EXHIBIT (4)(a)
[LOGO OF AIGLIFE] AIG Life Insurance Company
Wilmington, Delaware 19801
A capital stock company
This Immediate Variable Annuity Contract is issued by AIG Life Insurance Company
(We, Us, Our) to the Owner(s) (You, Your) named on the Contract Schedule in
consideration of the payment of the Single Premium. We will make annuity
payments to the Annuitant, and Joint Annuitant if any, as set forth in the
Contract Schedule beginning on the Income Start Date.
READ YOUR CONTRACT CAREFULLY
RIGHT TO EXAMINE THIS CONTRACT
This Contract may be returned within 10 days after You receive it, or longer if
required by applicable state law. It can be mailed or delivered to Us at Our
administrative office. As of the return date, We will promptly refund the Single
Premium adjusted by investment performance. This may be more or less than the
Single Premium paid. For all other purposes the returned Contract will be
treated as if We had never issued it.
This is a Variable Annuity Income Contract. Variable Annuity Income is not
guaranteed as to dollar amount and may increase or decrease on the Income Change
Dates depending on the experience of the Investment Options identified in the
Contract Schedule. You may also select a Fixed Annuity Income, which provides a
guaranteed income. The Fixed Annuity Income amount will remain the same unless
the Contract requires a reduction in amount.
Signed by the Company:
/s/ XXXXXXXXX X. XXXX /s/ XXXXXX X. XXXXXX, XX.
--------------------- -------------------------
Secretary President
SINGLE PREMIUM IMMEDIATE VARIABLE ANNUITY
NONPARTICIPATING
16IVIA0403
TABLE OF CONTENTS
CONTRACT SCHEDULE ........................................... 3
DEFINITIONS ................................................. 4
CONTRACT .................................................... 5
OWNERSHIP PROVISIONS ........................................ 5
SINGLE PREMIUM PAYMENT ...................................... 5
SEPARATE ACCOUNT ............................................ 6
SUBACCOUNTS ................................................. 6
INVESTMENT OPTIONS .......................................... 6
ANNUITY UNITS ............................................... 6
ANNUITY INCOME PAYMENT DATES ................................ 6
DETERMINATION OF THE INITIAL ANNUITY INCOME ................. 7
DETERMINATION OF SUBSEQUENT VARIABLE ANNUITY INCOME ......... 7
ANNUITY INCOME VALUATION DATES .............................. 7
TRANSFERS AMONG INVESTMENT OPTIONS .......................... 7
FIXED ANNUITY INCOME ........................................ 8
DEATH BENEFITS .............................................. 8
ANNUITY INCOME OPTIONS ...................................... 8
DELAY OF BENEFIT PAYMENT .................................... 8
GENERAL PROVISIONS .......................................... 8
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16IVIA0403
CONTRACT SCHEDULE
CONTRACT NUMBER: 1001
OWNER: Xxxx Xxx
CONTRACT DATE: November 1, 2000
INCOME START DATE: January 1, 2001
ANNUITANT: Xxxx Xxx
DATE OF BIRTH: January 1, 1946
[SEX: Male]
[JOINT ANNUITANT: Xxxx Xxx]
[DATE OF BIRTH: January 1, 1947]
[SEX: Female]
[SINGLE PURCHASE PAYMENT: $250,000.00]
MORTALITY AND EXPENSE RISK CHARGE: Equal to an annual basis of [0.52% ] of the
average daily net assets of the Separate Account.
TRANSFER FEE: [$10.00] However, we will not make a charge for the first [12]
transfers in any Contract Year.
[CANCELLATION CHARGE: A charge of [$200] for a partial withdrawal or
cancellation.]
INVESTMENT OPTIONS
[EQUITY INDEX] [MONEY MARKET]
[HIGH YIELD BOND] [DIVERSIFIED VALUE]
[INTERNATIONAL PORTFOLIO] [SMALL COMPANY GROWTH]
[MID-CAP INDEX]
ANNUITY INCOME
ANNUITY INCOME OPTION: [Life Annuity]
FREQUENCY OF ANNUITY INCOME: [Monthly]
[GUARANTEE PERIOD:]
[REDUCED ANNUITY PERCENTAGE TO JOINT ANNUITANT AFTER DEATH OF ANNUITANT: %]
INITIAL PERCENTAGE ALLOCATION OF PURCHASE PAYMENT TO PROVIDE:
Fixed Annuity Income: [ %] Variable Annuity Income: [ %]
[FIXED ANNUITY INCOME AMOUNT ON INCOME START DATE: $___ ]
[ESTIMATED VARIABLE ANNUITY INCOME AMOUNT ON INCOME START DATE: $___ ]
ASSUMED INVESTMENT RETURN: [ %] PER ANNUM
INCOME CHANGE DATES: [January 1 and July 1]
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16IVIA0403
DEFINITIONS
In addition to the other definitions set forth in this Contract, the following
terms shall have their respective meanings as set forth below. In addition, the
masculine form of any term shall be construed as including the feminine form of
that term.
Administrative Office means Our service center to You should direct all,
requests, instructions and other communications. Our Administrative Office is
located at [Vanguard Annuity and Insurance Services, P. O. Box 1105, Valley
Forge, PA 19482-1105].
Annuitant is the person designated in the Contract Schedule who receives annuity
income, and on whose life the amount of the Annuity Income is determined.
Annuity Income Option is the type of arrangement under which annuity income
payments are made.
Annuity Income Valuation Date is the date as of which annuity income amounts are
calculated.
Annuity Unit is an accounting unit of measure used to calculate variable annuity
income amounts.
Annuity Unit Value is the value of one Annuity Unit.
Assumed Investment Return (AIR) is the net investment return that will cause
Variable Annuity Income to remain level. The AIR is shown in the Contract
Schedule and is used in calculating the initial and subsequent variable annuity
income amounts.
Beneficiary is the person(s) who may receive certain benefits when there is no
longer a living Annuitant or Joint Annuitant.
Contract Date is the date the Contract becomes effective, and is shown in the
Contract Schedule.
Contract Year is the year between anniversaries based on the Contract Date.
Fixed Annuity Income provides a guaranteed income, the amount of which will be
the same on each payment date unless the Contract requires a change. The amount
of the income is set forth in the Contract Schedule.
Income Change Dates are the dates, as specified in the Contract Schedule, on
which the amount of Variable Annuity Income is changed.
Income Start Date is the date shown in the Contract Schedule when the annuity
income payment begins.
Investment Options are the available portfolios in which the Subaccounts invest.
The Separate Account is divided into Subaccounts and each Subaccount invests
exclusively in shares of a specific investment portfolio.
Joint Annuitant, if any, is named in the Contract Schedule. If living after the
death of the Annuitant, the Joint Annuitant receives annuity income.
Net Single Premium is the Single Premium less any taxes related to the premium
payment.
Owner(s) is the person or persons shown as Owner(s) in the Contract Schedule.
Payee means any person receiving a benefit under an Annuity Contract.
Single Premium is the purchase payment shown in the Contract Schedule.
Subaccount means a division of the Company's Separate Account which invests in a
particular investment portfolio.
Valuation Date means each day that the New York Stock Exchange is open for
trading, except for normal business holidays.
Valuation Period means the period between the close of business on any Valuation
Date and the close of business on the next succeeding Valuation Date.
Variable Annuity Income provides income that is not guaranteed and is related to
the investment experience of the selected Investment Options. Generally the
income amount will change on each Income Change Date.
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16IVIA0403
CONTRACT
The entire Contract consists of this form and any attached endorsement or rider.
Only Our authorized Officer may act on Our behalf to change or alter this
contract. Any change, modification or waiver must be made in writing.
OWNERSHIP PROVISIONS
OWNER
The Owner is named in the Contract Schedule and is the person who makes the
initial allocation of premium among the investment options.
ASSIGNMENT
Unless prohibited by the terms of this Contract or by law, the Payee may assign
any or all payments provided under this Annuity Contract. We will not be bound
by any assignment of this Annuity Contract unless the assignment is received in
Our Administrative Office. We are not responsible for the validity of such
assignments. The rights of the Payee and those of any Beneficiary (except an
irrevocable Beneficiary) will be subject to the assignment. An assignment will
not affect any payments We may make or actions We may take before such
assignment has been recorded at Our Administrative Office. Adverse federal
income tax consequences may result from an assignment.
BENEFICIARIES
Unless the Beneficiaries have been designated as irrevocable, the Beneficiaries
may be changed at any time by submitting a written notice to Us. Prior to the
Annuity Date You may name the Beneficiaries. After that date the Annuitant may
name or change the Beneficiaries. If a Beneficiary has been designated as
irrevocable, the Beneficiary's consent is needed for a change of Beneficiary. A
change of Beneficiary will take effect as of the date the written notice is
signed. However, the change will not affect any Annuity Benefit paid or action
taken before the change is recorded at Our Administrative Office. If the
Annuitant dies and there is no living Survivor, any death benefit will first be
payable to the most recently designated primary Beneficiary, and if such
Beneficiary is deceased, then to the most recently designated secondary
Beneficiary. If no Beneficiary is named or if no named Beneficiary survives the
Annuitant, any death benefit will be payable to the Annuitant's estate.
SINGLE PREMIUM PAYMENT
SINGLE PREMIUM PAYMENT
Your Single Premium Payment is shown on the Contract Schedule. Any taxes related
to the premium payment are deducted by the Company and the balance (the "Net
Single Premium") is available for allocation between Fixed and Variable Annuity
Income.
ALLOCATION OF THE PREMIUM
You, the Owner, determine the initial allocation of the Net Single Premium
between Fixed and Variable Annuity Income. The allocation is shown on the
Contract Schedule and will remain in effect until changed by written notice from
the Annuitant. If the initial allocation made at time of purchase has allocated
any portion of the Net Single Premium to Variable Annuity Income and the
Variable Investment Options, that portion of the Net Single Premium will first
be applied solely to the Money Market Division.
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The Net Single Premium portion will be allocated to the Money Market Division on
the later of the following dates:
1. The Contract Date; or
2. The date all requirements needed to place the Contract in force have
been satisfied, including receipt of the necessary premium in Our
Administrative Office.
The Net Single Premium will remain in the Money Market Division until the later
of the first Valuation Date following the 15th day after it was applied or the
first Valuation Day following the end of the Right to Examine period. At that
time, We will transfer the value of the Money Market Division into the Variable
Investment Option(s) selected at time of purchase.
All of the Net Single Premium allocated for Variable Annuity Income is placed in
Subaccounts, each of which invests in a specific Investment Option. All of the
Net Single Premium allocated for Fixed Annuity Income is placed in the Company's
General Account.
SEPARATE ACCOUNT
The Separate Account is established and maintained by the Company for the
purpose of investing amounts allocated to it from variable contracts issued by
the Company. The assets of the Separate Account are owned by the Company, are
held separately from other assets of the Company and are not chargeable with
liabilities arising out of any other business of the Company. Nothing contained
in this Contract shall be construed as to give You any rights, title or interest
in any of the assets held by the Separate Account. We have the right to transfer
to Our General Account any assets of the Separate Account which are in excess of
the liabilities of the Separate Account.
SUBACCOUNTS
The Separate Account is made up of one or more Subaccounts, each of which
invests in a portfolio of a specific Investment Option available under the
Contract. The Company reserves the right, subject to compliance with applicable
law, to make additions to, deletions from, or substitutions for the shares that
are held by any Subaccount or that the Subaccount may purchase.
INVESTMENT OPTIONS
The Investment Options you selected in the application are listed on the
Contract Schedule. The Subaccount may invest in mutual funds, unit investment
trusts and other investments which the Company elects to make available under
the Contract. Interests in an Investment Option are purchased at their net asset
value and valued on each Valuation Date. The Annuitant shares in the income,
gains and losses of the Investment Options for which the Annuitant's premiums
have been allocated. The Company does not guarantee the investment performance
of the Subaccounts. The Annuitant bears the full investment risk for amounts
allocated to Subaccounts.
ANNUITY UNITS
The Annuity Unit Value will vary from Valuation Date to Valuation Date with the
investment experience of the portfolio in which the Subaccount invests. For each
Subaccount You select, the premium amount allocated to it is converted into
Annuity Units, as follows: the number of Annuity Units is determined as of the
Valuation Date by dividing that premium amount by the Annuity Unit Value for
that Subaccount.
In determining Variable Annuity Unit values, the Company applies a Mortality and
Expense Risk Charge against the daily value of the assets of each Subaccount.
The amount of the charge is shown in the Contract Schedule.
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ANNUITY INCOME PAYMENT DATES
Variable Annuity Income will commence on the Income Start Date. Periodically, as
stated in the Contract Schedule, the same amount is paid to the Annuitant or
Joint Annuitant if applicable, until the next Income Change Date, which is
stated in the Contract Schedule.
If periodic benefit payments payable to any payee under the Contract are less
than $100, the Company reserves the right to make payments less frequently, and
will make these payments in an aggregate amount not later than the first day of
the period to which the payment applies.
DETERMINATION OF THE INITIAL ANNUITY INCOME
The following factors determine the amount of the first Annuity Income payment:
1. The amount of the premium allocated to provide Variable Annuity Income and
the Assumed Investment Return;
2. The amount of premium allocated to provide Fixed Annuity Income payments
and the prevailing interest rates;
3. The age and sex of the Annuitant, and Joint Annuitant if any;
4. The Annuity Income Option selected;
5. The frequency of Annuity Income payments;
6. The deduction of any applicable premium taxes; and
7. The time period from the Contract Date to the Income Start Date.
DETERMINATION OF SUBSEQUENT VARIABLE ANNUITY INCOME
As of an Annuity Income Valuation Date, We recalculate the Variable Annuity
Income to reflect the investment performance of each Subaccount You selected,
adjusted by the Assumed Investment Return factor. The Variable Annuity Income
will remain level until the next Income Change Date. Subsequent Variable Annuity
Income may be more or less than the previously calculated payment depending on
whether the net investment performance of the selected Subaccount is greater or
less than the Assumed Investment Return.
ANNUITY INCOME VALUATION DATES
The initial Annuity Income Valuation Date shall be coincident with the Contract
Date. Each subsequent Annuity Income Valuation Date shall be no earlier than
seven business days prior to the next Income Change Date and in no event shall
be later than that date. Any revision to the Variable Annuity Income in
connection with an Annuity Income Valuation Date shall be effective as of such
Income Change Date and shall remain fixed until the next following Income Change
Date thereafter.
TRANSFERS AMONG INVESTMENT OPTIONS
RIGHT TO TRANSFER
Subject to the "Transfer Restrictions" below, amounts allocated to Subaccounts
for Variable Annuity Income may be transferred among available Investment
Options at any time. The Company reserves the right to charge a transfer fee as
shown on the Contract Schedule. Amounts allocated for Variable Annuity Income
may be reallocated for Fixed Annuity Income. However, once amounts are allocated
for Fixed Annuity Income they cannot be reallocated for Variable Annuity Income.
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METHOD USED TO EFFECT TRANSFERS
Transfers among Investment Options are effected by transfers of Annuity Units
among the Subaccounts. The number of Annuity Units is affected by such
transfers. The number of Annuity Units attributable to the Variable Annuity
Income to be transferred is multiplied by the current Annuity Unit Value of the
Subaccount from which the Annuitant is transferring. This value is divided by
the current Annuity Unit Value of the Subaccount into which the Variable Annuity
Income is being transferred. The result of this division is the number of
additional Annuity Units allocated to the new Subaccount as a consequence of the
transfer. The total Variable Annuity Income, which may be affected by investment
experience after any transfer, will be calculated on the Annuity Income
Valuation Date next following the date of the transfer.
TRANSFER RESTRICTIONS
1. The Company reserves the right to limit the number of transfers among the
Subaccounts to no more than one (1) on any Valuation Date. The Company
reserves the right to request transfer instructions in writing via U. S.
mail.
2. The Company may limit substantive redemptions from a Portfolio followed by
a purchase back into the same Portfolio (not including the Money Market
Division).
3. The Company reserves the right to suspend an Owner's Transfer privilege.
4. Transfers will take effect as of the Valuation Date next following the date
on which the Company receives the transfer request.
5. The allocation of Variable Annuity Income after any transfer must result in
at least [five percent (5%)] of the total Variable Annuity Income being
derived from each of the utilized Subaccounts.
6. Amounts allocated for Fixed Annuity Income may not be reallocated for
Variable Annuity Income.
FIXED ANNUITY INCOME
Fixed Annuity Income represents obligations of the Company's General Account.
The Owner may select this payment on the application, and if so selected, the
payment amount is shown on the Contract Schedule. At any time thereafter, an
Annuitant may elect to transfer any or all of the Contract's Variable Annuity
Income to Fixed Annuity Income. Transfers may not be made from Fixed Annuity
Income to Variable Annuity Income.
DEATH BENEFITS
If neither the Annuitant nor Joint Annuitant, if any, is alive on the Income
Start Date, the Contract will be cancelled and the Company will pay a refund to
the Owner if living, or if not, to the Beneficiary. The amount of the refund
will be equal to the sum of the following: (1) the portion of the Net Single
Premium allocated for Variable Annuity Income, adjusted up or down for
investment performance; (2) the portion of the Net Single Premium allocated for
Fixed Annuity Income; and (3) the difference, if any, between the Single Premium
Payment and the Net Single Premium; minus the total of any payments already
made.
If an Annuitant dies after the Income Start Date, benefit continuation will be
determined by the Annuity Income Option in effect for the Certificate.
ANNUITY INCOME OPTIONS
The Annuity Income Option is selected by the Owner and is shown on the Contract
Schedule.
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DELAY OF BENEFIT PAYMENT
We will make any payment under this Contract within seven (7) days of its due
date or within seven (7) days of a request received in good order. However, We
reserve the right to suspend or postpone any type of payment or reallocation
from the Separate Account for any period when:
1. The New York Stock Exchange is closed for other than customary weekend and
holiday closings;
2. Trading on the New York Stock Exchange is restricted;
3. An emergency exists as a result of which it is not reasonable or
practicable to dispose of securities held in the Separate Account or
determine their value; or
4. The Securities and Exchange Commission so permits delay for the protection
of security holders.
GENERAL PROVISIONS
NON-PARTICIPATION IN SURPLUS
This Contract does not share in any distribution of the Company's profits or
surplus.
MISSTATEMENT OF AGE OR SEX
The Company may require proof of age and sex of the Annuitant and Joint
Annuitant, if any, before making any annuity income payments. If the Annuitant's
or Joint Annuitant's age or sex has been misstated, the Company will change the
benefits to those that the Net Single Premium would have purchased had the
correct age or sex been stated. If a misstatement is not discovered until after
the Income Start Date, the Company will take the following action: (1)
underpayments will be paid in one sum with the next annuity income payment
including interest at the annual rate of 3%, unless a higher interest rate is
legally required; (2) overpayments including interest at the annual rate of 3%,
unless a higher interest rate is legally required, will be deducted from future
annuity income payments until the total is repaid.
CONTRACT TO CONFORM TO INTERNAL REVENUE CODE
All terms of this Contract will be interpreted in accordance with the applicable
provisions of the Internal Revenue Code ("Code"). The Company reserves the right
to make changes to the Contract in order to conform to the applicable provisions
of the Code.
MODIFICATION OF CONTRACT
This Contract may not be modified by Us, without Your consent except as may be
required by applicable law. If the state insurance laws or regulations, the
federal securities or tax laws or regulations under which this Contract would
qualify as an annuity change, We may amend this Contract to comply with these
changes.
SEVERABILITY
Should one or more provisions of this Contract be held by a court of law to be
invalid, void or unenforceable, the remaining provisions will continue in full
force.
FACILITY OF PAYMENT
If a payee is unable to give a valid receipt for a payment made under this
Contract, We may make payments to the person, who, in Our opinion is caring for
that Payee until claim is made by his duly appointed guardian or other legal
representative.
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REPORTS
If You are receiving Variable Annuity Income, We will send You a report showing
the number of Annuity Units in each Subaccount and the value of each Annuity
Unit at least once per year and each time You transfer Annuity Units among
Subaccounts or to the General Account. The reports will be sent to Your last
known address.
TAXES
Any premium related taxes paid to any governmental entity will be charged
against the Single Premium prior to it being allocated as a Net Single Premium
to the Separate Account or Guaranteed Account.
If We incur taxes due to the operation of the Separate Account, We may make
charges for such taxes.
EVIDENCE OF SURVIVAL
Where any benefits under this Contract are contingent upon the recipient being
alive on a given date, We may require proof satisfactory to Us that the
condition has been met.
16IVIA0403
[LOGO OF AIGLIFE]
AIG LIFE INSURANCE COMPANY
[000 XXXX XXXXXX
XXXXXXXXXX, XXXXXXXX 00000]
SINGLE PREMIUM IMMEDIATE VARIABLE ANNUITY
NONPARTICIPATING
16IVIA0403
