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EXHIBIT 4(a)(iii)
[SAGE LIFE ASSURANCE OF AMERICA, INC. LOGO]
Member of Sage Insurance Group
A Stock Company
Home Office Customer Service Center
000 Xxxxxxxx Xxxxxx [P. O. Box 1234
Stamford, CT 06901 Wethersfield CT 06109-1234
0-000-000-0000]
PLEASE READ THIS CONTRACT CAREFULLY. This group contract is a legal contract
between the Contractholder and Sage Life Assurance of America, Inc. The
Contractholder has the rights described in the Contract. The Owner and Annuitant
are named in each Certificate. We will make Income Payments beginning on the
Income Date shown in each Certificate if the Annuitant is living on that date.
RIGHT TO EXAMINE A CERTIFICATE:
EACH OWNER MAY RETURN HIS OR HER CERTIFICATE TO US OR THE AGENT WHO SOLD IT TO
THE OWNER WITHIN 10 DAYS AFTER RECEIPT OF IT (THE FREE LOOK PERIOD). WHEN WE
RECEIVE THE RETURNED CERTIFICATE, WE WILL PROMPTLY REFUND TO THE OWNER HIS OR
HER ACCOUNT VALUE PLUS ANY CHARGES SHOWN IN THE SCHEDULE THAT WE HAVE DEDUCTED
FROM SUCH ACCOUNT VALUE ON OR BEFORE THE DATE THE RETURNED CERTIFICATE WAS
RECEIVED BY US, OR IF GREATER AND REQUIRED BY THE LAW OF THE OWNER'S STATE, THE
INITIAL PURCHASE PAYMENT.
ALL PAYMENTS AND VALUES, WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE VARIABLE
ACCOUNT, MAY INCREASE OR DECREASE, DEPENDING ON INVESTMENT RESULTS AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT. 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.
[SIG]
Chairman
GROUP FLEXIBLE PAYMENT DEFERRED COMBINATION FIXED AND
VARIABLE ANNUITY CONTRACT
Surrender Values while the Owner is living and prior to the Income Date.
Income Payments begin on the Income Date
Nonparticipating
DVA(MGC)-9712
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TABLE OF CONTENTS
DEFINITIONS..................................................................................3
MAKING PURCHASE PAYMENTS.....................................................................5
VARIABLE ACCOUNT.............................................................................5
FIXED ACCOUNT................................................................................7
TRANSFERS AMONG ACCOUNTS.....................................................................9
WITHDRAWING ALL OR PART OF THE OWNER'S ACCOUNT VALUE.........................................9
CHARGES......................................................................................9
OWNER, ANNUITANT AND BENEFICIARY............................................................10
DEATH BENEFITS..............................................................................10
GENERAL PROVISIONS..........................................................................12
ANNUITY INCOME BENEFITS.....................................................................14
SCHEDULE....................................................................................17
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DEFINITIONS
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"ACCOUNT VALUE" is the entire amount we hold under a Certificate for the Owner
before the Income Date. It is equal to the sum of the Variable Account Value and
the Fixed Account Value.
"ACCUMULATION UNIT" is the unit of measure we use before the Income Date to keep
track of the value of each Variable Sub-Account.
"ANNUITANT" is the natural person whose age determines the Maximum Income Date
and the amount and duration of income payments involving life contingencies. The
Annuitant may also be the person to whom any payment will be made starting on
the Income Date. The Annuitant's name appears in the Certificate Schedule.
"BENEFICIARY" is the person or persons to whom we pay a death benefit if any
Owner dies prior to the Income Date.
"CERTIFICATE DATE" is the date a Certificate is issued at our Customer Service
Center. The Certificate Date is shown in the Certificate Schedule. While a
Certificate is in force, every anniversary of the Certificate Date is a
CERTIFICATE ANNIVERSARY, and each and every consecutive twelve-month period
beginning on the Certificate Date and each Certificate Anniversary is a
CERTIFICATE YEAR.
"CONTINGENT ANNUITANT" is the natural person who becomes the Annuitant if the
Annuitant dies prior to the Income Date.
"CONTINGENT BENEFICIARY" is the person that becomes the Beneficiary if the named
Beneficiary dies prior to the Income Date.
"CUSTOMER SERVICE CENTER" is where we provide service to the Owner. The mailing
address and telephone number of the Customer Service Center are shown on the
first page of a Certificate.
"EXCESS WITHDRAWAL" is a withdrawal of Account Value that exceeds the Free
Withdrawal Amount.
"EXPIRY DATE" is the last day in a Guarantee Period.
"FIXED ACCOUNT" is a separate investment account of ours into which purchase
payments may be invested or Account Value may be transferred.
"FIXED ACCOUNT VALUE" is the sum of the value of each Fixed Sub-Account on any
particular day.
A "FIXED SUB-ACCOUNT" is established when purchase payments are invested or
amounts are transferred to the Fixed Account. The value of each Fixed
Sub-Account is equal to the amount invested, increased by interest and reduced
by any withdrawals or transfers from, or charges assessed against the Fixed
Sub-Account.
"FREE WITHDRAWAL AMOUNT" is the maximum amount that can be withdrawn in a
Certificate Year without being subject to a surrender charge. This amount is
described in the Schedule.
"GENERAL ACCOUNT" consists of all our assets other than those held in any
separate investment accounts.
"GUARANTEED INTEREST RATE" is the effective annual interest rate we will credit
for a specified Guarantee Period. The Guaranteed Interest Rate will never be
less than the minimum shown in the Schedule.
"GUARANTEE PERIOD" is a period of years for which a specified effective annual
interest rate is guaranteed by us. Interest is credited daily at a rate to yield
the declared annual Guaranteed Interest Rate.
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"HOME OFFICE" is our main office. The mailing address is shown on the first page
of a Certificate.
"INCOME DATE" is the date when income payments under a Certificate commence.
This date is shown in the Certificate Schedule.
"INCOME UNIT" is the unit of measure we use to calculate the amount of income
payments under the Variable Income Annuity.
"MARKET VALUE ADJUSTMENT" is a positive or negative adjustment that may apply to
withdrawals or transfers, whether in whole or in part, and amounts applied to an
income plan, from a Fixed Sub-Account before the end of a Guarantee Period.
"NET ASSET VALUE" is the price of one share of an investment portfolio.
"OWNER" is the Owner of a Certificate. The Owner's name appears in the
Certificate Schedule. The Owner is entitled to exercise all rights under his or
her Certificate. However, if the Owner designates an irrevocable beneficiary,
the Owner may need that beneficiary's consent before he or she may exercise the
Owner's rights under a Certificate. The death of any Owner before the Income
Date initiates payment of the death benefit.
"SATISFACTORY NOTICE" is a notice or request authorized by the Owner, in a form
satisfactory to us, received at our Customer Service Center.
"SUB-ACCOUNT" includes both Variable Sub-Accounts and Fixed Sub-Accounts, unless
the context indicates otherwise.
"SURRENDER VALUE" is the amount the Owner receives upon surrender of his or her
Certificate before the Income Date. It is the Owner's Account Value, plus or
minus any applicable Market Value Adjustment, and less any applicable surrender
charges or other charges shown in the Schedule.
"VALUATION DATE" is the date at the end of a Valuation Period when each Variable
Sub-Account is valued.
"VALUATION PERIOD" is the period between one calculation of an Accumulation Unit
value and the next calculation. Normally, we calculate Accumulation Units daily
when the New York Stock Exchange is open for trading and we are open for
business. We can delay this calculation if an emergency exists, making disposal
or fair valuation of assets in the Variable Account not reasonably practicable,
or the Securities and Exchange Commission (SEC) permits the delay. We may change
when we calculate the Accumulation Unit value by giving the Owner 30 days
notice, or such notice as may be required by law.
"VARIABLE ACCOUNT" is a separate investment account of ours into which purchase
payments may be invested or Account Value may be transferred. The Variable
Account is shown in the Schedule.
"VARIABLE ACCOUNT VALUE" is the sum of the value of each Variable Sub-Account on
a Valuation Date.
"VARIABLE SUB-ACCOUNT" is a division of the Variable Account that invests in
shares of a particular investment portfolio. The value of a Variable Sub-Account
is determined by multiplying (a) times (b) where:
(a) equals the number of Accumulation Units held in the Variable
Sub-Account; and
(b) equals the value of the Accumulation Unit for the Variable
Sub-Account.
"WE", "US" OR "OUR" is Sage Life Assurance of America, Inc.
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MAKING PURCHASE PAYMENTS
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INITIAL PURCHASE PAYMENT - The Owner must make the initial purchase payment in
order to put a Certificate in force. The amount of the Owner's initial purchase
payment is shown in the Certificate Schedule.
ADDITIONAL PURCHASE PAYMENTS - After the initial purchase payment, additional
purchase payments may be made at any time while a Certificate is in force and
before the Income Date. The amount of any additional purchase payments may vary
but are subject to limits described in the Schedule.
ALLOCATION OF PURCHASE PAYMENTS AMONG THE VARIABLE AND FIXED ACCOUNTS - Subject
to limits described in the Schedule, the Owner tells us how to allocate the
Owner's purchase payment, less any applicable taxes, by notifying us of the
Owner's choices. The Owner specified how to allocate the Owner's initial
purchase payment in the Owner's application for a Certificate. Initial purchase
payments allocated to the Fixed Account will be invested in Fixed Sub-Accounts
with the Guarantee Periods that the Owner specified in the Owner's application.
We may, however, require that an initial purchase payment allocated to a
Variable Sub-Account be invested in the Designated Sub-Account shown in the
Schedule during the Free Look Period. At the end of the Free Look Period, if the
Owner's initial purchase payment was allocated to the Designated Sub-Account by
us, we will transfer the value of the Designated Sub-Account to the
Sub-Account(s) the Owner specified in the Owner's application. For the purpose
of processing transfers from the Designated Sub-Account, the Free Look Period
will end 15 days after the Certificate Date.
Subject to our rules, the Owner may tell us how to allocate any additional
purchase payments. If the Owner does not tell us, they will be allocated in the
same manner as the Owner's most recent purchase payment.
CANCELLATION OF CERTIFICATE - If the Owner has not made a purchase payment for
more than [2] years and the Owner's Account Value is less than [$2,000] on a
Certificate Anniversary, we may cancel a Certificate and pay the Owner the
Surrender Value as though the Owner had made a full withdrawal. We will send the
Owner written notice at the Owner's address of record. The Owner will be allowed
61 days from the date we mail the Owner the notice to submit an additional
purchase payment to us in an amount not less than the difference between
[$2,000] and the Account Value on the last Certificate Anniversary. The
additional purchase payment is subject to the limits and minimums shown in the
Schedule.
VARIABLE ACCOUNT
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VARIABLE ACCOUNT - A variable account is an investment account we maintain
separate from our General Account and any other separate investment accounts we
may have. We own the assets in a variable account. A variable account will not
be charged with liabilities that arise from any other business that we conduct.
We may transfer to our General Account assets that exceed the reserves and other
liabilities of a variable account.
A variable account may invest in mutual funds, unit investment trusts and other
investment portfolios. Such a variable account is treated as a unit investment
trust under Federal securities laws and is registered with the SEC under the
Investment Company Act of 1940.
We may offer certain series or variable accounts that may not be registered with
the SEC under the Securities Act of 1933. Any such series or variable account,
if offered, will be described in the applicable offering document.
The Variable Account for a Certificate is shown in the Schedule. The laws of our
state of domicile govern this Variable Account.
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VARIABLE SUB-ACCOUNTS - A unit investment trust variable account includes
variable sub-accounts, each investing in a designated investment portfolio. The
sub-accounts and the investment portfolios in which they invest are specified in
the prospectus or offering document. Income, gains or losses, realized and
unrealized from assets in each variable sub-account are credited to or charged
against that variable sub-account without regard to other income, gains or
losses in the other sub-accounts or our other income, gains or losses.
CHANGES WITHIN THE VARIABLE ACCOUNT - We may, from time to time, make additional
Variable Sub-Accounts available to the Owner. These Sub-Accounts will invest in
investment portfolios we find suitable for the Group Contract. We also have the
right to eliminate Sub-Accounts, to combine two or more Sub-Accounts or to
substitute a new investment portfolio for the portfolio in which a Sub-Account
invests. Such an action may become necessary if, in our judgment, a portfolio or
Sub-Account no longer suits the purposes of the Group Contract. This may happen
due to a change in laws or regulations, or a change in a portfolio's or
Sub-Account's investment objectives or restrictions, or because the portfolio or
Sub-Account is no longer available for investment, or for some other reason. We
will get prior approval from the insurance department of our state of domicile
before taking such action. If required, this approval process will be on file
with the insurance department of the jurisdiction in which the Group Contract is
delivered. We will also get any required approval from the SEC and any other
required approvals before taking such an action.
Subject to any required regulatory approvals, we reserve the right to transfer
assets of the Variable Sub-Accounts that we determine to be associated with the
class of Group Contracts to which the Group Contract belongs, to another
variable account or variable sub-account.
When permitted by law, we reserve the right to:
1. Deregister the Variable Account under the Investment Company Act of
1940;
2. Operate the Variable Account as a management company under the
Investment Company Act of 1940, if it is operating as a unit
investment trust;
3. Operate the Variable Account as a unit investment trust under
the Investment Company Act of 1940, if it is operating as a
Managed Separate Account;
4. Restrict or eliminate any voting rights of Owners, or other persons
who have voting rights as to the Variable Account;
5. Combine the Variable Account with other separate investment accounts;
and
6. Combine a Variable Sub-Account with another Variable Sub-Account.
If any actions we take result in a material change in the underlying investments
of a Variable Sub-Account in which an Owner is invested, we will notify the
Owner of the change. The Owner may then choose a new Sub-Account.
ACCUMULATION UNITS - We keep track of the value of each of the Owner's Variable
Sub-Accounts by crediting the Owner with Accumulation Units for each
Sub-Account. The number of Accumulation Units credited to the Owner for each
Sub-Account is determined by dividing (a) by (b) where:
(a) is the dollar amount allocated to that Sub-Account; and
(b) is the value of the Accumulation Unit for that Sub-Account for the
Valuation Date on which the purchase payment or transferred amount is
invested in that Sub-Account.
Accumulation Units will be adjusted for any transfers and will be canceled on
payment of a death benefit, a withdrawal, a surrender, the application of
Account Value to an income plan on the Income Date, or assessment of charges
shown in the Schedule (other than the variable sub-account charges) based on
their value for the Valuation Period in which the transaction occurs.
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VALUE OF ACCUMULATION UNITS - The Accumulation Unit value for any Valuation
Period is determined by multiplying (a) by (b) where:
(a) is the Accumulation Unit value for the immediately preceding Valuation
Period; and
(b) is the "net investment factor" for the Variable Sub-Account for the
Valuation Period for which the value is being determined.
The value of an Accumulation Unit may increase, decrease or remain the same from
one Valuation Period to the next.
NET INVESTMENT FACTOR - The net investment factor for a Variable Sub-Account is
an index that measures the investment performance of that Sub-Account from one
Valuation Period to the next. The net investment factor for any Valuation Period
is determined by dividing (a) by (b), and then subtracting (c) where:
(a) is the net result of:
(i) the Net Asset Value per share of the investment portfolio share
in which the Sub-Account invests determined at the end of the
current Valuation Period; plus
(ii) the per share amount of any dividend or capital gains
distribution made by that investment portfolio on shares held
in the Sub-Account if the "ex-dividend" date occurs during the
current Valuation Period; and plus or minus
(iii) a per share charge or credit for any taxes reserved for, which
is determined by us to have resulted from the operations of
that Sub-Account;
(b) is the Net Asset Value per share of the investment portfolio share in
which the Sub-Account invests determined at the end of the immediately
preceding Valuation Period; and
(c) is the daily variable sub-account charges shown in the Schedule
(adjusted for the number of days in the Valuation Period).
The net investment factor may be more or less than, or equal to, one.
FIXED ACCOUNT
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FIXED ACCOUNT - The Fixed Account is a separate investment account under state
insurance law. It is maintained separate from our General Account and separate
from any other separate investment account that we may have. We own the assets
in the Fixed Account. Notwithstanding the foregoing, our obligations under (and
the values and benefits under) the Fixed Account option of a Certificate do not
vary as a function of the investment performance of the Fixed Account. Owners
and Beneficiaries with rights under a Certificate do not participate in the
investment gains or losses of the assets of the Fixed Account. Such gains or
losses accrue solely to us. We retain the risk that the value of the assets in
the Fixed Account may fall below the reserves and other liabilities that we must
maintain in connection with our obligations under the Fixed Account option of a
Certificate. In such event, we will transfer assets from our General Account to
the Fixed Account to make up the difference. The Fixed Account will not be
charged with liabilities that arise from any other business that we conduct. We
may transfer to our General Account assets that exceed the reserves and other
liabilities of the Fixed Account. The Fixed Account is not required to be
registered with the SEC as an investment company under the Investment Company
Act of 1940.
FIXED SUB-ACCOUNT - We will establish a separate Fixed Sub-Account for the Owner
each time the Owner allocate amounts to the Fixed Account. Amounts invested in
these Fixed Sub-Accounts earn interest at the Guaranteed Interest Rate in effect
on the date the amounts are allocated.
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GUARANTEE PERIODS - Each Fixed Sub-Account is guaranteed an interest rate for a
period we refer to as a Guarantee Period. The Guaranteed Interest Rate for a
Fixed Sub-Account is effective for the entire Guarantee Period. The length of a
Guarantee Period is measured from the end of the calendar month in which the
amount is allocated to the Fixed Sub-Account. The last day of the Guarantee
Period is its Expiry Date. Withdrawals or transfers from all or part of a Fixed
Sub-Account, and amounts applied to an income plan, made prior to the Expiry
Date of a Guarantee Period may be subject to a Market Value Adjustment.
We will notify the Owner at least thirty days prior to an Expiry Date of the
Owner's options for renewal, which include:
1. electing a new Guarantee Period from among those then offered by us,
but excluding any that extend beyond the Owner's Income Date; or
2. transferring the value of the Fixed Sub-Account to one or more
Variable Sub-Accounts.
If we do not receive Satisfactory Notice prior to the Expiry Date, we will
transfer the value of the expiring Fixed Sub-Account to the Designated
Sub-Account shown in the Schedule.
GUARANTEED INTEREST RATES - Periodically, we will declare Guaranteed Interest
Rates for then available Guarantee Periods. These rates will be guaranteed for
the duration of the respective Guarantee Periods. Guaranteed Interest Rates will
never be less than the Minimum Guaranteed Interest Rate shown in the Schedule.
MARKET VALUE ADJUSTMENT - A Market Value Adjustment may be applied to
withdrawals, transfers or amounts applied to an income plan when taken from a
Fixed Sub-Account prior to its Expiry Date. A Market Value Adjustment is applied
separately to each Fixed Sub-Account.
A Market Value Adjustment is determined by multiplying the amount withdrawn,
transferred or applied to an income plan by the following factor:
N/365
[(1+I)/(1+J+.0025)] -- 1
Where:
- I is the Index Rate for a maturity equal to the Fixed Sub-Account's
Guarantee Period;
- J is the Index Rate for a maturity equal to the time remaining
(rounded up to the next full year) in the Fixed Sub-Account's
Guarantee Period; and
- N is the remaining number of days in the Guarantee Period at the time
of calculation.
If there is no Index Rate for the maturity needed to calculate I or J, straight
line interpolation between the Index Rate of the next highest and next lowest
maturities will be used to determine that Index Rate. If the maturity is one
year or less, we will use the Index Rate for a one-year maturity.
Market Value Adjustments will be applied as follows:
- The Market Value Adjustment will be applied to the amount withdrawn,
transferred or applied to an income plan before deduction of any
applicable surrender charge.
- For a partial withdrawal or partial transfer, the Market Value
Adjustment will be calculated on the total amount that must be
withdrawn or transferred in order to provide the amount requested.
- If the Market Value Adjustment is negative, it is deducted from any
remaining value in the Fixed Sub-Account. Any remaining Market Value
Adjustment is deducted from the amount
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withdrawn, transferred or applied to an income plan.
- If the Market Value Adjustment is positive, it is added to any
remaining value in the Fixed Sub-Account. In the case of surrender or
full transfer, or if the full amount of the Fixed Sub-Account is
applied to an income plan, the Market Value Adjustment is added to the
amount withdrawn, transferred or applied to an income plan.
TRANSFERS AMONG ACCOUNTS
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Prior to the Income Date and while the Annuitant is living, the Owner may
transfer Account Value among Sub-Accounts. Certain restrictions may apply during
the Free Look Period. To make a transfer, the Owner must give us Satisfactory
Notice. Transfers generally take effect when we receive the notice. The number
of free transfers that we allow each Certificate Year is shown in the Charges
section of the Schedule. Restrictions for transfers are shown in the Schedule. A
transfer from a Fixed Sub-Account may be subject to a Market Value Adjustment.
WITHDRAWING ALL OR PART OF THE OWNER'S ACCOUNT VALUE
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Prior to the Income Date and while the Annuitant is living, the Owner may
withdraw all or part of the Owner's Account Value by giving us Satisfactory
Notice. The minimum withdrawal is shown in the Schedule.
If the Owner request a withdrawal of all of the Owner's Account Value, we will
terminate the Certificate and pay the Owner the Surrender Value. This amount may
also be applied to the income plans subject to any restrictions described in a
Certificate. Unless specified otherwise, we will make partial withdrawals as
described in the Schedule. Withdrawals generally take effect on the date we
receive Satisfactory Notice.
If the Owner makes a withdrawal from a Certificate in excess of the Free
Withdrawal Amount described in the Schedule, a surrender charge may be assessed.
Surrender charges are described in the Schedule. A withdrawal from the Fixed
Account may also be subject to a Market Value Adjustment.
EXCESS WITHDRAWALS - If a withdrawal is made for an amount greater than the Free
Withdrawal Amount, a surrender charge may be applicable. For purposes of
calculating the surrender charge only, purchase payments will be liquidated in
whole or in part on a "first-in-first-out-basis." This means we liquidate
purchase payments in the order they were made: the oldest unliquidated purchase
payment first, the next oldest unliquidated purchase payment second, etc., until
all purchase payments have been liquidated.
The surrender charge as to any liquidated purchase payment is determined by
multiplying the amount of the purchase payment being liquidated by the
applicable percentage shown in the Schedule. The total surrender charge will be
the sum of the surrender charges for each purchase payment being liquidated.
In a partial withdrawal, the surrender charge is deducted from the Account Value
remaining after the Owner is paid the amount requested. The amount requested
from a Sub-Account may not exceed the value of that Sub-Account less any
applicable surrender charge. In a complete withdrawal (or surrender of a
Certificate), it is deducted from the amount otherwise payable.
CHARGES
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The types and amounts of charges and when and how they are deducted are
described in the Schedule. Charges under this Group Contract and the
Certificates may be reduced or eliminated when certain sales or administration
of the Group Contract result in savings or reduction of expenses and or risks.
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OWNER, ANNUITANT AND BENEFICIARY
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THE OWNER - The Owner has the rights and options described in this Group
Contract, including but not limited to the right to receive income payments
beginning on the Income Date. One or more people may own a Certificate.
THE ANNUITANT - Unless another Annuitant is shown in the Schedule, the Owner is
also the Annuitant. The Owner may name a Contingent Annuitant. The Owner will be
the Contingent Annuitant unless the Owner names someone else. If there are joint
Owners, we will treat the youngest Owner as the Contingent Annuitant, unless the
Owner elects otherwise.
If the Owner is not the Annuitant and the Annuitant dies before the Income Date,
the Contingent Annuitant becomes the Annuitant. If the Annuitant dies and no
Contingent Annuitant has been named, we will allow the Owner sixty days to
designate someone other than himself or herself as Xxxxxxxxx.
THE BENEFICIARY - We pay the death benefit to the primary Beneficiary (unless
there are joint Owners in which case proceeds are payable to the surviving
Owner). If the primary Beneficiary dies before the Owner, the death benefit is
paid to the Contingent Beneficiary, if any. If there is no surviving
Beneficiary, we pay the death benefit to the Owner's estate.
One or more persons may be named as primary Beneficiary or Contingent
Beneficiary. We will assume any death benefit is to be paid in equal shares to
the multiple surviving Beneficiaries unless the Owner specifies otherwise.
The Owner has the right to change Beneficiaries. However, if the Owner
designates the primary Beneficiary as irrevocable, the Owner may need the
consent of that irrevocable Beneficiary to exercise the rights and options under
a Certificate.
CHANGE OF OWNER, BENEFICIARY OR ANNUITANT - During the Owner's lifetime and
while a Certificate is in force the Owner can transfer ownership of a
Certificate or change the Beneficiary, or change the Annuitant. (However, the
Annuitant cannot be changed after the Income Date.) To make any of these
changes, the Owner must send us Satisfactory Notice. If accepted, any change in
Owner, Beneficiary or Annuitant will take effect on the date the Owner signed
the notice. Any of these changes will not affect any payment made or action
taken by us before our acceptance. A CHANGE OF OWNER MAY BE A TAXABLE EVENT and
may also affect the amount of death benefit payable under a Certificate.
DEATH BENEFITS
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DEATH BENEFIT BEFORE THE INCOME DATE - If any Owner dies before the Income Date,
we will pay the Beneficiary the greatest of the following:
(a) the Account Value determined as of the day we receive proof of
death; or
(b) 100% of the sum of all purchase payments made to a Certificate,
reduced by any prior withdrawals (including any associated
surrender charge and Market Value Adjustment incurred); or
(c) the Highest Anniversary Value.
HIGHEST ANNIVERSARY VALUE - The Highest Anniversary Value is equal to the
greatest anniversary value attained from the following:
Upon our receipt of proof of death, we will calculate an anniversary
value for each Certificate Anniversary before the Owner's death
excluding, however, Certificate Anniversaries that come after the
Owner attains age 80. An anniversary value is equal to the Account
Value on a
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Certificate Anniversary, increased by the dollar amount
of any purchase payments made since that Certificate Anniversary and
reduced for any withdrawals (including any associated surrender
charge and Market Value Adjustment incurred) taken since that
anniversary. This reduction will be made in proportion to the
reduction in the Account Value that results from a withdrawal.
MULTIPLE OWNERS - If there are multiple Owners, the age of the oldest Owner will
be used to determine the death benefit.
DEATH BENEFIT WHEN NO NATURAL OWNERS - If there is no Owner who is a natural
person, we will treat the Annuitant as Owner for the purpose of paying the death
benefit, and the Annuitant's age will determine the death benefit payable to the
Beneficiary.
REQUIRED DISTRIBUTION OF PROCEEDS ON THE DEATH OF THE OWNER - The three
sub-subsections indicated below are required to qualify a Certificate as an
annuity contract under Section 72(s) of the Internal Revenue Code of 1986, as
amended. Where the terms of these three sub-sections are in conflict with any
other sections or sub-sections of a Certificate, these three sub-sections will
control. We reserve the right to amend or administer the Group Contract and any
Certificate as necessary to comply with the applicable tax requirements. These
three sub-sections and each Certificate should be construed so that they comply
with the applicable tax requirements.
DEATH BENEFIT OPTIONS BEFORE INCOME DATE - In the event any Owner
dies before the Income Date, the death benefit may be taken in one
sum, in which case that Certificate will terminate. Such sum shall
be paid within five years of the Owner's death unless one of the
options for continuation of the Certificate below is elected by the
person entitled to make that election.
CERTIFICATE CONTINUATION OPTION - If the death benefit is not taken
in one sum immediately, the Certificate will continue subject to the
following provisions:
1. If there are joint Owners, the surviving Owner becomes the
new Owner. Otherwise, the Beneficiary becomes the new Owner.
2. Unless specified otherwise, any excess of the death benefit
over the Account Value will be allocated to and among the
Variable and Fixed Accounts in proportion to their values as
of the date on which the death benefit is determined. We
will establish a new Fixed Sub-Account for any allocation to
the Fixed Account based on the Guarantee Period the Owner
then elects.
3. No additional purchase payments may be applied to a
Certificate.
4. If the new Owner is not the deceased Owner's spouse, the
entire interest in h a Certificate must be distributed under
one of the following options:
a. The entire interest in a Certificate must be
distributed over the life of the new Owner, or over a
period not extending beyond the life expectancy of the
new Owner, with distributions beginning within one year
of the Owner's death; or
b. The entire interest in a Certificate must be
distributed within 5 years of the Owner's death.
5. If the new Owner is the deceased Owner's spouse, a
Certificate will continue with the surviving spouse as the
new Owner. The surviving spouse may name a new Beneficiary.
If no Beneficiary is so named, the surviving spouse's estate
will be the Beneficiary. Upon the death of the surviving
spouse, the death benefit will equal the Account Value as of
the date we receive proof of the spouse's death, and the
entire interest in a Certificate must be distributed to the
new Beneficiary in accordance with the provisions of 4 (a)
or 4 (b) above.
If there is more than one Beneficiary, the foregoing provisions will
independently apply to each Beneficiary.
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DEATH BENEFIT ON OR AFTER THE INCOME DATE - If any Owner dies on or
after the Income Date but before the time the entire interest in a
Certificate has been distributed, the remaining portion will be
distributed at least as rapidly as under the method of distribution
being used as of the date of the Owner's death.
If income payments have been selected based on an income plan
providing for payments for a guaranteed period, and the Annuitant
dies on or after the Income Date, we will make the remaining
guaranteed payments to the Beneficiary. Any remaining payments will
be made as rapidly as under the method of distribution being used as
of the date of the Annuitant's death. If no Beneficiary is living,
we will commute any unpaid guaranteed payments to a single sum (on
the basis of the interest rate used in determining the payments) and
pay that single sum to the estate of the last to die of the
Annuitant or the Beneficiary.
PROOF OF DEATH - Proof of death must be received at our Customer Service Center
before we will pay any death benefit. We will accept one of the following items:
1. An original certified copy of an official death certificate; or
2. An original certified copy of a decree of a court of competent
jurisdiction as to the finding of death; or
3. Any other proof satisfactory to us.
GENERAL PROVISIONS
--------------------------------------------------------------------------------
ENTIRE CONTRACT - This Group Contract including any attached riders,
endorsements, amendments, and the application of the Contractholder constitutes
the entire contract between the Contractholder and us. All statements made by
the Contractholder, or any Owner will be deemed representations and not
warranties.
ASSIGNMENT - The Owner may assign a Certificate at any time prior to the Income
Date. No assignment will be binding on us unless we receive Satisfactory Notice.
We will not be liable for any payments made or actions we take before the
assignment is accepted by us. An absolute assignment will revoke the interest of
any revocable Beneficiary. We will not be responsible for the validity of any
assignment. AN ASSIGNMENT MAY BE A TAXABLE EVENT.
CLAIMS OF CREDITORS - To the extent permitted by law, no benefits payable under
a Certificate will be subject to the claims of the Owner's, the Beneficiary's,
or the Annuitant's creditors.
MISSTATEMENT AND PROOF OF AGE, SEX OR SURVIVAL - We may require proof of age,
sex or survival of any person upon whose age, sex or survival any payments
depend. If the age or sex of the Annuitant has been misstated, or if the age of
the Owner has been misstated, the benefits will be those that the Account Value
applied would have provided for the correct age and sex. If we have made
incorrect income payments, the amount of any underpayment will be paid
immediately. The amount of any overpayment will be deducted from future income
payments.
NO DIVIDENDS PAYABLE - A Certificate is non-participating and does not share in
any distribution of our surplus. We will not pay any dividends.
INCONTESTABILITY - This Group Contract is incontestable from its Effective Date.
A Certificate is incontestable from its Certificate Date.
REQUIRED REPORTS - We will furnish a report to the Owner as often as required by
law, but at least once each Certificate Year before the Income Date. The report
will show the number of Accumulation Units credited to each Variable Sub-Account
in which the Owner is invested and the corresponding
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Accumulation Unit value as of the date of the report. It will also show the
Owner's Fixed Account Value.
MORTALITY AND EXPENSES - Our actual mortality and expense experience will not
affect the amount of any income payments or any other values under a
Certificate.
TAXES BASED UPON PURCHASE PAYMENT OR VALUE - If there is a law or change in law
assessing taxes against us based upon purchase payments or value of a
Certificate, we reserve the right to charge the Owner and all similarly situated
Owners proportionately for that tax. This would include a tax based upon our
realized net capital gains in the Variable Sub-Accounts and on earnings in the
Fixed Account, on which we are not currently taxed.
PAYMENTS WE MAY DEFER - We may not be able to determine the value of the assets
of the Variable Sub-Accounts because:
1. The New York Stock Exchange 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 purchase payment has not cleared
through the banking system. This may take up to 15 days.
If this happens, we may delay:
1. Determination and payment of the Surrender Value;
2. Determination and payment of any death benefit if death occurs
before the Income Date;
3. Transfers of the Account Value; or
4. Application of the Account Value under an income plan.
We reserve the right to delay payment of amounts from the Fixed Account for up
to six months. If deferred 30 days or more, the amount deferred will earn
interest at a rate not less than the Minimum Deferral Interest Rate shown in the
Fixed Account section of the Schedule.
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
change the terms of this Group Certificate or a Certificate or make any
agreement binding on us. However, we can, with the agreement of the Group
Contractholder, make changes to the Group Contract and a Certificate without an
Owner's consent.
REQUIRED NOTE ON OUR COMPUTATIONS - We have filed a detailed statement of our
computations with the insurance supervisory officials in the appropriate
jurisdictions. The values are not less than those required by the laws of those
states or jurisdictions. Any benefit provided by an attached rider will not
increase these values unless otherwise stated in that rider.
CERTIFICATES - We will furnish Certificates to the Owners. Each Certificate will
summarize provisions of this Group Contract affecting an individual Owner.
FACTS RELATING TO COVERAGE - At any reasonable time we will have the right to
inspect any records of the Contractholder and plan sponsor which relate to this
Group Contract.
DISCONTINUANCE OF GROUP CONTRACT - This Group Contract may be discontinued by us
or the Contractholder. The party who initiates the discontinuance will send a
notice to each Owner of record, at his or her last known address, at least 15
days prior to the date of discontinuance. No new Owners will be accepted and no
additional purchase payments will be accepted on or after the date notice of the
discontinuance is received or sent by us, whichever is applicable.
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ANNUITY INCOME BENEFITS
--------------------------------------------------------------------------------
CHOOSING AN INCOME DATE AND INCOME PLAN - On the Income Date, if the Annuitant
is alive and a Certificate is in force, income payments will begin under the
income plan the Owner has chosen. If the Owner has not chosen an income plan,
the option shown in the Schedule will automatically apply. If the Owner has not
selected an Income Date, the Maximum Income Date shown in the Schedule will
automatically apply.
The Owner may choose or change an income plan or the Income Date by giving us
Satisfactory Notice at least 30 days before the Income Date. However, any Income
Date must meet the restrictions described in the Schedule.
Once income payments have begun, we reserve the right to disallow further
changes without our prior approval.
MINIMUM AMOUNTS - If the amount available to apply under any variable or fixed
option is less than the minimum amount shown in the Schedule, we reserve the
right to pay such amount in a lump sum in lieu of the payment otherwise provided
for.
Income payments will be made monthly unless quarterly, semi-annual or annual
payments are chosen by giving us Satisfactory Notice at least 30 days before the
Income Date. However, if at any time the payment becomes less than the minimum
income payment shown in the Schedule, we reserve the right to reduce the
frequency of payment to an interval that results in each payment being at least
equal to the minimum income payment. In no event will the interval be less
frequent than annual.
ALLOCATION OF ANNUITY - At the time the Owner elects the income plan, the Owner
may also elect to have the Account Value applied to provide a Variable Income
Annuity, a Fixed Income Annuity, or a combination of both. Unless the Owner
specifies otherwise, we will provide either variable or fixed, or a combination
of variable and fixed income payments in proportion to the Sub-Accounts in which
the Owner is invested as of a date not more than [5] Valuation Days before the
due date of the first income payment. If any applicable purchase payment taxes
are then due us, we will also deduct them proportionately.
VARIABLE INCOME ANNUITY
AMOUNT OF FIRST VARIABLE PAYMENT - The Income Tables shown in the Schedule are
used to determine the first monthly variable income payment for an assumed
investment rate of 3%. The Income Tables show the dollar amount of the first
monthly variable income payment that can be purchased with each $1,000 applied.
The assumed investment rates we currently allow are shown on the Schedule.
VALUE OF INCOME UNITS - The Income Unit value for any Valuation Period is
determined by multiplying (a) by (b), and then dividing by (c) where:
(a) is the Income Unit value for the immediately preceding Valuation
Period;
(b) is the "net investment factor" for the Variable Sub-Account for
the Valuation Period for which the value is being determined; and
(c) is the daily equivalent of the assumed investment rate for the
number of days in the Valuation Period.
The value of an Income Unit may increase, decrease or remain the same from one
Valuation Period to the next.
NUMBER OF INCOME UNITS - We determine the number of Income Units in each
Variable Sub-Account by dividing the first monthly variable income payment
attributable to that Sub-Account by its Income Unit value as of a date not more
than [5] Valuation Days before the due date of the first variable income
payment.
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AMOUNT OF SECOND AND SUBSEQUENT VARIABLE PAYMENTS - The dollar amount of the
second and subsequent variable income payments may change with the investment
performance of the Variable Sub-Accounts. The total amount of each variable
income payment will be equal to the sum of the variable income payments in each
Variable Sub-Account. The dollar amount of each payment for a Variable
Sub-Account is determined by multiplying the number of Income Units by the
Income Unit value for the Variable Sub-Account for the Valuation Period which
ends on a consistently applied date not more than [5] Valuation Days before the
payment is due.
We guarantee that the dollar amount of each payment after the first will not be
affected by variations in our expenses or mortality experience.
EXCHANGE OF INCOME UNITS - After the Income Date, if there is an exchange of
value of a designated number of Income Units of particular Variable Sub-Accounts
into other Income Units, the value will be such that the dollar amount of income
payment made on the date of exchange would be unaffected by the exchange.
FIXED INCOME ANNUITY
A Fixed Income Annuity is an annuity with income payments that remain fixed as
to dollar amount throughout the payment period. The Income Tables shown in the
Schedule are used to determine the monthly fixed income payment. The Income
Tables show the dollar amount of the monthly fixed income payment that can be
purchased with each $1,000 applied.
INCOME PLANS
The following is a list of income plans we guarantee to make available.
INCOME PLAN 1. LIFE ANNUITY - An annuity payable during the lifetime of the
Annuitant and terminating with the last payment preceding the death of the
Annuitant.
INCOME PLAN 2. LIFE ANNUITY WITH 10 OR 20 YEARS CERTAIN - An annuity payable
during the lifetime of the Annuitant with the provision that payments will be
made for a minimum of 10 or 20 years, as elected.
INCOME PLAN 3. JOINT AND LAST SURVIVOR ANNUITY - An annuity payable during the
joint lifetime of the Annuitant and a designated second person, and thereafter
during the remaining lifetime of the survivor, ceasing with the last payment
prior to the death of the survivor.
INCOME PLAN 4. PAYMENTS FOR A SPECIFIED PERIOD CERTAIN - An amount payable for
the number of years selected which may be from 5 to 30 years.
INCOME PLAN 5. ANNUITY PLAN - An amount can be used to purchase any single
premium annuity we offer on the Income Date for which the Owner and the
Annuitant are eligible.
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SCHEDULE
Group Contract No.: 123456789 Effective Date: 1/1/1998
Contractholder: ABC TRUST
Issued In: ILLINOIS (and subject to its laws)
This Schedule sets forth additional information that relates to the provisions
in this Group Contract with the corresponding headings.
MAKING PURCHASE PAYMENTS
The Designated Sub-Account is the [Money Market Sub-Account].
No purchase payment, whether initial or additional, may be allocated such that
any Sub-Account would have a value less than [$250].
Additional purchase payments are subject to the following limits:
1. [Non-qualified plan: Additional purchase payments may be made
until the earlier of the year in which the Owner attains age [85]
or the year in which the Annuitant attains age [85].]
2. [Qualified plan: Additional purchase payments may be made until
the year in which the Owner attains age [70 1/2], except rollover
contributions may be made until the year in which the Owner
attains age [85].]
3. The minimum additional purchase payment we will accept is [$250].
4. Our prior approval is required before the Owner makes a purchase
payment that causes the Account Value of all annuities that the
Owner maintains with us to exceed [$1,000,000].
VARIABLE ACCOUNT
The Variable Account for a Certificate is [The Sage Variable Annuity Account A].
[It is a unit investment trust variable account.]
FIXED ACCOUNT
The Fixed Account for the Certificate is [The Sage Fixed Interest Account A.]
The Minimum Guaranteed Interest Rate is [3%].
The Minimum Deferral Interest Rate is [3%].
The Designated Sub-Account is the [Money Market Sub-Account]. It is not part of
the Fixed Account.
Index Rate: [The Index Rate is the U.S. Treasury Constant Maturity Series as
reported in Federal Reserve Bulletin Release H.15. We currently base the Index
Rate for a calendar week on the reported rate for the preceding calendar week.
We reserve the right to set it less frequently but in no event less often than
monthly.]
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TRANSFERS AMONG ACCOUNTS
The minimum amount that can be transferred is [$250]. However, if less remains
in a Sub-Account, that amount may be transferred. If a transfer request would
reduce the Account Value remaining in a Sub-Account below [$250], we will treat
the transfer request as a request to transfer the entire amount.
The Owner's transfer request must clearly state the Sub-Accounts from which and
to which transfers are made.
We reserve the right to limit, upon notice, the maximum number of transfers the
Owner may make to [one] per calendar month or [12] per Certificate Year.
After the Income Date, we reserve the right to:
1. disallow transfers from the Fixed Account to the Variable
Account, or from the Variable Account to the Fixed Account; and
2. limit the maximum number of transfers between Variable
Sub-Accounts to [1] per Certificate Year.
WITHDRAWING ALL OR PART OF THE OWNER'S ACCOUNT VALUE
The Free Withdrawal Amount is the greater of (a) and (b) where:
[(a) is the excess of 10% of the total purchase payments over 100% of
all prior withdrawals in that Certificate Year; and
(b) is the excess of the Account Value on the date of withdrawal over
the unliquidated purchase payments.]
The minimum amount that can be withdrawn is [$250]. If a withdrawal request
would reduce the Account Value remaining in a Sub-Account below [$250], we will
treat the withdrawal request as a request to withdraw the entire amount.
If a requested withdrawal would reduce the Account Value below [$2,000], we
reserve the right to treat the request as a withdrawal of only the excess over
[$2,000].
Unless the Owner specifies otherwise, we will make withdrawals [proportionately
from all Sub-Accounts in which the Owner is invested].
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CHARGES
SURRENDER CHARGE - A surrender charge may be imposed upon surrender of a
Certificate or when an Excess Withdrawal is made. A Market Value Adjustment, if
any, is applied before calculating the surrender charge. The surrender charge is
applied to each purchase payment and is a percentage of each purchase payment as
follows:
Complete Years Maximum
Elapsed Since Surrender Charge
Payment Accepted Percentage
---------------- ----------
[0 7%
1 7%
2 6%
3 5%
4 4%
5 3%
6 1%
7+ 0%]
OR
Maximum
Certificate Surrender Charge
Year Percentage
----------- ----------
[1 7%
2 7%
3 6%
4 5%
5 4%
6 3%
7 1%
8+ 0%]
OR
The maximum surrender charge percentage is 0% for all Certificate Years.
TRANSFER CHARGE - We reserve the right to charge a maximum of [$25] for each
transfer after the [12th] in a Certificate Year. Each request is considered to
be one transfer regardless of the number of Sub-Accounts affected by the
transfer. The transfer charge will be deducted proportionately from the
Sub-Accounts from which the transfer is made.
ADMINISTRATION CHARGE - [$40] a year. This charge is incurred at the beginning
of each Certificate Year and deducted on each Certificate Anniversary or upon
surrender. The charge will be waived:
1. if the Account Value is at least [$50,000] at the time of
deduction; or
2. beginning on and after the [8th] Certificate Anniversary.
PURCHASE PAYMENT TAX CHARGE - The amount of any state and local taxes levied by
any governmental entity on purchase payments may be deducted from the Account
Value when such taxes are incurred. We reserve the right to defer the collection
of this charge and deduct it against the Owner's Account Value on the surrender
of a Certificate, or Excess Withdrawal, or application of the Account Value to
provide income payments.
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ASSET-BASED CHARGES - We deduct asset-based charges to compensate us for
assuming mortality and expense risks, and certain administrative expenses.
[Prior to the Income Date] asset-based charges are calculated as a percentage of
the Variable Account Value on the date of deduction. On the Certificate Date,
and monthly thereafter, the asset-based charges are deducted in proportion to
the Variable Sub-Accounts in which THE OWNER are invested. The maximum charges
are:
Asset-Based Charges Annual Charge Monthly Charge
------------------- ------------- --------------
Certificate Years 1-7 [1.40% .116667%
Certificate Years 8+ 1.25% .104167%]
We also deduct asset-based charges on the effective date of any transfer from
the Fixed Account, or allocation of purchase payment to the Variable Account,
based on the amount transferred or allocated, and based on the number of days
remaining until the next date of deduction.
VARIABLE SUB-ACCOUNT CHARGES - [On and after the Income Date] we deduct the
asset-based charges above from the assets in each Variable Sub-Account on a
daily basis. The maximum charges are:
Variable Sub-Account Charges Annual Charge Daily Charge
---------------------------- ------------- ------------
Certificate Years 1-7 [1.40% .0038626%
Certificate Years 8+ 1.25% .0034462%]
CHARGE DEDUCTION RULES - Unless otherwise specified above, charges are deducted
from the Account Value charges [proportionately from all Sub-Accounts in which
you are invested.] invested.
ANNUITY INCOME BENEFITS
If the Owner has not chosen an income plan, [Life Annuity with 10 Years Certain]
will automatically apply.
The Maximum Income Date is the first day of the first calendar month following
the Annuitant's [95th] birthday.
We reserve the right to require that the Income Date be at least [2 years] after
the Certificate Date.
The minimum amount that can be applied under any Variable or Fixed Income
Annuity is [$5,000].
The minimum income payment is [$100].
We currently allow assumed investment rates of [3%] and [6%]. If the Owner does
not specify one of these rates when the Owner chooses an income plan, the
assumed investment rate will be [3%].
Values for other ages, and for other payment periods, joint life combinations,
or assumed investment rates that we offer (Tables below assume 3%) are available
on request. Monthly income payments are shown for each $1,000 applied.
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INCOME TABLE FOR A FIXED PERIOD
Monthly Monthly Monthly
Fixed Period Income Fixed Period Income Fixed Period Income
of Years Payment of Years Payment of Years Payment
-------- ------- -------- ------- -------- -------
11 $8.88 21 $5.33
12 8.26 22 5.16
13 7.73 23 5.00
14 7.28 24 4.85
5 17.95 15 6.89 25 4.72
6 15.18 16 6.54 26 4.60
7 13.20 17 6.24 27 4.49
8 11.71 18 5.98 28 4.38
9 10.56 19 5.74 29 4.28
10 9.64 20 5.53 30 4.19
INCOME TABLE FOR LIFE
Male/Female Male/Female Male/Female
Age Life Only 10 Years Certain 20 Years Certain
--- --------- ---------------- ----------------
50 4.28 / 3.92 $4.24 / 3.90 $4.10 / 3.84
55 4.72 / 4.27 4.64 / 4.24 4.40 / 4.12
60 5.31 / 4.74 5.17 / 4.68 4.73 / 4.45
65 6.13 / 5.38 5.84 / 5.25 5.04 / 4.81
70 7.28 / 6.29 6.65 / 6.00 5.29 / 5.14
75 8.90 / 7.62 7.53 / 6.92 5.43 / 5.37
80 11.19 / 9.62 8.37 / 7.93 5.50 / 5.48
85 14.36 / 12.63 9.00 / 8.77 5.52 / 5.52
RIDERS
Accidental Death Benefit Rider
The Maximum Accidental Death Benefit is [$250,000].
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[SAGE LIFE ASSURANCE OF AMERICA, INC. LOGO]
Member of Sage Insurance Group
A Stock Company
GROUP FLEXIBLE PAYMENT DEFERRED COMBINATION FIXED AND
VARIABLE ANNUITY CONTRACT
Surrender Values while the Owner is living and prior to the Income Date.
Income Payments begin on the Income Date
Nonparticipating
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