[Xxxxxxx Xxxxxxx]
[XX-0123456]
[LOGO OF LINCOLN NATIONAL LIFE INSURANCE CO.]
A part of LINCOLN NATIONAL CORPORATION
(A Stock Company)
ANNUITY CONTRACT
Individual Flexible Purchase Payment
Deferred Variable Annuity Contract
With Annuity Payment Options
Nonparticipating
The Lincoln National Life Insurance Company (LNL) agrees to provide the benefits
and other rights described in this Contract in accordance with the terms of this
Contract.
READ THIS CONTRACT CAREFULLY. This is a legal contract between the Owner and
LNL. We want to be sure you understand the features and benefits contained in
this Contract. IT IS THEREFORE IMPORTANT THAT YOU READ YOUR CONTRACT CAREFULLY.
If you have any questions after reading the Contract, we hope you will contact
your representative or the Home Office of LNL.
NOTICE OF RIGHT TO EXAMINE CONTRACT. Within [10] days after this Contract is
first received, it may be cancelled for any reason without penalty (e.g., no
Sales Charge will be deducted) by delivering or mailing it to the representative
through whom it was purchased or to the Home Office of LNL. Upon cancellation,
LNL will return the value of the Variable Account as of the Valuation Date on
which LNL receives the cancellation request and any Sales Charge deducted from
Gross Purchase Payments.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE. THE AMOUNTS MAY INCREASE OR
DECREASE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT (SEE ARTICLE 4 AND
ARTICLE 7).
Signed for The Lincoln National Life Insurance Company at its Home Office
located at [0000 X. Xxxxxxx Xx. xx Xxxx Xxxxx, Xxxxxxx 00000.]
/s/ Xxx X. Xxxxxx /s/ Xxxx XxXxxx
Xxx X. Xxxxxx, President Xxxx XxXxxx
SVP & Chief Operating Officer
Form 30070-A 8/03
Table of Contents
Article Page
1 Definitions 4
2 Gross Purchase Payments 6
3 Contract Value 7
4 Variable Account 8
5 Transfers, Withdrawals and Surrenders 10
6 Death Benefits 12
7 Annuity Payment Options 15
8 Beneficiary 18
9 Suspension or Deferral of Payments 19
10 General Provisions 20
ARTICLE 1
DEFINITIONS
ACCUMULATION UNIT -- A unit of measure used in the calculation of the value of a
Variable Subaccount prior to the Annuity Commencement Date.
ANNUITANT OR JOINT ANNUITANT -- The person or persons upon whose life or lives
the annuity payments made after the Annuity Commencement Date will be based.
ANNUITY COMMENCEMENT DATE -- The Valuation Date on which the Contract Value is
withdrawn for payment of annuity benefits under the annuity payment option
selected.
ANNUITY PAYMENT DATE -- The date on which the Owner is entitled to the first
annuity payment. Subsequent annuity payments will be due on the same day of the
month as the first annuity payment, at the applicable frequency.
ANNUITY UNIT -- A unit of measure used after the Annuity Commencement Date to
calculate the amount of a Variable Annuity Payment.
BENEFICIARY -- The person or persons or entity designated by the Owner to
receive the Death Benefit, if any.
CODE -- The Internal Revenue Code of 1986, as amended.
CONTINGENT ANNUITANT -- Prior to the Annuity Commencement Date, the individual
who will become the Annuitant upon the death of the Annuitant.
CONTRACT -- The agreement between LNL and the Owner, in which LNL provides an
annuity as described on the front page of this Contract.
CONTRACT DATE -- The date this Contract became effective. The Contract Date is
shown on the Contract Specifications.
CONTRACT VALUE -- Prior to the Annuity Commencement Date, the sum of the values
of the Variable Subaccounts.
CONTRACT YEAR -- Each twelve-month period starting with the Contract Date on the
Contract Specifications and starting with each Contract Date anniversary
thereafter.
DEATH BENEFIT -- The amount payable upon death of an Owner or an Annuitant.
DOLLAR COST AVERAGING (DCA) -- An option that allows the automatic transfer of a
portion of the Contract Value in periodic installments from a designated DCA
holding account to one or more of the Variable Subaccounts available under the
Contract. The periodic installments will be over any DCA period made available
by LNL and selected by the Owner.
EARNINGS -- The excess of the Contract Value over the Gross Purchase Payments
which have not yet been withdrawn from this Contract.
FIXED ANNUITY PAYMENTS -- Periodic payments made to the Owner or the Owner's
designee by LNL on or after the Annuity Commencement Date which LNL guarantees
as to the dollar amount. Fixed annuity payments are made out of the General
Account.
FUND -- Any of the underlying investment options available in the Variable
Account.
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GENERAL ACCOUNT -- An account consisting of all assets owned by LNL other than
those assets in segregated investment accounts.
GROSS PURCHASE PAYMENTS -- Amounts paid into this Contract by the Owner before
deduction of the Sales Charge.
HOME OFFICE -- The principal office of LNL located at [0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxx Xxxxx, Xxxxxxx, 00000], or an institution designated by LNL.
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LNL -- The Lincoln National Life Insurance Company.
MATURITY DATE - The date by which an election to receive payments under an
Annuity Payment Option must be made. The Maturity Date is shown on the Contract
Specifications.
NET ASSET VALUE PER SHARE -- The market value of a Fund share calculated each
day.
NET PURCHASE PAYMENT - An amount equal to the Gross Purchase Payment less the
Sales Charge.
NOTICE -- Any form of communication providing information as required by LNL,
either in signed writing or another manner, that LNL approves in advance. All
Notices must be received by LNL in the Home Office and must include all required
information necessary to process the request. To be effective for any Valuation
Date, a Notice must be received in good order prior to the end of that Valuation
Date.
OWNER -- The one person, two persons or entity who exercises rights of ownership
under this Contract. If two persons are named as Owner, all references to Owner
means joint Owner.
QUALIFIED CONTRACT -- A contract that is used as a funding vehicle for a
retirement plan qualified for special tax treatment under the Code, including
Sections 401, 403, 408, 408A and 457. All other contracts are considered
Non-qualified contracts.
SALES CHARGE -- A charge deducted from each Gross Purchase Payment, expressed as
a percentage of the Gross Purchase Payment.
VALUATION DATE -- Close of the market of each day that the New York Stock
Exchange is open for business.
VALUATION PERIOD -- The period commencing at the close of business on a
particular Valuation Date and ending at the close of business on the next
succeeding Valuation Date.
VARIABLE ACCOUNT -- The segregated investment account into which LNL sets aside
and invests the assets allocated to the Variable Subaccount(s) made available by
LNL and selected by the Owner. The Variable Account for this variable annuity
Contract is shown on the Contract Data page.
VARIABLE ANNUITY PAYMENTS -- Periodic payments made to the Owner or the Owner's
designee by LNL on or after the Annuity Commencement Date which vary in amount
with the investment experience of each applicable Variable Subaccount.
VARIABLE SUBACCOUNT -- That portion of the Variable Account which invests in
shares of a particular Fund. There is a separate Variable Subaccount for each
particular Fund.
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ARTICLE 2
GROSS PURCHASE PAYMENTS
2.01 WHERE PAYABLE
All Gross Purchase Payments must be made to LNL at its Home Office.
2.02 AMOUNT AND FREQUENCY
LNL reserves the right to limit future Gross Purchase Payments into this
Contract. The minimum subsequent Gross Purchase Payments are shown on the
Contract Specifications.
Gross Purchase Payments may be made until the earliest of: the Annuity
Commencement Date, death of the Owner, or surrender of the Contract. In the
event that Gross Purchase Payments are discontinued by the Owner, this Contract
will continue and Gross Purchase Payments may be resumed at any time prior to
the earlier of: the Annuity Commencement Date, death of the Owner, or surrender
of this Contract.
2.03 SALES CHARGE
A Sales Charge will be deducted from each Gross Purchase Payment as shown in the
Contract Specifications.
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ARTICLE 3
CONTRACT VALUE
3.01 CONTRACT VALUE
The Contract Value, at any time prior to the Annuity Commencement Date, is equal
to the sum of the values of the Variable Subaccounts on a given Valuation Date.
3.02 ACCOUNT FEE
LNL will deduct an Account Fee from the Contract Value as shown on the Contract
Specifications.
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ARTICLE 4
VARIABLE ACCOUNT
4.01 THE VARIABLE ACCOUNT
The Variable Account, which is designated on the Contract Specifications, is for
the exclusive benefit of persons entitled to receive benefits under variable
annuity contracts. The Variable Account will not be charged with the liabilities
arising from any other part of LNL's business.
Subject to any required regulatory approvals, LNL reserves the right to
eliminate the shares of any Fund and substitute the securities of a different
Fund or investment company or mutual fund. Such elimination and substitution may
occur if the shares of a Fund are no longer available for investment or, if in
the judgment of LNL, further investment in any Fund should become inappropriate
in view of the purposes of the Contract. LNL may close any Variable Subaccount
to new Net Purchase Payments, transfers of Contract Value or both. LNL may add
new Variable Subaccounts in which the assets of the Variable Account may be
invested. LNL will give the Owner written notice of the elimination and
substitution of any Fund as required by law after such substitution occurs.
4.02 ALLOCATION OF NET PURCHASE PAYMENTS TO A VARIABLE SUBACCOUNT
The Owner may allocate Net Purchase Payments to any of the available Variable
Subaccounts in accordance with the restrictions on the Contract Specifications.
A Notice must be given to LNL if the Owner elects to allocate any Net Purchase
Payment to a new Variable Subaccount not previously selected.
Net Purchase Payments allocated to each Variable Subaccount will be invested at
Net Asset Value Per Share of one of the Funds. Following receipt of a Gross
Purchase Payment, LNL will use each Net Purchase Payment to buy Accumulation
Units in the Variable Subaccount(s) selected by the Owner.
4.03 VALUATION OF THE VARIABLE ACCOUNT
The value of the Variable Account, at any time prior to the Annuity Commencement
Date, is equal to the sum of the values allocated to the Variable Subaccounts.
The value of a Variable Subaccount, at any time prior to the Annuity
Commencement Date, is equal to the Accumulation Units credited to a Variable
Subaccount multiplied by the value of the Accumulation Unit for the respective
Variable Subaccount.
Accumulation Units are used to value all amounts allocated to or withdrawn from
a Variable Subaccount as a result of Net Purchase Payments, transfers,
withdrawals, or fees and charges. Accumulation Units for each Variable
Subaccount are valued separately. The value of an Accumulation Unit may increase
or decrease from Valuation Period to Valuation Period. The number of
Accumulation Units is determined by dividing the amount allocated to or
withdrawn from a Variable Subaccount by the dollar value of one Accumulation
Unit of the Variable Subaccount as of the Valuation Date the transaction becomes
effective. The number of Accumulation Units held for an Owner in a Variable
Subaccount will not be changed by any change in the dollar value of Accumulation
Units in the Variable Subaccount.
The value of an Accumulation Unit was arbitrarily established at the inception
of the Variable Subaccount. The Accumulation Unit value for a Variable
Subaccount for any later Valuation Period is determined as follows:
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a. the total value of Fund shares held in the Variable Subaccount is
calculated by multiplying the number of Fund shares owned by the
Variable Subaccount at the beginning of the Valuation Period by the
Net Asset Value Per Share of the Fund at the end of the Valuation
Period, and adding any dividend or other distribution of the Fund if
an ex-dividend date occurs during the Valuation Period; minus
b. the liabilities of the Variable Subaccount at the end of the Valuation
Period (such liabilities include daily charges imposed on the Variable
Subaccount (see Section 4.04) and may include a charge or credit with
respect to any taxes paid or reserved for by LNL that LNL determines
is a result of the operation of the Variable Account); the result
divided by
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c. the outstanding number of Accumulation Units in the Variable
Subaccount at the beginning of the Valuation Period.
The Accumulation Unit value may increase or decrease the dollar value of
benefits under the Contract. Expenses incurred by LNL will not adversely affect
the dollar value of benefits.
4.04 MORTALITY AND EXPENSE RISK AND ADMINISTRATIVE CHARGE
LNL will deduct a Mortality and Expense Risk and Administrative charge (daily
charge) from the Variable Account as shown on the Contract Specifications.
4.05 CHANGE IN OPERATION
LNL reserves the right to transfer assets of the Variable Account to another
account, and to modify the structure or operation of the Variable Account,
subject to obtaining any necessary regulatory approvals. LNL guarantees that
such modification will not affect the Contract Value.
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ARTICLE 5
TRANSFERS, WITHDRAWALS AND SURRENDERS
5.01 TRANSFERS BEFORE THE ANNUITY COMMENCEMENT DATE
Prior to the earlier of: the Annuity Commencement Date, termination of this
Contract upon payment of any Death Benefit, or surrender of this Contract, the
Owner may direct a transfer of a portion of the Contract Value from any
available Variable Subaccount to another Variable Subaccount by providing Notice
to transfer.
Transfers will be subject to the following:
a. The Transfer Requirements outlined on the Contract Specifications.
b. LNL reserves, in its sole opinion, the right to limit or modify
transfers that may have an adverse effect on other contract owners.
Restrictions may be applied in any manner reasonably designed to
prevent any use of the transfer right that is considered by LNL to
disadvantage other contract owners.
LNL has the right to waive or modify any of these restrictions.
Upon receipt of Notice to transfer, LNL will process the transfer within the
time period required by the Securities and Exchange Commission, unless the
Suspension or Deferral of Payments or Transfers from the Variable Account
provision (Article 9) is in effect.
Transfers will be accomplished at Accumulation Unit values as of the Valuation
Date the Notice to transfer is received.
5.02 WITHDRAWALS
The Owner may, upon Notice to LNL, withdraw a part of the Contract Value at any
time prior to the earlier of: the Annuity Commencement Date, termination of this
Contract upon payment of any Death Benefit, or surrender of this Contract.
Withdrawals will be subject to the withdrawal and surrender requirements as
shown on the Contract Specifications.
The Notice to withdraw must specify from which Variable Subaccount the
withdrawal will be made. If no Subaccount is specified, LNL will withdraw the
amount requested on a pro-rata basis from each Variable Subaccount.
Upon receipt of Notice of withdrawal, LNL will pay the amount of any withdrawal
within the time period as required by the Securities and Exchange Commission
unless the Suspension or Deferral of Payments or Transfers from the Variable
Account provision (Article 9) is in effect.
Xxxxxxxxxxx will be accomplished at Accumulation Unit values as of the Valuation
Date the Notice for withdrawal is received.
5.03 SURRENDERS
The Owner may, upon Notice to LNL, surrender this Contract for its Contract
Value at any time prior to the earlier of: the Annuity Commencement Date, or
termination of this Contract upon payment of any Death Benefit.
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This Contract will terminate upon surrender. The surrender will be effective on
the Valuation Date on which LNL receives Notice of surrender.
Surrenders will be subject to the withdrawal and surrender requirements as shown
on the Contract Specifications.
LNL reserves the right to surrender this Contract if any withdrawal reduces the
total Contract Value to a level at which this Contract may be surrendered in
accordance with the terms set forth in the standard nonforfeiture law for
individual deferred annuities applicable in the state in which this Contract was
purchased. LNL may surrender the Contract for its Contract Value.
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Upon receipt of Notice to surrender, LNL will pay the amount of any surrender
within the time period required by the Securities and Exchange Commission,
unless the Suspension or Deferral of Payments or Transfers from the Variable
Account provision (Article 9) is in effect.
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ARTICLE 6
DEATH BENEFITS
6.01 DEATH BEFORE THE ANNUITY COMMENCEMENT DATE
Entitlement.
If there is a single Owner, then upon the death of the Owner LNL will pay a
Death Benefit to the designated Beneficiary(s). If the designated Beneficiary of
the Death Benefit is the surviving spouse of the deceased Owner, the spouse may
elect to continue the Contract as the new Owner. The Death Benefit in effect at
the time of death of the original Owner will continue, unless subsequently
terminated by the surviving spouse. If there are no designated Beneficiaries,
LNL will pay a Death Benefit to the Owner's estate. Upon the death of the spouse
who continues the Contract as the new Owner, LNL will pay a Death Benefit to the
designated Beneficiary(s).
If there are two Owners, upon the death of the first Owner, LNL will pay a Death
Benefit to the surviving Owner. If the surviving Owner is the spouse of the
deceased Owner, then the spouse may elect to continue the Contract as sole
Owner. The Death Benefit in effect at the time of death of the original Owner
will continue, unless subsequently terminated by the surviving spouse. Upon the
death of the Owner who continues the Contract, LNL will pay a Death Benefit to
the designated Beneficiary(s).
If the Annuitant is also an Owner, then the Death Benefit paid upon the death of
the Annuitant will be subject to the Contract provisions regarding death of an
Owner. If the surviving spouse of the deceased Annuitant assumes the Contract,
the Contingent Annuitant, if any, will become the Annuitant. If there is no
named Contingent Annuitant, the surviving spouse will become the Annuitant.
If an Annuitant who is not an Owner dies, then the Contingent Annuitant, if
named, becomes the Annuitant and no Death Benefit is payable on the death of the
Annuitant.
If an Annuitant who is not an Owner dies and no Contingent Annuitant is named,
the youngest Owner immediately becomes the Annuitant and the Contract continues.
In lieu of continuing the Contract, the Owner(s) may elect to receive a Death
Benefit (in equal shares, if applicable). Written notification of the election
to receive the Death Benefit must be received by LNL within [75 days] of the
death of the Annuitant. This Contract will terminate when any Death Benefit is
paid due to the death of the Annuitant.
If the Owner is a corporation or other non-individual (non-natural person), the
death of the Annuitant will be treated as the death of the Owner.
The Death Benefit will be paid upon approval by LNL and after LNL is in receipt
of:
a. proof, satisfactory to LNL, of the death;
b. written authorization for payment; and
c. all claim forms, fully completed.
Due proof of death may be a certified copy of a death certificate, a certified
copy of a decree of a court of competent jurisdiction as to the findings of
death, or any other proof of death acceptable to LNL.
All Death Benefit payments will be subject to the laws and regulations governing
death benefits.
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Notwithstanding any provision of this Contract to the contrary, the payment of
Death Benefits provided under the Contract must be made in compliance with Code
Section 72(s) or 401(a)(9) as applicable, as amended from time to time.
Determination of Amounts
[The Death Benefit is equal to the Contract Value as of the Valuation Date on
which the death claim is approved by the LNL Home Office for payment.]
[OR]
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[The Death Benefit is equal to the greater of:
a. the Contract Value on the Valuation Date the Death Benefit is approved
by the LNL Home Office for payment; or
b. the sum of all Gross Purchase Payments minus all death benefit
reductions. Each death benefit reduction of Gross Purchase Payments
will be in proportion to the amount withdrawn.
Any withdrawal from the contract will result in a death benefit reduction. For
purposes of determining a death benefit reduction, a withdrawal is any amount
that the Owner requests to be withdrawn (including any applicable charges), any
amount partially annuitized and any amount deducted for premium tax, if any.
Cumulative amounts withdrawn include any current withdrawal from the Contract.
Upon the death of an Owner or Annuitant of this Contract, if a surviving spouse
continues the Contract, the excess, if any, of the Death Benefit over the
current Contract Value as of the date on which the death claim is approved by
LNL for payment will be credited into the Contract. This excess will only be
credited one time for each Contract.
If the Owner is a corporation or other non-individual (non-natural person) and
there are Joint Annuitants, upon the death of the first Joint Annuitant to die,
if the Contract is continued, the excess, if any, of the Death Benefit over the
current Contract Value as of the date on which the death claim is approved by
LNL for payment will be credited into the Contract. This excess will only be
credited one time for each Contract.
If at any time the [Owner] [or] [Annuitant] named on this Contract is changed,
except on the death of a prior [Owner] [or] [Annuitant], the Death Benefit for
the new [Owner] [or] [Annuitant] will be the [Contract Value] as of the
Valuation Date the death claim for the new [Owner] [or] [Annuitant] is approved
by the LNL Home Office for payment.
Other Death Benefit requirements may apply as shown on the Contract
Specifications.]
[OR]
[The Death Benefit is equal to the greatest of:
a. the Contract Value on the Valuation Date the Death Benefit is approved
by the LNL Home Office for payment; or
b. the sum of all Gross Purchase Payments minus all death benefit
reductions. Each death benefit reduction of Gross Purchase Payments
will be in proportion to the amount withdrawn.
c. the highest Contract Value on the Contract Date or [every 10/th/]
Contract Date anniversary (determined before the allocation of any Net
Purchase Payments on that Contract Date anniversary) prior to the
[70/th/] birthday of the deceased Owner or Annuitant and prior to the
date of death of the Owner or Annuitant for whom a death claim is
approved by the LNL Home Office for payment. The highest Contract
Value is adjusted for certain transactions. It is increased by Gross
Purchase Payments made on or after that Contract Date anniversary on
which the highest Contract Value is obtained. It is decreased by all
death benefit reductions incurred on or after the Contract Date
anniversary on which the highest Contract Value is obtained. Each
death benefit reduction of the highest Contract Value will be in
proportion to the amount withdrawn.
Any withdrawal from the contract will result in a death benefit reduction. For
purposes of determining a death benefit reduction, a withdrawal is any amount
that the Owner requests to be withdrawn (including
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any applicable charges), any amount partially annuitized and any amount deducted
for premium tax, if any. Cumulative amounts withdrawn include any current
withdrawal from the Contract.
Upon the death of an Owner or Annuitant of this Contract, if a surviving spouse
continues the Contract, the excess, if any, of the Death Benefit over the
current Contract Value as of the date on which the death claim is approved by
LNL for payment will be credited into the Contract. This excess will only be
credited one time for each Contract.
If the Owner is a corporation or other non-individual (non-natural person) and
there are Joint Annuitants, upon the death of the first Joint Annuitant to die,
if the Contract is continued, the excess, if any, of the Death Benefit over
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the current Contract Value as of the date on which the death claim is approved
by LNL for payment will be credited into the Contract. This excess will only be
credited one time for each Contract.
If at any time the [Owner] [or] [Annuitant] named on this Contract is changed,
except on the death of a prior [Owner] [or] [Annuitant], the Death Benefit for
the new [Owner] [or] [Annuitant] will be the [Contract Value] as of the
Valuation Date the death claim for the new [Owner] [or] [Annuitant] is approved
by the LNL Home Office for payment.
Other Death Benefit requirements may apply as shown on the Contract
Specifications.]
Payment of Amounts
The Death Benefit payable on the death of the Owner, or after the death of the
first Owner, or upon the death of the spouse who continues the Contract, will be
distributed to the designated Beneficiary(s) as follows:
a. the Death Benefit must be completely distributed within five years of
the Owner's date of death; or
b. an election may be made within the one year period after the Owner's
date of death for the designated Beneficiary, to receive the Death
Benefit in substantially equal installments over the life of such
designated Beneficiary or over a period not extending beyond the life
expectancy of such designated Beneficiary; provided that such
distributions begin not later than one year after the Owner's date of
death.
The Death Benefit payable upon the death of the Annuitant, must be elected by
the Owner within [75 days] of the death of the Annuitant, and will be
distributed to the Owner in either form of a lump sum or under an Annuity
Payment Option. An Annuity Payment Option must be selected within [60 days]
after LNL approves the death claim.
If a lump sum settlement is elected, the proceeds will be mailed within the time
period required by the Securities and Exchange Commission following LNL's
approval of the death claim, unless the Suspension or Deferral of Payments or
Transfers from the Variable Account provision (Article 9) is in effect.
The Death Benefit in effect will terminate on the Annuity Commencement Date.
6.02 DEATH ON OR AFTER THE ANNUITY COMMENCEMENT DATE
Upon receipt of due proof of death of the Annuitant, any remaining annuity
benefits payable will continue to be distributed under the Annuity Payment
Option then in effect.
Upon the death of the Owner, any remaining annuity payments will be made at
least as rapidly as the Annuity Payment Option then in effect. Upon the death of
the Owner, the rights of ownership granted by the Contract will pass to the
surviving Owner, if any, otherwise to the Beneficiary. If there is no named
Beneficiary at the time of a sole Owner's death, then the rights of ownership
will pass to the Annuitant, if still living; otherwise to the Joint Annuitant,
if applicable. If no named Beneficiary, Annuitant or Joint Annuitant survives
the Owner, any remaining payments payable will continue to the Owner's estate.
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ARTICLE 7
ANNUITY PAYMENT OPTIONS
7.01 ANNUITY PAYMENTS
Annuity Payments will commence on the Annuity Payment Date. Payments are made
under the Annuity Payment Option selected (see Section 7.02).
7.02 CHOICE OF ANNUITY PAYMENT OPTION
An election to receive payments under an Annuity Payment Option must be made by
the Maturity Date. The Maturity Date is set forth on the Contract
Specifications.
Upon written request by the Owner and any Beneficiary who cannot be changed, the
Maturity Date may be deferred. If the Maturity Date is extended, LNL reserves
the right to restrict the availability of certain Annuity Payment Options.
By Owner
Prior to the Annuity Commencement Date, the Owner may choose or change any
Annuity Payment Option. In addition, the Owner may select an Annuity Payment
Option that meets the requirements of Code Section 72(s) or 401(a)(9) as set
forth in Section 6.01, Payment of Amounts, for payment of the Death Benefit to a
Beneficiary. A Notice of such selection of a distribution method must be made
and approved by LNL. Upon Notice, the Owner may change or revoke, in writing to
the Home Office, any such selection, unless such selection was made irrevocable.
By Beneficiary
If an Annuity Payment Option has not been previously selected by the Owner as
the distribution option for the payment of the Death Benefit to a Beneficiary,
then at the time proceeds are payable to a Beneficiary, a Beneficiary may choose
any Annuity Payment Option that meets the requirements of Code Section 72(s) or
401(a)(9) as set forth in Section 6.01, Payment of Amounts. The Beneficiary then
becomes the Annuitant.
A Notice is required to choose an Annuity Payment Option.
7.03 ANNUITY PAYMENT OPTIONS
Annuity Payment Options are shown on the attached Annuity Payment Option Rider.
If an Annuity Payment Option is not chosen prior to the Maturity Date, payments
will commence to the Owner on the Maturity Date under the Annuity Payment Option
providing a Life Annuity with annuity payments guaranteed for 10 years.
At the time an Annuity Payment Option is selected under the provisions of this
Contract, the Owner may elect to have the Contract Value applied to provide a
Variable Annuity Payment, a Fixed Annuity Payment, or a combination Fixed and
Variable Annuity Payment. If no election is made, the Contract Value will be
used to provide a Variable Annuity Payment.
7.04 DETERMINATION OF THE AMOUNT OF THE FIRST ANNUITY PAYMENT
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The amount of annuity payment will depend on the age and sex (except in cases
where unisex rates are required) of the Annuitant as of the Annuity Commencement
Date. A choice may be made to receive payments once each month, four times each
year, twice each year, or once each year.
The attached Annuity Payment Option Rider, illustrates the minimum payment
amounts and the age adjustments which will be used to determine the first
monthly payment for a unisex Variable Annuity Payment based upon the assumed
interest rate selected by the Owner. The tables show the dollar amount of the
first monthly payment which can be purchased with each $1,000 of Contract Value,
after deduction of any applicable premium taxes. The Owner must select one of
the assumed interest rates, as shown on the Contract Specifications, for the
Variable Annuity Payment prior to the Annuity Commencement Date. The assumed
interest rate may not be changed after the Annuity Commencement Date.
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The attached Annuity Payment Option Rider, illustrates the minimum payment
amounts and the age adjustments that will be used to determine the monthly
payments for a Fixed Annuity Payment. The tables show the dollar amount of the
guaranteed monthly payments which can be purchased with each $1,000 of Contract
Value, after deduction of any applicable premium taxes.
Determination of the first Annuity Payment Date is shown on the Contract
Specifications.
7.05 DETERMINATION OF THE AMOUNT OF VARIABLE ANNUITY PAYMENTS AFTER THE FIRST
PAYMENT
The first Variable Annuity Payment is sub-divided into components, each of which
represents the product of:
a. the percentage elected by the Owner of a specific Variable Subaccount,
the performance of which will determine future Variable Annuity
Payments, and
b. the entire first Variable Annuity Payment.
Each Variable Annuity Payment after the first payment attributable to a specific
Variable Subaccount will be determined by multiplying the Annuity Unit value for
the Variable Subaccount for the Valuation Date no more than [14] days before
each payment is due by a constant number of Annuity Units. This constant number
of each specific Variable Subaccount is determined by dividing the component of
the first payment attributable to such Variable Subaccount as described above by
the Annuity Unit value for that Variable Subaccount on the Annuity Commencement
Date. The total Variable Annuity Payment will be the sum of the payments
attributable to each Variable Subaccount. In the absence of transfers between
Variable Subaccounts, the number of Annuity Units attributable to each Variable
Subaccount remains constant, although the Annuity Unit values will vary with the
investment performance of the Funds. The Annuity Unit value may increase or
decrease the dollar value of benefits under the Contract.
The Annuity Unit value for any Valuation Period for any Variable Subaccount is
determined by multiplying the Annuity Unit value for the immediately preceding
Valuation Period by the product of (a) the daily factor raised to a power equal
to the number of days in the current Valuation Period and (b) the Accumulation
Unit value of the same Variable Subaccount for this Valuation Period divided by
the Accumulation Unit value of the same Variable Subaccount for the immediately
preceding Valuation Period.
The valuation of all assets in the Variable Subaccount will be determined in
accordance with the provisions of applicable laws, rules, and regulations. The
method of determination by LNL of the value of an Accumulation Unit and of any
Annuity Unit will be conclusive upon the Owner, Annuitant and any Beneficiary.
LNL guarantees that the dollar amount of each payment after the first will not
be affected by variations in mortality experience from mortality assumptions on
which the first payment is based.
7.06 TRANSFERS AFTER THE ANNUITY COMMENCEMENT DATE
After the Annuity Commencement Date, if any portion of the annuity payment is a
Variable Annuity Payment, the Owner may direct a transfer of assets from one
Variable Subaccount to another Variable Subaccount or to a Fixed Annuity Payment
by providing Notice to transfer. Such transfers will be limited to [three (3)]
times per Contract Year. Assets may not be transferred from a Fixed Annuity
Payment to a Variable Annuity Payment.
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A transfer from one Variable Subaccount to another Variable Subaccount will
result in the purchase of Annuity Units in one Variable Subaccount and the
redemption of Annuity Units in the other Variable Subaccount. Such a transfer
will be accomplished at relative Annuity Unit values as of the Valuation Date
the Notice to transfer is received. The valuation of Annuity Units is described
above. A transfer from a Variable Subaccount to a Fixed Annuity Payment will
result in the redemption of Annuity Units in that Variable Subaccount and the
purchase of a minimum Fixed Annuity Payment based on the tables on the attached
Annuity Payment Option Rider.
7.07 PROOF OF AGE
Payment will be subject to proof of age that LNL will accept, such as a
certified copy of a birth certificate.
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7.08 MINIMUM ANNUITY PAYMENT REQUIREMENTS
LNL reserves the right to reduce the frequency of payments to an interval which
will result in each payment exceeding the minimum annuity payment amount shown
on the Contract Specifications.
7.09 EVIDENCE OF SURVIVAL
LNL has the right to ask for proof that the Annuitant(s) on whose life (or
lives) the payment is based is alive when each payment is due.
7.10 CHANGE IN ANNUITY PAYMENT OPTION
The Annuity Payment Option may not be changed after the Annuity Commencement
Date.
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ARTICLE 8
BENEFICIARY
8.01 DESIGNATION OF BENEFICIARY
The Owner may designate a Beneficiary and a contingent Beneficiary.
Prior to the Annuity Commencement Date, if there is a single Owner, the
designated Beneficiary will receive the Death Benefit proceeds upon the death of
the Owner unless the Beneficiary as the surviving spouse elects to continue the
Contract.
Prior to the Annuity Commencement Date, if there are two Owners, upon the death
of the first Owner, the surviving Owner will receive the Death Benefit proceeds.
The surviving Owner will be treated as the primary designated Beneficiary. Any
other Beneficiary designation on record at the time of death will be treated as
a contingent Beneficiary.
Prior to the Annuity Commencement Date, if the surviving spouse of a deceased
Owner continues the Contract as the sole Owner, then the designated
Beneficiaries move up, in the order of their original designation, to replace
the spouse as original Beneficiary, unless the Beneficiary designation is
subsequently changed by the surviving spouse as the new Owner.
Prior to the Annuity Commencement Date, if the Annuitant dies and a Death
Benefit is paid, the Owner will be treated as the primary designated
Beneficiary. Any other primary Beneficiary on record at the time of death will
be treated as a contingent Beneficiary.
Unless otherwise stated in the Beneficiary designation, multiple Beneficiaries
are presumed to share equally.
8.02 CHANGE OF BENEFICIARY
The Owner may change any Beneficiary unless otherwise provided in the previous
designation by providing a Notice to change beneficiary. A change of Beneficiary
will revoke any previous designation. The change will become effective upon
receipt by LNL of the Notice.
LNL reserves the right to request the Contract for endorsement of the change.
8.03 DEATH OF BENEFICIARY
Unless otherwise provided in the Beneficiary designation, if any Beneficiary
dies before the Owner, that Beneficiary's interest will go to any other primary
Beneficiaries named, according to their respective interests. If there are no
primary Beneficiaries, the Beneficiaries' interest will pass to a contingent
Beneficiary, if any. Prior to the Annuity Commencement Date, if no Beneficiary
or contingent Beneficiary survives the Owner, the Death Benefits will be paid to
the Owner's estate.
Unless otherwise provided in the Beneficiary designation, once a Beneficiary is
receiving Death Benefits or annuity payments under an Annuity Payment Option,
the Beneficiary may name his or her own Beneficiary to receive any remaining
benefits due under the Contract, should the original Beneficiary die prior to
receipt of all benefits. If no Beneficiary is named or the named Beneficiary
predeceases the original Beneficiary, any remaining benefits will continue to
the original Beneficiary's estate. A Beneficiary designation must be made by
Notice to LNL.
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ARTICLE 9
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE VARIABLE ACCOUNT
9.01 SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS FROM OR WITHIN THE VARIABLE
ACCOUNT
LNL reserves the right to suspend or postpone payments for a transfer,
withdrawal or surrender for any period when:
a. the New York Stock Exchange is closed (other than customary weekend
and holiday closings);
b. trading on the New York Stock Exchange is restricted;
c. an emergency exists as a result of which disposal of securities held
in the Variable Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the Variable
Account's net assets; or
d. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of the Owner.
The applicable rules and regulations of the Securities and Exchange Commission
will govern as to whether the conditions described in (2) and (3) exist.
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ARTICLE 10
GENERAL PROVISIONS
10.01 THE CONTRACT
The Contract and any riders attached constitute the entire Contract. Only the
President, a Vice President, the Secretary or an Assistant Secretary of LNL has
the power, on behalf of LNL, to change, modify, or waive any provisions of this
Contract.
LNL reserves the right to unilaterally change the Contract for the purpose of
keeping the Contract in compliance with federal or state law.
Any changes, modifications, or waivers must be in writing. No representative or
person other than the above named officers has authority to change or modify
this Contract or waive any of its provisions. All terms used in this Contract
will have their usual and customary meaning except when specifically defined.
10.02 OWNERSHIP
All Owners will be treated as having equal, undivided interests in the Contract,
including rights of survivorship. Either Owner, independently of the other, may
exercise any ownership rights in the Contract.
10.03 ANNUITANTS
Prior to the Annuity Commencement Date.
The Owner may name only one Annuitant. If the Owner is a tax-exempt entity, the
Owner may name one Annuitant or two Joint Annuitants.
If the Owner is a natural person, the Owner has the right to change the
Annuitant at any time by sending Notice of change to LNL. If the Owner is a
non-natural person, the Annuitant may not be changed. The new Annuitant must be
under the age of [91] as of the effective date of the change. Change of
Annuitant may affect the Death Benefit (refer to Article 6, Death Benefit).
A Contingent Annuitant may be named, or changed upon receipt of Notice by LNL.
On or After the Annuity Commencement Date.
The Annuitant or Joint Annuitants may not be changed. Any Contingent Annuitant
designation is no longer applicable and is terminated.
10.04 ASSIGNMENTS
The Contract may not be sold, discounted or pledged as collateral for a loan or
as security for the performance of an obligation or for any other purpose. In
addition, if this Contract is a Qualified Contract, the Contract will not be
transferable unless allowed under applicable law.
10.05 INCONTESTABILITY
This Contract will not be contested by LNL.
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10.06 MISSTATEMENT OF AGE AND/OR SEX
If the age and/or sex of the Annuitant has been misstated, the benefits
available under this Contract will be those which the Net Purchase Payments
would have purchased using the correct age and/or sex. Any underpayment already
made by LNL will be made up immediately and any overpayments already made by LNL
will be charged against the annuity benefit payments falling due after the
correction is made.
10.07 NONPARTICIPATING
The Contract is nonparticipating and will not share in the surplus earnings of
LNL.
10.08 OWNERSHIP OF THE ASSETS
LNL will have exclusive and absolute ownership and control of its assets,
including all assets in the Variable Account.
10.09 REPORTS
Prior to the Annuity Commencement Date, at least once each Calendar Year, LNL
will mail a report to the Owner. The report will be mailed to the last address
known to LNL. The report will include a statement of the Contract Value
including the number of Accumulation Units credited to the Variable Account and
the dollar value of such units. The information in the report will be as of a
date not more than two months prior to the date of mailing the report. The Owner
will have [60 days] from the date the report or confirmation is received to
notify LNL of any errors in the report or confirmation, otherwise the report or
confirmation will be deemed to be final and correct.
10.10 PREMIUM TAX
State and local government premium tax, if applicable, will be deducted from
Gross Purchase Payments or Contract Value when incurred by LNL or at another
time of LNL's choosing.
10.11 MAXIMUM ISSUE AGE
The Owner and the Annuitant (or both Joint Annuitants, if applicable), when
named, must be under the age of [91].
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ANNUITY
CONTRACT
Individual Flexible Purchase Payment
Deferred Variable Annuity Contract
With Annuity Payment Options
Nonparticipating
If you have any questions concerning
this Contract, please
contact your Lincoln National Life
representative or the Home Office of LNL.
THE LINCOLN NATIONAL
LIFE INSURANCE COMPANY
[0000 Xxxxx Xxxxxxx Xxxxxx
P. O. Box 7882
Fort Xxxxx, Indiana 46802]
[000-000-0000]
