Exhibit 4(a)
{PRUDENTIAL FINANCIAL LOGO] Pruco Life Insurance Company
Phoenix, Arizona 85014
a Prudential company
This is an annuity contract. Subject to the provisions of the Contract, and in
consideration of any Purchase Payments you make and we accept, we will make
Annuity Payments starting on the Annuity Date shown on the Contract Data pages.
Please read the Contract carefully; it is a legal contract between you and Pruco
Life Insurance Company. Expense charges applicable to the Contract are shown on
the Contract Data pages. If you have a question about the Contract, or a claim,
see one of our representatives or contact the Annuity Service Center.
10 DAY RIGHT TO CANCEL CONTRACT
This Contract may be returned within 10 days after you receive it. It can be
mailed or delivered to either us, at the Annuity Service Center, or the
representative who sold it to you. Return of this Contract by mail is effective
on being postmarked, properly addressed and postage prepaid. The returned
Contract will be canceled upon our receipt, and we will return your money in
accordance with applicable law. Under certain circumstances, we have the right
to allocate Purchase Payment(s) to the Money Market Subaccount until the
expiration of the Right to Cancel period. If we so allocate Purchase Payment(s),
we will refund the Purchase Payment(s), less any withdrawals, in the event of
cancellation under the terms of this paragraph.
READ YOUR CONTRACT CAREFULLY
Signed for Pruco Life Insurance Company,
an Arizona Corporation.
Secretary President
INDIVIDUAL DEFERRED VARIABLE
ANNUITY CONTRACT
Non-participating
ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT.
VFLX-2002 [(A)]
TABLE OF CONTENTS
CONTRACT DATA PAGES................................................... 3A
DEFINITIONS........................................................... 4
PURCHASE PAYMENTS..................................................... 7
CONTRACT VALUE........................................................ 7
VARIABLE SEPARATE ACCOUNT............................................. 8
CONTRACT MAINTENANCE CHARGE........................................... 8
TRANSFERS............................................................. 9
WITHDRAWALS........................................................... 10
DEATH BENEFIT......................................................... 11
SPOUSAL CONTINUANCE BENEFIT........................................... 15
ANNUITY AND SETTLEMENT OPTIONS........................................ 18
BENEFICIARY........................................................... 19
SUSPENSION OR DEFERRAL OF PAYMENTS OR
TRANSFERS FROM THE SEPARATE ACCOUNT................................... 20
GENERAL PROVISIONS.................................................... 21
VALUES AND BENEFITS................................................... 23
ANNUITY OPTION PAYMENT TABLES......................................... 23
VFLX-2002 Page 2 [(A)]
CONTRACT DATA
OWNER: [Xxxx Xxx] SEX: [M] AGE AT ISSUE: [35]
JOINT OWNER: [Xxxx Xxx] SEX: [F] AGE AT ISSUE: [35]
ANNUITANT: [Xxxx Xxx] SEX: [M] AGE AT ISSUE: [35]
CO-ANNUITANT: [Xxxx Xxx] SEX: [F] AGE AT ISSUE: [35]
CONTRACT NUMBER: [12345] CONTRACT DATE: [May 1, 2002]
PLAN TYPE: [Non-qualified] ANNUITY DATE: [May 1, 2062]
PURCHASE PAYMENTS:
INITIAL PURCHASE PAYMENT: [$10,000]
MINIMUM SUBSEQUENT PURCHASE PAYMENT: [$500]. For IRA contracts, the Minimum
Subsequent Purchase Payment is [$500]. We may allow a lower Minimum
Subsequent Purchase Payment for payroll deduction plans or other automatic
purchase plans. There is a [$100] Minimum Subsequent Purchase Payment for
Purchase Payments being made through an electronic funds transfer program.
ANNUAL PURCHASE PAYMENT LIMITS: The total of all Purchase Payments made into
this Contract in the first Contract Year may not exceed [$20,000,000]. The
total of all Purchase Payments made into this Contract in any Contract Year
after the first Contract Year may not exceed [$2,000,000]. Purchase Payments
of greater value may be allowed with our prior approval.
AGGREGATE PURCHASE PAYMENT LIMIT: The total of all Purchase Payments made
into this Contract may not exceed [$20,000,000]. Purchase Payments of
greater value may be allowed with our prior approval.
BENEFICIARY:
[As designated by Owner at Contract Date unless changed in accordance with
the Contract provisions.]
CONTRACT MAINTENANCE CHARGE:
If your Contract Value is less than [$100,000], we will charge a Contract
Maintenance Charge of the lesser of [2%] of the contract value or [$50].
This charge is deducted on the Contract Anniversary and when a surrender of
the Contract occurs, if the Contract Value at the time is then less than
[$100,000]. The Contract Maintenance Charge will be deducted on a pro-rata
basis from all Allocation Options to which your Contract Value is allocated.
During the Annuity Period, we reserve the right to assess an annual Contract
Maintenance Charge of [$50]. The decision to assess this charge may depend
on the Annuity or Settlement Option selected. We reserve the right to
increase the Contract Maintenance Charge, but it will not exceed $60 per
Contract Year, and to raise the Contract Value amount over which we will
waive the Contract Maintenance Charge.
VFLX-2002 Page 3A [(A)]
INSURANCE CHARGE:
This charge depends on whether you have elected the Guaranteed Minimum Death
Benefit ("GMDB") feature and, if so, which GMDB option you have elected.
This charge is deducted daily from the assets in each of the Subaccounts. If
you do not elect the GMDB feature, your death benefit is equal to the base
death benefit as described in the Death Benefit section of the contract.
[ ] You have not elected the GMDB feature. Therefore, the daily rate is
[0.00434896%], which is equivalent to an annual rate of [1.60%].
[ ] You have elected the GMDB feature with the Step-Up option. Therefore,
the daily rate is [0.00488777%], which is equivalent to an annual rate
of 1.80%.
[ ] You have elected the GMDB feature with the Roll-Up option. Therefore,
the daily rate is [0.00488777%], which is equivalent to an annual rate
of [1.80%].
[ ] You have elected the GMDB feature with the Greater of Step-Up or
Roll-Up option. Therefore, the daily rate is [0.00515678%], which is
equivalent to an annual rate of [1.90%].
We reserve the right to increase the Insurance Charge for the GMDB feature
up to .10% for applicants age 76 or more on the date the application is
signed.
ALLOCATION OPTIONS:
VARIABLE INVESTMENT OPTIONS:
The following variable investment options are available through allocation
to subaccounts of the Pruco Life Flexible Premium Variable Annuity Account.
We reserve the right to limit the availability of the below options, if
necessary, in order to comply with federal, state or local law.
[THE PRUDENTIAL SERIES FUND, INC.
Prudential Equity Portfolio
Prudential Global Portfolio
Prudential Xxxxxxxx Portfolio
Prudential Money Market Portfolio
Prudential Stock Index Portfolio
Prudential Value Portfolio
SP Aggressive Growth Asset Allocation Portfolio SP AIM Aggressive Growth
Portfolio SP AIM Core Equity Portfolio SP Alliance Large Cap Growth
Portfolio SP Alliance Technology Portfolio SP Balanced Asset Allocation
Portfolio SP Conservative Asset Allocation Portfolio XX Xxxxx Value
Portfolio SP Deutsche International Equity Portfolio SP Growth Asset
Allocation Portfolio SP INVESCO Small Company Growth Portfolio XX Xxxxxxxx
International Growth Portfolio XX Xxxxxxxx Equity Opportunity Portfolio SP
Large Cap Value Portfolio SP MFS Capital Opportunities Portfolio SP MFS
Mid-Cap Growth Portfolio
VFLX-2002 Page 3B [(A)]
SP PIMCO High Yield Portfolio
SP PIMCO Total Return Portfolio
SP Prudential U.S. Emerging Growth Portfolio
SP Small/Mid Cap Value Portfolio
SP Strategic Partners Focused Growth Portfolio
JANUS ASPEN SERIES
Janus Aspen Series Growth Portfolio -- Service Shares]
INTEREST RATE OPTIONS:
The following interest rate options are currently available. We may add
other options in the future.
DCA FIXED RATE INVESTMENT OPTION
Minimum Guaranteed Interest Rate: [3%]
Initial Interest Segment Interest Rate: [5%]
FIXED RATE INVESTMENT OPTION
Minimum Guaranteed Interest Rate: [2% on amounts allocated or
transferred to the Fixed Rate Investment Option prior to the tenth
Contract Anniversary; 3% on amounts allocated or transferred to the
Fixed Rate Investment Option on or after the tenth Contract
Anniversary].
Initial Interest Segment Interest Rate: [5%]
ALLOCATION GUIDELINES: Currently, you may select any Allocation Option which is
available at the time the Purchase Payment or transfer is made, with the
exception of the DCA Fixed Rate Account Option for which there may be certain
limitations. However, an amount of at least 1% of the Invested Purchase Payment
must be allocated to any Allocation Option. Allocations made pursuant to
automatic rebalancing or dollar cost-averaging are not subject to these
limitations.
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: Currently, there are no limits on the number
of transfers that can be made among Subaccounts. We reserve the right to
change this, but the Owner will always be allowed at least [12] transfers
among Subaccounts in a Contract Year.
TRANSFER CHARGE: The Transfer Charge for each transfer after the first [12]
in a Contract Year is $10. The charge is taken pro-rata from the Allocation
Options from which the transfer is made. Transfers made due to automatic
rebalancing or dollar cost-averaging will not be counted for purposes of the
Transfer Charge.
MINIMUM AMOUNT TO BE TRANSFERRED: Subject to the restrictions contained in
the Contract on transfers, the minimum transfer amount is [$250] or your
entire interest in any Allocation Option, if less. This requirement is
waived if the transfer is pursuant to automatic rebalancing or dollar
cost-averaging.
VFLX-2002-FL Page 3C [(A)}
WITHDRAWALS:
WITHDRAWAL CHARGE: The Withdrawal Charge is a percentage of the amount
withdrawn that is subject to a charge, and depends on the Contract Year in
which the withdrawal is made.
CONTRACT YEAR OF WITHDRAWAL
WITHDRAWAL CHARGE
---------- ------
[1 7%
2 7%
3 7%
4 and later 0%]
CHARGE-FREE AMOUNT: A certain amount (the Charge-Free Amount) may be
withdrawn without incurring a withdrawal charge. The Charge-Free Amount
available in any Contract Year is calculated on the Contract Anniversary
date. The Charge-Free Amount is equal to [10% of the sum of all Purchase
Payments received as of the applicable Contract Anniversary].
MINIMUM AMOUNT WHICH MAY BE WITHDRAWN: The minimum amount which may be
withdrawn is [$250]. The minimum amount which may be withdrawn under a
systematic withdrawal plan is [$100].
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN THE CONTRACT AFTER A WITHDRAWAL:
The minimum Contract Value which must remain in the Contract in order to
keep the Contract in force after a withdrawal is [$2,000]. We reserve the
right to terminate the Contract and pay you the Contract Surrender Value if
your Contract Value is less than [$2,000].
ENDORSEMENTS:
[Fixed Rate Option Endorsement]
[ANNUITY SERVICE CENTER
P.O. Box 7960
Philadelphia, PA 19101]
VFLX-2002 Page 3D [(A)]
DEFINITIONS
ACCUMULATION PERIOD: The period from, and including, the Contract Date to, but
excluding, the Annuity Date.
ADJUSTED CONTRACT VALUE: The Contract Value as of the Annuity Date less any
applicable Premium Tax Charge. The applicable Annuity Option Payment Table is
applied to this amount to determine the initial Annuity Payment.
ALLOCATION OPTIONS: Those allocation choices available under the Contract as of
any given time, including the Variable Investment Options and Interest Rate
Options to which Contract Value may be allocated. Allocation Options as of the
Contract Date are shown on the Contract Data pages.
ANNUITANT: The person named on the Contract Data pages upon whose continuation
of life any Annuity Payment involving life contingencies depends. You may only
change the Annuitant with our prior approval. If the Annuitant dies before the
Annuity Date, the Co-Annuitant, if applicable, becomes the Annuitant. If there
is no surviving Co-Annuitant, and the Annuitant was not the Owner, the Owner
becomes the Annuitant. You then have 60 days from the date we receive due proof
of death of the Annuitant or Co-Annuitant to name a new Annuitant. If no new
Annuitant is named during that 60 day period, the Owner will remain the
Annuitant.
ANNUITY DATE: The date the first Annuity or Settlement Payment to the Payee is
due. The Annuity Date is shown on the original Contract Data pages. You may
change the Annuity Date only with our permission. After the first Contract Year,
any such changed Annuity Date must be earlier than the date shown on the
Contract Data pages, cannot precede the second Contract Anniversary and must be
consistent with applicable law at the time. If there is a new Annuitant due to
the death of the Annuitant or the assignment of the Contract, and the new
Annuitant is older than the prior Annuitant, the Annuity Date will be based on
the age of the new Annuitant; however any such changed Annuity Date must be
earlier than the date shown on the Contract Data pages, cannot be later than the
Contract Anniversary next following the new Annuitant's 95th birthday and must
be consistent with applicable law at the time.
ANNUITY OR SETTLEMENT PAYMENTS: The series of payments made to you or any named
payee after the Annuity Date as described under the annuity or settlement option
selected.
ANNUITY PERIOD: The period of time, beginning on the Annuity Date, during which
Annuity or Settlement Payments are made.
ANNUITY SERVICE CENTER: The office indicated on the Contract Data pages to which
notices, requests and Purchase Payments must be sent. All sums payable to us
under the Contract must be sent to the Annuity Service Center. The Annuity
Service Center address may be changed at any time. You will be notified in
advance and in writing of any change in address.
BENEFICIARY: The person(s) or entity(ies) who has the right to receive the death
benefit when payable. The Owner must be the primary Beneficiary of the Joint
Owner, and the Joint Owner must be the primary Beneficiary of the Owner.
BUSINESS DAY: Any day the New York Stock Exchange and the Company are open for
business.
CHARGE-FREE AMOUNT: The Charge-Free Amount is a portion of the Contract Value
that may be withdrawn without incurring a Withdrawal Charge.
CO-ANNUITANT: The person shown on the Contract Data pages who becomes the
Annuitant upon the death of the Annuitant before the Annuity Date. No
Co-Annuitant may be designated if the Owner is a non-natural person.
COMPANY: Pruco Life Insurance Company, an Arizona corporation.
CONTRACT ANNIVERSARY: The same day and month as the Contract Date in each later
year.
VFLX-2002 Page 4 [(A)]
CONTRACT DATE: The date shown on the Contract Data pages on which the first
Contract Year begins.
CONTRACT SURRENDER VALUE: The Contract Value less any applicable Premium Tax
Charge, Withdrawal Charge or Contract Maintenance Charge.
CONTRACT VALUE: The dollar value as of any Business Day prior to the Annuity
Date of all amounts accumulated under this Contract.
CONTRACT YEAR: A year which starts on the Contract Date or in a Contract
Anniversary.
EARNINGS: The excess of the Contract Value over the sum of all Purchase Payments
made and not yet withdrawn.
ELIGIBLE HOSPITAL: An institution that meets either of the following
requirements:
1. It is accredited as a hospital under the Hospital
Accreditation Program of the Joint Commission on Accreditation
of Healthcare Organizations; or
2. It is legally operated, has 24-hour a day supervision by a
staff of doctors, has 24-hour a day nursing service by
registered graduate nurses, and either:
(a) It mainly provides general inpatient medical care and
treatment of sick and injured persons by the use of
medical, diagnostic and major surgical facilities.
All such facilities are located in it or are under
its control; or
(b) It mainly provides specialized inpatient medical care
and treatment of sick or injured persons by the use
of medical and diagnostic facilities (including x-ray
and laboratory). All such facilities are located in
it, are under its control, or are available to it
under a written agreement with a hospital (as defined
above) or with a specialized provider of these
facilities.
An eligible hospital is not an institution, or part of one, that: (a) furnished
mainly homelike or custodial care, or training in the routines of daily living;
or (b) is mainly a school.
ELIGIBLE NURSING HOME: An institution or special nursing unit of a hospital that
meets at least one of the following requirements:
1. It is Medicare-approved as a provider of skilled
nursing care services;
2. It is licensed as a skilled nursing home or as an
intermediate care facility by the state in which it
is located; or
3. It meets all the following requirements:
(a) It is licensed as a nursing home by the
state in which it is located;
(b) Its main function is to provide skilled,
intermediate, or custodial nursing care;
(c) It is engaged in providing continuous room
and board accommodations to 3 or more
persons;
(d) It is under the supervision of a registered
nurse (RN) or licensed practical nurse
(LPN);
(e) It maintains a daily medical record of each
patient; and
(f) It maintains control and records for all
medications dispensed.
GENERAL ACCOUNT: Our general investment account which contains all of our assets
with the exception of the Variable Separate Account and other segregated asset
accounts.
GOOD ORDER: An instruction received at the Annuity Service Center, utilizing
such forms, signatures and datings as we require, that is sufficiently complete
and clear that we do not need to exercise any discretion to follow such
instructions. We will notify you if an instruction is not in Good Order.
INTEREST RATE OPTIONS(S): Those interest rate option(s) available under the
Contract as of any given time. Interest Rate Option(s) as of the Contract Date
are shown on the Contract Data pages.
INVESTED PURCHASE PAYMENTS: The balance of each Purchase Payment after we make
any applicable deduction for: (1) Premium Tax Charge; and (2) charge for any
other type of tax (or component thereof) measured by or based upon the amount of
the Purchase Payment we receive.
VFLX-2002 Page 5 [(A)]
JOINT OWNER: The spouse of the Owner, if named on the Contract Data pages as the
Joint Owner, who shares ownership rights with the Owner as defined under this
Contract. You may add, change or remove a Joint Owner, subject to our
underwriting rules. The Contract may never have more than one Joint Owner. No
Joint Owner is permitted for IRA's or other qualified contracts.
OWNER: The person or entity named on the Contract data pages who has ownership
rights as defined under the Contract provided that, if a Joint Owner is named,
the Owner shares ownership rights with the Joint Owner. You may change the Owner
subject to our underwriting rules. Any change of an Owner will be effective when
we process the request.
PAYEE: The person who has a right to receive Annuity or Settlement Payments
under the Annuity and Settlement Options provision of this Contract. The Payee
can be designated as revocable or irrevocable at your discretion. If you do not
designate a Payee at least 5 Business Days before the Annuity Date, the Owner
will become the Payee.
PREMIUM TAX CHARGE: A charge which may be deducted from Purchase Payments or
Contract Value for premium taxes owed by us to any governmental entity.
PURCHASE PAYMENT: A payment you make to this Contract.
SPOUSAL CONTINUANCE BENEFIT: A benefit under the Contract that allows the
surviving spouse of a deceased Owner to continue the Contract, in lieu of
receiving a death benefit.
SUBACCOUNT: Variable Separate Account assets are divided into Subaccounts.
Assets of each Subaccount will be invested in shares of a Variable Investment
Option.
TERMINAL ILLNESS: An illness or physical condition which is reasonably expected
to result in death in twelve months or less. The Terminal Illness must be
certified in written form acceptable to us by a licensed physician who is not
the Owner, Annuitant or Beneficiary under the Contract or a spouse, parent or
child of the Owner, Annuitant or Beneficiary under the Contract.
VARIABLE INVESTMENT OPTION: Those investment options available under the
Contract through the Subaccounts as of any given time. Variable Investment
Options as of the Contract Date are shown on the Contract Data pages.
VARIABLE SEPARATE ACCOUNT: A segregated asset account maintained by us to
support this and certain other contracts. The segregated asset account(s)
available as of the Contract Date is shown on the Contract Data pages.
WE, OUR AND US: Pruco Life Insurance Company.
WITHDRAWAL CHARGES: A charge assessed on partial or full withdrawals or upon
settlement (depending on the payout option chosen) during the Withdrawal Charge
Period. The Withdrawal Charge equals a percentage, shown on the Contract Data
pages, of the amount subject to the charge.
WITHDRAWAL CHARGE PERIOD: The number of Contract Years during which Withdrawal
Charges are applied to withdrawals of amounts in the Contract. The Withdrawal
Charge Period is shown on the Contract Data pages.
YOU AND YOUR: The Owner of the Contract if there is no Joint Owner; if there is
a Joint Owner, the Owner and Joint Owner acting jointly. If we receive written
authorization from both the Owner and Joint Owner in Good Order, then, upon our
consent, we will allow either to represent the entire ownership interest in the
Contract, until that authorization has been revoked by either party. This
Contract will treat the Owner as having contributed 100% of the Purchase
Payments. Therefore, we will treat the Owner as the taxpayer with respect to all
distributions made under the Contract while he or she is the Owner, whether or
not a Joint Owner is also named.
VFLX-2002 Page 6 [(A)]
PURCHASE PAYMENTS
PURCHASE PAYMENTS: The initial Purchase Payment must be paid on the Contract
Date. In general, subsequent Purchase Payments may be made at any time before
the Annuity Date. However, no Purchase Payments may be made on or after the sole
or older of the Owner's or Joint Owner's, or Annuitant's, 85th birthday, and we
reserve the right to decline any Purchase Payment. The Minimum Subsequent
Purchase Payment, Annual Purchase Payment Limits and Aggregate Purchase Payment
Limit are shown on the Contract Data pages.
ALLOCATION OF PURCHASE PAYMENTS: Invested Purchase Payments are allocated to one
or more of the Allocation Options in accordance with your selection. The
allocation of the initial Invested Purchase Payment is made in accordance with
your selection made on the Contract Date. Unless you inform us otherwise,
subsequent Invested Purchase Payments will be allocated in the same manner,
subject to availability, as the initial Invested Purchase Payment. Assuming that
all other requirements are received in Good Order, we reserve the right to
allocate your initial Invested Purchase Payment to the Money Market Subaccount
until we receive your allocation selection. In addition, the Company has
reserved the right to allocate the initial Invested Purchase Payment to the
Money Market Subaccount under the 10 Day Right to Cancel Contract provision set
forth on the face page of this Contract. All allocations of Invested Purchase
Payments are subject to the Allocation Guidelines shown on the Contract Data
pages.
Currently, you may select as many of the available Allocation Options as you
wish. However, we reserve the right to limit this in the future. If the Purchase
Payment and forms required to issue a Contract are in Good Order, the initial
Invested Purchase Payment will be credited to your Contract within two (2)
Business Days after receipt at the Annuity Service Center. Additional Invested
Purchase Payments will be credited to your Contract as of the Business Day they
are received.
CONTRACT VALUE
Your Contract Value is the total of all amounts credited to your Contract as of
any Business Day as a result of your initial Invested Purchase Payment and the
increases and decreases described below.
On the Contract Date, the Contract Value is equal to the initial Invested
Purchase Payment. After that, the Contract Value as of any Business Day is
determined by starting with the Contract Value at the end of the previous day
and adjusting it for items that increase it or decrease it.
Items that increase the Contract Value are: Invested Purchase Payments; positive
investment performance in a Subaccount; interest credited to an Interest Rate
Option; any Credits and any adjustment under the Spousal Continuance Benefit.
Items that decrease the Contract Value are: withdrawals and the charges
associated with them; negative investment performance in a Subaccount; Insurance
Charge; Contract Maintenance Charge, if applicable; Transfer Charge; and any
Premium Tax Charge or other tax charge.
Investment results and interest are credited daily and the Insurance Charge is
deducted daily. The Contract Maintenance Charge is deducted annually as of the
Contract Anniversary and upon a total withdrawal. Other charges are assessed
only if the appropriate event occurs.
VFLX-2002 Page 7 [(A)]
VARIABLE SEPARATE ACCOUNT
THE VARIABLE SEPARATE ACCOUNT: The Variable Separate Account is designated on
the Contract Data pages. It consists of assets we have set aside and have kept
separate from the rest of our assets and those of our other separate accounts.
The assets of the Variable Separate Account, equal to reserves and other
liabilities of your Contract and those of other owners, will not be charged with
liabilities arising out of any other business we conduct.
The Variable Separate Account assets are divided into Subaccounts. The assets of
the Subaccount are allocated to the Variable Investment Option(s) shown on the
Contract Data pages. We may restructure, eliminate or combine Subaccounts or add
to or eliminate Variable Investment Option(s) from those shown. You may be
permitted to transfer your Contract Value or allocate Invested Purchase Payments
to the additional Subaccount(s). However, the right to make such transfers or
allocations will be limited by any terms and conditions we may impose.
Should the shares of any Variable Investment Option(s) become unavailable for
investment by the Variable Separate Account, we deem further investment in the
shares inappropriate, or if required for tax reasons, we may limit further
purchase of such shares or substitute shares of another Variable Investment
Option for shares already purchased.
VALUATION OF ASSETS: The value of the shares held by the Subaccounts in the
Variable Investment Options will be based on the net asset value of the
Investment Option on each Business Day.
INSURANCE CHARGE: Each Business Day, we deduct an Insurance Charge from the
Subaccounts of the Variable Separate Account which is equivalent, on an annual
basis, to the amount shown on the Contract Data pages.
CONTRACT MAINTENANCE CHARGE
We deduct an annual Contract Maintenance Charge shown on the Contract Data
pages. We determine your Contract Value as of your Contract Anniversary and make
any deductions required on a pro-rata basis from all Allocation Options to which
your Contract Value is allocated. If a total withdrawal is made on other than a
Contract Anniversary, we will determine your Contract Value and make a deduction
for the Contract Maintenance Charge the same as we would if it were a Contract
Anniversary.
VFLX-2002 Page 8 [(A)]
TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD: A transfer is subject to the
following:
1. the maximum number of transfers which may be made, the maximum number
of transfers which are not subject to a Transfer Charge and the minimum
amount which may be transferred are shown on the Contract Data pages;
2. a Transfer Charge is deducted if a transfer exceeds the maximum number
of free transfers. The Transfer Charge is shown on the Contract Data
pages;
3. a transfer will be effected as of the end of the Business Day when we
receive a request in Good Order;
4. we are not responsible for the consequences resulting from a transfer
made in accordance with your instructions;
5. your right to make transfers is subject to modification if we
determine, in our sole opinion, that the exercise of the right by one
or more Owners is, or would be, to the disadvantage of other Owners or
if required to do so by applicable laws or regulations. Restrictions
may be applied in any manner reasonably designed to prevent any use of
the transfer right which is considered by us to be to the disadvantage
of other Owners or to ensure compliance with such laws or regulations.
A modification could be applied to transfers to or from one or more of
the Subaccounts and could include, but not be limited to:
a. the requirement of a minimum time period between each transfer;
b. not accepting a transfer request of an agent acting under a power of
attorney on behalf of more than one Owner;
c. limiting the dollar amount that may be transferred among the
Subaccounts by an Owner at any one time; or
d. restricting the number of transfers per year.
No transfers are permitted after the Annuity Date.
VFLX-2002 Page 9 [(A)]
WITHDRAWALS
WITHDRAWALS: During the Accumulation Period, you may, upon a request in Good
Order, make a total or partial withdrawal of the Contract Surrender Value. You
may specify the Allocation Option(s) from which a withdrawal will be taken. If
you do not so specify, we will take the withdrawal on a pro-rata basis from all
Allocation Option(s) to which your Contract Value is allocated.
We will pay the amount of any withdrawal within seven (7) days of receipt of a
request in Good Order unless the "Suspension or Deferral of Payments Provision"
is in effect.
Each partial withdrawal must be for an amount which is not less than the amount
shown on the Contract Data pages. The minimum Contract Value which must remain
in the Contract after a partial withdrawal in order to keep the Contract inforce
is shown on the Contract Data pages. If the amount of the withdrawal requested
would reduce the Contract Value below this minimum, we will give you the maximum
amount available that, with the Withdrawal Charge, would not reduce the Contract
Value below such minimum. Special rules may apply for IRA's.
WITHDRAWAL CHARGE: A Withdrawal Charge may apply if you make a withdrawal during
the Withdrawal Charge Period shown on the Contract Data pages. The amount of the
Withdrawal Charge is a percentage, shown on the Contract Data pages, of the
amount withdrawn that is subject to the charge. If the withdrawal is effective
on the day before a Contract Anniversary, the Withdrawal Charge percentage used
will be the one for the following Contract Year. If you request a partial
withdrawal, we will deduct an amount from the Contract Value that is sufficient
to pay the Withdrawal Charge and provide you the amount requested.
For purposes of determining the Withdrawal Charge, withdrawals will be taken
first from Purchase Payments before Earnings. The Charge Free Amount will be
taken first from Purchase Payments. Withdrawals in excess of the Charge Free
Amount will come first from Purchase Payments and will be subject to Withdrawal
Charges, if applicable. Once all Purchase Payments have been withdrawn, further
withdrawals will be taken from any Earnings. Earnings are not subject to
Withdrawal Charges.
We will waive all Withdrawal Charges upon receipt of due proof that the Owner is
(i) Terminally Ill, or (ii) has been confined to an Eligible Nursing Home or
Eligible Hospital continuously for at least 90 days. The confinement must begin
after the Contract Date. This waiver will apply to the Terminal Illness or
confinement of the Annuitant if the Owner is a non-natural person. This waiver
is not available if the Contract has been assigned.
Withdrawal Charges will never be greater than that permitted by any applicable
law or regulation. Withdrawal Charges may be assessed upon settlement.
VFLX-2002 Page 10 [(A)]
DEATH BENEFIT
DEATH OF LAST SURVIVOR OF OWNER OR JOINT OWNER DURING THE ACCUMULATION PERIOD:
BASE DEATH BENEFIT:
If you did not elect the Guaranteed Minimum Death Benefit ("GMDB") feature, and
if the sole Owner, or last survivor of the Owner or Joint Owner, dies during the
Accumulation Period, the death benefit will be as described below.
Upon receipt of due proof of death and any other documentation we
request in Good Order, we will pay a death benefit equal to the greater
of:
1. the Contract Value as of the date we receive due proof of
death and any other documentation we need; or
2. the total Invested Purchase Payments made, proportionally
reduced by the effect of withdrawals.
GMDB FEATURE WITH STEP-UP OPTION:
If you elected the Guaranteed Minimum Death Benefit feature with the Step-Up
option, and if the sole Owner, or last survivor of the Owner or Joint Owner,
dies during the Accumulation Period, the death benefit will be as described
below.
On or prior to the Contract Anniversary coinciding with or next
following the 80th birthday of the sole or older of the Owner or Joint
Owner, upon receipt of due proof of death and any other documentation
we request in Good Order, we will pay a death benefit equal to the
greater of:
1. the Contract Value as of the date we receive due proof of
death and any other documentation we need; or
2. the Guaranteed Minimum Death Benefit as of the date we
receive due proof of death and any other documentation we
need. The GMDB is calculated daily and is equal to the
"Step-Up". Before the first Contract Anniversary, the Step-Up
is the initial Invested Purchase Payment increased by
subsequent Invested Purchase Payments and proportionally
reduced by the effect of withdrawals. The Step-Up for each
subsequent annual Contract Anniversary will be reset to the
greater of the previous Step-Up and the Contract Value as of
such Contract Anniversary. Between such Contract
Anniversaries, the Step-Up will be increased by Invested
Purchase Payments and proportionally reduced by the effect of
withdrawals.
GMDB FEATURE WITH ROLL-UP OPTION:
If you elected the Guaranteed Minimum Death Benefit feature with the Roll-Up
option, and if the sole Owner, or last survivor of the Owner or Joint Owner,
dies during the Accumulation Period, the death benefit will be as described
below.
On or prior to the Contract Anniversary coinciding with or next
following the 80th birthday of the sole or older of the Owner or Joint
Owner, upon receipt of due proof of death and any other documentation
we request in Good Order, we will pay a death benefit equal to the
greater of:
1. the Contract Value as of the date we receive due proof of
death and any other documentation we need; or
VFLX-2002 Page 11 [(A)]
2. the Guaranteed Minimum Death Benefit as of the date we
receive due proof of death and any other documentation we
need. The GMDB is calculated daily and is equal to the
"Roll-Up". The Roll-Up is equal to the total Invested
Purchase Payments made increased daily at an effective annual
interest rate of 5% starting on the date that each Invested
Purchase Payment is made, until the cap is reached ("Roll-Up
Cap"), and is proportionally reduced by the effect of
withdrawals. The Roll-Up Cap is equal to the sum of two times
each Invested Purchase Payment and is proportionally reduced
by the effect of withdrawals. Once the Roll-Up Cap is
reached, the Roll-Up will only be increased by subsequent
Invested Purchase Payments and proportionally reduced by the
effect of withdrawals.
GMDB FEATURE WITH GREATER OF STEP-UP OR ROLL-UP OPTION:
If you elected the Guaranteed Minimum Death Benefit feature with the Greater of
the Step-Up and Roll-Up option, and if the sole Owner, or last survivor of the
Owner or Joint Owner, dies during the Accumulation Period, the death benefit
will be as described below.
On or prior to the Contract Anniversary coinciding with or next
following the 80th birthday of the sole or older of the Owner or Joint
Owner, upon receipt of due proof of death and any other documentation
we request in Good Order, we will pay a death benefit equal to the
greater of:
1. the Contract Value as of the date we receive due proof of
death and any other documentation we need; or
2. the Guaranteed Minimum Death Benefit as of the date we
receive due proof of death and any other documentation we
need. The GMDB is calculated daily and is equal to the
greater of (a) and (b) where:
(a) is the "Step-Up". Before the first Contract
Anniversary, the Step-Up is the initial Invested
Purchase Payment increased by subsequent Invested
Purchase Payments and proportionally reduced by
the effect of withdrawals. The Step-Up for each
subsequent annual Contract Anniversary will be
reset to the greater of the previous Step-Up and
the Contract Value as of such Contract
Anniversary. Between such Contract Anniversaries,
the Step-Up will be increased by Invested Purchase
Payments and proportionally reduced by the effect
of withdrawals; and
(b) is the"Roll-Up". The Roll-Up is equal to the
total Invested Purchase Payments made increased
daily at an effective annual interest rate of 5%
starting on the date that each Invested Purchase
Payment is made, until the cap is reached
("Roll-Up Cap"), and is proportionally reduced by
the effect of withdrawals. The Roll-Up Cap is
equal to the sum of two times each Invested
Purchase Payment and is proportionally reduced by
the effect of withdrawals. Once the Roll-Up Cap is
reached, the Roll-Up will only be increased by
subsequent Invested Purchase Payments and
proportionally reduced by the effect of
withdrawals.
If you elected the GMDB feature with the Step-Up option, the Roll-Up option, or
the Greater of Step-Up and Roll-Up option, then, after the Contract Anniversary
coinciding with or next following the 80th birthday of the sole or older of the
Owner or Joint Owner, upon receipt of due proof of death and any other
documentation we request in Good Order, we will pay a death benefit equal to the
greater of:
1. the Contract Value as of the date we receive due proof of
death and any other documentation we need; or
2. the GMDB as of the Contract Anniversary coinciding with or
next following the sole or older of the Owner or Joint Owner's
80th birthday increased by subsequent Invested Purchase
Payments since such Contract Anniversary and proportionally
reduced by the effect of withdrawals since such Contract
Anniversary.
VFLX-2002 Page 12 [(A)]
Where the words "proportionally reduced by the effect of withdrawals" are used
in this Contract, the withdrawal reduces those values in the same proportion as
it reduces the Contract Value. We calculate the proportion by dividing the
Contract Value after the withdrawal (and any charges associated with them) by
the Contract Value immediately prior to the withdrawal. The resulting percentage
is multiplied by the applicable values (before the withdrawal) in determining
the death benefit.
If the ownership of the Contract changes as a result of an assignment, the value
of the death benefit will be reset to the Contract Value as of the date of the
assignment. Such value will be treated as a Purchase Payment made on that date
for purposes of computing the death benefit.
The Beneficiary may, within 60 calendar days of providing due proof of death,
elect to take the death benefit under one of the death benefit payout options
listed below, provided that any payout option shall not include a period certain
that exceeds the life expectancy of the Beneficiary. The Beneficiary will be the
sole measuring life in determining the amount of any such payout option. If no
payout option is selected within the 60 days, the death benefit will be payable
as a lump sum.
If the only Beneficiary is the spouse of the original Owner at the time of that
Owner's death and there was only one Owner who was also the sole Annuitant, the
surviving spouse may elect to continue the Contract under the Spousal
Continuance Benefit provision subject to the conditions detailed below.
If there are Joint Owners and the primary Beneficiary of the Owner is the spouse
of the Owner at the time of the Owner's death, the Contract will continue and
the spouse will become the Owner. If the primary Beneficiary of the Joint Owner
is the spouse of the Joint Owner at the time of the Joint Owner's death, the
Contract will continue and the spouse will become the Owner. In either case, the
spouse may instead elect to take the Adjusted Contract Value under any of the
payout options available under this Contract within 60 calendar days of
providing proof of death. If the spouse is the surviving Owner or Joint Owner
under the Contract, the death benefit will equal the Adjusted Contract Value.
If the Owner and Joint Owner are not spouses at the time of the Owner or Joint
Owner's death, the Contract will not continue, the death benefit will equal the
Adjusted Contract Value, and the Beneficiary will be required to choose one of
the death benefit payout options described below. In that event, the payout
described in Choice 2 and the beginning of the distribution described in Choice
3 will be based on the date of death of the first to die of the Owner or Joint
Owner.
The death benefit payout options are:
Choice 1 -- lump sum payment of the death benefit; or
Choice 2 -- the payment of the entire death benefit within 5 years of the
date of death of the last to survive of the Owner or Joint Owner; or
Choice 3 -- payment of the death benefit under an Annuity or Settlement
Option over the lifetime of the Beneficiary or over a period not extending
beyond the life expectancy of the Beneficiary with distribution beginning
within one year of the date of death of the last to survive of the Owner or
Joint Owner.
Any portion of the death benefit not applied under Choice 3 within one year of
the date of death of the last to survive of the Owner or Joint Owner, must be
distributed within five years of the date of death.
Once a death benefit becomes payable, the Payee's interest in any Annuity
Benefit under the Contract will cease.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election in Good Order, unless the
"Suspension or Deferral of Payments Provision" is in effect.
VFLX-2002 Page 13 [(A)]
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD: If the Annuitant dies before
the Annuity Date, the Co-Annuitant, if applicable, becomes the Annuitant. If
there is no surviving Co-Annuitant, and the Annuitant was not the Owner, the
Owner becomes the Annuitant. You have the right to name a new Annuitant within
60 days prior to the Annuity Date. If the Owner is a non-natural person, a new
Annuitant may not be designated, and the Annuitant will be deemed to be the
Owner for purposes of determining the death benefit.
DEATH OF ANNUITANT DURING THE ANNUITY PERIOD: If the Annuitant dies on or after
the Annuity Date, the Settlement Option then in effect will govern whether or
not we will continue to make any payments. The death of a non-Annuitant Owner or
Joint Owner has no effect on the payout during the Annuity Period.
PAYMENT OF DEATH BENEFIT: We will require due proof of death and any other
documentation we request in Good Order before any death benefit is paid. All
death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
SPECIAL TAX CONSIDERATIONS: There are special tax rules that apply to IRA and
other qualified contracts during both the Accumulation Period and Annuity Period
governing distributions upon the death of the Owner. These rules are contained
in provisions in the attached endorsements and supersede any other distribution
rules contained in the Contract.
The preceding provisions regarding the death of the Owner are intended to
satisfy the distribution at death requirements of section 72(s) of the Internal
Revenue Code of 1986, as amended. We reserve the right to amend this Contract by
subsequent endorsement as necessary to comply with applicable tax requirements,
if any, which are subject to change from time to time. Such additional
endorsements, if necessary to comply with amended tax requirements, will be
mailed to you and become effective within 30 days of mailing, unless you notify
us in writing, within that time frame, that you reject the endorsement.
If the Internal Revenue Service determines that the deductions for one or more
benefits under this Contract, including, without limitation, any supplemental
benefit added by endorsement, are taxable withdrawals, then the Owner may cancel
the affected benefit(s) within 90 days after written notice from us.
VFLX-2002 Page 14 [(A)]
SPOUSAL CONTINUANCE BENEFIT
The Spousal Continuance Benefit is available only if each of the following
conditions is present on the date we receive proof of the original Owner's death
as well as any other necessary documentation: 1) there is only one Owner of the
Contract and that Owner is the sole Annuitant, 2) there is only one Beneficiary,
and the Beneficiary is the Owner's spouse, 3) the surviving spouse is not older
than 95 on that date, and 4) the surviving spouse becomes the new Owner and
Xxxxxxxxx. Assuming each of these conditions is present, the surviving spouse
must elect the Spousal Continuance Benefit no later than 60 days after
furnishing proof of the Owner's death and any other documentation we need.
Upon activation of the Spousal Continuance Benefit, we waive any potential
Withdrawal Charges applicable to Purchase Payments made prior to activation of
the Benefit. Additionally, we will continue to waive Withdrawal Charges on
Purchase Payments made after activation of the Spousal Continuance Benefit.
BASE DEATH BENEFIT:
If you did not elect the GMDB feature, then, upon activation of the Spousal
Continuance Benefit, we will adjust the Contract Value to equal the death
benefit that would have been payable to the Beneficiary. If you have a death
benefit equal to the greater of the Contract Value or Invested Purchase Payments
(proportionately reduced by the effect of withdrawals), we would adjust the
Contract Value to equal the following, which amount we refer to below as the
"Contract Value (as adjusted to reflect the Spousal Continuance Benefit)":
The greater of:
1) the Contract Value, and
2) the sum of all Invested Purchase Payments (proportionately
reduced by the effect of withdrawals)
plus, with respect to each of the amounts specified immediately above, the
amount of any applicable Earnings Appreciator Benefit.
In adjusting the Contract Value in connection with the activation of the Spousal
Continuance Benefit, we will allocate any increase in the Contract Value among
the Allocation Options in the same proportions that existed immediately prior to
the spousal continuance adjustment.
As of the Spousal Continuance date, the value of the death benefit will be reset
to the Contract Value (as adjusted to reflect the Spousal Continuance Benefit).
We will treat the Contract Value (as adjusted to reflect the Spousal Continuance
Benefit) as a Purchase Payment made on that date for purposes of computing the
death benefit payable when the surviving spouse dies.
GMDB FEATURE WITH STEP-UP OPTION:
If you elected the GMDB feature with the Step-Up option, then, upon activation
of the Spousal Continuance Benefit, we will adjust the Contract Value to equal
the death benefit that would have been payable to the Beneficiary. Under the
GMDB with Step-Up option, we will adjust the Contract Value to equal the
following, which amount we refer to below as the "Contract Value (as adjusted to
reflect the Step-Up Spousal Continuance Benefit)":
The greater of:
1) the Contract Value, and
2) the Step-Up
plus, with respect to each of the amounts specified immediately above, the
amount of any applicable Earnings Appreciator Benefit.
VFLX-2002 Page 15 [(A)]
In adjusting the Contract Value in connection with the activation of the Spousal
Continuance Benefit, we will allocate any increase in the Contract Value among
the Allocation Options in the same proportions that existed immediately prior to
the spousal continuance adjustment.
As of the Spousal Continuance date, the value of the death benefit will be reset
to the Contract Value (as adjusted to reflect the Step-Up Spousal Continuance
Benefit). We will continue to compute the Step-Up with adjustments for
subsequent Purchase Payments and withdrawals as described in the DEATH OF LAST
SURVIVOR OF OWNER OR JOINT OWNER DURING THE ACCUMULATION PERIOD provisions above
and the following:
Upon activation of the Spousal Continuance Benefit by a surviving spouse who is
younger than 80, the Step-Up under the surviving spouse's Contract will be
adjusted to equal the Contract Value (as adjusted to reflect the Step-Up Spousal
Continuance Benefit). Moreover, for a surviving spouse who is younger than 80
upon activation of the Spousal Continuance Benefit, we will continue to compute
the Step-Up annually on the Contract Anniversary. We will make no adjustment to
the Step-Up if the surviving spouse is 80 or older upon activation of the
Spousal Continuance Benefit.
GMDB FEATURE WITH ROLL-UP OPTION:
If you elected the GMDB feature with the Roll-Up option, then, upon activation
of the Spousal Continuance Benefit, we will adjust the Contract Value to equal
the death benefit that would have been payable to the Beneficiary. Under the
GMDB with Roll-Up, we will adjust the Contract Value to equal the following,
which amount we refer to below as the "Contract Value (as adjusted to reflect
the Roll-Up Spousal Continuance Benefit)":
The greater of:
1) the Contract Value, and
2) the Roll-Up
plus, with respect to each of the amounts specified immediately above, the
amount of any applicable Earnings Appreciator Benefit.
In adjusting the Contract Value in connection with the activation of the Spousal
Continuance Benefit, we will allocate any increase in the Contract Value among
the Allocation Options in the same proportions that existed immediately prior to
the spousal continuance adjustment.
As of the Spousal Continuance date, the value of the death benefit will be reset
to equal the Contract Value (as adjusted to reflect the Roll-Up Spousal
Continuance Benefit). We will continue to compute the Roll-Up with adjustments
for subsequent Purchase Payments and withdrawals as described in the DEATH OF
LAST SURVIVOR OF OWNER OR JOINT OWNER DURING THE ACCUMULATION PERIOD provisions
above and the following:
Upon activation of the Spousal Continuance Benefit by a surviving spouse who is
younger than 80, the Roll-Up under the surviving spouse's Contract will be
adjusted to equal the Contract Value (as adjusted to reflect the Roll-Up Spousal
Continuance Benefit). Moreover, for a surviving spouse who is younger than 80
upon activation of the Spousal Continuance Benefit, we will re-set the surviving
spouse's Roll-Up Cap to equal 200% of the Contract Value (as adjusted to reflect
the Roll-Up Spousal Continuance Benefit). We will make no adjustment to either
the Roll-Up or the Roll-Up Cap if the surviving spouse is 80 or older upon
activation of the Spousal Continuance Benefit. If the surviving spouse was
younger than 80 at the Owner's death, then we will continue to increase the
Roll-Up annually until the earlier of either (i) the surviving spouse's
attainment of age 80 or (ii) the attainment of the Roll-Up Cap (i.e., the re-set
Roll-Up Cap discussed above).
VFLX-2002 Page 16 [(A)]
GMDB FEATURE WITH GREATER OF STEP-UP AND ROLL-UP OPTION
If you elected the GMDB feature with the Greater of Step-Up and Roll-Up Option,
then, upon activation of the Spousal Continuance Benefit, we will adjust the
Contract Value to equal the death benefit that would have been payable to the
Beneficiary. Under the GMDB with Greater of Roll-Up or Step-Up, we will adjust
the Contract Value to equal the following, which amount we refer to below as the
"Contract Value (as adjusted to reflect the Greater of Roll-Up or Step-Up
Spousal Continuance Benefit)":
The greatest of:
1. the Contract Value, and
2. the Roll-Up, and
3. the Step-Up
plus, with respect to each of the amounts specified immediately above, the
amount of any applicable Earnings Appreciator Benefit.
In adjusting the Contract Value in connection with the activation of the Spousal
Continuance Benefit, we will allocate any increase in the Contract Value among
the Allocation Options in the same proportions that existed immediately prior to
the spousal continuance adjustment.
As of the Spousal Continuance date, the value of the death benefit will be reset
to the Contract Value (as adjusted to reflect the Greater of Roll-Up or Step-Up
Spousal Continuance Benefit). We will continue to compute the Roll-Up and
Step-Up with adjustments for subsequent Purchase Payments and withdrawals as
described in the DEATH OF LAST SURVIVOR OF OWNER OR JOINT OWNER DURING THE
ACCUMULATION PERIOD provisions above and the following:
For the Roll-Up, upon activation of the Spousal Continuance Benefit by a
surviving spouse who is younger than 80, the Roll-Up under the surviving
spouse's Contract will be adjusted to equal the Contract Value (as adjusted to
reflect the Greater of Roll-Up or Step-Up Spousal Continuance Benefit).
Moreover, for a surviving spouse who is younger than 80 upon activation of the
Spousal Continuance Benefit, we will re-set the surviving spouse's Roll-Up Cap
to equal 200% of the Contract Value (as adjusted to reflect the Roll-Up Spousal
Continuance Benefit). We will make no adjustment to either the Roll-Up or the
Roll-Up Cap if the surviving spouse is 80 or older upon activation of the
Spousal Continuance Benefit. If the surviving spouse was younger than 80 at the
Owner's death, then we will continue to increase the Roll-Up annually until the
earlier of either (i) the surviving spouse's attainment of age 80 or (ii) the
attainment of the Roll-Up Cap (i.e., the re-set Roll-Up Cap discussed above).
For the Step-Up, upon activation of the Spousal Continuance Benefit by a
surviving spouse who is younger than 80, the Step-Up under the surviving
spouse's Contract will be adjusted to equal the Contract Value (as adjusted to
reflect the Greater of Roll-Up or Step-Up Spousal Continuance Benefit).
Moreover, for a surviving spouse who is younger than 80 upon activation of the
Spousal Continuance Benefit, we will continue to compute the Step-Up annually on
the Contract Anniversary. We will make no adjustment to the Step-Up if the
surviving spouse is 80 or older upon activation of the Spousal Continuance
Benefit.
For purposes of this Spousal Continuance Benefit, we intend reference to
attainment of age 80 to refer to the contract anniversary on or following the
actual 80th birthday of the surviving spouse.
VFLX-2002 Page 17 [(A)]
ANNUITY AND SETTLEMENT OPTIONS
GENERAL: On the Annuity Date, the Adjusted Contract Value will be applied under
the Annuity or Settlement Option you have selected. If the payment under any
option selected would be less than $20 per month, we reserve the right to pay
out the Adjusted Contract Value in a lump sum.
SELECTION OF AN ANNUITY OR SETTLEMENT OPTION: You may select an Annuity or
Settlement Option by notifying us of the selected Option in Good Order. If no
Annuity or Settlement Option is selected, or if the chosen Option is not
received in Good Order, Option 2, Life Income Annuity Option, will automatically
be applied. You may, at any time prior to the Annuity Date, by a request in Good
Order 30 days in advance, select and/or change the Annuity or Settlement Option.
ANNUITY AND SETTLEMENT OPTIONS: This Contract provides for payments under one of
the Annuity or Settlement Options described below. Any other Annuity or
Settlement Option acceptable to us may be selected.
OPTION 1 -- FIXED PERIOD ANNUITY OPTION. We will make equal payments for a
period you choose up to 25 years. At your choice, we will make such payments
annually, semi-annually, quarterly or monthly. The Option 1 Table shows the
minimum amounts we will pay.
OPTION 2 -- LIFE INCOME ANNUITY OPTION. We will make payments for as long as the
Annuitant lives, with payments certain for 120 months. At your choice, we will
make such payments annually, semi-annually, quarterly or monthly. The Option 2
Table shows the minimum amounts we will pay.
OPTION 3 -- INTEREST PAYMENT SETTLEMENT OPTION. We will credit interest on the
Adjusted Contract Value at the rate of at least 3% until you request payment of
all or part of the Adjusted Contract Value. At your choice, we will pay interest
on the Adjusted Contract Value not yet withdrawn annually, semi-annually,
quarterly or monthly. You may request full or partial payment of the Adjusted
Contract Value provided, however, that if a partial payment is requested, the
amount of any Adjusted Contract Value remaining after such requested amount is
paid must be at least $1,000. This option is not available for qualified
contracts.
OTHER ANNUITY OR SETTLEMENT OPTIONS: We may offer or consent to other settlement
options, including life income annuity options with payments certain for a
period of other than 120 months. Contact the representative who sold you the
Contract or call the toll-free number listed on your quarterly statement for
information.
ANNUITY: Unless you designate another Payee, you will be the Payee of the
Annuity Payments. The Adjusted Contract Value will be applied to the applicable
Annuity Table contained in this Contract based upon the Annuity Option you have
selected. The amount of the first payment for each $1,000 of Adjusted Contract
Value is shown in the Annuity Tables. If when Annuity Payments begin we are
using tables of annuity rates for these Contracts which result in larger Annuity
Payments, we will use those tables instead. Annuity Payments will depend on the
age and sex of the Annuitant, where permitted.
WITHDRAWAL CHARGES: If you choose Option 1 for a period of fewer than 5 years or
Option 3, the Adjusted Contract Value will be subject to a Withdrawal Charge
which will be applied in the same way as if you had made a full withdrawal on
the Annuity Date. Any amount used to provide income under Option 1 for a period
of 5 years or more or under Option 2 will be applied without charge. If you
choose any other method of payment not described in this Contract, we will tell
you if it is subject to a Withdrawal Charge.
VFLX-2002 Page 18 [(A)]
BENEFICIARY
BENEFICIARY: The Beneficiary designation in effect on the Contract Date will
remain in effect until changed. The Beneficiary is entitled to receive the
benefits to be paid at the death of the last to die of the Owner or Joint Owner
(or the first to die of the Owner or Joint Owner if the Owner and Joint Owner
are not spouses at the time of the Owner's or Joint Owner's death) during the
Accumulation Period. The Owner must be the primary Beneficiary of the Joint
Owner, and the Joint Owner must be the primary Beneficiary of the Owner. Other
than primary Beneficiaries, Beneficiaries must be the same for both the Owner
and Joint Owner.
When a Beneficiary is designated, any relationship shown is to the Owner unless
otherwise specified.
To show priority among Beneficiaries, we will label the classes, so that the
class with first priority is called the primary class, the class with next
priority is called the secondary class, and so on. The following statements
apply to Beneficiaries unless the Contract Data pages, Contract endorsement or
any change request that we have processed specifies otherwise:
One who survives the last to die of the Owner and Joint Owner will have the
right to be paid only if no one in a higher class survives the last to die
of the Owner and Joint Owner.
One who has the right to be paid will be the only one paid if no one else in
the same class survives the last to die of the Owner and Joint Owner.
Two or more in the same class who have the right to be paid will be paid in
equal shares.
If no one survives the sole Owner, we will pay in one sum to the Owner's
estate.
When there is insufficient evidence to determine the order of death then,
unless state law prohibits, we will deem the Owner to be the last survivor
and make payment to the Owner's Beneficiary.
Before we make a payment, we have the right to decide what proof we need of
the identity, age or any other facts about any persons designated as
Beneficiaries. If Beneficiaries are not designated by name and we make
payment(s) based on that proof, we will not have to make the payment(s)
again.
CHANGE OF BENEFICIARY: To initiate a change of Beneficiary, call the toll-free
number listed on your statement or contact the representative who sold you the
Contract. We may also ask you to send us the Contract. The change will take
effect only when we process the request. Then, any previous Beneficiary's
interest will end as of the date we receive the request in Good Order, even if
the Owner or Joint Owner is not living when we process the request. We will not
be liable for any payment made or action taken before we record the change.
VFLX-2002 Page 19 [(A)]
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE SEPARATE ACCOUNT
We reserve the right to suspend or postpone payments from the Separate Account
for a withdrawal or transfer for any period when:
1. the New York Stock Exchange is closed (other than customary weekend
and holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of shares of the
Investment Options held in the Separate Account is not reasonably
practicable or it is not reasonably practicable to determine the value
of such shares; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
VFLX-2002 Page 20 [(A)]
GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of this Contract, and any attached
endorsements or riders. This Contract may be changed or altered only by our
President or Secretary. Any change, modification or waiver must be made in
writing. This Contract may not be modified by us without your consent except as
may be required by applicable law or as set forth in this Contract.
ASSIGNMENT OF A CONTRACT: A request in Good Order specifying the terms of an
assignment of a Contract must be provided to the Annuity Service Center. We are
under no obligation to verify the assignment's validity or sufficiency. We will
not be liable for any payment made or action taken before we record the
assignment. If any Owner is living on the Annuity Date and an assignment is in
effect on that date, we have the right to pay the Contract Surrender Value in
one lump sum to the assignee where notice in Good Order is received. Partial
assignments, collateral or otherwise, are not allowed without our approval. We
reserve the right to restrict or refuse any assignment.
An assignment which results in a change of ownership will affect the value of
the death benefit. Please see the section of the Contract entitled, "Death of
Last Survivor of Owner of Joint Owner During the Accumulation Period", for more
information.
We will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with our consent.
If the Contract is assigned, your rights may only be exercised with the consent
of the assignee of record.
NON-PARTICIPATING IN SURPLUS: This Contract does not share in any distribution
of our profits or surplus.
INACTIVE CONTRACT: If permitted by law, we may terminate this Contract by paying
you the Contract Value, in one sum if prior to the Maturity Date, (i) you make
no Purchase Payments for two consecutive Contract Years, (ii) the total amount
of Purchase Payments made, less any partial withdrawals, is less than $2,000,
and (iii) the Contract Value on or after the end of such two year period is less
than $2,000.
INCONTESTABILITY: We will not contest this Contract. We consider all statements
made in the application for this Contract to be representations, not warranties.
MISSTATEMENT OF AGE OR SEX: We may require proof of age of the Annuitant before
making any life contingent Annuity Payment provided for by this Contract. If the
age or sex of the Annuitant has been misstated, the amount payable will be the
amount that the Contract Value would have provided at the true age or sex.
Once Annuity Payments have begun, any underpayments, with interest at 5%, will
be made up in one sum with the next Annuity Payment, and overpayments, with
interest at 5%, will be deducted from the future Annuity Payments until the
total is repaid.
CONTRACT SETTLEMENT: This Contract must be returned to us upon any settlement.
REPORTS: We will send you a report four times each calendar year until the
Annuity Date showing your Contract Value and other relevant information about
your Contract. You may ask for a report like this at any time. But, except for
the four reports we send you during the year, we have the right to charge a fee
for each report. We will also furnish an annual report of the Separate Account.
These reports will be sent to your last known address.
VFLX-2002 Page 21 [(A)]
TAXES: Any taxes, including any Premium Taxes and any other type of tax (or
component thereof) measured by or based upon any portion of the Purchase Payment
we receive, paid to any governmental entity will be charged against the Contract
Value. We will, in our sole discretion, determine when taxes have resulted from:
the investment experience of the Separate Account; receipt by us of the Purchase
Payment(s); or commencement of Annuity Payments. We may, at our discretion, pay
taxes when due and deduct that amount from the Contract Value at a later date.
Payment at an earlier date does not waive any right we may have to deduct
amounts at a later date. We reserve the right to establish a provision for
federal income taxes if we determine, in our sole discretion, that we will incur
a tax as a result of the operation of the Separate Account. We will deduct for
any income taxes incurred by it as a result of the operation of the Separate
Account whether or not there was a provision for taxes and whether or not it was
sufficient. We will deduct any withholding taxes required by applicable law.
EVIDENCE OF SURVIVAL: Before we make a payment, we have the right to require
proof of continued life and any other documentation we need to make a payment.
We can require this proof for any person whose life or death determines whether
or to whom we must make the payment.
PROTECTION OF PROCEEDS: No Beneficiary may commute, encumber, alienate or assign
any payments under this Contract before they are due. To the extent permitted by
law, no payments will be subject to the debts, contracts or engagements of any
Beneficiary or to any judicial process to levy upon or attach the same for
payment thereof.
VFLX-2002 Page 22 [(A)]
VALUES AND BENEFITS
Any values and death benefits that may be available under this Contract are not
less than the minimum benefits required by the law of any state in which this
Contract is delivered.
ANNUITY OPTION PAYMENT TABLES
AMOUNTS PAYABLE: For Options 1 and 2, we will use the tables below to compute
the minimum amount of the Annuity Option Payment.
If the Annuity Date is not a Contract Anniversary, we will adjust the amounts
accordingly.
The annuity payments in the Option 2 Table are based on the Annuitant's Adjusted
Age and sex. The Adjusted Age is the Annuitant's age last birthday when the
first Annuity payment is due, adjusted as shown in the Option 2 Table.
When we computed the amounts we show in the Option 2 Table, we adjusted the
Annuity 2000 Mortality Table to an age last birthday basis, less two years, and
we used an interest rate of 3% per year.
OPTION 1 TABLE
----------------------
MINIMUM AMOUNT OF
MONTHLY PAYMENT
FOR EACH $1,000,
THE FIRST PAYABLE
IMMEDIATELY
----------------------
NUMBER MONTHLY
OF YEARS PAYMENT
----------------------
1 $84.47
2 42.86
3 28.99
4 22.06
5 17.91
6 15.14
7 13.16
8 11.68
9 10.53
10 9.61
11 8.86
12 8.24
13 7.71
14 7.26
15 6.87
16 6.53
17 6.23
18 5.96
19 5.73
20 5.51
21 5.32
22 5.15
23 4.99
24 4.84
25 4.71
Multiply the monthly amount by
2.993 for quarterly, 5.963 for
semi-annual or 11.839 for annual
VFLX-2002 Page 23 [(A)]
OPTION 2 TABLE
AMOUNT OF ANNUITY PAYMENT FOR
EACH $1,000 APPLIED ON THE ANNUITY DATE
ADJUSTED ADJUSTED
AGE MALE FEMALE AGE MALE FEMALE
--------------------------------------------------------------
41 $3.51 $3.35 69 $5.84 $5.40
42 3.55 3.39 70 5.99 5.55
43 3.59 3.43 71 6.15 5.70
44 3.64 3.46 72 6.31 5.86
45 3.69 3.50 73 6.48 6.03
46 3.74 3.54 74 6.65 6.20
47 3.79 3.59 75 6.82 6.38
48 3.84 3.63 76 6.99 6.57
49 3.90 3.68 77 7.17 6.77
50 3.96 3.73 78 7.34 6.96
51 4.02 3.79 79 7.52 7.16
52 4.08 3.84 80 7.69 7.36
53 4.15 3.90 81 7.86 7.56
54 4.22 3.96 82 8.03 7.76
55 4.29 4.02 83 8.19 7.95
56 4.37 4.09 84 8.34 8.14
57 4.45 4.16 85 8.49 8.31
58 4.54 4.24 86 8.62 8.48
59 4.63 4.32 87 8.75 8.63
60 4.73 4.40 88 8.87 8.77
61 4.83 4.49 89 8.98 8.89
62 4.94 4.58 90 9.07 9.00
63 5.05 4.68 91 9.16 9.10
64 5.17 4.79 92 9.24 9.19
65 5.29 4.90 93 9.31 9.27
66 5.42 5.01 94 9.37 9.34
67 5.55 5.14 95 9.43 9.39
68 5.69 5.27
Calendar Year in Which
First Payment is Done Adjusted Age
--------------------- ------------
Prior to 2010 Actual Age
2010 Through 2019 Actual Age minus 1
2020 Through 2029 Actual Age minus 2
2030 Through 2039 Actual Age minus 3
After 2039 Actual Age minus 4
VFLX-2002 Page 24 [(A)]
INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT. ANNUITY PAYMENTS AND VALUES
PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE
SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
VFLX-2002 Page 25 [(A)]
