EXHIBIT 16.4
ANNUITY CONTRACT
PHL VARIABLE INSURANCE COMPANY
[LOGO] PHOENIX(R) A STOCK COMPANY
--------------------------------------------------------------------------------
The PHL Variable Insurance Company ("the Company") agrees, subject to the
conditions and provisions of this contract, to provide the benefits specified in
this contract. If the contract is in force on the Maturity Date, we shall begin
to pay a series of annuity payments automatically to the Owner beginning on the
Maturity Date for a period certain of 10 years and as long thereafter as the
Annuitant lives, unless another option is elected. The amount of each annuity
payment, as described in the Annuity Benefits section, will be based on the
Contract Value on the Maturity Date and the annuity payment factors.
We are issuing the contract in consideration of the application, if any, and our
receipt of the Single Premium at our Annuity Operations Division. The provisions
of this and the following pages and any attachments make up your contract.
RIGHT TO RETURN THIS CONTRACT. THIS CONTRACT MAY BE RETURNED WITHIN 10 DAYS (20
DAYS FOR REPLACEMENTS) AFTER YOU RECEIVE IT FOR A REFUND OF THE SINGLE PREMIUM,
LESS ANY WITHDRAWALS MADE UNDER THIS CONTRACT AS OF THE DATE OF CANCELLATION.
THIS CONTRACT WILL BE VOID FROM ITS BEGINNING. YOU MAY RETURN THE CONTRACT BY
DELIVERING OR MAILING IT TO US AT THE ADDRESS BELOW OR BY RETURNING IT TO THE
AGENT OR AGENCY OFFICE THROUGH WHICH IT WAS DELIVERED.
PHL VARIABLE INSURANCE COMPANY
[Annuity Operations Division
PO Box 8027
Boston, MA 02266-8027
Telephone (000) 000-0000]
Signed for PHL Variable Insurance Company at Xxx Xxxxxxxx Xxx, Xxxxxxxx,
Xxxxxxxxxxx 00000.
[ /s/ Xxxxxx X. Xxxxxxxxxxx ] [ /s/ Xxxx X. Xxxxx ]
[ President ] [ Secretary ]
READ YOUR CONTRACT CAREFULLY
IT IS A LEGAL CONTRACT BETWEEN THE OWNER AND PHL VARIABLE
INSURANCE COMPANY.
THE CONTRACT VALUE WILL DEPEND ON AMOUNTS CREDITED TO THE FIXED ACCOUNT AND THE
INDEXED ACCOUNTS. THE CONTRACT VALUE MAY INCREASE BASED ON THE INDEX CALCULATION
DESCRIBED IN THE INDEX ACCOUNT(S) YOU SELECTED. WHILE ACCOUNT VALUE FOR EACH
INDEXED ACCOUNT IS AFFECTED BY THE VALUE OF AN OUTSIDE INDEX, THE CONTRACT DOES
NOT DIRECTLY PARTICIPATE IN ANY STOCK OR EQUITY INVESTMENT. WITHDRAWALS OR A
SURRENDER MAY BE SUBJECT TO A MARKET VALUE ADJUSTMENT, WHICH MAY INCREASE OR
DECREASE THE AMOUNT WITHDRAWN OR SURRENDERED. WITHDRAWALS OR A SURRENDER MAY BE
SUBJECT TO SURRENDER CHARGES.
Single Premium Deferred Equity Indexed Modified Guaranteed Annuity
Nonparticipating - not eligible for dividends
05FNDEIA
TABLE OF CONTENTS
Section Provision
1. Schedule Pages
2. Definitions
3. Entire Contract
4. Owner(s) and Beneficiary(ies)
5. Premium, Allocation, and Reallocation
6. Fixed Account, Indexed Accounts
7. Withdrawals, Surrender, Termination
8. Market Value Adjustment Feature
9. Waiver Provisions
10. Death Benefit
11. Assignment
12. Deferral of Determinations
13. Proof Required for Payment
14. Misstatements
15. Change of Maturity Date
16. Statement of Account
17. Annuity Benefits
18. Annuity Payment Options
2
-------------------------------------------------------------------------------------------------------------------
SECTION 1: SCHEDULE PAGES
-------------------------------------------------------------------------------------------------------------------
Owner: [Xxxx Xxx]
Contract Number: [13000000]
Single Premium: [$100,000.00]
Contract Date: [February 1, 2006]
Maturity Date: [February 1, 2041]
Owner's Age: [35]
Owner's Sex: [Male]
Annuitant: [Xxxx Xxx]
Joint Annuitant: [None]
Beneficiary: [As specified later in this Section 1]
PREMIUM ALLOCATION PERCENTAGES
Fixed Account [100.00%]
Indexed Account A - Point-to-Point with Cap Indexed Account [000.00%]
Indexed Account B - Performance Trigger Indexed Account [000.00%]
Indexed Account C - Monthly Average with Spread Indexed Account [000.00%]
3
-------------------------------------------------------------------------------------------------------------------
SECTION 1: SCHEDULE PAGES (continued)
-------------------------------------------------------------------------------------------------------------------
Owner: [Xxxx Xxx]
Contract Number: [13000000]
FIXED ACCOUNT
(THE VALUES BELOW APPLY ONLY
TO THE FIXED ACCOUNT)
Premium Allocation [$100,000.00]
Initial Interest Rate [3.00%]
Guaranteed Minimum Interest Rate [0.00% for each Contract Year in surrender charge period, 0.00% for
each Contract Year thereafter]
INTEREST CREDITING
We will credit interest on Account Value allocated to the Fixed Account at rates
we declare on an annual effective basis. The initial interest rate applicable to
the Fixed Account applies to the first Contract Year only. On each subsequent
Contract Anniversary a new interest rate will be declared and will be guaranteed
for the following Contract Year. Subsequent interest rates may be higher or
lower than the initial interest rate, but in no event lower than the Guaranteed
Minimum Interest Rate as shown above.
4
-------------------------------------------------------------------------------------------------------------------
SECTION 1: SCHEDULE PAGES (continued)
-------------------------------------------------------------------------------------------------------------------
Owner: [Xxxx Xxx]
Contract Number: [13000000]
INDEXED ACCOUNT A - POINT-TO-POINT WITH CAP INDEXED ACCOUNT
-----------------------------------------------------------
(THE VALUES BELOW APPLY ONLY
TO THE POINT-TO-POINT WITH CAP INDEXED ACCOUNT)
Premium Allocation [$0.00]
Index [S&P 500(R)*]
Index Value on the Contract Date [1000.00]
Initial Index Cap [6.00%]
Guaranteed Minimum Index Cap [0.00% for each Contract Year during surrender charge
period, 0.00% for each Contract Year thereafter]
Guaranteed Minimum Index Credit [0.00%]
Account Value allocated to the Point-to-Point with Cap Indexed Account earns an
Index Credit on each Contract Anniversary that is based on the performance of
the Index for the past Contract Year. The Index Credit equals the lesser of the
Index Growth, the calculation of which is described below, and the applicable
Index Cap, but in no event less than the Guaranteed Minimum Index Credit as
shown above. Index Credit will not be calculated or applied anytime other than
on the Contract Anniversaries.
On each Contract Anniversary the Index Growth is calculated as ((i) divided by
(ii)) minus 1, where:
(i) is the Index Value on the Contract Anniversary, and
(ii) is the Index Value on the preceding Contract Anniversary.
On the first Contract Anniversary, the Contract Date is deemed the preceding
Contract Anniversary for the purpose of this calculation.
INDEX CAP
The Index Cap is the maximum Index Credit that can be applied to the Account
Value in any given Contract Year. The initial Index Cap applies to the first
Contract Year only. On each subsequent Contract Anniversary a new Index Cap will
be declared and will be guaranteed for the following Contract Year. Subsequent
Index Caps may be higher or lower than the initial Index Cap, but in no event
lower than the Guaranteed Minimum Index Cap as shown above.
* ["Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500"
and "500" are trademarks of The XxXxxx-Xxxx Companies, Inc. and have been
licensed for use by Phoenix Life Insurance Company and its affiliates. This
annuity is not sponsored, endorsed, sold or promoted by Standard & Poor's
and Standard & Poor's makes no representation regarding the advisability of
purchasing this annuity.]
5
-------------------------------------------------------------------------------------------------------------------
SECTION 1: SCHEDULE PAGES (continued)
-------------------------------------------------------------------------------------------------------------------
Owner: [Xxxx Xxx]
Contract Number: [13000000]
INDEXED ACCOUNT B - PERFORMANCE TRIGGER INDEXED ACCOUNT
-------------------------------------------------------
(THE VALUES BELOW APPLY ONLY
TO THE PERFORMANCE TRIGGER INDEXED ACCOUNT)
Premium Allocation [$0.00]
Index [S&P 500(R)*]
Index Value on the Contract Date [1000.00]
Initial Triggered Rate [5.00%]
Guaranteed Minimum Triggered Rate [0.00% for each Contract Year during surrender charge
period, 0.00% for each Contract Year thereafter]
Guaranteed Minimum Index Credit [0.00%]
Account Value allocated to the Performance Trigger Indexed Account earns an
Index Credit on each Contract Anniversary that is based on the performance of
the Index for the past Contract Year.
On each Contract Anniversary the Index Credit equals the Triggered Rate if the
Index Growth, the calculation of which is described below, is greater than zero.
The Index Credit equals the Guaranteed Minimum Index Credit as shown above if
the Index Growth is less than or equal to zero. Index Credit will not be
calculated or applied anytime other than on the Contract Anniversaries.
The Index Growth is calculated as ((i) divided by (ii)) minus 1, where:
(i) is the Index Value on the Contract Anniversary, and
(ii) is the Index Value on the preceding Contract Anniversary.
On the first Contract Anniversary, the Contract Date is deemed the preceding
Contract Anniversary for the purpose of this calculation.
TRIGGERED RATE
A Triggered Rate is applied to the Account Value if the Index Growth for the
Contract Year is greater than zero. The initial Triggered Rate applies to the
first Contract Year only. On each subsequent Contract Anniversary a new
Triggered Rate will be declared and will be guaranteed for the following
Contract Year. Subsequent Triggered Rates may be higher or lower than the
initial Triggered Rate, but in no event lower than the Guaranteed Minimum
Triggered Rate as shown above.
* ["Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500"
and "500" are trademarks of The XxXxxx-Xxxx Companies, Inc. and have been
licensed for use by Phoenix Life Insurance Company and its affiliates. This
annuity is not sponsored, endorsed, sold or promoted by Standard & Poor's
and Standard & Poor's makes no representation regarding the advisability of
purchasing this annuity.]
6
-------------------------------------------------------------------------------------------------------------------
SECTION 1: SCHEDULE PAGES (continued)
-------------------------------------------------------------------------------------------------------------------
Owner: [Xxxx Xxx]
Contract Number: [13000000]
INDEXED ACCOUNT C - MONTHLY AVERAGE WITH SPREAD INDEXED ACCOUNT
---------------------------------------------------------------
(THE VALUES BELOW APPLY ONLY
TO THE MONTHLY AVERAGE WITH SPREAD INDEXED ACCOUNT)
Premium Allocation [$0.00]
Index [S&P 500(R)*]
Index Value on the Contract Date [1000.00]
Initial Index Spread [2.00%]
Guaranteed Maximum Index Spread [10.00% for each Contract Year during surrender
charge period, 10.00% for each Contract Year
thereafter]
Guaranteed Minimum Index Credit [0.00%]
Account Value allocated to the Monthly Average with Spread Indexed Account earns
an Index Credit on each Contract Anniversary that is based on the performance of
the Index for the past Contract Year.
On each Contract Anniversary the Index Credit equals the Averaged Index Growth,
the calculation of which is described below, less the Index Spread, but in no
event less than the Guaranteed Minimum Index Credit as shown above. Index Credit
will not be calculated or applied anytime other than on the Contract
Anniversaries.
The Averaged Index Growth is calculated as ((i) divided by (ii)) minus 1, where:
(i) is the sum of the Index Values on each Monthly Processing Date
during the Contract Year, divided by 12, and
(ii) is the Index Value on the preceding Contract Anniversary.
On the first Contract Anniversary, the Contract Date is deemed the preceding
Contract Anniversary for the purpose of this calculation.
INDEX SPREAD
The Index Spread is the amount subtracted from the Averaged Index Growth when
the Index Credit is calculated. The initial Index Spread applies to the first
Contract Year only. On each subsequent Contract Anniversary a new Index Spread
will be declared and will be guaranteed for the following Contract Year.
Subsequent Index Spreads may be higher or lower than the initial Index Spread,
but in no event higher than the Guaranteed Maximum Index Spread as shown above.
* ["Standard & Poor's(R)", "S&P(R)", "S&P 500(R)", "Standard & Poor's 500"
and "500" are trademarks of The XxXxxx-Xxxx Companies, Inc. and have been
licensed for use by Phoenix Life Insurance Company and its affiliates. This
annuity is not sponsored, endorsed, sold or promoted by Standard & Poor's
and Standard & Poor's makes no representation regarding the advisability of
purchasing this annuity.]
7
--------------------------------------------------------------------------------
SECTION 1: SCHEDULE PAGES (continued)
--------------------------------------------------------------------------------
Owner: [Xxxx Xxx]
Contract Number: [13000000]
CONTRACT CHARGES
[Tax charge: 0.00% of Single Premium payment]
Surrender Charge: deducted in accordance with the following Surrender Charge
Schedule
Surrender Charge Schedule*
----------------------------------------------------------
Complete Contract Surrender Charge
Years Percentage
---------------------------- -- --------------------------
[0 7%
---------------------------- -- --------------------------
1 7%
---------------------------- -- --------------------------
2 7%
---------------------------- -- --------------------------
3 6%
---------------------------- -- --------------------------
4 6%
---------------------------- -- --------------------------
5 5%
---------------------------- -- --------------------------
6 5%
---------------------------- -- --------------------------
7+ 0%]
----------------------------------------------------------
* See Section 7 for a description of how this charge is determined.
8
--------------------------------------------------------------------------------
SECTION 1: SCHEDULE PAGES (continued)
--------------------------------------------------------------------------------
Owner: [Xxxx Xxx]
Contract Number: [13000000]
BENEFICIARY
[Xxxx Xxx]
9
--------------------------------------------------------------------------------
SECTION 2: DEFINITIONS
--------------------------------------------------------------------------------
The term "ACCOUNT" means an Indexed Account or a Fixed Account.
The term "ACCOUNT VALUE" means the value available in each Account for
annuitization or surrender, before the application of any surrender charge or
Market Value Adjustment.
The term "ANNUITANT/JOINT ANNUITANT" means the person or persons on whose
continuation of life or lives the annuity benefit is based upon for this
contract. The Annuitant shown on the Schedule Page when the contract was issued
is the Primary Annuitant. Unless otherwise prohibited by the terms of this
contract and any attachments, the Annuitant/Joint Annuitant may be changed prior
to the Maturity Date.
There may, however, be tax consequences.
The term "BENEFICIARY" is as defined in Section 4.
The term "BUSINESS DAY" means any day that we are open for business and the New
York Stock Exchange is open for trading. We will deem each Business Day to end
at the close of regularly scheduled trading of the New York Stock Exchange
(currently 4:00 p.m. Eastern Time) on that day.
The term "CONTRACT ANNIVERSARY" means the same day and month of each year as the
Contract Date following the Contract Date. If the day does not exist in a month,
the last day of the month will be used.
The term "CONTRACT DATE" means the date this Contract is issued and the date
from which Contract Years are measured. The Contract Date is shown on the
Schedule Pages. The contract will begin in effect on the Contract Date provided
the Single Premium is received and the Owner is alive.
The term "CONTRACT VALUE" is equal to the sum of the Account Value of each of
the Accounts.
The term "CONTRACT YEAR" means the 12-month period beginning on the Contract
Date and each 12-month period thereafter.
The term "GROSS WITHDRAWAl" means the amount deducted from the Contract Value
as a consequence of your request for a withdrawal.
The term "INDEX" means the measure used to determine the Index Credit for a
particular Indexed Account. The Index used for a particular Indexed Account is
shown on the Schedule Pages. If the Index is no longer available or if the Index
calculation is substantially changed, a suitable replacement index will be used,
subject to any required regulatory approval. We will notify you of the change.
The term "INDEX VALUE" means the published value of the Index, excluding any
dividends that may be paid by the firms that comprise the Index. The Index Value
on the Contract Date, Contract Anniversaries, or Monthly Processing Dates will
be the Index Value published as of the close of business on the Business Day
prior to the Contract Date, Contract Anniversary, or Monthly Processing Date,
respectively. If an Index Value is not published on any particular day, the
first preceding Index Value will be used.
The term "MATURITY DATE" is the date annuity payments commence in the form of an
annuity payment option. The Maturity Date is as shown on the Schedule Pages or
as later changed. For further details see Section 15.
The term "MONTHLY PROCESSING DATe" means the same day of each month as the
Contract Date. If the day does not exist in a month, the last day of the month
will be used.
The term "NET WITHDRAWAL" means the payment you will receive as a consequence of
your request for a withdrawal, provided sufficient Contract Value is available.
The Net Withdrawal is equal to the Gross Withdrawal, adjusted by any applicable
Market Value Adjustment, less any applicable Surrender Charges and taxes.
The term "OWNER" or "OWNERS" means the person, persons, or entity with ownership
rights in the Contract. The Owner is as shown on the Schedule Pages or as later
changed. For further details see Section 4.
The term "SURRENDER VALUE" is as defined in Section 7.
The terms "WE, US, AND OUR" refer to the Company.
The terms "WRITTEN REQUEST" and "WRITTEN NOTICE" mean a request or notice we
receive in writing at our Annuity Operations Division in a form satisfactory to
us.
The terms "YOU" and "YOUR" refer to the Owner(s) of this contract, as defined in
Section 4, or the joint Owners of this contract if a joint Owner is named.
10
--------------------------------------------------------------------------------
SECTION 3: ENTIRE CONTRACT
--------------------------------------------------------------------------------
This contract is an agreement between the Owner(s) and the Company. This
contract and any attachments comprise the entire contract. Any change in terms
of this contract, as required to conform with law, must be signed by one of our
executive officers and countersigned by another one of our executive officers.
Any benefits payable under this contract are payable at our Annuity Operations
Division. All paid-up annuity, surrender, and death benefits under this contract
are not less than the minimum benefits required by any statute of the state
where this contract is delivered or issued for delivery. Any additional amounts
we credit to the contract will be treated as any other gain in the contract and
will increase the paid-up annuity, cash surrender, and death benefits. Paid-up
annuity, cash surrender benefits and death benefits will be reduced by any
withdrawals.
--------------------------------------------------------------------------------
SECTION 4: OWNER(S) AND BENEFICIARY(IES)
--------------------------------------------------------------------------------
OWNER(S)
The Owner is the person, persons, or entity, with sole and absolute power to
exercise all rights and privileges without the consent of any other party,
except as otherwise provided by this contract or unless you provide otherwise by
written notice. If there is more than one Owner, all Owners must consent to any
changes. If no Owner is named, the Annuitant will be the Owner. If you are a
non-natural Owner, death of the Primary Annuitant will be treated as the death
of an Owner. Under contracts used with certain tax-qualified plans, the Owner
must be the Annuitant. More than one Owner may be named. If any Owner dies, all
rights vest equally in the surviving Owners. If any Owner dies prior to the
Maturity Date, the death benefit will be paid as provided in Section 10.
BENEFICIARY(IES)
The Beneficiary is the person who receives death benefits under this contract.
If there is no surviving Beneficiary when the death benefit becomes payable in
accordance with Section 10, the Owner will be the Beneficiary. If the Owner is
not living, then the estate of the Owner will be the Beneficiary.
The Owner(s) and the Beneficiary will be as shown in the contract unless you
change them or they are changed by the terms of this section.
CHANGES
While this contract is in effect, you may change the Beneficiary. You may also
change the Owner or Annuitant with our consent. You may only change the Owner by
transfering ownership of the entire contract between spouses or to a single
grantor trust. If the Owner is a natural person, You may change Annuitant(s) or
name a new Annuitant upon the death of the Primary Annuitant prior to the
Maturity Date. If you do not name a new Annuitant, and the Owner is a natural
person, the Owner will become the Annuitant.
A request to make any changes must be made by written request. If there is more
than one Owner, all Owners must sign the request. When we receive it, the change
will be effective as of the date it was signed by the last Owner to sign,
whether or not an Owner or Annuitant is then alive. The change, however, will be
subject to the rights of any assignee of record with us and subject to any
payment made or other action taken by us before we received and filed the
notice.
Your exercise of any rights will, to the extent thereof, assign, release, or
surrender the interest of the Annuitant and all beneficiaries and Owners under
this contract.
--------------------------------------------------------------------------------
SECTION 5: PREMIUM, ALLOCATION, AND REALLOCATION
--------------------------------------------------------------------------------
PREMIUM
The amount applied to this contract will be the Single Premium received minus a
deduction for any applicable tax including premium tax where applicable. The
Single Premium as shown on the Schedule Pages, is payable at Our Annuity
Operations Division but may be given to an authorized agent for forwarding to
Our Annuity Operations Division. No benefit associated with any such Single
Premium will be provided until it is actually received by us at our Annuity
Operations Division, and only if received prior to the Contract Date. The Single
Premium may not exceed $1,000,000 without our prior approval.
11
TAX
Any tax charged by a state or municipality on premium, whether or not
characterized as premium tax, any such other state or local taxes imposed or
other governmental charge which may be required based on the laws of the state
or municipality of delivery, or the state or municipality where the Owner
resides. The tax rate, if applicable, is shown on the Schedule Pages. We will
pay any tax due and will only reimburse ourselves upon the remittance of the tax
to the applicable state or municipality.
PREMIUM ALLOCATION
On the Contract Date, the Premium will be allocated to the Fixed Account and
Indexed Account(s) you elected, as shown on the Schedule Pages.
SEPARATE ACCOUNT
Assets supporting our liabilities under this contract are held in PHL Variable
Separate Account MVA1. PHL Variable Separate Account MVA1 ("Separate Account")
is a non-unitized separate account established under Connecticut law. The terms
and values of the contract do not depend on the performance of the assets in the
Separate Account. There are no discrete units in the Separate Account.
REALLOCATION AMONG ACCOUNTS
Within 30 days prior to each Contract Anniversary, you may request to reallocate
your Account Value among Accounts then available. Reallocation will be effective
on such Contract Anniversary. Requests for reallocation must be received in a
format satisfactory to us at our Annuity Operations Division prior to the
Contract Anniversary for such requests to be effective.
--------------------------------------------------------------------------------
SECTION 6: FIXED ACCOUNT, INDEXED ACCOUNTS
--------------------------------------------------------------------------------
FIXED ACCOUNT
The Fixed Account earns interest daily. Fixed Account information is shown on
the Schedule Pages.
On the Contract Date, the Account Value of the Fixed Account is equal to the
portion of the Premium allocated to the Fixed Account as of the Contract Date.
Thereafter, the Account Value for the Fixed Account equals:
1. the initial allocation and any reallocations to the Fixed
Account, plus
2. interest credited, less
3. any reallocations from the Fixed Account, less
4. any Gross Withdrawals from the Fixed Account.
INDEXED ACCOUNTS
This contract also provides for one or more Indexed Accounts. Indexed Account
information is shown on the Schedule Pages. We reserve the right to add
additional Indexed Accounts, or to cease offering one or more of the Indexed
Accounts at any time.
On the Contract Date, the Account Value of an Indexed Account is equal to the
portion of the Premium allocated to such Indexed Account as of the Contract
Date.
On each Contract Anniversary, the Account Value for an Indexed Account equals:
1. the Account Value immediately preceding the Contract Anniversary,
multiplied by the resulting value of (1 + the applicable Index
Credit), less
2. any reallocations from the Indexed Account, plus
3. any reallocations to the Indexed Account, less
4. any Gross Withdrawals from the Indexed Account.
12
On any other date, the Account Value for an Indexed Account equals:
1. the Account Value for such Indexed Account on the preceding
Contract Anniversary, less
2. any Gross Withdrawals from the applicable Indexed Account
since the preceding Contract Anniversary.
For the first Contract Year, the Contract Date is deemed to be the preceding
Contract Anniversary for purposes of this calculation.
An Index Credit is calculated on each Contract Anniversary according to the
Indexed Accounts you elected as shown on the Schedule Pages, and vests
immediately. Amounts surrendered or withdrawn effective on a Contract
Anniversary will receive the Index Credit for the preceding Contract Year.
Amounts surrendered or withdrawn prior to the end of a Contract Year will not
receive the Index Credit for such Contract Year.
--------------------------------------------------------------------------------
SECTION 7: WITHDRAWALS, SURRENDER, TERMINATION
--------------------------------------------------------------------------------
WITHDRAWALS
You may request a withdrawal from the Contract Value at any time prior to the
Maturity Date. Such withdrawals must be by written request and must include any
tax withholding information we may reasonably require. Applicable Surrender
Charges and Market Value Adjustments will be applied as described in this
Section 7 and in Section 8. The Account Value of each Account will be reduced
proportionately, unless otherwise agreed upon, by the Gross Withdrawal. The
payment you will receive is the Net Withdrawal.
In each Contract Year, you may withdraw a portion of your Contract Value free of
any Surrender Charge or Market Value Adjustment. This portion is called the free
withdrawal amount. During the first Contract Year, the free withdrawal amount is
10% of the Contract Value at the time of the first withdrawal. After the first
Contract Year, the free withdrawal amount is 10% of the Contract Value on the
preceding Contract Anniversary.
SURRENDER
You may request to withdraw the entire Contract Value at any time prior to the
Maturity Date, which is referred to as a surrender. Surrenders must also be by
written request and must include any tax withholding information we may
reasonably require. Applicable Surrender Charges and Market Value Adjustments
will be applied as described in this Section 7 and in Section 8. The payment you
will receive is the Surrender Value. The Surrender Value is an amount equal to
the Contract Value, adjusted by any applicable Market Value Adjustment, less any
applicable Surrender Charge and taxes.
SURRENDER CHARGE
A Surrender Charge may apply to a withdrawal or surrender, depending on the date
and amount of such withdrawal or surrender. The surrender charge schedule you
elected at issue is specified on the Schedule Pages. Surrender Charges will be
applied on Contract Value surrendered or withdrawn in excess of the free
withdrawal amount, and after the application of any Market Value Adjustment, up
to the Premium less prior withdrawals for which a Surrender Charge was applied.
TERMINATION
If the Contract Value becomes zero, the contract will immediately terminate,
unless otherwise determined by an attached rider, amendment, or endorsement. We
will mail a written notice to you at your most recent post office address on
file at our Annuity Operations Division.
13
SECTION 8: MARKET VALUE ADJUSTMENT FEATURE
--------------------------------------------------------------------------------
A Market Value Adjustment ("MVA") is applied to withdrawals or upon surrender
before the end of a surrender charge period. The MVA, which may be positive or
negative, applies to all Accounts within the contract.
The Market Value Adjustment equals the Contract Value withdrawn or surrendered
in excess of the free withdrawal amount multiplied by the following:
1+i (n/12)
-- --
| _____________ | -1
| 1+j+0.0050 |
| |
-- --
where:
i - is the Treasury Constant Maturity yield as published by the Federal
Reserve on the business day prior to the Contract Date for the maturity
matching the duration of the surrender charge period;
j - is the Treasury Constant Maturity yield as published by the Federal
Reserve on the business day prior to the date of withdrawal or surrender
for the maturity matching the remaining years in the surrender charge
period (fractional years rounded up to the next full year);
n - is the number of complete months from the time of withdrawal or
surrender to the end of the surrender charge period.
If a Treasury Constant Maturity yield for a particular maturity is not
published, the yield will be interpolated between the yields for maturities that
are published. If the Treasury Constant Maturity yields are no longer published,
we will choose a suitable replacement, subject to any regulatory approvals, and
provide you with notice accordingly.
A positive MVA will increase the amount withdrawn or surrendered. There is no
limit on a positive MVA. A negative MVA will decrease the amount withdrawn or
surrendered. A negative MVA will not decrease the amount withdrawn or
surrendered by more than the amount (i) exceeds (ii), where:
(i) equals the amount withdrawn or surrendered, and
(ii) equals the portion of the Premium associated with (i), adjusted by
prior withdrawals.
The MVA is waived on the free withdrawal amount, on death, and on annuitization
if annuitization occurs after five Contract Years. The MVA is not waived on
nursing home waiver and terminal illness waiver.
--------------------------------------------------------------------------------
SECTION 9: WAIVER PROVISIONS
--------------------------------------------------------------------------------
NURSING HOME WAIVER
Prior to the Maturity Date, you may withdraw a portion or surrender all of your
Contract Value, adjusted by any applicable Market Value Adjustment, without a
Surrender Charge, provided that:
a. more than one year has elapsed since the Contract Date, and
b. the surrender is requested within two years of the Owner's
admission into a Licensed Nursing Home Facility, and
c. the Owner has been confined to a Licensed Nursing Home Facility
for at least the preceding 120 days.
A Licensed Nursing Home Facility is defined as a state licensed hospital or
state licensed skilled or intermediate care nursing facility at which medical
treatment is available on a daily basis. You must provide us with satisfactory
evidence of confinement by written notice.
14
TERMINAL ILLNESS WAIVER
Prior to the Maturity Date, you may withdraw a portion or surrender all of your
Contract Value, adjusted by any applicable Market Value Adjustment, without a
Surrender Charge, provided that we receive proof, satisfactory to us of the
Owner's Terminal Illness. Terminal Illness is defined as an illness or condition
that is expected to result in the Owner's death within six months.
--------------------------------------------------------------------------------
SECTION 10: DEATH BENEFIT
--------------------------------------------------------------------------------
The death benefit will be determined upon the death of any owner. The death
benefit is equal to the Contract Value as of the date of death. No Surrender
Charge, Market Value Adjustment or Index Credit for the year in which the death
occurred will be included in the death benefit calculation. The death benefits
provided under this contract are not less than the minimum benefits required
under the laws of the state where this contract is delivered or issued for
delivery.
DEATH BEFORE MATURITY DATE
If the contract is held by a single Owner who dies before the Maturity Date, we
will pay the death benefit to the designated Beneficiary upon receipt of a
certified death certificate, or any other proof acceptable to us. If there is
more than one Owner and one of the Owners dies before the Maturity Date, we will
pay the death benefit to the surviving Owner(s), if any, who will be deemed to
be the designated Beneficiary(s). If the spouse of a deceased Owner is entitled
to receive all or some portion of the death benefit amount, the spouse may elect
to continue the contract as the new Owner. This election is only allowed prior
to the Maturity Date and can be elected only one time. When the spouse elects to
continue the contract, the death benefit that the spouse is entitled to receive
will become the new Contract Value for the continued contract.
If the contract is owned by a non-natural person, such as a trust, and the
Primary Annuitant dies before the Maturity Date, we will pay the death benefit
to the Owner. If a Joint Annuitant dies prior to the Maturity Date, a death
benefit is not paid. The Owner may appoint a new Joint Annuitant.
DISTRIBUTION AT DEATH REQUIREMENTS
Any Beneficiary who is a natural person entitled to a death benefit may, within
one year after the date of an Owner's death, elect to receive the death benefit
in the form of an annuity payment option. If an annuity payment option is
selected, it may not extend beyond such Beneficiary's life or life expectancy
and the payments must begin within one year after the date of death. If an
annuity payment option is not elected or the Beneficiary is a non-natural
person, the entire death benefit will be distributed in a lump sum no later than
five years after the date of death.
DEATH ON OR AFTER THE MATURITY DATE
If an Owner dies on or after the Maturity Date and there is no surviving Owner,
any remaining annuity payments will be paid to the Beneficiary under the annuity
payment option in effect on the date of death. If there is a surviving Owner,
the payments continue as if there had been no death. Payments to the Beneficiary
or surviving Owner may not be deferred or otherwise extended. If the Annuitant
and Joint Annuitant(s), if any, die and are survived by any Owner, any remaining
period certain annuity payments will be paid to such Owner. Payments may not be
deferred or otherwise extended.
--------------------------------------------------------------------------------
SECTION 11: ASSIGNMENT
--------------------------------------------------------------------------------
You may assign your interest in this contact, except as otherwise provided,
without the consent of any person other than an irrevocable Beneficiary. Your
interest, any interest of the Annuitant, and of any revocable Beneficiary shall
be subject to the terms of the assignment.
We will not be considered to have notice of any assignment of an interest in
this contract until we receive the original or copy of the written assignment at
our Annuity Operations Division. In no event will we be responsible for the
validity or sufficiency of any assignment. Any change will be subject to any
payment made or actions taken by us before we received the written assignment at
our Annuity Operations Division.
15
If this contract is issued in a tax-qualified plan, this contract is subject to
assignment restrictions for Federal Income Tax purposes. In such event, this
contract shall not be sold, assigned, discounted, or pledged as collateral for a
loan or as security for the performance of an obligation or for any other
purpose, to any person other than us.
--------------------------------------------------------------------------------
SECTION 12: DEFERRAL OF DETERMINATIONS
--------------------------------------------------------------------------------
We may postpone the processing of any withdrawals or surrender for up to six
months from the date of request contingent upon approval by the insurance
supervisory official in the jurisdiction in which this contract is issued.
--------------------------------------------------------------------------------
SECTION 13: PROOF REQUIRED FOR PAYMENT
--------------------------------------------------------------------------------
We may require proof of the correct age of the Annuitant and Joint Annuitant, if
any, before any annuity payments begin. We also have the right to require proof
of the identity, age, and survival of any person entitled to any payment under
this contract or upon whose life any payments depend.
--------------------------------------------------------------------------------
SECTION 14: MISSTATEMENTS
--------------------------------------------------------------------------------
If the age or sex of the Annuitant or Joint Annuitant has been misstated, any
benefits payable will be adjusted to the amount that the Contract Value would
have purchased based on the Annuitant's or Joint Annuitant's correct age and
sex. Any overpayment(s) and underpayment(s) made by us will be charged or
credited against future payments to be made under the contract. We will charge
interest on any overpayments and credit interest on any underpayments at the
effective annual rate required by the state where this contract is delivered.
--------------------------------------------------------------------------------
SECTION 15: CHANGE OF MATURITY DATE
--------------------------------------------------------------------------------
You may, by written request, change your Maturity Date at any time within 30
days prior to the Maturity Date. The new Maturity Date must be no later than (a)
the Contract Anniversary nearest the younger Annuitant's 95th birthday, or (b)
ten years from the Contract Date, whichever is later, but in no event earlier
than the fifth Contract Anniversary. If no change request is received by us, the
Maturity Date will be as shown on the Schedule Pages.
--------------------------------------------------------------------------------
SECTION 16: STATEMENT OF ACCOUNT
--------------------------------------------------------------------------------
We will send you a statement of account annually, or more frequently, as
required by law. The statement of account will include the Contract Value,
Surrender Value, and withdrawals. The statement of account will show any other
information required by the state or Federal laws or regulations. The statement
will be mailed to your most recent post office address on file at our Annuity
Operations Division.
--------------------------------------------------------------------------------
SECTION 17: ANNUITY BENEFITS
--------------------------------------------------------------------------------
On or before the Maturity Date, you may elect any one of the annuity payment
options as described in Section 18. If no election is made, we shall begin to
pay a series of annuity payments automatically to the Owner beginning on the
Maturity Date for a period certain of 10 years and as long thereafter as the
Annuitant lives. The amount of each annuity payment will be equal to the
Contract Value on the Maturity Date less any applicable tax, divided by $1,000
and then multiplied by the applicable annuity payment factors.
If the amount to be applied on the Maturity Date is less than $2,000 or would
result in monthly payments of less than $20, we shall have the right to pay such
amount to you in one lump sum in lieu of providing such annuity. We also have
the right to change the annuity payment frequency to annual if the monthly
annuity payment would otherwise be less than $20.
--------------------------------------------------------------------------------
SECTION 18: ANNUITY PAYMENT OPTIONS
--------------------------------------------------------------------------------
Election of an annuity payment option must be made by written request. We
reserve the right to require that the election of a payment option be in the
form of a supplementary contract distributed by us reflecting the terms of the
payment option elected. You may not change the annuity payment option you
elected after the first annuity payment is made. Where the election of an
annuity payment option is made
16
by the Beneficiary of any death benefit payable under this contract, limited as
described in Section 10, the term "Annuitant" as used below shall refer to such
Beneficiary.
OPTION A - LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN
A fixed payout annuity payable monthly while the Annuitant is living or, if
later, the end of the specified period certain. The period certain may be
specified as 5, 10, or 20 years. The period certain must be specified at the
time this option is elected.
OPTION B - NON-REFUND LIFE ANNUITY
A fixed payout annuity payable monthly while the Annuitant is living. No monthly
payment, death benefit or refund is payable after the death of the Annuitant.
Under either Option A or B, the applicable annuity payment option factor used to
determine the payment amount will not be less than the rate based on the 2000
Individual Annuity Mortality Table with a 10-year age setback and an interest
rate of 2.5%. Other values and tables may be used for other payment options that
we may make available.
OTHER ANNUITY PAYMENT OPTIONS
We may offer other annuity payment options or alternative versions of the
options listed above.
TABLES OF FIXED ANNUITY PAYMENT FACTORS
The tables below provide the minimum annuity payment factors for a monthly life
annuity with payments on a fixed basis for each $1,000 applied. If our annuity
payment factors in effect on the Maturity Date are more favorable, we will use
those rates. Annuity payment factors for payment frequencies, periods, ages and
any current rate information not shown here will be provided upon request.
OPTIONS A - LIFE ANNUITY WITH SPECIFIED PERIOD CERTAIN
------------------------------------------------------------------------------
5 YEARS CERTAIN 10 YEARS CERTAIN 20 YEARS CERTAIN
------------------------------------------------------------------------------
AGE MALE FEMALE MALE FEMALE MALE FEMALE
------------------------------------------------------------------------------
40 $2.90 $2.79 $2.89 $2.79 $2.89 $2.78
-------- ---------- ---------- ---------- ---------- ----------- ------------
45 3.05 2.92 3.05 2.92 3.03 2.91
-------- ---------- ---------- ---------- ---------- ----------- ------------
50 3.24 3.08 3.24 3.08 3.21 3.06
-------- ---------- ---------- ---------- ---------- ----------- ------------
55 3.48 3.28 3.47 3.28 3.42 3.25
-------- ---------- ---------- ---------- ---------- ----------- ------------
60 3.79 3.54 3.76 3.53 3.67 3.48
-------- ---------- ---------- ---------- ---------- ----------- ------------
65 4.17 3.87 4.13 3.85 3.97 3.76
-------- ---------- ---------- ---------- ---------- ----------- ------------
70 4.67 4.30 4.61 4.26 4.30 4.09
-------- ---------- ---------- ---------- ---------- ----------- ------------
75 5.36 4.88 5.21 4.81 4.63 4.45
-------- ---------- ---------- ---------- ---------- ----------- ------------
80 6.28 5.68 5.97 5.51 4.92 4.80
-------- ---------- ---------- ---------- ---------- ----------- ------------
85 7.49 6.81 6.82 6.41 5.12 5.07
-------- ---------- ---------- ---------- ---------- ----------- ------------
90 9.04 8.38 7.70 7.42 5.22 5.21
-----------------------------------------------------------------------------
OPTION B - NON-REFUND LIFE ANNUITY
----------------------------------------
AGE MALE FEMALE
----------------------------------------
40 $2.90 $2.79
------------ -------------- ------------
45 3.05 2.92
------------ -------------- ------------
50 3.24 3.08
------------ -------------- ------------
55 3.49 3.28
------------ -------------- ------------
60 3.79 3.54
------------ -------------- ------------
65 4.18 3.87
------------ -------------- ------------
70 4.69 4.31
------------ -------------- ------------
75 5.40 4.90
------------ -------------- ------------
80 6.38 5.73
------------ -------------- ------------
85 7.73 6.94
------------ -------------- ------------
90 9.61 8.73
----------------------------------------
17
[LOGO] PHOENIX(R)
Single Premium Deferred Equity Indexed Modified Guaranteed Annuity
Nonparticipating - not eligible for dividends
05FNDEIA
