Exhibit 4(b)
FIXED ACCOUNT ENDORSEMENT
ENDORSEMENT
SECTION 1. GENERAL INFORMATION
1.1 WHAT IS OUR Our agreement with you includes this endorsement
AGREEMENT WITH YOU? as a part of the contract to which it is attached.
The provisions of the contract apply to this
endorsement unless they conflict with the
endorsement. If there is a conflict, the
endorsement provision will apply. The issue date
for this endorsement is the same issue date as the
contract to which it is attached.
We promise to provide the investment option
described in this endorsement as long as the
contract and this endorsement are in force and all
the terms and conditions of this endorsement are
met.
1.2 WHAT IS THE BENEFIT This endorsement provides a choice of investment
PROVIDED BY THIS options under the fixed account. These investment
ENDORSEMENT? options are in addition to the investment options
available under the variable account provided by
the contract to which this endorsement is
attached.
ENDORSEMENT
SECTION 2. DEFINITIONS
2.1 WHAT ARE THE MOST FIXED ACCOUNT - an account under the contract
COMMONLY USED TERMS AND funded by our general account providing a choice
WHAT DO THEY MEAN? of fixed periods. It is not part of nor dependent
upon the investment performance of the variable
account.
FIXED AMOUNT - any portion of fixed contract value
allocated to a particular fixed period with a
particular expiration date (including interest
thereon).
FIXED CONTRACT VALUE - the value of the contract
in the fixed account.
FIXED PERIOD - an investment option under the
fixed account with a specific number of years for
which we agree to credit a particular effective
annual interest rate.
ENDORSEMENT
SECTION 3. PURCHASE PAYMENTS
3.1 CAN NET PURCHASE This endorsement allows you to allocate net
PAYMENTS BE purchase payments to any available fixed period of
ALLOCATED TO THE FIXED the fixed account. Net purchase payments allocated
ACCOUNT? to a fixed period of the fixed account become part
of the fixed contract value and earn interest at
the rate(s) declared for the fixed period(s)
selected.
The minimum net purchase payment allocated to a
fixed period is $1,000. If you request an
allocation of less than $1,000 to a fixed period,
that portion of the net purchase payment intended
for the fixed period will automatically be
allocated to the money market subaccount of the
variable account (described in Section 6 of your
contract).
ENDORSEMENT
SECTION 4. FIXED ACCOUNT
4.1 WHAT IS THE FIXED The fixed account is an option that is supported
ACCOUNT? by assets in our general account. The fixed
account does not depend on the investment
performance of the variable account. Subject to
applicable law, we have sole discretion over the
investment of assets supporting the fixed account.
4.2 WHAT ARE THE FIXED The fixed periods as of the contract issue date
PERIODS? are shown on the data page. A fixed period will
begin on the date the net purchase payment or
transfer amount is applied and will end when the
number of years in the fixed period selected has
elapsed. The last day of a fixed period is the
expiration date. As a result of any additional
purchase payments or transfer of any portion of
your fixed contract value, fixed amounts allocated
to fixed periods of the same duration may have
different expiration dates.
4.3 WHAT HAPPENS WHEN DCA FIXED PERIOD. A minimum amount is required to
A FIXED PERIOD ENDS? be transferred monthly from a DCA fixed period to
deplete the fixed amount by the expiration date.
The minimum transfer amount is the monthly sum
required to fully amortize
the fixed amount as of the expiration date.
ALL OTHER FIXED PERIODS. We will notify you of the
expiration date for the fixed amount. You may
exercise one of the following options by written
request at any time during the 30-day time period
prior to the expiration date:
a.) You may transfer the fixed amount to
any available fixed period at the
current guaranteed interest rate for
that period. You may only choose fixed
periods other than a DCA fixed period.
The fixed period selected cannot extend
past the payout date.
b.) You may transfer the fixed amount to
any available subaccount.
c.) If there is less than 1 year to the
payout date, you may continue to
accumulate interest on the fixed amount
at the current guaranteed interest rate
available for the 1 year fixed period.
If the 1 year fixed period is not
available, interest will accumulate at
the rate that we declare for that
purpose. The declared rate is
guaranteed not to be less that the
fixed account minimum guaranteed rate
described in Endorsement Section 6.3.
d.) If we are not notified during the
30-day time period prior to the
expiration date, a new fixed period
will begin automatically on the day
following the expiration date. The new
fixed period will be the same duration
as the previous fixed period. If a new
fixed period of the same duration is
not available, it will automatically be
the next closest duration that is
available.
ENDORSEMENT
SECTION 5. TRANSFER PRIVILEGE
5.1 CAN YOU TRANSFER Your variable contract value may be transferred to
VALUES TO AND FROM any available fixed period other than a DCA fixed
FIXED PERIODS? period at any time.
Transfers from any fixed period other than a DCA
fixed period will be allowed only during the
30-day period prior to the expiration date of that
fixed period.
Transfers to or from a fixed period are subject to
all of the following:
a.) the transfer request must be by written
request;
b.) the transfer request must be received
in our home office prior to the payout
date;
c.) the transfer is to any fixed period
other than the DCA fixed period;
d.) the amount transferred to a fixed
period must be at least $1,000, or it
will be transferred automatically to
the money market subaccount of the
variable account (described in Section
6 of your contract);
e.) the fixed period selected to transfer
to cannot extend beyond the payout
date;
f.) the deduction of any transfer fees that
we may impose.
Monthly transfers from a DCA fixed period are
required to deplete the fixed amount by the
expiration date. Transfers from a DCA fixed period
are also subject to the following:
a.) monthly transfers will be made
automatically to the subaccount(s) you
have designated;
b.) if no subaccounts have been designated,
the minimum transfer amount will be
automatically transferred to the Money
Market subaccount;
c.) the minimum transfer amount is the
monthly sum required to fully amortize
the fixed amount as of the expiration
date;
d.) the initial monthly transfer must occur
within one month of the purchase
payment allocation to the DCA fixed
period and will occur on the transfer
day you have designated;
e.) if an initial transfer day is not
designated, the initial transfer will
be made one (1) month after allocation
of the purchase payment to the DCA
fixed period;
f.) subsequent monthly transfers will occur
automatically on the same monthly day
as the initial monthly transfer day and
will continue until the fixed amount is
depleted;
g.) if a transfer day falls on a weekend or
holiday, the transfer will be made on
the following valuation day; and
h.) transfers from a DCA fixed period are
not subject to any transfer fees that
we may impose.
ENDORSEMENT
SECTION 6. FIXED CONTRACT VALUE
6.1 HOW IS YOUR FIXED Your fixed contract value at any time is the sum
CONTRACT VALUE of all fixed amounts. Each fixed amount is equal
DETERMINED? to:
a.) the amount initially allocated or
transferred to a fixed period with a
specified expiration date; plus the
interest subsequently earned;
b.) less any prior partial withdrawal or
amount borrowed (if loans are allowed
under the contract to which this
endorsement is attached);
c.) less the pro-rata portion of the annual
contract fee described in the contract
to which this endorsement is attached;
d.) less the pro-rata portion of any
applicable fees or charges provided for
by rider or endorsement; and
e.) less any amounts transferred to any
subaccount or fixed period.
6.2 WHAT INTEREST WILL BE The fixed period selected will determine the
CREDITED TO A FIXED current guaranteed interest rate for that fixed
AMOUNT? amount. The current guaranteed interest rate for
each of the available fixed periods as of the
contract issue date is shown on the data page. We
will periodically establish an applicable
guaranteed interest rate for each fixed period
make available. Once an interest rate is declared
for a fixed amount, it is guaranteed for the
duration of the fixed period. The guaranteed
effective annual interest rate that is declared
for each of the available fixed periods will meet
or exceed the fixed account minimum guaranteed
interest rate in effect at the time the interest
rate is declared.
6.3 WHAT IS THE FIXED The fixed account minimum guaranteed interest rate
ACCOUNT MINIMUM as of your contract issue date is shown on the
GUARANTEED INTEREST data page. The fixed account minimum guaranteed
RATE? interest rate will be recalculated each calendar
quarter (on each January 1, April 1, July 1, and
October 1). It will apply to new fixed amounts
from purchase payments and transfers and will
never be less than the lesser of:
a.) 3%; or
b.) the interest rate determined as
follows:
1.) the average of the three
applicable monthly five-year
Constant Maturity Treasury (CMT)
rates reported by the Federal
Reserve (described below), and
rounded to the nearest 0.05%;
2.) minus 1.25%; and
3.) subject to a minimum interest
rate of 1.00%.
The three monthly five-year Constant Maturity
Treasury rates used in the calculation above are
as follows:
a.) the prior September, October, and
November monthly five-year CMT rates
will be used to determine the first
quarter interest rate that is effective
each January 1;
b.) the prior December, January, and
February monthly five-year CMT rates
will be used to determine the second
quarter interest rate that is effective
each April 1;
c.) the prior March, April, and May monthly
five-year CMT rates will be used to
determine the third quarter interest
rate that is effective each July 1; and
d.) the prior June, July, and August
monthly five-year CMT rates will be
used to determine the fourth quarter
interest rate that is effective each
October 1.
ENDORSEMENT
SECTION 7. MARKET VALUE ADJUSTMENT
7.1 WHEN WILL A MARKET A market value adjustment will be imposed on any
VALUE ADJUSTMENT BE fixed amounts attributable to a fixed period of 3
IMPOSED? years or greater that are withdrawn at any time
other than the 30-day period prior to the
expiration date of the fixed period, including:
a.) partial withdrawals;
b.) full surrender;
c.) amounts borrowed (if loans are allowed
under the contract to which this
endorsement is attached); and
d.) fixed amounts applied to the income
payout options titled "Interest Option
(Fixed Income Payment)" or "Installment
Option (Variable Income Payment)", in
Section 14.2 of your contract, if
available in your state.
Each fixed amount will be treated separately for
purposes of determining any market value
adjustment.
A market value adjustment will not be applied at
any time to a fixed amount allocated to a DCA
fixed period or any fixed period less than 3
years. No market value adjustment will be imposed
on any fixed amount withdrawn in the following
situations:
a.) calculation of the death benefit upon
death of the annuitant;
b.) amounts withdrawn to pay fees or
charges related to your contract; or
c.) amounts withdrawn during the 30-day
period prior to the expiration date of
the fixed period.
7.2 HOW IS A MARKET The amount of the market value adjustment will be
VALUE ADJUSTMENT calculated by multiplying the amount being
CALCULATED? withdrawn from the fixed amount (before deduction
of any applicable surrender charge) by the
following factor:
0.70 x (I - J) x N/12
where:
I = the guaranteed interest rate being offered
for new fixed periods equal in duration to
the period related to the fixed amount being
withdrawn. If the applicable fixed period is
no longer offered, "I" will be the rate
determined by linear interpolation of the
guaranteed interest rates for the fixed
periods that are available. If the fixed
periods needed to perform the linear
interpolation are not available, "I" will be
the rate payable on the Treasury Constant
Maturity Series published by the Federal
Reserve for a security with time to maturity
equal to the applicable fixed period. Linear
interpolation will be used if this period of
time to maturity is not quoted. The interest
rate being credited to a DCA fixed period
will not be used as a factor in any market
value adjustment calculation.
J = the interest rate being credited to the
fixed amount being withdrawn.
N = the number of complete months remaining to
the end of the fixed period.
7.3 IS THERE A LIMIT TO In no event will:
THE MARKET VALUE
ADJUSTMENT? a.) the market value adjustment exceed an
amount equal to the total interest
earned (for all fixed amounts) that is
in excess of the effective annual
rate(s) based on the fixed account
minimum guaranteed interest rate in
effect for each fixed amount as
described in Endorsement Section 6;.
b.) the sum of any surrender charges and
market value adjustment for a fixed
amount be greater than 10% of the
amount withdrawn; or
c.) the market value adjustment reduce the
amounts withdrawn or transferred below
the amount required under the
nonforfeiture laws of the state with
jurisdiction over the contract.
The total amount withdrawn or
surrendered could be less than the total
purchase payment(s) because of the
cumulative effect of the market value
adjustment and surrender charge.
ENDORSEMENT
SECTION 8. WITHDRAWALS
8.1 HOW WILL A MARKET VALUE In general, the market value adjustment
ADJUSTMENT AFFECT PARTIAL will have the effect of reducing the
WITHDRAWALS AND THE SURRENDER amount available for withdrawal when
VALUE OF THE CONTRACT? interest rates rise (where "I" is
greater than "J", in the formula for the
market value adjustment). Alternatively,
the market value adjustment will have
the effect of increasing the amount for
withdrawal when interest rates fall
(where "J" is greater than "I" in the
formula for the market value
adjustment). The exact amount of the
market value adjustment is determined
using the formula shown in Endorsement
Section 7.2.
Any applicable market value adjustment
will affect the amount available for
withdrawal from a fixed amount. We will
pay you the amount you request in
connection with a partial withdrawal
from the fixed account by reducing the
appropriate fixed amount(s).
If, at the time a partial withdrawal is
requested from a fixed amount, the fixed
amount would be insufficient to permit
the deduction of a market value
adjustment, then we will not permit the
partial withdrawal.
Any applicable market value adjustment
is subtracted upon full surrender of the
contract, as described in the contract
to which this endorsement is attached.
Your surrender value will not be less
than the amount required by state law.
8.2 DOES A SURRENDER CHARGE The surrender charge provision described
APPLY TO FIXED AMOUNTS WITHDRAWN? in the contract to which this
endorsement is attached includes fixed
amounts withdrawn from your contract.
See Section 9 of your contract.
ENDORSEMENT
SECTION 9. RESTRICTIONS
9.1 ARE THERE ANY We reserve the right to restrict
RESTRICTIONS ON PURCHASE purchase payments and transfers to the
PAYMENTS AND TRANSFERS TO THE fixed account if:
FIXED ACCOUNT?
a.) the guaranteed effective annual
interest rate for the fixed
period(s) selected is equal to the
Fixed Account Minimum Guaranteed
Interest Rate described in
Endorsement Section 6; and
b.) the yield on investment does not
support the statutory minimum
interest rate for the fixed
period(s) selected; or
c.) your fixed account value exceeds our
published maximum fixed account
value as described in the current
prospectus or other disclosure
statement.
This restriction, if imposed, will be
exercised in a non-discriminatory
manner. We will give you at least 30
days advance written notice before
exercising our right to restrict
purchase payments and transfers to the
fixed account and will notify you when
we lift this restriction (in whole or in
part).
9.2 ARE THERE ANY Generally, the amount of any partial
RESTRICTIONS ON PAYMENT OF withdrawal or full surrender will be
PROCEEDS FROM THE FIXED ACCOUNT? paid to you within seven (7) days after
we receive your written request. Death
benefit proceeds are payable upon
receipt of due proof of death in our
home office.
Subject to obtaining prior written
approval by the commissioner if required
by state law, we reserve the right to
postpone payment of any partial
withdrawal or full surrender from any
fixed account investment option for up
to six (6) months from the date we
receive your written request or for up
to two (2) months from the date we
receive due proof of death. In the event
payment is postponed, we will pay
interest on the proceeds if required by
state law. Interest will be calculated
at the effective annual rate and for the
time period required under state law.
CUNA Mutual Life Insurance Company
A Mutual Insurance Company
/s/ Xxxxxxx X. Kitchen
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President
