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EXHIBIT NO. 4
The Variable Annuity Contract Form
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ABCD
P.O. BOX 182008
COLUMBUS, OHIO 43218-2008
Dear Policyowner:
PLEASE READ YOUR CONTRACT CAREFULLY
This is a legal contract between the Owner and Us.
This Contract is provided in return for:
(1) the application, which is a part of this Contract; and
(2) receipt of the Initial Purchase Payment.
To be sure the Owner is satisfied with this Contract, he/she has ten days toe
examine it and return it for any reason. This ten day period begins when the
Owner receives the contract. If the Owner returns this Contract to the Home
office of the Company during this ten day period, the Company will return the
Purchase Payment Value (as of the date of cancellation) without deduction for
any sales charges or administration fees. (The Company reserves the right to
return Contract Value where permitted by state law).
Thank you for relying on Us.
If you have any questions about your Contract or need more assistance contact
your agent or our home office.
Executed for the Company on the Date of Issue.
ABCD ABCDEF
Secretary President
READ YOUR CONTRACT CAREFULLY
PLEASE NOTE - ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN
BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT ARE VARIABLE, MAY
INCREASE OR DECREASE IN ACCORDANCE WITH THE NET INVESTMENT FACTOR, AND ARE NOT
GUARANTEED AS TO A FIXED DOLLAR AMOUNT.
NOTICE: Details for the variable provisions Details in the contract may be found
on pages 10, 14, and 15.
INDIVIDUAL, FLEXIBLE PURCHASE PAYMENT DEFERRED VARIABLE ANNUITY,
NON-PARTICIPATING
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CONTENTS
Page
Cover Page ............................................................ 1
Table of Contents ..................................................... 2
Data Page ............................................................. 3
Definitions ........................................................... 4
General Provisions .................................................... 6
Required Distributions and Death Benefit .............................. 8
Accumulation Provisions ............................................... 9
Surrender Provisions .................................................. 12
Annuitization Provisions .............................................. 14
Annuity Payment Options ............................................... 16
Annuity Tables ........................................................ 17
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DATA PAGE
OWNER
JOINT OWNER (if any)
ANNUITANT
BENEFICIARY
CONTINGENT BENEFICIARY (if any)
CONTRACT NUMBER
AGE AND SEX OF ANNUITANT
ISSUE DATE
INITIAL PURCHASE PAYMENT
ANNUITY COMMENCEMENT DATE
Contract Owners may have Purchase Payments applied to the general
Account of Financial Horizons Life Insurance Company or towards the
purchase of shares at net asset value of the following funds:
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
-Equity-Income Portfolio
-Overseas Portfolio
NATIONWIDE SEPARATE ACCOUNT TRUST
-Money Market Fund
-Total Return Fund
THE ONE GROUP INVESTMENT TRUST
Asset Allocation Fund
Government Bond Fund
Large Company Growth Fund
Small Company Growth Fund
Fidelity Equity Income Portfolio
Fidelity Overseas Portfolio
NSAT Money Market Fund
NSAT Total Return Fund
FOR USE WITH FINANCIAL HORIZONS VA SEPARATE ACCOUNT 3
A SEPARATE INVESTMENT ACCOUNT SPECIALLY
ESTABLISHED FOR INVESTMENT IN THE ABOVE FUNDS
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DEFINITIONS
THE COMPANY The Company is Financial Horizons Life Insurance
Company.
ACCUMULATION UNIT An accounting unit of measure used to calculate
the Variable Account Contract Value prior to the
Annuity Commencement Date.
ANNUITANT The person named on the Data Page on whose life
this Contract is issued and who will receive
annuity payments beginning within 10 working days
of the Annuity commencement Date. The Annuitant,
if someone other than the Owner, becomes the Owner
of the Contract on the Annuity Commencement Date.
The Company reserves the right to reject any
change of the Annuitant which has been made
without the prior consent of the Company.
ANNUITY COMMENCEMENT DATE The date on which annuity payments are scheduled
to commence. The Annuity Commencement Date is
shown on the Data Page. This date may be changed
by the Owner prior to the date annuity payments
actually commence. Annuity Payments will begin no
later than 10 working days after the Annuity
Commencement Date.
ANNUITY PAYMENT OPTION The method for making annuity payments. The
Annuity Payment Option selected on the application
may be changed by the Owner prior to the Annuity
Commencement Date.
ANNUITY UNIT An accounting unit of measure used to calculate
the value of Variable Annuity payments.
BENEFICIARY The Beneficiary named in the application to
receive certain benefits under this Contract when
the Annuitant dies.
CONTINGENT BENEFICIARY The person named in the application to be the
Beneficiary if the named Beneficiary is not
living when the annuitant dies.
CONTRACT ANNIVERSARY An anniversary of the Contract Issue Date as shown
on the Data Page.
CONTRACT OWNER (OWNER) The Contract owner is the person who possesses all
rights under the Contract, including the right to
designate and change any designations of the
Beneficiary, Contingent Beneficiary, Annuity
Payment Option, and the Annuity Commencement Date.
The Owner is the person named in the application,
unless changed. Please see "Contract Ownership"
and "Joint Ownership" on pages 6 and 7.
CONTRACT VALUE The sum of the Variable Account Contract Value and
the Fixed Account Contract Value.
CONTRACT YEAR Each year starting with either the Date of Issue
or a Contract Anniversary.
DATE OF ISSUE The Date shown as the Date of Issue on the Data
Page of the contract.
DISTRIBUTION Any payment of part or all of the Contract Value.
FIXED ACCOUNT All assets of the Company other than those in any
segregated asset account.
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FIXED ANNUITY An annuity providing for payments which are
guaranteed by the Company as to dollar amount
during the annuity payment period.
HOME OFFICE The main office of the Company located in
Columbus, Ohio.
JOINT OWNER The Joint Owner, if any, possesses an undivided
interest in the entire Contract in conjunction
with the Owner. Please see "Contract Ownership"
and "Joint Ownership" on pages 6 and 7.
NON-QUALIFIED CONTRACT A Contract issued to fund a Non-Qualified Plan.
NON-QUALIFIED PLAN A retirement program which does not receive
favorable tax treatment under the provisions of
the Internal Revenue Code.
PURCHASE PAYMENT ANNIVERSARY An anniversary of the date a purchase payment is
made under the Contract.
PURCHASE PAYMENT YEAR Any year commencing with the date a purchase
payment is made.
QUALIFIED CONTRACT A Contract issued to fund a Qualified Plan.
QUALIFIED PLAN A retirement program which receives favorable tax
treatment under the provisions of the Internal
Revenue Code.
VALUATION DATE Each day the New York Stock Exchange and the
Company's Home Office are open for business or any
other day during which there is a sufficient
degree of trading of the Variable Account's mutual
fund shares that the current net asset value of
its Accumulation Units might be materially
affected.
VALUATION PERIOD The period of time commencing at the close of
business of the New York Stock Exchange and ending
at the close of business for the next succeeding
Valuation Date.
VARIABLE ACCOUNT A separate investment account of the Company into
which Variable Account purchase payments are
allocated.
VARIABLE ANNUITY An annuity providing for payments which vary in
amount with the investment experience of the
Variable Account.
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GENERAL PROVISIONS
CHARGES The Company deducts charges for the maintenance
and administration of the Contract. These charges
are designed only to reimburse the Company for
expenses incurred that relate to the maintenance
and administration of the Contract. The Company
will monitor these charges to ensure that they do
not exceed accumulated expenses. The charges are
91) Contract Maintenance Charge: $30.00 on each
Contract Anniversary and on any date that is not
the Contract Anniversary when the Contract is
surrendered for its full value, and (2) Contract
Administration Charge: assessed daily through the
unit value calculation, equal to an annual rate of
0.05%. The Contract Maintenance Charge may not be
increased; it may, however be decreased by the
Company if the circumstances under which the
Contract is issued allow for lower than
anticipated maintenance and administration
expenses.
DEDUCTIONS FOR PREMIUM TAXES The Company will deduct from the Contract Value
the amount of any premium taxes levied by a sate
or any other governmental entity. At present,
premium taxes imposed by certain states range form
.50% to 3.0%. The Company currently deducts from
the Contract Value the applicable amount of
premium taxes levied at the time the Contract is
annuitized, except in those states which require
such taxes to be paid when incurred.
EXPENSE RISK CHARGE The Company will not increase charges for
administration of the Contract regardless of its
actual expenses. For assuming this expense risk,
the Company assesses and Expense Risk Charge
through the daily unit value calculation which is
equal to an annual rate of 0.45%.
MORTALITY RISK CHARGE The Company assumes a "mortality risk" that
variable annuity payments will not be affected by
the death rates of persons receiving such payments
or of the general population by virtue of annuity
rates incorporated in the Contract which cannot by
changed. For assuming this mortality risk, the
Company deducts a Mortality Risk Charge through
the daily unit value calculation, which is equal
to an annual rate of 0.80%.
BENEFICIARY PROVISIONS The Beneficiary and any Contingent Beneficiary are
named in the application, unless changed. If the
Beneficiary dies prior to the Annuitant, the
Contingent Beneficiary becomes the Beneficiary.
Unless the Owner has provided otherwise, when
there are two or more Beneficiaries, they will
receive equal shares. If there is no named
Beneficiary or Contingent Beneficiary upon the
Annuitant's death, the Owner (or the estate of the
Owner, if the Annuitant is the Owner) will be
deemed to be the Beneficiary. The Company may pay
the commuted value of any remaining unpaid
payments to the estate.
CONTRACT OWNERSHIP The Owner has all rights under the Contract,
unless otherwise provided. If the purchaser names
someone other than himself as Owner, the purchaser
would have no rights under the Contract. The Owner
is the person named in the application, unless
changed. The Annuitant, if someone other than the
Owner, becomes the Owner on the Annuity
Commencement Date. If the Owner dies, a
Distribution will be made in accordance with the
Death of Contract Owner provision, unless the
recipient of the distribution is the Owner's
spouse, in which case a Distribution may be paid
or the Contract may continue, depending on the
election of the surviving spouse.
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The Owner may name a new Owner at any time. Any
new choice of Owner will automatically revoke any
prior choice of Owner. Any request for change must
be made in writing and received at the Home
Office. The request for change must be a "Proper
written Application". The change will become
effective as of the date the written request is
signed. A new choice of Owner or Contingent Owner
will not apply to any payment made or action taken
by the Company prior to the time it was received.
A request for change in the Annuitant,
Beneficiary, or Contingent Beneficiary must be
made by the Owner in writing on a form acceptable
to the Company. Any such change is subject to
approval by the Company.
JOINT OWNERSHIP If a Joint Owner is named in the application, then
the Owner and Joint Owner will share an undivided
interest in the entire Contract. If the Owner and
Joint Owner wish to exercise Ownership rights in
the Contract independently of each other, it must
be so indicated in the application. Otherwise,
then an Owner and Joint Owner have been named, the
Company will only honor requests for changes and
the exercise of their ownership rights that are
made by both the Owner and Joint Owner. When a
Joint Owner has been named, al references to
"Owner" or "Contract Owner" throughout this
Contract should be constructed to mean both the
Owner and Joint Owner, unless otherwise provided.
Where the Contract is issued to fund a retirement
plan entered into pursuant to section 408 of the
Internal Revenue Code, all the terms of this
Contract and the rights of the owner, Joint Owner
and Annuitant may be subject to the Plan Document.
ALTERATION OR MODIFICATION All changes to the terms of this Contract must be
made in writing and must be signed by the
President or Secretary of the Company. No other
person may change or alter any of the terms or
conditions of the Contract.
ASSIGNMENT Unless otherwise provided, the Owner may assign
all rights under this Contract at any time during
the lifetime of the Annuitant, prior to the
Annuity Commencement Date. The Company will not be
bound by any assignment until written notice is
received and recorded at the Home Office. The
Company is not responsible for the validity of any
assignment. An assignment will not apply to any
payment made or action take by the Company prior
to the time it was recorded.
If this Contract is a Non-Qualified Contract, the
value of any portion of the Contract which is
assigned or pledged, may be treated like a cash
withdrawal for federal tax purposes.
If this Contract is issued to fund a retirement
plan pursuant to internal Revenue Code Section
408, it may not be assigned, pledged or otherwise
transferred except as allowable by applicable law.
ENTIRE CONTRACT This document is an annuity contract between the
Owner and the Company. This Contract, Annuity
application, Data Page, and Supplementary
Agreement (if applicable) make up the Entire
Contract.
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MISSTATEMENT OF AGE OR SEX If the age or sex of the Annuitant has been
misstated, all payments and benefits under this
Contract will be adjusted. Payments and benefits
will be made, based on the correct information.
Proof of age of an Annuitant may be required at
any time, on a form satisfactory to the Company.
When the age or sex of an Annuitant has been
misstated, the dollar amount of any overpayments
will be deducted from the next payment or payments
due under this Contract. The dollar amount of any
underpayment made by the Company as a result of
any such misstatement will be paid in full with
the next payment due under this Contract.
EVIDENCE OF SURVIVAL Where any payments under this Contract depend on
the recipient being alive on a given date, proof
that such person is living may be required by the
Company.
PROTECTION OF PROCEEDS Payments under this Contract are not assignable by
any Beneficiary prior to the time they are due.
Payments are not subject to the claims of
creditors or to legal process, except as mandated
by applicable laws.
REPORTS At least once each year prior to the Annuity
Commencement Date, a Report showing the Contract
Value will be provided to the Owner.
INCONTESTABILITY This Contract will not be contested.
CONTRACT SETTLEMENT The Company may require this Contract to be
returned to the Home Office prior to making any
payments. All sums payable to or by the company
under this Contract are payable at the Home
Office.
NUMBER AND GENDER Unless otherwise provided, all references in this
Contract which are in the singular form will
include the plural; all references in the plural
form will include the singular; and all references
in the male gender will include the female gender.
NON-PARTICIPATING This Contract is non-participating. It will not
share in the surplus of the Company.
CONTRACT VALUE All values equal or exceed those required under
state law.
REQUIRED DISTRIBUTIONS AND DEATH BENEFIT
Rules applicable for Contracts not issued in connection with a qualified plan or
individual retirement account.
DEATH OF CONTRACT OWNER If the Contract Owner (or Joint Owner): (a) has
named someone other than himself as Xxxxxxxxx, and
(b) dies prior to the Annuity Commencement Date, a
Distribution made in accordance with Section 72(s)
of the Internal Revenue Code will be paid.
The recipient of the Distribution will be any
surviving Joint Owner. If there is no Joint Owner,
the distribution will be paid to the Annuitant. If
the deceased Owner or Joint Owner is also the
Annuitant, the Distribution will be paid to the
Beneficiary (see "Death of Annuitant").
The Distribution will be paid within 5 years of
the Owner's death, unless: (a) the recipient of
the Distribution elects, within one year of the
Owner's death, to receive the Distribution in the
form of a life annuity or an annuity for a period
certain not exceeding the recipient's life
expectancy; or (b) the recipient of the
Distribution is the Owner's spouse, in which case,
the Contract may be continued by the surviving
spouse as Contract Owner.
DEATH OF ANNUITANT If the Annuitant dies prior to the Annuity
Commencement Date, a Death Benefit will be paid to
the Beneficiary upon receipt of proof of death of
the Annuitant. The death benefit will be paid as
rapidly as under the Annuity Payment Option
elected by the Owner and in effect at the time of
the Annuitant's death.
If the Owner or Joint Owner is also the Annuitant,
the death of such person will be treated as the
death of the Annuitant. If such person dies prior
to
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the Annuity Commencement Date, the
death benefit payable to the
Beneficiary will be paid in
conformance with the distribution
provisions set forth in the "Death
of Contract Owner" section of the
contract.
GENERAL DEATH BENEFIT PROVISION The value of the Death Benefit will
be determined as of the Valuation
Date on or next following the date
both proof of death, and an
election of single sum settlement
or Annuity Payment Option, are
received in good order by the
Company.
The amount of the Death Benefit
will be the greater of: (1) the sum
of all purchase payments, less
surrenders, or (2) the contract
Value. The amount of the Death
Benefit will be limited to the
Contract Value if the Annuity
Commencement Date is deferred
beyond age 75 of the Annuitant and
the Annuitant dies after attaining
such age.
If a single sum settlement is
requested, payment will be made in
accordance with any applicable laws
and regulations governing the
payment of Death Benefits. If an
Annuity Payment Option is desired,
election may be made by the
Beneficiary during the 90 day
period beginning of the date
written notice is received by the
Company. If no election has been
made by the end of such 90 day
period, the Death Benefit will be
paid to the Beneficiary in a single
sum.
Contracts issued in connection with
Qualified Plans or individual
retirement accounts will be subject
to specific rules set forth in the
plan or Contract concerning
distributions upon death of the
Annuitant.
ACCUMULATION PROVISIONS
FLEXIBLE PURCHASE PAYMENTS This Contract is bought for: (1)
the Initial Purchase Payment; and
(2) purchase payments made after
the first, if any. The cumulative
total of all purchase payments
under this and any other annuity
contract(s) issued by the Company
having the same Annuitant may not
exceed $1,000,000 without the prior
consent of the Company.
INITIAL PURCHASE PAYMENT The Initial Purchase Payment is due
on the Date of Issue. The Initial
Purchase Payment may not be less
than $5,000 for Non-Qualified
Contracts. However, if periodic
payments are expected by the
company, this Initial Purchase
Payment may be satisfied by
purchase payments made on an
annualized basis. For Qualified
Contracts issued pursuant to a
retirement plan which receives
favorable tax treatment under the
provisions of Section 408 of the
Internal Revenue Code; the minimum
purchase payments $2,000. However,
if periodic payment are expected by
the Company, the Company will
accept purchase payments which, on
an annualized basis, are at least
$2,000 for the first Contract Year.
Purchase Payments, if any, after
the first Contract Year must be at
least $10 each. The Company
reserves the right to reject any
Purchase Payment which does not
meet this minimum payment
requirement.
NO DEFAULT There are no penalties for failure
to continue Purchase Payments.
Unless surrendered for the full
Contract Value, the Contract will
continue in full force until the
Annuity Commencement Date. This
Contract will not be in default,
even if no additional purchase
payment are made after the first.
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CHANGE IN PURCHASE PAYMENTS The Owner is not obligated to continue Purchase
Payments. The Owner may: (1) increase or decrease
the amount of Purchase Payments, subject to any
minimum payment requirements: (2) change the
frequency of purchase Payments. A change in the
frequency or amount of Purchase Payments does not
have to be made by written request.
ALLOCATION OF PURCHASE The Owner elects to have the Purchase Payments
PAYMENTS allocated among the Fixed Account and the
Sub-Accounts of the Variable Account at the time
of application.
CONTRACT VALUE The Contract Value at any time will be the sum of:
(1) the Variable Account Contract Value; and (2)
the Fixed Account Contract Value.
FIXED ACCOUNT The Fixed Account Contract Value at any time will
be: (1) the sum of all amounts credited to the
Fixed Account under this Contract; plus (2)
interest credited to the Fixed Account; less (3)
any amounts canceled or withdrawn for charges,
deductions, or Surrenders.
INTEREST TO BE CREDITED The Company will credit interest to the Fixed
Account Contract Value. Such interest will be
credited at such rate or rates as the Company
prospectively declares from time to time. Such
rates will be declared to the Owner in writing
prior to each quarterly period. An such rate or
rates so determined, for which deposits are
received, will remain in effect for a period of
not less than 12 months. However, the Company
guarantees that it will credit interest at not
less than 3.0% per year.
VARIABLE ACCOUNT The Variable Account Contract Value is the sum of
CONTRACT VALUE the value of all Variable Account Accumulation
Units under this Contract. If: (1) part or all of
the Variable Account Contract Value is
surrendered, or (2) when charges or deductions are
made against the Variable Account Contract Value
then, an appropriate number of Accumulation Units
will be cancelled or surrendered to equal such
amount.
THE VARIABLE ACCOUNT The Variable Account is a separate investment
account of the Company. It is named on the Data
Page. The Company has allocated a part of its
assets for this Contract and certain other
contracts to the Variable account. Such assets of
the Variable Account remain the property of the
Company. However, they may not be charged with the
liabilities from any other business in which the
Company may take part.
INVESTMENTS OF THE The purchase payments applied to the Variable
VARIABLE ACCOUNT account will be invested at net asset value in one
or more of the mutual funds shown on the Data
Page.
SUB-ACCOUNTS The Variable Account is divided into Sub-Accounts
which invest in shares of mutual funds. Purchase
payments are allocated among one or more of these
Sub-Accounts, as designated by the Owner.
VALUATION OF ASSETS Mutual fund shares in the variable Account will be
valued at their net asset value.
VARIABLE ACCOUNT The number of Accumulation Units for each
ACCUMULATION UNITS Sub-Account of the Variable Account is found by
dividing: (1) the net amount allocated to the
Sub-Account; by (2) the Accumulation Unit value
for the Sub-Account for the Valuation Period
during which the Company received the Purchase
Payments.
VARIABLE ACCOUNT The value of an Accumulation Unit for each
Sub-Account of the Variable Account was
arbitrarily set at $10 when the first mutual fund
shares were bought. The value for any later
Valuation Period is found as follows:
The Accumulation Unit value for each Sub-Account
for the last prior Valuation Period is multiplied
by the Net Investment Factor for the Sub-
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Account for the next following Valuation period.
The result is the Accumulation Unit Value. The
value of an Accumulation Unit may increase or
decrease from one Valuation Period to the next.
The number of Accumulation Units will not change
as a result of investment experience.
NET INVESTMENT FACTOR The Net Investment Factor is an index applied to
measure the investment performance of a
Sub-Account from one Valuation Period to the next.
The Net Investment Factor may be greater or less
than one; therefore, the value of an Accumulation
Unit may increase or decrease.
The Net Investment Factor for any Sub-Account for
any Valuation period is determined by: dividing
(1) by (2) and subtracting (3) from the result,
where:
1. is the net result of:
a. the net asset value per share of the mutual
fund held in the Sub-Account, determined at
the end of the current Valuation Period;
plus
b. the per share amount of any dividend or
capital gain distributions made by the
mutual fund held in the Sub-Account, if the
"ex-dividend" date occurs during the current
Valuation Period; plus or minus.
c. a per share charge or credit for any taxes
reserved for, which is determined by the
Company to have resulted from the investment
operations of the Sub-Account.
2. is the net result of:
a. the net asset value per share of the mutual
fund held in the Sub-Account, determined at
the end of the last prior Valuation period;
plus or minus
b. the per share charge or credit for any taxes
reserved for the last prior Valuation
Period.
3. is a factor representing the Mortality and
Expense Risk Charge and the Administration
Charge deducted from the Variable Account. Such
factor is equal, on an annual basis, to 1.30%
of the daily net asset value of the Variable
Account.
For funds that credit dividends on a daily basis
and pay such dividends once a month, the Net
Investment Factor allows for the monthly
reinvestment of these daily dividends.
FIXED ACCOUNT PROVISIONS The Fixed Account is the general account of the
Company. It is made up of all assets of the
Company other than: (1) those in the Variable
Account; and (2) those in any other segregated
asset account.
TRANSFER PROVISIONS The Owner may annually transfer a portion of the
value of the Fixed Account to the Variable Account
and a portion of the Variable Account to the Fixed
Account without penalty or adjustment. Transfers
from the Fixed Account to the Variable Account
will be determined by the Company, but will not be
less than 10%, and will be declared before the
termination date of the then current interest rate
guarantee period. (The Company will always allow
10% of the Fixed Account value to be transferred
to the Variable Account.) Transfers from the Fixed
Account must be made within 30 days after the
termination date of the guaranteed period.
The Owner may request a transfer of up to 100% of
the Contract Value from the Variable Account to
the Fixed account. Such transfers must be made
prior to the Annuity Commencement Date or the
death of the Annuitant. No such transfers will be
permitted prior to the first Contract Anniversary
or within 12 months of any previous transfer. The
Owner's value of each sub-account will be
determined as of the day the written request for
transfer is received in good order at the Home
Office of the
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Company. The Company reserves the right to
restrict transfers to the Fixed account to 25% of
the Contract Value, depending on market conditions
at the time of transfer.
Transfers from the Fixed Account may not be made
prior to the first Contract Anniversary or within
12 months of any prior Transfer. Transfers must
also be made prior to the Annuity Commencement
Date.
DISTRIBUTION PROVISIONS The following events will give rise to a
Distribution:
1. Reaching the Annuity Commencement Date
--Distribution will be made pursuant to the
annuity Payment Option selected.
2. Death of the Annuitant prior tot he Annuity
Commencement Date -- Distribution to be made in
accordance with the options available under the
Death of Annuitant provision of this Contract.
3. Death of the Contract Owner -- Distribution to
be made in a manner consistent with the "Death
of Contract Owner" provisions of this Contract.
4. Surrender -- Distribution to be made in
accordance with the Surrender provisions of the
Contract.
5. In accordance with Section 72 of the Federal
Internal Revenue Code, if a non-natural person
is the Owner, any change in the primary
annuitant will be treated as the death of the
Owner.
EXCHANGE PRIVILEGES The Contract Owner may exchange this Contract for
an annuity contract which: (1) is issued by the
Company; and (2) is determined by the Company to
be the type and class eligible for such exchange.
In determining which contracts may be of the same
type and class as this Contract, the Company shall
apply its rules and regulations applicable
thereto.
The Contract Owner must request an exchange: (1)
in writing; and (2) at least 45 days prior to the
Annuity Commencement Date. Any such exchange shall
be made free from any Contingent Deferred Sales
Charge provided for in this Contract.
SURRENDER PROVISIONS
GENERAL SURRENDER PROVISIONS The Owner may Surrender part or all of the
Contract Value at any time this Contract is in
force and prior to the earlier of the Annuity
Commencement Date or the death of the Annuitant.
For the purpose of calculating the Contingent
Deferred Sales Charge, and in order to minimize
the applicable Contingent Deferred Sales Charge,
all amount withdrawn are deemed to be withdrawn on
the first-in first-out basis i.e., all withdrawals
are deemed to come from the oldest Purchase
Payments first. (Note--for tax purposes,
withdrawals may be treated differently.) All
Surrenders will have the following conditions:
1. The request for Surrender must be in writing.
2. The Surrender Value will be paid to the Owner
when proper written application and the
Contract are received at the Home Office.
3. Payment of the Variable account Contract Value
will be made within seven days of receipt of
both proper written application and the
Contract. Payment of the Fixed Account Contract
Value may be deferred up to six months
following receipt of application.
4. When written application and the Contract are
received, the Company will Surrender a number
of Variable Account Accumulation Units and an
amount from the Fixed Account needed to equal:
(a) the dollar
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amount requested; plus (b) any Contingent
Deferred Sales Charge which applies; plus (c)
any Contract Maintenance Charge which applies.
5. Unless the Owner has instructed otherwise, if a
partial Surrender is requested, the Surrender
will be made as follows: (a) from the Variable
Account Contract Value; and (b) from the Fixed
Account Contract Value. The amounts surrendered
from the Fixed Account and Variable Account,
will be in the same proportion that the Owner's
interest in the Fixed Account and Variable
Account bears to the total Contract Value.
CONTINGENT DEFERRED If part or all of the Contract Value is
SALES CHARGE surrendered, a Contingent Deferred Sales Charge
may be applied at the time of a surrender. The
Contingent Deferred Sales Charge may be applied at
the time of a surrender. The Contingent Deferred
Sales Charge will be equal to no more than 7% of
the lesser of: (1) the total of all purchase
payments made within 84 months prior to the date
of the request for Surrender; or (2) the amount
surrendered.
In no event will the cumulative total of all
Contingent Deferred Sales Charges exceed 7% of the
total purchase payments made within 84 months
prior to the date of the request for Surrender.
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The Contingent Deferred Sales Charge applies to purchase payments as follows:
Years From Date Of Sales Charge
Purchase Payment Percentage
---------------- ----------
0 7%
1 6%
2 5%
3 4%
4 3%
5 2%
6 1%
7 0%
A Contingent Deferred Sales Charge will not be
assessed against any values which have been held
under the Contract for at lease 84 months or any
values applied to purchase an annuity.
REDUCTION OF CONTINGENT The amount of Contingent Deferred Sales Charges on
DEFERRED SALES CHARGE the Contracts may be reduced when sales of the
Contracts are made to a trustee, employer or
similar entity pursuant to a retirement plan or
when sales are made in a similar arrangement where
offering the Contracts to a group of individuals
under such a program results in savings of sales
expenses. The entitlement to such a reduction in
Contingent Deferred Sales Charges will be
determined exclusively by the Company.
SURRENDERS WITHOUT CHARGE Once each year, starting with the second Purchase
Payment Year of a Purchase Payment, the Owner may
Surrender, without a Contingent Deferred sales
Charge, an amount equal to 10% of the purchase
payment at the time of surrender. This free
withdrawal privilege is non-cumulative and must be
used in the year available.
SURRENDER VALUE The Surrender Value is the amount that will be
paid if the full Contract Value is surrendered.
The Surrender Value at any time will be:
1. The Contract Value; less
2. Any Contingent Deferred Sales Charge which
applies; less
3. Any Contract Maintenance Charge which applies
PARTIAL SURRENDERS In the event of a Partial Surrender, the Company
will, unless instructed to the contrary, surrender
Accumulation Units from all Sub-Accounts in which
the contract Owner has an interest and from the
Fixed Account. The number of Accumulation Units
surrendered from each such Sub-Account and the
amount surrendered from the Fixed Account will be
in the same proportion that the Contract Owner's
interest in these Sub-Accounts and Fixed Account
bears to the total Contract Value.
DELAY IN PAYMENT OR The Company has the right to suspend or delay the
SURRENDER date of any Surrender payment from the Variable
Account for any period:
1. When the New York Stock Exchange is closed;
2. When trading on the New York Stock Exchange is
restricted;
3. When an emergency exists as a result of which:
(a) disposal of securities held in the Variable
Account is not reasonably practicable; or (b)
it is not reasonable practicable to fairly
determine the value of the net assets of the
Variable Account;
4. During any other period when the Securities and
Exchange Commission, by order, so permits for
the protection of security holders; or
5. When the request for Surrender is not made in
writing.
Rules and regulations of the Securities and
Exchange Commission will govern as to whether the
conditions set forth in numbers 2, 3, and 4 above
exist.
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The Company further reserves the right to delay
payment of a total surrender of Fixed Account
Contract Value for up to six months in those
states where applicable law requires the Company
to reserve such right.
ANNUITIZATION PROVISIONS
GENERAL All of the provisions within this section are
subject to the restrictions set forth in the
Section entitled "Death of Contract Owner", and
"Death of Annuitant".
ANNUITIZATION This is the process of purchasing an annuity
according to the option selected, during the
payout phase of the Contract. As of the Annuity
Commencement Date, the Contract Value is
surrendered and applied to the purchase rate then
in effect for the option selected. The purchase
rates for options set forth under this Contract
will be determined on a basis not less favorable
than the 1971 Individual Annuity Mortality Table
(set back one year) with minimum interest at 3.5%.
The purchase rates will not be less favorable than
those offered by the Company at the time of
Annuitization on a Single Premium Immediate
Annuity for the same age, sex, and Annuity Payment
Option. The rates shown in the Annuity Tables are
calculated on this guaranteed basis. Annuitization
is irrevocable once payments have begun.
ANNUITY COMMENCEMENT DATE Such date: (1) must be the first day of a calendar
month; and (2) must be at least two years after
the Date of Issue. The Annuity Commencement Date
may not be later than the first day of the first
calendar month after the Annuitant's 75th
birthday, unless a later date has: (1) been
requested by the Contract Owner; and (2) approved
by the Company. This date is selected by the Owner
at the time of application. Any applicable premium
taxes not already deducted will be deducted from
the Contract Value at this time. The remaining
Contract Value will then be applied to the Annuity
Payment Option selected by the Owner.
CHANGE OF ANNUITY The Owner may change the Annuity Commencement
COMMENCEMENT DATE Date. A change of Annuity Commencement Date must
be made prior to the Annuity Commencement Date and
by written request. The request must be received
at the Home Office prior to the new Annuity
Commencement Date. The date to which such a change
may be made must be the first day of a calendar
month.
CHANGE OF ANNUITY The Owner may change the Annuity Payment Option
PAYMENT OPTION prior to the Annuity Commencement Date. A change
of the Annuity Payment Option must be made by
written request and must be received at the Home
Office prior to the Annuity Commencement Date.
After a change of Annuity Payment Option is
received at the Home Office, it will become
effective as of the date it was requested. A
change of Annuity Payment Option will not apply to
any payment made or action taken by the Company
before it was received.
ANNUITY PAYMENT OPTIONS One Annuity Payment Option or a combination of
Annuity Payment Options may be selected. Any
Annuity Payment Option not set forth in the
Contract which is satisfactory to both the Company
and the Annuitant may be selected.
SUPPLEMENTARY AGREEMENT A Supplementary Agreement will be issued within 30
days following the Annuity Commencement Date. The
Supplementary Agreement will set forth the terms
of the Annuity Payment Option selected.
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FREQUENCY/AMOUNT OF PAYMENTS Payments will be made based on the payment option
selected and frequency selected. However, if the
net amount to be applied at the Annuity
Commencement Date is less than $500, the Company
has the right to pay such amount in one lump sum.
If any payment provided for would be or becomes
less than $20, the Company has the right to change
the frequency of payment to an interval that will
result in payments of at least $20.
FIXED ANNUITY PROVISIONS A Fixed Annuity is an annuity with level payments
which are guaranteed by the Company as to dollar
amount during the annuity payment period. At the
Annuity Commencement Date, the Contract Value will
be applied to the applicable Annuity Table. This
will be done in accordance with the Annuity
Payment Option selected.
VARIABLE ANNUITY A Variable Annuity is an annuity with payments
which: (1) are not pre-determined or guaranteed as
to dollar amount; and (2) vary in amount with the
investment experience of the Variable Account.
DETERMINATION OF FIRST At the Annuity Commencement Date, the Variable
VARIABLE ANNUITY PAYMENT Account Contract Value will be applied to the
applicable Annuity Table. This will be done in
accordance with the Annuity Payment Option
selected. The Annuity Tables are based on the 1971
Individual Annuity Mortality Table (set back one
year) with interest at 3.5%.
ANNUITY UNIT VALUE An Annuity Unit is used to calculate the value of
annuity payments. The value of an Annuity Unit for
each Sub-Account was arbitrarily set at $10 when
the first mutual funds were bought. The value for
any later Valuation Period is found as follows:
1. The Annuity Unit Value for each Sub-Account for
the last prior Valuation Period is multiplied
by the Net Investment Factor for the
Sub-Account for the Valuation Period for which
the Annuity Unit Value is being calculated.
2. The result is multiplied by an interest factor.
This is done to neutralize the Assumed
Investment Rate of 3.5% per year, which is
built into the Annuity Table.
VARIABLE ANNUITY PAYMENTS Variable Annuity payments after the first vary in
AFTER THE FIRST amount. The payment amount changes with the
investment performance of the Sub-Accounts within
the Variable Account. The dollar amount of such
payments is determined as follows:
1. The dollar amount of the first annuity payment
is divided by the value of an Annuity Unit as
of the Annuity Commencement Date. This result
establishes the fixed number of Annuity Units
for each monthly annuity payment after the
first. This number of Annuity Units remains
fixed during the annuity payment period.
2. The fixed number of Annuity Units is multiplied
by the Annuity Unit Value for the Valuation
Period for which the payment is due. This
result establishes the dollar amount of the
payment.
The Company guarantees that the dollar amount of
each payment after the first will not be affected
by the variations in expenses or mortality
experience.
ANNUITY PAYMENT OPTIONS
GENERAL All annuity payments will be mailed within 10
working days of the first of the month in which
they are scheduled to be made.
LIFE ANNUITY The amount to be paid under this option will be
paid during the lifetime of the Annuitant.
Payments will cease with the last payment due
prior to the death of the Annuitant.
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JOINT AND LAST The amount to be paid under this option will be
SURVIVOR ANNUITY paid and continued during the lifetimes of the
Annuitant and designated second person. Payments
will continue as long as either is living.
LIFE ANNUITY WITH The amount to be paid under this option will be
120 OR 240 PAYMENTS paid during the lifetime of the Annuitant. A
GUARANTEED guaranteed period of 120 or 240 months may be
selected. If the Annuitant dies prior to the end
of this guaranteed period, the Beneficiary may
choose to continue receiving payments until the
end of the guaranteed period, or receive the
commuted value of the remaining guaranteed
payments in a lump sum. Such lump sum payment will
be equal to the present value of the remaining
guaranteed payments to which the Annuitant would
have been entitled had he not died. Any lump sum
payment will be computed as of the date on which
proof of the death of the Annuitant is received at
the Home Office and computed at an assumed
investment rate which is equal to the rate used to
determine annuity payments, according to the
Annuity Tables, in effect on the Annuity
Commencement Date.
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ANNUITY TABLES
JOINT AND SURVIVOR MONTHLY ANNUITY PAYMENTS PER $1,000 APPLIED
ANNUITANT'S AGE LAST BIRTHDAY
FEMALE AGE
50 55 60 65 70
----- ----- ----- ----- -----
MALE AGE 50 $3.91 $4.07 $4.21 $4.34 $4.44
55 4.00 4.20 4.41 4.59 4.76
60 4.08 4.32 4.59 4.86 5.12
65 4.42 4.75 5.12 5.50
LIFE ANNUITY MONTHLY ANNUITY PAYMENTS PER $1,000 APPLIED
MALE FEMALE
GUARANTEED PERIOD GUARANTEED PERIOD
ANNUITANT'S ANNUITANT'S
ATTAINED AGE 120 240 ATTAINED AGE 120 240
LAST BIRTHDAY NONE MONTHS MONTHS LAST BIRTHDAY NONE MONTHS MONTHS
40 $3.99 $3.98 $3.91 40 $3.99 $3.98 $3.91
41 4.05 4.03 3.95 41 3.77 3.76 3.73
42 4.11 4.08 4.00 42 3.81 3.80 3.77
43 4.16 4.14 4.04 43 3.86 3.85 3.81
44 4.23 4.20 4.09 44 3.91 3.89 3.85
45 4.29 4.26 4.14 45 3.96 3.94 3.89
46 4.36 4.32 4.19 46 4.01 3.99 3.94
47 4.44 4.39 4.24 47 4.06 4.05 3.98
48 4.51 4.46 4.29 48 4.12 4.10 4.03
49 4.59 4.53 4.35 49 4.18 4.16 4.08
50 4.67 4.60 4.40 50 4.25 4.23 4.13
51 4.76 4.68 4.46 51 4.32 4.29 4.19
52 4.85 4.76 4.51 52 4.39 4.36 4.24
53 4.95 4.85 4.57 53 4.47 4.43 4.30
54 5.05 4.93 4.63 54 4.55 4.51 4.36
55 5.15 5.03 4.69 55 4.64 4.59 4.43
56 5.26 5.12 4.75 56 4.73 4.67 4.49
57 5.38 5.22 4.81 57 4.82 4.76 4.55
58 5.50 5.33 4.87 58 4.93 4.85 4.62
59 5.63 5.44 4.93 59 5.03 4.95 4.69
60 5.77 5.55 4.99 60 5.15 5.05 4.76
61 5.91 5.67 5.05 61 5.27 5.16 4.83
62 6.07 5.80 5.11 62 5.39 5.27 4.90
63 6.23 5.93 5.17 63 5.53 5.39 4.97
64 6.41 6.06 5.23 64 5.67 5.52 5.04
65 6.60 6.21 5.28 65 5.83 5.66 5.11
66 6.81 6.36 5.34 66 6.00 5.80 5.18
67 7.03 6.51 5.38 67 6.19 5.95 5.24
68 7.26 6.67 5.43 68 6.39 6.12 5.30
69 7.51 6.84 5.47 69 6.61 6.29 5.36
70 7.79 7.01 5.51 70 6.85 6.46 5.41
71 8.08 7.19 5.54 71 7.11 6.65 5.46
72 8.40 7.36 5.57 72 7.39 6.85 5.50
73 8.74 7.54 5.60 73 7.70 7.05 5.54
74 9.10 7.73 5.62 74 8.03 7.25 5.57
75 9.50 7.91 5.64 75 8.40 7.46 5.59
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AMENDATORY ENDORSEMENT
Attached to and made a part of this Contract issued by
NATIONWIDE LIFE AND ANNUITY INSURANCE COMPANY
ONE NATIONWIDE PLAZA COLUMBUS, OHIO 43216
PO BOX 16609
COLUMBUS, OHIO 43216-6609
This Endorsement restates and clarifies provisions of the Contract to which it
is attached. Notwithstanding any provisions of the Contract to the contrary, the
following provisions shall apply:
1. THE FOLLOWING IS HEREBY ADDED TO THE DEFINITION OF ANNUITANT:
"The Annuitant must be age [80] or younger at the time of Contract issuance
unless the Company has approved a request for an Annuitant of a greater age."
2. THE FOLLOWING IS XXXXXX ADDED TO THE DEFINITION OF CONTRACT OWNER:
"The Contract Owner must be age [80] or younger at the time of Contract issuance
unless the Company has approved a request for a Contract Owner of a greater
age."
3. THE SECOND SENTENCE OF THE INITIAL PURCHASE PAYMENT SECTION IS HEREBY DELETED
AND REPLACED WITH THE FOLLOWING:
"The Initial Purchase Payment may not be less than [$2,000] for Non-Qualified
Contracts."
4. THE FIRST PARAGRAPH OF THE SURRENDERS WITHOUT CHARGE SECTION IS HEREBY
DELETED AND REPLACED WITH THE FOLLOWING:
"Once each year, starting with the first Purchase Payment Year, the Contract
Owner may surrender without a Contingent Deferred Sales Charge, an amount equal
to [10%] of the Purchase Payments at the time of surrender. This free withdrawal
privilege is cumulative; that is, free amounts not taken during any given
contract year can be taken as free amounts in subsequent years."
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5. THE SECOND PARAGRAPH DESCRIBING THE AMOUNT OR THE VALUE OF THE DEATH BENEFIT
UNDER THE GENERAL DEATH BENEFIT PROVISIONS IS HEREBY DELETED AND REPLACED WITH
THE FOLLOWING:
"If the Annuitant dies prior to his [86] th birthday, the amount of the Death
Benefit will be the greater of 1. the Contract Value, 2. the total of all
purchase payments made to the contract, less an adjustment for amounts
surrendered, or 3. the Contract Value as of the most recent five year Contract
Anniversary, less an adjustment for amounts surrendered since that five year
anniversary. The amount of the Death Benefit will be limited to the Contract
Value if the Annuity Commencement Date is deferred beyond age [85] of the
Annuitant and the Annuitant dies after attaining such age."
Any adjustment for amounts surrendered will reduce 2 and 3 in the same
proportion that the Contract Value was reduced on the date(s) of the partial
surrender.
Except for the above mentioned amendments nothing else is changed in the
Contract.
/s/ XXXXXX X. CLICK /s/ XXXXXX X. XXXXXX
------------------------ -------------------------
Xxxxxx X. Click Xxxxxx X. Xxxxxx
Secretary President
