Exhibit 1
1.A.(5)(a)
Flexible Premium Variable
Survivorship Life Insurance
Contract - Nonparticipating
Adjustable death benefit. Death proceeds payable at death of the last
surviving Insured. Flexible premiums payable until the death of the last
surviving Insured.
The amount and duration of the death benefit may increase or decrease as
described in this contract, depending on the investment experience of the
subaccounts. The contract may provide a Guaranteed Minimum Death Benefit
Option, if elected at issue.
The contract value of this contract may increase or decrease daily
depending on the investment experience of the subaccounts. There is no
guaranteed minimum contract value.
Kansas City Life Insurance Company will pay the proceeds of this contract
according to the provisions on this and the following pages, all of which
are part of this contract. This contract is a legal contract between you
and Kansas City Life Insuranc e Company. READ YOUR CONTRACT CAREFULLY.
Signed for Kansas City Life Insurance Company, a stock company, at its Home
Office, 0000 Xxxxxxxx, XX Xxx 000000, Xxxxxx Xxxx, XX 00000-6139.
/s/X. Xxxx Xxxxxxxxx /s/W. E. Xxxxx
Secretary President
10-Day Right To Examine Contract
Please examine this contract carefully. If you are not satisfied, you may
return the contract to us or to your agent within 10 days of its receipt.
If returned, the contract will be void from the beginning and any premium
paid will be refunded.
Contract Number
9999999
Insureds
Xxxx Xxx
Xxxx Xxx
Agency
0001
GUIDE TO CONTRACT PROVISIONS
Page
Section 1: Contract Data 3
Section 2: Definition of Certain Terms 9
Section 3: Contract Proceeds 11
Section 4: General Provisions 12
4.1 Contract
4.2 Incontestability
4.3 Suicide
4.4 Age and Sex
4.5 Termination of Coverage
4.6 Modifications
4.7 Nonparticipating
4.8 Annual Report
Section 5: Premium and Reinstatement Provisions 13
Section 6: Ownership, Assignment and Beneficiary Provisions 15
Section 7: Contract Change Provisions 15
Section 8: Contract Values 16
Section 9: Loan Provisions 19
Section 10: The Variable Account 19
Section 11: Transfer Privilege 21
Section 12: Settlement Options 22
A copy of the original application and any additional benefits provided by
rider or endorsement follow page 24.
SECTION 1: CONTRACT DATA
BENEFICIARY
As stated in the application or in the
last beneficiary designation filed with us.
OWNER
As stated in the application or in the last ownership
designation filed with us.
INSUREDS' ISSUE AGE and SEX
Xxxx Xxx, age 35, Female
Xxxx Xxx, age 35, Male
RISK CLASSIFICATION
Xxxx Xxx - Standard Nontobacco
Xxxx Xxx - Standard Nontobacco
MINIMUM TOTAL SUM INSURED
$200,000
TOTAL SUM INSURED
Specified Amount $1,000,000
Additional Insurance Amount $ 0
Total $1,000,000
CONTRACT NUMBER
9999999
INSUREDS
Xxxx Xxx
Xxxx Xxx
CONTRACT DATE
July 01, 1997
AGENCY
0001
SECTION 1: CONTRACT DATA (CONTINUED) DATE PREPARED: 07/01/1997
INSUREDS CONTRACT NUMBER
Xxxx Xxx 9999999
Xxxx Xxx
MINIMUM PREMIUM: $4,900.88
TARGET PREMIUM: $6,534.50
PLANNED PREMIUM PAYMENT: $6,534.50 Annually
FORM NO. BENEFIT DESCRIPTION
J150
Coverage Option A: Death benefit equals the Total Sum Insured at the time of
death.
(Effective: July 01, 1997)
SECTION 1: CONTRACT DATA (CONTINUED) DATE PREPARED: 07/01/1997
INSUREDS CONTRACT NUMBER
Xxxx Xxx 9999999
Xxxx Xxx
PREMIUM EXPENSE CHARGES - DEDUCTIONS FROM PREMIUM PAYMENTS
Year 1 50% of premium up to target premium, 2% of excess premium
Years 2-5 15% of premium up to target premium, 2% of excess premium
Years 6-10 6% of premium up to target premium, 2% of excess premium
Years 11-20 2% of premium
Years 21+ Beginning in the 21st contract year there is no charge
Premium Processing Charge 4.85% of premium for all contract years
DEDUCTIONS FROM CONTRACT VALUE
Monthly Expense Charges
Administrative Expense Charge
$7.50 per month for all contract years plus $.02 per $1,000 of total
sum insured per month for all contract years.
Issue Expense Charge
$12.50 per month for first five contract years.
Monthly Cost Of Insurance
Deducted each month for all contract years; see Table One on
page 6.
MORTALITY AND EXPENSE RISK CHARGE
The current mortality and expense risk charge is .625% (on an annual
basis) of the average daily net assets of the variable account.
The guaranteed mortality and expense risk charge is .900% (on an
annual basis) of the average daily net assets of the variable account.
PARTIAL SURRENDER FEE
The partial surrender fee is the lesser of: (a) 2% of the amount
surrendered; or (b) $25.00
SECTION 1: CONTRACT DATA (CONTINUED) DATE PREPARED: 07/01/1997
INSUREDS CONTRACT NUMBER
Xxxx Xxx 9999999
Xxxx Xxx
MONTHLY COST OF INSURANCE RATES
The monthly cost of insurance rates used in calculating the cost of
insurance on each monthly anniversary day are based on each Insured's age,
number of completed contract years, sex, and risk class.
The cost of insurance rates used will be determined by us based on
our expectations as to future mortality experience. Any change in the
current cost of insurance rates will be on a uniform basis for Insureds of
the same age, sex and risk class whose contracts have been in force the same
length of time. The current cost of insurance rates will never be increased
to recover losses incurred, or decreased to distribute gains realized by us
prior to the change.
The cost of insurance rates used will not exceed those shown in the
tables below. The rates for Tobacco User Risk Class are based on the 1980
Commissioners Standard Ordinary Smoker Mortality Table, age last birthday.
The rates for Nontobacco User Risk Class are based on the 1980 Commissioners
Standard Ordinary Nonsmoker Mortality Table, age last birthday.
The guaranteed maximum cost of insurance rates for special risk classes
will be adjusted appropriately and reflected in Table One below.
Table One
Guaranteed Monthly Cost of Insurance Rates per $1,000
Contract Year Rate
1 $.00022
2 $.00070
3 $.00129
4 $.00199
5 $.00284
6 $.00387
7 $.00512
8 $.00658
9 $.00830
10 $.01030
11 $.01269
12 $.01548
13 $.01875
14 $.02257
15 $.02708
16 $.03245
17 $.03886
18 $.04663
19 $.05598
20 $.06696
21 $.07997
22 $.09501
23 $.11209
24 $.13177
25 $.15499
26 $.18262
27 $.21593
28 $.25694
29 $.30738
30 $.36776
31 $.43876
32 $.52066
33 $.61386
34 $.72013
35 $.84393
36 $.99117
37 $1.16945
38 $1.38762
39 $1.65191
40 $1.96470
41 $2.32637
42 $2.73577
43 $3.19270
44 $3.70153
45 $4.27485
46 $4.93039
47 $5.68596
48 $6.55862
49 $7.54960
50 $8.64926
51 $9.84252
52 $11.11673
53 $12.46043
54 $13.86761
55 $15.34597
56 $16.90553
57 $18.57708
58 $20.41868
59 $22.56727
60 $25.33395
61 $29.33313
62 $35.77192
63 $46.89109
64 $66.10462
65 $90.91184
The rates in the table above show the guaranteed monthly cost of insurance
rates from the first contract year to the contract year in which the youngest
Insured is age 100.
SECTION 1: CONTRACT DATA (CONTINUED) DATE PREPARED: 07/01/1997
INSUREDS CONTRACT NUMBER
Xxxx Xxx 9999999
Xxxx Xxx
Table Two
Corridor Percentages and Option L
Death Benefit Percentages
Contract
Year
Corridor
Percentages Option L
Death Benefit
Percentages
1 637% ----
2 612% ----
3 589% ----
4 566% ----
5 544% ----
6 523% ----
7 503% ----
8 484% ----
9 466% ----
10 448% ----
11 431% ----
12 414% ----
13 399% ----
14 384% ----
15 369% ----
16 355% ----
17 342% ----
18 329% ----
19 317% ----
20 305% ----
21 294% ----
22 283% ----
23 273% ----
24 263% ----
25 253% ----
26 244% ----
27 236% ----
28 227% ----
29 219% ----
30 212% ----
31 205% ----
32 198% ----
33 191% ----
34 185% ----
35 179% ----
36 174% ----
37 169% ----
38 164% ----
39 159% ----
40 154% ----
41 150% ----
42 147% ----
43 143% ----
44 140% ----
45 137% ----
46 134% ----
47 131% ----
48 128% ----
49 126% ----
50 124% ----
51 122% ----
52 120% ----
53 119% ----
54 117% ----
55 116% ----
56 115% ----
57 113% ----
58 112% ----
59 111% ----
60 109% ----
61 108% ----
62 106% ----
63 105% ----
64 103% ----
65 100% ----
The percentages in the table above are shown from the first contract year to
the contract year in which the youngest Insured is age 100.
SECTION 1: CONTRACT DATA (CONTINUED) DATE PREPARED: 07/01/1997
INSUREDS CONTRACT NUMBER
Xxxx Xxx 9999999
Xxxx Xxx
Investment Options
[ KCL Fixed Account
Subaccounts that invest in the Kansas City Life Variable Life Separate Account:
MFS Research Series
MFS Emerging Growth Series
MFS Total Return Series
MFS Bond Series
MFS World Governments Series
MFS Utilities Series
American Century VP Capital Appreciation
American Century VP International
Federated American Leaders Fund II
Federated High Income Bond Fund II
*Federated Prime Money Fund II
Dreyfus Capital Appreciation Portfolio
Dreyfus Small Cap Portfolio
Dreyfus Stock Index Fund
*The Federated Prime Money Fund II subaccount is referred to in this contract
as the money market subaccount.]
Section 2: Definition of Certain Terms
The following are key words used in this contract and are important in
describing both your rights and ours. As you read this contract, refer back
to these definitions.
2.1 Accumulation Unit
An accounting unit used to calculate the variable account value. It is a
measure of the net investment results of each of the variable subaccounts.
2.2 Additional Insurance Amount
An amount of insurance coverage under the contract which is not part of the
specified amount
2.3 Age
Age means the age of each Insured on their last birthday as of each contract
anniversary.
2.4 Allocation Date
The date on which the initial net premium is allocated to the money market
subaccount. The allocation date is the later of the date when all
underwriting and other requirements have been met and your application has
been approved, or the date the initial premium is received at the Home Office.
2.5 Beneficiary
The beneficiary is the person you have designated in the application or in
the last beneficiary designation filed with us to receive any proceeds
payable under this contract at the death of the last surviving Insured.
2.6 Cash Surrender Value
The contract value at the time of surrender less any contract indebtedness.
2.7 Contract Anniversary
The same day and month as the contract date each year that this contract
remains in force.
2.8 Contract Date
The date from which contract months, years and anniversaries are computed.
The incontestability and suicide periods for the total sum insured are
measured from this date.
2.9 Contract Value
The sum of the variable account value and the fixed account value (including
the loan account value). These values are described in more detail in
Section 8, Contract Values.
2.10 Contract Year
A period of twelve months starting with the contract date and each contract
anniversary thereafter.
2.11 Cost of Insurance
The charge we make for providing pure insurance protection using the current
cost of insurance rates for this contract. It does not include the cost of
any additional benefits provided by riders.
2.12 Coverage Options
The coverage option selected determines the amount of death proceeds payable.
Three coverage options (A, B or L) are available. These options are
described in Section 3.2, Amount of Proceeds Payable at Death.
2.13 Excess Premium
The portion of the total premiums received during any contract year that
exceeds the target premium.
2.14 Fixed Account
An account that is part of our general account, and is not part of or
dependent on the investment performance of the variable account.
2.15 Fixed Account Value
The contract value in the fixed account.
2.16 Insureds
The two persons whose lives are insured under this contract.
2.17 Minimum Premium
The amount required in the first year to issue this contract.
2.18 Monthly Anniversary Day
The day of each month when we make the monthly deductions for this contract.
It is the same day of each month as the contract date or the last day of the
month for those months not having such a day.
2.19 Monthly Deductions
The amount we deduct on the monthly anniversary day from the contract value
to pay the Deductions from Contract Value as shown in Section 1, Contract Data.
2.20 Mortality and Expense Risk Charge
This is a charge we deduct from the assets of the subaccounts to compensate
us for assuming the mortality and expense risks for this contract. This
charge is shown in Section 1, Contract Data.
Section 2: Definitions of Certain Terms (continued)
2.21 Net Investment Factor
The ratio of the subaccount performance of the current valuation day to the
immediately prior valuation day. The subaccount performance includes gains
or losses in the subaccounts, dividends paid, any capital gains or losses,
any taxes, and mortality and expense risk charges.
2.22 Net Premium
The premium payment minus the applicable premium expense charges.
2.23 Nontobacco
A rate class that defines an Insured who does not use tobacco products in
any form during the time period as defined in our underwriting guidelines.
2.24 Owner
The person entitled to exercise all rights and privileges provided in this
contract.
2.25 Planned Premium Payments
The amount and frequency of premium payments you elected to pay in your last
application. This is only an indication of your preference of future premium
payments. You may change the amount and frequency of premium payments at any
time. Section 5.8, Grace Period for Contract, describes the amount of premium
required to keep your contract in force. Section 5.6, Guaranteed Minimum
Death Benefit Option Premium Requirement, describes the amount of premium
required to keep the guaranteed minimum death benefit option in force. The
actual amount and frequency of premium payments will affect the contract
value and the amount and duration of insurance.
2.26 Premium Expense Charges
The premium expense charges are the amounts we deduct from each premium
payment. These charges are shown in Section 1, Contract Data.
2.27 Proceeds
The total amount we are obligated to pay under the terms of this contract.
2.28 Reallocation Date
The date the contract value in the money market subaccount is allocated to
the subaccounts and to the fixed account based on the net premium payment
allocation percentages specified in the application. The reallocation date is
30 days after the allocation date.
2.29 Specified Amount
The total sum insured less any additional insurance amount provided under this
contract. The actual death benefit will depend upon the coverage option in
effect at the time of death of the last surviving Insured.
2.30 Subaccounts
The division of accounts making up the variable account. The assets of each
subaccount are invested in a corresponding portfolio of a designated mutual
fund.
2.31 Target Premium
The annual target premium amount is shown in Section 1, Contract Data.
2.32 Tobacco
A rate class that defines an Insured who uses tobacco products in any form
during the time period as defined in our underwriting guidelines.
2.33 Total Sum Insured
The total sum insured equals the sum of the specified amount and any additional
insurance amount provided under this contract. This amount does not include
any additional benefits provided by riders.
2.34 Valuation Day
Each day on which both the New York Stock Exchange and Kansas City Life are
open for business.
2.35 Valuation Period
The interval of time commencing at the close of business one valuation day
and ending at the close of business on the next succeeding valuation day.
2.36 Variable Account
The Kansas City Life Variable Life Separate Account. This is not part of
our general account. The variable account has subaccounts each of which is
invested in a corresponding portfolio of a designated mutual fund.
2.37 Variable Account Value
The total value of a contract allocated to subaccounts of the variable account.
2.38 We, Our, Us
Kansas City Life Insurance Company.
Section 2: Definition of Certain Terms (continued)
2.39 Written Notice
A written notice or notice in a form satisfactory to us, which is signed by
the owner and received at the Home Office.
2.40 You, Your
The owner of this contract. The owner may be someone other than the Insureds'.
Section 3: Contract Proceeds
3.1 Payment of Proceeds
We will pay the death proceeds to the beneficiary upon receiving proof of death
of last surviving Insured while this contract is in force. We may also
require proof of death of the Insured who died first. When the proceeds are
paid, this contract must be returned to us.
Death proceeds will be increased by any premiums received after the date of
death of the last surviving Insured. Death proceeds will be decreased by any
unpaid indebtedness.
To the extent permitted by law, proceeds will not be subject to any claims of a
beneficiary's creditors.
3.2 Amount of Proceeds Payable at Death
The amount of proceeds payable upon the death of the last surviving Insured
is determined according to the coverage option you have elected. The
coverage option you elected is shown in Section 1, Contract Data. The death
benefit will be the greater of the amount determined by the coverage option
you have elected or the corridor death benefit, as described in Section 3.3.
Coverage Option A
The death benefit is the total sum insured on the date of death of the
last surviving Insured.
Coverage Option B
The death benefit is the total sum insured on the date of death of
the last surviving Insured, plus the contract value on the date of such death.
Coverage Option L
The death benefit will be the sum of:
(1) the total sum insured on the date of death of the
last surviving Insured; plus
(2) an amount calculated on the last contract anniversary
equal to the contract value multiplied by the applicable Option L death
benefit percentage shown in Table Two on page 7, less the total sum insured.
3.3 Corridor Death Benefit
The corridor death benefit is calculated by multiplying the contract value
on the date of death of the last surviving Insured by the applicable
corridor percentage in Table Two as shown in Section 1, Contract Data.
The purpose of the corridor percentages is to ensure that your contract
will not be disqualified as a life insurance contract under Section 7702 of
the Internal Revenue Code, as amended.
If changes occur in the Internal Revenue Code which would disqualify this
contract as a life insurance contract, we reserve the right to amend this
contract in order to make it qualify under any new federal income tax laws.
3.4 Guaranteed Minimum Death Benefit Option
The guaranteed minimum death benefit option is only available at issue and is
not available if Coverage Option B is elected. If the guaranteed minimum death
benefit option has been elected at issue, it will be shown in Section 1,
Contract Data. This option guarantees payment of the specified amount upon
the death of the last surviving Insured, regardless of this contract's
investment performance, provided the cumulative paid premiums equal or exceed
the cumulative guaranteed minimum death benefit option premium, plus
indebtedness, on each monthly anniversary day. These premiums are defined
in Section 5.6, Guaranteed Minimum Death Benefit Option Premium Requirement.
The charge for this option is shown in Section 1, Contract Data.
The guaranteed minimum death benefit option, if elected, does not guaranteed
the additional insurance amount.
3.5 Proceeds Applied Under Settlement Options
Prior to the death of the last surviving Insured you may elect to apply
surrender proceeds under any settlement option described in Section 12,
Settlement Options. The amount of proceeds will be equal to the cash
surrender value.
Section 3: Contract Proceeds (continued)
3.6 Proceeds Payable Upon Surrender
The proceeds payable upon surrender will be the cash surrender value as
defined in Section 8.9, Cash Surrender.
The amount of proceeds payable upon a partial surrender is defined in
Section 8.10, Partial Surrenders.
3.7 Interest on Death Proceeds
We will pay interest on single sum death proceeds from the date of the death
of the last surviving Insured until the date of payment. Interest will be
at an annual rate determined by us, but never less than the rate required by
the state in which this contract is delivered.
Section 4: General Provisions
4.1 Contract
This contract and application and any supplemental applications are the
entire contract. This contract is issued in consideration of the application
and payment of the premiums. A copy of any application is attached when this
contract is issued and any supplemental applications will be attached to or
endorsed on this contract when the supplemental coverage becomes effective.
In the absence of fraud, all statements made in any applications either by
you or by the Insureds' will be considered representations and not
warranties. Statements may be used to contest a claim or the validity of
this contract only if they are contained in an application.
4.2 Incontestability
After this contract has been in force during the Insureds' lifetime for two
years from the contract date, we cannot contest this contract, unless this
contract lapses as described in Section 5.8, Grace Period for Contract.
Any increase in the additional insurance amount will not be contested after
the increase has been in force during the Insureds' lifetime for two years
following the effective date of the increase.
4.3 Suicide
If either Insured dies by suicide, while sane or insane, within two years of
the contract date, this contract will terminate on the date of such suicide
and the amount payable by us will be equal to the contract value less any
indebtedness on the date of death.
If either Insured dies by suicide, while sane or insane, within two years
after the effective date of any increase in the additional insurance amount,
this contract will terminate on the date of such suicide and the amount
payable by us associated with such increase will be limited to the cost of
insurance for the increase on the date of death.
4.4 Age and Sex
If, while this contract is in force and one or both Insureds are alive, it is
determined that the age or sex of either Insured as stated in Section 1,
Contract Data is not correct, we will adjust the contract value under this
contract. The adjustment to the contract value will be the difference
between the following two amounts accumulated at 4% interest annually. The
two amounts are:
(1) the cost of insurance deductions that have been made; and
(2) the cost of insurance deductions that should have been made.
If, after the death of the last surviving Insured and while this contract is
in force, it is determined that the age or sex of either Insured as stated in
Section 1, Contract Data is not correct, the death benefit will be the net
amount at risk that the most recent cost of insurance deductions at the
correct age and sex would have provided plus the contract value on the date
of such death.
4.5 Termination of Coverage
Coverage under this contract terminates when any of the following events occur:
(1) you request that coverage terminate;
(2) the last surviving Insured dies; or
(3) this contract lapses, as described in Section 5.8, Grace Period
for Contract, and the grace period ends without sufficient premiums being paid.
4.6 Modifications
Upon notice to you, we may modify this contract, but only if such
modification is necessary to:
(1) make this contract or the variable account comply with any
law or regulation issued by a governmental agency to which we are subject; or
Section 4: General Provisions (continued)
(2) assure continued qualification of this contract under the
Internal Revenue Code or other federal or state laws relating to variable
life contracts; or
(3) reflect a change in the operation of the variable account; or
(4) provide additional variable account and/or fixed accumulation
options.
We reserve the right to modify this contract as necessary to attempt to
prevent the contract owner from being considered the owner of the assets of
the variable account. In the event of any such modification, we will issue
an appropriate endorsement to this contract, if required.
4.7 Nonparticipating
This contract is nonparticipating. It will not participate in any of our
profits, losses or surplus earnings.
4.8 Annual Report
At least annually we will send you a report about your contract. The report
will show:
(1) current total sum insured;
(2) current specified amount;
(3) current death benefit;
(4) contract value;
(5) value in the fixed account;
(6) number of accumulation units, accumulation unit value and
total value in each of the subaccounts of the variable account;
(7) cash surrender value;
(8) partial surrenders since the last report;
(9) premiums paid since the last report;
(10) all deductions since the last report;
(11) (11) amount of any indebtedness; and
(12) loan repayments, since the last report.
Upon receiving your written request, we will send you a report at any other
time during the year.
Section 5: Premium and Reinstatement Provisions
5.1 Payment
Your first premium must be paid when this contract is delivered. After the
first premium has been paid, subsequent premiums may be paid at any time.
There is no insurance until the first premium is received by us. All
premiums after the first are payable at the Home Office or to a
representative authorized to receive premiums. A receipt signed by us will
be furnished on request.
5.2 Right to Refund
If we receive a premium payment which affects the tax qualification of this
contract as described in Section 7702 of the Internal Revenue Code, as
amended, we reserve the right to refund any premium that cause the death
benefit of this contract to increase under Section 7702 of the Internal
Revenue Code, as amended.
5.3 Planned Premium Payments
The planned annual, semi-annual, quarterly or monthly premium payment is
shown in Section 1, Contract Data.
5.4 Amount and Frequency
Planned premiums may be paid annually, semi-annually, quarterly or monthly.
You may change the amount and frequency of planned premium payments at any
time. However, the actual amount and frequency of premium payments will
affect the contract value and the amount and duration of insurance. Each
premium payment will be credited by us as described in Section 8, Contract
Values.
The premium paid during the first contract year must by equal to or greater
than the minimum premium shown in Section 1, Contract Data.
We reserve the right to limit the amount of any increase in planned premium
payment.
5.5 Unscheduled Premiums
Unscheduled premiums may be paid at any time. We reserve the right to limit
the number and amount of unscheduled premium payments.
5.6 Guaranteed Minimum Death Benefit Option Premium Requirement
The guaranteed minimum death benefit option premium is the amount which
guarantees that the guaranteed minimum death benefit option will remain in
effect. To determine if the guaranteed Section 5: Premium and Reinstatement
Provisions (continued)
minimum death benefit option premium requirement has been met, the cumulative
paid premiums must equal or exceed the cumulative guaranteed minimum death
benefit option premium, plus indebtedness, on each monthly anniversary day.
The cumulative paid premium is an amount equal to the sum of all premiums
paid less the sum of all partial surrenders as described in Section 8.10,
Partial Surrenders, each accumulated at an annual effective interest rate of
4% to the date the guaranteed minimum death benefit option premium
requirement is tested.
The cumulative guaranteed minimum death benefit option premium equals the sum
of the guaranteed minimum death benefit option premium shown in Section 1,
Contract Data, paid monthly, accumulated at an annual effective interest rate
of 4% from the date of issue up to the date the guaranteed minimum death
benefit option premium requirement is tested.
If the guaranteed minimum death benefit option premium requirement is not
met, the guaranteed minimum death benefit option is in default. A 61-day
notice period begins on the day we mail the notice that the guaranteed
minimum death benefit option is in default and the premium required to
maintain the guaranteed minimum death benefit option. The default premium
will be the amount by which the cumulative guaranteed minimum death benefit
option premium plus indebtedness is greater than the cumulative paid premium.
The guaranteed minimum death benefit option will terminate if sufficient
premium is not paid by the end of the notice period.
If this contract contains an additional insurance amount or other optional
benefit riders, then in addition to testing the guaranteed minimum death
benefit option premium as outlined above, the contract value will be tested
to ensure that this contract is funded at a sufficient level to support the
additional insurance amount or other optional benefit riders. On each monthly
anniversary day the cash surrender value will be tested to determine if it is
sufficient to cover the monthly deductions.
If not, a 61-day notice period begins on the day we mail notice of the
default premium amount. The default premium will be equal to the payment
which would be sufficient to provide a cash surrender value equal to three
monthly deductions. The additional insurance amount and other optional
benefit riders will be removed from this contract if payment at least equal
to the default premium is not received by the end of the notice period.
5.7 Reactivation of the Guaranteed Minimum Death Benefit Option
The contract owner may apply to have the guaranteed minimum death benefit
option reactivated within two years of termination of such option.
Reactivation requires:
(1) a written notice to restore the guaranteed minimum death benefit option;
(2) evidence of insurability of the Insureds satisfactory to us, unless
reactivation is requested within one year after the beginning of the notice
period; and
(3) payment of the amount by which the cumulative guaranteed minimum
death benefit option premium, plus indebtedness, exceeds the cumulative paid
premiums on the date of reactivation, as described in Section 5.6, Guaranteed
Minimum Death Benefit Option Premium Requirement.
On the monthly anniversary day on which the reactivation takes effect, we
will deduct from the contract value any unpaid guaranteed minimum death
benefit option charges as described in Section 1, Contract Data. We reserve
the right to deny reactivation of the guaranteed minimum death benefit
option more than once during the life of this contract.
5.8 Grace Period for Contract
If the guaranteed minimum death benefit option has not been elected or has
been removed, a grace period begins if the cash surrender value on a monthly
anniversary day will not cover the monthly deduction for the month beginning
on that monthly anniversary day.
A 61-day grace period will begin on the day we mail notice of the premium
required to keep this contract in force. A total premium sufficient to
provide a cash surrender value equal to the next three monthly deductions
must be paid during the grace period to keep this contract in force.
This contract will terminate without value if sufficient premium is not paid
by the end of the grace period.
Section 5: Premium and Reinstatement Provisions (continued)
The cash surrender value and monthly deductions are described in Section 8,
Contract Values. If the last surviving Insured dies during the grace period,
any past due monthly deductions will be deducted from the proceeds.
5.9 Reinstatement of Contract
If the grace period expires without sufficient premiums being paid, this
contract may be reinstated within two years after the expiration of the grace
period. Your contract cannot be reinstated if it has been surrendered.
Reinstatement is subject to:
(1) receipt of evidence of insurability of the Insureds
satisfactory to us; and
(2) payment of the premium amount which would have been
sufficient to keep this contract from lapsing, as described in Section 5.8,
Grace Period for Contract, with 6% interest from the date of lapse; plus
(3) payment of three monthly deductions.
If this contract lapses and it is reinstated, we cannot contest the
reinstated contract after this contract has been in force during the
Insureds' lifetime for two years from the date of the reinstatement
application.
Section 6: Ownership, Assignment and Beneficiary Provisions
6.1 Ownership
The owner is shown in the application or in the last ownership designation
filed with us. As owner, you may exercise every right provided by your
contract. These rights and privileges end at the death of the last surviving
Insured.
The consent of the beneficiary is required to exercise these rights if you
have not reserved the right to change the beneficiary.
6.2 Change of Ownership
You may change the ownership of this contract by giving written notice to us
at our Home Office. The change will be effective on the date your request
was signed but will have no effect on any payment made or other action taken
by us before we receive it. We may require that this contract be submitted
for endorsement to show the change.
6.3 Assignment
An assignment is a transfer of some or all of your rights under this
contract. No assignment will be binding on us unless made in writing and
filed at our Home Office. We assume no responsibility for the validity or
effect of any assignment.
6.4 Beneficiary
The beneficiary is shown on the application or in the last beneficiary
designation filed with us. Death proceeds will be paid to the beneficiary
except as provided in this Section.
If any beneficiary dies before the death of the last surviving Insured, that
beneficiary's interest will pass to any other beneficiaries according to
their respective interests.
If all beneficiaries die before the death of the last surviving Insured, we
will pay the death proceeds to you, if living, otherwise to your estate or
legal successors.
Unless you have waived the right to do so, you may change the beneficiary by
filing a written request in a form satisfactory to us. In order to be
effective, the written request for change of beneficiary must be signed
while your contract is in force and one or both Insureds are living. The
change will be effective on the date your request was signed but will have
no effect on any payment made or other action taken by us before we receive it.
The interest of any beneficiary will be subject to:
(1) any assignment of this contract which is binding on us; and
(2) any optional settlement agreement in effect at the death of
the last surviving Insured.
6.5 Simultaneous Death of Beneficiary and the Last Surviving Insured
Death proceeds will be paid as though the beneficiary died before the death
of the last surviving Insured if:
(1) the beneficiary dies at the same time as or within 15 days of
the death of the last surviving Insured; and
(2) we have not paid the proceeds to the beneficiary within this
15-day period.
Section 7: Contract Change Provisions
7.1 Right to Change
You may request the changes provided for in this Section at any time. Your
request must be in writing to us at our Home Office.
7.2 Decreases in Total Sum Insured
The total sum insured may be decreased after the contract has been in force
for one year. When a decrease in total sum insured is made, we will first
reduce any additional insurance amount remaining and only then reduce the
specified amount. If the specified amount is decreased, the guaranteed
minimum death benefit option coverage amount will be decreased by the same
amount.
Once the total sum insured has been decreased, it cannot be decreased again
for the next twelve months. The effective date of decrease will be the
monthly anniversary day on or next following the date we receive your
application for decrease.
We reserve the right to decline to make any total sum insured decrease that
we determine would cause this contract to not qualify as life insurance under
applicable tax laws.
We reserve the right to require that the total sum insured remaining in force
after any requested decrease may not be less than the Minimum Total Sum
Insured shown in Section 1, Contract Data.
A decrease in the total sum insured will not decrease the Target Premium or
Guaranteed Minimum Death Benefit Option Premium, as shown in Section 1,
Contract Data.
7.3 Increases in Additional Insurance Amount
The additional insurance amount may be increased after the contract has been
in force for one year. Once the additional insurance amount has been
increased, it cannot be increased again for the next twelve months. The
effective date of increase will be the monthly anniversary day on or next
following the date we receive and approve your application for increase.
Increases to the additional insurance amount may be made either through
scheduled annual increases or requested increases. The maximum additional
insurance amount allowed at issue is four times the specified amount. After
issue, the additional insurance amount may increase to a maximum of eight
times the specified amount through scheduled annual increases.
Scheduled increases to the additional insurance amount, subject to our
approval, may be based on a flat amount annual increase or a percentage
annual increase, as shown in Section 1, Contract Data. The percentage
increase will be based on the specified percentage of the additional
insurance amount at the time the scheduled increase occurs. The guaranteed
minimum death benefit option will not be available if the additional
insurance amount exceeds or is scheduled to exceed the specified amount at
issue.
Any requested, unscheduled increase in the additional insurance amount must
be at least $25,000, and an application must be submitted. We reserve the
right to require satisfactory evidence of insurability.
7.4 Change in Coverage Option
The coverage option can be changed any time after the contract has been in
force one year. Once the coverage option has been changed, it cannot be
changed again for the next twelve months. Coverage Option L is only
available at issue.
If the coverage option is Option B or Option L, it may be changed to
Option A. The total sum insured will not change. The effective date of
change will be the monthly anniversary day on or next following the date we
receive and approve your application for change.
If the coverage option is Option A or Option L, it may be changed to Option B
subject to evidence of insurability satisfactory to us. The new total sum
insured will be the greater of the total sum insured less the contract value
as of the date of change; or $25,000. The effective date of change will be
the monthly anniversary day on or next following the date we receive and
approve your application for change. If the coverage option is changed to
Option B, the guaranteed minimum death benefit option, if in effect, will
terminate.
We reserve the right to decline any coverage option change that we determine
would cause this contract to not qualify as life insurance under applicable
tax laws.
7.5 Changing Your Contract
Any change to your contract that is not provided for in this Section must be
approved by us and signed by our President, Vice President, Secretary or
Assistant Secretary.
Section 7: Contract Change Provisions (continued)
An approved change must be endorsed on or attached to your contract. No
agent has the authority to make any changes or waive any of the terms of your
contract.
Section 8: Contract Values
8.1 Net Premium
The net premium is the premium payment received less the premium expense
charges shown in Section 1, Contract Data.
8.2 Contract Value
As of the contract date the contract value equals:
(1) the initial net premium paid; less
(2) the monthly deductions, as defined in Section 2.19 of this
contract.
On any day after the contract date, the contract value is equal to the fixed
account value (including the loan account value) plus the variable account
value.
8.3 Fixed Account Value
As of the contract date the fixed account value equals:
(1) the portion of the net premium allocated to
the fixed account; less
(2) the portion of the monthly deduction allocated to the fixed
account.
On each valuation day the fixed account value will be equal to:
A + B + C - D - E - F
"A" is the fixed account value on the preceding valuation day plus interest
from the preceding valuation day to the date of calculation.
"B" is the portion of the net premiums allocated to the fixed account and
received since the preceding valuation day, plus interest from the date such
net premiums were received to the date of calculation.
"C" is the amount of any transfers from the subaccounts to the fixed account
since the preceding valuation day, plus interest on such transferred amounts
from the effective dates of such transfers to the date of calculation.
"D" is the amount of any transfers from the fixed account, to the subaccounts
since the preceding valuation day, plus interest on such transferred amount
from the effective dates of such transfers to the date of calculation.
"E" is the amount of any partial surrenders deducted from the fixed account
since the preceding valuation day, plus interest on these surrendered amounts
from the effective date of the partial surrenders to the date of calculation.
"F" is a pro-rata share of the monthly deductions, as described in Section
8.6, Monthly Deductions, for the month beginning on that monthly anniversary
day.
8.4 Interest Rate for Fixed Account Value
The value in the fixed account is guaranteed to accumulate at a minimum
effective annual interest rate of 4%. We may credit a rate in excess of 4%
while this contract is in force.
The interest rate credited to new deposits can be changed at any time by us.
The interest rate credited to funds in the fixed account will not change more
often than once each year.
8.5 Variable Account Value
The variable account value is the sum of the values of the subaccounts under
this contract.
As of the allocation date the value of each subaccount equals:
(1) the portion of the initial net premium allocated to the
subaccount; less
(2) the pro-rata share of the monthly deductions and the
mortality and expense risk charge allocated to the subaccounts.
8.6 Monthly Deductions
We will make monthly deductions from the contract value on each monthly
anniversary day equal to the sum of the following:
(1) the monthly cost of insurance, as described in Section 8.7,
Cost of Insurance;
(2) the monthly expense charges, as shown in Section 1, Contract
Data; and
Section 8: Contract Values (continued)
(3) the monthly deductions for optional benefit charges and any
additional benefits provided by riders, as shown in Section 1, Contract Data.
8.7 Cost of Insurance
The cost of insurance rates used will not exceed those shown in Table One,
Section 1, Contract Data.
The cost of insurance on any monthly anniversary day is equal to:
Q x (R - S)/1000
"Q" is the cost of insurance rate (as described in Monthly Cost of Insurance
Rates, Section 1, Contract Data.)
"R" is the Insureds' death benefit on that day divided by no less than
1.0032737.
"S" is the contract value, as described in Section 8.2, Contract Value,
prior to subtracting the cost of insurance.
8.8 Cost of Additional Benefits Provided by Riders
The cost of additional benefits provided by riders will be shown in
Section 1, Contract Data.
8.9 Cash Surrender
You may surrender this contract for its cash surrender value at any time by
submitting a signed request to us.
The cash surrender value of this contract is:
(1) the contract value of this contract at the time of surrender;
less
(2) any indebtedness on this contract.
We will also refund any cost of insurance deducted for the period beyond the
date of contract surrender.
8.10 Partial Surrenders
At any time before the death of the last surviving Insured, you may surrender a
portion of the contract value and have the proceeds paid to you in a lump
sum. At the time of the partial surrender we will add the partial surrender
fee shown in Section 1, Contract Data, to the partial surrender amount. The
minimum partial surrender requested must be for at least $500. The maximum
partial surrender is the cash surrender value, less $300. We will deduct the
partial surrender amount from the contract value on the day written notice
for the partial surrender is received at our Home Office.
We will pay you the amount requested and cancel units equal to the amount
surrendered from the subaccounts and/or the fixed account according to your
instructions. If you provide no instructions, the partial surrender amount
will be deducted from the subaccounts and/or the fixed account on a pro-rata
basis. In the event that the partial surrender amount exceeds the
subaccount(s) value and/or the fixed account value, we will process the partial
surrender for the amount available and contact you for further instructions.
Under Options A and L, the contract value will be reduced by the partial
surrender amount. The total sum insured will be reduced by the partial
surrender amount minus the excess, if any, of the death benefit at the time
the partial surrender is made, over the total sum insured at the time the
partial surrender is made.
However, if the partial surrender amount is less than or equal to the excess
of the death benefit over the total sum insured, the total sum insured will
not be reduced.
Under Option B, the contract value will be reduced by the partial surrender
amount.
We reserve the right to reject a partial surrender request if:
(1) the partial surrender would reduce the total sum insured below the
minimum total sum insured as shown in Section 1, Contract Data; or
(2) the partial surrender would cause the contract to fail to qualify as a
life insurance contract under applicable tax laws.
Certain federal income tax consequences may apply to partial surrenders from
this contract. Therefore, you should consult with your tax advisor before
requesting any partial surrenders.
8.11 Time Period for Payment
Any partial surrender, cash surrender value, loan or death benefit will
usually be paid within seven days of receiving your written notice in our
Home Office, or receipt and filing of due proof of death the Insureds.
However, we have the right to suspend or delay the date of any surrender,
partial surrender, loan or death benefit payment from the subaccounts for any
period during which:
Section 8: Contract Values (continued)
(1) the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or trading on the New York Stock exchange is
restricted as determined by the Securities and Exchange Commission; or
(2) the Securities and Exchange Commission permits by an order
the postponement for the protection of contract owners; or
(3) the Securities and Exchange Commission determines that an
emergency exists that would make the disposal of securities held in the
variable account or the determination of the value of the variable account's
net assets not reasonably practicable.
For any surrender, partial surrender, loan or transfer from the fixed
account, we have the right to postpone making a payment to you for not more
than six months from the date of written notice. If payment is not made
within 30 days after receipt of documentation necessary to complete the
transaction, or such shorter period required by a particular jurisdiction,
interest will be added to the amount paid from the date of receipt of
documentation at 4% or such higher rate required for a particular state.
8.12 Extended Term Insurance
If your contract lapses, as described in Section 5.8, Grace Period for
Contract, the cash surrender value will be applied to continue the total sum
insured and any additional benefits provided by riders for a portion of the
next month.
The amount of extended term insurance is determined according to the coverage
option in effect as of the date insurance is extended under this option.
8.13 Basis of Computation
Reserves are based on the 1980 Commissioners Standard Ordinary Smoker or
Nonsmoker Mortality Tables, age last birthday at 4.5% per year. Reserves
will never be less than those provided for using the Commissioners Reserve
Valuation Method.
Guaranteed fixed account values and reserves under this contract are equal
to, or greater than, the minimum values required by law of the state in which
your contract is delivered. Where required, a detailed statement of the
method of computing these values has been filed with the insurance department
of that state.
The guaranteed fixed account values are based on the minimum guaranteed
interest rate as stated in Section 8.4, Interest Rate for Fixed Account
Value, and the guaranteed cost of insurance rates as shown in Table One,
Section 1, Contract Data.
Section 9: Loan Provisions
9.1 Contract Loans
You may obtain a contract loan by submitting a signed request to us. This
contract assigned to us is the only security needed.
When a loan is made, an amount equal to the loan will be transferred from the
fixed and variable accounts and transferred to the loan account. The loan
account is part of the fixed account, which is part of our general account.
If allocation instructions are not specified in your loan application, the
loan will be withdrawn pro rata from all subaccounts of the variable account
having subaccount values and from the fixed account.
Xxxxxxx transferred to the loan account do not participate in the investment
experience of the fixed or variable account from which they were withdrawn.
Amounts in the loan account will earn interest at the minimum guaranteed
effective annual interest rate of 4.0% per year. Different interest rates may
be applied to the loan account than the fixed account. Any interest credited
on loaned amounts will remain in the fixed account.
You may repay your contract loan in full or in part while your contract is
in force prior to the death of the last surviving Insured. Repayments must
be clearly marked as "loan repayments" or they will be credited as premiums.
Each loan repayment will result in a transfer of an amount equal to the loan
repayment from the loan account to the fixed and/or variable account. Your
current premium allocation schedule will be used to allocate the loan
repayments. We reserve the right to not accept partial loan repayments for
amounts less than $50.
A loan that exists at the end of the grace period may not be repaid unless
this contract is reinstated.
9.2 Amount of Loan Available
The amount of loan available will be equal to the cash surrender value of
this contract less any loan interest to the next contract anniversary.
Section 9: Loan Provisions (continued)
9.3 Loan Interest
Interest will be charged on a contract loan from the date of the loan at the
rate of 6% per year. We may establish a lower rate for any period for which
the contract loan is outstanding.
Interest is payable at the end of each contract year and on the date the loan
is repaid. If interest is not received by the contract anniversary, we will
transfer the accrued loan interest from the fixed and variable accounts to
the loan account on a pro rata basis.
9.4 Indebtedness
Indebtedness means all unpaid contract loans and accrued loan interest. Any
outstanding indebtedness will be deducted from the contract proceeds.
Your contract is terminated whenever your cash surrender value is no longer
positive. We will mail notice to your last known address recorded with us
and to the holder of any assignment of record at least 31 days before such
termination.
Section 10: The Variable Account
10.1 General Description
The name of the variable account is the Kansas City Life Variable Life
Separate Account. The income, gains and losses, whether or not realized,
from assets allocated to the variable account are credited or charged against
the variable account without regard to our other income, gains or losses. The
portion of the assets of the variable account equal to the reserves and other
contract liabilities with respect to the variable account will not be
chargeable with liabilities arising out of any other business we may contract.
The assets of the variable account are segregated by investment options, thus
establishing a series of subaccounts within the variable account.
When permitted by law, we reserve the right to:
(1) create new separate accounts;
(2) combine separate accounts;
(3) remove, combine or add subaccounts and make the new
subaccounts available to you at our discretion;
(4) substitute shares of another portfolio of the funds or shares
of another investment company for those of the funds;
(5) add new portfolios to the funds;
(6) deregister the variable account under the Investment Company
Act of 1940 if registration is no longer required;
(7) make any changes required by the Investment Company Act of
1940; and
(8) operate the variable account as a managed investment company
under the investment Company Act of 1940 or any other form permitted by law.
If a change is made, we will send you a revised prospectus and any notice
required by law. If required, we would first seek the approval of the
Securities and Exchange Commission, and when required, the appropriate state
regulatory authorities before making a change in the investment options.
10.2 Subaccounts
The subaccounts are separate investment accounts. They are named in
Section 1, Contract Data.
The subaccount values will fluctuate in accordance with the investment
experience of the applicable portfolio of the fund held within the subaccount.
The subaccount value is determined by multiplying the number of accumulation
units credited to the subaccount by the appropriate accumulation unit value.
The number of accumulation units to be purchased or redeemed in a transaction
is found by dividing:
(1) the dollar amount of the transaction; by
(2) the subaccount's unit value for the valuation period for that
transaction.
The number of units in any subaccount will be increased at the end of the
valuation period by any net premiums allocated to the subaccount during the
current valuation period and by any transfers to the subaccount from another
subaccount or from the fixed account during the current valuation period. The
number of units in any subaccount will be decreased at the end of the
valuation period by any amounts transferred from the subaccount to another
subaccount or the fixed account or surrendered during the current valuation
period. The number of units in any subaccount will also be reduced on each
monthly anniversary day by a pro-rata share of the monthly Section 10: The
Variable Account (continued)deduction. The monthly deduction will reduce
the subaccount units in proportion to each subaccount's value to the entire
contract value.
The value of an accumulation unit for each of the subaccounts has been
arbitrarily set at $10 when the first investments were bought. The value for
any later valuation period is equal to:
A x B
"A" is equal to the subaccount's accumulation unit value for the end of the
immediately preceding valuation day.
"B" is equal to the net investment factor for the most current valuation day.
The net investment factor equals:
X - Z
Y
"X" equals the sum of:
(1) the net asset value per accumulation unit held in the
subaccount at the end of the current valuation day; plus
(2) the per accumulation unit amount of any dividend, or capital
gain distribution on shares held in the subaccount during the current
valuation day; less
(3) the per accumulation unit amount of any capital loss
distribution on shares held in the subaccount during the current valuation
day; less
(4) the per accumulation unit amount of any taxes or any amount
set aside during the valuation day as a reserve for taxes.
"Y" equals the net asset value per accumulation unit held in the subaccount
as of the end of the immediately preceding valuation day.
"Z" equals the charges deducted from the subaccount on each valuation day for
the mortality and expense risk charge.
The mortality and expense risk charge is deducted from each of the
subaccounts on each valuation day and compensates us for assuming the
mortality and expense risks under this contract. These charges are shown in
Section 1, Contract Data.
The net investment factor may be greater, less than or equal to one.
Therefore, the value of the subaccount may increase, decrease or remain the
same.
10.3 Allocations
This contract provides investment options for the amount in the contract
value. The initial premium allocation percentages are indicated in the
application for this contract, a copy of which is attached. These
percentages will also apply to subsequent premium allocations until you
change them.
Allocation percentages must be zero or a whole number not greater than 100.
The sum of the premium allocation percentages must equal 100.
We reserve the right to limit the number of subaccount allocations in effect
at any one time.
On the allocation date the contract value will be allocated to the money
market subaccount. Any subsequent premiums that are received from this time
until the reallocation date, will also be allocated to the money market
subaccount. On the reallocation date, contract value in the money market
subaccount will be allocated to the subaccounts and to the fixed account
based on the premium payment allocation percentages in the contract
application. After the reallocation date, planned periodic premiums and
unscheduled premiums will be allocated as requested on the valuation day
they are received by the Home Office.
Section 11: Transfer Privilege
11.1 Transfer Fees
Six transfers per year may be made from subaccounts and the fixed account
free of charge. Any unused free transfers do not carry over to the next
contract year. Any additional transfers during a contract year will be
charged a $25 transfer fee. For the purpose of assessing a fee, each written
request or telephone request is considered to be one transfer. The
processing fee will be deducted from the amount being transferred, or from
the remaining contract value, according to your instructions.
Section 11: Transfer Privileges (continued)
11.2 Transfers From Subaccounts
After the right to examine period, you may transfer all or a part of an
amount from the value in any subaccount of the variable account to one or
more of the subaccounts of the variable account or to the fixed account.
The minimum amount that you may transfer is the lesser of:
(1) $250; or
(2) the total value in that subaccount on that date.
Any transfer that would reduce the amount in a subaccount below $250 will be
treated as a transfer request for the entire amount in that subaccount.
A transfer fee may apply as described in Section 11.1, Transfer Fees.
We may suspend or modify this transfer privilege at any time.
11.3 Transfers From The Fixed Account
At your request you may also transfer an amount from the unloaned value in
the fixed account to one or more subaccounts of the variable account. We
must receive the request in writing or other form acceptable to us. Only
one transfer may be made from the fixed account each contract year.
Transfers will only be made if the amount requested is not more than 25% of
the unloaned value in the fixed account.
We will not transfer more than 25% of the unloaned fixed account value,
unless the balance after the transfer is less than $250, in which case the
entire amount will be transferred.
A transfer fee may apply as described in Section 11.1, Transfer Fees.
We may suspend or modify this transfer privilege at any time.
Section 12: Settlement Options
12.1 Payment Options
You may apply proceeds of $2,000 or more which are payable under this
contract to any of the following options:
Option 1. Interest Payments
We will make interest payments to the payee annually or monthly as
elected. Interest on the proceeds will be paid at the guaranteed
rate of 3.0% per year and may be increased by additional interest
paid annually. The proceeds and any unpaid interest may be
withdrawn in full at any time.
Option 2. Installments of a Specified Amount
We will make annual or monthly payments until the proceeds plus
interest are fully paid. Interest on the proceeds will be paid at
the guaranteed rate of 3.0% per year and may be increased by
additional interest. The present value of any unpaid installments
may be withdrawn at any time.
Option 3. Installments For a Specified Period
Payment of the proceeds may be made in equal annual or monthly
payments for a specified number of years. Interest on the proceeds
will be paid at the guaranteed rate of 3.0% per year and may be
increased by additional interest. The present value of any unpaid
installments may be withdrawn at any time. The amount of each
payment is shown in Table A.
Option 4. Life Income
We will pay an income during the payee's lifetime. A minimum
guaranteed payment period may be chosen. Payments received under
the Installment Refund Option will continue until the total income
payments received equal the proceeds applied. The amount of each
payment is shown in Table B.
Option 5. Joint and Survivor Income
We will pay an income during the lifetime of two persons and will
continue to pay the same income as long as either person is living.
The minimum guaranteed payment period will be ten years. The amount
of each payment is shown in Table C.
If the payout rates in use by us at the time proceeds become payable are
more favorable than those shown in Options 4 and 5, we will provide a life
income using the more favorable rates.
These options are supported by our general account. The payments will not
reflect the investment experience of the variable account.
Section 12: Settlement Options (continued)
12.2 Payee
The payee is the person receiving proceeds under a settlement option. The
payee can be you, an Insured or a beneficiary. We will require satisfactory
proof of the payee's age under Options 4 and 5.
The contingent payee is the person named to receive proceeds if the payee is
not alive.
12.3 Minimum Payments
The payment under any settlement option must be at least $50. We may make
payments less frequently so that each payment is at least $50.
12.4 Choice of Options
You may choose an option by written notice during one or both Insureds
lifetime. If a settlement option is not in effect at the death of the
last surviving Insured, a choice may be made by the beneficiary.
12.5 Availability of Options
We reserve the right to restrict these options if you designate an executor,
administrator, trustee, corporation, partnership or association as the payee.
12.6 Operative Date
The first payment will be payable on the payment mode following the date
proceeds become payable.
12.7 Death of Payee
At the death of the payee, any payments remaining will be paid according to
the terms of the settlement option chosen, unless the contingent payee
elects in writing to receive the present value of any remaining guaranteed
payments in a single sum.
If a contingent payee has not been named or does not survive the payee, the
following amounts will be paid in one sum to the estate of the payee:
(1) any amount left on deposit under Option 1; and
(2) the present value of any remaining guaranteed payments under
Options 2 through 5.
If you have not named a contingent payee, or if every contingent payee named
by you dies before the payee, you may, by written notice to us, name a new
contingent payee. The new contingent payee will receive any amount that
would otherwise have been payable to the payee's estate.
12.8 Claims of Creditors
To the extent permitted by law, proceeds will not be subject to any claims
of a payee's creditors. TABLE A - INSTALLMENT OPTION*
for Each $1,000 of Proceeds Applied
Term of
Years
Annual
Monthly
1 $1000.00 $84.47
2 507.39 42.86
3 343.23 28.99
4 261.19 22.06
5 211.99 17.91
6 179.22 15.14
7 155.83 13.16
8 138.31 11.68
9 124.69 10.53
10 113.82 9.61
11 $104.93 $8.86
12 97.54 8.24
13 91.29 7.71
14 85.95 7.26
15 81.33 6.87
16 77.29 6.53
17 73.74 6.23
18 70.59 5.96
19 67.78 5.73
20 65.26 5.51
21 $62.98 $5.32
22 60.92 5.15
23 59.04 4.99
24 57.33 4.84
25 55.76 4.71
26 54.31 4.59
27 52.97 4.47
28 51.74 4.37
29 50.60 4.27
30 49.53 4.18
TABLE B - LIFE INCOME OPTIONS*
Monthly Income for Each $1,000 of Proceeds Applied
Age MALE
Minimum Guaranteed Payment Period
None
120
Months
240
Months Install-ment
Refund
50 $4.23 $4.19 $4.06 $4.05
51 4.31 4.26 4.11 4.11
52 4.38 4.33 4.17 4.17
53 4.46 4.40 4.22 4.23
54 4.55 4.48 4.28 4.29
55 4.63 4.56 4.33 4.36
56 4.73 4.65 4.39 4.43
57 4.83 4.74 4.45 4.51
58 4.94 4.83 4.51 4.59
59 5.05 4.93 4.57 4.67
60 5.17 5.04 4.63 4.75
61 5.30 5.15 4.69 4.85
62 5.44 5.27 4.75 4.94
63 5.60 5.39 4.81 5.04
64 5.76 5.52 4.86 5.15
65 5.93 5.65 4.92 5.26
66 6.12 5.79 4.97 5.37
67 6.32 5.94 5.02 5.50
68 6.53 6.09 5.06 5.62
69 6.76 6.24 5.11 5.76
70 7.00 6.40 5.14 5.90
71 7.26 6.56 5.18 6.04
72 7.53 6.72 5.21 6.20
73 7.83 6.88 5.24 6.36
74 8.15 7.05 5.26 6.53
75 8.49 7.22 5.28 6.70
Age FEMALE
Minimum Guaranteed Payment Period
None
120
Months
240
Months Install-
ment
Refund
50 $3.89 $3.87 $3.81 $3.80
51 3.95 3.93 3.86 3.84
52 4.01 3.98 3.91 3.89
53 4.07 4.04 3.96 3.95
54 4.13 4.11 4.01 4.00
55 4.20 4.17 4.07 4.06
56 4.28 4.24 4.12 4.12
57 4.36 4.32 4.18 4.18
58 4.44 4.40 4.24 4.25
59 4.53 4.48 4.30 4.32
60 4.63 4.57 4.37 4.39
61 4.73 4.66 4.43 4.47
62 4.84 4.76 4.50 4.55
63 4.95 4.86 4.56 4.64
64 5.08 4.97 4.63 4.73
65 5.21 5.09 4.69 4.83
66 5.35 5.21 4.76 4.93
67 5.50 5.34 4.82 5.04
68 5.66 5.47 4.88 5.15
69 5.84 5.61 4.94 5.27
70 6.02 5.76 5.00 5.39
71 6.23 5.92 5.05 5.53
72 6.45 6.08 5.10 5.67
73 6.70 6.25 5.14 5.81
74 6.96 6.43 5.18 5.97
75 7.24 6.61 5.22 6.14
TABLE C - JOINT AND SURVIVOR OPTION*
Monthly Income - Ten Year Guaranteed Payment Period
for Each $1,000 of Proceeds Applied
Male Female Age
Age 50 55 60 65 70 75
50 $3.31 $3.37 $3.43 $3.49 $3.53 $3.56
55 3.47 3.55 3.63 3.70 3.76
60 3.68 3.80 3.91 4.00
65 3.97 4.15 4.31
70 4.41 4.68
75 5.08
*Amounts not shown for available options will be furnished on request.
Flexible Premium Variable
Survivorship Life Insurance
Contract - Nonparticipating
Adjustable death benefit. Death proceeds payable at death of the last
surviving Insured. Flexible premiums payable until the death of the last
surviving Insured.
If you have any questions concerning this contract or if anyone suggests
that you change or replace this contract, please contact your Kansas City
Life agent or the Home Office of the Company.
1.A.(8)(d)
FUND PARTICIPATION AGREEMENT
This Agreement is entered into as of the day of _________,
1997, between KANSAS CITY LIFE INSURANCE COMPANY, a life
insurance company organized under the laws of the State of
Missouri ("Insurance Company"), and each of DREYFUS VARIABLE
INVESTMENT FUND, THE DREYFUS SOCIALLY RESPONSIBLE GROWTH FUND,
INC. and DREYFUS LIFE AND ANNUITY INDEX FUND, INC. (d/b/a DREYFUS
STOCK INDEX FUND) (each a "Fund").
ARTICLE I 1.
DEFINITIONS
1.1 "Act" shall mean the Investment Company Act of 1940, as
amended.
1.2 "Board" shall mean the Board of Directors or Trustees, as
the case may be, of a Fund, which has the responsibility for
management and control of the Fund.
1.3 "Business Day" shall mean any day for which a Fund
calculates net asset value per share as described in the Fund's
Prospectus.
1.4 "Commission" shall mean the Securities and Exchange
Commission.
1.5 "Contract" shall mean a variable annuity or life insurance
contract that uses any Participating Fund (as defined below) as
an underlying investment medium. Individuals who participate
under a group Contract are "Participants."
1.6 "Contractholder" shall mean any entity that is a party to a
Contract with a Participating Company (as defined below).
1.7 "Disinterested Board Members" shall mean those members of
the Board of a Fund that are not deemed to be "interested
persons" of the Fund, as defined by the Act.
1.8 "Dreyfus" shall mean The Dreyfus Corporation and its
affiliates, including Dreyfus Service Corporation.
1.9 "Participating Companies" shall mean any insurance company
(including Insurance Company) that offers variable annuity and/or
variable life insurance contracts to the public and that has
entered into an agreement with one or more of the Funds.
1.10 "Participating Fund" shall mean each Fund, including, as
applicable, any series thereof, specified in Exhibit A, as
such Exhibit may be amended from time to time by agreement
of the parties hereto, the shares of which are available to
serve as the underlying investment medium for the aforesaid
Contracts.
1.11 "Prospectus" shall mean the current prospectus and statement
of additional information of a Fund, as most recently filed
with the Commission.
1.12 "Separate Account" shall mean each of Kansas City Life
Variable Annuity Separate Account and Kansas City Life
Variable Universal Life Separate Account, each of which is a
separate account established by Insurance Company in
accordance with the laws of the State of Missouri.
1.13 "Software Program" shall mean the software program used by a
Fund for providing Fund and account balance information
including net asset value per share. Such Program may
include the Lion System. In situations where the Lion
System or any other Software Program used by a Fund is not
available, such information may be provided by telephone.
The Lion System shall be provided to Insurance Company at no
charge.
1.14 "Insurance Company's General Account(s)" shall mean the
general account(s) of Insurance Company and its affiliates
that invest in a Fund.
ARTICLE II 2.
REPRESENTATIONS
2.1 Insurance Company represents and warrants that (a) it is an
insurance company duly organized and in good standing under
applicable law; (b) it has legally and validly established the
Separate Account pursuant to the Missouri Insurance Code for the
purpose of offering to the public certain individual and group
variable annuity and life insurance contracts; (c) it has
registered the Separate Account as a unit investment trust under
the Act to serve as the segregated investment account for the
Contracts; and (d) the Separate Account is eligible to invest in
shares of each Participating Fund without such investment
disqualifying any Participating Fund as an investment medium for
insurance company separate accounts supporting variable annuity
contracts or variable life insurance contracts.
2.2 Insurance Company represents and warrants that (a) the
Contracts will be described in a registration statement filed
under the Securities Act of 1933, as amended ("1933 Act"); (b)
the Contracts will be issued and sold in compliance in all
material respects with all applicable federal and state laws; and
(c) the sale of the Contracts shall comply in all material
respects with state insurance law requirements. Insurance
Company agrees to notify each Participating Fund promptly of any
investment restrictions imposed by state insurance law and
applicable to the Participating Fund.
2.3 Insurance Company represents and warrants that the income,
gains and losses, whether or not realized, from assets allocated
to the Separate Account are, in accordance with the applicable
Contracts, to be credited to or charged against such Separate
Account without regard to other income, gains or losses from
assets allocated to any other accounts of Insurance Company.
Insurance Company represents and warrants that the assets of the
Separate Account are and will be kept separate from Insurance
Company's General Account and any other separate accounts
Insurance Company may have, and will not be charged with
liabilities from any business that Insurance Company may conduct
or the liabilities of any companies affiliated with Insurance
Company.
2.4 Each Participating Fund represents that it is registered
with the Commission under the Act as an open-end, management
investment company and possesses, and shall maintain, all legal
and regulatory licenses, approvals, consents and/or exemptions
required for the Participating Fund to operate and offer its
shares as an underlying investment medium for Participating
Companies. Each Participating Fund represents that its
investment policies, fees, operations and expenses are, and at
all times will be, in compliance with applicable federal and
state securities laws.
2.5 Each Participating Fund represents that it is currently
qualified as a regulated investment company under Subchapter M of
the Internal Revenue Code of 1986, as amended (the "Code"), and
that it will make every effort to maintain such qualification
(under Subchapter M or any successor or similar provision) and
that it will notify Insurance Company immediately upon having a
reasonable basis for believing that it has ceased to so qualify
or that it might not so qualify in the future.
2.6 Insurance Company represents and agrees that the Contracts
are currently, and at the time of issuance will be, treated as
life insurance policies or annuity contracts, whichever is
appropriate, under applicable provisions of the Code, and that it
will make every effort to maintain such treatment and that it
will notify each Participating Fund and Xxxxxxx immediately upon
having a reasonable basis for believing that the Contracts have
ceased to be so treated or that they might not be so treated in
the future. Insurance Company agrees that any prospectus
offering a Contract that is a "modified endowment contract," as
that term is defined in Section 7702A of the Code, will identify
such Contract as a modified endowment contract (or policy).
2.7 Each Participating Fund agrees that its assets shall be
managed and invested in a manner that complies with the
requirements of Section 817(h) of the Code.
2.8 Insurance Company agrees that each Participating Fund shall
be permitted (subject to the other terms of this Agreement) to
make its shares available to other Participating Companies and
Contractholders.
2.9 Each Participating Fund represents and warrants that any of
its directors, trustees, officers, employees, investment
advisers, and other individuals/entities who deal with the money
and/or securities of the Participating Fund are and shall
continue to be at all times covered by a blanket fidelity bond or
similar coverage for the benefit of the Participating Fund in an
amount not less than that required by Rule 17g-1 under the Act.
The aforesaid Bond shall include coverage for larceny and
embezzlement and shall be issued by a reputable bonding company.
Each Participating Fund represents and warrants that it is
covered (along with certain other named parties) by a directors
and officers/errors and omissions insurance policy in an amount,
as of the date of this Agreement, of $100 million.
2.10 Insurance Company represents and warrants that all of its
employees and agents who deal with the money and/or securities of
each Participating Fund are and shall continue to be at all times
covered by a blanket fidelity bond or similar coverage in an
amount not less than the coverage required to be maintained by
the Participating Fund. The aforesaid Bond shall include
coverage for larceny and embezzlement and shall be issued by a
reputable bonding company.
2.11 Insurance Company agrees that The Dreyfus Corporation and
Dreyfus Service Corporation shall each be deemed a third party
beneficiary under this Agreement and may enforce any and all
rights conferred by virtue of this Agreement.
ARTICLE III 3.
FUND SHARES
3.1 The Contracts funded through the Separate Account will
provide for the investment of certain amounts in shares of each
Participating Fund.
3.2 Each Participating Fund agrees to make its shares available
for purchase at the then applicable net asset value per share by
Insurance Company and the Separate Account on each Business Day
pursuant to rules of the Commission. Notwithstanding the
foregoing, each Participating Fund may refuse to sell its shares
to any person, or suspend or terminate the offering of its
shares, if such action is required by law or by regulatory
authorities having jurisdiction or is, in the sole discretion of
its Board, acting in good faith and in light of its fiduciary
duties under federal and any applicable state laws, necessary and
in the best interests of the Participating Fund's shareholders.
3.3 Each Participating Fund agrees that shares of the
Participating Fund will be sold only to (a) Participating
Companies and their separate accounts or (b) "qualified pension
or retirement plans" as determined under Section 817(h)(4) of the
Code. Except as otherwise set forth in this Section 3.3, no
shares of any Participating Fund will be sold to the general
public.
3.4 Each Participating Fund shall use its best efforts to
provide closing net asset value, dividend and capital gain
information on a per-share basis to Insurance Company by 6:00
p.m. Eastern time on each Business Day. Any material errors in
the calculation of net asset value, dividend and capital gain
information shall be reported immediately upon discovery to
Insurance Company. Non-material errors will be corrected in the
next Business Day's net asset value per share.
3.5 By the end of each Business Day, Insurance Company will use
the information described in Sections 3.2 and 3.4 to calculate
the unit values of the Separate Account for the day. Using this
unit value, Insurance Company will process the day's Separate
Account transactions received by it by the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m.
Eastern time) to determine the net dollar amount of each
Participating Fund's shares that will be purchased or redeemed at
that day's closing net asset value per share. The net purchase
or redemption orders will be transmitted to each Participating
Fund by Insurance Company by 11:00 a.m. Eastern time on the
Business Day next following Insurance Company's receipt of that
information. Subject to Sections 3.6 and 3.8, all purchase and
redemption orders for Insurance Company's General Accounts shall
be effected at the net asset value per share of each
Participating Fund next calculated after receipt of the order by
the Participating Fund or its Transfer Agent.
3.6 Each Participating Fund appoints Insurance Company as its
agent for the limited purpose of accepting orders for the
purchase and redemption of Participating Fund shares for the
Separate Account. Each Participating Fund will execute orders at
the applicable net asset value per share determined as of the
close of trading on the day of receipt of such orders by
Insurance Company acting as agent ("effective trade date"),
provided that the Participating Fund receives notice of such
orders by 11:00 a.m. Eastern time on the next following Business
Day and, if such orders request the purchase of Participating
Fund shares, the conditions specified in Section 3.8, as
applicable, are satisfied. A redemption or purchase request that
does not satisfy the conditions specified above and in Section
3.8, as applicable, will be effected at the net asset value per
share computed on the Business Day immediately preceding the next
following Business Day upon which such conditions have been
satisfied in accordance with the requirements of this Section and
Section 3.8.
3.7 Insurance Company will make its best efforts to notify each
applicable Participating Fund in advance of any unusually large
purchase or redemption orders.
3.8 If Insurance Company's order requests the purchase of a
Participating Fund's shares, Insurance Company will pay for such
purchases by wiring Federal Funds to the Participating Fund or
its designated custodial account on the day the order is
transmitted. Insurance Company shall make all reasonable efforts
to transmit to the applicable Participating Fund payment in
Federal Funds by 12:00 noon Eastern time on the Business Day the
Participating Fund receives the notice of the order pursuant to
Section 3.5. Each applicable Participating Fund will execute
such orders at the applicable net asset value per share
determined as of the close of trading on the effective trade date
if the Participating Fund receives payment in Federal Funds by
12:00 midnight Eastern time on the Business Day the Participating
Fund receives the notice of the order pursuant to Section 3.5.
If payment in Federal Funds for any purchase is not received or
is received by a Participating Fund after 12:00 noon Eastern time
on such Business Day, Insurance Company shall promptly, upon each
applicable Participating Fund's request, reimburse the respective
Participating Fund for any charges, costs, fees, interest or
other expenses incurred by the Participating Fund in connection
with any advances to, or borrowings or overdrafts by, the
Participating Fund, or any similar expenses incurred by the
Participating Fund, as a result of portfolio transactions
effected by the Participating Fund based upon such purchase
request. If Insurance Company's order requests the redemption of
any Participating Fund's shares valued at or greater than $1
million dollars, the Participating Fund will wire such amount to
Insurance Company within seven days of the order.
3.9 Each Participating Fund has the obligation to ensure that
its shares are registered with applicable federal agencies at all
times.
3.10 Each Participating Fund will confirm each purchase or
redemption order made by Insurance Company. Transfer of
Participating Fund shares will be by book entry only. No share
certificates will be issued to Insurance Company. Insurance
Company will record shares ordered from a Participating Fund in
an appropriate title for the corresponding account.
3.11 Each Participating Fund shall credit Insurance Company with
the appropriate number of shares.
3.12 On each ex-dividend date of a Participating Fund or, if not
a Business Day, on the first Business Day thereafter, each
Participating Fund shall communicate to Insurance Company the
amount of dividend and capital gain, if any, per share. All
dividends and capital gains shall be automatically reinvested in
additional shares of the applicable Participating Fund at the net
asset value per share on the ex-dividend date. Each
Participating Fund shall, on the day after the ex-dividend date
or, if not a Business Day, on the first Business Day thereafter,
notify Insurance Company of the number of shares so issued.
ARTICLE IV 4.
STATEMENTS AND REPORTS
4.1 Each Participating Fund shall provide monthly statements of
account as of the end of each month for all of Insurance
Company's accounts by the fifteenth (15th) day of the following
month.
4.2 Each Participating Fund shall distribute to Insurance
Company copies of the Participating Fund's Prospectuses (in hard
copy, camera ready form or on diskette, as specified by Insurance
Company), proxy materials, notices, periodic reports and other
printed materials (which the Participating Fund customarily
provides to its shareholders) in quantities as Insurance Company
may reasonably request for distribution to each Contractholder
and Participant.
4.3 Each Participating Fund will provide to Insurance Company at
least one complete copy of all registration statements,
Prospectuses, reports, proxy statements, sales literature and
other promotional materials, applications for exemptions,
requests for no-action letters, and all amendments to any of the
above, that relate to the Participating Fund or its shares,
contemporaneously with the filing of such document with the
Commission or other regulatory authorities.
4.4 Insurance Company will provide to each Participating Fund at
least one copy of all registration statements, Prospectuses,
reports, proxy statements, sales literature and other promotional
materials, applications for exemptions, requests for no-action
letters, and all amendments to any of the above, that relate to
the Contracts or the Separate Account, contemporaneously with the
filing of such document with the Commission.
4.5
ARTICLE V 5.
EXPENSES
5.1 The charge to each Participating Fund for all expenses and
costs of the Participating Fund, including but not limited to
management fees, administrative expenses and legal and regulatory
costs, will be made in the determination of the Participating
Fund's daily net asset value per share so as to accumulate to an
annual charge at the rate set forth in the Participating Fund's
Prospectus. Excluded from the expense limitation described
herein shall be brokerage commissions and transaction fees and
extraordinary expenses.
5.2 Except as provided in this Article V and, in particular in
the next sentence, Insurance Company shall not be required to pay
directly any expenses of any Participating Fund or expenses
relating to the distribution of its shares. Insurance Company
shall pay the following expenses or costs:
a. Such amount of the production expenses of any Participating
Fund materials, including the cost of printing a Participating
Fund's Prospectus, or marketing materials for prospective
Insurance Company Contractholders and Participants as Dreyfus and
Insurance Company shall agree from time to time.
b. Distribution expenses of any Participating Fund materials or
marketing materials for prospective Insurance Company
Contractholders and Participants.
c. Distribution expenses of any Participating Fund materials or
marketing materials for Insurance Company Contractholders and
Participants.
Except as provided herein, all other expenses of each
Participating Fund shall not be borne by Insurance Company.
ARTICLE VI 6.
EXEMPTIVE RELIEF
6.1 Insurance Company has reviewed a copy of the order dated
December 23, 1987 of the Securities and Exchange Commission under
Section 6(c) of the Act with respect to Dreyfus Variable
Investment Fund and a copy of the order dated August 23, 1989 of
the Securities and Exchange Commission under Section 6(c) of the
Act with respect to Dreyfus Life and Annuity Index Fund, Inc.
and, in particular, has reviewed the conditions to the relief set
forth in each related Notice. As set forth therein, if Dreyfus
Variable Investment Fund or Dreyfus Life and Annuity Index Fund,
Inc. is a Participating Fund, Insurance Company agrees, as
applicable, to report any potential or existing conflicts
promptly to the respective Board of Dreyfus Variable Investment
Fund and/or Dreyfus Life and Annuity Index Fund, Inc. and, in
particular, whenever contract voting instructions are
disregarded, and recognizes that it will be responsible for
assisting each applicable Board in carrying out its
responsibilities under such application. Insurance Company
agrees to carry out such responsibilities with a view to the
interests of existing Contractholders.
The Dreyfus Socially Responsible Growth Fund, Inc., if it is
a Participating Fund, shall furnish Insurance Company with a
copy of its application for an order of the Securities and
Exchange Commission under Section 6(c) of the Act for mixed
and shared funding relief, and the notice of such
application and order when issued by the SEC. Insurance
Company agrees to comply with the conditions on which such
order is issued, including reporting any potential or
existing conflicts promptly to the Board of The Dreyfus
Socially Responsible Growth Fund, Inc., and in particular
whenever Contractholder voting instructions are disregarded,
to the extent such conditions are not materially different
from the conditions of the mixed and shared funding relief
obtained by Dreyfus Variable Investment Fund and Dreyfus
Life and Annuity Index Fund, Inc., respectively; and
recognizes that it shall be responsible for assisting the
Board of The Dreyfus Socially Responsible Growth Fund, Inc.
in carrying out its responsibilities in connection with such
order. Insurance Company agrees to carry out such
responsibilities with a view to the interests of existing
Contractholders.
6.2 If a majority of the Board, or a majority of Disinterested
Board Members, determines that a material irreconcilable conflict
exists with regard to Contractholder investments in a
Participating Fund, the Board shall give prompt notice to all
Participating Companies and any other Participating Fund. If the
Board determines that Insurance Company is responsible for
causing or creating said conflict, Insurance Company shall at its
sole cost and expense, and to the extent reasonably practicable
(as determined by a majority of the Disinterested Board Members),
take such action as is necessary to remedy or eliminate the
irreconcilable material conflict. Such necessary action may
include, but shall not be limited to:
a. Withdrawing the assets allocable to the Separate Account
from the Participating Fund and reinvesting such assets in
another Participating Fund (if applicable) or a different
investment medium, or submitting the question of whether such
segregation should be implemented to a vote of all affected
Contractholders; and/or
b. Establishing a new registered management investment company.
6.3 If a material irreconcilable conflict arises as a result of
a decision by Insurance Company to disregard Contractholder
voting instructions and said decision represents a minority
position or would preclude a majority vote by all Contractholders
having an interest in a Participating Fund, Insurance Company may
be required, at the Board's election, to withdraw the investments
of the Separate Account in that Participating Fund.
6.4 For the purpose of this Article, a majority of the
Disinterested Board Members shall determine whether or not any
proposed action adequately remedies any irreconcilable material
conflict, but in no event will any Participating Fund be required
to bear the expense of establishing a new funding medium for any
Contract. Insurance Company shall not be required by this
Article to establish a new funding medium for any Contract if an
offer to do so has been declined by vote of a majority of the
Contractholders materially adversely affected by the
irreconcilable material conflict.
6.5 No action by Insurance Company taken or omitted, and no
action by the Separate Account or any Participating Fund taken or
omitted as a result of any act or failure to act by Insurance
Company pursuant to this Article VI, shall relieve Insurance
Company of its obligations under, or otherwise affect the
operation of, Article V.
ARTICLE VII 7.
VOTING OF PARTICIPATING FUND SHARES
7.1 Each Participating Fund shall provide Insurance Company with
copies, at no cost to Insurance Company, of the Participating
Fund's proxy material, reports to shareholders and other
communications to shareholders in such quantity as Insurance
Company shall reasonably require for distributing to
Contractholders or Participants.
Insurance Company shall:
(a) solicit voting instructions from Contractholders or
Participants on a timely basis and in accordance with applicable
law;
(b) vote the Participating Fund shares in accordance with
instructions received from Contractholders or Participants; and
(c) vote the Participating Fund shares for which no instructions
have been received in the same proportion as Participating Fund
shares for which instructions have been received.
Insurance Company agrees at all times to vote its
General Account shares in the same proportion as the
Participating Fund shares for which instructions have
been received from Contractholders or Participants.
Insurance Company further agrees to be responsible for
assuring that voting the Participating Fund shares for
the Separate Account is conducted in a manner
consistent with other Participating Companies.
7.2 Insurance Company agrees that it shall not, without the
prior written consent of each applicable Participating Fund
and Dreyfus, solicit, induce or encourage Contractholders to
(a) change or supplement the Participating Fund's current
investment adviser or (b) change, modify, substitute, add to
or delete from the current investment media for the
Contracts.
ARTICLE VIII 8.
MARKETING AND REPRESENTATIONS
8.1 Each Participating Fund or its underwriter shall
periodically furnish Insurance Company with the following
documents, in quantities as Insurance Company may reasonably
request:
a. Current Prospectus and any supplements thereto; and
b. Other marketing materials.
Expenses for the production of such documents shall be borne
by Insurance Company in accordance with Section 5.2 of this
Agreement.
8.2 Insurance Company shall designate certain persons or
entities that shall have the requisite licenses to solicit
applications for the sale of Contracts. No representation is
made as to the number or amount of Contracts that are to be sold
by Insurance Company. Insurance Company shall make reasonable
efforts to market the Contracts and shall comply with all
applicable federal and state laws in connection therewith.
8.3 Insurance Company shall furnish, or shall cause to be
furnished, to each applicable Participating Fund or its designee,
each piece of sales literature or other promotional material in
which the Participating Fund, its investment adviser or the
administrator is named, at least fifteen Business Days prior to
its use. No such material shall be used unless the Participating
Fund or its designee approves such material. Such approval (if
given) must be in writing and shall be presumed not given if not
received within ten Business Days after receipt of such material.
Each applicable Participating Fund or its designee, as the case
may be, shall use all reasonable efforts to respond within ten
days of receipt.
8.4 Insurance Company shall not give any information or make any
representations or statements on behalf of a Participating Fund
or concerning a Participating Fund in connection with the sale of
the Contracts other than the information or representations
contained in the registration statement or Prospectus of, as may
be amended or supplemented from time to time, or in reports or
proxy statements for, the applicable Participating Fund, or in
sales literature or other promotional material approved by the
applicable Participating Fund.
8.5 Each Participating Fund shall furnish, or shall cause to be
furnished, to Insurance Company, each piece of the Participating
Fund's sales literature or other promotional material in which
Insurance Company, including its affiliated broker-dealer, or the
Separate Account is named, at least fifteen Business Days prior
to its use. No such material shall be used unless Insurance
Company approves such material. Such approval (if given) must be
in writing and shall be presumed not given if not received within
ten Business Days after receipt of such material. Insurance
Company shall use all reasonable efforts to respond within ten
days of receipt.
8.6 Each Participating Fund shall not, in connection with the
sale of Participating Fund shares, give any information or make
any representations on behalf of Insurance Company or concerning
Insurance Company, the Separate Account, or the Contracts other
than the information or representations contained in a
registration statement or prospectus for the Contracts, as may be
amended or supplemented from time to time, or in published
reports for the Separate Account that are in the public domain or
approved by Insurance Company for distribution to Contractholders
or Participants, or in sales literature or other promotional
material approved by Insurance Company.
8.7 For purposes of this Agreement, the phrase "sales literature
or other promotional material" or words of similar import
include, without limitation, advertisements (such as material
published, or designed for use, in a newspaper, magazine or other
periodical, radio, television, telephone or tape recording,
videotape display, signs or billboards, motion pictures or other
public media), sales literature (such as any written
communication distributed or made generally available to
customers or the public, including brochures, circulars, research
reports, market letters, form letters, seminar texts, or reprints
or excerpts of any other advertisement, sales literature, or
published article), educational or training materials or other
communications distributed or made generally available to some or
all agents or employees, registration statements, prospectuses,
statements of additional information, shareholder reports and
proxy materials, and any other material constituting sales
literature or advertising under National Association of
Securities Dealers, Inc. rules, the Act or the 1933 Act.
ARTICLE IX 9.
INDEMNIFICATION
9.1 Insurance Company agrees to indemnify and hold harmless each
Participating Fund, Dreyfus, each respective Participating Fund's
investment adviser and sub-investment adviser (if applicable),
each respective Participating Fund's distributor, and their
respective affiliates, and each of their directors, trustees,
officers, employees, agents and each person, if any, who controls
or is associated with any of the foregoing entities or persons
within the meaning of the 1933 Act (collectively, the
"Indemnified Parties" for purposes of Section 9.1), against any
and all losses, claims, damages or liabilities joint or several
(including any investigative, legal and other expenses reasonably
incurred in connection with, and any amounts paid in settlement
of, any action, suit or proceeding or any claim asserted) for
which the Indemnified Parties may become subject, under the 1933
Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect to thereof) (i) arise out of
or are based upon any untrue statement or alleged untrue
statement of any material fact contained in information furnished
by Insurance Company for use in the registration statement or
Prospectus or sales literature or advertisements of the
respective Participating Fund or with respect to the Separate
Account or Contracts, or arise out of or are based upon the
omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; (ii) arise out of or as a result of
conduct, statements or representations (other than statements or
representations contained in the Prospectus and sales literature
or advertisements of the respective Participating Fund) of
Insurance Company or its agents, with respect to the sale and
distribution of Contracts for which the respective Participating
Fund's shares are an underlying investment; (iii) arise out of
the wrongful conduct of Insurance Company or persons under its
control with respect to the sale or distribution of the Contracts
or the respective Participating Fund's shares; (iv) arise out of
Insurance Company's incorrect calculation and/or untimely
reporting of net purchase or redemption orders; or (v) arise out
of any breach by Insurance Company of a material term of this
Agreement or as a result of any failure by Insurance Company to
provide the services and furnish the materials or to make any
payments provided for in this Agreement. Insurance Company will
reimburse any Indemnified Party in connection with investigating
or defending any such loss, claim, damage, liability or action;
provided, however, that with respect to clauses (i) and (ii)
above Insurance Company will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises
out of or is based upon any untrue statement or omission or
alleged omission made in such registration statement, prospectus,
sales literature, or advertisement in conformity with written
information furnished to Insurance Company by the respective
Participating Fund specifically for use therein. This indemnity
agreement will be in addition to any liability which Insurance
Company may otherwise have.
9.2 Each Participating Fund severally agrees to indemnify and
hold harmless Insurance Company, its affiliated broker-dealer,
and each of their directors, officers, employees, agents and each
person, if any, who controls Insurance Company within the meaning
of the 1933 Act against any losses, claims, damages or
liabilities to which Insurance Company or any such director,
officer, employee, agent or controlling person may become
subject, under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
(1) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the
registration statement or Prospectus or sales literature or
advertisements of the respective Participating Fund; (2) arise
out of or are based upon the omission to state in the
registration statement or Prospectus or sales literature or
advertisements of the respective Participating Fund any material
fact required to be stated therein or necessary to make the
statements therein not misleading; or (3) arise out of or are
based upon any untrue statement or alleged untrue statement of
any material fact contained in the registration statement or
Prospectus or sales literature or advertisements with respect to
the Separate Account or the Contracts and such statements were
based on information provided to Insurance Company by the
respective Participating Fund; and the respective Participating
Fund will reimburse any legal or other expenses reasonably
incurred by Insurance Company or any such director, officer,
employee, agent or controlling person in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the respective
Participating Fund will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or omission or alleged
omission made in such registration statement, Prospectus, sales
literature or advertisements in conformity with written
information furnished to the respective Participating Fund by
Insurance Company specifically for use therein. This indemnity
agreement will be in addition to any liability which the
respective Participating Fund may otherwise have.
9.3 Each Participating Fund severally shall indemnify and hold
Insurance Company harmless against any and all liability, loss,
damages, costs or expenses which Insurance Company may incur,
suffer or be required to pay due to the respective Participating
Fund's (1) incorrect calculation of the daily net asset value,
dividend rate or capital gain distribution rate; (2) incorrect
reporting of the daily net asset value, dividend rate or capital
gain distribution rate; and (3) untimely reporting of the net
asset value, dividend rate or capital gain distribution rate;
provided that the respective Participating Fund shall have no
obligation to indemnify and hold harmless Insurance Company if
the incorrect calculation or incorrect or untimely reporting was
the result of incorrect information furnished by Insurance
Company or information furnished untimely by Insurance Company or
otherwise as a result of or relating to a breach of this
Agreement by Insurance Company.
9.4 Promptly after receipt by an indemnified party under this
Article of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under this Article, notify
the indemnifying party of the commencement thereof. The omission
to so notify the indemnifying party will not relieve the
indemnifying party from any liability under this Article IX,
except to the extent that the omission results in a failure of
actual notice to the indemnifying party and such indemnifying
party is damaged solely as a result of the failure to give such
notice. In case any such action is brought against any
indemnified party, and it notified the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein and, to the extent that it may wish, assume
the defense thereof, with counsel satisfactory to such
indemnified party, and to the extent that the indemnifying party
has given notice to such effect to the indemnified party and is
performing its obligations under this Article, the indemnifying
party shall not be liable for any legal or other expenses
subsequently incurred by such indemnified party in connection
with the defense thereof, other than reasonable costs of
investigation. Notwithstanding the foregoing, in any such
proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties
to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests
between them. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written
consent.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the indemnification contained in
this Article IX. The provisions of this Article IX shall
survive termination of this Agreement.
9.5 Insurance Company shall indemnify and hold each respective
Participating Fund, Dreyfus and sub-investment adviser of
the Participating Fund harmless against any tax liability
incurred by the Participating Fund under Section 851 of the
Code arising from purchases or redemptions by Insurance
Company's General Accounts or the account of its affiliates.
ARTICLE X 10.
COMMENCEMENT AND TERMINATION
10.1 This Agreement shall be effective as of the date hereof and
shall continue in force until terminated in accordance with the
provisions herein.
10.2 This Agreement shall terminate without penalty:
a. As to any Participating Fund, at the option of Insurance
Company or the Participating Fund at any time from the date
hereof upon 180 days' notice, unless a shorter time is agreed to
by the respective Participating Fund and Insurance Company;
b. As to any Participating Fund, at the option of Insurance
Company, if shares of that Participating Fund are not reasonably
available to meet the requirements of the Contracts as determined
by Insurance Company. Prompt notice of election to terminate
shall be furnished by Insurance Company, said termination to be
effective ten days after receipt of notice unless the
Participating Fund makes available a sufficient number of shares
to meet the requirements of the Contracts within said ten-day
period;
c. As to a Participating Fund, at the option of Insurance
Company, upon the institution of formal proceedings against that
Participating Fund by the Commission, National Association of
Securities Dealers or any other regulatory body, the expected or
anticipated ruling, judgment or outcome of which would, in
Insurance Company's reasonable judgment, materially impair that
Participating Fund's ability to meet and perform the
Participating Fund's obligations and duties hereunder. Prompt
notice of election to terminate shall be furnished by Insurance
Company with said termination to be effective upon receipt of
notice;
d. As to a Participating Fund, at the option of each
Participating Fund, upon the institution of formal proceedings
against Insurance Company by the Commission, National Association
of Securities Dealers or any other regulatory body, the expected
or anticipated ruling, judgment or outcome of which would, in the
Participating Fund's reasonable judgment, materially impair
Insurance Company's ability to meet and perform Insurance
Company's obligations and duties hereunder. Prompt notice of
election to terminate shall be furnished by such Participating
Fund with said termination to be effective upon receipt of
notice;
e. As to a Participating Fund, at the option of that
Participating Fund, if the Participating Fund shall determine, in
its sole judgment reasonably exercised in good faith, that
Insurance Company has suffered a material adverse change in its
business or financial condition or is the subject of material
adverse publicity and such material adverse change or material
adverse publicity is likely to have a material adverse impact
upon the business and operation of that Participating Fund or
Dreyfus, such Participating Fund shall notify Insurance Company
in writing of such determination and its intent to terminate this
Agreement, and after considering the actions taken by Insurance
Company and any other changes in circumstances since the giving
of such notice, such determination of the Participating Fund
shall continue to apply on the sixtieth (60th) day following the
giving of such notice, which sixtieth day shall be the effective
date of termination;
f. As to a Participating Fund, upon termination of the
Investment Advisory Agreement between that Participating Fund and
Dreyfus or its successors unless Insurance Company specifically
approves the selection of a new Participating Fund investment
adviser after having been given a reasonable opportunity to do
so. Such Participating Fund shall promptly furnish notice of
such termination to Insurance Company;
g. As to a Participating Fund, in the event that Participating
Fund's shares are not registered, issued or sold in accordance
with applicable federal law, or such law precludes the use of
such shares as the underlying investment medium of Contracts
issued or to be issued by Insurance Company. Termination shall
be effective immediately as to that Participating Fund only upon
such occurrence without notice;
h. At the option of a Participating Fund upon a determination
by its Board in good faith that it is no longer advisable and in
the best interests of shareholders of that Participating Fund to
continue to operate pursuant to this Agreement. Termination
pursuant to this Subsection (h) shall be effective upon notice by
such Participating Fund to Insurance Company of such termination;
i. At the option of a Participating Fund if the Contracts cease
to qualify as annuity contracts or life insurance policies, as
applicable, under the Code, or if such Participating Fund
reasonably believes that the Contracts may fail to so qualify;
j. At the option of any party to this Agreement, if another
party shall breach any material provision of this Agreement and
such breach continues to be unremedied for a period of thirty
days after the receipt of written notice specifying such breach.
The right to cure a breach of a material provision of this
Agreement pursuant to this paragraph will not be available, and
this Agreement shall terminate immediately at the option of the
non-breaching party, with respect to a second breach of the same
or a substantially similar material provision of this Agreement
within any six month period after notice of the cure of the
initial breach;
k. At the option of a Participating Fund, if the Contracts are
not registered, issued or sold in accordance with applicable
federal and/or state law; or
l. Upon assignment of this Agreement, unless made with the
written consent of every other non-assigning party.
m. As to a Participating Fund, at the option of Insurance
Company, if Insurance Company shall determine, in its sole
judgment reasonably exercised in good faith, that the
Participating Fund has suffered a material adverse change in its
business or financial condition or is the subject of material
adverse publicity and such material adverse change or material
adverse publicity is likely to have a material adverse impact
upon the business and operation of Insurance Company, in which
case Insurance Company shall notify the Participating Fund in
writing of such determination and its intent to terminate this
Agreement, and after considering the actions taken by the
Participating Fund and any other changes in circumstances since
the giving of such notice, such determination of Insurance
Company shall continue to apply on the sixtieth (60th) day
following the giving of such notice, which sixtieth day shall be
the effective date of termination.
n. As to a Participating Fund, if the Participating
Fund fails to qualify as a regulated investment company
under Subchapter M of the Code, or fails to manage and
invest in a manner that complies with the requirements
of Section 817(h) of the Code.
Any such termination pursuant to Section 10.2a, 10.2d,
10.2e, 10.2f or 10.2k herein shall not affect the operation
of Article V of this Agreement. Any termination of this
Agreement shall not affect the operation of Article IX of
this Agreement.
10.3 Notwithstanding any termination of this Agreement pursuant
to Section 10.2 hereof, Insurance Company, at its option,
may continue to purchase additional shares of that
Participating Fund, as provided below, pursuant to the terms
and conditions of this Agreement for all Contracts in effect
on the effective date of termination of this Agreement
(hereinafter referred to as "Existing Contracts"). Under
such circumstances, only the owners of the Existing
Contracts or Insurance Company, whichever shall have legal
authority to do so, shall be permitted to reallocate
investments in that Participating Fund, redeem investments
in that Participating Fund and/or invest in that
Participating Fund upon the making of additional purchase
payments under the Existing Contracts. Furthermore, the
provisions of this Agreement shall remain in effect and
thereafter either that Participating Fund or Insurance
Company may terminate the Agreement as to that Participating
Fund, as so continued pursuant to this Section 10.3, upon
prior written notice to the other party, such notice to be
for a period that is reasonable under the circumstances but,
if given by the Participating Fund, need not be for longer
than the greater of (i) six months or (ii) the period
required by Insurance Company to obtain any necessary
approval from the Commission or any state insurance
regulatory authority provided that Insurance Company makes a
reasonable good faith effort to obtain such approvals in a
reasonable period of time.
10.4 Termination of this Agreement as to any one Participating
Fund shall not be deemed a termination as to any other
Participating Fund unless Insurance Company or such other
Participating Fund, as the case may be, terminates this
Agreement as to such other Participating Fund in accordance
with this Article X.
ARTICLE XI 11.
AMENDMENTS
11.1 Any other changes in the terms of this Agreement, except for
the addition or deletion of any Participating Fund as
specified in Exhibit A, shall be made by agreement in
writing between Insurance Company and each respective
Participating Fund.
ARTICLE XII
NOTICE
12.1 Each notice required by this Agreement shall be given by
certified mail, return receipt requested, to the appropriate
parties at the following addresses:
Insurance Company: Kansas City Life
Insurance Company
0000 Xxxxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxx
Participating Funds: [Name of Fund]
c/o Premier Mutual Fund Services, Inc.
000 Xxxx Xxxxxx,
0xx Xxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxxx Xxxxxx, Esq.
with copies to: [Name of Fund]
c/o The Dreyfus Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Xxxxxxxx X. Xxxxxxx, Esq.
Stroock & Stroock & Xxxxx
0 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxx X. Xxxx, Esq.
Xxxxxx X. Xxxxxxx, Esq.
Notice shall be deemed to be given on the date of receipt by
the addresses as evidenced by the return receipt.
ARTICLE XIII 12.
MISCELLANEOUS
13.1 This Agreement has been executed on behalf of each party by
the undersigned officer in his/her capacity as an officer.
The obligations of this Agreement shall only be binding upon
the assets and property of the party and shall not be
binding upon any director, trustee, officer or shareholder
of the individually. It is agreed that the obligations of
the Funds are several and not joint, that no Fund shall be
liable for any amount owing by another Fund and that the
Funds have executed one instrument for convenience only.
13.2 Each party shall cooperate with each other party in
connection with inquiries by appropriate governmental
authorities (including without limitation the Commission,
the National Association of Securities Dealers and state
insurance regulators) relating to this Agreement or the
transactions contemplated by this Agreement.
13.3 The rights, remedies and obligations contained in this
Agreement are cumulative and are in addition to any and all
rights, remedies and obligations, at law or in equity, which
the parties are entitled to under state and federal laws.
13.4 Subject to the requirement of legal process and regulatory
authority, each party shall treat as confidential the names
and addresses of the Contractholders and all information
reasonably identified as confidential in writing by any
other party and, except as permitted by this Agreement or as
otherwise required by applicable law or regulation, shall
not disclose, disseminate or utilize such names and
addresses and other confidential information without the
written consent of the affected party until such time as it
may come into the public domain.
13.5 The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of
the provisions of this Agreement or otherwise affect their
construction or effect.
13.6 If any provision of this Agreement shall be held invalid by
a court decision, statute, rule or otherwise, the remainder
of the Agreement shall not be affected.
ARTICLE XIV 13.
LAW
14.1 This Agreement shall be construed in accordance with the
internal laws of the State of New York, without giving
effect to principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement to be duly executed and attested as of the date first
above written.
KANSAS CITY LIFE INSURANCE COMPANY
By:
Its:
Attest:_____________________
DREYFUS LIFE AND ANNUITY INDEX FUND,
INC. (d/b/a DREYFUS STOCK INDEX FUND)
By:
Its:
Attest:_____________________
THE DREYFUS SOCIALLY RESPONSIBLE GROWTH
FUND, INC.
By:
Its:
Attest:_____________________
DREYFUS VARIABLE INVESTMENT FUND
By:
Its:
Attest:_____________________
EXHIBIT A
LIST OF PARTICIPATING FUNDS
Dreyfus Stock Index Fund
Dreyfus Variable Investment Fund:
Small Cap Portfolio
Capital Appreciation Portfolio
