PARKSTONE
VARIABLE ANNUITY
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
THE COMPANY'S PROMISE
In consideration of the Purchase Payments and the attached application, Security
Benefit Life Insurance Company (the "Company") will pay the benefits of this
Contract according to its provisions.
LEGAL CONTRACT
PLEASE READ YOUR CONTRACT CAREFULLY. It is a legal Contract between the Owner
and the Company. The Contract's table of contents is on page 2.
FREE LOOK PERIOD-RIGHT TO CANCEL
IF FOR ANY REASON THE OWNER IS NOT SATISFIED WITH THIS CONTRACT, THE OWNER MAY
RETURN IT TO THE COMPANY WITHIN 10 DAYS FROM THE DATE OF RECEIPT. IT MAY BE
RETURNED BY DELIVERING OR MAILING IT TO THE COMPANY. IF RETURNED, THIS CONTRACT
SHALL BE DEEMED VOID FROM THE CONTRACT DATE. THE COMPANY WILL REFUND ANY
PURCHASE PAYMENTS MADE AND ALLOCATED TO THE FIXED ACCOUNT AND WILL REFUND
SEPARATE ACCOUNT CONTRACT VALUE AS OF THE DATE THE RETURNED POLICY IS RECEIVED
BY THE COMPANY.
SIGNED FOR SECURITY BENEFIT LIFE INSURANCE COMPANY ON THE CONTRACT DATE.
XXXXX X. XXXXX XXXXXX X. XXXXXX
Secretary President
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
* Purchase Payments may be made until the earlier of the Annuity Start Date or
termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Start Date according to the
Contract provisions.
* Annuity Payments begin on the Annuity Start Date using the method specified
in this Contract.
* This Contract is Participating.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE ARE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
000 Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0000
0-000-000-0000
Form V6020 (R10-97) BP 602AP1
TABLE OF CONTENTS
CONTRACT SPECIFICATIONS ............................................... 3
DEFINITIONS ........................................................... 4
GENERAL PROVISIONS .................................................... 7
The Contract ........................................................ 7
Compliance .......................................................... 7
Misstatement of Age and Sex ......................................... 7
Evidence of Survival ................................................ 7
Incontestability .................................................... 7
Assignment .......................................................... 7
Transfers ........................................................... 8
Claims of Creditors ................................................. 8
Nonforfeiture Values ................................................ 8
Participation ....................................................... 9
Statements .......................................................... 9
OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS ....................... 9
Ownership ........................................................... 9
Joint Ownership ..................................................... 9
Annuitant ........................................................... 9
Primary and Contingent Beneficiaries ................................ 9
Ownership and Beneficiary Changes ................................... 9
PURCHASE PAYMENT PROVISIONS ........................................... 10
Flexible Purchase Payments .......................................... 10
Purchase Payment Limitations ........................................ 10
Purchase Payment Allocation ......................................... 10
Place of Payment .................................................... 10
CONTRACT VALUE AND EXPENSE PROVISIONS ................................. 10
Contract Value ...................................................... 10
Fixed Account Contract Value ........................................ 10
Fixed Account Interest Crediting .................................... 11
Separate Account Contract Value ..................................... 11
Accumulation Unit Value ............................................. 11
Net Investment Factor ............................................... 11
Determining Accumulation Units ...................................... 12
Mortality and Expense Risk Charge ................................... 12
Premium Tax Expense ................................................. 12
Administration Charge ............................................... 12
Mutual Fund Expenses ................................................ 12
WITHDRAWAL PROVISIONS ................................................. 12
Withdrawals ......................................................... 12, 13
Withdrawal Value .................................................... 13
Withdrawal Charges .................................................. 13
Free Withdrawals .................................................... 13
Systematic Withdrawals .............................................. 14
Free Systematic Withdrawals ......................................... 14
Disability Waiver ................................................... 14
Date of Request ..................................................... 14
Payment of Withdrawal Benefits ...................................... 14, 15
DEATH BENEFIT PROVISIONS .............................................. 15
Death Benefit ....................................................... 15
Proof of Death ...................................................... 16
Distribution Rules .................................................. 16
ANNUITY PAYMENT PROVISIONS ............................................ 16
Annuity Start Date .................................................. 16, 17
Change of Annuity Start Date ........................................ 17
Annuity Start Amount ................................................ 17
Withdrawal Charges .................................................. 17
Annuity Tables ...................................................... 17
Annuity Payments .................................................... 17
Change of Annuity Option ............................................ 18
Fixed Annuity Payments .............................................. 18
Variable Annuity Payments ........................................... 18
Annuity Units ....................................................... 18
Net Investment Factor ............................................... 18, 19
Alternate Annuity Option Rates ...................................... 19
Annuity Options ..................................................... 19, 20
ANNUITY TABLES ........................................................ 21, 22
AMENDMENTS OR ENDORSEMENTS, if any
-2- BP 602AP1
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VARIABLE ANNUITY CONTRACT SPECIFICATIONS
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OWNER OF RECORD: Xxxx X. Xxx
OWNER DATE OF BIRTH: 10-30-1953
JOINT OWNER NAME: Xxxx X. Xxx
JOINT OWNER DATE OF BIRTH: 7-18-1981
ANNUITANT NAME: Xxxxx X. Xxx
ANNUITANT DATE OF BIRTH: 5-13-1987
ANNUITANT SEX: Female
PRIMARY BENEFICIARY NAME: Xxxxx X. Xxx
CONTRACT NUMBER: Specimen
CONTRACT DATE: 6-30-1997
ISSUE DATE: 6-30-1997
ANNUITY START DATE: 7-1-2052*
PLAN: Non-qualified
ASSIGNMENT: This Policy may be assigned.
See Assignment Provision of your Policy.
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INITIAL PURCHASE PAYMENT ................. $5,000
MINIMUM SUBSEQUENT PURCHASE PAYMENTS ..... $2,000 ($50 pursuant to an automatic
investment program)
MINIMUM SYSTEMATIC WITHDRAWAL ............ $50
MORTALITY AND EXPENSE RISK CHARGE ........ 1.25% Annually (1.2% annually during
Annuity Options 1-4, 7 and 8)
ADMINISTRATION CHARGE .................... .15% Annually (0% annually during
Annuity Options 1-4, 7 and 8)
WITHDRAWAL CHARGES:
Purchase Payment Year .............. 1 2 3 4 5 6 7 8+
Withdrawal Charge .................. 7% 6% 5% 4% 3% 2% 1% 0%
FREE WITHDRAWAL PERCENTAGE ............... 10%
GUARANTEED RATE .......................... 3%
ANNUITY OPTION ........................... Life with 10-Year Fixed Period
Option*
SUBACCOUNTS:
SBL Money Market Subaccount
Parkstone Bond Subaccount
Colonial U. S. Stock Subaccount
X. Xxxx Price Equity Income Subaccount
SBL Social Awareness Subaccount
Parkstone Mid Capitalization Subaccount (formerly Equity Subaccount)
Colonial Strategic Income Subaccount
Parkstone Small Capitalization Subaccount
Lexington Global Aggressive Bond Subaccount
Parkstone International Discovery Subaccount
Newport Tiger Subaccount
METHOD FOR DEDUCTIONS:
Deductions for Premium Taxes and any unallocated partial withdrawals, including
Systematic Withdrawals, will be made sequentially from the Contract Value in
descending order of the Subaccounts listed above. The Fixed Account is the last
Account charged. The value of each Account will be depleted before the next is
charged.
*The Owner may select the Annuity Start Date and the Annuity Option. If no
Annuity Start Date or Annuity Option is selected by the Owner, they will be
assigned automatically.
V6020 A (10-97) -3- SBL 140
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DEFINITIONS
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ACCOUNT
An Account is one of the Subaccounts or the Fixed Account.
ACCUMULATION UNIT
The Accumulation Unit is a unit of measure. It is used to compute the
Separate Account Contract Value prior to the Annuity Start Date. It is also
used to compute the Variable Annuity Payments for Annuity Options 5 and 6.
ANNUITANT
The Annuitant is the person named by the Owner on whose life the Annuity
Payments depend for Annuity Options 1 through 4 and 8. The Annuitant
receives Annuity Payments under this Contract. Please see "Annuitant"
provisions on page 9.
ANNUITY OPTION
An Annuity Option is a set of provisions that form the basis for making
Annuity Payments. The Annuity Option is set prior to the Annuity Start
Date. Please see "Annuity Options" on pages 19 and 20.
ANNUITY START DATE
The Annuity Start Date is the date on which Annuity Payments are scheduled
to begin. This date may be changed by the Owner. The Annuity Start Date is
shown on Page 3. Please see "Annuity Start Date" on pages 16 and 17.
ANNUITY UNIT
The Annuity Unit is a unit of measure used to compute Variable Annuity
Payments for Annuity Options 1 through 4, 7 and 8.
AUTOMATIC INVESTMENT PROGRAM
A program pursuant to which Purchase Payments are automatically paid from
the Owner's bank account on a specified day of the month, on a monthly,
quarterly, semiannual or annual basis, or a salary reduction arrangement.
AUTOMATIC TRANSFERS
Automatic Transfers are Transfers among the Subaccounts and the Fixed
Account. Such Transfers are made automatically on a periodic basis by the
Company at the written request of the Owner. The Company reserves the right
to discontinue, modify or suspend Automatic Transfers.
COMPANY
The Company is Security Benefit Life Insurance Company, 000 XX Xxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxx 00000-0000.
CONTRACT ANNIVERSARY
A Contract Anniversary is a 12-month anniversary of the Contract Date.
CONTRACT DATE
The Contract Date is the date the Contract begins. The Contract Date is
shown on page 3.
CONTRACT YEAR
Contract Years are measured from the Contract Date.
CURRENT INTEREST
The Company may in its discretion pay Current Interest on the Fixed Account
at a rate that exceeds the Guaranteed Rate shown on page 3. The Company
will declare the rate of Current Interest, if any from time to time.
DESIGNATED BENEFICIARY
Upon the death of the Owner or Joint Owner, the Designated Beneficiary will
be the first person on the following list who is alive on the date of
death:
1. Owner;
2. Joint Owner;
3. Primary Beneficiary;
4. Contingent Beneficiary;
5. Annuitant; and
6. the Owner's estate if no one listed above is alive.
The Designated Beneficiary receives a death benefit upon the death of the
Owner prior to the Annuity Start Date. Please see "Ownership, Annuitant,
and Beneficiary Provisions" on page 9 and "Death Benefit Provisions" on
pages 15.
V 6020 B (R10-97) -4- BP 602AQ1
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DEFINITIONS (Continued)
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EARNINGS
Earnings include interest, dividends, realized gains or losses, and
unrealized gains or losses.
FIXED ACCOUNT
The Fixed Account is part of the Company's general account. The Company
manages the general account and guarantees that that it will credit
interest on Fixed Account Contract Value at an annual rate at least equal
to the Guaranteed Rate. This Rate is shown on page 3.
HOME OFFICE
The Address of the Company's Home Office is Security Benefit Life Insurance
Company, 000 XX Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxx 00000-0000.
ISSUE DATE
The Issue Date is the date the Company uses to determine the date the
Contract becomes incontestable. The Issue Date is shown on Page 3. Please
see "Incontestability" on page 7.
JOINT OWNER
The Joint Owner, if any, possesses an undivided interest in the entire
Contract with the Owner. The Joint Owner, if any, is named on page 3.
Please see "Joint Ownership" provisions on page 9.
NONNATURAL PERSON
Any group or entity that is not a living person such as a trust or
corporation.
OWNER
The Owner is the person who possesses all rights under the Contract. The
Owner is named on page 3. Please see "Ownership" provisions on page 9.
PREMIUM TAX
Any Premium Taxes levied by a state or other governmental entity will be
charged against this Contract. When Premium Tax is assessed after the
Purchase Payment is applied, it will be deducted as described on page 3.
PURCHASE PAYMENT
A Purchase Payment is money Received by the Company and applied to the
Contract.
PURCHASE PAYMENT ANNIVERSARY
A Purchase Payment Anniversary is a 12-month anniversary of the date the
Purchase Payment is applied.
PURCHASE PAYMENT YEAR
A Purchase Payment Year is each 12-month period starting with either the
Purchase Payment Anniversary or the date the Purchase Payment is applied.
The first Purchase Payment year begins on the date the Purchase Payment is
applied and increases by one on each successive Purchase Payment
Anniversary.
RECEIVED BY THE COMPANY
The phrase "Received by the Company" means receipt by the Company in good
order at its Home Office, 000 XX Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxx
00000-0000.
SEPARATE ACCOUNT
The Separate Account is a separate account established and maintained by
the Company under Kansas law. The Separate Account is registered with the
Securities and Exchange Commission under the Investment company Act of 1940
as a Unit Investment Trust. It was established by the Company to support
variable annuity contracts. The Company owns the assets of the Separate
Account and maintains them apart from the assets of its general account and
its other separate accounts. The assets held in the Separate Account equal
to the reserves and other Contract liabilities with respect to the Separate
Account may not be charged with liabilities arising from any other business
the Company may conduct.
-5- BP 602AQ1
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DEFINITIONS (Continued)
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SEPARATE ACCOUNT (CONTINUED)
Xxxxxx and realized and unrealized gains and losses from assets in the
Separate Account are credited to or charged against, the Separate Account
without regard to the income, gains or losses from the Company's general
account or its other separate accounts. The Separate Account is divided
into Subaccounts shown on page 3. Income and realized and unrealized gains
and losses from assets in each Subaccount are credited to, or charged
against, the Subaccount without regard to income, gains or losses in the
other Subaccounts. The Company has the right to transfer to its general
account any assets of the Separate Account that are in excess of the
reserves and other Contract liabilities with respect to the Separate
Account. The value of the assets in the Separate Account on each Valuation
Date is determined as of the end of each Valuation Date.
SUBACCOUNT NET ASSET VALUE
The Subaccount Net Asset Value is equal to: (1) the net asset value of all
shares of the underlying mutual fund held by the Subaccount; plus (2) any
cash or other assets; less (3) all liabilities of the Subaccount.
SUBACCOUNTS
The Variable Account is divided into Subaccounts which invest in shares of
mutual funds. Each Subaccount may invest its assets in a separate class or
series of a designated mutual fund or funds. The Subaccounts are shown on
page 3. Subject to the regulatory requirements then in force, the Company
reserves the right to:
1. change or add designated mutual funds or other investment vehicles;
2. add, remove or combine Subaccounts;
3. add, delete or make substitutions for securities that are held or
purchased by the Separate Account or any Subaccount;
4. operate the Separate Account as a management investment company;
5. combine the assets of the Separate Account with other separate accounts
of the Company or an affiliate thereof;
6. restrict or eliminate any voting rights of the Owner with respect to
the Separate Account or other persons who have voting rights as to the
Separate Account; and
7. terminate and liquidate any Subaccount.
If any of these changes result in a material change to the Separate Account
or a Subaccount, the Company will notify the Owner of the change. The
Company will not change the investment policy of any Subaccount in any
material respect without complying with the filing and other procedures of
the insurance regulators of the state of issue.
VALUATION DATE
A Valuation Date is each day the New York Stock Exchange and the Company's
Home Office are open for business.
VALUATION PERIOD
A Valuation Period is the interval of time from one Valuation Date to the
next Valuation Date.
V6020 C (R10-97) -6- BP 602AR1
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GENERAL PROVISIONS
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THE CONTRACT
The entire Contract between the Owner and the Company consists of this
Contract, the attached Application, and any Amendments, Endorsements or
Riders to the Contract. All statements made in the Application will, in the
absence of fraud, as ruled by a court of competent jurisdiction, be deemed
representations and not warranties. The Company will use no statement made
by or on behalf of the Owner or the Annuitant to void this Contract unless
it is in the written Application. Any change in the Contract can be made
only with the written consent of the President, a Vice President, or the
Secretary of the Company.
The Purchase Payment(s) and the Application must be acceptable to the
Company under its rules and practices. If they are not, the Company's
liability will be limited to a return of the Purchase Payment(s).
COMPLIANCE
The Company reserves the right to make any change to the provisions of this
Contract to comply with or give the Owner the benefit of any federal or
state statute, rule or regulation. This includes, but is not limited to,
requirements for annuity contracts under the Internal Revenue Code or the
laws of any state. The Company will provide the Owner with a copy of any
such change and will also file such a change with the insurance regulatory
officials of the state in which the Contract is delivered.
MISSTATEMENT OF AGE AND SEX
If the age or sex of the Annuitant has been misstated, payments shall be
adjusted, when allowed by law, to the amount which would have been provided
for the correct age or sex. Proof of the age of an Annuitant may be
required at any time, in a form suitable to the Company. If payments have
already commenced and the misstatement has caused an underpayment, the full
amount due will be paid with the next scheduled payment. If the
misstatement has caused an overpayment, the amount due will be deducted
from one or more future payments.
EVIDENCE OF SURVIVAL
When any payments under this contract depend on the payee being alive on a
given date, proof that the payee is living may be required by the Company.
Such proof must be in a form acceptable to the Company, and may be required
prior to making the payments.
INCONTESTABILITY
This Contract will not be contested after it has been in force for two
years from the Issue Date during the life of the Owner.
ASSIGNMENT
Please refer to page 3 to see if this Contract may be assigned. If it may
be assigned, no Assignment under this Contract is binding unless Received
by the Company in writing. The Company assumes no responsibility for the
validity, legality, or tax status of any Assignment. The Assignment will be
subject to any payment made or other action taken by the Company before the
Assignment is Received by the Company. Once filed, the rights of the Owner,
Annuitant and Beneficiary are subject to the Assignment. Any claim is
subject to proof of interest of the assignee.
-7- BP 602AR1
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GENERAL PROVISIONS (Continued)
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TRANSFERS
The Owner may Transfer Contract Value among the Fixed Account and
Subaccounts subject to the following.
Transfers are not allowed within 30 days of the Annuity Start Date. After
the Annuity Start Date, for Annuity Options 1 through 4, 7 and 8, the Owner
may Transfer Contract Value only among Subaccounts.
The Owner may make 12 Transfers per Contract Year, provided, however, that
Automatic Transfers are not included in this number. Any additional
Transfers in a Contract Year are subject to a fee of $25 per Transfer which
will be deducted from the Contract Value being transferred. The Company
reserves the right to (1) limit the amount that may be transferred; (2)
limit the number of Transfers allowed each Contract Year to 12; and (3)
suspend Transfers. Transfers must be at least $500.00 or, if less, the
remaining balance in the Account from which Contract Value is being
transferred.
The total dollar amount that may be Transferred from the Fixed Account in a
Contract Year is limited to the greatest of:
1. $5,000;
2. 1/3 of the Fixed Account Contract Value on the date the Transfer
request is Received by the Company; or
3. 120% of the dollar amount Transferred from the Fixed Account in the
prior Contract Year.
The Company reserves the right for a period of time to allow Transfers from
the Fixed Account in amounts that exceed the limits set forth above. In any
Contract Year following a Contract Year during which such limits were
waived, the total dollar amount that may be Transferred is the greatest of
1 above; 2 above; or
3. 120% of the lesser of:
a. the dollar amount Transferred from the Fixed Account in the prior
Contract Year; or
b. the maximum total dollar amount that would have been allowed in the
prior Contract Year under the Transfer provisions above absent the
waiver.
The Company will effect a Transfer to or from a Subaccount on the basis of
Accumulation Unit Value (or Annuity Unit Value) determined as of the end of
the Valuation Period in which the Transfer is effected. The Company will
effect a Transfer from the Fixed Account on the basis of Fixed Account
Contract Value as of the end of the Valuation Period in which the Transfer
is effected.
The Company reserves the right to delay Transfers from the Fixed Account
for up to 6 months as required by most states. The Company will notify you
if there will be a delay.
CLAIMS OF CREDITORS
The Contract Value and other benefits under this Contract are exempt from
the claims of creditors of the Owner to the extent allowed by law.
NONFORFEITURE VALUES
The Death Benefits, Withdrawal Values and Annuity Start Values will at
least equal the minimum required by law.
V 6020 D (R10-97) -8- BP 602AS1
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GENERAL PROVISIONS (Continued)
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PARTICIPATION
The Company is a mutual life insurance company. Therefore, it pays
dividends on some of its contracts. The Company does not expect dividends
to become payable on this Contract. At the end of each Contract Year the
Company will determine the Contract's dividend, if any. The Owner may
choose to have it: (1) added to the Contract Value, or (2) paid in cash. If
no choice is made, any dividend will be added to the Contract Value.
STATEMENTS
At least once each Contract Year the Owner shall be sent a statement
including the current Contract Value and any other information required by
law. The Owner may send a written request for statement at other intervals.
The Company may charge a reasonable fee for such statements.
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OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS
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OWNERSHIP
During the Owner's lifetime, all rights and privileges under the Contract
may be exercised only by the Owner. If the purchaser names someone other
than himself or herself as Owner, the purchaser has no rights in the
Contract. No Owner may be older than 90 on the Contract Date.
JOINT OWNERSHIP
If a Joint Owner is named in the application, then the Owner and Joint
Owner will share an undivided interest in the entire Contract as joint
tenants with rights of survivorship. When an Owner and Joint Owner have
been named, the Company will honor only requests for changes and the
exercise of other Ownership rights made by both the Owner and Joint Owner.
When a Joint Owner is named, all references to "Owner" throughout this
Contract should be construed to mean both the Owner and Joint Owner, except
for the "Statements" provision above and the "Death Benefit Provisions" on
page 15.
ANNUITANT
The Annuitant is named on page 3. The Owner may change the Annuitant prior
to the Annuity Start Date. The request for this change must be made in
writing and Received by the Company at least 30 days prior to the Annuity
Start Date. No Annuitant may be named who is more than 90 years old on the
Contract Date. When the Annuitant dies prior to the Annuity Start Date, the
Owner must name a new Annuitant within 30 days or, if sooner, by the
Annuity Start Date, except where the Owner is a Nonnatural Person. If a new
Annuitant is not named, the Owner becomes the Annuitant.
PRIMARY AND CONTINGENT BENEFICIARIES
The Primary Beneficiary is named on page 3. The Owner may change any
Beneficiary as described in "Ownership and Beneficiary Changes" below. If
the Primary Beneficiary dies prior to the Owner, the Contingent Beneficiary
becomes the Primary Beneficiary. Unless the Owner directs otherwise, when
there are two or more Primary Beneficiaries, they will receive equal
shares.
OWNERSHIP AND BENEFICIARY CHANGES
Subject to the terms of any existing Assignment, the Owner may name a new
Owner, new Primary Beneficiary or a new Contingent Beneficiary. Any new
choice of Owner, Primary Beneficiary or Contingent Beneficiary will revoke
any prior choice. Any change must be made in writing and recorded at the
Home Office. The change will become effective as of the date the written
request is signed, whether or not the Owner is living at the time the
change is recorded. A new choice of Primary Beneficiary or Contingent
Beneficiary will not apply to any payment made or action taken by the
Company prior to the time it was recorded. The Company may require the
Contract be returned so these changes may be made.
-9- BP 602AS1
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PURCHASE PAYMENT PROVISIONS
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FLEXIBLE PURCHASE PAYMENTS
The Contract becomes in force when the initial Purchase Payment is applied.
The Owner is not required to continue Purchase Payments in the amount or
frequency originally planned. The Owner may: (1) increase or decrease the
amount of Purchase Payments, subject to any Contract limits; or (2) change
the frequency of Purchase Payments. A change in frequency or amount of
Purchase Payments does not require a written request.
PURCHASE PAYMENT LIMITATIONS
Purchase Payments exceeding $1,000,000 will not be accepted without prior
approval by the Company. The Company will not accept Purchase Payments
after the Annuity Start Date. The Minimum Subsequent Purchase Payment
amount is shown on page 3.
PURCHASE PAYMENT ALLOCATION
Purchase Payments may be allocated among the Fixed Account and the
Subaccounts. Purchase Payments will be allocated according to the Owner's
instructions in the Application or more recent instructions, if any. The
allocations may be made by specifying the dollar amount or whole percentage
to be allocated to each Account. No less than $25 per Purchase Payment may
be allocated to any account. The Owner may change the allocations by
written notice to the Company.
PLACE OF PAYMENT
All Purchase Payments under this Contract are to be paid to the Company at
its Home Office. Purchase Payments after the initial Purchase Payment are
applied as of the end of the Valuation Period during which they are
Received by the Company.
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CONTRACT VALUE AND EXPENSE PROVISIONS
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CONTRACT VALUE
On any Valuation Date, the Contract Value is the sum of (1) the Separate
Account Contract Value; and (2) the Fixed Account Contract Value. At any
time after the first Contract Year and before the Annuity Start Date, the
Company reserves the right to pay to the Owner the Contract Value as a lump
sum if it is below $2,000.
FIXED ACCOUNT CONTRACT VALUE
On any Valuation Date, the Fixed Account Contract Value is equal to the
first Purchase Payment allocated under the Contract to the Fixed Account.
PLUS:
1. any other Purchase Payments allocated under the Contract to the Fixed
Account;
2. any Transfers from the Separate Account to the Fixed Account; and
3. any interest credited to the Fixed Account;
LESS:
1. any Withdrawals and applicable Withdrawal Charges deducted from the
Fixed Account;
2. any Transfers from the Fixed Account to the Separate Account and any
applicable Transfer Fees deducted from the Fixed Account;
3. any applicable Premium Taxes;
4. any Fixed Account Contract Value which are applied to any of Annuity
Options 1 through 4, 7 and 8; and.
5. any Annuity Payments made under Annuity Options 5 and 6.
V 6020 E (R10-97) -10- BP 602AT1
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CONTRACT VALUE AND EXPENSE PROVISIONS (Continued)
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FIXED ACCOUNT INTEREST CREDITING
The Company will credit interest on the Fixed Account Contract Value at an
annual rate at least equal to the Guaranteed Rate shown on page 3. Also,
the Company may in its sole judgment credit Current Interest at a rate in
excess of the Guaranteed Rate.
The Company may credit Current Interest on Contract Value that was
allocated or transferred to the Fixed Account during one period at a
different rate than amounts allocated or transferred to the Fixed Account
in another period. Therefore, at any time, portions of Fixed Account
Contract Value may be earning Current Interest at different rates based
upon the period during which such portions were allocated or transferred to
the Fixed Account.
SEPARATE ACCOUNT CONTRACT VALUE
On any Valuation Date, the Separate Account Contract Value is the sum of
the then current value of the Accumulation Units allocated to each
Subaccount for this Contract.
ACCUMULATION UNIT VALUE
The initial Accumulation Unit Value for each Subaccount was set at $10.
Accumulation Unit Value for any subsequent Valuation Date is equal to (1)
times (2), where:
1. is the Accumulation Unit Value determined on the immediately preceding
Valuation Date; and
2. is the Net Investment Factor on the Valuation Date with respect to
which the Accumulation Unit Value is being determined.
NET INVESTMENT FACTOR
The Net Investment Factor for any Subaccount as of the end of any Valuation
Period is determined by dividing (1) by (2) and subtracting (3) from the
result, where:
1. is equal to:
a. the net asset value per share of the mutual fund held in the
Subaccount, found as of the end of the current Valuation Period;
plus
b. the per share amount of any dividend or capital gain distributions
paid by the Subaccount's declared by the Sub-Account's underlying
mutual fund that is not included in the net asset value per share;
plus or minus
c. a per share charge or credit for any taxes reserved for, which the
Company deems to have resulted from the operation of the Separate
Account or the Subaccounts; operations of the Company with respect
to the Contract; or the payment of premiums or acquisition costs
under the Contract.
2. is the net asset value per share of the Subaccount's underlying mutual
fund as of the end of the prior Valuation Period.
3. is the daily factor representing the Mortality and Expense Risk Charge
and Administrative Charge which are deducted from the Separate Account.
Underlying mutual funds may declare dividends on a daily basis and pay such
dividends once a month. The Net Investment Factor allows for the monthly
reinvestment of these daily dividends. As described above, the gains and
losses from each Subaccount are credited to or charged against the
Subaccounts without regard to the gains or losses in the Company or other
Subaccounts.
The Accumulation Unit Value may increase or decrease from one Valuation
Period to the next.
-11- BP 602AT1
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CONTRACT VALUE AND EXPENSE PROVISIONS (Continued)
--------------------------------------------------------------------------------
DETERMINING ACCUMULATION UNITS
The number of Accumulation Units allocated to a particular Subaccount under
this Contract is found by dividing: (1) the amount allocated to the
Subaccount; by (2) the Accumulation Unit Value for the Subaccount as of the
end of the Valuation Period during which the amount is applied to the
Contract. The number of Accumulation Units allocated to a Subaccount under
the Contract will not change as a result of investment experience. Events
that change the number of Accumulation Units are:
1. Purchase Payments that are applied to the Subaccount;
2. Contract Value that is Transferred into or out of the Subaccount;
3. Withdrawals and any applicable Withdrawal Charges that are deducted
from the Subaccount; and
4. Premium Taxes and Transfer fees that are deducted from the Subaccount.
MORTALITY AND EXPENSE RISK CHARGE
The Company will deduct the Mortality and Expense Risk Charge shown on page
3. This charge will be computed and deducted from each Subaccount on each
Valuation Date. This charge is factored into the Accumulation Unit and
Annuity Unit Values on each Valuation Date.
PREMIUM TAX EXPENSE
The Company reserves the right to deduct Premium Tax when due or any time
thereafter. Any applicable Premium Taxes will be allocated as described on
page 3.
ADMINISTRATION CHARGE
The Company will deduct the Administration Charge shown on page 3. This
charge will be computed and deducted from each Subaccount on each Valuation
Date. This charge is factored into the Accumulation Unit Value on each
Valuation Date.
MUTUAL FUND EXPENSES
Each Subaccount invests in shares of a mutual fund. The net asset value per
share of each underlying fund reflects the deduction of any investment
advisory and administration fees and other expenses of the fund. These fees
and expenses are not deducted from the assets of a Subaccount, but are paid
by the underlying funds. The Owner indirectly bears a pro rata share of
such fees and expenses. An underlying fund's fees and expenses are not
specified or fixed under the terms of this Contract.
--------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS
--------------------------------------------------------------------------------
WITHDRAWALS
A full or partial Withdrawal of Contract Value is allowed at any time while
the Owner is living. This provision is subject to any federal or state
Withdrawal restrictions.
Upon the Owner's request for a full Withdrawal, the Company will pay the
Withdrawal Value in a lump sum, and the Contract will terminate.
All Withdrawals must meet the following conditions.
1. The request for Withdrawal must be Received by the Company in writing
or under other methods allowed by the Company, if any.
2. The Owner must apply: (a) while this Contract is in force; and (b)
prior to the Annuity Start Date, provided, however, that Withdrawals
may be made after the Annuity Start Date if payments are being made
under one of Annuity Options 5 through 7.
V 6020 F (R10-97) -12- BP 602AU1
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WITHDRAWAL PROVISIONS (Continued)
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WITHDRAWALS (CONTINUED)
3. The amount Withdrawn must be at least $500.00 except that a Withdrawal
of less than $500.00 is allowed (i) for Systematic Withdrawals, as
discussed on page 14; or (ii) when terminating the Contract.
A partial Withdrawal request must state the allocations for deducting the
Withdrawal from each Account. If no allocation is specified, the partial
Withdrawal will be deducted from the Accounts in the order described on
page 3, "Method for Deductions." Withdrawals of Fixed Account Contract
Value shall be made on a first in, first out basis.
WITHDRAWAL VALUE
The Withdrawal Value as of any Valuation Date will be (1) the Contract
Value on that date; less (2) any Premium Taxes due or paid by the Company;
and (3) any Withdrawal Charges.
WITHDRAWAL CHARGES
If part or all of the Contract Value is Withdrawn, Withdrawal Charges may
be applied at the time of Withdrawal. The Withdrawal Charges is applied to
Purchase Payment withdrawn. The amount of the charge is based on the number
of Purchase Payment Years the Purchase Payment has remained in the
Contract. See the Withdrawal Charges shown on page 3. The order of
withdrawal for the purpose of calculating Withdrawal Charges is as follows:
(1) Purchase Payments on a first in, first out basis; then (2) Earnings.
The Withdrawal Charge will not be assessed against:
1. any Free Withdrawal amounts;
2. any Free Systematic Withdrawal amounts;
3. any amounts remaining after all Purchase Payments are withdrawn;
4. payments under Annuity Options 1 through 4, 7 and 8.
5. payments under Annuity Options 5 and 6 provided that Annuity payments
are made for at least 7 years; or
6. any Purchase Payments remaining in the Contract for 84 months or
longer.
The Withdrawal Charge will be assessed against Contract Value allocated to
the Subaccounts and the Fixed Account in the same proportion as the
Withdrawal is allocated.
FREE WITHDRAWALS
A Free Withdrawal is a Withdrawal amount that is not subject to Withdrawal
Charges. The amount of Free Withdrawal available in a Contract Year is
equal to (1) Contract Value as of the date of the first Withdrawal in the
current Contract Year times (2) the Free Withdrawal Percentage. A Free
Withdrawal is only available with respect to the first Withdrawal in each
Contract Year. A Free Withdrawal is not available in any Contract Year that
Free Systematic Withdrawals have been made. Unused Free Withdrawal amounts
cannot be carried from one Contract Year to the next.
-13- BP 602AU1
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WITHDRAWAL PROVISIONS (Continued)
--------------------------------------------------------------------------------
SYSTEMATIC WITHDRAWALS
Systematic Withdrawals are automatic periodic Withdrawals from the Contract
in substantially equal amounts made while the Owner is living prior to the
Annuity Start Date. In order to start Systematic Withdrawals, the Owner
must make the request in writing. Systematic Withdrawals are subject to any
applicable Withdrawal Charge, except as discussed under "Free Systematic
Withdrawals" below. The Minimum Systematic Withdrawal is shown on page 3.
The Owner must choose the type of payment and its frequency. The Systematic
Withdrawal request must state the allocations for deducting the Withdrawals
from each Account. If no allocation is specified, the Withdrawals will be
deducted from the Accounts in the order described on page 3, "Methods for
Deductions." The payment type may be: (1) a percentage of Contract Value;
(2) a specified dollar amount; (3) all earnings in the Contract; (4) over a
fixed period of time; or (5) based upon the life expectancy of the Owner or
the Owner and a Beneficiary. The payment frequency may be: (1) monthly; (2)
quarterly; (3) semiannually; or (4) annually. Systematic Withdrawals may be
stopped or changed by the Owner upon proper written request Received by the
Company at least 30 days in advance of the requested date of termination or
change. The Company reserves the right to stop, modify, suspend or charge a
fee for Systematic Withdrawals at any time.
FREE SYSTEMATIC WITHDRAWALS
Free Systematic Withdrawals are not subject to a Withdrawal Charge. The
amount of Free Systematic Withdrawals available in a Contract Year is
determined as follows: the amount of Systematic Withdrawals that does not
exceed the Free Withdrawal amount available in that Contract Year. Free
Systematic Withdrawals are not available in any Contract Year in which a
Free Withdrawal has been made.
DISABILITY WAIVER
The Company will waive the Withdrawal Charges if, after the Contract Date,
an Owner becomes totally and permanently disabled prior to age 65. To
qualify, the Owner must provide: (1) a certified copy of the Owner's birth
certificate; and (2) proof of total and permanent disability within the
meaning of Internal Revenue Code Section 72(m)(7) or any successor
provision. The Company reserves the right to: (1) investigate any
disability claim; and (2) require current proof of qualification with each
withdrawal request.
DATE OF REQUEST
The Company will effect a Withdrawal of Separate Account Contract Value on
the basis of Accumulation Unit Value determined as of the end of the
Valuation Period in which all the required information is Received by the
Company. The Company will effect Systematic Withdrawals of Separate Account
Contract Value on the basis of Accumulation Unit Value as determined as of
the end of the Valuation Period in which such Withdrawal is scheduled.
PAYMENT OF WITHDRAWAL BENEFITS
The Company reserves the right to suspend a Transfer or delay payment of a
Withdrawal from the Separate Account for any period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists as a result of which: (a) disposal of
securities held in the Separate Account is not reasonably practicable;
or (b) it is not reasonably practicable to fairly value the net assets
of the Separate Account; or
4. during any period when the Securities and Exchange Commission, by
order, so permits to protect owners of securities of registered
investment companies.
V 6020G (R10-97) -14- BP 602AV1
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WITHDRAWAL PROVISIONS (Continued)
--------------------------------------------------------------------------------
PAYMENT OF WITHDRAWAL BENEFITS (CONTINUED)
Rules and regulations of the Securities and Exchange Commission will govern
as to whether the conditions set forth above exist.
The Company further reserves the right to delay payment of a Withdrawal
from the Fixed Account for up to six months as required by most states. The
Company will notify you if there will be a delay.
--------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
--------------------------------------------------------------------------------
DEATH BENEFIT
If any Owner dies prior to the Annuity Start Date, a Death Benefit will be
paid to the Designated Beneficiary when due Proof of Death and instructions
regarding payment are Received by the Company within six months of the date
of death. If an Owner is a Nonnatural Person, then the Death Benefit will
be paid in the event of the death of the Annuitant or any joint Owner that
is a natural person prior to the Annuity Start Date. Further, if an Owner
is a Nonnatural Person, the amount of the Death Benefit is based on the age
of the Annuitant or any Joint Owner that is a natural person on the Issue
Date.
If the age of each Owner was 75 or younger on the Issue Date, the Death
Benefit will be the greatest of: (1) the sum of all Purchase Payments, less
any Premium Taxes due or paid by the Company and less the sum of all
partial Withdrawals; (2) the Contract Value on the date due Proof of Death
and instructions regarding payment are Received by the Company, less any
Premium Taxes due or paid by the Company; (3) the Stepped-Up death Benefit
described below.
The Stepped-Up Death Benefit is:
1. the largest Death Benefit on any Contract Anniversary that is both an
exact multiple of five and occurs prior to the oldest Owner reaching
age 76; plus
2. any Purchase Payments received since the applicable fifth Contract
Anniversary; less
3. any reductions caused by Withdrawals since the applicable fifth
Contract Anniversary; less
4. any Premium Taxes due or paid by the Company.
If the age of any Owner on the Issue Date was 76 or older, or if due proof
of death (regardless of the age of any Owner on the Issue Date) and
instructions regarding payment are not Received by the Company within six
months of the date of the Owner's death, the Death Benefit will be: (1) the
Withdrawal Value as of the end of the Valuation Period during which due
Proof of Death and instructions regarding payment are Received by the
Company, less (2) any Premium Taxes due or paid by the Company.
If a lump sum payment is requested, the payment will be made in accordance
with any laws and regulations that govern the payment of Death Benefits.
The Designated Beneficiary may elect to receive the Death Benefit in the
form of annuity payments under one of the Annuity Options, subject to any
requirements under applicable law.
-15- BP 602AV1
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DEATH BENEFIT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
PROOF OF DEATH
Any of the following will serve as Proof of Death:
1. certified copy of the death certificate;
2. certified decree of a court of competent jurisdiction as to the finding
of death;
3. written statement by a medical doctor who attended the deceased Owner;
or
4. any proof accepted by the Company.
DISTRIBUTION RULES
The entire Death Benefit with any interest shall be paid within 5 years
after the death of any Owner, except as provided below. In the event that
the Designated Beneficiary elects an Annuity Option, the length of time for
the payment period may be longer than 5 years if: (1) the Designated
Beneficiary is a natural person; (2) the Death Benefit is paid out under
one of Annuity Options 1 through 8; and (3) payments are made over a period
that does not exceed the life or life expectancy of the Designated
Beneficiary; and (4) Annuity Payments begin within one year of the death of
the Owner. If the deceased Owner's spouse is the sole Designated
Beneficiary, the spouse shall become the sole Owner of the Contract. He or
she may elect to: (1) keep the Contract in force until the sooner of the
spouse's death or the Annuity Start Date; or (2) receive the Death Benefit.
If any Owner dies after the Annuity Start Date, Annuity Payments shall
continue to be paid at least as rapidly as under the method of payment
being used as of the date of the Owner's death.
If the Owner is a Nonnatural Person, the distribution rules set forth above
apply in the event of the death of, or a change in, the Annuitant. This
Contract is deemed to incorporate any provision of Section 72(s) of the
Internal Revenue Code of 1986, as amended (the "Code"), or any successor
provision. This Contract is also deemed to incorporate any other provision
of the Code deemed necessary by the Company, in its sole judgment, to
qualify this Contract as an annuity. The application of the distribution
rules will be made in accordance with Code section 72(s), or any successor
provision, as interpreted by the Company in its sole judgment.
The foregoing distribution rules do not apply to a Contract which is: (1)
provided under a plan described in Code section 401(a); (2) described in
Code section 403(b); (3) an individual retirement annuity or provided under
an individual retirement account or annuity; or (4) otherwise exempt from
the Code section 72(s) distribution rules.
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS
--------------------------------------------------------------------------------
ANNUITY START DATE
The Owner may choose the Annuity Start Date at the time of application. The
Annuity Start Date may not be prior to the third Contract Anniversary;
provided that the Annuity Start Date may be prior to the third Contract
Anniversary if one of Annuity Options 5 or 6 is elected. The Annuity Start
Date must be prior to the later of: (1) the oldest Annuitant's eighty-fifth
birthday; or (2) the tenth Contract Anniversary, but in no event later than
the oldest Annuitant's ninety-fifth birthday. If no Annuity Start Date is
chosen, the Company will use the later of: (1) the oldest Annuitant's
seventieth birthday; or (2) the tenth Contract Anniversary, but in no event
later than the Annuitant's ninety-fifth birthday.
V 6020H (R10-97) -16- BP 602AW1
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ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
ANNUITY START DATE (CONTINUED)
The Annuity Start Date is the date the first payment will be made to the
Annuitant under one of the Annuity Options.
CHANGE OF ANNUITY START DATE
An Owner may change the Annuity Start Date subject to approval by the
Company. A request for the change must be made in writing. The written
request must be Received by the Company at least 30 days prior to the new
Annuity Start Date and 30 days prior to the previous Annuity Start Date.
ANNUITY START AMOUNT
The Annuity Start Amount is applied to one of the Annuity Options listed on
page 19. The Annuity Start Amount is: (1) the Contract Value on the Annuity
Start Date; less (2) any Premium Taxes due or paid by the Company. Unless
otherwise directed by the Owner, Annuity Start Amount derived from Fixed
Account Contract Value will be applied to purchase a Fixed Annuity Option;
that derived from Separate Account Contract Value will be applied to
purchase a Variable Annuity Option.
WITHDRAWAL CHARGES
Withdrawal Charges are not applied to: (1) Annuity payments made under
Annuity Options 1-4, 7 and 8; or (2) those made under Annuity Options 5 and
6 that provide for payments over a period of at least 7 years. Withdrawal
Charges are applied to annuity payments under Annuity Options 5 and 6 that
provide for payments over a period of less than 7 years. See "Withdrawal
Provisions" on pages 12-15.
ANNUITY TABLES
Annuity Tables A through C show the guaranteed minimum amount of monthly
Annuity Payment per $1,000 of Annuity Start Amount for Annuity Options 1
through 4, 7 and 8 that applies to the first Variable Annuity Payment and
to each payment for Fixed Annuity Payments. The amount of each Annuity
Payment for Annuity Options 1 through 4 and 8 will depend on the
Annuitant's sex and age on the Annuity Start Date.
Tables A and B assume 1900 as the year of birth of hte Annuitant. To use
Tables A and B for an Annuitant born after 1900, the actual age is reduced
by 0.1 (one-tenth) of a year for each year the year of birth exceeds 1900.
For an Annuitant with a birth year prior to 1900, the actual age is
increased in a like manner. The actual age (in completed months) reduced or
increeased becomes the "adjusted age of the Annuitant." The guaranteed
payout rate is then found by interpolating the Annuitant's adjusted age
between the ages shown in Tables A and B. Tables A and B are based on the
1983 Table "A" mortality table and an interest rate of 3.5% per year. On
request the Company will furnish the amount of monthly Annuity Payment per
$1,000 applied for any ages not shown.
For Annuity Options 5 through 7, annuity rates based on age and sex are not
used to calculate annuity payments. Annuity Payments for Options 5 and 6
are computed without reference to the Annuity Tables.
ANNUITY PAYMENTS
The Annuity Option is shown on page 3. The Owner may choose any form of
Annuity Option that is allowed by the Company. The Owner may choose an
Annuity Option by written request. This request must be Received by the
Company at least 30 days prior to the Annuity Start Date. Several Annuity
Options are listed on pages 19 and 20. No Annuity Option can be selected
that requires the Company to make periodic payments of less than $50.00. If
no Annuity Option is chosen prior to the Annuity Start Date, the Company
will use Life with 10-Year Fixed Period Option. Each Annuity Option allows
for making Annuity Payments annually, semiannually, quarterly or monthly.
-17- BP 602AW1
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
CHANGE OF ANNUITY OPTION
Prior to the Annuity Start Date, the Owner may change the Annuity Option
chosen. The Owner must request the change in writing. This written request
must be Received by the Company at least 30 days prior to the Annuity Start
Date.
After the Annuity Start Date, the Owner may change the Annuity Option if
payments are being made under Annuity Options 5 through 7. The change must
be requested in writing.
After the change is recorded by the Company, it will be effective as of the
date it was requested. A change will not apply to any payment made or
action taken by the Company prior to the time it was recorded.
FIXED ANNUITY PAYMENTS
With respect to Fixed Annuity Payments, the amounts shown on the Tables are
the guaranteed minimum for each Annuity Payment for Annuity Options 1
through 4, 7 and 8.
VARIABLE ANNUITY PAYMENTS
With respect to Variable Annuity Payments, the amount shown on the Tables
is the guaranteed minimum first Annuity Payment, based on the assumed
interest rate of 3.5% for Annuity Options 1 through 4, 7 and 8. The amount
of each Annuity Payment after the first for these options is computed by
means of Annuity Units.
ANNUITY UNITS
The number of Annuity Units is found by dividing the first Annuity Payment
by the Annuity Unit Value for the selected Subaccount on the Annuity Start
Date. The number of Annuity Units for the Subaccount then remains constant,
unless a Transfer or Withdrawal of Annuity Units is made. After the first
Annuity Payment, the dollar amount of each subsequent Annuity Payment is
equal to the number of Annuity Units times the Annuity Unit Value for the
Subaccount on the due date of the Annuity Payment.
The Annuity Unit Value for each Subaccount was first set at $1.00. The
Annuity Unit Value for any subsequent Valuation Date is equal to (a) times
(b) times (c), where:
(a) is the Annuity Unit Value on the immediately preceding Valuation Date;
(b) is the Net Investment Factor for the Valuation Date;
(c) is a daily factor used to adjust for an assumed interest rate of 3.5%
per year used to determine the Annuity Payment amounts. The assumed
interest rate is reflected in the Annuity Tables.
NET INVESTMENT FACTOR
The Net Investment Factor for any Subaccount as of the end of any Valuation
Period is determined by dividing (1) by (2) and subtracting (3) from the
result, where:
1. is equal to:
(a) the net asset value per share of the mutual fund held in the
Subaccount, found as of the end of the current Valuation Period;
plus
(b) the per share amount of any dividend or capital gain distributions
paid by the Subaccount's underlying the mutual fund that is not
included in the net asset value per share; plus or minus
V 6020 I (R10-97) -18- BP 602AX1
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ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
NET INVESTMENT FACTOR (CONTINUED)
(c) a per share charge or credit for any taxes reserved for, which the
Company deems to have resulted from the operation of the Separate
Account or the Subaccounts; the operations of the Company with
respect to the Contract; or the payment of premium or acquisition
costs under the Contract.
2. is the net asset value per share of the Subaccount's underlying mutual
fund as of the end of the prior Valuation Period;
3. is a daily factor representing the Mortality and Expense Risk Charge
which is deducted from the Separate Account.
Underlying mutual funds may declare dividends on a daily basis and pay such
dividends once a month. The Net Investment Factor allows for the monthly
reinvestment of these daily dividends. As described above, the gains and
losses from each Subaccount are credited or charged against the Subaccount
without regard to the gains or losses in the Company or other Subaccounts.
ALTERNATE ANNUITY OPTION RATES
The Company may, at the time of election of an Annuity Option, offer more
favorable rates in lieu of the guaranteed rates shown in the Annuity
Tables.
ANNUITY OPTIONS
OPTION 1
LIFE OPTION: This option provides payments for the life of the Annuitant.
Table A shows some of the guaranteed rates for this option.
OPTION 2
LIFE WITH FIXED PERIOD OPTION: This option provides payments for the
life of the Annuitant. A fixed period of 5, 10, 15 or 20 years may be
chosen. Payments will made to the end of this period even if the
Annuitant dies prior to the end of the period. If the Annuitant dies before
receiving all the payments during the fixed period, the remaining payments
will be made to the Designated Beneficiary. Table A shows some of the
guaranteed rates for this option.
OPTION 3
LIFE WITH INSTALLMENT OR UNIT REFUND OPTION: This option provides payments
for the life of the Annuitant, with a period certain determined by dividing
the Annuity Start Amount by the amount of the first payment. A fixed number
of payments will be made even if the Annuitant dies. If the Annuitant dies
before receiving the fixed number of payments, any remaining payments will
be made to the Designated Beneficiary. Table A shows some of the guaranteed
rates for this option.
OPTION 4
JOINT AND LAST SURVIVOR OPTION: This option provides payments for the life
of the Annuitant and Joint Annuitant. Payments will made as long as either
is living. Table B shows some of the guaranteed rates for this option.
-19- BP 602AX1
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ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
OPTION 5
FIXED PERIOD OPTION: This option provides payments for a fixed number of
years between 5 and 20. If the Contract Value is held in the Fixed Account,
then the amount of the payments will vary as a result of the interest rate
(as adjusted periodically) credited on the Fixed Account. This rate is
guaranteed to be no less than the Guarantee Rate shown on page 3. If the
Contract Value is held in the Separate Account, then the amount of the
payments will vary as a result of the investment performance of the
Subaccounts chosen. If all the Annuitants die before receiving the fixed
number of payments, any remaining payments will be made to the Designated
Beneficiary.
OPTION 6
FIXED PAYMENT OPTION: This option provides a fixed payment amount. This
amount is paid until the amount applied, including daily interest
adjustments, is paid. If the Contract Value is held in the Fixed Account,
then the number of payments will vary as a result of the interest rate (as
adjusted periodically) credited on the Fixed Account. This rate is
guaranteed to be no less than the Guaranteed Rate shown on page 3. If the
Contract Value is held in the Separate Account, then the number of payments
will vary as a result of the investment performance of the Subaccounts
chosen. If all the Annuitants dies before receiving all the payments, any
remaining payments will be made to the Designated Beneficiary.
OPTION 7
PERIOD CERTAIN OPTION: This option provides payments for a fixed period of
5, 10, 15 or 20 years. Payments will be maade until the end of this period.
If the Annuitant dies prior to the end of hte period, the remaining
payments will be made to the Designated Beneficiary. Table C shows some of
the guaranteed rates for this option.
OPTION 8
JOINT AND CONTINGENT SURVIVOR OPTION: This option provides payments for the
life of the primary Annuitant. Payments will be made to the primary
Annuitant as long as he or she is living. Upon the deaath of the primary
Annuitant, payments will be made to the contingent Annuitant as long as he
or she is living. If the Contingent Annuitant is not living upon the death
of the Primary Annuitant, no payments will be made to the Contingent
Annuitant. Table B shows some of the guaranteed rates for this option.
V 6020 J (R10-97) -20- BP 602AY1
ANNUITY TABLES
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TABLE A
SETTLEMENT OPTIONS ONE, TWO, AND THREE
MINIMUM INITIAL MONTHLY INSTALLMENTS PER $1,000 OF AMOUNT APPLIED
--------------------------------------------------------------------------------
Option Two
Adjusted Year Fixed Period Ends
Age of Option One 5 10 15 20 Option Three
Annuitant Life Only Years Years Years Years Unit Refund
--------------------------------------------------------------------------------
MALE
55 4.99 4.97 4.91 4.80 4.66 4.73
56 5.09 5.07 5.00 4.88 4.72 4.81
57 5.20 5.17 5.10 4.97 4.78 4.90
58 5.32 5.29 5.20 5.05 4.85 4.99
59 5.44 5.41 5.31 5.14 4.91 5.08
60 5.57 5.53 5.42 5.23 4.97 5.18
61 5.71 5.67 5.54 5.33 5.04 5.29
62 5.86 5.81 5.67 5.42 5.10 5.40
63 6.02 5.97 5.80 5.52 5.16 5.51
64 6.20 6.13 5.94 5.62 5.22 5.63
65 6.38 6.31 6.08 5.72 5.28 5.76
66 6.58 6.49 6.23 5.82 5.33 5.90
67 6.79 6.69 6.38 5.92 5.38 6.04
68 7.02 6.90 6.54 6.02 5.43 6.19
69 7.26 7.12 6.71 6.12 5.48 6.35
70 5.50 5.48 5.39 5.24 5.01 5.20
71 7.80 7.60 7.05 6.30 5.55 6.69
72 8.09 7.86 7.22 6.39 5.59 6.88
73 8.41 8.13 7.40 6.47 5.62 7.07
74 8.75 8.42 7.57 6.55 5.64 7.27
75 9.12 8.72 7.75 6.62 5.66 7.49
FEMALE
55 4.54 4.53 4.51 4.46 4.38 4.40
56 4.62 4.61 4.58 4.53 4.44 4.47
57 4.71 4.70 4.66 4.60 4.51 4.54
58 4.80 4.79 4.75 4.68 4.57 4.62
59 4.90 4.88 4.84 4.76 4.64 4.70
60 5.00 4.99 4.93 4.84 4.70 4.78
61 5.11 5.09 5.03 4.93 4.77 4.87
62 5.23 5.21 5.14 5.02 4.84 4.96
63 5.36 5.33 5.25 5.12 4.91 5.06
64 5.49 5.46 5.37 5.21 4.98 5.17
65 5.64 5.60 5.50 5.31 5.05 5.28
66 5.79 5.75 5.63 5.42 5.12 5.39
67 5.95 5.91 5.77 5.53 5.19 5.52
68 6.13 6.08 5.91 5.63 5.25 5.65
69 6.32 6.26 6.07 5.74 5.32 5.79
70 6.53 6.46 6.23 5.86 5.37 5.94
71 6.75 6.67 6.40 5.97 5.43 6.09
72 6.99 6.89 6.58 6.08 5.48 6.26
73 7.26 7.13 6.76 6.18 5.52 6.44
74 7.54 7.39 6.95 6.29 5.57 6.63
75 7.85 7.67 7.14 6.39 5.60 6.83
Values not shown will be provided upon request. Annual, semiannual, or quarterly
installments can be determined by multiplying the monthly installments by
11.812853, 5.9572227, and 2.9914196 respectively.
-21- BP 602AY1
ANNUITY TABLES (CONTINUED)
--------------------------------------------------------------------------------
TABLE B
SETTLEMENT OPTIONS FOUR AND EIGHT
MINIMUM INITIAL MONTHLY INSTALLMENT PER $1,000 OF AMOUNT APPLIED
ADJUSTED AGE OF MALE AGE
FEMALE ANNUITANT 55 60 62 65 70 75
--------------------------------------------------------------------------------
55 4.16 4.27 4.30 4.35 4.42 4.47
60 4.34 4.51 4.57 4.66 4.78 4.86
62 4.41 4.61 4.68 4.79 4.94 5.04
65 4.51 4.76 4.85 4.99 5.20 5.35
70 4.66 4.99 5.13 5.34 5.67 5.95
75 4.78 5.19 5.37 5.66 6.16 6.63
Values not shown will be provided upon request. Annual, semiannual, or quarterly
installments can be determined by multiplying hte monthly installments by
11.812853, 5.9572227, and 2.9914196 respectively.
--------------------------------------------------------------------------------
TABLE C
SETTLEMENT OPTION SEVEN
MINIMUM INITIAL MONTHLY INSTALLMENT PER $1,000 OF AMOUNT APPLIED
PERIOD CERTAIN
5 YEARS 10 YEARS 15 YEARS 20 YEARS
--------------------------------------------------------------------------------
18.11 9.83 7.1 5.75
Values not shown will be provided upon request. Annual, semiannual, or quarterly
installments can be determined by multiplying the monthly installments by
11.812853, 5.9572227, and 2.9914196 respectively.
V 6020 K (R10-97) -22- BP 602AZ
PARKSTONE
VARIABLE ANNUITY
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
* Purchase Payments may be made until the earlier of the Annuity Start Date or
termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Start Date according to the
Contract provisions.
* Annuity Payments begin on the Annuity Start Date using the method specified
in this Contract.
* This Contract is Participating.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE AREE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" FOR DETAILS.)
[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
000 XX Xxxxxxxx, Xxxxxx, XX 00000-0001
0-000-000-0000
BP 602AP4
