Xxxxxxx Xxxxxxx
XX-0123456
LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK
(A Stock Company)
Home Office: 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxx Xxxx 00000
Servicing Office: 0000 Xxxxx Xxxxxxx Xxxxxx, XX Xxx 0000 Xxxx Xxxxx,
Xxxxxxx 00000
ANNUITY CONTRACT
Flexible Premium Deferred
Variable Annuity and/or
Market Value Adjusted Fixed Annuity
With Benefit Payment Options
Nonparticipating
Lincoln Life & Annuity Company of New York (LNY) agrees to provide the benefits
and other rights described in this Contract in accordance with the terms of this
Contract.
READ THIS CONTRACT CAREFULLY. This is a legal contract between the Owner and
LNY. We want to be sure you understand the features and benefits contained in
this Contract. IT IS THEREFORE IMPORTANT THAT YOU READ YOUR CONTRACT CAREFULLY.
If you have any questions after reading the Contract, we hope you will contact
your representative or the Servicing Office of LNY.
NOTICE OF 10-DAY RIGHT TO EXAMINE CONTRACT. Within 10 days after this Contract
is first received, it may be cancelled for any reason without penalty (e.g. no
Market Value Adjustment will apply) by delivering or mailing it to the
representative through whom it was purchased or to the Servicing Office of LNY.
When the Contract is received at the Servicing Office, LNY will return the
Contract Value plus an amount to reflect any deducted daily charges (daily
charges are described in section 3.03) as of the date of cancellation where
permitted by law.
UPON A TRANSFER, WITHDRAWAL, OR SURRENDER, PAYMENTS AND VALUES ALLOCATED TO THE
FIXED ACCOUNT MAY BE SUBJECT TO A MARKET VALUE ADJUSTMENT WHICH MAY RESULT IN
UPWARD OR DOWNWARD ADJUSTMENTS IN AMOUNTS TRANSFERRED, WITHDRAWN, OR SURRENDERED
BY THE OWNER.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON INVESTMENT
EXPERIENCE OF THE VARIABLE ACCOUNT, ARE VARIABLE (THE AMOUNT MAY INCREASE OR
DECREASE) AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT (SEE PAGES 9 AND 19).
Signed for Lincoln Life & Annuity Company of New York at its Home Office in
Syracuse, New York.
/s/ Xxxxxx X. Xxxxxxx
----------------------------
Xxxxxx X. Xxxxxxx, President
1
Table of Contents
Article Page
Contract Data.......................................................................... 3
1 Definitions............................................................................ 5
2 Purchase Payments...................................................................... 8
3 Variable Account....................................................................... 8
4 Fixed Account.......................................................................... 10
5 Options................................................................................ 12
6 Death Benefits......................................................................... 15
7 Annuity Payment Option................................................................. 17
8 Beneficiary............................................................................ 21
9 Additional Services.................................................................... 22
10 General Provisions..................................................................... 23
11 Annuity Purchase Rates Under a Variable Payment Option................................. 26
12 Annuity Purchase Rates Under a Fixed Payment Option.................................... 29
2
CONTRACT DATA
Contract Number XX-0123456
Annuitant Xxxxxxx Xxxxxxx
Age at Issue 35
Contract Date April 1, 2000
Purchase Payment $25,000.00
Purchase Payment Frequency Flexible
Maturity Date April 1, 2055
OWNER
Xxxxxxx Xxxxxxx
Xxxx Xxxxxxx
BENEFICIARY DESIGNATION
Please refer to the Client Information Profile for beneficiary designation.
FIXED ACCOUNT - SUB-ACCOUNTS
GUARANTEED MINIMUM INTEREST RATE: 3.00%
[ 1-YEAR INITIAL GUARANTEED PERIOD INTEREST RATE: 4.00% ]
[ 3-YEAR INITIAL GUARANTEED PERIOD INTEREST RATE: 5.00% ]
[ 5-YEAR INITIAL GUARANTEED PERIOD INTEREST RATE: 6.00% ]
[ 7-YEAR INITIAL GUARANTEED PERIOD INTEREST RATE: 7.00% ]
[ 10-YEAR INITIAL GUARANTEED PERIOD INTEREST RATE: 8.00% ]
DCA FIXED ACCOUNT
INITIAL GUARANTEED PERIOD / INTEREST RATE: [ 6 MONTHS ] / [ 4.00% ]
VARIABLE ACCOUNT
The Variable Account for this variable annuity Contract is the "Lincoln New York
Account N for Variable Annuities". There are currently [thirty-six] Sub-
accounts in the Variable Account available to the Owner. The Owner may direct
Purchase Payments under the Contract to any of the available Sub-accounts,
subject to limitations. The amounts allocated to each Sub-account will be
invested at net asset value in the shares of one of the Funds. The Sub-accounts
are:
[AFIS GLOBAL SMALL CAPITALIZATION FUND (Class 2)]
[AFIS GROWTH FUND (Class 2)]
[AFIS GROWTH-INCOME FUND (Class 2)]
[AFIS INTERNATIONAL FUND (Class 2)]
[AIM V.I. CAPITAL APPRECIATION FUND ]
[AIM V.I. GROWTH FUND ]
[AIM V.I. INTERNATIONAL EQUITY FUND ]
[AIM V.I. VALUE FUND ]
[ALLIANCE GROWTH AND INCOME PORTFOLIO (Class B)]
3
[ALLIANCE GROWTH PORTFOLIO (Class B)]
[ALLIANCE PREMIER GROWTH PORTFOLIO (Class B)]
[ALLIANCE TECHNOLOGY PORTFOLIO (Class B)]
[DELAWARE GROUP PREMIUM EMERGING MARKETS SERIES (Service Class) ]
[DELAWARE GROUP PREMIUM GROWTH & INCOME SERIES (Service Class)]
[DELAWARE GROUP PREMIUM HIGH YIELD SERIES (Service Class)]
[DELAWARE GROUP PREMIUM REIT SERIES (Service Class)]
[DELAWARE GROUP PREMIUM SELECT GROWTH SERIES (Service Class)]
[DELAWARE GROUP PREMIUM SMALL CAP VALUE SERIES (Service Class)]
[DELAWARE GROUP PREMIUM SOCIAL AWARENESS SERIES (Service Class)]
[DELAWARE GROUP PREMIUM TREND SERIES (Service Class)]
[DEUTSCHE ASSET MANAGEMENT VIT FUNDS: EQUITY 500 INDEX FUND]
[FIDELITY VIP EQUITY-INCOME PORTFOLIO (Service Class 2)]
[FIDELITY VIP GROWTH PORTFOLIO ( Service Class 2)]
[FIDELITY VIP OVERSEAS PORTFOLIO (Service Class 2)]
[FIDELITY VIP III GROWTH OPPORTUNITIES PORTFOLIO (Service Class 2)]
[FRANKLIN MUTUAL SHARES SECURITIES FUND (Class 2)]
[FRANKLIN SMALL CAP SECURITIES FUND (Class 2)]
[LIBERTY VARIABLE TRUST NEWPORT TIGER FUND ]
[LINCOLN NATIONAL BOND FUND ]
[LINCOLN NATIONAL MONEY MARKET FUND ]
[MFS VARIABLE INSURANCE TRUST EMERGING GROWTH SERIES (Service Class)]
[MFS VARIABLE INSURANCE TRUST RESEARCH SERIES (Service Class)]
[MFS VARIABLE INSURANCE TRUST TOTAL RETURN SERIES (Service Class)]
[MFS VARIABLE INSURANCE TRUST UTILITIES SERIES (Service Class)]
[XXXXXXXXX GROWTH SECURITIES FUND (Class 2 ]
[XXXXXXXXX INTERNATIONAL SECURITIES FUND (Class 2)]
[Other funds made available to LNY.]
See Section 3.01 for provisions governing any limitations, substitution or
elimination of Funds.
Variable Sub-Account charge before the Annuity Commencement Date: 1.65% (See
Section 3.03)
AFTER THE ANNUITY COMMENCEMENT DATE:
With a sub-account charge of 1.40%, the smallest rate of investment return
required to ensure that the dollar amount of variable annuity payments does not
decrease is:
. 4.40% for variable annuity options based on an assumed rate of return of 3%
per year; or
. 5.40% for variable annuity options based on an assumed rate of return of 4%
per year; or
. 6.40% for variable annuity options based on an assumed rate of return of 5%
per year.
4
ARTICLE 1
DEFINITIONS
1.01
ACCUMULATION UNIT - A unit of measure used in the calculation of the value of a
Variable Sub-account prior to the Annuity Commencement Date.
1.02
ANNUITANT OR JOINT ANNUITANT - The person or persons upon whose life or lives
the annuity benefit payments made after the Annuity Commencement Date will be
based.
1.03
ANNUITY COMMENCEMENT DATE - The Valuation Date on which the Contract Value is
withdrawn for payment of annuity benefits under the Annuity Payment Option
selected.
1.04
ANNUITY PAYMENT DATE - The date on which the Owner is entitled to the first
annuity benefit payment. Subsequent annuity benefit payments will be made on
the same day of the month as the first annuity benefit payment, at the
applicable frequency.
1.05
ANNUITY PAYMENT OPTION - An optional form of payment of the annuity benefits
provided for under this Contract.
1.06
ANNUITY UNIT - A unit of measure used after the Annuity Commencement Date to
calculate the amount of a variable annuity benefit payment.
1.07
BENEFICIARY - The person or entity designated by the Owner to receive the Death
Benefit, if any.
1.08
CODE - The Internal Revenue Code of 1986, as amended.
1.09
CONTINGENT ANNUITANT - Prior to the Annuity Commencement Date, the individual
who will become the Annuitant upon the death of the Annuitant.
1.10
CONTRACT - The agreement, between LNY and the Owner, in which LNY provides a
variable annuity and/or a market value adjusted annuity.
1.11
5
CONTRACT DATE - The date this Contract became effective. The Contract Date is
shown on the Contract Data page(s).
1.12
CONTRACT VALUE - Prior to the Annuity Commencement Date, the sum of the values
of the Variable Account and of the Fixed Account, attributable to this Contract,
prior to any applicable Market Value Adjustment.
1.13
CONTRACT YEAR - Each twelve-month period starting with the Contract Date on the
Contract Data page(s) and starting with each Contract anniversary thereafter.
1.14
DEATH BENEFIT - The amount payable upon death of an Owner, or Joint Owner, or an
Annuitant.
1.15
DOLLAR COST AVERAGING (DCA) - An option that allows the automatic transfer of a
portion of the Contract Value in periodic installments from a designated DCA
holding account to one or more of the Variable Sub-accounts available under the
Contract. The periodic installments will be over any DCA period made available
by LNY and selected by the Owner. A designated DCA holding account may be in
the Fixed Account and/or the Variable Account.
1.16
EXPIRATION DATE - The date on which a selected Guaranteed Period of the Fixed
Account will end.
1.17
FIXED ACCOUNT - The fixed portion of this Contract which is invested in the
general account of LNY.
1.18
FIXED SUB-ACCOUNT - That portion of the Fixed Account which accepts allocations
for a Guaranteed Period at a Guaranteed Interest Rate. There is a separate
Fixed Sub-account for each particular Guaranteed Period and DCA holding account.
1.19
FUND - Any of the underlying investment options available in the Variable
Account.
1.20
GUARANTEED INTEREST RATE - The effective annual rate of interest LNY guarantees
to credit on assets in each Fixed Sub-account.
1.21
GUARANTEED PERIOD - The length, in years, of the period during which an initial
or subsequent Guaranteed Interest Rate will be credited. The Guaranteed Period
is selected by the Owner from those made available by LNY at the time of
selection.
1.22
6
HOME OFFICE - The principal office of LNY located at 000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxxxx, Xxx Xxxx 00000.
1.23
LNY - Lincoln Life & Annuity Company of New York.
1.24
MATURITY DATE - The date specified on the Contract Data pages of this Contract.
1.25
NET ASSET VALUE PER SHARE - The market value of a Fund share calculated each day
by taking the closing market value of all securities owned, adding the value of
all other assets (such as cash), subtracting all liabilities, and then dividing
the result (total net assets) by the number of shares outstanding.
1.26
OWNER OR JOINT OWNERS - The one person, two persons or entity who exercises
rights of ownership under this Contract.
1.27
PURCHASE PAYMENTS - Amounts paid into this Contract by the Owner.
1.28
QUALIFIED PLAN - A retirement plan qualified for special tax treatment under the
Code, including Sections 401, 403, 408, 408A and 457. All other plans are
considered Non-Qualified.
1.29
SERVICING OFFICE - The administrative offices of LNY for purposes of this
Contract, located at 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx, 00000, or
an institution designated by LNY.
1.30
VALUATION DATE - Close of the market of each day that the New York Stock
Exchange is open for business.
1.31
VALUATION PERIOD - The period commencing at the close of business on a
particular Valuation Date and ending at the close of business on the next
succeeding Valuation Date.
1.32
VARIABLE ACCOUNT - The segregated investment account into which LNY sets aside
and invests the assets allocated to the Variable Sub-account(s) made available
by LNY and selected by the Owner. The Variable Account for this Variable
Annuity Contract is shown on the Contract Data page(s).
1.33
7
VARIABLE SUB-ACCOUNT - That portion of the Variable Account which invests in
shares of a particular Fund. There is a separate Variable Sub-account for each
particular Fund.
ARTICLE 2
PURCHASE PAYMENTS
2.01 WHERE PAYABLE
All Purchase Payments must be made to LNY at its Servicing Office or to an agent
designated by LNY.
2.02 AMOUNT AND FREQUENCY
Purchase Payments are made in the amount and at the frequency shown on the
Contract Data Pages. The Owner may change the frequency or amount of Purchase
Payments subject to LNY's rules in effect at the time of the change. LNY
reserves the right to limit future Purchase Payments into this Contract.
Purchase Payments may be made until the earliest of the Annuity Commencement
Date, termination of the Contract upon payment of any Death Benefit, surrender
of the Contract, or the Maturity Date.
In the event that Purchase Payments are discontinued by the Owner, this Contract
will continue and Purchase Payments may be resumed at any time prior to the
earlier of:
a. the Annuity Commencement Date;
b. termination of the Contract upon payment of any Death Benefit;
c. surrender of this Contract; or
d. the Maturity Date.
2.03 DOLLAR COST AVERAGING.
All or part of the Initial Premium Payment may be allocated to the Dollar Cost
Averaging Fixed Account or any other Sub-Account made available for the purpose
of Dollar Cost Averaging. Any amount so allocated will be transferred from the
Sub-Account used for Dollar Cost Averaging to the designated variable Sub-
Accounts in monthly installments over a period chosen by the Owner. Transfers
will occur on the same day each month until the end of the chosen period or, if
sooner, until the account value in the Sub-Account used for Dollar Cost
Averaging has been exhausted. Transfers from the Dollar Cost Averaging Fixed
Account are not subject to any Market Value Adjustment.
ARTICLE 3
VARIABLE ACCOUNT
3.01 THE VARIABLE ACCOUNT
Purchase Payments under the Contract may be allocated to the Variable Account of
the Contract. The Variable Account is for the exclusive benefit of persons
entitled to receive benefits under variable annuity contracts. Income, gains and
losses (whether or not realized) from assets allocated to the Variable Account
shall be credited to or charged against the Variable Account without regard to
other income, gains or losses of LNY. The Variable Account will not be charged
with the liabilities arising from any other part of LNY's business.
8
Subject to any required regulatory approvals, LNY reserves the right to
eliminate the shares of any Fund and substitute the securities of a different
Fund or investment company or mutual fund. Such elimination and substitution
may occur if the shares of a Fund are no longer available for investment, or, if
in the judgement of LNY, further investment in any Fund should become
inappropriate in view of the purposes of the Contract. LNY may add new Variable
Sub-accounts in which the assets of the Variable Account may be invested. LNY
will give the Owner written notice of the elimination and substitution of any
Fund within fifteen days after such substitution occurs.
3.02 ALLOCATION OF PURCHASE PAYMENTS INTO THE VARIABLE ACCOUNT
Any Purchase Payment to this Contract may be allocated to the Variable Account.
Purchase Payments allocated to the Variable Account of the Contract will be
credited to the Variable Sub-account(s) made available by LNY and selected by
the Owner.
The Owner may allocate Purchase Payments to any of the available Variable Sub-
accounts subject to the following limitations:
a. The minimum amount of a Purchase Payment allocated to any one Variable
Sub-account is $20.
b. If the Owner elects to allocate any Purchase Payment to a new Variable
Sub-account not previously selected, that election must be made to LNY in
writing.
Purchase Payments allocated to each Variable Sub-account will be invested at net
asset value in the shares of one of the Funds. LNY will use each Purchase
Payment to buy Accumulation Units in the Variable Sub-account(s) selected by the
Owner. The number of Accumulation Units bought shall be determined by dividing
the amount allocated to a Variable Sub-account by the dollar value of an
Accumulation Unit in such Variable Sub-account as of the Valuation Date
immediately following receipt of the Purchase Payment at the Servicing Office.
The number of Accumulation Units held for an Owner in a Variable Sub-account
will not be changed by any change in the dollar value of Accumulation Units in
the Variable Sub-account.
3.03 VALUATION OF THE VARIABLE ACCOUNT ALLOCATIONS
The value of the portion of this Contract allocated to the Variable Account at
any time prior to the Annuity Commencement Date is equal to the sum of the
values allocated under this Contract to the Variable Sub-accounts. The value of
the portion of this Contract allocated to a Variable Sub-account at any time
prior to the Annuity Commencement Date is equal to the Accumulation Units
credited under this Contract to a Variable Sub-account multiplied by the value
of the Accumulation Unit for the respective Variable Sub-account.
Accumulation Units for each Variable Sub-account are valued separately. The
value of a Variable Sub-account Accumulation Unit may increase or decrease from
Valuation Period to Valuation Period. Initially, the value of an Accumulation
Unit was arbitrarily established at the inception of the Variable Sub-account.
The Accumulation Unit value for a Variable Sub-account for any later Valuation
Period is determined as follows:
a. the total value of Fund shares held in the Variable Sub-account is
calculated by multiplying the number of Fund shares owned by the Variable
Sub-account at the beginning of the Valuation Period by the Net Asset Value
Per Share of the Fund at the end of the Valuation Period, and adding any
dividend or other distribution of the Fund if an ex-dividend date occurs
during the Valuation Period; minus
b. the liabilities of the Variable Sub-account at the end of the Valuation
Period (such liabilities include daily charges imposed on the Variable Sub-
account and may include a charge or credit with respect to any taxes paid
or reserved for by LNY that LNY determines as a result of the operation
from the Variable Account); the result divided by
9
c. the outstanding number of Accumulation Units in the Variable Sub-account at
the beginning of the Valuation Period.
The daily charge imposed on a Variable Sub-account for any Valuation Period
represents the daily mortality and expense risk charge and the daily
administrative charge adjusted for the number of calendar days in the Valuation
Period. On an annual basis, this daily charge will not exceed 1.65% of the
average daily net assets of the Variable Sub-account.
For any Valuation Period on or after the Annuity Commencement Date, on an annual
basis the daily charge will not exceed 1.40% of the average daily net assets of
the Variable Sub-account.
The Accumulation Unit value may increase or decrease the dollar value of
benefits under the Contract. Expenses incurred by LNY will not adversely affect
the dollar value of benefits.
ARTICLE 4
FIXED ACCOUNT
4.01 THE FIXED ACCOUNT
The Fixed Account holds the Fixed Sub-accounts for each Guaranteed Period. LNY
reserves the right to discontinue accepting new allocations or transfers to any
of the available Guaranteed Periods at any time. LNY may also add one or more
new Guaranteed Periods at any time.
4.02 ALLOCATION OF PURCHASE PAYMENTS INTO THE FIXED ACCOUNT
Any Purchase Payment to this Contract may be allocated to the Fixed Account for
the Contract. Purchase Payments allocated to the Fixed Account of the Contract
will be credited to the Fixed Sub-account(s) made available by LNY and selected
by the Owner.
The Owner may allocate Purchase Payments to any of the available Fixed Sub-
accounts subject to the following limitations:
a. The minimum amount of a Purchase Payment which may be allocated to any one
Fixed Sub-account is $2000.
b. If the Owner elects to allocate any Purchase Payment to a new Fixed Sub-
account not previously selected, that election must be made to LNY in
writing.
Any Purchase Payment allocated to a Fixed Sub-account will be invested at the
Guaranteed Interest Rate in effect for the respective Guaranteed Period on the
day the allocation is credited to the Fixed Sub-account.
4.03 VALUATION OF FIXED ACCOUNT ALLOCATIONS
The value of the portion of this Contract allocated to the Fixed Account at any
time prior to the Annuity Commencement Date is equal to the sum of the then
current values of all Fixed Sub-account(s) with respect to this Contract before
any applicable Market Value Adjustment. See Section 4.06 for an explanation of
the Market Value Adjustment.
4.04 CREDITING OF INTEREST ON FIXED ACCOUNT
LNY will establish the applicable effective annual Guaranteed Interest Rate for
each Fixed Sub-account at the beginning of that Guaranteed Period. The
Guaranteed Interest Rate will be guaranteed for the duration of the applicable
Guaranteed Period. Subsequent Guaranteed Interest Rate(s) will be determined at
the beginning of subsequent Guaranteed Period(s) and may be higher or lower than
the previous interest rate. A Guaranteed
10
Interest Rate will never be less than an effective annual interest rate of 3.0%.
LNY may credit interest at effective annual rates in excess of 3.0% at any time.
Prior to the earlier of:
a. the Annuity Commencement Date;
b. termination of this Contract upon payment of any Death Benefit; or
c. surrender of this Contract;
LNY guarantees that at the end of each Valuation Period the applicable effective
annual interest rate, adjusted for the number of days in the Valuation Period,
will be credited to the portion of Contract Value, if any, in the Fixed Account
at that time.
4.05 GUARANTEED PERIODS
Each individual Purchase Payment allocated to a Fixed Sub-account will have an
associated Guaranteed Period, Guaranteed Interest Rate and Expiration Date and
will be treated separately from other amounts allocated to the Fixed Account.
Multiple amounts within the same Fixed Sub-account may have different Guaranteed
Interest Rates, Expiration Dates, and Market Value Adjustments. The Guaranteed
Period begins when the amount is allocated to that Fixed Sub-account and ends on
the Expiration Date for the Guaranteed Period selected.
LNY will send written notice to the Owner at the last address known to LNY
regarding an upcoming expiration of a Purchase Payment's Guaranteed Period. LNY
will send this notice at least 45 but not more than 75 days prior to the
Expiration Date of such Guaranteed Period. The Owner may request in writing,
prior to the Expiration Date of a previously selected Guaranteed Period, to
transfer all or a portion of the value of the amount in a Fixed Sub-account at
the Expiration Date. The value may be transferred to one or more of the Fixed
Sub-accounts or Variable Sub-accounts. Such requests must be in accordance with
the transfer provision as described in Section 5.01. If no written notification
from the Owner is received by LNY within 60 days prior to the Expiration Date of
a previously selected Guaranteed Period, a subsequent Guaranteed Period of the
same duration, if available, will begin automatically upon the expiration of the
preceding Guaranteed Period.
If the written notification requests only a portion of the value of the Fixed
Sub-account to be transferred, the remaining amount will be automatically
invested in a subsequent Guaranteed Period of the same duration, if available,
upon the expiration of the preceding Guaranteed Period. In the event the
preceding Guaranteed Period is no longer available and no written notification
has been received from the Owner, all or the remaining portion of value of the
Fixed Sub-account will be transferred to a new Fixed Sub-account for a
Guaranteed Period with the shortest duration currently available.
A Guaranteed Period may not be selected if its Expiration Date would occur after
the Maturity Date.
4.06 MARKET VALUE ADJUSTMENT
Any transfer (except as noted below), withdrawal, or surrender of value from a
Fixed Sub-account, unless effective on the Expiration Date of a Guaranteed
Period, the Annuity Commencement Date, or at the death of the Owner, Joint Owner
or Annuitant, will be increased or decreased by the Market Value Adjustment
described in the following paragraphs. The Market Value Adjustment will not
apply to any Contract Value being transferred as part of a DCA program.
The amount of the Market Value Adjustment is calculated by multiplying the
dollar amount of any transfer, withdrawal, or surrender of value from a Fixed
Sub-account by the following amount:
(1+A)/n/ divided by (1 + B)/n/, the result reduced by 1.0, where:
11
A = the yield rate for a Treasury security (U.S. Treasury Bonds, Notes, or
Bills) with time to maturity equal to the applicable Guaranteed Period,
determined at the beginning of the Guaranteed Period.
B = the yield rate for a Treasury security (U.S. Treasury Bonds, Notes, or
Bills) with time to maturity equal to the time remaining in the
applicable Guaranteed Period, if greater than 1 year, determined at the
time of cash withdrawal or transfer. For periods remaining of 1 year or
less, the yield rate for a 1 Year Treasury security is used.
n = the number of years remaining in the applicable Guaranteed Period (e.g.
1 year and 73 days = 1 + (73 divided by 365) = 1.2 years).
As used herein, 'The yield rate for a Treasury security' means the applicable
yield rate based on the Treasury Constant Maturity Series published by the
Federal Reserve. If such yields are no longer published, the Company will
substitute an appropriate index of publicly traded obligations subject to
approval by the Superintendent of Insurance of the State of New York. Straight-
line interpolation is used to determine the yield rate for a Treasury security
with the appropriate time to maturity if that yield rate is not published.
A positive Market Value Adjustment increases the amount transferred, withdrawn,
or surrendered while a negative Market Value Adjustment decreases it.
4.07 MINIMUM VALUE OF FIXED ACCOUNT
The Minimum Value of the Fixed Account will be determined by crediting an
effective annual interest rate of 3.0% on amounts in the Fixed Account. The
effective annual interest rate, adjusted for the number of days in the Valuation
Period, will be credited at the end of each Valuation Period on the portion of
the Contract Value, if any, in the Fixed Account at that time.
ARTICLE 5
OPTIONS
5.01 TRANSFER OPTION
Prior to the earlier of:
a. the Annuity Commencement Date;
b. termination of this Contract upon payment of any Death Benefit;
c. surrender of this Contract; or
d. the Maturity Date;
the Owner may direct a transfer of a portion of the Contract Value:
a. from one Variable Sub-account to another Variable Sub-account or to a Fixed
Sub-account;
b. from one Fixed Sub-account to another Fixed Sub-account or to a Variable
Sub-account; and
c. from a designated DCA holding account to a Variable Sub-account under a DCA
program;
subject to the restrictions described below.
Such a transfer request must be made in writing to LNY at its Servicing Office.
A transfer from one Variable Sub-account to another Variable Sub-account will
result in the redemption of Accumulation Units in one Variable Sub-account and
the purchase of Accumulation Units in the other Variable Sub-account. A
transfer from the Fixed Account to a Variable Sub-account will result in a
withdrawal of Contract Value from the Fixed Account and the purchase of
Accumulation Units in the Variable
12
Sub-account. Such transfers will be accomplished at Accumulation Unit values as
of the Valuation Date the transfer request is received in the Servicing Office.
Transfers from a Fixed Sub-account will be subject to a Market Value Adjustment
(as described in Section 4.06) unless the transfer is effective on the
Expiration Date of the Guaranteed Period. If a request for a transfer from a
Fixed Sub-account is received during the 60-day period immediately preceding the
Expiration Date of that Guaranteed Period, the transfer will be effective as of
the Expiration Date unless an immediate transfer is requested. If an immediate
transfer is requested, the transfer will occur on the Valuation Date the
transfer is received in the Servicing Office. If a transfer request is received
at any time other than during this 60-day period, the transfer will be
accomplished as of the Valuation Date the transfer request is received in the
Servicing Office.
Transfers to a Fixed Sub-account will have an associated Guaranteed Period,
Guaranteed Interest Rate and Expiration Date and will be treated separately from
other Purchase Payment allocations or transfers of a portion of the Contract
Value to the Fixed Account. The allocation of multiple Purchase Payments and
transfers into the same Fixed Sub-account may result in portions of the Contract
Value therein having different Guaranteed Interest Rates, Expiration Dates, and
Market Value Adjustments. The Guaranteed Period begins when the transfer of a
portion of Contract Value is credited into that Fixed Sub-account and ends on
the Expiration Date of the Guaranteed Period selected. See Section 4.05 for an
explanation of Guaranteed Periods and Section 4.04 for an explanation of
Guaranteed Interest Rates.
Transfers will be subject to the following restrictions.
a. LNY reserves the right to restrict transfers during the first 30 days after
the Contract Date.
b. Twelve (12) transfers within and/or between the Variable Account and the
Fixed Account may be made per Contract Year. There will be no fee imposed
for these twelve (12) transfers. Transfers in excess of twelve (12) per
Contract Year must be authorized by LNY. LNY reserves the right to impose
a fee for any transfer in excess of 12 per Contract Year. This fee will
not exceed $25. Transfers made as a part of an automatic transfer program
(such as a DCA program) will not be counted against these twelve (12)
transfers.
c. The minimum single transfer amount from a Variable Sub-account or a Fixed
Sub-account is $300 or the entire amount in the Variable Sub-account or
Fixed Sub-account, whichever is less. If, after the transfer, the amount
remaining under this Contract in the Variable Sub-account and/or Fixed Sub-
account from which the transfer is taken is less than $300, the entire
amount held in that Variable Sub-account and/or Fixed Sub-account will be
transferred with the requested transfer amount.
d. For transfers on a date other than the Expiration Date of a Guaranteed
Period, the sum of the percentages transferred from any Fixed Sub-account
in any Contract Year, where the percentages are based upon the value of the
Fixed Sub-account at the time of the current withdrawal, will be limited to
25% of the value of the Fixed Sub-account. Such transfers will be subject
to a Market Value Adjustment. Transfers made as a part of an automatic
transfer program (such as a DCA program) will not be counted against the
25% limit and will not be subject to a Market Value Adjustment.
e. The minimum transfer amount to a Variable Sub-account is $300.
f. The minimum transfer amount to a Fixed Sub-account is $2000.
If the DCA program is discontinued by the Owner prior to the end of the selected
DCA period, any remaining portion of the Contract Value held in a designated DCA
holding account within the Fixed Account will be transferred automatically to
the Variable Sub-account(s) the Owner selected under the DCA program.
5.02 WITHDRAWAL OPTION
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The Owner may withdraw a part of the Contract Value at any time prior to the
earlier of:
a. the Annuity Commencement Date;
b. termination of this Contract upon payment of any Death Benefit;
c. surrender of this Contract; or
d. the Maturity Date.
A withdrawal will be effective on the Valuation Date on which LNY receives a
written request for withdrawal at its Servicing Office.
The request may specify from which Sub-account the withdrawal will be made. If
no Sub-account is specified, LNY will withdraw the amount requested on a pro-
rata basis from each Variable Sub-account and/or Fixed Sub-account. Any payment
from the Variable Account will be mailed from LNY's Servicing Office within
seven days after the date of withdrawal; however, LNY may be permitted to defer
such payment under the Investment Company Act of 1940, as in effect at the time
such request for withdrawal is received at its Servicing Office. Any payment
from the Fixed Account may be deferred for a period not to exceed six months
after receipt of the withdrawal request.
Withdrawals from a Variable Sub-account will result in the redemption of
Accumulation Units from that Variable Sub-account. Such withdrawals will be
accomplished at Accumulation Unit values as of the Valuation Date the withdrawal
request is received in the Servicing Office.
Withdrawals from a Fixed Sub-account will be subject to a Market Value
Adjustment (as described in Section 4.06) unless the withdrawal is effective on
the Expiration Date of the Guaranteed Period or at the death of the Owner, Joint
Owner or Annuitant. If a request for a withdrawal from a Fixed Sub-account is
received during the 60-day period immediately preceding the Expiration Date of
that Guaranteed Period, the withdrawal will be effective as of the Expiration
Date unless an immediate withdrawal is requested. If an immediate withdrawal is
requested, the withdrawal will occur on the Valuation Date the withdrawal is
received in the Servicing Office. If a withdrawal request is received at any
time other than during this 60-day period, the withdrawal will be accomplished
as of the Valuation Date the withdrawal request is received in the Servicing
Office.
The minimum withdrawal is $300. LNY reserves the right to surrender this
Contract if any withdrawal reduces the total Contract Value to less than $2,000,
and Purchase Payments have stopped for a period of three full years. By payment
of the Contract Value, LNY shall be relieved of any further obligation under
this Contract.
A partial withdrawal will result in a proportional reduction in any Death
Benefit payable under the Contract.
The Withdrawal Option is not available after the Annuity Commencement Date.
5.03 SURRENDER OPTION
The Owner may surrender this Contract for its Contract Value at any time prior
to the earlier of:
a. the Annuity Commencement Date;
b. termination of this Contract upon payment of any Death Benefit; or
c. the Maturity Date.
This Contract will terminate upon surrender. The surrender will be effective on
the Valuation Date on which LNY receives a written request for surrender at its
Servicing Office.
The surrender value on the Valuation Date of surrender will be the sum of "a."
and "b.", where:
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"a" is the greater of the Minimum Value of the Fixed Account (see Section
4.07) or the portion of the Contract Value in the Fixed Account after any
Market Value Adjustment(s) (see Section 4.06) and;
"b" is the portion of the Contract Value in the Variable Account.
Any payment from the Variable Account will be mailed from LNY's Servicing Office
within seven days after the date of surrender; however, LNY may be permitted to
defer such payment under the Investment Company Act of 1940, as in effect at the
time a request for surrender is received in its Servicing Office. Any payment
from the Fixed Account may be deferred for a period not to exceed six months
after receipt of the withdrawal request.
The Surrender Option is not available after the Annuity Commencement Date.
ARTICLE 6
DEATH BENEFITS
6.01 DEATH BEFORE THE ANNUITY COMMENCEMENT DATE
Entitlement.
If there is a single Owner, then upon the death of the Owner LNY will pay a
Death Benefit to the designated Beneficiary(s) in accordance with the terms of
Article 8. If the designated Beneficiary of the Death Benefit is the surviving
spouse of the deceased Owner, the spouse may elect to continue the Contract as
the new Owner. Upon the death of the spouse who continues the Contract as the
new Owner, LNY will pay a Death Benefit to the designated Beneficiary(s) named
by the spouse, as the new Owner, in accordance with the terms of Article 8. If
there are no designated Beneficiaries, LNY will pay a Death Benefit to the
Owner's estate.
If there are Joint Owners, upon the death of the first Joint Owner, LNY will pay
a Death Benefit to the surviving Joint Owner. If the surviving Joint Owner is
the spouse of the deceased Joint Owner, then the spouse may elect to continue
the Contract as sole Owner. Upon the death of the Joint Owner who continues the
Contract, LNY will pay a Death Benefit to the designated Beneficiary(s) in
accordance with the terms of Article 8.
If the Annuitant is also the Owner or a Joint Owner, then the Death Benefit paid
upon the death of the Annuitant will be subject to the Contract provisions
regarding death of the Owner or a Joint Owner. If the surviving spouse of the
deceased Annuitant assumes the Contract, the Contingent Annuitant, if any, will
become the Annuitant. If there is no named Contingent Annuitant, the surviving
spouse will become the Annuitant.
If an Annuitant who is not the Owner or a Joint Owner dies, then the Contingent
Annuitant, if named, becomes the Annuitant and no Death Benefit is payable on
the death of the Annuitant. If no Contingent Annuitant is named, the Owner (or
younger Joint Owner) becomes the Annuitant. In lieu of continuing the Contract,
a Death Benefit may be paid to the Owner (and Joint Owner in equal shares, if
applicable) if the Annuitant named on this Contract has not been changed, except
on death of a prior Annuitant, and written notification of the election to
receive the Death Benefit is received by LNY within 75 days of the death of the
Annuitant. This Contract will terminate when any Death Benefit is paid due to
the death of the Annuitant. A Death Benefit payable on the death of the
Annuitant will not be paid if the Annuitant has been changed subsequent to the
effective date of this Contract, unless the change occurred because of the death
of a prior Annuitant.
If the Owner is a corporation or other non-individual (non-natural person), the
death of the Annuitant will be treated as the death of the Owner.
The Death Benefit will be paid upon approval by LNY after LNY is in receipt of:
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a. due proof, satisfactory to LNY, of the death;
b. written authorization for payment; and
c. all claim forms, fully completed.
Due proof of death may be a certified copy of a death certificate, a certified
copy of a decree of a court of competent jurisdiction as to the findings of
death, or any other proof of death acceptable to LNY.
All Death Benefit payments will be subject to the laws and regulations governing
death benefits.
Notwithstanding any provision of this Contract to the contrary, the payment of
Death Benefits provided under the Contract must be made in compliance with Code
Section 72(s) or 401(a)(9) as applicable, as amended from time to time.
Determination of Amounts.
This Contract provides a Death Benefit called the Enhanced Guaranteed Minimum
Death Benefit (EGMDB). The EGMDB is equal to the greatest of:
a. the current Contract Value as of the date on which the death claim is
approved by LNY for payment; or
b. the sum of all Purchase Payments, decreased proportionally by all
withdrawals, partial annuitizations, and premium tax incurred, if any;
or
c. the highest Contract Value on any Contract Date anniversary (determined
before the allocation of any Purchase Payments on that Contract Date
anniversary) prior to the 81st birthday of the deceased (Owner, Joint
Owner, or Annuitant) and prior to the date of death of the deceased
(Owner, Joint Owner or Annuitant); where the highest Contract Value is
increased by Purchase Payments made on or subsequent to that Contract
Date anniversary on which the highest Contract Value is obtained, and
decreased proportionally for partial withdrawals, partial
annuitizations, and premium tax incurred, if any, on or subsequent to
that Contract Date anniversary on which the highest Contract Value is
obtained.
Upon the death of the Owner, Joint Owner, or Annuitant of this Contract, if a
surviving spouse continues the Contract, the excess, if any, of the Death
Benefit over the current Contract Value as of the date on which the death claim
is approved by LNY for payment will be credited into the Contract. This benefit
will only apply one time for each Contract.
If the Owner is a corporation or other non-individual (non-natural person) and
there are Joint Annuitants, upon the death of the first Joint Annuitant to die,
if the Contract is continued, the excess, if any, of the Death Benefit over the
current Contract Value as of the date on which the death claim is approved by
LNY for payment will be credited into the Contract. This benefit will only
apply one time for each Contract.
Payment of Amounts.
The Death Benefit payable on the death of the Owner, or after the death of the
first Joint Owner, or upon the death of the spouse who continues the Contract,
will be distributed to the designated Beneficiary(s) as follows:
a. the Death Benefit must be completely distributed within five years of the
Owner's date of death; or
b. the designated Beneficiary may elect, within the one year period after the
Owner's date of death, to receive the Death Benefit in substantially equal
installments over the life of such designated
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Beneficiary or over a period not extending beyond the life expectancy of
such designated Beneficiary; provided that such distributions begin not
later than one year after the Owner's date of death.
The Death Benefit payable upon the death of the Annuitant, if elected by the
Owner or Joint Owner within 75 days of the death of the Annuitant, will be
distributed to the Owner or Joint Owners in either the form of a lump sum or
under an Annuity Payment Option. An Annuity Payment Option must be selected
within 60 days after LNY approves the death claim.
If a lump sum settlement is elected, the proceeds will be mailed within seven
days of approval by LNY of the claim. This payment may be postponed as permitted
by the Investment Company Act of 1940.
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6.02 DEATH ON OR AFTER THE ANNUITY COMMENCEMENT DATE
The Death Benefit options listed in Section 6.01 are no longer applicable and
the Death Benefit option in effect will terminate.
If the Owner or a Joint Owner dies on or after the Annuity Commencement Date,
any remaining benefits payable will continue to be distributed under the Annuity
Payment Option then in effect. The rights of ownership granted by the Contract
will pass to the Joint Owner, if any, otherwise to the Beneficiary. If there is
no named Beneficiary at the time of the Owner's or last surviving Joint Owner's
death, then the rights of ownership will pass to the Annuitant, if still living;
otherwise to the Joint Annuitant, if applicable. If no named Joint Owner,
Beneficiary, Annuitant, or Joint Annuitant survives the Owner, any remaining
benefits payable will continue to the Owner's estate.
On receipt of due proof of death, as described in Section 6.01, of the Annuitant
or both Joint Annuitants, any remaining benefits payable under the Annuity
Payment Option will be paid to the Owner or Joint Owner, if living; otherwise,
to the Beneficiary. If there is no Beneficiary, any remaining benefits payable
will continue to the Annuitant's estate.
ARTICLE 7
ANNUITY PAYMENT OPTION
7.01 ANNUITY BENEFIT PAYMENTS
An election to receive payments under an Annuity Payment Option must be made by
the Maturity Date. If an Annuity Payment Option is not chosen prior to the
Maturity Date, payments will commence to the Owner on the Maturity Date under
the Annuity Payment Option providing a life annuity with annuity benefit
payments guaranteed for 10 years. The Maturity Date is set forth on the
Contract Data Pages. Upon written request by the Owner and any Beneficiary who
cannot be changed, the Maturity Date may be deferred. Purchase Payments may be
made until the new Maturity Date.
Any Contract Value from a Fixed Sub-account applied to an Annuity Payment Option
will be exempt from a Market Value Adjustment.
7.02 CHOICE OF ANNUITY PAYMENT OPTION
By Owner
Prior to the Annuity Commencement Date, the Owner may choose or change any
Annuity Payment Option. In addition, the Owner may select an Annuity Payment
Option as the distribution method for payment of the Death Benefit to a
Beneficiary. Such selection of a distribution method must be made in writing to
the Servicing Office and approved by LNY. The Owner may change or revoke, in
writing to the Servicing Office, any such selection, unless such selection was
made irrevocable.
By Beneficiary
If an Annuity Payment Option has not been previously selected by the Owner as
the distribution option for the payment of the Death Benefit to the Beneficiary,
then at the time proceeds are payable to a Beneficiary, a Beneficiary may choose
any Annuity Payment Option that meets the requirements of Code Section 72(s) or
401(a)(9). The Beneficiary then becomes the Annuitant.
A choice or change of an Annuity Payment Option must be made in writing to LNY.
After the Annuity Commencement Date, the Annuity Payment Option may not be
changed.
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7.03 ANNUITY PAYMENT OPTIONS
a. Life Annuity / Life Annuity with Certain Period - Fixed and/or variable
annuity benefit payments will be made for the lifetime of the Annuitant
with no Certain Period, or life and a 10 year Certain Period, or life and a
20 year Certain Period.
b. Unit Refund Life Annuity - Variable annuity benefit payments will be made
for the lifetime of the Annuitant with the guarantee that upon death, if:
1) the number of Annuity Units initially purchased (determined by dividing
the total dollar amount applied to purchase this option by the Annuity
Unit value on the Annuity Commencement Date) is greater than;
2) the number of Annuity Units paid as part of each variable annuity
benefit payment multiplied by the number of annuity benefit payments
paid prior to death;
then a refund payment equal to the number of Annuity Units determined by
(1) minus (2) will be made.
The refund payment value will be determined using the Annuity Unit value on
the Valuation Date on which the refund payment is approved by LNY, after
LNY is in receipt of:
(a) due proof of death acceptable to LNY;
(b) written authorization for payment; and
(c) all claim forms, full completed.
c. Cash Refund Life Annuity - Fixed annuity benefit payments will be made for
the lifetime of the Annuitant with the guarantee that upon death, if:
1) the total dollar amount applied to purchase this option is greater
than;
2) the fixed annuity benefit payment multiplied by the number of annuity
benefit payments paid prior to death;
then a refund payment equal to the dollar amount of (1) minus (2) will be
made.
The refund payment will be paid upon approval by LNY after LNY is in
receipt of:
(a) due proof of death acceptable to LNY;
(b) written authorization for payment; and
(c) all claim forms, fully completed.
This option is only available to Annuitants under age 91.
d. Joint Life Annuity / Joint Life Annuity with Certain Period - Fixed and/or
variable annuity benefit payments will be made during the joint life of the
Annuitant and a Joint Annuitant. Payments will be made for joint life with
no Certain Period, or joint life and a 10-year Certain Period, or joint
life and a 20-year Certain Period. Upon the death of either Xxxxxxxxx,
annuity benefit payments continue at the same amount for the life of the
surviving Annuitant.
e. Joint Life and Two-Thirds to Survivor Annuity / Joint Life and Two-Thirds
to Survivor Annuity with Certain Period - Fixed and/or variable annuity
benefit payments will be made during the joint life of the Annuitant and a
Joint Annuitant. Upon the death of either Xxxxxxxxx, two-thirds of the
annuity
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benefit payment due while both Xxxxxxxxxx were alive will continue for the
life of the surviving Annuitant. Payments will be made for joint life with
no Certain Period, or joint life and a 10-year Certain Period, or joint
life and a 20-year Certain Period.
f. Other options may be available as agreed upon in writing by LNY.
At the time an Annuity Payment Option is selected under the provisions of this
Contract, the Owner may elect to have the Contract Value, adjusted as described
in Section 7.04, applied to provide a variable annuity benefit payment, a fixed
annuity benefit payment, or a combination fixed and variable annuity benefit
payment. If no election is made, the value of the Owner's Variable Account will
be used to provide a variable annuity benefit payment and the value of the
Owner's Fixed Account will be used to provide a fixed annuity benefit payment.
At the time Income Payments commence, they will not be less than those that
would be provided by a specific amount for any single premium immediate annuity
contract offered by LNY at the time to the same class of annuitants. The
specific amount is the greater of the surrender value or 95% of the accumulation
value.
7.04 DETERMINATION OF THE AMOUNT OF THE FIRST ANNUITY PAYMENT
The amount of annuity benefit payment will depend on the age and sex (except in
cases where unisex rates are required) of the Annuitant(s) as of the Annuity
Commencement Date. A choice may be made to receive payments once each month,
four times each year, twice each year, or once each year. If no choice is made,
payments will automatically be made monthly.
Article 11 of this Contract illustrates the minimum payment amounts and the age
adjustments which will be used to determine the first monthly payment for a
variable annuity benefit payment based upon the assumed interest rate selected
by the Owner. The tables show the dollar amount of the first monthly payment
which can be purchased with each $1,000 of Contract Value, after deduction of
any applicable premium taxes. Amounts shown use an Individual Mortality Table
on file with the New York Superintendent of Insurance, with an assumed interest
rate of 3.0%, 4.0%, and 5.0% per year. The Owner must select one of the assumed
interest rates for the variable annuity benefit payment prior to the Annuity
Commencement Date. The assumed interest rate may not be changed after the
Annuity Commencement Date.
Article 12 of this Contract illustrates the minimum payment amounts and the age
adjustments which will be used to determine the monthly payments for a fixed
annuity benefit payment. The tables show the dollar amount of the guaranteed
monthly payments which can be purchased with each $1,000 of Contract Value,
after deduction of any applicable premium taxes. Amounts shown use an
Individual Annuity Mortality Table on file with the New York Superintendent of
Insurance, with an interest rate of 2.75% per year.
Minimum payment amounts for ages not shown in Articles 11 and 12 can be obtained
from LNY's Servicing Office. The minimum payment amounts shown for Joint and
Survivor Annuities under both Article 11 and Article 12 are for joint ages; that
is, for a male and a female both of the same age. Minimum payment amounts for
other age and sex combinations on Joint and Survivor Annuities are not
illustrated in Articles 11 and 12, but are available from LNY's Servicing
Office.
For a 100% fixed annuity benefit payment, the Annuity Payment Date must be at
least 30 days after the Annuity Commencement Date.
The Annuity Unit value, if applicable, and Contract Value used to effect annuity
benefit payments will be determined as of the Annuity Commencement Date.
7.05 DETERMINATION OF THE AMOUNT OF VARIABLE ANNUITY PAYMENTS AFTER THE FIRST
PAYMENT
The first variable annuity benefit payment is sub-divided into components, each
of which represents the product of:
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a. the percentage elected by the Owner of a specific Variable Sub-account, the
performance of which will determine future variable annuity benefit
payments; and
b. the entire first variable annuity benefit payment.
Each variable annuity benefit payment after the first payment attributable to a
specific Variable Sub-account will be determined by multiplying the Annuity Unit
value for the Variable Sub-account for the date each payment is due by a
constant number of Annuity Units. This constant number for each specific
Variable Sub-account is determined by dividing the component of the first
payment attributable to such Variable Sub-account as described above by the
Annuity Unit value for that Variable Sub-account on the Annuity Commencement
Date. The total variable annuity benefit payment will be the sum of the
payments attributable to each Variable Sub-account. In absence of transfers
between Variable Sub-accounts, the number of Annuity Units attributable to each
Variable Sub-account remains constant, although the Annuity Unit values will
vary with the investment performance of the Funds. The Annuity Unit value may
increase or decrease the dollar value of benefits under the Contract.
The Annuity Unit value for any Valuation Period for any Variable Sub-account is
determined by multiplying the Annuity Unit value for the immediately preceding
Valuation Period by the product of (a) the daily factor raised to a power equal
to the number of days in the current Valuation Period and (b) the Accumulation
Unit value of the same Variable Sub-account for this Valuation Period divided by
the Accumulation Unit value of the same Variable Sub-account for the immediately
preceding Valuation Period. The daily factor is equal to 0.999919020 for a 3%
assumed interest rate, 0.999892552 for a 4% assumed interest rate, and
0.999866337 for a 5% assumed interest rate.
The valuation of all assets in the Variable Sub-account will be determined in
accordance with the provisions of applicable laws, rules, and regulations. The
method of determination by LNY of the value of an Accumulation Unit and of any
Annuity Unit will be conclusive upon the Owner and any Beneficiary.
LNY guarantees that the dollar amount of each installment after the first will
not be affected by variations in mortality experience from mortality assumptions
on which the first installment is based. After the Annuity Commencement Date,
if any portion of the annuity benefit payment is a variable annuity benefit
payment, the Owner may direct a transfer of assets from one Variable Sub-account
to another Variable Sub-account or to a fixed annuity benefit payment. Such
transfers will be limited to three (3) times per Contract Year. Assets may not
be transferred from a fixed annuity benefit payment to a variable annuity
benefit payment.
A transfer from one Variable Sub-account to another Variable Sub-account will
result in the purchase of Annuity Units in one Variable Sub-account and the
redemption of Annuity Units in the other Variable Sub-account. Such a transfer
will be accomplished at relative Annuity Unit values as of the Valuation Date
the transfer request is received by LNY at its Servicing Office. The valuation
of Annuity Units is described above. A transfer from a Variable Sub-account to
a fixed annuity benefit payment will result in the redemption of Annuity Units
in that Variable Sub-account and the purchase of a minimum fixed annuity benefit
payment based on the tables in Article 12.
7.06 PROOF OF AGE
Payment will be subject to proof of age that LNY will accept, such as a
certified copy of a birth certificate.
7.07 MINIMUM ANNUITY BENEFIT PAYMENT REQUIREMENTS
If the Annuity Payment Option chosen results in payments of less than $50 from
any Variable Sub-account and/or a fixed annuity benefit payment of less than
$50, the frequency will be changed so that payments will be at least $50.
7.08 EVIDENCE OF SURVIVAL
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LNY has the right to ask for proof that the person (or persons) on whose life
(or lives) the payment is based is alive when each payment is due.
7.09 CHANGE IN ANNUITY PAYMENT OPTION
The Annuity Payment Option may not be changed after the Annuity Commencement
Date.
ARTICLE 8
BENEFICIARY
8.01 DESIGNATION OF BENEFICIARY
The Owner may designate a Beneficiary(s) and a contingent Beneficiary(s).
If there is a single Owner, the designated Beneficiary(s) will receive the Death
Benefit proceeds upon the death of the Owner unless the Beneficiary as the
surviving spouse elects to continue the Contract.
If there are Joint Owners, upon the death of the first Joint Owner, the
surviving Joint Owner will receive the Death Benefit proceeds. The surviving
Joint Owner will be treated as the primary designated Beneficiary. Any other
Beneficiary designation on record at the time of death will be treated as a
contingent Beneficiary.
If the surviving spouse of the deceased continues the Contract as the sole
Owner, then the designated Beneficiary(s) move up, in the order of their
original designation, to replace the spouse as original Beneficiary, unless the
Beneficiary designation is subsequently changed by the surviving spouse as the
new Owner (see Section 8.02).
If the Annuitant dies and a Death Benefit is paid, the Owner (and Joint Owner if
applicable) will be treated as the primary designated Beneficiary(s). Any other
Beneficiary designation on record at the time of death will be treated as a
contingent Beneficiary.
Unless otherwise stated in the Beneficiary designation, if there is more than
one Beneficiary they are presumed to share equally.
8.02 CHANGE OF BENEFICIARY
The Owner may change any Beneficiary unless otherwise provided in the previous
designation. A change of Beneficiary will revoke any previous designation. A
change may be made by sending a written request, in a form acceptable to LNY, to
its Servicing Office. When a change of Beneficiary is received by LNY, whether
or not the Owner is then alive, it will take effect as of the date the request
was sent. For purposes of determining on which date a written change of
Beneficiary is sent, the postmark date will be used. Any payment made or action
taken or allowed before the change of Beneficiary is received will be without
prejudice to LNY.
LNY reserves the right to request the Contract for endorsement of the change.
8.03 DEATH OF BENEFICIARY
Unless otherwise provided in the Beneficiary designation, if any Beneficiary
dies before the Owner, that Beneficiary's interest will go to any other
Beneficiaries named, according to their respective interests. If there are no
Beneficiaries, the Beneficiary's interest will pass to a contingent
Beneficiary(s), if any. Prior to
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the Annuity Commencement Date, if no Beneficiary or contingent Beneficiary
survives the Owner, the Death Benefits will be paid to the Owner's estate.
Unless otherwise provided in the Beneficiary designation, once a Beneficiary is
receiving Death Benefits or annuity benefit payments under an Annuity Payment
Option, the Beneficiary may name his or her own Beneficiary(s) to receive any
remaining benefits due under the Contract, should the original Beneficiary die
prior to receipt of all benefits. If no Beneficiary is named or the named
Beneficiary predeceases the original Beneficiary, any remaining benefits will
continue to the original Beneficiary's estate. A Beneficiary designation must
be made in writing to the LNY Servicing Office in a form acceptable to LNY.
ARTICLE 9
ADDITIONAL SERVICES
There are three additional programs available under this Contract: Automatic
Withdrawal Service (AWS); Cross-Reinvestment; and Portfolio Rebalancing. In
order to take advantage of one of these programs, the appropriate election form
must be completed and sent to LNY at the Servicing Office. These programs are
described below. Only one of these programs may be in effect at a time. None
of these three programs can be in effect if a DCA (see section 2.03) is in
effect.
9.01 AUTOMATIC WITHDRAWAL SERVICE
The Automatic Withdrawal Service (AWS) provides for an automatic periodic
withdrawal of Contract Value. This service may be elected at any time prior to
the Annuity Commencement Date. The AWS program may be cancelled or changed by
the Owner at any time by sending a written request to the Servicing Office.
9.02 CROSS-REINVESTMENT
Cross-Reinvestment allows the Owner to automatically transfer amounts in a
designated Variable Subaccount that exceed a baseline amount to another specific
Variable Subaccount at specific intervals. This program may be elected at any
time prior to the Annuity Commencement Date.
The Owner designates the holding account, the receiving account(s), and the
baseline amount. Cross-Reinvestment will continue until we receive written
authorization to terminate the program.
A transfer under the Cross-Reinvestment program is not considered a transfer for
purposes of limiting the number of transfers that may be made in a Contract
Year.
9.03 PORTFOLIO REBALANCING
Portfolio Rebalancing is an option that restores to a predetermined level the
percentage of Contract Value allocated to each Variable Subaccount. The
rebalancing may take place monthly, quarterly, semi-annually, or annually. The
Portfolio Rebalancing program is available prior to the Annuity Commencement
Date.
The predetermined level will be the allocation initially selected when the
Contract was purchased, unless subsequently changed. The allocation may be
changed at any time by submitting a written request to LNY at its Servicing
Office. If the Portfolio Rebalancing program is selected, all Purchase Payments
allocated to the Variable Subaccounts must be subject to rebalancing.
Once the Portfolio Rebalancing program is activated, any Variable Subaccount
transfer executed outside of the Portfolio Rebalancing program will terminate
the program. Any subsequent Purchase Payment or withdrawal that modifies the
account balance within each Variable Subaccount may also cause termination of
the Portfolio Rebalancing program. Any such termination will be confirmed to
the Owner. The Owner may terminate the Portfolio Rebalancing program, or re-
enroll, at any time by submitting a written request to LNY at the Servicing
Office.
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ARTICLE 10
GENERAL PROVISIONS
10.01 THE CONTRACT
The Contract, any riders attached, together with the application therefore if a
copy of such application is attached to the Contract when issued, constitute the
entire Contract. Only the President, a Vice President, the Secretary or an
Assistant Secretary of LNY has the power, on behalf of LNY, to change, modify,
or waive any provisions of this Contract.
LNY reserves the right to unilaterally change the Contract for the purpose of
keeping the Contract in compliance with federal or state law, subject to the
prior approval of the New York Superintendent of Insurance.
Any changes, modifications, or waivers must be in writing. No representative or
person other than the above named officers has authority to change or modify
this Contract or waive any of its provisions. All terms used in this Contract
will have their usual and customary meaning except when specifically defined.
10.02 OWNERSHIP
The Owner is the person who has the ability to exercise the rights within this
Contract.
The Owner may name a Joint Owner. Joint Owners will be treated as having equal,
undivided interests in the Contract, including rights of survivorship. Either
Joint Owner, independently of the other, may exercise any ownership rights in
the Contract. The existence of a Joint Owner will not operate to continue the
Contract upon the death of the first Owner, unless the Joint Owner is the spouse
of the deceased Owner (see Section 6.01 - Entitlement).
The Owner may transfer all rights and privileges of ownership. On the effective
date of transfer, the transferee will become the Owner and will have all the
rights and privileges of the Owner. The Owner may revoke any transfer prior to
its effective date. Unless provided otherwise, a transfer will not affect the
interest of any Beneficiary designated prior to the effective date of the
transfer.
A transfer of ownership, or a revocation of transfer, must be in writing to the
Company at its Servicing Office. When a transfer or revocation has been
received, it will take effect as of the effective date specified by the Owner.
Any payment made or any action taken or allowed by the Company before the
transfer or the revocation is received will be without prejudice to the Company.
10.03 ANNUITANTS
Prior to the Annuity Commencement Date.
The Owner may name only one Annuitant. If the Owner is a tax-exempt entity, the
Owner may name one Annuitant or two Joint Annuitants.
If the Owner is a natural person, the Owner has the right to change the
Annuitant at any time. A request for change of Annuitant must be in writing to
LNY at its Servicing Office; once received by LNY, the change will be effective
as of the date the request was sent. For purposes of determining on which date
a written change of Annuitant is sent, the postmark date will be used. The new
Annuitant must be under the age of 90 as of the effective date of the change.
A Death Benefit may not be payable upon the death of the new Annuitant (see
Section 6.01).
A Contingent Annuitant may be named, or changed, by notifying LNY in writing.
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On or After the Annuity Commencement Date.
The Annuitant or Joint Annuitants may not be changed. Any Contingent Annuitant
designation is no longer applicable and is terminated.
10.04 ASSIGNMENTS
During the lifetime of the Annuitant, this Contract may be assigned. LNY will
not be bound by any assignment unless it is received in writing at LNY's
Servicing Office in a form acceptable to LNY. The effective date of the
assignment will be the date it is received by LNY. LNY will not be responsible
for the validity of any assignment.
If this Contract is used with a Qualified Plan, the Contract will not be
transferable unless allowed under applicable law.
10.05 INCONTESTABILITY
This Contract will not be contested by LNY.
10.06 MISSTATEMENT OF AGE AND/OR SEX
If the age and/or sex of an Annuitant is misstated, the amount payable under the
contract will be adjusted to be the amount of Income which the actual premium
paid would have purchased for the correct age and/or sex according to the
Company's rates in effect on the Date of Issue. Any overpayment by the Company,
with interest at the rate of 6% per year, compounded annually, will be charged
against the payments to be made next succeeding the adjustment. Any
underpayment by the Company will be paid in a lump sum, with interest at the
rate of 6% per year, compounded annually.
10.07 NONPARTICIPATING
The Contract is nonparticipating and will not share in the surplus earnings of
LNY.
10.08 VOTING RIGHTS
The Owner will have a right to vote only at the meetings of the Funds of the
Variable Account invested in by the Owner due to the Owner's interest in the
Variable Sub-accounts of the Variable Account. Ownership of this Contract will
not entitle any person to vote at any meeting of shareholders of LNY. Votes
attributable to the Contract will be cast in conformity with applicable law.
10.09 OWNERSHIP OF THE ASSETS
LNY will have exclusive and absolute ownership and control of its assets,
including all assets in the Variable Account.
10.10 REPORTS
Prior to the Annuity Commencement Date, at least once each Contract Year, LNY
will mail a report to the Owner. The report will be mailed to the last address
known to LNY. The report will include a statement of the number of Accumulation
Units credited to the Variable Account under this Contract and the dollar value
of such units as well as a statement of the value of the Fixed Account of this
Contract. The report will also include the total account value, the cash
surrender value, and Death Benefit. Such other information as may be required
by law or regulation will also be included.
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The information in the report will be as of a date not more than two months
prior to the date of mailing the report. LNY will also mail to the Owner at
least once in each Contract Year a report of the investments held in the
Variable Sub-accounts under this Contract.
10.11 PREMIUM TAX
State and local government premium tax, if applicable, will be deducted from
Purchase Payments or Contract Value when incurred by LNY or at another time of
LNY's choosing.
10.12 MAXIMUM ISSUE AGE
The Owner (or both Joint Owners, if applicable) and the Annuitant (or both Joint
Annuitants, if applicable) must be under the age of 90 when this Contract is
issued.
10.13 LOANS
Loans are not permitted under this Contract.
10.14 MINIMUM BENEFITS PAYABLE
Any benefits paid under this Contract will not be less than those required by
the New York Insurance Law.
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ARTICLE 11
ANNUITY PURCHASE RATES UNDER A VARIABLE PAYMENT OPTION
11.01 A VARIABLE PAYMENT OPTION WITH A 3.0% ASSUMED INTEREST RATE
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11.02 A VARIABLE PAYMENT OPTION WITH A 4.0% ASSUMED INTEREST RATE
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11.03 A VARIABLE PAYMENT OPTION WITH A 5.0% ASSUMED INTEREST RATE
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ARTICLE 12
ANNUITY PURCHASE RATES UNDER A FIXED PAYMENT OPTION
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ANNUITY
CONTRACT
Flexible Premium Deferred
Variable Annuity and/or
Market Value Adjusted Fixed Annuity
With Benefit Payment Options
Nonparticipating
If you have any questions concerning
this Contract, please
contact your Lincoln Life & Annuity Company of New York
representative or the Servicing Office of LNY.
LINCOLN LIFE & ANNUITY
COMPANY OF NEW YORK
Servicing Office:
0000 Xxxxx Xxxxxxx Xxxxxx
P.O. Box 7866
Fort Xxxxx, Indiana 46802
000-000-0000
Home Office:
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxx Xxxx 00000
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