Allianz Life Insurance Company of North America
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000-0000
A Stock Company
This is a legal Contract between the Contract Owner (referred to in this
Contract as you and your) and Allianz Life Insurance Company of North America
(herein referred to as we, us and our). We will make Annuity Payments as set
forth in this Contract beginning on the Income Date.
This Contract is issued in consideration of the payment of the initial Purchase
Payment.
READ YOUR CONTRACT CAREFULLY
RIGHT TO EXAMINE: This Contract may be returned within 10 days after you receive
it. It can be mailed or delivered to either us or the agent who sold it. Return
of this Contract by mail is effective on being postmarked, properly addressed
and postage prepaid. The returned Contract will be treated as if we had never
issued it. We will promptly refund the Contract Value in states where permitted.
This may be more or less than the Purchase Payments. We have the right to
allocate payments to the Money Market Sub-Account until the expiration of the
Right to Examine period. If we so allocate payments, we will refund the greater
of the Purchase Payments, less any surrenders, or the Contract Value.
Benefits available under this Contract are not less than those required by
statute of the state in which this Contract is delivered.
This is a Variable Annuity Contract with Annuity Payments and Contract Values
increasing or decreasing depending on the experience of the Variable Account
which is set forth in the Contract Schedule.
Signed for Allianz Life Insurance Company of North America by:
Secretary President
INDIVIDUAL FLEXIBLE PAYMENT VARIABLE ANNUITY
NON-PARTICIPATING
TABLE OF CONTENTS
RIGHT TO EXAMINE..................................................................................................1
CONTRACT SCHEDULE..................................................................................;;;;;........i-v
DEFINITIONS.......................................................................................................4
PURCHASE PAYMENTS.................................................................................................6
PURCHASE PAYMENTS..............................................................................................6
CHANGE IN PURCHASE PAYMENTS....................................................................................6
NO DEFAULT.....................................................................................................6
BONUS......................................................................................................... 6
ALLOCATION OF PURCHASE PAYMENTS................................................................................6
VARIABLE ACCOUNT..................................................................................................7
THE VARIABLE ACCOUNT...........................................................................................7
VALUATION OF ASSETS............................................................................................7
ACCUMULATION UNITS.............................................................................................7
ACCUMULATION UNIT VALUE........................................................................................7
NET INVESTMENT FACTOR..........................................................................................7
MORTALITY AND EXPENSE RISK CHARGE..............................................................................8
ADMINISTRATIVE CHARGE..........................................................................................8
DISTRIBUTION EXPENSE CHARGE....................................................................................8
MORTALITY AND EXPENSE GUARANTEE................................................................................8
REWARDS VALUE.....................................................................................................8
CONTRACT MAINTENANCE CHARGE.......................................................................................9
TRANSFERS.........................................................................................................9
SURRENDER PROVISIONS.............................................................................................10
SURRENDERS....................................................................................................10
CONTINGENT DEFERRED SALES CHARGE..............................................................................10
PROCEEDS PAYABLE ON DEATH........................................................................................11
DEATH OF CONTRACT OWNER DURING THE ACCUMULATION PERIOD........................................................11
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD...........................................................11
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD..........................................................11
DEATH OF CONTRACT OWNER DURING THE ANNUITY PERIOD.............................................................11
DEATH OF ANNUITANT............................................................................................12
PAYMENT OF DEATH BENEFIT......................................................................................12
BENEFICIARY...................................................................................................12
CHANGE OF BENEFICIARY.........................................................................................12
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION.....................................................................13
CONTRACT OWNER, ANNUITANT, ASSIGNMENT PROVISIONS.................................................................13
CONTRACT OWNER................................................................................................13
JOINT CONTRACT OWNER..........................................................................................13
ANNUITANT.....................................................................................................13
ASSIGNMENT OF A CONTRACT......................................................................................13
ANNUITY PROVISIONS...............................................................................................14
GENERAL.......................................................................................................14
FIXED ANNUITY.................................................................................................14
VARIABLE ANNUITY..............................................................................................14
INCOME DATE...................................................................................................15
SELECTION OF AN ANNUITY OPTION................................................................................15
ANNUITY OPTIONS...............................................................................................15
OPTION 1 - LIFE ANNUITY.....................................................................................15
OPTION 2 - LIFE ANNUITY WITH MONTHLY PAYMENTS OVER 10, 15 OR 20 YEARS GUARANTEED...........................15
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY..................................................................16
OPTION 4 - JOINT AND LAST SURVIVOR WITH MONTHLY PAYMENTS OVER 10, 15 OR 20 YEARS GUARANTEED.................16
OPTION 5 - REFUND LIFE ANNUITY..............................................................................17
OPTION 6 - SPECIFIED PERIOD CERTAIN ANNUITY...........................................17
GENERAL PROVISIONS...............................................................................................18
THE CONTRACT..................................................................................................18
NON-PARTICIPATING IN SURPLUS..................................................................................18
MISSTATEMENT OF AGE OR SEX....................................................................................18
CONTRACT SETTLEMENT...........................................................................................18
REPORTS.......................................................................................................18
TAXES.........................................................................................................18
EVIDENCE OF SURVIVAL..........................................................................................18
PROTECTION OF PROCEEDS........................................................................................18
MODIFICATION OF CONTRACT......................................................................................19
CONTRACT SCHEDULE
CONTRACT OWNER: [Xxxx Xxx] CONTRACT NUMBER: [??687456]
JOINT OWNER: [Xxxx Xxx] ISSUE DATE: [1//15/00]
ANNUITANT: [Xxxx Xxx] INCOME DATE: [04/15/09]
PURCHASE PAYMENTS:
INITIAL PURCHASE PAYMENT: [$15,000]
MINIMUM SUBSEQUENT
PURCHASE PAYMENT: [$250 or $100 if you have selected AIP]
MAXIMUM TOTAL
PURCHASE PAYMENTS: [$1 million; higher amounts may be accepted with our prior
approval]
ALLOCATION GUIDELINES:
[1. Currently, you can select up to 10 of the Investment Options.
2. If allocations are made in percentages, whole numbers must be used.]
INVESTMENT OPTIONS:
Variable Account: [Allianz Life Variable Account B]
Sub-Accounts:
[AIM V.I. CAPITAL APPRECIATION]
[AIM V.I. GROWTH]
[AIM V.I. INTERNATIONAL EQUITY]
[AIM V.I. VALUE]
[XXXXX AMERICAN GROWTH]
[XXXXX AMERICAN LEVERAGED ALLCAP]
[XXXXX AMERICAN MIDCAP GROWTH]
[XXXXX AMERICAN SMALL CAPITALIZATION]
[XXXXX VA FINANCIAL]
[XXXXX VA REAL ESTATE]
[XXXXX VA VALUE]
[FRANKLIN GROWTH AND INCOME]
[FRANKLIN RISING DIVIDENDS SECURITIES]
[FRANKLIN SMALL CAP]
[FRANKLIN U.S. GOVERNMENT]
[X.X. XXXXXX INTERNATIONAL OPPORTUNITIES]
[X.X. XXXXXX U.S. DISCIPLINED EQUITY]
[MUTUAL DISCOVERY SECURITIES]
[MUTUAL SHARES SECURITIES]
[XXXXXXXXXXX VA GLOBAL SECURITIES]
[XXXXXXXXXXX VA HIGH INCOME]
[XXXXXXXXXXX VA MAIN STREET GROWTH & INCOME]
[PIMCO VIT HIGH YIELD BOND]
[PIMCO VIT STOCKSPLUS GROWTH AND INCOME]
[PIMCO VIT TOTAL RETURN BOND]
[XXXXXXXX GLOBAL TECHNOLOGY]
[XXXXXXXX SMALL-CAP VALUE]
[XXXXXXXXX DEVELOPING MARKETS EQUITY]
[XXXXXXXXX GLOBAL GROWTH]
[XXXXXXXXX PACIFIC GROWTH]
[USALLIANZ VIP DIVERSIFIED ASSETS]
[USALLIANZ VIP FIXED INCOME]
[USALLIANZ VIP GLOBAL OPPORTUNITIES]
[USALLIANZ VIP GROWTH]
[USALLIANZ VIP MONEY MARKET]
[XXX XXXXXX LIT ENTERPRISE]
[XXX XXXXXX LIT GROWTH & INCOME]
[Allianz Life General Account]
[ALLIANZ LIFE FIXED ACCOUNT]
BONUS RATE:
1. [4% of the Purchase Payment with total Purchase Payments (less surrenders and related contingent
deferred sales charges) of under $25,000;
2. 5% of the Purchase Payment with total Purchase Payments (less surrenders and related contingent deferred
sales charges) of $25,000 - $99,999;
3. 6% of the Purchase Payment with total Purchase Payments (less surrenders and related contingent deferred
sales charges) of $100,000 - $999,999;
4. 7% of the Purchase Payment with total Purchase Payments (less surrenders and related contingent deferred
sales charges) of $1,000,000 - $4,999,999;
5. 8% of the Purchase Payment with total Purchase Payments (less surrenders and related contingent deferred
sales charges) of $5,000,000 or greater.]
BONUS VESTING SCHEDULE:
1. [Up through 12 completed months from date of Purchase Payment - 0%;
2. At least 12 and through 24 completed months from date of Purchase Payment - 35%;
3. At least 24 and through 36 completed months from date of Purchase Payment - 70%
4. At least 36 completed months from date of Purchase Payment - 100%.]
MORTALITY AND EXPENSE RISK CHARGE: During the Accumulation Period, the mortality and expense risk charge is
equal on an annual basis to [1.50%] of the average daily net assets of the Variable Account. During the Annuity
Period, the mortality and expense risk charge is equal on an annual basis to [1.50%] of the average daily net
assets of the Variable Account. We may decrease this charge, but we may not increase it.
ADMINISTRATIVE CHARGE: Equal on an annual basis to [.15%] of the average daily net assets of the Variable
Account.
DISTRIBUTION EXPENSE CHARGE: [None]
CONTRACT MAINTENANCE CHARGE: The contract maintenance charge is currently [$40.00] each Contract Year.
During the Accumulation Period the contract maintenance charge will be deducted from the Rewards Value the day
before each Contract Anniversary while this Contract is in force. If a full surrender is made on a date other
than a Contract Anniversary and your Rewards Value is less than [$75,000], the full contract maintenance charge
will be deducted at the time of the full surrender. The contract maintenance charge will be deducted from the
Investment Options in the same proportion that the amount of the Rewards Value in each Investment Option bears to
the total Rewards Value.
During the Annuity Period, the contract maintenance charge will be collected pro rata from each Annuity Payment.
If the total Rewards Value is at least [$75,000], we will not assess the contract maintenance charge. In the
event you own more than one Contract of the same type issued by the Company, we will determine the total Rewards
Value for all of the Contracts. If the Contract Owner is not a natural person, we will look to the Annuitant in
determining the foregoing.
COMMUTATION FEE APPLICABLE TO ANNUITY OPTIONS 2, 4 AND 6:
------------------------------- -------------------------
[Years Since Income Date Commutation Factor
------------------------------- -------------------------
------------------------------- -------------------------
0 - 1 7%
------------------------------- -------------------------
------------------------------- -------------------------
1 - 2 6%
------------------------------- -------------------------
------------------------------- -------------------------
2 - 3 5%
------------------------------- -------------------------
------------------------------- -------------------------
3 - 4 4%
------------------------------- -------------------------
------------------------------- -------------------------
4 - 5 3%
------------------------------- -------------------------
------------------------------- -------------------------
5 - 6 2%
------------------------------- -------------------------
------------------------------- -------------------------
Over 6 1%]
------------------------------- -------------------------
MAXIMUM CUMULATIVE PERCENTAGE FOR PARTIAL LIQUIDATION FOR ANNUITY OPTIONS 2 AND 4: [75%]
ASSUMED INVESTMENT RETURN: [5%]
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: Currently, there are no limits on the number of transfers that can be
made. We reserve the right to change this, but you will always be allowed at least 12 transfers in any
Contract Year. Currently, you are allowed [12] free transfers each Contract Year. This applies to
transfers prior to and after the Income Date.
TRANSFER FEE: For each transfer in excess of the free transfers permitted, the transfer fee is [$25].
Any transfers made by us at the end of the Right to Examine period and any transfers made pursuant to a
regularly scheduled transfer will not be counted in determining the application of the transfer fee.
MINIMUM AMOUNT TO BE TRANSFERRED: [None]
SURRENDERS:
CONTINGENT DEFERRED SALES CHARGE: A contingent deferred sales charge is assessed when Purchase Payments
are surrendered. The charge is calculated at the time of each surrender. For partial surrenders, the
charge is deducted from the remaining Rewards Value and is deducted from the Investment Options in the
same proportion that the amount of the surrender from the Investment Options bears to the total Rewards
Value. The contingent deferred sales charge is based upon the length of the time from receipt of the
Purchase Payment. Surrenders are deemed to have come from the oldest Purchase Payments first, and from
all Purchase Payments prior to earnings. Each Purchase Payment is tracked as to its date of receipt
and the contingent deferred sales charge is determined in accordance with the following:
[CONTINGENT DEFERRED SALES CHARGE
Number of Completed
Years from Receipt Charge
0 8.5%
1 8.5%
2 8.5%
3 8.5%
4 8%
5 7%
6 6%
7 5%
8 4%
9 3%
10 years or more 0%]
PARTIAL SURRENDER PRIVILEGE: [Each Contract Year, on a non-cumulative basis, you can make partial
surrenders up to an amount equal to 10% of Purchase Payments (minus any previous surrenders taken in the
current Contract Year which were not subject to a contingent deferred sales charge) without incurring a
contingent deferred sales charge. Purchase Payments surrendered under the partial surrender privilege
are still subject to applicable contingent deferred sales charge upon full surrender of the Contract.]
[If you have a qualified contract and are age 70 1/2 or older, you can elect the minimum distribution
program with respect to your Contract. Such surrenders will not be subject to a contingent deferred
sales charge. Such payments will be designed to meet the applicable minimum distribution requirements
imposed by the Internal Revenue Code on qualified contracts. Payments may be made monthly or quarterly
unless your Contract Value is less than $25,000 in which case the payments shall be made annually. If
you have elected the minimum distribution program, any additional surrenders in a Contract Year which
exceed 10% of Purchase Payments when combined with minimum distribution surrenders will be subject to
any applicable contingent deferred sales charge.]
MINIMUM PARTIAL SURRENDER: [$500]
MINIMUM CONTRACT VALUE THAT MUST REMAIN IN THE CONTRACT AFTER A PARTIAL SURRENDER: [$10,000]
FIXED ACCOUNT INITIAL RATE: [3%]
We guarantee this rate for one year from the Issue Date.
RIDERS:
[Individual Retirement Annuity Endorsement]
[Xxxx Individual Retirement Annuity Endorsement]
[403 (b) Annuity Endorsement]
[Unisex Endorsement]
[Group Pension Plan Death Benefit Endorsement]
[Pension Plan and Profit Sharing Plan Endorsement]
[Declared Interest Rate Fixed Account Endorsement]
[Waiver of Contingent Deferred Sales Charge Endorsement]
[Traditional Death Benefit Endorsement]
[Enhanced Death Benefit Endorsement]
SERVICE CENTER: [USALLIANZ] SERVICE CENTER
[300 Xxxxxx Xxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
000-000-0000]
DEFINITIONS
ACCUMULATION PERIOD: The period prior to the Income Date during which you can
make Purchase Payments.
ACCUMULATION UNIT: An accounting unit of measure used to calculate the Rewards
Value prior to the Income Date.
ADJUSTED CONTRACT VALUE: The Contract Value less any applicable Premium Tax.
This amount is used to determine the death benefit or the initial Annuity
Payment.
AGE: Age on last birthday unless otherwise specified.
ANNUITANT(S): The natural person upon whose continuation of life any Annuity
Payment involving life contingencies depends. You may change the Annuitant at
any time prior to the Income Date unless the Contract Owner is a non-individual.
ANNUITY CALCULATION DATE: The date on which the first Annuity Payment is
calculated which will be no more than ten (10) business days prior to the Income
Date.
ANNUITY OPTION: An arrangement under which Annuity Payments are made under this
Contract.
ANNUITY PAYMENTS: The series of payments made to you or any named payee after
the Income Date under the Annuity Option selected.
ANNUITY PERIOD: The period of time beginning on the Income Date during which
Annuity Payments are made.
ANNUITY RESERVE: The assets which support the Annuity Option you have selected
during the Annuity Period.
ANNUITY UNIT: An accounting unit of measure used to calculate variable Annuity
Payments after the Income Date.
ASSUMED INVESTMENT RETURN: The investment return upon which the variable Annuity
Payments in the Contract are based.
AUTHORIZED REQUEST: A request, in a form satisfactory to the Company, which is
received by the Service Center.
BENEFICIARY: The person(s) or entity(ies) who will receive any death benefit
payable under this Contract.
COMMUTATION FEE: A fee assessed after the Income Date by the Company equal to
the percentage of the amount liquidated as shown on the Contract Schedule.
COMPANY: Allianz Life Insurance Company of North America.
CONTRACT ANNIVERSARY: An anniversary of the Issue Date of this Contract.
CONTRACT OWNER: The person(s) or entity(ies) entitled to the ownership rights
stated in this Contract. If Joint Owners are named, all references to Contract
Owner shall mean the Joint Owners.
CONTRACT SURRENDER VALUE: The Contract Value as of any Valuation Date less any
applicable Premium Tax, less any contingent deferred sales charge and less any
applicable contract maintenance charge.
CONTRACT VALUE: The Rewards Value as of any Valuation Date less any unvested
bonus.
CONTRACT YEAR: Any period of twelve (12) months commencing with the Issue Date
and each Contract Anniversary thereafter.
GENERAL ACCOUNT: Our general investment account which contains all the assets of
the Company with the exception of the Variable Account and other segregated
asset accounts.
INCOME DATE: The date on which Annuity Payments are to begin.
INVESTMENT OPTION(S): Those investments available under the Contract. Current
Investment Options are shown on the Contract Schedule.
ISSUE DATE: The date shown on the Contract Schedule on which the first Contract
Year begins.
JOINT OWNER: If there is more than one Contract Owner, each Contract Owner shall
be a Joint Owner of the Contract. Joint Owners have equal ownership rights and
must both authorize any exercising of those ownership rights unless otherwise
allowed by us. Any Joint Owner must be the spouse of the other Contract Owner,
unless limited by state law.
LIQUIDATION VALUE: The present value of any remaining guaranteed variable
Annuity Payments after the Income Date to the end of the period certain commuted
at the Assumed Investment Return.
NET ASSET VALUE: The total value of the shares of the underlying fund, less any
investment management and portfolio administration fees and liabilities of the
underlying fund, held by the Sub-Account, as of the close of trading on a
Valuation Date.
PREMIUM TAX: Any premium taxes owed to any governmental entity and assessed
against Purchase Payments or Contract Value.
PURCHASE PAYMENT: A payment made toward this Contract.
REWARDS VALUE: The dollar value as of any Valuation Date of all amounts
accumulated under this Contract including all vested and unvested bonus amounts
and gains and losses attributable to all bonus amounts.
SERVICE CENTER: The office indicated on the Contract Schedule of this Contract
to which notices, requests and Purchase Payments must be sent.
SUB-ACCOUNT: Variable Account assets are divided into Sub-Accounts. The current
Sub-Accounts are shown on the Contract Schedule.
VALUATION DATE: The Variable Account will be valued each day that the New York
Stock Exchange is open for trading.
VALUATION PERIOD: The period commencing at the close of business of the New York
Stock Exchange on each Valuation Date and ending at the close of business for
the next succeeding Valuation Date.
VARIABLE ACCOUNT: A separate account maintained by us in which a portion of our
assets has been allocated for this and certain other contracts. It has been
designated on the Contract Schedule.
PURCHASE PAYMENTS
PURCHASE PAYMENTS: Purchase Payments are payable according to the frequency and
in the amount selected by you. The initial Purchase Payment is due on the Issue
Date. We reserve the right to decline any Purchase Payment. The minimum
subsequent Purchase Payment and the maximum total Purchase Payments allowed are
shown on the Contract Schedule.
CHANGE IN PURCHASE PAYMENTS: You may elect to increase or decrease or to change
the frequency of Purchase Payments.
NO DEFAULT: Unless surrendered, this Contract remains in force and will not be
in default if no additional Purchase Payments are made.
BONUS: Each Purchase Payment made prior to the Contract Owner's 81st birthday
will be credited with a bonus at the time of contribution to the Contract. The
bonus rate will be based on the total amount of Purchase Payments made at the
time of the contribution, less any surrenders and applicable contingent deferred
sales charge, as shown on the Contract Schedule. The bonus will be credited to
the Contract under the following terms:
1. Bonus amounts will become available for surrender only when such amounts
become vested as shown on the Contract Schedule.
2. All bonus amounts and any gains and losses attributable to such amounts
shall be treated as earnings under the Contract.
3. All gains and losses attributable to bonus amounts are part of the Contract
Value and are always 100% vested.
4. If Joint Owners are named, the age of the older Joint Owner will be used
and if the Contract Owner is a non-natural person, then the age of the
Annuitant will be used to determine whether a bonus is applicable.
ALLOCATION OF PURCHASE PAYMENTS: Purchase Payments and bonus amounts are
allocated to one or more of the Investment Options in accordance with your
selection. The allocation of the initial Purchase Payment and bonus amount is
made in accordance with your selection made at the Issue Date. Unless you inform
us otherwise, subsequent Purchase Payments and bonus amounts are allocated in
the same manner as the initial Purchase Payment and bonus amount. However, the
Company has reserved the right to allocate the initial Purchase Payment and
bonus amount to the Money Market Sub-Account until the expiration of the Right
to Examine period. All allocations of Purchase Payments and bonus amounts are
subject to the Allocation Guidelines shown on the Contract Schedule. We
guarantee that you will be allowed to select at least five Investment Options
for such allocations.
VARIABLE ACCOUNT
THE VARIABLE ACCOUNT: The Variable Account is designated on the Contract
Schedule. It consists of assets we have set aside and have kept separate from
the rest of our assets and those of our other separate accounts. The assets of
the Variable Account, equal to reserves and other liabilities of your Contract
and those of other Contract Owners, will not be charged with liabilities arising
out of any other business we may conduct.
The Variable Account assets are divided into Sub-Accounts as shown on the
Contract Schedule. We may add additional Sub-Accounts to those shown. You may be
permitted to transfer your Rewards Value or allocate Purchase Payments or bonus
amounts to the additional Sub-Accounts. However, the right to make such
transfers or allocations will be limited by any terms and conditions we may
impose.
Should the shares of any Sub-Account become unavailable for investment by the
Variable Account, or our Board of Directors deems further investment in the
shares inappropriate, we may limit further purchase of such shares or substitute
shares of another Sub-Account for shares already purchased.
VALUATION OF ASSETS: Assets of the underlying fund of each Sub-Account will be
valued at their Net Asset Value on each Valuation Date.
ACCUMULATION UNITS: Accumulation Units shall be used to account for all amounts
allocated to or surrendered from the Sub-Accounts of the Variable Account as a
result of Purchase Payments, surrenders, transfers, bonus amounts, or fees and
charges. We will determine the number of Accumulation Units of a Sub-Account
purchased or canceled. This will be done by dividing the amount allocated to (or
the amount surrendered from) the Sub-Account by the dollar value of one
Accumulation Unit of the Sub-Account as of the end of the Valuation Period
during which the transaction is processed at the Service Center. Purchase
Payments, bonus amounts, surrenders and transfers from or to a Sub-Account will
result in the addition of or the cancellation of Accumulation Units in a
Sub-Account.
ACCUMULATION UNIT VALUE: The Accumulation Unit value for each Sub-Account was
initially arbitrarily set at $10. Subsequent Accumulation Unit values for each
Sub-Account are determined by multiplying the Accumulation Unit value for the
immediately preceding Valuation Period by the net investment factor for the
Sub-Account for the current period.
The Accumulation Unit value may increase or decrease from Valuation Period to
Valuation Period.
NET INVESTMENT FACTOR: The net investment factor for each Sub-Account is
determined by dividing A by B and multiplying by (1 - C) where:
A is (i) the Net Asset Value per share of the underlying fund held by
the Sub-Account at the end of the current Valuation Period; plus
(ii) any dividend or capital gains per share declared on behalf of
such underlying fund held by the Sub-Account that has an
ex-dividend date within the current Valuation Period.
B is the Net Asset Value per share of the underlying fund held by the
Sub-Account for the immediately preceding Valuation Period.
C is (i) the Valuation Period equivalent of the daily mortality and
expense risk charge, the administrative charge and the distribution
expense charge, if any, which are shown on the Contract Schedule; plus
(ii) a charge factor, if any, for any taxes or any tax reserve we have
established as a result of the operation or maintenance of the
Sub-Account.
MORTALITY AND EXPENSE RISK CHARGE: Each Valuation Period, we deduct a mortality
and expense risk charge from the Variable Account which is equal, on an annual
basis, to the amount shown on the Contract Schedule. The mortality and expense
risk charge compensates the Company for assuming the mortality and expense risks
under this Contract.
ADMINISTRATIVE CHARGE: Each Valuation Period, we deduct an administrative charge
from the Variable Account which is equal, on an annual basis, to the amount
shown on the Contract Schedule. The administrative charge compensates us for the
costs associated with the administration of this Contract and the Variable
Account.
DISTRIBUTION EXPENSE CHARGE: Each Valuation Period, we deduct a distribution
expense charge from the Variable Account which is equal, on an annual basis, to
the amount shown on the Contract Schedule. The distribution expense charge
compensates the Company for costs associated with the distribution of Contracts.
MORTALITY AND EXPENSE GUARANTEE: We guarantee that the dollar amount of each
annuity payment after the first will not be affected by variations in mortality
or expense experience.
REWARDS VALUE
The Rewards Value for any Valuation Period is equal to the total dollar value
accumulated under this Contract in all of the Investment Options. The Rewards
Value in a Sub-Account of the Variable Account is determined by multiplying the
number of Accumulation Units by the Accumulation Unit value.
CONTRACT MAINTENANCE CHARGE
We deduct an annual contract maintenance charge shown on the Contract Schedule.
Prior to the Income Date, this will be deducted from the Rewards Value. The
number of Accumulation Units to be canceled from each applicable Investment
Option is in the ratio that the value of each Investment Option bears to the
total Rewards Value. After the Income Date the contract maintenance charge is
deducted from the Annuity Payment.
TRANSFERS
You may transfer all or a part of your interest in an Investment Option to
another Investment Option. We reserve the right to charge for transfers if there
are more than the number of free transfers shown on the Contract Schedule. All
transfers are subject to the following:
1. The deduction of any transfer fee that may be imposed as shown on the
Contract Schedule. The transfer fee will be deducted from the Investment
Option from which the transfer is made. If the entire amount in the
Investment Option is transferred, then the transfer fee will be deducted
from the amount transferred. If there are multiple source Investment
Options, it will be treated as a single transfer. Any transfer fee will be
deducted proportionally from the source Investment Options if less than the
entire amount in the Investment Option is transferred.
2. We reserve the right to limit transfers until the expiration of the Right
to Examine period.
3. The minimum amount which can be transferred is shown on the Contract
Schedule.
4. No transfer will be effective within seven calendar days prior to the date
on which the first Annuity Payment is due.
5. Any transfer direction must clearly specify:
a. the amount which is to be transferred; and
b. the Investment Options which are to be affected.
6. After the Income Date, transfers may not be made from a fixed Annuity
Option to a variable Annuity Option.
7. After the Income Date, you can make transfers from a variable Annuity
Option to a fixed Annuity Option. The number of Annuity Units canceled from
the variable Annuity Option will be equal in value to the amount of the
Annuity Reserve transferred out of the Variable Account. The amount
transferred will purchase fixed Annuity Payments under the Annuity Option
in effect and based on the age and sex of the Annuitant at the time of the
transfer where allowed.
8. Your right to make transfers is subject to modification if we determine in
our sole opinion, that the exercise of the right by one or more Contract
Owners is, or would be, to the disadvantage of other Contract Owners.
Restrictions may be applied in any manner reasonably designed to prevent
any use of the transfer right which we consider to be to the disadvantage
of other Contract Owners. A modification could be applied to transfers to
or from one or more of the Investment Options, and could include, but is
not limited to:
a. the requirement of a minimum time period between each transfer;
b. not accepting a transfer request from an agent acting under a power of
attorney on behalf of more than one Contract Owner; or
c. limiting the dollar amount that may be transferred between the
Investment Options by a Contract Owner at any one time;
9. We reserve the right at any time and without prior notice to any party
to modify the transfer provisions described above. However, if we do
modify these provisions we guarantee that they will not be any more
restrictive than the above.
If you elect to use this transfer privilege, we will not be liable for transfers
made in accordance with your instructions. All amounts and Accumulation Units
will be determined as of the end of the Valuation Period during which the
request for transfer is received at the Service Center.
SURRENDER PROVISIONS
SURRENDERS: During the Accumulation Period, you may, upon Authorized Request,
make a full or partial surrender of the Contract Value. Surrenders will result
in the cancellation of Accumulation Units from each Investment Option in the
ratio that the value of each Investment Option bears to the total Rewards Value.
You must specify, by Authorized Request, which Accumulation Units are to be
canceled if other than the above mentioned method of cancellation is desired.
The Company will pay the amount of any surrender from the Variable Account
within seven (7) days of receipt of a request in good order unless the
Suspension or Deferral of Payments Provision is in effect.
Each partial surrender must be for an amount which is not less than the minimum
partial surrender amount shown on the Contract Schedule. The minimum Contract
Value which must remain in the Contract after a partial surrender is shown on
the Contract Schedule.
Partial surrenders in excess of the partial surrender privilege amount shown on
the Contract Schedule will reduce unvested bonus amounts by such excess amount's
percentage of the Contract Value at the time of the surrender. This percentage
is determined by dividing the amount of the partial surrender, including any
contingent deferred sales charge assessed, in excess of the partial surrender
privilege amount by the Contract Value.
CONTINGENT DEFERRED SALES CHARGE: Upon a full or partial surrender of this
Contract a contingent deferred sales charge as set forth on the Contract
Schedule may be assessed. Under certain circumstances, we allow surrenders
without the contingent deferred sales charge as set forth on the Contract
Schedule. Purchase Payments surrendered under the partial surrender privilege
are still subject to applicable contingent deferred sales charge upon full
surrender of the Contract.
PROCEEDS PAYABLE ON DEATH
DEATH OF CONTRACT OWNER DURING THE ACCUMULATION PERIOD: Upon the death of the
Contract Owner, or any Joint Owner, during the Accumulation Period, the death
benefit will be paid to the Beneficiary(ies) designated by the Contract Owner.
Upon the death of a Joint Owner, the surviving Joint Owner, if any, will be
treated as the primary Beneficiary. Any other Beneficiary designation on record
at the time of death will be treated as a contingent Beneficiary.
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD: The death benefit will be
the Adjusted Contract Value determined as of the end of the Valuation Period
during which the Company receives both due proof of death and an election for
the payment method.
Any part of the death benefit amount that had been invested in the Variable
Account remains in the Variable Account until distribution begins. From the time
the death benefit is determined until complete distribution is made, any amount
in the Variable Account will be subject to investment risk which is borne by the
Beneficiary.
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD: If the Owner has not
previously designated a death benefit option, a Beneficiary must request that
the death benefit be paid under one of the death benefit options below. In
addition, if the Beneficiary is the spouse of the Contract Owner, he or she may
elect to continue the Contract in his or her own name and exercise all the
Contract Owner's rights under the Contract.
Option A - lump sum payment of the death benefit; or
Option B - the payment of the entire death benefit within 5 years of
the date of the death of the Contract Owner or any Joint Owner. The
full contract maintenance charge is assessed each Beneficiary on each
Contract Anniversary; or
Option C - payment of the death benefit under an Annuity Option over
the lifetime of the Beneficiary or over a period not extending beyond
the life expectancy of the Beneficiary with distribution beginning
within one year of the date of death of the Contract Owner or any Joint
Owner. The full Contract Maintenance Charge will continue to be
assessed to each Beneficiary.
Any portion of the death benefit not applied under Option C within one year of
the date of the Contract Owner's death, must be distributed within five years of
the date of death.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the valid election, including any required
governmental forms, unless the Suspension or Deferral of Payments Provision is
in effect.
Payment to the Beneficiary, other than in a lump sum, may only be elected during
the sixty-day period after the day on which such lump sum first became payable
by the Company.
DEATH OF CONTRACT OWNER DURING THE ANNUITY PERIOD: If you, or any Joint Owner,
dies during the Annuity Period, and you are not an Annuitant, any remaining
payments under the Annuity Option elected will continue at least as rapidly as
under the method of distribution in effect at such Contract Owner's death. Upon
your death during the Annuity Period, the Beneficiary becomes the Contract
Owner.
DEATH OF ANNUITANT: Upon the death of an Annuitant, who is not the Contract
Owner, during the Accumulation Period, you will become the Annuitant, unless you
designate another Annuitant. If the Contract Owner is a non-individual, the
death of the Annuitant will be treated as the death of the Contract Owner and a
new Annuitant may not be designated.
Upon the death of the Annuitant during the Annuity Period, the death benefit, if
any, will be as specified in the Annuity Option elected. Death benefits will be
paid at least as rapidly as under the method of distribution in effect at the
Annuitant's death.
PAYMENT OF DEATH BENEFIT: The Company will require due proof of death and
payment election and any required governmental forms before any death benefit is
paid. Due proof of death will be:
1. a certified death certificate; or
2. a certified decree of a court of competent jurisdiction as to the
finding of death; or
3. any other proof satisfactory to the Company.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
BENEFICIARY: The Beneficiary designation in effect on the Issue Date will remain
in effect until changed. The Beneficiary is entitled to receive the benefits to
be paid at your death.
Unless you provide otherwise, the death benefit will be paid in equal shares to
the survivor(s) as follows:
1. to the primary Beneficiary(ies) who survive you and/or the Annuitant's
death, as applicable; or if there are none;
2. to the contingent Beneficiary(ies) who survive you and/or the Annuitant's
death, as applicable; or if there are none;
3. to your estate.
CHANGE OF BENEFICIARY: Subject to the rights of any irrevocable
Beneficiary(ies), you may change the primary Beneficiary(ies) or contingent
Beneficiary(ies). A change may be made by Authorized Request. The change will
take effect as of the date the Authorized Request is signed. If the Authorized
Request reaches our Service Center after the Contract Owner dies but before any
payment is made, the change will be valid. The Company will not be liable for
any payment made or action taken before it records the change.
SUSPENSION OR DEFERRAL OF PAYMENTS PROVISION
The Company reserves the right to suspend or postpone payments from the Variable
Account for a surrender or transfer for any period when:
1. the New York Stock Exchange is closed (other than customary
weekend and holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of 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
4. during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of Contract
Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
CONTRACT OWNER, ANNUITANT, ASSIGNMENT PROVISIONS
CONTRACT OWNER: As the Contract Owner you have all the interest and rights under
this Contract. The Contract Owner is the person designated as such on the Issue
Date, unless changed.
You may change owners of the Contract at any time by Authorized Request. A
change of Contract Owner will automatically revoke any prior designation of
Contract Owner. The change will become effective as of the date the Authorized
Request is signed. We will not be liable for any payment made or action taken
before the change is recorded. We will not be responsible for any tax
consequences of any such change.
JOINT OWNER: A Contract may be owned by Joint Owners. If Joint Owners are named,
any Joint Owner must be the spouse of the other Contract Owner, unless limited
by state law. Upon the death of either Contract Owner, the surviving Joint Owner
will be the primary Beneficiary. Any other Beneficiary designation will be
treated as a contingent Beneficiary unless otherwise indicated in an Authorized
Request.
ANNUITANT: The Annuitant is the person on whose life Annuity Payments are based.
The Annuitant is the person designated by you subject to our underwriting rules
then in effect. The Annuitant may not be changed in a Contract which is owned by
a non-individual.
ASSIGNMENT OF A CONTRACT: An Authorized Request specifying the terms of an
assignment of a Contract must be provided to the Service Center. We will not be
liable for any payment made or action taken before we record the assignment.
We will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with our consent.
If the Contract is assigned, your rights may only be exercised with the consent
of the assignee of record.
ANNUITY PROVISIONS
GENERAL: On the Income Date, the Adjusted Contract Value will be applied under
the Annuity Option you have selected. You may elect to have the Adjusted
Contract Value applied to provide a fixed annuity, a variable annuity or a
combination fixed and variable annuity. If a combination is elected, you must
specify what part of the Adjusted Contract Value is to be applied to the fixed
and variable Annuity Options. If you select a fixed annuity, the Adjusted
Contract Value is allocated to the General Account and the annuity is paid as a
fixed annuity. If you select a variable annuity, the Adjusted Contract Value
will be allocated to the Sub-Accounts of the Variable Account in accordance with
your selection, and the annuity will be paid as a variable annuity. Unless you
designate another payee, you will be the payee of the Annuity Payments. The
Adjusted Contract Value will be applied to the applicable annuity rate based
upon the Annuity Option you have selected. We may offer more favorable rates
than those guaranteed here at the time your first Annuity Payment is calculated.
Annuity Payments will depend on the Age and, where permitted, sex of the
Annuitant.
FIXED ANNUITY: You may elect to have the Adjusted Contract Value applied to
provide a fixed annuity. The dollar amount of each fixed Annuity Payment is
guaranteed to be at least an amount equal to the Adjusted Contract Value,
divided first by $1000 and then multiplied by the appropriate Annuity Payment
amount for each $1000 of value for the Annuity Option selected. The guaranteed
rates are based on an interest rate of 2 1/2% per year and the 1983(a)
Individual Annuity Mortality Table with mortality improvement projected 30 years
using Mortality Projection Scale G.
VARIABLE ANNUITY: You may elect to have the Adjusted Contract Value applied to
provide a variable annuity. Variable Annuity Payments reflect the investment
performance of the Variable Account in accordance with the allocation of the
Adjusted Contract Value to the Sub-Accounts during the Annuity Period. Variable
Annuity Payments are not guaranteed as to dollar amount.
On the Income Date a fixed number of Annuity Units will be purchased as follows:
The first Annuity Payment is equal to the Adjusted Contract Value, divided first
by $1000 and then multiplied by the appropriate Annuity Payment amount for each
$1000 of value for the Annuity Option selected. In each Sub-Account the fixed
number of Annuity Units is determined by dividing the amount of the initial
Annuity Payment determined for each Sub-Account by the Annuity Unit value on the
Income Date. Thereafter, the number of Annuity Units in each Sub-Account remains
unchanged unless you elect to transfer between Sub-Accounts. All calculations
will appropriately reflect the Annuity Payment frequency selected.
On each subsequent Annuity Payment date, the total Annuity Payment is the sum of
the Annuity Payments for each Sub-Account. The Annuity Payment in each
Sub-Account is determined by multiplying the number of Annuity Units then
allocated to such Sub-Account by the Annuity Unit value for that Sub-Account.
On each subsequent Valuation Date, the value of an Annuity Unit is determined in
the following way:
First: The net investment factor is determined as described under "Variable
Account - net investment factor" above.
Second: The value of an Annuity Unit for a Valuation Period is equal to:
a. the value of the Annuity Unit for the immediately preceding Valuation
Period;
b. multiplied by the net investment factor for the current Valuation Period;
c. divided by the assumed net investment factor (see below) for the Valuation
Period.
The assumed net investment factor is equal to one plus the Assumed Investment
Return which is used in determining the basis for the purchase of an Annuity,
adjusted to reflect the particular Valuation Period. The Assumed Investment
Return that we will use is shown on the Contract Schedule. However, we may agree
with you to use a different value. The Assumed Investment Return will never
exceed 7%.
INCOME DATE: You select an Income Date at the time of issue. The Income Date
must always be the first day of a calendar month. The earliest Income Date you
can select is three years after the Issue Date. The latest Income Date you can
select is the later of the first day of the first calendar month following the
Annuitant's 90th birthday or 10 years from the Issue Date, or the maximum date
permitted under state law. You may, at any time prior to the Income Date, change
the Income Date by Authorized Request 30 days in advance.
SELECTION OF AN ANNUITY OPTION: You can select an Annuity Option by Authorized
Request. If no Annuity Option is selected, Option 2, with 120 Monthly Payments
Guaranteed, will automatically be applied. You may, at any time prior to the
Income Date, by Authorized Request 30 days in advance, select and/or change the
Annuity Option.
ANNUITY OPTIONS: This Contract provides for Annuity Payments under one of the
Annuity Options described below. The Company may make available other annuity
options.
OPTION 1 - LIFE ANNUITY. We will make monthly Annuity Payments during the life
of the Annuitant and ceasing with the last Annuity Payment due prior to the
Annuitant's death.
OPTION 2 - LIFE ANNUITY WITH MONTHLY PAYMENTS OVER 10, 15 OR 20 YEARS
GUARANTEED. We will make monthly Annuity Payments during the life of the
Annuitant with a guarantee that if at the Annuitant's death there have been less
than 120, 180 or 240 monthly Annuity Payments made as selected, monthly Annuity
Payments will continue for the remainder of the guaranteed period.
Alternatively, the Contract Owner may elect to receive a lump-sum payment equal
to the present value of the guaranteed monthly Annuity Payments remaining, as of
the date the notice of the Annuitant's death is received at the Service Center,
commuted at an appropriate rate. Proof of the Annuitant's death and return of
the Contract are required prior to the payment of any commuted values. For a
fixed Annuity Option, the commutation rate will be the Statutory Calendar Year
Interest Rate based on the NAIC Standard Valuation Law for Single Premium
Immediate Annuities corresponding to the Income Date. For a variable Annuity
Option, the commutation rate will be the Assumed Investment Return as shown on
the Contract Schedule.
During the lifetime of the Annuitant and while the number of Annuity Payments
made is less than the guaranteed number of payments elected, the Contract Owner
electing a variable Annuity Option may request a surrender representing a
partial liquidation of the Liquidation Value. You will be allowed to make a
partial liquidation at least once per Contract Year after the Income Date. The
total of all partial liquidations, measured as a percentage of the Liquidation
Value, cannot exceed the amount shown on the Contract Schedule. A Commutation
Fee will be subtracted from the amount liquidated before the proceeds are paid
out. Partial liquidations will be processed on the next annuity payment date
following your written request. The minimum allowable partial liquidation will
be the lesser of $500 or the remaining portion of the Liquidation Value
available.
After a partial liquidation, the subsequent monthly Annuity Payments during the
guaranteed period certain will be reduced by the percentage of the Liquidation
Value liquidated, including the Commutation Fee. After the guaranteed number of
payments has been made, the number of Annuity Units used in calculating the
monthly payments will be restored to their original values as if no liquidations
had taken place.
OPTION 3 - JOINT AND LAST SURVIVOR ANNUITY. We will make monthly Annuity
Payments during the joint lifetime of the Annuitant and the Joint Annuitant.
Upon the death of the Annuitant, if the Joint Annuitant is then living, Annuity
Payments will continue to be paid during the remaining lifetime of the Joint
Annuitant at a level of 100%, 75% or 50% of the previous level, as selected.
Monthly Annuity Payments cease with the final Annuity Payment due prior to the
last survivor's death.
OPTION 4 - JOINT AND LAST SURVIVOR ANNUITY WITH MONTHLY PAYMENTS OVER 10, 15, OR
20 YEARS GUARANTEED. We will make monthly Annuity Payments during the joint
lifetime of the Annuitant and the Joint Annuitant. Monthly Annuity Payments will
continue to be paid during the remaining lifetime of the Joint Annuitant at 100%
of the previous level, as selected. The Company guarantees that if at the last
death of the Annuitant and the Joint Annuitant, there have been less than 120,
180, or 240 monthly Annuity Payments made as selected, monthly Annuity Payments
will continue to be made for the remainder of the guaranteed period.
Alternatively, the Contract Owner may elect to receive a lump-sum payment equal
to the present value of the guaranteed monthly Annuity Payments remaining, as of
the date the notice of the Annuitant's and Joint Annuitant's death is received
at the Service Center, commuted at an appropriate rate. Proof of death of the
Annuitant and Joint Annuitant and return of this Contract are required prior to
the payment of any commuted values. For a fixed Annuity Option, the commutation
rate will be the Statutory Calendar Year Interest Rate based on the NAIC
Standard Valuation Law for Single Premium Immediate Annuities corresponding to
the Income Date. For a variable Annuity Option, the commutation rate will be the
Assumed Investment Return as shown on the Contract Schedule.
During the lifetime of the Annuitant or Joint Annuitant and while the number of
Annuity Payments made is less than the guaranteed number of payments elected,
the Contract Owner electing a variable Annuity Option may request a surrender
representing a partial liquidation of the Liquidation Value. You will be allowed
to make a partial liquidation at least once per Contract Year after the Income
Date. The total of all partial liquidations, measured as a percentage of the
Liquidation Value, cannot exceed the amount shown on the Contract Schedule. A
Commutation Fee will be subtracted from the amount liquidated before the
proceeds are paid out. Partial liquidations will be processed on the next
annuity payment date following your written request. The minimum allowable
partial liquidation will be the lesser of $500 or the remaining portion of the
Liquidation Value available.
After a partial liquidation, the subsequent monthly Annuity Payments during the
guaranteed period certain will be reduced by the percentage of the Liquidation
Value liquidated, including the Commutation Fee. After the guaranteed number of
payments has been made, the number of Annuity Units used in calculating the
monthly payments will be restored to their original values as if no liquidations
had taken place.
OPTION 5 - REFUND LIFE ANNUITY. We will make monthly Annuity Payments during the
lifetime of the Annuitant ceasing with the last Annuity Payment due prior to the
Annuitant's death with a guarantee that at the Annuitant's death, you will
receive a refund. For a fixed Annuity Option the amount of the refund will be
any excess of the amount of the Adjusted Contract Value applied under this
Option over the total of all Annuity Payments made under this Option. For a
variable Annuity Option the amount of the refund will be the then dollar value
of the number of Annuity Units equal to (1) the Adjusted Contract Value applied
to this Option divided by the Annuity Unit value used to determine the first
Annuity Payment, minus (2) the product of the number of the Annuity Units
represented by each monthly Annuity Payment and the number of payments made.
This calculation will be based upon the assumption that the allocation of
Annuity Units actually in-force at the time of the Annuitant's death had been
the allocation of Annuity Units at issue and at all times thereafter. If the
refund calculated above is not greater than zero there will be no refund paid.
OPTION 6: SPECIFIED PERIOD CERTAIN ANNUITY: Monthly Annuity Payments are paid
for a specified period of time. The Specified Period Certain is elected by the
Contract Owner and must be specified as a whole number of years from 10 to 30.
If at the time of the last death of the Annuitant and any Joint Annuitant, the
Annuity Payments actually made have been for less than the Specified Period
Certain, then Annuity Payments will be continued thereafter to the Contract
Owner for the remainder of the Specified Period Certain. If you have selected a
variable Annuity Option, you may request a surrender representing a partial
liquidation of the Liquidation Value. You will be allowed to make a partial
liquidation at least once per Contract Year after the Income Date up to 100% of
the Liquidation Value. A Commutation Fee will be subtracted from the amount
liquidated before the proceeds are paid out. The Commutation Fee is a percentage
of the amount surrendered as shown on the Contract Schedule. Partial
liquidations will be processed on the next annuity payment date following your
written request. The Company will require the return of the Contract prior to
the payment of the entire commuted value.
GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of this Contract, and any attached
application, endorsements or riders. This Contract may be changed or altered
only by our President or Secretary. Any change, modification or waiver must be
made in writing.
NON-PARTICIPATING IN SURPLUS: This Contract does not share in any distribution
of our profits or surplus.
MISSTATEMENT OF AGE OR SEX: We may require proof of Age of the Annuitant before
making any life contingent Annuity Payment provided for by this Contract. If the
Age or sex of the Annuitant has been misstated the amount payable will be the
amount that the Adjusted Contract Value would have provided at the true Age or
sex.
Once Annuity Payments have begun, any underpayments will be made up in one sum
with the next Annuity Payment, and overpayments will be deducted from the future
Annuity Payments until the total is repaid.
CONTRACT SETTLEMENT: This Contract must be returned to us upon any settlement.
Prior to any settlement as a death claim, due proof of death must be submitted
to us. Any paid-up annuity, cash surrender or death benefits that may be
available are not less than the minimum benefits required by statute.
REPORTS: We will furnish you with a report showing the Contract Value at least
once each calendar year. This report will be sent to your last known address.
TAXES: Any taxes paid to any governmental entity will be charged against the
Contract Value. We will, in our sole discretion, determine when taxes have
resulted from: the investment experience of the Variable Account; receipt by us
of the Purchase Payment(s); or commencement of Annuity Payments. We may, at our
discretion, pay taxes when due and deduct that amount from the Contract Value at
a later date. Payment at an earlier date does not waive any right we may have to
deduct amounts at a later date. We reserve the right to establish a provision
for federal income taxes if we determine, in our sole discretion, that we will
incur a tax as a result of the operation of the Variable Account. We will deduct
for any income taxes incurred by it as a result of the operation of the Variable
Account whether or not there was a provision for taxes and whether or not it was
sufficient. We will deduct any withholding taxes required by applicable law.
EVIDENCE OF SURVIVAL: Where any benefits under this Contract are contingent upon
the recipient being alive on a given date, we may require proof satisfactory to
us that the condition has been met.
PROTECTION OF PROCEEDS: No Beneficiary may commute, encumber, alienate or assign
any payments under this Contract before they are due. To the extent permitted by
law, no payments will be subject to the debts, contracts or engagements of any
Beneficiary or to any judicial process to levy upon or attach the same for
payment thereof.
MODIFICATION OF CONTRACT: This Contract may be modified by us in order to
maintain compliance with state and federal law. This Contract may be changed or
altered only by our President or our Secretary. A change or alteration will be
made in writing.
INDIVIDUAL FLEXIBLE PAYMENT VARIABLE ANNUITY
NON-PARTICIPATING
