EXHIBIT 99.(b)(5)(a)
COUNTRY INVESTORS LIFE ASSURANCE COMPANY
0000 X Xxxxxxx Xxxxxx, XX Xxx 0000
Xxxxxxxxxxx, XX 00000-2000
Phone (000) 000-0000
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
CONTRACT NUMBER
ANNUITANT
CONTRACT DATE
This contract is issued in consideration of the
application and payment of the Initial Premium.
Additional premiums may be paid as provided in the
Premium Section.
The Retirement Life Income is payable monthly unless
less frequent payments are elected by the Owner. A
Death Benefit is payable as defined in Section III.
These payments and any other contractual benefits are
subject to the terms of this contract which are
contained on this and the following pages.
For service or information on this contract, contact
Our agent, agency office or Our Variable Product
Service Center, [PO Box 9239, Des Moines, Iowa
00000-0000, phone 000-000-0000, fax 000-000-0000].
NOTICE OF RIGHT TO EXAMINE CONTRACT
YOU MAY, WITHIN 30 DAYS AFTER RECEIPT OF THIS CONTRACT,
RETURN IT TO OUR VARIABLE PRODUCT SERVICE CENTER OR TO
THE AGENT WHO SOLD THIS CONTRACT. WITHIN 7 DAYS OF OUR
RECEIPT OF THE CONTRACT TOGETHER WITH YOUR WRITTEN
REQUEST FOR CANCELLATION, THE CONTRACT SHALL BE VOID
FROM THE EFFECTIVE DATE WITH YOU AND THE COMPANY BEING
IN THE SAME POSITION AS IF NO CONTRACT HAD BEEN
EXECUTED, AND WE WILL REFUND AN AMOUNT EQUAL TO THE
GREATER OF THE PREMIUMS PAID OR THE SUM OF:
1. THE ACCUMULATED VALUE OF THE CONTRACT ON THE
DATE THE CONTRACT IS RECEIVED AT OUR VARIABLE
PRODUCT SERVICE CENTER;
2. ANY ADMINISTRATIVE CHARGES WHICH WERE DEDUCTED;
AND
3. AMOUNTS APPROXIMATING DAILY CHARGES AGAINST THE
VARIABLE ACCOUNT.
Signed for COUNTRY Investors Life Assurance Company at
its Home Office in Bloomington, Illinois.
/s/ Xxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxxxx
Secretary President
Retirement Life Income at Annuitization.
Premiums payable to Annuitization.
Contract is non-participating.
THE ACCUMULATED VALUE IN THE VARIABLE ACCOUNT IS BASED
ON THE INVESTMENT EXPERIENCE OF THAT ACCOUNT, AND MAY
INCREASE OR DECREASE DAILY. IT IS NOT GUARANTEED AS TO
DOLLAR AMOUNT. THE VARIABLE FEATURES OF THIS CONTRACT
ARE DESCRIBED IN SECTION V.
CI-VFPDA-04
CONTRACT CONTENTS
PAGE NO.
Introduction to Contract Cover
Contract Specifications 1
SECTION I - DEFINITIONS
Age 2
Annuitization 2
Business Day 2
Contract Anniversary 2
Contract Date 2
Contract Year 2
Declared Interest Option 2
Due Proof of Death 2
Fund 2
General Account 2
Retirement Life Income 2
SEC 2
Subaccount 2
Valuation Period 2
Variable Account 2
Variable Accumulated Value 2
We, Us, Our, and Company 2
You and Your 2
SECTION II - GENERAL PROVISIONS
This is a Contract 3
Change or Waiver of Terms 3
Misstatement of Age or Sex 3
Premium 3
Accumulated Value 3
Allocation of Premium 3
Termination 4
Assignment and Transfer 4
Owner, Annuitant, and Beneficiary 4
Annual Report 5
Basis of Computation of Contract Payments 5
SECTION III - PROCEEDS PAYABLE AT DEATH
Death Benefit Prior to Annuitization 5
Death of the Annuitant Prior to Annuitization 5
Death of Owner Prior to Annuitization 6
Deceased Owner is also the Annuitant 6
Owner is not an Individual 6
Death on or after Annuitization 6
SECTION IV - NON-PARTICIPATION
SECTION V - VARIABLE ACCOUNT
Variable Account 6
Subaccounts 7
Unit Value 7
Variable Accumulated Value 8
Declared Interest Option Accumulated Value 8
Subaccount Units 8
Fund Investment Options 9
Transfers 9
Excessive Trading Limits 10
SECTION VI - SURRENDER PROVISIONS
Cash Surrender of Accumulated Value 10
Cash Surrender Value 10
Partial Withdrawal of Accumulated Value 11
Waiver of Surrender Charge for Confinement 11
Delay of Payment 12
Tax Charges 12
SECTION VII - SETTLEMENT OPTIONS
SECTION VIII - FIXED SETTLEMENT OPTIONS
Option 1 - Interest Payment Option 13
Option 2 - Fixed Time Payment Option 14
Option 3 - Lifetime Payment Option 14
Option 4 - Fixed Amount Payment Option 16
Option 5 - Joint Lifetime Payment Option 16
SECTION IX - VARIABLE SETTLEMENT OPTIONS
Option A - Payment of Life Income 17
Option B - Payment of Joint and Survivor Life Income 17
Assumed Interest Rate and Factor 18
Annuity Unit 18
Fixed Interest Option 18
Allocation 18
Exchanges of Annuity Units 18
Commuted Value 18
Amount of Variable Payments 19
Annuity Unit Value 19
Net Investment Factor 19
SECTION X - SPENDTRHIFT
A copy of the Application for this contract and any Riders and Endorsements
follow page 20.
CONTRACT SPECIFICATIONS
Contract Number [12345]
Annuitant [XXXX XXX]
Contract Date [05-01-2002]
Initial Premium [$70,000.00]
Owner(s) [XXXX XXX]
Beneficiary As stated in the application unless
changed by endorsement.
On Declared Interest Option:
Guaranteed Minimum Rate [3.0%]
Death Benefit As stated in Section III
[Incremental Death Benefit Factor 40%]
Table of Surrender Charges:
[CONTRACT YEAR SURRENDER CHARGE PERCENTAGE (AS A PERCENT OF
OF WITHDRAWAL ACCOUNT VALUE WITHDRAWN)
-------------- --------------------------------------------
1 7%
2 7%
3 7%
4 6%
5 5%
6 4%
7 2%
Thereafter 0%]
Form number CI-VFPDA-04
1
CONTRACT SPECIFICATIONS
SCHEDULE OF CHARGES
Annual Administrative Charge: [$45.00 per year]
Transfer Charge: [$10.00 per transfer. This charge is
guaranteed to never exceed $25.00.]
Mortality and Expense Risk Charge: [0.0032682% of the Variable Account
Value per day (equivalent to 1.20%
per year).]
[Guaranteed Minimum Death Benefit Charge 0.20% of Account Value]
[Incremental Death Benefit Rider Charge 0.20% of Account Value]
Surrender Charge Period [7 Contract Years]
SCHEDULE OF INVESTMENT OPTIONS
General Account: The general assets of Country Investors Life Assurance
Company
Separate Account: [COUNTRY Investors Variable Annuity Account]
[Subaccounts: Subaccounts at issue are listed in the application]
SCHEDULE OF FORMS
Form No. Description
--------------- ---------------------------------------------------
[CI-VFPDA-04
Flexible Premium Deferred Variable Annuity]
[CI-GMDB-04 Guaranteed Minimum Death Benefit Endorsement]
[CI-IDB-04 Incremental Death Benefit Rider]
Form Number CI-VPDA-04
Policy Number [12345]
1A
SECTION I
DEFINITIONS
AGE Age, as used in this contract to determine rates and
benefits, means Age on the Annuitant's last birthday.
ANNUITIZATION The date You elect to receive Retirement Life Income.
BUSINESS DAY Each day that the New York Stock Exchange is open for
trading. Assets are valued at the close of Business
Day.
CONTRACT The same date in each year as the Contract Date.
ANNIVERSARY
CONTRACT DATE The date We issue the contract.
CONTRACT YEAR The 12-month period that begins on the Contract Date or
on a Contract Anniversary.
DECLARED INTEREST An option in which the Accumulated Value accrues
OPTION interest at a rate declared by the Company. The
declared rate will never be less than the guaranteed
minimum rate. The Declared Interest Option is
supported by the General Account.
DUE PROOF OF DEATH Proof of death satisfactory to us. Such proof may
consist of a certified copy of the death record, a
certified copy of a court decree reciting a finding of
death, or any other proof satisfactory to us.
FUND An investment company registered with the SEC under the
Investment Company Act of 1940 as an open-end
diversified management investment company or unit
investment trust in which the Account invests.
GENERAL ACCOUNT All our assets other than those allocated to the
Variable Account or any other Separate Account. We
have complete ownership and control of the assets of
the General Account.
INVESTMENT OPTION A Fund or a separate investment portfolio of a Fund in
which a Subaccount invests.
RETIREMENT LIFE Periodic annuity income benefits paid to You or someone
INCOME You elect to receive payments under the terms of this
contract.
SEC The U.S. Securities and Exchange Commission.
SUBACCOUNT A subdivision of the Variable Account, which invests
its assets exclusively in a corresponding Investment
Option.
VALUATION PERIOD The period between the close of business on a Business
Day and the close of business on the next Business Day.
VARIABLE ACCOUNT The Separate Account shown on the Contract
Specification pages. It is registered with the SEC
under the Investment Company Act of 1940 as a unit
investment trust.
VARIABLE ACCUMULATED The sum of the contract's Accumulated Value in each
VALUE Subaccount.
WE, US, OUR, AND COUNTRY Investors Life Assurance Company.
COMPANY
YOU OR YOUR The Owner of this contract.
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SECTION II
GENERAL PROVISIONS
THIS IS A CONTRACT This is a legal contract between the Owner and the
Company. The entire contract includes the application
and any attached riders and endorsements.
CHANGE OR WAIVER OF No change or waiver of any terms will be valid unless
TERMS it is in writing and signed by Our President, Vice
President, Secretary, Assistant Secretary, or Actuary.
MISSTATEMENT OF Two questions in the application concern the
AGE OR SEX Annuitant's Age and sex. If either or both of the
answers to these questions are not correct, all
benefits and amounts payable under this contract would
be the benefits and amounts payable had the correct Age
and sex been stated. Any overpayment We make because of
misstatement of Age or sex, together with interest
thereon at not less than the Guaranteed Minimum Rate
shown on the Contract Specifications page, compounded
annually, will be deducted from the current or next
succeeding payment or payments under this contract. Any
underpayments made will be added to the next payment
with interest at not less than the Guaranteed Minimum
Rate shown on the Contract Specifications page.
In the case of lump sum settlement, We will adjust the
lump sum to reflect the correct Age or sex at a rate
not less than the Guaranteed Minimum Rate shown on the
Contract Specifications page compounded annually.
We reserve the right to require proof of Age and sex of
the Annuitant before making or continuing annuity
payments under this contract.
PREMIUM Premiums may be paid during the lifetime of the
Annuitant, and prior to Annuitization. Each premium
after the first is payable at Our Variable Product
Service Center. Additional premium payments may be made
at any time during the continuance of this contract. We
reserve the right to limit the number/amount of
additional premium payments. They may be discontinued
at any time.
ACCUMULATED VALUE The Accumulated Value of this contract will be the sum
of:
1. the Variable Accumulated Value; plus
2. the Declared Interest Option Accumulated Value.
ALLOCATION OF The Owner will determine the percentage of premium that
PREMIUM will be allocated to each Subaccount of the Variable
Account and to the Declared Interest Option. The Owner
may choose to allocate all the premium, a percentage or
nothing to a particular Subaccount or to the Declared
Interest Option. Any allocation must be for at least
10% of the individual premium payment. A fractional
percent may not be chosen. Total allocations must equal
100% of the premium payment.
On the Contract Date, premiums will be initially
allocated to the money market Subaccount. On the 11th
day following the Contract Date, We will transfer part
or all of the Accumulated Value in the money market
Subaccount to the Subaccounts or the Declared Interest
Option in accordance with the premium allocation
percentages shown in the application. Subsequent
premiums will be allocated in accordance with the
premium allocation percentages shown in the application
or the most recent written instructions of the Owner.
The Owner may change the allocation for future premiums
at any time, subject to the following rules:
1. the contract must be in force;
2. there must be an Accumulated Value;
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3. the change must be in writing on a form acceptable
to Us;
4. the form must be signed by the Owner; and
5. the change will take effect no later than the
Business Day following the date We receive the
signed form at Our Variable Product Service
Center.
A change of allocation of future premiums does not
affect current Accumulated Values.
TERMINATION This contract ends when any one of the following events
occurs:
1. the Owner requests that the contract be cancelled;
2. the Annuitant dies;
3. the contract is surrendered; or
4. all of the value is applied to a fixed payment
option.
We also reserve the right to terminate the contract if
the Accumulated Value is $0 on any Contract
Anniversary.
ASSIGNMENT If this contract is part of a Qualified Plan as defined
AND TRANSFER under the Internal Revenue Code, it may not be sold,
assigned, transferred, discounted, or pledged as
collateral for a loan or as security for the
performance of any obligation, or for any other purpose
to any person. However, if this contract is owned by a
trust or a custodian or an employer as part of a
Qualified Plan, the trustee, custodian or employer may
assign ownership of this contract to the Annuitant. The
transfer, assignment or exercise of any ownership
rights under this contract shall be made by written
notice and shall be effective only if received by the
Company at its Variable Product Service Center. When
received, such transfer, assignment or exercise of
ownership rights shall take effect as of the date such
notice was exercised.
In no event shall the Company be prejudiced by any
payment made or action taken inconsistent with this
transfer, assignment, or exercise before receipt of
such notice. The Company assumes no responsibility for
the validity of any assignment. The rights of the Owner
or any Beneficiary shall be subject to the rights of
any Assignee on record at the Variable Product Service
Center of the Company.
OWNER, ANNUITANT The Owner is the person who owns the contract as shown
AND BENEFICIARY on Our records. The Annuitant is the person on whose
life Retirement Life Income payments are based. The
Annuitant may be the Owner or someone else may be the
Owner.
Unless the contract is endorsed to provide otherwise,
if the Issue Age of the Annuitant is less than the age
to contract or age of majority, whichever is less, as
prescribed by the laws of the state in which this
contract is issued, ownership shall vest in the
Annuitant on the Contract Anniversary that is on or
follows the Annuitant's 18th birthday. If the Owner and
all contingent owners die prior to that anniversary,
the Owner's estate shall then become the Owner.
A Beneficiary is any person named on Our records to
receive death proceeds after the Annuitant dies. There
may be different classes of Beneficiaries such as
primary and secondary. These classes establish the
order of payment. Secondary Beneficiaries will not
receive benefits if any Primary Beneficiary is alive.
There may be more than one Beneficiary in a class. If
no Beneficiary survives the Annuitant, the Owner will
be the Beneficiary, and if the Owner is the Annuitant,
the Annuitant's estate will be the Beneficiary.
The Owner may change ownership or change any
Beneficiary while the Annuitant is living. To make a
change, a written request, satisfactory to Us, must be
received at Our Variable Product Service Center. The
change will take effect as of the date the request is
signed, even if the Annuitant dies before We
4
receive it. Each change will be subject to any payment
We made or other action We took before receiving the
request.
ANNUAL REPORT At least once each year We will send a report, without
charge, to the Owner which shows:
1. all premiums paid and charges made since the last
report;
2. the current Accumulated Value including the value
in each Subaccount and the Declared Interest
Option; and
3. any partial withdrawals since the last report.
An illustrative report will be sent to the Owner upon
request. A fee, not to exceed $25, may be charged for
this report.
BASIS OF COMPUTATION The minimum payments under the Settlement Options are
OF CONTRACT PAYMENTS based on mortality rates from the Annuity 2000
Mortality Table. For Fixed Settlement Options, the
interest used is at an annual rate of [3%].
SECTION III
PROCEEDS PAYABLE AT DEATH
Notwithstanding any other provision of this contract,
the contract will be interpreted and administered in
accordance with Section 72(s) of the Internal Revenue
Code.
DEATH BENEFIT PRIOR We will pay the Death Benefit when we receive due proof
TO ANNUITIZATION of the Annuitant's death. The Death Benefit is equal to
the greater of:
1. the sum of all premium payments less the sum of all
partial withdrawals, as of the date Due Proof of
Death is received, or
2. the Accumulated Value as of the date Due Proof of
Death is received;
For purposes of this section, a partial withdrawal is
equal to "1" times "2" divided by "3" where:
1. is the Death Benefit immediately prior to
withdrawal;
2. is the amount of the partial withdrawal; and
3. is the Accumulated Value immediately prior to
withdrawal.
Prior to Annuitization, if You have not selected a
payment option by the date of death, the Beneficiary
may make such election within 60 days of the date We
receive due proof of the Annuitant's death. The
Beneficiary may elect to receive the Death Benefit as a
lump sum payment or apply it to one of the options set
forth in the DEATH OF THE ANNUITANT PRIOR TO
ANNUITIZATION provision described below.
DEATH OF THE When we receive due proof that the Annuitant died
ANNUITANT PRIOR TO before Annuitization, we will provide the Death Benefit
ANNUITIZATION to the Beneficiary as described below.
1. If the Beneficiary is the deceased Xxxxxxxxx's
surviving spouse, the Beneficiary may elect to
continue this contract as Owner and Annuitant
rather than receiving the Death Benefit. If the
contract is continued, all current applicable
surrender charges will be waived. If this
Beneficiary elects to have the death proceeds
paid, the death proceeds must be distributed:
a. by the end of 5 years after the date of the
deceased Xxxxxxxxx's death, or
b. payments must begin no later than one year
after the deceased Xxxxxxxxx's death and
must be made for a period certain or for
this Beneficiary's lifetime, so long as any
period certain does not exceed this
Beneficiary's life expectancy.
5
2. If the Beneficiary is not the deceased Xxxxxxxxx's
surviving spouse, the death proceeds must be
distributed as provided in 1a. or 1b. above.
3. Death proceeds which are not paid to or for the
benefit of a natural person must be distributed by
the end of 5 years after the date of the deceased
Xxxxxxxxx's death.
DEATH OF OWNER PRIOR If any Owner dies prior to Annuitization and before the
TO ANNUITIZATION entire interest in the contract is distributed, the
surviving joint Owner, if any, will become the new
Owner. If there is not a surviving joint Owner, the
contingent Owner will become the new Owner. If no joint
Owner or contingent Owner is named, the Owner's estate
becomes the new Owner. The remaining portion of any
interest in the contract must be distributed to the
extent provided below:
1. If the new Owner is the deceased Owner's surviving
spouse, the new Owner may elect to continue this
contract rather than receive the Cash Surrender
Value. If the contract is continued, all current
applicable surrender charges will be waived. If the
new Owner elects to receive the Cash Surrender
Value, the Cash Surrender Value must be
distributed:
a. by the end of 5 years after the date of the
deceased Owner's death, or
b. payments must begin no later than one year after
the deceased Owner's death and must be made for
a period certain or for the new Owner's
lifetime, so long as any period certain does not
exceed the new Owner's life expectancy.
2. If the new Owner is not the deceased Owner's
surviving spouse, the Cash Surrender Value must be
distributed as provided in 1a. or 1b. above.
If there is more than one Owner, these distribution
requirements are applied at the death of the first
Owner.
DECEASED OWNER IS If the deceased Owner is also the Annuitant, the DEATH
ALSO THE ANNUITANT OF THE ANNUITANT PRIOR TO ANNUITIZATION provision
described above will apply.
OWNER IS NOT AN If a corporation or other non-individual owns this
INDIVIDUAL policy, the Annuitant will be treated as this
contract's Owner for the purpose of administering the
DEATH OF THE OWNER PRIOR TO ANNUITIZATION provision
above.
DEATH ON OR AFTER The death proceeds on or after Annuitization depend on
ANNUITIZATION the settlement option elected. If death of any Owner or
the Annuitant occurs on or after Annuitization, but
before the entire interest under the contract is
distributed, the remaining portion of such interest in
the contract will be distributed at least as rapidly as
under the method of distribution being used as of the
date of death.
SECTION IV
NON-PARTICIPATION
This contract is non-participating, its Premiums
include no charge or consideration for participation in
surplus.
SECTION V
VARIABLE ACCOUNT
VARIABLE ACCOUNT We own the assets of the Variable Account. We will
value the assets of the Variable Account each Business
Day. The assets of such account will be kept separate
from the assets of Our General Account and any of Our
other Separate Accounts. Xxxxxx and realized and
unrealized gains or losses from assets in the Variable
Account will be credited to or charged against such
account without regard to Our other income, gains or
losses.
6
That portion of the assets of the Variable Account
which equals the reserves and other contract
liabilities of the contracts which are supported by the
Variable Account will not be charged with liabilities
arising from any other business We conduct. We have the
right to transfer to Our General Account any assets of
the Variable Account which are in excess of such
reserves and other contract liabilities.
The Variable Account is registered with the SEC and
thereby subject to SEC rules and regulations. It is
also subject to the laws of the State of Illinois that
regulate the operations of insurance companies
incorporated in Illinois.
We also reserve the right to transfer assets of the
Variable Account, which We determine to be associated
with the class of contracts to which this contract
belongs, to another Separate Account. If this type of
transfer is made, the term "Variable Account," as used
in this contract, shall then mean the Separate Account
to which those assets were transferred.
When permitted by law, We also reserve the right to:
1. deregister the Variable Account under the
Investment Company Act of 1940;
2. manage the Variable Account under the direction of
a committee;
3. restrict or eliminate any voting rights of Owners,
or other persons who have voting rights as to
Variable Account assets; and
4. combine the Variable Account with other Separate
Accounts.
SUBACCOUNTS The Variable Account is divided into Subaccounts.
Subject to obtaining any approvals or consents required
by applicable law, We reserve the right to eliminate or
combine any Subaccounts and the right to transfer the
assets of one or more Subaccounts to any other
Subaccount. We also reserve the right to add new
Subaccounts and make such Subaccounts available to any
class or series of contracts as We deem appropriate.
Each new Subaccount would invest in a new Investment
Option of the Fund, or in shares of another investment
company.
UNIT VALUE The Unit Value for a Subaccount on any Business Day is
determined by dividing each Subaccount's net asset
value by the number of units outstanding at the time of
calculation. The Unit Value for each Subaccount was set
initially at $10.00 when the Subaccounts first
purchased fund shares. The Unit Value for each
subsequent Valuation Period is calculated by dividing
(1) by (2), where:
(1) is:
a. the value of the net assets of the Subaccount at
the end of the preceding Valuation Period; plus
b. the investment income and capital gains,
realized or unrealized, credited to the net
assets of that Subaccount during the Valuation
Period for which the Unit Value is being
determined; minus
c. the capital losses, realized or unrealized,
charged against those net assets during the
Valuation Period; minus
d. any amount charged against the Subaccount for
taxes, or any amount set aside during the
Valuation Period by the company as a provision
for taxes attributable to the operation or
maintenance of that Subaccount; minus
e. the mortality and expense risk shown on the
Contract Specifications Page; this charge may go
up or down but will never exceed 0.0038091% of
the net daily assets in that Subaccount for each
day in the Valuation Period; the maximum charge
corresponds to a charge of 1.40% per year of the
average daily net assets of the Subaccount for
mortality and expense risks.
(2) is the number of units outstanding at the end of
the preceding Valuation Period.
7
We will value the net assets in each Subaccount at
their fair market value in accordance with accepted
accounting practices and applicable laws and
regulations.
VARIABLE ACCUMULATED The initial Variable Accumulated Value is the total
VALUE amount of premium, if any, allocated to the money
market subaccount valued no later than the Business Day
following the day We receive a completed application
and the minimum initial premium. After such date, the
contract's Variable Accumulated Value is equal to the
sum of the contract's Accumulated Value in each
Subaccount. The value in a Subaccount is equal to (1)
multiplied by (2) where:
(1) is the current number of Subaccount Units; and
(2) is the current Unit Value.
The Variable Accumulated Value will vary from Business
Day to Business Day reflecting changes in (1) and (2)
above.
DECLARED INTEREST The Declared Interest Option Accumulated Value as of
OPTION ACCUMULATED the 11th day following the Contract Date is the
VALUE Accumulated Value allocated to the Declared Interest
Option as of that date. Thereafter, the Declared
Interest Option Accumulated Value changes every
Valuation Period. The Declared Interest Option
Accumulated Value increases when:
1. premiums are allocated to the Declared Interest
Option; or
2. transfers from the other Subaccounts are credited
to the Declared Interest Option; or
3. any interest is credited to the Declared Interest
Option.
The Declared Interest Option Accumulated Value
decreases when:
1. the Owner makes a partial withdrawal from the
Declared Interest Option; or
2. transfers are made from the Declared Interest
Option to other Subaccounts; or
3. the Annual Administrative Charge shown on the
Contract Specifications Page is deducted (the
Annual Administrative Charge will be prorated among
the Subaccounts and the Declared Interest Option).
For the purposes of the above calculation, interest
accrues on the Accumulated Value in the Declared
Interest Option on a daily basis. However, We credit
interest on the Accumulated Value no less frequently
than at the end of each Contract Year. In any Contract
Year, We will not credit interest that accrues on
amounts deducted for contract charges, surrenders,
withdrawals, or transfers from the Declared Interest
Option during the Contract Year.
SUBACCOUNT UNITS When transactions are made which affect the Variable
Accumulated Value, dollar amounts are converted to
Subaccount Units. The number of Subaccount Units for a
transaction is determined by dividing the dollar amount
of the transaction by the current Unit Value. The
number of units for a Subaccount increases when:
1. premiums are allocated to that Subaccount; or
2. transfers from the Declared Interest Option or
other Subaccounts are credited to that Subaccount.
The number of units for a Subaccount decreases when:
1. the Owner makes a surrender or partial withdrawal
from that Subaccount;
2. transfers are made from that Subaccount to the
Declared Interest Option or other Subaccounts; or
3. the Annual Administrative Charge shown on the
Contract Specifications Page is deducted (the
Annual Administrative Charge will be prorated among
the Subaccounts and the Declared Interest Option).
8
FUND INVESTMENT The Funds have one or more Investment Options available
OPTIONS under the contract, each of which corresponds to one of
the Subaccounts of the Variable Account. The Investment
Options are listed on the Contract Specifications Page.
Premiums allocated to a Subaccount will automatically
be invested in the fund investment option associated
with that Subaccount. The Owner will share only in the
income, gains or losses of the Investment Option(s)
where shares are held.
We have the right, subject to compliance with any
applicable laws, to:
1. add;
2. delete; or
3. substitute;
Investment Options that the Variable Account may invest
in.
In the event of any substitution or change, We may, by
appropriate endorsement, make such changes in this and
other contracts as may be necessary or appropriate to
reflect the substitution or change.
TRANSFERS The Owner may transfer all or part of the Accumulated
Value among the Subaccounts of the Variable Account and
between the Subaccounts and the Declared Interest
Option, subject to the following rules:
1. the transfer request must be in writing on a form
acceptable to Us;
2. the form must be signed by the Owner;
3. the transfer will take effect as of the end of the
Valuation Period during which We receive the signed
form in good order at Our Variable Product -
Service Center;
4. the Owner may transfer amounts among the
Subaccounts of the Variable Account an unlimited
number of times in a Contract Year;
5. the Owner may transfer amounts from the Declared
Interest Option to the Variable Account no more
than four times in a contract year; amounts
transferred from the Declared Interest Option are
considered transferred on a last-in-first-out
basis;
6. the first 12 transfers in each Contract Year will
be made without a Transfer Charge; thereafter, each
time amounts are transferred a Transfer Charge may
be imposed. We treat all transfer requests on a
Business Day as one transfer request for purposes
of determining whether to assess the Transfer
Charge. The Transfer Charge, not to exceed $25, is
shown on the Contract Specifications Page;
7. the Accumulated Value on the date of the transfer
will not be affected by the transfer except to the
extent of the Transfer Charge that will be deducted
on a pro rata basis from the Declared Interest
Option and/or the Subaccounts to which the transfer
is made;
8. the Owner must transfer at least:
a. a total of $100; or
b. the total Accumulated Value in a Subaccount or
the total Accumulated Value in the Declared
Interest Option, if the total amount transferred
is less than $100.
9
9. no more than 25% of the Accumulated Value in the
Declared Interest Option may be transferred at any
one time unless the balance in the Declared
Interest Option after the transfer would be less
than $1,000; if the balance in the Declared
Interest Option would fall below $1,000, the entire
Accumulated Value in the Declared Interest Option
may be transferred.
EXCESSIVE TRADING We reserve the right to limit transfers in any Contract
LIMITS Year, or to refuse any transfer request for an Owner
if:
1. We believe, in Our sole discretion, that excessive
trading by the Owner, or a specific transfer
request, or group of transfer requests, may have a
detrimental effect on:
a. other Owners;
b. the accumulation unit values of any
Subaccount;
c. the share prices of any Investment Option;
or
d. Our ability to effectively manage the assets
of the Declared Interest Option;
2. We are informed by one or more Funds that they
intend to restrict the purchase of portfolio
shares:
a. because of excessive trading; or
b. because they believe that a specific
transfer, or group of transfers, would have
a detrimental effect on the price of
portfolio shares.
We may apply the restrictions in any manner reasonably
designed to prevent transfers that We consider
disadvantageous to other Owners.
SECTION VI
SURRENDER PROVISIONS
CASH SURRENDER OF At any time prior to Annuitization and before the death
ACCUMULATED VALUE of the Annuitant, You may elect to surrender the
contract for the total Cash Surrender Value described
below.
All of the values are the same or more than the
minimums set by the laws of the state where this
contract is delivered.
CASH SURRENDER VALUE The total Cash Surrender Value is equal to Your
Accumulated Value reduced by the Surrender Charge. The
Surrender Charge is a percentage of Accumulated Value
and depends on the Contract Year in which the surrender
is requested. The Surrender Charge is shown in the
Table of Surrender Charges on the Contract
Specification Page.
If the Cash Surrender Value is applied under Fixed
Settlement Options 3 or 5 or determined at the time of
the Annuitant's death prior to Annuitization, then the
Surrender Charge shall be waived. If a Cash Surrender
Value is applied under any Variable Settlement Option,
We will waive the Surrender Charge. Surrender Charges
will also be waived for any amount that is required to
satisfy the minimum distribution requirements of
Section 401(a)(9) of the Internal Revenue Code.
If the Cash Surrender Value is applied under Fixed
Settlement Options 2 or 4, We will add the number of
years in the term of the settlement option to the
actual Contract Year of this contract to determine the
Surrender Charge.
10
If the Cash Surrender Value is applied under Fixed
Settlement Option 1, the Surrender Charge at the date
of settlement shall be waived. If proceeds left under
Fixed Settlement Option 1 are subsequently withdrawn,
We will apply a Surrender Charge determined by years
elapsed from the Contract Date to the date such
proceeds are withdrawn.
PARTIAL WITHDRAWAL Partial withdrawals of Accumulated Value will be
OF ACCUMULATED VALUE permitted. In the event of a partial withdrawal, the
Accumulated Value will be reduced by the amount of any
partial withdrawal and any Surrender Charge applying to
such withdrawal. The Owner may tell Us how to allocate
a partial withdrawal among the Subaccounts and the
Declared Interest Option. If the Owner does not so
instruct, We will prorate the partial withdrawal among
the Subaccounts and the Declared Interest Option in
proportion to the Accumulated Value in each of the
Subaccounts and the Accumulated Value in the Declared
Interest Option on the date We receive the request.
Amounts withdrawn from the Declared Interest Option are
considered withdrawn on the last-in-first-out basis.
The amount of any partial withdrawal must be at least
$500. If the Cash Surrender Value after a partial
withdrawal is less than $2,000, We have the right to
pay the remaining Cash Surrender Value to the Owner as
a full surrender.
After the first Contract Year, You may withdraw an
amount not greater than 10% of the Accumulated Value as
of the end of the previous Contract Year and the
Surrender Charge will be waived. Any amount withdrawn
in excess of 10% will be reduced by the Surrender
Charge, and the Accumulated Value will be further
reduced by this result.
With each such withdrawal, Your written request is
required.
WAIVER OF SURRENDER We will waive any Surrender Charge for a surrender or
CHARGE FOR partial withdrawal if You have been confined in an
CONFINEMENT Extended Care Facility for at least 30 consecutive
days, provided the following.
CONFINEMENT IN AN EXTENDED CARE FACILITY:
1. began after the effective date of this contract;
2. must be medically necessary and prescribed by a
Physician; and
3. is based on physical conditions that prohibit daily
living in a non-institutional environment.
If You make a partial withdrawal during confinement, We
will continue to waive Surrender Charges thereafter on
partial withdrawals or a surrender until 90 days after
discharge. We must receive a written request for
surrender and Proof of Confinement at Our Variable
Product Service Center no later than 90 days after
discharge.
DEFINITIONS:
Proof of Confinement is a written statement from the
Physician or Extended Care Facility that includes the
dates of confinement.
A Physician is a licensed medical doctor (M.D.) or
licensed doctor of osteopathy (D.O.) practicing within
the scope of his or her license. Physician does not
include the Owner or Annuitant, or a spouse, child,
parent, grandparent, grandchild, sibling, or in-law of
the Owner or Annuitant.
11
Extended Care Facility means a Skilled Nursing
Facility, Intermediate Care Facility, or Custodial Care
Facility as defined below.
Custodial Care Facility means a facility that: (a) is
licensed and operated as such in the state in which it
is located, (b) provides nursing service 24 hours a day
under the supervision of a licensed Physician,
registered graduate professional nurse or licensed
practical nurse, and (c) cares for three or more
persons for a charge.
Intermediate Care Facility means a facility that (a) is
licensed and operated as such in the state in which it
is located; (b) provides nursing service 24 hours a day
under the supervision of a licensed Physician,
registered graduate professional nurse or licensed
practical nurse; and (c) maintains a daily medical
record of each patient.
Skilled Nursing Facility means a facility that (a) is
licensed and operated as such in the state in which it
is located (b) provides nursing service 24 hours a day
under the supervision of a licensed Physician,
registered graduate professional nurse or licensed
practical nurse; and (c) maintains a daily medical
record of each patient.
DELAY OF PAYMENT Proceeds from full surrenders and partial withdrawals
will usually be mailed to the Owner within 7 days after
the Owner's signed request is received in Our Variable
Product Service Center. We will usually mail any death
claim proceeds within 7 days after We receive Due Proof
of Death. We have the right to delay such payment
whenever:
1. the New York Stock Exchange is closed other than on
customary weekends and any holiday closing;
2. trading on the New York Stock Exchange is
restricted as determined by the SEC;
3. the SEC, by order, permits postponement for the
protection of contract owners; or
4. as a result of an emergency, as determined by the
SEC, it is not reasonably possible to dispose of
securities or to determine the value of the net
assets of the Variable Account.
We have the right to defer payment that is derived from
any amount paid to Us by check or draft until We are
satisfied the check or draft has been paid by the bank
on which it is drawn.
We also have the right to delay payment from the
Declared Interest Option for up to 6 months from the
date We receive the Owner's request for full surrender,
partial withdrawal or transfer.
TAX CHARGES The Company may deduct state and local government
premium tax from the Accumulated Value, if such taxes
are applicable in your state. The Company may also
make a charge against the Accumulated Value of this
contract for any tax or economic burden on the Company
resulting from the application of federal, state or
local tax laws that the Company determines to be
properly attributable to the Separate Account or the
contracts. The charge will be applied by:
1. redeeming the number of Subaccount Units from the
Separate Account equal to the pro rata share of the
charge applicable to the Subaccounts; or
2. deducting from the Declared Interest Option
Accumulated Value the pro rata portion of the
charge applicable to the Declared Interest Option.
12
SECTION VII
SETTLEMENT OPTIONS
These are optional methods of settlement. They provide
alternate ways in which payment can be made.
To elect any settlement option, We require that a
written request, satisfactory to Us, be received at Our
Variable Product Service Center. The Owner may elect an
option during the Annuitant's lifetime. If the Death
Benefit is payable in one sum when the Annuitant dies,
the Beneficiary may elect an option with Our consent.
The effective date of a settlement option is the date
the amount is applied under that option. For a Death
Benefit, this is the date that Due Proof of Death is
received at Our Variable Product Service Center. For
the Cash Surrender Value, it is the effective date of
surrender.
The first payment is due on the effective date, except
the first payment under Fixed Settlement Option 1 is
due one month later. A later date for the first payment
may be requested in the payment option election. All
payment dates will fall on the same day of the month as
the first one. No payment will become due until a
payment date. No partial payment will be made for any
period shorter than the time between payment dates.
All or part of the Cash Surrender Value or Death
Benefit may be applied under any payment option. If
this contract is assigned, any amount due to the
Assignee will be paid in one sum. The balance, if any,
may be applied under any payment option.
If required by law to ignore the Annuitant's sex, the
unisex settlement option factors will apply.
If the amount to be applied under any settlement option
for any one person is less than $5,000, We may pay that
amount in one sum instead. If the payments under any
option come to less than $100 each, We have the right
to make payments at less frequent intervals.
Our payment options are described below. Any other
payment option agreed to by Us may be elected. The
payment options are described in terms of monthly
payments. Annual, semiannual, or quarterly payments may
be requested instead. The amount of these payments will
be determined in a way which is consistent with monthly
payments and will be quoted on request.
SECTION VIII
FIXED SETTLEMENT OPTIONS
FIXED SETTLEMENT The fixed settlement options are:
OPTION CHOICES
OPTION 1. Interest Payment Option. We will hold any
amount applied under this option. Interest
on the unpaid balance will be paid each
month at a rate determined by Us. This rate
will not be less than the equivalent of
[3%] per year.
13
OPTION 2. Fixed Time Payment Option. Equal
monthly payments will be made for any
period selected, up to 30 years. The amount
of each payment depends on the total amount
applied, the period selected and the
monthly payment rates We are using when the
first payment is due. The rate of any
payment will not be less than shown in the
Option 2 Table.
OPTION 2 TABLE
Minimum Monthly Payment Rates for each $1,000 Applied
MONTHLY MONTHLY
YEARS PAYMENT YEARS PAYMENT
----- ------- ----- -------
1 $ 84.47 16 $ 6.53
2 42.86 17 6.23
3 28.99 18 5.96
4 22.06 19 5.73
5 17.91 20 5.51
6 15.14 21 5.32
7 13.16 22 5.15
8 11.68 23 4.99
9 10.53 24 4.84
10 9.61 25 4.71
11 8.86 26 4.59
12 8.24 27 4.47
13 7.71 28 4.37
14 7.26 29 4.27
15 6.87 30 4.18
For quarterly payment multiply by 2.990. For semiannual
payment, multiply by 5.957. For annual payment,
multiply by 11.829.
OPTION 3. Lifetime Payment Option. Equal monthly
payments are based on the life of a named
person. Payments will continue for the
lifetime of that person. The three
variations are:
(A) Straight Life. No specific number of
payments is guaranteed. Payments stop
when the named person dies.
(B) Life Income with Refund. Payments
stop when they cumulatively equal
the amount applied or when the named
person dies, whichever is later.
(C) Life Income with Period Certain.
(Payments guaranteed for 10, 15 or
20 years.) Payments stop at the end
of the selected guaranteed period or
when the named person dies,
whichever is later.
The Option 3 Table shows the minimum
monthly payment for each $1,000 applied.
The actual payments will be based on the
monthly payment rates We are using when
the first payment is due. They will not
be less than shown in the Table.
14
OPTION 3 TABLE
Minimum Monthly Payment Rates for each $1,000 Applied
PAYMENTS GUARANTEED FOR
--------------------------
PAYMENTS
FOR LIFE AMOUNT 10 15 20
AGE* ONLY APPLIED YEARS YEARS YEARS
---- -------- ------- ----- ----- -----
MALE
50 4.08 3.93 4.05 4.01 3.95
55 4.46 4.25 4.41 4.34 4.24
60 4.98 4.64 4.88 4.75 4.56
65 5.69 5.15 5.48 5.22 4.88
70 6.67 5.80 6.23 5.73 5.16
75 & Over 8.02 6.63 7.08 6.20 5.36
FEMALE
PAYMENTS
FOR LIFE AMOUNT 10 15 20
AGE* ONLY APPLIED YEARS YEARS YEARS
---- -------- ------- ----- ----- -----
50 3.83 3.74 3.81 3.79 3.76
55 4.15 4.02 4.13 4.09 4.03
60 4.59 4.38 4.54 4.46 4.35
65 5.18 4.84 5.07 4.93 4.71
70 6.01 5.45 5.78 5.47 5.05
75 & Over 7.22 6.26 6.67 6.03 5.31
UNISEX
PAYMENTS
FOR LIFE AMOUNT 10 15 20
AGE* ONLY APPLIED YEARS YEARS YEARS
---- -------- ------- ----- ----- -----
50 3.95 3.83 3.93 3.90 3.85
55 4.30 4.13 4.27 4.21 4.13
60 4.78 4.50 4.70 4.60 4.45
65 5.42 4.98 5.27 5.07 4.79
70 6.32 5.61 5.99 5.60 5.11
75 & Over 7.59 6.43 6.86 6.11 5.33
* Age on birthday preceding the due date of the first
payment. Monthly payment rates for ages not shown will
be furnished on request. Monthly payment rates for ages
over 75 are the same as those for 75.
15
OPTION 4. Fixed Amount Payment Option. Each
monthly payment will be for an agreed
fixed amount not to be changed at any
time after the initial amount is chosen.
The amount of each payment may not be
less than $10 for each $1,000 applied.
Interest will be credited each month on
the unpaid balance and added to it. This
interest will be at a rate determined by
Us, but not less than the equivalent of
[3%] per year. If interest is greater
than [3%], the period for which payments
are made increases. Payments continue
until the amount We hold runs out. The
last payment will be for the balance
only.
OPTION 5. Joint Lifetime Payment Option. Equal
monthly payments are based on the lives
of two named persons. While both are
living, one payment will be made each
month. When one dies, the same payment
will continue for the lifetime of the
other.
The Option 5 Table shows the minimum
monthly payment for each $1,000 applied.
The actual payments will be based on the
monthly payment rates We are using when
the first payment is due. They will not
be less than shown in the Table.
OPTION 5 TABLE
Minimum Monthly Payment Rates for each $1,000 Applied
MALE PAYEE AGE*
FEMALE -------------------------------------------------------------------
PAYEE
AGE* 50 55 60 65 70 75
--------- ---- ---- ---- ---- ---- ----
50 3.53 3.61 3.68 3.73 3.76 3.79
55 3.65 3.77 3.88 3.97 4.04 4.08
60 3.76 3.94 4.1 4.25 4.36 4.45
65 3.86 4.08 4.32 4.55 4.74 4.9
70 3.93 4.21 4.51 4.84 5.16 5.43
75 & Over 3.98 4.3 4.68 5.11 5.57 6.02
UNISEX PAYEE AGE*
UNISEX ----------------------------------------------------------------------
PAYEE
AGE* 50 55 60 65 70 75
--------- ---- ---- ---- ---- ---- ----
50 3.53 3.63 3.72 3.79 3.85 3.89
55 3.63 3.78 3.92 4.03 4.12 4.19
60 3.72 3.92 4.11 4.29 4.44 4.56
65 3.79 4.03 4.29 4.55 4.80 5.00
70 3.85 4.12 4.44 4.80 5.16 5.50
75 & Over 3.89 4.19 4.56 5.00 5.50 6.02
*Age on birthday preceding the due date of the first
payment. Monthly payment rates for ages not shown will
be furnished on request. Monthly payment rates for ages
over 75 are the same as those for 75.
Options for any amount payable to an association,
corporation, partnership or fiduciary are available
with Our consent. However, a corporation or partnership
may apply any amount payable to it under Fixed
Settlement Options 3 or 5 if the option payments are
based on the life or lives of the Annuitant, the
Annuitant's spouse, any child of the Annuitant, or any
other person agreed to by Us.
If provided in the payment option election, the
following rights will be
16
available:
Under Fixed Settlement Options 1, 2, and 4, all or
part of the unpaid balance may be withdrawn or
applied under any other settlement option. The amount
withdrawn or applied will be adjusted under the terms
of the cancelled settlement agreement.
When computing the payments under Fixed Settlement
Option 2, We include interest from the effective date
of the option to the date of each payment. If future
payments are withdrawn or paid early, We must deduct
the amount of interest included for the period after
withdrawal or early payment. The commuted value of
future payments is the sum of those payments, less the
interest from the date of withdrawal or early payment
to the date of each future payment. The interest rate
originally used in computing the option payments will
be the rate used to determine the commuted value.
If the Cash Surrender Value is applied under any
option, We may delay payment of any withdrawal for up
to six months.
SECTION IX
VARIABLE SETTLEMENT OPTIONS
VARIABLE SETTLEMENT The variable settlement options are:
OPTION CHOICES
OPTION A. PAYMENT OF LIFE INCOME. Payments will
continue for the lifetime of the payee,
but for not less than the guaranteed
period. The Owner or payee may choose
one of the guaranteed periods shown in
the Option A - Payment of Life Income
table in this contract.
Variable Settlement Option A Initial Factors
Monthly Life Income with Guaranteed Period
Original Installment Per $1,000 Proceeds
MALE FEMALE UNISEX
------------------------------------------------------------------------------
AGE OF 10 20 10 20 10 20
PAYEE YEARS YEARS YEARS YEARS YEARS YEARS
------------------------------------------------------------------------------
35 $4.38 $4.35 $4.26 $4.25 $4.32 $4.30
40 4.55 4.50 4.39 4.37 4.47 4.43
45 4.76 4.67 4.56 4.52 4.66 4.60
50 5.02 4.89 4.79 4.71 4.90 4.80
55 5.37 5.13 5.08 4.95 5.22 5.04
60 5.82 5.40 5.47 5.22 5.64 5.31
65 6.40 5.67 5.98 5.53 6.19 5.60
70 7.11 5.89 6.66 5.80 6.88 5.84
75 7.89 6.02 7.50 5.99 7.69 6.01
80 8.65 6.09 8.40 6.08 8.51 6.08
85 9.24 6.11 9.14 6.11 9.18 6.11
OPTION B. PAYMENT OF JOINT AND SURVIVOR LIFE
INCOME. Payments will continue as long
as one or both of two payees are alive.
17
Variable Settlement Option B
Joint and 100% to Survivor Monthly Life Income
Original Monthly Installment Per $1,000 Proceeds
MALE FEMALE PAYEE AGE
PAYEE
AGE 55 60 65 70 75
------------------------------------------------------------------------------
55 $4.73 $4.88 $5.02 $5.15 $5.25
60 4.83 5.03 5.24 5.44 5.62
65 4.92 5.18 5.47 5.77 6.05
70 4.98 5.29 5.66 6.08 6.52
75 5.03 5.38 5.82 6.36 6.98
UNISEX UNISEX PAYEE AGE
PAYEE
AGE 55 60 65 70 75
------------------------------------------------------------------------------
55 $4.73 $4.86 $4.98 $5.07 $5.15
60 4.86 5.04 5.22 5.38 5.50
65 4.98 5.22 5.48 5.72 5.94
70 5.07 5.38 5.72 6.09 6.44
75 5.15 5.50 5.94 6.44 6.98
ASSUMED INTEREST The assumed interest rate in the Variable Payment
RATE AND FACTOR Option Tables is 5% per year. The daily assumed
interest factor derived from an assumed interest rate
of 5% is 0.9998663. We may also offer other assumed
interest rates and other Variable Settlement Options
from time to time, which may be available at the time a
payment option is elected.
ANNUITY UNIT An annuity unit is an accounting unit of measure used
to calculate the amount of payments.
FIXED INTEREST A fixed interest option is an option whereby payments
OPTION made are based on a guaranteed interest rate equal to
the assumed interest rate. The fixed interest option
is supported by the General Account.
ALLOCATION On the date the proceeds are applied to a Variable
Settlement Option, the payee(s) will determine the
percentage of proceeds that will be allocated to the
Subaccounts and to the Fixed Interest Option. Any
allocation must be for at least 10% of the proceeds. A
fractional percent may not be chosen.
EXCHANGES OF The payee(s) may exchange annuity units of one
ANNUITY UNITS Subaccount for those of another on a dollar equivalent
basis.
The following rules apply to exchanges:
1. the exchange request may be by telephone or in
writing on a form acceptable to Us;
2. the exchange will take effect as of the end of
the Valuation Period during which We receive the
request at Our Variable Product Service Center;
and
3. the payee(s) may exchange annuity units among
the Subaccounts an unlimited number of times in a
Contract Year.
COMMUTED VALUE The value payable at full surrender of the Variable
Settlement Option will be equal to the commuted value
of payments remaining in the guaranteed period, if any.
The interest rate used to compute the commuted value of
any unpaid payments remaining in the guaranteed period
will be the assumed interest rate. Each payment under a
Variable Settlement Option will be assumed to be equal
to the number of annuity units times the applicable
annuity unit value.
18
AMOUNT OF VARIABLE The amount of the first payment under a Variable
PAYMENTS Settlement Option is equal to:
1. the number of thousands of dollars of proceeds
applied to the option; TIMES
2. the factor per $1,000 for the option, from the
Variable Payment Option Tables.
The amount of each later payment is equal to the sum
for each Subaccount of the number of annuity units
times the applicable annuity unit value as of the end
of the Valuation Period on the payment date selected.
ANNUITY UNIT VALUE The number of annuity units credited under a Variable
Settlement Option for each Subaccount is equal to:
1. the amount of the first payment; TIMES
2. the initial Subaccount percentage allocation;
DIVIDED BY
3. the applicable annuity unit value as of the
option's effective date.
The number of annuity units remains constant. However,
if the payee(s) exchange annuity units among the
Subaccounts, the units are exchanged on a dollar
equivalent basis.
The annuity unit values depend on the assumed interest
rate and on the net investment factor. An annuity unit
value is determined for each Subaccount for each
Valuation Period. The annuity unit value of each
Subaccount for its first Valuation Period was set at
$1.00. Each annuity unit value for each later Valuation
Period is equal to:
1. the annuity unit value for the immediately
preceding Valuation Period; TIMES
2. the net investment factor for that Valuation
Period; TIMES
3. the daily assumed interest factor for each day
in that Valuation Period.
NET INVESTMENT The net investment factor for each Subaccount for each
FACTOR Valuation Period is determined by dividing "1" by "2"
and subtracting "3" from the result, where:
1. is equal to:
a. the net asset value of the Subaccount as of
the end of the Valuation Period; PLUS
b. the amount of all investment income and
capital gains, realized or unrealized,
credited to the net assets of the
Subaccount during the Valuation Period;
MINUS
c. the amount of capital losses, realized or
unrealized, charged against the net assets
during the Valuation Period;
2. is equal to the net asset value of the
Subaccount for the immediately preceding Valuation
Period;
3. is a charge no greater than 0.0038091% of the
net assets in the Subaccount for each day in the
Valuation Period.
19
SECTION X
SPENDTHRIFT
To the extent permitted by law, no payment of principal
or interest to anyone entitled to proceeds under this
contract shall be subject in any way to the debts,
contracts, or engagements or to any judicial process to
levy upon or attach the proceeds for payment. No
settlement option payment and no amount held under a
settlement option can be commuted, anticipated,
encumbered, alienated, or assigned in advance of its
payment date unless the Owner's written consent is
given before the Annuitant dies. This consent must be
received and acknowledged by Our Variable Product
Service Center.
20
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
Retirement Life Income at Annuitization. Premiums payable to Annuitization.
Contract is non-participating. The Accumulated Value in the Variable Account is
based on the investment experience of that Account, and may increase or decrease
daily. It is not guaranteed as to dollar amount. The variable features of this
contract are described in Section V.
