EXHIBIT NO. (4)
SPECIMEN CONTRACT
FLEXIBLE PREMIUM DEFERRED
VARIABLE ANNUITY CONTRACT
GLENBROOK LIFE AND ANNUITY COMPANY, A Stock Company, Home Office:
Allstate Plaza, Northbrook, Illinois 60062
This Contract is issued in consideration of the initial purchase payment and any
application. Glenbrook Life and Annuity Company will pay the benefits of
this Contract, subject to its terms and conditions.
Throughout this Contract, "you" and "your" refer to the Contract owner(s).
"We", "us" and "our" refer to Glenbrook Life and Annuity Company.
This flexible premium deferred variable annuity provides a cash withdrawal
benefit, a death benefit, and a settlement value during the Accumulation Phase
and periodic income payments beginning on the Payout Start Date during the
Payout Phase.
The dollar amount of income payments or other values provided by this Contract,
when based on the investment experience of the Variable Account, varies to
reflect the performance of the Variable Account. For amounts in the Guaranteed
Maturity Fixed Account, the withdrawal benefit, the death benefit, the
settlement value, transfers to other sub-accounts and any periodic income
payments may be subject to a Market Value Adjustment which may result in an
upward or downward adjustment of the amount distributed.
This Contract does not pay dividends.
The tax status of this Contract as it applies to the owner should be reviewed
each year.
PLEASE READ YOUR CONTRACT CAREFULLY.
THIS IS A LEGAL CONTRACT BETWEEN THE CONTRACT OWNER(S) AND GLENBROOK LIFE AND
ANNUITY COMPANY.
RETURN PRIVILEGE
If you are not satisfied with this Contract for any reason, you
may return it to us or our agent within 20 days after you receive it. We will
refund any purchase payments allocated to the Variable Account, adjusted to
reflect investment gain or loss from the date of allocation to the date of
cancellation, plus any purchase payments allocated to the Fixed Account. If
this Contract is qualified under Section Section408 of the Internal Revenue
Code, we will refund the greater of any purchase payments or the Contract Value.
If you have any questions about your Glenbrook Life variable annuity, please
contact Glenbrook Life at (000) 000-0000.
/s/ /s/
Secretary Chief Executive Officer
GLAU178 Page 1
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ANNUITY DATA
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CONTRACT NUMBER: . . . . . . . . . . . . . . . . . . . . . . . . . . . 444444444
ISSUE DATE:. . . . . . . . . . . . . . . . . . . . . . . . . . . . .JULY 1, 1994
INITIAL PURCHASE PAYMENT:. . . . . . . . . . . . . . . . . . . . . . .$10,000.00
IRA
INITIAL ALLOCATION OF PURCHASE PAYMENT:
RATE
ALLOCATED GUARANTEED GUARANTEED
AMOUNT (%) INTEREST RATE THROUGH
FUND MANAGER #1
SUB-ACCOUNT A 10% N/A N/A
FUND MANAGER #2
SUB-ACCOUNT B 10% N/A N/A
FUND MANAGER #3
SUB-ACCOUNT C 10% N/A N/A
FUND MANAGER #4
SUB-ACCOUNT D 10% N/A N/A
FUND MANAGER #5
SUB-ACCOUNT E 10% N/A N/A
FUND MANAGER #6
SUB-ACCOUNT F 10% N/A N/A
GUARANTEED MATURITY FIXED ACCOUNT
1 YEAR GUARANTEE PERIOD 10% 5.00% 06/30/1995
3 YEAR GUARANTEE PERIOD 10% 6.40% 06/30/1997
5 YEAR GUARANTEE PERIOD 5% 7.00% 06/30/1999
7 YEAR GUARNATEE PERIOD 5% 7.20% 06/30/2001
10 YEAR GUARANTEE PERIOD 5% 7.35% 06/30/2004
DOLLAR COST AVERAGING FIXED ACCOUNT
1 YEAR GUARANTEE PERIOD 5% 5.00% 06/30/1995
MINIMUM GUARANTEED RATE
GUARANTEED MATURITY FEXED ACCOUNT:. . . . . . . . . . . . . . . . . . 2.50%
DOLLAR COST AVERAGING FIXED ACCOUNT:. . . . . . . . . . . . . . . . . 2.50%
PAYOUT START DATE: . . . . . . . . . . . . . . . . . . . . . . . . .JULY 1, 2049
(THE LATEST DATE ON WHICH INCOME PAYMENTS MUST BEGIN)
OWNER: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .XXXX XXX
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .XXXX XXX
ANNUITANT: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .XXXX XXX
AGE AT ISSUE: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
SEX:. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .MALE
RELATIONSHIP
BENEFICIARY TO OWNER PERCENTAGE
----------- -------------- ----------
XXXX XXX WIFE 100%
CONTINGENT RELATIONSHIP
BENEFICIARY TO OWNER PERCENTAGE
----------- -------------- ----------
XXXX XXX DAUGHTER 100%
GLAU178 Page 2 (multi-manager VA)
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY
GLAU178 Page 3
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TABLE OF CONTENTS
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THE PERSONS INVOLVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ACCUMULATION PHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PAYOUT PHASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
INCOME PAYMENT TABLES. . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
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THE PERSONS INVOLVED
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OWNER. The person named at the time of application is the owner of this
Contract unless subsequently changed. As owner, you will receive any
periodic income payments, unless you have directed us to pay them to someone
else. The Contract cannot be jointly owned by both a non-natural person and a
natural person.
You may exercise all rights stated in this Contract, subject to the rights of
any irrevocable beneficiary.
You may change the owner or beneficiary at any time. If the owner is a natural
person, you may change the annuitant prior to the Payout Start Date. Once we
have received a satisfactory written request for an owner, beneficiary or
annuitant change, the change will take effect as of the date you signed it. We
are not liable for any payment we make or other action we take before receiving
any written request for a change from you.
You may not assign an interest in this Contract as collateral or security for a
loan. However, you may assign periodic income payments under this Contract
prior to the Payout Start Date. We are bound by an assignment only if it is
signed by the assignor and filed with us. We are not responsible for the
validity of an assignment.
If the sole surviving owner dies prior to the Payout Start Date, the beneficiary
becomes the new owner. If the sole surviving owner dies after the Payout Start
Date, the beneficiary becomes the new owner and will receive any subsequent
guaranteed income payments.
If more than one person is designated as owner:
- owner as used in this contract refers to all people named as owners,
unless otherwise indicated;
- any request to exercise ownership rights must be signed by all owners;
and
- on the death of any person who is an owner, the surviving person(s)
named as owner will continue as owner.
ANNUITANT. The annuitant is the person named on the Annuity Data Page, but may
be changed by the owner, as described above. The annuitant must be a natural
person. If the annuitant dies prior to the Payout Start Date, the new annuitant
will be:
- the youngest owner; otherwise,
- the youngest beneficiary.
BENEFICIARY. The beneficiary is the person(s) named on the Annuity
Data Page, but may be changed by the owner, as described above. We will
determine the beneficiary from the most recent written request we have
received from you. If you do not name a beneficiary or if the beneficiary named
is no longer living, the beneficiary will be:
- your spouse if living; otherwise
- your children equally if living; otherwise
- your estate.
The beneficiary may become the owner under the circumstances described above.
The beneficiary may assign benefits under the Contract, as described above, once
they are payable to the beneficiary. We are bound by an assignment only if it
is signed by the assignor and filed with us. We are not responsible for the
validity of an assignment.
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ACCUMULATION PHASE
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ACCUMULATION PHASE DEFINED. The "Accumulation Phase" is the first of two phases
during your Contract. The Accumulation Phase begins on the issue date
stated on the Annuity Data Page. This phase will continue until the Payout
Start Date unless the Contract is terminated before that date.
CONTRACT YEAR. The one year period beginning on the issue date and on
each anniversary of the issue date.
PURCHASE PAYMENTS. You may make subsequent purchase payments during the
Accumulation Phase until your 86th birthday. The number of purchase payments is
unlimited prior to your 86th birthday. The minimum subsequent purchase payment
amount is $50. We reserve the right to reduce the minimum purchase payment. We
may limit the maximum amount of purchase payments we will accept.
We will invest the purchase payments in the Investment Alternatives you select.
You may allocate any portion of your purchase payment in whole percents from 0%
to 100% or in exact dollar amounts to any of the Investment Alternatives. The
total allocation must equal 100% or the total dollar amount of your purchase
payment. For each purchase payment, the minimum amount that may be allocated to
any Fixed Account option is $50.
The allocation of the initial purchase payment is shown on the Annuity Data
Page. Allocation of each subsequent purchase payment will be the same as for
the most recent purchase payment unless you change the allocation. You may
change the allocation of subsequent purchase payments at any time, without
charge, simply by giving us written notice. Any change will be effective at the
time we receive the notice.
INVESTMENT ALTERNATIVES. Investment Alternatives are the Sub-accounts of the
Variable Account, the Dollar Cost Averaging Fixed Account, and the Sub-accounts
of the Guaranteed Maturity Fixed Account shown on the Application.
VARIABLE ACCOUNT. The "Variable Account" for this Contract is the Glenbrook
Life Multi-Manager Variable Account. This account is a separate investment
account to which we allocate assets contributed under this and certain other
contracts. The income, gains and losses, realized or unrealized, from assets
allocated to the Variable Account are credited to or charged against the account
without regard to our other income, gains or losses.
VARIABLE SUB-ACCOUNTS. The Variable Account is divided into Sub-accounts.
Each Sub-account invests solely in the shares of the mutual fund underlying
that Sub-account.
FIXED ACCOUNT OPTIONS. The Fixed Account options are the Dollar Cost Averaging
Fixed Account and the Sub-accounts of the Guaranteed Maturity Fixed Account.
DOLLAR COST AVERAGING FIXED ACCOUNT. Money in the Dollar Cost Averaging Fixed
Account will earn interest for one year at the current rate in effect at the
time of allocation to the Dollar Cost Averaging Fixed Account. After one year,
a one year renewal rate will be declared. Subsequent renewal dates will be on
anniversaries of the first renewal date.
GUARANTEED MATURITY FIXED ACCOUNT. The Guaranteed Maturity Fixed Account is
divided into Sub-accounts. A Sub-account is identified by its Guarantee Period
and the date the Guarantee Period begins. You create a Sub-account when:
- you make a purchase payment and allocate part or all of that
purchase payment to the Sub-account; or
- you select a new Guarantee Period when a Sub-account expires; or
- you transfer to the Sub-account an amount from an existing Sub-
account of the Variable Account or from another Sub-account of
the Guaranteed Maturity Fixed Account.
A Sub-account continues until the end of its Guarantee Period.
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You must select a Guarantee Period for all purchase payments and transfers
allocated to a Sub-account of the Guaranteed Maturity Fixed Account. If you do
not select a Guarantee Period for a purchase payment or transfer, we will assign
the same period(s) you selected for your most recent purchase payment.
Guarantee Periods are offered at our discretion and may range from one to ten
years. We may change the Guarantee Periods available for future purchase
payments or transfers allocated to the Guaranteed Maturity Fixed Account.
We will mail you a notice prior to the expiration of the Guarantee Period of
each Sub-account outlining the options available at the end of the Guarantee
Period. During the 30 day period after a Guarantee Period expires you may:
- take no action and we will automatically renew the Sub-account
value to a Guarantee Period of the same duration to be
established as of the day the previous Guarantee Period expired;
or
- notify us to apply the Sub-account value to a new Guarantee
Period(s) to be established as of the day the previous Guarantee
Period expired; or
- notify us to apply the Sub-account value to any Sub-account of
the Variable Account on the day we receive the notification; or
- receive the entire Sub-account value through a partial or full
withdrawal that is not subject to a Market Value Adjustment. In
this case, the Sub-account will be deemed to have been renewed at
the shortest Guarantee Period then being offered with current
interest credited from the date the Guarantee Period expired.
The minimum amount that can be allocated to a new Sub-account is $50.
CREDITING INTEREST. We credit interest daily to money allocated to the Fixed
Account(s) at a rate which compounds over one year to the interest rate we
guaranteed when the money was allocated. We will credit interest to the initial
purchase payment from the issue date. We will credit interest to subsequent
purchase payments from the date we receive them. We will credit interest to
transfers from the date the transfer is made. The interest rates will never be
less than the minimum guaranteed rates shown on the Annuity Data Page.
TRANSFERS. Prior to the Payout Start Date, you may transfer amounts between
Investment Alternatives. You may make 12 transfers per Contract Year without
charge. Each transfer after the 12th transfer in any Contract Year may be
assessed a $10 transfer fee. Transfers are subject to the following
restrictions.
- The minimum amount that may be transferred into a Sub-account of
the Guaranteed Maturity Fixed Account is $50.
- Any transfer from a Sub-account of the Guaranteed Maturity Fixed
Account at a time other than during the 30 day period after a
Guarantee Period expires will be subject to a Market Value
Adjustment.
- At the end of 36 months from the date of a purchase payment
allocation to the Dollar Cost Averaging Fixed Account, any
remaining portion of the purchase payment and interest in the
Dollar Cost Averaging Fixed Account will be transferred to the
Variable Account Money Market Sub-account.
- No amount may be transferred into the Dollar Cost Averaging Fixed
Account.
We reserve the right to waive the transfer fees and restrictions contained in
this Contract.
CONTRACT VALUE. Your "Contract Value" is equal to the sum of:
- the number of Accumulation Units you hold in each Sub-account of
the Variable Account multiplied by the Accumulation Unit Value
for that Sub-account on the most recent Valuation Date; plus
- the total value you have in the Dollar Cost Averaging Fixed
Account; plus
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- the sum of Sub-account values in the Guaranteed Maturity Fixed
Account.
ACCUMULATION UNITS AND ACCUMULATION UNIT VALUE. Amounts which you allocate to a
Sub-account of the Variable Account are used to purchase Accumulation
Units in that Sub-account. The Accumulation Unit Value for each Sub-account
at the end of any Valuation Period is calculated by multiplying the Accumulation
Unit Value at the end of the immediately preceding Valuation Period by the Sub-
account's Net Investment Factor for the Valuation Period. The Accumulation
Unit Values may go up or down. Additions or transfers to a Sub-account of the
Variable Account will increase the number of Accumulation Units for that Sub-
account. Withdrawals or transfers from a Sub-account of the Variable Account
will decrease the number of Accumulation Units for that Sub-account.
VALUATION PERIOD AND VALUATION DATE. A "Valuation Period" is the time interval
between the closing of the New York Stock Exchange on consecutive Valuation
Dates. A "Valuation Date" is any date the New York Stock Exchange is open for
trading.
NET INVESTMENT FACTOR. For each Sub-account of the Variable Account, the "Net
Investment Factor" for a Valuation Period is (A) divided by (B), minus (C)
where:
(A) is the sum of:
(1) the net asset value per share of the mutual fund underlying
the Sub-account determined as of the end of the current
Valuation Period, plus
(2) the per share amount of any dividend or capital gain
distributions made by the mutual fund underlying the Sub-
account during the current Valuation Period.
(B) is the net asset value per share of the mutual fund underlying
the Sub-account determined as of the end of the immediately
preceding Valuation Period.
(C) is the sum of the annualized Administrative Expense Charge and
the annualized Mortality and Expense Risk Charge divided by 365
and then multiplied by the number of calendar days in the current
Valuation Period.
CHARGES. The charges for this Contract include Administrative Expense Charges,
Mortality and Expense Risk Charges, Contract Maintenance Charges, transfer
charges, and taxes. If withdrawals are made, the Contract may also be subject
to Withdrawal Charges and Market Value Adjustments.
ADMINISTRATIVE EXPENSE CHARGE. The annualized Administrative Expense Charge
will never be greater than 0.10%. (See Net Investment Factor for a description
of how this charge is applied.)
MORTALITY AND EXPENSE RISK CHARGE. The annualized Mortality and Expense Risk
Charge will never be greater than 1.25%. (See Net Investment Factor for a
description of how this charge is applied.)
Our actual mortality and expense experience will not adversely affect the dollar
amount of variable benefits or other contractual payments or values under this
Contract.
CONTRACT MAINTENANCE CHARGE. Prior to the Payout Start Date, a Contract
Maintenance Charge will be deducted from your Contract Value on each contract
anniversary. The charge will be deducted on a pro-rata basis from each Sub-
account of the Variable Account in the proportion that your value in each bears
to your total value in all Sub-accounts of the Variable Account. A reduced
Contract Maintenance Charge proportional to the part of the Contract Year
elapsed will also be deducted if the Contract is terminated on any date other
than a contract anniversary. After the Payout Start Date the Contract
Maintenance Charge will be deducted in equal parts from each income payment.
The annualized charge will never be greater than $35 per contract year. The
Contract Maintenance Charge will be waived if, on the contract anniversary,
total purchase payments are $50,000 or more or if all money is allocated to the
Fixed Account(s) on the contract anniversary.
TAXES. Any premium tax or income tax withholding relating to this Contract may
be deducted from purchase payments or the Contract Value when the tax is
incurred or at a later time.
WITHDRAWAL. You have the right, subject to the restrictions and charges
described in this Contract,
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to withdraw part or all of your Contract Value at any time during the
Accumulation Phase. A withdrawal must be at least $50. If any withdrawal
reduces the Contract Value to less than $2,000, we will treat the request as a
withdrawal of the entire Contract Value. If you withdraw the entire Contract
Value, the Contract will terminate.
You must specify the Investment Alternative(s) from which you wish to make a
withdrawal. When you make a withdrawal, your Contract Value will be reduced by
the amount paid to you and any applicable Withdrawal Charge, Market Value
Adjustment, and taxes.
Any Withdrawal Charge will be waived on withdrawals taken to satisfy IRS minimum
distribution rules. This waiver is permitted only for withdrawals which satisfy
distributions resulting from this Contract.
FREE WITHDRAWAL AMOUNT. Each Contract Year the Free Withdrawal Amount is equal
to 15% of the amount of purchase payments. Each Contract Year you may withdraw
the Free Withdrawal Amount without any Withdrawal Charge or Market Value
Adjustment. Each Contract Year begins on the anniversary of the date the
Contract was established. Any Free Withdrawal Amount which is not withdrawn in
a year may not be carried over to increase the Free Withdrawal Amount in a
subsequent year.
WITHDRAWAL CHARGE. To determine the Withdrawal Charge, we assume that purchase
payments are withdrawn first, beginning with the oldest payment. When all
purchase payments have been withdrawn, additional withdrawals will not be
assessed a Withdrawal Charge.
Withdrawals in excess of the Free Withdrawal Amount will be subject to a
Withdrawal Charge as follows:
Payment Year: 1 2 3 4 5 6 7 and Later
Percentage: 6% 6% 5% 5% 4% 3% 0%
For each purchase payment withdrawal, the "Payment Year" in the table is
measured from the date we received the purchase payment. The Withdrawal Charge
is determined by multiplying the percentage corresponding to the Payment Year
times that part of each purchase payment withdrawal that is in excess of the
Free Withdrawal Amount.
MARKET VALUE ADJUSTMENT. Withdrawals in excess of the Free Withdrawal Amount,
transfers, death benefits, and amounts applied to an income plan from a Sub-
account of the Guaranteed Maturity Fixed Account other than during the 30 day
period after a Guarantee Period expires are subject to a Market Value
Adjustment. A Market Value Adjustment is an increase or decrease in the amount
reflecting changes in the level of interest rates since the Sub-account was
established. As used in this provision, "Treasury Rate" means the U. S.
Treasury Note Constant Maturity yield as reported in Federal Reserve Bulletin
Release H.15. The Market Value Adjustment is based on the following:
I = the Treasury Rate for a maturity equal to the Sub-account's
Guarantee Period for the week preceding the establishment of
the Sub-account;
N = the number of whole and partial years from the date we
receive the withdrawal, transfer, or death benefit request,
or from the Payout Start Date, to the end of the Sub-
account's Guarantee Period;
J = the Treasury Rate for a maturity equal to the Sub-account's
Guarantee Period for the week preceding the receipt of the
withdrawal request, transfer request, death benefit request,
or Income Payment request.
An adjustment factor is determined from the following formula:
.9 x (I - J) x N
The amount subject to a Market Value Adjustment that is deducted from a Sub-
account of the Guaranteed Maturity Fixed Account is multiplied by the adjustment
factor to determine the amount of the Market Value Adjustment. The amount
deducted from the Sub-account includes the transfer
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amount or the amount we pay you, income tax we withhold for you, the Withdrawal
Charge, any applicable premium tax charge, and the Market Value Adjustment.
DEATH OF OWNER OR ANNUITANT. A benefit may be paid to the owner determined
immediately after the death if, prior to the Payout Start Date:
- any owner dies; or
- the annuitant dies and the owner is not a natural person.
If the owner eligible to receive the death benefit is not a natural person, the
owner may elect to receive the benefit in one or more distributions. Otherwise,
if the owner is a natural person, the owner may elect to receive a benefit
either in one or more distributions or by periodic payments through an Income
Plan.
A Death Benefit will be paid: 1) if the owner elects to receive the Death
Benefit distributed in a single payment within 180 days of the date of death,
and 2) if the Death Benefit is paid as of the day the value of the Death Benefit
is determined. Otherwise, the Settlement Value will be paid. In any event, the
entire value of the Contract must be distributed within five (5) years after the
date of death unless an Income Plan is elected or a surviving spouse continues
the Contract in accordance with the following provisions.
Payments from the Income Plan must begin within one year of the date of death
and must be payable throughout:
- the life of the owner; or
- a period not to exceed the life expectancy of the owner; or
- the life of the owner with payments guaranteed for a period not to exceed
the life expectancy of the owner.
If the surviving spouse of the deceased owner is the new owner, then the spouse
may elect one of the options listed above or may continue the Contract in the
Accumulation Phase as if the death had not occurred. If the Contract is
continued in the Accumulation Phase, the surviving spouse may make a single
withdrawal of any amount within one year of the date of death without incurring
a Withdrawal Charge. However, any applicable Market Value Adjustment,
determined as of the date of the withdrawal, will apply.
DEATH BENEFIT. Prior to the Payout Start Date, the death benefit is equal to
the greatest of:
- the Contract Value on the date we determine the death
benefit; or
- the Settlement Value on the date we determine the death
benefit; or
- the Contract Value on the Death Benefit Anniversary
immediately preceding the date we determine the death
benefit, increased by purchase payments made since that
Death Benefit Anniversary and reduced by an adjustment for
any partial withdrawals since that Death Benefit
Anniversary. The adjustment is equal to the Contract Value
on the Death Benefit Anniversary multiplied by the ratio of
the withdrawal amount to the Contract Value immediately
prior to the withdrawal.
The first Death Benefit Anniversary is the issue date. Subsequent Death Benefit
Anniversaries are those contract anniversaries that are multiples of 7 Contract
Years, beginning with the 7th contract anniversary. For example, the issue
date, 7th, and 14th contract anniversaries are the first three Death Benefit
anniversaries.
We will determine the value of the death benefit as of the end of the Valuation
Period during which we receive a complete request for payment of the death
benefit. A complete request includes due proof of death.
SETTLEMENT VALUE. The Settlement Value is the same amount that would be paid in
the event of withdrawal of the Contract Value. We will calculate the Settlement
Value at the end of the Valuation Period coinciding with the requested
distribution date for payment or on the mandatory distribution date of 5 years
after the date of death.
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PAYOUT PHASE
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PAYOUT PHASE DEFINED. The "Payout Phase" is the second of the two phases during
your Contract. During this phase the Contract Value adjusted by any Market
Value Adjustment and less any applicable taxes is applied to the Income Plan you
choose and is paid out as provided in that plan.
The Payout Phase begins on the Payout Start Date. It continues until we make
the last payment as provided by the Income Plan chosen.
PAYOUT START DATE. The "Payout Start Date" is the date the Contract Value
adjusted by any Market Value Adjustment and less any applicable taxes is applied
to an Income Plan. The anticipated Payout Start Date is shown on the Annuity
Data Page. You may change the Payout Start Date by writing to us at least 30
days prior to this date.
The Payout Start Date must be on or before the later of:
- the annuitant's 90th birthday; or
- the 10th anniversary of this Contract's issue date.
INCOME PLANS. An "Income Plan" is a series of payments on a scheduled basis to
you or to another person designated by you. The Contract Value on the Payout
Start Date adjusted by any Market Value Adjustment and less any applicable
taxes, will be applied to your Income Plan choice from the following list:
1. LIFE INCOME WITH GUARANTEED PAYMENTS. We will make payments for
as long as the annuitant lives. If the annuitant dies before the
selected number of guaranteed payments have been made, we will
continue to pay the remainder of the guaranteed payments.
2. JOINT AND SURVIVOR LIFE INCOME WITH GUARANTEED PAYMENTS. We will
make payments for as long as either the annuitant or joint
annuitant, named at the time of Income Plan selection, lives. If
both the annuitant and the joint annuitant die before the
selected number of guaranteed payments have been made, we will
continue to pay the remainder of the guaranteed payments.
3. GUARANTEED NUMBER OF PAYMENTS. We will make payments for a
specified number of months beginning on the Payout Start Date.
These payments do not depend on the annuitant's life. The number
of months guaranteed may be from 60 to 360.
We reserve the right to make available other Income Plans.
INCOME PAYMENTS. Income payment amounts may vary based on any Sub-account of
the Variable Account and/or may be fixed for the duration of the Income Plan.
The method of calculating the initial payment is different for Variable Amount
Income Payments and Fixed Amount Income Payments. The Contract Maintenance
Charge will be deducted in equal payments from each income payment. The
Contract Maintenance Charge will be waived if total Purchase Payments are
$50,000 or more as of the Payout Start Date.
VARIABLE AMOUNT INCOME PAYMENTS. The initial income payment based upon the
Variable Account is calculated by applying the portion of the Contract Value in
the Variable Account on the Payout Start Date, less any applicable premium tax,
to the appropriate value from the Income Payment Table selected. Subsequent
income payments will vary depending upon the changes in the Annuity Unit Values
for the Sub-accounts upon which the income payments are based.
The portion of the initial income payment based upon a particular Variable Sub-
account is determined by applying the amount of the Contract Value in that Sub-
account on the Payout Start Date, less any applicable premium tax, to the
appropriate value from the Income Payment Table. This portion of the initial
income payment is divided by the Annuity Unit Value on the Payout Start Date for
that Variable Sub-account to determine the number of Annuity Units from that
Sub-account which will be used to determine subsequent income payments. Unless
Annuity Transfers are made between Sub-accounts, each subsequent income payment
from that Sub-account will be that number of Annuity Units times the Annuity
Unit Value for the Sub-account for the Valuation Date on which the income
payment is
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made.
ANNUITY UNIT VALUE. The Annuity Unit Value for each Sub-account of the Variable
Account at the end of any Valuation Period is calculated by:
- multiplying the Annuity Unit Value at the end of the immediately
preceding Valuation Period by the Sub-account's Net Investment
Factor during the period; and
then
- dividing the result by 1.000 plus the assumed investment rate for
the period. The assumed investment rate is an effective annual
rate of 3%.
FIXED AMOUNT INCOME PAYMENTS. The income payment amount derived from any monies
allocated to the Dollar Cost Averaging Fixed Account or Sub-accounts of the
Guaranteed Maturity Fixed Account during the Accumulation Phase are fixed for
the duration of the Income Plan. The Fixed Amount Income Payment is calculated
by applying the portion of the Contract Value in the Fixed Account(s) on the
Payout Start Date, adjusted by any Market Value Adjustment plus any amount from
the Variable Account that the owner elects to apply to a Fixed Amount Income
Payment and less any applicable premium tax, to the greater of the appropriate
value from the Income Payment Table selected or such other value as we are
offering at that time.
ANNUITY TRANSFERS. After the Payout Start Date, no transfers may be made from
the Fixed Amount Income Payment. If you choose an Income Plan which depends on
any person's life, transfers between Variable Sub-accounts or from the Variable
Amount Income Payment to the Fixed Amount Income Payment may not be made for six
months after the Payout Start Date. Annuity transfers may be made once every
six months thereafter. If you choose an Income Plan which does not depend on
any person's life, transfers between Variable Sub-accounts ar from the Variable
Amount Income Payment to the Fixed Amount Income Payment are permitted
immediately.
PAYOUT TERMS AND CONDITIONS. The income payments are subject to the following
terms and conditions:
- If the Contract Value is less than $2,000, or not enough to
provide an initial payment of at least $20, we reserve the right
to:
- change the payment frequency to make the payment at
least $20; or
- terminate the Contract and pay you the Contract Value
adjusted by any Market Value Adjustment and less any
applicable taxes in a lump sum.
- If we do not receive a written choice of an Income Plan from you
at least 30 days before the Payout Start Date, the Income Plan
will be life income with guaranteed payments for 120 months.
- If you choose an Income Plan which depends on any person's life,
we may require:
- proof of age and sex before income payments begin; and
- proof that the annuitant or joint annuitant is still
alive before we make each payment.
- After the Payout Start Date, the Income Plan cannot be changed
and withdrawals cannot be made unless income payments are being
made from the Variable Account under Income Plan 3. You may
terminate the income payments being made from the Variable
Account under Income Plan 3 at any time and withdraw their value,
subject to Withdrawal Charges.
- If any owner dies during the Payout Phase, the remaining income
payments will be paid to the successor owner as scheduled.
Page 12
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INCOME PAYMENT TABLES
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The initial income payment will be at least the amount based on the
adjusted age of the annuitant(s) and the tables below, less any
federal income taxes which are withheld. The adjusted age is the actual
age on the Payout Start Date reduced by one year for each six full years between
January 1, 1983 and the Payout Start Date. Income payments for ages and
guaranteed payment periods not shown below will be determined on a basis
consistent with that used to determine those that are shown. The Income Payment
Tables are based on 3.0% interest and the 1983a Annuity Mortality Tables.
Income Plan 1 - Life Income with Guaranteed Payments for 120 Months
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Monthly Income Payment for each $1,000 Applied to this Income Plan
------------------------------------------------------------------------------------------------
Annuitant's Annuitant's Annuitant's
Age Male Female Age Male Female Age Male Female
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35 $3.43 $3.25 49 $4.15 $3.82 63 $5.52 $4.97
36 3.47 3.28 50 4.22 3.88 64 5.66 5.09
37 3.51 3.31 51 4.29 3.94 65 5.80 5.22
38 3.55 3.34 52 4.37 4.01 66 5.95 5.35
39 3.60 3.38 53 4.45 4.07 67 6.11 5.49
40 3.64 3.41 54 4.53 4.14 68 6.27 5.64
41 3.69 3.45 55 4.62 4.22 69 6.44 5.80
42 3.74 3.49 56 4.71 4.29 70 6.61 5.96
43 3.79 3.53 57 4.81 4.38 71 6.78 6.13
44 3.84 3.58 58 4.92 4.46 72 6.96 6.31
45 3.90 3.62 59 5.02 4.55 73 7.13 6.50
46 3.96 3.67 60 5.14 4.65 74 7.31 6.69
47 4.02 3.72 61 5.26 4.75 75 7.49 6.88
48 4.08 3.77 62 5.39 4.86
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Income Plan 2 - Joint and Survivor Life Income with Guaranteed Payments for 120 Months
------------------------------------------------------------------------------------------------
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Monthly Income Payment for each $1,000 Applied to this Income Plan
------------------------------------------------------------------------------------------------
Female Annuitant's Age
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Male
Annuitant's 35 40 45 50 55 60 65 70 75
Age
-----------------------------------------------------------------------------------------------
35 $3.09 $3.16 $3.23 $3.28 $3.32 $3.36 $3.39 $3.40 $3.42
40 3.13 3.22 3.31 3.39 3.46 3.51 3.56 3.59 3.61
45 3.17 3.28 3.39 3.50 3.60 3.69 3.76 3.81 3.85
50 3.19 3.32 3.45 3.60 3.74 3.87 3.98 4.07 4.14
55 3.21 3.35 3.51 3.68 3.87 4.06 4.23 4.37 4.48
60 3.23 3.37 3.55 3.75 3.98 4.23 4.47 4.70 4.88
65 3.24 3.39 3.57 3.80 4.07 4.37 4.71 5.04 5.34
70 3.24 3.40 3.59 3.83 4.13 4.48 4.90 5.36 5.81
75 3.25 3.41 3.61 3.86 4.17 4.56 5.04 5.61 6.22
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Income Plan 3 - Guaranteed Number of Payments
-----------------------------------------------------------
-----------------------------------------------------------
Monthly Income Payment for each
Specified Period $1,000 Applied to this Income Plan
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Page 13
10 Years $9.61
11 Years 8.86
12 Years 8.24
13 Years 7.71
14 Years 7.26
15 Years 6.87
16 Years 6.53
17 Years 6.23
18 Years 5.96
19 Years 5.73
20 Years 5.51
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GENERAL PROVISIONS
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THE ENTIRE CONTRACT. The entire contract consists of this Contract, any
attached application, an any attached endorsements.
All statements made in written applications are representations and not
warranties. No statement will be used by us in defense of a claim or to void
the Contract unless it is included in a written application.
Only our officers may change the Contract or waive a right or requirement. No
other individual may do this.
We may not modify this Contract without your consent, except to make it comply
with any changes in the Internal Revenue Code or as required by any other
applicable law.
INCONTESTABILITY. We will not contest the validity of this Contract after the
issue date.
MISSTATEMENT OF AGE OR SEX. If any age or sex has been misstated, we will pay
the amounts which would have been paid at the correct age and sex.
If we find the misstatement of age or sex after the income payments begin, we
will:
- pay all amounts underpaid including interest; or
- stop payments until the total payments are equal to the corrected amount.
For purposes of the Misstatement of Age or Sex provision, interest will be
calculated at an effective annual rate of 6%.
ANNUAL STATEMENT. At least once a year, prior to the Payout Start Date, we will
send you a statement containing Contract Value information. We will provide
you with Contract Value information at any time upon request. The information
presented will comply with any applicable law.
SETTLEMENTS. We may require that this Contract be returned to us prior to any
settlement. We must receive due proof of death of the owner or annuitant prior
to settlement of a death claim. Due proof of death is one of the following:
- a certified copy of a death contract; or
- a certified copy of a decree of a court of competent jurisdiction as
to a finding of death; or
- any other proof acceptable to us.
Any full withdrawal or death benefit under this Contract will not be less than
the minimum benefits required by any statute of the state in which the Contract
is delivered.
DEFERMENT OF PAYMENTS. We will pay any amounts due from the Variable Account
under this Contract within seven days, unless:
- the New York Stock Exchange is closed for other than usual weekends or
holidays,
Page 14
or trading on such Exchange is restricted;
- an emergency exists as defined by the Securities and Exchange
Commission; or
- the Securities and Exchange Commission permits delay for the
protection of Contract holders.
We reserve the right to postpone payments or transfers from the Dollar Cost
Averaging Fixed Account and Guaranteed Maturity Fixed Account for up to six
months. If we elect to postpone payments or transfers from the Dollar Cost
Averaging Fixed Account or Guaranteed Maturity Fixed Account for 30 days or
more, we will pay interest as required by applicable law. Any interest would be
payable from the date the withdrawal request is received by us to the date the
payment or transfer is made.
VARIABLE ACCOUNT MODIFICATIONS. We reserve the right, subject to applicable
law, to make additions to, deletions from, or substitutions for the mutual fund
shares underlying the Sub-accounts of the Variable Account. We will not
substitute any shares attributable to your interest in a Sub-account of the
Variable Account without notice to you and prior approval of the Securities and
Exchange Commission, to the extent required by the Investment Company Act of
1940.
We reserve the right to establish additional Sub-accounts of the Variable
Account, each of which would invest in shares of another mutual fund. You may
then instruct us to allocate purchase payments or transfers to such Sub-
accounts, subject to any terms set by us or the mutual fund. We reserve the
right to limit the availability of funds for this Contract.
In the event of any such substitution or change, we may by endorsement, make
such changes as may be necessary or appropriate to reflect such substitution or
change.
If we deem it to be in the best interests of persons having voting rights under
the contracts, the Variable Account may be operated as a management company
under the Investment Company Act of 1940 or it may be deregistered under such
Act in the event such registration is no longer required.
Page 15
GLENBROOK LIFE AND ANNUITY COMPANY
ENHANCED DEATH BENEFIT RIDER
This rider was issued because you selected the Enhanced Death Benefit Option at
the time you applied for this annuity. The Death Benefit and Mortality and
Expense Risk Charge provisions of your Contract are modified as follows:
I. Prior to the Payout Start Date, the death benefit will be the greater of
the values stated in the Death Benefit provision on page 8 of your
Contract, or the value of the Enhanced Death Benefit Option.
The Enhanced Death Benefit Option is:
The greatest of the Anniversary Values as of the date we determine the
death benefit. The Anniversary Value is equal to the Contract Value
on a Contract Anniversary, increased by purchase payments made since
that anniversary and reduced by an adjustment for any partial
withdrawals since that anniversary. The adjustment is equal to that
Contract Value multiplied by the ratio of the withdrawal amount to the
Contract Value immediately prior to the withdrawal. Anniversary
Values will be calculated for each Contract anniversary prior to the
earlier of:
a. the date of death of the owner or the annuitant, if the owner is
not a natural person, or
b. the oldest owner's or the annuitant's, if the owner is not a
natural person, 80th birthday.
The Enhanced Death Benefit Option will never be greater than the maximum
death benefit allowed by any non-forfeiture laws which govern the Contract.
II. The annualized Mortality and Expense Risk Charge of 1.25% stated on page 6
of your Contract is changed. The annualized Mortality and Expense Risk
Charge will never be greater than 1.35%.
Except as amended, the Contract remains unchanged.
/s/ /s/
Secretary Chief Executive Officer
