FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK(SM)
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
FSBL'S PROMISE
In consideration of the Purchase Payments, First Security Benefit Life Insurance
and Annuity Company of New York ("FSBL") will pay the benefits of this Contract
according to its terms.
LEGAL CONTRACT
PLEASE READ YOUR CONTRACT CAREFULLY. It is a legal Contract between you, the
Owner, and us, FSBL. The Contract's table of contents is on page 2.
FREE LOOK PERIOD-RIGHT TO CANCEL
IF FOR ANY REASON YOU ARE NOT SATISFIED WITH THE CONTRACT, YOU MAY RETURN THIS
CONTRACT WITHIN 10 DAYS AFTER YOU RECEIVE IT (60 DAYS FROM THE DATE OF RECEIPT
IF IT IS A REPLACEMENT CONTRACT). YOU MAY RETURN THE CONTRACT BY DELIVERING OR
MAILING IT TO FSBL. IF RETURNED, THIS CONTRACT WILL THEN BE DEEMED VOID FROM THE
BEGINNING. NO WITHDRAWAL CHARGE WILL BE IMPOSED, AND WE WILL REFUND CONTRACT
VALUE AS OF THE DATE THE RETURNED CONTRACT IS DELIVERED TO FSBL, INCREASED BY
ANY FEES OR OTHER CHARGES PAID.
Signed for First Security Benefit Life Insurance and Annuity Company of New York
on the Contract Date.
/s/ X. Xxxxxxx Xxxxxx
--------------------------------------- ------------------------------------
[Secretary] [President]
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
* Purchase Payments may be made until the earlier of the Annuity Start Date
or termination of the Contract
* A death benefit may be paid prior to the Annuity Start Date according to
the Contract provisions
* Annuity Payments begin on the Annuity Start Date using the method specified
in the Contract
* This Contract is non-participating and does not participate in FSBL's
surplus
* The smallest annual net rate of return that would have to be earned on the
assets of the Separate Account so that the dollar amount of variable
Annuity Payments would not decrease is 3 1/2%. The annual net rate of
return is based upon the rate of return of the underlying mutual fund
reduced by expenses of the Separate Account, including the maximum
mortality and expense risk charge of 0.30%, the maximum administration
charge of 0.60%, and any applicable rider charges.
BENEFITS AND VALUES PROVIDED BY THIS CONTRACT ARE BASED UPON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT AND ARE VARIABLE. THESE AMOUNTS MAY INCREASE
OR DECREASE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. (SEE "CONTRACT VALUE AND
EXPENSE PROVISIONS" AND "ANNUITY BENEFIT PROVISIONS" FOR DETAILS.)
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
00 Xxxx Xxx Xxx Xxxx, Xxxxx Xxxxxx, XX 00000
[0-000-000-0000]
IF A CREDIT ENHANCEMENT RIDER HAS BEEN PURCHASED, FSBL WILL RECAPTURE THE AMOUNT
OF ANY CREDIT ENHANCEMENT APPLIED DURING THE 12 MONTHS PRECEDING THE DATE OF THE
OWNER'S DEATH.
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TABLE OF CONTENTS
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Page
CONTRACT DATA PAGE................................... 3
DEFINITIONS.......................................... 4
GENERAL PROVISIONS................................... 7
The Contract.................................... 7
Compliance...................................... 7
Misstatement of Age or Sex...................... 7
Evidence of Survival............................ 7
Incontestability................................ 7
Assignment...................................... 7
Transfers....................................... 8
Claims of Creditors............................. 8
Basis of Values................................. 8
Participation................................... 8
Statements...................................... 8
Delay of Payment................................ 8
OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS...... 9
Ownership....................................... 9
Joint Ownership................................. 9
Annuitant....................................... 9
Primary and Contingent Beneficiaries............ 9
Ownership and Beneficiary Changes............... 9
PURCHASE PAYMENT PROVISIONS.......................... 10
Flexible Purchase Payments...................... 10
Purchase Payment Limitations................... 10
Purchase Payment Allocation..................... 10
Place of Payment................................ 10
CONTRACT VALUE AND
EXPENSE PROVISIONS................................... 10
Contract Value.................................. 10
Accumulation Unit Value......................... 10
Net Investment Factor........................... 11
Determining Accumulation Units.................. 11
Mortality and Expense Risk Charge............... 11
Administration Charge........................... 11
Rider Charge.................................... 11
Method of Deducting Rider Charges............... 12
Account Administration Charge................... 13
Premium Tax Expense............................. 13
Withdrawal Charges.............................. 13
Free Withdrawals................................ 13
WITHDRAWAL PROVISIONS................................ 14
Withdrawals..................................... 14
Partial Withdrawals........................ 14
Systematic Withdrawals.......................... 14
Withdrawal Value................................ 15
DEATH BENEFIT PROVISIONS............................. 15
Death Benefit................................... 15
Proof of Death.................................. 15
Distribution Rules.............................. 15
ANNUITY BENEFIT PROVISIONS........................... 16
Annuity Start Date.............................. 16
Change of Annuity Start Date.................... 16
Annuity Options................................. 16
Annuity Start Amount............................ 17
Fixed Annuity Payments.......................... 17
Variable Annuity Payments....................... 18
Annuity Tables.................................. 18
Annuity Payments................................ 18
Annuity Units................................... 18
Annuity Unit Value.............................. 19
Alternate Annuity Option Rates.................. 19
ANNUITY TABLES....................................... 20
AMENDMENTS OR RIDERS, if any
2
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CONTRACT DATA PAGE
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OWNER NAME: CONTRACT NUMBER:
[Xxxx Xxx] [123456789]
JOINT OWNER NAME: CONTRACT DATE:
[Xxxx Xxx] [July 1, 1999]
ANNUITANT NAME: ANNUITY START DATE:
[Xxxx Xxx] [October 5, 2030]
ANNUITANT DATE OF BIRTH: PLAN:
[October 5, 1960] [Non-Qualified]
ASSIGNMENT:
This Contract may be assigned.
See assignment provision.
PRIMARY BENEFICIARY NAME: ANNUITY OPTION:
[Xxxxx Xxx] [Option 2]
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FIRST PURCHASE PAYMENT............................... [$50,000]
MINIMUM SUBSEQUENT PURCHASE PAYMENT.................. [$500 ($50 under an
automatic investment
program)]
FREE WITHDRAWAL PERCENTAGE........................... [10%]
SEPARATE ACCOUNT..................................... Variable Annuity Account A
ADMINISTRATION CHARGE................................ [0.25% - 0.60% Annually]
ACCOUNT ADMINISTRATION CHARGE........................ [$0 Annually]
WITHDRAWAL CHARGE
Age of Purchase Payment in Years................ 0+
Withdrawal Charge............................... 0%
MORTALITY AND EXPENSE RISK CHARGE.................... [0.20% Annually]
AFTER ANNUITY START DATE FOR OPTIONS 1-6........ [0.30% Annually]
RIDERS AND RIDER CHARGES -
Asset Allocation..................................... No Charge
Dollar Cost Averaging................................ No Charge
[Credit Enhancement at 3%] [0.40%]
[Return of Premium Death Benefit] [0.10%]
3
BASIS OF ANNUITY TABLES.............. 1983 (a) Mortality Table with mortality
improvement under Projection Scale G
ASSUMED INTEREST RATE................ 3.5% annually
SUBACCOUNTS:
[
1. AIM V.I. Capital Appreciation 22. Rydex VT Absolute Return Strategies 50. Rydex VT Inverse Xxxxxxx
2. AIM V.I. International Growth 23. Rydex VT Banking 2000
3. AIM V.I. Mid Cap Core Equity 24. Rydex VT Basic Materials 51. Rydex VT Inverse S&P 500
4. Direxion Dynamic VP XX Xxxx 25. Rydex VT Biotechnology 52. Rydex VT Japan Advantage
5. Dreyfus VIF International 26. Rydex VT Commodities 53. Rydex VT Large Cap Growth
6. Federated Fund for U.S. 27. Rydex VT Consumer Products 54. Rydex VT Large Cap Value
Government Securities II 28. Rydex VT Dynamic Dow 55. Rydex VT Leisure
7. Federated High Income Bond II 29. Rydex VT Dynamic OTC 56. Rydex VT Mid Cap Advantage
8. Fidelity VIP Contrafund 30. Rydex VT Dynamic Xxxxxxx 2000(R) 57. Rydex VT Mid Cap Growth
9. Fidelity VIP Growth 31. Rydex VT Dynamic S&P 500 58. Rydex VT Mid Cap Value
Opportunities 32. Rydex VT Dynamic Strengthening 59. Rydex VT Multi-Cap Core
10. Fidelity VIP Index 500 Dollar Equity
11. Fidelity VIP Investment Grade 33. Rydex VT Dynamic Weakening Dollar 60. Rydex VT Nova
Bond 34. Rydex VT Electronics 61. Rydex VT OTC
12. Xxxxxxxxx Xxxxxx AMT Guardian 35. Rydex VT Energy 62. Rydex VT Precious Metals
13. Xxxxxxxxx Xxxxxx AMT Partners 36. Rydex VT Energy Services 63. Rydex VT Real Estate
14. Xxxxxxxxxxx Xxxx Xxxxxx Xxxxx 00. Rydex VT EP Aggressive 64. Rydex VT Retailing
Cap Fund(R)/VA 38. Rydex VT EP Conservative 65. Rydex VT Xxxxxxx 2000(R)
15. PIMCO VIT Low Duration 39. Rydex VT EP Moderate Advantage
16. PIMCO VIT Real Return 40. Rydex VT Europe Advantage 66. Rydex VT Sector Rotation
17. PIMCO VIT StocksPLUS(R) 41. Rydex VT Financial Services 67. Rydex VT Small Cap Growth
Growth and Income 42. Rydex VT Government Long Bond 68. Rydex VT Small Cap Value
18. PIMCO VIT Total Return Advantage 69. Rydex VT Technology
19. RVT CLS AdvisorOne Xxxxxxx 43. Rydex VT Health Care 70. Rydex VT Telecommunications
20. RVT CLS AdvisorOne Berolina 44. Rydex VT Hedged Equity 71. Rydex VT Transportation
21. RVT CLS AdvisorOne Clermont 45. Rydex VT Internet 72. Rydex VT U.S. Government
46. Rydex VT Inverse Dynamic Dow Money Market
47. Rydex VT Inverse Government Long 73. Rydex VT Utilities
Bond 74. SBL Global
48. Rydex VT Inverse Mid Cap 75. SBL Small Cap Value
49. Rydex VT Inverse OTC 76. Xxx Xxxxxx LIT Government
77. Xxxxx Fargo Advantage
Opportunity VT]
METHOD FOR DEDUCTING ACCOUNT CHARGE:
The Account Charge is deducted at each Contract Anniversary. A pro rata
Account Charge is deducted:
(1) upon a full Withdrawal of Contract Value;
(2) when a Contract has been in force for less than a full Contract
Year;
(3) upon the Annuity Start Date; and
(4) upon payment of a death benefit.
The Account Charge will be waived if Contract Value is $50,000 or more upon
the date the Account Charge is to be deducted.
3A
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DEFINITIONS
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ACCOUNT
One of the Subaccounts.
ACCUMULATION UNIT
A unit of measure used to compute Contract Value.
ADMINISTRATIVE OFFICE
The address of FSBL's Administrative Office is First Security Benefit Life
Insurance and Annuity Company of New York, [P.O. Box 750497, Topeka, Kansas
66675-0497.]
ANNUITANT
The person you name on whose life Annuity Payments may be determined. Please see
"Annuity Benefit Provisions" on page 16.
ANNUITY START AMOUNT
Contract Value as of the Annuity Start Date, less any Premium tax and, if
applicable, any pro rata Account Charge.
ANNUITY OPTION
A set of provisions that form the basis for making Annuity Payments. Please see
"Annuity Options" on page 16.
ANNUITY PAYMENTS
Payments made beginning on the Annuity Start Date according to the provisions of
the Annuity Option selected. Annuity Payments are made on the same day of each
month, on a monthly, quarterly, semiannual or annual basis.
ANNUITY START DATE
The date on which Annuity Payments begin as elected by the Owner.
ANNUITY UNIT
A unit of measure used to compute Variable Annuity Payments.
AUTOMATIC TRANSFERS
Transfers among the Subaccounts made automatically. FSBL makes Automatic
Transfers on a periodic basis at the written request of the Owner. FSBL may
discontinue, modify or suspend Automatic Transfers.
COMPANY
First Security Benefit Life Insurance and Annuity Company of New York, 00 Xxxx
Xxx Xxx Xxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000.
CONTRACT ANNIVERSARY
The same date in each subsequent year as your Contract Date.
4
CONTRACT DATE
The date the Contract begins. The Contract Date is shown on the Contract Data
Page.
CONTRACT VALUE
The total value of your Contract, which consists of amounts allocated to the
Subaccounts. FSBL determines Contract Value as of each Valuation Date.
CONTRACT YEAR
Contract Years are measured from the Contract Date.
DESIGNATED BENEFICIARY
Upon the death of the Owner or Joint Owner, the Designated Beneficiary will be
the first person on the following list who, if a natural person, is alive on the
date of death:
1. Owner;
2. Joint Owner;
3. Primary Beneficiary;
4. Contingent Beneficiary;
5. Annuitant; and
6. The Owner's estate if no one listed above is alive.
The Designated Beneficiary receives a death benefit upon the death of the Owner
prior to the Annuity Start Date. Please see "Ownership, Annuitant, and
Beneficiary Provisions" on page 9 and "Death Benefit Provisions" on page 15.
GENERAL ACCOUNT
All assets of FSBL other than those allocated to the Separate Account or any
other separate account of FSBL.
HOME OFFICE
The address of FSBL's Home Office is First Security Benefit Life Insurance and
Annuity Company of New York, 00 Xxxx Xxx Xxx Xxxx, Xxxxx Xxxxxx, Xxx Xxxx 00000.
JOINT OWNER
The Joint Owner, if any, shares an undivided interest in the entire Contract
with the Owner. The Joint Owner, if any, is named on the Contract Data Page.
Please see "Joint Ownership" provisions on page 9.
NONNATURAL PERSON
Any group or entity that is not a living person, such as a trust or corporation.
OWNER
The person(s) who has (have) all rights under this Contract. The Owner as of the
Contract Date is named on the Contract Data Page. Please see "Ownership"
provisions on page 9 and the definition of "Joint Owner," above.
PREMIUM TAX
Any Premium tax levied by a state or other governmental entity.
5
PURCHASE PAYMENT
Money Received by FSBL and applied to the Contract.
RECEIVED BY FSBL
Receipt by FSBL in good order at its Administrative Office, [P.O. Box 750497,
Topeka, Kansas 66675-0497.]
SEPARATE ACCOUNT
A separate account established and maintained by FSBL under New York law. The
Separate Account as set forth on the Contract Data Page is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940 as a
Unit Investment Trust. It was established by FSBL to support variable annuity
contracts. FSBL owns the assets of the Separate Account and maintains them apart
from the assets of its General Account and its other separate accounts. The
assets held in the Separate Account equal to the reserves and other Contract
liabilities with respect to the Separate Account may not be charged with
liabilities arising from any other business FSBL may conduct. Income and
realized and unrealized gains and losses from assets in the Separate Account are
credited to, or charged against, the Separate Account without regard to the
income, gains or losses from FSBL's General Account or its other separate
accounts.
The Separate Account is divided into Subaccounts shown on the Contract Data
Page. Income and realized and unrealized gains and losses from assets in each
Subaccount are credited to, or charged against, the Subaccounts without regard
to income, gains or losses in the other Subaccounts. FSBL has the right to
transfer to its General Account any assets of the Separate Account that are in
excess of the reserves and other Contract liabilities with respect to the
Separate Account. The value of the assets in the Separate Account is determined
on each Valuation Date as of the end of each Valuation Date.
SUBACCOUNTS
The Separate Account is divided into Subaccounts which invest in shares of
mutual funds. Each Subaccount may invest its assets in a separate class or
series of a designated mutual fund or funds. The Subaccounts are shown on the
Contract Data Page. Subject to the regulatory requirements then in force, FSBL
reserves the right to:
1. change or add designated mutual funds or other investment vehicles;
2. add, remove or combine Subaccounts;
3. add, delete or make substitutions for securities that are held or
purchased by the Separate Account or any Subaccount;
4. operate the Separate Account as a management investment company;
5. combine the assets of the Separate Account with other separate accounts
of FSBL or an affiliate thereof;
6. restrict or eliminate any voting rights of the Owner with respect to
the Separate Account or other persons who have voting rights as to the
Separate Account; and
7. terminate and liquidate any Subaccount.
If any of these changes result in a material change to the Separate Account or a
Subaccount, FSBL will notify you of the change. FSBL will not change the
investment policy of any Subaccount in any material respect without complying
with the filing and other procedures of the insurance regulators of the state of
issue.
TRANSFER
A Transfer of Contract Value of one Subaccount for the equivalent dollar amount
of Contract Value of another Subaccount.
VALUATION DATE
A Valuation Date is each day the New York Stock Exchange and FSBL's
Administrative Office are open for business.
6
VALUATION PERIOD
A Valuation Period is the interval of time from one Valuation Date to the next
Valuation Date.
WITHDRAWAL
A Withdrawal of Contract Value in the dollar amount specified by the Owner.
Withdrawals include Systematic Withdrawals. See "Withdrawal Provisions" on page
14.
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GENERAL PROVISIONS
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THE CONTRACT
The entire Contract between the Owner and FSBL consists of this Contract, and
any Amendments, Endorsements or Riders to the Contract. All statements made in
the Application will, as ruled by a court of competent jurisdiction, be deemed
representations and not warranties. Any change in the Contract can be made only
with the written consent of the President, a Vice President, or the Secretary of
FSBL.
The Purchase Payment(s) and the Application must be acceptable to FSBL under its
rules and practices. If they are not, FSBL's liability shall be limited to a
return of the Purchase Payment(s).
COMPLIANCE
FSBL reserves the right to make any change to the provisions of this Contract to
comply with or give the Owner the benefit of any federal or state statute, rule
or regulation. This includes, but is not limited to, requirements for annuity
contracts under the Internal Revenue Code or the laws of any state. FSBL will
provide the Owner with a copy of any such change and will also file such a
change with the insurance regulatory officials of the state in which the
Contract is delivered.
MISSTATEMENT OF AGE
If the age of the Annuitant has been misstated, payments shall be adjusted, when
allowed by law, to the amount which would have been provided for the correct
age. Proof of the age of an Annuitant may be required at any time, in a form
suitable to FSBL. If payments have already commenced and the misstatement has
caused an underpayment, the amount of such underpayment, with interest at the
rate of 3%, will be paid with the next scheduled payment. If the misstatement
has caused an overpayment, the amount of such overpayment, with interest at the
rate of 3%, will be deducted from one or more future payments.
EVIDENCE OF SURVIVAL
Before FSBL makes a payment, it has the right to require proof of the life or
death of any person whose life or death determines whether, or to whom, or how
much FSBL must pay under this Contract.
INCONTESTABILITY
FSBL will not contest the validity of this Contract.
ASSIGNMENT
No Assignment under this Contract is binding unless Received by FSBL in writing.
FSBL assumes no responsibility for the validity, legality, or tax status of any
Assignment. The Assignment will be subject to any payment made or other action
taken by FSBL before the Assignment is Received by FSBL. Once Received by FSBL,
the rights of the Owner are subject to the Assignment. Any claim is subject to
proof of interest of the assignee. If the Contract has been absolutely assigned,
the assignee becomes the Owner.
7
TRANSFERS
The Owner may Transfer Contract Value among the Subaccounts upon written request
or under other methods allowed by FSBL, subject to the following.
FSBL reserves the right to:
1. limit the amount that may be subject to Transfer to $1,000,000 per
Transfer;
2. limit the number of Transfers per Contract Year to six; and
3. suspend Transfers if the Owner engages in a market timing strategy or
makes programmed transfers.
Transfers must be at least $500 or if less the amount remaining in the
Subaccount.
FSBL will effect a Transfer to or from a Subaccount on the basis of Accumulation
Unit Value determined as of the end of the Valuation Period in which the
Transfer request is Received by FSBL. Transfers are effected as of the close of
the Valuation Period in which all information required to make the Transfer is
Received by FSBL.
After the Annuity Start Date, you may Transfer Annuity Units among the
Subaccounts.
CLAIMS OF CREDITORS
The Contract Value and other benefits under this Contract are exempt from the
claims of creditors to the extent allowed by law.
BASIS OF VALUES
A detailed statement showing how values are determined has been filed with the
state insurance department. All values and reserves are at least equal to those
required by the laws of the state in which this Contract is delivered.
PARTICIPATION
This Contract is not participating and does not participate in FSBL's surplus.
STATEMENTS
At least once per year prior to the Annuity Start Date, FSBL will send you a
report that will show your Contract Value and any other information required by
law. After the Annuity Start Date, we will send you any information that may be
required.
DELAY OF PAYMENT
Generally, payments and Transfers will be made within seven days from receipt of
the payment and/or request in a form satisfactory to us. FSBL reserves the right
to suspend a Transfer or delay payment of a Withdrawal from Contract Value for
any period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists as a result of which:
(a) disposal of securities held in the Separate Account is not
reasonably practicable; or
(b) it is not reasonably practicable to fairly value the net
assets of the Separate Account; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits to protect owners of securities.
Rules and regulations of the Securities and Exchange Commission will govern as
to whether the conditions set forth above exist.
8
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OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS
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OWNERSHIP
During the Owner's lifetime, all rights and privileges under the Contract may be
exercised only by the Owner. If the purchaser names someone other than himself
or herself as Owner, the purchaser has no rights in the Contract. No Owner may
be older than age 90 on the Contract Date.
JOINT OWNERSHIP
If a Joint Owner is named in the application, then the Owner and Joint Owner
share an undivided interest in the entire Contract as joint tenants with rights
of survivorship. When an Owner and Joint Owner have been named, FSBL will honor
only requests for changes and the exercise of other Ownership rights made by
both the Owner and Joint Owner. When a Joint Owner is named, all references to
"Owner" throughout this Contract should be construed to mean both the Owner and
Joint Owner, except for the "Statements" provision on page 8 and the "Death
Benefit Provisions" on page 15.
ANNUITANT
The Annuitant is named on the Contract Data Page. The Owner may change the
Annuitant prior to the Annuity Start Date. The request for this change must be
made in writing and Received by FSBL at least 30 days prior to the Annuity Start
Date. No Annuitant may be named who is more than 90 years old on the Contract
Date. When the Annuitant dies prior to the Annuity Start Date, the Owner must
name a new Annuitant within 30 days or, if sooner, by the Annuity Start Date,
except where the Owner is a Nonnatural Person. If a new Annuitant is not named,
the Owner becomes the Annuitant.
PRIMARY AND CONTINGENT BENEFICIARIES
The Primary Beneficiary is named on the Contract Data Page. The Owner may change
any Beneficiary as described in "Ownership and Beneficiary Changes" below. If
the Primary Beneficiary dies prior to the Owner, the Contingent Beneficiary
becomes the Primary Beneficiary. Unless the Owner directs otherwise, when there
are two or more Primary Beneficiaries, they will receive equal shares.
OWNERSHIP AND BENEFICIARY CHANGES
Subject to the terms of any existing Assignment, you may name a new Owner, a new
Primary Beneficiary or a new Contingent Beneficiary; provided that you may not
change or remove an irrevocable Beneficiary without obtaining his or her written
consent in a form acceptable to us. Any new choice of Owner, Primary Beneficiary
or Contingent Beneficiary will revoke any prior choice. Any change must be made
in writing and delivered to the Administrative Office. The change will become
effective as of the date the written request is signed, whether or not the Owner
is living at the time the change is Received by FSBL. A new choice of Primary
Beneficiary or Contingent Beneficiary will not apply to any payment made or
action taken by FSBL prior to the time it was Received by FSBL. FSBL may require
the Contract be returned so these changes may be made.
9
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PURCHASE PAYMENT PROVISIONS
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FLEXIBLE PURCHASE PAYMENTS
This Contract will not be in force until we receive at our Administrative Office
the initial Purchase Payment. You may make additional Purchase Payments at any
time before the Annuity Start Date, while the Owner is living, and this Contract
is in force. Purchase Payments are payable in U.S. dollars and checks should be
made payable to FSBL.
PURCHASE PAYMENT LIMITATIONS
Purchase Payments exceeding $2,000,000 will not be accepted without prior
approval by FSBL. The Minimum Subsequent Purchase Payment amount is shown on the
Contract Data Page.
PURCHASE PAYMENT ALLOCATION
Purchase Payments will be allocated among the Subaccounts. The allocations may
be a whole dollar amount or a whole percentage and no less than $25 per Purchase
Payment may be allocated to any Account. Purchase Payments will be allocated
according to the Owner's instructions in the Application or more recent
instructions, if any. The Owner may change the allocations by written notice to
FSBL.
PLACE OF PAYMENT
All Purchase Payments under this Contract are to be paid to FSBL at its
Administrative Office. Purchase Payments after the initial Purchase Payment are
applied as of the end of the Valuation Period during which they are Received by
FSBL.
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CONTRACT VALUE AND EXPENSE PROVISIONS
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CONTRACT VALUE
On any Valuation Date, the Contract Value is the sum of the then current value
of the Accumulation Units allocated to each Subaccount for this Contract. For
example, if 100 Accumulation Units were allocated to each of the SBL Global and
SBL Small Cap Value Subaccounts as of June 1, Contract Value as of that date
would be determined as follows:
Number of Accumulation Unit
Subaccount Accumulation Units Value as of June 1 Subaccount Value
---------- ------------------ ------------------ ----------------
SBL Global 100 $10 $1,000
SBL Small Cap Value 100 $12 $1,200
------
Contract Value as of June 1.............................................. $2,200
FSBL reserves the right to pay to the Owner the Contract Value as a lump sum if
it is below $2,000 and no Purchase Payments have been received during the
preceding three-year period.
ACCUMULATION UNIT VALUE
The initial Accumulation Unit Value for each Subaccount was set by FSBL. The
Accumulation Unit Value for any subsequent Valuation Date is equal to (1) times
(2) where:
1. is the Accumulation Unit Value determined on the immediately preceding
Valuation Date; and
2. is the Net Investment Factor as of the Valuation Date with respect to
which Accumulation Unit Value is being determined.
10
The Accumulation Unit Value for any subsequent Valuation Date which is a
Subaccount Payable Date is further adjusted by deducting any Subaccount
Adjustment declared as of the preceding Subaccount Record Date. See "Method of
Deducting Rider Charges," below.
NET INVESTMENT FACTOR
The Net Investment Factor for any Subaccount as of the end of any Valuation
Period is determined by dividing (1) by (2) and subtracting (3) from the result,
where:
1. is equal to:
a. the net asset value per share of the mutual fund held in the
Subaccount, found as of the end of the current Valuation Period;
plus
b. the per share amount of any dividend or capital gain distributions
paid by the Subaccount's underlying mutual fund that is not
included in the net asset value per share; plus or minus
c. a per share charge or credit for any taxes reserved for, which
FSBL deems to have resulted from the operation of the Separate
Account or the Subaccounts; operations of FSBL with respect to the
Contract; or the payment of premiums or acquisition costs under
the Contract.
2. is the net asset value per share of the Subaccount's underlying mutual
fund as of the end of the prior Valuation Period.
3. is a daily factor which is deducted from the Separate Account
representing the Base Charge for mortality and expense risk and the
Administration Charge.
The Accumulation Unit Value may increase or decrease from one Valuation Period
to the next.
DETERMINING ACCUMULATION UNITS
The number of Accumulation Units allocated to a Subaccount under this Contract
is found by dividing:
1. the amount allocated to, or deducted from, the Subaccount; by
2. the Accumulation Unit Value for the Subaccount as of the end of the
Valuation Period during which the amount is allocated or deducted under
the Contract.
The number of Accumulation Units allocated to a Subaccount under the Contract
will not change as a result of investment experience. Events that change the
number of Accumulation Units are:
1. Purchase Payments that are applied to the Subaccount;
2. Contract Value that is Transferred into or out of the Subaccount;
3. Withdrawals and applicable Withdrawal Charges that are deducted from
the Subaccount;
4. Annuity Start Amount applied from the Subaccount to one of Annuity
Options 1 through 6;
5. Premium tax and Account Charges that are deducted from the Subaccount;
and
6. Reinvestment of Subaccount Adjustments that are paid by the Subaccount.
MORTALITY AND EXPENSE RISK CHARGE
FSBL will deduct a Mortality and Expense Risk Charge as shown on the Contract
Data Page against your Contract Value held in the Subaccounts. This charge is
guaranteed not to increase.
ADMINISTRATION CHARGE
FSBL will deduct the Administration Charge shown on the Contract Data Page
against your Contract Value held in the Subaccounts. This charge will be
computed and deducted from each Subaccount on each Valuation Date. This charge
is factored into the Accumulation Unit and Annuity Unit Values on each Valuation
Date. This charge is guaranteed not to increase.
RIDER CHARGE
FSBL will deduct a charge for Riders as shown on the Contract Data Page against
your Contract Value held in the Subaccounts. The amount of the charge for Riders
is based upon the Riders selected by the Owner on the application or as
otherwise permitted by FSBL.
11
METHOD OF DEDUCTING RIDER CHARGES
The Mortality and Expense Risk Charge and Administration Charge as shown on the
Contract Data Page will be computed and deducted from each Subaccount on each
Valuation Date. Those charges are factored into the Accumulation Unit Values on
each Valuation Date.
Any charge for Riders (the "Rider Charge") will be deducted from monthly
Subaccount Adjustments paid by, and reinvested in, the respective Subaccounts.
Subaccount Adjustments are declared by FSBL and paid monthly by the Subaccounts
for the purpose of deducting any applicable Rider Charge.
The amount of the Rider Charge is determined by adding the charges for each
Rider selected by the Owner. The Rider Charge is a percentage on an annual basis
of Contract Value allocated to each Subaccount as of the Subaccount Payable
Date.
FSBL will declare a Subaccount Adjustment for each Subaccount on one Valuation
Date of each calendar month ("Subaccount Record Date"). FSBL will pay the
Subaccount Adjustment on a subsequent Valuation Date ("Subaccount Payable Date")
within five Valuation Dates of the Subaccount Record Date. Such Subaccount
Adjustment will be declared as a dollar amount per Accumulation Unit.
For each Subaccount, any Owner as of the Subaccount Record Date will receive on
the Subaccount Payable Date a net Subaccount Adjustment equal to:
1. the amount of Subaccount Adjustment per Accumulation Unit; times
2. the number of Accumulation Units allocated to the Subaccount as of the
Subaccount Record Date; less
3. the amount of the Rider Charge for that Subaccount; provided that FSBL
will not deduct any Rider Charge from the first Subaccount Adjustment
following the Contract Date.
The net Subaccount Adjustment will be reinvested on the Subaccount Payable Date
at the Accumulation Unit Value determined as of the close of the Subaccount
Payable Date in Accumulation Units of the Subaccount. The net Subaccount
Adjustment shall never be less than zero.
FSBL reserves the right to compute and deduct the Rider Charge from each
Subaccount on each Valuation Date in lieu of the method discussed above, in
which event the charge would be factored into the Accumulation Unit Values on
each Valuation Date.
EXAMPLE
Assuming Contract Value of $50,000 allocated to the SBL Global Subaccount and
the Return of Premium Death Benefit Rider, the Rider Charge would be as follows:
Rider Charge on Annual Basis 0.10%.
Further assuming 5,000 Accumulation Units with an Accumulation Unit Value of $10
per unit on December 30 and a gross Subaccount Adjustment of $0.025 per unit
declared on December 31 (Subaccount Record Date), the net Subaccount Adjustment
amount would be as follows:
Gross Subaccount Adjustment Per $0.025 Accumulation Unit Value as of
Unit; less Valuation Date before Subaccount Record Date $10.00
Rider Charge Per Unit -$0.00085
--------
Net Subaccount Adjustment Per Unit; $0.02415 X
times
Number of Accumulation Units 5,000 Accumulation Unit Value as of Subaccount $9.975
-------- Payable Date
Net Subaccount Adjustment Amount $120.75
The net Subaccount Adjustment amount would be reinvested on the Subaccount
Payable Date in Accumulation Units of the SBL Global Subaccount, as follows:
$0.02415 (net Subaccount Adjustment per unit) divided by $9.975 (Accumulation
Unit value as of the Subaccount Payable Date) times 5,000 Units equals 12.105
Accumulation Units. On the Subaccount Payable Date, 12.105 Accumulation Units
are added to Contract Value for a total of 5,012.105 Accumulation Units after
the Subaccount Adjustment reinvestment. Contract Value on the
12
Subaccount Payable Date is equal to 5,012.105 Accumulation Units times $9.975
(Accumulation Unit Value as of the Subaccount Payable Date) for a Contract Value
of $49,995.75 after the Subaccount Adjustment reinvestment.
The Rider Charge is not deducted from Annuity Unit Values.
ACCOUNT ADMINISTRATION CHARGE
FSBL will deduct the Account Administration Charge ("Account Charge") from
Contract Value as shown on the Contract Data Page. FSBL will allocate the
Account Charge to the Accounts in the same proportion that Contract Value is
allocated among the Accounts. The Account Charge and other charges may be waived
or reduced uniformly on all Contracts issued under certain plans or arrangements
which are expected to result in administrative cost savings. This charge is
guaranteed not to increase.
PREMIUM TAX EXPENSE
FSBL reserves the right to deduct Premium tax when due or any time thereafter.
FSBL will allocate the Premium tax to the Accounts in the same proportion that
Contract Value is allocated among the Accounts.
WITHDRAWAL CHARGES
Purchase Payments may be subject to a Withdrawal Charge, which is shown on the
Contract Data Page. The Withdrawal Charge may apply to amounts you withdraw
under your Contract, depending on the length of time each Purchase Payment has
been allocated to your Contract and the amount you withdraw. FSBL does not apply
the Withdrawal Charge on:
o Death benefit proceeds; or
o Annuity Payments.
The amount of the Withdrawal Charge depends on how long your Purchase Payments
are held under the Contract. Each Purchase Payment you make is considered to
have a certain "age," depending on the length of time since that Purchase
Payment was effective. A Purchase Payment is "age one" in the year beginning on
the date the purchase payment is Received by FSBL and increases in age each year
thereafter. When you withdraw an amount, the "age" of any Purchase Payment you
withdraw determines the level(s) of Withdrawal Charge as shown on the Contract
Data Page. For the purpose of calculating Withdrawal Charge, FSBL assumes that
withdrawal amounts will be applied to Purchase Payments first in the order
Purchase Payments were received. The Withdrawal Charge will be deducted
proportionately from each Account selected for Withdrawal. This charge is
guaranteed not to increase.
FREE WITHDRAWALS
During a Contract Year, you may make Free Withdrawals, which are Withdrawals
that are not subject to the Withdrawal Charge. The amount of Free Withdrawals
available in any Contract Year is determined as follows. In the first Contract
Year, the amount is equal to:
1. cumulative purchase payments; times
2. the Free Withdrawal percentage shown on the Contract Data Page; less
3. any Free Withdrawals made during the Contract Year.
The amount of Free Withdrawals in subsequent Contract Years is equal to:
1. Contract Value as of the first day of the current Contract Year; times
2. the Free Withdrawal percentage shown on the Contract Data Page; less
3. any Free Withdrawals made during the Contract Year.
Unused Free Withdrawal amounts are not carried from one Contract Year to the
next. Free Withdrawals do not reduce Purchase Payments for purposes of
calculating the Withdrawal Charge on future Withdrawals.
13
--------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS
--------------------------------------------------------------------------------
WITHDRAWALS
A full or partial Withdrawal of Contract Value is allowed at any time prior to
the Annuity Start Date while the Owner is living. Withdrawals will be effected
as of the end of the Valuation Period in which the Withdrawal request is
Received by FSBL, and payment will be made within the time frame required by
applicable law. (Please see "Delay of Payment," page 9 for a discussion of the
circumstances under which payments may be delayed.) Withdrawals normally will be
effective as of the close of the Valuation Period during which we receive your
proper request. Any Withdrawal will reduce Contract Value by the amount of the
Withdrawal, any Withdrawal Charges attributable to the Withdrawal, any Premium
tax and, in the case of a full Withdrawal, any pro rata Account Charge.
Upon the Owner's request for a full Withdrawal, FSBL will pay the Withdrawal
Value in a lump sum, and the Contract will terminate. If you make a full
withdrawal, we require return of your Contract or a signed Lost Contract
Affidavit with your proper request.
All Withdrawals must meet the following conditions.
1. The request for Withdrawal must be Received by FSBL in writing or under
other methods allowed by FSBL, if any;
2. The Owner must apply prior to the Annuity Start Date while this
Contract is in force; and
3. The amount withdrawn must be at least $500, except upon a full
Withdrawal.
PARTIAL WITHDRAWALS
A partial Withdrawal request must state the allocations for deducting the
Withdrawal from each Account. If no allocation is specified, FSBL will deduct
the Withdrawal from the Accounts in the same proportion that Contract Value is
allocated among the Accounts. If your partial Withdrawal causes your Contract
Value to be less than $2,000 immediately after the Withdrawal and no Purchase
Payments have been made in the prior three years, we may terminate your Contract
and send you the Withdrawal proceeds; provided, however, that FSBL shall not
deduct any Withdrawal Charge in connection with such a Withdrawal.
SYSTEMATIC WITHDRAWALS
Systematic Withdrawals are automatic periodic Withdrawals from Contract Value in
substantially equal amounts prior to the Annuity Start Date. To start Systematic
Withdrawals, you must make the request in writing, stating the type of payment,
its frequency and allocations for such Withdrawals. If no allocation is
specified, FSBL will deduct Systematic Withdrawals from the Accounts in the same
proportion that Contract Value is allocated among the Accounts. Any Systematic
Withdrawal will reduce Contract Value by the amount of the Systematic
Withdrawal, any Withdrawal Charges attributable to the Systematic Withdrawal,
and any Premium tax.
The type of payment may be:
1. in a fixed amount;
2. in Level Payments calculated by FSBL;
3. for a specified period;
4. a specified percentage;
5. earnings only; or
6. based upon the life expectancy of the Owner or the Owner and a
beneficiary.
The payment frequency may be:
1. monthly;
2. quarterly;
3. semiannually; or
4. annually.
14
The minimum Systematic Withdrawal amount is $100 per payment. You may stop or
change Systematic Withdrawals upon proper written request Received by FSBL at
least 30 days in advance of the requested date of termination or change. FSBL
reserves the right to stop, modify or suspend Systematic Withdrawals at any
time.
WITHDRAWAL VALUE
The Withdrawal Value is the amount available for Withdrawal. The Withdrawal
Value as of the close of any Valuation Date is the Contract Value less:
1. any Withdrawal Charges;
2. any pro rata Account Charge; and
3. any Premium tax due or paid by FSBL.
--------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
--------------------------------------------------------------------------------
DEATH BENEFIT
FSBL will pay a Death Benefit upon the death of the Owner prior to the Annuity
Start Date while this Contract is in force. FSBL will pay the Death Benefit
proceeds to the Designated Beneficiary when due Proof of Death and instructions
regarding payment are Received by FSBL. Such proceeds will equal the amount of
the Death Benefit reduced by any charge for Premium tax due or paid by FSBL with
respect to the Contract.
The Death Benefit is equal to the Contract Value as of the date due Proof of
Death and instructions regarding payment are Received by FSBL.
If a lump sum payment is requested, the payment will be made in accordance with
any laws and regulations that govern the payment of Death Benefits.
PROOF OF DEATH
Any of the following will serve as Proof of Death of the Owner:
1. certified copy of the death certificate;
2. certified decree of a court of competent jurisdiction as to the finding
of death;
3. any proof accepted by FSBL.
DISTRIBUTION RULES
In the event of an Owner's death prior to the Annuity Start Date, the entire
Death Benefit shall be paid within 5 years after the death of the Owner, except
as provided below. In the event that the Beneficiary elects an Annuity Option,
the length of time for payment of the benefit may be longer than 5 years if:
1. The Designated Beneficiary is a natural person;
2. The Death Benefit is paid out under one of Annuity Options 1 through 6;
3. Payments are made over a period that does not exceed the life or life
expectancy of the Beneficiary; and
4. Payments begin within one year of the death of the Owner.
If the deceased Owner's spouse is the sole Designated Beneficiary, the spouse
shall become the sole Owner of the Contract. He or she may elect to:
1. keep the Contract in force until the sooner of the spouse's death or
the Annuity Start Date; or
2. receive the Death Benefit.
If any Owner dies on or after the Annuity Start Date, Annuity Payments shall
continue to be paid at least as rapidly as under the method of payment being
used as of the date of the Owner's death.
If the Owner is a Nonnatural Person, the distribution rules set forth above
apply in the event of the death of, or change in, the Annuitant.
15
The foregoing distribution rules do not apply to a Contract, which is:
1. provided under a plan described in Code section 401(a) or 403(b);
2. an individual retirement annuity or provided under an individual
retirement account or annuity; or
3. otherwise exempt from the Code section 72(s) distribution rules.
--------------------------------------------------------------------------------
ANNUITY BENEFIT PROVISIONS
--------------------------------------------------------------------------------
ANNUITY START DATE
The Annuity Start Date is the date as of which the first Annuity Payment is
computed under one of the Annuity Options. The Annuity Start Date shall not be
earlier than the 12-month anniversary of the Contract Date. The Owner may elect
the Annuity Start Date at the time of application. If no Annuity Start Date is
selected, FSBL will use the later of the:
(1) the oldest Annuitant's seventieth birthday; or
(2) the tenth Contract Anniversary.
The Annuity Start Date must be prior to the later of the oldest Annuitant's 90th
birthday or the tenth Contract Anniversary.
CHANGE OF ANNUITY START DATE
The Owner may change the Annuity Start Date. A request for the change must be
made in writing. The written request must be received by FSBL at least 30 days
prior to the new Annuity Start Date as well as 30 days prior to the previous
Annuity Start Date.
ANNUITY OPTIONS
The Contract provides for Annuity Payments to be made under one of Annuity
Options 1 through 6. Your Annuity Option is shown on the Contract Data Page.
Options 1 through 4 and 6 generally provide for payments to be made during the
life of the Annuitant or Joint Annuitants. Under Option 5, Annuity Payments are
made to the Annuitant and in the event of the Annuitant's death, to the
Designated Beneficiary.
Options 1 through 6 are available as either a Fixed or Variable Annuity or a
combination Fixed and Variable Annuity. The Annuity Options are shown below.
Prior to the Annuity Start Date, the Owner may change the Annuity Option
selected. The Owner must request the change in writing. This request must be
Received by FSBL at least 30 days prior to the Annuity Start Date.
OPTION 1 LIFE INCOME OPTION: This option provides Annuity Payments for the life
of the Annuitant. Upon the Annuitant's death, no further Annuity
Payments will be made.
OPTION 2 LIFE INCOME WITH PERIOD CERTAIN OPTION: This option provides Annuity
Payments for the life of the Annuitant. A fixed period of 5, 10, 15 or
20 years may be chosen. Annuity Payments will be made to the end of
this period even if the Annuitant dies prior to the end of the period.
If the Annuitant dies before receiving all of the Annuity Payments
during the fixed period, the remaining Annuity Payments will be made
to the Designated Beneficiary. Upon the Annuitant's death after the
period certain, no further Annuity Payments will be made.
OPTION 3 LIFE INCOME WITH INSTALLMENT OR UNIT REFUND OPTION: This option
provides Annuity Payments for the life of the Annuitant, with a period
certain determined by dividing the Annuity Start Amount by the amount
of the first Annuity Payment. A fixed number of Annuity Payments will
be made even if the Annuitant dies. If the Annuitant dies before
receiving the fixed number of Annuity Payments, any remaining Annuity
Payments will be made to the Designated Beneficiary. If the Annuitant
dies after receiving the fixed number of Annuity Payments, no further
Annuity Payments will be made.
16
OPTION 4 JOINT AND LAST SURVIVOR OPTION: This option provides Annuity Payments
for the lives of the Annuitant and Joint Annuitant. Annuity Payments
will be made as long as either is living. Upon the death of one
Annuitant, Annuity Payments continue to the surviving Joint Annuitant
at the same or a reduced level of 75%, 66 2/3% or 50% of Annuity
Payments, as elected by the Owner. With respect to Fixed Annuity
Payments, the amount of the Annuity Payment, and with respect to
Variable Annuity Payments, the number of Annuity Units used to
determine the Annuity Payment, is reduced as of the first Annuity
Payment following the Annuitant's death. In the event of the death of
one Annuitant, the surviving Joint Annuitant has the right to exercise
all rights under the Contract. Upon the death of the last Annuitant,
no further Annuity Payments will be made.
OPTION 5 PERIOD CERTAIN OPTION: This option provides Annuity Payments for a
fixed period of 10, 15 or 20 years. Annuity Payments will be made
until the end of this period. If the Annuitant dies prior to the end
of the period, the remaining Annuity Payments will be made to the
Designated Beneficiary.
OPTION 6 JOINT AND CONTINGENT SURVIVOR OPTION: This option provides Annuity
Payments for the life of the primary Annuitant. Annuity Payments will
be made to the primary Annuitant as long as he or she is living. Upon
the death of the primary Annuitant, Annuity Payments will be made to
the contingent Annuitant as long as he or she is living. If the
contingent Annuitant is not living upon the death of the primary
Annuitant, no further payments will be made.
ANNUITY START AMOUNT
Annuity Start Amount is Contract Value as of the Annuity Start Date, less any
Premium tax and, if applicable, any pro rata Account Charge. Annuity Start
Amount allocated to the Fixed Account is applied to purchase a Fixed Annuity and
that allocated to the Subaccounts is applied to purchase a Variable Annuity. For
Annuity Options 1 through 6, the Annuity Start Amount is divided by $1,000, and
the result is multiplied by the applicable amount in the Annuity Tables to
determine the minimum guaranteed monthly Annuity Payment with respect to a Fixed
Annuity or the first monthly Annuity Payment with respect to a Variable Annuity.
FIXED ANNUITY PAYMENTS
With respect to Fixed Annuity Payments, the amount set forth in the Annuity
Tables as adjusted for the rate of interest credited by FSBL, is the amount of
each monthly Annuity Payment for Annuity Options 1 through 6. Neither expense
actually incurred (other than tax on investment return), nor mortality actually
experienced, shall adversely affect the dollar amount of Annuity Payments
already commenced.
17
VARIABLE ANNUITY PAYMENTS
With respect to Variable Annuity Payments, the amount set forth in the Annuity
Tables, as adjusted for the Assumed Interest Rate, is the amount of the FIRST
monthly Annuity Payment for Annuity Options 1 through 6. The amount of each
Annuity Payment after the first for these options is computed by means of
Annuity Units. Variable Annuity Payments will fluctuate with the performance of
the Subaccount(s). Neither expense actually incurred (other than tax on
investment return), nor mortality actually experienced, shall adversely affect
the dollar amount of Annuity Payments already commenced.
ANNUITY TABLES
The amounts set forth in the Annuity Tables for Annuity Options 1 through 4 and
6 depend on the age of the Annuitant or the Joint Annuitants on the Annuity
Start Date. The Annuity Tables are modified to reflect:
(1) the Assumed Interest Rate for Variable Annuity Payments; or
(2) the rate of interest in effect on the Annuity Start Date for Fixed
Annuity Payments.
The rate of interest for Fixed Annuity Payments is guaranteed not to be less
than 1.5%. The basis of the Annuity Tables for Options 1 through 4 and 6 is the
1983(a) Mortality Table projected for mortality improvement for 45 years using
Projection Scale G and an interest rate factor equal to 1.5%. The Annuity Tables
contain the amount of monthly Annuity Payment per $1,000 of Annuity Start
Amount. The Annuity Tables state values for the exact ages shown.
The values will be interpolated based on the exact age(s) of the Annuitant or
Joint Annuitants on the Annuity Start Date. The Assumed Interest Rate is set
forth on the Contract Data Page. The Annuity Table for Option 5 is determined
without reference to the age of the Annuitant and is based upon an interest rate
factor equal to 1.5%. The Annuity Tables are used in accordance with generally
accepted actuarial principles.
ANNUITY PAYMENTS
If no Purchase Payments have been received by FSBL during the three-years
preceding the Annuity Start Date, you may not select an Annuity Option that
requires FSBL to make Annuity Payments of less than $20.00. If FSBL refuses to
commence Annuity Payments of less than $20.00, FSBL will permit surrender of the
contract, with no withdrawal charges. If no Annuity Option is chosen prior to
the Annuity Start Date, FSBL will use Option 1 with a ten-year period certain.
Each Annuity Option allows for making Annuity Payments annually, semiannually,
quarterly or monthly. Annuity Payments due on a date other than a Valuation
Date, are paid as of the end of the next following Valuation Date.
ANNUITY UNITS
On the Annuity Start Date, the amount of the first Variable Annuity Payment is
divided by the Annuity Unit Value as of that date to determine the number of
Annuity Units to be used in calculating subsequent Annuity Payments. If the
Annuity Start Amount was allocated to more than one Subaccount, the first
Variable Annuity Payment will be allocated to each Subaccount in the percentage
corresponding to the allocation of Annuity Start Amount. The number of Annuity
Units for each Subaccount is then found by dividing the amount of the first
Variable Annuity Payment allocated to that Subaccount by the Annuity Unit Value
for the Subaccount on the Annuity Start Date. The number of Annuity Units for
the Subaccount then remains constant, unless a Transfer of Annuity Units is
made. After the first Variable Annuity Payment, the dollar amount of each
subsequent Annuity Payment is equal to the sum of the payment amount determined
for each Subaccount. The payment amount for each Subaccount is equal to the
number of Annuity Units allocated to that Subaccount multiplied by the Annuity
Unit Value as of the date of the Annuity Payment.
18
An example of an initial Variable Annuity Payment calculation for a male, age 60
is as follows:
Annuity Start Amount = $100,000 $100,000 = 100
--------
$1,000
Amount determined by reference in 1999 to Annuity Table for a male, age 60 under
Option 1 $4.00
First Variable Annuity Payment 100 x $4.00 = $400
Xxxxxxx
Xxxxxxx First Unit Value Number of Annuity
Start Amount Variable Annuity on Annuity Units Used to Determine
Subaccount Allocation Payment Allocation Start Date Subsequent Payments
---------- ------------- ------------------ ---------- --------------------
SBL Global 50% $200.00 / $1.51 = 132.4503
SBL Small Cap Value 50% $200.00 / $1.02 = 196.0784
An example of a subsequent Variable Annuity Payment calculation using the assumptions above is as follows:
Annuity Unit
Value on Date of New Annuity
Subaccount Annuity Units Subsequent Payment Payment Amount
---------- ------------- ------------------ --------------
SBL Global 132.4503 x $1.60 = $211.92
SBL Small Cap Value 196.0784 x $1.10 = $215.69
-------
$427.61
ANNUITY UNIT VALUE
The Annuity Unit Value for each Subaccount was first set by FSBL. The Annuity
Unit Value for any subsequent Valuation Date is equal to (a) times (b) times
(c), where:
(a) is the Annuity Unit Value on the immediately preceding Valuation Date:
(b) is the Net Investment Factor for the day;
(c) is a factor used to adjust for the Assumed Interest Rate set forth on
the Contract Data Page which is used to determine Variable Annuity
Payment amounts.
ALTERNATE ANNUITY OPTION RATES
Currently, FSBL does not sell single premium immediate annuities ("SPIAs").
However, in the future, FSBL may sell SPIAs. If so, any more favorable rates
available under FSBL's SPIAs will be given to the Annuitant.
19
ANNUITY TABLES
---------------------------------------------------------------------------------------------------------------------------
TABLE A
---------------------------------------------------------------------------------------------------------------------------
ANNUITY OPTIONS ONE, TWO, AND THREE
MINIMUM MONTHLY INSTALLMENTS PER $1,000 OF AMOUNT APPLIED
----------------------- ------------------------- -------------------------------------------- -----------------------------------
Option One Option Two Option Three
Age Life Income Life Income with Period Certain Unit
Of Annuitant Only 5 10 15 20 Refund
----------------------- ------------------------- ---------- ---------- ----------- ---------- -----------------------------------
UNISEX
55 3.00 3.00 3.00 2.98 2.96 2.88
56 3.07 3.06 3.06 3.04 3.02 2.93
57 3.13 3.13 3.12 3.10 3.07 2.98
58 3.20 3.20 3.19 3.17 3.13 3.04
59 3.27 3.27 3.26 3.23 3.20 3.10
60 3.35 3.34 3.33 3.31 3.26 3.16
61 3.43 3.42 3.41 3.38 3.33 3.22
62 3.51 3.51 3.49 3.46 3.40 3.29
63 3.60 3.60 3.58 3.54 3.47 3.36
64 3.70 3.69 3.67 3.62 3.54 3.43
65 3.80 3.79 3.77 3.71 3.61 3.50
66 3.91 3.90 3.87 3.80 3.69 3.58
67 4.02 4.01 3.98 3.90 3.77 3.67
68 4.15 4.13 4.09 4.00 3.85 3.75
69 4.28 4.26 4.21 4.11 3.93 3.85
70 4.42 4.40 4.34 4.21 4.01 3.94
71 4.57 4.55 4.48 4.33 4.08 4.05
72 4.74 4.71 4.62 4.44 4.16 4.16
73 4.91 4.88 4.77 4.56 4.24 4.27
74 5.10 5.07 4.93 4.68 4.31 4.39
75 5.31 5.26 5.10 4.80 4.38 4.52
VALUES NOT SHOWN WILL BE PROVIDED UPON REQUEST. ANNUAL, SEMIANNUAL, OR QUARTERLY
INSTALLMENTS CAN BE DETERMINED BY MULTIPLYING THE MONTHLY INSTALLMENTS BY
11.9185007, 5.9814315, AND 2.9962817.
20
ANNUITY TABLES (CONTINUED)
Table B
------------------------------------------------------------------------------------------------------------------
ANNUITY OPTIONS FOUR AND SIX (100% SURVIVOR OPTION)
MINIMUM MONTHLY INSTALLMENT PER $1,000 OF AMOUNT APPLIED
AGE OF PRIMARY ANNUITANT AGE OF SECONDARY ANNUITANT
55 60 62 65 70 75
-------------------------------------------------- ---------------------------------------------------------------
55 2.68 2.78 2.82 2.86 2.92 2.95
60 2.78 2.94 2.99 3.07 3.17 3.24
62 2.82 2.99 3.06 3.15 3.28 3.37
65 2.86 3.07 3.15 3.27 3.45 3.58
70 2.92 3.17 3.28 3.45 3.72 3.96
75 2.95 3.24 3.37 3.58 3.96 4.34
VALUES NOT SHOWN WILL BE PROVIDED UPON REQUEST. ANNUAL, SEMIANNUAL, OR QUARTERLY
INSTALLMENTS CAN BE DETERMINED BY MULTIPLYING THE MONTHLY INSTALLMENTS BY
11.9185007, 5.9814315, AND 2.9962817, RESPECTIVELY.
--------------------------------------------------------------------------------
TABLE C
--------------------------------------------------------------------------------
ANNUITY OPTION FIVE
MINIMUM MONTHLY INSTALLMENT PER $1,000 OF AMOUNT APPLIED FOR FIXED ANNUITY
PAYMENTS
PERIOD CERTAIN
5 YEARS 7 YEARS 10 YEARS 15 YEARS 20 YEARS
---------------------------------------------------------------------------------------------
FIXED ANNUITY PAYMENT 17.28 12.53 8.96 6.20 4.81
VALUES NOT SHOWN WILL BE PROVIDED UPON REQUEST. ANNUAL, SEMIANNUAL, OR QUARTERLY
INSTALLMENTS CAN BE DETERMINED BY MULTIPLYING THE MONTHLY INSTALLMENTS BY
11.9185007, 5.9814315, 2.9962817, RESPECTIVELY.
21
FIRST SECURITY BENEFIT LIFE INSURANCE
AND ANNUITY COMPANY OF NEW YORK(SM)
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
* Purchase Payments may be made until the earlier of the Annuity Start Date
or termination of the Contract
* A death benefit may be paid prior to the Annuity Start Date according to
the Contract provisions
* Annuity Payments begin on the Annuity Start Date using the method specified
in the Contract
* This Contract is non-participating and does not participate in FSBL's
surplus
BENEFITS AND VALUES PROVIDED BY THIS CONTRACT ARE BASED UPON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT AND ARE VARIABLE. THESE AMOUNTS MAY INCREASE
OR DECREASE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT. (SEE "CONTRACT VALUE AND
EXPENSE PROVISIONS" AND "ANNUITY BENEFIT PROVISIONS" FOR DETAILS.)
IF A CREDIT ENHANCEMENT RIDER HAS BEEN PURCHASED, FSBL WILL RECAPTURE THE AMOUNT
OF ANY CREDIT ENHANCEMENT APPLIED DURING THE 12 MONTHS PRECEDING THE DATE OF THE
OWNER'S DEATH.
FIRST SECURITY BENEFIT LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
00 Xxxx Xxx Xxx Xxxx, Xxxxx Xxxxxx, XX 00000
[0-000-000-0000]
22
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CONTRACT DATA PAGE
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OWNER NAME: CONTRACT NUMBER:
[Xxxx Xxx] [123456789]
JOINT OWNER NAME: CONTRACT DATE:
[Xxxx Xxx] [July 1, 1999]
ANNUITANT NAME: ANNUITY START DATE:
[Xxxx Xxx] [October 5, 2030]
ANNUITANT DATE OF BIRTH: PLAN:
[October 5, 1960] [Non-Qualified]
ASSIGNMENT:
This Contract may be assigned. See
assignment provision.
PRIMARY BENEFICIARY NAME: ANNUITY OPTION:
[Xxxxx Xxx] [Option 2]
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FIRST PURCHASE PAYMENT....................................... [$50,000]
MINIMUM SUBSEQUENT PURCHASE PAYMENT.......................... [$500 ($50 under an automatic investment program)]
FREE WITHDRAWAL PERCENTAGE................................... [10%]
SEPARATE ACCOUNT............................................. Variable Annuity Account A
ADMINISTRATION CHARGE........................................ [0.25% - 0.60% Annually]
ACCOUNT ADMINISTRATION CHARGE................................ [$0 Annually]
WITHDRAWAL CHARGE
Age of Purchase Payment in Years........................ 1 2 3 4 5 6
Withdrawal Charge....................................... 5% 4% 3% 2% 1% 0%
MORTALITY AND EXPENSE RISK CHARGE............................ [0.00% Annually]
AFTER ANNUITY START DATE FOR OPTIONS 1-6................ [0.30% Annually]
RIDERS AND RIDER CHARGES -
Asset Allocation............................................. No Charge
Dollar Cost Averaging........................................ No Charge
[Credit Enhancement at 3%] [0.40%]
[Return of Premium Death Benefit] [0.10%]
BASIS OF ANNUITY TABLES...................................... 1983 (a) Mortality Table with mortality improvement under
Projection Scale G
ASSUMED INTEREST RATE........................................ 3.5% annually
3
SUBACCOUNTS:
[
1. AIM V.I. Capital Appreciation 22. Rydex VT Absolute Return Strategies 50. Rydex VT Inverse Xxxxxxx
2. AIM V.I. International Growth 23. Rydex VT Banking 2000
3. AIM V.I. Mid Cap Core Equity 24. Rydex VT Basic Materials 51. Rydex VT Inverse S&P 500
4. Direxion Dynamic VP XX Xxxx 25. Rydex VT Biotechnology 52. Rydex VT Japan Advantage
5. Dreyfus VIF International 26. Rydex VT Commodities 53. Rydex VT Large Cap Growth
6. Federated Fund for U.S. 27. Rydex VT Consumer Products 54. Rydex VT Large Cap Value
Government Securities II 28. Rydex VT Dynamic Dow 55. Rydex VT Leisure
7. Federated High Income Bond II 29. Rydex VT Dynamic OTC 56. Rydex VT Mid Cap Advantage
8. Fidelity VIP Contrafund 30. Rydex VT Dynamic Xxxxxxx 2000(R) 57. Rydex VT Mid Cap Growth
9. Fidelity VIP Growth 31. Rydex VT Dynamic S&P 500 58. Rydex VT Mid Cap Value
Opportunities 32. Rydex VT Dynamic Strengthening 59. Rydex VT Multi-Cap Core
10. Fidelity VIP Index 500 Dollar Equity
11. Fidelity VIP Investment Grade 33. Rydex VT Dynamic Weakening Dollar 60. Rydex VT Nova
Bond 34. Rydex VT Electronics 61. Rydex VT OTC
12. Xxxxxxxxx Xxxxxx AMT Guardian 35. Rydex VT Energy 62. Rydex VT Precious Metals
13. Xxxxxxxxx Xxxxxx AMT Partners 36. Rydex VT Energy Services 63. Rydex VT Real Estate
14. Xxxxxxxxxxx Xxxx Xxxxxx Xxxxx 00. Rydex VT EP Aggressive 64. Rydex VT Retailing
Cap Fund(R)/VA 38. Rydex VT EP Conservative 65. Rydex VT Xxxxxxx 2000(R)
15. PIMCO VIT Low Duration 39. Rydex VT EP Moderate Advantage
16. PIMCO VIT Real Return 40. Rydex VT Europe Advantage 66. Rydex VT Sector Rotation
17. PIMCO VIT StocksPLUS(R) 41. Rydex VT Financial Services 67. Rydex VT Small Cap Growth
Growth and Income 42. Rydex VT Government Long Bond 68. Rydex VT Small Cap Value
18. PIMCO VIT Total Return Advantage 69. Rydex VT Technology
19. RVT CLS AdvisorOne Xxxxxxx 43. Rydex VT Health Care 70. Rydex VT Telecommunications
20. RVT CLS AdvisorOne Berolina 44. Rydex VT Hedged Equity 71. Rydex VT Transportation
21. RVT CLS AdvisorOne Clermont 45. Rydex VT Internet 72. Rydex VT U.S. Government
46. Rydex VT Inverse Dynamic Dow Money Market
47. Rydex VT Inverse Government Long 73. Rydex VT Utilities
Bond 74. SBL Global
48. Rydex VT Inverse Mid Cap 75. SBL Small Cap Value
49. Rydex VT Inverse OTC 76. Xxx Xxxxxx LIT Government
77. Xxxxx Fargo Advantage
Opportunity VT]
METHOD FOR DEDUCTING ACCOUNT CHARGE:
The Account Charge is deducted at each Contract Anniversary. A pro rata
Account Charge is deducted:
(1) upon a full Withdrawal of Contract Value;
(2) when a Contract has been in force for less than a full Contract
Year;
(3) upon the Annuity Start Date; and
(4) upon payment of a death benefit.
The Account Charge will be waived if Contract Value is $50,000 or more
upon the date the Account Charge is to be deducted.
