Account with other separate accounts or
subaccounts of ours or our affiliate;
. transfer the assets of any Variable Account to other separate accounts or
subaccounts of ours or our affiliate;
. run any Variable Account under the direction of a committee, board, or
other group;
. restrict or eliminate any voting rights of policy Owners with respect to
any Variable Account, or other persons who have voting rights as to any
Variable Account;
. change the allocations permitted under the policy;
. terminate and liquidate any Variable Account; and
. make any other change needed to comply with law.
If any of these changes result in a material change in the underlying investment
of a Variable Account of our Separate Account, we will notify you of such
change.
Unless required by law or regulation, an investment policy may not be changed
without our consent. We will not change the investment policy of the Separate
Account without the approval of the Insurance Commissioner in the state of
California and without following filing and other procedures established by
insurance regulators of the state of issue.
Page 17
SUBSTITUTION OF INSURED
Benefit--Subject to our approval, you may request a substitution of the Insured
under this policy for a new Insured after the first policy year. We will
require the following before we substitute the Insured:
. The new Insured must submit evidence of insurability satisfactory to us.
. You must submit a written application for the substitution.
We may adjust the Face Amount, Accumulated Value, Surrender Charge, and any
policy fees and charges to reflect the new Insured. A revised schedule of
benefits will be sent to you outlining the benefits for the new Insured. Riders
on the new Insured will be added only with our consent and subject to our
requirements for those riders.
If approved, the substitution will be effective on the next Monthly Payment Date
on or next following our approval.
GENERAL PROVISIONS
Entire Contract--This policy is a contract between you and us. This policy, the
attached copy of the initial application, any applications for reinstatement,
all subsequent applications to change the policy, any endorsements, benefits, or
riders, and all additional policy information sections added to this policy are
the entire contract. Only an authorized officer is permitted to change this
contract or extend the time for paying premiums. Any such change must be in
writing.
All statements in the application shall, in the absence of fraud, be deemed
representations and not warranties. We will not use any statement to contest
this policy or defend a claim on grounds of misrepresentation unless the
statement is in an application.
Incontestability--Except for failure to pay premiums, this policy cannot be
contested after the expiration of the following time periods:
. The initial Face Amount cannot be contested after the policy has been in
force during the Insured's lifetime for two years from the Policy Date; and
. An increase in the Face Amount cannot be contested after the increased
amount has been in force during the Insured's lifetime for two years from
its effective date.
If this policy has been reinstated, it cannot be contested after it has been in
force during the Insured's lifetime for two years from the date of
reinstatement. Except for failure to pay premiums, in no event will we contest
this policy after reinstatement unless there is a material misrepresentation in
the reinstatement application.
Non-Participating--This policy will not share in any of our surplus earnings.
Juvenile Insured--If an Insured's Age on the Policy Date is less than 20, the
Insured may apply for Nonsmoker risk status on attaining Age 20. This option
must be requested in writing and accompanied by satisfactory evidence of
nonsmoking.
Suicide Exclusion--If the Insured dies by suicide, while sane or insane, within
two years of the Policy Date, no death benefit proceeds will be paid. Instead,
we will return the sum of the premiums paid, less the sum of any Policy Debt and
withdrawals.
Page 18
If the Insured dies by suicide, while sane or insane, within two years of the
effective date of any increase in the Face Amount, no benefit will be paid with
respect to such increase. Instead, we will refund the Cost of Insurance Charges
made with respect to that increase.
Misstatement--If the Insured's Age is misstated in the application or if the
Insured's Risk Classification is misstated, the amount of the death benefit
shall be the greater of that which would be purchased by the most recent Cost of
Insurance Charge at the correct Age and Risk Classification, or the Guideline
Minimum Death Benefit for the correct Age and Risk Classification.
If the Insured's Age or Risk Classification is misstated, the Accumulated Value
will be modified by recalculating all prior Cost of Insurance charges and other
monthly deductions based on the correct Age and Risk Classification.
Reports--A report will be mailed to you at the end of each policy quarter to
your last known address. This report will include the following information for
the policy quarter:
. the Accumulated Value;
. the Cash Surrender Value;
. the current death benefit;
. any Surrender Charges;
. any existing Policy Debt;
. transactions that occurred during the policy quarter;
. changes in the Guideline Premiums, if applicable; and
. any information required by law.
In addition to the above reports, an annual report will also be mailed to you.
The report will contain financial statements for the Separate Account and the
designated investment company or companies in which the Separate Account
invests, the latter of which will include a list of the portfolio securities of
the investment company, as required by the Investment Company Act of 1940. We
will also send any other reports as required by Federal securities law.
Policy Illustrations--Upon request we will give you an illustration of the
future benefits under this policy based upon both guaranteed and current cost
factor assumptions. However, if you ask us to do this more than once in any
policy year, we reserve the right to charge you a fee not to exceed $25 per
request for this service. Illustrated benefits that are not guaranteed, such as
benefits based on the current cost factor assumptions, will vary depending upon
a number of factors, including but not limited to, changes in future investment
performance.
Basis of Values--A detailed statement showing how values are determined has been
filed with the state insurance department. All values are at least equal to the
minimums required by the law of the state in which this policy is delivered,
based on the Commissioner's 1980 Standard Ordinary Mortality Table and interest
at the rate of 3%, except for unisex issues which are based on the 1980 CSO
Table B and interest at the rate of 3%.
Ownership of Assets--We have the exclusive and absolute control of our assets,
including all assets in the Separate Account.
Compliance--We reserve the right to make any change to the provisions of this
policy to comply with, or give you the benefit of, any Federal or state statute,
rule, or regulation, including but not limited to requirements for life
insurance contracts under the Code or any state.
We will provide you with a copy of any such change, and file such a change with
the insurance supervisory official of the state in which this policy is
delivered. You have the right to refuse any such change.
Page 19
INDEX
Accumulated Value 10 Loan Repayment 16
Administrative Charge 12 M&E Risk Charge 12
Age 5 MEC 7
Assignment 6 MEC Premium Limitation 7
Basis of Values 19 MEC Rules 8
Beneficiary 6 Misstatement 19
Cash Surrender Value 14 Modified Endowment Contract 7
Cash Value Accumulation Test 7 Monthly Deduction 11
Code 5 Monthly Payment Date 5
Compliance 19 Mortality and Expense Risk Charge 12
Cost of Insurance Charge 12 Net Amount at Risk 12
Cost of Insurance Rates 12 Net Cash Surrender Value 14
Death Benefit 7 Net Premium 5
Death Benefit Options 9 Non-Participating 18
Death Benefit Proceeds 9 Owner 6
Death Benefit Qualification Test 7 Policy Date 5
Entire Contract 18 Policy Debt 5
Evidence of Insurability 5 Policy Illustrations 19
Face Amount 5 Policy Loans 16
Face Amount Change 9 Premium Allocation 6
Face Amount Decrease 10 Premium Limitation 7
Face Amount Increase 9 Premium Load 12
Fixed Accumulated Value 10 Premiums 6
Fixed Options 5, 15 Reinstatement 13
Free Look Transfer Date 5 Reports 19
Grace Period 13 Risk Classification 3
Guideline Premium Limitation 7 Separate Account 5, 17
Guideline Premium Test 7 Suicide Exclusion 18
Home Office 5 Surrender 14
Income Benefits 15 Surrender Charges 14
Incontestability 18 Transfers 13
Insured 5 Valuation Date 5
Investment Options 5 Valuation Period 5
Juvenile Insured 18 Variable Account 5, 17
Lapse 13 Variable Accumulated Value 11
Loan Account 11, 16 Withdrawals 14
Loan Amount Available 16 Written Request 6
Loan Interest 16
Page 20
[LOGO OF PACIFIC LIFE]
INSURANCE COMPANY
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
________________________________________________________________________
FLEXIBLE
PREMIUM
VARIABLE LIFE
INSURANCE
POLICY
. Adjustable Face Amount
. Benefits Vary Based on Investment Experience
. Non-Participating
