Exhibit 4(a)
PLEASE READ THIS CONTRACT CAREFULLY
Annuity benefit payments and other values provided by this contract, when
based on the investment performance of the Variable Account, may increase or
decrease and are not guaranteed as to fixed dollar amount. Please refer to
the Value of the Variable Account section for additional information.
Values removed from a Guarantee Period Account prior to the end of its
Guarantee Period may be subject to a Market Value Adjustment that may
increase or decrease the values. A negative Market Value Adjustment will
never be applied to the Death Benefit. A positive Market Value Adjustment,
if applicable, will be added to the Death Benefit when the benefit paid is
the contract's Accumulated Value. Please refer to the Market Value Adjustment
section for additional information.
RIGHT TO EXAMINE CONTRACT
The Owner may cancel this contract by returning it to the Company or one of
its authorized representatives within ten days after receipt. If returned,
the Company will refund an amount equal to the Accumulated Value, after
application of any Market Value Adjustment, plus any fees or other charges
imposed and less any Payment Credits. These values are determined as of the
date the contract is returned to the Company. If, however, the contract is
issued as an Individual Retirement Annuity (IRA), the Company will refund
gross payments.
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
Home Office: Dover, Delaware
Principal Office: 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000
This is a legal contract between Allmerica Financial Life Insurance and
Annuity Company (the Company) and the Owner and is issued in consideration of
the Initial Payment shown on the Specifications page. Additional Payments
are permitted. Payments may be allocated to Variable Sub-Accounts, the Fixed
Account or Guarantee Period Accounts. While this contract is in effect, the
Company agrees to pay annuity benefits payments beginning on the Annuity Date
or to pay a Death Benefit to the Beneficiary if an Owner dies prior to the
Annuity Date.
Flexible Payment Deferred Variable and Fixed Annuity
Annuity Benefit Payments Payable on the Annuity Date
Death Benefit Payable to Beneficiary if Owner Dies prior to Annuity Date
Non-Participating
FORM A3028-99
TABLE OF CONTENTS
SPECIFICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
OWNER, ANNUITANT AND BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . 9
THE ACCUMULATION PHASE . . . . . . . . . . . . . . . . . . . . . . . . . . .
PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
PAYMENT CREDITS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
VALUES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
XXXXXXXXXX AND SURRENDER . . . . . . . . . . . . . . . . . . . . . . . . . .14
DEATH BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
THE PAYOUT PHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ANNUITY BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
PRESENT VALUE OF ANNUITY BENEFIT PAYMENTS. . . . . . . . . . . . . . . . . .23
DEATH OF THE ANNUITANT . . . . . . . . . . . . . . . . . . . . . . . . . . .23
ANNUITY BENEFIT PAYMENT OPTIONS. . . . . . . . . . . . . . . . . . . . . . .24
ANNUITY BENEFIT PAYMENT GUARANTEE OPTIONS. . . . . . . . . . . . . . . . . .24
ANNUITY OPTION RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
FORM A3028-99
DEFINITIONS
Accumulated Value The aggregate value of all accounts in this contract
before the Annuity Date. As long as the Accumulated
Value is greater than zero, the contract will stay
in effect.
Accumulation Unit A measure used to calculate the value of a
Sub-Account before annuity benefit payments begin.
Annuitant On and after the Annuity Date, the person upon whose
continuation of life annuity benefit payments
involving life contingency depend. Joint Annuitants
are permitted and unless otherwise indicated, any
reference to Annuitant shall include joint
Annuitants.
Annuity Date The date annuity benefit payments begin. The
Annuity Date is shown on the Specifications page.
Annuity Unit A measure used to calculate annuity benefit payments
under a variable annuity option.
Beneficiary The person, persons or entity entitled to the Death
Benefit prior to the Annuity Date or any annuity
benefit payments upon the death of the Owner on or
after the Annuity Date.
Company Allmerica Financial Life Insurance and Annuity
Company.
Contract Year A one-year period based on the issue date or an
anniversary thereof.
Effective Valuation Date The Valuation Date on or immediately following the
day a payment, request for transfer, withdrawal or
surrender, or proof of death is received at the
Principal Office.
Fixed Account The part of the Company's General Account to which
all or a portion of a Payment or transfer may be
allocated.
Fund Each separate investment company, investment series
or portfolio eligible for investment by a
Sub-Account of the Variable Account.
General Account All assets of the Company that are not allocated to
a Separate Account.
Gross Payment Base Total gross payments made to the contract reduced by
withdrawals which exceed the Withdrawal Without
Surrender Charge amount.
Guarantee Period The number of years that a Guaranteed Interest Rate
applies to a Guarantee Period Account.
Guarantee Period Account An account which corresponds to a Guaranteed
Interest Rate for a specified Guarantee Period and
is supported by assets in a Separate Account. The
Owner may only invest in a Guarantee Period Account
prior to the Annuity Date.
Guaranteed Interest Rate The annual effective rate of interest after daily
compounding credited to a Guarantee Period Account.
Market Value Adjustment A positive or negative adjustment to earnings in a
Guarantee Period Account assessed if any portion of
a Guarantee Period Account is withdrawn or
transferred prior to the end of its Guarantee
Period.
FORM A3028-99 7
Owner The person, persons or entity entitled to exercise
the rights and privileges under this contract.
Joint Owners are permitted and unless otherwise
indicated, any reference to Owner shall include
Joint Owners.
Payment Credit The amount credited to the contract by the Company
each time a Payment is made into the contract.
Pro Rata How a Payment or withdrawal may be allocated among
the accounts. A Pro Rata allocation or withdrawal
will be made in the same proportion that the value
of each account bears to the Accumulated Value.
Request A request or notice made by the Owner, in a manner
consistent with the Company's current procedures,
which is received by the Company.
Qualified Contract A contract that is purchased in connection with a
retirement plan which meets the requirements of
Sections 401, 403, 408 and 408A, of the Internal
Revenue Code.
Separate Account A segregated account established by the Company.
The assets in a Separate Account are not commingled
with the Company's general assets and obligations.
The assets of a Separate Account are not subject to
claims arising out of any other business the Company
may conduct.
State The state or jurisdiction in which the contract is
issued.
Sub-Account A Variable Account subdivision that invests
exclusively in shares of a corresponding Fund.
Surrender Value The amount payable to the Owner on full surrender
after application of any Market Value Adjustment,
surrender charge and Contract Fee.
Survivor Annuity Benefit The number of Annuity Units (under a variable joint
Percentage life annuitization option) or the dollar value of
the annuity benefit payments (under a fixed joint
life annuitization option) paid during the
surviving Annuitant's life may be less than or
equal to the amount paid when both individuals are
living. The Survivor Annuity Benefit Percentage is
the percentage of total Annuity Units or dollars
paid in each annuity benefit during the survivor's
life. For example, with a Joint and Two-thirds
Survivor Option, the Survivor Annuity Benefit
Percentage is 66 2/3 %. This percentage is only
applicable after the death of the first Annuitant.
Valuation Date A day the values of all units are determined.
Valuation Dates occur on each day the New York Stock
Exchange is open for trading, or such other dates
when there is sufficient trading in a Fund's
portfolio securities such that the current unit
value may be materially affected.
Valuation Period The interval between two consecutive Valuation
Dates.
Variable Account The Company's Separate Account, consisting of
Sub-Accounts that invest in the underlying Funds.
FORM A3028-99 8
OWNER, ANNUITANT AND BENEFICIARY
Owner When the contract is issued, the Owner will be as
shown on the Specifications page. The Owner may be
changed in accordance with the terms of this
contract. Upon the death of an Owner prior to the
Annuity Date, a Death Benefit is paid. The Maximum
Alternative Annuity Date is based upon the age of
the Owner.
The Owner may exercise all rights and options
granted in this contract or by the Company, subject
to the consent of any irrevocable Beneficiary.
Where there are joint Owners, the consent of both is
required in order to exercise any ownership rights.
Assignment Prior to the Annuity Date and prior to the death of
an Owner, the Owner may be changed at any time.
Only the Owner may assign this contract. An
absolute assignment will transfer ownership to the
assignee. This contract may also be collaterally
assigned as security. The limitations on ownership
rights while the collateral assignment is in effect
are stated in the assignment. Additional
limitations may exist for contracts issued under
provisions of the Internal Revenue Code.
An assignment will take place only when the Company
has actually received a Request in writing and
recorded the change at the Principal Office. The
Company will not be deemed to know of the assignment
until such time. When recorded, the assignment will
take effect as of the date it was signed. The
assignment will be subject to payments made or
actions taken by the Company before the change was
recorded.
The Company will not be responsible for the validity
of any assignment nor the extent of any assignee's
interest. The interests of the Beneficiary will be
subject to any assignment.
Annuitant When the contract is issued, the Annuitant will be
as shown on the Specifications page. The Annuitant
may be changed in accordance with the terms of this
contract. Prior to the Annuity Date, an Annuitant
may be replaced or added unless the Owner is a
non-natural person. At all times there must be at
least one Annuitant. If the Annuitant dies and a
replacement is not named, the Owner will be
considered to be the new Annuitant. Upon the death
of an Annuitant prior to the Annuity Date, a Death
Benefit is not paid unless the Owner is a
non-natural person.
A change of Annuitant will take place only when the
Company has actually received a Request in writing
and recorded the change at the Principal Office.
The Company will not be deemed to know of the change
of Annuitant until such time. When recorded, the
change of Annuitant will take effect as of the date
it was signed. The change of Annuitant will be
subject to payments made or actions taken by the
Company before the change was recorded.
FORM A3028-99 9
Beneficiary The Beneficiary is as named on the Specifications
page unless subsequently changed. The Owner may
declare any Beneficiary to be revocable or
irrevocable. A revocable Beneficiary may be changed
at any time prior to the Annuity Date and before the
death of an Owner or after the Annuity Date and
before the death of the Annuitant. An irrevocable
Beneficiary must consent in writing to any change.
Unless otherwise indicated, the Beneficiary will be
revocable.
A Beneficiary change must be made in writing in a
form acceptable to the Company and will be subject
to the rights of any assignee of record. When the
Company receives the form, the change will take
place as of the date it was signed, even if an Owner
or the Annuitant dies after the form is signed but
prior to the Company's receipt of the form. Any
rights created by the change will be subject to
payments made or actions taken by the Company before
the change was recorded.
All benefits payable to the Beneficiary under this
contract will be divided equally among the surviving
Beneficiaries of the same class, unless the Owner
directs otherwise. If there is no surviving
Beneficiary in a particular class, then the benefit
is divided equally among the surviving Beneficiaries
of the next class. If there is no surviving
Beneficiary, the deceased Beneficiary's interest
will pass to the Owner or the Owner's estate. At
the death of the first joint Owner prior to the
Annuity Date, the surviving joint Owner is the sole,
primary Beneficiary notwithstanding that the
designated Beneficiary may be different.
The Beneficiary can not assign, transfer, commute,
anticipate or encumber the proceeds or payments
unless given that right by the Owner.
Protection of Proceeds To the extent allowed by law, this contract and any
payments made under it will be exempt from the
claims of creditors.
FORM A3028-99 10
THE ACCUMULATION PHASE
PAYMENTS
Payments Each Payment is equal to the gross payment less the
amount of any applicable premium tax. The Company
reserves the right to deduct the amount of the
premium tax from the Accumulated Value at a later
date rather than when the premium tax liability is
first incurred by the Company. In no event will an
amount be deducted for premium taxes before the
Company has incurred a tax liability under
applicable State law.
Initial Payment The Initial Payment is shown on the Specifications
page.
Additional Payments Prior to the Annuity Date and before the death of an
Owner, the Owner may make additional Payments of at
least the Minimum Additional Payment Amount (see
Specifications page). Total Payments made may not
exceed [$5,000,000] without the Company's consent.
Payment Allocations The Initial Payment is allocated in accordance with
the Payment Allocation, shown on the Specifications
page. Each subsequent Payment will be allocated in
the same manner unless allocation instructions
accompany the Payment or the Payment Allocation is
changed by the Owner.
The minimum amount that may be allocated to a
Guarantee Period Account is shown on the
Specifications page. If the Owner requests an
allocation less than the minimum amount, the Company
reserves the right to apply that amount to the
[money market Sub-Account.]
PAYMENT CREDITS
Each time the Owner makes a Payment to the contract,
the Company will credit an amount equal to or
greater than such Payment multiplied by the Payment
Credit Percentage (see Specifications page). This
amount will be credited to the contract's
Accumulated Value. Each Payment Credit will be
allocated in the same manner as its corresponding
Payment.
The Payment Credit will be deducted from the amount
paid to the Owner if the Owner exercises the Right
To Examine Contract provision.
VALUES
Value of the Variable The value of a Sub-Account on a Valuation Date is
Account determined by multiplying the Accumulation Units in
that Sub-Account by the Accumulation Unit Value as
of the Valuation Date.
FORM A3028-99 11
Accumulation Units are purchased when an amount is
allocated to a Sub-Account. The number of
Accumulation Units purchased equals that amount
divided by the applicable Accumulation Unit Value as
of the Valuation Date.
Accumulation Unit The value of a Sub-Account Accumulation Unit as of
Values any Valuation Date is determined by multiplying the
value of an Accumulation Unit for the preceding
Valuation Date by the Net Investment Factor for
that Valuation Period.
Net Investment Factor The Net Investment Factor measures the investment
performance of a Sub-Account from one Valuation
Period to the next. This factor is equal to
1.000000 plus the result (which may be positive or
negative) from dividing (a) by (b) and subtracting
(c) and (d) where:
(a) is the investment income of a Sub-Account for
the Valuation Period, including realized or
unrealized capital gains and losses during the
Valuation Period, adjusted for provisions made
for taxes, if any;
(b) is the value of that Sub-Account's assets
at the beginning of the Valuation Period;
(c) is the Mortality and Expense Risk Charge
applicable to the current Valuation Period
(see Specifications page) plus any applicable
Rider charges; and
(d) is the Administrative Charge applicable to
the current Valuation Period (see
Specifications page).
The Company assumes the risk that its actual
mortality expense experience may exceed the amounts
provided under the contract. The Company guarantees
that the charge for mortality and expense risks and
the administrative charge will not be increased.
Subject to applicable State and federal laws, these
charges may be decreased or the method used to
determine the Net Investment Factor may be changed.
Value of the Fixed Amounts allocated to the Fixed Account receive
Account interest at rates periodically set by the Company.
The Company guarantees that the initial rate of
interest in effect when an amount is allocated to
the Fixed Account will remain in effect for that
amount for one year or until such amount is
transferred out of the Fixed Account, whichever is
sooner. Thereafter, the rate of interest for that
amount will be the Company's current interest rate,
but no less than the Minimum Fixed Account
Guaranteed Interest Rate (see Specifications page).
The value of the Fixed Account on any date is the
sum of amounts allocated to the Fixed Account plus
interest compounded and credited daily at the rates
applicable to those amounts. The value of the Fixed
Account will be at least equal to the minimum
required by law in the State in which this contract
is delivered.
FORM A3028-99 12
Value of the Guarantee Amounts allocated to the same Guarantee Period
Period Accounts Account on the same day will be treated as one
Guarantee Period Account. The interest rate in
effect when an amount is allocated to a Guarantee
Period Account is guaranteed for the duration of
the Guarantee Period. Each time the Guaranteed
Interest Rate changes for a particular Guarantee
Period, a new Guarantee Period Account is
established.
The value of a Guarantee Period Account on any date
is the sum of amounts allocated to that Guarantee
Period Account plus interest compounded and credited
daily at the rate applicable to that amount.
Guaranteed Interest The Company will periodically set Guaranteed
Rates Interest Rates for each available Guarantee Period.
These rates will be guaranteed for the duration of
the respective Guarantee Periods. A Guaranteed
Interest Rate will never be less than the Guarantee
Period Account Minimum Interest Rate (see
Specifications page).
Renewal Guarantee At least 45 days (but not more than 75 days) prior
Periods to the end of a Guarantee Period, the Company will
notify the Owner in writing of the expiration of
that Guarantee Period. The Owner may transfer
amounts to the Sub-Accounts, the Fixed Account or
establish a new Guarantee Period Account of any
duration then offered by the Company as of the day
following the expiration of the Guarantee Period.
The transfer will not be subject to a Market Value
Adjustment; see "Market Value Adjustment", page [8].
Guaranteed Interest Rates corresponding to the
available Guarantee Periods may be higher or lower
than the previous Guaranteed Interest Rates. If
reallocation instructions are not received at the
Principal Office before the end of a Guarantee
Period, the Guarantee Period Account value will be
automatically applied to a new Guarantee Period
Account with the same Guarantee Period unless:
(a) less than the Guarantee Period Account Minimum
Allocation Amount (see Specifications page)
remains in the Guarantee Period Account on its
expiration date; or
(b) the Guarantee Period would extend beyond the
Annuity Date or is no longer available.
In such cases, the Guarantee Period Account value
will be transferred to the [money market
Sub-Account.]
Contract Fee Prior to the Annuity Dates on each contract
anniversary and when the contract is surrendered,
the Company will deduct a Contract Fee (see
Specifications page) Pro Rata.
FORM A3028-99 13
TRANSFER
Prior to the Annuity Date, the Owner may transfer
amounts among accounts by Request to the Principal
Office. Transfers to a Guarantee Period Account
must be at least equal to the Guarantee Period
Account Minimum Allocation Amount (see
Specifications page). If the Owner requests the
transfer of a smaller amount to the Guarantee Period
Account, the Company may transfer that amount to the
[money market Sub-Account.]
Any transfer from a Guarantee Period Account prior
to the end of its Guarantee Period will be subject
to a Market Value Adjustment.
There is no charge for the first twelve transfers
per contract year. A transfer charge of up to $25
may be imposed on each additional transfer.
The Company reserves the right to establish and
impose reasonable rules restricting transfers. All
transfers are subject to the Company's consent.
XXXXXXXXXX AND SURRENDER
Prior to the Annuity Date, the Owner may, by
Request, withdraw a part of the Surrender Value or
surrender the contract for its Surrender Value.
Any withdrawal must be at least the Minimum
Withdrawal Amount (see Specifications page). A
withdrawal will not be permitted if the Accumulated
Value remaining in the contract would be less than
the Minimum Accumulated Value After Withdrawal (see
Specifications page). The Request must indicate the
dollar amount to be paid and the accounts from which
it is to be withdrawn. A withdrawal from a Guarantee
Period Account will be subject to a Market Value
Adjustment.
When surrendered, this contract terminates and the
Company has no further liability under it. The
Surrender Value will be based on the Accumulated
Value on the Effective Valuation Date.
Amounts taken from the Variable Account will be paid
within 7 days of the date a Request is received.
The Company reserves the right to delay payments
subject to applicable laws, rules and regulations
governing variable annuities.
Amounts taken from the Fixed Account or the
Guarantee Period Accounts will normally be paid
within 7 days of the date a Request is received.
The Company may defer payment for up to six months
from the receipt date.
If deferred for 30 days or more, the amount payable
will be credited interest at a rate of at least 3%
or the rate mandated by the appropriate State.
FORM A3028-99 14
Withdrawal Without In each calendar year, withdrawals up to the
Surrender Charge greater of (a) or (b) may be made without a
surrender charge where:
(a) is cumulative earnings excluding Payment
Credits, calculated by determining the
Accumulated Value as of the Effective Valuation
Date reduced by total gross payments and
Payment Credits not previously withdrawn; and
(b) is a percent (see Specifications page) of the
Gross Payment Base as of the Effective
Valuation Date, reduced by any prior Withdrawal
Without Surrender Charge made in the same
calendar year.
The Withdrawal Without Surrender Charge will first
be deducted from cumulative earnings even if it is
based upon (b) above. To the extent that it exceeds
cumulative earnings, the excess will be considered
withdrawn on a last-in, first-out basis from
Payments not previously withdrawn. Amounts
withdrawn from a Guarantee Period Account prior to
the end of the applicable Guarantee Period will be
subject to a Market Value Adjustment.
Life Expectancy For Qualified Contracts and contracts funding
Distribution Benefit employer-sponsored Internal Revenue Code section
457 plans, in each calendar year, the amount of the
Life Expectancy Distribution ("LED") benefit
available under the Company's then current LED
rules that exceeds the Withdrawal Without Surrender
Charge amount may also be withdrawn without charge.
Each calendar year the LED benefit available is
reduced by any prior Withdrawal Without Surrender
Charge in the same year. LED benefits are based on
the life expectancy of the Owner or the joint life
expectancies of the Owner and the Beneficiary.
Withdrawal With Any amounts withdrawn or surrendered in excess of
Surrender Charge the Withdrawal Without Surrender Charge amount or
Life Expectancy Distribution benefit, if
applicable, may be subject to a surrender charge.
These amounts will be taken on a first-in, first-out
basis from Payments not previously considered
withdrawn. The Company will compute applicable
charges using the Surrender Charge Table (see
Specifications page).
FORM A3028-99 15
Waiver of Surrender The surrender charge will be waived if an Owner, or
Charge the Annuitant if the Owner is a non-natural person,
is:
(a) admitted to a "medical care facility" after
being named Owner or Annuitant and remains
confined there until the later of one year
after the issue date or 90 consecutive days;
(b) first diagnosed by a licensed "physician" as
having a "fatal illness" after the issue date
and after being named Owner or Annuitant; or
(c) "physically disabled" after the issue date
and after being named Owner or Xxxxxxxxx and
before attaining age 65. The Company may
require proof of continuing disability, and
reserves the right to obtain an examination by
a licensed "physician" of its choice and at
its expense.
"Medical care facility" means any State licensed
facility providing medically necessary inpatient
care which is prescribed by a licensed "physician"
in writing and based on physical limitations which
prohibit daily living in a non-institutional
setting. "Fatal illness" means a condition
diagnosed by a licensed "physician" which is
expected to result in death within two years of the
diagnosis. "Physician" means a person other than
the Owner, the Annuitant or a member of one of their
families who is State licensed to give medical care
or treatment and is acting within the scope of that
license. "Physically disabled" means the Owner or
Annuitant has been unable to engage in an occupation
or to conduct daily activities for a period of at
least 12 consecutive months as a result of disease
or bodily injury.
No additional Payments are permitted after this
provision becomes effective.
Market Value Adjustment A transfer, withdrawal or surrender from a Guarantee
Period Account after the expiration of its Guarantee
Period will not be subject to a Market Value
Adjustment. A Market Value Adjustment will apply to
all other transfers, withdrawals or surrenders from
a Guarantee Period Account. Amounts in a Guarantee
Period Account that are applied under an Annuity
Option are treated as withdrawals when calculating
the Market Value Adjustment. The Market Value
Adjustment will be determined by multiplying the
amount taken from each Guarantee Period Account by
the market value factor. The market value factor
for each Guarantee Period Account is equal to:
n/365
(1+i)
-----
(1+j)- 1
where:
i - is the Guaranteed Interest Rate expressed
as a decimal (for example: 3% = 0.03) being
credited to the current Guarantee Period;
FORM A3028-99 16
j - is the new Guaranteed Interest Rate,
expressed as a decimal, for a Guarantee Period
with a duration equal to the number of years
remaining in the current Guarantee Period,
rounded to the next higher number of whole
years. If that rate is not available, the
Company will use a suitable rate or index
allowed by the Department of Insurance; and
n - is the number of days remaining from the
Effective Valuation Date to the end of the
current Guarantee Period.
If the Guaranteed Interest Rate being credited is
lower than the new Guaranteed Interest Rate, the
Market Value Adjustment will decrease the Guarantee
Period Account value. Similarly, if the Guaranteed
Interest Rate being credited is higher than the new
Guaranteed Interest Rate, the Market Value
Adjustment will increase the Guarantee Period
Account value. The Market Value Adjustment will
never result in a change to the value more than the
interest earned in excess of an amount based on the
Guarantee Period Account Minimum Interest Rate (see
Specifications page).
DEATH BENEFIT
At the death of an Owner prior to the Annuity Date,
the Company will pay to the Beneficiary a Death
Benefit upon receipt at the Principal Office of
proof of death. If the Owner is a non-natural
person, prior to the Annuity Date, a Death Benefit
is paid on the death of an Annuitant upon receipt at
the Principal Office of proof of death.
Death Benefit The Death Benefit will be the greater of:
(a) the Accumulated Value on the Effective
Valuation Date, increased by any positive
Market Value Adjustment; or
(b) the sum of the gross payments made under this
contract prior to the date of death,
proportionately reduced to reflect all partial
withdrawals.
For each withdrawal, the proportionate
reduction is calculated by multiplying the
Death Benefit under the (b) option, immediately
prior to the withdrawal, by the following:
Amount of the withdrawal
------------------------
Accumulated Value immediately
prior to the withdrawal
FORM A3028-99 17
Payment of the Death Unless the Owner has specified otherwise, the Death
Benefit Benefit will be paid to the Beneficiary within 7
days of the Effective Valuation Date.
Alternatively, the Beneficiary may, by a Request in
writing, elect to:
(a) defer distribution of the Death Benefit for a
period no more than 5 years from the date of
death; or
(b) receive distributions over his/her life
expectancy (or over a period not extending
beyond such life expectancy). Distributions
must begin within one year from the date of
death.
If distribution of the Death Benefit is deferred
under (a) or (b), any value in the Guarantee Period
Accounts will be transferred to the [money market
Sub-Account]. The excess, if any, of the Death
Benefit over the Accumulated Value will also be
transferred to the [money market Sub-Account.] The
Beneficiary may, by Request, effect transfers and
withdrawals, but may not make additional Payments.
If there are multiple Beneficiaries, the consent of
all is required.
If the sole Beneficiary is the deceased Owner's
spouse, the Beneficiary may, by Request in writing,
continue the contract and become the new Owner and
Annuitant subject to the following:
(a) any value in the Guarantee Period Accounts
will be transferred to the [money market
Sub-Account];
(b) the excess, if any, of the Death Benefit over
the contract's Accumulated Value will also be
transferred to the [money market Sub-Account];
(c) additional Payments may be made; and
(d) any subsequent spouse of the new Owner, if
named as the Beneficiary, may not continue the
contract.
FORM A3028-99 18
THE PAYOUT PHASE
ANNUITY BENEFIT
Annuity Options Annuity Options are available on a fixed, variable
or combination fixed and variable basis. The
Annuity Options described below or any alternative
option offered by the Company may be chosen. If no
option is chosen, monthly annuity benefit payments
will be made under the Fixed Life Annuity with Cash
Back option.
The Owner may also elect to have the Death Benefit
applied under any Annuity Option not extending
beyond the Beneficiary's life expectancy. Such an
election may not be altered by the Beneficiary.
Fixed annuity options are funded through the General
Account. Variable annuity options may be funded
through one or more of the Sub-Accounts. Not all
Sub-Accounts may be made available.
Selection of Annuity The Owner must select an Annuity Benefit Payment
Benefit Payments Option (see page 24 for a list of such options).
Annuity benefit payments will be paid monthly or at
any other frequency currently offered by the
Company. If the first payment would be less than
the Minimum Annuity Benefit Payment (see
Specifications page), a single payment will be made
instead. If a life annuity option has been
elected, satisfactory proof of the date of birth of
the Annuitant must be received at the Principal
Office before any payment is made. Also, if a life
annuity option has been elected, the Company may
require from time to time satisfactory proof that
the Annuitant is alive.
Annuity Benefit In the case of a variable annuity option, the Owner
Payment Change Frequency must select an Annuity Benefit Payment Change
Frequency. This is the frequency of change in the
dollar value of the variable annuity benefit
payments. For example, if an annual Annuity
Benefit Payment Change Frequency is chosen, the
dollar value of variable annuity benefit payments
will remain constant within each one-year period.
The Owner must also select the date of the first
change.
Assumed Investment In the case of a variable annuity option, the Owner
Return must select an Assumed Investment Return ("AIR").
This rate is used to determine the initial variable
annuity benefit payment and how the payment will
change over time in response to the performance of
the selected Sub-Accounts. If the actual
performance of the selected Sub-Account (as
measured by the Net Investment Factor) is equal to
the AIR, the annuity benefit payment attributable
to that Sub-Account will be constant. If the
actual performance is greater than the AIR, the
annuity benefit payment will increase. If the
actual performance is less than the AIR, the
annuity benefit payment will decrease.
Reversal of Decision The Owner may reverse the decision to annuitize by
To Annuitize a Request in writing within 90 days after the
Annuity Date. Upon receipt of such notice, the
Company will place the contract back to the
Accumulation Phase subject to the following:
FORM A3028-99 19
(a) The funds applied under a variable annuity
option during this period will be treated as if
they had been invested in the Accumulation
Phase of the contract, with the same
allocations that were in effect since the
Annuity Date.
(b) The funds applied under a fixed annuity
option during this period will be treated as if
they had been invested in the Accumulation
Phase of the contract in the Fixed Account,
since the Annuity Date.
(c) Any annuity benefit payment paid or
withdrawal taken during this period will
treated as a withdrawal of the Surrender Value
as of the date of the payment or withdrawal.
Fixed annuity benefit payments will be treated
as withdrawals from the Fixed Account. Variable
annuity benefit payments will be treated as
withdrawals from the variable Sub-Accounts.
Surrender charges may apply to these
withdrawals.
(d) If the Company learns of the Owner's
decision to reverse after the Maximum
Alternative Annuity Date (see Specifications
page) the Owner must immediately select another
Annuity Benefit Payment Option.
Annuity Value The Annuity Value will be the Accumulated Value,
after application of any applicable Market Value
Adjustment less any applicable premium tax. For a
Death Benefit annuity, the Annuity Value will be the
amount of the Death Benefit, less any applicable
premium tax. The Annuity Value applied under a
variable Annuity Option is based on the Accumulation
Unit Value on a Valuation Date not more than four
weeks, uniformly applied, before the Annuity Date.
The amount of the first annuity benefit payment
under all available options except period certain
options will depend on the age and/or sex of the
Annuitant on the Annuity Date and the Annuity Value
applied. Period certain options are based only on
the duration of payments and the Annuity Value.
Annuity Unit Values A Sub-Account Annuity Unit Value on any Valuation
Date is equal to its value on the preceding
Valuation Date multiplied by the product of:
(a) a discount factor equivalent to the Assumed
Investment Return; and
(b) the Net Investment Factor of the Sub-Account
funding the annuity benefit payments for the
applicable Valuation Period.
The value of an Annuity Unit as of any date other
than a Valuation Date is equal to its value as of
the preceding Valuation Date.
Each variable annuity benefit payment is equal to
the number of Annuity Units multiplied by the
applicable value of an Annuity Unit, except that
under a Joint and Survivor Option, after the first
death, the number of units in each payment is equal
to the total number of units multiplied by the
Survivor Annuity Benefit Percentage.
FORM A3028-99 20
Variable annuity benefit payments will increase or
decrease with the value of the Annuity Units as of
the date of the first payment of each Annuity
Benefit Payment Change Frequency. The Company
guarantees that the amount of each variable annuity
benefit payment will not be affected by changes in
mortality and expense experience.
Number of Annuity Units For each Sub-Account the number of Annuity Units
determining the benefit payable is equal to the
amount of the first annuity benefit payment divided
by the value of the Annuity Unit as of the Valuation
Date used to calculate the amount of the first
payment. Once annuity benefit payments begin, the
number of Annuity Units will not change unless a
split, a withdrawal or a transfer is made.
Payment of Annuity Annuity benefit payments are paid to the Owner. By
Benefit Payments request in writing, the Owner may direct that
payments are made to another person, persons or
entity. If an Owner, who is not also an Annuitant,
dies on or after the Annuity Date, the following
occurs:
(a) If the deceased Owner was the sole Owner,
then the remaining annuity benefit payments
will be payable to the Beneficiary in
accordance with the terms of the Annuity Option
selected. Upon the death of a sole Owner, the
Beneficiary becomes the Owner of the contract.
(b) If the contract has joint Owners, then the
remaining annuity benefit payments will be
payable to the surviving joint Owner in
accordance with the terms of the Annuity Option
selected. Upon the death of the surviving
joint Owner, the Beneficiary becomes the Owner
of the contract.
TRANSFER
After the Annuity Date and prior to the death of the
Annuitant, the Owner may transfer among Sub-Accounts
by Request to the Principal Office.
Transfers may increase or decrease the number of
Annuity Units in each subsequent payment.
There is no charge for the first twelve transfers
per contract year. A transfer charge of up to $25
may be imposed on each additional transfer.
The Company reserves the right to establish and
impose reasonable rules restricting transfers. All
transfers are subject to the Company's consent.
WITHDRAWAL
After the Annuity Date and prior to the death of the
Annuitant, the Owner may have the right, based on
the Annuity Option selected, to make withdrawals.
If the Death Benefit is applied under an Annuity
Option the Beneficiary may also make withdrawals in
accordance with this provision.
FORM A3028-99 21
Amounts withdrawn that were applied under a variable
Annuity Option will be paid within 7 days of the
date a Request is received. The Company reserves
the right to delay payments subject to applicable
laws, rules and regulations governing variable
annuities.
Amounts withdrawn that were applied under a fixed
Annuity Option will normally be paid within 7 days
of the date a Request is received. The Company may
defer payment for up to six months from the date a
Request is received. If deferred for 30 days or
more, the amount payable will be credited interest
at a rate of at least 3% or the appropriate rate
mandated by the State.
Only one Request for withdrawal under each of the
following provisions may be made each calendar year.
Payment Withdrawal Each calendar year, the Owner can request a
Amount Option withdrawal up to an amount equal to the Payment
Withdrawal Amount (see Specifications page)
multiplied by the previous annuity benefit payment.
For fixed Annuity Options, each withdrawal
proportionately reduces the dollar amount of each
future annuity benefit payment. The proportionate
reduction is calculated by multiplying the dollar
amount of each future annuity benefit payment by the
following:
Amount of the withdrawal
------------------------
Present Value of all remaining
fixed annuity benefit payments
immediately prior to the withdrawal.
For variable Annuity Options, each withdrawal
proportionately reduces the number of Annuity Units
in each future annuity benefit payment. The
proportionate reduction is calculated by multiplying
the number of Annuity Units in each future annuity
benefit payment by the following:
Amount of the withdrawal
------------------------
Present Value of all remaining
variable annuity benefit payments
immediately prior to the withdrawal.
Present Value Over the life of the contract, for period certain,
Withdrawal Option life with period certain and cash back Annuity
Options when there are remaining guaranteed
payments, the Owner may request withdrawals which
represent a percentage of the Present Value of
those remaining guaranteed annuity benefit
payments. Each year a withdrawal is taken under
this provision, the Company records the percentage
withdrawn. Each withdrawal proportionately reduces
future annuity benefit payments. (See
proportionate reduction calculation below.) The
total percentage withdrawn over the life of the
contract cannot exceed the Present Value Withdrawal
Amount (see Specifications page).
FORM A3028-99 22
For fixed Annuity Options, each withdrawal
proportionately reduces the dollar amount of each
future annuity benefit payment. The proportionate
reduction is calculated by multiplying the dollar
amount of each future annuity benefit payment by the
following:
Amount of the withdrawal
------------------------
Present Value of all remaining
fixed guaranteed annuity benefit payments
immediately prior to the withdrawal.
For variable Annuity Options, each withdrawal
proportionately reduces any remaining guaranteed
payments. The proportionate reduction is calculated
by multiplying the number of Annuity Units in each
future annuity benefit payment by the following:
Amount of the withdrawal
------------------------
Present Value of all remaining
variable guaranteed annuity benefit payments
immediately prior to the withdrawal.
If an Annuitant is still living after there are no
remaining guaranteed payments under a life with
period certain or life with cash back payout:
(a) for variable Annuity Options, the number of
Annuity Units will increase to the number of
Annuity Units payable prior to any withdrawals,
adjusted for transfers.
(b) for fixed Annuity Options, the dollar amount
of the annuity benefit payments will increase
to the amount payable prior to any withdrawals,
adjusted for transfers.
PRESENT VALUE OF ANNUITY BENEFIT PAYMENTS
For a variety of purposes, it is at times necessary
to determine the Present Value of either all future
annuity benefit payments or of future guaranteed
annuity benefit payments. Present Values are
calculated based on the Annuity 2000 Mortality
Table, male, female or unisex rates as appropriate,
and the interest rate or AIR used to determine the
annuity benefit payments increased by the following
adjustments:
Adjustment
Death of the Annuitant 0.00%
Withdrawals
5 or more years after the issue date 0.00%
Within 5 years of issue date:
15 or more years of annuity benefit payments being valued 1.00%
10-14 years of annuity benefit payments being valued 1.50%
Less than 10 years of annuity benefit payments being valued 2.00%
DEATH OF THE ANNUITANT
Unless otherwise indicated by the Owner, upon the
death of the Annuitant, the Present Value of the
remaining guaranteed annuity benefit payments may be
paid to the Owner.
FORM A3028-99 23
ANNUITY BENEFIT PAYMENT OPTIONS
PERIOD CERTAIN ANNUITY:
Periodic annuity benefit payments for a chosen
number of years. The number of years selected may
be from 5 to 30.
LIFE ANNUITY:
(a) Single Life - Periodic annuity benefit
payments during the Annuitant's life. The
annuity benefit payments do not continue after
the death of the Annuitant.
(b) Joint and Survivor - Periodic annuity benefit
payments during the joint lifetime of the joint
Annuitants. For variable options, after the
first death, the number of units in each
payment during the lifetime of the survivor is
equal to the total number of units multiplied
by the Survivor Annuity Benefit Percentage.
For fixed options, after the first death, the
dollar amount of each payment during the
lifetime of the survivor is equal to the dollar
value of each payment paid prior to such death
multiplied by the Survivor Annuity Benefit
Percentage.
ANNUITY BENEFIT PAYMENT GUARANTEE OPTIONS
If a life Annuity Option has been elected, the Owner
may also select one of the following guarantees:
PERIOD CERTAIN
Periodic guaranteed payments for a period of ten
years, or any other period currently made available
by the Company.
CASH BACK:
Upon notification of the Annuitant's death, any
excess of the Annuity Value applied over the total
amount of annuity benefit payments made will be paid
to the Owner or Beneficiary, whichever is
applicable.
ANNUITY OPTION RATES
The first variable annuity benefit payment will be
based on the Annuity Option Rates made available by
the Company on the rate basis available at the time
the Annuity Option is selected. The fixed annuity
benefit payments will be based on the greater of
the guaranteed Annuity Option Rates shown in the
tables on the following pages or the Company's
non-guaranteed current Annuity Option Rates
applicable to this class of contracts. The Company
guarantees that once an Annuity Option is selected,
the annuity benefit payments will not be affected
by changes in mortality and expense experience.
FORM A3028-99 24
ANNUITY OPTION TABLES
FIRST MONTHLY ANNUITY BENEFIT PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE APPLIED
Age Life Annuity with Life Life Annuity
Nearest Payments Guaranteed Annuity with Cashback
Payment for 10 Years
Male Female Unisex Male Female Unisex Male Female Unisex
50 4.05 3.81 3.91 4.08 3.83 3.93 3.90 3.72 3.79
51 4.11 3.87 3.97 4.15 3.89 3.99 3.96 3.77 3.85
52 4.18 3.93 4.03 4.22 3.95 4.06 4.01 3.82 3.90
53 4.25 3.99 4.10 4.30 4.01 4.13 4.07 3.88 3.96
54 4.33 4.06 4.17 4.38 4.08 4.20 4.14 3.94 4.02
55 4.41 4.13 4.24 4.46 4.15 4.28 4.20 3.99 4.07
56 4.49 4.20 4.32 4.55 4.23 4.36 4.27 4.06 4.14
57 4.58 4.28 4.40 4.65 4.31 4.45 4.34 4.12 4.21
58 4.68 4.36 4.49 4.75 4.40 4.54 4.42 4.19 4.28
59 4.78 4.45 4.58 4.86 4.49 4.64 4.50 4.26 4.36
60 4.88 4.54 4.67 4.98 4.59 4.74 4.58 4.34 4.44
61 4.99 4.63 4.77 5.10 4.69 4.85 4.67 4.42 4.52
62 5.10 4.73 4.88 5.23 4.80 4.97 4.76 4.50 4.60
63 5.23 4.84 4.99 5.37 4.92 5.10 4.85 4.59 4.69
64 5.35 4.95 5.11 5.52 5.04 5.24 4.95 4.68 4.79
65 5.48 5.07 5.24 5.69 5.18 5.38 5.06 4.78 4.89
66 5.62 5.20 5.37 5.86 5.32 5.54 5.17 4.89 5.00
67 5.77 5.33 5.51 6.04 5.47 5.70 5.28 4.99 5.11
68 5.92 5.47 5.65 6.24 5.64 5.88 5.40 5.11 5.23
69 6.07 5.62 5.80 6.45 5.82 6.07 5.52 5.23 5.35
70 6.23 5.78 5.96 6.67 6.01 6.27 5.66 5.36 5.48
71 6.39 5.94 6.12 6.90 6.21 6.49 5.79 5.49 5.61
72 6.56 6.11 6.29 7.16 6.44 6.72 5.94 5.63 5.75
73 6.73 6.29 6.47 7.43 6.68 6.98 6.09 5.78 5.90
74 6.90 6.48 6.65 7.71 6.94 7.25 6.24 5.94 6.06
75 7.08 6.67 6.83 8.02 7.22 7.54 6.41 6.11 6.23
These tables are based on an annual interest rate of 3%
and the Annuity 2000 Mortality Tables.
FORM A3028-99 25
ANNUITY OPTION TABLES (CONTINUED)
FIRST MONTHLY ANNUITY BENEFIT PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE APPLIED
Joint and Survivor Life Annuity
Older Age
50 55 60 65 70 75 80
Y 50 3.53 3.61 3.68 3.73 3.76 3.79 3.80
O
U 55 3.77 3.88 3.97 4.04 4.08 4.11
N
G 60 4.10 4.25 4.36 4.45 4.50
E
R 65 4.55 4.74 4.90 5.01
70 5.16 5.43 5.64
A
G 75 6.02 6.41
E
80 7.25
Joint and Two-Thirds Survivor Life Annuity
Older Age
50 55 60 65 70 75 80
Y 50 3.80 3.93 4.09 4.25 4.43 4.61 4.80
O
U 55 4.11 4.29 4.49 4.70 4.91 5.13
N
G 60 4.53 4.77 5.02 5.29 5.55
E
R 65 5.09 5.42 5.75 6.07
A 70 5.88 6.31 6.75
G
E 75 6.99 7.59
80 8.58
These tables are based on an annual interest rate of 3%
and the Annuity 2000 Mortality Tables.
FORM A3028-99 26
ANNUITY OPTION TABLES (CONTINUED)
FIRST MONTHLY ANNUITY BENEFIT PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE APPLIED
Number Variable or Xxxxxxx Xxxxxxx
of Years for a Certain Period
5 17.91
10 9.61
15 6.87
20 5.51
25 4.71
30 4.18
These tables are based on an annual interest rate of 3%.
and the Annuity 2000 Mortality Tables.
FORM A3028-99 27
GENERAL PROVISIONS
Entire Contract The entire contract consists of this contract, any
application attached at issue, riders,
Specifications pages and endorsements.
Misstatement of Age If the age or sex of an individual is misstated,
or Sex the Company will adjust all benefits payable to
that which would be available at the correct age or
sex. Any underpayments already made by the Company
will be paid immediately. Any overpayments will be
deducted from future annuity benefit payments.
Failure to Notify Company After the Annuity Date and once notified of the
of Annuitant Death Annuitant's death, the Company reserves the right
to recover any overpaid annuity benefit payments.
Modifications Only the President or Vice President of the Company
may modify or waive any provisions of this contract.
Agents or Brokers are not authorized to do so.
Incontestability The Company cannot challenge the validity of this
contract after it has been in force for more than
two years from the issue date.
Change of Annuity Date The Owner may change the Annuity Date by Request at
any time after the issue date. The request must be
received at the Principal Office at least one month
before the new Annuity Date. To the extent
permitted by applicable laws, rules and regulations
governing variable annuities, the new Annuity Date
must be no later than the Maximum Alternative
Annuity Date shown on the Specifications page.
Minimums All values and benefits available under this
contract equal or exceed those required by the State
in which the contract is delivered.
Annual Report The Company will furnish an annual report to the
Owner containing a statement of the number and value
of Accumulation Units credited to the Sub-Accounts,
the value of the Fixed Account and the Guarantee
Period Accounts and any other information required
by applicable law, rules and regulations.
Addition, Deletion, or The Company reserves the right, subject to
Substitution of compliance with applicable law, to add to, delete
Investments from, or substitute for the shares of a Fund that
are held by the Sub-Accounts or that the
Sub-Accounts may purchase. The Company also
reserves the right to eliminate the shares of any
Fund no longer available for investment or if the
Company believes further investment in the Fund is
no longer appropriate for the purposes of the
Sub-Accounts.
FORM A3028-99 28
The Company will not substitute shares attributable
to any interest in a Sub-Account without notice to
the Owner and prior approval of the Securities and
Exchange Commission as required by the Investment
Company Act of 1940. This will not prevent the
Variable Account from purchasing other securities
for other series or classes of contracts, or from
permitting a conversion between series or classes of
contracts on the basis of requests made by Owners.
The Company reserves the right, subject to
compliance with applicable laws, to establish
additional Separate Accounts, Guarantee Period
Accounts and Sub-Accounts and to make them available
to any class or series of contracts as the Company
considers appropriate. Each new Separate Account or
Sub-Account will invest in a new investment company,
or in shares of another open-end investment company,
or such other investments as may be permitted under
applicable law. The Company also reserves the right
to eliminate or combine existing Sub-Accounts and to
transfer the assets of any Sub-Accounts to any other
Sub-Accounts. In the event of any substitution or
change, the Company may, by appropriate notice, make
such changes in this and other contracts as may be
necessary or appropriate to reflect the substitution
or change. If the Company considers it to be in the
best interests of the owners, the Variable Account
or any Sub-Account may be operated as a management
company under the Investment Company Act of 1940 or
in any other form permitted by law, or may be
de-registered under the Act in the event
registration is no longer required, or may be
combined with other accounts of the Company.
Changes in Law The Company reserves the right to make any changes
to provisions of the contract to comply with, or
give Owners the benefit of, any federal or State
statute, rule, or regulation.
Change of Name Subject to compliance with applicable law, the
Company reserves the right to change the names of
the Variable Account or the Sub-Accounts.
Federal Tax The Variable Account is not currently subject to
Considerations tax, but the Company reserves the right to assess a
charge for taxes if the Variable Account becomes
subject to tax.
Splitting of Units The Company reserves the right to split the value of
a unit, either to increase or decrease the number of
units. Any splitting of units will have no material
effect on the benefits, provisions or investment
return of this contract or upon the Owner, the
Annuitant, any Beneficiary, or the Company.
Insulation of Separate The investment performance of Separate Account
Account assets is determined separately from the other
assets of the Company. The assets of a Separate
Account equal to the reserves and liabilities of
the contracts supported by the account will not be
charged with liabilities from any other business
that the Company may conduct.
FORM A3028-99 29
Flexible Payment Deferred Variable and Fixed Annuity
Annuity Benefit Payments Payable on the Annuity Date
Death Benefit Payable to Beneficiary if Owner Dies prior to Annuity Date
Non-Participating
FORM A3028-99 30
