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SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY
NON-PARTICIPATING FLEXIBLE PREMIUM
DEFERRED VARIABLE ANNUITY POLICY
RETIREMENT BENEFIT PAYABLE ON THE RETIREMENT DATE. DEATH BENEFIT PAYABLE AT
DEATH BEFORE THE RETIREMENT DATE. FLEXIBLE PREMIUMS PAYABLE FOR THE ANNUITANT'S
LIFE OR UNTIL THE RETIREMENT DATE. THE ACCUMULATED VALUE IN THE VARIABLE ACCOUNT
IS BASED ON THE INVESTMENT EXPERIENCE OF THAT ACCOUNT, AND MAY INCREASE OR
DECREASE DAILY. IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. THE VARIABLE
FEATURES OF THIS POLICY ARE DESCRIBED ON PAGES 10, 11, AND 12.
Southern Farm Bureau Life Insurance Company will pay the benefits of this policy
subject to all of its terms.
RIGHT TO EXAMINE POLICY
THE OWNER MAY CANCEL THIS POLICY BY DELIVERING OR MAILING A WRITTEN NOTICE TO
THE AGENT THROUGH WHOM IT WAS PURCHASED, TO OUR ADMINISTRATOR, OR THE SOUTHERN
FARM BUREAU LIFE INSURANCE COMPANY, 0000 XXXXXXXXXX XXXX, XXXXXXX, XXXXXXXXXXX
00000, AND BY RETURNING THE POLICY OR CONTRACT BEFORE MIDNIGHT OF THE TENTH DAY
AFTER THE DATE YOU RECEIVE THE POLICY. NOTICE GIVEN BY MAIL AND RETURN OF THE
POLICY OR CONTRACT BY MAIL ARE EFFECTIVE ON BEING POSTMARKED, PROPERLY ADDRESSED
AND POSTAGE PREPAID. SOUTHERN FARM BUREAU LIFE WILL REFUND, WITHIN SEVEN DAYS
AFTER IT RECEIVES THE RETURNED POLICY, AN AMOUNT EQUAL TO THE GREATER OF THE
PREMIUMS PAID OR THE SUM OF:
a) THE ACCUMULATED VALUE OF THE POLICY ON THE DATE THE POLICY IS RECEIVED
AT THE HOME OFFICE;
b) ANY ADMINISTRATIVE CHARGES WHICH WERE DEDUCTED; AND
c) AMOUNTS APPROXIMATING DAILY CHARGES AGAINST THE VARIABLE ACCOUNT.
READ YOUR POLICY CAREFULLY! THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER
AND SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY.
Signed for and on behalf of Southern Farm Bureau Life Insurance Company at its
home office at 0000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx 00000, effective as of
the date of issue of this policy.
/s/ Xxxx X. Loop Jr. /s/ V. N. Xxxx
President Secretary
SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY,
0000 XXXXXXXXXX XXXX, XXXXXXX, XX 00000
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FORM AV200 Page 1
INDEX OF MAJOR POLICY PROVISIONS
POLICY DATA ..................................................... Page 3
Annuitant(s); Age; Sex; Policy Number; Policy Date; Owner(s);
Normal Retirement Date; Interest Rates; Schedule of Forms and
Premiums; Schedule of Charges; Schedule of Investment Options.
SECTION 1 - DEFINITIONS ......................................... Page 5
1.1 You or Your; 1.2 Our, Us or the Company; 1.3 Annual
Administrative Charge; 1.4 Annuitant; 1.5 Age; 1.6
Beneficiary; 1.7 Business Day; 1.8 Declared Interest Option;
1.9 Due Proof of Death; 1.10 Eligibility for Waiver of
Surrender Charge; 1.11 Fund; 1.12 General Account; 1.13 Home
Office; 1.14 Owner; 1.15 Qualified Physician; 1.16 Policy
Anniversary; 1.17 Policy Date; 1.18 Policy Year; 1.19
Qualified Nursing Care Center; 1.20 Retirement Date; 1.21 SEC;
1.22 Surrender Charge; 1.23 Terminal Illness 1.24 Valuation
Period; 1.25 Variable Account.
SECTION 2 - THE CONTRACT ........................................ Page 6
2.1 Retirement Date; 2.2 Contract; 2.3 Modification; 2.4
Incontestable Clause; 2.5 Misstatement of Age or Sex; 2.6
Return of Policy and Policy Settlement; 2.7 Termination; 2.8
Non-Participation.
SECTION 3 - OWNERSHIP AND BENEFICIARIES ......................... Page 7
3.1 Ownership; 3.2 Beneficiary; 3.3 Change of Owner or
Beneficiary; 3.4 Assignment.
SECTION 4 - PREMIUMS ............................................ Page 8
4.1 Premium Payment; 4.2 Payment Frequency; 4.3 Unscheduled
Premiums; 4.4 Allocation of Premium.
SECTION 5 - ANNUITY AND DEATH BENEFITS .......................... Page 9
5.1 Annuity Benefit; 5.2 Death of Annuitant During
Accumulation Period; 5.3 Death of Owner; 5.4 Death Benefit at
Death of Annuitant During Accumulation Period.
SECTION 6 - VARIABLE ACCOUNT .................................... Page 10
6.1 Variable Account; 6.2 Subaccounts; 6.3 Fund Investment
Options; 6.4 Transfers.
SECTION 7 - ACCUMULATED VALUE BENEFITS .......................... Page 12
7.1 Accumulated Value; 7.2 Net Accumulated Value; 7.3 Variable
Accumulated Value; 7.4 Subaccount Units; 7.5 Unit Value; 7.6
Declared Interest Option Accumulated Value; 7.7 Declared
Interest Option Interest; 7.8 Surrender; 7.9 Surrender Charge;
7.10 Ten Percent Withdrawal Privilege; 7.11 Waiver of
Surrender Charge; 7.12 Partial Withdrawal; 7.13 Delay of
Payment; 7.14 Tax Charges; 7.15 Annual Report.
SECTION 8 - PAYMENT OF PROCEEDS ................................. Page 16
8.1 Choice of Options; 8.2 Payment Options; 8.3 Interest and
Mortality; 8.4 Withdrawal of Proceeds; 8.5 Claims of
Creditors, 8.6 Proof of Survival.
PAYMENT OPTION TABLES ........................................... Page 18
Any additional benefits and endorsements which apply to this policy are listed
on the policy data page and are described in the forms which follow page 18 of
this policy.
FORM AV200 Page 2
POLICY DATA
Annuitant(s) [XXXX XXX]
Age [35]
Sex [MALE]
Policy Number [12345]
Policy Date [03-01-1998]
Owner(s) [XXXX XXX]
Normal Retirement Date [11-01-2026]
On Declared Interest Option:
Guaranteed Interest Rate 3.00%
Current Interest Rate [5.50%]
Current Interest Rate guaranteed to: [03-01-1999]
************************** SCHEDULE OF FORMS AND PREMIUMS
**************************
Form No. Description
-------- -----------
[AV200]
FORM AV200 Page 3
SCHEDULE OF CHARGES
Annual Administrative Charge: [$30.00 per year]
Transfer Charge: [$25]
Mortality and Expense Risk Charge: [.0038091% of the variable cash value
per day (equivalent to 1.40% per year).]
[A surrender charge will apply during the first 7 policy years.]
[The surrender charge will be as shown in the following table:
Surrender Charge
Policy Year (as a percent of Accumulated Value)
----------- -----------------------------------
1 7.0%
2 6.0%
3 5.0%
4 4.0%
5 3.0%
6 2.0%
7 1.0%
Thereafter 0%]
However, the total surrender charge assessed will never exceed 8.5% of the
premiums paid.
SCHEDULE OF INVESTMENT OPTIONS
General Account: The general assets of Southern Farm Bureau Life Insurance
Company.
Separate Account: [Southern Farm Bureau Life Variable Account]
Subaccounts: Fund:
[X. Xxxx Price - Prime Reserve X. Xxxx Price Fixed Income Series, Inc.
X. Xxxx Price - Mid-Cap Growth X. Xxxx Price Equity Series, Inc.
X. Xxxx Price - Limited Term Bond X. Xxxx Price Fixed Income Series, Inc.
X. Xxxx Price - Equity Income X. Xxxx Price Equity Series, Inc.
X. Xxxx Price - Pers Strategy Bal X. Xxxx Price Equity Series, Inc.
Fidelity VIP Growth Fidelity Variable Insurance Products Fund
Fidelity VIP Contrafund Fidelity Variable Insurance Products Fund
Fidelity VIP Index 500 Fidelity Variable Insurance Products Fund
Fidelity VIP High Income Fidelity Variable Insurance Products Fund
Fidelity VIP Overseas Fidelity Variable Insurance Products Fund]
FORM AV200 Page 4
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SECTION 1 - DEFINITIONS
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1.1 YOU OR YOUR means the owner, or owners, of this policy.
1.2 OUR, US, WE, OR THE COMPANY means Southern Farm Bureau Life Insurance
Company.
1.3 ANNUAL ADMINISTRATIVE CHARGE means a fee that is charged yearly. The
annual administrative charge may go up or down but is guaranteed not
to exceed $45. The annual administrative charge as of the policy date
is shown on the policy data page.
1.4 ANNUITANT is (are) the person (or persons) whose life (or lives)
determine(s) the annuity and death benefit. No more than two annuitants
may be named. Provisions referring to the death of an annuitant mean the
last surviving annuitant.
1.5 AGE means age at the last birthday.
1.6 BENEFICIARY is (are) the person (or persons) named by you to whom the
proceeds payable on the death of the annuitant will be paid. Prior to the
retirement date, if no beneficiary survives the annuitant, you or your
estate will be the beneficiary.
1.7 BUSINESS DAY means a day when the New York Stock Exchange is open for
trading, except for the day after Thanksgiving, any other designated
company holidays, and any day our home office or administrative office is
closed because of a weather-related or comparable type of emergency.
Assets are valued at the close of the business day.
1.8 DECLARED INTEREST OPTION means an option pursuant to which accumulated
value accrues interest at a guaranteed minimum rate. The declared interest
option is supported by the general account.
1.9 DUE PROOF OF DEATH means proof of death that is satisfactory to us. Such
proof may consist of a certified copy of the death record, a certified copy
of a court decree reciting a finding of death, or any other proof
satisfactory to us.
1.10 ELIGIBILITY FOR WAIVER OF SURRENDER CHARGE means the annuitant:
a) is diagnosed by a qualified physician as having a terminal illness;
b) stays in a qualified nursing care center for 90 consecutive days; or
c) is required to satisfy the minimum distribution requirement of
Sec. 401(a) 9 of the Internal Revenue Code.
1.11 FUND means the investment options shown on the policy data page. The
corresponding funds are registered with the SEC under the Investment
Company Act of 1940 as open-end diversified management investment companies
or unit investment trusts.
1.12 GENERAL ACCOUNT means all our assets other than those allocated to the
variable account or any other separate account. We have complete ownership
and control of the assets of the general account.
1.13 HOME OFFICE means Southern Farm Bureau Life Insurance Company at its home
office, 0000 Xxxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx, 00000.
1.14 OWNER is (are) the person (or persons) who own(s) the policy and who is
entitled to exercise all rights and privileges provided in the policy. The
original owner(s) is
FORM AV200 Page 5
shown on the policy data page.
1.15 QUALIFIED PHYSICIAN means a licensed medical practitioner performing within
the scope of his/her license. Such person must be someone other than you,
the annuitant, or a member of the immediate family of either you or the
annuitant.
1.16 POLICY ANNIVERSARY means the same date in each year as the policy date.
1.17 POLICY DATE means the policy date shown on the policy data page. This date
is used to determine policy years and anniversaries. The date of issue is
equal to the policy date.
1.18 POLICY YEAR means the 12-month period that begins on the policy date or on
a policy anniversary.
1.19 QUALIFIED NURSING CARE CENTER means a long-term care center that is
licensed to operate according to the laws of their location. The following
are qualified nursing care centers:
a) Skilled Nursing Center - means a center:
1) that provides skilled nursing care supervised by a licensed
physician;
2) that provides 24-hour nursing care by, or supervised by, an
R.N.; and
3) that keeps a daily medical record of each patient.
b) Intermediate Care Center - means a center:
1) that provides 24-hour nursing care by, or supervised by, an
R.N. or an L.P.N.; and
2) that keeps a daily medical record of each patient.
c) Hospital - means a center:
1) that operates for the care and treatment of sick or injured
persons as inpatients;
2) that provides 24-hour nursing care by, or supervised by, an R.N.;
3) that is supervised by a staff of licensed physicians; and
4) that has medical, diagnostic, and major surgery capabilities or
access to such capabilities.
Qualified nursing care center does not include:
a) drug or alcohol treatment centers;
b) homes for the aged or mentally ill, community living centers, or
places that primarily provide domiciliary, residency or retirement
care;
c) places owned or operated by a member of the annuitant's immediate
family.
1.20 TERMINAL ILLNESS is any disease or medical condition which the qualified
physician expects will result in death within one (1) year.
1.21 RETIREMENT DATE means the policy anniversary nearest the retirement age
chosen in the application. If no age is chosen, age 70 will be used.
Subject to the payment option provisions, the owner may change the
retirement date at any time. However, the retirement date may not be
changed after payments begin.
1.22 SEC means the Securities and Exchange Commission, a U.S. government
agency.
1.23 SURRENDER CHARGE means a fee that is applied at the time of any partial
withdrawal or full surrender. The surrender charges are shown on the
policy data page.
1.24 VALUATION PERIOD means the period between the close of business on a
business day
FORM AV200 Page 6
and the close of business on the next business day.
1.25 VARIABLE ACCOUNT means the Separate Account shown on the policy data page.
It is a unit investment trust registered with the SEC under the Investment
Company Act of 1940.
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SECTION 2 - THE CONTRACT
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2.1 RETIREMENT DATE - The owner may choose a retirement date on the
application. However, such retirement date may not be after the
latest of the annuitant's 70th birthday or the 10th policy
anniversary. If no date is chosen on the application, age 70 will be
used. The owner may change the retirement date at any time.
However, the retirement date may not be changed after payments begin.
However, if the policy is subject to Internal Revenue Service minimum
distribution requirements, we will begin distributions as required.
2.2 CONTRACT - This policy is a legal contract. We issue this policy in
consideration of the first premium and the statements in the application.
The entire contract consists of:
a) the basic policy;
b) any endorsements or additional benefit riders;
c) the attached copy of your application; and
d) any amendments, supplemental applications or other attached papers.
We rely on statements made in the application for the policy. These
statements in the absence of fraud are deemed representations and not
warranties. No statement will void this policy or be used in defense
of a claim unless:
a) it is contained in the application; and
b) such application is attached to this policy.
2.3 MODIFICATION - No one can change any part of this policy except the owner
and one of our officers. Both must agree to a change, and it must be in
writing. No agent may change this policy or waive any of its provisions.
2.4 INCONTESTABLE CLAUSE - We will not contest this policy from its policy
date.
2.5 MISSTATEMENT OF AGE OR SEX - We have the right to correct benefits for
misstated age or sex. In such an event, benefits will be the amount the
premium actually paid would have bought at the correct age or sex.
2.6 RETURN OF POLICY AND POLICY SETTLEMENT - We reserve the right to have this
policy sent to us for any: a) modification; b) death settlement; c)
surrender; d) assignment; e) change of owner or beneficiary; f) payment
option election; or g) exercise of any policy privilege.
We will send a supplementary contract to replace this policy if any
payment option is chosen. All sums to be paid by us under this policy are
considered paid when tendered by us at our home office.
2.7 TERMINATION - This policy ends when any one of the following events occurs:
a) the owner requests that the policy be canceled;
FORM AV200 Page 7
b) the annuitant dies; or
c) the policy is surrendered.
2.8 NON-PARTICIPATION - This policy does not share in the company's surplus or
profits.
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SECTION 3 - OWNERSHIP AND BENEFICIARIES
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3.1 OWNERSHIP - The owner has all rights, title and interest in the policy
during the accumulation period and while the annuitant is living. You may
exercise all rights and options stated in the policy, subject to the rights
of any irrevocable beneficiary or assignee of record.
3.2 BENEFICIARY - Beneficiaries are as named in the application, unless changed
by the owner. The interests of any beneficiary in a class who dies before
the annuitant will pass to any survivors of the class, unless the policy
provides otherwise. Secondary beneficiaries will have the right to receive
the proceeds only if no primary beneficiary survives. If no beneficiary
survives the annuitant, we will pay the proceeds to you or your estate.
In finding and identifying beneficiaries we may rely on sworn statements,
other facts, or evidence we deem satisfactory. Any benefits we pay based
on such information will be a valid discharge of our duty up to the
amount paid.
3.3 CHANGE OF OWNER OR BENEFICIARY - While the annuitant lives, a change of
owner or beneficiary can be made at any time, subject to the following
rules:
a) the change must be in writing on a form acceptable to us;
b) it must be signed by the owner;
c) if the owner is more than one person, the written notice for change
must be signed by all persons named as owner;
d) the form must be sent to and recorded by us;
e) a request for change of beneficiary must be signed by any irrevocable
beneficiary; and
f) the change will take effect on the date signed, but it will not apply
to any payment or action by us before we record the form.
3.4 ASSIGNMENT - No assignment of this policy will bind us unless:
a) it is in writing on a form acceptable to us;
b) signed by the owner;
c) if the owner is more than one person, the written notice of
assignment must be signed by all persons named as owner; and
d) received by us at our home office.
We will not be responsible for the validity of an assignment.
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SECTION 4 - PREMIUMS
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4.1 PREMIUM PAYMENT - Premium payments may be made at any time. However, we
FORM AV200 Page 8
reserve the right to limit or restrict the amount of a premium payment as
we deem appropriate. The first premium must be equal to or greater than
$1,000. Thereafter, premium payments are flexible as to both timing and
amount. Each premium is to be paid at our home office or to our
administrator. No payment may be less than $50 without our consent.
4.2 PAYMENT FREQUENCY - The first premium is due on or prior to the policy
date. We will send periodic reminder notices to the owner. The minimum
amount for which such notice will be sent will be $50. A reminder notice
may be sent for different periods, which may be 12, 6, or 3 months. The
reminder notice period may be changed upon request.
4.3 UNSCHEDULED PREMIUMS - Unscheduled premium payments of at least $50 may be
made at any time prior to the maturity date. The company may, in its
discretion, waive the $50 minimum requirements. The company reserves the
right to limit the number and amount of unscheduled premium payments.
4.4 ALLOCATION OF PREMIUM - The owner will determine the percentage of premium
that will be allocated to each subaccount of the variable account and to
the declared interest option. The owner may choose to allocate all the
premium, a percentage, or nothing to a particular subaccount or to the
declared interest option. Any allocation must be for at least 10% of the
premium. A fractional percent may not be chosen.
On the policy date, premiums will be initially allocated to the money
market subaccount. On the 11th day following the policy date, we will
transfer part or all of the accumulated value in the money market
subaccount to the subaccounts or the declared interest option in
accordance with the premium allocation percentages shown in the
application. For any premium received subsequently, the premium will be
allocated in accordance with the premium allocation percentages shown in
the application or the most recent written instructions of the owner.
The owner may change the allocation for future premiums at any time,
subject to the following rules:
a) The policy must be in force;
b) There must be an accumulated value;
c) The change must be in writing on a form acceptable to us;
d) The form must be signed by the owner;
e) The change will take effect on the business day on or next following
the date we receive the signed form at our home office.
A change of allocation of future premiums does not affect current
accumulated values.
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SECTION 5 - ANNUITY AND DEATH BENEFITS
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5.1 ANNUITY BENEFIT - If the annuitant lives to the retirement date, we will
pay the annuitant a monthly income for the rest of the annuitant's life
beginning on the
FORM AV200 Page 9
retirement date if:
a) this policy is in force on the retirement date;
b) the owner has not elected to have the accumulated value paid in a
single sum; and
c) the owner has not elected a payment option.
The amount of payments will be obtained by applying the accumulated value
under payment option 3. We will make at least 120 payments. After 120
payments the annuitant must be living to receive further payments. If
the annuitant dies before 120 payments have been received, any remaining
payments will be paid to the beneficiary. If no beneficiary survives, we
will pay the commuted value, as determined by us, of any remaining
payments to the estate of the last beneficiary to die.
5.2 DEATH OF ANNUITANT DURING ACCUMULATION PERIOD - If the sole annuitant dies
during the accumulation period and the annuitant is not an owner, we will
pay the death benefit to the beneficiary. The beneficiary may elect to
apply this sum under one of the annuity payment options as payee. See
Section 5.3 if you are the annuitant.
5.3 DEATH OF OWNER - If any owner dies prior to the retirement date and the
deceased owner is the sole annuitant, we will pay the death benefit to
the beneficiary in one sum within five (5) years of the deceased owner's
death. The beneficiary may elect (within 60 days of the date we receive
due proof of death) to apply this sum under one of the annuity payment
options as payee, provided:
a) payments under the annuity payment option begin not later than one (1)
year after the owner's death; and
b) payments will be payable for the life of the beneficiary, or over a
period not greater than the beneficiary's life expectancy.
If any owner dies and the deceased owner is not the annuitant (or a
co-annuitant survives the deceased owner/annuitant), the new owner will
be the surviving owner if any. The new owner will be the annuitant
(unless otherwise provided) if there are no surviving owners. If the
sole new owner is the deceased owner's spouse, the contract may be
continued. If the new owner is someone other than the deceased owner's
spouse, the surrender value of the policy must be distributed within five
(5) years of the deceased owner's death.
If any owner dies on or after the retirement date, but before all
proceeds payable under this contract have been distributed, we will
continue payments to the annuitant (or, if the deceased owner was the
annuitant, to the beneficiary) under the payment method in effect at the
time of the deceased owner's death.
For purposes of this section, if any owner of this contract is not an
individual, the death or change of any annuitant shall be treated as the
death of an owner.
5.4 DEATH BENEFIT AT DEATH OF ANNUITANT DURING ACCUMULATION PERIOD - The death
benefit will be determined based on the annuitant's age on the policy
date. If there is more than one annuitant, we will use the age of the last
surviving annuitant.
If the annuitant's age on the policy date is:
a) less than 76, the death benefit will be equal to the greater of:
1) the sum of all premium payments less the sum of all partial
withdrawal
FORM AV200 Page 10
reductions, as of the date due proof of death is received;
2) the accumulated value as of the date due proof of death is
received;
3) the death benefit anniversary amount as of the date of death plus
any premium payment made and less the sum of all partial
withdrawal reductions since the most recent death benefit
anniversary prior to death;
The death benefit anniversary amount is equal to the accumulated
value on the most recent policy anniversary. The death benefit
anniversary amount is determined on the first policy anniversary and
on each subsequent policy anniversary thereafter.
b) 76 or greater, the death benefit is equal to the greater of:
1) the sum of all premium payments less the sum of all partial
withdrawal reductions, as of the date due proof of death is
received; or
2) the accumulated value as of the date due proof of death is
received.
For purposes of this section, partial withdrawal reduction is equal to a)
times b) divided by c) where:
a) is the death benefit immediately prior to withdrawal;
b) is the amount of the partial withdrawal; and
c) is the accumulated value immediately prior to withdrawal.
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SECTION 6 - VARIABLE ACCOUNT
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6.1 VARIABLE ACCOUNT - We own the assets of the variable account. We will
value the assets of the variable account each business day. The assets
of such account will be kept separate from the assets of our general
account and any other separate accounts. Income, and realized and
unrealized gains or losses from assets in the variable account will be
credited to or charged against such account without regard to our other
income, gains or losses.
That portion of the assets of the variable account which equals the
reserves and other policy liabilities of the policies which are
supported by the variable account will not be charged with liabilities
arising from any other business we conduct. We have the right to
transfer to our general account any assets of the variable account which
are in excess of such reserves and other policy liabilities.
While the variable account is registered with the SEC and thereby
subject to SEC rules and regulations, it is also subject to the laws of
the State of Mississippi which regulate the operations of insurance
companies incorporated in Mississippi. The investment policy of the
variable account will not be changed without the approval of the
Insurance Commissioner of the State of Mississippi. The approval
process is on file with the insurance commissioner of the state in which
this policy was delivered.
We also reserve the right to transfer assets of the variable account,
which we determine to be associated with the class of policies to which
this policy belongs, to another separate account. If this type of
transfer is made, the term "variable account," as used in this policy,
shall then mean the variable account to which the assets were
transferred.
FORM AV200 Page 11
When permitted by law, we also reserve the right to:
a) deregister the variable account under the Investment Company Act of
1940;
b) manage the variable account under the direction of a committee;
c) restrict or eliminate any voting rights of owners, or other persons
who have voting rights as to the variable account; and
d) combine the variable account with other separate accounts.
6.2 SUBACCOUNTS - The variable account is divided into subaccounts. The
subaccounts are listed on page 4. Subject to obtaining any approvals or
consents required by applicable law, we reserve the right to eliminate or
combine any subaccounts and the right to transfer the assets of one or more
subaccounts to any other subaccount. We also reserve the right to add new
subaccounts and make such subaccounts available to any class or series of
policies as we deem appropriate. Each new subaccount would invest in a new
investment option of the fund, or in shares of another investment company.
The owner will determine the percentage of premium that will be allocated
to each subaccount in accordance with the allocation of premium provision.
6.3 FUND INVESTMENT OPTIONS - The fund has several investment options each of
which corresponds to one of the subaccounts of the variable account. The
investment options are listed on the policy data page. Premiums allocated
to a subaccount will automatically be invested in the fund investment
option associated with that subaccount. The owner will share only in the
income, gains or losses of the investment option(s) where shares are held.
We have the right, subject to compliance with any applicable laws, to make:
a) additions to;
b) deletions from; or
c) substitutions for;
the shares of a fund investment option that are held by the variable
account or that the account may purchase.
We also reserve the right to dispose of the shares of an investment
option of the fund listed on page 4 and to substitute shares of another
investment option of such fund or another mutual fund investment option,
if:
a) the shares of the investment option are no longer available for
investment; or
b) if in our judgment further investment in the investment option should
become inappropriate in view of the purposes of the variable account.
In the event of any substitution or change, we may, by appropriate
endorsement, make such changes in this and other policies as may be
necessary or appropriate to reflect the substitution or change.
6.4 TRANSFERS - The owner may transfer all or part of the accumulated value
among the subaccounts of the variable account and between the subaccounts
and the declared interest option, subject to the following rules:
a) the transfer request must be in writing on a form acceptable to us;
b) the form must be signed by the owner;
c) the transfer will take effect as of the end of the valuation period
during which we receive the signed form at our home office;
d) the owner may transfer amounts among the subaccounts of the variable
account
FORM AV200 Page 12
an unlimited number of times in a policy year;
e) the owner may transfer amounts from the declared interest option to the
variable account an unlimited number of times; amounts transferred
from the declared interest option are considered transferred on a
last-in-first-out basis;
f) the first 12 transfers in each policy year will be made without a
transfer charge; thereafter, each time amounts are transferred a
transfer charge may be imposed; this transfer charge is shown on the
policy data page;
g) the accumulated value on the date of the transfer will not be affected
by the transfer except to the extent of the transfer charge; unless
paid in cash, the transfer charge will be deducted on a pro rata
basis from the declared interest option and/or the subaccounts to
which the transfer is made;
h) the owner must transfer at least:
1) a total of $100; or
2) the total accumulated value in the subaccount or the total
accumulated value in the declared interest option, if the total
amount transferred is less than $100.
i) no more than 25% of the accumulated value in the declared interest
option may be transferred unless the balance in the declared interest
option after the transfer would be less than $1,000; if the balance
in the declared interest option would fall below $1,000, the
accumulated value in the declared interest option may be transferred.
--------------------------------------------------------------------------------
SECTION 7 - ACCUMULATED VALUE BENEFITS
--------------------------------------------------------------------------------
7.1 ACCUMULATED VALUE - The accumulated value of this policy will be the sum
of:
a) the accumulated value in the subaccounts of the variable account; plus
b) the accumulated value in the declared interest option.
7.2 NET ACCUMULATED VALUE - The net accumulated value of this policy will be
the accumulated value less a surrender charge. All of the values are the
same or more than the minimums set by the laws of the state where the
policy is delivered.
7.3 VARIABLE ACCUMULATED VALUE - On the business day on or next following the
day we receive a completed application and the minimum initial premium,
the variable accumulated value is the total amount of premium, if any,
allocated to the subaccounts of the variable account. After such date,
the policy's variable accumulated value is equal to the sum of the
policy's accumulated value in each subaccount. The value in a subaccount
is equal to a) multiplied by b) where:
a) is the current number of subaccount units; and
b) is the current unit value.
The variable accumulated value will vary from business day to business day
reflecting changes in a) and b) above.
7.4 SUBACCOUNT UNITS - When transactions are made which affect the variable
accumulated value, dollar amounts are converted to subaccount units. The
number of subaccount units for a transaction is determined by dividing the
dollar amount of the transaction by the current unit value.
FORM AV200 Page 13
The number of units for a subaccount attributable to a policy increases
when:
a) premiums are allocated under the policy to that subaccount; or
b) transfers from the declared interest option or other subaccounts are
credited under the policy to that subaccount.
The number of units for a subaccount attributable to a policy decreases
when:
a) the owner makes a surrender or partial withdrawal from that subaccount;
b) transfers are made from that subaccount to the declared interest option
or other subaccounts; or
c) the annual administrative charge shown on the policy data page is
deducted (the annual administrative charge will be prorated among the
subaccounts and the declared interest option).
7.5 UNIT VALUE - The unit value for a subaccount on any business day is
determined by dividing each subaccount's net asset value by the number of
units outstanding at the time of calculation. The unit value for each
subaccount was set initially at $10 when the subaccounts first purchased
fund shares. The unit value for each subsequent valuation period is
calculated by dividing a) by b), where:
a) is:
1) the value of the net assets of the subaccount at the end of the
preceding valuation period; plus
2) the investment income and capital gains, realized or unrealized,
credited to the net assets of that subaccount during the valuation
period for which the unit value is being determined; minus
3) the capital losses, realized or unrealized, charged against those
net assets during the valuation period; minus
4) any amount charged against the subaccount for taxes, or any amount
set aside during the valuation period by the company as a provision
for taxes attributable to the operation or maintenance of that
subaccount; minus
5) the mortality and expense risk shown on the policy data page; this
charge may go up or down but will never exceed 0.0038091% of the
net daily assets in that subaccount for each day in the valuation
period; the maximum charge corresponds to a charge of 1.4% per
year of the average daily net assets of the subaccount for
mortality and expense risks.
b) is the number of units outstanding at the end of the preceding
valuation period.
The unit value for a valuation period applies for each day in the period.
We will value the net assets in each subaccount at their fair market
value in accordance with accepted accounting practices and applicable
laws and regulations.
7.6 DECLARED INTEREST OPTION ACCUMULATED VALUE - The declared interest option
accumulated value as of the 11th day following the policy date is the
premium allocated to the declared interest option as of that date.
Thereafter, the declared interest option accumulated value changes every
valuation period.
The declared interest option accumulated value increases when:
a) premiums are allocated to the declared interest option; or
b) transfers from the other subaccounts are credited to the declared
interest option; or
FORM AV200 Page 14
c) any interest is credited to the declared interest option.
The declared interest option accumulated value decreases when:
a) the owner makes a partial withdrawal from the declared interest option;
or
b) transfers are made from the declared interest option to other
subaccounts; or
c) the annual administrative charge shown on the policy data page is
deducted (the annual administrative charge will be prorated among the
subaccounts and the declared interest option).
For the purposes of the above calculation, interest does not accrue on
amounts deducted for policy charges, amounts transferred from or on
amounts surrendered or withdrawn from the declared interest option.
Interest is accrued on the accumulated value of the declared interest
option on a daily basis and is credited no less frequently than once a
policy year.
7.7 DECLARED INTEREST OPTION INTEREST - The guaranteed minimum interest rate
applied to the declared interest option accumulated value is an effective
rate of 3% per year. Interest in excess of the minimum rate may be
applied. The amount of the excess interest credited for any policy year
will be set by us at the start of that policy year and will be guaranteed
for such year.
7.8 SURRENDER - Before the retirement date, the owner may surrender the policy,
subject to the following rules:
a) the owner must send a written request to us along with such information
or evidence as may be required by law or as may be needed to process
the request;
b) if the owner is more than one person, the written request must be
signed by all persons named as owner;
c) the amount of any such surrender may be paid in cash or we will apply
part or all of it under a payment option;
d) we have the right to defer payment of a surrender from the declared
interest option for up to 6 months;
e) the amount of accumulated value surrendered will be subject to a
surrender charge;
f) upon surrender, the policy will terminate.
7.9 SURRENDER CHARGE - The surrender charge is shown on the policy data page.
The total surrender charges assessed will never exceed 8.5% of premiums
paid.
If all of the accumulated value is applied under payment option 2, 3, 4 or
5, the surrender charge will be reduced as follows:
a) if option 3 or 5 is used, the surrender charge will be zero; or
b) if option 2 or 4 is used, the surrender charge will be applied,
however, the fixed number of years for which payment will be made is
added to the number of years the contract has been in force to
determine what the charge will be.
7.10 TEN PERCENT WITHDRAWAL PRIVILEGE - After the first policy year, amounts up
to the "withdrawal privilege amount" may be withdrawn from the policy
during each policy year without being subject to the surrender charge. The
withdrawal privilege amount will be equal to 10% of the accumulated value
on the most recent policy anniversary. If the policy is subsequently
surrendered during the policy year, the surrender charge will be applied to
any partial withdrawals taken during that policy
FORM AV200 Page 15
year, as well as the amount surrendered.
7.11 WAIVER OF SURRENDER CHARGE - The owner may make a surrender of this
policy without incurring a surrender charge if the annuitant becomes
eligible for waiver of the surrender charge.
The waiver of the surrender charge is subject to the following rules:
a) we must receive a written request signed by the owner or, if the owner
is more than one person, the written request must be signed by all
persons named as owner;
b) the policy must be in force or not providing benefits under any payment
option;
c) proof must be provided that the conditions of eligibility requirements
for waiver of the surrender charge have been met, including an
attending physician's statement and any other proof we may require;
we reserve the right to seek a second medical opinion or have an
examination performed at our expense by a physician we choose;
d) if there are joint annuitants, you may exercise this waiver privilege
once, for either the first or second annuitant, but not both;
e) the annuitant must become eligible for waiver of surrender charge
after the first contract year ends.
7.12 PARTIAL WITHDRAWAL - Before the retirement date, the owner may obtain a
partial withdrawal of the accumulated value, subject to the following
rules:
a) The amount of any partial withdrawal must be at least $500;
b) If the accumulated value after a partial withdrawal is less than
$2,000, we have the right to pay the remaining accumulated value to
the owner as a full surrender;
c) the owner must send a written request to us along with such
information or evidence as may be required by law or as may be needed
to process the request;
d) if the owner is more than one person, the written request must be
signed by all persons named as owner;
e) The accumulated value will be reduced by the amount of any partial
withdrawal and any surrender charge applying to such withdrawal. The
owner may tell us how to allocate a partial withdrawal among the
subaccounts and the declared interest option. If the owner does not
so instruct, we will prorate the partial withdrawal among the
subaccounts and the declared interest option; this allocation will be
in the same proportion that the accumulated value in each of the
subaccounts and the accumulated value in the declared interest option
bears to the total accumulated value on the date we receive the
request;
f) Amounts withdrawn from the declared interest option are considered
withdrawn on the last-in-first-out basis.
7.13 DELAY OF PAYMENT - Proceeds from full surrenders and partial withdrawals
will usually be mailed to the owner within 7 days after the owner's signed
request is received in our home office. We will usually mail any death
claim proceeds within 7 days after we receive due proof of death. We have
the right to delay such payment whenever:
a) the New York Stock Exchange is closed other than on customary weekends
and any holiday closing;
b) trading on the New York Stock Exchange is restricted as determined by
the SEC;
FORM AV200 Page 16
c) the SEC, by order, permits postponement for the protection of
policyowners;
d) as a result of an emergency, as determined by the SEC, it is not
reasonably possible to dispose of securities or to determine the
value of the net assets of the variable account.
We have the right to defer payment which is derived from any amount paid
to us by check or draft until we are satisfied the check or draft has been
paid by the bank on which it is drawn.
We also have the right to delay making a full surrender or partial
withdrawal from the declared interest option for up to 6 months from the
date we receive the owner's request.
7.14 TAX CHARGES - The company may deduct state and local government premium tax
from the accumulated value, if such taxes are applicable in your state.
The company may also make a charge against the accumulated value of this
policy for any tax or economic burden on the company resulting from the
application of federal, state or local tax laws that the company determines
to be properly attributable to the separate account or the policies. The
charge will be applied by:
a) redeeming the number of subaccount units from the separate account
equal to the pro rata share of the charge applicable to the
subaccounts; or
b) deducting from the declared interest option accumulated value the pro
rata portion of the charge applicable to the declared interest option.
7.15 ANNUAL REPORT - At least once each year we will send a report, without
charge, to the owner which shows:
a) all premiums paid and charges made since the last report;
b) the current accumulated value including the value in each subaccount
and the declared interest option; and
c) any partial withdrawals since the last report.
An illustrative report will be sent to the owner upon request. A fee may
be charged for this report.
--------------------------------------------------------------------------------
SECTION 8 - PAYMENT OF PROCEEDS
--------------------------------------------------------------------------------
8.1 CHOICE OF OPTIONS - The owner may choose to have the proceeds of this
policy paid under a payment option. After the annuitant's death, the
beneficiary may choose an option if the owner had not done so before the
annuitant's death. If no payment option is chosen, we will pay the
proceeds of this policy in one sum. We may also fulfill our obligation
under this policy by paying the proceeds in one sum if:
a) the proceeds are less than $2,000;
b) periodic payments become less than $20; or
c) the payee is an assignee, estate, trustee, partnership, corporation, or
association.
8.2 PAYMENT OPTIONS - The choice of payment options are:
1) INTEREST INCOME - The proceeds will be left with us to earn interest.
The interest will be paid every 1, 3, 6 or 12 months as the payee
chooses. The rate of interest will be determined by us. The payee
may withdraw all or part of the proceeds at any time.
FORM AV200 Page 17
2) INCOME FOR FIXED TERM - The proceeds will be paid out in equal
installments for a fixed term of years.
3) LIFE INCOME WITH TERM CERTAIN - The proceeds will be paid out in equal
installments for as long as the payee lives, but for not less than a
term certain. The owner or payee may choose one of the terms certain
shown in the payment option tables.
4) INCOME FOR FIXED AMOUNT - The proceeds will be paid out in equal
installments of a specified amount. The payments will continue until
all proceeds plus interest have been paid out.
5) JOINT AND TWO-THIRDS TO SURVIVOR MONTHLY LIFE INCOME - The proceeds
will be paid out in equal monthly installments for as long as two
joint payees live. When one payee dies, installments of two-thirds of
the first installment will be paid to the surviving payee. Payments
will stop when the surviving payee dies.
The proceeds may be paid in any other manner requested and agreed to by
us, or under any other payment options made available by the company.
8.3 INTEREST AND MORTALITY - The minimum interest rate used in computing any
payment option is 3% per year. Higher interest rates may be used on the
effective date of the supplementary contract. We may at any time declare
additional interest on these funds. The amount of additional interest and
how it is determined will be set by us.
The mortality table which is used for options 3 and 5 is the "Annuity 2000"
individual annuity mortality table.
8.4 WITHDRAWAL OF PROCEEDS - The payee may not withdraw the funds under a
payment option unless agreed to in the supplementary contract. We have the
right to defer a withdrawal for up to 6 months. We may also refuse to
allow partial withdrawals of less than $250.
8.5 CLAIMS OF CREDITORS - Payments under any payment option will be exempt from
the claims of creditors to the maximum extent allowed by law.
8.6 PROOF OF SURVIVAL - We may require proof that a payee under a payment
option is alive. This proof must be in a form acceptable to us.
FORM AV200 Page 18
PAYMENT OPTION TABLES
(PER $1,000 OF PROCEEDS)
Option 2 - Income for Fixed Term
Installments per $1,000 of Proceeds
-----------------------------------
Number
of Years Annual Monthly
-----------------------------------
5 211.99 17.91
10 113.82 9.61
15 81.33 6.87
20 65.26 5.51
25 55.76 4.71
30 49.53 4.18
Guaranteed Settlement Option 5
Joint and Two-thirds to Survivor Monthly Life Income
Monthly Installments per $1,000 of Proceeds
--------------------------------------------------------------------------
Male Female Age
Age 55 60 62 65 70
--------------------------------------------------------------------------
60 4.33 4.58 4.68 4.85 5.16
62 4.41 4.67 4.79 4.97 5.31
65 4.53 4.82 4.95 5.16 5.54
70 4.75 5.09 5.24 5.49 5.97
75 4.97 5.35 5.53 5.83 6.42
-------------------------------------------------------------------------------
Guaranteed Settlement Option 3
Life Income with Term Certain
Monthly Installments per $1,000 Proceeds
-------------------------------------------------------------------------------
Male Female
-------------------------------------------------------------------------------
Years Certain Years Certain
0 5 10 15 20 0 5 10 15 20
Age
-------------------------------------------------------------------------------
55 4.51 4.49 4.45 4.38 4.27 4.19 4.19 4.16 4.12 4.06
56 4.60 4.59 4.54 4.46 4.33 4.27 4.26 4.24 4.19 4.12
57 4.70 4.68 4.63 4.54 4.39 4.35 4.35 4.32 4.27 4.19
58 4.81 4.79 4.73 4.62 4.46 4.44 4.43 4.40 4.34 4.25
59 4.92 4.90 4.83 4.70 4.52 4.54 4.53 4.49 4.42 4.32
60 5.04 5.01 4.93 4.79 4.59 4.64 4.63 4.58 4.51 4.39
-------------------------------------------------------------------------------
61 5.16 5.14 5.05 4.88 4.66 4.75 4.73 4.68 4.59 4.46
62 5.30 5.27 5.16 4.98 4.72 4.86 4.84 4.79 4.68 4.53
63 5.45 5.41 5.29 5.08 4.79 4.98 4.96 4.90 4.78 4.60
64 5.60 5.56 5.42 5.17 4.85 5.11 5.09 5.01 4.88 4.67
65 5.77 5.72 5.55 5.27 4.91 5.25 5.22 5.14 4.98 4.75
-------------------------------------------------------------------------------
66 5.95 5.89 5.69 5.38 4.97 5.40 5.36 5.26 5.08 4.82
67 6.14 6.06 5.84 5.48 5.03 5.55 5.52 5.40 5.19 4.89
68 6.34 6.25 5.99 5.58 5.09 5.73 5.68 5.55 5.30 4.95
69 6.55 6.45 6.15 5.68 5.14 5.91 5.86 5.70 5.41 5.02
70 6.78 6.66 6.31 5.78 5.19 6.11 6.05 5.86 5.53 5.08
-------------------------------------------------------------------------------
71 7.03 6.89 6.47 5.88 5.23 6.32 6.25 6.02 5.64 5.14
72 7.29 7.12 6.64 5.97 5.27 6.55 6.47 6.20 5.75 5.19
73 7.56 7.37 6.81 6.07 5.31 6.80 6.70 6.38 5.86 5.24
74 7.86 7.63 6.99 6.15 5.34 7.07 6.95 6.57 5.97 5.29
75 8.18 7.90 7.16 6.24 5.37 7.37 7.22 6.76 6.08 5.33
-------------------------------------------------------------------------------
FORM AV200 Page 19
NON-PARTICIPATING
FLEXIBLE PREMIUM DEFERRED
VARIABLE ANNUITY POLICY
If you have any questions concerning this policy or if anyone suggests that you
change or replace this policy, please contact your Southern Farm Bureau Life
agent or our administrator. [000-000-0000]
SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY
0000 XXXXXXXXXX XXXX
XXXXXXX, XX 00000
