EXHIBIT (4)(b)(ii)
IRA ENDORSEMENT
ENDORSEMENT
In order to qualify this contract as an Individual Retirement Annuity under
Section 408 of the Internal Revenue Code of 1986, as amended, (hereafter
referred to as The Code), the following provisions and restrictions are hereby
made applicable, notwithstanding any provisions to the contrary contained in the
policy. In the case of a conflict between the policy and the endorsement, the
endorsement overrides the policy.
ARTICLE 1 - Non-Transferability and Non-Forfeitability
The owner may not change the ownership of the policy and the policy may not be
sold, assigned or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose to anyone. The owner's
rights shall at all times be non-forfeitable.
ARTICLE 2 - Premium Limitation
Except in the case of a rollover contribution, as that term is described in
Section 402(a)(5), 402(a)(6), 402(a)(7); 403(a)(4), 403(b)(8), or 408(d)(3) of
The Code, or a direct transfer from one Individual Retirement Annuity issued by
the Company to another Individual Retirement Annuity issued by the Company, no
premiums will be accepted unless they are in cash, and the total of such
premiums shall not exceed $2000 for any taxable year. If the premium consists
entirely of an employer contribution under a simplified employee pension, as
such is defined in Section 408(k) of The Code, the maximum amount of premium
stated in paragraph 1 of this article shall be increased by the amount of this
limitation in effect under section 415(c)(1)(A) of The Code.
The minimum premium required for each additional premium payment under this IRA
is $50. The sentence stating that "Each additional premium payment must be at
least $1,000" found in the Premium Payments section of the policy is deleted.
ARTICLE 3 - Refund of Premiums
Any refund of premiums (other than those attributable to excess contributions)
will be applied towards the payment of future premiums or the purchase of
additional benefits before the close of the calendar year following the year of
the refund.
ARTICLE 4 - Distributions Before Death Of The Owner
Federal tax law requires that minimum distributions from individual retirement
arrangements, including Individual Retirement Annuities, begin not later than
April 1 of the calendar year following the year in which the owner attains age
70 1/2. In order to comply with this requirement, the Surrender Value of this
annuity may be distributed as a lump sum or may be distributed in equal or
substantially equal amounts over (a) the life of the owner, or the lives of the
owner and a designated beneficiary, or (b) a period certain not extending beyond
the life expectancy of the owner, or the joint life expectancy of the owner and
a designated beneficiary.
If distributions are to be made to the owner in the manner described in (a) or
(b) of this Article, the amount to be distributed each year, beginning with the
first calendar year for which
distributions are required and then for each succeeding calendar year, shall not
be less than the quotient obtained by the dividing the Surrender Value as of the
beginning of each year by the lesser of (1) the applicable life expectancy or
(2) if the owner's spouse is not the designated beneficiary, the applicable
divisor determined from the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of
the Proposed Income Tax Regulations. For purposes of this calculation only,
"Surrender Value at the beginning of each year" will include amounts not in this
Individual Retirement Annuity at the beginning of the year because they have
been withdrawn for the purpose of making a rollover contribution to another
individual retirement plan. Distributions after the death of the owner shall be
distributed using the applicable life expectancy as the relevant divisor without
regard to Section 1.401(a)(9)-2 of the Proposed Income Tax Regulations.
Life expectancy and joint and last survivor expectancy are computed by use of
the expected return multiples in Tables V of Section 1.72-9 of the Income Tax
Regulations. Unless otherwise elected by the owner by the time distributions are
required to begin, life expectancies shall be subsequent years. The life
expectancy of a non-spouse beneficiary may not be recalculated, instead life
expectancy will be calculated using the attained age of such beneficiary during
the calendar year in which distributions are required to begin pursuant to this
section, and payments for subsequent years shall be calculated based on such
life expectancy reduced by one for each calendar year which has elapsed since
the calendar year life expectancy was first calculated. Distributions under this
annuity shall be made in accordance with the requirements of Section 401(a)(9)
of the Code and the regulations thereunder.
ARTICLE 5 - Distributions Upon Death Of The Owner
If the owner dies after distribution of his or her interest has commenced, the
remaining portion of such interest will continue to be distributed at least as
rapidly as under the method of distribution being used prior to the owner's
death.
If the owner dies before distribution of his or her interest commences, the
owner's entire interest will be distributed in accordance with one of the
following four provisions: (a) The owner's entire interest will be paid within
five years after the owner's death. (b) If the owner's interest is payable to a
designated beneficiary and the owner has not elected (a) above, then the entire
interest will be distributed in substantially equal installments over the life
or life expectancy of the designated beneficiary commencing no later than one
year after the date of the owner's death. The designated beneficiary may elect
at any time to receive greater payments to the extent of payments guaranteed to
be made. (c) If the designated beneficiary is the owner's surviving spouse, the
spouse may elect within the five year period commencing with the owner's date of
death to receive equal or substantially equal payments over the life or life
expectancy of the surviving spouse commencing at any date prior to the date on
which the deceased owner would have attained age 70 1/2. The surviving spouse
may increase the frequency or amount of these payments at any time to the extent
of any payments guaranteed to be made. (d) If the designated beneficiary is the
owner's surviving spouse, the spouse may treat the contract as his or her own
individual retirement annuity. This election will be deemed to have been made if
such surviving spouse makes a regular IRA contribution to the contract, makes a
rollover to or from such contract, or fails to elect any of the above three
provisions.
For purposes of this Article 5, payments will be calculated by use of he
expected return multiples in Tables V and VI of Section 1.72-9 of the Income Tax
Regulations. Unless otherwise elected by the surviving spouse by the time
distributions are required to begin, life expectancies shall be recalculated
annually. Such election shall be irrevocable as to the surviving spouse and
shall
apply to all subsequent years. In the case of any other designated beneficiary,
life expectancy will be calculated at the time payment first commences and
payments for any 12-consecutive month period will be based on such life
expectancy minus the number of whole years passed since distribution first
commenced.
Any amount paid to a child of the owner will be treated as if it had been paid
to the surviving spouse if the remainder of the interest becomes payable to the
surviving spouse when the child reaches the age of majority.
ARTICLE 6 - Applicant
The applicant for the policy is the owner/annuitant of the policy. This policy
is established for the exclusive benefit of the owner(s) or his or her
beneficiaries.
ARTICLE 7 - Annual Reports
The Company will furnish annual calendar year reports concerning the status of
the annuity.
ARTICLE 8 - Amendments
The Company shall have the right, solely at its discretion, to amend any and all
provisions of the policy in order to maintain qualification of the policy as an
Individual Retirement Annuity under Section 408 of The Code. Such endorsement
will be effective with respect to the annuitant and this policy upon receipt by
the owner. The owner has the right to refuse to accept any amendment; however,
the Company shall not be held liable for any such tax consequences incurred by
the owner as a result of his or her refusal to accept such amendment.
For THE LIFE INSURANCE COMPANY OF VIRGINIA
Xxxx X. Xxxxxxxx, III
President
