GROUP FLEXIBLE PREMIUM VARIABLE
ANNUITY CONTRACT
AMERICAN MATURITY LIFE INSURANCE COMPANY
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
(a stock life insurance company, herein called the "Company")
Agrees with the Contract Owner to provide benefits as provided herein.
This is a Group Variable Annuity Contract.
The Contract Specifications on Page 3 and the conditions and provisions on this
and the following pages are part of the Contract.
Signed for the Company
Xxxxxx X. Xxxx, President Xxxxx Xxxxxx, Secretary
TABLE OF CONTENTS
SECTION
Page
1. Contract Specifications 3
2. Definitions 6
3. Premium Payments 9
4. Valuation Provisions 10
5. Transfers 11
6. Annual Fees and Deductions 12
7. Control Provisions 13
8. General Provisions 14
9. Surrender Provisions 16
10. Annuity Benefits 21
11. Annuity Tables 24
2
1. CONTRACT SPECIFICATIONS
Contract Owner: The AARP Group Annuity Trust
Contract Holder: The Executive Director of the American
Association of Retired Persons (AARP)
Trustee for the AARP Group Annuity Trust
Contract Effective Date: November 1, 1996
Contract Number: 10
Eligibility Requirements: Members of the American Association
of Retired Persons,
herein referred to as
members.
This Contract affords members the right to participate in a flexible premium
variable annuity under the terms and conditions contained herein. To
participate, the member submits an Enrollment Form, a premium payment, and any
other required administrative forms. The Company may accept the member's
Enrollment Form according to the Certificate Issue Requirements below and
according to state and federal law applicable to variable annuities.
Upon accepting a member's Enrollment Form, the Company will send the member a
Certificate of Participation (herein "Certificate").
CERTIFICATE ISSUE REQUIREMENTS
MAXIMUM ISSUE AGE:
90
MINIMUM PURCHASE PAYMENT:
$5,000
MINIMUM SUBSEQUENT PAYMENT:
$250 - ($100 for systematic deposit program)
MAXIMUM AGGREGATE PURCHASE WITHOUT COMPANY CONSENT:
$1,000,000
3
CERTIFICATE SPECIFICATIONS:
ANNUAL WITHDRAWAL AMOUNT:
A Contingent Deferred Sales Charge is not assessed against any withdrawals made
each Certificate Year, on a non-cumulative basis, of up to 10% of premium
payments remaining in the Certificate as of the last Certificate Anniversary.
ANNUAL FEE:
$25 on each Certificate Anniversary before the Annuity Commencement Date, or at
the time of full surrender, if the Certificate Value is less than $50,000 on
either date.
MORTALITY AND EXPENSE RISK CHARGE:
0.65% per annum of the average daily Sub-Account value
ADMINISTRATION CHARGE:
0.20% per annum of the average daily Sub-Account value
MINIMUM FIXED ACCOUNT INTEREST RATE:
3%
CONTINGENT DEFERRED SALES CHARGE SCHEDULE:
See "Contingent Deferred Sales Charge" provisions for a description of the
Contingent Deferred Sales Charge. The Contingent Deferred Sales Charge is a
percentage of the Gross Surrender Value (not to exceed the aggregate amount of
premium payments made) and equals:
CHARGE CERTIFICATE YEAR
5% 1
4% 2
3% 3
2% 4
1% 5
0% 6 and thereafter
SEPARATE ACCOUNT:
Separate Account AMLVA
AVAILABLE SUB-ACCOUNTS: BASED ON FUND:
4
Money Market Portfolio Money Market Portfolio
of the Xxxxxxx Variable Life Investment
Fund
Bond Portfolio Bond Portfolio
of the Xxxxxxx Variable Life Investment
Fund
Balanced Portfolio Balanced Portfolio
of the Janus Aspen Series
Capital Growth Portfolio Capital Growth Portfolio
of the Xxxxxxx Variable Life Investment
Fund
Growth & Income Portfolio Growth & Income Portfolio
of the Xxxxxxx Variable Life Investment
Fund
[Partners Portfolio] [Partners Portfolio
of the Xxxxxxxxx & Xxxxxx Advisors
Management Trust]
[Capital Appreciation [Capital Appreciation Portfolio
Portfolio] of the Dreyfus Variable Investment
Fund]
Small Cap Portfolio Small Cap Portfolio
of the Dreyus Variable Investment
Fund
Worldwide Growth Portfolio Worldwide Growth Portfolio
of the Janus Aspen Series
Or other Sub-Accounts as may be made available from time to time.
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2. DEFINITIONS
ACCUMULATION UNIT - A unit of measure used to calculate the value of a
Sub-Account of a Certificate before the Annuity Commencement Date.
ADMINISTRATION CHARGE - A dollar amount that the Company deducts to cover
administrative expenses. This charge is an annual percentage. It is shown on
the Contract Specifications Page.
ADMINISTRATIVE OFFICE OF THE COMPANY -- Currently located at 000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000. All correspondence should be sent to
our mailing address at X.X. Xxx 0000, Xxxxxxxx, XX 00000-0000. Any additional
premium payments should be sent to X.X. Xxx 000000, Xxxxxxxx, XX 00000-0000.
AMLVA - See "Separate Account."
ANNUAL FEE - An amount that is deducted from the Certificate at the end of each
Certificate Year before the Annuity Commencement Date, or on the date of full
surrender of the Certificate, if earlier. The fee reimburses certain costs in
administering the Certificates and the Separate Account; the Company does not
intend to realize a profit from this fee.
ANNUITANT - The person on whose life an annuity is purchased.
ANNUITY - An Annuity is a contract with an insurance company in which an
individual deposits a sum of money (premium) and the insurer guarantees to make
periodic income payments to that individual for a specified period, or for life.
ANNUITY COMMENCEMENT DATE - The date on which the Certificate Owner's selected
Annuity Option, to receive regular annuity payments, becomes effective.
ANNUITY PERIOD - The period during which the Certificate Owner receives
scheduled income payments according to the annuity option the Certificate Owner
selected.
ANNUITY UNIT - A unit of measure used to calculate the value of annuity payments
under the variable annuity option.
BENEFICIARY - The person entitled to receive benefits according to the terms of
the Contract in case of the death of a Certificate Owner or Annuitant, as
applicable.
BUSINESS DAY - Every day the New York Stock Exchange is open for trading. The
end of the Business Day is the close of the New York Stock Exchange. The New
York Stock Exchange normally closes at 4:00 p.m. Eastern time.
CERTIFICATE - The Certificate Owner's policy. The Certificate is issued by the
Company to the Certificate Owner. It is evidence that the Certificate Owner, or
someone on behalf of the Certificate Owner, made a premium payment under this
Contract.
CERTIFICATE ANNIVERSARY - An anniversary of the Certificate Date. Similarly,
Certificate Years are measured
6
from the Certificate Date. The Certificate Date is shown on the Certificate in
the Certificate Specifications section.
CERTIFICATE DATE - The effective date of the Certificate (the date on which the
Certificate Owner's annuity takes effect).
CERTIFICATE OWNER - The owner(s) of the Certificate.
CERTIFICATE VALUE - The value of the Sub-Account(s) plus the value of the Fixed
Account on any Business Day.
CERTIFICATE YEAR - Each 12-month period starting on the Certificate Date and
ending the day before Certificate Anniversary.
COMPANY - American Maturity Life Insurance Company, sometimes referred to as
"the Company."
CONTINGENT ANNUITANT - The person designated by the Certificate Owner who, upon
the Annuitant's death prior to the Annuity Commencement Date, becomes the
Annuitant.
CONTINGENT DEFERRED SALES CHARGE ("CDSC") - A surrender charge that may be
deducted from the Certificate Owner's Certificate Value if a withdrawal is made
from the Certificate within a certain number of years. See "Contingent
Deferred Sales Charge" under the Surrender Provisions of the Certificate
(Section 6, Page 17).
CONTRACT OWNER - The AARP Group Annuity Trust.
DUE PROOF OF DEATH - A certified copy of the death certificate, an order of a
court of competent jurisdiction, a statement from a physician who attended the
deceased, or any other proof acceptable to the Company.
ENROLLMENT FORM - The form the Certificate Owner completes in order to purchase
the Certificate.
FIXED ACCOUNT - An investment option that earns a rate of interest of at least
3% per annum. Amounts invested in the Fixed Account become part of the
Company's General Account.
FUND(S) - Currently the Funds listed on the Contract Specifications page, or any
other Fund(s) that the Company may add from time to time.
GENERAL ACCOUNT - All assets of the Company other than those allocated to the
Separate Accounts of the Company.
GROSS SURRENDER VALUE - The Certificate Value (dollar amount) that is deducted
from the Certificate when the Certificate Owner makes a full or partial
surrender.
MORTALITY AND EXPENSE RISK CHARGE - A dollar amount that the Company deducts
from the Sub-Accounts to cover administrative expenses and mortality risks.
This charge is an annual percentage and is shown on the Contract Specifications
Page.
NET INVESTMENT FACTOR - A factor used to determine the value of Accumulation
Units or Annuity Units each day.
NET SURRENDER VALUE - The amount payable to the Certificate Owner on a
surrender after the deduction for any unpaid Taxes and any Contingent Deferred
Sales Charge. If the Certificate Owner fully surrenders the Certificate the
Annual Fee is also deducted.
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SEPARATE ACCOUNT ("SEPARATE ACCOUNT AMLVA") - An account established by the
Company to separate the assets funding the variable benefits for the class of
contracts to which the Certificate belongs from the other assets of the Company.
The assets in the Separate Account are not chargeable with liabilities arising
out of any other business the Company may conduct. The Separate Account and
the Funds, which are the underlying securities of the Separate Account, are
listed on the Contract Specifications of this Contract.
SUB-ACCOUNT - The subdivisions of the Separate Account. The Certificate Owner
purchases units of the Sub-Accounts to participate in the investment experience
of the underlying Funds.
SURRENDER - A full or partial withdrawal from the Certificate.
TAXES - The amount of tax, if any, charged by a federal, state or municipal
entity on premium payments or Certificate Values.
TOTAL DISABILITY - Totally Disabled means a disability that: (1) results from
bodily injury or disease; (2) begins while the Certificate is in force; (3) has
existed continuously for at least 12 months; and (4) prevents the Certificate
Owner from engaging in the substantial and material duties of the Certificate
Owner's regular occupation.
3. PREMIUM PAYMENTS
PREMIUM PAYMENTS
Premium payments may be accepted at the Administrative Office of the Company.
Payments are made by check
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payable to American Maturity Life Insurance Company or by any other method that
the Company may deem acceptable. The initial premium payment, and the minimum
subsequent payment that the Company may accept, are shown in the Contract
Specifications. The Company reserves the right to limit the amount of a premium
payment.
ALLOCATION OF PREMIUM PAYMENTS
The initial premium payment is allocated to those Sub-Accounts and/or Fixed
Account the Certificate Owner selected on his Enrollment Form. The same
allocations are made for subsequent premium payments unless otherwise directed
by the Certificate Owner. Any allocation to a Sub-Account or Fixed Account must
be at least equal to the Company's minimum amount rules then in effect.
Certain laws in some states require a full return of premium upon the exercise
of the Right to Examine (shown on the front page of the Certificate). For
Certificates sold in those states, the Company will allocate premium payments to
the Money Market Sub-Account for the period during which the Right to Examine
may be exercised according to state law.
PREMIUM TAXES AND OTHER TAXES
A deduction is made for premium taxes or other taxes ("Taxes") which are imposed
by some states or other governmental entities. The Company will determine when
taxes have resulted from the receipt of premium payments, the commencement of
annuity payments, or the investment experience of the Separate Account. The
Company may, at its discretion, pay taxes when due and deduct that amount from
the Certificate Value at a later date. Payment at a earlier date does not waive
any right that the Company may have to deduct amounts at a later date. The
Company reserves the right to establish a provision for federal income taxes if
it determines, in its sole discretion, that it will incur a tax as a result of
the operation of the Separate Account.
4. VALUATION PROVISIONS
THE FIXED ACCOUNT
If the Certificate Owner allocates any premium payments to the Fixed Account,
the Fixed Account will earn interest at no less than a 3% annual effective rate.
The Company, in its sole discretion, may credit interest rates greater than 3%.
The Company will determine the value of the Fixed Account daily by crediting
interest to the
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Fixed Account.
THE SUB-ACCOUNTS
The available Sub-Accounts and their underlying investments are listed in the
Contract Specifications. The Certificate Owner may allocate premium payments to
one or more Sub-Accounts. Any premium payment allocated to a Sub-Account is
applied to provide for a number of Accumulation Units with respect to that
Sub-Account.
ACCUMULATION UNITS
The number of Accumulation Units credited to each Sub-Account is determined by
dividing the premium payment allocated to a Sub-Account by the dollar value of
one Accumulation Unit for such Sub-Account, next computed after the receipt of a
premium payment by the Company. The number of Accumulation Units so determined
will not be affected by any subsequent change in the value of such Accumulation
Units. The Accumulation Unit value in any Sub-Account may increase or decrease
from day to day as described below.
NET INVESTMENT FACTOR
The net investment factor for each of the Sub-Accounts is equal to the net asset
value per share of the corresponding Fund at the end of the valuation period
(plus the per share amount of any unpaid dividends or capital gains by the Fund)
divided by the net asset value per share of the corresponding Fund at the
beginning of the valuation period and subtracting from that amount the Mortality
and Expense Risk Charge and the Administration Charge shown in the Contract
Specifications.
ACCUMULATION UNIT VALUE
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund. The Accumulation Unit Value is
determined on each Business Day by multiplying the Accumulation Unit Value of
the particular Sub-Account on the preceding Business Day by the net investment
factor for that Sub-Account for the valuation period then ended. The value of
the Sub-Account on each Business Day is then calculated by multiplying the
number of Accumulation Units in that Sub-Account by the Accumulation Unit Value
on that Business Day.
5. TRANSFERS
TRANSFERS AMONG THE SUB-ACCOUNTS AND/OR FIXED ACCOUNT
At any time before the Annuity Commencement Date, the Certificate Owner may
transfer values among the Sub-Accounts and/or the Fixed Account.
After a transfer, if the remaining value of any Sub-Account or Fixed Account is
less than $500, the Company
10
reserves the right to transfer the entire remaining balance. The Company
reserves the right to defer transfers from the Fixed Account for up to six
months from the date of request.
After the Annuity Commencement Date, the Certificate Owner may elect in writing
to transfer values among the Sub-Accounts once every three (3) months.
ALL TRANSFERS
The Company reserves the right to limit the number of transfers to twelve (12)
per Certificate Year, with no two (2) transfers occuring on consecutive business
days. The Company reserves the right to limit the size, number, and frequency
of transfers. Further, the Company may restrict or suspend transfers. The
Company may reject any transfer request, or the Company may impose a fee of up
to $15 for any unscheduled transfer in excess of 12 transfers in any Certificate
Year. The Company reserves the right to accept transfer instructions solely
from the Certificate Owner and not from a representative, agent or person acting
under a power of attorney for the Certificate Owner.
6. ANNUAL FEES AND DEDUCTIONS
ANNUAL FEE
Before the Annuity Commencement Date, each year an Annual Fee is deducted from
the Certificate. The Annual Fee is deducted on each Certificate Anniversary, or
on the date of surrender of the Certificate, if earlier. The Annual Fee is
deducted from the Certificate Value by reducing each Sub-Account and Fixed
Account pro-rata according to the value in each on that day.
11
The Fixed Account will be reduced by the pro-rata dollar amount. The
Sub-Accounts will be reduced by a number of Accumulation Units. The number of
Accumulation Units deducted from the Sub-Account is determined by dividing the
pro-rata portion of the Annual Fee applicable to that Sub-Account, by the value
of an Accumulation Unit for the Sub-Account on the date the Annual Fee is
deducted.
SEPARATE ACCOUNT CHARGES
Each Business Day, a charge is deducted from each Sub-Account equal to the
Mortality and Expense Risk Charge and the Administration Charge shown in the
Contract Specifications.
7. CONTROL PROVISIONS
ANNUITANT, CONTINGENT ANNUITANT AND CERTIFICATE OWNER(S)
The Annuitant may not be changed.
The designations of Certificate Owner and Contingent Annuitant will remain in
effect until changed by the Certificate Owner. Changes in the designation of
the Certificate Owner may be made during the lifetime of the Annuitant by
written notice to the Company. Changes in the designation of Contingent
Annuitant may be made at any time prior to the Annuity Commencement Date by
written notice to the Company. Notwithstanding the
12
foregoing, if no Contingent Annuitant has been named and the Certificate
Owner/Annuitant's spouse is the Beneficiary, it will be assumed that the
Certificate Owner/Annuitant's spouse is the Contingent Annuitant. A Certificate
Owner who is a non-natural person may not designate a Contingent Annuitant.
The Certificate Owner has the sole power to exercise all the rights, options and
privileges granted by the Certificate or permitted by the Company and to agree
with the Company to any change in or amendment to the Certificate. The rights
of the Certificate Owner shall be subject to the rights of any assignee of
record with the Company and of any irrevocably designated Beneficiary. In the
case of joint Certificate Owners, each Certificate Owner alone may exercise all
rights, options and privileges, except with respect to the Surrender Provisions
and change of ownership or Beneficiary. If the Certificate Owner dies on or
after the Annuity Commencement Date, then the Joint Certificate Owner, or if
none, the Annuitant, becomes the Certificate Owner.
BENEFICIARY
The Designated Beneficiary will remain in effect until changed by the
Certificate Owner. Changes in the Designated Beneficiary may be made during the
lifetime of the Annuitant by written notice to the Administrative Office of the
Company. If the Designated Beneficiary has been designated irrevocably,
however, such designation cannot be changed or revoked without such
Beneficiary's written consent. Upon receipt of such notice and written consent,
if required, at the Administrative Office of the Company, the new designation
will take effect as of the date the notice is signed, whether or not the
Annuitant or Certificate Owner is alive at the time of receipt of such notice.
The change will be subject to any payment made or other action taken by the
Company before the receipt of the notice.
In the event of the death of the Annuitant when there is no surviving Contingent
Annuitant, the Beneficiary shall be the surviving Certificate Owner, or joint
Certificate Owners, if applicable, notwithstanding that the Designated
Beneficiary may be different. Otherwise, the Beneficiary will be the Designated
Beneficiary then in effect. If the Annuitant is the sole Certificate Owner and
there is no Designated Beneficiary in effect, the Annuitant's estate will be the
Beneficiary.
In the event of the death of a Certificate Owner prior to the Annuity
Commencement Date, the Beneficiary will be as follows. Upon the death of the
joint Certificate Owner, the Beneficiary will be the surviving joint Certificate
Owner, notwithstanding that the designated Beneficiary may be different. If the
Certificate Owner was the sole Certificate Owner, the Beneficiary shall be the
Designated Beneficiary then in effect. If no Beneficiary designation is in
effect or if the Designated Beneficiary has died prior to the death of the
Certificate owner, the Certificate Owner's estate shall be the Beneficiary.
8. GENERAL PROVISIONS
THE CONTRACT
This Contract and the Application constitute the entire Contract.
MODIFICATION
The Contract or the Certificates cannot be modified except over the signature of
the President, a Vice President, a Secretary or an Assistant Secretary of the
Company.
The Company reserves the right to modify the Contract and Certificates, but only
if such modification: (i) is necessary to make the Contract and Certificates or
the Separate Account comply with any law or regulation issued
13
by a governmental agency to which the Company is subject; (ii) is necessary to
assure continued qualification of the Contract and Certificates under the
Internal Revenue Code or other federal or state laws relating to retirement
annuities or annuity contracts; (iii) is necessary to reflect a change in the
operation of the Separate Account or the Sub-Account(s); (iv) provides
additional Sub-Account or Fixed Account options; or (v) withdraws Sub-Account or
Fixed Account options. In the event of any such modification, the Company will
provide notice to the Contract Owner and Certificate Owner, or to the
Annuitant(s) during the annuity period. The Company may also make appropriate
endorsements to the Contract and Certificate to reflect such modification.
MINIMUM VALUE STATEMENT
Any Net Surrender Values, death benefits or settlement provisions available
under the Certificate equal or exceed those required by the state in which the
Certificate is delivered.
NON-PARTICIPATION
This Contract and the Certificates do not share in the surplus earnings of the
Company. That portion of the assets of the Separate Account equal to the
reserves and other contract liabilities of the Separate Account shall not be
chargeable with liabilities arising out of any other business the Company may
conduct.
MISSTATEMENT OF AGE AND SEX
All statements made by the Certificate Owner are deemed to be true and complete
to the best of his/her knowledge and belief.
If the age and/or sex of the Annuitant and/or Certificate Owner is incorrectly
stated, death benefits or annuity payments will be adjusted to the payment which
would have been provided at the correct age and sex. The payments will be
adjusted for any overpayments or underpayments that may have been made. The
adjusted annuity payment or death benefit will include interest of 3% per annum
in the event of an underpayment or will deduct interest of 3% per annum in the
event of an overpayment.
PROTECTION OF PROCEEDS
To the extent permitted by law, no values under the Certificate will be subject
to the debts, contracts, or engagements of any Beneficiary, and all such values
shall be free from legal process and the claims of any creditors.
REPORTS TO THE CERTIFICATE OWNER
The Certificate Owner shall receive copies of any shareholder reports of the
Funds and of any other notices, reports or documents required by law to be
delivered to Certificate Owners. The Company will also deliver to the
Certificate Owner, at least quarterly, a statement showing the Certificate
Value.
VOTING RIGHTS
The Company shall notify the Certificate Owner of any Fund shareholder's
meetings at which the shares held for the Certificate Owner Sub-Account may be
voted. The Company shall also send the Certificate Owner proxy
14
materials and a form of instruction so that the Certificate Owner can instruct
the Company how to vote the shares held for the Certificate Owner's Sub-Account.
The Company shall arrange for the handling and tallying of proxies received from
Certificate Owners. The Company will vote the Fund shares in accordance with
the instructions received from the Certificate Owners having the right to give
voting instructions. If the Certificate Owner desires to attend any meeting
which shares held for the Certificate Owner's benefit may be voted, the
Certificate Owner may request the Company to furnish a proxy or otherwise
arrange for the exercise of voting rights with respect to the Fund shares held
for such Certificate Owner's Sub-Account.
In the event that the Certificate Owner gives no instructions or leaves the
manner of voting discretionary, the Company will vote such shares of the
appropriate Fund in the same proportion as shares of that Fund for which
instructions have been received. Also, the Company will vote the Fund shares in
this proportionate manner which are held by the Company for its own Sub-Account.
During the annuity period under a Certificate the number of votes will decrease
as the assets held to fund annuity benefits decrease.
SUBSTITUTION
The Company reserves the right to substitute the shares of any other registered
Investment Company for the shares of any Fund already purchased or to be
purchased in the future by the Separate Account provided that the substitution
has been approved by the Securities and Exchange Commission. The Company also
may limit further purchases of such shares.
CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT
At the Company election and subject to any necessary vote by persons having the
right to give instructions with respect to the voting of the Fund shares held by
the Sub-Accounts, the Separate Account may be operated as a management company
under the Investment Company Act of 1940 or it may be deregistered under the
Investment Company Act of 1940 in the event registration is no longer required.
Deregistration of the Separate Account requires an order by the Securities and
Exchange Commission.
PROOF OF SURVIVAL
The payment of any annuity benefit will be subject to evidence that the
Annuitant is alive on the date such payment is otherwise due.
9. SURRENDER PROVISIONS
FULL SURRENDER
Beginning 30 days after the Certificate Date, at any time prior to the Annuity
Commencement Date, the Certificate Owner has the right to terminate the
Certificate by submitting a written request to the Administrative Office . In
such event, the Certificate Owner will be entitled to the Net Surrender Value of
the Certificate.
On any Business Day, the Gross Surrender Value of the Certificate for a full
surrender equals the Certificate Value. The Net Surrender Value of the
Certificate is equal to the Gross Surrender Value minus:
(a) any applicable Taxes not previously deducted;
(b) the Annual Fee as specified in the Contract Specifications (for full, not
partial, surrenders); and
(c) any applicable Contingent Deferred Sales Charge as specified in the
Contract Specifications.
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PARTIAL SURRENDERS
Beginning 30 days after the Certificate date, and before the Annuity
Commencement Date, the Certificate Owner may partially surrender Certificate
Values and receive a Net Surrender Value.
Any partial surrender request must be in writing. If the Certificate Owner does
not specify which Sub-Account(s) or Fixed Account from which the partial
surrender is to be taken, the surrender will be effected on a pro rata basis
according to the value in each Sub-Account or Fixed Account.
For any partial surrender, the Certificate Values remaining after the surrender
must be at least equal to the Company's minimum amount rules then in effect. If
the remaining Certificate Value following such surrender is less than the
Company's minimum amount rules, the Certificate will be terminated and the
Company will pay the Net Surrender Value as if it were a full surrender.
The Company reserves the right to deduct a partial surrender fee of up to $15
per partial surrender in excess of 12 partial surrenders during any Certificate
Year. The fee would be deducted on a pro-rata basis from Certificate Values
held in the Sub-Accounts and Fixed Account immediately after the partial
surrender.
CONTINGENT DEFERRED SALES CHARGES "CDSC"
Unless specified otherwise, a Contingent Deferred Sales Charge ("charge") is
assessed against any premium payments surrendered before the end of the charge
period shown in the Contingent Deferred Sales Charge Schedule in the Contract
Specifications. In the Schedule, the length of time from the Certificate Date
to the time of surrender determines the charge. The charge is a percentage of
the Gross Surrender Value attributable to premium payments. For this purpose,
premium payments will be deemed to be surrendered before any other Certificate
Values. When the total Gross Surrender Value equals all premium payments, a
Contingent Deferred Sales Charge will not be assessed against the surrender of
the remaining Certificate Value.
The Company will not assess a Contingent Deferred Sales Charge against
withdrawals that qualify for the Annual Withdrawal Amount shown in the Contract
Specifications. Withdrawals of values in excess of the Annual Withdrawal
Amount will be subject to Contingent Deferred Sales Charges, according to the
Contingent Deferred Sales Charge Schedule, if applicable.
No Contingent Deferred Sales Charges will be assessed against Certificate
Values:
- applied to an Annuity Option (see Section 10, Page 23);
- equal to the Annual Withdrawal Amount described in the Certificate
Specifications;
- surrendered to meet the minimum distribution rules under the Internal
Revenue Code as they apply to amounts held under the Certificate ( see
Section 9, Page18 );
- surrendered while the Certificate Owner is confined to a nursing home( see
Section 9, Page 18)
- surrendered while the Certificate Owner is under age 65 and is totally
disabled at the time of the surrender request( see Section 9, Page 18);
- surrendered when there is medical evidence that the life expectancy of the
Certificate Owner is less than twelve months ( see Section 9, Page 18)
- if the Certificate terminates due to the death of the Certificate Owner or
Annuitant, as applicable;
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SURRENDERS NOT SUBJECT TO CONTINGENT DEFERRED SALES CHARGES
NURSING HOME CONFINEMENT: No Contingent Deferred Sales Charge is assessed upon
surrenders that occur during the Certificate Owner's confinement in a facility
certified as a nursing home. Such confinement must (1) have been continuous for
at least 90 days before the surrender request; (2) must be at the recommendation
of a U.S. licensed physician; (3) must be for medically necessary reasons and;
(4) must be confined at the time of the surrender request.
DISABILITY: No Contingent Deferred Sales Charge is assessed upon surrenders
that occur when the Certificate Owner is under age 65 and Totally Disabled. The
Certificate Owner must provide written proof, satisfactory to the Company, that
the Certificate Owner is Totally Disabled. Totally Disabled means a disability
that: (1) results from bodily injury or disease; (2) begins while the
Certificate is in force; (3) has existed continuously for at least 12 months;
and (4) prevents the Certificate Owner from engaging in the substantial and
material duties of the Certificate Owner's regular occupation. During the first
12 months of Total Disability, regular occupation means the Certificate Owner's
usual full time (at least 30 hours per week) work when Total Disability begins.
The Company reserves the right to require reasonable proof of such work. After
the first 12 months of Total Disability, regular occupation means that for which
the Certificate Owner is reasonably qualified by education, training or
experience.
TERMINAL ILLNESS: No Contingent Deferred Sales Charge is assessed upon
surrenders that occur when the Certificate Owner has been diagnosed by a U.S.
licensed physician with a medical condition that results in a life expectancy of
less than twelve months. The Certificate Owner must provide written proof,
satisfactory to the Company, that the Certificate Owner has been diagnosed with
a medical determinable condition that results in a life expectancy of less than
twelve months.
IRS MINIMUM DISTRIBUTIONS: No Contingent Deferred Sales Charge is assessed
against surrenders necessary to meet the minimum distribution requirements set
forth in Section 401(a) of the Internal Revenue Code as such requirements apply
to amounts held under the Certificate. The Certificate Owner must indicate on
his written request for surrender that the surrender is a required minimum
distribution.
TERMINATION AFTER THE ANNUITY COMMENCEMENT DATE
The Certificate Owner may not surrender the Certificate for its Net Surrender
Value after the Annuity Commencement Date.
PAYMENT ON SURRENDER - DEFERRAL OF PAYMENT
Payment on any request for surrender will be made as soon as possible and, with
respect to the Certificate Values in the Sub-Accounts, no later than seven days
after the written request is received by the Company. However, such payment may
be subject to postponement:
(a) for any period during which the New York Stock Exchange is closed or during
which trading on the New York Stock Exchange is restricted;
(b) for any period during which an emergency exists as a result of which (i)
disposal of the securities held in the Sub-Accounts is not reasonably
practicable, or (ii) it is not reasonably practicable for the value of the
net assets of the Separate Account to be fairly determined; and
17
(c) for such other periods as the Securities and Exchange Commission may, by
order, permit for the protection of the Certificate Owners. The conditions
under which trading shall be deemed to be restricted or any emergency shall
be deemed to exist shall be determined by rules and regulations of the
Securities and Exchange Commission.
The Company may defer payment of any amounts from the Fixed Account for up to
six months from the date of the request to surrender. If the Company defer
payment for more than 30 days, the Company will pay interest of at least 3% per
year on the amount deferred, calculated as of the date of receipt of the
request.
DEATH BENEFIT
A Death Benefit will be paid if the Annuitant dies prior to the Annuity
Commencement Date and there is no designated Contingent Annuitant surviving, or
if any Certificate Owner dies prior to the Annuity Commencement Date. The Death
Benefit will be payable to the Beneficiary as determined under the Control
Provisions of this Contract.
The Death Benefit is equal to the greater of: (a) total Purchase Payments less
any prior Gross Surrenders and Withdrawals since the Certificate Date or (b) the
Certificate Value. The Death Benefit shall be calculated as of the end of the
valuation period during which the Company receives Due Proof of Death.
The Death Benefit may be taken in a lump sum or under any of the settlement
options then being offered by the Company, subject, however to the Required
Distribution provisions below. When payment of the Death Benefit is taken in
one lump sum, payment will be made within 7 days after the date Due Proof of
Death is received, except when the Company is permitted to defer such payment
under the Investment Company Act of 1940. Payment to the Beneficiary, other
than in a lump sum, may only be elected during the sixty-day period beginning
with the date of receipt of Due Proof of Death.
DEATH OF ANNUITANT AFTER ANNUITY COMMENCEMENT DATE
In the event of the death of the Annuitant after the Annuity Commencement Date,
a Death Benefit, equal to the present value of any remaining payments under the
annuity option chosen, will be paid in one sum to the Beneficiary unless other
provisions shall have been made and approved by the Company.
If the Annuitant dies after the Annuity Commencement Date but before the Company
issues the payee's first check, the Beneficiary will be entitled to the Net
Surrender Value applied to the Annuity Option, without assessment of the
Contingent Deferred Sales Charge or Annual Fee.
REQUIRED DISTRIBUTIONS
A. DEATH OF OWNER OR PRIMARY ANNUITANT
Subject to the alternative election or spouse beneficiary provisions in
subsection B or C below, and to the tax qualification provision in subsection D
below:
1. If any Certificate Owner dies on or after the Annuity Commencement Date and
before the entire interest in this Certificate has been distributed, the
remaining portion of such interest shall be distributed at least as
18
rapidly as under the method of distribution being used as of the date of
such death.
2. If any Certificate Owner dies before the Annuity Commencement Date, the
entire interest in this Certificate will be distributed within 5 years
after such death.
3. If the Certificate Owner is not an individual, then for purposes of the
immediately preceding paragraph 1 or 2, the primary annuitant under this
Certificate shall be treated as the Certificate Owner for purposes of these
Required Distributions only, and any change in the primary annuitant shall
be treated as the death of the Certificate Owner. The primary annuitant is
the individual, the events in the life of whom are of primary importance in
affecting the timing or amount of the payout under the Certificate.
B. ALTERNATIVE ELECTION TO SATISFY DISTRIBUTION REQUIREMENTS
If any portion of the interest of a Certificate Owner described in subsection A
immediately above is payable to or for the benefit of a designated beneficiary,
and such beneficiary elects within a period of less than one year after such to
have such portion distributed over a period that: (1) does not extend beyond
such beneficiary's life (or life expectancy) and (2) starts within 1 year after
such death, for purposes of satisfying the requirements of paragraph A.1 or A.2
immediately above, such portion shall be treated as distributed entirely on the
date such periodic distributions begin. Such beneficiary may elect any
settlement option allowed by the Company, subject to any restrictions imposed by
any regulations under Section 72(s) of the Internal Revenue Code.
C. SPOUSE BENEFICIARY
In the event of the Certificate Owner's death where the sole Beneficiary is the
spouse of the Certificate Owner and the Annuitant or Contingent Annuitant is
living, such spouse may elect, in lieu of receiving the Death Benefit, to be
treated as the Certificate Owner for purposes of subsection A. Only one such
spousal election may be made with respect to any Certificate.
D. TAX QUALIFICATION
The Contract (and any Certificate thereunder) is intended to qualify as an
annuity contract for Federal income tax purposes. To that end, the provisions
of this Contact (and any such Certificate) are to be interpreted to ensure or
maintain such tax qualification, notwithstanding any other provisions to the
contrary. Payments and distributions under this Contract shall be made in a
timely manner necessary to maintain such qualification under the applicable
provisions in the Internal Revenue Code in existence at the time this Contract
is issued. Notwithstanding any other provisions to the contrary, the Company
reserves the right to amend this Contract and Certificate to reflect any
clarifications that may be needed or are appropriate to maintain such tax
qualification or to conform this Contract or Certificate to any applicable
changes in the tax qualification requirements. The Company will send the
Certificate Owner a copy of any such amendment.
19
10. ANNUITY BENEFITS
ANNUITY COMMENCEMENT DATE
The Certificate Owner may select an Annuity Commencement Date. The Annuity
Commencement Date selected must be at least one year after the Certificate Date
and on or before the Annuitant's attained age 90, except in certain states where
an earlier age is required. If the Certificate Owner does not choose an Annuity
Commencement Date, the scheduled Annuity Commencement Date will be the date of
the Annuitant's attained age 90, or an earlier age if required by state law. The
Certificate Owner may change the Annuity Commencement Date if the Certificate
Owner notifies the Company in writing 30 days before the scheduled Annuity
Commencement Date.
ANNUITY BENEFIT
On the Annuity Commencement Date, unless directed otherwise, the Company will
apply the Net Surrender Value to purchase monthly income payments payable to the
Annuitant according to the Annuity Option the Certificate Owner elects. The
Contingent Deferred Sales Charge will not be assessed. The Certificate Owner
may not surrender the Certificate after the Annuity Commencement Date.
ELECTION OF ANNUITY OPTION
The Certificate Owner may elect any one of the annuity options described below
or under any of the settlement
20
options offered by the Company at that time. In the absence of the Certificate
Owner's election, the Net Surrender Value, without deduction for any Contingent
Deferred Sales Charge, will be applied on the Annuity Commencement Date under
the Fifth Option to provide a Payment for a Designated Period for 5 years. The
Net Surrender Value is determined on the basis of the value of the Fixed Account
as of the Annuity Commencement Date, and of the Accumulation Unit Value of each
Sub-Account no later than the fifth Business Day preceding the date annuity
payments are to commence.
DATE OF PAYMENT
The first annuity payment under the Annuity Option shall be made one month, (or
the period selected for periodic payments: annual, semi-annual, quarterly, or
monthly), following the Annuity Commencement Date. Subsequent payments shall be
made on the same calendar day of the month as was the first payment, or the
preceding day if no such day exists (e.g. September 31), in accordance with the
payment period selected.
ALLOCATION OF ANNUITY
The Certificate Owner may further elect to have the Net Surrender Value applied
to a variable annuity, a fixed dollar annuity or a combination of both. Once
every 3 months, following the Annuity Commencement Date, the Certificate Owner
may elect, in writing, to transfer among any Sub-Account(s) on which variable
annuity payments are based. No transfers may be made between the Sub-Accounts
and the General Account after the Annuity Commencement Date.
If no election is made to the contrary, the value of each Sub-Account shall be
applied to provide a variable annuity based thereon, and the value of the Fixed
Account shall be applied to provide a fixed dollar annuity.
VARIABLE ANNUITY AND FIXED DOLLAR ANNUITY
VARIABLE ANNUITY - A variable annuity is an annuity with payments increasing or
decreasing in amount in accordance with the net investment results of the
Sub-Account(s) of the Separate Account (as described in the Valuation
Provisions). After the first monthly payment for a variable annuity has been
determined in accordance with the provisions of this Certificate (see
Description of Tables), a number of Annuity Units is determined by dividing that
first monthly payment by the appropriate Annuity Unit value on the Annuity
Commencement Date.
The value of an Annuity Unit for each Sub-Account of the Separate Account will
vary to reflect the investment experience of the applicable Fund. The Annuity
Unit Value is determined by multiplying the value of the Annuity Unit for that
Sub-Account on the preceding Business Day by the product of (a) the net
investment factor for that Sub-Account for the day for which the Annuity Unit
value is being calculated, and (b) an interest factor to offset the effect of
the asumed interest rate of 5% per year, which is built into the annuity tables.
Once variable annuity payments have begun, the number of Annuity Units remains
fixed with respect to a particular Sub-Account(s). If the Certificate Owner
elects that continuing annuity payments be based on a different Sub-Account(s),
the number will change effective with that election but will remain constant
following such election.
The dollar amount of the second and subsequent variable annuity payments is not
predetermined and may increase or decrease from month to month. The actual
amount of each variable annuity payment after the first is determined by
multiplying the number of Annuity Units by the Annuity Unit Value as described
above. The Annuity Unit Value will be determined no earlier than the fifth
Business Day preceding the date the annuity
21
payment is due.
The Company guarantees that the dollar amount of variable annuity payments will
not be adversely affected by variations in the expense results and in the actual
mortality experience of payees from the mortality assumptions, including any age
adjustment, used in determining the first monthly payment.
FIXED DOLLAR ANNUITY - A fixed dollar annuity is an annuity with payments that
remain fixed as to dollar amount throughout the payment period.
ANNUITY OPTIONS
FIRST OPTION - LIFE ANNUITY - An annuity payable monthly during the lifetime of
the Annuitant, ceasing with the last payment due prior to the death of the
Annuitant.
SECOND OPTION - LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN - An
annuity providing monthly income for a fixed period of 120 months, 180 months,
or 240 months (as selected), and for as long thereafter as the Annuitant shall
live.
THIRD OPTION - CASH REFUND LIFE ANNUITY - An annuity payable monthly during the
lifetime of the Annuitant ceasing with the last payment due prior to the death
of the Annuitant provided that, at the death of the Annuitant, the Beneficiary
will receive an additional payment equal to the excess, if any, of (a) minus (b)
where: (a) is the Net Surrender Value applied on the Annuity Commencement Date
under this option: and (b) is the dollar amount of annuity payments already
paid. This option is not available for variable annuitization.
FOURTH OPTION - JOINT AND LAST SURVIVOR LIFE ANNUITY - An annuity payable
monthly during the joint lifetime of the Annuitant and a secondary Annuitant,
and thereafter during the remaining lifetime of the survivor, ceasing with the
last payment prior to the death of the survivor.
FIFTH OPTION - PAYMENT FOR A DESIGNATED PERIOD - An amount payable monthly for
the number of years selected which may be from 5 to 30 years.
22
11. ANNUITY TABLES
The attached tables show the dollar amount of the first monthly payment for the
variable annuity and the minimum dollar amount of the monthly payments for the
fixed annuity for each $1,000 applied under the Annuity Options. Under the
First, Second and Third Options, the amount of each payment will depend upon the
age and sex of the Annuitant at the time of the Annuity Commencement Date.
Under the Fourth Option, the amount of each payment will depend upon the sex of
both Annuitants and their ages at the time the Annuity Commencement Date.
The variable payment annuity tables for the First, Second, and Fourth Options
are based on the 1983a Individual Annuity Mortality Table with ages set back one
year, and an interest rate of 5% per annum. The table for the Fifth Option is
based on an interest rate of 5% per annum.
The fixed annuity payment tables for the First, Second , Third and Fourth
Options are based on the 1983a Individual Annuity Mortality Table with ages set
back one year, and an interest rate of 3% per annum. The table for the Fifth
Option is based on an interest rate of 3% per annum.
Once the Certificate Owner elects an annuity option, the Certificate Owner may
not change it with respect to any Annuitant following the Annuity Commencement
Date.
MINIMUM PAYMENT
No election of any options or combination of options may be made under this
Certificate unless the first payment for each affected Sub-Account or Fixed
Account would be at least equal to the minimum payment amount according to
Company rules then in effect. If at any time, payments to be made to any
Annuitant from each Sub-Account or Fixed Account are or become less than the
minimum payment amount, the Company shall have the right to change the frequency
of payment to
23
such intervals as will result in a payment at least equal to the minimum. If
any amount due would be less than the minimum payment amount per annum, the
Company may make such other settlement as may be equitable to the Annuitant.
24
GROUP FLEXIBLE PREMIUM VARIABLE
ANNUITY CERTIFICATE
AMERICAN MATURITY LIFE INSURANCE COMPANY
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
(a stock life insurance company, herein called the "Company", or "We" or "Us")
Certifies that a Group Flexible Premium Variable Annuity Contract has been
issued to the AARP Group Annuity Trust. This Certificate is a summary of Your
rights under that contract.
YOUR RIGHT TO EXAMINE THIS CERTIFICATE:
American Maturity Life Insurance Company wants You to be satisfied with the
Certificate You have purchased. We urge You to examine it carefully. If for any
reason You are not satisfied with it, You may cancel the Certificate by
returning it within ten days after You receive it. A written request for
cancellation must accompany the Certificate. In such event, We will pay You the
Certificate Value as of the date We receive Your request. However, You bear the
investment risk prior to Our receiving Your request.
Signed for the Company
Xxxxxx X. Xxxx, President Xxxxx Xxxxxx, Secretary
PREMIUM PAYMENTS ARE FLEXIBLE AS DESCRIBED ON PAGE 8.
NONPARTICIPATING. THIS ANNUITY DOES NOT EARN DIVIDENDS.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CERTIFICATE, WHEN BASED ON INVESTMENT
EXPERIENCE OF A SUB-ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO A FIXED
DOLLAR AMOUNT. DETAILS OF THE VARIABLE PROVISIONS ARE DESCRIBED UNDER THE
VALUATION PROVISIONS, SECTION 4, PAGE 9.
TABLE OF CONTENTS
SECTION PAGE
1. Certificate Specifications 3
2. Definitions 5
3. Premium Payments 8
4. Valuation Provisions 9
5. Transfers 10
6. Annual Fees and Deductions 10
7. Control Provisions 11
8. General Provisions 12
9. Surrender Provisions 14
10. Annuity Benefits 18
11. Annuity Tables 20
2
1. CERTIFICATE SPECIFICATIONS
CERTIFICATE NUMBER: [ ]
CERTIFICATE DATE: [ ]
CERTIFICATE OWNER: [ ]
JOINT CERTIFICATE OWNER: [ ]
ANNUITANT: [ ]
CONTINGENT ANNUITANT: [ ]
AGE OF ANNUITANT: [ ]
SEX OF ANNUITANT: [ ]
BENEFICIARY(IES): [ ]
[ ]
[ ]
ANNUITY COMMENCEMENT DATE: [ ]
INITIAL PREMIUM PAYMENT: [ ]
ANNUAL FEE:
$25 on each Certificate Anniversary before the Annuity Commencement Date, or at
the time of full surrender, if the Certificate Value is less than $50,000 on
either date.
MORTALITY AND EXPENSE RISK CHARGE:
0.65% per annum of the average daily Sub-Account value
ADMINISTRATION CHARGE:
0.20% per annum of the average daily Sub-Account value
MINIMUM SUBSEQUENT PAYMENT:
$ 250 (or $100 if part of an electronic funds transfer program)
CONTINGENT DEFERRED SALES CHARGE SCHEDULE:
See "Contingent Deferred Sales Charge" provisions for a description of the
Contingent Deferred Sales Charge. The Contingent Deferred Sales Charge is a
percentage of the Gross Surrender Value (not to exceed the aggregate amount of
premium payments made) and equals:
CHARGE CERTIFICATE YEAR
5% 1
4% 2
3% 3
2% 4
1% 5
0% 6 and thereafter
3
ANNUAL WITHDRAWAL AMOUNT:
A Contingent Deferred Sales Charge is not assessed against any withdrawals made
each Certificate Year, on a non-cumulative basis, of up to 10% of premium
payments remaining in the Certificate as of the last Certificate Anniversary.
FIXED ACCOUNT:
Minimum Fixed Account Rate: [ 3% ]
SEPARATE ACCOUNT:
Separate Account AMLVA
AVAILABLE SUB-ACCOUNTS: BASED ON FUND:
Money Market Portfolio Money Market Portfolio
of the Xxxxxxx Variable Life Investment
Fund
Bond Portfolio Bond Portfolio
of the Xxxxxxx Variable Life Investment
Fund
Balanced Portfolio Balanced Portfolio
of the Janus Aspen Series
Capital Growth Portfolio Capital Growth Portfolio
of the Xxxxxxx Variable Life Investment
Fund
Growth & Income Portfolio Growth & Income Portfolio
of the Xxxxxxx Variable Life Investment
Fund
[Partners Portfolio] [Partners Portfolio
of the Xxxxxxxxx & Xxxxxx Advisors
Management Trust]
[Capital Appreciation [Capital Appreciation Portfolio
Portfolio] of the Dreyfus Variable Investment
Fund]
[Small Cap Portfolio] [Small Cap Portfolio
of the Dreyus Variable Investment
Fund]
Worldwide Growth Portfolio Worldwide Growth Portfolio
of the Janus Aspen Series
Or other Sub-Accounts as may be made available from time to time.
4
2. DEFINITIONS
ACCUMULATION UNIT - A unit of measure used to calculate the value of a
Sub-Account of a Certificate before the Annuity Commencement Date.
ADMINISTRATION CHARGE - A dollar amount We deduct to cover administrative
expenses. This charge is an annual percentage. It is shown on the Certificate
Specifications Page.
ADMINISTRATIVE OFFICE OF THE COMPANY - Currently located at 000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000. All correspondence should be sent to
our mailing address at X.X. Xxx 0000, Xxxxxxxx, XX 00000-0000. Any additional
premium payments should be sent to X.X. Xxx 000000, Xxxxxxxx, XX 00000-0000.
AMLVA - See "Separate Account."
ANNUAL FEE - An amount that is deducted from Your Certificate at the end of each
Certificate Year before the Annuity Commencement Date, or on the date of full
surrender of the Certificate, if earlier. The fee reimburses certain costs in
administering the Certificates and the Separate Account; We do not intend to
realize a profit from this fee.
ANNUITANT - The person on whose life an annuity is purchased.
ANNUITY - An Annuity is a contract with an insurance company in which You
deposit a sum of money(Your premium) and the insurer guarantees to make periodic
income payments to You for a specified period, or for life.
ANNUITY COMMENCEMENT DATE - The date on which Your selected Annuity Option, to
receive regular annuity payments, becomes effective.
ANNUITY PERIOD - The period during which You receive scheduled income payments
according to the annuity option You have selected.
ANNUITY UNIT - A unit of measure used to calculate the value of annuity payments
under the variable annuity option.
BENEFICIARY - The person entitled to receive benefits according to the terms of
the Certificate in case of the death of a Certificate Owner or Annuitant, as
applicable.
BUSINESS DAY - Every day the New York Stock Exchange is open for trading. The
end of the Business Day is the close of the New York Stock Exchange. The New
York Stock Exchange normally closes at 4:00 p.m. Eastern time.
CERTIFICATE - This document, which is Your policy. This Certificate was issued
by Us to You. It is evidence that You, or someone on your behalf, made a
premium payment under the group contract issued by Us to the AARP Group Annuity
Trust.
CERTIFICATE ANNIVERSARY - An anniversary of the Certificate Date. Similarly,
Certificate Years are measured
5
from the Certificate Date. The Certificate Date is shown on the Certificate
Specifications.
CERTIFICATE DATE - The effective date of the Certificate (the date on which Your
annuity takes effect).
CERTIFICATE OWNER - The owner(s) of the Certificate, sometimes referred to as
"You."
CERTIFICATE VALUE - The value of the Sub-Account(s) plus the value of the Fixed
Account on any Business Day.
CERTIFICATE YEAR - Each 12-month period starting on the Certificate Date and
ending the day before each Certificate Anniversary.
COMPANY - American Maturity Life Insurance Company, sometimes referred to as
"We" or "Us."
CONTINGENT ANNUITANT - The person designated by You who, upon the Annuitant's
death prior to the Annuity Commencement Date, becomes the Annuitant.
CONTINGENT DEFERRED SALES CHARGE ("CDSC") - A surrender charge that may be
deducted from Your Certificate Value if You make withdrawals from Your
Certificate within a certain number of years. See "Contingent Deferred Sales
Charge" under the Surrender Provisions of this Certificate. (see Section 6, Page
15)
CONTRACT OWNER - The AARP Group Annuity Trust.
DUE PROOF OF DEATH - A certified copy of the death certificate, an order of a
court of competent jurisdiction, a statement from a physician who attended the
deceased, or any other proof acceptable to Us.
ENROLLMENT FORM - The form You completed in order to purchase this Certificate.
FIXED ACCOUNT - An investment option that earns a rate of interest of at least
3% per annum. Amounts invested in the Fixed Account become part of Our General
Account.
FUND(S) - Currently the Funds listed on the Certificate Specifications page, or
any other Fund(s) that We may add from time to time.
GENERAL ACCOUNT - All assets of the Company other than those allocated to the
Separate Accounts of the Company.
GROSS SURRENDER VALUE - The Certificate Value (dollar amount) to be deducted
from Your Certificate when you make a full or partial surrender.
MORTALITY AND EXPENSE RISK CHARGE - A dollar amount we deduct from the
Sub-Accounts to cover administrative expenses and mortality risks. This charge
is an annual percentage and is shown on the Certificate Specifications Page.
NET INVESTMENT FACTOR - A factor used to determine the value of Accumulation
Units or Annuity Units each day.
NET SURRENDER VALUE - The amount payable to You on a surrender after the
deduction for any unpaid Taxes and
6
any Contingent Deferred Sales Charge. If You fully surrender Your Certificate
the Annual Fee is also deducted.
SEPARATE ACCOUNT ("SEPARATE ACCOUNT AMLVA") - An account established by Us to
separate the assets funding the variable benefits for the class of contracts to
which this Certificate belongs from the other assets of the Company. The assets
in the Separate Account are not chargeable with liabilities arising out of any
other business We may conduct. The Separate Account and the Funds, which are
the underlying securities of the Separate Account, are listed on the Certificate
Specifications of this Certificate.
SUB-ACCOUNT - The subdivisions of the Separate Account. You purchase units of
the Sub-Accounts to participate in the investment experience of the underlying
Funds.
SURRENDER - A full or partial withdrawal from your Certificate.
TAXES - The amount of tax, if any, charged by a federal, state or municipal
entity on premium payments or Certificate Values.
TOTAL DISABILITY - Totally Disabled means a disability that: (1) results from
bodily injury or disease; (2) begins while the Certificate is in force; (3) has
existed continuously for at least 12 months; and (4) prevents You from engaging
in the substantial and material duties of Your regular occupation.
WE, OUR, US - American Maturity Life Insurance Company.
YOU, YOUR - The Certificate Owner(s).
3. PREMIUM PAYMENTS
PREMIUM PAYMENTS
Premium payments may be accepted at Our Administrative Office. Payments are
made by check payable to American Maturity Life Insurance Company or by any
other method that We deem acceptable. Your initial
7
premium payment, and the minimum subsequent payment that We may accept, are
shown in the Certificate Specifications. We reserve the right to limit the
amount of a premium payment.
ALLOCATION OF PREMIUM PAYMENTS
Your initial premium payment is allocated to those Sub-Accounts and/or Fixed
Account You selected on Your Enrollment Form. The same allocations are made for
subsequent premium payments unless otherwise directed by You. Any allocation to
a Sub-Account or Fixed Account must be at least equal to Our minimum amount
rules then in effect.
Certain laws in some states require a full return of premium upon the exercise
of the Right to Examine (shown on the front page of this Certificate). For
Certificates sold in those states, We will allocate premium payments to the
Money Market Sub-Account during this Right to Examine period according to state
law.
PREMIUM TAXES AND OTHER TAXES
A deduction is made for premium taxes or other taxes ("Taxes") which are imposed
by some states or other governmental entities. We will determine when taxes
have resulted from the receipt of premium payments, the commencement of annuity
payments, or the investment experience of the Separate Account. We may, at Our
discretion, pay taxes when due and deduct that amount from the Certificate Value
at a later date. Payment at a earlier date does not waive any right that We may
have to deduct amounts at a later date. We reserve the right to establish a
provision for federal income taxes if the Company determines, in its sole
discretion, that it will incur a tax as a result of the operation of the
Separate Account.
4. VALUATION PROVISIONS
THE FIXED ACCOUNT
If You allocate any premium payments to the Fixed Account, the Fixed Account
will earn interest at no less than a 3% annual effective rate. We , in Our sole
discretion, may credit interest rates greater than 3%. We will
8
determine the value of the Fixed Account daily by crediting interest to the
Fixed Account.
THE SUB-ACCOUNTS
The available Sub-Accounts and their underlying investments are listed in the
Certificate Specifications. You may allocate premium payments to one or more
Sub-Accounts. Any premium payment allocated to a Sub-Account is applied to
provide for a number of Accumulation Units with respect to that Sub-Account.
ACCUMULATION UNITS
The number of Accumulation Units credited to each Sub-Account is determined by
dividing the premium payment allocated to a Sub-Account by the dollar value of
one Accumulation Unit for such Sub-Account, next computed after the receipt of a
premium payment by Us. The number of Accumulation Units so determined will not
be affected by any subsequent change in the value of such Accumulation Units.
The Accumulation Unit value in any Sub-Account may increase or decrease from day
to day as described below.
NET INVESTMENT FACTOR
The net investment factor for each of the Sub-Accounts is equal to the net asset
value per share of the corresponding Fund at the end of the valuation period
(plus the per share amount of any unpaid dividends or capital gains by the Fund)
divided by the net asset value per share of the corresponding Fund at the
beginning of the valuation period and subtracting from that amount the Mortality
and Expense Risk Charge and the Administration Charge shown in the Certificate
Specifications.
ACCUMULATION UNIT VALUE
The Accumulation Unit Value for each Sub-Account will vary to reflect the
investment experience of the applicable Fund. The Accumulation Unit Value is
determined on each Business Day by multiplying the Accumulation Unit Value of
the particular Sub-Account on the preceding Business Day by the net investment
factor for that Sub-Account for the valuation period then ended. The value of
the Sub-Account on each Business Day is then calculated by multiplying the
number of Accumulation Units in that Sub-Account by the Accumulation Unit Value
on that Business Day.
5. TRANSFERS
TRANSFERS AMONG THE SUB-ACCOUNTS AND/OR FIXED ACCOUNT
At any time before the Annuity Commencement Date, You may transfer values among
the Sub-Accounts and/or the Fixed Account.
9
After a transfer, if the remaining value of any Sub-Account or Fixed Account is
less than $500, We reserve the right to transfer the entire remaining balance.
We reserve the right to defer transfers from the Fixed Account for up to six
months from the date of request.
After the Annuity Commencement Date, You may elect in writing to transfer values
among the Sub-Accounts once every three (3) months.
ALL TRANSFERS
We reserve the right to limit the number of transfers to twelve (12) per
Certificate Year, with no two (2) transfers occurring on consecutive Business
Days. We reserve the right to limit the size, number, and frequency of
transfers. Further, We may restrict or suspend transfers. We may reject any
transfer request, or We may impose a fee of up to $15 for any unscheduled
transfer in excess of 12 transfers in any Certificate Year. We reserve the
right to accept transfer instructions solely from You and not from Your
representative, agent or person acting under a power of attorney for You.
6. ANNUAL FEES AND DEDUCTIONS
ANNUAL FEE
Before the Annuity Commencement Date, each year an Annual Fee is deducted from
the Certificate. The Annual Fee is deducted on each Certificate Anniversary, or
on the date of surrender of the Certificate, if earlier. The
10
Annual Fee is deducted from the Certificate Value by reducing each Sub-Account
and Fixed Account pro-rata according to the value in each on that day.
The Fixed Account will be reduced by the pro-rata dollar amount. The
Sub-Accounts will be reduced by a number of Accumulation Units. The number of
Accumulation Units deducted from the Sub-Account is determined by dividing the
pro-rata portion of the Annual Fee applicable to that Sub-Account, by the value
of an Accumulation Unit for the Sub-Account on the date the Annual Fee is
deducted.
SEPARATE ACCOUNT CHARGES
Each Business Day, a charge is deducted from each Sub-Account equal to the
Mortality and Expense Risk Charge and the Administration Charge shown in the
Certificate Specifications.
7. CONTROL PROVISIONS
ANNUITANT, CONTINGENT ANNUITANT AND CERTIFICATE OWNER(S)
The Annuitant may not be changed.
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The designations of Certificate Owner and Contingent Annuitant will remain in
effect until changed by the Certificate Owner. Changes in the designation of
the Certificate Owner may be made during the lifetime of the Annuitant by
written notice to us. Changes in the designation of Contingent Annuitant may be
made at any time prior to the Annuity Commencement Date by written notice to the
Company. Notwithstanding the foregoing, if no Contingent Annuitant has been
named and the Certificate Owner/Annuitant's spouse is the Beneficiary, it will
be assumed that the Certificate Owner/Annuitant's spouse is the Contingent
Annuitant. A Certificate Owner who is a non-natural person may not designate a
Contingent Annuitant.
The Certificate Owner has the sole power to exercise all the rights, options and
privileges granted by this Certificate or permitted by the Company and to agree
with the Company to any change in or amendment to the Certificate. The rights
of the Certificate Owner shall be subject to the rights of any assignee of
record with the Company and of any irrevocably designated Beneficiary. In the
case of joint Certificate Owners, each Certificate Owner alone may exercise all
rights, options and privileges, except with respect to the Surrender Provisions
and change of ownership or beneficiary. If the Certificate Owner dies on or
after the Annuity Commencement Date, then the Joint Certificate Owner, or if
none, the Annuitant, becomes the Certificate Owner.
BENEFICIARY
The Designated Beneficiary will remain in effect until changed by the
Certificate Owner. Changes in the Designated Beneficiary may be made during the
lifetime of the Annuitant by written notice to the Administrative Office of the
Company. If the Designated Beneficiary has been designated irrevocably,
however, the designation cannot be changed or revoked without such Beneficiary's
written consent. Upon receipt of such notice and written consent, if required,
at the Administrative Office of the Company, the new designation will take
effect as of the date the notice is signed, whether or not the Annuitant or
Certificate Owner is alive at the time of receipt of such notice. The change
will be subject to any payment made or other action taken by the Company before
the receipt of the notice.
In the event of the death of the Annuitant when there is no surviving Contingent
Annuitant, the Beneficiary shall be the surviving Certificate Owner, or joint
Certificate Owners, if applicable, notwithstanding that the Designated
Beneficiary may be different. Otherwise, the Beneficiary will be the Designated
Beneficiary then in effect. If the Annuitant is the sole Certificate Owner and
there is no Designated Beneficiary in effect, the Annuitant's estate will be the
Beneficiary.
In the event of the death of a Certificate Owner prior to the Annuity
Commencement Date, the Beneficiary will be as follows. Upon the death of the
joint Certificate Owner, the Beneficiary will be the surviving joint Certificate
Owner, notwithstanding that the designated Beneficiary may be different. If the
Certificate Owner was the sole Certificate Owner, the Beneficiary shall be the
Designated Beneficiary then in effect. If no Beneficiary designation is in
effect or if the Designated Beneficiary has died prior to the death of the
Certificate owner, the Certificate Owner's estate shall be the Beneficiary.
8. GENERAL PROVISIONS
THE CERTIFICATE
This Certificate is a summary of the group annuity Contract between American
Maturity Life Insurance Company and the AARP Group Annuity Trust. This
Certificate and the Enrollment Form constitute the entire Certificate.
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MODIFICATION
The Contract or the Certificates cannot be modified except over the signature of
the President, a Vice President, a Secretary or an Assistant Secretary of the
Company.
We reserve the right to modify the Contract and Certificates, but only if such
modification: (i) is necessary to make the Contract and Certificates or the
Separate Account comply with any law or regulation issued by a governmental
agency to which the Company is subject; (ii) is necessary to assure continued
qualification of the Contract and Certificates under the Internal Revenue Code
or other federal or state laws relating to retirement annuities or annuity
contracts; (iii) is necessary to reflect a change in the operation of the
Separate Account or the Sub-Account(s); (iv) provides additional Sub-Account or
Fixed Account options; or (v) withdraws Sub-Account or Fixed Account options.
In the event of any such modification, the Company will provide notice to the
Contract Owner and Certificate Owner, or to the Annuitant(s) during the annuity
period. We may also make appropriate endorsements to the Contract and
Certificate to reflect such modification.
MINIMUM VALUE STATEMENT
Any Net Surrender Values, death benefits or settlement provisions available
under the Certificate equal or exceed those required by the state in which the
Certificate is delivered.
NON-PARTICIPATION
This Certificates does not share in our surplus earnings. That portion of the
assets of the Separate Account equal to the reserves and other contract
liabilities of the Separate Account shall not be chargeable with liabilities
arising out of any other business We may conduct.
MISSTATEMENT OF AGE AND SEX
All statements made by You are deemed to be true and complete to the best of
Your knowledge and belief.
If the age and/or sex of the Annuitant and/or Certificate Owner is incorrectly
stated, death benefits or annuity payments will be adjusted to the payment which
would have been provided at the correct age and sex. The payments will be
adjusted for any overpayments or underpayments that may have been made. The
adjusted annuity payment or death benefit will include interest of 3% per annum
in the event of an underpayment or will deduct interest of 3% per annum in the
event of an overpayment.
PROTECTION OF PROCEEDS
To the extent permitted by law, no values under the Certificate will be subject
to the debts, contracts, or engagements of any Beneficiary, and all such values
shall be free from legal process and the claims of any creditors.
REPORTS TO THE CERTIFICATE OWNER
The Certificate Owner shall receive copies of any shareholder reports of the
Funds and of any other notices, reports or documents required by law to be
delivered to Certificate Owners. We will also deliver to You, at least
quarterly, a statement showing the Certificate Value.
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VOTING RIGHTS
We shall notify You of any Fund shareholder's meetings at which the shares held
for the Your Sub-Account may be voted. We shall also send You proxy materials
and a form of instruction so that You can instruct us how to vote the shares
held for Your Sub-Account. We shall arrange for the handling and tallying of
proxies received from Certificate Owners. We will vote the Fund shares in
accordance with the instructions received from the Certificate Owners having the
right to give voting instructions. If You desire to attend any meeting which
shares held for the Certificate Owner's benefit may be voted, You may request
the Company to furnish a proxy or otherwise arrange for the exercise of voting
rights with respect to the Fund shares held for such Certificate Owner's
Sub-Account.
In the event that the Certificate Owner does not give Us instructions or leaves
the manner of voting discretionary, the Company will vote such shares of the
appropriate Fund in the same proportion as shares of that Fund for which
instructions have been received. Also, the Company will vote the Fund shares in
this proportionate manner which are held by the Company for its own Sub-Account.
During the annuity period under a Certificate the number of votes will decrease
as the assets held to fund annuity benefits decrease.
SUBSTITUTION
We reserve the right to substitute the shares of any other registered Investment
Company for the shares of any Fund already purchased or to be purchased in the
future by the Separate Account provided that the substitution has been approved
by the Securities and Exchange Commission. The Company also may limit further
purchases of such shares.
CHANGE IN THE OPERATION OF THE SEPARATE ACCOUNT
At Our election and subject to any necessary vote by persons having the right to
give instructions with respect to the voting of the Fund shares held by the
Sub-Accounts, the Separate Account may be operated as a management company under
the Investment Company Act of 1940 or it may be deregistered under the
Investment Company Act of 1940 in the event registration is no longer required.
Deregistration of the Separate Account requires an order by the Securities and
Exchange Commission.
PROOF OF SURVIVAL
The payment of any annuity benefit will be subject to evidence that the
Annuitant is alive on the date such payment is otherwise due.
9. SURRENDER PROVISIONS
FULL SURRENDER
Beginning 30 days after the Certificate Date, at any time prior to the Annuity
Commencement Date, You have the right to terminate Your Certificate by
submitting a written request to Our Administrative Office . In such event, You
will be entitled to the Net Surrender Value of Your Certificate.
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On any Business Day, the Gross Surrender Value of Your Certificate for a full
surrender equals the Certificate Value. The Net Surrender Value of Your
Certificate is equal to the Gross Surrender Value minus:
(a) any applicable Taxes not previously deducted;
(b) the Annual Fee as specified in the Certificate Specifications (for full,
not partial, surrenders); and
(c) any applicable Contingent Deferred Sales Charge as specified in the
Certificate Specifications.
PARTIAL SURRENDERS
Beginning 30 days after the Certificate date, and before the Annuity
Commencement Date, You may partially surrender Certificate Values and receive a
Net Surrender Value.
Any partial surrender request must be in writing. If You do not specify which
Sub-Account(s) or Fixed Account from which the partial surrender is to be taken,
the surrender will be effected on a pro rata basis according to the value in
each Sub-Account or Fixed Account.
For any partial surrender, the Certificate Values remaining after the surrender
must be at least equal to the Company's minimum amount rules then in effect. If
the remaining Certificate Value following such surrender is less than the
Company's minimum amount rules, the Certificate will be terminated and We will
pay the Net Surrender Value as if it were a full surrender.
We reserve the right to deduct a partial surrender fee of up to $15 per partial
surrender in excess of 12 partial surrenders during any Certificate Year. The
fee would be deducted on a pro-rata basis from Certificate Values held in the
Sub-Accounts and Fixed Account immediately after the partial surrender.
CONTINGENT DEFERRED SALES CHARGES "CDSC"
Unless specified otherwise, a Contingent Deferred Sales Charge ("charge") is
assessed against any premium payments surrendered before the end of the charge
period shown in the Contingent Deferred Sales Charge Schedule in the Certificate
Specifications. In the Schedule, the length of time from the Certificate Date
to the time of surrender determines the charge. The charge is a percentage of
the Gross Surrender Value attributable to premium payments. For this purpose,
premium payments will be deemed to be surrendered before any other Certificate
Values. When the total Gross Surrender Value equals all premium payments, a
Contingent Deferred Sales Charge will not be assessed against the surrender of
the remaining Certificate Value.
We will not assess a Contingent Deferred Sales Charge against withdrawals that
qualify for the Annual Withdrawal Amount shown in the Certificate
Specifications. Withdrawals of values in excess of the Annual Withdrawal
Amount will be subject to Contingent Deferred Sales Charges, according to the
Contingent Deferred Sales Charge Schedule, if applicable.
No Contingent Deferred Sales Charges will be assessed against Certificate
Values:
- applied to an Annuity Option (see Section 10, Page 21)
- equal to the Annual Withdrawal Amount described in the Certificate
Specifications;
- surrendered to meet the minimum distribution rules under the Internal
Revenue Code as they apply to
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amounts held under the Certificate (see Section 9, Page 16);
- surrendered while the Certificate Owner is confined to a nursing home (see
Section 9, Page 16);
- surrendered while the Certificate Owner is under age 65 and is totally
disabled at the time of the surrender request (see Section 9, Page 16);
- surrendered when there is medical evidence that the life expectancy of the
Certificate Owner is less than twelve months (see Section 9, Page 16);
- if the Certificate terminates due to the death of the Certificate Owner or
Annuitant, as applicable;
SURRENDERS NOT SUBJECT TO CONTINGENT DEFERRED SALES CHARGES
NURSING HOME CONFINEMENT: No Contingent Deferred Sales Charge is assessed upon
surrenders that occur during Your confinement in a state certified nursing
home. Such confinement must (1) have been continuous for at least 90 days
before the surrender request; (2) must be at the recommendation of a U.S.
licensed physician; (3) must be for medically necessary reasons and; (4) must be
confined at the time of the surrender request.
DISABILITY: No Contingent Deferred Sales Charge is assessed upon surrenders
that occur when You are under age 65 and Totally Disabled. You must provide
written proof, satisfactory to the Company, that You are Totally Disabled.
Totally Disabled means a disability that: (1) results from bodily injury or
disease; (2) begins while the Certificate is in force; (3) has existed
continuously for at least 12 months; and (4) prevents You from engaging in the
substantial and material duties of Your regular occupation. During the first 12
months of Total Disability, regular occupation means Your usual full time (at
least 30 hours per week) work when Total Disability begins. We reserve the
right to require reasonable proof of such work. After the first 12 months of
Total Disability, regular occupation means that for which You are reasonably
qualified by education, training or experience.
TERMINAL ILLNESS: No Contingent Deferred Sales Charge is assessed upon
surrenders that occur when You have been diagnosed by a U.S. licensed physician
with a medical condition that results in a life expectancy of less than twelve
months. You must provide written proof, satisfactory to Us, that You have been
diagnosed with a medical determinable condition that results in a life
expectancy of less than twelve months.
IRS MINIMUM DISTRIBUTIONS: No Contingent Deferred Sales Charge is assessed
against surrenders necessary to meet the minimum distribution requirements set
forth in Section 401(a) of the Internal Revenue Code as such requirements apply
to amounts held under the Certificate. You must indicate on Your written request
for surrender that the surrender is a required minimum distribution.
TERMINATION AFTER THE ANNUITY COMMENCEMENT DATE
You may not surrender the Certificate for its Net Surrender Value after the
Annuity Commencement Date.
PAYMENT ON SURRENDER - DEFERRAL OF PAYMENT
Payment on any request for surrender will be made as soon as possible and, with
respect to the Certificate Values in the Sub-Accounts, no later than seven days
after the written request is received by Us. However, such payment may be
subject to postponement:
(a) for any period during which the New York Stock Exchange is closed or during
which trading on the New York Stock Exchange is restricted;
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(b) for any period during which an emergency exists as a result of which (i)
disposal of the securities held in the Sub-Accounts is not reasonably
practicable, or (ii) it is not reasonably practicable for the value of the
net assets of the Separate Account to be fairly determined; and
(c) for such other periods as the Securities and Exchange Commission may, by
order, permit for the protection of the Certificate Owners. The conditions
under which trading shall be deemed to be restricted or any emergency shall
be deemed to exist shall be determined by rules and regulations of the
Securities and Exchange Commission.
We may defer payment of any amounts from the Fixed Account for up to six months
from the date of the request to surrender. If We defer payment for more than 30
days, We will pay interest of at least 3% per year on the amount deferred,
calculated as of the date of receipt of the request.
DEATH BENEFIT
A Death Benefit will be paid if the Annuitant dies prior to the Annuity
Commencement Date and there is no designated Contingent Annuitant surviving, or
if any Certificate Owner dies prior to the Annuity Commencement Date. The Death
Benefit will be payable to the Beneficiary as determined under the Control
Provisions of this Certificate.
The Death Benefit is equal to the greater of: (a) total Purchase Payments less
any prior Gross Surrenders and Withdrawals since the Certificate Date or (b) the
Certificate Value. The Death Benefit shall be calculated as of the end of the
valuation period during which the Company receives Due Proof of Death.
The Death Benefit may be taken in a lump sum or under any of the settlement
options then being offered by the Company, subject, however to the Required
Distribution provisions below. When payment of the Death Benefit is taken in
one lump sum, payment will be made within 7 days after the date Due Proof of
Death is received, except when the Company is permitted to defer such payment
under the Investment Company Act of 1940. Payment to the Beneficiary, other
than in a lump sum, may only be elected during the sixty-day period beginning
with the date of receipt of Due Proof of Death.
DEATH OF ANNUITANT AFTER ANNUITY COMMENCEMENT DATE
In the event of the death of the Annuitant after the Annuity Commencement Date,
a Death Benefit, equal to the present value of any remaining payments under the
annuity option chosen, will be paid in one sum to the Beneficiary unless other
provisions shall have been made and approved by the Company.
If the Annuitant dies after the Annuity Commencement Date but before We issue
the payee's first check, the Beneficiary will be entitled to the Net Surrender
Value applied to the Annuity Option, without assessment of the Contingent
Deferred Sales Charge or Annual Fee.
REQUIRED DISTRIBUTIONS
A. DEATH OF OWNER OR PRIMARY ANNUITANT
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Subject to the alternative election or spouse beneficiary provisions in
subsection B or C below, and to the tax qualification provision in subsection D
below:
1. If any Certificate Owner dies on or after the Annuity Commencement Date and
before the entire interest in this Certificate has been distributed, the
remaining portion of such interest shall be distributed at least as rapidly
as under the method of distribution being used as of the date of such
death.
2. If any Certificate Owner dies before the Annuity Commencement Date, the
entire interest in this Certificate will be distributed within 5 years
after such death.
3. If the Certificate Owner is not an individual, then for purposes of the
immediately preceding paragraph 1 or 2, the primary annuitant under this
Certificate shall be treated as the Certificate Owner for purposes of these
Required Distributions only, and any change in the primary annuitant shall
be treated as the death of the Certificate Owner. The primary annuitant is
the individual, the events in the life of whom are of primary importance in
affecting the timing or amount of the payout under the Certificate.
B. ALTERNATIVE ELECTION TO SATISFY DISTRIBUTION REQUIREMENTS
If any portion of the interest of a Certificate Owner described in subsection A
immediately above is payable to or for the benefit of a designated beneficiary,
and such beneficiary elects within a period of less than one year after such to
have such portion distributed over a period that: (1) does not extend beyond
such beneficiary's life (or life expectancy) and (2) starts within 1 year after
such death, for purposes of satisfying the requirements of paragraph A.1 or A.2
immediately above, such portion shall be treated as distributed entirely on the
date such periodic distributions begin. Such beneficiary may elect any
settlement option allowed by the Company, subject to any restrictions imposed by
any regulations under Section 72(s) of the Internal Revenue Code.
C. SPOUSE BENEFICIARY
In the event of the Certificate Owner's death where the sole Beneficiary is the
spouse of the Certificate Owner and the Annuitant or Contingent Annuitant is
living, such spouse may elect, in lieu of receiving the Death Benefit, to be
treated as the Certificate Owner for purposes of subsection A. Only one such
spousal election may be made with respect to any Certificate.
D. TAX QUALIFICATION
The Contract (and any Certificate thereunder) is intended to qualify as an
annuity contract for Federal income tax purposes. To that end, the provisions
of the Contact (and any such Certificate) are to be interpreted to ensure or
maintain such tax qualification, notwithstanding any other provisions to the
contrary. Payments and distributions under this Contract shall be made in a
timely manner necessary to maintain such qualification under the applicable
provisions in the Internal Revenue Code in existence at the time this Contract
is issued. Notwithstanding any other provisions to the contrary, the Company
reserves the right to amend this Contract and Certificate to reflect any
clarifications that may be needed or are appropriate to maintain such tax
qualification or to conform this Contract or Certificate to any applicable
changes in the tax qualification requirements. The Company will send You a copy
of any such amendment.
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10. ANNUITY BENEFITS
ANNUITY COMMENCEMENT DATE
You may select an Annuity Commencement Date. The Annuity Commencement Date
selected must be at least one year after the Certificate Date and on or before
the Annuitant's attained age 90, except in certain states where an earlier age
is required. If You do not choose an Annuity Commencement Date, the scheduled
Annuity Commencement Date will be the date of the Annuitant's attained age 90,
or an earlier age if required by state law. You may change the Annuity
Commencement Date if You notify Us in writing 30 days before the scheduled
Annuity Commencement Date.
ANNUITY BENEFIT
On the Annuity Commencement Date, unless directed otherwise, We will apply the
Net Surrender Value to purchase monthly income payments payable to the Annuitant
according to the Annuity Option You elect. The
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Contingent Deferred Sales Charge will not be assessed. You may not surrender
the Certificate after the Annuity Commencement Date.
ELECTION OF ANNUITY OPTION
You may elect any one of the annuity options described below or under any of the
settlement options offered by Us at that time. In the absence of your election,
the Net Surrender Value, without deduction for any Contingent Deferred Sales
Charge, will be applied on the Annuity Commencement Date under the Fifth Option
to provide a Payment for a Designated Period for 5 years. The Net Surrender
Value is determined on the basis of the value of the Fixed Account as of the
Annuity Commencement Date, and of the Accumulation Unit Value of each
Sub-Account no later than the fifth Business Day preceding the date annuity
payments are to commence.
DATE OF PAYMENT
The first annuity payment under the Annuity Option shall be made one month, (or
the period selected for periodic payments: annual, semi-annual, quarterly, or
monthly), following the Annuity Commencement Date. Subsequent payments shall be
made on the same calendar day of the month as was the first payment, or the
preceding day if no such day exists (e.g. September 31), in accordance with the
payment period selected.
ALLOCATION OF ANNUITY
You may further elect to have the Net Surrender Value applied to a variable
annuity, a fixed dollar annuity or a combination of both. Once every 3 months,
following the Annuity Commencement Date, You may elect, in writing, to transfer
among any Sub-Account(s) on which variable annuity payments are based. No
transfers may be made between the Sub-Accounts and the General Account after the
Annuity Commencement Date.
If no election is made to the contrary, the value of each Sub-Account shall be
applied to provide a variable annuity based thereon, and the value of the Fixed
Account shall be applied to provide a fixed dollar annuity.
VARIABLE ANNUITY AND FIXED DOLLAR ANNUITY
VARIABLE ANNUITY - A variable annuity is an annuity with payments increasing or
decreasing in amount in accordance with the net investment results of the
Sub-Account(s) of the Separate Account (as described in the Valuation
Provisions). After the first monthly payment for a variable annuity has been
determined in accordance with the provisions of this Certificate (see
Description of Tables), a number of Annuity Units is determined by dividing that
first monthly payment by the appropriate Annuity Unit Value on the Annuity
Commencement Date.
The value of an Annuity Unit for each Sub-Account of the Separate Account will
vary to reflect the investment experience of the applicable Fund. The Annuity
Unit Value is determined by multiplying the value of the Annuity Unit for that
Sub-Account on the preceding Business Day by the product of (a) the net
investment factor for that Sub-Account for the day for which the Annuity Unit
Value is being calculated, and (b) an interest factor to offset the effect of
the assumed interest rate of 5% per year, which is built into the annuity
tables.
Once variable annuity payments have begun, the number of Annuity Units remains
fixed with respect to a particular Sub-Account(s). If You elect that continuing
annuity payments be based on a different Sub-Account(s), the number will change
effective with that election but will remain constant following such election.
The dollar amount of the second and subsequent variable annuity payments is not
predetermined and may increase
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or decrease from month to month. The actual amount of each variable annuity
payment after the first is determined by multiplying the number of Annuity Units
by the Annuity Unit Value as described above. The Annuity Unit Value will be
determined no earlier than the fifth Business Day preceding the date the annuity
payment is due.
The Company guarantees that the dollar amount of variable annuity payments will
not be adversely affected by variations in the expense results and in the actual
mortality experience of payees from the mortality assumptions, including any age
adjustment, used in determining the first monthly payment.
FIXED DOLLAR ANNUITY - A fixed dollar annuity is an annuity with payments that
remain fixed as to dollar amount throughout the payment period.
ANNUITY OPTIONS
FIRST OPTION - LIFE ANNUITY - An annuity payable monthly during the lifetime of
the Annuitant, ceasing with the last payment due prior to the death of the
Annuitant.
SECOND OPTION - LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS CERTAIN - An
annuity providing monthly income for a fixed period of 120 months, 180 months,
or 240 months (as selected), and for as long thereafter as the Annuitant shall
live.
THIRD OPTION - CASH REFUND LIFE ANNUITY - An annuity payable monthly during the
lifetime of the Annuitant ceasing with the last payment due prior to the death
of the Annuitant provided that, at the death of the Annuitant, the Beneficiary
will receive an additional payment equal to the excess, if any, of (a) minus (b)
where: (a) is the Net Surrender Value applied on the Annuity Commencement Date
under this option: and (b) is the dollar amount of annuity payments already
paid. This option is not available for variable annuitization.
FOURTH OPTION - JOINT AND LAST SURVIVOR LIFE ANNUITY - An annuity payable
monthly during the joint lifetime of the Annuitant and a secondary Annuitant,
and thereafter during the remaining lifetime of the survivor, ceasing with the
last payment prior to the death of the survivor.
FIFTH OPTION - PAYMENT FOR A DESIGNATED PERIOD - An amount payable monthly for
the number of years selected which may be from 5 to 30 years.
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11. ANNUITY TABLES
The attached tables show the dollar amount of the first monthly payment for the
variable annuity and the minimum dollar amount of the monthly payments for the
fixed annuity for each $1,000 applied under the Annuity Options. Under the
First, Second and Third Options, the amount of each payment will depend upon the
age and sex of the Annuitant at the time the Annuity Commencement Date. Under
the Fourth Option, the amount of each payment will depend upon the sex of both
Annuitants and their ages at the time the Annuity Commencement Date.
The variable payment annuity tables for the First, Second, and Fourth Options
are based on the 1983a Individual Annuity Mortality Table with ages set back one
year, and an interest rate of 5% per annum. The table for the Fifth Option is
based on an interest rate of 5% per annum.
The fixed annuity payment tables for the First, Second , Third and Fourth
Options are based on the 1983a Individual Annuity Mortality Table with ages set
back one year, and an interest rate of 3% per annum. The table for the Fifth
Option is based on an interest rate of 3% per annum.
Once you elect an annuity option, you may not change it with respect to any
Annuitant following the Annuity Commencement Date.
MINIMUM PAYMENT
No election of any options or combination of options may be made under this
Certificate unless the first payment for each affected Sub-Account or Fixed
Account would be at least equal to the minimum payment amount
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according to Company rules then in effect. If at any time, payments to be made
to any Annuitant from each Sub-Account or Fixed Account are or become less than
the minimum payment amount, the Company shall have the right to change the
frequency of payment to such intervals as will result in a payment at least
equal to the minimum. If any amount due would be less than the minimum payment
amount per annum, we may make such other settlement as may be equitable to the
Annuitant.
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