Aetna Life Insurance and Annuity Company
Endorsement
This Contract is endorsed as follows.
Add the following to Section I, General Definitions:
Dollar Cost Averaging - A program that permits the Contract Holder to
systematically transfer amounts from any of the Funds and the one-year
AG Account Guaranteed Term to any of the Funds by completing the
appropriate section of the enrollment form or a Dollar Cost Averaging
election form.
Delete Section 1.05, Beneficiary, and replace it with the following:
1.05 Beneficiary - The individual or estate entitled to receive any
payment from the Contract upon the death of the Annuitant, or
if the Contract Holder is different from the Annuitant, upon
the death of the Contract Holder. If the Contract is held by
joint Contract Holders, the survivor will be deemed the
designated Beneficiary and any other Beneficiary on record
will be treated as the contingent Beneficiary.
Delete Section 1.08, Contract Holder, and replace it with the following:
1.08 Contract Holder - A person who purchases an interest in this
Contract. Aetna reserves the right to limit ownership to
natural persons. If more than one Contract Holder owns an
Contract, each Contract Holder will be a joint Contract
Holder. Any joint Contract Holder must be the spouse of the
other joint Contract Holder. The Contract Holder has all
right, title and interest under the Contract. Joint Contract
Holders have joint ownership rights and both must authorize
exercising any ownership rights unless Aetna allows otherwise.
If the Contract is owned by a nonnatural person, the death
benefit will be paid at the death of the Annuitant.
Delete Section 1.19, Market Value Adjustment, and replace it with the following:
1.19 Market Value Adjustment - An adjustment that may apply to an
amount withdrawn or transferred from an AG Account Guaranteed
Term prior to the end of that Guaranteed Term. The adjustment
reflects the change in the value of the investment due to
changes in interest rates since the date of deposit and is
computed using the formula given in 3.06. The adjustment is
expressed as a percentage of each dollar withdrawn or
transferred.
Delete Section 2.04, Payments and Elections, and replace it with the following:
IMPNQEND(4/95)
2.04 Payments and Elections - While the Contract Holder is living,
Aetna will pay the Contract Holder any Annuity payments as and
when due. After the Contract Xxxxxx's death, or at the death
of the first Contract Holder if the Contract is owned jointly,
any Annuity payments remaining to be made will be paid in
accordance with 4.03. Aetna will determine other payments
and/or elections as of the end of the Valuation Period in
which the request is received at its Home Office. Such
payments will be made within seven calendar days of receipt at
its Home Office of a written claim for payment which is in
good order, except as provided in 3.14.
Delete Section 2.06, Control of Contract, and replace it with the following:
2.06 Control of Contract - This is a Contract between the Contract
Holder and Aetna. The Contract Holder has all rights, title
and interest for amounts held in his or her Contract. Choices
made under this Contract must be made in writing. If the
Contract is jointly owned, both joint Contract Holders must
authorize any Contract Holder Change in writing. Until receipt
of such choices at Aetna's Home Office, Aetna may rely on any
previous choices made.
The Contract is not subject to the claims of any creditors of
the Contract Holder, except to the extent permitted by law.
The Contract Holder may assign or transfer his or her rights
under the Contract. Aetna reserves the right not to accept
assignment or transfer to a nonnatural person. Any assignment
or transfer made under the Contract must be submitted to
Aetna's Home Office in writing and will not be effective until
accepted by Aetna.
Delete Section 2.07, Designation of Beneficiary, and replace it with the
following:
2.07 Designation of Beneficiary - Each Contract Holder shall name
his or her Beneficiary. If the Contract is owned jointly, both
joint Contract Holders must agree in writing to the
Beneficiary designated. The Beneficiary may be changed at any
time. Changes to a Beneficiary must be submitted to Aetna's
Home Office in writing and will not be effective until
accepted by Aetna.
Delete the first two paragraphs of Section 3.05, Market Value Adjustment, and
replace them with the following:
3.05 Market Value Adjustment - Except as noted below, an MVA will
apply to a withdrawal from the AG Account before the end of a
Guaranteed Term when the withdrawal is due to:
(a) A Transfer; except for Transfers from the one-year AG
Account Guaranteed Term under the Dollar Cost
Averaging program or, as specified in AG Account
Matured Term Value Transfer;
(b) A full or partial surrender (including a 10% free
withdrawal under 3.13), except for a partial
withdrawal under the Systematic Withdrawal Option
(see 3.09); or
(c) An election of Annuity option 2 (see 4.07).
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Full and partial surrenders and Transfers made within six
months after the date of the Annuitant's death will be the
greater of:
(a) The aggregate MVA amount which is the sum of all
market value adjusted amounts calculated due to a
withdrawal of amounts. This total may be greater or
less than the Current Value of those amounts; or
(b) The applicable portion of the Current Value in the AG
Account.
Delete Section 3.06, Transfer of Current Value from the Funds or AG Account, and
replace them with the following:
3.06 Transfer of Current Value from the Funds or AG Account -
Before an Annuity option is elected, all or any portion of the
Adjusted Current Value of the Contract Holder's Contract may
be transferred from any Fund or Guaranteed Term of the AG
Account:
(a) To any other Fund; or
(b) To a Guaranteed Term of the AG Account available in the
current Deposit Period.
Transfer requests can be submitted as a percentage or as a
dollar amount. Aetna may establish a minimum transfer amount.
Within a Guaranteed Term Group, the amount to be surrendered
to transferred will be withdrawn first from the oldest Deposit
Period, then from the next oldest, and so on until the amount
requested is satisfied.
The Contract Holder may make an unlimited number of Transfers
during the Accumulation Period. The number of free Transfers
allowed by Aetna is shown on Contract Schedule I. Additional
Transfers may be subject to a Transfer fee as shown on
Contract Schedule I.
Amounts transferred from the AG Account under the Dollar Cost
Averaging program, or amounts transferred as a Matured Term
Value on or within one calendar month of the Term's Maturity
Date, do not count against the annual Transfer limit.
Amounts applied to Guaranteed Terms of the AG Account may not
be transferred to the Funds or to another Guaranteed Term
during the Deposit Period or for 90 days after the close of
the Deposit Period except for (1) a Matured Term Value(s)
during the calendar month following, the Term's Maturity Date
and (2) amounts transferred from the one-year AG Account
Guaranteed Term under the Dollar Cost Averaging program.
Delete the first paragraph in Section 3.09, Systematic Withdrawal Option (SWO),
and replace it with the following:
3.09 Systematic Withdrawal Option (SWO) - A distribution option
under which a portion of the Contract's Current Value will be
automatically surrendered and distributed each year. SWO
payments will be calculated on the Contract's full Current
Value. The
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distributed amount is withdrawn pro rata from each
investment option under the Contract. A Surrender Fee will not
be deducted from any portion of the Current Value which is
paid as a distribution under SWO. Contract Holders should
consult their tax advisor prior to requesting this
distribution option. Aetna will not be responsible for any
adverse tax consequences due to receiving SWO payments.
Delete Section 3.10, Death Benefit Amount, and replace it with the following:
3.10 Death Benefit Amount - If the Contract Holder or Annuitant
dies before Annuity payments start, the Beneficiary is
entitled to a death benefit under the Contract. If the
Contract is owned jointly, the death benefit is paid at the
death of the first joint Contract Holder to die. The claim
date is the date when proof of death and the Beneficiary's
claim are received in good order at Aetna's Home Office. The
amount of the death benefit is determined as follows:
(a) Death of Annuitant less than 75 years of age: The
guaranteed death benefit is the greatest of:
(1) The sum of all Net Purchase Payment(s) made
to the Contract (as of the date of death)
minus the sum of all amounts surrendered,
applied to an Annuity, or deducted from the
Contract;
(2) The highest step-up value as of the date of
death. A step-up value is determined on each
anniversary of the Effective Date. Each
step-up value is calculated as the
Contract's Current Value on the Effective
Date anniversary, increased by the amount of
any Purchase Payment(s) made, and decreased
by the sum of all amounts surrendered,
deducted, and/or applied to an Annuity
option since the Effective Date anniversary.
(3) The Contract's Current Value as of the date of
death.
The excess, if any, of the guaranteed death benefit
value over the Contract's Current Value is determined
as of the date of death. Any excess amount will be
deposited in the Contract and allocated to the Aetna
Variable Encore Fund as of the claim date. The
Current Value on the claim date, plus any excess
amount deposited, becomes the Contract's Current
Value.
(b) Death of Annuitant age 75 or greater: The death benefit
amount is the greatest of:
(1) The sum of all Net Purchase Payment(s) made
to the Contract (as of the date of death)
minus the sum of all amounts surrendered,
applied to an Annuity, or deducted from the
Contract;
(2) The highest step-up value prior to the Contact
Xxxxxx's 75th birthday. A step-up value is determined
on each anniversary of the Effective Date. Each step-
up value is calculated as the Contract's Current
Value on the
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Effective Date anniversary, increased by the amount
of any Purchase Payment(s) made, and decreased by the
sum of all amounts surrendered, deducted, and/or
applied to an Annuity option since the Effective Date
anniversary.
(3) The Contract's Current Value as of the date of death.
The excess, if any, of the guaranteed death benefit
value over the Contract's Current Value is determined
as of the date of death. Any excess amount will be
deposited in the Contract and allocated to the Aetna
Variable Encore Fund as of the claim date. The
Current Value on the claim date, plus any excess
amount deposited, becomes the Contract's Current
Value.
(c) Death of Contact Holder if the Contract Holder is not
the Annuitant: The death benefit amount is the
Contract's Adjusted Current Value on the claim date.
A Surrender Fee may apply to any full or partial
surrender (see 3.13 and Contract Schedule I).
(d) At the death of a surviving spouse Beneficiary who
continued the Contract in his or her own name, the
death benefit amount is equal to the Contract's
Current Value less any applicable Surrender Fee on
the amount of any Purchase Payment(s) made since the
death of the Contract Holder.
Delete Section 3.11, Death Benefit Options available to Beneficiary, and replace
it with the following:
3.11 Death Benefit Options available to Beneficiary - Prior to any
election, or until amounts must be otherwise distributed under
this section, the Contract's Current Value will be retained in
the Contract. The Beneficiary has the right to allocate or
reallocate any amount to any available investment option
(subject to an MVA if applicable). The following options are
available to the Beneficiary:
(a) When the Contract Holder is the Annuitant: If the Contract
Xxxxxx/Annuitant dies, and:
(1) If the Beneficiary is the Contract Xxxxxx's
surviving spouse, the Beneficiary may exercise all
Contract Holder rights under the Contract and
continue in the Accumulation Period, or may elect
(i), (ii), or (iii) below. Under the Code,
distributions from the Contract are not required
until the spousal Beneficiary's death. The spousal
Beneficiary may elect to:
(i) Apply some or all of the Adjusted Current
Value to Annuity option 2, 3 or 4
(see 4.07);
(ii) Apply some or all of the Adjusted Current
Value to Annuity option 1 (see 4.07); or
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(iii) Receive, at any time, a lump sum
payment equal to the Contract's
Adjusted Current Value.
(2) If the Beneficiary is other than the Contract
Xxxxxx's surviving spouse, then options (i), (ii), or
(iii) under (1) above apply. Any portion of the
Adjusted Current Value not applied to Annuity option
2, 3, or 4 within one year of the Contract Holder's
death, must be distributed within five years of the
date of death.
(3) If no Beneficiary exists, a lump sum payment equal to
the Adjusted Current Value will be made to the
Contract Holder's estate.
(b) When the Contract Holder is not the Annuitant and the
Contract Holder dies, and:
(1) If the Beneficiary is the Contract Xxxxxx's
surviving spouse, the Beneficiary may exercise all
Contract Holder rights under the Contract and continue
in the Accumulation Period, or may elect (i), (ii), or
(iii) below.
Under the Code, distributions from the
Contract are not required until the spousal
Beneficiary's death. The spousal Beneficiary
may elect to:
(i) Apply some or all of the Adjusted Current Value
to Annuity option 2, 3 or 4 see 4.07);
(ii) Apply some or all of the Surrender
Value to Annuity option 1 (see 4.07); or
(iii) Receive, at any time, a lump sum payment equal
to the Contract's Surrender Value.
(2) If the Beneficiary is other than the Contract
Xxxxxx's surviving spouse, then options (i), (ii), or
(iii) under (1) above apply. Any portion of the
Adjusted Current Value not applied to Annuity Option
2, 3, or 4 within one year of the Contract Xxxxxx's
death, must be distributed within five years of the
date of death.
(3) If no Beneficiary exists, a lump sum payment equal to
the Surrender Value will be made to the Contract
Holder's estate.
(c) When the Contract Holder is not the Annuitant and the
Annuitant dies: The Beneficiary must elect Annuity
option 2, 3, or 4 within 60 days of the date of death
or the gain, if any, will be includable in the
Beneficiary's income in the tax year in which the
Annuitant dies.
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Delete Section 3.12, Liquidation of Surrender Value, and replace it with the
following:
3.12 Liquidation of Surrender Value - All or any portion of the
Contract's Current Value may be surrendered at any time.
Surrender requests can be submitted as a percentage of the
Current Value or as a specific dollar amount. Net Purchase
Payment amounts are withdrawn first, and then the excess
value, if any. For any partial surrender, amounts are
withdrawn on a pro rata basis from the Fund(s) and/or the
Guaranteed Term(s) Groups of the AG Account in which the
Current Value is invested. Within a Guaranteed Term Group, the
amount to be surrendered or transferred will be withdrawn
first from the oldest Deposit Period, then from the next
oldest, and so on until the amount requested is satisfied.
After deduction of the Maintenance Fee, if applicable, the
surrendered amount shall be reduced by a Surrender Fee, if
applicable. An MVA may apply to amounts surrendered from the
AG Account.
Delete subsection (a) of Section 4.03, Death of Annuitant/Beneficiary, and
replace it with the following:
4.03 Death of Annuitant/Beneficiary: (a) Contract Holder is
Annuitant: When the Contract Holder is the Annuitant and the
Annuitant dies under option 2 or 3, or both the Annuitant and
the second Annuitant die under option 4(d), the present value
of any remaining guaranteed payments will be paid in one sum
to the Beneficiary, or upon election by the Beneficiary, any
payments remaining will continue to the Beneficiary. If option
4 has been elected and the Contract Holder dies, the remaining
payments will continue to the successor payee. If no successor
payee has been designated, the Beneficiary will be treated as
the successor payee. If the Contract has joint Contract
Holders, the surviving joint Contract Holder will be deemed
the successor payee.
Delete the first paragraph of subsection (b) of Section 4.03, Death of
Annuitant/Beneficiary, and replace it with the following:
(b) Contract Holder is Not Annuitant: When the Contract Holder
is not the Annuitant and the Contract Holder dies, the
remaining payments under options 2, 3 or 4 will continue to
the successor payee. If no successor payees has been
designated, the Beneficiary will be treated as the successor
payee. If the Contract has joint Contract Holders, the
surviving joint Contract Holder will be deemed the successor
payee.
Endorsed and made part of the Contract on the Effective Date of the Contract.
/s/ Xxx Xxxxxxx
President
AETNA LIFE INSURANCE AND ANNUITY COMPANY
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