EXHIBIT (4)(a)
Specimen Flexible Payment
Variable Accumulation Deferred
Annuity Contract
WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
(A STOCK COMPANY)
Home Office: Columbus, Ohio
Administrative Office: P.O. Box 5068
Clearwater, Florida 34618-5068
000-000-0000
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IN THIS CONTRACT Western Reserve Life Assurance Co. Of Ohio will be referred to
as WE, OUR or US. OFFICE refers to our Administrative Office located in
Clearwater, Florida.
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WE agree to pay the benefits of this Contract in accordance with its provisions.
CONTRACT VALUES DURING THE ACCUMULATION PERIOD WILL INCREASE OR DECREASE IN
ACCORDANCE WITH THE CONTRACT VALUE PROVISIONS AND THE INVESTMENT EXPERIENCE OF
THE APPLICABLE SUB-ACCOUNTS IN THE SEPARATE ACCOUNT. CONTRACT VALUES, WHEN BASED
ON THE INVESTMENT EXPERIENCE OF A SUB-ACCOUNT OF THE SEPARATE ACCOUNT, ARE
VARIABLE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
THE CONSIDERATION for this Contract is the application and the payment of the
Initial Payment.
THE ANNUITANT, OWNER, AND BENEFICIARY are as shown in the application unless
changed in accordance with the provisions of this Contract.
THE PROVISIONS on the following pages are part of this Contract.
IN WITNESS WHEREOF, we have signed this Contract at our Office in Clearwater,
Florida as of the Contract Date.
/s/ XXXXXXX X. XXXXXX /s/ XXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx Xxxx X. Xxxxxx
Secretary President
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RIGHT TO EXAMINE CONTRACT - The Owner may cancel this Contract at any time
within ten days after receipt by returning it to us at P.O. Box 5068,
Clearwater, Florida 34618. If the Contract is returned within this period, we
will pay to the Owner the sum of:
1. The purchase payments received; plus (or minus)
2. The accumulated gains (or losses), if any, in the Separate Account for
this Contract as of the date we receive the returned Contract.
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FLEXIBLE PAYMENT VARIABLE ACCUMULATION DEFERRED ANNUITY
Death Benefit Prior to Maturity.
Monthly Annuity Commencing on Maturity Date.
Non-Participating - No Dividends
CONTRACT GUIDE
ENDORSEMENTS............................................................. 2
CONTRACT SCHEDULE........................................................ 3
DEFINITIONS.............................................................. 5
GENERAL PROVISIONS....................................................... 6
SEPARATE ACCOUNT PROVISIONS.............................................. 8
PURCHASE PAYMENT PROVISIONS.............................................. 9
CONTRACT VALUE PROVISIONS................................................ 9
DEATH BENEFIT PROVISIONS................................................. 13
ANNUITY PROVISIONS....................................................... 14
FIXED ACCOUNT ANNUITY PAYMENTS........................................... 15
VARIABLE ACCOUNT ANNUITY PAYMENTS........................................ 16
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ENDORSEMENTS
Page 2
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
CLEARWATER, FLORIDA
CONTRACT SCHEDULE
OWNER: XXXX XXX CONTRACT NUMBER: 01-12345678
ANNUITANT: XXXX XXX CONTRACT DATE: JANUARY 1, 1997
ANNUITY OPTION: D-10 YEAR CERTAIN MATURITY DATE: JANUARY 1, 2042
INITIAL PAYMENT: $100,000
ANTICIPATED PURCHASE PAYMENT PATTERN
AMOUNT MODE YEAR PAYABLE
$ 100,000 ANNUAL 45 YEARS
* THE ANTICIPATED PURCHASE PAYMENT PATTERN IS BASED UPON SELECTION MADE IN THE
APPLICATION. THE AMOUNT AND MODE MAY BE CHANGED IN ACCORDANCE WITH THE PURCHASE
PAYMENT PROVISIONS ON PAGE 9.
SEPARATE ACCOUNT PROVISIONS
SEPARATE ACCOUNT: WRL SERIES ANNUITY ACCOUNT
MORTALITY AND EXPENSE CHARGE: 1.40% (Annually)
PURCHASE PAYMENT PROVISIONS
MAXIMUM ADDITIONAL PAYMENT: $ 1,000,000
MINIMUM ADDITIONAL PAYMENT: $ 50
CONTRACT VALUE PROVISIONS
ANNUAL CONTRACT CHARGE: $ 35
MINIMUM BALANCE $ 5,000
WITHDRAWAL CHARGE PERIOD: 84 MONTHS FROM THE DATE OF EACH
PURCHASE PAYMENT
WITHDRAWAL CHARGE PERCENTAGE (AS A PERCENTAGE OF EACH RESPECTIVE PURCHASE
PAYMENT):
MONTHS SINCE DATE OF PAYMENT PERCENTAGE
12 MONTHS OR LESS 8%
13 MONTHS THROUGH 24 MONTHS 7%
25 MONTHS THROUGH 36 MONTHS 6%
37 MONTHS THROUGH 48 MONTHS 5%
49 MONTHS THROUGH 60 MONTHS 4%
61 MONTHS THROUGH 72 MONTHS 3%
73 MONTHS THROUGH 84 MONTHS 2%
85 MONTHS OR MORE 0%
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DEFINITIONS
ACCOUNTS. Allocation options including the Fixed Account and the Sub-Accounts of
the Separate Account.
ACCUMULATION PERIOD. The period between the Contract Date and the Maturity Date
while the Contract is in force.
ACCUMULATION UNIT VALUE. An accounting unit of measure used to calculate
Sub-Account values for the Contract during the Accumulation Period.
AGE. Issue Age refers to the age of the Annuitant's birthday nearest the
Contract Date. Attained Age refers to the Issue Age plus the number of Completed
Contract years.
ANNUITANT. The person named on the application, or as subsequently changed, to
receive annuity payments. The Annuitant may be changed as provided in the Death
Benefit Provisions and Annuity Provisions.
ANNUITY PROCEEDS. The amount applied to purchase periodic annuity payments. Such
amount is the Annuity Value on the Maturity Date, less any applicable Premium
Tax.
ANNUITY UNIT VALUE. An accounting unit of measure used to calculate annuity
payments from a Sub-Account after the Maturity Date.
ANNUITY VALUE. The value as described in the Annuity Value section of the
Contract Value Provisions.
CASH VALUE. The value as described in the Cash Value section of the Contract
Value Provisions.
CONTINGENT BENEFICIARY. The new Beneficiary upon the current Beneficiary's
death.
CONTRACT DATE. The later of the date on which payments are first received and
the date the properly completed application is received by us at our Office.
DEATH BENEFIT PROCEEDS. The value as described in the Death Benefit Proceeds
section of the Death Benefit Provisions.
DEATH REPORT DAY. The Valuation Date coincident with or next following the day
on which we have received both (1) due proof of death and (2) a Written Notice
for an election of:
a) a single sum payment; or
b) an alternative election as described under the Death Benefit Provisions.
FIXED ACCOUNT. An allocation option other than the Separate Account.
MATURITY DATE. The date on which the Accumulation Period ends and annuity
payments are to commence. The date may be changed as provided in the Annuity
Provisions.
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PREMIUM TAX. Premium Tax levied by a state or other government entity. The
Premium Tax will be paid when due and charged either against the purchase
payment or the contract value.
SEC. The Securities and Exchange Commission
SEPARATE ACCOUNT. A separate investment account composed of several Sub-Accounts
established to receive and invest net payments under the Contract and under
other variable annuity contracts issued by the Company.
SERIES FUND. A designated mutual fund from which a Sub-Account of the Separate
Account will buy shares.
SUB-ACCOUNT. A Separate Account allocation option that is made available under
this Contract.
SURRENDER. The termination of the Contract at the option of the Owner.
VALUATION DATE. Each day on which the New York Stock Exchange is open for
business.
VALUATION PERIOD. The period commencing at the end of one Valuation Date and
continuing to the end of the next succeeding Valuation Date.
WITHDRAWAL CHARGE PERIOD. The period of time during which a withdrawal charge
may be imposed as shown on Page 3. For each purchase payment, the period begins
on the date the payment is received by us.
WRITTEN NOTICE. Written Notice means a notice by the Owner to us requesting or
exercising a right of the Owner as provided in the Contract provisions. In order
for a notice to be considered a Written Notice, it must: be in writing, signed
by the Owner; be in a form acceptable to us; and contain the information and
documentation, as determined in our sole discretion, necessary for us to take
the action requested or for the Owner to exercise the right specified. A Written
Notice will not be considered complete until all necessary supporting
documentation required or requested by us has been received by us at our
Administrative Office.
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GENERAL PROVISIONS
THE CONTRACT. This Contract and the application, if any, constitute the entire
Contract. No Contract provision can be waived or changed except by endorsement.
Such endorsement must be signed by our President or Secretary. We reserve the
right to amend the Contract to meet the requirements of any applicable Federal
or state laws or regulations.
OWNERSHIP. This Contract belongs to the Owner. The Owner as shown on Page 3, or
as subsequently changed, may exercise all rights under this Contract including
the right to transfer ownership. These rights may be subject to the consent of
any assignee or irrevocable beneficiary. Joint owners may be named, provided the
Joint Owners are husband and wife.
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CHANGE OF OWNERSHIP UPON REQUEST. We will not be bound by any requested change
in the ownership designation unless it is made by Written Notice. The change
will be effective on the date the Written Notice is accepted by us. If we
request, this Contract must be returned to our Office for endorsement.
Changing the Owner cancels any prior Ownership designation, but it does not
change the Beneficiary or the Annuitant.
CHANGE OF OWNERSHIP UPON DEATH OF OWNER. Should the Owner die during the
Accumulation Period, we will be bound by the following:
1. In the event of death of one Joint Owner, this Contract will continue
with the surviving Joint Owner as sole Owner.
2. If the Owner is the Annuitant, then the Death Benefit Proceeds are
payable as provided in the Death Benefit Provisions.
3. If the Owner is not the Annuitant and dies before the Annuitant:
a. If no Beneficiary is named and alive, the Owner's estate will
become the new Owner. The Cash Value must be distributed within
five years of the former Owner's death;
b. If the Beneficiary is alive and is the Owner's spouse, this
Contract will continue with the spouse as the new Owner; or
c. If the Beneficiary is alive and is not the Owner's spouse, the
Beneficiary will become the new Owner. The Cash Value must be
distributed either:
1) within five years of the former Owner's death; or
2) over the lifetime of the new Owner, if a natural person, with
payments beginning within one year of the former Owner's death;
or
3) over a period that does not exceed the life expectancy (as
defined by the Internal Revenue Code and Regulations adopted
under the Code) of the new Owner, if a natural person, with
payments beginning within one year of the former Owner's death.
BENEFICIARY. The Beneficiary, as named in the application or subsequently
changed, is entitled to receive the Death Benefit Proceeds, if any, as provided
in the Death Benefit Provisions of this Contract, or the Cash Value, if any, as
provided in 3.c above. If no Beneficiary is alive, the benefits payable to the
Beneficiary will be paid to the Owner's estate.
CHANGE OF BENEFICIARY. We will not be bound by any change in the Beneficiary
designation unless it is made by Written Notice. The change will be effective on
the date the Written Notice was signed; however, no change will apply to any
payment we made before the Written Notice is received. If we request, this
Contract must be returned to our Office for endorsement.
ASSIGNMENT. This Contract may be assigned prior to the Maturity Date. We will
not be bound by any assignment unless made by Written Notice. The assignment
will be effective on the date the Written Notice is received at our Office and
accepted by us. We assume no responsibility for the validity of any assignment.
INCONTESTABILITY. This Contract is incontestable from the Contract Date.
AGE AND SEX. If a date of birth or sex has been misstated, any amount payable
will be adjusted to conform to the correct date of birth and sex.
CONTRACT YEARS. Contract years, quarters and anniversaries are measured from the
Contract Date.
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REPORTS. During the Accumulation Period, we will send a report to the Owner at
least once each year. It will show the activity that occurred during the year
and the value of the Contract as of the date of the report.
CONTRACT PAYMENT. All payments from the Fixed Account will be paid in one sum
unless otherwise elected under the Annuity Provisions of this Contract. We have
the right to postpone payments and transfers from the Fixed Account for up to
six months. All payments and transfers from the Sub-Accounts will be processed
as provided in this Contract unless one of the following situations exists:
1. The New York Stock Exchange is closed; or
2. The SEC requires that trading be restricted or declares an emergency; or
3. The SEC allows us to defer payments to protect our contract owners.
PROTECTION OF PROCEEDS. Unless the Owner directs by filing Written Notice, no
Beneficiary may assign any payments under this Contract before the same are due.
To the extent permitted by law, no payments under this Contract will be subject
to the claims of creditors of any Beneficiary.
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SEPARATE ACCOUNT PROVISIONS
The variable benefits under this Contract are provided through the Separate
Account referenced on Page 3. The assets of the Separate Account are our
property. Assets equal to the liabilities of the Separate Account will not be
charged with liabilities arising out of any other business we may conduct. If
the assets of the Separate Account exceed the liabilities arising under the
contracts supported by the Separate Account, then the excess may be used to
cover the liabilities of our general account. The assets of the Separate Account
shall be valued as often as any Contract benefits vary, but at least monthly.
SUB-ACCOUNTS. The Separate Account has various Sub-Accounts. Each Sub-Account
invests exclusively in shares of one of the portfolios of an underlying Series
Fund. Assets invested after the Maturity Date may be invested in different
Sub-Accounts than assets invested during the Accumulation Period. We reserve the
right to add or remove any Sub-Account of the Separate Account. Xxxxxx and
realized and unrealized gains and losses from assets in each Sub-Account are
credited to, or charged against, that Sub-Account without regard to income,
gains, or losses in other Sub-Accounts. Any amount charged against the Contract
value for federal or state income taxes will be deducted from that Sub-Account.
TRANSFERS AMONG SUB-ACCOUNTS. During the Accumulation Period, the Owner may
transfer all or a portion of this Contract's value in its Sub-Accounts to other
Sub-Accounts or the Fixed Account. We reserve the right to charge a $25 fee for
each transfer in excess of one per Contract month, or twelve per Contract year.
This charge will be deducted from the funds transferred. We must be notified in
a manner satisfactory to us. The transfer ordinarily will take effect on the
first Valuation Date on or following the date notice is received at our Office.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS. We reserve the right to
transfer assets of the Separate Account, which we determine to be associated
with the class of contracts to which this Contract belongs, to another Separate
Account. If this type of transfer is made, the term "Separate Account", as used
in this Contract, shall then mean the Separate Account to which the assets were
transferred. We also reserve the right to add, delete, or substitute investments
held by any Sub-Account.
We reserve the right, when permitted by law, to:
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1. Deregister the Separate Account under the Investment Company Act of
1940;
2. Manage the Separate Account under the direction of a committee at any
time;
3. Restrict or eliminate any voting privileges of contract owners or other
persons who have voting privileges as to the Separate Account; and
4. Combine the Separate Account or any Sub-Account(s) with one or more
other separate accounts or sub-accounts.
CHANGE OF INVESTMENT OBJECTIVES. We reserve the right to change the investment
objective of any Sub-Account. If required by law or regulation, an investment
objective of the Separate Account, or of a Series Fund portfolio designated for
a Sub-Account, will not be materially changed unless a statement of the change
is filed with and approved by the appropriate insurance official of the state of
our domicile or deemed approved in accordance with such law or regulation. If
required, approval or change of any investment objective will be filed with the
Insurance Department of the state where this Contract is delivered.
ACCUMULATION UNIT VALUE. Some of the Contract values fluctuate with the
investment results of the Sub-Accounts. In order to determine how investment
results affect the Contract values, an Accumulation Unit Value is determined for
each Sub-Account. The Accumulation Unit Value may increase or decrease from one
Valuation Period to the next. Accumulation Unit Values also will vary between
Sub-Accounts.
The Accumulation Unit Value of any Sub-Account at the end of a Valuation Period
is the result of:
1. The total value of the assets held in the Sub-Account. This value is
determined by multiplying the number of shares of the designated Series
Fund portfolio owned by the Sub-Account times the net asset value per
share; minus
2. The accrued charge for adverse mortality and expense experience. The
daily amount of this charge is equal to the daily net assets of the
Sub-Account multiplied by the daily Mortality and Expense Charge. The
maximum annual factor for the Mortality and Expense Charge is shown on
Page 3; minus
3. The accrued amount of reserve for any taxes that are determined by us
to have resulted from the investment operations of the Sub-Account; and
the result divided by
4. The number of outstanding units in the Sub-Account.
The use of the Accumulation Unit Value in determining Contract values is
described in the Contract Value Provisions.
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PURCHASE PAYMENT PROVISIONS
PURCHASE PAYMENTS. Payments after the first are payable at our Office. The
amount of payment which may be paid during any Contract year may not exceed the
Maximum Additional Payment shown on Page 3 without our consent. Payments will
not be accepted in an amount less than the Minimum Additional Payment shown on
Page 3 without our consent. Our acceptance of any payment shall not constitute a
waiver of these limits with respect to subsequent payments.
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CONTRACT VALUE PROVISIONS
NET PURCHASE PAYMENT. The net payment will be the payment received less Premium
Tax, if any.
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ALLOCATION OF NET PURCHASE PAYMENTS. Net payments will be allocated to the
Accounts on the first Valuation Date on or following the date the payment is
received at our Office. With respect to the Initial Payment, the allocation will
take place on the Contract Date.
We reserve the right to limit any allocaton to any Account to no less than 10%
of each net purchase payment. No fractional percentages are permitted. The
allocation of future net purchase payments may be changed by the Owner. We
reserve the right to charge a fee of $25 for each change of allocation in excess
of one per Contract quarter. The request for change of allocations must be in a
manner satisfactory to us. The allocation change will be effective the date the
request for change is recorded by us.
SUB-ACCOUNT VALUE. At the end of any Valuation Period, the Sub-Account value is
equal to the number of units that the Contract has in the Sub-Account,
multiplied by the Accumulation Unit Value of that Sub-Account.
The number of units that the Contract has in each Sub-Account is equal to:
1. The initial units purchased on the Contract Date; plus
2. Units purchased at the time additional net purchase payments are
allocated to the Sub-Account; plus
3. Units purchased through transfers from another Account; minus
4. Any units that are redeemed to pay for partial withdrawals; minus
5. Any units that are redeemed as part of a transfer to another Account;
minus
6. Any units that are redeemed to pay the Annual Contract Charge, Premium
Tax and transfer fees, if any.
FIXED ACCOUNT. At the end of any Valuation Period, the Fixed Account value is
equal to:
1. The sum of all net purchase payments allocated to the Fixed Account;
plus
2. Any amounts transferred from a Sub-Account to the Fixed Account; plus
3. Total interest credited to the Fixed Account; minus
4. Any amounts withdrawn from the Fixed Account to pay for partial
withdrawals; minus
5. Any amounts transferred to a Sub-Account from the Fixed Account; minus
6. Any amounts charged to pay the Annual Contract Charge, Premium Tax and
transfer fees, if any.
Interest on the Fixed Account will be compounded daily at a minimum guaranteed
effective annual interest rate of 3% per year. We may declare from time to time
higher current interest rates. The interest rates we set will be credited for
increments of at least one year measured from each purchase payment or transfer
date.
On transfers from the Fixed Account to a Sub-Account, unless we otherwise
consent:
1. Written Notice must be within 30 days after a Contract anniversary.
2. The transfer will ordinarily take place on the first Valuation Date on
or following the date we receive such Written Notice.
3. The amount that may be transferred is the greater of (a) 25% of the
amount in the Fixed Account; or (b) the amount transferred in the prior
Contract year from the Fixed Account.
We reserve the right to defer payment of any amounts from the Fixed Account for
no longer than six months after we receive such Written Notice.
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ANNUAL CONTRACT CHARGE. During the Accumulation Period, the Annual Contract
Charge shown on Page 3 will be made once a year on each Contract anniversary
from the Annuity Value. This charge will be deducted from each Sub-Account and
the Fixed Account in proportion to the value each bears to the Annuity Value. If
the Contract is Surrendered on other than a Contract anniversary, the charge
will also be made on the date of Surrender.
The Annual Contract Charge will be waived if the sum of all Net Purchase
Payments received, minus all withdrawals, exceeds $50,000 as of the Contract
anniversary for which the charge is payable. However, we reserve the right to
discontinue such waiver of the Annual Contract Charge at any time and to assess
the charge as it becomes payable.
ANNUITY VALUE. At the end of any Valuation Period, the Annuity Value is equal to
the sum of the Account values.
PARTIAL WITHDRAWAL. Prior to the Maturity Date, a partial withdrawal may be made
by the Owner without Surrender of this Contract. Unless we otherwise consent:
1. The request must be made by Written Notice.
2. The partial withdrawal may not reduce the Cash Value to less than the
Minimum Balance shown on Page 3.
The amount payable will be the partial withdrawal less any applicable withdrawal
charge and Premium Tax. The Sub-Account(s) for the withdrawal may be specified.
If not specified, withdrawals will be deducted from each Sub-Account and the
Fixed Account in proportion to the value each bears to the Annuity Value.
CASH VALUE. This Contract may be Surrendered by the Owner for its Cash Value
upon Written Notice at any time prior to the then current Maturity Date. The
Cash Value at any time equals the Annuity Value on the Valuation Date coincident
with or next following the date we receive Written Notice of Surrender less any
applicable withdrawal charge and Premium Tax. Payment will usually be made
within seven days of Written Notice subject to the Contract Payment section of
the General Provisions and the Fixed Account section of these provisions.
WITHDRAWAL CHARGE. On the Surrender or partial withdrawal of purchase payments
paid beyond the Withdrawal Charge Period shown on Page 3, no withdrawal charge
will be imposed.
On the partial withdrawal of purchase payments within the Withdrawal Charge
Period, the withdrawal charge will equal the purchase payment paid within the
Withdrawal Charge Period times the applicable Withdrawal Charge Percentage shown
on Page 3. However, for the first partial withdrawal during each Contract year,
any withdrawal charge will be waived on the first 10% of the Annuity Value
withdrawn.
On the Surrender of purchase payments within the Withdrawal Charge Period, the
withdrawal charge will equal the purchase payment paid within the Withdrawal
Charge Period times the applicable Withdrawal Charge Percentage shown on Page 3.
No waiver of a withdrawal charge will be made for any portion of a Surrender.
BASIS OF COMPUTATION. A detailed statement of the method of computation of
values has been filed with the insurance supervisory official of the
jurisdiction in which this Contract is delivered. All values for this Contract
are equal to or greater than the values required by statutes in such
jurisdiction.
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DEATH BENEFIT PROVISIONS
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD. If the Annuitant dies during
the Accumulation Period and the Owner is a natural person other than the
Annuitant, the Owner will automatically become the Annuitant and the Contract
will continue. In the event of Joint Owners, the younger Joint Owner will
automatically become the Annuitant and the Contract will continue.
If the Annuitant dies during the Accumulation Period and the Owner is either (1)
the same individual as the Annuitant, or (2) other than a natural person, then
the Death Benefit Proceeds as calculated below are payable to the Beneficiary.
However, in the event of Joint Owners, if the Annuitant dies during the
Accumulation Period and is the same individual as one of the Joint Owners, the
surviving Joint Owner will automatically become the Annuitant and the Contract
will continue.
DEATH BENEFIT PROCEEDS. If the Annuitant dies during the Accumulation Period,
and (a) prior to the end of the seventh Contract year, or (b) after the
Annuitant's Attained Age 79, the Death Benefit Proceeds, if payable, will be the
greater of:
1. The Annuity Value as of the Death Report Day; or
2. The excess of (a) the amount of purchase payments paid as of the Death
Report Day less (b) any amounts withdrawn from the Contract to pay for
partial withdrawals.
If the Annuitant dies during the Accumulation Period and after the seventh
Contract year but prior to the Annuitant's attained age 80, the Death Benefit
Proceeds, if payable, will be the greater of:
1. The Annuity Value as of the Death Report Day; or
2. The excess of (a) the amount of purchase payments paid as of the Death
Report Day less (b) any amounts withdrawn from the Contract to pay for
partial withdrawals; or
3. The Annuity Value as of the seventh Contract anniversary, less any
amounts withdrawn from the Contract after the seventh Contract year to
pay for partial withdrawals.
ALTERNATIVE ELECTION. If the Beneficiary is entitled to receive the Death
Benefit Proceeds, the Beneficiary may elect, in lieu of a lump sum payment, one
of the following options that provides for complete distribution and termination
of this Contract at the end of the distribution period:
1. Within five years of the date of death of the Annuitant; or
2. Over the lifetime of the Beneficiary; or
3. Over a period that does not exceed the life expectancy (as defined by
the Internal Revenue Code and Regulations adopted under the Code) of
such Beneficiary.
Multiple beneficiaries may choose individually among any of the three options.
For subparagraphs (1) and (3), the Annuity Value as of the Death Report Day will
be adjusted to equal the Death Benefit Proceeds and this Contract will remain in
force as a deferred annuity until the end of the elected distribution period.
For subparagraph (2), the Maturity Date will be changed to the Death Report Day
and the Death Benefit Proceeds will be used to purchase annuity payments under
the Annuity Provisions of this Contract.
For elections made under subparagraph (1), we will:
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a. at the time of election, allow one partial withdrawal, without a
withdrawal charge, and one transfer of all or a portion of the
Contract's value among Sub-Accounts or the Fixed Account without a
transfer charge. Additional partial withdrawals and transfers are not
permitted;
b. not deduct the Annual Contract Charge nor assess the Withdrawal Charge
upon complete distribution;
c. not permit payment of the Death Benefit Proceeds under the Annuity
Provisions of this Contract upon complete distribution.
The Beneficiary may not name a Beneficiary for payment of the Death Benefit
Proceeds. In the event the Beneficiary dies prior to distribution of all
Death Benefit Proceeds, we will pay the remaining value of the Death
Benefit Proceeds to the Contingent Beneficiary, if named by the Owner. If
no Contingent Beneficiary is named, such payment will be made to the
Beneficiary's estate.
Subparagraphs (2) and (3) may be elected only if the Beneficiary is a natural
person and payments start within one year of the date of death of the Annuitant.
Except in the event of Joint Owners, as provided in the Death of Annuitant
During the Accumulation Period provision, if the Beneficiary is entitled to
receive the Death Benefit Proceeds and is the spouse of the deceased Annuitant,
then the Beneficiary may elect to become the new Annuitant and Owner and keep
the Contract in force in lieu of receiving the Death Benefit Proceeds. However,
if the spouse is also a Joint Owner of this Contract, the terms of the Death of
Annuitant During the Accumulation Period provision shall apply.
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ANNUITY PROVISIONS
COMMENCEMENT OF ANNUITY PAYMENTS. Monthly annuity payments will begin as of the
Maturity Date shown on Page 3, unless another Maturity Date has been elected as
provided in these provisions.
MATURITY DATE. The Maturity Date shown on Page 3 may be changed to a different
Maturity Date, subject to all of the following:
1. Written Notice is received at Our Office prior to the Maturity Date.
2. The new Maturity Date is at least 5 years after the Contract Date.
3. The Attained Age of the Annuitant as of the new Maturity Date is not
greater than 90.
ANNUITY OPTION. The Annuity Option shown on Page 3 may be changed to any other
option available upon Written Notice prior to the Maturity Date. If a variable
account annuity payment option is chosen, the Owner must include in the Written
Notice the Sub-Account allocation of the Annuity Proceeds as of the Maturity
Date.
CHANGE OF ANNUITANT. As of the Maturity Date and upon agreement with us, the
Owner may elect a different Annuitant or add a joint annuitant who will be a
joint payee under either Option C or Option E.
PAYEE. The Annuitant(s) on the Maturity Date will become the payee(s) and
receive the annuity payments.
AVAILABILITY. If the payee is not a natural person, an Annuity Option is only
available with our permission. No Annuity Option is available if:
1. The payee is an assignee; or
2. The periodic payment is less than $100.
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AGE. Age, when required, means age nearest birthday on the effective date of the
option. We will furnish rates for ages or combination of ages not shown upon
request.
PROOF OF AGE AND SEX. Prior to making the first monthly annuity payment under
this Contract, we reserve the right to require satisfactory evidence of the
birthdate and the sex of any payee. If required by law to ignore differences in
sex of any payee, annuity payments will be determined using unisex rates.
PROOF OF SURVIVAL. Prior to making any payment under this Contract, we reserve
the right to require satisfactory evidence that the payee is:
1. Alive on the due date of such payment; and
2. Legally qualified to receive such payment.
DEATH BENEFIT AFTER THE MATURITY DATE. The death benefit after the Maturity Date
and after the commencement of annuity payments depends upon the annuity option
selected. If a payee dies on or after the commencement of annuity payments, the
remaining portion of any interest in the Contract will be distributed at least
as rapidly as under the method of distribution being used as of the date of the
payee's death.
RESTRICTIONS. After the Maturity Date, no additional purchase payments, partial
withdrawals, transfers, full Surrenders, change of Annuitants or Annuity Options
may be made under this Contract.
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FIXED ACCOUNT ANNUITY PAYMENTS
INTEREST AND MORTALITY. All Fixed Account annuity option payments are based on a
guaranteed interest rate of 3%. Mortality is based on the "1983 Table a"
mortality table with projection. Gender based mortality tables will be used
unless prohibited by law.
AMOUNT OF MONTHLY FIXED ACCOUNT ANNUITY PAYMENT. The amount of each monthly
annuity payment will be determined by multiplying:
1. The appropriate rate based on the guaranteed interest rate and, for
Options B and C, the mortality table for Fixed Account annuity
payments; times
2. The Annuity Proceeds as of the Maturity Date.
FIXED ACCOUNT ANNUITY OPTIONS. The following options are available for payment
of Fixed Account monthly annuity payments. The rates shown are the guaranteed
rates for each $1,000 of Annuity Proceeds at selected ages. Any guaranteed rates
not shown for the options below will be available upon request. Higher current
rates may be available at the Maturity Date.
Option A - Fixed Period. The Annuity Proceeds will be paid in equal
installments. The installments will be paid over a fixed period determined from
the following table:
FIXED PERIOD
(IN MONTHS) RATE
------------ -----
60 17.91
120 9.61
180 6.87
240 5.51
Option B - Life Income. The Annuity Proceeds will be paid in equal installments
determined from the following table. Such installments are payable:
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1. During the payee's lifetime only (Life Annuity); or
2. During a 10 Year fixed period certain and for the payee's remaining
lifetime (Certain Period); or
3. Until the sum of installments paid equals the Annuity Proceeds applied
and for the payee's remaining lifetime (Installment Refund).
LIFE ANNUITY CERTAIN PERIOD INSTALLMENT REFUND
------------------------------ ------------------------------- -------------------------------
Xxxxx's
Age Male Female Unisex Male Female Unisex Male Female Unisex
55 4.20 3.81 4.01 4.15 3.79 3.98 4.00 3.71 3.85
60 4.67 4.17 4.43 4.59 4.14 4.37 4.37 4.02 4.19
65 5.33 4.68 5.01 5.17 4.61 4.90 4.84 4.42 4.62
70 6.26 5.39 5.82 5.89 5.24 5.58 5.45 4.94 5.18
75 7.53 6.42 6.97 6.75 6.06 6.42 6.24 5.64 5.91
80 9.33 7.95 8.63 7.66 7.04 7.37 7.25 6.57 6.88
85 11.84 10.21 11.02 8.48 8.04 8.27 8.55 7.78 8.14
90 15.31 13.49 14.40 9.08 8.81 8.96 10.21 9.30 9.74
Option C - Joint and Survivor Life Income. The Annuity Proceeds will be paid in
equal installments during the joint lifetime of two payees and continuing upon
the death of the first payee for the remaining lifetime of the survivor.
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VARIABLE ACCOUNT ANNUITY PAYMENTS
ANNUITY UNIT VALUE. The Annuity Proceeds will be used to purchase variable
annuity units in the chosen Sub-Account(s). The Annuity Unit Value in any
Sub-Account will increase or decrease reflecting the investment experience of
that Sub-Account.
The Annuity Unit Value of any Sub-Account at the end of a Valuation Period is
equal to (a) multiplied by (b) multiplied by (c), where:
(a) is the Annuity Unit Value for that Sub-Account at the end of the
immediately preceding Valuation Period;
(b) is the net investment factor for the Sub-Account for the Valuation
Period; and (c) is the Assumed Investment Return adjustment factor for
the Valuation Period.
The Assumed Investment Return adjustment factor for the Valuation Period is the
product of discount factors of .99986634 per day to recognize the 5.0% effective
annual Assumed Investment Return.
The net investment factor used to calculate the value of the Annuity Unit Value
in each Sub-Account for the Valuation Period is determined by dividing (d) by
(e) and subtracting (f) from the result, where:
(d) is the net result of:
(1) the net asset value of a Series Fund share held in that Sub-Account
determined as of the end of the current Valuation Period; plus
(2) the per share amount of any dividend or capital gain distributions
made by the Series Fund for shares held in that Sub-Account if the
ex-dividend date occurs during the Valuation Period; plus or minus
(3) a per share charge or credit for any taxes reserved for, which we
determine to have resulted from the investment operations of the
Sub-Account.
(e) is the net asset value of a Series Fund share held in the Sub-Account
determined as of the end of the immediately preceding Valuation Period.
(f) is a factor representing the mortality and expense risk charge. This
factor is equal, on an annual basis, to 1.40% of the daily net asset
value of a Series Fund share held in the Separate Account for that
Sub-Account.
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DETERMINATION OF THE FIRST VARIABLE PAYMENT. The amount of the first variable
payment is determined by multiplying the Annuity Proceeds times the appropriate
rate from the variable option selected. The tables are based on the "1983 Table
a" mortality table with projection with a 5% effective annual Assumed Investment
Return and assuming a Maturity Date in the year 2000. Gender based mortality
tables will be used unless prohibited by law.
The amount of the first payment depends upon the adjusted age of the Annuitant.
The adjusted age is the Annuitant's actual age nearest birthday at the Maturity
Date, adjusted as follows:
MATURITY DATE ADJUSTED AGE
------------- ------------
Before 2001 Actual Age
2001 - 2010 Actual Age minus 1
2011 - 2020 Actual Age minus 2
2021 - 2030 Actual Age minus 3
2031 - 2040 Actual Age minus 4
After the year 2040 as determined by us.
DETERMINATION OF SUBSEQUENT VARIABLE PAYMENTS. The amount of variable annuity
payments after the first will increase or decrease according to the Annuity Unit
Value which reflects the investment experience of the selected Sub-Account(s).
Each variable annuity payment after the first will be equal to the number of
variable annuity units in each selected Sub-Account multiplied by the Annuity
Unit Value of that Sub-Account on the date the payment is processed. The number
of variable annuity units in any selected Sub-Account is determined by dividing
the first variable annuity payment allocated to that Sub-Account by the variable
Annuity Unit Value of that Sub-Account on the date the first annuity payment is
processed.
VARIABLE ACCOUNT ANNUITY OPTIONS. The following options are available for
payment of Variable Account monthly annuity payments. The rates shown are the
guaranteed rates for each $1,000 of Annuity Proceeds at selected ages. These
rates are used to determine the first variable payment under each option. Any
guaranteed rates not shown for the options below will be available upon request.
Option D - Variable Life Income. The Annuity Proceeds will be paid in
installments determined from the following table. Such installments are payable:
1. during the payee's lifetime only (Variable Life Annuity); or
2. during a 10 year fixed period certain and for the payee's remaining
lifetime (Variable Certain Period).
VARIABLE LIFE ANNUITY VARIABLE CERTAIN PERIOD
---------------------------- --------------------------
Adjusted
Payee's Age Male Female Unisex Male Female Unisex
55 5.39 4.98 5.19 5.33 4.95 5.14
60 5.88 5.36 5.63 5.77 5.31 5.55
65 6.57 5.88 6.23 6.35 5.78 6.07
70 7.53 6.61 7.08 7.05 6.41 6.75
75 8.84 7.68 8.25 7.86 7.21 7.54
80 10.69 9.26 9.97 8.71 8.15 8.44
85 13.27 11.62 12.44 9.48 9.07 9.29
90 16.82 15.02 15.89 10.03 9.79 9.93
Option E - Variable Joint and Survivor Life Income. The Annuity Proceeds will be
paid in installments during the joint lifetime of two payees and continuing upon
the death of the first payee for the remaining lifetime of the survivor.
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WESTERN RESERVE LIFE
ASSURANCE CO. OF OHIO
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FLEXIBLE PAYMENT VARIABLE ACCUMULATION DEFERRED ANNUITY
Death Benefit Prior to Maturity.
Monthly Annuity Commencing on Maturity Date.
Non-Participating - No Dividends
