Exhibit (4)(i)
ESTATE ENHANCEMENT BENEFIT RIDER
The Estate Enhancement Benefit Rider is made a part of the Contract to which it
is attached (this Contract).
As used in this form: (1) the Estate Enhancement Benefit Rider will be referred
to as "this Rider"; and (2) the Estate Enhancement Benefit provided by this
Rider will be referred to as the Death Benefit.
The Death Benefit provided by this Rider is only in effect: (1) for Non-
Qualified Contracts and Contracts sold as Individual Retirement Annuities (IRA
and Xxxx XXX) under Code Section 408(b) or 408A of the Internal Revenue Code of
1986, as amended; and (2) for Contracts where the Owner, Joint Owner (if
applicable) and Annuitant are all under the age of 76 on the Contract Date.
Section 2.13 (DEATH OF ANNUITANT) of this Contract shall be omitted in its
entirety.
Section 2.14 (WAIVER OF CONTINGENT DEFERRED SALES CHARGES) of this Contract
shall become Section 2.13 (WAIVER OF CONTINGENT DEFERRED SALES CHARGES).
The following definition shall replace Section 1.13 (DEATH BENEFIT) of this
Contract in its entirety:
DEATH BENEFIT - The amount payable upon death of the Owner, Joint Owner (if
applicable), or Annuitant.
The following language shall replace Section 2.01 (WHERE PAYABLE) of this
Contract in its entirety:
All Purchase Payments must be made to LNL or to its designated agent(s).
The following language shall replace part "3" of the fourth paragraph of Section
2.04 (VALUATION OF ACCUMULATION UNITS) of this Contract:
3. is a daily factor representing the mortality and expense risk and
administrative charge deducted from the Sub-account adjusted for the
number of days in the Valuation Period. On an annual basis the charge
will not exceed [1.60%] if the Enhancement Rate described in Section
2.12 below is greater than 0.0% or [1.40%] if the Enhancement Rate is
equal to 0.0%.
The following language shall replace the first sentence in the first paragraph
of Section 2.08 (TRANSFERS) of this Contract:
Prior to the earlier of: (1) the Maturity Date; or (2) surrender of this
Contract; or (3) termination of this Contract upon payment of any Death
Benefit; or (4) the Annuity Commencement Date; the Owner may direct a
transfer of assets from one Sub-account to another Sub-account or to the
Fixed Account of this Contract.
The following language shall replace the second paragraph of Section 2.11
(CONTINGENT DEFERRED SALES CHARGE) of this Contract:
A CDSC will be waived under certain circumstances (see section 2.13 for
details).
The following language shall replace Section 2.12 (DEATH BENEFITS) of this
Contract in its entirety:
2.12 DEATH BENEFIT
DEATH BEFORE THE ANNUITY COMMENCEMENT DATE
Entitlement
If there is a single Owner, upon the death of the Owner LNL will pay a
Death Benefit to the designated Beneficiary(s) in accordance with the terms
of Article 4. If the designated Beneficiary of the Death Benefit is the
surviving spouse of the deceased Owner, the spouse may elect to continue
this Contract as the new Owner. Upon the death of the spouse who continues
the Contract as the new Owner, LNL will pay a Death Benefit to the
designated Beneficiary(s) named by the spouse as the new Owner in
accordance with the terms of Article 4. If there are no designated
Beneficiaries, LNL will pay a Death Benefit to the Owner's estate.
If there are Joint Owners, upon the death of the first Joint Owner LNL will
pay a Death Benefit to the surviving Joint Owner. If the surviving Joint
Owner is the spouse of the deceased Joint Owner, the spouse may elect to
continue this Contract as sole
Owner. Upon the death of the Joint Owner who continues this Contract, LNL
will pay a Death Benefit to the designated Beneficiary(s) in accordance
with the terms of Article 4.
If the Annuitant is also the Owner or a Joint Owner, the Death Benefit paid
on the death of the Annuitant will be subject to the Contract provisions
regarding death of Owner or a Joint Owner. If the surviving spouse of the
deceased Annuitant assumes this Contract, the Contingent Annuitant, if any,
will become the Annuitant. If there is no Contingent Annuitant, the
surviving spouse will become the Annuitant.
If an Annuitant who is not the Owner or a Joint Owner dies, the Contingent
Annuitant, if one is named, becomes the Annuitant and no Death Benefit is
payable upon the death of the Annuitant. If no Contingent Annuitant is
named, the Owner (or younger of Joint Owners) becomes the Annuitant. In
lieu of continuing this Contract, a Death Benefit may be paid to the Owner
(and Joint Owner in equal shares if applicable) if the Annuitant named on
this Contract has not been changed, except upon death of a prior Xxxxxxxxx,
and written notification of the election to receive the Death Benefit is
received by LNL within 75 days of the death of the Annuitant.
If the Owner is a corporation or other non-individual (non-natural person),
the death of the Annuitant will be treated as the death of the Owner.
The Death Benefit will be paid upon approval by LNL after LNL is in receipt
of: (1) due proof, satisfactory to LNL, of the death; (2) written
authorization for payment; and (3) all required claim forms, fully
completed.
Due proof of death may be: (1) a certified copy of the death certificate;
(2) a certified copy of a decree of a court of competent jurisdiction as to
the findings of death; or (3) any other proof of death acceptable to LNL.
Determination of Amount
The Death Benefit is equal to the greatest of the following four amounts:
1) The Contract Value on the Valuation Date the Death Benefit is approved
by the LNL Home Office for payment.
2) The sum of all Purchase Payments, minus all withdrawals, partial
annuitizations and premium tax (if any) made, effected of incurred.
3) The highest Contract Value on the Contract Date or on any Contract
Date anniversary (determined before the allocation of any Purchase
Payments on that Contract Date anniversary) prior to the 81st birthday
of the deceased individual (Owner, Joint Owner, or Annuitant) and
prior to the date of death of the individual (Owner, Joint Owner, or
Annuitant) for whom a death claim is approved by the LNL Home Office
for payment. The highest Contract Value is adjusted for certain
transactions. It is increased by Purchase Payments made on or after
that Contract Date anniversary on which the highest Contract Value is
obtained. It is decreased by partial withdrawals, partial
annuitizations and premium tax (if any) made, effected or incurred on
or after that Contract Date anniversary on which the highest Contract
Value is obtained.
4) The Contract Value on the Valuation Date the Death Benefit is approved
by the LNL Home Office for payment plus an amount equal to the result
of the Enhancement Rate multiplied times the lesser of: (a) the
Contract Earnings; or (b) the Covered Earnings Limit. The Enhancement
Rate, Contract Earnings and Covered Earnings Limit are described
below:
Age of oldest Owner, Joint Owner or Annuitant
on date when this Rider became effective
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Ages [0-69] Ages [70-75] Ages [76+]
Enhancement Rate equals: [40.0%] [25.0%] [0.0%]
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Contract Earnings equals:
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1) the Contract Value as of the date of death of the individual (Owner,
Joint Owner, or Annuitant) for whom a death claim is approved by the
LNL Home Office; minus
2) each Purchase Payment that is made to this Contract on or after the
Contract Date and prior to the date of death of the individual (Owner,
Joint Owner, or Annuitant) for whom a death claim is approved by the
LNL Home Office; plus
3) the amount by which each withdrawal made:
a) on or after the effective date of this Contract; and
b) prior to the date of death of the individual (Owner, Joint Owner,
or Annuitant) for whom a death claim is approved by the LNL Home
Office;
exceeded the Contract Earnings immediately prior to the withdrawal.
Covered Earnings Limit equals [200%] of:
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1) the initial Purchase Payment; plus
2) each Purchase Payment that is made to this Contract on or after the
Contract Date and prior to both the date of death of the individual
(Owner, Joint Owner, or Annuitant) for whom a death claim is approved
by the LNL Home Office and the Contract Date anniversary immediately
preceding the 76/th/ birthday of the oldest of the Owner, Joint Owner
(if applicable) or Annuitant; minus
3) the amount by which each withdrawal made:
a) on or after the effective date of this Contract; and
b) prior to the date of death of the individual (Owner, Joint Owner,
or Annuitant) for whom a death claim is approved by the LNL Home
Office; exceeded the Contract Earnings immediately prior to the
withdrawal.
If the recipient of the Death Benefit is the surviving spouse of the deceased
individual, the surviving spouse may elect to receive the Death Benefit by
continuing this Contract as the sole Owner and having paid into this Contract
the excess, if any, of the Death Benefit over the Contract Value on the date
the Death Benefit is approved by the LNL Home Office for payment. If the
surviving spouse elects to continue this Contract as the sole Owner, this
Rider will continue in effect for this Contract and provide a subsequent Death
Benefit, but with the following three changes:
1) The Enhancement Rate used to calculate a subsequent Death Benefit will be
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determined by the age of the older of the surviving spouse or the Annuitant
on the date the original Death Benefit was approved for payment.
2) The Contract Earnings for a subsequent Death Benefit will equal:
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a) the Contract Value as of the date of death of the individual
(Surviving spouse or Annuitant) for whom a death claim for a
subsequent Death Benefit is approved by the LNL Home Office; minus
b) the original Death Benefit; minus
c) each Purchase Payment that is made to this Contract on or after the
date the original Death Benefit was approved for payment and prior to
the date of death of the individual (Surviving spouse or Annuitant)
for whom a death claim for a subsequent Death Benefit is approved by
the LNL Home Office; plus
d) the amount by which each withdrawal made:
1) on or after the date the original Death Benefit was approved for
payment; and
2) prior to the date of death of the individual (Surviving spouse or
Annuitant) for whom a death claim for a subsequent Death Benefit
is approved by the LNL Home Office;
exceeded the Contract Earnings immediately prior to the withdrawal.
3) The Covered Earnings Limit will equal [200%] of:
----------------------
a) the original Death Benefit; plus
b) each Purchase Payment that is made to this Contract on or after the
date the original Death Benefit was approved for payment and prior to
both the date of death of the individual (Surviving spouse or
Annuitant) for whom a death claim for a subsequent Death Benefit is
approved by the LNL Home Office and the Contract Date anniversary
immediately preceding the 76th birthday of the older of the surviving
spouse or the Annuitant; minus
c) the amount by which each withdrawal made:
1) on or after the date the original Death Benefit was approved for
payment; and
2) prior to the date of death of the individual (Surviving spouse or
Annuitant) for whom a death claim for a subsequent Death Benefit
is approved by the LNL Home Office;
exceeded the Contract Earnings immediately prior to the withdrawal.
The Death Benefit will not be paid upon the death of any Owner, Joint Owner or
Annuitant who has been changed after the effective date of this Contract,
unless such change is a result of the death of the Annuitant or a result of
the surviving spouse continuing this Contract as the sole Owner. This Rider
will terminate upon the occurrence of any of the following: (1) payment of
the original Death Benefit, unless this Contract is continued by the surviving
spouse as the sole Owner in which case this Rider will terminate upon payment
of the subsequent Death Benefit; or (2) annuitization of this Contract; or (3)
termination of this Contract.
Payment of Amount
The Death Benefit payable upon the death of the Owner, or after the death of
the first Joint Owner, or upon the death of the spouse who continues this
Contract, will be distributed to the designated Beneficiary(s) as follows:
1) the Death Benefit must be completely distributed within five years of the
Owner's (or Joint Owner's) date of death; or
2) the designated Beneficiary may elect, within the one year period after
the Owner's date of death, to receive the Death Benefit in substantially
equal installments over the life of such designated Beneficiary or over a
period not extending beyond the life expectancy of such designated
Beneficiary; provided that such distributions begin not later than one
year after the Owner's date of death.
The Death Benefit payable upon the death of the Annuitant, if elected by
the Owner or Joint Owner within 75 days of the death of the Annuitant,
will be distributed to the Owner or Joint Owner in either the form of a
lump sum or an Annuity Payment Option. An Annuity Payment Option must be
selected within 60 days after the LNL Home Office approves the death
claim (see the Entitlement provision).
If a lump sum settlement is elected, the proceeds will be mailed within
seven days of approval by LNL of the claim. This payment may be postponed
as permitted by the Investment Company Act of 1940.
Notwithstanding any provision of this Contract to the contrary, no
payment of proceeds provided under this Contract will be allowed that
does not satisfy the requirements of Code Section 72(s) or 401(a)(9) as
applicable, as amended from time to time.
All Death Benefit payments will be subject to the laws and regulations
governing death benefits.
DEATH ON OR AFTER THE ANNUITY COMMENCEMENT DATE
The Death Benefit described in Section 2.12 is no longer applicable and
will terminate upon the commencement of Annuity Payments.
If the Owner or Joint Owner dies on or after the Annuity Commencement
Date, any remaining benefits payable will continue to be distributed
under the Annuity Payment Option then in effect. The rights of ownership
granted by this Contract will pass to the Joint Owner, if any; otherwise
to the Beneficiary.
If there is no named Beneficiary at the time of the Owner's or last
surviving Joint Owner's death, the rights of ownership will pass to the
Annuitant, if still living; otherwise to the Joint Annuitant (if
applicable). If no named Joint Owner, Beneficiary, Annuitant, or Joint
Annuitant survives the Owner, any remaining benefits payable will
continue to the Owner's estate.
On receipt of due proof of death (see the Entitlement provision) of the
Annuitant or both Joint Annuitants, any remaining benefits payable under
the Annuity Payment Option will be paid to the Owner, if living at the
time of the death of the Annuitant(s); otherwise to the Joint Owner (if
applicable), if living at the time of the death of the Annuitant(s);
otherwise to the Beneficiary. If there is no Beneficiary, any remaining
benefits payable will continue to the Annuitant's estate.
The following language shall replace part (5) in the first paragraph of Section
2.13 (WAIVER OF CONTINGENT DEFERRED SALES CHARGES) of this Contract:
(5) a surrender of this Contract as a result of the payment of a Death
Benefit upon the death of the Owner or a Joint Owner or the Annuitant;
The following language shall replace the third paragraph of Section 2.13 (WAIVER
OF CONTINGENT DEFERRED SALES CHARGES) of this Contract:
If a non-natural person is the Owner of the Contract, the Annuitant will be
considered the Owner of this Contract for purposes of this Section 2.13.
The following language shall be added after the first sentence of the first
paragraph of the By Owner provision in Section 3.02 (CHOICE OF ANNUITY PAYMENT
OPTION) of this Contract:
In addition, the Owner may select an Annuity Payment Option as a method of
paying the Death Benefit to a Beneficiary.
The following language shall replace the third paragraph of Section 4.01
(DESIGNATION) of this Contract:
If the surviving Joint Owner is the spouse of the deceased Joint Owner and
continues this Contract as the sole Owner, then the designated
Beneficiary(s) move up, in the order of their original designation, to
replace the spouse as original Beneficiary, unless the Beneficiary
designation is subsequently changed by the surviving spouse as the new
Owner.
The following language shall be added after the third paragraph of Section 4.01
(DESIGNATION) of this Contract:
If the Annuitant dies and a Death Benefit is paid, the Owner (and Joint
Owner if applicable) will be treated as primary Beneficiary(s). Any other
Beneficiary designation on record at the time of death will be treated as a
contingent Beneficiary.
The following language shall replace the first sentence of the second paragraph
of Section 5.02 (OWNERSHIP) of this Contract:
The Owner may name a Joint Owner.
The following language shall replace the first paragraph of Section 5.11
(MAXIMUM ISSUE AGE) of this Contract:
The Owner, Joint Owner, and Annuitant must be under the age of 90 when this
Contract is issued.
The Lincoln National Life Insurance Company
Xxxxx X. Xxxxxx, Vice President
