RIDER - GUARANTEED MINIMUM ACCUMULATION BENEFIT AND GUARANTEED MINIMUM
WITHDRAWAL BENEFIT
The Penn Mutual Life Insurance Company (the "Company") agrees, subject to and in
accordance with the provisions of this supplemental agreement, to provide the
Guaranteed Minimum Accumulation Benefit and the Guaranteed Minimum Withdrawal
Benefit described below.
This agreement is a part of the contract to which it is attached. It is subject
to all of the provisions of the contract unless stated otherwise in this
agreement.
GUARANTEED MINIMUM ACCUMULATION BENEFIT - When this rider is in effect, the
Guaranteed Minimum Accumulation Benefit will be equal to (a) plus (b) minus (c)
where:
(a) is the Contract Value at the start of the Benefit Period;
(b) is a percentage, specified in the Additional Contract Specifications,
of the amount of each subsequent Purchase Payment and the full amount
of any Purchase Payment Enhancement, if applicable to the contract,
received during the Benefit Period; and
(c) is an adjustment for withdrawals taken during the Benefit Period.
The Benefit Period for this benefit is ten years after either:
(a) the rider effective date; or
(b) a Step-Up Benefit Date.
If the Guaranteed Minimum Accumulation Benefit exceeds the Contract Value at the
end of the Benefit Period, the Company will increase such Contract Value to
equal the Guaranteed Minimum Accumulation Benefit.
At the end of the Benefit Period, the Owner can elect to renew the Guaranteed
Minimum Accumulation Benefit for a new Benefit Period. At the time of renewal,
the Rider Charge as described below may be increased, but not above the then
current charge applicable to the class of Contact Owners then electing this
benefit.
ADJUSTMENTS FOR WITHDRAWALS - The Guaranteed Minimum Accumulation Benefit will
be reduced by a proportional amount of any partial withdrawals of Contract
Value. The reductions in the Guaranteed Minimum Accumulation Benefit occur as of
the date of each applicable partial withdrawal.
The amount of the reduction in relation to the amount of partial withdrawals is
calculated as follows:
The Guaranteed Minimum Accumulation Benefit after the withdrawal equals the
Guaranteed Minimum Accumulation Benefit immediately before the withdrawal
less the multiplication of (i) and (ii), where:
(i) is the Guaranteed Minimum Accumulation Benefit immediately before the
withdrawal and
(ii) is a ratio of (A) over (B) where:
(A) is the current withdrawal amount; and
(B) is the Contract Value immediately before the withdrawal.
GUARANTEED MINIMUM WITHDRAWAL BENEFIT - When this rider is in effect, the
Guaranteed Minimum Withdrawal Benefit provides two ways to receive guaranteed
minimum withdrawal amounts from the Benefit Base as defined below. Withdrawals
can be received via the Return of Benefit Base Withdrawal Option or the Lifetime
Withdrawal Option. Both of these options operate concurrently until one or both
of the options terminate as described below.
BENEFIT BASE - The Benefit Base establishes the basis for the total guaranteed
minimum withdrawal amounts as well as the Guaranteed Annual Withdrawal Amount
and Guaranteed Annual Lifetime Withdrawal Amount as defined below. The Benefit
Base is the greatest of (a), (b), or (c) below, where:
RIDER - GUARANTEED MINIMUM ACCUMULATION BENEFIT AND GUARANTEED MINIMUM
WITHDRAWAL BENEFIT (CONTINUED)
(a) is the Contract Value on the date of the first withdrawal, just before the
first withdrawal;
(b) is the sum of (1) plus (2), where;
(1) is the Contract Value on the rider effective date accumulated
on a daily basis using the Benefit Base Accumulation Rate (shown
in the Additional Contract Specifications) until the earlier of
the Benefit Base Accumulation Cease Date (shown in the Additional
Contract Specifications) and the date of the first withdrawal; and
(2) is each Purchase Payment received after the rider effective
date but prior to the first withdrawal accumulated on a daily
basis using the Benefit Base Accumulation Rate (shown in the
Additional Contract Specifications) until the earlier of the
Benefit Base Accumulation Cease Date (shown in the Additional
Contract Specifications) and the date of the first withdrawal; and
(c) is the highest Contract Value as of a contract anniversary date until the
earlier of the Benefit Base Accumulation Cease Date (shown in the Additional
Contract Specifications) and the date of the first withdrawal.
Purchase payments made after the date of the first withdrawal will increase the
Benefit Base on a dollar-for-dollar basis.
DEATH BENEFIT ENHANCEMENT BENEFIT BASE - For purposes of calculating the Death
Benefit Enhancement as described below, the Death Benefit Enhancement Benefit
Base is the greatest of (a), (b or (c) below, where:
(a) is the Contract Value on the date of the first withdrawal, just before
the first withdrawal;
(b) is the sum of (1) plus (2), where:
(1) is the Contract Value on the rider effective date accumulated
on a daily basis using the Benefit Base Accumulation Rate (shown
in the Additional Contract Specifications) until the earliest of
the Benefit Base Accumulation Cease Date (shown in the Additional
Contract Specifications), the Annuitant's attainment of age 80,
and the date of the first withdrawal; and
(2) is each Purchase Payment received after the rider effective
date but prior to the first withdrawal accumulated on a daily
basis using the Benefit Base Accumulation Rate (shown in the
Additional Contract Specifications) until the earliest of the
Benefit Base Accumulation Cease Date (shown in the Additional
Contract Specifications), the Annuitant's attainment of age 80,
and the date of the first withdrawal; and
(c) is the highest Contract Value as of a contract anniversary date until
the earliest of the Benefit Base Accumulation Cease Date (shown in the
Additional Contract Specifications), the Annuitant's attainment of age
80, and the date of the first withdrawal.
Purchase Payments made after the date of the first withdrawal will increase the
Death Benefit Enhancement Benefit Base on a dollar-for-dollar basis.
RETURN OF BENEFIT BASE WITHDRAWAL OPTION - The Return of Benefit Base Withdrawal
Option guarantees that withdrawals can be taken each contract year equal to the
Guaranteed Annual Withdrawal Amount, as long as this option remains in-force.
The initial Guaranteed Annual Withdrawal Amount is equal to the Guaranteed
Annual Withdrawal Percentage, shown in the Additional Contract Specifications,
multiplied by the initial Benefit Base.
Total withdrawals in a contract year that do not exceed the Guaranteed Annual
Withdrawal Amount will reduce the Benefit Base by the amount of the withdrawals.
EXTRA RETURN OF BENEFIT BASE WITHDRAWAL - All or part of a withdrawal that
exceeds the remaining Guaranteed Annual Withdrawal Amount in that contract year.
EFFECT OF WITHDRAWALS ON GUARANTEED ANNUAL WITHDRAWAL AMOUNT - Cumulative
withdrawals in a contract year that do not exceed the Guaranteed Annual
Withdrawal Amount will not change the Guaranteed Annual Withdrawal Amount
RIDER - GUARANTEED MINIMUM ACCUMULATION BENEFIT AND GUARANTEED MINIMUM
WITHDRAWAL BENEFIT (CONTINUED)
in subsequent contract years. Each Extra Return of Benefit Base Withdrawal in a
contract year will reduce the Guaranteed Annual Withdrawal Amount in subsequent
years in a proportional manner. The reduction is determined by multiplying the
Guaranteed Annual Withdrawal Amount by the ratio of (a) to (b) where:
(a) is the amount of the Extra Return of Benefit Base Withdrawal; and
(b) is the Contract Value immediately prior to the withdrawal of the Extra
Return of Benefit Base Withdrawal.
LIFETIME WITHDRAWAL OPTION - The Lifetime Withdrawal Option guarantees that
withdrawals can be taken each contract year equal to the Guaranteed Annual
Lifetime Withdrawal Amount as long as this option remains in-force. The initial
Guaranteed Annual Lifetime Withdrawal Amount is equal to the Guaranteed Annual
Lifetime Withdrawal Percentage, shown in the Additional Contract Specifications,
multiplied by the initial Benefit Base.
Total withdrawals in a contract year that do not exceed the Guaranteed Annual
Lifetime Withdrawal Amount will not reduce the Guaranteed Annual Lifetime
Withdrawal Amount.
EXTRA LIFETIME WITHDRAWAL -- All or part of a withdrawal that exceeds the
remaining Guaranteed Annual Lifetime Withdrawal Amount in that contract year.
EFFECT OF WITHDRAWALS ON GUARANTEED ANNUAL LIFETIME WITHDRAWAL AMOUNT --
Withdrawals in a contract year that do not exceed the Guaranteed Annual Lifetime
Withdrawal Amount will not change the Guaranteed Annual Lifetime Withdrawal
Amount in subsequent contract years. Each Extra Lifetime Withdrawal in a
contract year will reduce the Guaranteed Annual Lifetime Withdrawal Amount in
subsequent years in a proportional manner. The reduction is determined by
multiplying the Guaranteed Annual Withdrawal Amount by the ratio of (a) to (b)
where:
(a) is the amount of the withdrawal of Extra Lifetime Withdrawal; and
(b) is the Contract Value immediately prior to the withdrawal of the Extra
Lifetime Withdrawal.
EFFECT OF WITHDRAWALS ON BENEFIT BASE - The Benefit Base is reduced, on a
dollar-for-dollar basis, by the amount of withdrawals in a contract year that do
not exceed the Guaranteed Annual Withdrawal Amount, until the Benefit Base is
reduced to zero. Once the Guaranteed Annual Withdrawal Amount has been withdrawn
in a contract year, any Extra Return of Benefit Base Withdrawals reduce the
Benefit Base until it is reduced to zero by the greater of (a) and (b) where:
(a) is a proportional reduction determined by multiplying (1) and (2)
where:
(1) is the Benefit Base; and
(2) is the ratio of the Extra Return of Benefit Base Withdrawal to the
Contract Value immediately prior to the Extra Return of Benefit
Base Withdrawal; and
(b) is the amount of the Extra Return of Benefit Base Withdrawal.
EFFECT OF WITHDRAWALS LESS THAN THE GUARANTEED ANNUAL WITHDRAWAL AMOUNT - If
total withdrawals in a contract year are less than the Guaranteed Annual
Withdrawal Amount, the Guaranteed Annual Withdrawal Amount is not increased in
subsequent contract years.
EFFECT OF WITHDRAWALS LESS THAN THE GUARANTEED ANNUAL LIFETIME WITHDRAWAL AMOUNT
- If total withdrawals in a contract year are less than the Guaranteed Annual
Lifetime Withdrawal Amount, the Guaranteed Annual Lifetime Withdrawal Amount is
not increased in subsequent contract years.
EFFECT OF ADDITIONAL PURCHASE PAYMENTS ON GUARANTEED MINIMUM WITHDRAWAL BENEFIT
- If the Contract to which this rider is attached allows for additional Purchase
Payments, such Purchase Payments will serve to increase the Benefit Base, the
Guaranteed Annual Withdrawal Amount, and the Guaranteed Annual Lifetime
Withdrawal Amount as long as the Contract Value is positive. The Benefit Base
will be increased by the amount of each additional Purchase Payment. The
increase to the Guaranteed Annual Withdrawal Benefit will be equal to the
Guaranteed Annual Withdrawal Percentage multiplied by each additional Purchase
Payment. The increase to the Guaranteed
RIDER - GUARANTEED MINIMUM ACCUMULATION BENEFIT AND GUARANTEED MINIMUM
WITHDRAWAL BENEFIT (CONTINUED)
Annual Lifetime Withdrawal Benefit will be equal to the Guaranteed Annual
Lifetime Withdrawal Percentage multiplied by each additional Purchase Payment.
EFFECT OF REQUIRED MINIMUM DISTRIBUTIONS ON GUARANTEED MINIMUM WITHDRAWAL
BENEFIT - Either or both of the Guaranteed Annual Withdrawal Amount and the
Guaranteed Annual Lifetime Withdrawal Amount will be increased in any contract
year in order to meet that contract year's required minimum distribution
requirement according to the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated thereunder. This increase applies only
in relation to the required minimum distribution based on the value of the
Contract.
REMAINING GUARANTEED MINIMUM WITHDRAWAL BENEFIT PAYMENTS WHEN CONTRACT VALUE IS
REDUCED TO ZERO - If the Contract Value is reduced to zero and any benefits are
due under either the Return of Benefit Base Withdrawal Option or the Lifetime
Withdrawal Option, such Remaining Guaranteed Minimum Withdrawal Benefit Payments
will be made as described below. In this situation the only provisions of the
Contract that remain in effect are those that are associated with Remaining
Guaranteed Minimum Withdrawal Benefit Payments. No additional Purchase Payments
will be accepted once the Contract Value is reduced to zero.
If the Contract Value is reduced to zero in a contract year and there is any
Guaranteed Annual Lifetime Withdrawal Amount due or any remaining Benefit Base,
the Owner has the option to receive the Remaining Guaranteed Minimum Withdrawal
Benefit Payment under either withdrawal option. If the Return of Benefit Base
Withdrawal Option is elected, the Remaining Guaranteed Minimum Withdrawal
Benefit Payment made in the contract year in which the Contract Value is reduced
to zero is equal to the remaining Guaranteed Annual Withdrawal Amount not yet
withdrawn in that year. In subsequent contract years, the Remaining Guaranteed
Minimum Withdrawal Benefit Payment equals the Guaranteed Annual Withdrawal
Amount in effect as of the date that the Contract Value is reduced to zero. If
the Lifetime Withdrawal Option is elected, the Remaining Guaranteed Minimum
Withdrawal Benefit Payment made in the contract year in which the Contract Value
is reduced to zero is equal to the remaining Guaranteed Annual Lifetime
Withdrawal Amount not yet withdrawn in that year. In subsequent contract years,
the Remaining Guaranteed Minimum Withdrawal Benefit Payment equals the
Guaranteed Annual Lifetime Withdrawal Amount in effect as of the date that the
Contract Value is reduced to zero. If no election is made, the default option is
the Lifetime Withdrawal Option.
If the Contract Value is reduced to zero in a contract year where the Guaranteed
Annual Lifetime Withdrawal Amount is reduced to zero by the impact of Extra
Lifetime Withdrawals and the Benefit Base is positive, Remaining Guaranteed
Minimum Withdrawal Benefit Payments will be made under the Return of Benefit
Base Withdrawal Option only. In the contract year in which the Contract Value is
reduced to zero, the Remaining Guaranteed Minimum Withdrawal Benefit Payment
made in that year is equal to the Guaranteed Annual Withdrawal Amount not yet
withdrawn. In subsequent contract years, the Remaining Guaranteed Minimum
Withdrawal Benefit Payment is the Guaranteed Annual Withdrawal Amount in effect
as of the date that the Contract Value is reduced to zero or any remaining
Benefit Base, if less.
Remaining Guaranteed Minimum Withdrawal Benefit Payments are made once each
contract year.
If the total Remaining Guaranteed Minimum Withdrawal Benefit Payments due each
contract year are less than $100, the Remaining Guaranteed Minimum Withdrawal
Benefit Payments will be commuted and a lump sum will be paid. If the Remaining
Guaranteed Minimum Withdrawal Benefit Payments are based on the Guaranteed
Annual Lifetime Withdrawal Amount, such payments will be commuted using the
greater of the then currently available annuity factors or the then currently
available annuity factors for a single life annuity for the Contract to which
this rider is attached. If the Remaining Guaranteed Minimum Withdrawal Benefit
Payments are based on the Guaranteed Annual Withdrawal Amount, the remaining
Benefit Base will be paid.
RIDER - GUARANTEED MINIMUM ACCUMULATION BENEFIT AND GUARANTEED MINIMUM
WITHDRAWAL BENEFIT (CONTINUED)
STEP-UP BENEFIT AND STEP-UP BENEFIT DATE - The Step-Up Benefit for the
Guaranteed Minimum Accumulation Benefit is the increase in the Guaranteed
Minimum Accumulation Benefit to an amount equal to 100% of the Contract Value as
of the Step-Up Benefit Date. The Step-Up Benefit for the Guaranteed Minimum
Withdrawal Benefit is an increase in the Benefit Base to an amount equal to 100%
of the Contract Value as of the Step-Up Benefit Date. As a result of the
election of this Step-Up Benefit, the Guaranteed Annual Withdrawal Amount steps
up to an amount equal to the Contract Value as of the Guaranteed Minimum
Withdrawal Benefit Step-Up Date multiplied by the Guaranteed Annual Withdrawal
Percentage. Also as a result of the election of this Step-Up Benefit, the
Guaranteed Annual Lifetime Withdrawal Amount steps up to an amount equal to the
Contract Value as of the Step-Up Date multiplied by the Guaranteed Annual
Lifetime Withdrawal Percentage.
The first Step-Up Benefit Date is any Contract Anniversary starting with the
fifth anniversary of the Effective Date of this rider on which the Owner elects
a Step-Up Benefit. Subsequent Step-Up Benefit Dates can be no earlier than the
fifth anniversary of the previous Step-Up Benefit Date.
The Contract Owner may elect the Step-Up Benefit as of the Step-Up Benefit Date.
Such an election must be made in writing by the Contract Owner and received by
the Company, in good order, at least thirty days prior to the contract
anniversary on which the Step-Up Benefit is effective.
Once a Step-Up Benefit has been elected and is effective a new Guaranteed
Minimum Accumulation Benefit, a new Benefit Base, a new Guaranteed Annual
Withdrawal Amount, and a new Guaranteed Annual Lifetime Withdrawal Amount will
commence as of the most recent Step-Up Date and the previously effective Step-Up
Benefit will terminate.
DEATH BENEFIT ENHANCEMENT - Prior to the Annuity Date and upon receipt of due
proof of the Annuitant's death and the necessary forms to make payment to a
beneficiary, the Company will pay to the beneficiary a Death Benefit Enhancement
in addition to the death benefit provided in the contract to which this
agreement is attached. The Death Benefit Enhancement is equal to the remaining
Death Benefit Enhancement Benefit Base, which is calculated as described above
for purposes of determining the Death Benefit Enhancement, minus the sum of the
Fixed Account death benefit and the Variable Account death benefit payable under
the contract. The Death Benefit Enhancement cannot be less than zero. The
maximum Death Benefit Enhancement is shown in the Additional Contract
Specifications.
If the beneficiary is the surviving spouse of the deceased Annuitant, the spouse
may elect to become the Contract Owner and upon such election, the Contract
Value shall be adjusted to equal the amount of the death benefit provided in the
contract plus the Death Benefit Enhancement.
ANNUITY PAYMENTS - If annuity payments are to commence under the conditions
specified in the Contract to which this rider is attached, the Owner can elect
one of the following options:
(a) apply the Contract Value to any of the annuity options available in the
Annuity Options section of the Contract;
(b) request that as of the annuity payment commencement date, annuity
payments are made each year equal to the Guaranteed Annual Lifetime
Withdrawal Amount until the death of the Annuitant; or
(c) request that as of the annuity payment commencement date, the remaining
Benefit Base is paid out in the form of annuity payments. Each year
these annuity payments will equal the lesser of Guaranteed Annual
Withdrawal Amount or the remaining Benefit Base. These annuity payments
will be made until the earlier of the Annuitant's death or the date
that the Benefit Base is reduced to zero.
If annuity payments are to commence under the conditions specified in the
Contract to which this rider is attached and none of the above elections have
been made, then the default annuity option in your Contract will apply.
RIDER - GUARANTEED MINIMUM ACCUMULATION BENEFIT AND GUARANTEED MINIMUM
WITHDRAWAL BENEFIT (CONTINUED)
TRANSFER LIMITS - This rider modifies the Transfers section of the Contract to
which it is attached, as follows:
No more than two transfers may be made in a calendar month and no more than 12
such transfers can be made in a calendar year.
INVESTMENT ALLOCATION LIMITS - The Company reserves the right to make the
availability of the Benefit incorporated within this rider contingent upon the
allocation of the entire Contract Value, for the full Benefit Period, according
to an asset allocation program established by the Company for this agreement.
RIDER CHARGE - On an annual basis the Rider Charge will be a percentage of the
average monthly Contract Value that is allocated to the Variable Account during
a contract year. The Rider Charge will be deducted annually on the date
specified in the Additional Contract Specifications and will not exceed the
value shown on the Additional Contract Specifications. The Rider Charge will
also be deducted when the Variable Account Value is withdrawn or transferred in
full, if such withdrawal or transfer is not on the date specified on the
Additional Contract Specifications. The Rider Charge will not be deducted after
the Annuity Date.
If the Step-Up Benefit is elected, the Rider Charge may be increased, but not
above the then current charge applicable to the class of Contact Owners then
electing this benefit.
TERMINATION OF AGREEMENT - This agreement will terminate:
a) any contract anniversary after the fifth on the contract anniversary
immediately following receipt by the Company of a written request by
the Owner to discontinue the agreement;
b) if the Contract Value equals zero and there is no Guaranteed Annual
Withdrawal Amount due in future years, no Guaranteed Annual Lifetime
Withdrawal Amount due in future years, or no remaining Benefit Base;
c) full surrender of the contract;
d) date of the first death of an Owner or the date of death of the
annuitant;
e) upon receipt by the Company of a written request by the Owner to change
the annuitant;
f) annuitization.
EFFECTIVE DATE - The Effective Date of this agreement is the same as the
Contract Date of the contract unless another effective date is shown below.
The Penn Mutual Life Insurance Company
/s/ Xxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
GMWB-05
A017973R
