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Exhibit 4
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000
X.X. XXX 000000, XXXXXXXX, XXXX 00000-0000
0-000-000-0000 (for any inquiries)
CERTIFICATE AGREEMENT
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Certificate Effective Date
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Certificate Owner Name Date of Birth Social Security Number
Nationwide Life and Annuity Insurance Company issues this Certificate of
Participation ("Certificate Agreement") to the Certificate Owner named below.
The terms of the Certificate Owner's rights, benefits, and options are shown in
the following pages.
This Certificate Agreement describes the Certificate Owner's rights and
benefits. It is not part of, nor does it modify any provisions of the Contract.
Group Contract Number: FHL -661
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Group Contract Holder: Trustee, Nationwide BEST OF AMERICA(R) Group Master Trust
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Re:
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(Name of B/D) (Indicate NQ, XXX, 403(b) Non-ERISA, 401(a)
investment only, Sep XXX, Simple XXX, Spousal
XXX, Xxxx XXX, CRTs, ORPs)
TEN DAY LOOK
TO BE SURE THAT THE CERTIFICATE OWNER IS SATISFIED WITH THIS CERTIFICATE
AGREEMENT, THE CERTIFICATE OWNER HAS A TEN DAY "LOOK". WITHIN TEN DAYS OF THE
DAY THE CERTIFICATE AGREEMENT IS RECEIVED BY THE CERTIFICATE OWNER, IT MAY BE
RETURNED TO THE HOME OFFICE OF THE COMPANY OR THE AGENT THROUGH WHOM IT WAS
PURCHASED. WHEN THE CERTIFICATE AGREEMENT IS RECEIVED AT THE HOME OFFICE, THE
COMPANY WILL VOID THE CERTIFICATE AGREEMENT AS THOUGH IT HAD NEVER BEEN IN FORCE
AND THE CERTIFICATE ACCOUNT VALUE WILL BE REFUNDED IN FULL.
FOR IRAS, IF THE CERTIFICATE OWNER RETURNS THE CERTIFICATE AGREEMENT WITHIN THE
"TEN DAY LOOK" PERIOD, THE COMPANY WILL RETURN THE PURCHASE PAYMENT.
/s/ XXXXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
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Xxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
Secretary President
READ YOUR CONTRACT CAREFULLY
Group Flexible Purchase Payment Deferred Variable Annuity, Non-Participating
ANNUITY PAYMENTS, DEATH BENEFITS, SURRENDER VALUES, AND OTHER CERTIFICATE
ACCOUNT VALUES PROVIDED BY THIS CERTIFICATE AGREEMENT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, OR WHEN SUBJECT TO A MARKET VALUE
ADJUSTMENT, ARE VARIABLE, MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE
FLUCTUATIONS IN THE NET INVESTMENT FACTOR OR APPLICATION OF A MARKET VALUE
ADJUSTMENT, AS APPLICABLE, AND ARE NOT GUARANTEED AS TO FIXED-DOLLAR AMOUNT,
UNLESS OTHERWISE SPECIFIED.
NOTICE - The details of the variable provisions in the Certificate Agreement
may be found on Pages 8, 11, 12, and 22.
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CONTENTS
DATA PAGE.................................................................................INSERT
CONTENTS.......................................................................................2
DEFINITIONS....................................................................................4
GENERAL PROVISIONS.............................................................................7
Certificate Account
Entire Certificate Agreement
Non-Participating
Incontestability
Certificate Agreement Settlement
Evidence of Survival
Alteration or Modification
Assignment
Protection of Proceeds
Misstatement of Age or Sex
Reports
Number
DEDUCTIONS AND CHARGES.........................................................................8
Certificate Account Maintenance Charge
Variable Account Charge
Deduction for Premium Taxes
OWNERSHIP PROVISIONS...........................................................................8
Certificate Ownership
Joint Certificate Ownership
Contingent Certificate Ownership
Annuitant
Contingent Annuitant
Beneficiary
Changes of Parties Named in the Certificate Agreement
ACCUMULATION PROVISIONS.......................................................................10
Purchase Payments
Allocation of Purchase Payments
Fixed Account Provisions
Variable Account Provisions
Accumulation Unit Value
Valuation of Underlying Mutual Fund Shares
Substitution of Underlying Mutual Fund Shares
Net Investment Factor
Guaranteed Term Options (GTOs)
Market Value Adjustment (MVA) Formula
TRANSFERS, SURRENDERS, AND WITHDRAWALS........................................................14
Transfer Provisions
Surrenders
Restrictions on Surrenders for Certain Qualified Plans, TSAs, and IRAs
Surrender Value
Suspension or Delay of Surrender
Contingent Deferred Sales Charge (CDSC)
Withdrawals Without Charge
Systematic Withdrawals
LOANS.........................................................................................17
REQUIRED DISTRIBUTION PROVISIONS..............................................................18
Required Distribution-Non-Qualified Certificate Agreements
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Required Distribution-TSAs, IRAs, and Certificate Agreements Issued under
Qualified Plans
DEATH PROVISIONS..............................................................................20
Death of Certificate Owner
Death of Certificate Owner/Annuitant
Death of Annuitant
Death Benefit Payment
Death Benefit
ANNUITIZATION PROVISIONS......................................................................21
Annuity Commencement Date
Change of Annuity Commencement Date and Annuity Payment Option
Annuitization
Fixed Payment Annuity-First and Subsequent Payments
Variable Payment Annuity-First Payment
Variable Payment Annuity-Subsequent Payments
Annuity Unit Value
Frequency and Amount of Payments
ANNUITY PAYMENT OPTIONS.......................................................................23
Selection of Annuity Payment Option
Life Annuity
Joint and Survivor Annuity
Life Annuity With 120 or 240 Monthly Payments Guaranteed
Any Other Option
Supplementary Agreement
TABLES........................................................................................25
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DEFINITIONS
ACCUMULATION UNIT - An accounting unit of measure used to calculate the Variable
Account value prior to the Annuitization Date.
ANNUITANT - The person upon whose continuation of life any annuity payments
involving life contingencies depends.
ANNUITIZATION - The period during which annuity payments are received by the
Annuitant.
ANNUITIZATION DATE - The date the annuity payments actually commence.
ANNUITY COMMENCEMENT DATE - The date on which annuity payments are scheduled to
commence.
ANNUITY PAYMENT OPTION - The chosen form of annuity payments. Several options
are available under the Certificate Agreement.
ANNUITY UNIT - An accounting unit of measure used to calculate the value of
variable annuity payments.
BENEFICIARY - The person designated to receive certain benefits under the
Certificate Agreement upon the death of the Annuitant, if there is no surviving
Joint Certificate Owner, prior to the Annuitization Date.
CERTIFICATE AGREEMENT - The document which describes a Certificate Owner's
rights and benefits.
CERTIFICATE ACCOUNT - An account in which all financial transactions of the
Certificate Owner occurring under the Certificate Agreement prior to the
Annuitization Date are recorded.
CERTIFICATE ACCOUNT VALUE - With respect to each Certificate Account, the sum of
the value of all Accumulation Units, plus any amount attributable to the Fixed
Account, plus any amount held under a Guaranteed Term Option (GTO) which may be
subject to a MVA.
CERTIFICATE ANNIVERSARY - Each 12-month anniversary of the Certificate Effective
Date.
CERTIFICATE EFFECTIVE DATE - The date the first Purchase Payment is applied to
the Certificate Account.
CERTIFICATE OWNER (OWNER(S)) - The person who possesses all rights under the
Certificate Agreement, including the right to designate and change parties named
in the Certificate Agreement, Annuity Payment Option, and the Annuity
Commencement Date. The Certificate Owner is the person named as owner on the
Enrollment Card unless a subsequent change is made.
CERTIFICATE YEAR - Each year the Certificate Agreement remains in force
commencing with the Certificate Effective Date.
CHARITABLE REMAINDER TRUST (CRT) - A charitable remainder annuity trust or a
charitable remainder unitrust as those terms are defined in Section 664 of the
Code.
CODE - The Internal Revenue Code of 1986, as amended.
COMPANY - Nationwide Life and Annuity Insurance Company.
CONSTANT MATURITY TREASURY RATE(S) OR CMT RATE(S) - Interest rate quotations for
1, 2, 3, 5, 7 and 10 years published by the Federal Reserve Board on a regular
basis. The Company uses CMT Rates in its Market Value Adjustment (MVA) Formula
because they represent a readily available and consistently reliable interest
rate benchmark in financial markets.
CONTINGENT ANNUITANT - The Contingent Annuitant may be the recipient of certain
rights or benefits under the Certificate Agreement when the Annuitant dies
before the Annuitization Date.
CONTINGENT BENEFICIARY - The person or entity designated to be the Beneficiary
if the named Beneficiary is not living at the time of the death of the
Annuitant.
CONTINGENT CERTIFICATE OWNER - A Contingent Certificate Owner succeeds to the
rights of a Certificate Owner upon the Certificate Owner's death before
Annuitization if there is no Joint Certificate Owner.
CONTRACT - The Group Flexible Purchase Payment Deferred Variable Annuity issued
to the Contract Holder.
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CONTRACT HOLDER - The entity named on the face page. The Contract Holder
possesses no rights under the Certificate Agreement.
DEATH BENEFIT - The benefit that is payable upon the death of the Annuitant,
unless a Contingent Annuitant has been named. If the Annuitant dies after the
Annuitization Date, any benefit that may be payable shall be as specified in the
Annuity Payment Option elected.
DISABILITY - Being unable to engage in any substantial gainful activity by
reason of a medically determinable physical or mental impairment, which can be
expected to result in death or to be of long-continued and indefinite duration.
DISTRIBUTION - Any payment of part or all of a Certificate Owner's Certificate
Account Value.
ENROLLMENT CARD - The form required for participation in the Contract.
FIXED ACCOUNT - The portion of the Certificate Account which is held under the
general account of the Company.
FIXED PAYMENT ANNUITY - An annuity providing for payments, which are guaranteed
by the Company as to dollar amount during Annuitization.
GUARANTEED TERM - The 3, 5, 7 or 10 year period corresponding respectively to a
3, 5, 7 or 10 year Guaranteed Term Option (GTO). Because every Guaranteed Term
will end on the last day of a calendar quarter, the Guaranteed Term may last for
up to 3 months beyond the 3, 5, 7 or 10 year anniversary of the allocation to
the Guaranteed Term Option (GTO).
GUARANTEED TERM OPTION (GTO) - A funding option offered under the Certificate
Agreement which provides a guaranteed interest rate (the Specified Interest
Rate), paid over certain maturity duration's (the Guaranteed Term), so long as
certain conditions are met.
HOME OFFICE - The main office of the Company located in Columbus, Ohio.
INDIVIDUAL RETIREMENT ANNUITY (XXX) - An annuity which qualifies for favorable
tax treatment under Section 408 of the Internal Revenue Code which is
established for the exclusive benefit of the Owner or the Owner's beneficiaries.
This does not include Xxxx XXX - see definition Xxxx XXX.
INTEREST RATE GUARANTEE PERIOD - The interval of time during which an interest
rate credited to the Fixed Account is guaranteed to remain the same.
INVESTMENT PERIOD - The period of time beginning with a declaration by the
Company of new GTO interest rates (the different Specified Interest Rates for
each of the GTOs) and ending with the subsequent declaration of new Specified
Interest Rates by the Company.
JOINT CERTIFICATE OWNER - The Joint Certificate Owner, if any, possesses an
undivided interest in the entire Certificate Agreement in conjunction with the
Certificate Owner. If a Joint Certificate Owner is named, references to
Certificate Owner and Joint Certificate Owner will apply to both the Owner and
the Joint Certificate Owner, or either of them, unless the context requires
otherwise.
MARKET VALUE ADJUSTMENT (MVA) - The upward or downward adjustment in value of
amounts allocated to a GTO which prior to the Maturity Period for the GTO are:
1) distributed pursuant to a surrender; 2) reallocated to another investment
option available under this Certificate Agreement; 3) distributed pursuant to
the death of the Owner or Annuitant; or 4) annuitized under this Certificate
Agreement at any time other than the Maturity Period.
MVA FACTOR - The value multiplied by the Specified Value or that portion of the
Specified Value being distributed from a GTO, in order to effect an MVA.
MVA FORMULA - The MVA Formula is utilized when a distribution is made from a GTO
during the Guaranteed Term which is subject to an MVA.
MATURITY DATE - The date on which a particular GTO matures. Such date will be
the last day of a calendar quarter in which the third, fifth, seventh or tenth
anniversary of the date on which amounts are allocated to a 3, 5, 7 or 10 year
GTO, respectively.
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MATURITY PERIOD - The period of time during which the value of amounts allocated
under a GTO may be distributed without any MVA. The Maturity Period shall begin
on the day following the Maturity Date and will end on the thirtieth day
thereafter.
MINIMUM DISTRIBUTION -The amount that is required to be withdrawn from Qualified
Plans, Tax Sheltered Annuities (TSAs) and IRAs to meet distribution requirements
established by the Code.
MULTIPLE MATURITY ACCOUNT - A separate account of the Company established for
the purpose of facilitating accounting and investment processes associated with
the offering of GTOs under the Certificate Agreements.
NON-QUALIFIED CERTIFICATE - A certificate which does not qualify for favorable
tax treatment under the provisions of Sections 403(a) (Qualified Plans), 408
(IRAs), 403(b) (TSAs) or 408A (Xxxx IRAs) of the Code.
PHYSICIAN - A doctor of medicine or osteopathy legally authorized to practice
medicine and surgery by the state in which he performs such function or action.
This person cannot be the Certificate Owner, Contingent Certificate Owner,
Annuitant, Contingent Annuitant, Beneficiary, Contingent Beneficiary, nor a
member of the immediate family of these persons.
PURCHASE PAYMENT(S) - A deposit of new value into the Certificate Account. The
term Purchase Payment does not include transfers between the Variable Account
and Fixed Account, among the Sub-Accounts or to or from a GTO.
PURCHASE PAYMENT YEAR - Each 12-month period starting from the date each
Purchase Payment is made.
QUALIFIED PLAN(S) - A retirement plan that receives favorable tax treatment
under the provisions of Section 401 or 403(b) of the Code.
XXXX XXX - An individual retirement annuity meeting the requirements of Section
408A of the Code.
SPECIFIED INTEREST RATE - The interest rate guaranteed to be credited to amounts
allocated under a selected GTO so long as such allocations are not distributed
for any reason from the GTO prior to the GTO Maturity Period or Maturity Date.
SPECIFIED VALUE - The amount of a GTO allocation minus withdrawals and transfers
out of the GTO, plus interest accrued at the Specified Interest Rate. The
Specified Value is subject to an MVA at all times other than during the Maturity
Period.
SUB-ACCOUNTS - Separate and distinct divisions of the Variable Account to which
specific Underlying Mutual Fund shares are allocated and for which Accumulation
Units and Annuity Units are separately maintained.
TAX SHELTERED ANNUITIES (TSA) - An annuity, which qualifies for favorable tax
treatment under Section 403(b) of the Code.
TERMINAL ILLNESS - An illness, diagnosed by a Physician, which is expected to
result in death within 12 months of diagnosis. The diagnosis of Terminal Illness
must occur after the Certificate Agreement is in force.
UNDERLYING MUTUAL FUND(S) - The registered management investment companies in
which the assets of the Sub-Accounts of the Variable Account will be invested.
VALUATION DATE - Each day the New York Stock Exchange and the Company's Home
Office are open for business.
VALUATION PERIOD - The period of time commencing at the close of a Valuation
Date and ending at the close of business for the next succeeding Valuation Date.
VARIABLE ACCOUNT - A separate investment account of the Company into which
Variable Account Purchase Payments are allocated.
VARIABLE PAYMENT ANNUITY - An annuity providing payments, which are not
predetermined or guaranteed as to dollar amount and which vary in amount with
the investment experience of the Variable Account.
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GENERAL PROVISIONS
CERTIFICATE ACCOUNT
The Company shall establish and maintain a Certificate Account for each
Certificate Owner. The Certificate Agreement is established for the exclusive
benefit of the Certificate Owner or the Certificate Owner's beneficiaries. Each
Certificate Owner's Purchase Payments will be credited to the Certificate
Account.
ENTIRE CERTIFICATE AGREEMENT
The Certificate Agreement, riders, and endorsements, if any, make up the entire
agreement between the Company and the Certificate Owner. The Contract Holder
delegates rights to each Certificate Owner with respect to the Certificate
Owner's Certificate Account. Statements in the Certificate Agreement are deemed
representations and not warranties.
NON-PARTICIPATING
The Certificate Agreement is non-participating. It will not share in the surplus
of the Company.
INCONTESTABILITY
The Certificate Agreement, riders, and endorsements will not be contested.
CERTIFICATE AGREEMENT SETTLEMENT
The Company may require that the Certificate Agreement be returned to the Home
Office prior to making any payments. All sums payable to or by the Company under
this Certificate Agreement are payable at the Home Office.
EVIDENCE OF SURVIVAL
Where any payments under this Certificate Agreement depend on the recipient
being alive on a given date, the Company may require proof that such person is
living. Such proof may be required prior to making the payments.
ALTERATION OR MODIFICATION
All changes in or to the terms of the Certificate Agreement must be made in
writing and signed by the President or Secretary of the Company. No other person
can alter or change any of the terms or conditions of the Certificate Agreement.
Provisions of the Certificate Agreement may be modified or superseded as
required by the terms of the Qualified Plan or applicable law. Where required,
other changes to the Certificate Agreement will be made only with mutual
agreement of the Company and the Certificate Owner. As required, a copy of the
amendment will be furnished to the Certificate Owner.
The Company reserves the right as of a specified date to: (1) discontinue the
Fixed Account option for any new Certificate Owner; and (2) not accept future
deposits into the Fixed Account from existing Certificate Owners.
ASSIGNMENT
If permitted, a Certificate Owner may assign some or all rights under the
Certificate Agreement. Such assignment must be made in writing and executed by
the Certificate Owner during the lifetime of the Annuitant and prior to the
Annuitization Date. The assignment will take effect on the date it is recorded
by the Company at its Home Office. The assignment will not be recorded until the
Company has received sufficient direction from the Certificate Owner and
assignee as to the proper allocation of Certificate Agreement rights under the
assignment.
The Company is not responsible for the validity of tax consequences of any
assignment or for any payment or other settlement made prior to the Company's
recording of the assignment.
Certificate Agreements issued to fund a retirement plan pursuant to Sections
403, 408 or 408A of the Code, may not be sold, discounted, assigned, pledged or
transferred for the performance of any obligation to any person other than the
Certificate Owner or other person exercising ownership rights under the terms of
the plan, or as otherwise allowed by applicable law.
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PROTECTION OF PROCEEDS
Proceeds under this Certificate Agreement are not assignable by any Beneficiary
prior to the time such proceeds become payable. To the extent permitted by
applicable law, proceeds are not subject to the claims of creditors or to legal
process.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Annuitant has been misstated, all payments and benefits
under the Certificate Agreement will be adjusted. Payments and benefits will be
made, based on the correct age or sex. Proof of age of an Annuitant may be
required at any time, in a form satisfactory to the Company. When the age or sex
of an Annuitant has been misstated, the dollar amount of any overpayment will be
deducted from the next payment or payments due under the Certificate Agreement.
The dollar amount of any underpayment made by the Company as a result of any
such misstatement will be paid in full with the next payment due under the
Certificate Agreement.
REPORTS
Prior to the Annuitization Date, a report showing the Certificate Account Value
will be provided to the Certificate Owner at least once each year.
NUMBER
Unless otherwise provided, all references in this Certificate Agreement which
are in the singular form will include the plural; all references in the plural
form will include the singular.
DEDUCTIONS AND CHARGES
CERTIFICATE ACCOUNT MAINTENANCE CHARGE
The Company will deduct a [$30] Certificate Account maintenance charge on each
Certificate Anniversary and at the time the Certificate Account is surrendered.
On any Certificate Anniversary that the Certificate Account Value is greater
than or equal to [$50,000], this charge shall be waived for that Certificate
Year. Additionally, if the Certificate Account is surrendered and the
Certificate Account Value is greater than or equal to [$50,000], this charge
shall be waived. This charge compensates the Company for administrative expenses
incurred relating to the issuance and maintenance of the Certificate Agreements.
VARIABLE ACCOUNT CHARGE
The Variable Account charge applies to allocations made to the Sub-Accounts. The
Company deducts charges from the Variable Account equal to an annual rate of
[1.35%] of the daily net assets of the Variable Account. This fee compensates
the Company for the expense and mortality risks assumed in connection with the
Death Benefit and annuity features of the Certificate Agreement.
DEDUCTION FOR PREMIUM TAXES
The Company will charge against the Certificate Account Value the amount of any
premium taxes levied by a state or any other government entity upon Purchase
Payments received by the Company. The Company at its sole discretion and in
compliance with applicable state law will determine the method used to recoup
premium taxes. The Company currently deducts such charges from a Certificate
Account Value either (1) at the time the Certificate Agreement is surrendered,
(2) at the Annuitization Date, or (3) at such earlier date as the Company may be
subject to such taxes.
OWNERSHIP PROVISIONS
CERTIFICATE OWNERSHIP
Unless otherwise provided, the Certificate Owner has all rights under the
Certificate Agreement. IF THE PURCHASER NAMES SOMEONE OTHER THAN HIMSELF AS
CERTIFICATE OWNER, THE PURCHASER WILL HAVE NO RIGHTS UNDER THE CERTIFICATE
AGREEMENT.
Unless the Certificate Owner is a CRT, the Annuitant shall become the
Certificate Owner on the Annuitization Date.
JOINT CERTIFICATE OWNERSHIP
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Joint Certificate Owners must be spouses at the time joint ownership is
requested. If a Joint Certificate Owner is named, the Joint Certificate Owner
will possess an undivided interest in the Certificate Agreement. Unless
otherwise provided, the exercise of any ownership right in the Certificate
Agreement (including the right to surrender or partially surrender the
Certificate Account; or to change the parties to the Certificate Agreement, the
Payment Option, or the Annuitization Date) shall require written request signed
by both Certificate Owners.
If a Certificate Owner who is not also the Annuitant dies before the
Annuitization Date and there is a surviving Joint Certificate Owner, the Joint
Certificate Owner shall become the Certificate Owner.
If a Certificate Owner who is also the Annuitant dies before the Annuitization
Date and there is a surviving Joint Certificate Owner, all benefits under the
Certificate Agreement are payable to the Joint Certificate Owner.
Joint Certificate Owners may be selected only for a Certificate Agreement issued
as a Non-Qualified Certificate Agreement and may not be selected when the
Certificate Owner is a CRT.
CONTINGENT CERTIFICATE OWNERSHIP
The Contingent Certificate Owner is the person who may receive certain benefits
under the Certificate Agreement, if the Certificate Owner, who is not the
Annuitant, dies prior to the Annuitization Date and there is no surviving Joint
Certificate Owner. If more than one Contingent Certificate Owner survives the
Certificate Owner, each will share equally unless otherwise specified in the
Contingent Certificate Owner designation. If no Contingent Certificate Owner
survives a Certificate Owner and there is no surviving Joint Certificate Owner,
all rights, and interest of the Certificate Agreement will vest with the last
surviving Certificate Owner's estate.
If a Certificate Owner, who is also the Annuitant, dies before the Annuitization
Date, then the Contingent Certificate Owner does not have any rights in the
Certificate Agreement. However, a surviving Contingent Certificate Owner who is
also the Beneficiary will have all the rights of a Beneficiary.
Contingent Certificate Owners may be selected only for a Certificate Agreement
issued as a Non-Qualified Certificate Agreement and may not be selected when the
Certificate Owner is a CRT.
ANNUITANT
The Annuitant is the person who will receive annuity payments upon
Annuitization. The Annuitant must be age [90] or younger at the time of
Certificate Agreement issuance unless the Company has approved a request for an
Annuitant of greater age. The Annuitant may be changed prior to the
Annuitization Date with the consent of the Company.
If the Certificate Agreement is owned by a CRT, the payments made during
Annuitization will be paid to the CRT. For Certificate Agreements that are
issued as IRAs or TSAs the Certificate Owner must be the Annuitant and the
entire interest of the Annuitant in the Certificate Agreement is nonforfeitable.
CONTINGENT ANNUITANT
If the Annuitant dies before the Annuitization Date, the Contingent Annuitant
becomes the Annuitant. All provisions of the Certificate Agreement which are
based on the death of the Annuitant prior to the Annuitization Date will be
based on the death of the last survivor of the Annuitant and Contingent
Annuitant.
A Contingent Annuitant may be selected only for a Certificate Agreement issued
as a Non-Qualified Certificate Agreement and may not be selected when the
Certificate Owner is a CRT.
BENEFICIARY
If there is no surviving Joint Certificate Owner, or if the Annuitant is someone
other than a Certificate Owner, the Beneficiary is the person who will receive
benefits under the Certificate Agreement if the Annuitant dies prior to the
Annuitization Date. If a Certificate Owner who is also the Annuitant dies before
the Annuitization Date and there is a surviving Joint Certificate Owner, all
benefits under the Certificate Agreement are payable to the surviving Joint
Certificate Owner. If more than one Beneficiary survives the Annuitant, each
will share equally unless otherwise specified in the beneficiary designation. If
there is no surviving Joint Certificate Owner and no Beneficiary survives the
Annuitant, all rights and interest of such parties will vest in the Contingent
Beneficiary, and if more than one Contingent Beneficiary survives, each will
share equally unless otherwise specified in the Contingent Beneficiary
designation. If no
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Contingent Beneficiary survives the Annuitant, all rights and interest of the
Certificate Agreement will vest with the last surviving Certificate Owner's
estate.
If the Certificate Owner is a CRT, upon the death of the Annuitant, all interest
in the Death Benefit proceeds will accrue to the CRT. Any designation which
creates a conflict with the CRT's right to such interest shall be void and of no
effect.
CHANGES OF PARTIES NAMED IN THE CERTIFICATE AGREEMENT
Notwithstanding any other provisions in the Certificate Agreement, prior to the
Annuitization Date, and subject to any existing assignments, the Certificate
Owner may request a change in the Certificate Owner, Contingent Certificate
Owner, Joint Certificate Owner, Annuitant, Contingent Annuitant, Beneficiary, or
Contingent Beneficiary. Such change, upon receipt and recording by the Company
at its Home Office, will take effect as of the time the written notice was
signed, whether or not the Certificate Owner or Annuitant are living at the time
of record, but without further liability as to any payment or settlement made by
the Company before receipt of such change is recorded at the Home Office.
Any request for change of Certificate Owner must be recorded at the Home Office,
may require a signature guarantee, and must be signed by the Certificate Owner
and the person designated as the new Certificate Owner.
Any change to the Annuitant or Contingent Annuitant is subject to underwriting
and approval by the Company. Notwithstanding any provisions in this Certificate
Agreement, for Non-Qualified certificates, if any Certificate Owner is not a
natural person, the change of the Annuitant will be treated as the death of the
Certificate Owner and will result in a distribution, regardless of whether a
Contingent Annuitant is also named. Distributions will be made as if the
Certificate Owner died at the date of such change.
For Certificate Agreements issued as IRAs, TSAs, or under Qualified Plans, the
Certificate Owner cannot transfer ownership or name someone other than him or
herself as Annuitant.
ACCUMULATION PROVISIONS
PURCHASE PAYMENTS
The Certificate Agreement is provided in return for any Purchase Payments made.
The cumulative total of all Purchase Payments under this and any other annuity
certificate agreement and/or contract issued by the Company having the same
Annuitant may not exceed $1,000,000 without the prior written consent of the
Company.
The initial Purchase Payment is due on the Certificate Effective Date and may
not be less than [$2,000]. Purchase Payments, if any, after the initial Purchase
Payment must be at least [$ 1,000] and may be made at any time.
In addition, if subsequent Purchase Payments are made via automated
clearinghouse, the minimum payment amount will be reduced to [$100].
No Purchase Payments are required after the first Purchase Payment. This
Certificate Agreement will not lapse for failure to pay subsequent Purchase
Payments.
If no Purchase Payments have been received in the Certificate Account for a
period of two full years and the paid-up annuity benefit at maturity would be
less than [$50] a month, the Company may, at its option, terminate the
Certificate Agreement by payment of the accumulated value and will by such
payment, be relieved of any obligation under the Certificate Agreement.
Except in the case of a Non-Qualified certificate or a rollover contribution (as
permitted by Section 402(c), 403(a)(4), 403(b)(8), or 408 (d)(3)) of the Code or
a contribution made in accordance with the terms of a Simplified Employee
Pension (SEP) as described in Section 408(k) of the Code, no contributions will
be accepted unless they are in cash, and the total of such contributions shall
not exceed $2,000 for any taxable year. Any refund of Purchase Payments (other
than those attributable to excess contributions) will be applied, before the
close of the calendar year following the year of the refund, toward the payment
of future Purchase Payments or the purchase of additional benefits.
For certificate agreements issued as TSAs, Purchase Payments, exclusive of
rollovers, made during any taxable year shall not exceed the Section 402(g) of
the Code limit for the calendar year in which such taxable year begins. Section
402(g) of the Code limit applies to Purchase Payments that are elective
deferrals within the meaning of
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Section 402(g)(3) of the Code and made under this Certificate Agreement and all
other certificate agreements, contracts, plans, or arrangements of the
Certificate Owner's employer. However, the maximum amount of Purchase Payments
that may be made by the Certificate Owner may be increased or decreased under
the provisions of Sections 403(b) or 415 of the Code.
ALLOCATION OF PURCHASE PAYMENTS
The Certificate Owner elects to have the Purchase Payments allocated among the
Fixed Account, the Sub-Accounts of the Variable Account, and the GTOs under the
Multiple Maturity Account. The Certificate Owner may change the allocation of
future Purchase Payments by a proper submission that is received and recorded by
the Company.
FIXED ACCOUNT PROVISIONS
The Fixed Account value at any time will be: the sum of all amounts credited to
the Fixed Account under this Certificate Agreement less any amounts canceled or
withdrawn for charges, deductions, or surrenders. Any paid up annuity cash
surrender or death benefit that may become payable from the Fixed Account will
not be less than the minimum benefits as required by the statute of any state in
which the Certificate Agreement is issued.
The Company will credit interest to the Fixed Account value. Such interest will
be credited at such rate or rates as the Company prospectively declares from
time to time, at the sole discretion of the Company. The interest rate declared
will be stated as an annual effective yield. Such rates will be declared to the
Certificate Owner in writing on quarterly statements. Any such rate or rates so
determined, for which deposits are received, will remain in effect for a period
of not less than 12 months. However, the Company guarantees that it will credit
interest at not less than [3.0%] per year or any lesser amount as permitted by
state law.
At the end of an Interest Rate Guarantee Period, a new interest rate is declared
with an Interest Rate Guarantee Period starting at the end of the prior period
and ending at the end of the calendar quarter one-year later. For new Purchase
Payments allocated to the Fixed Account or transfers from the Variable Account
or the GTOs, this period begins upon the date of deposit or transfer and ends at
the end of the calendar quarter at least one year (but not more than 15 months)
from deposit or transfer.
VARIABLE ACCOUNT PROVISIONS
The Variable Account value is the sum of the value of all Accumulation Units
under this Certificate Agreement.
The Company has allocated a part of its assets to the Certificate Agreement and
other certificate agreements and/or contracts to the Variable Account. Such
assets of the Variable Account remain the property of the Company. However, they
may not be charged with the liabilities from any other business in which the
Company may take part.
The Variable Account is divided into Sub-Accounts which invest in shares of the
Underlying Mutual Funds. Purchase Payments are allocated among one or more of
these Sub-Accounts, as designated by the Certificate Owner, and are subject to
the terms and conditions of the Underlying Mutual Funds.
ACCUMULATION UNIT VALUE
The number of Accumulation Units for each Sub-Account of the Variable Account is
found by dividing: (1) the net amount allocated to the Sub-Account; by (2) the
Accumulation Unit value for the Sub-Account for the Valuation Period during
which the Company received the Purchase Payment.
When the Underlying Mutual Fund shares were first established the value of an
Accumulation Unit for each Sub-Account of the Variable Account was arbitrarily
set at $10. The value for any later Valuation Period is found as follows:
The Accumulation Unit value for each Sub-Account for the last prior Valuation
Period is multiplied by the net investment factor for the Sub-Account for the
next following Valuation Period. The result is the Accumulation Unit value. The
value of an Accumulation Unit may increase or decrease from one Valuation Period
to the next. The number of Accumulation Units will not change as a result of
investment experience.
VALUATION OF UNDERLYING MUTUAL FUND SHARES
Underlying Mutual Fund shares in the Variable Account will be valued at their
net asset value.
SUBSTITUTION OF UNDERLYING MUTUAL FUND SHARES
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If the shares of the Underlying Mutual Funds should no longer be available for
investment by the separate account or if in the judgment of the Company's
management further investment in such Underlying Mutual Fund's shares should be
inappropriate in view of the purposes of the Certificate Agreement, the Company
may substitute shares of another Underlying Mutual Fund for Underlying Mutual
Fund shares already purchased or to be purchased in the future by purchase
payments under the Certificate Agreement.
In the event of such substitution or change, the Company may, by appropriate
endorsement, make such changes to this and other certificate agreements of this
class as may be necessary to reflect such substitution or change. Nothing
contained herein shall prevent the separate account from purchasing other
securities for other series or classes of certificate agreements and/or
contracts or from effecting a conversion between series or classes of
certificate agreements and/or contracts on the basis of requests made
individually by owners of such certificate agreements.
NET INVESTMENT FACTOR
The net investment factor is an index applied to measure the investment
performance of a Sub-Account from one Valuation Period to the next. The net
investment factor may be greater or less than one; therefore, the value of an
Accumulation Unit may increase or decrease.
The net investment factor for any Sub-Account for any Valuation Period is
determined by: dividing (1) by (2) and subtracting (3) from the result, where:
1. is the net of:
a. the net asset value per share of the Underlying Mutual Fund
held in the Sub-Account, determined at the end of the current
Valuation Period; plus
b. the per share amount of any dividend or income Distributions
made by the Underlying Mutual Fund held in the Sub-Account, if
the "ex-dividend" date occurs during the current Valuation
Period.
2. is the net result of:
a. the net asset value per share of the Underlying Mutual Fund
held in the Sub-Account, determined at the end of the last
prior Valuation Period.
b. the per share credit or charge for any taxes reserved for the
last prior Valuation Period, plus or minus
c. a per share credit or charge for any taxes reserved for, which
is determined by the Company to have resulted from the
investment operations of the Sub-Account.
3. is a factor representing the variable account charge plus additional
charges for any riders or options which become a part of the
Certificate Agreement.
For funds that credit dividends on a daily basis and pay such dividends once a
month, the net investment factor allows for the monthly reinvestment of these
daily dividends.
GUARANTEED TERM OPTIONS (GTOS)
At any particular time under this Certificate Agreement, four GTOs will be
available: a three year GTO, a five year GTO, a seven year GTO and a ten year
GTO. Amounts allocated to a three year GTO will have a Guaranteed Term of three
years, a five year GTO will have a Guaranteed Term of five years, and so on.
Regardless of the source from which a GTO allocation is made, the minimum for
each allocation is [$1,000].
GTOs are not available as funding options if the Certificate Account is
annuitized. All investment amounts allocated to a GTO must be transferred to
other investment options at the time of Annuitization. If a variable Certificate
Account is annuitized while a GTO is in effect, and prior to the Maturity Date
of the GTO, a Market Value Adjustment (MVA) will apply to amounts transferred to
other investment options under the Certificate Agreement which may be used
during Annuitization.
For the duration of the Guaranteed Term of a GTO, the Company will credit a
Specified Interest Rate on amounts remaining allocated under the GTO. The
interest rates in effect during any particular Investment Period will be
guaranteed for GTO allocations (made during the Investment Period) for the
duration of the Guaranteed Term associated with the GTO. Each GTO in the same
Investment Period has its own Specified Interest Rate for the Guaranteed Term
relating to the selected GTO. The Company, however, reserves the right to change
the Specified Interest Rate at any time for prospective allocations to GTOs.
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A MVA will apply against all amounts which are transferred or surrendered from
allocations under a GTO prior to the Maturity Period for the particular GTO.
During the Maturity Period, allocations under a GTO may be transferred,
surrendered, or distributed for any other reason without any MVA (a CDSC may
apply on amounts surrendered). At all times other than during a Maturity Period,
a MVA will apply to amounts distributed from allocations under a GTO.
At least 15 days and at most 30 days prior to the end of each calendar quarter,
variable annuity Certificate Owners having GTOs with Maturity Dates coinciding
with the end of the calendar quarter will be notified of the impending
expiration of the GTO. Certificate Owners will then have the option of directing
the withdrawal or transfer of the GTO without application of any MVA during the
Maturity Period. Withdrawals or transfers during the Maturity Period, beginning
the day after the Maturity Date and ending thirty days after the Maturity Date,
will not be subject to an MVA. For the period commencing with the first day
after the Maturity Date and ending on the thirtieth day following the Maturity
Date, the GTO will be credited with the same Specified Interest Rate in effect
before the Maturity Date.
If no such direction is received by the thirtieth day following the Maturity
Date, amounts in the GTO will be automatically transferred to a money market
sub-account of the variable annuity. The Company reserves the right to restrict
transfers into and out of the Multiple Maturity Account to one per calendar year
at all times other than during a Maturity Period.
MARKET VALUE ADJUSTMENT (MVA) FORMULA
The MVA Formula is a calculation expressing the relationship between three
factors: (1) the CMT Rate for a period equivalent to the Guaranteed Term at the
time of deposit in the GTO; (2) the CMT Rate at the time of distribution for a
period of time equivalent to the time remaining in the GTO; and (3) the number
of days remaining until the Maturity Date of the GTO. A MVA generally reflects
the relationship between the prevailing interest rates at the time of
investment, prevailing interest rates at the time of distribution, and the
amount of time remaining in the Guaranteed Term of the GTO selected. Generally,
if the Specified Interest Rate is lower than prevailing interest rates,
application of the MVA will result in a downward adjustment of amounts allocated
to a GTO. If the Specified Interest Rate is higher than prevailing interest
rates, application of the MVA will result in an upward adjustment of amounts
allocated to a GTO. The MVA is applied only when amounts allocated to a GTO are
distributed from the GTO prior to a Maturity Period. The result of the MVA
Formula is the MVA Factor.
The formula for determining the MVA Factor is:
(1 + a) t
---------------------
1 + b + 0.0025
Where:
a = the CMT Rate for a period equivalent to the Guaranteed Term
at the time of deposit in the GTO;
b = the CMT Rate at the time of distribution for a period of time
with maturity equal to the time remaining in the Guaranteed Term.
In determining the number of years to maturity, any partial year
will be counted as a full year, unless this would cause the
number of years to exceed the Guaranteed Term.
t = the number of days until the Maturity Date, divided by 365.25.
In the case of a above, the CMT Rate utilized will be the rate published by the
Federal Reserve Board, the Friday preceding the Wednesday before the Investment
Period during which the allocation to the GTO was made.
In the case of b above, the CMT Rate utilized will be the rate published the
Friday preceding the Wednesday preceding withdrawal, transfer or other
distribution giving rise to the MVA.
For periods which do not coincide with the available CMT periods, rates used in
a and b will be linearly interpolated (where the difference in rates is
proportional to the difference in years).
The MVA Factor will be equal to 1 during the Investment Period. That is, for the
period of time following a GTO allocation during which the Specified Interest
Rate for GTOs of the same duration is not changed, the MVA Factor will be equal
to 1.
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The MVA Formula shown above also accounts for some of the administrative and
processing expenses incurred when fixed-interest investments are liquidated.
This is represented in the addition of 0.0025 in the MVA Formula. The result of
the MVA Formula shown above is the MVA Factor. The MVA Factor will either be
greater, less than, or equal to 1 and will be multiplied by the Specified Value
or that portion of the Specified Value being withdrawn, transferred, or
distributed for any other reason. If the result is greater than 1, a gain will
be realized by the Certificate Owner; if less than 1, a loss will be realized.
If the MVA Factor is exactly 1, no gain or loss will be realized.
If the Federal Reserve Board halts publication of CMT Rates, or if, for any
other reason, CMT Rates are not available to be relied upon, the Company will
use appropriate rates based on treasury bond yields.
TRANSFERS, SURRENDERS, AND WITHDRAWALS
TRANSFER PROVISIONS
Transfers among the Fixed Account, Variable Account, and the GTOs must be made
prior to the Annuitization Date. Transfers among the Sub-Accounts may occur once
daily without charges and penalties. The Company reserves the right to restrict
transfers into and out of the Multiple Maturity Account to one per calendar year
at all times other than during the Maturity Period. The Company also reserves
the right to refuse any transfer requests submitted by individuals or firms
performing market timing services on behalf of multiple Certificate Owners or
when disposal or the purchase of the Underlying Mutual Funds is not possible due
to actions taken, or limitations imposed, independently by the Underlying Mutual
Funds.
A Certificate Owner may transfer annually, at the end of an Interest Rate
Guarantee Period, funds from the Fixed Account to the Variable Account or to a
GTO without incurring a penalty or adjustment. The maximum allowable transfer
amount from the Fixed Account to the Variable Account or to a GTO will be
determined by the Company at its sole discretion, but will not be less than
[10%] of the total value of the portion of the Fixed Account at the end of an
Interest Rate Guaranteed Period. Transfers to a GTO must be at least [$1,000].
All transfers from the Fixed Account must be made within 45 days after the
expiration date of the Interest Rate Guarantee Period.
A Certificate Owner may annually transfer a portion of the Variable Account or
the GTO to the Fixed Account. The Company reserves the right to limit the
maximum amount transferable to the Fixed Account. This maximum will never be
less than [10%] of the combined value of the Variable Account and the amount
allocated to the GTO for any 12-month period. The Company also reserves the
right to refuse transfers or Purchase Payments into the Fixed Account if the
Fixed Account value is greater than or equal to [30%] of the total Certificate
Account Value at the time such transfer is requested.
SURRENDERS
Prior to the earlier of the Annuitization Date or the death of the Annuitant and
any Contingent Annuitant, the Certificate Owner may surrender part or all of the
Certificate Account Value. A surrender request must be in writing or in a form
otherwise acceptable to the Company. The Company reserves the right to require
that the signature(s) be guaranteed by a member firm of a major stock exchange
or other depository institution qualified to give such a guaranty.
When written application and proof of interest are received, the Company will
surrender the number of Variable Account Accumulation Units, any amount from the
Fixed Account; any amount from any GTO under the Multiple Maturity Account and
any amount from any other options under this Certificate Agreement needed to
equal the dollar amount requested. Unless specified, the dollar amount requested
will equal: (a) the amount requested; less (b) any Contingent Deferred Sales
Charge (CDSC) and/or any premium taxes which apply.
If a partial surrender is requested, unless the Certificate Owner has instructed
otherwise, amounts will be surrendered as follows: (a) from the Variable Account
(b) from the Fixed Account and (c) from the GTOs under the Multiple Maturity
Account. The amounts surrendered from each of these accounts will be in the same
proportion that the Certificate Owner's interest in each account bears to the
total Certificate Account Value. Additionally, the amount that is surrendered
from each underlying Sub-Account will be in the same proportion that each
Sub-Account bears to the total Variable Account.
The surrender value will be paid to the Certificate Owner within seven days of
receipt of proper request and proof of interest satisfactory to the Company are
received at the Home Office. The Company reserves the right to delay
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payment of a total surrender of Certificate Owner's Fixed Account value for up
to six months in those states where applicable law requires the Company to
reserve such right.
RESTRICTIONS ON SURRENDERS FOR CERTAIN QUALIFIED PLANS, TSAS AND IRAS
The surrender of Certificate Account Value attributable to contributions made
pursuant to a salary reduction agreement (within the meaning of Section
402(g)(3)(C) of the Code), or transfers from a Custodial Account described in
Section 403(b)(7) of the Code, may be executed only when the Certificate Owner
attains age 59 1/2, separates from service, dies, or becomes disabled (within
the meaning of Section 72(m)(7) of the Code).
These surrender limitations apply to the following portions of the Certificate
Value:
(1) salary reduction contributions to TSAs made for plan years
beginning after December 31, 1988;
(2) earnings credited to such certificate agreements after the last
plan year beginning before January 1, 1989, on amounts attributable to
salary reduction contributions; and
(3) all amounts transferred from custodial accounts described in
Section 403(b)(7) of the Code (except that employer contributions and
earnings in such accounts as of December 31, 1988, may be withdrawn in
the case of hardship).
Payments pursuant to a Qualified Domestic Relations Order will not violate any
surrender limitations included herein, but may be subject to restrictions found
in the employer's plan or the Code.
Any distribution other than the above, including exercise of a contractual ten
day look provision may result in the immediate application of taxes and
penalties under Section 72 of the Code. A premature distribution may not be
eligible for rollover treatment. To assist in preventing disqualification in the
event of a surrender during the free look period, the Company will agree to
transfer the proceeds to another contract and/or certificate agreement which
meets the requirements of Section 408 of the Code, upon proper direction by the
Certificate Owner.
SURRENDER VALUE
The surrender value is the amount that will be paid if the full Certificate
Account is surrendered. The surrender value at any time will be:
The Certificate Account Value less the sum of any applicable;
1. Contingent deferred sales charge (CDSC),
2. Premium taxes,
3. Any outstanding loan balance, and
4. Certificate Agreement maintenance charge.
SUSPENSION OR DELAY OF SURRENDER
The Company has the right to suspend or delay the date of any surrender from the
Variable Account for any period:
1. When the New York Stock Exchange is closed;
2. When trading on the New York Stock Exchange is restricted;
3. When an emergency exists as a result of which: disposal of securities
held in the Variable Account is not reasonably practicable or it is not
reasonably practicable to fairly determine the value of the net assets
of the Variable Account; or
4. During any other period when the Securities and Exchange Commission, by
order, so permits for the protection of security holders.
Rules and regulations of the Securities and Exchange Commission may govern as to
whether certain conditions set forth above exist.
Payment of funds from the Variable Account and Multiple Maturity Accounts will
be made within seven days of receipt of both proper written application and
proof of interest satisfactory to the Company. The Company reserves
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the right to delay payment of a total surrender of Certificate Owner's Fixed
Account value for up to six months in those states where applicable law requires
the Company to reserve such right.
CONTINGENT DEFERRED SALES CHARGE (CDSC)
If part or all of the Certificate Account Value is withdrawn, a CDSC may be
assessed by the Company. The CDSC is designed to cover expenses relating to the
sale of the Certificate Agreement.
The CDSC is calculated by multiplying the applicable CDSC percentages noted
below by the Purchase Payments that are withdrawn. For purposes of calculating
the amount of the CDSC, withdrawals are considered to come first from the oldest
Purchase Payment made to the Certificate Account, then from the next oldest
Purchase Payment and so forth, with any earnings attributable to such Purchase
Payments considered only after all Purchase Payments made to the Certificate
Account have been considered. For purposes of calculating CDSC, amounts
withdrawn without charge as described in the "Withdrawals without Charge"
provision will not be considered a withdrawal of Purchase Payments. (For federal
income tax purposes, a full or partial withdrawal is treated as a withdrawal of
earnings first.)
Years* Measured From Date of Payment: 0 1 2 3 4 5 6 7 Thereafter
---------------------------------------------------------------------------------------------------------------
CDSC %: 8% 8% 7% 6% 5% 4% 3% 2% 0%
* The CDSC percentage will change to the next year's CDSC percentage on the last
day of the Purchase Payment Year.
CDSC, if applicable, will be assessed against full or partial surrenders from
GTOs. If any such surrender occurs prior to the Maturity Date for any particular
GTO, the amount surrendered will be subject to a MVA in addition to CDSC.
WITHDRAWALS WITHOUT CHARGE
During each Certificate Year, the Certificate Owner may withdraw without CDSC a
total amount equal to the greater of (1), (2) or (3) where:
(1) is the lesser of a. or b. where:
a. is 12% of Purchase Payments which are less than 96 months old minus
total withdrawals from the Certificate Account which are subject to
CDSC
b. is 12% of Certificate Account Value
(2) is current Certificate Agreement earnings and
(3) is the amounts required to meet Minimum Distribution requirements.
This CDSC-free withdrawal privilege is non-cumulative; that is, free amounts not
taken during any given Certificate Year cannot be taken as free amounts in
subsequent Certificate Years.
Current Certificate Agreement earnings are defined as: (Certificate Account
Value on the date of the withdrawal less Certificate Account Value on the date
of the last Certificate Anniversary) minus Purchase Payments made to the
Certificate Account since the last Certificate Anniversary plus Purchase
Payments withdrawn since the last Certificate Anniversary which were subject to
CDSC.
A CDSC will not be assessed against the withdrawal of any: (1) Purchase Payments
which have been held under this Certificate Agreement for at least [96] months;
(2) Death Benefit payments made upon the death of the Annuitant prior to the
Annuitization Date; (3) amounts applied to an Annuity Payment Option after two
years from the Certificate Effective Date; (4) or as otherwise noted in the
Certificate Agreement.
Also, CDSC will not apply to amounts withdrawn if the Certificate Owner is
diagnosed by a Physician to have a Terminal Illness at any time after the
Certificate Agreement has been issued. In the case of Joint Certificate
Ownership, the waiver will apply if either the Owner or the Joint Certificate
Owner is diagnosed to have a Terminal Illness. Written notice and proof of
Terminal Illness must be received in a form satisfactory to the Company and
recorded at the Home Office prior to the waiver of surrender charges.
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CDSC will also be waived to amounts withdrawn if the Certificate Owner has not
yet attained age 65 and is Disabled. In the case of Joint Certificate Ownership,
the waiver will apply if either the Owner or the Joint Certificate Owner is
Disabled. Written notice and proof of the Disability must be received in a form
satisfactory to the Company and recorded at the Home Office prior to the waiver
of surrender charges.
In addition, when this Certificate Agreement is exchanged for another
certificate agreement or contract issued by the Company or any of its affiliate
insurance companies, of the type and class, which the Company determines, is
eligible for such waiver, the Company will waive the CDSC on the first
certificate agreement. A CDSC may apply to the certificate agreement or contract
received in the exchange.
When a Certificate Agreement is held by a CRT, the amount which may be withdrawn
from the Certificate Account without application of a CDSC, shall be the larger
of (a) or (b) where (a) is the amount which would otherwise be available for
withdrawal without application of a CDSC; and where (b) is the excess of the
Certificate Account Value at the close of the day prior to the date of the
withdrawal, over total Purchase Payments (reduced by previous withdrawals)
attributed to the Certificate Account as of the date of the withdrawal.
The amount of CDSC on the Certificate Account may be reduced when sales of the
Certificate Agreement are made to a trustee, employer or similar entity pursuant
to a retirement plan or when sales are made in a similar arrangement where
offering the certificate agreement to a group of individuals results in savings
of sales expenses. The entitlement of such a reduction in CDSC will be
determined by the Company.
SYSTEMATIC WITHDRAWALS
The Certificate Owner may elect in writing on a form provided by the Company to
take systematic withdrawals of a specified dollar amount (of at least [$100]) on
a monthly, quarterly, semi-annual or annual basis. The Company will process the
withdrawals as directed by surrendering on a pro-rata basis Accumulation Units
from all of the Sub-Accounts in which the Certificate Owner has an interest and
the Fixed Account. A CDSC may apply to systematic withdrawals in accordance with
the considerations set forth in the "Contingent Deferred Sales Charge" and
"Withdrawals Without Charge" provisions of the Certificate Agreement. Unless
otherwise directed by the Certificate Owner, the Company will withhold federal
income taxes from each systematic withdrawal.
Systematic withdrawals are not available prior to the expiration of the ten day
look provision of the Certificate Agreement. The Company reserves the right to
assess a processing fee for this service.
LOANS
Loans, secured by the Certificate Account Value, are available 30 days after the
Certificate Effective Date for Certificate Agreements that are issued as TSAs.
The Company will charge a loan-processing fee of [$25] for each loan. Specific
loan terms are disclosed at the time of loan application or loan issuance.
For each loan, the minimum amount that may be borrowed is [$1,000]. For
non-ERISA TSAs which have Certificate Account Values up to $20,000, the maximum
loan balance that may be outstanding at any time is 80% of the Certificate
Account Value, but not more than $10,000. For non-ERISA TSAs which have
Certificate Account Values of $20,000 or more, the maximum loan balance which
may be outstanding at any time is 50% of the Certificate Account Value, but not
more than $50,000. The highest loan balance owed during the prior one-year
period will reduce the $50,000 limit. The aggregate of all loans may not exceed
the maximum loan limitations stated above.
An amount equal to the principal amount of the loan will be transferred to a
collateral fixed account from the Variable Account, the Fixed Account, or the
GTO pursuant to agreement between the Certificate Owner and the Company. Amounts
transferred from the GTO may be subject to a MVA. No withdrawal charges are
deducted at the time of the loan or on the transfers to the collateral account.
Loan repayments will be allocated among the Variable Account, the Fixed Account,
the GTO or any other investment option that may be available under the
Certificate Agreement pursuant to agreement between the Certificate Owner and
the Company. Loan repayments allocated to the GTO must be at least [$1,000].
The amount that is payable upon surrender of the Certificate Account, the death
of the Certificate Owner, death of the Annuitant, or Annuitization of the
Certificate Account will be reduced by the amount of the loan outstanding,
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plus accrued interest. Until the loan is repaid, the Company reserves the right
to restrict any transfer of the Certificate Agreement which would otherwise
qualify as a transfer as permitted in the Code.
Loans may also be subject to additional limitations or restrictions under the
terms of the employer's plan. Loans permitted under this Certificate Agreement
may be taxable in whole or in part as required by the Code. The Company will
calculate the maximum nontaxable loan based on the information provided by the
Owner/Annuitant or the employer. Loan amounts and accrued interest amounts,
which are in default, will be treated as deemed Distributions for federal income
tax purposes, to the extent required by law.
REQUIRED DISTRIBUTION PROVISIONS
This Certificate Agreement is intended to be treated as an "annuity contract"
for federal income tax purposes. Accordingly, all provisions of this Certificate
Agreement shall be interpreted and administered in accordance with the
requirements of Section 72 of the Code. In no event shall any payment be
deferred beyond the time limits permitted by Section 72 of the Code. The Company
reserves the right to amend this Certificate Agreement to comply with
requirements set out in the Code and regulations and rulings thereunder, as they
may exist from time to time.
Payments will be calculated by use of the expected return multiples specified in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations and calculated
in accordance with the calculation methods made available by the Company,
prescribed by the regulations and elected by the Owner.
REQUIRED DISTRIBUTION-NON-QUALIFIED CERTIFICATES
Upon the death of any Owner, Certificate Owner or Joint Certificate Owner
(including an Annuitant who becomes the Certificate Owner of the Certificate
Agreement on the Annuitization Date) (each of the foregoing "a deceased Owner"),
certain distributions for Non-Qualified Certificates are required by Section
72(s) of the Code. Notwithstanding any provision of the Certificate Agreement to
the contrary, the following distributions shall be made in accordance with such
requirements.
1. If any deceased Certificate Owner dies on or after the
Annuitization Date and before the entire interest under the
Certificate Account has been distributed, then the remaining
portion of such interest shall be distributed at least as
rapidly as under the method of distribution in effect as of
the date of such deceased Certificate Owner's death.
2. If any deceased Certificate Owner dies prior to the
Annuitization Date, then the entire interest in the
Certificate Account (consisting of either the Death Benefit or
the Certificate Account Value reduced by certain charges as
set forth elsewhere in the Certificate Agreement) shall be
distributed within 5 years of the death of the deceased
Certificate Owner, provided however:
(a) If any portion of such interest is payable to or for
the benefit of a natural person who is a surviving
Certificate Owner, Contingent Certificate Owner,
Joint Certificate Owner, Annuitant, Contingent
Annuitant, Beneficiary, or Contingent Beneficiary as
the case may be (each a "designated beneficiary"),
such portion may, at the election of the designated
Beneficiary, be distributed over the life of such
designated beneficiary, or over a period not
extending beyond the life expectancy of such
designated beneficiary, provided that payments begin
within one year of the date of the deceased
Certificate Owner's death (or such longer period as
may be permitted by federal income tax regulations).
Life expectancy and the amount of each payment will
be determined as prescribed by federal income tax
regulations.
(b) If the designated beneficiary is the surviving spouse
of the deceased Certificate Owner, such spouse may
elect, in lieu of receiving the Death Benefit as a
lump sum, to become the Certificate Owner of this
Certificate Agreement, and the distributions required
under these Required Distribution Provisions will be
made upon the death of such spouse. If the spouse
elects to become the Certificate Owner and the Death
Benefit that would have been payable exceeds the
Certificate Account Value, then the Certificate
Account Value will be increased to be equal to the
amount that would have been paid as the Death
Benefit.
In the event that the Certificate Owner is a person that is not a natural person
(e.g., a trust or corporation), then, for purposes of these distribution
provisions, (i) the death of the Annuitant shall be treated as the death of any
Certificate Owner, (ii) any change of the Annuitant shall be treated as the
death of any Certificate Owner, and (iii) in either case the
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appropriate distribution required under these distribution rules shall be made
upon such death or change, as the case may be. The Annuitant is the primary
annuitant as defined in Section 72(s)(6)(B) of the Code.
These distribution provisions shall not be applicable to any Certificate
Agreement that is not required to be subject to the provisions of Section 72(s)
of the Code by reason of Section 72(s)(5) or any other law or rule. Such
certificate agreements include, but are not limited to, any Certificate
Agreements (i) which is provided under a plan described in Section 401(a) of the
Code which includes a trust exempt from tax under Section 501 of the Code; (ii)
which is provided under a plan described in Section 403(a) of the Code; (iii)
which is described in Section 403(b) of the Code; (iv) which is an individual
retirement annuity or provided under an individual retirement account or annuity
as described in Section 408 of the Code; or (v) which is qualified funding asset
(as defined in Section 130(d) of the Code, but without regard to whether there
is a qualified assignment).
REQUIRED DISTRIBUTION-TSAS, IRAS, AND CERTIFICATE AGREEMENTS ISSUED UNDER
QUALIFIED PLANS
The entire interest of an Annuitant under a TSA, Qualified Plan, or XXX is
required to be distributed in a manner consistent with the provisions of Section
401(a)(9) of the Code, and regulations thereunder, and will be paid, as
requested by the Certificate Owner, notwithstanding anything else contained
herein, to the Certificate Owner over a period not exceeding:
A. the life of the Certificate Owner or the lives of the Certificate Owner
and the Certificate Owner's designated beneficiary; or
B. a period not extending beyond the life expectancy of the Certificate
Owner or the life expectancy of the Certificate Owner and the
Certificate Owner's designated beneficiary.
If the Certificate Owner's entire interest is to be distributed in equal or
substantially equal payments over a period described in A or B, then (1) for an
XXX, payments are required to commence not later than the first day of April
following the calendar year in which the Certificate Owner attains age 70 1/2,
and (2) if the Certificate Agreement is issued as a TSA or under a Qualified
Plan, payments are required to commence not later than the first day of April
following the later of the calendar year in which the Certificate Owner attains
the age of 70 1/2 or the Certificate Owner retires.
If the Annuitant dies on or after the date Minimum Distributions have begun, the
remaining Certificate Account interest will continue to be distributed at least
as rapidly as under the method of distribution being used prior to the
Certificate Owner's death, unless otherwise permitted by the Code.
If the Annuitant dies prior to the commencement of required Minimum
Distributions, the interest in the Certificate Account must be distributed by
December 31 of the calendar year in which the fifth anniversary of the death
occurs unless:
A. the Annuitant names the surviving spouse as the Beneficiary and such
spouse elects to receive the Distribution in substantially equal
payments over the surviving spouse's life (or a period not exceeding
the surviving spouse's life expectancy) and commencing not later than
December 31 of the year in which the deceased Annuitant would have
attained 70 1/2. If such surviving spouse dies before distributions
begin under this provision, this section shall be applied as if the
surviving spouse were the Annuitant.
B. the Annuitant names a Beneficiary other than the surviving spouse and
such Beneficiary elects to receive a Distribution in substantially
equal payments over the Beneficiary's life (or a period not exceeding
the Beneficiary's life expectancy) commencing not later than December
31 of the year following the year in which the deceased Annuitant died.
For purposes of this requirement, any amount paid to a child of the Annuitant
will be treated as if it has been paid to the surviving spouse if the remainder
of the interest becomes payable to the surviving spouse when the child reaches
the age of majority.
If the Beneficiary under an XXX is the surviving spouse of the Annuitant, the
surviving spouse may elect to treat the Certificate Agreement as his or her own,
whether or not distributions had commenced prior to the death of the Certificate
Owner. If the spouse elects to become the Certificate Owner and the Death
Benefit that would have been payable exceeds the Certificate Account Value, then
the Certificate Account Value will be increased to be equal to the amount that
would have been paid as the death benefit. This election will be deemed to have
been made if such
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surviving spouse makes a regular XXX contribution to the Certificate Account,
makes a rollover to or from the Certificate Account, or fails to elect any of
the above provisions. The result of such an election is that the surviving
spouse will be considered the individual for whose benefit the XXX is
maintained.
For TSAs these provisions apply only to the portion of the Certificate Account
Value in a 403(b) TSA which accrued after December 31, 1986. Amounts accruing
prior to January 1, 1987, will be distributed in accordance with the rules in
effect prior to the Tax Reform Act of 1986.
DEATH PROVISIONS
DEATH OF CERTIFICATE OWNER
If any Certificate Owner and the Annuitant are not the same person and such
Certificate Owner dies prior to the Annuitization Date, the Death Benefit
provisions do not apply. The surviving Joint Certificate Owner, if any, becomes
the new Certificate Owner. If there is no surviving Joint Certificate Owner, the
Contingent Certificate Owner becomes the new Certificate Owner. If there is no
surviving Joint Certificate Owner or Contingent Certificate Owner, the last
surviving Certificate Owner's estate becomes the new Certificate Owner. The
entire interest in the Certificate Agreement must be distributed in accordance
with the "Required Distribution Provisions".
DEATH OF CERTIFICATE OWNER/ANNUITANT
If any Certificate Owner and the Annuitant are the same person, and such person
dies prior to the Annuitization Date, the Death Benefit shall be payable to the
surviving Joint Certificate Owner, the Beneficiary, the Contingent Beneficiary
or the last surviving Certificate Owner's estate, as specified in the
"Beneficiary" section and distributed in accordance with the "Required
Distribution Provisions".
DEATH OF ANNUITANT
If the Certificate Owner and the Annuitant are not the same person and the
Annuitant dies prior to the Annuitization Date, a Death Benefit will be payable
to the Beneficiary, the Contingent Beneficiary, or the estate of the last
surviving Certificate Owner, as specified in the "Beneficiary" section, unless
there is surviving Contingent Annuitant. In such case, the Contingent Annuitant
becomes the Annuitant.
DEATH BENEFIT PAYMENT
The value of the Death Benefit will be determined as of the Valuation Date
coincident with, or next following the date the Company receives in writing at
the Home Office the following three items: (1) proper proof of the Annuitant's
death; (2) an election specifying distribution method; and (3) any applicable
state required form(s).
Proof of death is either:
(1) a copy of a certified death certificate;
(2) a copy of a certified decree of a court of competent jurisdiction as to
the finding of death;
(3) a written statement by a medical doctor who attended the deceased; or
(4) any other proof satisfactory to the Company.
The Beneficiary must elect a method of distribution, which complies, with the
"Distribution Provisions" of this Certificate Agreement. The Beneficiary may
elect to receive such Death Benefits in the form of: (1) a lump sum
distribution; (2) an annuity payout; or (3) any distribution that is permitted
under state and federal regulations and is acceptable by the Company. If such
election is not received by the Company within 60 days of the Annuitant's death,
the Beneficiary will be deemed to have elected a cash payment as of the last day
of the 60 day period.
Payment of the Death Benefit will be made or will commence within 30 days after
receipt of proof of death and notification of the election.
DEATH BENEFIT
If the Annuitant dies at any time prior to the Annuitization Date, the dollar
amount of the Death Benefit will be the greater of: (1) the Certificate Account
Value or (2) the sum of all Purchase Payments, less an adjustment for each
amount surrendered.
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The adjustment for amounts surrendered will reduce item (2) above in the same
proportion that the Certificate Account Value was reduced on the date of the
partial surrender.
ANNUITIZATION PROVISIONS
ANNUITY COMMENCEMENT DATE
The Annuity Commencement Date is a date chosen by the Certificate Owner and is
generally the first day of a calendar month. The date must be at least two years
after the Certificate Effective Date. If the Certificate Owner does not choose
an Annuity Commencement Date, a date will be established for the Certificate
Agreement. The Certificate Owner may change the Annuity Commencement Date prior
to the Annuitization Date at any time via a written request as outlined in the
"Change in Annuity Commencement Date and Annuity Payment Option" section.
For those Certificate Agreements issued under Qualified Plans, TSAs, or IRAs, if
the Annuity Commencement Date is not chosen by the Certificate Owner, the
Annuity Commencement Date established on the Certificate Effective Date will be
the date on which the Certificate Owner reaches 70 1/2. For Non-Qualified
Certificates, the Annuity Commencement Date established on the Certificate
Effective Date will be the date on which the Certificate Owner reaches age 92.
The Annuity Commencement Date may be changed but may not be later than the first
day of the first calendar month after the Annuitant's 92nd birthday unless
otherwise agreed upon by the Certificate Owner and Company.
CHANGE OF ANNUITY COMMENCEMENT DATE AND ANNUITY PAYMENT OPTION
The Certificate Owner may change the Annuity Commencement Date and the Annuity
Payment Option prior to the Annuitization Date. Such changes must be in writing
and approved by the Company, and must comply with the "Annuity Commencement
Date" section above. A change will become effective as of the date requested,
but will not apply to any payment made or action taken by the Company before it
is recorded at Home Office.
ANNUITIZATION
Annuitization is irrevocable once payments have begun. To annuitize the
Certificate Account, the Certificate Owner shall notify the Company in writing
of election of:
(1) an Annuity Payment Option; and
(2) either a Fixed Payment Annuity, Variable Payment Annuity, or any other
combination that may be available on the Annuitization Date.
Any amounts in the Fixed Account which the Certificate Owner elects to annuitize
as a Variable Payment Annuity must be moved to a variable Sub-Account prior to
the Annuitization Date.
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FIXED PAYMENT ANNUITY - FIRST AND SUBSEQUENT PAYMENTS
The first payment of a Fixed Payment Annuity will be determined by applying the
portion of the total Certificate Account Value specified by the Certificate
Owner to the fixed annuity table in effect on the Annuitization Date for the
Annuity Payment Option elected. The purchase rates for any options guaranteed to
be available will be determined on a basis not less favorable than 3.0% minimum
interest and the applicable Annuity 2000 Mortality Table with Scale G, assuming
annuitization in the year 2000, and the following age adjustments.
ANNUITIZATION DATE ADJUSTED AGE
Before 2009 Actual Age Last Birthday minus 4 years
2009 - 2015 Actual Age Last Birthday minus 5 years
2016 - 2022 Actual Age Last Birthday minus 6 years
2023 - 2029 Actual Age Last Birthday minus 7 years
2030 - 2036 Actual Age Last Birthday minus 8 years
2037 - 2043 Actual Age Last Birthday minus 9 years
After 2043 Actual Age Last Birthday minus 10 years
The determination of the applicable Annuity 2000 Mortality Table and Scale G
will be based upon the type of Certificate Agreement issued: Non-Qualified, TSA,
or XXX.
The rates shown in the fixed annuity tables are calculated on this guaranteed
basis.
Subsequent fixed annuity payments will remain level unless the Annuity Payment
Option elected dictates otherwise.
VARIABLE PAYMENT ANNUITY - FIRST PAYMENT
A Variable Payment Annuity is a series of payments which are not predetermined
or guaranteed as to dollar amount and which vary in amount with the investment
experience of the underlying Variable Sub-Accounts selected by the Certificate
Owner.
The first payment of a Variable Payment Annuity will be determined by applying
the portion of the total Certificate Account Value specified by the Certificate
Owner to the variable annuity table in effect on the Annuitization Date for the
Annuity Payment Option elected.
The purchase rates for any options guaranteed to be available will be determined
on a basis not less favorable than a 3.5% assumed investment return and the
applicable Annuity 2000 Mortality Table with Scale G, assuming annuitization in
the year 2000, and the following age adjustments.
ANNUITIZATION DATE ADJUSTED AGE
Before 2009 Actual Age Last Birthday minus 4 years
2009 - 2015 Actual Age Last Birthday minus 5 years
2016 - 2022 Actual Age Last Birthday minus 6 years
2023 - 2029 Actual Age Last Birthday minus 7 years
2030 - 2036 Actual Age Last Birthday minus 8 years
2037 - 2043 Actual Age Last Birthday minus 9 years
After 2043 Actual Age Last Birthday minus 10 years
The determination of the applicable Annuity 2000 Mortality Table and Scale G
will be based upon the type of Certificate Agreements issued: Non-Qualified,
TSA, or XXX.
VARIABLE PAYMENT ANNUITY - SUBSEQUENT PAYMENTS
Variable annuity payments after the first payment vary in amount. The payment
amount changes with the investment performance of the Sub-Accounts selected by
the Certificate Owner within the Variable Account. The dollar amount of such
payments is determined as follows:
1. The dollar amount of the first annuity payment is divided by the
annuity unit value as of the Annuitization Date. This result
establishes the fixed number of Annuity Units for each monthly annuity
payment after the first. The number of Annuity Units remains fixed
during the annuity payment period.
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2. The fixed number of Annuity Units is multiplied by the annuity unit
value for the Valuation Date for which the payment is due. This result
establishes the dollar amount of the payment.
The Company guarantees that the dollar amount of each payment after the first
will not be affected by variations in the Company's expenses or mortality
experience.
ANNUITY UNIT VALUE
An Annuity Unit is used to calculate the value of annuity payments. When the
Underlying Mutual Fund shares were first established the value of an
Accumulation Unit for each Sub-Account of the Variable Account was arbitrarily
set at $10. The value for any later Valuation Period is found as follows:
1. The Annuity Unit value for each Sub-Account for the immediately
preceding Valuation Period is multiplied by the net investment factor
for the Sub-Account for the Valuation Period for which the Annuity Unit
value is being calculated.
2. The result is multiplied by an interest factor because the assumed
investment rate of 3.5% per year is built into the purchase rate basis
for Variable Payment Annuities.
FREQUENCY AND AMOUNT OF PAYMENTS
All annuity payments will be mailed within 10 working days of the first of the
month in which they are scheduled. Payments will be made based on the Annuity
Payment Option selected and frequency selected. However, if the net amount to be
applied to any Annuity Payment Option at the Annuitization Date is less than
[$500], the Company has the right to pay such amount in one lump sum in lieu of
periodic annuity payments.
If any payment would be or becomes less than [$20], the Company has the right to
change the frequency of payments to an interval that will result in payments of
at least [$20]. In no event will the Company make payments under an annuity
option less frequently than annually.
ANNUITY PAYMENT OPTIONS
SELECTION OF ANNUITY PAYMENT OPTION
The Certificate Owner may select an Annuity Payment Option prior to
Annuitization. If an Annuity Payment Option is not selected, a life annuity with
a guarantee period of 240 months will be the automatic form of payment.
Options available may be limited based on the age of the Annuitant (and Joint
Annuitant, if applicable), and based on Distribution requirements under the Code
in the case of Certificate Agreements issued as IRAs or TSAs.
The following are the annuity payment options, which are guaranteed to be
available by the Company subject to the restrictions set forth in the paragraph
above.
LIFE ANNUITY
The amount to be paid under this option will be paid during the lifetime of the
Annuitant. Payments will cease with the last payment due prior to the death of
the Annuitant.
JOINT AND SURVIVOR ANNUITY
The amount to be paid under this option will be paid during the joint lifetimes
of the Annuitant and a designated second person. Payments will continue as long
as either is living.
LIFE ANNUITY WITH 120 OR 240 MONTHLY PAYMENTS GUARANTEED
The amount to be paid under this option will be paid during the lifetime of the
Annuitant. A guaranteed period of 120 or 240 months may be selected. If the
Annuitant dies prior to the end of this guaranteed period, the recipient chosen
by the Owner will receive the remaining guaranteed payments.
ANY OTHER OPTION
The amount and period under any other option will be determined by the Company.
Payment options not set forth in the Certificate Agreement are available only if
they are approved by both the Company and the Annuitant.
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SUPPLEMENTARY AGREEMENT
A supplementary agreement will be issued within 30 days following the
Annuitization Date. The supplementary agreement will set forth the terms of the
Annuity Payment Option selected
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GUARANTEED ANNUITY TABLES FOR NON-QUALIFIED AND XXX CERTIFICATES
FIXED MONTHLY BENEFITS PER [$1000] APPLIED
JOINT AND SURVIVOR MONTHLY ANNUITY PAYMENTS
ADJUSTED AGE OF FEMALE ANNUITANT*
---------------------------------
50 55 60 65 70 80
-- -- -- -- -- --
ADJUSTED AGE OF 50 3.36 3.48 3.58 3.67 3.74
MALE ANNUITANT* 55 3.44 3.59 3.75 3.88 4.00
--------------- 60 3.50 3.69 3.90 4.10 4.29 4.56
65 3.77 4.03 4.32 4.60 5.07
70 4.14 4.50 4.90 5.66
80 4.75 5.36 6.95
LIFE ANNUITY: MONTHLY ANNUITY PAYMENTS
MALE GUARANTEED PERIOD FEMALE GUARANTEED PERIOD
---------------------- ------------------------
ANNUITANT'S ANNUITANT'S
ADJUSTED 120 240 ADJUSTED 120 240
AGE* NONE MONTHS MONTHS AGE* NONE MONTHS MONTHS
---- ---- ------ ------ ---- ---- ------ ------
50 3.88 3.85 3.77 50 3.63 3.69 3.58
51 3.94 3.91 3.83 51 3.69 3.67 3.63
52 4.01 3.98 3.88 52 3.74 3.73 3.68
53 4.09 4.05 3.94 53 3.80 3.79 3.73
54 4.16 4.12 4.00 54 3.87 3.85 3.78
55 4.24 4.20 4.06 55 3.94 3.91 3.84
56 4.33 4.28 4.12 56 4.01 3.98 3.90
57 4.42 4.36 4.18 57 4.09 4.06 3.96
58 4.52 4.45 4.25 58 4.17 4.13 4.02
59 4.62 4.55 4.31 59 4.25 4.21 4.09
60 4.73 4.65 4.38 60 4.34 4.30 4.16
61 4.85 4.75 4.45 61 4.44 4.39 4.23
62 4.98 4.87 4.52 62 4.55 4.49 4.30
63 5.11 4.98 4.59 63 4.66 4.59 4.37
64 5.26 5.11 4.66 64 4.78 4.70 4.45
65 5.41 5.24 4.73 65 4.91 4.82 4.53
66 5.58 5.37 4.80 66 5.04 4.94 4.60
67 5.76 5.52 4.87 67 5.19 5.07 4.68
68 5.95 5.66 4.93 68 5.35 5.21 4.76
69 6.15 5.82 5.00 69 5.52 5.35 4.83
70 6.37 5.98 5.06 70 5.70 5.50 4.91
71 6.60 6.14 5.11 71 5.90 5.67 4.98
72 6.84 6.31 5.17 72 6.12 5.84 5.05
73 7.10 6.48 5.22 73 6.35 6.01 5.11
74 7.39 6.66 5.26 74 6.60 6.20 5.17
75 7.69 6.84 5.30 75 6.88 6.39 5.23
76 8.01 7.03 5.34 76 7.17 6.59 5.27
77 8.36 7.21 5.37 77 7.49 6.80 5.32
78 8.73 7.40 5.40 78 7.84 7.01 5.36
79 9.13 7.58 5.42 79 8.22 7.22 5.39
80 9.55 7.76 5.44 80 8.64 7.43 5.42
81 10.01 7.94 5.46 81 9.08 7.64 5.44
82 10.50 8.11 5.48 82 9.57 7.84 5.46
83 11.03 8.27 5.49 83 10.10 8.04 5.48
84 11.59 8.43 5.49 84 10.67 8.23 5.49
85 12.19 8.58 5.50 85 11.29 8.40 5.50
*Adjusted Age is defined in the Fixed Payment Annuity - First and Subsequent
Payment" section of the Certificate Agreement.
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GUARANTEED ANNUITY TABLES FOR QUALIFIED PLANS
FIXED MONTHLY BENEFITS PER [$1000] APPLIED
JOINT AND SURVIVOR MONTHLY ANNUITY PAYMENTS
ADJUSTED AGE OF ANNUITANT
-------------------------
50 55 60 65 70 80
-- -- -- -- -- --
ADJUSTED AGE 50 3.31 3.40 3.47 3.52 3.56
OF SURVIVOR 55 3.40 3.52 3.64 3.73 3.80
----------- 60 3.74 3.64 3.81 3.96 4.09 4.25
65 3.73 3.96 4.20 4.41 4.72
70 4.09 4.41 4.74 5.30
80 4.72 5.30 6.71
LIFE ANNUITY: MONTHLY ANNUITY PAYMENTS
GUARANTEED PERIOD
ANNUITANT'S
ADJUSTED AGE* NONE 120 MONTHS 240 MONTHS
------------- ---- ---------- ----------
50 3.63 3.62 3.58
51 3.69 3.67 3.63
52 3.7 3.73 3.68
53 3.80 3.79 3.73
54 3.87 3.85 3.78
55 3.94 3.91 3.84
56 4.01 3.98 3.90
57 4.09 4.06 3.96
58 4.17 4.13 4.02
59 4.25 4.21 4.09
60 4.34 4.30 4.16
61 4.44 4.39 4.23
62 4.55 4.49 4.30
63 4.66 4.59 4.37
64 4.78 4.70 4.45
65 4.91 4.82 4.53
66 5.04 4.94 4.60
67 5.19 5.07 4.68
68 5.35 5.21 4.76
69 5.52 5.35 4.83
70 5.70 5.50 4.91
71 5.90 5.67 4.98
72 6.12 5.84 5.05
73 6.35 6.01 5.11
74 6.60 6.20 5.17
75 6.88 6.39 5.23
76 7.17 6.59 5.27
77 7.49 6.80 5.32
78 7.84 7.01
79 8.22 7.22
80 8.64 7.43
81 9.08 7.64
82 9.57 7.84
83 10.10 8.04
84 10.67 8.23
85 11.29 8.40
*Adjusted Age is defined in the Fixed Payment Annuity - First and Subsequent
Payments sections of the Certificate Agreement
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TABLE OF VALUES
END OF GUARANTEED END OF GUARANTEED
CERTIFICATE CERTIFICATE GUARANTEED CASH CERTIFICATE CERTIFICATE GUARANTEED CASH
YEAR ACCOUNT VALUE SURRENDER VALUE YEAR ACCOUNT VALUE SURRENDER VALUE
---- ------------- --------------- ---- ------------- ---------------
1 2,030 1,889 36 66,404 66,026
2 3,091 2,880 37 69,426 69,048
3 4,184 3,920 38 72,539 72,161
4 5,309 5,001 39 75,745 75,367
5 6,468 6,125 40 79,048 78,669
6 7,662 7,293 41 82,449 82,071
7 8,892 8,505 42 85,952 85,574
8 10,159 9,763 43 89,561 89,183
9 11,464 11,085 44 93,278 92,899
10 12,808 12,429 45 97,106 96,728
11 14,192 13,814 46 101,049 100,671
12 15,618 15,239 47 105,111 104,732
13 17,086 16,708 48 109,294 108,916
14 18,599 18,221 49 113,603 113,225
15 20,157 19,778 50 118,041 117,663
16 21,762 21,383 51 122,612 122,234
17 23,414 23,036 52 127,321 126,942
18 25,117 24,738 53 132,170 131,792
19 26,870 26,492 54 137,165 136,787
20 28,676 28,298 55 142,310 141,932
21 30,537 30,158 56 147,610 147,231
22 32,453 32,074 57 153,068 152,690
23 34,426 34,048 58 158,690 158,312
24 36,459 36,081 59 164,481 164,102
25 38,553 38,175 60 170,445 170,067
26 40,710 40,331 61 176,588 176,210
27 42,931 42,553 62 182,916 182,538
28 45,219 44,840 63 189,434 189,055
29 47,575 47,197 64 196,147 195,768
30 50,033 49,654 65 203,061 202,683
31 52,564 52,185 66 210,183 209,804
32 55,171 54,792 67 217,518 217,140
33 57,856 57,477 68 225,074 224,695
34 60,621 60,243 69 232,856 232,478
35 63,470 63,092 70 240,872 240,493
The Surrender Value may be increased by interest credited at a higher rate. The
values shown above are guaranteed surrender values. These values are based on a
[$2,000] initial Purchase Payment and subsequent Purchase Payments at the
beginning of each year of [$1,000] starting in year 2 and interest at the
minimum guaranteed rate of [3.0%]. In years where the end of year Certificate
Account Value is less than [$50,000], a [$30] certificate account maintenance
fee is deducted. No deduction has been made in the Table for any applicable
premium taxes. This Table assumes that there are no partial withdrawals.
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
7 YEAR CDSC RIDER
This rider is made part of the Contract to which it is attached. It shall become
effective on the Date of Issue. All references to "Contract" and "Contract
Value", shall also mean "Certificate Agreement" and "Certificate Account Value",
respectively. To the extent any provisions contained in this rider are contrary
to or inconsistent with those of the Contract to which it is attached, the
provisions of this rider will control the Contract accordingly.
The benefits described in this rider will cease upon termination of the
Contract.
1. THE FOLLOWING LANGUAGE IS ADDED TO THE "DEDUCTIONS AND CHARGES"
PROVISION OF THE CONTRACT:
ADDITIONAL CHARGE
Upon the election of this rider, the Company will deduct a charge at an
annual maximum rate of [0.05%] of the daily net assets of the Variable
Account. The Company reserves the right to charge less than the maximum
rate.
2. THE CONTINGENT DEFERRED SALES CHARGE SECTION OF THE CONTRACT IS HEREBY
DELETED AND REPLACED WITH THE FOLLOWING:
CONTINGENT DEFERRED SALES CHARGE (CDSC)
If part or all of the Contract Value is withdrawn, a CDSC may be
assessed by the Company. The CDSC is designed to cover expenses
relating to the sale of the Contract.
The CDSC is calculated by multiplying the applicable CDSC percentages
noted below by the Purchase Payments that are withdrawn. For purposes
of calculating the amount of the CDSC, withdrawals are considered to
come first from the oldest Purchase Payment made to the Contract, then
from the next oldest Purchase Payment and so forth, with any earnings
attributable to such Purchase Payments considered only after all
Purchase Payments made to the Contract have been considered. For
purposes of calculating CDSC, amounts withdrawn without charge as
described in the "Withdrawals without Charge" provision will not be
considered a withdrawal of Purchase Payments. (For federal income tax
purposes, a full or partial withdrawal is treated as a withdrawal of
earnings first.)
Years* Measured
---------------------------------------------------------------------------------------
From Date of Payment: 0 1 2 3 4 5 6 Thereafter
---------------------------------------------------------------------------------------
CDSC %: 8% 7% 6% 5% 4% 3% 2% 0%
* The CDSC percentage will change to the next year's CDSC percentage on
the last day of the Purchase Payment Year.
CDSC, if applicable, will be assessed against full or partial
surrenders from GTOs. If any such surrender occurs prior to the
Maturity Date for any particular GTO, the amount surrendered will be
subject to a MVA in addition to CDSC.
3. (1) A IN THE FIRST PARAGRAPH OF THE WITHDRAWALS WITHOUT CHARGE SECTION
IS HEREBY DELETED AND REPLACED WITH THE FOLLOWING:
"a. is 12% of Purchase Payments which are less than [84] months old
minus total withdrawals from the Contract which are subject to CDSC
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4. (1) UNDER THE SECOND PARAGRAPH OF WITHDRAWALS WITHOUT CHARGE SECTION IS
HEREBY DELETED AND REPLACED WITH THE FOLLOWING:
"(1) Purchase Payments which have been held under this Contract for at
least [84] months;"
ABCD ABCDEF
Secretary President
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
MAXIMUM ANNIVERSARY DEATH BENEFIT RIDER
This rider is made part of the Contract to which it is attached. All references
to "Contract", "Contract Anniversary" and "Contract Value" shall also mean
"Certificate Agreement," and "Certificate Anniversary " and "Certificate Account
Value", respectively.
To the extent any provisions contained in this rider are contrary to or
inconsistent with those of the Contract to which it is attached, the provisions
of this rider will control the Contract accordingly.
This rider is only available to those Contracts with Annuitants who are age 84
or less at the time this rider is elected.
The benefits described in this rider will cease upon termination of the
Contract.
1. THE FOLLOWING LANGUAGE IS ADDED TO THE "DEDUCTIONS AND CHARGES"
PROVISION OF THE CONTRACT:
ADDITIONAL CHARGE
Upon the election of this rider, the Company will deduct a charge at an
annual maximum rate of [0.15%] of the daily net assets of the Variable
Account. The Company reserves the right to charge less than the maximum
rate.
2. THE "DEATH BENEFIT" SECTION OF THE CONTRACT WHICH DEFINES THE VALUE OF
THE DEATH BENEFIT IS REPLACED BY THE FOLLOWING:
If the Annuitant dies at any time prior to the Annuitization Date, the
dollar amount of the Death Benefit will be the greatest of: (1) the
Contract Value; or (2) the sum of all Purchase Payments, less an
adjustment for each amount surrendered; or (3) the greatest Contract
Value on any Contract Anniversary date prior to the Annuitant's 86th
birthday, less an adjustment for each amount subsequently surrendered,
plus Purchase Payments received after that Contract Anniversary date.
The adjustment for each amount surrendered will reduce items (2) and
(3) above in the same proportion that the Contract Value was reduced on
the date of the partial surrender.
ABCD ABCDEF
Secretary President
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
FIVE YEAR RESET DEATH BENEFIT RIDER
This rider is made part of the Contract to which it is attached. All references
to "Contract", "Contract Value", and "Contract Anniversary " shall also mean
"Certificate Agreement", "Certificate Account Value" and "Certificate
Anniversary ", respectively . To the extent any provisions contained in this
rider are contrary to or inconsistent with those of the Contract to which it is
attached, the provisions of this rider will control the Contract accordingly.
This rider is only available to Contracts with Annuitants who are age 80 or less
at the time this rider is elected.
The benefits described in this rider will cease upon termination of the
Contract.
1. THE FOLLOWING LANGUAGE IS ADDED TO THE "DEDUCTIONS AND CHARGES"
PROVISION OF THE CONTRACT:
ADDITIONAL CHARGE
Upon the election of this rider, the Company will deduct a charge at an
annual maximum rate of [0.05%] of the daily net assets of the Variable
Account. The Company reserves the right to charge less than the maximum
rate.
2. THE "DEATH BENEFIT" SECTION OF THE CONTRACT WHICH DEFINES THE VALUE OF
THE DEATH BENEFIT IS REPLACED BY THE FOLLOWING:
If the Annuitant dies at any time prior to the Annuitization Date, the
dollar amount of the Death Benefit will be the greatest of: (1) the
Contract Value; or (2) the sum of all Purchase Payments, less an
adjustment for each amount surrendered; or (3) the Contract Value as of
the most recent five-year Contract Anniversary date occurring prior to
the Annuitant's 86th birthday, less an adjustment for each amount
subsequently surrendered, plus Purchase Payments received after that
five-year Contract Anniversary date.
The adjustment for each amount surrendered will reduce items (2) and
(3) above in the same proportion that the Contract Value was reduced on
the date of the partial surrender.
ABCD ABCDEF
Secretary President
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
INCOME GUARD
GUARANTEED ANNUITIZATION VALUE (GAV) RIDER
This rider is made a part of the Contract to which it is attached. It shall
become effective on the Date of Issue. All references to "Contract", "Contract
Owner", "Contract Value", "Contract Anniversary", and "Date of Issue" shall also
mean "Certificate Agreement", "Certificate Owner", "Certificate Account Value",
"Certificate Anniversary", and "Certificate Effective Date", respectively.
To the extent any provisions contained in this rider are contrary to or
inconsistent with those of the Contract to which it is attached, the provisions
of this rider will control those of the Contract accordingly.
The benefits described in this rider will cease upon termination of the
Contract.
THE "DEFINITIONS" SECTION OF THE CONTRACT IS MODIFIED WITH THE ADDITION OF THE
FOLLOWING:
Guaranteed Annuitization Value (GAV) - The amount that may be used to
provide a guaranteed level of determinable lifetime annuity payments.
The GAV affords protection against negative investment performance,
which could result in a Contract Value that is less than the GAV at the
time of Annuitization.
DETERMINING THE GAV
This rider permits the Owner to elect one of two optional methods for
determining his/her GAV:
5% INTEREST GAV
The GAV will be equal to (a) - (b), but will never be greater than 200%
of all Purchase Payments, where:
(a) is the sum of all Purchase Payments, plus interest accumulated at a
compounded annual rate of 5%, starting on the Date of Issue and ending
on the Contract Anniversary occurring immediately prior to the
Annuitant's 86th birthday (GAV interest will accrue on Purchase
Payments only after such Purchase Payments are contributed to the
Contract);
(b) is the sum of all reductions to the GAV due to surrenders or
withdrawals made by the Owner. All such GAV reductions will be
proportionately the same as reductions to the Contract Value caused by
the surrenders or withdrawals. (For example, a surrender which reduces
the Contract Value by 25% will also reduce the GAV by 25%.)
To compensate the Company for risks assumed in conjunction with this
rider option, the Company will deduct [0.45%] of the daily net assets
of the Variable Account. This charge will be in addition to charges
otherwise applicable to the Contract.
MAXIMUM CONTRACT ANNIVERSARY GAV
The GAV will be equal to the highest Contract Value on any Contract
Anniversary occurring prior to the Annuitant's 86th birthday, less an
adjustment for amounts surrendered, plus Purchase Payments received
after the Contract Anniversary. The adjustment for amounts surrendered
will reduce the GAV in the same proportion that the Contract Value was
reduced on the date of the partial surrender.
To compensate the Company for risks assumed in conjunction with this
rider option, the Company will deduct [0.30%] of the daily net assets
of the Variable Account. This charge will be in addition to charges
otherwise applicable to the Contract.
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WHEN THE GAV MAY BE USED TO BEGIN ANNUITY PAYMENTS
The Owner may elect to halt the accumulation phase of the Contract and
activate annuity payments (annuitize the Contract) using the GAV to
determine the amount of such payments during the 30 day period
following any Contract Anniversary which occurs:
(a) at least 7 years after the Date of Issue; and
(b) after the Annuitant has attained age 60.
This rider in no way restricts or limits the right of the Owner to
annuitize the Contract at other times, nor will it in any way restrict
the right to annuitize the Contract using Contract Values that may be
higher than the GAV.
ANNUITY (PAYMENT) OPTIONS THAT MAY BE USED WITH THE GAV
If the Owner elects to use the GAV as stated above, he/she may choose
any life contingent Fixed Payment Annuity option which will be
calculated using the GAV and the guaranteed annuity purchase rates set
forth in the Contract. Such Fixed Payment Annuity options include:
Life Annuity
Joint and Last Survivor Annuity
Life Annuity with 120 or 240 Monthly Payments Guaranteed.
OTHER TERMS AND CONDITIONS - PLEASE READ CAREFULLY
1. The GAV rider may not be elected at any time other than prior
to the Date of Issue, at the time of application.
2. If the GAV rider is elected, the Annuitant may not be age 83
or older on the Date of Issue.
3. If elected, the GAV rider is irrevocable and will remain in
place for as long as the Contract remains in force.
4. After the first Contract Year, if the Owner's Fixed Account
allocation becomes greater than 30% of the Contract Value
through the application of additional Purchase Payments or
surrenders, withdrawals or transfers from the Variable Account
or Guaranteed Term Options, if applicable, then for purposes
of calculating the GAV rider under the 5% Interest GAV option,
0% will accrue in that Contract Year. If the Owner's Fixed
Account allocation becomes greater than 30% of the Contract
Value solely as a result of fluctuations in the value of the
Owner's Variable Account investment options, then interest
will continue to accrue, for purposes of the GAV, at 5%
annually, subject to the other terms and conditions outlined
herein.
/s/ XXXXXXXX X. XXXXXX /s/ XXXXXX X. XXXXXX
--------------------------------- --------------------------------
Xxxxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx
Secretary President
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NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
NURSING HOME AND LONG TERM CARE RIDER
This rider is made part of the Contract to which it is attached. It shall become
effective on the Date of Issue. All references to "Contract", "Contract Owner",
"Contract Anniversary", "Joint Ownership" and "Joint Owner", shall also mean
"Certificate Agreement", "Certificate Owner", "Certificate Anniversary", "Joint
Certificate Ownership" and "Joint Certificate Owner", respectively.
To the extent any provisions contained in this rider are contrary to or
inconsistent with those of the Contract to which it is attached, the provisions
of this rider will control the Contract accordingly.
The benefits described in this rider will cease upon termination of the
Contract.
1. THE FOLLOWING DEFINITIONS ARE ADDED TO THE "DEFINITION" SECTION OF THE
CONTRACT:
HOSPITAL - A state licensed facility which is: operated as a Hospital
according to the law of the jurisdiction in which it is located;
operates primarily for the care and treatment of sick or injured
persons as inpatients; provides continuous 24 hours a day nursing
service by or under the supervision of a registered graduate
professional nurse (R.N.) or a licensed practical nurse (L.P.N); is
supervised by a staff of physicians; and has medical, diagnostic, and
major surgical facilities or has access to such facilities on a
prearranged basis.
INTERMEDIATE CARE FACILITY - A licensed facility which is: operated as
an Intermediate Care Facility according to the law of the jurisdiction
in which it is located; provides continuous 24 hours a day nursing
service by or under the supervision of a registered graduate
professional nurse (R.N.) or a licensed practical nurse (L.P.N.); and
maintains a daily medical record of each patient.
LONG TERM CARE FACILITY - A state Skilled Nursing Facility or
Intermediate Care Facility. Long Term Care Facility does not mean: a
place that primarily treats drug addicts or alcoholics; a home for the
aged or mentally ill, a community living center, or a place that
primarily provides domiciliary, residency, or retirement care; or a
place owned or operated by a member of the Contract Owner's immediate
family.
SKILLED NURSING FACILITY - A licensed facility which is operated as a
Skilled Nursing Facility according to the law of the jurisdiction in
which it is located; provides skilled nursing care under the
supervision of a Physician; provides continuous 24 hour a day nursing
service by or under the supervision of a registered graduate
professional nurse (R.N.); and maintains a daily medical record of each
patient.
2. THE FOLLOWING LANGUAGE IS ADDED TO THE "DEDUCTIONS AND CHARGES"
PROVISION OF THE CONTRACT:
ADDITIONAL CHARGE
Upon the election of this rider, the Company will deduct a charge at an
annual maximum rate of [0.05%] of the daily net assets of the Variable
Account. The Company reserves the right to charge less than the maximum
rate.
3. THE FOLLOWING PROVISION IS ADDED AFTER THE "WITHDRAWALS WITHOUT
CHARGES" SECTION OF THE CONTRACT:
ADDITIONAL WAIVER OF SURRENDER CHARGES
The surrender charge will not apply if the Contract Owner is confined
to a Long Term Care Facility or Hospital for a continuous 90 day period
commencing on or after the third Contract Anniversary Date. In the case
of Joint Ownership, the waiver will apply if either Joint Owner is
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confined. Request for waiver must be received by the Company during the
period of confinement or no later than 90 days after the confinement
period ends.
If the withdrawal request is received later than 90 days after the
confinement period ends, the surrender charge, if applicable, will be
assessed. Written notice and proof of confinement must be received in a
form satisfactory to the Company and be recorded at the Home Office
prior to the waiver of surrender charges.
ABCD ABCDEF
Secretary President
