EXHIBIT (4)(a)
ML LIFE INSURANCE COMPANY OF NEW YORK
Home Office: 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000-0000
Service Center: P. X. Xxx 00000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
ML LIFE INSURANCE COMPANY OF NEW YORK will make periodic annuity payments for
the life of the Annuitant or as otherwise provided in this Contract. Payments
will be made to the Owner starting on the Annuity Date.
This is a legal Contract between you and us. PLEASE READ THE CONTRACT
CAREFULLY.
EXCEPT FOR FIXED ANNUITY PAYMENTS, THE VALUES OF THE SUBACCOUNTS ARE BASED ON
THE VALUE OF THE SEPARATE ACCOUNT ASSETS WHICH ARE NOT GUARANTEED AS TO
FIXED-DOLLAR AMOUNT AND WILL INCREASE OR DECREASE IN VALUE BASED UPON
INVESTMENT RESULTS.
TEN DAY RIGHT TO REVIEW CONTRACT: You may cancel this Contract within ten
days (sixty days in the case of a replacement) after you receive it. Simply
return or mail it to us or your Financial Advisor. We will refund the greater
of the Contract Value or all of your Premiums.
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TABLE OF CONTENTS
SECTION PAGE
Definitions...............................................................2
Contract Schedule.........................................................3
1. General Provisions.....................................................4
2. Premiums...............................................................6
3. The Separate Account...................................................6
4. Charges, Deductions and Credits........................................7
5. Transfers..............................................................8
6. Withdrawals............................................................8
7. Payment at Death.......................................................9
8. Annuity Provisions....................................................11
9. Annuity Options.......................................................11
10.Annuity Option Tables.................................................13
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ML Life Insurance Company of New York is a stock life insurance company.
/s/ Xxxxx X. Xxxxxxxxx /s/ Xxxx X. Xxxxx
President Secretary
Flexible Premium Deferred
Variable Annuity Contract
Nonparticipating
DEFINITIONS
1. ACCUMULATION UNIT: A unit of measure used to compute the value of your
interest in a subaccount of the Separate Account prior to the Annuity
Date.
2. ANNUITANT: Annuity payments may depend upon the continuation of a
person's life. That person is called the Annuitant.
3. ANNUITY DATE: The date on which annuity payments are scheduled to begin.
4. ATTAINED AGE: The age of a person on the Contract Date plus the number
of full contract years since the Contract Date.
5. BENEFICIARY: The person(s) designated by you to receive payment upon the
death of an Owner prior to the Annuity Date.
6. COMPANY: ML Life Insurance Company of New York. Also referred to as
"we" or "us."
7. CONTRACT ANNIVERSARY: The yearly anniversary of the Contract Date.
8. CONTRACT DATE: The effective date of the Contract as shown on the
Contract Schedule. This is usually the business day we receive your
initial premium at our Service Center.
9. CONTRACT VALUE: The value of your interest in the Separate Account.
10. CONTRACT YEAR: The period from the Contract Date to the first Contract
Anniversary, and thereafter, the period from one Contract Anniversary to
the next Contract Anniversary.
11. DUE PROOF OF DEATH: A certified copy of the death certificate,
Beneficiary Statement and any additional paperwork necessary to process a
death claim.
12. FUND: An investment portfolio of an open-end management investment
company or unit investment trust in which a subaccount invests.
13. NONQUALIFIED CONTRACT: A retirement arrangement plan other than a
qualified plan described under Section 401, 403, 408, 457 or any similar
provisions of the Internal Revenue Code.
14. OWNER: The person or persons entitled to exercise all rights under the
Contract. In this Contract, "you" means Owner.
15. PREMIUMS: The money you pay into this Contract.
16. SEPARATE ACCOUNT: This Contract is funded by a separate account of the
Company. The separate account has multiple subaccounts which invest in
shares or units of an underlying Fund. The separate account and the
subaccounts currently available with this Contract are identified in the
Contract Schedule.
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CONTRACT SCHEDULE
ML LIFE INSURANCE COMPANY OF NEW YORK Contract Number: [%999999999]
Home Office: New York, NY Contract Date: [October 1, 2001]
Service Center: Issue Date: [October 2, 2001]
X.X. Xxx 00000 Financial Advisor:
Xxxxxxxxxxxx, XX 00000-0000 [XXXXXX W AGENT]
0-000-000-0000
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OWNER INFORMATION ANNUITANT INFORMATION
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Name: [XXXX Q PUBLIC] Name: [XXXX Q PUBLIC]
Age: [70] Age: [70] Sex: [M]
Co-Owner: [XXXX Q PUBLIC] Joint Annuitant:
Co-Owner Age: [68] Age: Sex:
Address: [777 LUCKY STREET] Annuity Date: [January 1, 2020]
[ANYWHERE, USA 77777]
Maximum Owner Age: 80 Maximum Annuitant Age: 80
Maximum Annuitization Age: 95
Beneficiary: [XXXXXXX Q PUBLIC]
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CONTRACT INFORMATION
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CONTRACT TYPE: FLEXIBLE PREMIUM INDIVIDUAL VARIABLE ANNUITY
MINIMUM ADDITIONAL PREMIUM: $50
SEPARATE ACCOUNT: The ML of New York Variable Annuity Separate Account C (The
"Separate Account")
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FEES AND CHARGES
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ASSET-BASED INSURANCE CHARGE: 1.85%
TRANSFER CHARGE: We reserve the right to charge $25 for each transfer during
a Contract Year in excess of 12.
CONTRACT FEE: $50 at the end of each Contract Year (and on full withdrawal)
if the greater of premiums less withdrawals or Contract Value is less than
$75,000.
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CONTRACT SCHEDULE (CONTINUED)
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CONTRACT VALUE CREDIT
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Contract Value Credits will be added to the Contract on the last business day
of each calendar quarter and upon surrender, annuitization or receipt of Due
Proof of Death. The amount added to the Contract will be the sum of the
Contract Value Credits determined for each month within that calendar quarter,
as described below.
Contract Value Credits will be determined on the last business day of each
month or upon termination as follows:
(a) Determine the Contract Value on that date
(b) Allocate the Contract Value into the tiers shown below
(c) Multiply the amount in each tier by the corresponding annual credit
percentage
(d) Sum the results of each tier
(e) Multiply by the number of days in the month that the Contract was
in-force (excluding the Contract Date)
(f) Divide by 365
CONTRACT VALUE TIER ANNUAL CREDIT
PERCENTAGE
Less than $250,000 0.00%
Next $250,000 0.20%
Next $250,000 0.30%
Next $250,000 0.40%
Next $1,000,000 0.50%
Next $3,000,000 0.65%
Excess over $5,000,000 0.75%
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FUND ALLOCATIONS
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MAXIMUM NUMBER OF SUBACCOUNTS: [18]
INITIAL PREMIUM: [$75,000.00]. For the first 14 days following the Contract
Date all premiums will be allocated to the Domestic Money Market
Subaccount.
SUBACCOUNTS AND ALLOCATION AFTER 14 DAYS FOLLOWING THE CONTRACT DATE:
[100%] [Fund Name] [100%] [Fund Name] [100%] [Fund Name]
[100%] [Fund Name] [100%] [Fund Name] [100%] [Fund Name]
[100%] [Fund Name] [100%] [Fund Name] [100%] [Fund Name]
[100%] [Fund Name] [100%] [Fund Name] [100%] [Fund Name]
[100%] [Fund Name] [100%] [Fund Name] [100%] [Fund Name]
[100%] [Fund Name] [100%] [Fund Name] [100%] [Fund Name]
[100%] [Fund Name] [100%] [Fund Name] [100%] [Fund Name]
100% TOTAL
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WITHDRAWALS
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MINIMUM WITHDRAWAL AMOUNT: $100
MINIMUM REMAINING CONTRACT VALUE AFTER WITHDRAWAL: $5,000
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TRANSFERS
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MINIMUM TRANSFER AMOUNT: $100
MAXIMUM NUMBER OF TRANSFERS WITHOUT TRANSFER CHARGE: 12 Per Contract Year
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GUARANTEED MINIMUM DEATH BENEFIT
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Maximum Anniversary Value
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1. GENERAL PROVISIONS
1.1 BENEFICIARY: The beneficiary is shown in the Contract Schedule. You may
change the beneficiary while you are alive.
You may name a beneficiary irrevocably. If you do so, you can later
change the beneficiary only with the beneficiary's written consent.
If a beneficiary does not survive you, the estate or heirs of such
beneficiary have no rights under this Contract. However, if a
beneficiary survives you but dies before the Contract Value is
distributed, the estate or heirs of such beneficiary are entitled to the
death benefit that would otherwise have been paid to such beneficiary.
If no beneficiary survives you, payment of the death benefit will be
made to your estate.
1.2 OWNERSHIP OF CONTRACT: Unless another Owner is named by the purchaser,
the purchaser is the Owner. Upon notice to us you may assign the
Contract to a new Owner. The assignment terminates all prior
beneficiary designations. When the Contract is issued or the Owner is
changed, the age of the Owner (or older co-owner or Annuitant, if
applicable) must be less than the Maximum Owner Age shown in the
Contract Schedule.
The beneficiary of co-owner spouses must be the surviving spouse.
Ownership rights must be exercised by the co-owners jointly. Co-owners
are deemed to be joint tenants with right of survivorship unless they
indicate otherwise.
1.3 ANNUITANT: When an annuity option is elected, the amount payable as of
the Annuity Date is based on the age and sex of the Annuitant, the
Annuity Option selected, and the Contract Value.
The Annuitant may be changed at any time prior to the Annuity Date. A
change of Annuitant by a non-natural owner will be treated as the death
of an Owner. When the Contract is issued or a new Annuitant is named,
the age of the Annuitant (or the older joint annuitant, if applicable)
must be less than the Maximum Annuitant Age shown in the Contract
Schedule.
1.4 NOTICES, CHANGES AND CHOICES: To be effective, all notices, changes and
choices you may make under this Contract must be in writing, signed and
received by us at our Service Center. If acceptable to us, notices,
changes, and choices relating to beneficiaries, ownership, Annuitants,
and Annuity Date will take effect as of the date signed unless we have
already acted in reliance on the prior status. We are not responsible
for their validity.
1.5 MISSTATEMENT OF AGE OR SEX: If the age of the Owner (or co-owner, if
applicable) is misstated, any death benefit payable under this Contract
will be adjusted to reflect the correct age.
If the age or sex of the Annuitant (or joint annuitant, if applicable)
is misstated, annuity payments will be adjusted to reflect the correct
age(s) and sex(es). Any amount we have overpaid as the result of such
misstatement will be deducted from the next payments made by us under
this Contract. Interest on the overpayment will be charged at the rate
of 6% per year. Any amount we have underpaid will be paid in full with
the next payment made by us under this Contract. We will pay interest
on the underpayment at the rate of 6% per year.
1.6 PROOF OF AGE, SEX, OR SURVIVAL: We may require satisfactory proof of
age, sex, or survival of any person on whose continued life any payment
under this Contract depends.
1.7 INCONTESTABILITY: We will not contest this Contract.
1.8 THE CONTRACT: This Contract, any applications, and any endorsements or
riders are the entire Contract. It is issued in consideration of the
payment of the Initial Premium.
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Only our President, a Vice President, Secretary, or Assistant Secretary
may change the Contract. Any change must be in writing.
At any time we may make such changes in this Contract as required to
make it conform with any law, regulation, or ruling issued by a
government agency.
1.9 NONPARTICIPATING: This Contract is nonparticipating. It does not share
in our surplus.
1.10 DATES: Contract years and anniversaries are measured from the Contract
Date.
1.11 CONTRACT PAYMENTS: All sums payable to or by us are payable at our
Service Center. We may require return of this Contract prior to making
payment. Paid-up annuity benefits, Contract withdrawal values and death
benefits will not be less than the minimum required by the laws of the
state in which the Contract is delivered.
1.12 PROTECTION OF PROCEEDS: Payments under this Contract may not be
assigned by the payee prior to their due dates. To the extent allowed
by law, payments are not subject to legal process for debts of a payee.
1.13 PERIODIC REPORTS: At least once a year prior to the Annuity Date we
will furnish you with a report for your Contract. It will show the
current number of Accumulation Units, the value per Accumulation Unit
and the Contract Value.
1.14 PAYMENTS UNDER THE CONTRACT: Payment generally will be made within
seven days of our receipt of a completed request, but we may defer
payment if:
(a) The New York Stock Exchange is closed;
(b) Trading on the New York Stock Exchange is restricted;
(c) An emergency exists such that it is not reasonably practical to
dispose of securities in the Separate Account or to determine the
value of its assets;
(d) The Securities and Exchange Commission by order so permits for the
protection of security holders; or
(e) Payment is derived from a check used to pay a Premium which has not
cleared through the banking system.
Conditions (b), (c) and (d) will be decided by or in accordance with
rules of the Securities and Exchange Commission. Transfers also may be
deferred upon the occurrence of any of the events described above. We
reserve the right, at our option, to defer any payments in accordance
with the deferment provisions of the Investment Company Act of 1940, as
amended.
1.15 TAX QUALIFICATION: This Contract is intended to qualify as an annuity
contract for federal income tax purposes. To that end, the provisions
of this Contract are to be interpreted to ensure or maintain such tax
qualification, notwithstanding any other provision to the contrary.
Distributions under this Contract shall be made in a time and manner
necessary to maintain such qualification under the applicable provisions
of the Internal Revenue Code including, in the case of an Owner who is a
non-natural person, the requirement to distribute the entire interest in
the Contract upon any change of the Annuitant. For this purpose, the
entire interest in the Contract is the Contract Value less any
applicable charges. We reserve the right to amend this Contract to
reflect any clarifications that may be needed or are appropriate to
maintain such qualification or to conform this Contract to any
applicable changes in the tax qualification requirements.
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2. PREMIUMS
2.1 ADDITIONAL PREMIUMS: The Minimum Additional Premium is shown on the
Contract Schedule. Premiums may be paid at any time prior to the
Annuity Date without prior notice to us. We will restrict your right to
make additional premium payments as required by law.
You may choose to have additional premiums paid systematically from your
Xxxxxxx Xxxxx brokerage account. You may change the premium amount,
premium allocation, or cancel this feature upon written notice to us.
2.2 PREMIUM ALLOCATION: Your Premiums will be allocated to the subaccounts
of the Separate Account, as shown in the Contract Schedule. If you do
not give us allocation instructions with subsequent Premiums, we will
allocate those Premiums according to the allocation instructions last
received from you.
3. THE SEPARATE ACCOUNT
3.1 THE SEPARATE ACCOUNT: The Separate Account is identified in the
Contract Schedule. It is a separate investment account of ML Life
Insurance Company of New York. With respect to the Separate Account,
income, gains, and losses, whether or not realized, from assets
allocated to the Separate Account are credited to or charged against the
Separate Account without regard to other income, gains, or losses of the
Company. Assets allocated to the Separate Account remain our property
but are separate from our general account and any other separate
accounts we may have. Separate Account assets, to the extent equal to
the Separate Account's reserves and other liabilities, may not be
charged with liabilities from any other business we conduct. We reserve
the right to transfer any excess to our general account.
3.2 SUBACCOUNTS: Current subaccounts are shown in the Contract Schedule.
We reserve the right to limit the number of subaccounts in which you may
invest to the number shown in the Contract Schedule.
3.3 CHANGES TO THE SEPARATE ACCOUNT: We may make additional subaccounts
available. We reserve the right, subject to obtaining any necessary
regulatory approvals, to close or eliminate subaccounts; to substitute a
new portfolio for the portfolio in which a subaccount invests; to
deregister the Separate Account under the Investment Company Act of 1940
(the "1940 Act"); to make any changes required by the 1940 Act; to
operate the Separate Account as a unit investment trust, a managed
investment company under the 1940 Act or any other form permitted by
law; to transfer all or a portion of the assets of a subaccount or
Separate Account to another subaccount or Separate Account pursuant to a
combination or otherwise; and to create a new Separate Account.
3.4 NUMBER OF ACCUMULATION UNITS: For each subaccount the number of
your Accumulation Units is the sum of:
Each Premium or transfer allocated to the subaccount
Divided by
The value of an Accumulation Unit for that subaccount for the
valuation period in which we received the Premium, processed the
transfer or added the credit.
The number of Accumulation Units will be adjusted for transfers from
each subaccount, withdrawals and charges. Adjustments will be made as
of the valuation period in which the transaction is effective.
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3.5 VALUE OF EACH ACCUMULATION UNIT: For each subaccount, the value of an
Accumulation Unit was arbitrarily set at $10 when the subaccount was
established. The value may increase or decrease from one valuation
period to the next. For any valuation period the value is:
The value of an Accumulation Unit for the last prior valuation
period
Multiplied by
The Net Investment Factor for that subaccount for the current
valuation period.
3.6 NET INVESTMENT FACTOR: This is an index used to measure the investment
performance of a subaccount from one valuation period to the next. For
any subaccount, we determine the Net Investment Factor by dividing the
value of the assets of the subaccount for that valuation period by the
value of the assets of the subaccount for the preceding valuation
period. We subtract from that result the daily equivalent of the
asset-based insurance charge and the fund management fee, if any, for
the valuation period. We also take reinvestment of dividends and
capital gains into account when we determine the Net Investment Factor.
We may adjust the Net Investment Factor to make provision for any change
in tax law that requires us to pay tax on earnings in the Separate
Account and any charge that may be assessed against the Separate Account
for assessments or federal premium taxes or federal, state or local
excise, profits or income taxes measured by or attributable to the
receipt of Premiums.
3.7 VALUATION PERIOD: This is the interval from one determination of the
net asset value of a subaccount to the next. Net asset values are
determined as of the close of regular trading on each day the New York
Stock Exchange is open.
4. CHARGES, DEDUCTIONS AND CREDITS
4.1 CONTRACT FEE: A Contract Fee may be deducted from the Contract Value on
or prior to the Annuity Date. The amount of this fee and circumstances
under which it will be imposed are shown in the Contract Schedule.
4.2 ASSET-BASED INSURANCE CHARGE AND FUND MANAGEMENT FEE: The asset-based
insurance charge is made to compensate us for our expenses for
administration of the Separate Account, for issue and administration of
the Contract, for providing a guaranteed minimum death benefit, and our
risks. A fund management fee, if any, is made to compensate us for
managing the assets of a managed sub-account. The maximum charges
equal, on an annual basis, the percentages shown in the Contract
Schedule. These charges are deducted daily from the net asset value of
the subaccounts.
4.3 TAXES, FEES AND ASSESSMENTS: Any charges made by us attributable to
premium taxes imposed by a state or other government will be deducted at
the Annuity Date, except in those jurisdictions that do not allow us to
reduce our current taxable premium income by the amount of any
withdrawal or death benefit. In those jurisdictions, we will also
deduct a charge for those taxes on any withdrawal or death benefit paid
under the Contract. We may also deduct a charge for assessments or
federal premium taxes or federal, state, or local excise, profits, or
income taxes measured by or attributable to the receipt of Premiums. We
also reserve the right to deduct from the Separate Account any taxes
imposed on the Separate Account.
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4.4 PAYMENT OF DEDUCTIONS: The asset-based insurance charge and any fund
management fee will be computed and deducted from each subaccount for
each day the Contract is in force. The transfer charge described in
Section 5.1 will be deducted pro rata from the subaccounts from which
Contract Value is being transferred. Other applicable charges will be
deducted from each subaccount of the Separate Account in the ratio of
your interest in each subaccount to your Contract Value.
4.5 CONTRACT VALUE CREDIT: A contract value credit may be added to the
Contract Value prior to the Annuity Date. The amount of this credit,
how it is calculated and circumstances under which it may be added to
the Contract Value are shown in the Contract Schedule.
4.6 ADDITION OF CREDITS: Any credits will be added to each subaccount of
the Separate Account in the ratio of your interest in each subaccount to
your Contract Value.
5. TRANSFERS
5.1 TRANSFERS AMONG SUBACCOUNTS: You may transfer all or part of your
Contract Value among the subaccounts. Your request will be processed as
of the end of the valuation period during which your request is received
in good order. The number of transfers allowed each contract year
without charge is shown in the Contract Schedule. We reserve the right
to charge for each additional transfer as shown in the Contract
Schedule. The minimum amount which may be transferred from any
subaccount in any transaction is shown in the Contract Schedule.
An excessive number of transfers, including short-term "market timing"
transfers, may adversely affect the performance of the underlying
portfolio in which a subaccount invests. If, in our sole opinion, a
pattern of an excessive number of transfers develops for a Contract, we
reserve the right not to process a transfer request. We also reserve
the right not to process a transfer request when the sale or purchase of
shares or units of an underlying portfolio is not reasonably practicable
due to actions taken or limitations imposed by the underlying fund.
5.2 DOLLAR COST AVERAGING PROGRAM: You may transfer all or part of your
Contract Value in a designated subaccount to one or more other
subaccounts pursuant to the Dollar Cost Averaging Program (DCA Program).
We will transfer a specified amount each month from the subaccount that
you designate and allocate it in accordance with your instructions to
the subaccount(s) that you select. To elect the DCA Program you need to
have a minimum amount in the designated subaccount equal to the amount
to be transferred each month multiplied by the number of monthly
transfers.
5.3 REBALANCING PROGRAM: You may choose the Rebalancing Program where you
select the percentage of premium and Contract Value to be allocated to
subaccounts you select based on your investment goals and risk
tolerance. We will allocate your premiums or Contract Value to these
subaccounts in accordance with the percentages you select. At the end
of each selected period we will automatically reallocate your Contract
Value to maintain the particular percentage allocation among the
subaccounts you have selected.
6. WITHDRAWALS
6.1 WITHDRAWALS: You may withdraw all or part of your Contract Value. Your
request will be processed as of the end of the valuation period during
which your request is received in good order. Notice must be received
by us prior to the Annuity Date. The minimum amount of each withdrawal,
and the Contract Value that must remain after a withdrawal, are shown in
the Contract Schedule. For a full withdrawal, this Contract must be
surrendered to our Service Center.
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6.2 SYSTEMATIC WITHDRAWAL PROGRAM: You may have automatic withdrawals of a
specified dollar amount made periodically. We will make these
withdrawals from the subaccounts in the same proportion as the value of
each subaccount bears to the Contract Value. These systematic
withdrawals are in addition to the withdrawals permitted annually under
the Contract. The minimum amount of each withdrawal and the remaining
Contract Value after a withdrawal is shown in the Contract Schedule. The
Systematic Withdrawal Program cannot extend beyond the Annuity Date.
6.3 PAYMENT OF WITHDRAWALS: Unless you notify us otherwise, partial
withdrawals will be deducted from each subaccount in the ratio of your
Contract Value in each subaccount to the Contract Value. If you take a
full withdrawal, you may receive the Contract Value in a lump sum or
apply it under an annuity option described in Section 9. Withdrawals
will be based on values for the valuation period in which the notice
(and Contract if required) is received at our Service Center.
6.4 EFFECT OF WITHDRAWALS ON DEATH BENEFIT: Withdrawals will reduce on a
proportional basis the amount payable to a beneficiary if an Owner dies
prior to the Annuity Date. See Section 7.1.1.
7. PAYMENT AT DEATH
7.1 DEATH OF OWNER
(including an Annuitant who is also an Owner)
7.1.1 DEATH PRIOR TO ANNUITY DATE: If an Owner dies prior to the Annuity Date
(or if there are co-owners, upon the death of the first co-owner), we
will pay the beneficiary the death benefit specified below in a lump sum
or, if requested, under an Annuity Option under Section 7.1.4. If the
Owner is a non-natural person, then the Annuitant, rather than the Owner
will be used to determine the death benefit. The death benefit is
determined as of the date we receive Due Proof of Death of the Owner at
our Service Center.
(a) If the Owner is under age 80 on the Contract Date, the death
benefit is the greatest of:
(i) the premiums paid into the Contract less "adjusted" withdrawals
from the Contract;
(ii) the Contract Value; or
(iii)the Maximum Anniversary Value.
Each "adjusted" withdrawal equals the amount withdrawn multiplied
by the greater of (i) and (iii) divided by (ii) (all of which are
determined immediately prior to the withdrawal).
(b) If the Owner is age 80 or over on the Contract Date, the death
benefit is the greater of:
(i) the premiums paid into the Contract less "adjusted"
withdrawals from the Contract; or
(ii) the Contract Value.
Each "adjusted" withdrawal equals the amount withdrawn multiplied
by (i) divided by (ii) (both determined immediately prior to the
withdrawal).
If we have not received the beneficiary's instructions for making
payment within 60 days following our receipt of the Owner's certified
death certificate, Due Proof of Death will be deemed to have been
received by us on the 60th day, and payment will be made in a lump sum.
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The following is an explanation and example of the effect of a
withdrawal on the death benefit. For purposes of this example (b)(i) of
this section and the greater of (a)(i) and (a)(iii) of this section are
referred to as the Guaranteed Minimum Death Benefit (GMDB).
The adjustment to a withdrawal causes the GMDB to be reduced in the same
proportion that the withdrawal reduces the Contract Value. For example:
Assume that the GMDB and Contract Value immediately prior to a
withdrawal are $100,000 and $50,000, respectively. If a $10,000
withdrawal is taken from the Contract, the "adjusted" withdrawal would
equal the amount withdrawn, multiplied by the GMDB divided by the
Contract Value ($10,000 x $100,000 / $50,000 = $20,000). Since a
$10,000 withdrawal reduces the Contract Value by 20% ($10,000 /
$50,000), the GMDB is also reduced by 20% or $20,000 (20% x $100,000).
7.1.2 MAXIMUM ANNIVERSARY VALUE: The Maximum Anniversary Value is equal to
the greatest anniversary value for the Contract. An anniversary value
is equal to the Contract Value on a Contract Anniversary increased by
premium payments and decreased by "adjusted" withdrawals, as defined in
Section 7.1.1(a), since that anniversary.
To determine the Maximum Anniversary Value, we will calculate an
anniversary value for each Contract Anniversary through the earlier of
your attained age 80 or the anniversary on or prior to your date of
death. If the Contract has co-owners, we will calculate the anniversary
value through the earlier of the older Owner's attained age 80 or the
anniversary on or prior to any Owner's date of death if a death benefit
is payable.
We will calculate the Maximum Anniversary Value based on your age (or
the age of the older Owner, if the Contract has co-owners) on the
Contract Date. Subsequent changes in Owner will not increase the period
of time used to determine the Maximum Anniversary Value. If a new Owner
has not reached attained age 80 and is older than the Owner whose age is
being used to determine the Maximum Anniversary Value at the time of the
ownership change, the period of time used in the calculation of the
Maximum Anniversary Value will be based on the age of the new Owner at
the time of the ownership change. If at the time of an ownership change
the new Owner is attained age 80 or over, we will use the Maximum
Anniversary Value as of the anniversary on or prior to the ownership
change, increased by premium payments and decreased by "adjusted"
withdrawals, as defined in Section 7.1.1(a), since that anniversary.
7.1.3 CONTRACT CONTINUATION OPTION: If an Owner dies prior to the Annuity
Date and the beneficiary is the surviving spouse of the deceased Owner,
such spouse may choose to continue this Contract. The spouse shall
become the "new" owner and the beneficiary until a new beneficiary is
named. If the death benefit which would have been paid to the surviving
spouse is greater than the Contract Value as of the date we determine
the death benefit, we will increase the Contract Value of the continued
Contract to equal the death benefit we would have paid to the surviving
spouse. Your interest in each subaccount will be increased by the ratio
of your Contract Value in each subaccount to your Contract Value. If
the surviving co-owner is not the surviving spouse of the deceased
Owner, the Contract may not be continued under this provision.
7.1.4 ANNUITY OPTION: If an Owner dies prior to the Annuity Date and the
surviving spouse of the deceased Owner is the beneficiary, he or she may
choose to receive payments under any of the Annuity Options of this
Contract. For any other beneficiary, only those options are available
that provide for full payment of such Owner's interest in the Contract:
(a) Within five years of the date of such Owner's death;
(b) Over the lifetime of such beneficiary of this Contract; or
(c) Over a period that does not exceed the life expectancy, as defined
by Internal Revenue Service regulations, of such beneficiary of
this Contract.
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Subparagraphs (b) and (c) apply only to individuals, and such payments
must start within one year of the date of such Owner's death.
7.1.5 DEATH AFTER ANNUITY DATE: See Section 9.8.
7.2 DEATH OF ANNUITANT WHO IS NOT AN OWNER
7.2.1 If the Annuitant dies prior to the Annuity Date and the Annuitant is not
an Owner, the Owner, provided the Owner is a natural person, may
designate a new Annuitant. If one is not designated, the Owner will
become the Annuitant. If the Owner is a non-natural person, the death
of the Annuitant shall be treated as the death of an Owner.
8. ANNUITY PROVISIONS
8.1 ANNUITY DATE: The Annuity Date may be no earlier than the first
Contract Anniversary nor any later than the date the Annuitant would
reach the Maximum Annuitization Age shown in the Contract Schedule. If
you have not chosen an Annuity Date, it will be the date the Annuitant
would reach the Maximum Annuitization Age shown in the Contract
Schedule. You may change the Annuity Date prior to the Annuity Date.
8.2 AMOUNT OF ANNUITY PAYMENTS: The Contract Value will be transferred to
our general account and applied to the Annuity Option you select, at our
then current annuity purchase rates, which will be furnished on request.
The annuity purchase rates will assume interest of not less than 3%.
They will not be less favorable than those shown in the annuity tables
in this Contract. The tables show the minimum guaranteed amount of each
monthly payment for each $1,000 so applied, according to the sex (when
permissible) and age at the Annuity Date of the Annuitant. The tables
are based on the 1983 Table "a" for Individual Annuity Valuation,
projected forward to 2000 with interest at 3%. The amount of your
annuity payments will not be less than those that would be provided by
application of the Contract Value to purchase a single premium immediate
annuity contract then offered by us for the same annuity plan.
8.3 ANNUITY OPTIONS: If you have not chosen an Annuity Option described in
Section 9, Option 4 will apply with a 10-year guarantee period. You may
change options prior to the Annuity Date. An option not set forth in the
Contract may be chosen if acceptable to us.
8.4 MINIMUM ANNUITY PAYMENT: If the Contract Value to be applied at the
Annuity Date is less than $2,000, we may pay such amount in a lump sum.
If any payment would be less than $20 per month, we may change the
frequency so payments are at least $20 each.
9. ANNUITY OPTIONS
9.1 OPTION 1 - PAYMENTS OF A FIXED AMOUNT: Equal payments in the amount
chosen will be made until the amount of your Contract Value transferred
to our general account adjusted for interest credited of at least 3% is
exhausted. The term over which such payments are made must be at least
five years.
9.2 OPTION 2 - PAYMENTS FOR A FIXED PERIOD: Payments will be made for the
period chosen. The period must be at least 5 years.
9.3 OPTION 3 - LIFE ANNUITY: Payments will be made for the life of the
Annuitant. Payments will cease with the last payment due prior to the
Annuitant's death.
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9.4 OPTION 4 - LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR 5, 10, 15 OR 20
YEARS: Payments will be made for the guaranteed period chosen (5, 10,
15 or 20 years) and as long thereafter as the Annuitant lives.
9.5 OPTION 5 - LIFE ANNUITY WITH GUARANTEED RETURN OF CONTRACT VALUE:
Payments will be made until the sum of the annuity payments equals the
amount of your Contract Value transferred to our general account at the
Annuity Date, and as long thereafter as the Annuitant lives.
9.6 OPTION 6 - JOINT AND SURVIVOR LIFE ANNUITY: Payments will be made
during the lifetimes of the Annuitant and a designated second person.
The amount of such payments will not change by reason of the first death
of a joint Annuitant.
9.7 OPTION 7 - JOINT AND SURVIVOR LIFE ANNUITY WITH PAYMENTS GUARANTEED FOR
5, 10, 15 OR 20 YEARS: Payments will be made for the guaranteed period
chosen (5, 10, 15 or 20 years) and as long thereafter as either of the
joint Annuitants lives.
9.8 DEATH OF ANNUITANT: On the death of an Annuitant who is not an Owner
while guaranteed amounts remain unpaid under options 1, 2, 4, 5 or 7,
the Owner may choose either:
(a) To have payments continue for the amount or period guaranteed; or
(b) To receive the present value of the remaining guaranteed payments
in a lump sum.
If an Owner who is also the Annuitant dies while guaranteed amounts
remain unpaid, the remaining guaranteed payments shall continue to be
paid to the beneficiary or the present value of such payments may be
paid in a lump sum to the beneficiary, if the beneficiary so elects.
Present values will be computed at the interest rate that was used to
compute the amount of the initial annuity payment.
9.9 PAYMENT: Monthly payments will be made beginning on the Annuity Date,
but prior to the Annuity Date you may choose a less frequent payment
interval. The amount of each payment on an annual, semiannual, or
quarterly basis will not be less than the monthly payment computed from
the annuity tables in this Contract multiplied by the appropriate
factor.
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10. ANNUITY OPTION TABLES
MINIMUM GUARANTEED MONTHLY ANNUITY PAYMENT FOR EACH $1,000 APPLIED UNDER OPTION
OPTION 2 (PAYMENTS FOR A FIXED PERIOD)
---------------------------------------------------------------------------------------------------
YEARS EACH YEARS EACH YEARS EACH YEARS EACH
PAYABLE PAYMENT PAYABLE PAYMENT PAYABLE PAYMENT PAYABLE PAYMENT
---------------------------------------------------------------------------------------------------
5 17.91 9 10.53 13 7.71 17 6.23
6 15.14 10 9.61 14 7.26 18 5.96
7 13.16 11 8.86 15 6.87 19 5.73
8 11.68 12 8.24 16 6.53 20 5.51
---------------------------------------------------------------------------------------------------
OPTION 3 (LIFE ANNUITY), OPTION 4 (LIFE ANNUITY WITH 10 OR 20 YEARS GUARANTEED)
AND OPTION 5 (RETURN OF CONTRACT VALUE GUARANTEED)
-------------------------------------------------------------------------------------------------------------------------------
(*)ADJUSTED LIFE 10 YEARS 20 YEARS RETURN OF (*)ADJUSTED LIFE 10 YEARS 20 YEARS RETURN OF
MALE AGE ANNUITY GUARANTEED GUARANTEED CONTRACT VALUE FEMALE AGE ANNUITY GUARANTEED GUARANTEED CONTRACT VALUE
-------------------------------------------------------------------------------------------------------------------------------
56 4.42 4.37 4.20 4.21 56 4.12 4.10 4.01 4.00
57 4.51 4.45 4.27 4.28 57 4.20 4.17 4.07 4.06
58 4.60 4.54 4.33 4.35 58 4.28 4.25 4.13 4.13
59 4.70 4.63 4.39 4.43 59 4.36 4.33 4.19 4.20
60 4.80 4.73 4.46 4.51 60 4.45 4.41 4.26 4.27
61 4.92 4.83 4.52 4.60 61 4.55 4.50 4.33 4.35
62 5.04 4.93 4.59 4.68 62 4.65 4.59 4.40 4.43
63 5.17 5.05 4.65 4.78 63 4.76 4.69 4.47 4.52
64 5.30 5.16 4.72 4.88 64 4.87 4.80 4.54 4.61
65 5.45 5.29 4.78 4.98 65 5.00 4.91 4.61 4.70
66 5.61 5.42 4.85 5.09 66 5.13 5.03 4.68 4.80
67 5.77 5.55 4.91 5.20 67 5.27 5.15 4.76 4.91
68 5.95 5.69 4.97 5.32 68 5.42 5.29 4.83 5.02
69 6.14 5.84 5.03 5.45 69 5.58 5.42 4.90 5.14
70 6.34 5.99 5.08 5.58 70 5.75 5.57 4.97 5.27
71 6.55 6.14 5.13 5.72 71 5.94 5.73 5.03 5.40
72 6.78 6.30 5.18 5.86 72 6.14 5.89 5.09 5.54
73 7.02 6.46 5.23 6.02 73 6.36 6.06 5.15 5.69
74 7.28 6.63 5.27 6.18 74 6.60 6.23 5.21 5.85
75 7.55 6.80 5.31 6.34 75 6.86 6.42 5.25 6.02
76 7.84 6.97 5.34 6.52 76 7.13 6.61 5.30 6.20
77 8.16 7.15 5.37 6.71 77 7.43 6.80 5.34 6.39
78 8.49 7.32 5.40 6.90 78 7.75 7.00 5.37 6.59
79 8.85 7.50 5.42 7.11 79 8.10 7.20 5.40 6.80
80 9.24 7.67 5.44 7.32 80 8.47 7.40 5.43 7.02
81 9.65 7.84 5.46 7.55 81 8.87 7.60 5.45 7.26
82 10.09 8.01 5.47 7.79 82 9.31 7.79 5.47 7.51
83 10.55 8.17 5.49 8.04 83 9.79 7.99 5.48 7.77
84 11.05 8.32 5.49 8.31 84 10.31 8.17 5.49 8.05
85 11.58 8.47 5.50 8.59 85 10.87 8.35 5.50 8.36
-------------------------------------------------------------------------------------------------------------------------------
OPTION 6 (JOINT AND SURVIVOR LIFE ANNUITY)
-------------------------------------------------------------------------------------------------------------------------------
(*)ADJUSTED (*)ADJUSTED MALE AGE (*)ADJUSTED
FEMALE -------------------------------------------------------------------------------------------------- FEMALE
AGE 50 55 60 65 70 75 80 85 AGE
-------------------------------------------------------------------------------------------------------------------------------
50 3.46 3.54 3.60 3.65 3.69 3.71 3.72 3.73 50
55 3.58 3.70 3.80 3.88 3.94 3.98 4.01 4.03 55
60 3.68 3.85 4.00 4.13 4.24 4.32 4.37 4.40 60
65 3.77 3.98 4.20 4.40 4.59 4.73 4.83 4.90 65
70 3.84 4.09 4.38 4.67 4.96 5.21 5.41 5.55 70
75 3.89 4.18 4.52 4.92 5.34 5.74 6.10 6.38 75
80 3.92 4.24 4.63 5.11 5.67 6.26 6.85 7.37 80
85 3.95 4.28 4.71 5.25 5.93 6.72 7.58 8.45 85
-------------------------------------------------------------------------------------------------------------------------------
Information for ages or Annuity Options not shown will be furnished on request.
(*)"Adjusted Age" is the actual age on the Annuity Date reduced by one year
for each 10 full years between January 1, 2000 and the Annuity Date. For
example:
--------------------------------------------------------
ANNUITY DATE ADJUSTED AGE
--------------------------------------------------------
Before 2010 Actual Age
--------------------------------------------------------
2010 to 2019 Subtract 1 year from actual age
--------------------------------------------------------
2020 to 2029 Subtract 2 years from actual age
--------------------------------------------------------
2030 to 2039 Subtract 3 years from actual age
--------------------------------------------------------
2040 to 2049 Subtract 4 years from actual age
--------------------------------------------------------
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