Xxxxxxx Xxxxxxx
XX-0123456
-Registered Trademark-[LOGO] LINCOLN NATIONAL
LIFE INSURANCE CO.
-------------------
A part of LINCOLN NATIONAL CORPORATION
(A Stock Company)
ANNUITY CONTRACT
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
VARIABLE AND FIXED ANNUITY BENEFIT PAYMENT OPTIONS
NONPARTICIPATING
The Lincoln National Life Insurance Company (LNL) agrees to provide the benefits
and other rights described in this Contract in accordance with the terms of this
Contract.
READ THIS CONTRACT CAREFULLY. This is a legal contract between the Owner and
LNL. We want to be sure you understand the features and benefits contained in
this Contract. IT IS THEREFORE IMPORTANT THAT YOU READ YOUR CONTRACT CAREFULLY.
If you have any questions after reading the Contract, we hope you will contact
your representative or the Home Office of LNL.
NOTICE OF 10-DAY RIGHT TO EXAMINE CONTRACT. WITHIN 10 DAYS AFTER THIS CONTRACT
IS FIRST RECEIVED, IT MAY BE CANCELLED FOR ANY REASON WITHOUT PENALTY (E.G., THE
SALES CHARGE WILL BE RETURNED) BY DELIVERING OR MAILING IT TO THE REPRESENTATIVE
THROUGH WHOM IT WAS PURCHASED OR TO THE HOME OFFICE OF LNL. UPON CANCELLATION,
LNL WILL RETURN THE VALUE OF THE VARIABLE ACCOUNT AS OF THE VALUATION DATE ON
WHICH LNL RECEIVES THE CANCELLATION REQUEST AND ANY GROSS PURCHASE PAYMENTS MADE
TO THE DCA FIXED ACCOUNT OF THE CONTRACT.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE (THE AMOUNT MAY INCREASE OR
DECREASE), AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT (SEE PAGES 5 AND
11).
Signed for The Lincoln National Life Insurance Company at its Home Office
located at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000.
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxx, President Xxxxxxxx Xxxxxxxx, Second Vice President
Form 29530
Table of Contents
Article Page
1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2 Purchase Payments, Options and Benefits . . . . . . . . . . . . 5
3 Annuity Payment Options . . . . . . . . . . . . . . . . . . . . 10
4 Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5 General Provisions . . . . . . . . . . . . . . . . . . . . . . . 12
6 Annuity Purchase Rates Under a Variable Payment Option . . . . . 14
7 Annuity Purchase Rates Under A Fixed Payment Option . . . . . . 15
Form 29530
CONTRACT DATA
Contract Number XX-0123456
Annuitant Xxxxxxx Xxxxxxx
Age at Issue 35
Contract Date April 1, 1989
Gross Purchase Payment $100,000
Purchase Payment Frequency Flexible
Maturity Date April 1, 2044
Owner
Xxxxxxx Xxxxxxx
Beneficiary Designation
PLEASE REFER TO THE CLIENT INFORMATION PROFILE FOR BENEFICIARY DESIGNATION
VARIABLE ACCOUNT
There are currently [ten] Variable Sub-accounts in the Variable Account
available to the Owner. The Owner may direct Net Purchase Payments under the
Contract to any of the available Variable Sub-accounts, subject to limitations.
The amounts allocated to each Variable Sub-account will be invested at net asset
value in the shares of one of the Funds of the American Variable Insurance
Series (Series). The Funds are:
1. [Growth Fund]
2. [International Fund]
3. [Global Growth Fund]
4. [Growth-Income Fund]
5. [Asset Allocation Fund]
6. [High-Yield Bond Fund]
7. [Bond Fund]
8. [U.S. Government/AAA-Rated Securities Fund]
9. [Cash Management Fund]
10. [Global Small Cap Fund]
11. Other funds made available by LNL
See Section 2.03 for provisions governing any limitations, substitutions or
elimination of Funds.
Form 29530 Page 3
SALES CHARGE
For purposes of determining the Sales Charge associated with this Contract, the
following table will be used.
Sales Charge as a percentage
Owner's Investment (as defined in Section 2.10) of Gross Purchase Payment
------------------ -------------------------
Less than $50,000 5.75%
$50,000 or greater but less than $100,000 4.50%
$100,000 or greater but less than $250,000 3.50%
$250,000 or greater but less than $500,000 2.50%
$500,000 or greater but less than $1,000,000 2.00%
$1,000,000 or greater 1.00%
Form 29530 Page 3.1
ARTICLE 1
DEFINITIONS
1.01
ACCUMULATION UNIT -- A unit of measure used to calculate the variable Contract
Value during the accumulation period.
1.02
ANNUITANT OR JOINT ANNUITANT -- The person(s) upon whose life the annuity
benefit payments made after the Annuity Commencement Date will be based.
1.03
ANNUITY COMMENCEMENT DATE -- The Valuation Date when the Contract Value is
initially withdrawn for payment of annuity benefits under the Annuity Payment
Option selected.
1.04
ANNUITY PAYMENT OPTION -- An optional form of payment of annuity benefits
provided for under this Contract.
1.05
ANNUITY UNIT -- A unit of measure used after the Annuity Commencement Date to
calculate the amount of each variable annuity benefit payment.
1.06
BENEFICIARY -- The person or entity designated by the Owner to receive the Death
Benefit, if any, payable upon the death of the Owner.
1.07
CODE -- The Internal Revenue Code (IRC) of 1986, as amended.
1.08
CONTRACT -- The agreement, between LNL and the Owner, in which LNL provides a
variable annuity.
1.09
CONTRACT DATE -- The date this Contract became effective. The Contract Date is
shown on the Contract Data page.
1.10
CONTRACT VALUE -- The sum of the values of all the Accumulation Units at a given
time and the value of the DCA Fixed Account attributable to this Contract.
1.11
CONTRACT YEAR - Each twelve month period starting with the Contract Date on your
Contract Data Pages and with each Contract anniversary thereafter.
1.12
DCA FIXED ACCOUNT -- A portion of this Contract established by LNL to accept Net
Purchase Payments or transfers of Contract Value, that may only be used for
Dollar Cost Averaging purposes. Funds in the DCA Fixed Account are invested in
the General Account of LNL.
1.13
DEATH BENEFIT -- The amount payable to the Owner's designated Beneficiary upon
death of the Owner.
1.14
DOLLAR COST AVERAGING (DCA) -- An option that allows automatic transfers of Net
Purchase Payments or Contract Value in equal periodic installments, in
accordance with LNL procedures, over the DCA period selected by the Owner.
1.15
FUND -- Any of the underlying investment options available in the Series in
which Net Purchase Payments are invested through the Variable Account.
1.16
GENERAL ACCOUNT -- An account consisting of all assets owned by LNL other than
those assets in segregated investment accounts.
1.17
GROSS PURCHASE PAYMENT -- Amounts paid into this Contract before deduction of
Sales Charge.
1.18
HOME OFFICE -- The principal office of LNL located at 0000 Xxxxx Xxxxxxx Xxxxxx,
Xxxx Xxxxx, Xxxxxxx 00000.
1.19
LNL -- The Lincoln National Life Insurance Company.
1.20
MATURITY DATE -- The date specified on the Contract Data Pages of this Contract.
1.21
NET ASSET VALUE PER SHARE -- The market value of a Fund or Series share
calculated each day by taking the closing market value of all securities owned,
adding the value of all other assets (such as cash), subtracting all
liabilities, and then dividing the result (total net assets) by the number of
shares outstanding.
1.22
NET PURCHASE PAYMENT -- An amount equal to the Gross Purchase Payment less the
Sales Charge. The Net Purchase Payment is the amount allocated to the DCA Fixed
Account and/or the Variable Account.
Form 29530 Page 4
1.23
OWNER OR JOINT OWNER -- The individual(s) or entity who exercise rights of
ownership under this Contract.
1.24
QUALIFIED PLAN -- A retirement plan qualified for special tax treatment under
the Internal Revenue Code of 1986, as amended, including Sections 401, 403, 408,
408A and 457. All other plans are considered Non-Qualified.
1.25
SALES CHARGE -- A charge deducted from each Gross Purchase Payment prior to
allocation to the DCA Fixed Account and/or the Variable Account, expressed as a
percentage of the Gross Purchase Payment.
1.26
SERIES -- American Variable Insurance Series, the mutual fund(s) into which Net
Purchase Payments allocated to the Variable Account are invested.
1.27
VALUATION DATE -- Close of the market on each day that the New York Stock
Exchange is open for business.
1.28
VALUATION PERIOD -- The period commencing at the close of business on a
particular Valuation Date and ending at the close of business on the next
succeeding Valuation Date.
1.29
VARIABLE ACCOUNT -- The segregated investment account into which The Lincoln
National Life Insurance Company sets aside and invests the assets allocated to
the Variable Sub-account(s) selected by the Owner.
1.30
VARIABLE SUB-ACCOUNT -- That portion of the Variable Account which invests in
shares of a particular Fund in the Series. There is a separate Variable
Sub-account for each particular Fund.
ARTICLE 2
PURCHASE PAYMENTS, OPTIONS, AND BENEFITS
2.01 WHERE PAYABLE
All Gross Purchase Payments must be made to LNL at its Home Office or to an
institution designated by LNL.
2.02 AMOUNT AND FREQUENCY
Gross Purchase Payments are made in an amount and at the frequency shown on the
Contract Data Pages. The Owner may change the frequency or amount of Gross
Purchase Payments subject to LNL's rules in effect at the time of the change.
The minimum initial Gross Purchase Payment is $1,500 for Non-Qualified Plans and
$300 for Qualified Plans. The minimum annual amount of subsequent Gross Purchase
Payments is $300 for either Non-Qualified Plans or Qualified Plans. The minimum
payment to the Contract at any one time must be at least $25.00 if transmitted
electronically; otherwise the minimum amount is $100.00.
Gross Purchase Payments may be made until the earliest of the Annuity
Commencement Date, the surrender of the Contract, Maturity Date or death of the
Owner, or Joint Owner, that results in payment of any Death Benefit.
2.03 VARIABLE ACCOUNT
Net Purchase Payments under the Contract may be allocated to the Lincoln
National Variable Annuity Account H (Variable Account) of the Contract. The
Variable Account is for the exclusive benefit of persons entitled to receive
benefits under variable annuity contracts. The Variable Account will not be
charged with the liabilities arising from any other part of LNL's business.
The Owner may direct Net Purchase Payments under the Contract to any of the then
available Variable Sub-accounts subject to the following limitations:
1) the allocation to any one Variable Sub-account must be at least $20.
2) If the Owner elects to direct Net Purchase Payments to a new Variable
Sub-account not previously selected, that election must be made in writing
to LNL or may be made by telephone transfer provided LNL has received the
appropriate authorization from the Owner for telephone transfers in
accordance with LNL procedures.
The amounts allocated to each Variable Sub-account will be invested at net asset
value in the shares of one of the Funds of the American Variable Insurance
Series (Series). The Funds are shown on the Contract Data page.
Subject to any required regulatory approvals, LNL reserves the right to
eliminate the shares of any Fund and substitute the shares of a different Fund
or investment company or mutual fund if the shares of a Fund are no longer
available for investment, or, if in the judgment of LNL, further investment in
any Fund should become inappropriate in view of the purposes of the Contract.
LNL may add a new Variable Subaccount in order to invest the assets of the
Variable
Form 29530 Page 5
Account into a Fund. LNL will give the Owner written notice of the elimination
and substitution of any Fund within fifteen days after such substitution occurs.
LNL will use each Net Purchase Payment allocated to the Variable Account by the
Owner to buy Accumulation Units in the Variable Sub-account(s) selected by the
Owner. The number of Accumulation Units bought will be determined by dividing
the amount directed to the Variable Sub-account by the dollar value of an
Accumulation Unit in such Variable Sub-account next determined, immediately
following receipt of the Net Purchase Payment at the Home Office of LNL. The
number of Accumulation Units held for the Variable Account of an Owner will not
be changed by any change in the dollar value of Accumulation Units in any
Variable Sub-account.
2.04 VALUATION OF ACCUMULATION UNITS
The value of the Variable Account at any time prior to the Annuity Commencement
Date equals the sum of the values of the Accumulation Units credited in the
Variable Sub-accounts under the Contract.
The value of a Variable Sub-account on any Valuation Date is the number of
Accumulation Units in the Variable Sub-account multiplied by the value of an
Accumulation Unit in the Variable Sub-account.
Accumulation Units for each Variable Sub-account are valued separately.
Initially, the value of an Accumulation Unit was arbitrarily established at the
inception of the Variable Sub-account. It may increase or decrease from
Valuation Period to Valuation Period. The Accumulation Unit value for a Variable
Sub-account for any later Valuation Period is determined as follows:
a. The total value of Fund or Series shares held in the Variable Sub-account
is calculated by multiplying the number of Fund or Series shares owned by
the Variable Sub-account at the beginning of the Valuation Period by the
Net Asset Value Per Share of the Fund or Series at the end of the Valuation
Period, and adding any dividend or other distribution of the Fund or Series
if an ex-dividend date occurs during the Valuation Period; minus
b. The liabilities of the Variable Sub-account at the end of the Valuation
Period (such liabilities include daily charges imposed on the Variable
Sub-account, and may include a charge or credit with respect to any taxes
paid or reserved for by LNL that LNL determines as a result of the
operation from the Variable Account); the result divided by
c. The outstanding number of Accumulation Units in the Variable Sub-account at
the beginning of the Valuation Period.
The daily charges imposed on a Variable Sub-account for any Valuation Period
represent the daily mortality and expense risk charge and the daily
administrative charge adjusted for the number of calendar days in the Valuation
Period. On an annual basis, these charges will not exceed 0.69%. For any period
in which the Enhanced Guaranteed Minimum Death Benefit (see Section 2.11) is not
in effect, these charges will not exceed 0.60% on an annual basis. The
Accumulation Unit value may increase or decrease the dollar value of benefits
under the Contract. The dollar value of benefits will not be adversely affected
by expenses incurred by LNL.
2.05 DCA FIXED ACCOUNT
Net Purchase Payments under the Contract may be allocated to the DCA Fixed
Account of this Contract. Interest will be credited daily on all Net Purchase
Payments and transferred amounts that are allocated to the DCA Fixed Account.
Prior to: the Annuity Commencement Date; payment of any Death Benefit, or
surrender of this Contract; whichever occurs first, LNL guarantees that it will
credit interest on amounts allocated to the DCA Fixed Account at an effective
annual rate not less than 3.0% during all years. LNL may credit interest at
effective annual rates in excess of 3.0% at any time.
If Dollar Cost Averaging has been elected by the Owner, automatic transfers will
be made from the DCA Fixed Account, or from one of the Variable Sub-account(s)
made available by LNL for this purpose, to one or more Variable Sub-account(s)
available under this Contract and selected by the Owner. Any interest credited
or other gains, if any, attributable to the DCA Fixed Account or Variable
Sub-account will be transferred with the final DCA transfer.
2.06 AUTOMATIC NONFORFEITURE OPTION
In the event that Gross Purchase Payments are discontinued, this Contract will
continue until the earlier of:
a. the Maturity date;
b. surrender of this Contract;
c. payment of any Death Benefit; or
d. the Annuity Commencement Date.
Gross Purchase Payments may be resumed at any time prior to the earlier of:
a. the Maturity Date;
b. surrender of this Contract;
c. payment of any Death Benefit; or
Form 29530 Page 6
d. the Annuity Commencement Date.
LNL reserves the right to surrender this Contract in accordance with the terms
set forth in the nonforfeiture law, applicable in the state in which this
Contract is delivered, for individual deferred annuities.
2.07 TRANSFERS
Prior to the earlier of:
a. the Maturity Date;
b. surrender of the Contract;
c. payment of any Death Benefit; or
d. the Annuity Commencement Date;
the Owner may direct a transfer of Contract Value;
a. from one Variable Sub-account to another Variable Sub-account or to the DCA
Fixed Account; or
b. from the DCA Fixed Account to a Variable Sub-account;
subject to the limitations described below. Such a transfer request must be made
in writing to LNL or may be made by telephone provided LNL has received the
appropriate authorization from the Owner for telephone transfers in accordance
with LNL procedures.
A transfer between Variable Sub-accounts will result in the redemption of
Accumulation Units in one Variable Sub-account and the purchase of Accumulation
Units in the other Variable Sub-account. Such a transfer will be accomplished at
Accumulation Unit values as of the Valuation Date the transfer request is
received in the Home Office. The valuation of Accumulation Units is described in
Section 2.04.
LNL reserves the right to impose a charge in the future for transfers between
Variable Sub-accounts.
The minimum transfer amount is the lesser of $300 or the entire amount in the
Variable Sub-account or the DCA Fixed Account.
If, after the transfer, the amount remaining in:
a. the Variable Sub-account; or
b. the DCA Fixed Account;
from which the transfer is taken is less than $300, the entire amount held in
that Variable Sub-account or the DCA Fixed Account will be transferred with the
transfer amount.
There are no restrictions on the maximum amount which may be transferred from a
Variable Sub-account(s). Only one transfer will be allowed from the DCA Fixed
Account in any 12 month period. The amount available for transfer is limited to
25% of the value of the DCA Fixed Account. These restrictions do not apply to
automatic DCA transfers.
Transfers cannot be made during the first 30 days after the Contract Date and no
more than six transfers will be allowed in any Contract Year (excluding
automatic DCA transfers). LNL reserves the right to waive or modify any of these
restrictions.
2.08 WITHDRAWAL OPTION
A withdrawal will be effective as of the Valuation Date on which LNL receives a
written request at its Home Office.
The minimum withdrawal is $300. LNL reserves the right to surrender this
Contract if any withdrawal reduces the total Contract Value to a level at which
this Contract may be surrendered in accordance with applicable law for
individual deferred annuities.
The request should specify from which Variable Sub-account the withdrawal will
be made. If none is specified, LNL will withdraw the amount requested on a
pro-rata basis from each Variable Sub-account and the DCA Fixed Account.
Any cash payment will be mailed from LNL's Home Office within seven days after
the date of withdrawal; however, LNL may be permitted to defer such payment
under the Investment Company Act of 1940, as in effect at the time such request
for withdrawal is received by LNL.
The Withdrawal Option is not available after the Annuity Commencement Date.
2.09 SURRENDER OPTION
The Owner may surrender this Contract for its surrender value. On surrender,
this Contract terminates. Surrender will be effective on the Valuation Date on
which LNL receives a written request at its Home Office. The surrender value
will be the value of all of the variable Accumulation Units attributable to this
Contract plus the value of the DCA Fixed Account.
Any cash payment will be mailed from LNL's Home Office within seven days after
the date of surrender; however, LNL may be permitted to defer such payment under
the Investment Company Act of 1940, as in effect at the time a request for
surrender is received by LNL.
The Surrender Option is not available after the Annuity Commencement Date.
Form 29530 Page 7
2.10 SALES CHARGES
A Sales Charge, as described on the Contract Data Pages, will apply to all
initial and subsequent Gross Purchase Payments paid into this Contract. This
charge is taken as a percentage of the Gross Purchase Payment and is based on
the amount of the Owner's investment at the time of each Gross Purchase Payment.
The Owner's investment is determined at a given time, in accordance with LNL
procedures, as the sum of:
a. The account values for any of the following individual LNL contracts owned
by an Eligible Owner (defined below) marketed under the names of: The
American Legacy Variable Annuity, American Legacy II Variable Annuity,
American Legacy III Variable Annuity, or American Legacy Shareholder's
Advantage Variable Annuity; plus
b. The amount (in dollars) of an Eligible Owner's investment in existing
mutual funds in The American Funds Group in accordance with the procedures
established by the American Funds Group; plus
c. The amount of the current Gross Purchase Payment made into this Contract.
An Eligible Owner includes the Owner of this Contract, the spouse of the Owner
of this Contract, and a child under the age of 21 of the Owner of this Contract.
2.11 DEATH BENEFITS
BEFORE THE ANNUITY COMMENCEMENT DATE.
ENTITLEMENT.
If there is a single Owner, upon the death of the Owner LNL will pay a Death
Benefit to the designated Beneficiary(s) in accordance with the terms of Article
4. If the designated Beneficiary of the Death Benefit is the surviving spouse of
the deceased Owner, the designated Beneficiary may elect to continue the
Contract as the new Owner in lieu of receiving the Death Benefit. Upon the death
of the designated Beneficiary who continues the Contract as the new Owner, LNL
will pay a Death Benefit to the designated Beneficiary(s) in accordance with the
terms of Article 4.
If there are Joint Owners, upon the death of the first Joint Owner, LNL will pay
a Death Benefit to the surviving Joint Owner. The surviving Joint Owner, as the
spouse of the deceased Joint Owner, may elect to continue the Contract as sole
Owner in lieu of receiving the Death Benefit. Upon the death of the Joint Owner
who continues the Contract, LNL will pay a Death Benefit to the designated
Beneficiary(s) in accordance with the terms of Article 4.
The Death Benefit will be paid if LNL is in receipt of:
a. Proof of death acceptable to LNL;
b. written authorization for payment; and
c. all claim forms, fully completed.
Due proof of death may be a certified copy of a death certificate, a certified
copy of the statement of death from the attending physician, a certified copy of
a decree of a court of competent jurisdiction as to the findings of death, or
any other proof of death acceptable to LNL.
All Death Benefit payments will be subject to the laws and regulations governing
death benefits.
Notwithstanding any provision of this Contract to the contrary, no payment of
Death Benefits provided under the Contract will be allowed that does not satisfy
the requirements of Code Section 72(s) or 401(a)(9) as applicable, as amended
from time to time.
DETERMINATION OF AMOUNTS.
This Contract provides a Death Benefit called the Enhanced Guaranteed Minimum
Death Benefit (EGMDB), if in effect. If the EGMDB was not available at issue or
was terminated, then the Death Benefit is equal to the Guarantee of Principal.
The EGMDB is equal to the greater of:
a. the current Contract Value as of the Valuation Date on which the death
claim is approved by LNL for payment; or
b. the highest Contract Value on any Contract anniversary date (including the
Contract Date) on ages up to, and including, the Owner's age 75 (if there
are Joint Owners this is youngest Joint Owner's age). The highest Contract
Value is increased by Net Purchase Payments subsequent to such anniversary
date on which the highest Contract Value is obtained. The highest Contract
Value is decreased, on a pro-rata basis, by partial withdrawals and premium
tax (if applicable) made, effected, or incurred subsequent to such
anniversary date on which the highest Contract Value is obtained. The
highest Contract Value is adjusted for decreases such that the ratio of (A)
to (B) after a partial withdrawal or premium tax (if applicable) deduction
is the same as the ratio of (A) to (B) before the partial withdrawal or
premium tax (if applicable) deduction, where:
(A) is the highest Contract Value obtained; and
(B) is the actual Contract Value.
The Guarantee of Principal is equal to the greater of:
Form 29530 Page 8
a. the current Contract Value as of the Valuation Date on which the death
claim is approved by LNL for payment; or
b. the sum of all Net Purchase Payments decreased, on a pro-rata basis, by
partial withdrawals and premium tax (if applicable) incurred. The sum of
all Net Purchase Payments is adjusted such that the ratio of (A) to (B)
after a partial withdrawal or premium tax (if applicable) deduction is the
same as the ratio of (A) to (B) before the partial withdrawal or premium
tax (if applicable) deduction, where:
(A) is the sum of all Net Purchase Payments made; and
(B) is the Contract Value.
The EGMDB will not be in effect if this Contract is issued to an Owner with an
attained age of 75 or greater at issue (or if issued to Joint Owners where
youngest age is 75 or greater at issue ). Under these circumstances, there will
be no EGMDB provided and the Death Benefit is equal to the Guarantee of
Principal.
The EGMDB will only be in effect, unless terminated by the Owner, for
Non-Qualified Contracts and Contracts sold as Individual Retirement Annuities
(IRA) under Code Section 408(b) and Xxxx Individual Retirement Annuities under
Code Section 408A. For all other Contracts the EGMDB will not be in effect the
Death Benefit is equal to the Guarantee of Principal.
If the Contract is continued by the surviving spouse, the EGMDB will continue,
if it was in effect at the time of death of the original Owner, unless
subsequently terminated by the surviving spouse. A surviving spouse who
continues the Contract cannot add the EGMDB to the Contract.
At any time prior to the Annuity Commencement Date, an Owner may choose to
terminate the EGMDB by giving written notice to LNL, and the Contract will then
have no EGMDB. The EGMDB will terminate on the next Valuation Date following
receipt of the written notice in the LNL Home Office and the Death Benefit will
then be the Guarantee of Principal. Termination of the EGMDB by the Owner or
surviving spouse who assumed the Contract will be permanent and final.
If the Owner is a corporation or other non-individual (non-natural person), the
death of the Annuitant will be treated as the death of the Owner. The EGMDB, if
applicable, will apply on the death of the Annuitant only in this situation.
PAYMENT OF AMOUNTS.
The Death Benefit payable on the death of the Owner, or after the death of the
first Joint Owner, or upon the death of the spouse who continues the Contract as
the new Owner, will be distributed to the designated Beneficiary(s) as follows:
a. the Death Benefit must be completely distributed within five years of the
Owner's date of death; or
b. the designated Beneficiary may elect, within the one year period after the
Owner's date of death, to receive the Death Benefit in substantially equal
installments over the life of such designated Beneficiary or over a period
not extending beyond the life expectancy of such designated Beneficiary;
provided that such distributions begin not later than one year after the
Owner's date of death.
If a lump sum settlement is elected, the proceeds will be mailed within seven
days of approval by LNL of the claim. This payment may be postponed as permitted
by the Investment Company Act of 1940.
ON OR AFTER THE ANNUITY COMMENCEMENT DATE.
If the Owner dies on or after the Annuity Commencement Date, any remaining
annuity benefit payments will continue to be distributed under the Annuity
Payment Option then in effect. All of the Owner's rights granted by the Contract
will pass to the Joint Owner, if any; otherwise to the Beneficiary. If there is
no named Beneficiary at the time of the owner's death, the Owner's rights will
pass to the Annuitant, if still living; otherwise to the Joint Annuitant, if
applicable. If no named Beneficiary, Annuitant, or Joint Annuitant survives the
Owner, any remaining annuity benefit payments will continue to the Owner's
estate.
2.12 DEATH OF ANNUITANT
BEFORE THE ANNUITY COMMENCEMENT DATE.
If the Annuitant is also the Owner or a Joint Owner, then the Death Benefit paid
will be subject to the Contract provisions regarding death of the Owner. If the
surviving spouse of the Owner/Xxxxxxxxx assumes the Contract, the Contingent
Annuitant becomes the Annuitant. If no Contingent Annuitant is named, the
surviving spouse becomes the Annuitant.
If an Annuitant who is not the Owner or Joint Owner dies, the Contingent
Annuitant, if any, becomes the Annuitant. If no Contingent Annuitant is named,
the Owner (or the younger of the Joint Owners) becomes the Annuitant.
ON OR AFTER THE ANNUITY COMMENCEMENT DATE.
On receipt of due proof of death, as described in Section 2.11, of the Annuitant
or both Joint Annuitants, any remaining annuity benefit payments under the
Annuity Payment Option will be paid to the owner if living; otherwise, to the
Beneficiary. If there
Form 29530 Page 9
is no Beneficiary, any remaining annuity benefit payments will continue to the
estate of the Annuitant.
ARTICLE 3
ANNUITY PAYMENT OPTIONS
3.01 ANNUITY BENEFIT PAYMENTS
An election to receive annuity benefit payments under an Annuity Payment Option
must be made by the Maturity Date.
If an Annuity Payment Option is not chosen prior to the Maturity Date, annuity
benefit payments will commence to the Owner on the Maturity Date under the
Annuity Payment Option providing a Life Annuity with annuity benefit payments
guaranteed for 10 years.
The Maturity Date is set forth on the Contract Data Pages. Upon written request
by the Owner and any Beneficiary who cannot be changed, the Maturity Date may be
deferred. Gross Purchase Payments may be made until the new Maturity Date.
3.02 CHOICE OF ANNUITY PAYMENT OPTION
Prior to the Annuity Commencement Date, the Owner or a Beneficiary entitled to a
Death Benefit in a lump sum may choose or change any Annuity Payment Option. In
addition, the Owner may select an Annuity Payment Option as a method of paying
the Death Benefit to a Beneficiary. The Beneficiary will be bound by this
selection. A choice of or change to an Annuity Payment Option must be made in
writing to LNL. For a 100% fixed annuity benefit payment, the Annuity
Commencement Date must be at least thirty days prior to the time that annuity
benefit payments are to begin. If any portion of the annuity benefit payment
will be on a variable basis, the first payment will be made fourteen days after
the Annuity Commencement Date. The Annuity Payment Option chosen for payment of
Death Benefits must meet the requirements of Section 72(s) or 401(a)(9) of the
Code.
3.03 ANNUITY PAYMENT OPTIONS
1) Life Annuity/Life Annuity with Guaranteed Period -- Annuity benefit
payments will be made for the lifetime of the Annuitant with no certain
period, or life and a 10 year certain period, or life and a 20 year certain
period.
2) Unit Refund Life Annuity -- Variable annuity benefit payments will be made
for the lifetime of the Annuitant with the guarantee that upon death, if:
a) the number of Annuity Units initially purchased (determined by
dividing the total dollar amount applied to purchase this option
by the Annuity Unit Value on the Annuity Commencement Date) is
greater than;
b) the number of Annuity Units paid as part of each variable annuity
benefit payment multiplied by the number of annuity benefit
payments paid prior to death;
then a refund payment equal to the number of Annuity Units determined by
(a) minus (b) will be made. The refund payment value will be determined
using the Annuity Unit Value on the Valuation Date on which the death
claim is approved by LNL for payment after LNL is in receipt of:
a. proof of death acceptable to LNL;
b. written authorization for payment; and
c. all claim forms, fully completed.
3) Cash Refund Life Annuity -- Fixed annuity benefit payments will be made for
the lifetime of the Annuitant with the guarantee that upon death, if:
a) the total dollar amount applied to purchase
this option is greater than;
b) the fixed annuity benefit payment multiplied by the number of
annuity benefit payments paid prior to death;
then a refund payment equal to the dollar amount of (a) minus (b) will be
made after the death claim is approved by LNL for payment and LNL is in
receipt of:
a. proof of death acceptable to LNL;
b. written authorization for payment; and
c. all claim forms, fully completed.
4) Joint Life Annuity/Joint Life Annuity with Guaranteed Period -- Annuity
benefit payments will be made during the joint life of the Annuitant and a
Joint Annuitant of the Owner's choice. Annuity benefit payments continue
for the life of the survivor at the death of the Annuitant or Joint
Annuitant. Annuity benefit payments will be made for life with no certain
period, or life and a 10 year certain period, or life and a 20 year certain
period.
5) Other Annuity Payment Options may be available as agreed upon in writing by
LNL.
At the time an Annuity Payment Option is selected under the provisions of this
Contract, the Owner may elect to have the total Contract Value applied to
provide a variable annuity benefit payment, a fixed annuity benefit payment, or
a combination fixed and
Form 29530 Page 10
variable annuity benefit payment. If no election is made, the value of the
Owner's Variable Account will be used to provide a variable annuity benefit
payment, and the DCA Fixed Account will be used to provide a fixed annuity
benefit payment.
The amount of annuity benefit payments will depend on the age and sex (except in
cases where unisex rates are required) of the Annuitant as of the Annuity
Commencement Date. A choice may be made to receive annuity benefit payments once
each month, four times each year, twice each year, or once each year.
3.04 THE AMOUNT OF THE ANNUITY BENEFIT PAYMENT
The Contract Value and the Annuity Unit value used to effect annuity benefit
payments will be calculated as of the Annuity Commencement Date.
Article 6 of this Contract illustrates the minimum annuity benefit payment
amounts and the age adjustments which will be used to determine the first
monthly annuity benefit payment under a variable Annuity Payment Option. The
tables show the dollar amount of the first monthly annuity benefit payment which
can be purchased with each $1,000 of Contract Value after deduction of any
applicable premium taxes. Amounts shown use the 1983 'a' Individual Annuity
Mortality Table, modified, with an assumed rate of return of 4% per year.
Article 7 of this Contract illustrates the minimum annuity benefit payment
amounts and the age adjustments which will be used to determine the monthly
annuity benefit payments under a fixed Annuity Payment Option. The tables show
the dollar amount of the guaranteed monthly annuity benefit payments which can
be purchased with each $1,000 of Contract Value after deduction of any
applicable premium taxes. Amounts shown use the 1983 'a' Individual Annuity
Mortality Table, modified, with an interest rate of 3.0% per year and a 2.0%
expense load.
3.05 DETERMINATION OF THE AMOUNT OF VARIABLE ANNUITY BENEFIT PAYMENTS AFTER THE
FIRST PAYMENT
The first variable annuity benefit payment is subdivided into components where
each of them represents the product of:
a. the percentage elected by the Contract Owner of a specific Variable Sub-
account; and
b. the entire first variable annuity benefit payment.
On the Annuity Commencement Date, the Contract is credited with Xxxxxxx Units
for each Variable Subaccount. The number of Annuity Units credited is computed
by dividing the component of the first annuity benefit payment attributable to a
specific Variable Sub-account by the Annuity Unit value for that Variable Sub-
account. Each component of each variable annuity benefit payment after the first
payment attributable to a specific Variable Sub-account will be determined by
multiplying the Annuity Unit value for that Variable Sub-account on the monthly,
quarterly, semi-annual, or annual anniversary of the Annuity Commencement Date
by the number of Annuity Units attributable to that Variable Sub-account. The
total variable annuity benefit payment will be the sum of the payments
attributable to each Variable Subaccount. In the absence of transfers between
Variable Sub-accounts, the number of Annuity Units attributable to each Variable
Sub-account remains constant, although the Annuity Unit values will vary with
the investment performance of the Funds. The Annuity Unit Value may increase or
decrease the dollar value of benefits under the Contract.
The Annuity Unit value for any Valuation Period for any Variable Sub-account is
determined by multiplying the Annuity Unit value for the immediately preceding
Valuation Period by the product of (a) 0.9998926 raised to a power equal to the
number of days in the current Valuation Period and (b) the Accumulation Unit
value of the same Variable Subaccount for this Valuation Period divided by the
Accumulation unit value of the same Variable Subaccount for the immediately
preceding Valuation Period.
LNL will value all assets in the Variable Sub-account in accordance with the
provisions of applicable laws, rules, and regulations. The determination by LNL
of the value of an Accumulation Unit or of an Annuity Unit, consistent with the
above-described methodology, will be binding on all parties to this Contract.
LNL guarantees that the dollar amount of each annuity benefit payment after the
first will not be affected by variations in mortality experience from mortality
assumptions on which the first payment is based.
After the Annuity Commencement Date, if any portion of the annuity benefit
payment is a variable annuity benefit payment, the Owner may direct a transfer
of assets from one Variable Sub-account to another Variable Sub-account or to a
fixed annuity benefit payment. Such transfers will be limited to three (3) times
per Contract Year. Assets may not be transferred from a fixed annuity benefit
payment to a variable annuity benefit payment.
A transfer from one Variable Sub-account to another Variable Sub-account will
result in the purchase of Annuity Units in one Variable Sub-account and the
redemption of Annuity Units in the other Variable Sub-account. Such a transfer
will be accomplished at Annuity Unit values as of the Valuation Date the
transfer request is received. The valuation of Annuity Units is described above.
A transfer from one Variable Sub-account to a fixed annuity benefit payment will
result in the redemption of Annuity Units in one Variable Sub-account and the
purchase of a mini-
Form 29530 Page 11
mum fixed annuity benefit payment based on the tables in Article 7.
3.06 PROOF OF AGE
Payment will be subject to proof of age that LNL will accept such as a certified
copy of a birth certificate.
3.07 MINIMUM ANNUITY BENEFIT PAYMENT REQUIREMENTS
If the Annuity Payment Option chosen results in annuity benefit payments of less
than $50 per Variable Sub-account, the frequency will be changed so that annuity
benefit payments will be at least $50.
For the purposes of this Section, the fixed annuity benefit payment of the
Contract is considered a Variable Sub-account.
3.08 EVIDENCE OF SURVIVAL
LNL has the right to ask for proof that the person on whose life the annuity
benefit payment is based is alive when each annuity benefit payment is due.
3.09 CHANGE IN ANNUITY PAYMENT OPTION
The Annuity Payment Option may not be changed after the Annuity Commencement
Date.
ARTICLE 4 BENEFICIARY
4.01 DESIGNATION
The Owner may designate a Beneficiary(s). Unless otherwise stated in the
Beneficiary designation, if there is more than one Beneficiary, they are
presumed to share equally.
Upon the Owner's death, the surviving Joint Owner, if any, will be treated as
the primary, designated Beneficiary. Any other Beneficiary designation on record
at the time of death will be treated as a contingent beneficiary.
If a surviving spouse continues the Contract after the death of the Owner, the
remaining Beneficiaries move up, in the order of their original designation, to
replace the spouse as original Beneficiary, unless the Beneficiary designation
is subsequently changed by the surviving spouse as the new Owner.
4.02 CHANGE
The Owner may change any Beneficiary unless otherwise provided in the previous
designation. A change of Beneficiary will revoke any previous designation.
A change may be made by filing a written request, in a form acceptable to LNL,
at its Home Office. The change will become effective upon receipt of the written
request by LNL at its Home Office. LNL reserves the right to request the
Contract for endorsement of the change.
4.03 DEATH
Unless otherwise provided in the Beneficiary designation, if any Beneficiary
dies before the Owner, that Beneficiary's interest will go to any other
Beneficiaries named, according to their respective interests. If there are no
Beneficiaries, the Beneficiary's interest will pass to a Contingent
Beneficiary(s), if any. Prior to the Annuity Commencement Date, if no
Beneficiary or Contingent Beneficiary survives the Owner, the Death Benefits
will be paid to the Owner's estate.
Once a Beneficiary is receiving Death Benefits or annuity benefit payments, the
Beneficiary may name his or her own Beneficiary(s) to receive any remaining
benefits due under the Contract, should the original Beneficiary die prior to
receipt of all benefits. If no such Beneficiary is named or the named
Beneficiary predeceases the original Beneficiary, any remaining benefits will
continue to the original Beneficiary's estate. A Beneficiary designation must be
made in writing to the LNL Home Office in a form acceptable to LNL.
ARTICLE 5
GENERAL PROVISIONS
5.01 THE CONTRACT
The Contract and any riders attached constitute the entire Contract. Only the
President, a Vice President, the Secretary or an Assistant Secretary of LNL has
the power, on behalf of LNL, to change, modify, or waive any provisions of this
Contract.
LNL reserves the right to unilaterally change the Contract for the purpose of
keeping the Contract in compliance with federal or state law.
Any changes, modifications, or waivers must be in writing. No representative or
person other than the above named officers has authority to change or modify
this Contract or waive any of its provisions. All terms used in this Contract
will have their usual and customary meaning except when specifically defined.
5.02 OWNERSHIP
The Owner is the person who has the ability to exercise the rights within this
Contract.
The Owner may only name his or her spouse as a Joint Owner. Joint Owner(s) will
be treated as having
Form 29530 Page 12
equal, undivided interests in the Contract, including rights of survivorship.
Either Joint Owner, independently of the other, may exercise any ownership
rights in the Contract.
Prior to the Annuity Commencement Date, the Owner has the right to change the
Annuitant at any time by notifying LNL in writing of the change. The Annuitant
may not be changed in a Contract owned by a nonnatural person. The Owner may
also name a Contingent Annuitant by notifying LNL in writing. The Contingent
Annuitant designation is no longer applicable after the Annuity Commencement
Date.
5.03 ASSIGNMENTS
If this Contract is used with a Qualified Plan, the Contract will not be
transferable unless allowed under applicable law. In addition, if this Contract
is used with either a Qualified Plan or a Non-Qualified Plan, it may not be
sold, discounted or pledged as collateral for a loan or as security for the
performance of an obligation or for any other purpose.
5.04 INCONTESTABILITY
This Contract will not be contested by LNL.
5.05 MISSTATEMENT OF AGE AND/OR SEX
If the age and/or sex of the Annuitant has been misstated, the benefits
available under this Contract will be those which the Contract Value would have
purchased using the correct age and/or sex. Any underpayment already made by LNL
will be made up immediately and any overpayments already made by LNL will be
charged against the annuity payments falling due after the correction is made.
5.06 NONPARTICIPATING
The Contract is nonparticipating and will not share in the surplus earnings of
LNL.
5.07 VOTING RIGHTS
The Owner will have a right to vote at the meetings of the Series. Ownership of
this Contract will not entitle any person to vote at any meeting of shareholders
of LNL. Votes attributable to the Contract will be cast in conformity with
applicable law.
5.08 OWNERSHIP OF THE ASSETS
LNL will have exclusive and absolute ownership and control of its assets,
including all assets in the Variable Account.
5.09 REPORTS
Prior to the Annuity Commencement Date, at least once each Contract Year LNL
will mail a report to the Owner. The report will be mailed to the last address
known to LNL. The report will include a statement of the number of Accumulation
Units credited to the Variable Account under this Contract and the dollar value
of such units as well as a statement of the value of the DCA Fixed Account of
this Contract. The information in the report will be as of a date not more than
two months prior to the date of mailing the report. LNL will also mail to the
Owner at least once in each Contract Year a report of the investments held in
the Variable Sub-accounts under this Contract.
5.10 PREMIUM TAX
State and local government premium tax, if applicable, will be deducted from
Gross Purchase Payments or Contract Value. This will be deducted when incurred
by LNL or at another time of LNL's choosing.
5.11 MAXIMUM ISSUE AGE
This Contract will not be issued to Owners over the age of 90. This also applies
to each Joint Owner, if any.
Form 29530 Page 13
ARTICLE 6
ANNUITY PURCHASE RATES UNDER A VARIABLE PAYMENT OPTION
--------------------------------------------------------------------------------
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
--------------------------------------------------------------------------------
SINGLE LIFE ANNUITIES
--------------------------------------------------------------------------------
No 120 240
Period Months Months Unit
Age Certain Certain Certain Refund
--------------------------------------------------------------------------------
60 $4.83 $4.78 $4.61 $4.62
61 4.92 4.87 4.67 4.69
62 5.02 4.96 4.74 4.76
63 5.13 5.05 4.80 4.84
64 5.24 5.15 4.87 4.93
65 5.36 5.26 4.93 5.02
66 5.49 5.38 5.00 5.11
67 5.63 5.50 5.07 5.21
68 5.78 5.62 5.13 5.31
69 5.94 5.76 5.19 5.42
70 6.11 5.90 5.25 5.53
71 6.30 6.05 5.31 5.65
72 6.50 6.21 5.37 5.78
73 6.73 6.37 5.42 5.91
74 6.97 6.54 5.46 6.05
75 7.23 6.72 5.50 6.20
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
JOINT AND SURVIVOR ANNUITIES
--------------------------------------------------------------------------------
Joint and Full to Survivor Joint and Two-Thirds Survivor
--------------------------------------------------------------------------------
Certain Period Certain Period
--------------------------------------------------------------------------------
Joint
None 120 240 Age None 120 240
--------------------------------------------------------------------------------
$4.42 $4.42 $4.38 60 $4.84 $4.79 $4.62
4.49 4.49 4.45 61 4.93 4.87 4.68
4.57 4.56 4.51 62 5.03 4.96 4.74
4.65 4.64 4.58 63 5.13 5.06 4.81
4.73 4.73 4.65 64 5.24 5.16 4.87
4.82 4.82 4.72 65 5.36 5.27 4.94
4.92 4.91 4.79 66 5.49 5.38 5.00
5.03 5.02 4.87 67 5.63 5.50 5.07
5.14 5.13 4.94 68 5.78 5.62 5.13
5.26 5.24 5.02 69 5.94 5.75 5.19
5.39 5.37 5.09 70 6.11 5.89 5.25
5.53 5.50 5.16 71 6.29 6.04 5.31
5.68 5.64 5.23 72 6.48 6.19 5.36
5.85 5.79 5.30 73 6.69 6.35 5.41
6.02 5.94 5.36 74 6.92 6.51 5.46
6.21 6.11 5.41 75 7.16 6.68 5.50
--------------------------------------------------------------------------------
Age Adjustment Table
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
------------- ----------------- ------------- -----------------
Before 1920 + 2 1960-1969 -3
1920-1929 + 1 1970-1979 -4
1930-1939 0 1980-1989 -5
1940-1949 - 1 1990-1999 -6
1950-1959 - 2 ETC. ETC.
Form 29530 Page 14
ARTICLE 7
ANNUITY PURCHASE RATES UNDER A FIXED PAYMENT OPTION
--------------------------------------------------------------------------------
DOLLAR AMOUNT OF FIRST MONTHLY PAYMENT WHICH IS
PURCHASED WITH EACH $1,000 APPLIED
--------------------------------------------------------------------------------
SINGLE LIFE ANNUITIES
--------------------------------------------------------------------------------
No 120 240
Period Months Months Cash
Age Certain Certain Certain Refund
--------------------------------------------------------------------------------
60 $4.42 $4.38 $4.22 $4.18
61 4.52 4.47 4.29 4.26
62 4.62 4.56 4.36 4.34
63 4.73 4.66 4.43 4.42
64 4.85 4.77 4.50 4.51
65 4.97 4.89 4.57 4.60
66 5.11 5.01 4.64 4.69
67 5.25 5.13 4.71 4.79
68 5.41 5.27 4.78 4.90
69 5.57 5.41 4.85 5.01
70 5.75 5.56 4.91 5.13
71 5.95 5.71 4.98 5.25
72 6.16 5.88 5.04 5.38
73 6.38 6.05 5.09 5.52
74 6.63 6.23 5.14 5.66
75 6.90 6.42 5.19 5.81
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
JOINT AND SURVIVOR ANNUITIES
--------------------------------------------------------------------------------
Joint and Full to Survivor Joint and Two-Thirds Survivor
--------------------------------------------------------------------------------
Certain Period Certain Period
--------------------------------------------------------------------------------
Joint
None 120 240 Age None 120 240
--------------------------------------------------------------------------------
$4.01 $4.01 $3.98 60 $4.43 $4.38 $4.22
4.09 4.08 4.05 61 4.52 4.47 4.29
4.17 4.16 4.12 62 4.63 4.57 4.36
4.25 4.25 4.19 63 4.74 4.67 4.43
4.34 4.34 4.26 64 4.85 4.78 4.50
4.44 4.43 4.34 65 4.98 4.89 4.57
4.54 4.54 4.42 66 5.11 5.01 4.64
4.66 4.64 4.50 67 5.26 5.13 4.71
4.77 4.76 4.58 68 5.41 5.27 4.78
4.90 4.88 4.66 69 5.57 5.41 4.85
5.04 5.01 4.74 70 5.75 5.55 4.91
5.18 5.15 4.82 71 5.94 5.70 4.98
5.34 5.30 4.89 72 6.14 5.86 5.03
5.51 5.45 4.96 73 6.35 6.03 5.09
5.69 5.62 5.03 74 6.59 6.20 5.14
5.89 5.79 5.09 75 6.84 6.38 5.18
--------------------------------------------------------------------------------
Age Adjustment Table
Year of Birth Adjustment to Age Year of Birth Adjustment to Age
------------- ----------------- ------------- -----------------
Before 1920 + 2 1960-1969 - 3
1920-1929 + 1 1970-1979 - 4
1930-1939 0 1980-1989 - 5
1940-1949 - 1 1990-1999 - 6
1950-1959 - 2 ETC. ETC.
Form 29530 Page 15
ANNUITY
CONTRACT
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
VARIABLE AND FIXED ANNUITY BENEFIT PAYMENT OPTIONS
NONPARTICIPATING
If you have any questions concerning
this Contract, please
contact your Lincoln National Life
representative or the Home Office of LNL.
THE LINCOLN NATIONAL
LIFE INSURANCE COMPANY
0000 XXXXX XXXXXXX XXXXXX
P.O. BOX 2348
FORT XXXXX, INDIANA 46801
000-000-0000
Form 29530
