FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
THE COMPANY'S PROMISE
In consideration for the Purchase Payments and the attached application, First
Security Benefit Life Insurance and Annuity Company of New York (the "Company")
will pay the benefits of this Contract according to its provisions.
LEGAL CONTRACT
PLEASE READ YOUR CONTRACT CAREFULLY. It is a legal Contract between the Owner
and the Company. The Contract's table of contents is on page 2.
FREE LOOK PERIOD-RIGHT TO CANCEL
IF FOR ANY REASON THE OWNER IS NOT SATISFIED WITH THIS CONTRACT, HE OR SHE MAY
RETURN IT TO THE COMPANY WITHIN 30 DAYS FROM THE DATE OF RECEIPT. IT MAY BE
RETURNED BY DELIVERING OR MAILING IT TO THE COMPANY. IF RETURNED, THIS CONTRACT
SHALL BE DEEMED VOID FROM THE CONTRACT DATE. THE COMPANY WILL REFUND (I) ANY
PURCHASE PAYMENTS MADE AND ALLOCATED TO THE FIXED ACCOUNT; AND (II) SEPARATE
ACCOUNT CONTRACT VALUE AS OF THE DATE THE RETURNED POLICY IS POSTMARKED FOR
RETURN TO THE COMPANY, INCREASED BY ANY FEES OR OTHER CHARGES PAID.
Signed for First Security Benefit Life Insurance and Annuity Company of New York
on the Contract Date.
XXXXX X. XXXXX XXXXXX X. XXXXXX
Secretary President
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
* Purchase Payments may be made until the earlier of the Annuity Payout Date or
termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Payout Date according to the
Contract provisions.
* Annuity Payments begin on the Annuity Payout Date using the method specified
in this Contract.
* The smallest annual rate of investment return that would have to be earned on
the assets of the Separate Account so that the dollar amount of Variable
Annuity Payments will not decrease is 3 1/2%. A daily charge corresponding to
an annual charge of .55% is applied to the assets of the Separate Account by
the Company. Please refer to the "Contract Value and Expense Provisions"
beginning on page 10.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE ARE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
00 Xxxx Xxx Xxx Xxxx, 0xx Xxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000
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TABLE OF CONTENTS
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PAGE
CONTRACT SPECIFICATIONS ............................................... 3
DEFINITIONS ........................................................... 4-6
GENERAL PROVISIONS .................................................... 7, 8
THE CONTRACT ....................................................... 7
COMPLIANCE ......................................................... 7
MISSTATEMENT OF AGE AND SEX ........................................ 7
EVIDENCE OF SURVIVAL ............................................... 7
INCONTESTABILITY ................................................... 7
ASSIGNMENT ......................................................... 7
EXCHANGES .......................................................... 8
CLAIMS OF CREDITORS ................................................ 8
NONFORFEITURE VALUES ............................................... 8
NON-PARTICIPATING .................................................. 8
STATEMENTS ......................................................... 8
OWNERSHIP, ANNUITANT AND
BENEFICIARY PROVISIONS ................................................ 9
OWNERSHIP .......................................................... 9
JOINT OWNERSHIP .................................................... 9
ANNUITANT .......................................................... 9
PRIMARY AND SECONDARY BENEFICIARIES ................................ 9
OWNERSHIP AND BENEFICIARY CHANGES .................................. 9
PURCHASE PAYMENT PROVISIONS ........................................... 10
FLEXIBLE PURCHASE PAYMENTS ......................................... 10
PURCHASE PAYMENT LIMITATIONS ....................................... 10
PURCHASE PAYMENT ALLOCATION ........................................ 10
PLACE OF PAYMENT ................................................... 10
CONTRACT VALUE AND EXPENSE PROVISIONS ................................. 10-12
CONTRACT VALUE ..................................................... 10
FIXED ACCOUNT CONTRACT VALUE ....................................... 10
FIXED ACCOUNT INTEREST CREDITING ................................... 11
SEPARATE ACCOUNT CONTRACT VALUE .................................... 11
ACCUMULATION UNIT VALUE ............................................ 11
DETERMINING ACCUMULATION UNITS ..................................... 11
MORTALITY AND EXPENSE RISK CHARGE .................................. 12
PREMIUM TAX EXPENSE ................................................ 12
MUTUAL FUND EXPENSES ............................................... 12
WITHDRAWAL PROVISIONS ................................................. 12, 13
WITHDRAWALS ........................................................ 12
WITHDRAWAL VALUE ................................................... 13
SYSTEMATIC WITHDRAWALS ............................................. 13
DATE OF REQUEST .................................................... 13
PAYMENT OF WITHDRAWAL BENEFITS ..................................... 13
DEATH BENEFIT PROVISIONS .............................................. 14, 15
DEATH BENEFIT ...................................................... 14
PROOF OF DEATH ..................................................... 14
DISTRIBUTION RULES ................................................. 14, 15
ANNUITY PAYMENT PROVISIONS ............................................ 15-19
ANNUITY PAYOUT DATE ................................................ 15
CHANGE OF ANNUITY PAYOUT DATE ...................................... 15
ANNUITY PAYOUT AMOUNT .............................................. 15
ANNUITY TABLES ..................................................... 16
ANNUITY PAYMENTS ................................................... 16
CHANGE OF ANNUITY OPTION ........................................... 16
FIXED ANNUITY PAYMENTS ............................................. 16
VARIABLE ANNUITY PAYMENTS .......................................... 16
ANNUITY UNITS ...................................................... 16, 17
NET INVESTMENT FACTOR .............................................. 17
ALTERNATE ANNUITY OPTION RATES ..................................... 17
ANNUITY OPTIONS .................................................... 18, 19
ANNUITY TABLES ........................................................ 20
AMENDMENTS OR ENDORSEMENTS, IF ANY
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CONTRACT SPECIFICATIONS
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OWNER NAME: CONTRACT NUMBER:
OWNER DATE OF BIRTH: CONTRACT DATE:
JOINT OWNER NAME: ISSUE DATE:
JOINT OWNER DATE OF BIRTH: ANNUITY PAYOUT DATE:
ANNUITANT NAME: PLAN:
ANNUITANT DATE OF BIRTH: ASSIGNMENT:
ANNUITANT GENDER:
PRIMARY BENEFICIARY NAME: SECONDARY BENEFICIARY
NAME:
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INITIAL PURCHASE PAYMENT ..............................
MINIMUM SUBSEQUENT PURCHASE PAYMENTS ..................
investment program
MINIMUM SYSTEMATIC WITHDRAWAL ......................... $100
MORTALITY AND EXPENSE RISK CHARGE ..................... .55% Annually
GUARANTEED RATE ....................................... 3%
ANNUITY OPTION ........................................
SUBACCOUNTS:
New America Growth Subaccount
International Stock Subaccount
Mid-Cap Growth Subaccount
Equity Income Subaccount
Personal Strategy Balanced Subaccount
Limited-Term Bond Subaccount
Prime Reserve Subaccount
METHOD FOR DEDUCTIONS:
Deductions for any Premium Taxes will be allocated proportionately to the
Owner's Contract Value in the Subaccounts and the Fixed Account.
* The Annuity Payout Date and Annuity Option may be changed by the Owner prior
to the Annuity Payout Date. See "Change of Annuity Payout Date" and "Change
of Annuity Option."
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DEFINITIONS
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ACCOUNT
An Account is one of the Subaccounts or the Fixed Account.
ACCUMULATION UNIT
The Accumulation Unit is a unit of measure. It is used to
compute the Separate Account Contract Value prior to the
Annuity Payout Date. It is also used to compute the
Variable Annuity Payments for Annuity Options 5 through 7.
ANNUITANT
The Annuitant is the person named by the Owner on whose
life the Annuity Payments depend for Annuity Options 1
through 4. The Annuitant receives Annuity Payments under
this Contract. Please see "Annuitant" provisions on page 9.
ANNUITY OPTION
An Annuity Option is a set of provisions that form the
basis for making Annuity Payments. The Annuity Option is
set prior to the Annuity Payout Date. Please see "Annuity
Options" on pages 18 and 19.
ANNUITY PAYOUT DATE
The Annuity Payout Date is the date on which Annuity
Payments are scheduled to begin. This date may be changed
by the Owner. The Annuity Payout Date is shown on Page 3.
Please see "Annuity Payout Date" on page 15.
ANNUITY UNIT
The Annuity Unit is a unit of measure used to compute
Variable Annuity Payments for Annuity Options 1 through 4.
AUTOMATIC EXCHANGES
Automatic Exchanges are Exchanges among the Subaccounts and
the Fixed Account. Such exchanges are made automatically on
a periodic basis by the Company at the written request of
the Owner.
COMPANY
The Company is First Security Benefit Life Insurance and
Annuity Company of New York.
CONTRACT ANNIVERSARY
A Contract Anniversary is a 12-month anniversary of the
Contract Date.
CONTRACT DATE
The Contract Date is the date the Contract begins. The
Contract Date is shown on page 3.
CONTRACT YEAR
Contract Years are measured from the Contract Date.
CURRENT INTEREST
The Company may in its discretion pay Current Interest on
the Fixed Account at a rate that exceeds the Guaranteed
Rate shown on page 3. The Company will declare the rate of
Current Interest, if any, from time to time.
DESIGNATED BENEFICIARY
Upon the death of the Owner or Joint Owner, the Designated
Beneficiary will be the first person on the following list
who is alive on the date of death: 1. Owner; 2. Joint
Owner; 3. Primary Beneficiary; 4. Secondary Beneficiary; 5.
Annuitant; and 6. the Owner's estate if no one listed above
is alive.
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DEFINITIONS (CONTINUED)
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DESIGNATED
BENEFICIARY (Cont'd)
The Designated Beneficiary receives a death benefit upon
the death of the Owner. Please see "Ownership, Annuitant,
and Beneficiary Provisions" on page 9 and "Death Benefit
Provisions" on pages 14 and 15.
FIXED ACCOUNT
The Fixed Account is part of the Company's general account.
The Company manages the general account and guarantees that
it will credit interest on Fixed Account Contract Value at
an annual rate at least equal to the Guaranteed Rate. This
Rate is shown on page 3.
GUARANTEE PERIOD
Current Interest, if declared, is fixed for rolling periods
of one year, referred to as Guarantee Periods. The
Guarantee Period that applies to any Fixed Account Contract
Value: (1) starts on the date that such Contract Value is
allocated to the Fixed Account pursuant to: (a) a Purchase
Payment Received by the Company; or (b) an Exchange to the
Fixed Account; and (2) ends on the last day of the same
month in the year in which the Guarantee Period expires.
When any Guarantee Period expires, a new Guarantee Period
shall start for such Contract Value on the date that
follows such expiration date. Such period shall end on the
immediately preceding date in the year in which the
Guarantee Period expires. For example, Contract Value
exchanged to the Fixed Account on June 1 would have a
Guarantee Period starting on that date and ending on June
30 of the following year. A new Guarantee Period for such
Contract Value would start on July 1 of that year and end
on June 30 of the following year.
HOME OFFICE
The address of the Company's Home Office is First Security
Benefit Life Insurance and Annuity Company of New York, 00
Xxxx Xxx Xxx Xxxx, 0xx Xxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000.
ISSUE DATE
The Issue Date is the date the Company uses to determine
the date the Contract becomes incontestable. The Issue Date
is shown on Page 3. Please see "Incontestability" on page
7.
JOINT OWNER
The Joint Owner, if any, shares an undivided interest in
the entire Contract with the Owner. The Joint Owner, if
any, is named on page 3. Please see "Joint Ownership"
provisions on page 9.
NONNATURAL PERSON
Any group or entity that is not a living person, such as a
trust or corporation.
OWNER
The Owner is the person who has all rights under the
Contract. The Owner is named on page 3. Please see
"Ownership" provisions on page 9.
PREMIUM TAX
Any Premium Taxes levied by a state or other governmental
entity will be charged against this Contract. When Premium
Tax is assessed after the Purchase Payment is applied, it
will be deducted as described on page 3.
PURCHASE PAYMENT
A Purchase Payment is money Received by the Company and
applied to the Contract.
RECEIVED BY THE
COMPANY
The phrase "Received by the Company" means receipt by the
Company in good order at its Home Office at the address
indicated above or such other address designated in writing
by the Company.
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DEFINITIONS (CONTINUED)
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SEPARATE ACCOUNT
The X. Xxxx Price Variable Annuity Account of First
Security Benefit Life Insurance and Annuity Company of New
York is a Separate Account established and maintained by
the Company under New York law. The Separate Account is
registered with the Securities and Exchange Commission
under the Investment Company Act of 1940 as a Unit
Investment Trust. It was established by the Company to
support variable annuity contracts. The Company owns the
assets of the Separate Account and maintains them apart
from the assets of its general account and its other
separate accounts. The assets held in the Separate Account
equal to the reserves and other Contract liabilities with
respect to the Separate Account shall not be chargeable
with liabilities arising out of any other business of the
Company.
Income and realized and unrealized gains and losses from
assets in the Separate Account are credited to, or charged
against, the Separate Account without regard to the income,
gains or losses from the Company's general account or its
other separate accounts. The Separate Account is divided
into Subaccounts shown on page 3. Income and realized and
unrealized gains and losses from assets in each Subaccount
are credited to, or charged against, the Subaccount without
regard to income, gains or losses in the other Subaccounts.
The Company has the right to transfer to its general
account any assets of the Separate Account that are in
excess of the reserves and other Contract liabilities with
respect to the Separate Account. The value of the assets
in the Separate Account on each Valuation Date is
determined at the end of each Valuation Date.
SUBACCOUNT NET
ASSET VALUE
The Subaccount Net Asset Value is equal to: (1) the net
asset value of all shares of the underlying mutual fund
held by the Subaccount; plus (2) any cash or other assets;
less (3) all liabilities of the Subaccount.
SUBACCOUNTS
The Separate Account is divided into Subaccounts which
invest in shares of open-end management investment
companies, commonly known as mutual funds. Each Subaccount
may invest its assets in a separate class or series of a
designated mutual fund or funds. The Subaccounts are shown
on page 3. Subject to the regulatory requirements then in
force, the Company reserves the right to:
1. change or add designated mutual funds or other
investment vehicles;
2. add, remove or combine Subaccounts;
3. add, delete or make substitutions for securities that
are held or purchased by the Separate Account or any
Subaccount;
4. operate the Separate Account as a management investment
company;
5. combine the assets of the Separate Account with other
Separate Accounts of the Company or an affiliate
thereof;
6. restrict or eliminate any voting rights of the Owner
with respect to the Separate Account or other persons
who have voting rights as to the Separate Account; and
7. terminate and liquidate any Subaccount.
If any of these changes result in a material change to the
Separate Account or a Subaccount, the Company will notify
the Owner of the change. The Company will not change the
investment policy of any Subaccount in any material respect
without complying with the filing and other procedures of
the insurance regulators of the state of issue.
VALUATION DATE
A Valuation Date is each day the New York Stock Exchange
and the Company are open for business.
VALUATION PERIOD
A Valuation Period is the interval of time from one
Valuation Date to the next Valuation Date.
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GENERAL PROVISIONS
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THE CONTRACT
The entire Contract between the Owner and the Company
consists of this Contract, the attached Application, and
any Amendments, Endorsements or Riders to the Contract. All
statements made in the Application will, as ruled by a
court of competent jurisdiction, be deemed representations
and not warranties. The Company will use no statement made
by or on behalf of the Owner or the Annuitant to void this
Contract unless it is in the written Application. Any
change in the Contract can be made only with the written
consent of the President, a Vice President, or the
Secretary of the Company.
The Purchase Payment(s) and the Application must be
acceptable to the Company under its rules and practices. If
they are not, the Company's liability shall be limited to a
return of the Purchase Payment(s).
COMPLIANCE
The Company reserves the right to make any change to the
provisions of this Contract to comply with or give the
Owner the benefit of any federal or state statute, rule or
regulation. This includes, but is not limited to,
requirements for annuity contracts under the Internal
Revenue Code or the laws of any state. The Company will
provide the Owner with a copy of any such change and will
obtain approval for such a change with the insurance
regulatory officials of the state in which the Contract is
delivered.
MISSTATEMENT OF AGE
AND SEX
If the age or sex of the Annuitant has been misstated,
payments shall be adjusted, when allowed by law, to the
amount which would have been provided for the correct age
or sex. Proof of the age of an Annuitant may be required at
any time, in a form suitable to the Company. If payments
have already commenced and the misstatement has caused an
underpayment, the full amount due with interest at the rate
of 3% will be paid with the next scheduled payment. If the
misstatement has caused an overpayment, the amount due with
interest at the rate of 3% will be deducted from one or
more future payments.
EVIDENCE OF SURVIVAL
When any payments under this Contract depend on the payee
being alive on a given date, proof that the payee is living
may be required by the Company. Such proof must be in a
form accepted by the Company, and may be required prior to
making the payments.
INCONTESTABILITY
This Contract will not be contested after it has been in
force for two years from the Issue Date during the life of
the Owner.
ASSIGNMENT
Please refer to page 3 to see if this Contract may be
assigned. If it may be assigned, no Assignment under this
Contract is binding unless Received by the Company in
writing. The Company assumes no responsibility for the
validity, legality, or tax status of any Assignment. The
Assignment will be subject to any payment made or other
action taken by the Company before the Assignment is
Received by the Company. Once filed, the rights of the
Owner, Annuitant and Beneficiary are subject to the
Assignment. Any claim is subject to proof of interest of
the assignee.
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GENERAL PROVISIONS (CONTINUED)
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EXCHANGES
The Owner may Exchange Contract Value among the Fixed
Account and Subaccounts subject to the following.
Exchanges are not allowed within 30 days of the Annuity
Payout Date. After the Annuity Payout Date, for Annuity
Options 1 through 4, the Owner may Exchange Contract Value
only among Subaccounts. The Company reserves the right to:
(1) prohibit exchanges that would reduce an account to less
than $500; (2) limit the number of Exchanges allowed each
Contract Year to six; and (3) subject to New York Insurance
Department approval, waive the limit on Exchanges allowed
each Contract Year. Exchanges must be at least $500 or, if
less, the remaining balance in the Fixed Account or a
Subaccount.
Contract Value may be exchanged from the Fixed Account
only: (1) during the calendar month in which the applicable
Guarantee Period expires; and (2) pursuant to an Automatic
Exchange. Exchanges of Fixed Account Contract Value will
be made: (1) first from Fixed Account Contract Value for
which the Guarantee Period expires during the calendar
month in which the Exchange is effected; (2) then in the
order that starts with Fixed Account Contract Value which
has the longest amount of time before its Guarantee Period
expires; and (3) ends with that which has the least amount
of time before its Guarantee Period expires.
The Company will effect an Exchange to or from a Subaccount
on the basis of Accumulation Unit Value (or, when
appropriate, Annuity Unit Value) determined at the end of
the Valuation Period in which the Exchange is effected. The
Company will effect an Exchange from the Fixed Account on
the basis of Fixed Account Contract Value at the end of the
Valuation Period in which the Exchange is effected.
The Company reserves the right to delay Exchanges from the
Fixed Account for up to 6 months. The Company will inform
you if there will be a delay.
CLAIMS OF CREDITORS
The Contract Value and other benefits under this Contract
are exempt from the claims of creditors of the Owner to the
extent allowed by law.
NONFORFEITURE
VALUES
The Death Benefits, Withdrawal Values and Annuity Payout
Values will at least equal the minimum required by law.
NON-PARTICIPATING
This Contract is not participating and will pay no
dividend.
STATEMENTS
At least once each Contract Year the Owner shall be sent a
statement including the current Contract Value and any
other information required by law. The Owner may send a
written request for a statement at other intervals. The
Company may charge a reasonable fee for such statements.
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OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS
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OWNERSHIP
During the Owner's lifetime, all rights and privileges
under the Contract may be exercised only by the Owner. If
the purchaser names someone other than himself or herself
as Owner, the purchaser has no rights in the Contract. No
Owner may be older than age 85 on the Contract Date.
JOINT OWNERSHIP
If a Joint Owner is named in the application, then the
Owner and Joint Owner share an undivided interest in the
entire Contract as joint tenants with rights of
survivorship. When an Owner and Joint Owner have been
named, the Company will honor only requests for changes and
the exercise of other Ownership rights made by both the
Owner and Joint Owner. When a Joint Owner is named, all
references to "Owner" throughout this Contract should be
construed to mean both the Owner and Joint Owner, except
for the final sentence of the "Annuitant" provision below,
the "Statements" provision on page 8 and the "Death Benefit
Provisions" on pages 14 and 15.
ANNUITANT
The Annuitant is named on page 3. The Owner may change the
Annuitant prior to the Annuity Payout Date. The request for
this change must be made in writing and Received by the
Company at least 30 days prior to the Annuity Payout Date.
No Annuitant may be named who is more than 85 years old on
the Contract Date. When the Annuitant dies prior to the
Annuity Payout Date, the Owner must name a new Annuitant
within 30 days or, if sooner, by the Annuity Payout Date,
except where the Owner is a Nonnatural Person. If a new
Annuitant is not named, the Owner becomes the Annuitant.
PRIMARY AND
SECONDARY
BENEFICIARIES
The Primary Beneficiary and any Secondary Beneficiary are
named on page 3. The Owner may change any Beneficiary as
described in "Ownership and Beneficiary Changes" below. If
the Primary Beneficiary dies prior to the Owner, the
Secondary Beneficiary becomes the Primary Beneficiary.
Unless the Owner directs otherwise, when there are two or
more Primary Beneficiaries, they will receive equal shares.
OWNERSHIP AND
BENEFICIARY CHANGES
Subject to the terms of any existing Assignment, the Owner
may name a new Owner, a new Primary Beneficiary or a new
Secondary Beneficiary. Any new choice of Owner, Primary
Beneficiary or Secondary Beneficiary will revoke any prior
choice. Any change must be made in writing and recorded at
the Home Office. The change will become effective as of the
date the written request is signed, whether or not the
Owner is living at the time the change is recorded. A new
choice of Primary Beneficiary or Secondary Beneficiary will
not apply to any payment made or action taken by the
Company prior to the time it was recorded. The Company may
require the Contract be returned so these changes may be
made.
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PURCHASE PAYMENT PROVISIONS
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FLEXIBLE PURCHASE
PAYMENTS
The Contract becomes in force when the initial Purchase
Payment is applied. The Owner is not required to continue
Purchase Payments in the amount or frequency originally
planned. The Owner may: (1) increase or decrease the amount
of Purchase Payments; or (2) change the frequency of
Purchase Payments. A change in frequency or amount of
Purchase Payments does not require a written request.
PURCHASE PAYMENT
LIMITATIONS
Total Purchase Payments to the Contract may not be greater
than $1,000,000 without prior approval by the Company. The
Minimum Subsequent Purchase Payment amount is shown on page
3.
PURCHASE PAYMENT
ALLOCATION
Purchase Payments may be allocated among the Fixed Account
and the Subaccounts. The allocations may be a whole dollar
amount or whole percentage. However, no less than $25 per
Purchase Payment may be allocated to any Account. The Owner
may change the allocations by written notice to the
Company.
PLACE OF PAYMENT
All Purchase Payments under this Contract are to be paid to
the Company. Purchase Payments after the first Purchase
Payment are applied as of the end of the Valuation Period
during which they are Received by the Company.
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CONTRACT VALUE AND EXPENSE PROVISIONS
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CONTRACT VALUE
On any Valuation Date, the Contract Value is the sum of:
(1) the Separate Account Contract Value; and (2) the Fixed
Account Contract Value. At any time after the first
Contract Year and before the Annuity Payout Date, the
Company reserves the right to pay to the Owner the Contract
Value as a lump sum if it is below $2,000 and no Purchase
Payments have been paid for three years.
FIXED ACCOUNT
CONTRACT VALUE
On any Valuation Date, the Fixed Account Contract Value is
equal to the first Purchase Payment allocated under the
Contract to the Fixed Account:
PLUS:
1. any other Purchase Payments allocated under the Contract
to the Fixed Account;
2. any Exchanges from the Separate Account to the Fixed
Account; and
3. any interest credited to the Fixed Account.
LESS:
1. any Withdrawals deducted from the Fixed Account;
2. any Exchanges from the Fixed Account to the Separate
Account;
3. any applicable Premium Taxes;
4. any Fixed Account Contract Value which is applied to any
of Annuity Options 1 through 4; and
5. any Annuity Payments made under Annuity Options 5
through 7.
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CONTRACT VALUE AND EXPENSE PROVISIONS (CONTINUED)
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FIXED ACCOUNT
INTEREST CREDITING
The Company will credit interest on Fixed Account Contract
Value at an annual rate at least equal to the Guaranteed
Rate shown on page 3. Also, the Company may in its sole
judgment credit Current Interest at a rate in excess of the
Guaranteed Rate. The rate of Current Interest, if declared,
will be fixed during the Guarantee Period. Fixed Account
Contract Value will earn Current Interest during each
Guarantee Period at the rate, if any, declared by the
Company on the first day of the Guarantee Period.
The Company may credit Current Interest on Contract Value
that was allocated or exchanged to the Fixed Account during
one period at a different rate than amounts allocated or
exchanged to the Fixed Account in another period.
Therefore, at any time, portions of Fixed Account Contract
Value may be earning Current Interest at different rates
based upon the period during which such portions were
allocated or exchanged to the Fixed Account.
SEPARATE ACCOUNT
CONTRACT VALUE
On any Valuation Date, the Separate Account Contract Value
is the sum of the then current value of the Accumulation
Units allocated to each Subaccount for this Contract.
ACCUMULATION UNIT
VALUE
The initial Accumulation Unit Value for each Subaccount was
set at $10. Other Accumulation Unit Values are found on
each Valuation Date by dividing (1) by (2) where:
1. is equal to:
a. the Subaccount Net Asset Value determined at the end
of the current Valuation Period; plus
b. any dividends declared by the Subaccount's underlying
mutual fund that are not part of the Subaccount Net
Asset Value; less
c. the accrued Mortality and Expense Risk Charge; and
d. any taxes for which the Company has reserved which
the Company deems to have resulted from the operation
of the Subaccount.
2. is the number of Accumulation Units at the start of the
Valuation Period.
The Accumulation Unit Value may increase or decrease from
one Valuation Period to the next.
DETERMINING
ACCUMULATION
UNITS
The number of Accumulation Units allocated to a Subaccount
under this Contract is found by dividing: (1) the amount
allocated to the Subaccount; by (2) the Accumulation Unit
Value for the Subaccount at the end of the Valuation Period
during which the amount is applied under the Contract. The
number of Accumulation Units allocated to a Subaccount
under the Contract will not change as a result of
investment experience. Events that change the number of
Accumulation Units are:
1. Purchase Payments that are applied to the Subaccount;
2. Contract Value that is Exchanged into or out of the
Subaccount;
3. Withdrawals that are deducted from the Subaccount; and
4. Premium Taxes that are deducted from the Subaccount.
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CONTRACT VALUE AND EXPENSE PROVISIONS (CONTINUED)
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MORTALITY AND
EXPENSE RISK
CHARGE
The Company will deduct the Mortality and Expense Risk
Charge shown on page 3. This charge will be computed and
deducted from each Subaccount on each Valuation Date. This
charge is factored into the Accumulation Unit and Annuity
Unit Values on each Valuation Date.
PREMIUM TAX EXPENSE
The Company reserves the right to deduct Premium Tax when
due or any time thereafter. Any applicable Premium Taxes
will be allocated as described on page 3.
MUTUAL FUND EXPENSES
Each Subaccount invests in shares of a mutual fund. The net
asset value per share of each underlying fund reflects the
deduction of any investment advisory and administration
fees and other expenses of the fund. These fees and
expenses are not deducted from the assets of a Subaccount,
but are paid by the underlying funds. The Owner indirectly
bears a pro rata share of such fees and expenses. An
underlying fund's fees and expenses are not specified or
fixed under the terms of this Contract.
--------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS
--------------------------------------------------------------------------------
WITHDRAWALS
A full Withdrawal of the Contract Value or partial
Withdrawal of Separate Account Contract Value is allowed at
any time. Partial Withdrawals of Fixed Account Contract
Value are, however, restricted as described below. This
provision is subject to any federal or state Withdrawal
restrictions.
A partial Withdrawal of Fixed Account Contract Value may be
made only: (1) pursuant to Systematic Withdrawals; (2)
during the calendar month in which the applicable Guarantee
Period expires; and (3) once per Contract Year in an amount
up to the greater of $5,000 or 10 percent of the Fixed
Account Contract Value at the time of the partial
Withdrawal.
Upon the Owner's request for a full Withdrawal, the Company
will pay the Withdrawal Value in a lump sum.
All Withdrawals must meet the following conditions.
1. The request for Withdrawal must be Received by the
Company in writing or under other methods allowed by the
Company.
2. The Owner must apply: (a) while this Contract is in
force; and (b) prior to the Annuity Payout Date.
3. The amount Withdrawn must be at least $500.00 except for
Systematic Withdrawals, as discussed below, or when
terminating the Contract.
A partial Withdrawal request must state the allocations for
deducting the Withdrawal from each Account. If the Owner
does not specify the allocation, the Company will contact
the Owner for instructions. The Withdrawal will be effected
as of the end of the Valuation Period in which such
instructions are Received by the Company. Withdrawals of
Fixed Account Contract Value will be made: (1) first from
Fixed Account Contract Value for which the Guarantee Period
expires during the calendar month in which the Withdrawal
is effected; (2) then in the order that starts with Fixed
Account Contract Value which has the longest amount of time
before its Guarantee Period expires; and (3) ends with that
which has the least amount of time before its Guarantee
Period expires.
-12-
--------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
WITHDRAWAL VALUE
The Withdrawal Value at any time will be: (1) the Contract
Value; less (2) any Premium Taxes due or paid by the
Company.
SYSTEMATIC
WITHDRAWALS
Systematic Withdrawals are automatic periodic distributions
from the Contract in substantially equal amounts prior to
the Annuity Payout Date. In order to start Systematic
Withdrawals, the Owner must make the request in writing.
The Minimum Systematic Withdrawal is shown on page 3. The
Owner must choose the type of payment and its frequency.
The payment type may be: (1) a percentage of Contract
Value; (2) a specified dollar amount; (3) all earnings in
the Contract; or (4) based upon the life expectancy of the
Owner or the Owner and a Beneficiary. The payment frequency
may be: (1) monthly; (2) quarterly; (3) semiannually; or
(4) annually. Systematic Withdrawals of Fixed Account
Contract Value must provide for payments over a period of
not less than 36 months. Systematic Withdrawals may be
stopped by the Owner upon proper written request Received
by the Company at least 30 days in advance. The Company
reserves the right to stop, modify or suspend Systematic
Withdrawals.
Withdrawals, including systematic withdrawals, may: (1)
subject the Owner to a penalty tax if taken before age 59
1/2; and (2) may be restricted or limited if made from an
Individual Retirement Annuity qualified under Internal
Revenue code (IRC) Section 408 or a Tax Sheltered Annuity
qualified under IRC Section 403(b).
DATE OF
REQUEST
The Company will effect a Withdrawal of Separate Account
Contract Value on the basis of Accumulation Unit Value
determined at the end of the Valuation Period in which all
the required information is Received by the Company.
PAYMENT OF
WITHDRAWAL
BENEFITS
The Company reserves the right to suspend an Exchange or
delay payment of a Withdrawal from the Separate Account for
any period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is
restricted; or
3. when an emergency exists as a result of which: (a)
disposal of securities held in the Separate Account is
not reasonably practicable; or (b) it is not reasonably
practicable to fairly value the net assets of the
Separate Account.
Rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions set
forth above exist.
The Company further reserves the right to delay payment of
a Withdrawal from the Fixed Account for up to six months as
required by most states. The Company will notify you if
there will be a delay.
-13-
--------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
--------------------------------------------------------------------------------
DEATH BENEFIT
If any Owner dies prior to the Annuity Payout Date, a death
Benefit will be paid to the Designated Beneficiary when due
Proof of Death and instructions regarding payment are
Received by the Company. If an Owner is a Nonnatural
Person, then the Death Benefit will be paid in the event of
the death of the Annuitant or any joint Owner that is a
natural person prior to the Annuity Payout Date. Further,
if an Owner is a Nonnatural Person, the amount of the death
benefit is based on the age of the Annuitant or any joint
Owner that is a natural person on the Issue Date.
If the age of each Owner was 75 or younger on the Issue
Date, the Death Benefit will be the greatest of: (1) the
sum of all Purchase Payments, less any Premium Taxes due or
paid by the Company and less the sum of all partial
Withdrawals; (2) the Contract Value on the date due Proof
of Death and instructions regarding payment are Received by
the Company, less any Premium Taxes due or paid by the
Company; or (3) the Stepped-Up Death Benefit below.
The Stepped-Up Death Benefit is:
1. the largest Death Benefit on any Contract Anniversary
that is both an exact multiple of five and occurs prior
to the oldest Owner reaching age 76; plus
2. any Purchase Payments received since the applicable
fifth Contract Anniversary; less
3. any reductions caused by Withdrawals since the
applicable fifth Contract Anniversary; less
4. any Premium Taxes due or paid by the Company.
If the age of any Owner on the Issue Date was 76 or older,
the Death Benefit will be: (1) the Contract Value on the
date due Proof of Death and instructions regarding payment
are Received by the Company; less (2) any Premium Taxes due
or paid by the Company.
If a lump sum payment is requested, the payment will be
made in accordance with any laws and regulations that
govern the payment of Death Benefits.
The value of the Death Benefit is determined as of the date
that both Proof of Death and instructions regarding payment
are Received by the Company in good order.
PROOF OF
DEATH
Any of the following will serve as Proof of Death:
1. certified copy of the death certificate;
2. certified decree of a court of competent jurisdiction as
to the finding of death;
3. written statement by a medical doctor who attended the
deceased Owner; or
4. any proof accepted by the Company.
DISTRIBUTION
RULES
The entire Death Benefit with any interest shall be paid
within 5 years after the death of any Owner, except as
provided below. In the event that the Designated
Beneficiary elects an Annuity Option, the length of time
for the payment period may be longer than 5 years if: (1)
the Designated Beneficiary is a natural person; (2) the
Death Benefit is paid out under Annuity Options 1 through
7; (3) payments are made over a period that does not exceed
the life or life expectancy of the Designated Beneficiary;
and (4) Annuity Payments begin within one year of the death
of the Owner. If the deceased Owner's spouse is the sole
Designated Beneficiary, the spouse shall become the sole
Owner of the Contract. He or she may elect to: (1) keep the
Contract in force until the sooner of the spouse's death or
the Annuity Payout Date; or (2) receive the Death Benefit.
-14-
--------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
DISTRIBUTION
RULES (cont'd)
If any Owner dies after the Annuity Payout Date, Annuity
Payments will continue to be paid at least as rapidly as
under the method of payment being used as of the date of
the Owner's death.
If the Owner is a Nonnatural Person, the distribution rules
set forth above apply in the event of the death of, or a
change in, the Annuitant. This Contract is deemed to
incorporate any provision of Section 72(s) of the Internal
Revenue Code of 1986, as amended (the "Code"), or any
successor provision. This Contract is also deemed to
incorporate any other provision of the Code deemed
necessary by the Company, in its sole judgment, to qualify
this Contract as an annuity. The application of the
distribution rules will be made in accordance with Code
section 72(s), or any successor provision, as interpreted
by the Company in its sole judgment.
The foregoing distribution rules do not apply to a Contract
which is: (1) provided under a plan described in Code
section 401(a); (2) described in Code section 403(b); (3)
an individual retirement annuity or provided under an
individual retirement account or annuity; or (4) otherwise
exempt from the Code section 72(s) distribution rules.
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS
--------------------------------------------------------------------------------
ANNUITY PAYOUT
DATE
The Owner may choose the Annuity Payout Date at the time of
application. If no Annuity Payout Date is chosen, the
Company will use the later of: (1) the oldest Annuitant's
seventieth birthday; or (2) the fifth Contract Anniversary.
The Annuity Payout Date must be prior to the oldest
Annuitant's ninetieth birthday.
The Annuity Payout Date is the date the first payment will
be made to the Annuitant under any of the Annuity Options.
CHANGE OF ANNUITY
PAYOUT DATE
The Owner may change the Annuity Payout Date. A request for
the change must be made in writing. The written request
must be Received by the Company at least 30 days prior to
the new Annuity Payout Date as well as 30 days prior to the
previous Annuity Payout Date.
ANNUITY PAYOUT
AMOUNT
The Annuity Payout Amount is applied to one or more of the
Annuity Options listed on pages 18 and 19. The Annuity
Payout Amount is: (1) the Contract Value on the Annuity
Payout Date; less (2) any Premium Taxes due or paid by the
Company. Unless otherwise directed by the Owner, Annuity
Payout Amount derived from Fixed Account Contract Value
will be applied to purchase a Fixed Annuity Option; that
derived from Separate Account Contract Value will be
applied to purchase a Variable Annuity Option.
-15-
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
ANNUITY TABLES
The Annuity Tables show the guaranteed minimum amount of
monthly Annuity Payment that applies to the first payment
for Variable Annuity Payments and to each payment for Fixed
Annuity Payments for each $1,000 of Annuity Payout Amount
for each of Annuity Options 1 through 4. The amount of each
Annuity Payment for Annuity Options 1 through 4 will depend
on the Annuitant's sex and age on the Annuity Payout Date.
The Annuity Tables state values for the exact ages shown.
The values will be interpolated based on the Annuitant's
exact age on the Annuity Payout Date. On request the
Company will furnish the amount of monthly Annuity Payment
per $1,000 applied for any ages not shown.
The Company bases the Tables for Annuity Options 1 through
4 on: (1) the 1983 Table "A" Mortality Table projected for
mortality improvement for 45 years using Projection Scale
G; and (2) an interest rate of 3 1/2% a year.
For Annuity Options 5 through 7, age and sex are not
considered. Annuity Payments for these options are computed
without reference to the Annuity Tables.
ANNUITY PAYMENTS
The Annuity Option is shown on page 3. The Owner may choose
any form of Annuity Option that is allowed by the Company.
The Owner may choose an Annuity Option by written request.
This request must be Received by the Company at least 30
days prior to the Annuity Payout Date. Several Annuity
Options are listed on pages 18 and 19. No Annuity Option
can be selected that requires the Company to make periodic
payments of less than $20.00. If no Annuity Option is
chosen prior to the Annuity Payout Date, the Company will
use Life with 10-Year Fixed Period Option. Each Annuity
Option allows for making Annuity Payments annually,
semiannually, quarterly or monthly.
CHANGE OF ANNUITY
OPTION
Prior to the Annuity Payout Date, the Owner may change the
Annuity Option chosen. The Owner must request the change in
writing. This request must be Received by the Company at
least 30 days prior to the Annuity Payout Date.
FIXED ANNUITY
PAYMENTS
With respect to Fixed Annuity Payments, the amounts shown
on the Tables are the guaranteed minimum for each Annuity
Payment for Annuity Options 1 through 4.
VARIABLE ANNUITY
PAYMENTS
With respect to Variable Annuity Payments, the amounts
shown on the Tables are the first Annuity Payment, based on
the assumed interest rate of 3 1/2% for Annuity Options 1
through 4. The amount of each Annuity Payment after the
first for these options is computed by means of Annuity
Units. Neither expense actually incurred (other than tax on
investment return), nor mortality actually experienced,
shall adversely affect the dollar amount of annuity income
already commenced.
ANNUITY UNITS
The number of Annuity Units is found by dividing the first
Annuity Payment by the Annuity Unit Value for the selected
Subaccount on the Annuity Payout Date. The number of
Annuity Units for the Subaccount then remains constant,
unless an Exchange of Annuity Units is made. After the
first Annuity Payment, the dollar amount of each subsequent
Annuity Payment is equal to the number of Annuity Units
times the Annuity Unit Value for the Subaccount on the due
date of the Annuity Payment.
-16-
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
ANNUITY UNITS (Cont'd)
The Annuity Unit Value for each Subaccount was first set at
$1.00. The Annuity Unit Value for any subsequent Valuation
Date is equal to (a) times (b) times (c), where:
(a) is the Annuity Unit Value on the immediately preceding
Valuation Date;
(b) is the Net Investment Factor for the Valuation Date;
(c) is a factor used to adjust for an assumed interest rate
of 3 1/2% per year used to determine the Annuity
Payment amounts. The assumed interest rate is reflected
in the Annuity Tables.
NET INVESTMENT
FACTOR
The Net Investment Factor for any Subaccount at the end of
any Valuation Period is found by dividing (1) by (2) and
subtracting (3) from the result, where:
1. is equal to:
a. the net asset value per share of the mutual fund
held in the Subaccount, found at the end of the
current Valuation Period; plus
b. the per share amount of any dividend or capital gain
distributions paid by the Subaccount's underlying
mutual fund that is not included in the net asset
value per share; plus or minus
c. a per share charge or credit for any taxes reserved
for, which the Company deems to have resulted from
the operation of the Subaccount.
2. is the net asset value per share of the Subaccount's
underlying mutual fund as found at the end of the prior
Valuation Period.
3. is a factor representing the Mortality and Expense Risk
Charge deducted from the Separate Account.
Underlying mutual funds may declare dividends on a daily
basis and pay such dividends once a month. The Net
Investment Factor allows for the monthly reinvestment of
these daily dividends. As described above, the gains and
losses from each Subaccount are credited or charged against
the Subaccount without regard to the gains or losses in the
Company or other Subaccounts.
ALTERNATE ANNUITY
OPTION RATES
The Company may, at the time of election of an Annuity
Option, offer more favorable rates in lieu of the
guaranteed rates shown in the Annuity Tables.
-17-
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
ANNUITY OPTIONS
OPTION 1
LIFE OPTION: This option provides payments for the life of
the Annuitant. Table A shows some of the guaranteed rates
for this option.
OPTION 2
LIFE WITH FIXED PERIOD OPTION: This option provides
payments for the life of the Annuitant. A fixed period of
5, 10, 15 or 20 years may be chosen. Payments will be made
to the end of this period even if the Annuitant dies prior
to the end of the period. If the Annuitant dies before
receiving all the payments during the fixed period, the
remaining payments will be made to the Designated
Beneficiary. Table A shows some of the guaranteed rates for
this option.
OPTION 3
LIFE WITH INSTALLMENT OR UNIT REFUND OPTION: This option
provides payments for the life of the Annuitant, with a
period certain determined by dividing the Annuity Payout
Amount by the amount of the first payment. A fixed number
of payments will be made even if the Annuitant dies. If the
Annuitant dies before receiving the fixed number of
payments, any remaining payments will be made to the
Designated Beneficiary. Table A shows some of the
guaranteed rates for this option.
OPTION 4
JOINT AND LAST SURVIVOR OPTION: This option provides
payments for the life of the Annuitant and Joint Annuitant.
Payments will be made as long as either is living. Table B
shows some of the guaranteed rates for this option.
OPTION 5
FIXED PERIOD OPTION: This option provides payments for a
fixed number of years between 5 and 20. If the Contract
Value is held in the Fixed Account, then the amount of the
payments will vary as a result of the interest rate (as
adjusted periodically) credited on the Fixed Account. This
rate is guaranteed to be no less than the Guaranteed Rate
shown on page 3. If the Contract Value is held in the
Separate Account, then the amount of the payments will vary
as a result of the investment performance of the
Subaccounts chosen. If all the Annuitants die before
receiving the fixed number of payments, any remaining
payments will be made to the Designated Beneficiary.
OPTION 6
FIXED PAYMENT OPTION: This option provides a fixed payment
amount. This amount is paid until the amount applied,
including daily interest adjustments, is paid. If the
Contract Value is held in the Fixed Account, then the
number of payments will vary as a result of the interest
rate (as adjusted periodically) credited on the Fixed
Account. This rate is guaranteed to be no less than the
Guaranteed Rate shown on page 3. If the Contract Value is
held in the Separate Account, then the number of payments
will vary as a result of the investment performance of the
Subaccounts chosen. If all the Annuitants die before
receiving all the payments, any remaining payments will be
made to the Designated Beneficiary.
-18-
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
ANNUITY OPTIONS (cont'd)
OPTION 7
AGE RECALCULATION OPTION: This option provides for payments
based upon the Annuitant's life expectancy, or the joint
life expectancies of the Annuitant and a beneficiary, at
the Annuitant's attained age (and the Annuitant's
beneficiary's attained or adjusted age, if applicable) each
year. The payments are computed by reference to actuarial
tables prescribed by the Treasury Secretary. Payments are
made until the amount applied is exhausted. If the Contract
Value is held in the Fixed Account, then the number of
payments will vary as a result of the interest rate (as
adjusted periodically) credited on the Fixed Account. This
rate is guaranteed to be not less than the Guaranteed Rate
shown on page 3. If the Contract Value is held in the
Separate Account, then the number of payments will vary as
a result of the investment performance of the Subaccounts
chosen. If all the Annuitants die before receiving the
remaining payments, such payments will be made to the
Designated Beneficiary.
-19-
ANNUITY TABLES
--------------------------------------------------------------------------------
Table A
Guaranteed Minimum Amount
of Monthly Payment for
each $1,000 applied
SINGLE LIFE ANNUITY
--------------------------------------------------------------------------------
AGE OF MONTHLY PAYMENTS CERTAIN INSTALLMENT
PAYEE 0 60 120 180 240 REFUND
--------------------------------------------------------------------------------
MALE
55 4.45 4.44 4.41 4.37 4.30 4.31
56 4.52 4.51 4.48 4.43 4.36 4.37
57 4.60 4.59 4.56 4.50 4.42 4.44
58 4.68 4.67 4.64 4.57 4.47 4.51
59 4.77 4.76 4.72 4.65 4.53 4.58
60 4.87 4.85 4.81 4.72 4.60 4.65
61 4.97 4.95 4.90 4.80 4.66 4.73
62 5.07 5.05 5.00 4.89 4.72 4.82
63 5.19 5.17 5.10 4.97 4.79 4.90
64 5.31 5.29 5.20 5.06 4.85 5.00
65 5.44 5.41 5.32 5.15 4.92 5.09
66 5.58 5.55 5.44 5.24 4.98 5.20
67 5.73 5.69 5.56 5.34 5.05 5.30
68 5.89 5.84 5.69 5.44 5.11 5.41
69 6.06 6.00 5.82 5.54 5.17 5.53
70 6.24 6.17 5.97 5.64 5.23 5.66
FEMALE
55 4.11 4.11 4.10 4.08 4.05 4.05
56 4.17 4.17 4.16 4.14 4.10 4.10
57 4.23 4.23 4.22 4.19 4.15 4.15
58 4.30 4.29 4.28 4.25 4.21 4.21
59 4.37 4.36 4.35 4.32 4.27 4.27
60 4.44 4.44 4.42 4.38 4.33 4.34
61 4.52 4.51 4.49 4.45 4.39 4.40
62 4.60 4.59 4.57 4.52 4.45 4.47
63 4.69 4.68 4.65 4.60 4.52 4.55
64 4.78 4.77 4.74 4.68 4.58 4.63
65 4.88 4.87 4.84 4.76 4.65 4.71
66 4.99 4.98 4.93 4.85 4.72 4.80
67 5.10 5.09 5.04 4.94 4.79 4.89
68 5.23 5.21 5.15 5.04 4.86 4.99
69 5.36 5.34 5.27 5.14 4.94 5.09
70 5.50 5.48 5.39 5.24 5.01 5.20
RATES NOT SHOWN WILL BE PROVIDED ON REQUEST. THE GUARANTEED MINIMUM MONTHLY
PAYMENTS SHOWN APPLY TO THE INITIAL PAYMENT FOR VARIABLE ANNUITY PAYMENTS AND TO
EACH PAYMENT FOR FIXED ANNUITY PAYMENTS.
--------------------------------------------------------------------------------
JOINT & LAST |
SURVIVOR ANNUITY |
TABLE B - MONTHLY FEMALE | MALE AGE
INSTALLEMNTS AGE | 55 60 62 65 70
--------------------------------|-----------------------------------------------
Until last Death 55 | 3.85 3.93 3.95 3.99 4.03
of Two Payees 60 | 3.98 4.10 4.15 4.21 4.29
per $1,000 of 62 | 4.03 4.18 4.23 4.30 4.40
benefit amount 65 | 4.11 4.28 4.35 4.45 4.59
70 | 4.21 4.45 4.54 4.69 4.92
ANNUAL, SEMIANNUAL, OR QUARTERLY PAYMENTS CAN BE DETERMINED FROM TABLE A OR B BY
MULTIPLYING THE MONTHLY PAYMENTS BY 11.812854, 5.9572233, AND 2.9914201,
RESPECTIVELY.
-20-
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
* Purchase Payments may be made until the earlier of the Annuity Payout Date
or termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Payout Date according to
the Contract provisions.
* Annuity Payments begin on the Annuity Payout Date using the method as
specified in this Contract.
* The smallest annual rate of investment return that would have to be earned
on the assets of the Separate Account so that the dollar amount of Variable
Annuity Payments will not decrease is 3 1/2%. A daily charge corresponding
to an annual charge of .55% is applied to the assets of the Separate Account
by the Company. Please refer to the "Contract Value and Expense Provisions"
beginning on page 10.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE ARE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
00 Xxxx Xxx Xxx Xxxx, 0xx Xxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
THE COMPANY'S PROMISE
In consideration for the Purchase Payments and the attached application, First
Security Benefit Life Insurance and Annuity Company of New York (the "Company")
will pay the benefits of this Contract according to its provisions.
LEGAL CONTRACT
PLEASE READ YOUR CONTRACT CAREFULLY. It is a legal Contract between the Owner
and the Company. The Contract's table of contents is on page 2.
FREE LOOK PERIOD-RIGHT TO CANCEL
IF FOR ANY REASON THE OWNER IS NOT SATISFIED WITH THIS CONTRACT, HE OR SHE MAY
RETURN IT TO THE COMPANY WITHIN 30 DAYS FROM THE DATE OF RECEIPT. IT MAY BE
RETURNED BY DELIVERING OR MAILING IT TO THE COMPANY. IF RETURNED, THIS CONTRACT
SHALL BE DEEMED VOID FROM THE CONTRACT DATE. THE COMPANY WILL REFUND (I) ANY
PURCHASE PAYMENTS MADE AND ALLOCATED TO THE FIXED ACCOUNT; AND (II) SEPARATE
ACCOUNT CONTRACT VALUE AS OF THE DATE THE RETURNED POLICY IS POSTMARKED FOR
RETURN TO THE COMPANY, INCREASED BY ANY FEES OR OTHER CHARGES PAID.
Signed for First Security Benefit Life Insurance and Annuity Company of New York
on the Contract Date.
XXXXX X. XXXXX XXXXXX X. XXXXXX
Secretary President
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
* Purchase Payments may be made until the earlier of the Annuity Payout Date
or termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Payout Date according to
the Contract provisions.
* Annuity Payments begin on the Annuity Payout Date using the method specified
in this Contract.
* The smallest annual rate of investment return that would have to be earned
on the assets of the Separate Account so that the dollar amount of Variable
Annuity Payments will not decrease is 3 1/2% A daily charge corresponding to
an annual charge of .55% is applied to the assets of the Separate Account by
the Company. Please refer to the "Contract Value and Expense Provisions"
beginning on page 10.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE ARE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
00 Xxxx Xxx Xxx Xxxx, 0xx Xxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000
--------------------------------------------------------------------------------
TABLE OF CONTENTS
--------------------------------------------------------------------------------
PAGE
CONTRACT SPECIFICATIONS ............................................... 3
DEFINITIONS ........................................................... 4-6
GENERAL PROVISIONS .................................................... 7, 8
THE CONTRACT ....................................................... 7
COMPLIANCE ......................................................... 7
MISSTATEMENT OF AGE ............................................... 7
EVIDENCE OF SURVIVAL ............................................... 7
INCONTESTABILITY ................................................... 7
ASSIGNMENT ......................................................... 7
EXCHANGES .......................................................... 8
CLAIMS OF CREDITORS ................................................ 8
NONFORFEITURE VALUES ............................................... 8
NON-PARTICIPATING .................................................. 8
STATEMENTS ......................................................... 8
OWNERSHIP, ANNUITANT AND
BENEFICIARY PROVISIONS ................................................ 9
OWNERSHIP .......................................................... 9
JOINT OWNERSHIP .................................................... 9
ANNUITANT .......................................................... 9
PRIMARY AND SECONDARY BENEFICIARIES ................................ 9
OWNERSHIP AND BENEFICIARY CHANGES .................................. 9
PURCHASE PAYMENT PROVISIONS ........................................... 10
FLEXIBLE PURCHASE PAYMENTS ......................................... 10
PURCHASE PAYMENT LIMITATIONS ....................................... 10
PURCHASE PAYMENT ALLOCATION ........................................ 10
PLACE OF PAYMENT ................................................... 10
CONTRACT VALUE AND EXPENSE PROVISIONS ................................. 10-12
CONTRACT VALUE ..................................................... 10
FIXED ACCOUNT CONTRACT VALUE ....................................... 10
FIXED ACCOUNT INTEREST CREDITING ................................... 11
SEPARATE ACCOUNT CONTRACT VALUE .................................... 11
ACCUMULATION UNIT VALUE ............................................ 11
DETERMINING ACCUMULATION UNITS ..................................... 11
MORTALITY AND EXPENSE RISK CHARGE .................................. 12
PREMIUM TAX EXPENSE ................................................ 12
MUTUAL FUND EXPENSES ............................................... 12
WITHDRAWAL PROVISIONS ................................................. 12, 13
WITHDRAWALS ........................................................ 12
WITHDRAWAL VALUE ................................................... 13
SYSTEMATIC WITHDRAWALS ............................................. 13
DATE OF REQUEST .................................................... 13
PAYMENT OF WITHDRAWAL BENEFITS ..................................... 13
DEATH BENEFIT PROVISIONS .............................................. 14, 15
DEATH BENEFIT ...................................................... 14
PROOF OF DEATH ..................................................... 14
DISTRIBUTION RULES ................................................. 14, 15
ANNUITY PAYMENT PROVISIONS ............................................ 15-19
ANNUITY PAYOUT DATE ................................................ 15
CHANGE OF ANNUITY PAYOUT DATE ...................................... 15
ANNUITY PAYOUT AMOUNT .............................................. 15
ANNUITY TABLES ..................................................... 16
ANNUITY PAYMENTS ................................................... 16
CHANGE OF ANNUITY OPTION ........................................... 16
FIXED ANNUITY PAYMENTS ............................................. 16
VARIABLE ANNUITY PAYMENTS .......................................... 16
ANNUITY UNITS ...................................................... 16, 17
NET INVESTMENT FACTOR .............................................. 17
ALTERNATE ANNUITY OPTION RATES ..................................... 17
ANNUITY OPTIONS .................................................... 18, 19
ANNUITY TABLES ........................................................ 20
AMENDMENTS OR ENDORSEMENTS, IF ANY
-2-
--------------------------------------------------------------------------------
DEFINITIONS (CONTINUED)
--------------------------------------------------------------------------------
SEPARATE ACCOUNT
The X. Xxxx Price Variable Annuity Account of First
Security Benefit Life Insurance and Annuity Company of New
York is a Separate Account established and maintained by
the Company under New York law. The Separate Account is
registered with the Securities and Exchange Commission
under the Investment Company Act of 1940 as a Unit
Investment Trust. It was established by the Company to
support variable annuity contracts. The Company owns the
assets of the Separate Account and maintains them apart
from the assets of its general account and its other
separate accounts. The assets held in the Separate Account
equal to the reserves and other Contract liabilities with
respect to the Separate Account shall not be chargeable
with liabilities arising out of any other business of the
Company.
Income and realized and unrealized gains and losses from
assets in the Separate Account are credited to, or charged
against, the Separate Account without regard to the income,
gains or losses from the Company's general account or its
other separate accounts. The Separate Account is divided
into Subaccounts shown on page 3. Income and realized and
unrealized gains and losses from assets in each Subaccount
are credited to, or charged against, the Subaccount without
regard to income, gains or losses in the other Subaccounts.
The Company has the right to transfer to its general
account any assets of the Separate Account that are in
excess of the reserves and other Contract liabilities with
respect to the Separate Account. The value of the assets in
the Separate Account on each Valuation Date are determined
at the end of each Valuation Date.
SUBACCOUNT NET
ASSET VALUE
The Subaccount Net Asset Value is equal to: (1) the net
asset value of all shares of the underlying mutual fund
held by the Subaccount; plus (2) any cash or other assets;
less (3) all liabilities of the Subaccount.
SUBACCOUNTS
The Separate Account is divided into Subaccounts which
invest in shares of open-end management investment
companies, commonly known as mutual funds. Each Subaccount
may invest its assets in a separate class or series of a
designated mutual fund or funds. The Subaccounts are shown
on page 3. Subject to the regulatory requirements then in
force, the Company reserves the right to:
1. change or add designated mutual funds or other
investment vehicles;
2. add, remove or combine Subaccounts;
3. add, delete or make substitutions for securities that
are held or purchased by the Separate Account or any
Subaccount;
4. operate the Separate Account as a management investment
company;
5. combine the assets of the Separate Account with other
Separate Accounts of the Company or an affiliate
thereof;
6. restrict or eliminate any voting rights of the Owner
with respect to the Separate Account or other persons
who have voting rights as to the Separate Account; and
7. terminate and liquidate any Subaccount.
If any of these changes result in a material change to the
Separate Account or a Subaccount, the Company will notify
the Owner of the change. The Company will not change the
investment policy of any Subaccount in any material respect
without complying with the filing and other procedures of
the insurance regulators of the state of issue.
VALUATION DATE
A Valuation Date is each day the New York Stock Exchange
and the Company are open for business.
VALUATION PERIOD
A Valuation Period is the interval of time from one
Valuation Date to the next Valuation Date.
-6-
--------------------------------------------------------------------------------
GENERAL PROVISIONS
--------------------------------------------------------------------------------
THE CONTRACT
The entire Contract between the Owner and the Company
consists of this Contract, the attached Application, and
any Amendments, Endorsements or Riders to the Contract. All
statements made in the Application will, as ruled by a
court of competent jurisdiction, be deemed representations
and not warranties. The Company will use no statement made
by or on behalf of the Owner or the Annuitant to void this
Contract unless it is in the written Application. Any
change in the Contract can be made only with the written
consent of the President, a Vice President, or the
Secretary of the Company.
The Purchase Payment(s) and the Application must be
acceptable to the Company under its rules and practices. If
they are not, the Company's liability shall be limited to a
return of the Purchase Payment(s).
COMPLIANCE
The Company reserves the right to make any change to the
provisions of this Contract to comply with or give the
Owner the benefit of any federal or state statute, rule or
regulation. This includes, but is not limited to,
requirements for annuity contracts under the Internal
Revenue Code or the laws of any state. The Company will
provide the Owner with a copy of any such change and will
obtain approval for such a change with the insurance
regulatory officials of the state in which the Contract is
delivered.
MISSTATEMENT OF AGE
If the age of the Annuitant has been misstated, payments
shall be adjusted, when allowed by law, to the amount which
would have been provided for the correct age. Proof of the
age of an Annuitant may be required at any time, in a form
suitable to the Company. If payments have already commenced
and the misstatement has caused an underpayment, the full
amount due with interest at the rate of 3% will be paid
with the next scheduled payment. If the misstatement has
caused an overpayment, the amount due with interest at the
rate of 3% will be deducted from one or more future
payments.
EVIDENCE OF SURVIVAL
When any payments under this Contract depend on the payee
being alive on a given date, proof that the payee is living
may be required by the Company. Such proof must be in a
form accepted by the Company, and may be required prior to
making the payments.
INCONTESTABILITY
This Contract will not be contested after it has been in
force for two years from the Issue Date during the life of
the Owner.
ASSIGNMENT
Please refer to page 3 to see if this Contract may be
assigned. If it may be assigned, no Assignment under this
Contract is binding unless Received by the Company in
writing. The Company assumes no responsibility for the
validity, legality, or tax status of any Assignment. The
Assignment will be subject to any payment made or other
action taken by the Company before the Assignment is
Received by the Company. Once filed, the rights of the
Owner, Annuitant and Beneficiary are subject to the
Assignment. Any claim is subject to proof of interest of
the assignee.
-7-
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
ANNUITY TABLES
The Annuity Tables show the guaranteed minimum amount of
monthly Annuity Payment that applies to the first payment
for Variable Annuity Payments and to each payment for Fixed
Annuity Payments for each $1,000 of Annuity Payout Amount
for each of Annuity Options 1 through 4. The amount of each
Annuity Payment for Annuity Options 1 through 4 will depend
on the Annuitant's age on the Annuity Payout Date. The
Annuity Tables state values for the exact ages shown. The
values will be interpolated based on the Annuitant's exact
age on the Annuity Payout Date. On request the Company will
furnish the amount of monthly Annuity Payment per $1,000
applied for any ages not shown.
The Company bases the Tables for Annuity Options 1 through
4 on: (1) the 1983 Table "A" Mortality Table projected for
mortality improvement for 45 years using Projection Scale
G; and (2) an interest rate of 3 1/2% a year.
For Annuity Options 5 through 7, age is not considered.
Annuity Payments for these options are computed without
reference to the Annuity Tables.
ANNUITY PAYMENTS
The Annuity Option is shown on page 3. The Owner may choose
any form of Annuity Option that is allowed by the Company.
The Owner may choose an Annuity Option by written request.
This request must be Received by the Company at least 30
days prior to the Annuity Payout Date. Several Annuity
Options are listed on pages 18 and 19. No Annuity Option
can be selected that requires the Company to make periodic
payments of less than $20.00. If no Annuity Option is
chosen prior to the Annuity Payout Date, the Company will
use Life with 10-Year Fixed Period Option. Each Annuity
Option allows for making Annuity Payments annually,
semiannually, quarterly or monthly.
CHANGE OF ANNUITY
OPTION
Prior to the Annuity Payout Date, the Owner may change the
Annuity Option chosen. The Owner must request the change in
writing. This request must be Received by the Company at
least 30 days prior to the Annuity Payout Date.
FIXED ANNUITY
PAYMENTS
With respect to Fixed Annuity Payments, the amounts shown
on the Tables are the guaranteed minimum for each Annuity
Payment for Annuity Options 1 through 4.
VARIABLE ANNUITY
PAYMENTS
With respect to Variable Annuity Payments, the amounts
shown on the Tables are the first Annuity Payment, based on
the assumed interest rate of 3 1/2% for Annuity Options 1
through 4. The amount of each Annuity Payment after the
first for these options is computed by means of Annuity
Units. Neither expense actually incurred (other than tax on
investment return), nor mortality actually experienced,
shall adversely affect the dollar amount of annuity income
already commenced.
ANNUITY UNITS
The number of Annuity Units is found by dividing the first
Annuity Payment by the Annuity Unit Value for the selected
Subaccount on the Annuity Payout Date. The number of
Annuity Units for the Subaccount then remains constant,
unless an Exchange of Annuity Units is made. After the
first Annuity Payment, the dollar amount of each subsequent
Annuity Payment is equal to the number of Annuity Units
times the Annuity Unit Value for the Subaccount on the due
date of the Annuity Payment.
-16-
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
ANNUITY UNITS (Cont'd)
The Annuity Unit Value for each Subaccount was first set at
$1.00. The Annuity Unit Value for any subsequent Valuation
Date is equal to (a) times (b) times (c), where:
(a) is the Annuity Unit Value on the immediately preceding
Valuation Date;
(b) is the Net Investment Factor for the Valuation Date;
(c) is a factor used to adjust for an assumed interest rate
of 3 1/2% per year used to determine the Annuity
Payment amounts. The assumed interest rate is reflected
in the Annuity Tables.
NET INVESTMENT
FACTOR
The Net Investment Factor for any Subaccount at the end of
any Valuation Period is found by dividing (1) by (2) and
subtracting (3) from the result, where:
1. is equal to:
a. the net asset value per share of the mutual fund
held in the Subaccount, found at the end of the
current Valuation Period; plus
b. the per share amount of any dividend or capital gain
distributions paid by the Subaccount's underlying
mutual fund that is not included in the net asset
value per share; plus or minus
c. a per share charge or credit for any taxes reserved
for, which the Company deems to have resulted from
the operation of the Subaccount.
2. is the net asset value per share of the Subaccount's
underlying mutual fund as found at the end of the prior
Valuation Period.
3. is a factor representing the Mortality and Expense Risk
Charge deducted from the Separate Account.
Underlying mutual funds may declare dividends on a daily
basis and pay such dividends once a month. The Net
Investment Factor allows for the monthly reinvestment of
these daily dividends. As described above, the gains and
losses from each Subaccount are credited or charged against
the Subaccount without regard to the gains or losses in the
Company or other Subaccounts.
ALTERNATE ANNUITY
OPTION RATES
The Company may, at the time of election of an Annuity
Option, offer more favorable rates in lieu of the
guaranteed rates shown in the Annuity Tables.
-17-
ANNUITY TABLES
--------------------------------------------------------------------------------
Table A
Guaranteed Minimum Amount
of Monthly Payment for
each $1,000 applied
SINGLE LIFE ANNUITY
--------------------------------------------------------------------------------
AGE OF MONTHLY PAYMENTS CERTAIN INSTALLMENT
PAYEE 0 60 120 180 240 REFUND
--------------------------------------------------------------------------------
UNISEX
55 4.11 4.11 4.10 4.08 4.05 4.05
56 4.17 4.17 4.16 4.14 4.10 4.10
57 4.23 4.23 4.22 4.19 4.15 4.15
58 4.30 4.29 4.28 4.25 4.21 4.21
59 4.37 4.36 4.35 4.32 4.27 4.27
60 4.44 4.44 4.42 4.38 4.33 4.34
61 4.52 4.51 4.49 4.45 4.39 4.40
62 4.60 4.59 4.57 4.52 4.45 4.47
63 4.69 4.68 4.65 4.60 4.52 4.55
64 4.78 4.77 4.74 4.68 4.58 4.63
65 4.88 4.87 4.84 4.76 4.65 4.71
66 4.99 4.98 4.93 4.85 4.72 4.80
67 5.10 5.09 5.04 4.94 4.79 4.89
68 5.23 5.21 5.15 5.04 4.86 4.99
69 5.36 5.34 5.27 5.14 4.94 5.09
70 5.50 5.48 5.39 5.24 5.01 5.20
RATES NOT SHOWN WILL BE PROVIDED ON REQUEST. THE GUARANTEED MINIMUM MONTHLY
PAYMENTS SHOWN APPLY TO THE INITIAL PAYMENT FOR VARIABLE ANNUITY PAYMENTS AND TO
EACH PAYMENT FOR FIXED ANNUITY PAYMENTS.
--------------------------------------------------------------------------------
JOINT & LAST |
SURVIVOR ANNUITY |
TABLE B - MONTHLY | AGE
INSTALLEMNTS AGE | 55 60 62 65 70
--------------------------------|-----------------------------------------------
Until last Death 55 | 3.77 3.87 3.90 3.95 4.00
of Two Payees 60 | 3.87 4.01 4.06 4.13 4.24
per $1,000 of 62 | 3.90 4.06 4.12 4.21 4.34
benefit amount 65 | 3.95 4.13 4.21 4.32 4.49
70 | 4.00 4.24 4.34 4.49 4.75
ANNUAL, SEMIANNUAL, OR QUARTERLY PAYMENTS CAN BE DETERMINED FROM TABLE A OR B BY
MULTIPLYING THE MONTHLY PAYMENTS BY 11.812854, 5.9572233, AND 2.9914201,
RESPECTIVELY.
-20-
ENDORSEMENT
--------------------------------------------------------------------------------
TAX-SHELTERED ANNUITY PROVISIONS
--------------------------------------------------------------------------------
TAX-SHELTERED
ANNUITY ENDORSEMENT
This Contract is established as a Tax-Sheltered Annuity
("TSA") under Section 403(b) of the Internal Revenue Code
of 1986, as amended (the "Code") or any successor
provision, pursuant to the Owner's request in the
Application. Accordingly, this endorsement is attached to
and made part of the Contract as of its Issue Date or, if
later, the date shown below.
RESTRICTIONS ON
TAX-SHELTERED
ANNUITY
To ensure treatment as a TSA, this Contract will be subject
to the requirements of Code Section 403(b), which are
briefly summarized below:
a) The Contract may not be transferred, sold, assigned,
discounted, or pledged as collateral for a loan or as
security for the performance of an obligation or for any
other purpose to any person other than as a surrender to
the Company.
b) Distributions must be in accordance with the minimum
distribution and incidental death benefit rules of
Section 403(b)(10) of the Code. Accordingly,
distributions must begin no later than April 1 following
the calendar year in which the Owner attains age 70 1/2
(the "required beginning date"). Prior to the required
beginning date, the Owner shall elect, in a manner
acceptable to the Company, to have the balance in the
Contract distributed in:
1) A single lump sum payment;
2) Equal or substantially equal monthly, quarterly, or
annual payments over the life of the Owner or over
the joint and last survivor lives of the Owner and
his or her Designated Beneficiary; or
3) Equal or substantially equal annual payments over a
specified period that may not be longer than the
Owner's life expectancy or the joint and last
survivor life expectancy of the Owner and his or her
Designated Beneficiary.
If the Owner dies before reaching his or her required
beginning date, the Owner's entire interest must generally
be distributed within five years of the Owner's death.
However, the five-year rule will be deemed satisfied if
distributions begin before the close of the calendar year
following the year of the Owner's death to a designated
beneficiary and are made over the life of the beneficiary
(or over a period not extending beyond the life expectancy
of the beneficiary). If the designated beneficiary is the
Owner's surviving spouse, the commencement of distributions
may be delayed until the Owner would have reached age
70 1/2.
--------------------------------------------------------------------------------
TAX-SHELTERED ANNUITY PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
RESTRICTIONS ON
TAX-SHELTERED
ANNUITY (Cont'd)
c) Distributions attributable to Contributions made
pursuant to a salary reduction agreement or earnings
credited after December 31, 1988, may not be distributed
unless the Owner has satisfied one of the following:
(i) attained age 59 1/2;
(ii) separated from Service;
(iii) died;
(iv) become Disabled (as per Section 72(m)(7) of the
Code);
(v) incurred a Hardship (as per Section 403(b)(11) of the
Code); or
(vi) such other conditions as may be prescribed under
Section 403(b) of the Code.
The Company reserves the right to require written proof of
the events in items (i) through (vi). The proof must be
satisfactory to the Company before Distribution will be
made.
d) If a Distribution is made because of Hardship it will
not include income on Contributions made under a salary
reduction agreement.
e) The annual limit for elective deferrals under this
Contract cannot exceed the limits in Section
403(b)(1)(E) of the Code.
f) The Owner's rights under the contract are
nonforfeitable, except for failure to pay future
premiums.
g) If the contract is purchased under a "Plan" within the
meaning of Section 403(b) of the Code, the Plan meets
the nondiscrimination requirements of Section 403(b)(12)
of the Code.
TRANSFERS
At the election of the Owner, distributions that qualify as
"eligible rollover distributions" may be made in the form
of a direct trustee-to-trustee transfer in accordance with
Section 401(a)(31) of the Code.
TAX CONSEQUENCES
The Company will not incur any liability or be responsible
for: the timing, purpose or propriety of any contribution
or distribution; any tax or penalty imposed on account of
any such contribution or distribution; or any other
failure, in whole or in part, by the Owner or his or her
employer to comply with the provisions set forth in the
Code or any other law.
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
XXXXX X. XXXXX XXXXXX X. XXXXXX
Secretary President
___________________________________________
Endorsement Effective Date
(If Other Than Issue Date)
ENDORSEMENT
--------------------------------------------------------------------------------
INDIVIDUAL RETIREMENT ANNUITY PROVISIONS
--------------------------------------------------------------------------------
INDIVIDUAL RETIREMENT
ANNUITY ENDORSEMENT
This Contract is established as an Individual Retirement
Annuity ("IRA") as defined in Section 408(b) of the
Internal Revenue Code of 1986, as amended (the "Code") or
any successor provision pursuant to the Owner's request in
the Application. Accordingly, this endorsement is attached
to and made part of the Contract as of its Issue Date or,
if later, the date shown below.
RESTRICTIONS ON
INDIVIDUAL RETIREMENT
ANNUITY
To ensure treatment as an IRA, this Contract will be
subject to the requirements of Code Section 408(b), which
are briefly summarized below:
a) The Owner must be the Annuitant.
b) The Owner may not name a new Owner or a Contingent
Owner to this Contract.
c) Distributions must begin no later than April 1
following the calendar year in which the Annuitant
attains age 70 1/2 (the "required beginning date").
Prior to the required beginning date, the Owner shall
elect, in a manner acceptable to the Company, to have
the balance in the Contract distributed in:
1) A single lump sum payment;
2) Equal or substantially equal monthly, quarterly, or
annual payments over the life of the Owner or over
the joint and last survivor lives of the Owner and
his or her Designated Beneficiary; or
3) Equal or substantially equal annual payments over a
specified period that may not be longer than the
Owner's life expectancy or the joint and last
survivor life expectancy of the Owner and his or
her Designated Beneficiary.
d) An Annuity Option may not be elected with a Fixed
Period that will guarantee Annuity Payments beyond the
life expectancy of the Annuitant and Beneficiary and
Annuity Payments must be made at least annually and in
equal amounts.
e) The Contract may not be transferred, sold, assigned,
discounted, or pledged as collateral for a loan or as
security for the performance of an obligation or for
any other purpose to any person other than as a
surrender to the Company.
f) Contributions are not fixed and other than qualified
rollover contributions, are limited to the amount
allowed in Section 408(b) of the Code. The Owner has
the sole responsibility for determining whether the
Contribution is in accordance with applicable federal
tax requirements. Any refund of contributions will be
applied before the close of the calendar year following
the year of the refund toward the payment of future
premiums or the purchase of additional benefits.
--------------------------------------------------------------------------------
INDIVIDUAL RETIREMENT ANNUITY PROVISIONS (CONTINUED)
--------------------------------------------------------------------------------
RESTRICTIONS ON
INDIVIDUAL RETIREMENT
ANNUITY (continued)
g) Distributions under this provision of the Contract must
satisfy the minimum distribution rules of Section
408(b)(3) of the Code, including the minimum incidental
death benefit requirement of Treasury Regulation
1.408-8. The Owner or Designated Beneficiary, as
applicable, has the sole responsibility to elect a
distribution that will satisfy these rules.
h) If the Owner dies before reaching his or her required
beginning date, the Owner's entire interest must
generally be distributed within five years of the
Owner's death. However, the five-year rule will be
deemed satisfied if distributions begin before the
close of the calendar year following the Owner's death
to a designated beneficiary and are made over the life
of the beneficiary (or over a period not extending
beyond the life expectancy of the beneficiary). If the
designated beneficiary is the Owner's surviving spouse,
the commencement of distributions may be delayed until
the Owner would have reached age 70 1/2.
Annuity Payments may not begin before the Annuitant attains
the age of 59 1/2 without incurring a penalty tax except in
the situations described in Section 72(t) of the Internal
Revenue Code.
Notwithstanding any other provision of this Contract, the
above restrictions will apply if this endorsement is
applicable.
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
XXXXX X. XXXXX XXXXXX X. XXXXXX
Secretary President
___________________________________________
Endorsement Effective Date
(If Other Than Issue Date)
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
* Purchase Payments may be made until the earlier of the Annuity Payout Date
or termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Payout Date according to
the Contract provisions.
* Annuity Payments begin on the Annuity Payout Date using the method as
specified in this Contract.
* The smallest annual rate of investment return that would have to be earned
on the assets of the Separate Account so that the dollar amount of Variable
Annuity Payments will not decrease is 3 1/2%. A daily charge corresponding
to an annual charge of .55% is applied to the assets of the Separate Account
by the Company. Please refer to the "Contract Value and Expense Provisions"
beginning on page 10.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE ARE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
00 Xxxx Xxx Xxx Xxxx, 0xx Xxxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000
