[LOGO] SUN LIFE ASSURANCE
COMPANY OF CANADA (U.S.)
A member of Sun Financial Group
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
Insured Xxxx Xxx
Policy Number VL0000001
This Policy is a legal contract in which We, Sun Signed at Wellesley Hills, Massachusetts, on
Life Assurance Company of Canada (U.S.), the Issue Date.
promise to provide the kind of insurance
described below. Upon death of the Insured prior to
Maturity, We agree to pay the Beneficiary such
amounts as then become due and payable. Until
that time, We agree to provide You, as Owner, the Xxxxxx X. Xxxxxxx, President
other rights and benefits of the Policy. These
rights and benefits are subject to the provisions on
the pages which follow.
Xxxxxxxx X. Xxxx, Secretary
THE AMOUNT OF THE DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY
INCREASE OR DECREASE TO REFLECT THE INVESTMENT EXPERIENCE OF THE VARIABLE
ACCOUNT, AS DESCRIBED IN SECTION 8.
THE ACCOUNT VALUE IN EACH SUB-ACCOUNT OF THE VARIABLE ACCOUNT MAY INCREASE OR
DECREASE IN ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THAT SUB-ACCOUNT OF THE
VARIABLE ACCOUNT. THERE IS NO MINIMUM GUARANTEED ACCOUNT VALUE FOR AMOUNTS IN
THE SUB-ACCOUNTS OF THE VARIABLE ACCOUNT.
THE POLICY PROCEEDS ARE PAYABLE AT THE DEATH OF THE INSURED PRIOR TO MATURITY
AND WHILE THE POLICY IS IN FORCE. THE CASH SURRENDER VALUE, IF ANY, IS PAYABLE
ON THE DATE OF MATURITY.
THE POLICY DOES NOT PARTICIPATE IN DIVIDENDS.
FLEXIBLE PREMIUMS ARE PAYABLE DURING THE LIFETIME OF THE INSURED PRIOR TO
MATURITY.
RIGHT TO RETURN POLICY.
PLEASE READ YOUR POLICY CAREFULLY. IF YOU ARE NOT SATISFIED WITH IT, YOU MAY
RETURN IT BY DELIVERING OR MAILING IT TO US AT ONE SUN LIFE EXECUTIVE PARK,
ATTN: CORPORATE MARKETS, WELLESLEY HILLS, MASSACHUSETTS 02181, OR TO THE SALES
REPRESENTATIVE THROUGH WHOM YOU PURCHASED THE POLICY WITHIN 20 DAYS FROM THE
DATE OF RECEIPT OR WITHIN 45 DAYS AFTER THE APPLICATION IS SIGNED, WHICHEVER
PERIOD ENDS LATER (THE "FREE LOOK PERIOD"). THE POLICY WILL THEN BE DEEMED VOID
AS THOUGH IT HAD NEVER BEEN APPLIED FOR. YOU WILL RECEIVE A REFUND EQUAL TO THE
SUM OF (1) THE DIFFERENCE BETWEEN ANY PREMIUM PAYMENTS MADE, INCLUDING FEES AND
CHARGES, AND THE AMOUNTS ALLOCATED TO THE VARIABLE ACCOUNT, (2) THE VALUE OF THE
AMOUNTS ALLOCATED TO THE VARIABLE ACCOUNT ON THE DATE THE CANCELLATION REQUEST
IS RECEIVED BY THE COMPANY OR THE SALES REPRESENTATIVE THROUGH WHOM YOU
PURCHASED THE POLICY, AND (3) ANY FEES OR CHARGES IMPOSED ON AMOUNTS ALLOCATED
TO THE VARIABLE ACCOUNT.
TABLE OF CONTENTS
1. POLICY SPECIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . Page 4a
2. TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK . . . . . . . . . . . . . . . . .Page 8
3. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Account Value. . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Anniversary. . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Application. . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Attained Age . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Beneficiary. . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Cash Surrender Value . . . . . . . . . . . . . . . . . . . . . . .Page 9
Class. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Daily Risk Percentage. . . . . . . . . . . . . . . . . . . . . . .Page 9
Due Proof. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Effective Date of Coverage . . . . . . . . . . . . . . . . . . . .Page 9
Expense Charges Applied to Premium . . . . . . . . . . . . . . . .Page 9
Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
General Account. . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Insured. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Investment Start Date. . . . . . . . . . . . . . . . . . . . . . .Page 9
Issue Age. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Page 9
Issue Date . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Loan Account . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Minimum Premium. . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Monthly Anniversary Day. . . . . . . . . . . . . . . . . . . . . Page 10
Monthly Cost of Insurance. . . . . . . . . . . . . . . . . . . . Page 10
Monthly Expense Charge . . . . . . . . . . . . . . . . . . . . . Page 10
Mortality and Expense Risk Percentage. . . . . . . . . . . . . . Page 10
Net Premium. . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Our Principal Office . . . . . . . . . . . . . . . . . . . . . . Page 10
Owner. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Partial Surrender. . . . . . . . . . . . . . . . . . . . . . . . Page 10
Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Policy Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Policy Month . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Policy Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Policy Year. . . . . . . . . . . . . . . . . . . . . . . . . . . Page 10
Premium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Sales Load Refund at Surrender . . . . . . . . . . . . . . . . . Page 11
Service Center . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Specified Face Amount. . . . . . . . . . . . . . . . . . . . . . Page 11
Sub-Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Target Premium . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Valuation Date . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Valuation Period . . . . . . . . . . . . . . . . . . . . . . . . Page 11
Variable Account . . . . . . . . . . . . . . . . . . . . . . . . Page 11
We, Our and Us . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
You and Your . . . . . . . . . . . . . . . . . . . . . . . . . . Page 11
4. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . Page 12
Entire Contract. . . . . . . . . . . . . . . . . . . . . . . . . Page 12
Alteration . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 12
Modification . . . . . . . . . . . . . . . . . . . . . . . . . . Page 12
TABLE OF CONTENTS (CONTINUED)
Page 2
Assignments. . . . . . . . . . . . . . . . . . . . . . . . . . . Page 12
Conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 12
Nonparticipating . . . . . . . . . . . . . . . . . . . . . . . . Page 12
Misstatement of Age or Sex (Non-Unisex Policy) . . . . . . . . . Page 12
Suicide. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 13
Incontestability . . . . . . . . . . . . . . . . . . . . . . . . Page 13
Report to Owner. . . . . . . . . . . . . . . . . . . . . . . . . Page 13
Illustrations. . . . . . . . . . . . . . . . . . . . . . . . . . Page 13
5. RIGHTS OF OWNERS AND BENEFICIARIES . . . . . . . . . . . . . . . . . Page 14
Rights of Owner. . . . . . . . . . . . . . . . . . . . . . . . . Page 14
Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 14
Rights of Beneficiary. . . . . . . . . . . . . . . . . . . . . . Page 14
6. THE VARIABLE ACCOUNT . . . . . . . . . . . . . . . . . . . . . . . . Page 15
Sub-Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . Page 15
Addition, Deletion or Substitution of Investments. . . . . . . . Page 15
Transfers Between Sub-Accounts . . . . . . . . . . . . . . . . . Page 15
7. PREMIUMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 16
Planned Periodic Premiums. . . . . . . . . . . . . . . . . . . . Page 16
Premium. . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 16
Net Premiums . . . . . . . . . . . . . . . . . . . . . . . . . . Page 16
Allocation of Net Premium. . . . . . . . . . . . . . . . . . . . Page 16
Modified Endowment Contract. . . . . . . . . . . . . . . . . . . Page 17
8. DEATH BENEFIT. . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 17
Death Benefit Compliance Test. . . . . . . . . . . . . . . . . . Page 17
Death Benefit and Death Benefit Option . . . . . . . . . . . . . Page 17
Changes in Specified Face Amount . . . . . . . . . . . . . . . . Page 18
Decreases in Specified Face Amount . . . . . . . . . . . . . . . Page 18
Increases in Specified Face Amount . . . . . . . . . . . . . . . Page 18
Changes in the Death Benefit Option. . . . . . . . . . . . . . . Page 18
9. ACCOUNT VALUE. . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 19
Account Value. . . . . . . . . . . . . . . . . . . . . . . . . . Page 19
Account Value in the Sub-Accounts. . . . . . . . . . . . . . . . Page 19
Net Investment Factor. . . . . . . . . . . . . . . . . . . . . . Page 20
Loan Account . . . . . . . . . . . . . . . . . . . . . . . . . . Page 21
Daily Risk Percentage. . . . . . . . . . . . . . . . . . . . . . Page 21
Monthly Expense Charge . . . . . . . . . . . . . . . . . . . . . Page 21
Monthly Cost of Insurance. . . . . . . . . . . . . . . . . . . . Page 21
Monthly Cost of Insurance Rates. . . . . . . . . . . . . . . . . Page 22
Basis of Computation . . . . . . . . . . . . . . . . . . . . . . Page 22
Insufficient Value . . . . . . . . . . . . . . . . . . . . . . . Page 22
Grace Period . . . . . . . . . . . . . . . . . . . . . . . . . . Page 22
Splitting Units. . . . . . . . . . . . . . . . . . . . . . . . . Page 22
10. POLICY BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . Page 23
Benefits at Death. . . . . . . . . . . . . . . . . . . . . . . . Page 23
Cash Surrender Value . . . . . . . . . . . . . . . . . . . . . . Page 23
Surrender. . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 23
Partial Surrender. . . . . . . . . . . . . . . . . . . . . . . . Page 23
Allocation of Partial Surrender. . . . . . . . . . . . . . . . . Page 23
Policy Loan. . . . . . . . . . . . . . . . . . . . . . . . . . . Page 23
Deferral of Payment. . . . . . . . . . . . . . . . . . . . . . . Page 24
Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . Page 24
RIDERS AND ENDORSEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
APPLICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page 3
1. POLICY SPECIFICATIONS
Insured Xxxx Xxx
Policy Number VL0000001
Office ABC Insurance Agency
Issue Age, Sex 35 Male
Class Preferred - Guaranteed Issue
Specified Face Amount $100,000
Additional Protection Benefit Rider Face Amount $50,000
---------
Total Face Amount $150,000
Minimum Total Face Amount $50,000
Minimum Specified Face Amount $5,000
Minimum Premium $990
Planned Periodic Premium $1,400
Billing Period Annual
Issue Date January 1, 1997
Maturity January 1, 2062
Currency United States Dollars
Owner XYZ Corporation
Beneficiary As stated in the Application
unless subsequently changed
Death Benefit Option Option A: Specified Face Amount
Death Benefit Compliance Test Guideline Premium
Variable Account
Name G
Securities & Exchange Commission
Registration Unit Investment Trust
THE PLANNED PERIODIC PREMIUM SHOWN ABOVE MAY BE INSUFFICIENT TO CONTINUE
COVERAGE TO MATURITY. THE PERIOD FOR WHICH THE POLICY WILL REMAIN IN FORCE
DEPENDS ON THE AMOUNT AND TIMING OF PREMIUMS PAID, DEDUCTIONS FOR BENEFITS AND
RIDERS, CHANGES IN THE SPECIFIED FACE AMOUNT AND DEATH BENEFIT OPTION,
SUB-ACCOUNT PERFORMANCE, POLICY LOANS, PARTIAL SURRENDERS AND FEES.
Service Center: Andesa TPA, Inc., 0000 X. Xxxxx Xxxxx Xxxx., Xxxxx 000,
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Page 4a
1. POLICY SPECIFICATIONS (CONTINUED)
Xxxx Xxx VL0000001
Expense Charges Applied to Premium
Premium Tax 4.0% in all
Policy years
DAC Tax 1.25% in all
Policy years
Sales Load
Policy Years 1 through 7
On Premium paid during the Policy Year up to and
including Target 8.75%
On Premium paid during the Policy Year in
excess of Target 2.25%
Policy Years 8 and after on all Premium 0%
Sales Load Refund at Surrender
Policy Years 1 through 3
On Premium paid during the Policy Year up to
and including Target 6%
On Premium paid during the Policy Year in
excess of Target 2.25%
Policy Years 4 and after on all Premium 0%
Target Premium $3,965
Monthly Expense Charge in All Months $13.75
Mortality and Expense Risk Percentage 0.90%
Daily Risk Percentage 0.0024548%
Policy Loan Interest Rate (payable in arrears) 5% annually during Policy
years 1-10 4.25% annually
in Policy years 11 and
after
Interest Credited on Loan Account 4% annually
-------------------------------------------------------------------------------
Supplemental Benefits and Changes
Type Effective Date of Coverage Face Amount
Additional Protection Benefit Rider January 1, 1997 $50,000
-------------------------------------------------------------------------------
Page 4b
1. POLICY SPECIFICATIONS (CONTINUED)
Xxxx Xxx VL0000001
NET PREMIUM ALLOCATION PERCENTAGES (as of January 1, 1997)
MFS/Sun Life Series Trust
Sub-Account - Capital Appreciation Series 50%
------
Sub-Account - Emerging Growth Series %
------
Sub-Account - Government Securities Series 50 %
------
Sub-Account - Total Return Series %
------
Sub-Account - World Growth Series %
------
Fidelity Variable Insurance Products Fund
Fidelity Variable Insurance Products Fund II
Sub-Account - Contrafund Portfolio %
------
Sub-Account - Equity-Income Portfolio %
------
Sub-Account - Growth Portfolio %
------
Sub-Account - High-Income Portfolio %
------
Sub-Account - Index 500 Portfolio %
------
Sub-Account - Money Market Portfolio %
------
Xxxxxxxxx & Xxxxxx Advisers Management Trust
Sub-Account - Limited Maturity Bond Portfolio %
------
Sub-Account - Partners Portfolio %
------
JPM Series Trust II
Sub-Account - Bond Portfolio %
------
Sub-Account - Equity Portfolio %
------
Sub-Account - Small Company Portfolio %
------
Xxxxxxxxx Variable Products Series Fund
Sub-Account - Stock Fund Portfolio %
------
Page 5
1. POLICY SPECIFICATIONS (CONTINUED)
Xxxx Xxx VL0000001
DESCRIPTION OF VARIABLE ACCOUNT G SUB-ACCOUNTS
Variable Account G is divided into 17 Sub-Accounts. Each Sub-Account invests in
a series, portfolio or fund of MFS/Sun Life Series Trust, Fidelity Variable
Insurance Products Fund, Fidelity Variable Insurance Products Fund II, Xxxxxxxxx
& Xxxxxx Advisers Management Trust, JPM Series Trust II and Xxxxxxxxx Variable
Products Series Fund. The names and investment objectives of these series,
portfolios or funds follow:
MFS/SUN LIFE SERIES TRUST. MFS/Sun Life Series Trust (the "MFS Series Fund") is
an open-end investment management company registered under the Investment
Company Act of 1940 (a "mutual fund") organized as a Massachusetts business
trust. The MFS Series Fund is managed by Massachusetts Financial Services, Inc.
("MFS"), a subsidiary of the Company. In addition, the World Growth Series is
managed by the following sub-advisers: Oechsle International Advisors, L.P., an
independent international investment adviser, Foreign & Colonial Management
Limited ("FCM"), and Foreign & Colonial Emerging Markets Limited, a subsidiary
of FCM. The MFS Series Fund is composed of nineteen independent portfolios of
securities, five of which are currently available for investment by the Variable
Account.
CAPITAL APPRECIATION SERIES seeks capital appreciation by investing in
securities of all types, with major emphasis on common stocks.
EMERGING GROWTH SERIES seeks long term growth of capital by investing primarily
(I.E., at least 80% of its assets under normal circumstances) in common stocks
of emerging growth companies. Emerging growth companies include companies that
MFS believes are early in their life cycle but which have the potential to
become major enterprises. Dividend and interest income from portfolio
securities, if any, is incidental to its objective of long-term growth of
capital.
GOVERNMENT SECURITIES SERIES seeks current income and preservation of capital by
investing in U.S. Government and U.S. Government-related securities.
TOTAL RETURN SERIES seeks primarily to obtain above-average income (compared to
a portfolio entirely invested in equity securities) consistent with prudent
employment of capital; its secondary objective is to take advantage of
opportunities for growth of capital and income. Assets will be allocated and
reallocated from time to time between money market, fixed income and equity
securities. Under normal market conditions, at least 25% of the series' assets
will be invested in fixed income securities and at least 40% and no more than
75% of its assets will be invested in equity securities.
WORLD GROWTH SERIES seeks capital appreciation by investing in securities of
companies worldwide growing at rates expected to be well above the growth rate
of the overall U.S. economy.
FIDELITY VIP FUND AND VIP FUND II. Variable Insurance Products Fund ("VIP
Fund") and Variable Insurance Products Fund II ("VIP Fund II") are mutual funds
organized as Massachusetts business trusts. VIP Fund and VIP Fund II are both
managed by Fidelity Management & Research Company ("FMR"), located at 00
Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. FMR is the management arm of
Fidelity Investments, which was established in 1946 and is one of the largest
investment management organizations in the United States. Various Fidelity
companies perform activities required for the operation of VIP Fund and VIP Fund
II, and affiliates of FMR may assist it in the choosing of investments for the
funds. Each of the VIP Fund and VIP Fund II is composed of five portfolios of
securities, for a total of 10 portfolios, of which six portfolios, in the
aggregate, are available for investment under the Policy.
VIP II CONTRAFUND PORTFOLIO seeks long-term capital appreciation. Portfolio
purchases will normally be common stock and securities convertible into common
stock of companies believed to be undervalued due to an overly pessimistic
appraisal by the public.
Page 6a
1. POLICY SPECIFICATIONS (CONTINUED)
Xxxx Xxx VL0000001
VIP EQUITY-INCOME PORTFOLIO seeks reasonable income by investing primarily in
income-producing equity securities. The portfolio seeks to achieve a yield in
excess of the composite yield of the Standard & Poor's 500 Composite Stock Index
("S&P 500"), a recognized measure of U.S. stock market performance. At least
65% of the portfolio's assets will be invested in income-producing common or
preferred stock, with the remainder normally invested in convertible and non-
convertible debt obligations.
VIP GROWTH PORTFOLIO seeks capital appreciation. Portfolio purchases normally
will be common stocks of both smaller, less-known companies and well-known,
established companies although the investments are not restricted to any one
type of security. Dividend income will only be considered if it might have an
effect on stock values.
VIP HIGH INCOME PORTFOLIO seeks a high level of current income by investing in
high income producing, lower-rated debt securities (sometimes called "junk
bonds"), preferred stocks including convertible securities and restricted
securities.
VIP II INDEX 500 PORTFOLIO seeks investment results that correspond to the total
return of common stocks publicly traded in the United States, as presented by
the S&P 500. The portfolio will primarily invest in equity securities of
companies that compose the S&P 500. The portfolio will also purchase short-term
debt securities for cash management purposes and use various investment
techniques, such as futures contracts, to adjust its exposure to the S&P 500.
VIP MONEY MARKET PORTFOLIO seeks to obtain as high a level of current income as
is consistent with preserving capital and providing liquidity. The Portfolio
will invest in high quality U.S. dollar-denominated money market instruments of
domestic and foreign issuers.
XXXXXXXXX & XXXXXX ADVISERS MANAGEMENT TRUST. Xxxxxxxxx & Xxxxxx Advisers
Management Trust ("AMT") is a mutual fund organized as a Delaware business
trust. AMT is composed of seven separate portfolios (each an "AMT Portfolio").
Each AMT Portfolio invests all of its net investable assets in its corresponding
series (each an "AMT Series") of Advisers Managers Trust, an open-end management
investment company. All AMT Series of Advisers Managers Trust are managed by
Xxxxxxxxx & Xxxxxx Management Inc. Each AMT Series invests in accordance with
an investment objective, policies, and limitations identical to those of its
corresponding AMT Portfolio. The Policy provides for investment in shares of
the two AMT Portfolios described below.
LIMITED MATURITY BOND PORTFOLIO primarily seeks the highest current income and
total return consistent with low risk to principal and liquidity; and
secondarily, total return. AMT Limited Maturity Bond Portfolio invests in a
diversified portfolio of fixed and variable rate debt securities and seeks to
increase income and preserve or enhance total return by actively managing
average portfolio duration in light of market conditions and trends. This AMT
Series' dollar-weighted average portfolio duration may range up to four years.
PARTNERS PORTFOLIO seeks capital growth through an investment approach that is
designed to increase capital with reasonable risk. Its investment program seeks
securities believed to be undervalued based on strong fundamentals such as low
price-to-earning ratios, consistent cash flow, and support from asset values.
JPM SERIES TRUST II. The JPM Series Trust II ("JPM") is a mutual fund organized
as a Delaware business trust. JPM is composed of five separate portfolios of
securities, each of which has separate investment objectives and policies. The
Policy provides for investment in the three portfolios of JPM described below.
1. POLICY SPECIFICATIONS (CONTINUED)
Xxxx Xxx VL0000001
Page 6b
JPM BOND PORTFOLIO seeks to provide a high total return consistent with moderate
risk of capital and maintenance of liquidity by investing broadly in the fixed-
income markets.
JPM EQUITY PORTFOLIO seeks to provide a high total return by investing in
selected equity securities of large and mid-sized U.S. corporations with market
capitalizations above $1.5 billion.
JPM SMALL COMPANY PORTFOLIO seeks to provide a high total return by investing in
equity securities of companies primarily with market capitalizations of less
than $2 billion.
XXXXXXXXX VARIABLE PRODUCTS SERIES FUND. Xxxxxxxxx Variable Products Series
Fund ("TVPSF") is a mutual fund organized as a Massachusetts business trust.
TVPSF has contracted with Xxxxxxxxx Investment Counsel, Inc. to manage the
Xxxxxxxxx Stock Fund. TVPSF is composed of six separate series, each of which
has separate investment objectives and policies. The Policy provides for
investment in one of the series of TVPSF described below.
XXXXXXXXX STOCK FUND seeks capital growth through a policy of investing
primarily in common stocks issued by companies, large and small, throughout the
world. In pursuit of this objective, the fund will normally maintain at least
65% of its assets in common and preferred stocks.
There can be no assurance that the investment objectives of these series,
portfolios or funds, or any other funds that the Variable Account may offer,
will be achieved. The objectives of these series, portfolios or funds may be
changed in accordance with the requirements of the Investment Company Act of
1940.
Page 6c
1. POLICY SPECIFICATIONS (CONTINUED)
TABLE OF DEATH BENEFIT PERCENTAGES
APPLICABLE APPLICABLE
AGE PERCENTAGE AGE PERCENTAGE
20 250% 60 130%
21 250% 61 128%
22 250% 62 126%
23 250% 63 124%
24 250% 64 122%
25 250% 65 120%
26 250% 66 119%
27 250% 67 118%
28 250% 68 117%
29 250% 69 116%
30 250% 70 115%
31 250% 71 113%
32 250% 72 111%
33 250% 73 109%
34 250% 74 107%
35 250% 75 105%
36 250% 76 105%
37 250% 77 105%
38 250% 78 105%
39 250% 79 105%
40 250% 80 105%
41 243% 81 105%
42 236% 82 105%
43 229% 83 105%
44 222% 84 105%
45 215% 85 105%
46 209% 86 105%
47 203% 87 105%
48 197% 88 105%
49 191% 89 105%
50 185% 90 105%
51 178% 91 104%
52 171% 92 103%
53 164% 93 102%
54 157% 94 101%
55 150% 95 100%
56 146% 96 100%
57 142% 97 100%
58 138% 98 100%
59 134% 99 100%
Page 7
2. TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
MONTHLY RATES MONTHLY RATES
UNISEX UNISEX
AGE OR MALES FEMALES AGE OR MALES FEMALES
20 0.15836 0.08751 60 1.34180 0.78979
21 0.15919 0.08917 61 1.46381 0.84488
22 0.15752 0.09084 62 1.60173 0.91417
23 0.15502 0.09251 63 1.75809 1.00267
24 0.15169 0.09501 64 1.93206 1.10539
25 0.14752 0.09668 65 2.12283 1.21731
26 0.14419 0.09918 66 2.32623 1.33511
27 0.14252 0.10168 67 2.54312 1.45461
28 0.14169 0.10501 68 2.77350 1.57247
29 0.14252 0.10835 69 3.02328 1.69955
30 0.14419 0.11251 70 3.30338 1.84590
31 0.14836 0.11668 71 3.62140 2.02325
32 0.15252 0.12085 72 3.98666 2.24419
33 0.15919 0.12502 73 4.40599 2.51548
34 0.16669 0.13168 74 4.87280 2.83552
35 0.17586 0.13752 75 5.37793 3.19685
36 0.18670 0.14669 76 5.91225 3.59370
37 0.20004 0.15752 77 6.46824 4.01942
38 0.21505 0.17003 78 7.04089 4.47410
39 0.23255 0.18503 79 7.64551 4.97042
40 0.25173 0.20171 80 8.30507 5.52957
41 0.27424 0.22005 81 9.03761 6.17118
42 0.29675 0.23922 82 9.86724 6.91414
43 0.32260 0.25757 83 10.80381 7.77075
44 0.34929 0.27674 84 11.82571 8.72632
45 0.37931 0.29675 85 12.91039 9.76952
46 0.41017 0.31677 86 14.03509 10.89151
47 0.44353 0.33761 87 15.18978 12.08770
48 0.47856 0.36096 88 16.36948 13.35774
49 0.51777 0.38598 89 17.57781 14.70820
50 0.55948 0.41350 90 18.82881 16.15259
51 0.60870 0.44270 91 20.14619 17.71416
52 0.66377 0.47523 92 21.57655 19.43814
53 0.72636 0.51276 93 23.20196 21.40786
54 0.79730 0.55114 94 25.28174 23.83051
55 0.87326 0.59118 95 28.27411 27.16158
56 0.95591 0.63123 96 33.10677 32.32378
57 1.04192 0.66961 97 41.68475 41.21204
58 1.13378 0.70633 98 58.01259 57.81394
59 1.23235 0.74556 99 83.33333 83.33333
Page 8
3. DEFINITIONS
ACCOUNT VALUE: The sum of the amounts in each Sub-Account of the Variable
Account with respect to the Policy, and the amount of the Loan Account.
ANNIVERSARY: The same day in each succeeding year as the day of the year
corresponding to the Issue Date.
APPLICATION: Your application for the Policy, a copy of which is attached
hereto and incorporated herein.
ATTAINED AGE: The Insured's Issue Age plus the number of completed Policy Years.
BENEFICIARY: The person or entity entitled to receive the Policy Proceeds as
they become due at death.
BUSINESS DAY: Any day that We are open for business.
CASH SURRENDER VALUE: The Account Value decreased by the balance of any
outstanding Policy Debt, increased by the Sales Load Refund at Surrender, if
any.
CLASS: The risk, underwriting and substandard table rating, if any,
classification of the Insured, as specified in Section 1.
COMPANY: Sun Life Assurance Company of Canada (U.S.).
DAILY RISK PERCENTAGE: The daily rate for deduction of the mortality and
expense risk charge as specified in Section 1.
DUE PROOF: Such evidence as We may reasonably require in order to establish
that Policy Proceeds are due and payable.
EFFECTIVE DATE OF COVERAGE: Initially, the Investment Start Date; with respect
to any increase in the Total Face Amount, the Monthly Anniversary Day that falls
on or next follows the date We approve the supplemental application for such
increase; with respect to any decrease in the Total Face Amount, the Monthly
Anniversary Day that falls on or next follows the date We receive Your request.
EXPENSE CHARGES APPLIED TO PREMIUM: The expense charges applied to Premium,
consisting of the charges for premium tax, the Federal deferred acquisition cost
("DAC") tax, and the sales load as specified in Section 1.
FUND: A mutual fund in which a Sub-Account invests.
GENERAL ACCOUNT: The assets held by Us, other than those allocated to the
Sub-Accounts of the Variable Account or any other separate account of the
Company.
INSURED: The person on whose life the Policy is issued.
INVESTMENT START DATE: The date the first Premium is applied, which will be the
later of the Issue Date, the Business Day We approve the application for a
Policy, or the Business Day We receive a Premium equal to or in excess of the
Minimum Premium.
ISSUE AGE: The Insured's age as of the Insured's birthday nearest the Issue
Date.
Page 9
ISSUE DATE: The date specified as such in Section 1, from which Anniversaries,
Policy Years, and Policy Months are measured.
LOAN ACCOUNT: An account established for the Policy, the value of which is the
principal amount of any outstanding loan against the Policy, plus credited
interest thereon.
MATURITY: The Anniversary on which the Insured's Attained Age is 100. If the
Insured is living and the Policy is in force on this date, the Cash Surrender
Value is payable to You. It is possible that insurance coverage may not
continue to Maturity as described in the Insufficient Value Provision of Section
9, even if Planned Periodic Premiums are paid in a timely manner.
MINIMUM PREMIUM: The Premium amount specified as such in Section 1.
MONTHLY ANNIVERSARY DAY: The same day in each succeeding month as the day of
the month corresponding to the Issue Date.
MONTHLY COST OF INSURANCE: A deduction made on a monthly basis for the
insurance coverage provided by the Policy, as specified in Section 9.
MONTHLY EXPENSE CHARGE: A per Policy deduction made on a monthly basis for
administration and other expenses as specified in Section 1.
MORTALITY AND EXPENSE RISK PERCENTAGE: The annual percentage rate deducted from
the Account Value in the Sub-Accounts for the mortality and expense risk charge
as specified in Section 1. This annual rate is converted to a daily rate, the
Daily Risk Percentage, and deducted from the Account Value on a daily basis.
NET PREMIUM: The amount You pay as the Premium less the Expense Charges Applied
to Premium.
OUR PRINCIPAL OFFICE: Sun Life Assurance Company of Canada (U.S.) (Attn:
Corporate Markets), One Sun Life Executive Park, Wellesley Hills, Massachusetts,
02181, or such other address as We may hereafter specify to You by written
notice.
OWNER: The person, persons or entity entitled to the ownership rights stated in
the Policy while the Insured is alive.
PARTIAL SURRENDER: A surrender of a portion of the Account Value in exchange
for a payment to the Owner in accordance with the terms of Section 10.
POLICY: This life insurance contract, including the attached copy of the
Application and any attached copies of supplemental applications for increases
in the face amount.
POLICY DEBT: The principal amount of any outstanding loan against the Policy,
plus accrued but unpaid interest on such loan.
POLICY MONTH: A policy month is a one-month period commencing on the Issue Date
or any Monthly Anniversary Day and ending on the next Monthly Anniversary Day.
POLICY PROCEEDS: The amount determined in accordance with the terms of the
Policy which is payable at the death of the Insured prior to Maturity. This
amount is the Death Benefit as described in Section 8, decreased by the amount
of any outstanding Policy Debt, and increased by the amounts payable under any
supplemental benefits.
POLICY YEAR: A Policy Year is a one-year period commencing on the Issue Date or
any Anniversary and ending on the next Anniversary.
Page 10
PREMIUM: An amount paid to Us by the Owner or on the Owner's behalf as
consideration for the benefits provided by the Policy.
SALES LOAD REFUND AT SURRENDER: The portion of any Premium paid in the Policy
Year of surrender which is refunded upon Surrender in the first three Policy
Years, determined in the manner specified in Section 1.
SERVICE CENTER: The office specified in Section 1 or such other service center
or address as We may hereafter specify to You by written notice.
SPECIFIED FACE AMOUNT: The amount of life insurance coverage You request as
specified in Section 1.
SUB-ACCOUNTS: Sub-accounts into which the assets of the Variable Account are
divided, each of which corresponds to an investment choice available to You.
TARGET PREMIUM: The amount of Premium specified as such in Section 1. The
sales load deduction and the Sales Load Refund at Surrender vary depending on
whether Premiums paid in the given Policy Year are below or above the Target
Premium.
UNIT: A unit of measurement that We use to calculate the value of each Sub-
Account.
UNIT VALUE: The value of each Unit of assets in a Sub-Account.
VALUATION DATE: Any day that benefits vary and on which the New York Stock
Exchange, We, and the relevant Fund are open for business. A Valuation Date
will also include any day that may be required by any applicable Securities and
Exchange Commission Rules and Regulations.
VALUATION PERIOD: The period of time from one determination of Unit Values to
the next, subsequent determination of Unit Values. We will determine Unit
Values for each Valuation Date as of the close of the New York Stock Exchange on
that Valuation Date.
VARIABLE ACCOUNT: Sun Life Assurance Company of Canada (U.S.) Variable Account
G, a separate account of the Company consisting of assets set aside by the
Company, the investment performance of which is kept separate from that of the
general assets of the Company (also referred to as "Variable Account G").
WE, OUR and US: We, Our and Us refer to Sun Life Assurance Company of Canada
(U.S.).
YOU and YOUR: In this Policy, You and Your refer to the Owner of the Policy.
In the Application, You and Your refer to the proposed Insured.
Page 11
4. GENERAL PROVISIONS
ENTIRE CONTRACT. Your entire contract with Us consists of the Policy, including
the attached copy of the Application and any attached copies of supplemental
applications for increases in the face amount. Any illustrations prepared in
connection with the Policy do not form a part of Our contract with You and are
intended solely to provide information about possible future performance, based
solely upon data available at the time such illustrations are prepared.
ALTERATION. Sales Representatives do not have the authority to either alter or
modify the Policy or to waive any of its provisions. The only persons with this
authority are Our president, actuary, secretary, or one of Our vice presidents.
MODIFICATION. Upon notice to You, We may modify the Policy if such modification
(1) is necessary to make the Policy or the Variable Account comply with any law
or regulation issued by a governmental agency to which the Company or the
Variable Account is subject; or (2) is necessary to assure continued
qualification of the Policy under the Internal Revenue Code or other federal or
state laws as a life insurance policy; or (3) is necessary to reflect a change
in the operation of the Variable Account or the Sub-Accounts; or (4) adds,
deletes or otherwise changes Sub-Account options. We also reserve the right to
modify certain provisions of the Policy as stated in those provisions. In the
event of any such modification, We may make appropriate amendment to the Policy
to reflect such modification.
ASSIGNMENTS. During the lifetime of the Insured, You may assign all or some of
Your rights under the Policy. All Assignments must be filed at Our Service
Center and must be in written form satisfactory to Us. The Assignment will then
be effective as of the date You signed the form, subject to any action taken
before it was received by Us at Our Service Center. We are not responsible for
the validity or legal effect of any Assignment.
CONVERSION. You may convert the Policy into a flexible premium universal life
policy offered by Sun Life Assurance Company of Canada during the first 24
months after the Issue Date while the Policy is in force. Choice of a new
policy is subject to Our approval and will be restricted to those policies that
offer the same Class and rating as the Policy. The new policy will be issued
with the same Class and rating as the Policy without evidence of the Insured's
insurability. The conversion provision does not apply to any riders or
supplemental benefits that may be attached to the Policy. Riders or
supplemental benefits will terminate automatically when the Policy is converted.
NONPARTICIPATING. The Policy does not pay dividends.
MISSTATEMENT OF AGE OR SEX (NON-UNISEX POLICY). If the age or (in the case of a
Non-Unisex Policy) sex of the Insured is stated incorrectly in the Application,
the amounts payable by Us will be adjusted as follows:
- Misstatement discovered at death: The Death Benefit will be recalculated to
that which would be purchased by the most recently charged Monthly Cost of
Insurance Rate for the correct age or (for a Non-Unisex Policy) Sex.
- Misstatement discovered prior to death: The Account Value will be
recalculated from the Issue Date using the Monthly Cost of Insurance Rates
based on the correct age or (for a Non-Unisex Policy) Sex.
If Your Policy is Unisex, it is so indicated in Section 1.
Page 12
SUICIDE. If the Insured, whether sane or insane, commits suicide within two
years after the Issue Date, We will not pay any part of the Policy Proceeds. We
will refund to You the Premiums paid, less the amount of any Policy Debt and any
Partial Surrenders.
INCONTESTABILITY. All statements made in the Application or in a supplemental
application are representations and not warranties. We relied and will rely on
these statements when approving the issuance, increase in face amount, increase
in Death Benefit over Premium paid, or change in Death Benefit Option of the
Policy. No statement can be used by Us in defense of a claim unless the
statement was made in the Application or in a supplemental application. In the
absence of fraud, after the Policy has been in force during the lifetime of the
Insured for a period of two years from its Issue Date, We cannot contest it
except for non-payment of Premiums in accordance with the Insufficient Value
provision of Section 9. However, any increase in the face amount which is
effective after the Issue Date will be incontestable only after such increase
has been in force during the lifetime of the Insured for two years from the
Effective Date of Coverage of such increase. Any increase in Death Benefit over
Premium paid or increase in Death Benefit due to a Death Benefit Option change
will be incontestable only after such increase has been in force during the
lifetime of the Insured for two years from the date of the increase.
REPORT TO OWNER. We will send You a report at least once each Policy Year. The
report will show current Policy values, Premiums paid, and deductions made since
the last report. It will also show the balance of any outstanding Policy loans
and accrued interest on such loans. There is no charge for this report.
ILLUSTRATIONS. Upon request, We will provide You with an illustration of future
Account Value and Death Benefits. This illustration will be furnished to You
for a nominal fee not to exceed $25.
Page 13
5. RIGHTS OF OWNERS AND BENEFICIARIES
RIGHTS OF OWNER. While the Insured is alive, unless You have assigned any of
these rights, You may:
- transfer ownership to a new Owner;
- name a contingent Owner who will automatically become the Owner of the
Policy if You die before the Insured;
- change or revoke a contingent Owner;
- change or revoke a Beneficiary;
- exercise all other rights in the Policy;
- increase or decrease the Specified Face Amount, subject to the other
Provisions of the Policy;
- change the Death Benefit Option, subject to the Changes in the Death
Benefit Option Provisions of Section 8 of the Policy.
When You transfer Your rights to a new Owner, You automatically revoke any prior
contingent Owner designation. When You want to change or revoke a prior
Beneficiary designation, You have to specify that action. You do not affect a
prior Beneficiary when You merely transfer ownership, or change or revoke a
contingent Owner designation.
PROCEDURE. You do not need the consent of a Beneficiary or a contingent Owner
in order to exercise any of Your rights. However, You must give Us written
notice of the requested action. The request must be filed at Our Service Center
and must be in written form satisfactory to Us. Your request will then, except
as otherwise specified herein, be effective as of the date You signed the form,
subject to any action taken before it was received by Us at Our Service Center.
RIGHTS OF BENEFICIARY. The Beneficiary has no rights in the Policy until the
death of the Insured. If a Beneficiary is alive at that time, the Beneficiary
will be entitled to payment of the Policy Proceeds as they become due.
Page 14
6. THE VARIABLE ACCOUNT
The assets of the Variable Account shall be kept separate from Our other assets.
We have the right to transfer to the General Account any assets of the Variable
Account which are in excess of the reserves and other Policy liabilities of the
Variable Account. Although the assets maintained in the Variable Account will
not be charged with any liabilities arising out of any other business conducted
by Us, all obligations arising under the Policy, including the promise to make
all benefit payments, are Our general corporate obligations.
At Our election, and subject to any necessary vote by those having voting
rights, the Variable Account may be operated as a unit investment trust or a
management company under the Investment Company Act of 1940. It may be
registered under the Investment Company Act of 1940 or deregistered in the event
registration is no longer required. In the event of any change in the operation
of the Variable Account pursuant to this provision, We may make appropriate
amendment to the contract to reflect the change and take such other action as
may be necessary and appropriate to effect the change.
SUB-ACCOUNTS. The assets of the Variable Account are divided into Sub-Accounts.
Each Sub-Account corresponds to an investment choice described in Section 1.
Each Sub-Account invests exclusively in a different investment portfolio.
Income, gains and losses, whether or not realized, from the assets of each
Sub-Account are credited or charged against that Sub-Account without regard to
income, gains or losses in other Sub-Accounts of the Variable Account. All
amounts allocated to the Variable Account will be used to purchase shares of one
or more of the Funds, as You designate. Deductions and surrenders from the
Variable Account will, in effect, be made by redeeming the number of Fund shares
at net asset value equal in total value to the amount to be deducted. The
Variable Account will be fully invested in Fund shares at all times.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS. Shares of any or all of the
portfolios may not always be available for purchase by the Sub-Accounts of the
Variable Account, or We may decide that further investment in any such shares is
no longer appropriate. In either event, shares of other registered open-end
investment companies or unit investment trusts may be substituted both for
Portfolio shares already purchased by the Variable Account and/or as the
security to be purchased in the future, provided that these substitutions have
been approved by the Securities and Exchange Commission. In addition, the
investment policies of the Sub-Accounts will not be changed without the approval
of the Insurance Commissioner of the State of Delaware. We also reserve the
right to eliminate or combine existing Sub-Accounts or to transfer assets
between Sub-Accounts. In the event of any substitution or other act pursuant to
this provision, We may make appropriate amendment to the Policy to reflect the
substitution.
TRANSFERS BETWEEN SUB-ACCOUNTS. Subject to Our rules as they may exist from
time to time and to any limits that may be imposed by the Funds, including those
set forth in Section 1, You may at any time transfer to another Sub-Account all
or a portion of the Account Value allocated to a Sub-Account. We will make
transfers pursuant to an authorized written or telephone request to the Service
Center. Telephone requests will be honored only if We have a properly completed
telephone authorization form for You on file. We and Our agents and affiliates
will not be responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. We will use reasonable procedures to confirm
that instructions communicated by telephone are genuine. The procedures We
follow for transactions initiated by telephone include requirements that You
identify yourself by name and identify a personal identification number.
Transfers may be requested by indicating the transfer of either a specified
dollar amount or a specified percentage of the Sub-Account's value from which
the transfer will be made. If You request a transfer based on a specified
percentage of the Sub-Account's value, that percentage will be converted into a
request for the transfer of a specified dollar amount based on application of
the specified percentage to the Sub-Account's value at the time the request is
received.
Transfer privileges are subject to Our consent. We reserve the right to impose
limitations on transfers, including, but not limited to: (1) the minimum amount
that may be transferred; and (2) the minimum amount that may remain in a Sub-
Account following a transfer from that Sub-Account.
7. PREMIUMS
Page 15
All Premium payments are payable to Us, and should be mailed to Our Principal
Office.
PLANNED PERIODIC PREMIUMS. While You are not required to make subsequent
Premium payments according to a fixed schedule, You may select a planned
periodic Premium schedule and corresponding billing period, subject to Our
Premium limits. Except as otherwise provided herein, the billing period must be
annual or semi-annual. We will send You reminder notices for the planned
periodic Premium at each billing period as specified in Section 1 unless
reminder notices have been suspended as described below. However, You are not
required to pay the planned periodic Premium; You may increase or decrease the
planned periodic Premium subject to Our limits, and You may skip a planned
payment or make unscheduled payments. You may change Your planned payment
schedule or the billing period, subject to Our approval. Depending on the
investment performance of the Sub-Accounts You select, the planned periodic
Premium may not be sufficient to keep the Policy in force, and You may need to
change Your planned payment schedule or make additional payments in order to
prevent termination of Your Policy. We will suspend reminder notices at Your
written request, and We reserve the right to suspend reminder notices if
Premiums are not being paid (except for notices in connection with the grace
period). We will notify You prior to suspending reminder notices.
PREMIUM. We reserve the right to limit the number of Premium payments We accept
on an annual basis. No Premium payment may be less than $100 without Our
consent, although We will accept a smaller Premium payment if it is necessary to
keep Your Policy in force. We reserve the right not to accept a Premium payment
that causes the Death Benefit to increase by an amount that exceeds the Premium
received. Evidence of insurability satisfactory to Us may be required before We
accept such a Premium.
If the Death Benefit Compliance Test You have specified is the Guideline Premium
Test, We will not accept Premium payments that would, in Our opinion, cause the
Policy to fail to qualify as life insurance under that test. Maximum Premium
limits for each year (based on reasonable industry interpretations) will be
shown in Your annual report. If a Premium payment is made in excess of these
limits, We will accept only that portion of the Premium within those limits, and
will refund the remainder to You.
NET PREMIUMS. The Net Premium is the amount You pay as the Premium less the
Expense Charges Applied to Premium. The Expense Charges Applied to Premium are
the sum of (1), (2) and (3) where (1) equals the premium tax percentage applied
to all Premium, (2) equals the DAC tax percentage applied to all Premium, and
(3) equals the sales load percentages applied to the appropriate amount of
Premium paid during the Policy Year. The DAC tax and premium tax will be
determined by Us from time to time based on Our expectations of future federal,
state and local taxes. However, the DAC tax and premium tax will not be greater
than that specified in Section 1. The sales load percentages are specified in
Section 1.
ALLOCATION OF NET PREMIUM. Except as otherwise provided herein, Net Premium
will be allocated to the Sub-Accounts in accordance with the allocation
percentages specified by You. Your initial allocation percentages are shown in
Section 1. There are no limitations concerning the number of Sub-Accounts to
which Net Premium may be allocated, but the minimum allocation for any Sub-
Account to which You choose to allocate Account Value is 5% of Net Premium, and
percentages must be in whole numbers.
You may change the allocation percentages at any time pursuant to written or
telephone request to the Service Center. Telephone requests will be honored
only if We have a properly completed telephone authorization form for You on
file. We and Our agents and affiliates will not be responsible for losses
resulting from acting upon telephone requests reasonably believed to be genuine.
We will use reasonable procedures to confirm that instructions communicated by
telephone are genuine. The procedures We follow for transactions initiated by
telephone include requirements that You identify yourself by name and identify a
personal identification number.
An allocation change will be effective as of the date the Service Center
receives the request for that change.
MODIFIED ENDOWMENT CONTRACT. At the time a Premium is received that would, in
Our opinion, cause the Policy to become a modified endowment contract based on
reasonable industry interpretations of Section 7702A of the Internal Revenue
Code, We will so notify You and will not credit the Premium unless We have
received specific instructions from You to do so. If such instructions are not
received within 24 hours of the date we send You notification, the Premium will
be immediately returned to You.
Page 16
8. DEATH BENEFIT
DEATH BENEFIT COMPLIANCE TEST. The Death Benefit Compliance Test, as specified
by You in the Application, is either The Cash Value Accumulation Test or The
Guideline Premium Test, as shown in Section 1. The choice You make determines
the Death Benefit Percentages as shown in Section 2. Once selected, this test
may not be changed to another test.
DEATH BENEFIT and DEATH BENEFIT OPTION. The Death Benefit depends upon the
Death Benefit Option in effect at that time. The Death Benefit Option in effect
on the Issue Date is specified in Section 1. The two options are:
Option A - Specified Face Amount. The Death Benefit is the greater of the
Specified Face Amount, or the Account Value multiplied by the applicable Death
Benefit Percentage.
Option B - Specified Face Amount plus Account Value. The Death Benefit is the
greater of the Specified Face Amount plus the Account Value, or the Account
Value multiplied by the applicable Death Benefit Percentage. Option B is not
available if the Death Benefit Compliance Test specified in Section 1 is The
Cash Value Accumulation Test.
At any time the Death Benefit is defined as the Account Value multiplied by the
applicable Death Benefit Percentage, and the Death Benefit less the Account
Value exceeds the Total Face Amount specified in Section 1, We reserve the right
to distribute Account Value to You as a Partial Surrender to the extent
necessary so that the Death Benefit less the Account Value equals the Total Face
Amount. You will not have the option of providing evidence of insurability to
maintain Your level of Death Benefit.
The Policy Proceeds will be paid as they become due upon the death of the
Insured prior to Maturity. We will make payment when We receive Due Proof of
that death. The Death Benefit used to determine Policy Proceeds is based on
the Specified Face Amount and Account Value in effect on the date of death.
Page 17
CHANGES IN SPECIFIED FACE AMOUNT. After the end of the first Policy Year, You
may change the Specified Face Amount. You must send Your request for a change
to Our Service Center, in writing. Each such change will be effective on the
Effective Date of Coverage for change.
DECREASES IN SPECIFIED FACE AMOUNT. The Specified Face Amount may not decrease
to less than the Minimum Specified Face Amount specified in Section 1. A
decrease in Specified Face Amount may not decrease the Policy's Total Face
Amount to an amount less than the Minimum Total Face Amount specified in Section
1. A decrease in Specified Face Amount will be applied to the initial Specified
Face Amount and to each increase in Specified Face Amount in the following
order:
- first, to the most recent increase;
- second, to the next most recent increases, in reverse chronological
order; and
- finally, to the initial Specified Face Amount.
INCREASES IN SPECIFIED FACE AMOUNT. An increase in the Specified Face Amount
is subject to Our underwriting rules in effect at the time of the increase. You
may be required to submit evidence of the Insured's insurability satisfactory to
Us.
CHANGES IN THE DEATH BENEFIT OPTION. You may change the Death Benefit Option if
the Death Benefit Compliance Test specified in Section 1 is the Guideline
Premium Test. You may not change the Death Benefit Option if the Death Benefit
Compliance Test specified in Section 1 is the Cash Value Accumulation Test.
Changes in the Death Benefit Option are subject to Our underwriting rules in
effect at the time of change. Requests for a change must be made in writing to
Our Service Center. The effective date of the change will be the Policy
Anniversary on or next following the date of receipt of Your request.
If the Death Benefit Option change is from Option B to Option A, the Specified
Face Amount will be increased by the Account Value. If the Death Benefit Option
change is from Option A to Option B, the Specified Face Amount will be reduced
by the Account Value. In either case, the amount of the Death Benefit at the
time of change will not be altered, but the change in Death Benefit Option will
affect the determination of the Death Benefit from that point on.
Page 18
9. ACCOUNT VALUE
ACCOUNT VALUE. The Account Value is the sum of the amounts in each Sub-Account
of the Variable Account with respect to the Policy, plus the amount of the Loan
Account. The Account Value varies depending upon the Premiums paid, Expense
Charges Applied to Premium, Mortality and Expense Risk Percentage deductions,
Monthly Expense Charges, Monthly Cost of Insurance charges, Policy loans and
loan repayments, Partial Surrenders, fees, and the Net Investment Factor for the
Sub-Accounts to which Your Account Value is allocated.
We measure the amounts in the Sub-Accounts in terms of Units and Unit Values.
On any given date, the amount You have in a Sub-Account is equal to the Unit
Value multiplied by the number of Units credited to You in that Sub-Account.
Amounts allocated to a Sub-Account will be used to purchase Units of that Sub-
Account. Units are redeemed when You make Partial Surrenders, undertake Policy
loans or transfer amounts from a Sub-Account, and for payment of the mortality
and expense risk charge, the Monthly Expense Charge, and the Monthly Cost of
Insurance charge. The number of Units of each Sub-Account purchased or redeemed
is determined by dividing the dollar amount of the transaction by the Unit Value
for the Sub-Account. The Unit Value for each Sub-Account is established at
$10.00 for the first Valuation Date. The Unit Value for any subsequent
Valuation Date is equal to the Unit Value for the preceding Valuation Date
multiplied by the Net Investment Factor (determined as provided below). The
Unit Value of a Sub-Account for any Valuation Date is determined as of the close
of the Valuation Period ending on that Valuation Date.
Transactions are processed on the date We receive a Premium at Our Principal
Office or any acceptable written or telephonic request is received at the
Service Center. If Your Premium or request is received on a date that is not a
Valuation Date, or after the close of the New York Stock Exchange on a Valuation
Date, the transaction will be processed on the next subsequent Valuation Date.
ACCOUNT VALUE IN THE SUB-ACCOUNTS. The Account Value attributable to each
Sub-Account of the Variable Account on the Investment Start Date equals:
- that portion of Net Premium received and allocated to the Sub-Account, less
- the Monthly Expense Charges due on the Issue Date and subsequent Monthly
Anniversary Days through the Investment Start Date, less
- the Monthly Cost of Insurance deductions due from the Issue Date through
the Investment Start Date.
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The Account Value attributable to each Sub-Account of the Variable Account on
subsequent Valuation Dates is equal to:
- the Account Value attributable to the Sub-Account on the preceding
Valuation Date multiplied by that Sub-Account's Net Investment Factor, less
the Daily Risk Percentage multiplied by the number of days in the Valuation
Period multiplied by the Account Value in the Sub-Account, plus
- that portion of Net Premium received and allocated to the Sub-Account
during the current Valuation Period, plus
- any amounts transferred by You to the Sub-Account from another Sub-Account
during the current Valuation Period, plus
- that portion of any loan repayment allocated to the Sub-Account during the
current Valuation Period, plus
- that portion of any interest credited on the Loan Account which is
allocated to the Sub-Account during the current Valuation Period, less
- any amounts transferred by You from the Sub-Account to another Sub-Account
during the current Valuation Period, less
- that portion of any Partial Surrenders deducted from the Sub-Account during
the current Valuation Period, less
- that portion of any Policy loan transferred from the Sub-Account to the
Loan Account during the current Valuation Period, less
- if a Monthly Anniversary Day occurs during the current Valuation Period,
that portion of the Monthly Expense Charge for the Policy Month just
beginning charged to the Sub-Account, less
- if a Monthly Anniversary Day occurs during the current Valuation Period,
that portion of the Monthly Cost of Insurance for the Policy Month just
ending charged to the Sub-Account, less
- if You Surrender during the current Valuation Period, that portion of the
pro-rata Monthly Cost of Insurance for the Policy Month charged to the
Sub-Account.
NET INVESTMENT FACTOR. The Net Investment Factor for each Sub-Account for any
Valuation Period is determined by dividing (1) by (2) where:
(1) is the net result of:
(I) the net asset value of a Fund share held in the Sub-Account
determined as of the end of the Valuation Period, plus
(II) the per share amount of any dividend or other distribution
declared on Fund shares held in the Sub-Account if the "ex-dividend"
date occurs during the Valuation Period, plus or minus
(III) a per share credit or charge with respect to any taxes reserved
for by the Company, or paid by the Company if not previously reserved
for, during the Valuation Period which are determined by the Company
to be attributable to the operation of the Sub-Account; and
(2) is the net asset value of a Fund share held in the Sub-Account
determined as of the end of the preceding Valuation Period.
LOAN ACCOUNT. The Loan Account is an account established for the Policy, the
value of which is the principal amount of any outstanding Policy loan against
the Policy, plus credited interest thereon.
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The Account Value in the Loan Account is zero on the Investment Start Date.
The Account Value in the Loan Account on any day after the Investment Start Date
equals:
- the Account Value in the Loan Account on the preceding day credited with
interest at the Interest Credited on Loan Account rate specified in Section
1, plus
- any amount transferred from Sub-Accounts to the Loan Account for Policy
loans requested on that day, less
- any loan repayments made on that day, less
- if that day is a Policy Anniversary, any amount transferred to the
Sub-Accounts by which the Account Value in the Loan Account exceeds the
outstanding Policy loan.
DAILY RISK PERCENTAGE. The Daily Risk Percentage will be determined by Us from
time to time based on Our expectations of future interest, mortality experience,
persistency, expenses and taxes. However, the Daily Risk Percentage will not be
greater than that specified in Section 1.
MONTHLY EXPENSE CHARGE. The Monthly Expense Charge will be determined by Us
from time to time based on Our expectations of future expenses. However, the
Monthly Expense Charge will not be greater than that shown in Section 1. The
Monthly Expense Charge deduction will be allocated among Sub-Accounts in the
same proportion that the Account Value attributable to each Sub-Account bears to
the aggregate Account Value of all Sub-Accounts immediately prior to the
deduction.
MONTHLY COST OF INSURANCE. We deduct a Monthly Cost of Insurance charge from
Your Account Value to cover anticipated costs of providing insurance coverage.
This charge is made, in arrears, at the end of each Policy Month. If You
Surrender the Policy on any day other than a Monthly Anniversary Day, a pro-rata
charge will be made. The Monthly Cost of Insurance deduction will be allocated
among the Sub-Accounts in the same proportion that the Account Value in each
Sub-Account bears to the total Account Value less the Loan Account immediately
prior to the deduction.
The Monthly Cost of Insurance equals the sum of (1), (2) and (3) where
(1) is the Monthly Cost of Insurance Rate (described below) multiplied by
the Net Amount at Risk divided by 1,000; the Net Amount at Risk equals the
Death Benefit at the end of the Policy Month before the deduction of the
Monthly Cost of Insurance less the Account Value at the end of the Policy
Month before the deduction of the Monthly Cost of Insurance;
(2) is the monthly rider cost for any riders which are a part of the Policy
(with the monthly rider cost, if any riders are added, as described in the
rider itself); and
(3) is the Flat Extra specified in Section 1 of the Policy, times the Total
Face Amount divided by 1000, if applicable.
The Account Value deduction occurs first to the initial Total Face Amount and
second to successive increases.
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MONTHLY COST OF INSURANCE RATES. The Monthly Cost of Insurance Rates are based
on the length of time the Policy has been in force and the Insured's Sex (in the
case of Non-Unisex Policies), Issue Age, Class and table rating, if any. The
Monthly Cost of Insurance Rates will be determined by Us from time to time based
on Our expectations of future experience with respect to mortality, persistency,
interest rates, expenses and taxes. However, the Monthly Cost of Insurance
Rates will not be greater than those shown in Section 2.
BASIS OF COMPUTATION. Guaranteed Maximum Monthly Cost of Insurance Rates are
based on the 1980 Commissioner's Standard Ordinary Mortality Table A for Male
and Unisex Policies and Table G for Female Non-Unisex Policies. We have filed a
detailed statement of Our methods for computing Account Value with the insurance
department in the jurisdiction where the Policy was delivered.
INSUFFICIENT VALUE. If on a Valuation Date the Account Value less the
outstanding Policy Debt is less than or equal to zero, then the Policy will
terminate for no value, subject to the Grace Period provision.
GRACE PERIOD. If, on a Valuation Date, the Policy will terminate by reason of
insufficient value, We will allow a grace period. This grace period will allow
61 days from that Valuation Date for the payment of a Premium sufficient to
cover the deductions from the Account Value. These deductions include the
Monthly Cost of Insurance and the Monthly Expense Charge. Notice of Premium due
will be mailed to Your last known address or the last known address of any
assignee of record. We will assume that Your last known address is the address
shown on the Application (or notice of assignment), unless We receive written
notice of a change in address in a form satisfactory to Us. If the Premium due
is not paid within 61 days after the beginning of the Grace Period, then the
Policy and all rights to benefits will terminate without value at the end of the
61 day period. The Policy will continue to remain in force during this Grace
Period. If the Policy Proceeds become payable by Us during the Grace Period,
then any overdue Monthly Cost of Insurance and Monthly Expense Charge will be
deducted from the amount payable by Us.
SPLITTING UNITS. We reserve the right to split or combine the value of Units.
In effecting any such change, strict equity will be preserved and no change will
have a material effect on the benefits or other provisions of the Policy.
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10. POLICY BENEFITS
BENEFITS AT DEATH. The Policy Proceeds will be paid as they become due upon the
death of the Insured prior to Maturity, in accordance with Section 8.
CASH SURRENDER VALUE. The Cash Surrender Value is the Account Value decreased
by the balance of any outstanding Policy Debt, increased by the Sales Load
Refund at Surrender described in Section 1.
SURRENDER. You may Surrender the Policy for the Cash Surrender Value at any
time.
PARTIAL SURRENDER. You may make a Partial Surrender of the Policy once each
Policy Year after the first Policy Year by written request to Our Service
Center. The maximum amount of any Partial Surrender is the Account Value
decreased by the balance of any outstanding Policy Debt. Unless You provide
evidence satisfactory to Us that the Insured is still insurable, the Total Face
Amount will be reduced to the extent necessary so that (1) does not exceed (2)
where
(1) is the Death Benefit increased by the amounts payable under
supplemental benefits less the Account Value immediately after the
Partial Surrender; and
(2) is the Death Benefit increased by the amounts payable under
supplemental benefits less the Account Value immediately before the
Partial Surrender.
If You provide such evidence, You will have the option of keeping the Death
Benefit equal to what it was immediately prior to the Partial Surrender. The
Specified Face Amount remaining in force after the Partial Surrender must be no
lower than the Minimum Specified Face Amount shown in Section 1. A Partial
Surrender may not decrease the Policy's Total Face Amount shown in Section 1 to
an amount less than the Minimum Total Face Amount shown in Section 1.
ALLOCATION OF PARTIAL SURRENDER. You may allocate the Partial Surrender among
the Sub-Accounts of the Variable Account. If You do not specify the allocation,
then the Partial Surrender will be allocated among the Sub-Accounts in the same
proportion that the Account Value of each Sub-Account bears to the aggregate
Account Value of all Sub-Accounts on the date of the Partial Surrender.
POLICY LOAN. You may request a Policy loan of up to 90% of the Policy's Account
Value, decreased by the amount of any outstanding Policy Debt on the date the
Policy loan is made. Account Value equal to the Policy loan will be transferred
from the Sub-Accounts to the Loan Account on the date the Policy loan is made.
You may allocate the Policy loan among the Sub-Accounts. If You do not specify
the allocation, then the Policy loan shall be allocated among the Sub-Accounts
in the same proportion that the Account Value of each Sub-Account bears to the
aggregate Account Value of all Sub-Accounts immediately prior to the loan.
Interest on the Policy loan will accrue daily at the policy loan interest rate
specified in Section 1. This interest shall be due and payable to Us in arrears
on each Policy Anniversary. Any unpaid interest will be added to the principal
amount as an additional Policy loan and will bear interest at the same rate and
in the same manner as the prior Policy loan.
All funds We receive from You will be credited to Your Policy as Premium unless
We have received written notice, in form satisfactory to Us, that the funds are
for loan repayment. Loan repayments will first reduce the outstanding balance
of the Policy loan and then accrued but unpaid interest on such loans. We will
accept repayment of any Policy loan at any time before Maturity. The amount of
the loan repayment up to the outstanding balance of the Policy loan will be
transferred from the Loan Account to the Sub-Accounts. You may allocate the
loan repayment among the Sub-Accounts. If You do not specify the allocation,
then the loan repayment shall be allocated among the Sub-Accounts in the same
proportion that the Account Value of each Sub-Account bears to the total Account
Value less the Loan Account immediately prior to the loan repayment.
Page 23
DEFERRAL OF PAYMENT. We will usually pay any amount due from the Variable
Account within seven days after the Valuation Date following Our receipt of
written notice giving rise to such payment or, in the case of death of the
Insured, Due Proof of such death. Any special conditions that apply to a
Sub-Account are specified in the description of the Sub-Account in Section 1.
Payment of any amount payable from the Variable Account on death, Surrender,
Partial Surrender, or Policy loan may be postponed whenever:
- the New York Stock Exchange ("NYSE") is closed other than customary weekend
and holiday closing, or trading on the NYSE is otherwise restricted,
- the Securities and Exchange Commission, by order, permits postponement for
the protection of Policy Owners, or
- an emergency exists as determined by the Securities and Exchange
Commission, as a result of which disposal of securities is not reasonably
practicable, or it is not reasonably practicable to determine the value of
the assets of the Variable Account.
TERMINATION. The Policy terminates on the earlier of the date We receive Your
request to Surrender, the expiration date of the Grace Period due to
insufficient value, the date of death of the Insured, or the date of Maturity.
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