EXHIBIT 4(a)
GOLDEN DEFERRED COMBINATION
AMERICAN VARIABLE AND FIXED
LIFE INSURANCE ANNUITY CONTRACT
COMPANY
GOLDEN AMERICAN IS A STOCK COMPANY DOMICILED IN WILMINGTON, DELAWARE.
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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This is a legal Contract between its Owner and us. PLEASE READ IT CAREFULLY.
In this Contract YOU or YOUR refers to the Owner shown above. WE, OUR or US
refers to Golden American Life Insurance Company. You may allocate this
Contract's Accumulation Value among the Variable Separate Account, the General
Account and the Fixed Account shown in the Schedule.
If this Contract is in force, we will make income payments to the Owner
starting on the Annuity Commencement Date as shown in the Schedule. If the
Owner dies prior to the Annuity Commencement Date, we will pay a death benefit
to the Beneficiary. The amount of such benefit is subject to the terms of
this Contract.
ALL PAYMENTS AND VALUES, WHEN BASED ON THE INVESTMENT EXPERIENCE OF A VARIABLE
SEPARATE ACCOUNT DIVISION, MAY INCREASE OR DECREASE, DEPENDING ON THE
CONTRACT'S INVESTMENT RESULTS. ALL PAYMENTS AND VALUES BASED ON THE FIXED
ACCOUNT MAY BE SUBJECT TO A MARKET VALUE ADJUSTMENT, THE OPERATION OF WHICH
MAY CAUSE SUCH PAYMENTS AND VALUES TO INCREASE OR DECREASE.
RIGHT TO EXAMINE CONTRACT: YOU MAY RETURN THIS CONTRACT TO US OR THE AGENT
THROUGH WHOM YOU PURCHASED IT WITHIN 10 DAYS AFTER YOU RECEIVE IT. IF SO
RETURNED, WE WILL TREAT THE CONTRACT AS THOUGH IT WERE NEVER ISSUED. UPON
RECEIPT WE WILL PROMPTLY REFUND THE ACCUMULATION VALUE, ADJUSTED FOR ANY
MARKET VALUE ADJUSTMENT, MINUS ANY CREDIT, PLUS ANY CHARGES WE HAVE DEDUCTED
AS OF THE DATE THE RETURNED CONTRACT IS RECEIVED BY US.
Customer Service Center Secretary:
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
President:
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DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACT - NO DIVIDENDS
Variable Cash Surrender Values while the Annuitant and Owner are living and
prior to the Annuity Commencement Date. Death benefit subject to guaranteed
minimum. Additional Premium Payment Option. Partial Withdrawal Option. Non-
participating. Investment results reflected in values.
GA-IA-1036-02/97
CONTRACT CONTENTS
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THE SCHEDULE YOUR CONTRACT BENEFITS............... 14
PAYMENT AND INVESTMENT INFORMATION.3A CASH VALUE BENEFIT
THE VARIABLE SEPARATE ACCOUNTS.....3B PARTIAL WITHDRAWAL OPTION
THE GENERAL ACCOUNT................3C PROCEEDS PAYABLE TO THE BENEFICIARY
CONTRACT FACTS.....................3D
CHARGES AND FEES...................3E
INCOME PLAN FACTORS................3F CHOOSING AN INCOME PLAN.......... 16
IMPORTANT TERMS .................... 4
INTRODUCTION TO THIS CONTRACT....... 6 ANNUITY BENEFITS
ANNUITY COMMENCEMENT DATE SELECTION
THE CONTRACT FREQUENCY SELECTION
THE OWNER THE INCOME PLAN
THE ANNUITANT THE ANNUITY OPTIONS
THE BENEFICIARY PAYMENT WHEN NAMED PERSON DIES
CHANGE OF OWNER OR BENEFICIARY
OTHER IMPORTANT INFORMATION...... 18
PREMIUM PAYMENTS AND ALLOCATION
CHANGES........................... 8
SENDING NOTICE TO US
INITIAL PREMIUM PAYMENT REPORTS TO OWNER
ADDITIONAL PREMIUM PAYMENT OPTION ASSIGNMENT - USING THIS CONTRACT
YOUR RIGHT TO CHANGE ALLOCATION OF AS COLLATERAL SECURITY
ACCUMULATION VALUE CHANGING THIS CONTRACT
WHAT HAPPENS IF A VARIABLE SEPARATE CONTRACT CHANGES - APPLICABLE
ACCOUNT DIVISION IS NOT AVAILABLE TAX LAW
MISSTATEMENT OF AGE OR SEX
NON-PARTICIPATING
HOW WE MEASURE THE CONTRACT'S PAYMENTS WE MAY DEFER
ACCUMULATION VALUE 9 AUTHORITY TO MAKE AGREEMENTS
REQUIRED NOTE ON OUR COMPUTATIONS
THE VARIABLE SEPARATE ACCOUNTS
THE GENERAL ACCOUNT
VALUATION PERIOD
ACCUMULATION VALUE
ACCUMULATION VALUE IN EACH DIVISION
MEASUREMENT OF INVESTMENT EXPERIENCE
CHARGES DEDUCTED FROM ACCUMULATION VALUE
ON EACH CONTRACT PROCESSING DATE
Copies of any application and any additional Riders and Endorsements are at
the back of this Contract.
THE SCHEDULE
The Schedule gives specific facts about this Contract and its coverage.
Please refer to the Schedule while reading this Contract.
2
THE SCHEDULE
PAYMENT AND INVESTMENT INFORMATION
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Annuitant's Issue Age Annuitant's Sex Owner's Issue Age
[55] [MALE] [35]
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Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Contract Date Issue Date Residence Status
[JANUARY 1, 1994] [JANUARY 1, 1994] [DELAWARE]
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Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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INITIAL INVESTMENT
Initial Premium Payment received: [$10,000]
Your initial Accumulation Value has been invested as follows:
PERCENTAGE OF
DIVISIONS ACCUMULATION VALUE
--------- ------------------
[Multiple Allocation 10%
Fully Managed 10%
Capital Appreciation 10%
Rising Dividends 10%
All-Growth 10%
Real Estate 10%
Hard Assets 5%
Emerging Markets 5%
Limited Maturity Bond 5%
Liquid Asset 5%
Value Equity 5%
Strategic Equity 5%
Managed Global 5%
Fixed Allocation - 1 Year 5%
------------------------- ---
Total 100%
===== ====
ADDITIONAL PREMIUM PAYMENT INFORMATION
[We will accept additional Premium Payments until either the Annuitant or
Owner reaches the Attained Age of 85. The minimum additional payment which
may be made is [$500.00].]
[In no event may you contribute to your XXX for the taxable year in which you
attain age 70 1/2 and thereafter (except for rollover contributions). The
minimum additional payment which may be made is [$250.00].]
3A1
THE SCHEDULE
PAYMENT AND INVESTMENT INFORMATION (continued)
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Annuitant's Issue Age Annuitant's Sex Owner's Issue Age
[55] [MALE] [35]
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Initial Premium Annuity Option Annuity Commencement Date
$[10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Contract Date Issue Date Residence Status
[JANUARY 1, 1994] [JANUARY 1, 1994] [DELAWARE]
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Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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ACCUMULATION VALUE ALLOCATION RULES
The maximum number of Divisions in which you may be invested at any one time
is [sixteen]. You are allowed unlimited allocation changes per Contract Year
without charge. We reserve the right to impose a charge for any allocation
change in excess of [twelve] per Contract Year. The Excess Allocation Charge
is shown in the Schedule. Allocations into and out of the Guaranteed
Interest Divisions are subject to restrictions (see General Account).
ALLOCATION CHANGES BY TELEPHONE
You may request allocation changes by telephone during our telephone request
business hours. You may call our Customer Service Center at 1-800-366-0066
to make allocation changes by using the personal identification number you
will receive. You may also mail any notice or request for allocation changes
to our Customer Service Center at the address shown on the cover page.
3A2
THE SCHEDULE
THE VARIABLE SEPARATE ACCOUNTS
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Separate Account(s)
[SEPARATE ACCOUNT B, SEPARATE ACCOUNT D AND THE Contract Number
FIXED ACCOUNT] [123456]
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DIVISIONS INVESTING IN SHARES OF A MUTUAL FUND
Separate Account B (the "Account") is a unit investment trust Separate
Account, organized in and governed by the laws of the State of Delaware, our
state of domicile. The Account is divided into Divisions. Each Division
listed below invests in shares of the mutual fund portfolio (the "Series")
designated. Each portfolio is a part of The GCG Trust managed by Directed
Services, Inc.
SERIES SERIES
------ ------
[Multiple Allocation Real Estate
Fully Managed Hard Assets
Value Equity Emerging Markets
Small Cap Limited Maturity Bond
Capital Appreciation Liquid Assets
Rising Dividend Strategic Equity
All-Growth Managed Global]
Each Division listed below invests in shares of the mutual fund portfolio
(the "Portfolio") designated. Each portfolio is a part of the Equi-Select
Series Trust managed by Equitable Investment Services, Inc.
PORTFOLIO
---------
[OTC
Growth & Income
Value + Growth
Research
Total Return]
The Division listed below invests in shares of the mutual fund portfolio (the
"Portfolio") designated. The portfolio is a part of the Warburg Pincus Trust
managed by Warburg, Xxxxxx Counselors, Inc.
PORTFOLIO
---------
[International Equity]
3B
THE SCHEDULE
THE GENERAL ACCOUNT
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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GENERAL ACCOUNT
[GUARANTEED INTEREST DIVISION
A Guaranteed Interest Division provides an annual minimum interest rate of
3%. At our sole discretion, we may periodically declare higher interest
rates for specific Guarantee Periods. Such rates will apply to periods
following the date of declaration. Any declaration will be by class and will
be based on our future expectations.
LIMITATIONS OF ALLOCATIONS
We reserve the right to restrict allocations into and out of the General
Account. Such limits may be dollar restrictions on allocations into the
General Account or we may restrict reallocations into the General Account.
TRANSFERS FROM A GUARANTEED INTEREST DIVISION
We currently require that an amount allocated to a Guarantee Period not be
transferred until the Maturity Date, except pursuant to our published rules.
We reserve the right not to allow amounts previously transferred from a
Guaranteed Interest Division to the Variable Separate Account Divisions or to
a Fixed Allocation to be transferred back to a Guaranteed Interest Division
for a period of at least six months from the date of transfer.]
3C
THE SCHEDULE
CONTRACT FACTS
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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CONTRACT FACTS
CONTRACT PROCESSING DATE
The Contract Processing Date for your Contract is [January 1] of each year.
SPECIALLY DESIGNATED DIVISIONS
When a distribution is made from an investment portfolio underlying a
Variable Separate Account Division in which reinvestment is not available, we
will allocate the amount of the distribution to the [Liquid Asset Division]
unless you specify otherwise.
PARTIAL WITHDRAWALS
The maximum amount that can be withdrawn each Contract Year without being
considered an Excess Partial Withdrawal is 10% of the Accumulation Value as
of the date of the withdrawal. We will collect a Surrender Charge for Excess
Partial Withdrawals and a charge for any unrecovered Premium Tax. In no
event may a Partial Withdrawal exceed 90% of the Cash Surrender Value. After
a Partial Withdrawal, the remaining Accumulation Value must be at least $100
to keep the Contract in force.
CONVENTIONAL PARTIAL WITHDRAWALS
Minimum Withdrawal Amount: $1,000.
Any Conventional Partial Withdrawal from a Fixed Allocation is subject to a
Market Value Adjustment unless withdrawn from a Fixed Allocation within 30
days prior to the Maturity Date.
SYSTEMATIC PARTIAL WITHDRAWALS
Systematic Partial Withdrawals may be taken on a monthly, quarterly or annual
basis. You select the day withdrawals will be made, but no later than the
28th day of the month. If you do not elect a day, the certificate date will
be used.
Minimum Withdrawal Amount: $100.
Maximum Withdrawal Amount:
Variable Separate Account Divisions: 0.83% monthly, 2.50% quarterly or 10%
annually of Accumulation Value.
Fixed Allocations and
Guaranteed Interest Divisions: Interest earned on a Fixed Allocation
or Guaranteed Interest Division for
the prior month, quarter or year
(depending on the frequency selected).
Systematic Partial Withdrawals from Fixed Allocations are not subject to a
Market Value Adjustment.
[XXX PARTIAL WITHDRAWALS FOR QUALIFIED PLANS ONLY
XXX Partial Withdrawals may be taken on a monthly, quarterly or annual basis.
A minimum withdrawal of $100.00 is required. You select the day the
withdrawals will be made, but no later than the 28th day of the month. If
you do not elect a day, the Contract Date will be used. Systematic Partial
Withdrawals and Conventional Partial Withdrawals are not allowed when XXX
Partial Withdrawals are being taken. An XXX Partial Withdrawal in excess of
the maximum amount allowed under the Systematic Partial Withdrawal option may
be subject to a Market Value Adjustment.]
3D1
THE SCHEDULE
CONTRACT FACTS (continued)
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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DEATH BENEFITS
[IF DEATHBEN = "1": The Death Benefit is the greatest of (i) the
Accumulation Value less an amount equal to all Credits applied within twelve
months prior to date of death, (ii) the Guaranteed Death Benefit less an
amount equal to all Credits applied within twelve months prior to date of
death, (iii) the Cash Surrender Value, and (iv) the sum of premiums paid,
less any Partial Withdrawals.
IF DEATHBEN = "2": The Death Benefit is the greatest of (i) the Accumulation
Value less an amount equal to all Credits applied within twelve months prior
to date of death, (ii) the Guaranteed Death Benefit less an amount equal to
all Credits applied within twelve months prior to date of death, (iii) the
Cash Surrender Value, and (iv) the sum of premiums paid, less any Partial
Withdrawals.
IF DEATHBEN = "3": The Death Benefit is the greatest of (i) the Cash
Surrender Value, (ii) the Accumulation Value less an amount equal to all
Credits applied within twelve months prior to date of death, (iii) the sum of
the premiums paid, less any Partial Withdrawals.]
GUARANTEED DEATH BENEFIT
On the Contract Date, the Guaranteed Death Benefit is the initial premium
plus any Credits. On subsequent Valuation Dates, the Guaranteed Death
Benefit is calculated as follows:
[IF DEATHBEN = "1": OPTION 1:
(1) Start with the Guaranteed Death Benefit from the prior Valuation Date;
(2) Calculate interest on (1) for the current Valuation Period at the
Guaranteed Death Benefit Interest Rate;
(3) Add (1) and (2);
(4) Add any additional premiums paid and Credits during the current
Valuation Period to (3);
(5) Subtract Partial Withdrawals made during the current Valuation Period
from (4);
Each accumulated initial or additional Premium Payment and Credit, reduced by
any Partial Withdrawals (including any associated Market Value Adjustment and
Surrender Charge incurred) allocated to such premium, will continue to grow
at the Guaranteed Death Benefit Interest Rate until reaching its Maximum
Guaranteed Death Benefit.
GUARANTEED DEATH BENEFIT INTEREST RATE
The Guaranteed Death Benefit is accumulated at a rate of 7% compounded
annually, except:
(1) Amounts in the Liquid Asset Division are accumulated at the net rate of
return for the Liquid Asset Division during the current Valuation Period
if less than 7%; and
(2) Amounts in the Limited Maturity Bond Division are accumulated at the net
rate of return for the Limited Maturity Bond Division during the current
Valuation Period if less than 7%; and
(3) Amounts in a Fixed Allocation or Guaranteed Interest Division are
accumulated at the interest rate being credited to such Fixed Allocation
or Guaranteed Interest Division during the current Valuation Period if
less than 7%.
MAXIMUM GUARANTEED DEATH BENEFITS
The Maximum Guaranteed Death Benefit equals two times the cumulative premiums
paid, plus two times cumulative Credits applied, less an adjustment to
reflect Partial Withdrawals. Each Partial Withdrawal reduces the maximum
Guaranteed Death Benefit as follows: First, the Maximum Guaranteed Death
Benefit is reduced by any Partial Withdrawals of earnings; second, the
Maximum Guaranteed Death Benefit is reduced in proportion to the reduction in
Accumulation Values for other Partial Withdrawals (in each case, including
any associated Market Adjustment and Surrender Charge incurred). To the
extent that Partial Withdrawals in a Contract Year do not exceed 7% of
cumulative Premiums and did not exceed 7% of the cumulative premiums in any
prior Contract Year, such withdrawals will be treated as earnings for
purposes of calculating the Maximum Guaranteed Death Benefit. Once Partial
Withdrawals exceed 7% of the cumulative premiums in any Contract Year,
Partial Withdrawals will be treated as Other Partial Withdrawals.)
3D2
THE SCHEDULE
CONTRACT FACTS (continued)
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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[IF DEATHBEN = "2": OPTION 2:
(1) Start with the Guaranteed Death Benefit from the prior Valuation Date;
(2) Add to (1) any additional premium paid and any Credits since the prior
Valuation Date and subtract from (1) any Partial Withdrawals taken prior
to the Valuation Date.
(3) On a Valuation Date that occurs on or prior to the Owner's attained age
80, which is also a Contract Anniversary, we set the Guaranteed Death
Benefit equal to the greater of (2) or the Accumulation Value as of such
date.
On all other Valuation Dates, the Guaranteed Death Benefit is equal to (2).]
[IF DEATHBEN = "3": OPTION 3:
(1) Start with the Guaranteed Death Benefit from the prior Valuation Date;
(2) Add any additional premiums paid and any Credits during the current
Valuation Period to (1);
(3) Subtract any Partial Withdrawals made during the current Valuation
Period from (2).]
CHANGE OF OWNER
A change of Owner will result in recalculation of the death benefit and
Guaranteed Death Benefit. As of the date of change, we will use the
Accumulation Value of the Contract, for the purpose of such recalculation
only, as the initial premium to determine a new Guaranteed Death Benefit for
this Contract. The new Owner's age at the time of the change will be used as
the basis for this calculation. The new Owner's death will determine when a
death benefit is payable.
[IF DEATHBEN = "1": If the new Owner's age is less than or equal to 75, the
Guaranteed Death Benefit Option in effect prior to the change of Owner will
remain in effect. If the new Owner's age is greater than 75, the Guaranteed
Death Benefit will be zero and the Death Benefit will be the greater of the
Cash Surrender Value, the Accumulation Value less an amount equal to all
Credits applied within twelve months prior to date of death, and the sum of
the premiums paid, less any Partial Withdrawals.
IF DEATHBEN = "2": If the new Owner's age is less than or equal to 79, the
Guaranteed Death Benefit Option in effect prior to the change of Owner will
remain in effect. If the new Owner's age is greater than 79, the Guaranteed
Death Benefit will be zero and the Death Benefit will be the greater of the
Cash Surrender Value, the Accumulation Value less an amount equal to all
Credits applied within twelve months prior to date of death, and the sum of
the premiums paid, less any Partial Withdrawals.
IF DEATHBEN = "3": The Guaranteed Death Benefit Option after the change of
Owner will remain the same as before the change.]
CHOOSING AN INCOME PLAN
REQUIRED DATE OF ANNUITY COMMENCEMENT
[Distributions from a Contract funding a qualified plan must commence no
later than [April 1st] of the calendar year following the calendar year in
which the Owner attains age 70 1/2.]
The Annuity Commencement Date is required to be the same date as the Contract
Processing Date in the month following the Annuitant's 90th birthday. If, on
the Annuity Commencement Date, a Surrender Charge remains, your elected
Annuity Option must include a period certain of at least five years duration.
In applying the Accumulation Value, we may first collect any Premium Taxes
due us.
MINIMUM ANNUITY INCOME PAYMENT
The minimum monthly annuity income payment that we will make is [$20].
OPTIONAL BENEFIT RIDERS - [None.]
3D3
THE SCHEDULE
CONTRACT FACTS (continued)
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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ATTAINED AGE
The Issue Age of the Annuitant or Owner plus the number of full years elapsed
since the Contract Date.
FIXED ACCOUNT
MINIMUM FIXED ALLOCATION
The minimum allocation to the Fixed Account in any one Fixed Allocation is
[$250.00].
MINIMUM GUARANTEED INTEREST RATE - [3%.]
GUARANTEE PERIODS
We currently offer Guarantee Periods of [1,2,3,4,5,6,7,8,9 and 10] year(s).
We reserve the right to offer Guarantee Periods of durations other than those
available on the Contract Date. We also reserve the right to cease offering
a particular Guarantee Period or Periods.
INDEX RATE
The Index Rate is the average of the Ask Yields for the U.S. Treasury Strips
as reported by a national quoting service for the applicable maturity. The
average is based on the period from the 22nd day of the calendar month two
months prior to the calendar month of Index Rate determination to the 21st
day of the calendar month immediately prior to the month of determination.
The applicable maturity date for these U.S. Treasury Strips is on or next
following the last day of the Guarantee Period. If the Ask Yields are no
longer available, the Index Rate will be determined using a suitable
replacement method.
We currently set the Index Rate once each calendar month. However, we
reserve the right to set the Index Rate more frequently than monthly, but in
no event will such Index Rate be based on a period less than 28 days.
CREDIT ADDED TO PREMIUM
A Credit will be added to each Premium Payment applied to the Accumulation
Value. The Credit will be applied pro rata to each Variable Separate Account
Division, Fixed Allocation or Guaranteed Interest Division in the same ratio
as the applicable Premium Payment. The Credit is equal to [4%] of the
Premium Payment applied to the Accumulation Value. In the following
circumstances the Credit may not be payable:
(1) When the Contract is returned under the Right To Examine Contract
provision, any Credit will be deducted from the refund amount.
(2) If a death benefit becomes payable, any Credit based on premiums
received within one year prior to the date of death of the Owner (or
Annuitant if the Owner is not an individual) may reduce the death
benefit payable.
(3) If any Surrender Charges are waived under the Waiver of Surrender Charge
Rider: 1) The accumulated value will be reduced for all credits applied
within one year prior to the date such surrender charges are waived; 2)
No credits will be applied to payments received after the earliest date
in which any surrender charges are waived.
3D4
THE SCHEDULE
CHARGES AND FEES
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
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Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
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Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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DEDUCTIONS FROM PREMIUMS
[None.]
DEDUCTIONS FROM ACCUMULATION VALUE
INITIAL ADMINISTRATIVE CHARGE
[None.]
ADMINISTRATIVE CHARGE
We charge [$40] to cover a portion of our ongoing administrative expenses for
each Contract Processing Period. The charge is incurred at the beginning of
the Contract Processing Period and deducted on the Contract Processing Date
at the end of the period. At the time of deduction, this charge will be
waived if:
(1) The Accumulation Value is at least $100,000 ; or
(2) The sum of premiums paid to date is at least $100,000.
EXCESS ALLOCATION CHARGE
Currently none, however, we reserve the right to charge [$25] for a change if
you make more than [twelve] allocation changes per Contract Year. Any charge
will be deducted in proportion to the amount being transferred from each
Division.
SURRENDER CHARGE
A Surrender Charge is imposed as a percentage of premium if the Contract is
surrendered or an Excess Partial Withdrawal is taken. The percentage imposed
at time of surrender or Excess Partial Withdrawal depends on the number of
complete years that have elapsed since a Premium Payment was made. The
Surrender charge expressed as a percentage of each Premium Payment is as
follows:
COMPLETE YEARS ELAPSED SURRENDER
SINCE PREMIUM PAYMENT CHARGES
--------------------- ---------
[0 8%
1 8%
2 8%
3 8%
4 7%
5 6%
6 5%
7 3%
8 1%
9+ 0%]
For the purpose of calculating the Surrender Charge for an Excess Partial
Withdrawal: a) we treat premiums as being withdrawn on a first-in, first-out
basis; and b) amounts withdrawn which are not considered an Excess Partial
Withdrawal are not considered a withdrawal of any Premium Payments.
3E1
THE SCHEDULE
CHARGES AND FEES
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
------------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
------------------------------------------------------------------------------
Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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[PREMIUM TAXES
We deduct the amount of any premium or other state and local taxes levied by
any state or governmental entity when such taxes are incurred.
We reserve the right to defer collection of Premium Taxes until surrender or
until application of Accumulation Value to an Annuity Option. We reserve the
right to change the amount we charge for Premium Tax charges on future
Premium Payments to conform with changes in the law or if the Owner changes
state of residence. ]
DEDUCTIONS FROM THE DIVISIONS
MORTALITY AND EXPENSE RISK CHARGE - We deduct [IF DEATHBEN = "1": .004280% IF
DEATHBEN = "2": .003863% IF DEATHBEN = "3": .003446%] of the assets in each
Variable Separate Account Division on a daily basis (equivalent to an annual
rate of [IF DEATHBEN = "1": 1.55% IF DEATHBEN = "2": 1.40% IF DEATHBEN
= "3": 1.25%]) for mortality and expense risks. This charge is not deducted
from the Fixed Account or General Account values.
ASSET BASED ADMINISTRATIVE CHARGE - We deduct [0.000411%] of the assets in
each Variable Separate Account Division on a daily basis (equivalent to an
annual rate of [0.15%]) to compensate us for a portion of our ongoing
administrative expenses. This charge is not deducted from the Fixed Account
or General Account values.
CHARGE DEDUCTION DIVISION
All charges against the Accumulation Value in this Contract will be deducted
from the [Liquid Asset Division].
3E2
THE SCHEDULE
INCOME PLAN FACTORS
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Annuitant Owner
[XXXXXX X. XXX] [XXXX X. XXX]
------------------------------------------------------------------------------
Initial Premium Annuity Option Annuity Commencement Date
[$10,000] [LIFE 10-YEAR CERTAIN] [JANUARY 1, 2053]
------------------------------------------------------------------------------
Separate Account(s) Contract Number
[SEPARATE ACCOUNT B AND THE FIXED ACCOUNT] [123456]
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Values for other payment periods, ages or joint life combinations are
available on request. Monthly payments are shown for each $1,000 applied.
TABLE FOR INCOME FOR A FIXED PERIOD
Fixed Period Monthly Fixed Period Monthly Fixed Period Monthly
of Years Income of Years Income of Years Income
------------ ------- ------------ ------- ------------ -------
[5 17.95 14 7.28 23 5.00
6 15.18 15 6.89 24 4.85
7 13.20 16 6.54 25 4.72
8 11.71 17 6.24 26 4.60
9 10.56 18 5.98 27 4.49
10 9.64 19 5.74 28 4.38
11 8.88 20 5.53 29 4.28
12 8.26 21 5.33 30 4.19]
13 7.73 22 5.16
TABLE FOR INCOME FOR LIFE
Male/Female Male/Female Male/Female
Age 10 Years Certain 20 Years Certain Refund Certain
--- ---------------- ---------------- --------------
[50 $4.06/3.83 $3.96/3.77 $3.93/3.75
55 4.43/4.14 4.25/4.05 4.25/4.03
60 4.90/4.56 4.57/4.37 4.66/4.40
65 5.51/5.10 4.90/4.73 5.12/4.83
70 6.26/5.81 5.18/5.07 5.76/5.42
75 7.11/6.70 5.38/5.33 6.58/6.19
80 7.99/7.70 5.48/5.46 7.69/7.21
85 8.72/8.59 5.52/5.51 8.72/8.59
90 9.23/9.18 5.53/5.53 10.63/10.53]
3F
IMPORTANT TERMS
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ACCUMULATION VALUE - The amount that a Contract provides for investment at any
time. Initially, this amount is equal to the premium paid.
ANNUITANT - The person designated by the Owner to be the measuring life in
determining Annuity Payments.
ANNUITY COMMENCEMENT DATE - For each Contract, the date on which Annuity
Payments begin.
ANNUITY OPTIONS - Options the Owner selects that determine the form and amount
of annuity payments.
ANNUITY PAYMENT - The periodic payment an Owner receives. It may be either a
fixed or a variable amount based on the Annuity Option chosen.
ATTAINED AGE - The Issue Age of the Annuitant or Owner plus the number of full
years elapsed since the Contract Date.
BENEFICIARY - The person designated to receive benefits in the case of the
death of the Owner.
BUSINESS DAY - Any day the New York Stock Exchange ("NYSE") is open for
trading, exclusive of federal holidays, or any day on which the Securities
and Exchange Commission ("SEC") requires that mutual funds, unit investment
trusts or other investment portfolios be valued.
CASH SURRENDER VALUE - The amount the Owner receives upon surrender of the
Contract.
CONTRACT ANNIVERSARY - The anniversary of the Contract Date.
CONTRACT DATE - The date we received the initial premium and upon which we
begin determining the Contract values. It may not be the same as the
Contract Issue Date. This date is used to determine Contract months,
processing dates, years, and anniversaries.
CONTRACT ISSUE DATE - The date the Contract is issued at our Customer Service
Center.
CONTRACT PROCESSING DATES - The days when we deduct certain charges from the
Accumulation Value. If the Contract Processing Date is not a Valuation
Date, it will be on the next succeeding Valuation date. The Contract
Processing Date will be on the Contract Anniversary of each year.
CONTRACT PROCESSING PERIOD - The period between successive Contract Processing
Dates unless it is the first Contract Processing Period. In that case, it
is the period from the Contract Date to the first Contract Processing Date.
CONTRACT YEAR - The period between Contract Anniversaries.
CHARGE DEDUCTION DIVISION - The Division from which all charges are deducted
if so designated or elected by the Owner.
CONTINGENT ANNUITANT - The person designated by the Owner who, upon the
Annuitant's death prior to the Annuity Commencement Date, becomes the
Annuitant.
CONTRACT ISSUE DATE - The date the group contract is issued at our Customer
Service Center.
CONTRACTHOLDER - The entity to whom the certificates group contract is issued.
CREDIT - An amount added to the Contract's Accumulation Value at the time a
Premium Payment is made.
4
IMPORTANT TERMS (continued)
------------------------------------------------------------------------------
EXPERIENCE FACTOR - The factor which reflects the investment experience of the
portfolio in which a Variable Separate Account Division invests and also
reflects the charges assessed against the Division for a Valuation Period.
FIXED ACCOUNT - This is the Separate Account established to support Fixed
Allocations.
FIXED ALLOCATION - An amount allocated to the Fixed Account that is credited
with a Guaranteed Interest Rate for a specified Guarantee Period.
GUARANTEED DEATH BENEFIT INTEREST RATE - The annual rate at which the
Guaranteed Death Benefit is calculated.
GUARANTEE PERIOD - The period of years a rate of interest is guaranteed to be
credited to a Fixed Allocation or allocations to a Guaranteed Interest
Division.
GUARANTEED INTEREST DIVISION - An investment option available in the General
Account, an account which contains all of our assets other than those held
in our Separate Accounts.
GUARANTEED INTEREST RATE - The effective annual interest rate which we will
credit for a specified Guarantee Period.
GUARANTEED MINIMUM INTEREST RATE - The minimum interest rate which can be
declared by us for Fixed Allocations or allocations to a Guaranteed
Interest Division.
INDEX OF INVESTMENT EXPERIENCE - The index that measures the performance of a
Variable Separate Account Division.
INITIAL PREMIUM - The payment amount required to put each Contract in effect.
ISSUE AGE - The Annuitant's or Owner's age on the last birthday on or before
the Contract Date.
MARKET VALUE ADJUSTMENT - A positive or negative adjustment to a Fixed
Allocation. It may apply if all or part of a Fixed Allocation is
withdrawn, transferred, or applied to an Annuity Option prior to the end of
the Guarantee Period.
MATURITY DATE - The date on which a Guarantee Period matures.
OWNER - The person who owns a Contract and is entitled to exercise all rights
of the Contract. This person's death also initiates payment of the death
benefit.
RIDERS - Riders add provisions or change the terms of the Contract.
SPECIALLY DESIGNATED DIVISION - Distributions from a portfolio underlying a
Division in which reinvestment is not available will be allocated to this
Division unless you specify otherwise.
VALUATION DATE - The day at the end of a Valuation Period when each Division
is valued.
VALUATION PERIOD - Each business day together with any non-business days
before it.
VARIABLE SEPARATE ACCOUNT DIVISION - An investment option available in the
Variable Separate Account shown in the Schedule.
5
INTRODUCTION TO THIS CONTRACT
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THE CONTRACT
This is a legal Contract between you and us. We provide benefits as stated
in this Contract. In return, you supply us with the Initial Premium Payment
required to put this Contract in effect.
This Contract, together with any Riders or Endorsements, constitutes the
entire Contract. Riders and Endorsements add provisions or change the terms
of the basic Contract.
THE OWNER
You are the Owner of this Contract. You are also the Annuitant unless
another Annuitant has been named by you and is shown in the Schedule. You
have the rights and options described in this Contract, including but not
limited to the right to receive the Annuity Benefits on the Annuity
Commencement Date.
One or more people may own this Contract. If there are multiple Owners
named, the age of the oldest Owner will be used to determine the applicable
death benefit. In the case of a sole Owner who dies prior to the Annuity
Commencement Date, we will pay the Beneficiary the death benefit then due.
If the sole Owner is not an individual, we will treat the Annuitant as Owner
for the purpose of determining when the Owner dies under the death benefit
provision (if there is no Contingent Annuitant), and the Annuitant's age will
determine the applicable death benefit payable to the Beneficiary. The sole
Owner's estate will be the Beneficiary if no Beneficiary designation is in
effect, or if the designated Beneficiary has predeceased the Owner. In the
case of a joint Owner of the Contract dying prior to the Annuity Commencement
Date, the surviving Owner(s) will be deemed as the Beneficiary(ies).
THE ANNUITANT
The Annuitant is the measuring life of the Annuity Benefits provided under
this Contract. You may name a Contingent Annuitant. The Annuitant may not
be changed during the Annuitant's lifetime.
If the Annuitant dies before the Annuity Commencement Date, the Contingent
Annuitant becomes the Annuitant. You will be the Contingent Annuitant unless
you name someone else. The Annuitant must be a natural person. If the
Annuitant dies and no Contingent Annuitant has been named, we will allow you
sixty days to designate someone other than yourself as an Annuitant. If all
Owners are not individuals and, through the operation of this provision, an
Owner becomes Annuitant, we will pay the death proceeds to the Beneficiary.
If there are joint Owners, we will treat the youngest of the Owners as the
Contingent Annuitant designated, unless you elect otherwise.
THE BENEFICIARY
The Beneficiary is the person to whom we pay death proceeds if any Owner dies
prior to the Annuity Commencement Date. See Proceeds Payable to the
Beneficiary for more information. We pay death proceeds to the primary
Beneficiary (unless there are joint Owners in which case the death benefit
proceeds are payable to the surviving Owner). If the primary Beneficiary
dies before the Owner, the death proceeds are paid to the Contingent
Beneficiary, if any. If there is no surviving Beneficiary, we pay the death
proceeds to the Owner's estate.
6
INTRODUCTION TO THIS CONTRACT (continued)
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One or more persons may be named as primary Beneficiary or contingent
Beneficiary. In the case of more than one Beneficiary, we will assume any
death proceeds are to be paid in equal shares to the surviving Beneficiaries.
You can specify other than equal shares.
You have the right to change Beneficiaries, unless you designate the primary
Beneficiary irrevocable. When an irrevocable Beneficiary has been
designated, you and the irrevocable Beneficiary may have to act together to
exercise the rights and options under this Contract.
CHANGE OF OWNER OR BENEFICIARY
During your lifetime and while this Contract is in effect you can transfer
ownership of this Contract or change the Beneficiary. To make any of these
changes, you must send us written notice of the change in a form satisfactory
to us. The change will take effect as of the day the notice is signed. The
change will not affect any payment made or action taken by us before
recording the change at our Customer Service Center. A Change of Owner may
affect the amount of death benefit payable under this Contract. See Proceeds
Payable to Beneficiary.
7
PREMIUM PAYMENTS AND ALLOCATION CHARGES
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INITIAL PREMIUM PAYMENT
The Initial Premium Payment is required to put this Contract in effect. The
amount of the Initial Premium Payment is shown in the Schedule.
ADDITIONAL PREMIUM PAYMENT OPTION
You may make additional Premium Payments under this Contract after the end of
the Right to Examine period. Restrictions on additional Premium Payments,
such as the Attained Age of the Annuitant or Owner and the timing and amount
of each payment, are shown in the Schedule. We reserve the right to defer
acceptance of or to return any additional Premium Payments.
As of the date we receive and accept your additional Premium Payment:
(1) The Accumulation Value will increase by the amount of the Premium
Payment plus any Credit less any premium deductions as shown in the
Schedule.
(2) The increase in the Accumulation Value will be allocated among the
Divisions of the Variable Separate Account and General Account and
allocations to the Fixed Account in accordance with your instructions.
If you do not provide such instructions, allocation will be among the
Divisions of the Variable Separate Account and General Account and
allocations to the Fixed Account in proportion to the amount of
Accumulation Value in each Division or Fixed Allocation.
WHERE TO MAKE PAYMENTS
Remit the Premium Payments to our Customer Service Center at the address
shown on the cover page. On request we will give you a receipt signed by our
treasurer.
YOUR RIGHT TO CHANGE ALLOCATION OF ACCUMULATION VALUE
You may change the allocation of the Accumulation Value among the Divisions
and Fixed Allocations after the end of the Right to Examine period. The
number of free allocation changes each year that we will allow is shown in
the Schedule. To make an allocation change, you must provide us with
satisfactory notice at our Customer Service Center. The change will take
effect when we receive the notice. Restrictions for reallocation into and
out of Divisions of the Variable Separate Account and General Account and
allocations to the Fixed Account are shown in the Schedule. An allocation
from the Fixed Account may be subject to a Market Value Adjustment. See the
Schedule.
WHAT HAPPENS IF A VARIABLE SEPARATE ACCOUNT DIVISION IS NOT AVAILABLE
When a distribution is made from an investment portfolio supporting a unit
investment trust Separate Account Division in which reinvestment is not
available, we will allocate the distribution to the Specially Designated
Division shown in the Schedule unless you specify otherwise.
Such a distribution may occur when an investment portfolio or Division
matures, when distribution from a portfolio or Division cannot be reinvested
in the portfolio or Division due to the unavailability of securities, or for
other reasons. When this occurs because of maturity, we will send written
notice to you thirty days in advance of such date. To elect an allocation to
other than the Specially Designated Division shown in the Schedule, you must
provide satisfactory notice to us at least seven days prior to the date the
investment matures. Such allocations will not be counted as an allocation
change of the Accumulation Value for purposes of the number of free
allocations permitted.
8
HOW WE MEASURE THE CONTRACT'S ACCUMULATION VALUE
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The variable Annuity Benefits under this Contract are provided through
investments which may be made in our Separate Accounts.
THE VARIABLE SEPARATE ACCOUNTS
These accounts, which are designated in the Schedule, are kept separate from
our General Account and any other Separate Accounts we may have. They are
used to support Variable Annuity Contracts and may be used for other purposes
permitted by applicable laws and regulations. We own the assets in the
Separate Accounts. Assets equal to the reserves and other liabilities of the
accounts will not be charged with liabilities that arise from any other
business we conduct; but, we may transfer to our General Account assets which
exceed the reserves and other liabilities of the Variable Separate Accounts.
Income and realized and unrealized gains or losses from assets in these
Variable Separate Accounts are credited to or charged against the account
without regard to other income, gains or losses in our other investment
accounts.
The Variable Separate Account will invest in mutual funds, unit investment
trusts and other investment portfolios which we determine to be suitable for
this Contract's purposes. The Variable Separate Account is treated as a unit
investment trust under Federal securities laws. It is registered with the
Securities and Exchange Commission ("SEC") under the Investment Company Act
of 1940. The Variable Separate Account is also governed by state law as
designated in the Schedule. The trusts may offer non-registered series.
VARIABLE SEPARATE ACCOUNT DIVISIONS
A unit investment trust Separate Account includes Divisions, each investing
in a designated investment portfolio. The Divisions and the investment
portfolios designated may be managed by a separate investment adviser. Such
adviser may be registered under the Investment Advisers Act of 1940.
CHANGES WITHIN THE VARIABLE SEPARATE ACCOUNTS
We may, from time to time, make additional Variable Separate Account
Divisions available to you. These Divisions will invest in investment
portfolios we find suitable for this Contract. We also have the right to
eliminate Divisions from a Variable Separate Account, to combine two or more
Divisions or to substitute a new portfolio for the portfolio in which a
Division invests. A substitution may become necessary if, in our judgment, a
portfolio or Division no longer suits the purpose of this Contract. This may
happen due to a change in laws or regulations, or a change in a portfolio's
investment objectives or restrictions, or because the portfolio or Division
is no longer available for investment, or for some other reason. We may get
prior approval from the insurance department of our state of domicile before
making such a substitution. We will also get any required approval from the
SEC and any other required approvals before making such a substitution.
Subject to any required regulatory approvals, we reserve the right to
transfer assets of the Variable Separate Account which we determine to be
associated with the class of contracts to which this Contract belongs, to
another Variable Separate Account or Division.
When permitted by law, we reserve the right to:
(1) deregister a Variable Separate Account under the Investment Company Act
of 1940;
(2) operate a Variable Separate Account as a management company under the
Investment Company Act of 1940, if it is operating as a unit investment
trust;
(3) operate a Variable Separate Account as a unit investment trust under the
Investment Company Act of 1940, if it is operating as a managed Variable
Separate Account;
(4) restrict or eliminate any voting rights of Owners, or other persons who
have voting rights to a Variable Separate Account; and,
(5) combine a Variable Separate Account with other Variable Separate
Accounts.
9
HOW WE MEASURE THE CONTRACT'S ACCUMULATION VALUE (continued)
------------------------------------------------------------------------------
THE GENERAL ACCOUNT
The General Account contains all assets of the Company other than those in
the Separate Accounts we establish. The Guaranteed Interest Divisions
available for investment are shown in the Schedule. We may, from time to
time, offer other Divisions where assets are held in our General Account.
VALUATION PERIOD
Each Division and Fixed Allocation will be valued at the end of each
Valuation Period on a Valuation Date. A Valuation Period is each Business
Day together with any non-Business Days before it. A Business Day is any day
the New York Stock Exchange (NYSE) is open for trading, and the SEC requires
mutual funds, unit investment trusts, or other investment portfolios to value
their securities.
ACCUMULATION VALUE
The Accumulation Value of this Contract is the sum of the amounts in each of
the Divisions of the Variable Separate Account and General Account and
allocations to the Fixed Account. You select the Divisions of the Variable
Separate Account and General Account and allocations to the Fixed Account to
which to allocate the Accumulation Value. The maximum number of Divisions
and Fixed Allocations to which the Accumulation Value may be allocated at any
one time is shown in the Schedule.
ACCUMULATION VALUE IN EACH DIVISION AND FIXED ALLOCATION
ON THE CONTRACT DATE
On the Contract Date, the Accumulation Value is allocated to each Division
and Fixed Allocation as elected by you, subject to certain terms and
conditions imposed by us. We reserve the right to allocate premium to the
Specially Designated Division during any Right to Examine Contract period.
After such time, allocation will be made proportionately in accordance with
the initial allocation(s) as elected by you.
ON EACH VALUATION DATE
At the end of each subsequent Valuation Period, the amount of Accumulation
Value in each Division and Fixed Allocation will be calculated as follows:
(1) We take the Accumulation Value in the Division or Fixed Allocation at
the end of the preceding Valuation Period.
(2) We multiply (1) by the Variable Separate Account Division's Net Rate of
Return for the current Valuation Period or we calculate the interest to
be credited to a Fixed Allocation or to a Guaranteed Interest Division
for the current Valuation Period.
(3) We add (1) and (2).
(4) We add to (3) any additional Premium Payments plus Credits (less any
premium deductions as shown in the Schedule) allocated to the Division
or Fixed Allocation during the current Valuation Period.
(5) We add or subtract allocations to or from that Division or Fixed
Allocation during the current Valuation Period.
(6) We subtract from (5) any Partial Withdrawals which are allocated to the
Division or Fixed Allocation during the current Valuation Period.
(7) We subtract from (6) the amounts allocated to that Division or Fixed
Allocation for:
(a) any charges due for the Optional Benefit Riders as shown in the
Schedule;
(b) any deductions from Accumulation Value as shown in the Schedule.
All amounts in (7) are allocated to each Division or Fixed Allocation in the
proportion that (6) bears to the Accumulation Value unless the Charge
Deduction Division has been specified (see the Schedule).
10
HOW WE MEASURE THE CONTRACT'S ACCUMULATION VALUE (continued)
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FIXED ACCOUNT
The Fixed Account is a Separate Account under state insurance law and is not
required to be registered with the Securities and Exchange Commission under
the Investment Company Act of 1940. The Fixed Account includes various Fixed
Allocations which we credit with fixed rates of interest for the Guarantee
Period or Periods you select. We reset the interest rates for new Fixed
Allocations periodically based on our sole discretion.
GUARANTEE PERIODS
Each Fixed Allocation is guaranteed an interest rate or rates for a period, a
Guarantee Period. The Guaranteed Interest Rates for a Fixed Allocation are
effective for the entire period. The Maturity Date of a Guarantee Period
will be on the last day of the calendar month in which the Guarantee Period
ends. Withdrawals and transfers made during a Guarantee Period may be
subject to a Market Value Adjustment unless made within thirty days prior to
the Maturity Date.
Upon the expiry of a Guarantee Period, we will transfer the Accumulation
Value of the expiring Fixed Allocation to a Fixed Allocation with a Guarantee
Period equal in length to the expiring Guarantee Period, unless you select
another period prior to a Maturity Date. We will notify you at least thirty
days prior to a Maturity Date of your options for renewal. If the period
remaining from the expiry of the previous Guarantee Period to the Annuity
Commencement Date is less than the period you have elected or the period
expiring, the next shortest period then available that will not extend beyond
the Annuity Commencement Date will be offered to you. If a period is not
available, the Accumulation Value will be transferred to the Specially
Designated Division.
We will declare Guaranteed Interest Rates for the then available Fixed
Allocation Guarantee Periods. These interest rates are based solely on our
expectation as to our future earnings. Declared Guaranteed Interest Rates
are subject to change at any time prior to application to specific Fixed
Allocations, although in no event will the rates be less than the Minimum
Guaranteed Interest Rate (see the Schedule).
MARKET VALUE ADJUSTMENTS
A Market Value Adjustment will be applied to a Fixed Allocation upon
withdrawal, transfer or application to an Income Plan if made more than
thirty days prior to such Fixed Allocation's Maturity Date, except on
Systematic Partial Withdrawals and XXX Partial Withdrawals. The Market Value
Adjustment is applied to each Fixed Allocation separately.
The Market Value Adjustment is determined by multiplying the amount of the
Accumulation Value withdrawn, transferred or applied to an Income Plan by the
following factor:
( 1 + I ) N/365
-------------------------
( 1 + J + .0050 ) 1
Where I is the Index Rate for a Fixed Allocation on the first day of the
applicable Guarantee Period: J is the Index Rate for new Fixed Allocations
with Guarantee Periods equal to the number of years (fractional years rounded
up to the next full year) remaining in the Guarantee Period at the time of
calculation; and N is the remaining number of days in the Guarantee Period at
the time of calculation. (The Index Rate is described in the Schedule.)
Market Value Adjustments will be applied as follows:
(1) The Market Value Adjustment will be applied to the amount withdrawn
before deduction of any applicable Surrender Charge.
(2) For a Partial Withdrawal, partial transfer or in the case where a
portion of an allocation is applied to an Income Plan, the Market Value
Adjustment will be calculated on the total amount that must be
withdrawn, transferred or applied to an Income Plan in order to provide
the amount requested.
11
HOW WE MEASURE THE CONTRACT'S ACCUMULATION VALUE (continued)
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(3) If the Market Value Adjustment is negative, it will be assessed first
against any remaining Accumulation Value in the particular Fixed
Allocation. Any remaining Market Value Adjustment will be applied
against the amount withdrawn, transferred or applied to an Income Plan.
(4) If the Market Value Adjustment is positive, it will be credited to any
remaining Accumulation Value in the particular Fixed Allocation. If a
cash surrender, full transfer or full application to an Income Plan has
been requested, the Market Value Adjustment is added to the amount
withdrawn, transferred or applied to an Income Plan.
MEASUREMENT OF INVESTMENT EXPERIENCE
INDEX OF INVESTMENT EXPERIENCE
The Investment Experience of a Variable Separate Account Division is
determined on each Valuation Date. We use an Index to measure changes in
each Division's experience during a Valuation Period. We set the Index at
$10 when the first investments in a Division are made. The Index for a
current Valuation Period equals the Index for the preceding Valuation Period
multiplied by the Experience Factor for the current Valuation Period.
HOW WE DETERMINE THE EXPERIENCE FACTOR
For Divisions of a unit investment trust Separate Account the Experience
Factor reflects the Investment Experience of the portfolio in which the
Division invests as well as the charges assessed against the Division for a
Valuation Period. The factor is calculated as follows:
(1) We take the net asset value of the portfolio in which the Division
invests at the end of the current Valuation Period.
(2) We add to (1) the amount of any dividend or capital gains distribution
declared for the investment portfolio and reinvested in such portfolio
during the current Valuation Period. We subtract from that amount a
charge for our taxes, if any.
(3) We divide (2) by the net asset value of the portfolio at the end of the
preceding Valuation Period.
(4) We subtract the daily Mortality and Expense Risk Charge for each
Division shown in the Schedule for each day in the Valuation Period.
(5) We subtract the daily Asset Based Administrative Charge shown in the
Schedule for each day in the Valuation Period.
Calculations for Divisions investing in unit investment trusts are on a per
unit basis.
NET RATE OF RETURN FOR A Variable SEPARATE ACCOUNT DIVISION
The Net Rate of Return for a Variable Separate Account Division during a
Valuation Period is the Experience Factor for that Valuation Period minus
one.
INTEREST CREDITED TO A GUARANTEED INTEREST DIVISION
Accumulation Value allocated to a Guaranteed Interest Division will be
credited with the Guaranteed Interest Rate for the Guarantee Period in effect
on the date the premium or reallocation is applied. Once applied, such rate
will be guaranteed until the Maturity Date of that Guarantee Period.
Interest will be credited daily at a rate to yield the declared annual
Guaranteed Interest Rate. No Guaranteed Interest Rate will be less than the
Minimum Interest Rate shown in the Schedule.
INTEREST CREDITED TO A FIXED ALLOCATION
A Fixed Allocation will be credited with the Guaranteed Interest Rate for the
Guarantee Period in effect on the date the premium or reallocation is
applied. Once applied, such rate will be guaranteed until that Fixed
Allocation's Maturity Date. Interest will be credited daily at a rate to
yield the declared annual Guaranteed Interest Rate.
We periodically declare Guaranteed Interest Rates for then available
Guarantee Periods. No Guaranteed Interest Rate will be less than the Minimum
Interest Rate shown in the Schedule.
12
HOW WE MEASURE THE CONTRACT'S ACCUMULATION VALUE (continued)
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CHARGES DEDUCTED FROM ACCUMULATION VALUE ON EACH CONTRACT PROCESSING DATE
Expense charges and fees are shown in the Schedule.
CHARGE DEDUCTION DIVISION OPTION
We will deduct all charges against the Accumulation Value of this Contract
from the Charge Deduction Division if you elected this option on the
application (see the Schedule). If you did not elect this Option or if the
charges are greater than the amount in the Charge Deduction Division, the
charges against the Accumulation Value will be deducted as follows:
(1) If these charges are less than the Accumulation Value in the Variable
Separate Account Divisions, they will be deducted proportionately from
all Divisions.
(2) If these charges exceed the Accumulation Value in the Variable Separate
Account Divisions, any excess over such value will be deducted
proportionately from any Fixed Allocations and Guaranteed Interest
Divisions.
Any charges taken from the Fixed Account or the General Account will be taken
from the Fixed Allocations or Guaranteed Interest Divisions starting with the
Guarantee Period nearest its Maturity Date until such charges have been paid.
At any time while this Contract is in effect, you may change your election of
this Option. To do this you must send us a written request to our Customer
Service Center. Any change will take effect within seven days of the date we
receive your request.
13
YOUR CONTRACT BENEFITS
------------------------------------------------------------------------------
While this Contract is in effect, there are important rights and benefits
that are available to you. We discuss these rights and benefits in this
section.
CASH VALUE BENEFIT
CASH SURRENDER VALUE
The Cash Surrender Value, while the Annuitant is living and before the
Annuity Commencement Date, is determined as follows:
(1) We take the Contract's Accumulation Value;
(2) We adjust for any applicable Market Value Adjustment;
(3) We deduct any Surrender Charge;
(4) We deduct any charges shown in the Schedule that have been incurred but
not yet deducted, including;
(a) any administrative fee that has not yet been deducted;
(b) the pro rata part of any charges for Optional Benefit Riders; and
(c) any applicable premium or other tax.
CANCELLING TO RECEIVE THE CASH SURRENDER VALUE
At any time while the Annuitant is living and before the Annuity Commencement
Date, you may surrender this Contract to us. To do this, you must return
this Contract with a signed request for cancellation to our Customer Service
Center.
The Cash Surrender Value will vary daily. We will determine the Cash
Surrender Value as of the date we receive the Contract and your signed
request in our Customer Service Center. All benefits under this Contract
will then end.
We will usually pay the Cash Surrender Value within seven days; but, we may
delay payment as described in the Payments We May Defer provision.
PARTIAL WITHDRAWAL OPTION
After the Contract Date, you may make Partial Withdrawals. The minimum
amount that may be withdrawn is shown in the Schedule. For purposes of
calculating any Surrender Charge, any Partial Withdrawal you take will not be
considered premium, unless it is an Excess Partial Withdrawal. To take a
Partial Withdrawal, you must provide us satisfactory notice at our Customer
Service Center.
PROCEEDS PAYABLE TO THE BENEFICIARY
PRIOR TO THE ANNUITY COMMENCEMENT DATE
If the sole Owner dies prior to the Annuity Commencement Date, we will pay
the Beneficiary the death benefit. If there are joint Owners and any Owner
dies, we will pay the surviving Owners the death benefit. We will pay the
amount on receipt of due proof of the Owner's death at our Customer Service
Center. Such amount may be received in a single lump sum or applied to any
of the Annuity Options (see Choosing an Income Plan). When the Owner (or all
Owners where there are joint Owners) is not an individual, the death benefit
will become payable on the death of the Annuitant prior to the Annuity
Commencement Date (unless a Contingent Annuitant survived the Annuitant).
Only one death benefit is payable under this Contract. In all events,
distributions under the Contract must be made as required by applicable law.
HOW TO CLAIM PAYMENTS TO BENEFICIARY
We must receive proof of the Owner's (or the Annuitant's) death before we
will make any payments to the Beneficiary. We will calculate the death
benefit as of the date we receive due proof of death. The Beneficiary should
contact our Customer Service Center for instructions.
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CHOOSING AN INCOME PLAN
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ANNUITY BENEFITS
If the Annuitant and Owner are living on the Annuity Commencement Date, we
will begin making payments to the Owner. We will make these payment under
the Annuity Option (or Options) as chosen in the application or as
subsequently selected. You may choose or change an Annuity Option by making
a written request at least 30 days prior to the Annuity Commencement Date.
Unless you have chosen otherwise, Option 2 on a 10-year period certain basis
will become effective. The amounts of the payments will be determined by
applying the Accumulation Value on the Annuity Commencement Date in
accordance with the Annuity Options section below (see Payments We Defer).
Before we pay any Annuity Benefits, we require the return of this Contract.
If this Contract has been lost, we require the applicable lost Contract form.
ANNUITY COMMENCEMENT DATE SELECTION
You select the Annuity Commencement Date. You may select any date following
the fifth Contract Anniversary but before the required date of Annuity
Commencement as shown in the Schedule. If you do not select a date, the
Annuity Commencement Date will be in the month following the required date of
Annuity Commencement.
FREQUENCY SELECTION
You may choose the frequency of the Annuity Payments. They may be monthly,
quarterly, semi-annually or annually. If we do not receive written notice
from you, the payments will be made monthly.
THE INCOME PLAN
While this Contract is in effect and before the Annuity Commencement Date,
you may chose one or more Annuity Options for the payment of death benefits
proceeds. If, at the time of the Owner's death, no Option has been chosen
for paying the death benefit proceeds, the Beneficiary may choose an Option
within one year. You may also elect an Annuity Option on surrender of the
Contract for its Cash Surrender Value. For each Option we will issue a
separate written agreement putting the Option into effect.
Our approval is needed for any Option where:
(1) the person named to receive payment is other than the Owner or
Beneficiary; or
(2) the person named is not a natural person, such as a corporation; or
(3) any income payment would be less than the minimum annuity income payment
shown in the Schedule.
THE ANNUITY OPTIONS
There are four Options to choose from. They are:
OPTION 1. INCOME FOR A FIXED PERIOD
Payment is made in equal installments for a fixed number of years. We
guarantee each monthly payment will be at least the Income for Fixed Period
amount shown in the Schedule. Values for annual, semiannual or quarterly
payments are available on request.
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CHOOSING AN INCOME PLAN (continued)
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OPTION 2. INCOME FOR LIFE
Payment is made to the person named in equal monthly installments and
guaranteed for at least a period certain. The period certain can be 10 or 20
years. Other periods certain are available on request. A refund certain may
be chosen instead. Under this arrangement, income is guaranteed until
payments equal the amount applied. If the person named lives beyond the
guaranteed period, payments continue until his or her death.
We guarantee each payment will be at least the amount shown in the Schedule.
By age, we mean the named person's age on his or her last birthday before the
Option's effective date. Amounts for ages not shown are available on
request.
OPTION 3. JOINT LIFE INCOME
This Option is available if there are two persons named to receive payments.
At least one of the persons named must be either the Owner of Beneficiary of
this Contract. Monthly payments are guaranteed and are made as long as at
least one of the named persons is living. The monthly payment amounts are
available upon request. Such amounts are guaranteed and will be calculated
on the same basis as the Table for Income for Life, however, the amounts will
be based on two lives.
OPTION 4. ANNUITY PLAN
An amount can be used to buy any single premium immediate annuity we offer
for the Option's effective date.
The minimum rates for Option 1 are based on 3% interest, compounded annually.
The minimum rates for Options 2 and 3 are based on 3% interest, compounded
annually, and the Annuity 2000 Mortality Table. We may pay a higher rate at
our discretion.
PAYMENT WHEN NAMED PERSON DIES
When the person named to receive payment dies, we will pay any amounts still
due as provided by the Option agreement. The amounts still due are
determined as follows:
(1) For Option 1 or for any remaining guaranteed payments in Option 2,
payments will be continued.
(2) For Option 3, no amounts are payable after both named persons have died.
(3) For Option 4, the annuity agreement will state the amount due, if any.
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OTHER IMPORTANT INFORMATION
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SENDING NOTICE TO US
Whenever written notice is required, send it to our Customer Service Center.
The address of our Customer Service Center is shown on the cover page.
Please include your Contract number in all correspondence.
REPORTS TO OWNER
We will send you a report at least once during each Contract Year. The
report will show the Accumulation Value and the Cash Surrender Value as of
the end of the Contract Processing Period. The report will also show the
allocation of the Accumulation Value as of such date and the amounts deducted
from or added to the Accumulation Value since the last report. The report
will also include any information that may be currently required by the
insurance supervisory official of the jurisdiction in which the Contract is
delivered.
We will also send you copies of any shareholder reports of the portfolios in
which the Divisions of the Variable Separate Account invest, as well as any
other reports, notices or documents required by law to be furnished to
Owners.
ASSIGNMENT - USING THIS CONTRACT AS COLLATERAL SECURITY
You can assign this Contract as collateral security for a loan or other
obligation. This does not change the ownership. Your rights and any
Beneficiary's right are subject to the terms of the assignment. To make or
release an assignment, we must receive written notice satisfactory to us, at
our Customer Service Center. We are not responsible for the validity of any
assignment.
CHANGING THIS CONTRACT
This Contract or any additional benefit riders may be changed to another
annuity plan according to our rules at the time of the change.
CONTRACT CHANGES - APPLICABLE TAX LAW
We reserve the right to make changes in this Contract or its Riders to the
extent we deem it necessary to continue to qualify this Contract as an
annuity. Any such changes will apply uniformly to all Contracts that are
affected. You will be given advance written notice of such changes.
MISSTATEMENT OF AGE OR SEX
If an age or sex has been misstated, the amounts payable or benefits provided
by this Contract will be those that the Premium Payment made would have
bought at the correct age or sex.
NON-PARTICIPATING
This Contract does not participate in the divisible surplus of Golden
American Life Insurance Company.
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OTHER IMPORTANT INFORMATION (continued)
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PAYMENTS WE MAY DEFER
We may not be able to determine the value of the assets of the Variable
Separate Account Divisions because:
(1) the NYSE is closed for trading;
(2) the SEC determines that a state of emergency exists;
(3) an order or pronouncement of the SEC permits a delay for the protection
of Owners; or
(4) the check used to pay the premium has not cleared through the banking
system. This may take up to 15 days.
During such times, as to amounts allocated to the Divisions of the Variable
Separate Account, we may delay;
(1) determination and payment of the Cash Surrender Value;
(2) determination and payment of any death benefit if death occurs before
the Annuity Commencement Date;
(3) allocation changes of the Accumulation Value; or,
(4) application of the Accumulation Value under an income plan.
As to the amounts allocated to a Guaranteed Interest Division of the General
Account and as to amounts allocated to Fixed Allocations of the Fixed
Account, we may, at any time, defer payment of the Cash Surrender Value for
up to six months after we receive a request for it. We will allow interest
of at least 3.00% a year on any Cash Surrender Value payment derived from the
Fixed Allocations or the Guaranteed Interest Divisions that we defer 30 days
or more.
AUTHORITY TO MAKE AGREEMENTS
All agreements made by us must be signed by one of our officers. No other
person, including an insurance agent or broker, can:
(1) change any of this Contract's terms;
(2) extend the time for Premium Payments; or
(3) make any agreement binding on us.
REQUIRED NOTE ON OUR COMPUTATIONS
We have filed a detailed statement of our computations with the insurance
supervisory official in the jurisdiction where this Contract is delivered.
The values are not less than those required by the law of that state or
jurisdiction. Any benefit provided by an attached Optional Benefit Rider
will not increase these values unless otherwise stated in that Rider.
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DEFERRED COMBINATION VARIABLE AND FIXED ANNUITY CONTRACT - NO DIVIDENDS
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Variable Cash Surrender Values while the Annuitant and Owner are living and
prior to the Annuity Commencement Date. Death benefit subject to guaranteed
minimum. Additional Premium Payment Option. Partial Withdrawal Option. Non-
participating. Investment results reflected in values.
