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Aetna Life Insurance and Annuity Company
Home Office: 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
(000) 000-0000
Aetna Life Insurance and Annuity Company, herein called
Aetna, agrees to pay the benefits stated in this Contract.
Specifications
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Plan
Marathon Plus
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Type of Plan
Individual Retirement Annuity Rollover Account
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Contract Holder
Xxxx X. Xxxxx
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Contract No.
Specimen
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Effective Date
September 1, 1993
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This Contract is Delivered in Your State and is Subject to the Laws of that
Jurisdiction
THE VARIABLE FEATURES OF THE CONTRACT ARE DESCRIBED IN PARTS III AND IV.
Right to Cancel
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The Contract Holder may cancel this Contract within 10 days of receiving it, by
sending a written notice to Aetna at the above address or to the agent from whom
it was purchased. Aetna will return all payments made for this Contract within 7
days after it receives the notice of cancellation and this Contract at its Home
Office.
This page, the following pages, and the application make up the entire Contract.
Signed at the Home Office on the Effective Date.
/s/ X. X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxx
Xxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
President Secretary
Individual Variable, Fixed, or Combination Annuity Contract
Nonparticipating
ALL PAYMENTS AND VALUES PROVIDED BY THE CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR
DECREASE IN THE CURRENT VALUE. THE MARKET
I-CDA-IC(IR/MP)
VALUE ADJUSTMENT FORMULA DOES NOT APPLY TO A GUARANTEED TERM AT THE TIME OF ITS
MATURITY.
2
Specifications
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Guaranteed There is a guaranteed interest rate for Purchase
Interest Rate Payment(s) held in the MG Account. (See Schedule I).
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Deductions from There will be deductions for mortality and expense
the Separate risks and administrative fees. (See Contract
Account Schedule I and II).
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Deduction from Purchase Purchase Payment(s) are subject to a deduction for
Purchase premium taxes, if any. (See 3.01.)
Payment(s)
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Surrender Fee There will be a charge deducted upon surrender.
(See Contract Schedule I).
This Contract is a legal contract and constitutes the entire legal relationship
between Aetna and the Contract Holder.
READ THIS CONTRACT CAREFULLY. This Contract sets forth, in detail, all of the
rights and obligations of both you and Aetna. IT IS THEREFORE IMPORTANT THAT YOU
READ THIS CONTRACT CAREFULLY.
3
Contract Schedule I
Accumulation Period
Separate Account
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Separate Account: Variable Annuity Account B
Charges to Separate A daily charge is deducted from any portion of the
Account: Current Value allocated to the Separate Account. The
deduction is the daily equivalent of the annual
effective percentage shown in the following chart:
Administrative Charge 0.15%
Mortality Risk Charge 0.35%
Expense Risk Charge 0.90%
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Total Separate Account
Charges 1.40%
Marathon Guaranteed Account (MG Account)
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Minimum Guaranteed Interest Rate (effective annual
rate of return): 3.0%.
Separate Account and MG Account
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Transfers: An unlimited number of Transfers may be made during
the Accumulation Period. Aetna allows 12 free
Transfers in any calendar year. Thereafter, Aetna
reserves the right to charge $10 for each subsequent
Transfer.
Maintenance Fee: The annual Maintenance Fee is $30. If the Current
Value is $50,000 or more on the date the Maintenance
Fee is to be deducted, the Maintenance Fee is $0.
Surrender Fee: For each surrender, the Surrender Fee will be
determined as follows:
Surrender Fee
Length of Time from Deposit of Net (as percentage of
Purchase Payment (Years) Net Purchase Payments
Less than 2 years 7%
2 or more but less than 4 years 6%
4 or more but less than 5 years 5%
5 or more but less than 6 years 4%
6 or more but less than 7 years 3%
7 years or more 0%
4
Contract Schedule I (Continued)
Accumulation Period
Separate Account and MG Account (Cont'd)
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Systematic Withdrawal The specified payment or specified percentage may not
Option (SWO): be greater than 10% of the Current Value at time of
election.
See 1. GENERAL DEFINITIONS for explanations.
5
Contract Schedule II
Annuity Period
Separate Account
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Charges to Separate A daily charge at an annual effective of 1.25% for
Account: Annuity mortality and expense risks. The
administrative charge is established upon election of
an Annuity option. This charge will not exceed 0.25%
Variable Annuity Assumed If a Variable Annuity is chosen, an assumed annual net
Annual Net Return Rate: return rate of 5.0% may elected. If 5.0% is not
elected, Aetna will use an assumed annual net return
rate of 3.5%.
The assumed annual net return rate factor for 3.5% per
year is 0.9999058.
The assumed annual net return rate factor for 5.0% per
year is 0.9998663.
If the portion of a Variable Annuity payment for any
Fund is not to decrease, the Annuity return factor
under the Separate Account for that Fund must be:
(a) 4.75% on an annual basis plus an annual return of
up to 0.25% to offset the administrative charge
set at the time Annuity payments commence if an
assumed annual net return rate of 3.5% is chosen;
or
(b) 6.25% on an annual basis plus an annual return of
up to 0.25% to offset the administrative charge
set at the time Annuity payments commence, if an
assumed annual net return rate of 5% is chosen.
Fixed Annuity
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Minimum Guaranteed Interest Rate (effective annual
rate of return): 3.0%
See 1. GENERAL DEFINITIONS for explanations.
6
TABLE OF CONTENTS
Page
I. GENERAL DEFINITIONS
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1.01 Accumulation Period.................................................9
1.02 Adjusted Current Value..............................................9
1.03 Annuitant...........................................................9
1.04 Annuity.............................................................9
1.05 Beneficiary.........................................................9
1.06 Code................................................................9
1.07 Contract............................................................9
1.08 Contract Holder.....................................................9
1.09 Current Value.......................................................9
1.10 Deposit Period......................................................9
1.11 Fixed Annuity......................................................10
1.12 Fund(s)............................................................10
1.13 General Account....................................................10
1.14 Guaranteed Rates - MG Account......................................10
1.15 Guaranteed Term....................................................10
1.16 Guaranteed Term(s) Groups..........................................10
1.17 Maintenance Fee....................................................10
1.18 Marathon Guaranteed Account (MG Account)...........................11
1.19 Market Value Adjustment (MVA)......................................11
1.20 Matured Term Value.................................................11
1.21 Matured Term Value Transfer........................................11
1.22 Maturity Date......................................................11
1.23 Net Purchase Payment...............................................11
1.24 Nonunitized Separate Account.......................................11
1.25 Purchase Payment...................................................11
1.26 Reinvestment.......................................................12
1.27 Separate Account...................................................12
1.28 Surrender Value....................................................12
1.29 Transfers..........................................................12
1.30 Valuation Period (Period)..........................................12
1.31 Variable Annuity...................................................12
II. GENERAL PROVISIONS
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2.01 Change of Contract.................................................13
2.02 Change of Fund(s)..................................................13
2.03 Nonparticipating Contract..........................................14
2.04 Payments and Elections.............................................14
2.05 State Laws.........................................................14
7
Page
2.06 Control of Contract................................................14
2.07 Designation of Beneficiary.........................................14
2.08 Misstatements and Adjustments......................................15
2.09 Incontestability...................................................15
2.10 Grace Period.......................................................15
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
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3.01 Net Purchase Payment...............................................15
3.02 Fund(s) Record Units -- Separate Account...........................15
3.03 Net Return Factor(s) -- Separate Account...........................15
3.04 Fund Record Unit Value -- Separate Account.........................16
3.05 Market Value Adjustment............................................16
3.06 Transfer of Current Value from the Funds or MG Account.............18
3.07 Reports............................................................18
3.08 Notice to the Contract Holder......................................18
3.09 Loans..............................................................19
3.10 Distribution Options...............................................19
3.11 Death Benefit Amount...............................................23
3.12 Death Benefit Options Available to Beneficiary.....................24
3.13 Required Distribution to Contract Holder/Beneficiary...............25
3.14 Liquidation of Surrender Value.....................................26
3.15 Surrender Fee......................................................26
3.16 Payment of Surrender Value.........................................27
3.17 Reinstatement......................................................27
3.18 Payment of Adjustment Current Value................................28
IV. ANNUITY PROVISIONS
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4.01 Choices to be Made.................................................28
4.02 Annuity Payments to Contract Holder................................29
4.03 Annuity Payments to Beneficiary....................................29
4.04 Terms of Annuity Options...........................................29
4.05 Death of Annuitant/ Beneficiary....................................30
4.06 Fund(s) Annuity Units -- Separate Account..........................31
4.07 Fund Annuity Unit Value -- Separate Account........................31
4.08 Annuity Net Return Factor(s) -- Separate Account...................32
4.09 Annuity Options....................................................32
8
I. GENERAL DEFINITIONS
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1.01 Accumulation Period: The period during which the Net Purchase
Payment is allied to the Contract to provide
future Annuity payment(s).
1.02 Adjusted Current Value: The Current Value of a Contract plus or minus
any aggregate MG Account MVA, if applicable.
(See 1.19)
1.03 Annuitant: The person whose life is measured for purposes
of the guaranteed death benefit and the
duration of Annuity payments under this
Contract. The Contract Holder and Annuitant
must be the same person under this Contract.
1.04 Annuity: Payment of an income:
(a) For the life of one or two persons;
(b) For a stated period; or
(c) For some combination of (a) and (b).
1.05 Beneficiary: The individual or estate entitled to receive
any payment from the Contract upon the death
of the Annuitant.
1.06 Code: The Internal Revenue Code of 1986, as it may
be amended from time to time.
1.07 Contract: This agreement between Aetna and the Contract
Holder to provide an annuity which qualifies
as an Individual Retirement. Annuity under
Code Section 408(b) for the exclusive benefit
of the Contract Holder or his or her
Beneficiary(ies).
1.08 Contract Holder: A person who purchases this Contract. The
Contract Holder has all right, title and
interest under the Contract.
1.09 Current Value: As of the most recent Valuation Period, the
Net Purchase Payment and any additional amount
deposited pursuant to 3.11 plus any interest
added to the portion allocated to the MG
Account; and plus or minus the investment
experience of the portion allocated to the
Funds since deposit; less all Maintenance Fees
deducted, any amounts surrendered and any
amounts applied to an Annuity.
1.10 Deposit Period: A calendar week, a calendar month, a calendar
quarter, or any other period of time specified
by Aetna during which the Net Purchase
Payment, Transfers and Reinvestments are
accepted into the MG Account for one or more
Guaranteed Terms. Aetna reserves the right to
extend the Deposit Period.
1.11 Fixed Annuity: An Annuity with payments that do not vary in
amount.
9
1.12 Fund(s): The open-end management investment companies
(mutual funds) in which the Separate Account
invests.
1.13 General Account: The account holding the assets of Aetna, other
than those assets held in Aetna's separate
accounts.
1.14 Guaranteed Rates - MG Aetna will declare the interest rate(s)
Account: applicable to a specific Guaranteed Term at
the start of the Deposit Period for that
Guaranteed Term. The rate(s) are guaranteed by
Aetna for that Deposit Period and the ensuing
Guaranteed Term. The Guaranteed Rates are
annual effective yields. That is, interest is
credited daily at a rate that will produce
time Guaranteed Rate over the period of a
year. No Guaranteed Rate will ever be less
than the Minimum Guaranteed Rate shown on
Contract Schedule I.
For Guaranteed Terms of one year or less, one
Guaranteed Rate is credited for the full
Guaranteed Term. For longer Guaranteed Terms,
an initial Guaranteed Rate is credited from
the date of deposit to the end of a specified
period within the Guaranteed Term. There may
be different Guaranteed Rate(s) declared for
subsequent specified time intervals throughout
the Guaranteed Term.
1.15 Guaranteed Term: The period of time for which MG Account
Guaranteed Rates are guaranteed on Net
Purchase Payments. Transfers and Reinvestments
made into a current Deposit Period for the MG
Account. Such period begins on the day
following the close of the Deposit Period and
ends on the designated Maturity Date.
Guaranteed Terms are offered at Aetna's
discretion for various lengths of time ranging
up to and including ten years.
During a Deposit Period, Aetna may make
available any number of Guaranteed Terms. The
Contract Holder may allocate the Net Purchase
Payment and Transfers into any or all of the
available Guaranteed Terms.
1.16 Guaranteed Term(s) All MG Account Guaranteed Term(s) with the
Groups: same length of time from the close of the
Deposit Period until the designated Maturity
Date.
1.17 Maintenance Fee: The Maintenance Fee (see Contract Schedule I)
will be deducted during the Accumulation
Period from the Current Value on each
anniversary of the date the Contract is
established and upon the surrender of the
entire Contract.
10
1.18 Marathon Guaranteed An accumulation option where Aetna guarantees
Account (MG Account): stipulated rate(s) of interest for specified
periods of time. All assets of Aetna,
including amounts in the Nonunitized Separate
Account, are available to meet the guarantees
under the MG Account.
1.19 Market Value An adjustment to the amount withdrawn or
Adjusted (MVA): transferred from an MG Account Guaranteed Term
prior to the end of that Guaranteed Term. The
adjustment reflects the change in the value of
the investment due toe changes in interest
rates since the date of deposit and is
computed using the formula given in 3.05. The
adjustment is expressed as a percentage of
each dollar being withdrawn.
1.20 Matured Term Value: The amount due on an MG Account Guaranteed
Term's Maturity Date.
1.21 Matured Term Value During the calendar month following an MG
Transfer: Account Maturity Date, the Contract Holder may
notify Aetna's Home Office in writing to
Transfer or surrender all or part of the
Matured Term Value, plus interest at the new
Guaranteed Rate accrued thereon, from the MG
Account without an MVA. This provision only
applies to the first such written request
received from the Contract Holder during this
period for any Matured Term Value.
1.22 Maturity Date: The last day of an MG Account Guaranteed Term.
1.23 Net Purchase Payment: The Purchase Payment less premium taxes,
as applicable.
1.24 Nonunitized Separate A separate account set up by Aetna under Title
Account: 38, Section 38a-433, of the Connecticut
General Statutes, that holds assets for MG
Account Terms. There are no discrete units for
this Account. The Contract Holder does not
participate in the investment gain or loss
from the assets held in the Nonunitized
Separate Account. Such gain or loss is borne
entirely by Aetna. These assets may be
chargeable with liabilities arising out of any
other business of Aetna.
1.25 Purchase Payment: The cash payment accepted by Aetna at its Home
office which is a rollover amount under Code
Section 402(c), 403(a)(4), 403(b)(8), or
408(d)(3). Aetna may require verification that
a rollover amount qualifies as such under the
Code. Payments to Simplified Employee Pension
plans and annual deductible and nondeductible
contributions to Individual Retirement
Annuities are not accepted under this
Contract.
11
1.26 Reinvestment: Aetna will mail a notice to the Contract
Holder at least 18 calendar days before a
Guaranteed Term's Maturity Date. This notice
will contain the Terms available during
current Deposit Periods with their Guaranteed
Rate(s), and projected Matured Term Value. If
no specific direction is given by the Contract
Holder prior to the Maturity Date, each
Matured Term Value will be reinvested in the
current Deposit Period for a Guaranteed Term
of the same duration. If a Guaranteed Term of
the same duration is unavailable, each Matured
Term Value will automatically be reinvested in
the current Deposit Period for the next
shortest Guaranteed Term available. If no
shorter Guaranteed Term is available, the next
longer Guaranteed Term will be used. Aetna
will mail a confirmation statement to the
Contract Holder the next business day after
the Maturity Date. This notice will state the
Guaranteed Term and Guaranteed Rate(s) which
will apply to the reinvested Matured Term
Value.
1.27 Separate Account: A separate account that buys and holds shares
of the Fund(s) income, gains or losses,
realized or unrealized, are credited or
charged to the Separate Account without regard
to other income, gains or losses of Aetna.
Aetna owns the assets held in the Separate
Account and is not a trustee as to such
amounts. This Separate Account generally is
not guaranteed and is held at market value.
The assets of the Separate Account, to the
extent of reserves and other contract
liabilities of the Account, shall not be
charged with other Aetna liabilities.
1.28 Surrender Value: The amount payable by Aetna upon the surrender
of any portion of the Contract.
1.29 Transfers: The movement of invested amounts among the
available Fund(s) and the MG Account under
this Contract during the Accumulation Period.
1.30 Valuation Period (Period): The period of time for which a fund determines
its net asset value, usually from 4:15 p.m.
Eastern time each day the New York Stock
Exchange is open until 4:15 p.m. the next such
day, or such other day that one or more of the
Funds determines its net asset value.
1.31 Variable Annuity: An Annuity with payments that vary with the
net investment results of one or more Funds
held under the Separate Account.
12
II. GENERAL PROVISIONS
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2.01 Change of Contract: Only an authorized officer of Aetna may change
the terms of this Contract. Aetna will notify
the Contract Holder in writing at least 30
days before the effective date of any change.
Any change will not affect the amount or terms
of any Annuity which begins before the change.
Aetna may make any change that affects the MG
Account Market Value Adjustment (3.05) with at
least 30 days' advance written notice to the
Contract Holder. Any such change shall become
effective for any new Term.
Aetna reserves the right to change the terms
of the distribution options (3.10) for future
elections and discontinue the availability of
these options after proper notification.
The following will not be changed:
(a) Net Purchase Payment (1.23)
(b) MG Account Guaranteed Rate (1.14)
(c) Net Return Factor(s)
-- Separate Account (3.03)
(d) Current Value (1.09)
(e) Surrender Value (1.28)
(f) Fund(s) Annuity Unit Value
-- Separate Account (4.05)
(g) Annuity options (4.09)
(h) Fixed Annuity Interest Rates (4.01)
(i) Transfers (1.29)
Any change that affects the tables for the
Annuity options may be made:
(a) No earlier than 12 months after the
effective date of this Contract; and
(b) No earlier than 12 months after the
effective date of any prior change.
This Contract may be changed as deemed
necessary by Aetna to comply with federal or
state law.
2.02 Change of Fund(s): Aetna, or the Separate Account, may:
(a) Change the Fund(s) which may be invested
in by the Separate Account; and
(b) Replace the shares of any Fund(s) held in
the Separate Account with shares of any
other Fund(s).
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2.02 Change of Fund(s)
(Cont'd):
Changes must be:
(a) Approved by a majority vote in the
Separate Account with respect to the
Fund(s) whose shares are to be replaced;
or
(b) Deemed necessary by Aetna under the
Investment Company Act of 1940; or
(c) Deemed necessary by Aetna to accomplish
the purpose of the Separate Account.
Aetna will notify the Contract Holder of
any change.
2.03 Nonparticipating Contract: The Contract Holder or Beneficiaries will not
have a right to share in the earnings of
Aetna.
2.04 Payments and Elections: While the Contract Holder is living, Aetna
will pay the Contract Holder any Annuity
payments as and when due. After the Contract
Holder's death, any Annuity payments required
to be made will be paid in accordance with
4.05. Aetna will determine other payments
and/or elections as of the end of the
Valuation Period in which the request is
received at its Home Office. Such payments
will be made within 7 calendar days of receipt
at its Home Office of a written claim for
payment which is in good order, except as
provided in 3.16.
2.05 State Laws: The Contract complies with the laws of the
state in which it is delivered. Any surrender,
death, or Annuity payments are equal to or
greater than the minimum required by such
laws. Annuity tables for legal reserve
valuation shall be as required by state law.
Such tables may be different from Annuity
tables used to determine Annuity payments.
2.06 Control of Contract: This is a Contract between the Contract Holder
and Aetna. The Contract Holder has a
nonforfeitable right to all amounts held under
this Contract. Choices made under this
Contract must be in writing. Until receipt of
such choices at Aetna's Home Office. Aetna may
rely on any previous choices made.
The Contract may not be attached, alienated,
or subject to the claims of any creditors of
the Contract Holder except to the extent
permitted by law. This Contract is
nontransferable by the Contract Holder. The
Contract Holder may not assign, transfer,
pledge or use as collateral his or her rights
under the Contract.
2.07 Designation of Beneficiary: Each Contract Holder shall name his or her
Beneficiary. The Beneficiary may be changed at
any time. Changes to a Beneficiary must be
submitted to Aetna's Home Office in writing
and will not be effective until accepted by
Aetna.
14
2.08 Misstatements and If Aetna finds the age of any Annuitant to be
Adjustments: misstated, the correct facts will be used to
adjust payments.
2.09 Incontestability: Aetna cannot cancel this Contract because of
any error of fact on the application.
2.10 Grace Period: This Contract will remain in effect except as
provided in the Payment of Adjusted Current
Value provision (see 3.18).
III. PURCHASE PAYMENT, CURRENT VALUE, AND SURRENDER PROVISIONS
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3.01 Net Purchase Payment: This amount is the actual Purchase Payment
less any premium tax. Aetna will generally
deduct the premium tax when Annuity benefits
are elected (see Part IV). If Aetna determines
that under applicable state law, it must pay a
premium tax when the Purchase Payment is
received or at any other time, it will deduct
the tax at that time.
The Net Purchase Payment will be credited
among:
(a) The current Deposit Period(s) for
Guaranteed Terms under the MG Account; and
(b) The Fund(s) in which the Separate Account
invests.
The Contract Holder shall tell Aetna the
allocation percentage to be applied to the
current Deposit Period for each of the
available Guaranteed Terms in the MG Account
and/or each Fund.
3.02 Fund(s) Record Units -- The portion of the Net Purchase Payment
applied to each Fund under the Separate
Account will determine the number of Fund
record units for that Fund. This number is
equal to the portion of the Net Purchase
Payment applied to each Fund divided by the
Fund record unit value (see 3.04) for the
Valuation Period in which the Purchase Payment
is received in good order at Aetna's Home
Office.
3.03 Net Return Factor(s) -- The net return factor(s) are used to compute
Separate Account: all Separate Account record units for any
Fund.
The net return factor for each Fund is equal
to 1.0000000 plus the net return rate.
15
3.03 Net Return Factor(s) -- The net return rate is equal to:
Separate Account (Cont'd)
(a) The value of the shares of the Fund held
by the Separate Account at the end of the
Valuation Period; minus
(b) The value of the shares of the Fund held
by the Separate Account at the start of
the Valuation Period; plus or minus
(c) Taxes (or reserves for taxes) on the
Separate Account (if any); divided by
(d) The total value of the Fund record units
and Fund Annuity units of the Separate
Account at the start of the Valuation
Period; minus
(e) A daily Separate Account charge at an
annual rate as shown on Contract Schedule
I for mortality and expense risks, which
may include profit; and a daily
administrative charge.
A net return rate may be more or less than 0%.
The value of a share of the Fund is equal to
the net assets of the Fund divided by the
number of shares outstanding.
3.04 Fund Record Unit Value -- A Fund record unit value is computed by
Separate Account: multiplying the net return factors for the
current Valuation Period by the Fund record
unit value for the previous Period. The dollar
value of Fund record units, Separate Account
assets, and Variable Annuity payments may go
up or down due to investment gain or loss.
3.05 Market Value Adjustment: There will be an MVA for a withdrawal from the
MG Account before the end of a Guaranteed Term
when the withdrawal is due to:
(a) A Transfer; except as specified in MG
Account Matured Term Value Transfer;
(b) A full or partial surrender, including a
10% free withdrawal under 3.15; or
(c) An election of Annuity option 2 (see
4.09).
Full and partial surrenders and Transfers made
within six months after the date of the
Annuitant's death will be the greater of:
(a) The aggregate MVA amount which is the sum
of all market value adjusted amounts
calculated due to a withdrawal of amounts.
This total may be greater or less than the
Current Value of those amounts; or
(b) The applicable portion of the Current
Value in the MG Account.
16
3.05 Market Value After the six-month period, the surrender or
Adjustment (Cont'd) Transfer will be the aggregate MVA amount,
which may be greater or less than the Current
Value of those Adjustment (Cont'd): amounts.
The greater of the aggregate MVA amount or the
applicable portion of the Current Value
applies to amounts withdrawn from the MG
Account on account of an election of Annuity
options 3 or 4 (see 4.09).
Market value adjusted amounts will be equal to
the amount withdrawn multiplied by the
following ratio:
x
---
365
(1 + i)
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x
---
365
(1 + j)
Where:
i is the Deposit Period Yield
j is the Current Yield
x is the number of days remaining, (computed
from Wednesday of the week of withdrawal)
in the Guaranteed Term.
The Deposit Period Yield will be determined as
follows:
(a) At the close of the last business day of
each week of the Deposit Period, a yield
will be computed as the average of the
yields on that day of U.S. Treasury Notes
which mature in the last three months of
the Guaranteed Term.
(b) The Deposit Period Yield is the average
of those yields for the Deposit Period.
If withdrawal is made before the close
of the Deposit Period, it is the average
of those yields on each week preceding
withdrawal.
The Current Yield is the average of the
yields on the last business day of the
week preceding withdrawal on the same
U.S. Treasury Notes included in the
Deposit Period Yield.
In the event that no U.S. Treasury Notes
which mature in the last three months of
the Guaranteed Term exist, Aetna reserves
the right to use the U.S. Treasury Notes
that mature in the following quarter.
17
3.06 Transfer of Current Before an Annuity option is elected, all
Value from the Funds or or any portion of the Adjusted Current Value
MG AccountL of the Contract may be transferred from any
Fund or Guaranteed the Funds or MG Account:
(a) To any other Fund; or
(b) To any Guaranteed Term of the MG Account
available in the current Deposit Period.
Transfer requests can be submitted as a
percentage or as a dollar amount. Aetna may
establish a minimum transfer amount. Within a
Guaranteed Term Group, the amount to be
surrendered or transferred will be withdrawn
first from the oldest Deposit Period, then
from the next oldest, and so on until the
amount requested is satisfied.
The Contract Holder may make an unlimited
number of Transfers during the Accumulation
Period. The number of free Transfers allowed
by Aetna is shown on Contract Schedule I.
Additional transfers may be subject to a
Transfer fee as shown on Contract Schedule I.
Transfers from the MG Account of a Matured
Term Value on or within one calendar month
after a Term's Maturity Date do not count
against the annual Transfer limit.
Amounts applied to Guaranteed Terms of the MG
Account may not be transferred to the Funds or
to another Guaranteed Term during the Deposit
or for 90 days after the close of the Deposit
Period except for Matured Term Value(s) during
the calendar month following the Term's
Maturity Date.
Transfers from Guaranteed Terms of the MG
Account are subject to the MVA provisions in
3.05.
3.07 Reports: Aetna, as issuer of the Contract, will make
any reports required of it by federal law.
Aetna will furnish annual calendar year
reports concerning the status of the annuity.
3.08 Notice to the Contract The Contract Holder will receive
Holder quarterly statements from Aetna of:
(a) The value of any amounts held in:
(1) The MG Account; and
(2) The Fund(s) under the Separate
Account.
(b) The number of any Fund(s) record units;
and
(c) The Fund(s) record unit value.
Such number or values will be as of a specific
date no more than 60 days before the date of
the notice.
18
3.09 Loans: Loans are not available under this Contract.
3.10 Distribution Options: The following distribution options may be
elected by the Contract Holder during the
Accumulation Period.
(a) Estate Conservation Option (ECO) - A
distribution option under which a portion
of the Current Value will automatically be
surrendered and distributed each year. ECO
payments will be calculated based on the
Contract's full Current Value. The
distributed amount will be withdrawn pro
rata from each investment option used
under the Contract. A Surrender Fee will
not be deducted from any portion of the
Adjusted Current Value which is paid as
a distribution under ECO. Contract
Holders should consult their tax advisers
prior to requesting this distribution
option. Aetna will not be responsible
for any adverse tax consequences due to
receiving ECO payments.
(1) Amount of Distribution: Each year
that ECO is in effect, Aetna will
calculate and distribute an amount
equal to the minimum required
distribution under the Code. The
annual distribution will be
determined by dividing the Current
Value as of December 31 of the year
prior to the payment year, by a life
expectancy factor.
The Contract Holder, or spouse
Beneficiary if ECO is elected after
the Contract Holder's death, shall
elect either single life expectancy
or joint life expectancy. Life
expectancy is computed by use of the
expected return multiples in Tables V
and VI of section 1.72-9 of the
Income Tax Regulations.
Joint life expectancy can only be
elected based on the joint life
expectancy of the Contract Holder and
his or her Beneficiary. If the
Contract Holder makes any changes in
the Beneficiary designation under the
Contract, ECO distributions after the
change will be recalculated as
required by IRS regulations.
19
3.10 Distribution Options Life expectancies shall be
(Conr'd) recalculated annually. If the joint
life expectancy is elected with a
non-spouse Beneficiary, the life
expectancy of the non-spouse
Beneficiary must not be recalculated.
Instead, the life expectancy will be
calculated using the attained age of
the Beneficiary during the calendar
year in which the Contract Holder
attains age 70 1/2, and payments for
subsequent years shall be recalculated
based on such life expectancy reduced
by one for each calendar year which
has elapsed since the calendar year
life expectancy was first (Cont'd):
calculated.
If joint life expectancy is elected
with a spouse Beneficiary, at the
death of either, the payments can
continue and will be calculated based
solely on the survivor's life
expectancy. If joint life expectancy
is elected with a non-spouse
Beneficiary and the non-spouse
Beneficiary dies first, payments will
continue based on the joint life
expectancy.
If a single life expectancy is elected
and the Contract Holder dies, or if a
joint life expectancy is elected and
the survivor dies, the death benefits
determined under Section 3.11 will be
paid to the Beneficiary in a lump sum
not later than December 31 following
the year of death.
(2) Minimum Initial Current Value: At its
discretion, Aetna may require a
minimum initial Current Value for
election of this option. If after
election of this option, the Current
Value is insufficient to make a
scheduled ECO payment, Aetna will
distribute the entire balance.
(3) Date of Distribution: Distribution
will be made annually on the 15th of
any month or such other date Aetna may
designate or allow. The Contract
Holder shall specify an initial
distribution month, not earlier than
the calendar year in which the
Contract Holder attains age 70 1/2, or
such later time when distributions
must commence as specified under the
Code, whichever is appropriate. For a
spouse Beneficiary, the earliest date
is the date of the Contract Holder's
death.
(4) Election and Revocation: ECO may be
elected by the Contract Holder by
submitting a written request to Aetna
at its Home Office.
20
3.10 Distribution Options Once elected, this option may be
(Cont'd): revoked by the Contract Holder, or
spouse Beneficiary if elected after
the Contract Holder's death, by
submitting a written request to Aetna
at its Home Office. Any revocation
will apply only to amounts not yet
paid. The Contract Holder assumes
responsibility for compliance with
minimum distribution rules under the
Code. ECO may be elected only once by
the Contract Holder or by a spouse
Beneficiary.
(b) Systematic Withdrawal Option (SWO): A
distribution option under which a portion
of the Current Value will automatically
be surrendered and distributed each year.
SWO payments will be calculated based on
the Contract's full Current Value. The
distributed amount will be withdrawn pro
rata from each investment option used
under the Contract. A Surrender Fee will
not be deducted from any portion of the
Adjusted Current Value which is paid as a
distribution under SWO. Contract Holders
should consult their tax advisers prior
to requesting this distribution option.
Aetna will not be responsible for any
adverse tax consequences due to receiving
SWO payments.
(1) Amount of Distribution: The Contract
Holder may elect one of the three
payment methods described below.
(i) Specified Payment: Payments of a
designated dollar amount. The
annual amount may not be greater
than the percentage of the
Current Value at time of
election as shown on Contract
Schedule I. This annual dollar
amount will remain constant. At
its discretion, Aetna may
require a minimum initial
payment amount; or
(ii) Specified Period: Payments made
over a period of time of at
least 10 years. The maximum
specified period shall be
determined under the Code
minimum distribution rules. The
annual amount is calculated by
dividing the Current Value as of
December 31 of the year prior to
the payment year by the number
of payment years remaining; or
21
3.10 Distribution Options (iii) Specified Percentage: Payments
(Cont'd): of a designated percentage which
cannot be greater than the
percentage of the Current Value
at the time of election as shown
on Contract Schedule I. The
percentage may be changed by
written request. Aetna reserves
the right to limit the number of
times the percentage may be
changed. The annual amount is
calculated by multiplying the
Current Value as of December 31
of the year prior to the payment
year by the designated
percentage. Payments will be
made until the year the Contract
Holder attains age 70-1/2 or, if
elected by the spouse
Beneficiary, the year the
Contract 3.10 Distribution
Options (Cont'd): Holder would
have attained age 70-1/2.
Under both the Specified Payment and
Specified Period payment methods, a
higher amount shall be paid in any
year if required under the Code
minimum distribution rules. For
purposes of this determination, life
expectancy for the initial
distribution year shall be calculated
based on single life expectancy Table
V of section 1.72-9 of the Income Tax
Regulations. With each subsequent
year, the life expectancy will be the
life expectancy for the previous year
reduced by one.
Payments upon the Contract Holder's
death will be made to the Beneficiary
in the manner described in 3.12.
(2) Minimum Initial Current Value: At its
discretion, Aetna may require a
minimum initial Current Value for
election of this option. If after
election of this option the Current
Value is insufficient to make a
scheduled SWO payment, Aetna will
distribute the entire balance.
(3) Date of Distribution: The Contract
Holder shall specify the initial
distribution date. The earliest date
for distribution is the first date on
which the Contract Holder attains age
59 1/2. As elected by the Contract
Holder, SWO payments will be made on
a monthly, quarterly, semi-annual or
annual basis. If SWO payments are
made more frequently than annually,
the designated annual amount is
divided by the number of payments due
each year. Subsequent distributions
will be made on the 15th of any month
or such other date Aetna may
designate or allow.
22
3.10 Distribution Options (Cont'd): (4) Election and Revocation: SWO may be
elected by submitting a completed
and signed election form to Aetna's
Home Office.
Once elected, this option may be
revoked by the Contract Holder, or
spouse Beneficiary if elected after
the Contract Holder's death, by
submitting a written request to Aetna
at its Home Office. Any revocation
will apply only to amounts not yet
paid. SWO may be elected only once by
the Contract Holder or by the spouse
Beneficiary.
3.11 Death Benefit Amount: If the Contract Holder/Annuitant dies before
Annuity payments start, the Beneficiary is
entitled to a deathbenefit under the Contract.
The claimdate is the date when proof of death
and the Beneficiary's claim are received in
good order at Aetna's Home Office. The amount
of the deathbenefit is determined as follows:
(a) Death of Contract Holder/
Annuitant less than 75 years of
age: The guaranteed death benefit
is the greatest of:
(1) The Net Purchase Payment
made to the Contract minus
the sum of all amounts
surrendered, applied to an
Annuity, or deducted from
the Contract;
(2) The step up value as of the
date of death minus the total
of all partial surrenders,
amounts applied to an Annuity
and deductions made from the
Contract since determination
of the step up value. The
step up value is the Current
Value on the most recent
seventh year anniversary of
the date the Net Purchase
Payment is applied to the
Contract;
(3) The Contract's Current Value
as of the date of death.
The excess, if any, of the
guaranteed death benefit value
over the Contract's Current
Value is determined as of the
date of death. Any excess amount
will be deposited to the
Contract and allocated to Aetna
Variable Encore Fund as of the
claim date. The Current Value on
the claim date plus any excess
amount deposited becomes the
Contract's Current Value.
23
3.11 Death Benefit (b) Death of Contract Holder/Annuitant age
Amount (Cont'd): 75 or greater: The death benefit amount
is the Contract Current Value on the
claim date.
3.12 Death Benefit Options Prior to any election, or until amounts must
be otherwise distributed under this section,
the Current Value will be retained in the
Contract. The Beneficiary has the right under
the Contract to allocate or reallocate any
Available amount to any of the available
investment options (subject to an MVA, as to
Beneficiary: applicable). The following
options are available to the Beneficiary:
(a) If the Beneficiary is the Contract
Holder's surviving spouse, the surviving
spouse may exercise all rights under the
Contract and continue in the
Accumulation Period, or below. Under the
Code, distributions from the Contract
are not required until December 31st of
the year in which the original Contract
Holder would have attained age 70 1/2.
The Beneficiary may elect to:
(1) Apply some or all of the Adjusted
Current Value to Annuity option 2,
3 or 4 (see 4.09);
(2) Apply some or all of the Adjusted
Current Value to Annuity option 1
(see 4.09); or
(3) Receive, at any time, a lump sum
payment equal to the Adjusted
Current Value.
If ECO is in effect on the Contract
Holder's date of death, the surviving
spouse can elect to continue receiving
ECO payments if a joint life expectancy
was chosen. Otherwise, the surviving
spouse must receive a lump sum payment
equal to the Adjusted Current Value.
If SWO is in effect and the Contract
Holder dies before the required
beginning date for minimum distributions
(see 3.13), SWO payments will cease and
the surviving spouse may claim the death
benefit in accordance with the terms of
this section.
If SWO is in effect and the Contract
Holder dies after the required beginning
date for minimum distributions, the
surviving spouse can elect to continue
to receive the SWO payments. Otherwise,
the surviving spouse must elect to
receive a lump sum payment equal to the
Adjusted Current Value.
24
3.12 Death Benefit Options (b) If the Beneficiary is other than the
Contract Holder's surviving spouse, then
options (1), (2), or (3) under (a) above
apply. Any portion of the Adjusted
Current Value that is not applied to
Annuity option 2, 3 or 4 by December
31st of the year following the year of
the Contract Holder's death must be
distributed by December 31st of the
Available year containing the fifth
anniversary of the Contract Holder's
date of to Beneficiary (Cont'd): death.
If ECO or SWO is in effect on the
Contract Holder's date of death, the
Beneficiary must receive an automatic
and immediate lump sum payment equal to
the Adjusted Current Value.
(c) If no Beneficiary exists, a lump sum
payment equal to the Adjusted Current
Value will be made to the Contract
Holder's estate.
3.13 Required Distribution (a) Contract Holder: The entire
to Contract Holder/ interest of the Contract Holder
Beneficiary: will be distributed or begin to be
distributed no later than April 1
following the calendar year in
which the Contract Holder attains
age 70 1/2 (required beginning
date), over (a) the life of the
Contract Holder, or the lives of
the Contract Holder and his or her
designated Beneficiary, or (b) a
period certain not extending beyond
the life expectancy of the Contract
Holder, or the joint and last
survivor expectancy of the Contract
Holder and his or her designated
Beneficiary. Payments must be made
in periodic payments at intervals
no longer than one year. In
addition, payments must be either
nonincreasing or they may increase
3.13 Required Distribution only as
provided in Q&A F-3 of section
1.401(a)(9)-1 of the Proposed to
Contract Holder/ Beneficiary:
Income Tax Regulations.
All distributions made hereunder
shall be made in accordance with
the requirements of section
401(a)(9) of the Code, and the
regulations thereunder, including
the minimum distribution incidental
benefit requirement of section
1.401(a)(9)-2 of the Proposed
Income Tax Regulations.
Distribution may be an Annuity as
set forth in Sections 4.01 through
4.04, payments under ECO or SWO as
defined in Section 3.10 or a lump
sum payment.
(b) Beneficiary: If the Contract Holder
dies after distribution of his or
her interest has begun, the
remaining portion of such interest
will continue to be distributed at
least as rapidly as under the
method of distribution being used
prior to the Contract Holder's
death.
25
3.13 Required Distribution Distributions are considered to have begun if
to Contract Holder/ distributions are made on account of the
Beneficiary (Cont'd): Contract Holder's reaching his or her
required beginning date or if prior to the
required beginning date distributions
irrevocably commence to the Contract Holder
over a period permitted and in an Annuity
form acceptable under section 1.401(a)(9) of
the Income Tax Regulations.
3.14 Liquidation of Surrender All or any portion of the Adjusted Current
Value: Value may be surrendered at any time.
Surrender requests can be submitted as a
percentage of the Adjusted Current Value or
as a specific dollar amount. The Net Purchase
Payment amount is withdrawn first, and then
the excess value, if any. Amounts are
withdrawn on a pro rata basis from the
Fund(s) and or the Guaranteed Term(s) Groups
of the MG Account in which the Current Value
is invested. Within a Guaranteed Term Group,
the amount to be surrendered or transferred
will be withdrawn first from the oldest
Deposit Period, then from the next oldest,
and so on until the amount requested is
satisfied.
After deduction of the Maintenance Fee, if
applicable, the surrendered amounts shall be
reduced by a Surrender Fee, if applicable.
3.15 Surrender Fee: The Surrender Fee only applies to the Net
Purchase Payment portion surrendered and
varies according to the elapsed time since
deposit (see Contract Schedule I).
No Surrender Fee is deducted from any portion
of the Current Value which is paid:
(a) To a Beneficiary due to the Contract
Holder's death before Annuity payments
start;
(b) As a premium for an Annuity option 2, 3
or 4 under this Contract (see 4.09);
(c) As a distribution under the ECO or SWO
provision (see 3.10);
(d) At least 12 months after the date of the
Purchase Payment to the Contract, in an
amount equal to or less than 10% of the
Current Value. This applies to the first
surrender request, partial or full, in a
calendar year. The Current Value is
calculated as of the date the surrender
request is received in good order at
Aetna's Home Office. This waiver is not
available to the Contract Holder while
SWO is in effect;
26
3.15 Surrender Fee (Cont'd): (e) For a full surrender of the Contract
where the Contract's Current Value is
$2,500 or less and no surrenders have
been taken from the Contract within the
prior 12 months;
(f) By Aetna under 3.18; or
(g) If the Contract Holder has spent at
least 45 consecutive days in a licensed
nursing care facility and each of the
following conditions are met:
(1) more than one calendar year has
elapsed since the date the Contract
was issued; and
(2) the surrender is requested within 3
years of admission to a licensed
nursing care facility.
The waiver does not apply if the
Contract Holder was in a nursing care
facility at the time the Contract was
issued.
3.16 Payment of Surrender Value: Under certain emergency conditions, Aetna
may defer payment:
(a) For a period of up to 6 months (unless
not allowed by state law); or
(b) As provided by federal law.
3.17 Reinstatement: All or a portion of the proceeds of a full
surrender may be reinvested within 30 days
after the surrender. Any Maintenance Fee
and Surrender Fee charged at the time of
surrender on the amount being reinvested
will be included in the reinstatement. Any
Market Value Adjustment(s) deducted from
surrenders will not be included in the
reinstatement.
Amounts will be reinstated among the MG
Account and the Funds in the Separate
Account in the same proportion as they were
at the time of surrender. Any amounts
reinstated to the MG Account will be
credited to the Guaranteed Terms available
during the current Deposit Period in the
same proportion as they were at the time of
surrender. In the event that a Guaranteed
Term of the same duration is unavailable,
amounts will be reinvested in the next
shortest Guaranteed Term available in the
current Deposit Period. If no shorter
Guaranteed Term is available, the next
longer Guaranteed Term will be used. The
number of Fund(s) record units reinstated
will be based on the record unit value(s)
next computed after receipt at Aetna's Home
Office to the reinstatement request and the
amount to be reinstated.
27
3.17 Reinstatement (Cont'd): Any Maintenance Fee which falls due after
the surrender and before the reinstatement
will be deducted from the amount
reinstated.
Any Contract surrendered because the
Current Value was less than $2,500
immediately following any partial surrender
may not be reinstated (see 3.18).
Reinstatement is permitted only once.
3.18 Payment of Adjustment Upon 90 days' written notice to the
Current Value: Contract Holder, Aetna will terminate any
Contract if the Current Value becomes less
than $2,500 immediately following any
partial surrender. Aetna does not intend to
exercise this right in cases where the
Current Value is reduced to $2,500 or less
solely due to investment performance. A
Surrender Fee will not be deducted from the
Adjusted Current Value: Value. This
terminated Adjusted Current Value may not
be reinstated.
IV. ANNUITY PROVISIONS
-------------------------------------------------------------------------------
4.01 Choices to be Made: The Contract Holder may tell Aetna to apply
any portion of the Adjusted Current Value
(minus any premium tax) for an Annuity
under option 2, 3, or 4 (see 4.09). The
first Annuity payment may not be earlier
than one calendar year after the Purchase
Payment nor later than the later of:
(a) The first day of the month following
the Annuitant's 85th birthday or
(b) The tenth anniversary of the last
Purchase Payment. In lieu of the
election of an Annuity, the Contract
Holder may tell Aetna to make a lump
sum payment.
When an Annuity Option is chosen, Aetna
must also be told if payments are to be
made other than monthly and whether to pay:
(a) A Fixed Annuity using the General
Account;
(b) A Variable Annuity using any of the
Fund(s) available under this Contract
for Annuity purposes; or
(c) A combination of (a) and (b).
If a Fixed Annuity is chosen, the Annuity
purchase rate for the option chosen
reflects at least the Minimum Guaranteed
Interest Rate (see Contract Schedule II),
but may reflect a higher interest rate. If
a Variable Annuity is chosen, the initial
Annuity payment for the option chosen
reflects the assumed annual return rate
elected. (see Contract Schedule II).
28
4.02 Annuity Payments to Contract In no event may any payments to the
Contract Holder: Annuitant under an Annuity Option extend
beyond:
(a) The life of the Contract Holder;
(b) The lives of the Contract Holder and
Beneficiary;
(c) Any certain period greater than the
Contract Holder's life expectancy
according to regulations under Code
Section 401(a)(9), determined as of the
date payments are to begin; or
(d) A period greater than the joint and
last survivor life expectancies of the
Contract Holder and the Contract
Holder's Beneficiary according to
regulations under Code Section
401(a)(9), determined as of the date
payments are to begin.
4.03 Annuity Payments to Beneficiary: In no event may payments to the
Beneficiary under an Annuity option
extend beyond:
(a) The life of the Beneficiary; or (b)
Any certain period greater than the
Beneficiary's life expectancy as
determined by regulations under Code
Section 401(a)(9).
4.04 Terms of Annuity Options: (a) When payments start, the age of the
Annuitant plus the number of years for
which payments are guaranteed must not
exceed 95.
(b) An Annuity option may not be elected
if the first payment would be less
than $50 or if the total payments in a
year would be less than $250 (less if
required by state law). Aetna reserves
the right to increase the minimum
first Annuity payment amount and the
annual minimum annual Annuity payment
amount based upon increases reflected
in the Consumer Price Index-Urban,
(CPI-U) since July 1, 1993.
(c) If a Fixed Annuity under option 2, 3 or
4 is chosen and a larger payment would
result from applying the Surrender
Value to a current Aetna single premium
immediate Annuity, Aetna will make the
larger payment.
29
4.04 Terms of Annuity (d) For purposes of calculating the
Options (Cont'd) guaranteed first payment of a Variable
Annuity or the payments for a Fixed
Annuity, the Annuitant's and second
Annuitant's adjusted age will be used.
The Annuitant's and second Annuitant's
adjusted age is his or her age as of
the birthday closest to the Annuity
commencement date reduced by one year
for Annuity commencement dates
occurring during the period of time
from July 1, 1993 through December 31,
1999. The Annuitant's and second
Annuitant's age will be reduced by two
years for Annuity commencement dates
occurring during the period of time
from January 1, 2000 through December
31, 2009. The Annuitant's and second
Annuitant's age will be reduced by one
additional year for Annuity
commencement dates occurring in each
succeeding decade.
The Annuity purchase rates for options
3 and 4 are based on mortality from
1983 Table a.
(e) Assumed Annual Net Return Rate is the
interest rate used to determine the
amount of the first Annuity payment
under a Variable Annuity as shown on
Contract Schedule II. The Separate
Account must earn this rate plus enough
to cover the mortality and expense
risks charges (which may include
profit) and administrative charges if
future Variable Annuity Payments are to
remain level, (see Annuity return
factor under Variable Annuity Assumed
Annual Net Return Rate on Contract
Schedule II).
(f) Once elected, Annuity payments cannot
be commuted to a lump sum except for
Variable Annuity payments under option
2 (see 4.09). The life expectancy of
the Contract Holder or Contract Holder
and second Annuitant shall be
irrevocable upon the election of an
Annuity option.
4.05 Death of Annuitant/ (a) When an Annuitant dies under option 2
Beneficiary: or 3, or both the Annuitant and the
second Annuitant die under option 4(d),
the present value of any remaining
guaranteed payments will be paid in one
sum to the Beneficiary, or upon
election by the Beneficiary, any
remaining payments will continue to the
Beneficiary. If option 4 has been
elected and the Annuitant dies, the
remaining payments will continue to
the second Annuitant as successor
payee.
(b) If there is no Beneficiary under option
2, 3 or 4, the present value of any
remaining payments will be paid in one
sum to the Contract Holder's estate.
30
Death of Annuitant/ (c) If the Beneficiary designated under
Beneficiary (Cont'd): option 1 dies, the amount held plus
accrued interest will be paid in one
sum to a successor Beneficiary, if any,
named by the designated Beneficiary. If
there is no successor 4.05 Death of
Annuitant/ Beneficiary Beneficiary, the
lump sum will be paid to the designated
Beneficiary's (Cont'd): estate.
(d) If the Beneficiary dies while receiving
Annuity payments, the present value of
any remaining guaranteed payments will
be paid in one sum to the successor
Beneficiary, or upon election by the
successor Beneficiary, any remaining
payments will continue to the successor
Beneficiary. If no successor
Beneficiary has been designated, the
present value of any remaining
guaranteed payments will be paid in one
sum to the Beneficiary's estate.
(e) The present value will be determined as
of the Valuation Period in which proof
of death acceptable to Aetna and a
request for payment is received at
Aetna's Home Office. The interest rate
used to determine the first payment
will be used to calculate the present
value.
4.06 Fund(s) Annuity Units -- The number of each Fund's Annuity units
Separate Account: is based on the amount of the first
Variable Annuity payment which is equal
to:
(a) The portion of the Current Value
applied to pay a Variable Annuity
(minus any premium tax); divided by
(b) 1,000; multiplied by
(c) The payment rate for the option chosen.
Such amount, or portion, of the variable
payment will be divided by the appropriate
Fund Annuity unit value (see 4.07) on the
tenth Valuation Period before the due date
of the first payment to determine the
number of each Fund Annuity units. The
number of each Fund Annuity units remains
fixed. Each future payment is equal to the
sum of the products of each Fund Annuity
unit value multiplied by the appropriate
number of units. The Fund Annuity unit
value on the tenth Valuation Period prior
to the due date of the payment is used.
4.07 Fund(s) Annuity Unit Value -- For any Valuation Period, a Fund Annuity
Separate Account: unit value is equal to:
(a) The Value for the previous Period;
multiplied by
(b) The Annuity net return factor(s) (see
4.08 below) for the Period; multiplied
by
(c) A factor to reflect the assumed annual
net return rate (see Contract Separate
Schedule II).
31
4.07 Fund(s) Annuity Unit Value -- The dollar value of a Fund Annuity unit
Separate Account (Cont'd): values and Annuity payments may go up
or down due to investment gain or loss.
4.08 Annuity Net Return Factor(s) -- The Annuity net return factor are used
Separate Account: to compute Annuity payments for any Fund.
The Annuity net return factor for each
Fund is equal to 1.0000000 plus the net
return rate.
The net return rate is equal to:
(a) The value of the shares of the Fund
held by the Separate Account at the
end of a Valuation Period; minus
(b) The value of the shares of the Fund
held by the Separate Account at the
start of the Valuation Period; plus or
minus
(c) Taxes (or reserves for taxes) on the
Separate Account (it any); divided by
(d) The total value of the Fund record
units and Fund Annuity units of the
Separate Account at the start of the
Valuation Period; minus
(e) A daily charge for Annuity mortality
and expense risks, which may include
profit, and a daily administrative
charge (at the annual rate as shown on
Contract Schedule II).
A net return rate may be more or less
than 0%.
The value of a share of the Fund is equal
to the net assets of the Fund divided by
the number of shares outstanding.
Payments shall not be changed due to
changes in the mortality or expense
results or administrative charges.
4.09 Annuity Options: Option 1 -- Payment of Interest on Sum
Left with Aetna -- This option may be
used only by the Beneficiary when the
Contract Holder dies before Aetna has
started paying an Annuity. A portion or
all of the sum paid upon death may be
held under this option and will be held
in the General Account of Aetna at
interest (see 3.12 and 4.01). The
Beneficiary may later tell Aetna to:
(a) Pay a portion or all of the sum
held by Aetna; or
(b) Apply a portion or all of the sum
held by Aetna to any Annuity option
below.
32
4.09 Annuity Options (Cont'd): If a nonspouse Beneficiary elects that
some or all of the Current Value is to be
held under this option, the Beneficiary
must tell Aetna to pay the full sum held
under this option by December 31st of the
year containing the fifth anniversary of
the Contract Holder's date of death.
Option 2 -- Payments for a Stated Period
of Time -- An Annuity will be paid for
the number of years chosen. The number of
years must be at least 5 and not more
than 30.
If payments for this option are made
under a Variable Annuity, the present
value of any remaining payments may be
withdrawn at any time. If a withdrawal is
requested within 3 years after the start
of payments, it will be treated as a
surrender and any applicable Surrender
Fee will be applied (see 3.15).
Option 3 -- Life Income - An Annuity will
be paid for the life of the Annuitant. If
also chosen, Aetna will guarantee
payments for 60, 120, 180, or 240 months.
Option 4 -- Life Income Based upon the
Lives of Two Annuitants -- An Annuity
will be paid during the lives of the
Annuitant and a second Annuitant.
Payments will continue until both
Annuitants have died. When this option is
chosen, a choice must be made of:
(a) 100% of the payment to continue
after the first death;
(b) 66-2/3% of the payment to continue
after the first death;
(c) 50% of the payment to continue after
the first death;
(d) Payments for a minimum of 120 months
with 100% of the payment to continue
after the first death; or
(e) 100% of the payment to continue at
the death of the second Annuitant
and 50% of the payment to continue
at the death of the Annuitant.
Other Options -- Aetna may make other
options available as allowed by the laws
of the state in which this Contract is
delivered.
33
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
-------------------- ----------------- ---------------- ----------------- ------------------- -----------------
Guaranteed Quarterly Semi-Annual Annual
Years Rate Monthly Payment Payment Payment Payment
-------------------- ----------------- ---------------- ----------------- ------------------- -----------------
3 3.00% $ 28.99 $ 86.76 $172.88 $343.23
4 3.00% 22.06 66.02 131.56 261.19
5 3.00% 17.91 53.59 106.78 211.99
6 3.00% 15.14 45.30 90.27 179.22
7 3.00% 13.16 39.39 78.49 155.83
8 3.00% 11.68 34.96 69.66 138.31
9 3.00% 10.53 31.52 62.81 124.69
10 3.00% 9.61 28.77 57.33 113.82
11 3.00% 8.86 26.52 52.85 104.93
12 3.00% 8.24 24.65 49.13 97.54
13 3.00% 7.71 23.08 45.98 91.29
14 3.00% 7.26 21.73 43.29 85.95
15 3.00% 6.87 20.56 40.96 81.33
16 3.00% 6.53 19.54 38.93 77.29
17 3.00% 6.23 18.64 37.14 73.74
18 3.00% 5.96 17.84 35.56 70.59
19 3.00% 5.73 17.13 34.14 67.78
20 3.00% 5.51 16.50 32.87 65.26
21 3.00% 5.32 15.92 31.72 62.98
22 3.00% 5.15 15.40 30.68 60.92
23 3.00% 4.99 14.92 29.74 59.04
24 3.00% 4.84 14.49 28.88 57.33
25 3.00% 4.71 14.09 28.08 55.76
26 3.00% 4.59 13.73 27.36 54.31
27 3.00% 4.47 13.39 26.68 52.97
28 3.00% 4.37 13.08 26.06 51.74
29 3.00% 4.27 12.79 25.49 50.60
30 3.00% 4.18 12.52 24.95 49.53
-------------------- ----------------- ---------------- ----------------- ------------------- -----------------
34
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
Payments Guaranteed for a Stated Period of Months
-------------------- ----------------- ---------------- ----------------- ---------------- ------------------
Adjusted
Age of Annuitant None 60 120 180 240
-------------------- ----------------- ---------------- ----------------- ---------------- ------------------
50 $ 4.05 $ 4.05 $4.03 $3.99 $3.93
51 4.12 4.11 4.09 4.05 3.99
52 4.19 4.19 4.16 4.11 4.04
53 4.27 4.26 4.23 4.18 4.10
54 4.35 4.34 4.31 4.25 4.16
55 4.44 4.42 4.39 4.32 4.22
56 4.53 4.51 4.47 4.40 4.29
57 4.62 4.61 4.56 4.48 4.35
58 4.72 4.71 4.65 4.56 4.42
59 4.83 4.81 4.75 4.64 4.49
60 4.95 4.93 4.86 4.73 4.55
61 5.07 5.05 4.97 4.83 4.62
62 5.20 5.17 5.08 4.92 4.69
63 5.34 5.31 5.20 5.02 4.76
64 5.49 5.45 5.33 5.12 4.83
65 5.65 5.61 5.47 5.22 4.89
66 5.82 5.77 5.61 5.33 4.96
67 6.01 5.94 5.75 5.44 5.02
68 6.20 6.13 5.91 5.54 5.08
69 6.41 6.33 6.07 5.65 5.14
70 6.64 6.54 6.23 5.76 5.19
71 6.88 6.76 6.41 5.86 5.24
72 7.14 7.00 6.59 5.97 5.28
73 7.43 7.26 6.77 6.06 5.32
74 7.73 7.53 6.96 6.16 5.35
75 8.06 7.82 7.14 6.25 5.38
-------------------- ----------------- ---------------- ----------------- ---------------- ------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
35
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $l,000
After Deduction of any Charge for Premium Taxes
Rates for a Fixed Annuity with Guaranteed Interest Rate of 3.0%
------------------------------------ --------------- --------------- ---------------- --------------- -----------------
Adjusted Ages
------------------------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
------------------ ----------------- --------------- --------------- ---------------- --------------- -----------------
55 50 $ 3.69 $ 4.05 $ 4.27 $3.69 $4.03
55 55 3.88 4.25 4.47 3.87 4.14
55 60 3.99 4.44 4.71 3.98 4.42
60 55 3.99 4.44 4.71 3.98 4.42
60 60 4.24 4.71 4.99 4.23 4.57
60 65 4.38 4.97 5.32 4.38 4.93
65 60 4.38 4.97 5.32 4.38 4.93
65 65 4.72 5.33 5.70 4.71 5.14
65 70 4.93 5.68 6.15 4.91 5.66
70 65 4.93 5.68 6.15 4.91 5.66
70 70 5.40 6.21 6.70 5.36 5.96
70 75 5.69 6.68 7.32 5.62 6.67
75 70 5.69 6.68 7.32 5.62 6.67
75 75 6.37 7.45 8.15 6.23 7.12
75 80 6.78 8.11 8.99 6.54 8.13
------------------ ----------------- --------------- --------------- ---------------- --------------- -----------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
36
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
------------------ ----------------- ---------------- ----------------- ------------------ ----------------
Quarterly Semi-Annual Annual
Years Guaranteed Rate Monthly Payment Payment Payment Payment
------------------ ----------------- ---------------- ----------------- ------------------ ----------------
3 3.50% $29.19 $87.33 $173.91 $344.86
4 3.50% 22.27 66.61 132.65 263.04
5 3.50% 18.12 54.19 107.92 213.99
6 3.50% 15.35 45.92 91.44 181.32
7 3.50% 13.38 40.01 79.69 158.01
8 3.50% 11.90 35.59 70.88 140.56
9 3.50% 10.75 32.16 64.05 127.00
10 3.50% 9.83 29.42 58.59 116.18
11 3.50% 9.09 27.18 54.13 107.34
12 3.50% 8.46 25.32 50.42 99.98
13 3.50% 7.94 23.75 47.29 93.78
14 3.50% 7.49 22.40 44.62 88.47
15 3.50% 7.10 21.24 42.31 83.89
16 3.50% 6.76 20.23 40.29 79.89
17 3.50% 6.47 19.34 38.51 76.37
18 3.50% 6.20 18.55 36.94 73.25
19 3.50% 5.97 17.85 35.54 70.47
20 3.50% 5.75 17.22 34.28 67.98
21 3.50% 5.56 16.65 33.15 65.74
22 3.50% 5.39 16.13 32.13 63.70
23 3.50% 5.24 15.66 31.19 61.85
24 3.50% 5.09 15.24 30.34 60.17
25 3.50% 4.96 14.85 29.56 58.62
26 3.50% 4.84 14.49 28.85 57.20
27 3.50% 4.73 14.15 28.19 55.90
28 3.50% 4.63 13.85 27.58 54.69
29 3.50% 4.53 13.57 27.02 53.57
30 3.50% 4.45 13.30 26.49 52.53
------------------ ----------------- ---------------- ----------------- ------------------ ----------------
37
OPTION 2
Payments for a Stated Period of Time
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
------------------- ------------------ ---------------- ------------------ ------------------- -----------------
Semi-Annual Annual
Years Guaranteed Rate Monthly Payment Quarterly Payment Payment Payment
------------------- ------------------ ---------------- ------------------ ------------------- -----------------
3 5.00% $ 29.80 $ 89.04 $ 176.99 $ 349.72
4 5.00% 22.89 68.38 135.93 268.58
5 5.00% 18.74 56.00 111.33 219.98
6 5.00% 15.99 47.77 94.96 187.64
7 5.00% 14.02 41.90 83.30 164.59
8 5.00% 12.56 37.52 74.58 147.35
9 5.00% 11.42 34.11 67.81 133.99
10 5.00% 10.51 31.40 62.42 123.34
11 5.00% 9.77 29.19 58.03 114.66
12 5.00% 9.16 27.36 54.38 107.45
13 5.00% 8.64 25.81 51.31 101.39
14 5.00% 8.20 24.50 48.69 96.21
15 5.00% 7.82 23.36 46.44 91.75
16 5.00% 7.49 22.37 44.47 87.88
17 5.00% 7.20 21.51 42.75 84.48
18 5.00% 6.94 20.74 41.23 81.47
19 5.00% 6.71 20.06 39.88 78.80
20 5.00% 6.51 19.46 38.68 76.42
21 5.00% 6.33 18.91 37.59 74.28
22 5.00% 6.17 18.42 36.62 72.35
23 5.00% 6.02 17.98 35.73 70.61
24 5.00% 5.88 17.57 34.93 69.02
25 5.00% 5.76 17.20 34.20 67.57
26 5.00% 5.65 16.87 33.53 66.25
27 5.00% 5.54 16.56 32.92 65.04
28 5.00% 5.45 16.28 32.35 63.93
29 5.00% 5.36 16.01 31.83 62.90
30 5.00% 5.28 15.77 31.35 61.95
------------------- ------------------ ---------------- ------------------ ------------------- -----------------
38
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
Payments Guaranteed for a Stated Period of Months
-------------------- ----------------- ---------------- ----------------- ---------------- -------------------
Adjusted
Age of Annuitant None 60 120 180 240
-------------------- ----------------- ---------------- ----------------- ---------------- -------------------
50 $ 4.34 $ 4.34 $ 4.31 $ 4.27 $ 4.22
51 4.41 4.40 4.38 4.33 4.27
52 4.48 4.47 4.45 4.40 4.32
53 4.56 4.55 4.52 4.46 4.38
54 4.64 4.63 4.59 4.53 4.44
55 4.72 4.71 4.67 4.60 4.50
56 4.81 4.80 4.75 4.67 4.56
57 4.91 4.89 4.84 4.75 4.62
58 5.01 4.99 4.93 4.83 4.69
59 5.12 5.10 5.03 4.92 4.75
60 5.23 5.21 5.13 5.00 4.82
61 5.36 5.33 5.24 5.09 4.88
62 5.49 5.45 5.35 5.19 4.95
63 5.63 5.59 5.47 5.28 5.02
64 5.78 5.73 5.60 5.38 5.08
65 5.94 5.89 5.73 5.48 5.15
66 6.11 6.05 5.87 5.58 5.21
67 6.29 6.22 6.02 5.69 5.27
68 6.49 6.41 6.17 5.79 5.33
69 6.70 6.60 6.33 5.90 5.38
70 6.92 6.81 6.49 6.00 5.43
71 7.17 7.04 6.66 6.10 5.48
72 7.43 7.27 6.84 6.20 5.52
73 7.71 7.53 7.02 6.30 5.55
74 8.02 7.80 7.20 6.39 5.59
75 8.35 8.08 7.38 6.48 5.62
-------------------- ----------------- ---------------- ----------------- ---------------- -------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
39
OPTION 3
Life Income
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
Payments Guaranteed for a Stated Period of Months
------------------- ----------------- ----------------- ----------------- ---------------- ------------------
Adjusted
Age of Annuitant None 60 120 180 240
------------------- ----------------- ----------------- ----------------- ---------------- ------------------
50 $ 5.26 $ 5.25 $ 5.22 $ 5.17 $ 5.11
51 5.33 5.32 5.28 5.23 5.15
52 5.40 5.38 5.34 5.29 5.20
53 5.47 5.45 5.41 5.35 5.26
54 5.54 5.53 5.48 5.41 5.31
55 5.63 5.61 5.56 5.47 5.36
56 5.71 5.69 5.63 5.54 5.42
57 5.80 5.78 5.72 5.61 5.47
58 5.90 5.88 5.81 5.69 5.53
59 6.01 5.98 5.90 5.77 5.59
60 6.12 6.09 6.00 5.85 5.65
61 6.24 6.21 6.10 6.93 5.71
62 6.37 6.33 6.21 6.02 5.77
63 6.51 6.46 6.33 6.11 5.83
64 6.66 6.60 6.45 6.20 5.89
65 6.82 6.75 6.57 6.30 5.95
66 6.99 6.91 6.71 6.39 6.01
67 7.17 7.08 6.85 6.49 6.06
68 7.36 7.27 6.99 6.59 6.12
69 7.57 7.46 7.15 6.69 6.17
70 7.80 7.67 7.30 6.78 6.21
71 8.05 7.89 7.47 6.88 6.25
72 8.31 8.13 7.64 6.97 6.29
73 8.59 8.38 7.81 7.06 6.33
74 8.90 8.64 7.99 7.15 6.36
75 9.23 8.93 8.16 7.23 6.38
------------------- ----------------- ----------------- ----------------- ---------------- ------------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
40
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 3.5%
--------------------------------- ---------------- ---------------- ----------------- ------------------ -----------------
Adjusted Ages
---------------------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
--------------- ------------------ ---------------- ---------------- ----------------- ------------------ ----------------
55 50 $ 3.97 $ 4.35 $ 4.56 $ 3.97 $4.31
55 55 4.16 4.54 4.76 4.15 4.42
55 60 4.27 4.73 5.00 4.26 4.48
60 55 4.27 4.73 5.00 4.26 4.70
60 60 4.51 4.99 5.27 4.50 4.84
60 65 4.66 5.25 5.61 4.65 4.93
65 60 4.66 5.25 5.61 4.65 5.22
65 65 4.99 5.61 5.99 4.98 5.42
65 70 5.19 5.97 6.44 5.17 5.54
70 65 5.19 5.97 6.44 5.17 5.93
70 70 5.67 6.49 6.99 5.62 6.23
70 75 5.95 6.96 7.61 5.87 6.40
75 70 5.95 6.96 7.61 5.87 6.95
75 75 6.64 7.73 8.43 6.48 7.40
75 80 7.04 8.39 9.29 6.79 7.64
----------------- --------------- ---------------- ---------------- ----------------- ------------------ -----------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
41
OPTION 4
Life Income for Two Payees
Amount of First Monthly Payment for Each $1,000
After Deduction of any Charge for Premium Taxes
Rates for a Variable Annuity with Assumed Net Return Rate of 5.0%
---------------------------------- ----------------- ----------------- ---------------- ----------------- -----------------
Adjusted Ages
----------------------------------
Second
Annuitant Annuitant Option 4a Option 4b Option 4c Option 4d Option 4e
---------------- ----------------- ----------------- ----------------- ---------------- ----------------- -----------------
55 50 $4.88 $5.26 $5.48 $4.88 $5.23
55 55 5.04 5.44 5.66 5.04 5.32
55 60 5.15 5.63 5.91 5.14 5.38
60 55 5.15 5.63 5.91 5.14 5.59
60 60 5.37 5.87 6.16 5.37 5.72
60 65 5.52 6.14 6.51 5.51 5.80
65 60 5.52 6.14 6.51 5.51 6.10
65 65 5.83 6.49 6.87 5.82 6.29
65 70 6.04 6.84 7.34 6.00 6.41
70 65 6.04 6.84 7.34 6.00 6.81
70 70 6.49 7.35 7.87 6.44 7.08
70 75 6.77 7.84 8.51 6.68 7.25
75 70 6.77 7.84 8.51 6.68 7.81
75 75 7.45 8.60 9.33 7.27 8.25
75 80 7.86 9.28 10.20 7.57 8.49
----------------- ---------------- ----------------- ----------------- ---------------- ----------------- -----------------
Rates are based on mortality from 1983 Table a. The rates do not differ by sex.
Rates for ages not shown will be provided on request and will be computed
on a basis consistent with the rates in the above tables.
42
--------------------------------------------------------------------------------
Aetna Life Insurance and Annuity Company
Home Office: 000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
(000) 000-0000
Individual Variable, Fixed, or Combination Annuity Contract
Nonparticipating
--------------------------------------------------------------------------------
ALL PAYMENTS AND VALUES PROVIDED BY THE CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THIS CONTRACT CONTAINS A MARKET VALUE ADJUSTMENT FORMULA.
APPLICATION OF A MARKET VALUE ADJUSTMENT MAY RESULT IN EITHER AN INCREASE OR
DECREASE IN THE CURRENT VALUE. THE MARKET VALUE ADJUSTMENT FORMULA DOES NOT
APPLY TO A GUARANTEED TERM AT THE TIME OF ITS MATURITY.
