EXHIBIT 4(c)
[PRUDENTIAL FINANCIAL LOGO] Pruco Life Insurance Company of New Jersey
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
a Prudential Financial company
This is an annuity contract. Subject to the provisions of the Contract, and in
consideration of any Purchase Payments you make and we accept, we will make
Annuity Payments starting on the Annuity Date shown on the Contract Data pages.
Please read the Contract carefully; it is a legal contract between you and Pruco
Life Insurance Company of New Jersey. Expense charges applicable to the Contract
are shown on the Contract Data pages. If you have a question about the Contract,
or a claim, see your representative or contact the Annuity Service Center.
RIGHT TO CANCEL CONTRACT
This Contract may be returned within 10 days after you receive it. It can be
mailed or delivered to either us, at the Annuity Service Center, or the
representative who sold it to you. Return of this Contract by mail is effective
on being postmarked, properly addressed and postage prepaid. The returned
Contract will be cancelled upon our receipt, and we will return an amount equal
to (A) the portion of the Purchase Payment(s), including any fees or other
charges, allocated to any of the Interest Rate Investment Options, and (B) the
sum of (i) the difference between Purchase Payments received, including any fees
or other charges, and the amount(s) allocated to the Variable Investment Options
under the Contract, and (ii) the Contract Value as of the date the Contract is
mailed or delivered to us or to the representative who sold it to you. If you
exercise your Right to Cancel the Contract, the entire Credit will be
recaptured.
AFTER THE RIGHT TO CANCEL PERIOD ENDS, WE RESERVE THE RIGHT TO RECAPTURE ANY
CREDIT THAT WE GRANTED EITHER WITHIN ONE YEAR PRIOR TO THE OWNER'S DEATH OR
AFTER THE OWNER'S DEATH.
READ YOUR CONTRACT CAREFULLY
Signed for Pruco Life Insurance Company of New Jersey,
A New Jersey Corporation.
/s/ XXXXXXXX X. XXXXXX /s/ XXXXXX XXXXX
Secretary President
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED VARIABLE
ANNUITY CONTRACT
NONPARTICIPATING
ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT.
TABLE OF CONTENTS
CONTRACT DATA PAGES..........................................................3
DEFINITIONS..................................................................4
PURCHASE PAYMENTS............................................................6
CREDITS......................................................................6
CONTRACT VALUE...............................................................7
VARIABLE SEPARATE ACCOUNT....................................................7
FIXED RATE INVESTMENT OPTION.................................................8
DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION.....................9
CONTRACT MAINTENANCE CHARGE..................................................9
TRANSFERS...................................................................10
WITHDRAWALS.................................................................10
GUARANTEED MINIMUM DEATH BENEFIT............................................11
SPOUSAL CONTINUANCE BENEFIT.................................................13
ANNUITY AND SETTLEMENT OPTIONS..............................................14
BENEFICIARY.................................................................15
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS FROM THE SEPARATE ACCOUNT...15
GENERAL PROVISIONS..........................................................16
VALUES AND BENEFITS.........................................................16
ANNUITY SETTLEMENTS TABLES..................................................17
Page 2
CONTRACT DATA
OWNER: [Xxxx Xxx] SEX: [M] AGE AT ISSUE: [35]
JOINT OWNER: [Xxxx Xxx] SEX: [F] AGE AT ISSUE: [35]
ANNUITANT: [Xxxx Xxx] SEX: [M] AGE AT ISSUE: [35]
CO-ANNUITANT: [Xxxx Xxx] SEX: [F] AGE AT ISSUE: [35]
CONTRACT NUMBER: [12345] CONTRACT DATE:[April 1, 2002]
PLAN TYPE: [Non-Qualified] ANNUITY DATE: [April 1, 2062]
PURCHASE PAYMENTS:
INITIAL PURCHASE PAYMENT: [$10,000.00]
MINIMUM SUBSEQUENT PURCHASE PAYMENT: $500. The Minimum Subsequent
Purchase Payment for automatic purchase plans, if available, is $100.
ANNUAL PURCHASE PAYMENT LIMITS: The total of all Purchase Payments (net of
Purchase Payments withdrawn) made into this Contract in the first Contract
Year may not exceed $7,000,000. The total of all Purchase Payments (net of
Purchase Payments withdrawn) made into this Contract in any Contract Year
after the first Contract Year may not exceed $2,000,000. Purchase Payments
of greater value may be allowed with our prior approval.
AGGREGATE PURCHASE PAYMENT LIMIT: The total of all Purchase Payments (net of
Purchase Payments withdrawn) made into this Contract may not exceed
$7,000,000. Purchase Payments of greater value may be allowed with our prior
approval.
CREDIT PAYMENT:
The credit that we pay with respect to any Purchase Payment depends on
(i) the age of the sole or older of the Owner or Joint Owner on the date
on which the Purchase Payment is made and (ii) the amount of the
Purchase Payment. Specifically,
- If the sole Owner or the older of the Owner or Joint Owner is age 80 or
younger on the date that the Purchase Payment is made, then we will add a
Credit to the Purchase Payment as follows: 4% if the Purchase Payment is
less than $250,000 or 5% if the Purchase Payment is greater than or equal to
$250,000, but less than $1,000,000; and 6% if the Purchase Payment is
greater than or equal to $1,000,000.
- If the sole Owner or the older of the Owner or Joint Owner is age 81 or more
at the time that the Purchase Payment is made, then we will add a Credit
equal to 3% of the Purchase Payment.
THE INSURANCE CHARGE WILL BE 0.10% LESS AND THE WITHDRAWAL CHARGE SCHEDULE WILL
BE LESS (7%, 6%, 5%, 4%, 3%, 2%, 1%) IF THE CONTRACT DID NOT CONTAIN THE CREDIT.
BENEFICIARY:
As designated by Owner at Contract Date, unless changed in accordance with
the Contract provisions.
CONTRACT MAINTENANCE CHARGE:
If your Contract Value is less than $75,000, we will charge a Contract
Maintenance Charge of the lesser of $30 or 2% of the Contract Value. This
charge is deducted on the Contract Anniversary and when a surrender of the
Contract occurs, if the Contract Value at the time is then less than
$75,000. The Contract Maintenance Charge will be deducted on a pro-rata
basis from all Allocation Options to which your Contract Value is allocated.
We reserve the right to raise the Contract Value amount over which we will
waive the Contract Maintenance Charge.
Page 3
INSURANCE CHARGE:
This charge depends on whether you have elected the Guaranteed Minimum Death
Benefit ("GMDB") feature. This charge is deducted daily from the assets in
each of the Subaccounts. If you do not elect the GMDB feature, you do not
elect a GMDB Protected Value option, and your death benefit is equal to the
base death benefit as described in the Guaranteed Minimum Death Benefit
section of the Contract.
[ ] You have not elected the GMDB feature. Therefore, the daily rate is
0.00407916%, which is equivalent to an annual rate of 1.50%.
[ ] You have elected the GMDB feature and the GMDB Protected Value option of
the GMDB Step-Up. Therefore, the daily rate is 0.00461849%, which is
equivalent to an annual rate of 1.70%.
ALLOCATION GUIDELINES:
Currently, you may select any Allocation Option which is available at the
time the Purchase Payment or transfer is made, with exception of the DCA
Fixed Rate Investment Option for which there may be certain limitations. An
amount of at least $2000 must be allocated to the DCA Fixed Rate Investment
Option, and at least 1% of the Invested Purchase Payment must be allocated
to any other Allocation Option. Allocations made pursuant to automatic
rebalancing or dollar cost averaging (not part of the DCA Program) are not
subject to these limitations. We reserve the right to limit the availability
of the Allocation Options, if necessary, in order to comply with federal,
state or local law.
Page 3A
ALLOCATION OPTIONS:
VARIABLE INVESTMENT OPTIONS:
The following variable investment options are available through allocation
to subaccounts of the Pruco Life of New Jersey Flexible Premium Variable
Annuity Account. We reserve the right to limit the availability of the below
options, if necessary, in order to comply with federal, state or local law.
[THE PRUDENTIAL SERIES FUND, INC.
Prudential Equity Portfolio
Prudential Global Portfolio
Prudential Xxxxxxxx Portfolio
Prudential Money Market Portfolio
Prudential Stock Index Portfolio
Prudential Value Portfolio
SP Aggressive Growth Asset Allocation Portfolio
SP AIM Aggressive Growth Portfolio
SP AIM Core Equity Portfolio
SP Alliance Large Cap Growth Portfolio
SP Alliance Technology Portfolio
SP Balanced Asset Allocation Portfolio
SP Conservative Asset Allocation Portfolio
XX Xxxxx Value Portfolio
SP Deutsche International Equity Portfolio
SP Growth Asset Allocation Portfolio
SP INVESCO Small Company Growth Portfolio
XX Xxxxxxxx International Growth Portfolio
SP Large Cap Value Portfolio
SP MFS Capital Opportunities Portfolio
SP MFS Mid Cap Growth Portfolio
SP PIMCO High Yield Portfolio
SP PIMCO Total Return Portfolio
SP Prudential U.S. Emerging Growth Portfolio
SP Small/Mid Cap Value Portfolio
SP Strategic Partners Focused Growth Portfolio
JANUS ASPEN SERIES
Janus Aspen Series Growth Portfolio - Service Shares]
Page 3B
INTEREST RATE INVESTMENT OPTIONS:
The following interest rate investment options are currently available. We
may add other options in the future.
DCA FIXED RATE INVESTMENT OPTION:
MINIMUM GUARANTEED INTEREST RATE: 3%
INITIAL INTEREST SEGMENT INTEREST RATE FOR 6 MONTH OPTION: [7%]
INITIAL INTEREST SEGMENT INTEREST RATE FOR 12 MONTH OPTION: [8%]
FIXED RATE INVESTMENT OPTION:
Minimum Interest Crediting Rate: 3%
INITIAL INTEREST SEGMENT INTEREST RATE: [5%]
INITIAL BASE INTEREST CREDITING RATE: [4%]
INITIAL ADDITIONAL INTEREST CREDITING RATE: [1%]
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: Currently, there are no limits on the number
of transfers that can be made among Subaccounts. We reserve the right to
change this, but the Owner will always be allowed at least 12 transfers
among Subaccounts in a Contract Year.
TRANSFER CHARGE: The Transfer Charge for each transfer after the first 12 in
a Contract Year is $25. The charge is taken pro-rata from the Allocation
Options from which the transfer is made. Transfers made due to automatic
rebalancing and dollar cost-averaging (whether or not part of a DCA Program)
will not be counted for purposes of the Transfer Charge.
MINIMUM AMOUNT TO BE TRANSFERRED: Subject to the restrictions contained in
the Contract on transfers, the minimum transfer amount is $250 or your
entire interest in any Allocation Option, if less. This requirement is
waived if the transfer is pursuant to automatic rebalancing or dollar
cost-averaging. The minimum periodic transfer amount for amounts transferred
pursuant to the dollar cost averaging feature or from the DCA Fixed Rate
Investment Option under a DCA Program is $100.
Page 3C
WITHDRAWALS:
WITHDRAWAL CHARGE: The Withdrawal Charge is a percentage of the amount
withdrawn that is subject to a charge, and depends on the number of Contract
Anniversaries that have elapsed since a Purchase Payment was made.
Number of Contract Withdrawal
Anniversaries Since Date Charge
of Each Purchase
Payment
------------------------ ----------
0 8%
1 8%
2 8%
3 8%
4 7%
5 6%
6 5%
7 0%
CHARGE-FREE AMOUNT: A certain amount (the Charge-Free Amount) may be
withdrawn without incurring a Withdrawal Charge. Prior to the first Contract
Anniversary, the Charge-Free Amount equal to 10% of the initial Purchase
Payment. The Charge-Free Amount available in any Contract Year after the
first is calculated on the Contract Anniversary date. The Charge-Free Amount
in any Contract Year after the first is equal to 10% of the sum of gross
Purchase Payments that are subject to Withdrawal Charges as of the Contract
Anniversary date. Purchase Payments subject to a Withdrawal Charge are
withdrawn on a first-in, first-out basis for purposes of determining the
Charge-Free Amount.
MINIMUM AMOUNT WHICH MAY BE WITHDRAWN: The minimum amount which may be
withdrawn is $250. The minimum amount which may be withdrawn under a
systematic withdrawal plan is $100.
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN THE CONTRACT AFTER A WITHDRAWAL:
The minimum Contract Value which must remain in the Contract in order to
keep the Contract inforce after a withdrawal is $2,000.
ENDORSEMENTS:
[Individual Retirement Annuity Endorsement]
ANNUITY SERVICE CENTER:
[Annuity Service Center
P.O. Box 7960
Philadelphia, PA 19101]
Page 3D
DEFINITIONS
ACCUMULATION PERIOD: The period from, and including, the Contract Date to, but
excluding, the Annuity Date.
ADDITIONAL INTEREST CREDITING RATE: A rate of interest credited to amounts
allocated to the Fixed Rate Investment Option. The Additional Interest Crediting
Rate will be declared on or before the date on which allocations are made. The
Additional Interest Crediting Rate will only be credited until the first rate
change date for each such allocation. The Additional Interest Crediting Rate
will not apply to amounts transferred to the Fixed Rate Investment Option from
any other Allocation Option.
ADJUSTED CONTRACT VALUE: The Contract Value as of the Annuity Date less any
applicable charges for any type of tax (or component thereof) measured by or
based on the amount of Purchase Payment we receive. The applicable Annuity Table
is applied to this amount to determine the initial Annuity Payment.
ALLOCATION OPTIONS: Those investment options available under the Contract as of
any given time to which Contract Value may be allocated. Allocation Options as
of the Contract Date are shown on the Contract Data pages.
ANNUITANT: The person named on the first page upon whose continuation of life
any Annuity Payment involving life contingencies depends. If the Annuitant dies
before the Annuity Date, the Co-Annuitant, if applicable, becomes the Annuitant,
if the requirements for changing Annuity Date are met (see definition of Annuity
Date). If there is no surviving or eligible Co-Annuitant, and the Annuitant was
not the Owner, the Owner becomes the Annuitant. You then have 60 days from the
date we receive due proof of death of the Annuitant or Co-Annuitant to name a
new Annuitant. If no new Annuitant is named during that 60 day period, the Owner
will remain the Annuitant. You may not change an Annuitant or Co-Annuitant and
may add or remove an Annuitant or Co-Annuitant only with our prior approval.
ANNUITY DATE: The date the first Annuity or Settlement Payment to the Payee is
due. The Annuity Date is shown on the original Contract Data pages. You must
have our permission to change the Annuity Date. The maximum annuity age is the
later of age 90 or the 10th Contract Anniversary. If there is a new Annuitant
due to the death of the Annuitant, and the new Annuitant is older than the prior
Annuitant, the Annuity Date will be based on the age of the new Annuitant;
however, any such changed Annuity Date must be at least one year after the
Contract Date, must be earlier than the date shown on the Contract Data pages,
cannot be later than the Contract Anniversary next following the new Annuitant's
90th birthday, or, if later, the tenth Contract Anniversary, and must be
consistent with applicable law at the time.
ANNUITY OR SETTLEMENT PAYMENTS: The series of payments made to you or any named
payee after the Annuity Date as described under the Annuity or Settlement Option
selected.
ANNUITY PERIOD: The period of time, beginning on the Annuity Date, during which
Annuity or Settlement Payments are made.
ANNUITY SERVICE CENTER: The office indicated on the Contract Data pages to which
notices, requests and Purchase Payments must be sent. All sums payable to us
under the Contract must be sent to the Annuity Service Center. The Annuity
Service Center address may be changed at any time. You will be notified in
advance and in writing of any change in address.
BASE INTEREST CREDITING RATE: A rate of interest credited to amounts allocated
or transferred to the Fixed Rate Investment Option. The Base Interest Crediting
Rate will be declared on or before the date on which allocations or transfers
are made.
BENEFICARY: The person(s) or entity(ies) who has the right to receive the death
benefit upon the death of the first to die of the Owner or Joint Owner. The
Owner must be the primary Beneficiary of the Joint Owner, and the Joint Owner
must be the primary Beneficiary of the Owner.
BUSINESS DAY: Any day the New York Stock Exchange and the Company are open for
business.
CHARGE-FREE AMOUNT: The Charge-Free Amount is a portion of the Contract Value
that may be withdrawn without incurring a Withdrawal Change.
CO-ANNUITANT: The person shown on the Contract Data pages who becomes the
Annuitant upon the death of the Annuitant before the Annuity Date. No
Co-Annuitant may be designated if the Owner is a non-natural person.
COMPANY: Pruco Life Insurance Company of New Jersey, a New Jersey corporation.
Page 4
CONTRACT ANNIVERSARY: The same day and month as the Contract Date in each later
year.
CONTRACT DATE: The date shown on the Contract Data pages on which the first
Contract Year begins.
CONTRACT SURRENDER VALUE: The Contract Value less any applicable Withdrawal
Charge, Credit recapture, Contract Maintenance Charge or charge for any type of
tax (or component thereof) measured by or based on the amount of Purchase
Payment we receive.
CONTRACT VALUE: The dollar value as of any Business Day prior to the Annuity
Date of all amounts accumulated under this Contract.
CONTRACT YEAR: A year which starts on the Contract Date or on a Contract
Anniversary.
CREDIT: An amount we add to your Contract Value at the time an Invested Purchase
Payment is credited to the Contract Value.
DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION: A portion of the
General Account into which you may allocate Invested Purchase Payments. It does
not share in the investment experience of any Subaccount of the Variable
Separate Account.
DOLLAR COST AVERAGING (DCA) INTEREST SEGMENT: A DCA Interest Segment is a
portion of the DCA Option that is created whenever you allocate all or part of
an Invested Purchase Payment to the DCA Option.
DOLLAR COST AVERAGING (DCA) PROGRAM: A DCA Program permits you to allocate all
or part of an Invested Purchase Payment to the DCA Option and automatically
transfer amounts on a periodic basis from the DCA Option to selected Allocation
Options for a given period of time.
EARNINGS: The excess of the Contract Value over the sum of all Purchase Payments
made and not yet withdrawn.
GOOD ORDER: An instruction received at the Annuity Service Center, utilizing
such forms, signatures and datings as we require, that is sufficiently complete
and clear that we do not need to exercise any discretion to follow such
instructions. We will notify you if an instruction is not in Good Order.
INTEREST RATE INVESTMENT OPTIONS: Those interest rate option(s) available under
the Contract as of any given time. Interest Rate Investment Option(s) as of the
Contract Date are shown on the Contract Data pages.
INTEREST SEGMENT INTEREST RATE: The rate at which interest is credited to a
one-year interest segment. It is equal to the sum of the Base Interest Crediting
Rate and any applicable Additional Interest Crediting Rate.
INVESTED PURCHASE PAYMENTS: The balance of each Purchase Payment after we make
any applicable deduction for charges for any type of tax (or component thereof)
measured by or based on the amount of Purchase Payment we receive.
JOINT OWNER: The person, if named on the Contract Data pages as the Joint Owner,
who shares ownership rights with the Owner, as defined under this Contract, and
has the right to receive a death benefit upon the death of the Owner. You may
add, change, or remove a Joint Owner, subject to our rules. The Contract may
never have more than one Joint Owner. No Joint Owner is allowed for IRAs or
other tax-qualified contracts. Unmarried persons who wish to own the Contract
jointly should consult with their tax advisor.
OWNER: The person or entity named on the Contract Data pages who has ownership
rights as defined under the Contract, provided that, if a Joint Owner is named,
the Owner shares ownership rights with the Joint Owner, as defined under this
Contract, and has the right to receive a death benefit upon the death of the
Joint Owner. You may change the Owner subject to our rules. Any change of an
Owner will be effective on the date the change request is signed, provided we
receive such request in Good Order .
PAYEE: The person who has a right to receive Annuity or Settlement Payments
under the Annuity and Settlement Options provision of this Contract. The Payee
can be designated as revocable or irrevocable at your discretion if you do not
designate a Payee at least 5 Business Days before the Annuity date, the Owner
will become the Payee.
PURCHASE PAYMENT: A payment you make to this Contract.
Page 5
SUBACCOUNT: Variable Separate Account assets are divided in Subaccounts. Assets
of each Subaccount will be invested in shares of a Variable Investment Option
VARIABLE INVESTMENT OPTION: Those investment options available under the Contact
through the Subaccounts as of any given time. Variable Investments Options as of
the Contract Date are shown on the Contract Data pages.
VARIABLE SEPARATE ACCOUNT: A segregated asset account maintained by us to
support this and certain other contracts. The segregated asset account(s)
available as of the Contract Date is shown on the Contract Data pages.
WE, OUR AND US: Pruco Life Insurance Company of New Jersey.
WITHDRAWAL CHARGES: A charge assessed on partial or full withdrawals during the
Withdrawal Charge Period. The Withdrawal Charge equals a percentage, shown on
the Contract Data pages, of the amount subject to the charge.
WITHDRAWAL CHARGE PERIOD: The number of Contract Anniversaries since each
Purchase Payment during which Withdrawal Charges are applied to withdrawals of
amounts in the Contract. The Withdrawal Charge Period is shown on the Contract
Data pages.
YOU AND YOUR: The Owner of the Contract if there is no Joint Owner; if there is
a Joint Owner, the Owner and Joint Owner acting jointly. If we receive written
authorization from both the Owner and Joint Owner in Good Order, then, upon our
consent, we will allow either to represent the entire ownership interest in the
Contract, until that authorization has been revoked by either party. This
Contract will treat the Owner as having contributed 100% of the Purchase
Payments. Therefore, we will treat the Owner as the taxpayer with respect to all
distributions made under the Contract while he or she is the Owner, whether or
not a Joint Owner is also named.
PURCHASE PAYMENTS
PURCHASE PAYMENTS: The initial Purchase Payment must be paid on the Contract
Date. In general, subsequent Purchase Payments may be made at any time before
the Annuity Date. However, no Purchase Payments may be made on or after the sole
or older of the Owner's or Joint Owner's, or Annuitant's 85th birthday. The
Minimum Subsequent Purchase Payment, Annual Purchase Payment Limits and
Aggregate Purchase Payment Limit are shown on the Contract Data pages.
ALLOCATION OF PURCHASE PAYMENTS: Invested Purchase Payments are allocated to one
or more of the Allocation Options in accordance with your selection. The
allocation of the initial Invested Purchase Payment is made in accordance with
your selection made on the Contract Date. You may change the allocation of
future Invested Purchase Payments at any time. If, after the Initial Purchase
Payment, we receive a Purchase Payment without allocation instructions, we will
allocate the corresponding Invested Purchase Payment in the same proportion as
the most recent Purchase Payment you made (unless that was a Purchase Payment
you directed us to allocate on a one-time only basis.) Assuming that all other
requirements are received in Good Order, we reserve the right to allocate your
initial Invested Purchase Payment to the Money Market Subaccount until we
receive your allocation selection. All allocations of Invested Purchase Payments
are subject to the Allocation Guidelines shown on the Contract Data pages.
Currently, you may select as many of the available Allocation Options as you
wish. However, we reserve the right to limit this in the future, if necessary,
in order to comply with federal or state law, subject to regulatory approval. If
the Purchase Payment and forms required to issue a Contract are in Good Order,
the initial Invested Purchase Payment will be credited to your Contract within
two (2) Business Days after receipt at the Annuity Service Center. Additional
Invested Purchase Payments will be credited to your Contract as of the Business
Day they are received.
CREDITS
We add a Credit amount to your Contract Value with each Invested Purchase
Payment. Each Credit amount is allocated to the Contract Value when the
applicable Invested Purchase Payment is credited to your Contract Value. The
Credit is allocated to the Allocation Options in the same percentage as the
Invested Purchase Payment to which it relates.
The Credit percentage may be determined by the amount of the Purchase Payment.
The Credit percentage for your initial Purchase Payment is shown on the Contract
Data pages. The Credit percentage on subsequent Purchase Payments will vary, but
is guaranteed to be at least 3% of the Purchase Payment.
We will recapture all Credits if you terminate the Contract during the Right To
Cancel period specified on the cover of this Contract. After the Right To Cancel
period ends, we reserve the right to recapture any Credit that we granted either
within one year prior to the Owner's death or after the Owner's death.
Page 6
CONTRACT VALUE
Your Contract Value is the total of all amounts credited to your Contract as of
any Business Day as a result of your initial Invested Purchase Payment and the
increases and decreases described below.
On the Contract Date, the Contract Value is equal to the initial Invested
Purchase Payment and the Credit amount. After that, the Contract Value as of any
Business Day is determined by starting with the Contract Value at the end of the
previous day and adjusting it for items that increase it or decrease it.
Items that increase the Contract Value are: Invested Purchase Payments, Credit
amounts, interest credited under an Interest Rate Investment Option, positive
investment performance in a Subaccount, and any adjustment under the Spousal
Continuance Benefit.
Items that decrease the Contract Value are: withdrawals and the charges and
Credit recaptures associated with them; negative investment performance in a
Subaccount; Insurance Charge; Contract Maintenance Charge, if applicable;
Transfer Charge; and charges for any type of tax (or component thereof) measured
by or based on the amount of Purchase Payment we receive.
Investment results, interest credited under the Fixed Rate Investment Option, if
applicable, and interest credited under the DCA Fixed Rate Investment Option, if
applicable, are applied daily and the Insurance Charge is deducted daily. The
Contract Maintenance Charge is deducted annually as of the Contract Anniversary
and upon a total withdrawal. Other charges are assessed only if the appropriate
event occurs.
To determine the value of your Contract, we use a unit of measure called an
accumulation unit. Each day we determine the value of an accumulation unit for
each of the Variable Investment Options. We do this by: (1) adding up the total
amount of money allocated to a specific investment option; (2) subtracting from
that amount insurance charges and any other applicable charges, such as for
taxes; and (3) dividing this amount by the number of outstanding accumulation
units.
When you make a Purchase Payment, we credit your Contract with accumulation
units of the subaccount or subaccounts selected. The number of accumulation
units credited to your Contract is determined by dividing the amount of the
Purchase Payment allocated to an investment option by the unit price of the
accumulation unit for that investment option. The number of accumulation units
canceled by withdrawals or charges (other than those expressed as a percent of
Contract Value) is equal to the amount of the withdrawal or charge divided by
the unit price of the accumulation unit for the investment option(s) from which
the withdrawal or charge is made. We calculate the unit price for each
investment option after the New York Stock Exchange closes each day and then
credit your Contract. The value of the accumulation units can increase,
decrease, or remain the same from day to day.
VARIABLE SEPARATE ACCOUNT
THE VARIABLE SEPARATE ACCOUNT: The Variable Separate Account is designated on
the Contract Data pages. It consists of assets we have set aside and have kept
separate from the rest of our assets and those of our other separate accounts.
The assets of the Variable Separate Account, equal to reserves and other
liabilities of your Contract and those of other owners, will not be charged with
liabilities arising out of any other business we may conduct. The operation of
the Variable Separate Account is subject to the laws of the state in which the
Contract is delivered.
The Variable Separate Account assets are divided into Subaccounts. The assets of
the Subaccount are allocated to the Variable Investment Option(s) shown on the
Contract Data pages. We may restructure, eliminate or combine Subaccounts or add
to or eliminate Variable Investment Option(s) from those shown. You may be
permitted to transfer your Contract Value or allocate Invested Purchase Payments
to the additional Subacount(s). However, the right to make such transfers or
allocations will be limited by any terms and conditions imposed to comply with
federal or state law, subject to regulatory approval.
Should the shares of any Variable Investment Option(s) become unavailable for
investment by the Variable Separate Account, we deem further investment in the
shares inappropriate, or if required for tax reasons, we may limit further
purchase of such shares or substitute shares of another Variable Investment
Option for shares already purchased.
VALUATION OF ASSETS: The value of the shares held by the Subaccounts in the
Variable Investment Options will be based on the net asset value of the
Investment Option on each Business Day.
INSURANCE CHARGE: Each Business Day, we deduct an Insurance Charge from the
Subaccounts of the Variable Separate Account which is equivalent, on an annual
basis, to the amount shown on the Contract Data pages. The amount of the
Insurance Charge is based on whether you have elected the GMDB.
Page 7
FIXED RATE INVESTMENT OPTION
INTEREST RATES: The Initial Interest Segment Interest Rate applicable to the
Fixed Rate Investment Option on the Contract Date is shown on the Contract Data
page. It is equal to the sum of the Initial Base Interest Crediting Rate and any
applicable Initial Additional Interest Crediting Rate. The Initial Base Interest
Crediting Rate and the Initial Additional Interest Crediting Rate are shown on
the Contract Data page. We will credit interest to the portion of the initial
Purchase Payment, if any, allocated to the Fixed Rate Investment Option at the
daily equivalent of these rates.
The Base Interest Crediting Rate is credited on allocations and transfers to the
Fixed Rate Investment Option. The rate will be declared when allocations or
transfers are made. The declared Base Interest Crediting Rate will never be less
than the Minimum Interest Crediting Rate shown on the Contract Data page.
The Additional Interest Crediting Rate is in addition to the Base Interest
Crediting Rate we credit. The Additional Interest Crediting Rate is credited on
allocations to the Fixed Rate Investment Option. Additional Interest Crediting
Rates for allocations to this Option will be declared when those allocations are
made. This rate will only be credited until the first rate change date for such
allocation. We reserve the right to limit the availability of the Additional
Interest Crediting Rate. Transfers to the Fixed Rate Investment Option are not
eligible to receive the Additional Interest Crediting Rate.
ONE-YEAR INTEREST SEGMENT: A one-year interest segment is created whenever you
allocate or transfer an amount to the Fixed Rate Investment Option. We credit
interest to the amount in each interest segment daily at a specific rate
declared for that interest segment until the earliest of: the date it is
withdrawn; the date it is transferred to another Allocation Option; the maturity
date of the one-year interest segment; the Annuity Date; and the date as of
which a death benefit is determined.
TRANSFERS FROM FIXED RATE INVESTMENT OPTION: At the maturity date of a one-year
interest segment, you have 30 days during which you may elect to transfer the
amount in that interest segment into any other Allocation Option available on
that date, other than a DCA Option. Once you have made an election, and we have
received it, it may not be reversed.
Amounts that you withdraw or transfer into another Allocation Option during the
30 day period will receive interest from the maturity date to the date of
withdrawal or transfer at the rate that would have applied to those amounts had
you taken no action within the 30 day period. If you do not make an election to
transfer within 30 days following the maturity date of the interest segment, we
will transfer the amount in the interest segment on the maturity date to another
one-year interest segment. Amounts that are transferred to another one-year
interest segment during the 30 day period will receive the rate that is
effective as of the maturity date for that interest segment.
You may only make transfers from a one-year interest segment within the 30 day
period immediately following the maturity date of that interest segment.
However, we reserve the right to permit transfers from a one-year interest
segment prior to the maturity date of that interest segment.
TRANSFERS INTO FIXED RATE INVESTMENT OPTION: At our discretion you may make
transfers from any other Allocation Option into the Fixed Rate Investment
Option. Each transfer will create a new one-year interest segment. We credit
interest to the amount in each interest segment daily at a specific rate
declared for that interest segment. Transfers into the Fixed Rate Investment
Option from any of the other Allocation Options will not be eligible for an
Additional Interest Crediting Rate amount.
DEFERRAL OF PAYMENTS OR TRANSFERS FROM THE GENERAL ACCOUNT: We reserve the right
to defer payment for a withdrawal or transfer from the Fixed Rate Investment
Option for the period permitted by law, but for not more than six months after a
request in Good Order is received by us at the Annuity Service Center.
Page 8
DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION
DCA PROGRAM: If a DCA Program is elected, you may allocate all or part of your
Invested Purchase Payments to the DCA Fixed Rate Investment Option ("DCA
Option"). The DCA Program provides for a systematic transfer of the funds
allocated to the DCA Option on a periodic basis from the DCA Option to selected
Allocation Options for a given number of payments. However, you may not transfer
any Contract Value to the DCA Option from the other Allocation Options.
INTEREST TO BE CREDITED: A DCA Interest Segment is a portion of the DCA Option
that is created when you allocate all or part of an Invested Purchase Payment to
the DCA Option. We credit interest to the amount in each DCA Interest Segment
daily at the daily equivalent of a specific rate declared for that DCA Interest
Segment until the earliest of: 1) the date the amount in the DCA Interest
Segment is transferred out of the DCA Interest Segment; 2) the date the amount
in the DCA Interest Segment is withdrawn; 3) the date as of which any death
benefit payable is determined, and 4) the Annuity Date. The initial Interest
Segment Interest Rate applicable for Invested Purchase Payments allocated to the
DCA Option on the Contract Date is shown on the Contract Data pages. Interest
rates for future allocations to the DCA Option will be declared on or before the
date when those allocations are made. The declared rates will never be less than
the Minimum Guaranteed Interest Rate shown on the Contract Data pages. The
current effective interest rates can be found by contacting the representative
who sold you this Contract or by calling the Annuity Service Center.
TRANSFERS: Invested Purchase Payments allocated to the DCA Option are
transferred systematically on a periodic basis to the other Allocation Options
that you have specified. We will transfer the amount allocated in a series of
equal payments on each transfer date such that the amount of each payment
corresponds to the number of payments for the period selected for the transfers.
The final transfer includes the interest credited during the period (but see
below for the effect of withdrawals). The first periodic transfer from the DCA
Option is made as of the date of the allocation of the applicable Invested
Purchase Payment. Subsequent transfers are made periodically on the anniversary
of the first transfer (for example, monthly or quarterly). The final transfer
amount includes the interest credited during the elected period. Once the
initial transfer has been processed, the transfer period may not be changed. The
other Allocation Options to which the transfers are being made may be changed.
Transfers from the DCA Option do not count toward the maximum number of free
transfers permissible under the Contract.
EFFECT OF WITHDRAWALS ON TRANSFERS: Withdrawals from the DCA Option are
permitted. We will recalculate the periodic transfer amount to reflect the
reduction in the DCA Option caused by the withdrawal. This recalculation may
include some or all of the interest credited to the date of the next scheduled
transfer. Any interest that is not included in the recalculated transfer amount
will be paid with the final transfer amount, unless there is another subsequent
withdrawal. Deductions of the Contract Maintenance Charge, Insurance Charge, or
any other charges for optional benefits are treated as withdrawals for this
purpose. If a withdrawal reduces the periodic transfer amount to below $100, the
remaining balance in the DCA Option will be transferred to the other Allocation
Options that you had most recently selected for the DCA Program on the next
scheduled transfer date. If a withdrawal request does not specify the Allocation
Options from which the withdrawal is to be made, we will take the withdrawals on
a pro-rata basis from all Allocation Options to which your Contract Value is
then allocated. Systematic withdrawals from the DCA Option are permitted.
DEFERRAL OF PAYMENTS OR TRANSFERS FROM THE GENERAL ACCOUNT: We reserve the right
to defer payment for a withdrawal or transfer from the DCA Option for the period
permitted by law, but for not more than six months after a request in Good Order
is received by us at the Annuity Service Center.
CONTRACT MAINTENANCE CHARGE
We deduct an annual Contract Maintenance Charge shown on the Contract Data
pages. We determine your Contract Value as of your Contract Anniversary and make
any deductions required on a pro-rata basis from all Allocation Options to which
your Contact Value is allocated. If a total withdrawal is made on other than a
Contract Anniversary, we will determine your Contract Value and make a deduction
for the Contract Maintenance Charge the same as we would if it were a Contract
Anniversary.
Page 9
TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD: A transfer is subject to the
following:
1. the maximum number of transfers which may be made, the maximum number
of transfers which are not subject to a Transfer Charge and the minimum
amount which may be transferred are shown on the Contract Data pages;
2. a Transfer Charge is deducted if a transfer exceeds the maximum number
of free transfers. The Transfer Charge is shown on the Contract Data
pages. The Transfer Charge is deducted from the amount which is
transferred;
3. a transfer will be effected as of the end of the Business Day when we
receive a request in Good Order;
4. we are not responsible for the consequences resulting from a transfer
made in accordance with your instructions;
No transfers are permitted after the Annuity Date.
WITHDRAWALS
WITHDRAWALS: During the Accumulation Period, you may, upon a request in Good
Order, make a total or partial withdrawal of the Contract Surrender Value. You
may specify the Allocation Option(s) from which a withdrawal will be taken. If
you do not specify, we will take the withdrawal on a pro-rata basis from all
Allocation Option(s) to which your Contract Value is allocated.
We will pay the amount of any withdrawal within 7 days of receipt of request in
Good Order unless the "Suspension or Deferral of Payments Provision" is in
effect. If we postpone payment of a withdrawal for more than 7 days after we
receive your withdrawal request, we will pay interest. The interest will be
calculated daily from the date we receive your request, at the effective annual
rate of 3%. No interest will be paid if the amount of interest calculated is
less than $25.
Each partial withdrawal must be for an amount which is not less than the amount
shown on the Contract Data pages. The minimum Contract Value which must remain
in the Contract after a partial withdrawal in order to keep the Contract inforce
is shown on the Contract Data pages. If the amount of the withdrawal requested
would reduce the Contract Value below this minimum, we will give you the maximum
amount available that, with the Withdrawal Charge, would not reduce the Contract
Value below such minimum. Special rules may apply for IRAs.
When a withdrawal is taken from a tax-qualified Contract in order to satisfy a
mandatory distribution requirement with respect to the Contract Value in this
Contract, Withdrawal Charges will be waived on any amount that exceeds the
Charge-Free Amount.
WITHDRAWAL CHARGE: A Withdrawal Charge may apply if you make a withdrawal during
the Withdrawal Charge Period for a Purchase Payment. The amount of the
Withdrawal Charge varies with the number of Contract Anniversaries that have
elapsed since each Purchase Payment was made, and is a percentage, shown on the
Contract Data pages, of the amount withdrawn that is subject to the charge. If a
withdrawal is effective on the day before a Contract Anniversary, the Withdrawal
Charge percentage used will be the one as of the following Contract Anniversary.
If you request a partial withdrawal, we will deduct an amount from the Contract
Value that is sufficient to pay the Withdrawal Charge, and recapture any Credit
subject to recapture, and provide you the amount requested.
In determining the Withdrawal Charge, Purchase Payments will be taken out before
Earnings, on a first-in, first-out basis. Purchase Payments that are not subject
to Withdrawal Charges are withdrawn first from the Contract. Purchase Payments
that are subject to Withdrawal Charges are withdrawn next, on a first-in,
first-out basis, and the Charge Free Amount is applied to these Purchase
Payments. Once all Purchase Payments have been withdrawn, further withdrawals
will be taken from any Earnings. Earnings are not subject to Withdrawal Charges.
Withdrawal Charges will never be greater than that permitted by any applicable
law or regulation.
Page 10
GUARANTEED MINIMUM DEATH BENEFIT
The Guaranteed Minimum Death Benefit (GMDB) is a feature providing for the
option to receive an enhanced death benefit upon the death of the sole Owner or
the first to die of the Owner or Joint Owner during the Accumulation Period. The
GMDB feature must be elected at the time you purchase your Contract. If you
elect the GMDB feature, the GMDB Protected Value option is equal to the GMDB
Step-Up. The Contract Data pages indicate whether you have elected the GMDB
feature. The GMDB Protected Value is calculated daily.
If the calculation of the death benefit is to be done at a time when any Credit
applied to a Purchase Payment has been applied within one year before the date
of death or after the date of death, the Contract Value will first be adjusted
to recapture the Credit.
GMDB STEP-UP -
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS LESS THAN AGE 80
ON THE CONTRACT DATE, the GMDB Step-Up before the first Contract Anniversary is
the initial Invested Purchase Payment increased by subsequent Invested Purchase
Payments and proportionally reduced by the effect of withdrawals (as described
below). The GMDB Step-Up on each Contract Anniversary will be the greater of the
previous GMDB Step-Up and the Contract Value as of such Contract Anniversary.
Between Contract Anniversaries, the GMDB Step-Up will be increased by Invested
Purchase Payments and reduced by the effect of withdrawals.
We stop increasing the GMDB Protected Value by any appreciation in the Contract
Value on the later of: the Contract Anniversary coinciding with or next
following the sole or older Owner's 80th birthday, or the 5th Contract
Anniversary. However we still increase the GMDB Protected Value by subsequent
Invested Purchase Payments and reduce it by the effect of withdrawals.
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS AGE 80 OR MORE ON
THE CONTRACT DATE, the GMDB Step-Up before the third Contract Anniversary is the
sum of Invested Purchase Payments, reduced by the effect of withdrawals (see
below). On the third Contract Anniversary the GMDB Step-Up will be adjusted to
the greater of the then current GMDB Step-Up or the Contract Value as of that
Contract Anniversary. Thereafter the GMDB Protected Value is only increased by
subsequent Invested Purchase Payments and reduced by the effect of withdrawals.
Where the words "reduced by the effect of withdrawals" are used in connection
with the GMDB Step-Up, withdrawals from the Contract will reduce the GMDB
Protected Value in the same proportion as they reduce the Contract Value. We
calculate the proportion by dividing the Contract Value after the withdrawal
(including Withdrawal Charges) by the Contract Value immediately prior to the
withdrawal. The resulting percentage is multiplied by the GMDB Protected Value
(before the withdrawal) in determining the GMDB Protected Value.
DEATH OF THE FIRST TO DIE OF THE OWNER AND JOINT OWNER DURING THE ACCUMULATION
PERIOD:
If you have elected the GMDB feature, and if the Owner or Joint Owner dies
before the Annuity Date, the death benefit payable to your beneficiary will be
as described below:
Upon receipt of due proof of death and any other documentation we need, the
beneficiary is entitled to receive a death benefit equal to the greater of:
(a) the Contract Value, adjusted as described above, as of the date
we receive due proof of death and any other documentation we
need; and
(b) the GMDB Protected Value as of the date we receive due proof of
death and any other documentation we need.
If you do not elect the GMDB feature, upon receipt of due proof of death and any
other documentation we need, the beneficiary is entitled to receive a base death
benefit equal to the greater of:
(a) the Contract Value, adjusted as described above, as of the date
we receive due proof of death and any other documentation we
need; and
(b) the initial Invested Purchase Payment increased by subsequent
Invested Purchase Payments and reduced by the effect of
withdrawals.
If the ownership of the Contract changes as result of an assignment, the value
of the death benefit will be reset to the Contract Value as of the date of the
assignment. Such value will be treated as a Purchase Payment made on that date
for purposes of computing the death benefit.
Page 11
The Beneficiary may, within 60 days of providing proof of death, elect to take
the death benefit under one of the death benefit payout options listed below,
provided that any payout option shall not include a period certain that exceeds
the life expectancy of the Beneficiary. The Beneficiary will be the sole
measuring life in determining the amount of any such payout option. If no payout
option is selected within the 60 days, the death benefit will be payable as a
lump sum.
If the Owner and Joint Owner are not spouses at the time of the Owner's or Joint
Owner's death, the Contract will not continue, the amount payable will equal the
death benefit, and the Beneficiary will be required to choose one of the death
benefit payout options described below. In that event, the payout described in
Choice 2 and the beginning of the distribution described in Choice 3 will be
based on the date of death of the first to die of the Owner or Joint Owner.
The death benefit payout options are:
Choice 1 - lump sum payment of the death benefit; or
Choice 2 - the payment of the entire death benefit within a period of 5
years from the date of death of the first to die of the Owner or Joint
Owner. The entire death benefit will include any increases or losses
resulting from the performance of the Allocation Options during this period.
During this period the Beneficiary may: reallocate the Contract Value among
the Allocation Options; name a Beneficiary to receive any remaining death
benefit in the event of the Beneficiary's death; and make withdrawals from
the Contract Value, in which case, any such withdrawals will not be subject
to any Withdrawal Charges. However, the Beneficiary may not make any
Purchase Payments to the Contract. During this 5 year period, existing
charges and costs will be deducted from the death benefit as though the
Contract had continued; or
Choice 3 - payment of the death benefit under an Annuity or Settlement
Option over the lifetime of the Beneficiary or over a period not extending
beyond the life expectancy of the Beneficiary with distribution beginning
within one year of the date of death of the first to die of the Owner or
Joint Owner.
If the Owner and Joint Owner are spouses at the death of the first to die of the
Owner and Joint Owner, any portion of the death benefit not applied under Choice
3 within one year of the date of death of the survivor must be distributed
within 5 years of the survivor's date of death. If the Owner and Joint Owner are
not spouses at the death of the first to die of the Owner and Joint Owner, any
portion of the death benefit, not applied under Choice 3 within one year of the
date of death of the first to die must be distributed within 5 years of the date
of death of the first to die.
Once a death benefit becomes payable, the Payee's interest in any Annuity
Benefit under the Contract will cease.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments Provision is in effect.
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD: If the Annuitant dies before
the Annuity Date, the Co-Annuitant, if applicable, becomes the Annuitant. If
there is no surviving Co-Annuitant, and the Annuitant was not the Owner, the
Owner becomes the Annuitant. You have right to name a new Annuitant within 60
days. If the Owner is a non-natural person, the death of the Annuitant will be
treated as the death of the Owner, a new Annuitant may not be designated, and
the Annuitant will be the Owner for purposes of determining the death benefit.
DEATH OF ANNUITANT DURING THE ANNUITY PERIOD: If the Annuitant dies on or after
the Annuity Date, the Settlement Option then in effect will govern whether or
not we will continue to make any payments. The death of a non-Annuitant Owner or
Joint Owner has no effect on the payout during the Annuity Period.
PAYMENT OF DEATH BENEFIT: We will require due proof of death and any other
documentation we request in Good Order before any death benefit is paid. All
death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
SPECIAL TAX CONSIDERATIONS: There are special tax rules that apply to IRAs and
other qualified contracts during both the Accumulation Period and Annuity Period
governing distributions upon the death of the Owner. These rules are contained
in provisions in the attached endorsements and supersede any other distribution
rules contained in the Contract.
The preceding provisions regarding the death of the Owner are intended to
satisfy the distribution at death requirements of section 72(s) of the Internal
Revenue Code of 1986, as amended. We reserve the right to amend this Contract by
subsequent endorsement as necessary to comply with applicable tax requirements,
if any, which are subject to change from time to time. Such additional
endorsements, if necessary to comply with amended tax requirements, will be
mailed to you and become effective within 30 days of mailing, unless you notify
us in writing, within that time frame, that you reject the endorsement.
If the Internal Revenue Service determines that the deductions for one or more
benefits under this Contract, including, without limitation, the GMDB feature
and any supplemental benefit added by endorsement, are taxable withdrawals, then
the sole or surviving Owner may cancel the affected benefit(s) within 90 days
after written notice from us.
Page 12
SPOUSAL CONTINUANCE BENEFIT
This benefit is available if, on the date we receive due proof of the Owner's
death, (1) there is only one Owner of the Contract and there is only one
Beneficiary who is the Owner's spouse; or (2) there are an Owner and Joint Owner
of the Contract, and the Joint Owner is the Owner's spouse and the Owner's
Beneficiary under the Contract. In the case of (1) and (2) above, the surviving
spouse cannot be older than age 95 on that date, and the surviving spouse will
become the new Owner under the Contract. Assuming each of those conditions is
present, the surviving spouse can elect the Spousal Continuance Benefit, but
must do so no later than 60 days after furnishing due proof of the Owner's death
in Good Order.
Upon activation of the Spousal Continuance Benefit, the Contract Value is
adjusted to equal the amount of the death benefit to which the surviving spouse
would have been entitled. This Contract Value will serve as the basis for
calculating any death benefit payable upon the death of the surviving spouse. We
will allocate any increase in the adjusted Contract Value among the Allocation
Options in the same proportions that existed immediately prior to the spousal
continuance adjustment.
Under the Spousal Continuance Benefit, we waive any potential Withdrawal Charges
applicable to Purchase Payments made prior to activation of the Spousal
Continuance Benefit. However, we will continue to impose Withdrawal Charges on
Purchase Payments made after activation of the Spousal Continuance Benefit.
IF YOU ELECTED THE BASE DEATH BENEFIT, then upon activation of the Spousal
Continuance Benefit, we will adjust the Contract Value to equal the greater of:
1. the Contract Value, and
2. the sum of all Invested Purchase Payments (adjusted for withdrawals).
IF YOU HAVE ELECTED THE GMDB FEATURE WITH THE GMDB STEP-UP, we will adjust the
Contract Value to equal the following, which amount we refer to below as the
"Contract Value (as adjusted to reflect the GMDB Step-Up Spousal Continuance
Benefit)":
The greater of:
1. the Contract Value, and
2. the GMDB Step-Up.
If the Contract is being continued by the surviving spouse in accordance with
the Spousal Continuance provisions, the attained age of the surviving spouse
will be the basis used in determining the death benefit payable under the
Guaranteed Minimum Death Benefit provisions of the Contract.
SPOUSAL CONTINUANCE BENEFIT CANNOT BE ACTIVATED --
The Spousal Continuance Benefit cannot be activated and the Contract will not
continue if the Beneficiary is not the Owner's spouse at the time we receive due
proof of the Owner's death. The Beneficiary will be required to choose one of
the death benefit payout options described in the Contract.
DEATH OF THE SURVIVING SPOUSAL OWNER DURING ACCUMULATION PERIOD AFTER ACTIVATION
OF THE SPOUSAL CONTINUANCE BENEFIT --If a surviving spousal owner dies after
activating the Spousal Continuance Benefit but before the Annuity Date, a death
benefit will be payable, based on the applicable conditions described above.
Page 13
ANNUITY AND SETTLEMENT OPTIONS
GENERAL: On the Annuity Date, the Adjusted Contract Value will be applied under
the Annuity or Settlement Option you have selected. If the Adjusted Contract
Value is less than $2,000, or if the payment under any option selected would be
less than $20 per month, we reserve the right to pay out the Adjusted Contract
Value in a lump sum. We guarantee that the dollar amount of each payment, once
determined, will not be affected by variations in mortality or expense
experience.
SELECTION OF AN ANNUITY OR SETTLEMENT OPTION: You may select an Annuity or
Settlement Option by notifying us of the selected option in Good Order. If no
Annuity or Settlement Option is selected, or if the chosen Option is not
received in Good Order, Option 2, Life Income Annuity Option, will automatically
be applied. You may, at any time prior to the Annuity Date, by a request in Good
Order 30 days in advance, select and/or change the Annuity or Settlement Option.
If an annuity option is selected, the payment amount will be calculated using
the Annuity Settlement Tables shown on Page 17. This payment amount will never
be less than what the amount of your Contract Value would purchase under any
comparable single premium immediate annuity we are then offering for sale to a
similar class of annuitants.
ANNUITY AND SETTLEMENT OPTIONS: This Contract provides for payments under one of
the Annuity or Settlement Options described below. Any other Annuity or
Settlement Option acceptable to us may be selected.
OPTION 1 - FIXED PERIOD ANNUITY OPTION. We will make equal payments for a period
you choose, from 10 years up to 25 years. At your choice, we will make such
payments annually, semi-annually, quarterly, or monthly. The Option 1 Table
shows the minimum amounts we will pay.
OPTION 2 - LIFE INCOME ANNUITY OPTION. We will make payments for as long as the
Annuitant lives, with payments certain for 120 months. At your choice, we will
make such payments annually, semi-annually, quarterly or monthly. Table 2 shows
the minimum amounts we will pay.
OTHER ANNUITY OR SETTLEMENT OPTIONS: We may offer or consent to other settlement
options, including life income annuity options with payments certain for a
period of other than 120 months. Contact the representative who sold you the
Contract or call the toll-free number listed on your quarterly statement for
information.
ANNUITY: Unless you designate another Payee, you will be the Payee of the
Annuity Payments. The Adjusted Contract Value will be applied to the applicable
Annuity Table contained in this Contract based upon the Annuity Option you have
selected. The amount of the first payment for each $1,000 of Adjusted Contact
Value is shown in the Annuity Tables. If when Annuity Payments begin we are
using tables of annuity rates for these Contracts which result in larger Annuity
Payments, we will use those tables instead. Annuity Payments will depend on the
age and sex of the Annuitant, where permitted
ANNUITY BENEFITS NOT SUBJECT TO WITHDRAWAL CHARGES: The Annuity Benefit will not
be subject to a Withdrawal Charge if you choose Option 1 or Option 2. In
addition to the methods of payment described in this Contract, you may choose
from other methods of payment which are not subject to a Withdrawal Charge.
Page 14
BENEFICIARY
BENEFICIARY: The Beneficiary designation in effect on the Contract Date will
remain in effect until changed. The Beneficiary is entitled to receive the
benefits to be paid at the death of the first to die of the Owner or Joint Owner
during the Accumulation Period. The Owner must be the primary Beneficiary of the
Joint Owner, and the Joint Owner must be the primary Beneficiary of the Owner.
Other than primary Beneficiaries, Beneficiaries must be the same for both the
Owner and Joint Owner.
When a Beneficiary is designated, any relationship shown is to the Owner unless
otherwise specified.
To show priority among Beneficiaries, we will label the classes, so that the
class with first priority is called the primary class, the class with next
priority is called the secondary class, and so on. The following statements
apply to Beneficiaries unless the Contract Data pages, Contract endorsement or
any change request that we have processed specifies otherwise:
One who survives the first to die of the Owner and Joint Owner will have
the right to be paid only if no one in a prior class survives the first to
die of the Owner and Joint Owner.
One who has the right to be paid will be the only one paid if no one else
in the same class survives the first to die of the Owner and Joint Owner.
Two or more in the same class who have the right to be paid in equal
shares.
If no one survives the sole Owner, we will pay in one sum to the Owner's
estate.
Unless you notify us otherwise in writing received in Good Order, when
there is insufficient evidence to determine the order of death, we will
deem the Owner to be the last survivor and make payment to the Owner's
Beneficiary.
Before we make a payment, we have the right to decide what reasonable
proof we need of the identity, age or any other facts about any persons
designated as Beneficiaries. If Beneficiaries are not designated by name
and we make payment(s) based on that proof, we will not have to make the
payment(s) again.
CHANGE OF BENEFICIARY: To initiate a change of Beneficiary, call the toll-free
number listed on your statement or contact the representative who sold you the
Contract. We will send you a change request form. We may also ask you to send us
the Contract. The change of beneficiary will take effect on the date you sign
the change request form, provided such request is received in Good Order. Then,
any previous Beneficiary's interest will end as of the date the change request
is signed and we receive it in Good Order, even if the Owner or Joint Owner is
not living when we process the request.
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANFERS
FROM THE SEPARATE ACCOUNT
We reserve the right to suspend or postpone payments from the Separate Account
for a withdrawal or transfer for any period when:
1. the New York Stock Exchange is closed (other that customary weekend
and holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of shares of the
Investment Options held in the Separate Account is not reasonably
practicable or it is not reasonably practicable to determine the value
of such shares; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
Page 15
GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of this Contract, and any attached
application, endorsement or riders. This Contract may be changed or altered only
by our President or Secretary. Any change, modification or waiver must be made
in writing. This Contract may not be modified by us without your consent except
as may be required by applicable law, including changes necessary to comply with
IRS requirements for annuity contracts, or as set forth in this Contract.
ASSIGNMENT OF A CONTRACT: A request in Good Order specifying the terms of an
assignment of a Contract must be provided to the Annuity Service Center. We are
under no obligation to verify the assignment's validity or sufficiency. We will
not be liable for any payment made or action taken before we record the
assignment. If any Owner is living on the Annuity Date and an assignment is in
effect on that date, we have the right to pay the Contract Surrender Value in
one lump sum to the assignee where notice in Good Order is received. Partial
assignments, collateral or otherwise, are not allowed without our approval. We
reserve the right to restrict or refuse any assignment.
An assignment which results in a change of ownership will affect the value of
the death benefit. Please see the section of the Contract entitled, "Guaranteed
Minimum Death Benefits," for more information.
We will not be responsible for the validity or tax consequence of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with our consent.
If the Contract is assigned, your rights may only be exercised with consent of
the assignee of record.
NON-PARTICIPATING IN SURPLUS: This Contract does not share in any distribution
of our profits or surplus.
INCONTESTABILITY: We will not contest this Contract. We consider all statements
made in the application for this Contract to be representations, not warranties.
MISSTATEMENT OF AGE OR SEX: We may require proof of age of the Annuitant before
making any life contingent Annuity Payment provided for by this Contract. If the
age or sex of the Annuitant has been misstated, the amount payable will be the
amount that the Contract Value would have provided at the true age or sex.
Once Annuity Payments have begun, any underpayments, with interest at 5% will be
made up in one sum with the next Annuity Payment, and overpayments, with
interest at 5%, will be deducted from the future Annuity Payments until the
total is repaid.
CONTRACT SETTLEMENT: This Contract must be returned to us upon any settlement.
REPORTS: We will send you a report four times each calendar year until the
Annuity Date showing your Contract Value and other relevant information about
your Contract. We will also furnish an annual report of the Separate Account.
These reports will be sent to your last known address.
TAXES: Any taxes, including any type of tax (or component thereof) measured by
or based upon any portion of the Purchase Payment we receive, paid to any
governmental entity will be charged against the Contract Value, unless a
deduction was made for this tax in calculating the Invested Purchase Payment
amount. We will, in our sole discretion, determine when taxes have resulted
from: the investment experience of the Separate Account; receipt by us of the
Purchase Payment(s); or commencement of Annuity Payments. We may, at our
discretion, pay taxes when due and deduct that amount from the Contract Value at
a later date. Payment at an earlier date does not waive any right we may have to
deduct amounts at a later date. We reserve the right to establish a provision
for federal income taxes if we determine, in our sole discretion, that we will
incur a tax as a result of the operation of the Separate Account. We will deduct
for any income taxes incurred by it as a result of the operation of the Separate
Account whether or not there was a provision for taxes and whether or not it was
sufficient. We will deduct any withholding taxes required by applicable law.
EVIDENCE OF SURVIVAL: Before we make a payment, we have the right to require
reasonable proof of continued life and any other documentation we need to make a
payment. We can require this proof for any person whose life or death determines
whether or to whom we must make the payment.
PROTECTION OF PROCEEDS: No beneficiary may commute, encumber, alienate, or
assign any payments under this Contract before they are due. To the extent
permitted by law, no payments will be subject to the debts, contracts or
engagements of any Beneficiary or to any judicial process to levy upon or attach
the same for payments thereof.
VALUES AND BENEFITS
Any cash values, paid up annuities and death benefits that may be available
under this Contract are not less than the minimum benefits required by the law
of any state in which this Contract is delivered.
Page 16
ANNUITY SETTLEMENT TABLES
Tables 1 and 2 below are applied to the Adjusted Contract Value to compute the
minimum amount of the annuity payment. Table 1 is used to compute the minimum
annuity payment under Option 1 (Fixed Period Annuity Option). Table 2 is used to
compute the minimum annuity payment under Option 2 (Life Income Annuity Option).
The rates in Tables 1 and 2 are applied per $1,000 of Adjusted Contract Value.
The annuity payments in Table 2 are based on the Annuitant's Adjusted Age and
sex. The Adjusted Age is the Annuitant's age last birthday prior to the date on
which the first Annuity payment is due, adjusted as shown in the "Translation of
Adjusted Age" Table.
When we computed the amounts shown in Table 2 below, we adjusted the Annuity
2000 Mortality Table to an age last birthday basis, less two years, with
projected mortality improvements (modified Scale G). We used an interest rate of
3% per year in preparing Table 2.
-------------------------------------------------------------------------
TABLE 1
-------------------------------------------------------------------------
Number of Monthly Number of Monthly Number of Monthly
Years Payment Years Payment Years Payment
-------------------------------------------------------------------------
10 9.61 15 6.87 20 $5.51
-------------------------------------------------------------------------
11 8.86 16 6.53 21 5.32
-------------------------------------------------------------------------
12 8.24 17 6.23 22 5.15
-------------------------------------------------------------------------
13 7.71 18 5.96 23 4.99
-------------------------------------------------------------------------
14 $7.26 19 5.73 24 4.84
-------------------------------------------------------------------------
25 4.71
-------------------------------------------------------------------------
In using Table 1, multiply the monthly payment by 2.993 for quarterly
payments, 5.963 for semi-annual payments, or 11.839 for annual payments.
----------------------------------------------------------------------------------------------
TABLE 2
----------------------------------------------------------------------------------------------
Adjusted Adjusted Adjusted
Age Male Female Age Male Female Age Male Female
----------------------------------------------------------------------------------------------
41 $3.40 $3.25 61 $4.66 $4.32 81 $7.67 $7.33
----------------------------------------------------------------------------------------------
42 3.44 3.29 62 4.76 4.41 82 7.85 7.53
----------------------------------------------------------------------------------------------
43 3.48 3.32 63 4.87 4.50 83 8.02 7.73
----------------------------------------------------------------------------------------------
44 3.53 3.35 64 4.98 4.60 84 8.18 7.93
----------------------------------------------------------------------------------------------
45 3.57 3.39 65 5.10 4.71 85 8.33 8.12
----------------------------------------------------------------------------------------------
46 3.62 3.43 66 5.23 4.82 86 8.48 8.29
----------------------------------------------------------------------------------------------
47 3.67 3.47 67 5.36 4.94 87 8.62 8.46
----------------------------------------------------------------------------------------------
48 3.72 3.51 68 5.49 5.06 88 8.75 8.61
----------------------------------------------------------------------------------------------
49 3.77 3.56 69 5.64 5.19 89 8.87 8.75
----------------------------------------------------------------------------------------------
50 3.83 3.61 70 5.78 5.33 90 8.98 8.88
----------------------------------------------------------------------------------------------
51 3.88 3.66 71 5.94 5.48 91 9.08 8.99
----------------------------------------------------------------------------------------------
52 3.95 3.71 72 6.10 5.63 92 9.16 9.09
----------------------------------------------------------------------------------------------
53 4.01 3.76 73 6.26 5.79 93 9.24 9.18
----------------------------------------------------------------------------------------------
54 4.08 3.82 74 6.43 5.96 94 9.32 9.26
----------------------------------------------------------------------------------------------
55 4.15 3.88 75 6.60 6.14 95 9.38 9.33
----------------------------------------------------------------------------------------------
56 4.22 3.94 76 6.78 6.33
----------------------------------------------------------------------------------------------
57 4.30 4.01 77 6.95 6.52
----------------------------------------------------------------------------------------------
58 4.38 4.08 78 7.13 6.71
----------------------------------------------------------------------------------------------
59 4.47 4.16 79 7.31 6.92
----------------------------------------------------------------------------------------------
60 4.56 4.24 80 7.49 7.12
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Translation of Adjusted Age
----------------------------------------------------------------------------------------------
Calendar Year in Which Calendar Year in Which
First Payment Is Due Adjusted Age First Payment Is Due Adjusted Age
----------------------------------------------------------------------------------------------
Prior to 2010 Actual Age 2050 through 2059 Actual Age minus 5
----------------------------------------------------------------------------------------------
2010 through 2019 Actual Age minus 1 2060 through 2069 Actual Age minus 6
----------------------------------------------------------------------------------------------
2020 through 2029 Actual Age minus 2 2070 through 2079 Actual Age minus 7
----------------------------------------------------------------------------------------------
2030 through 2039 Actual Age minus 3 2080 through 2089 Actual Age minus 8
----------------------------------------------------------------------------------------------
2040 through 2049 Actual Age minus 4 2090 through 2099 Actual Age minus 9
----------------------------------------------------------------------------------------------
Page 17
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
NON-PARTICIPATING. ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT,
WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE
VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
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