PLEASE READ THIS CONTRACT CAREFULLY
ANNUITY BENEFIT PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN
BASED ON THE INVESTMENT PERFORMANCE OF THE VARIABLE ACCOUNT, MAY INCREASE OR
DECREASE AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT. PLEASE REFER TO
THE VALUE OF THE VARIABLE ACCOUNT SECTION FOR ADDITIONAL INFORMATION.
VALUES REMOVED FROM A GUARANTEE PERIOD ACCOUNT PRIOR TO THE END OF ITS
GUARANTEE PERIOD MAY BE SUBJECT TO A MARKET VALUE ADJUSTMENT THAT MAY
INCREASE OR DECREASE THE VALUES. A NEGATIVE MARKET VALUE ADJUSTMENT WILL
NEVER BE APPLIED TO THE DEATH BENEFIT. A POSITIVE MARKET VALUE ADJUSTMENT,
IF APPLICABLE, WILL BE ADDED TO THE DEATH BENEFIT WHEN THE BENEFIT PAID IS
THE CONTRACT'S ACCUMULATED VALUE. PLEASE REFER TO THE MARKET VALUE
ADJUSTMENT SECTION FOR ADDITIONAL INFORMATION.
RIGHT TO EXAMINE CONTRACT
The Owner may cancel this contract by returning it to the Company or one of
its authorized representatives within ten days after receipt. If returned,
the Company will refund an amount equal to the sum of (1) gross payments,
less any amounts allocated to the Variable Account, (2) the Accumulated Value
of amounts allocated to the Variable Account on the date the returned
contract is received at the Principal Office and (3) any fees or other
charges imposed on the amounts allocated to the Variable Account. If,
however, the contract is issued as an Individual Retirement Annuity (IRA),
the Company will refund the greater of the above or the gross payments.
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
Home Office: Dover, Delaware
Principal Office: 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000
This is a legal contract between Allmerica Financial Life Insurance and
Annuity Company (the Company) and the Owner and is issued in consideration of
the initial payment shown on the Specifications page. Additional payments
are permitted. Payments may be allocated to Variable Sub-Accounts, the
Fixed Account or Guarantee Period Accounts. While this contract is in
effect, the Company agrees to pay annuity benefits beginning on the Annuity
Date or to pay a death benefit to the Beneficiary if an Owner dies prior to
the Annuity Date.
/s/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
--------------------- ----------------------
President Secretary
FLEXIBLE PAYMENT DEFERRED VARIABLE AND FIXED ANNUITY
NON-PARTICIPATING
1
TABLE OF CONTENTS
SPECIFICATIONS........................................................... 3
DEFINITIONS.............................................................. 5
OWNER, ANNUITANT AND BENEFICIARY......................................... 7
PAYMENTS................................................................. 8
VALUES................................................................... 8
TRANSFERS................................................................ 10
XXXXXXXXXX AND SURRENDER................................................. 10
DEATH BENEFIT............................................................ 11
ANNUITY BENEFIT.......................................................... 12
ANNUITY OPTION TABLES.................................................... 15
GENERAL PROVISIONS....................................................... 18
2
SPECIFICATIONS
Contract Type: [NQ] Contract Number: [zz00600000]
Issue Date: [ ] Annuity Date: [xx/xx/xx]
Owner: [ ] Owner Date of Birth: [xx/xx/xx]
Joint Owner: [ ] Joint Owner Date of Birth: [xx/xx/xx]
Annuitant: [ ] Annuitant Date of Birth: [xx/xx/xx]
Joint Annuitant: [ ] Joint Annuitant Date of Birth [xx/xx/xx]
Annuitant Sex: [ ] Primary Beneficiary: [ ]
Joint Annuitant Sex: [ ] Contingent Beneficiary: [ ]
Minimum Fixed Account Guaranteed Interest Rate: [3%] Minimum Additional Payment: [$100.00]
Minimum Guarantee Period Account Interest Rate: [3%] Minimum Guarantee Period [$1,000.00]
Account Allocation Amount:
Minimum Withdrawal Amount: [$100.00] Minimum Accumulated Value [$1,000.00]
After Withdrawal:
Minimum Annuity Benefit Payment: [$50.00] Maximum Alternative [xx/xx/xx]
Annuity Date:
Mortality and Expense Risk Charge: [1.25%] on an annual basis of the daily value of the Sub-Account assets.
Administrative Charge: [.15%] on an annual basis of the daily value of the Sub-Account assets.
Contract Fee: [$35, if the Accumulated Value is less than $75,000.00]
[Enhanced Death Benefit Rider [.25%]
Annual Percentage Rate Charge:
[Enhanced Death Benefit Rider [5%]
Effective Annual Yield
Principal Office: 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 [0-000-000-0000]
3
SPECIFICATIONS (continued)
Owner: [ ] Contract Number:
Joint Owner: [ ] [zzz0000000]
Initial Net Payment: [$25,000.00]
Initial Net Payment Allocation:
Variable Sub-Accounts
----------------------
[Emerging Markets
International Growth
Capital Growth
Growth Shares
Europe
Real Estate Growth
Growth and Income
Equity-Income
Balanced
Swiss Franc Bond
America Incoome
America Income
Money Market]
[You may invest in up to 17 Variable Sub-Accounts over the life of your
contract.]
Fixed Account
--------------
Initial Interest Rate:
Guarantee Period Accounts
--------------------------
Guaranteed
Guarantee Interest Expiration
Period Rate Date
------------- ---------- -----------
[2 years
3 years
4 years
5 years
6 years
7 years
8 years
9 years
10 years]
____
100% TOTAL
4
DEFINITIONS
ACCUMULATED VALUE The aggregate value of all accounts in this
contract before the Annuity Date. As long as
the Accumulated Value is greater than zero, the
contract will stay in effect.
ACCUMULATION UNIT A measure used to calculate the value of a
Sub-Account before annuity benefit payments
begin.
ANNUITANT At issue, the person whose age is used to
determine the Annuity Date. On and after the
Annuity Date, the person upon whose
continuation of life annuity benefit payments
involving life contingency depend. Joint
Annuitants are permitted and unless otherwise
indicated, any reference to Annuitant shall
include joint Annuitants.
ANNUITY DATE The date annuity benefit payments begin. The
Annuity Date is based upon the age of the
Owner. The Annuity Date is shown on the
Specifications page.
ANNUITY UNIT A measure used to calculate annuity benefit
payments under a variable annuity option.
BENEFICIARY The person, persons or entity entitled to the
annuity benefit prior to the Annuity Date or
any annuity benefit payments upon the death of
an Owner who is not also an Annuitanton or
after the Annuity Date.
COMPANY Allmerica Financial Life Insurance and Annuity
Company.
CONTRACT YEAR A one-year period based on the date of issue or
an anniversary thereof.
FIXED ACCOUNT The part of the Company's General Account to
which all or a portion of a payment or transfer
may be allocated.
FUND Each separate investment company, investment
series or portfolio eligible for investment by
a Sub-Account of the Variable Account.
GENERAL ACCOUNT All assets of the Company that are not
allocated to a Separate Account.
GUARANTEE PERIOD The number of years that a Guaranteed Interest
Rate may be credited to a Guarantee Period
Account. The Guarantee Period may range from
two to ten years.
GUARANTEE PERIOD An account which corresponds to a Guaranteed
ACCOUNT Interest Rate for a specified Guarantee Period
and is supported by assets in a Separate Account.
GUARANTEED INTEREST RATE The annual effective rate of interest after
daily compounding credited to a Guarantee
Period Account.
MARKET VALUE ADJUSTMENT A positive or negative adjustment to earnings
in a Guarantee Period Account assessed if any
portion of a Guarantee Period Account is
withdrawn or transferred prior to the end of
its Guarantee Period.
OWNER The person, persons or entity entitled to
exercise the rights and privileges under this
contract. Joint Owners are permitted if one of
the two is an Annuitant and unless otherwise
indicated, any reference to Owner shall include
joint Owners.
5
PRINCIPAL OFFICE The Company's office at 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx, 00000.
PRO RATA How a payment or withdrawal may be allocated
among the accounts. A Pro Rata allocation or
withdrawal will be made in the same proportion
that the value of each account bears to the
Accumulated Value.
SEPARATE ACCOUNT A segregated account established by the
Company. The assets in a Separate Account are
not commingled with the Company's general
assets and obligations. The assets of a
Separate Account are not subject to claims
arising out of any other business the Company
may conduct.
SUB-ACCOUNT A Variable Account subdivision that invests
exclusively in shares of a corresponding Fund.
SURRENDER VALUE The amount payable to the Owner on full
surrender after application of any Market Value
Adjustment and contract fee.
TELEPHONE REQUEST A request by telephone to the Principal Office.
A signed authorization must be on file for
such requests to be honored.
VALUATION DATE A day the values of all units are determined.
Valuation Dates occur on each day the New York
Stock Exchange is open for trading, or such
other dates when there is sufficient trading in
a Fund's portfolio securities so that the
current unit value may be materially affected.
VALUATION PERIOD The interval between two consecutive Valuation
Dates.
VARIABLE ACCOUNT The Company's Separate Account, consisting of
Sub-Accounts that invest in the underlying
Funds.
WRITTEN REQUEST A request or notice in writing satisfactory to
the Company and filed at the or Written Notice
Principal Office.
6
OWNER, ANNUITANT AND BENEFICIARY
OWNER When the contract is issued, the Owner will be
as shown on the Specifications page. The Owner
may be changed in accordance with the terms of
this contract. Upon the death of an Owner
prior to the Annuity Date, a death benefit is
paid. The Annuity Date is based upon the age of
the Owner.
The Owner may exercise all rights and options
granted in this contract or by the Company,
subject to the consent of any irrevocable
Beneficiary. Where the contract is owned
jointly, the consent of both is required in
order to exercise any ownership rights.
ASSIGNMENT Prior to the Annuity Date and prior to the
death of an Owner, the Owner may be changed at
any time. Only the Owner may assign this
contract. An absolute assignment will transfer
ownership to the assignee. This contract may
also be collaterally assigned as security. The
limitations on ownership rights while the
collateral assignment is in effect are stated
in the assignment. Additional limitations may
exist for contracts issued under provisions of
the Internal Revenue Code.
An assignment will take place only when the
Company has received Written Notice and
recorded the change at the Principal Office.
The Company will not be deemed to know of the
assignment until it has received Written
Notice. When recorded, the assignment will
take effect as of the date it was signed. The
assignment will be subject to payments made or
actions taken by the Company before the change
was recorded.
The Company will not be responsible for the
validity of any assignment nor the extent of
any assignee's interest. The interests of the
Annuitant and the Beneficiary will be subject
to any assignment.
ANNUITANT The Annuitant will be as shown on the
Specifications page unless changed in
accordance with the terms of this contract.
Prior to the Annuity Date, an Annuitant may be
replaced or added unless the Owner is a
non-natural person. At all times there must be
at least one Annuitant. If an Annuitant dies
and a replacement is not named, the Owner will
be considered to be the new Annuitant.
A change of Annuitant will take place only when
the Company has received Written Notice and
recorded the change at the Principal Office.
The Company will not be deemed to know of the
change of Annuitant until it has received
Written Notice. When recorded, the change of
Annuitant will take effect as of the date it
was signed. The change of Annuitant will be
subject to payments made or actions taken by
the Company before the change was recorded.
BENEFICIARY The Beneficiary is as named on the
Specifications page unless subsequently
changed. The Owner may declare any Beneficiary
to be revocable or irrevocable. A revocable
Beneficiary may be changed at any time prior to
the Annuity Date and before the death of an
Owner or after the Annuity Date and before the
death of an Annuitant. An irrevocable
Beneficiary must consent in writing to any
change. Unless otherwise indicated, the
Beneficiary will be revocable.
A Beneficiary change must be made in writing on
a Beneficiary designation form and will be
subject to the rights of any assignee of
record. When the Company receives the form,
the change will take place as of the date it
was signed, even if the Owner or Annuitant dies
after the form is signed but prior to the
Company's receipt of the form. Any rights
created by the change will be subject to
payments made or actions taken by the Company
before the change was recorded.
All death benefits provided by this contract
will be divided equally among the surviving
Beneficiaries of the same class, unless the
Owner directs otherwise. If there is no
surviving Beneficiary, the deceased
Beneficiary's interest will pass to the Owner
or the Owner's estate.
7
PROTECTION OF PROCEEDS To the extent allowed by law, this contract and
any payments made under it will be exempt from
the claims of creditors. Neither the Annuitant
nor the Beneficiary can assign, transfer,
commute, anticipate or encumber the proceeds or
payments unless given that right by the Owner.
PAYMENTS
INITIAL PAYMENT The Initial Payment is shown on the
Specifications page.
ADDITIONAL PAYMENTS Prior to the Annuity Date and while the
contract is in force, the Owner may make
additional payments of at least the Minimum
Additional Payment (see Specifications page).
Total payments made may not exceed $5,000,000
without the Company's consent.
NET PAYMENTS Each Net Payment is equal to the gross payment
less the amount of any applicable premium tax.
The Company reserves the right to deduct the
amount of the premium tax from the Accumulated
Value at a later date rather than when the
premium tax liability tax is first incurred by
the Company. In no event will an amount be
deducted for premium taxes before the Company
has incurred a tax liability under applicable
state law.
NET PAYMENT ALLOCATIONS The initial Net Payment is allocated as shown
on the Specifications page. Additional Net
Payments will be allocated in the same
proportion as the initial Net Payment, unless
changed by the Owner's Written or Telephone
Request, providing that the telephone
authorization is on file at the Company.
The minimum amount that may be allocated to a
Guarantee Period Account is shown on the
Specifications page. If the Owner requests an
allocation less than the minimum amount, the
Company reserves the right to apply that amount
to the Money Market Sub-Account.
VALUES
VALUE OF THE VARIABLE The value of a Sub-Account on a Valuation Date
ACCOUNT is determined by multiplying the Accumulation
Units in that Sub-Account by the Accumulation
Unit Value as of the Valuation Date.
Accumulation Units are credited when an amount
is allocated to a Sub-Account. The number of
Accumulation Units credited equals that amount
divided by the applicable Accumulation Unit
Value as of the Valuation Date.
ACCUMULATION UNIT VALUES The value of a Sub-Account Accumulation Unit as
of any Valuation Date is determined by
multiplying the value of an Accumulation Unit
for the preceding Valuation Date by the net
investment factor for that Valuation Period.
NET INVESTMENT FACTOR The net investment factor measures the
investment performance of a Sub-Account from
one Valuation Period to the next. This factor
is equal to 1.000000 plus the result from
dividing (a) by (b) and subtracting (c) and (d)
where:
(a) is the investment income of a Sub-Account
for the Valuation Period, including
realized or unrealized capital gains and
losses during the Valuation Period,
adjusted for provisions made for taxes, if
any;
8
(b) is the value of that Sub-Account's assets
at the beginning of the Valuation Period;
(c) is the Mortality and Expense Risk Charge
(see Specifications page); and
(d) is the Administrative Charge (see
Specifications page).
The Company assumes the risk that its actual
mortality experience and expenses may exceed
the amounts provided under the contract. The
Company guarantees that the charge for
mortality and expense risks and the
administrative charge will not be increased.
Subject to applicable state and federal laws,
these charges may be decreased or the method
used to determine the net investment factor may
be changed.
VALUE OF THE FIXED ACCOUNT Amounts allocated to the Fixed Account are
credited interest at rates periodically set by
the Company. The Company guarantees that the
rate of interest in effect when an amount is
allocated to the Fixed Account will remain in
effect for that amount for one year.
Thereafter, the rate of interest for that
amount will be the Company's current interest
rate, but no less than the Minimum Fixed
Account Guaranteed Interest Rate (see
Specifications page).
The value of the Fixed Account on any date is
the sum of amounts allocated to the Fixed
Account plus interest compounded and credited
daily at the rates applicable to those amounts.
The value of the Fixed Account will be at
least equal to the minimum required by law in
the state in which this contract is delivered.
VALUE OF THE GUARANTEE A Guarantee Period Account will be established
PERIOD ACCOUNTS on the date a Net Payment or transfer is
allocated to a specific Guarantee Period.
Amounts allocated to the same Guarantee Period
on the same day will be treated as one
Guarantee Period Account. The interest rate in
effect when an amount is allocated to a
Guarantee Period is guaranteed for the duration
of the Guarantee Period. Additional amounts
allocated to Guarantee Periods of the same or
different durations will result in additional
Guarantee Period Accounts, each with its own
Guaranteed Interest Rate and expiration date.
The value of a Guarantee Period Account on any
date is the sum of the amounts allocated to
that Guarantee Period Account plus interest
compounded and credited daily at the rate
applicable to that amount.
GUARANTEED INTEREST RATES The Company will periodically set Guaranteed
Interest Rates for each available Guarantee
Period. These rates will be guaranteed for the
duration of the respective Guarantee Periods.
A Guaranteed Interest Rate will never be less
than the Minimum Guarantee Period Account
Interest Rate (see Specifications page.)
RENEWAL GUARANTEE PERIODS At least 45 days (but not more than 75 days)
prior to the end of a Guarantee Period, the
Company will notify the Owner in writing of the
expiration of that Guarantee Period. The Owner
may transfer amounts to the Sub-Accounts, the
Fixed Account or establish a new Guarantee
Period Account of any duration then offered by
the Company as of the day following the
expiration of the Guarantee Period. The
transfer will not be subject to a Market Value
Adjustment; see "Market Value Adjustment," page
11. Guaranteed Interest Rates corresponding to
the available Guarantee Periods may be higher
or lower than the previous Guaranteed Interest
Rate. If reallocation instructions are not
received at the Principal Office before the end
of a Guarantee Period, the Guarantee Period
Account value will be automatically applied to
a new Guarantee Period Account with the same
Guarantee Period unless:
9
(a) less than the Minimum Guarantee Period
Account Allocation (see Specifications
page) remains in the Guarantee Period
Account on its expiration date; or
(b) the Guarantee Period would extend beyond
the Annuity Date or is no longer available.
In such cases, the Guarantee Period Account
value will be transferred to the Money Market
Sub-Account.
CONTRACT FEE The Company will deduct a contract fee (see
Specifications page) Pro Rata on each contract
anniversary prior to the Annuity Date and when
the contract is surrendered.
TRANSFERS
Prior to the Annuity Date, the Owner may
transfer amounts among accounts by Written or
Telephone Request (providing that the telephone
authorization is on file at the Company) to the
Principal Office. Transfers to a Guarantee
Period Account must be at least equal to the
Minimum Guarantee Period Account Allocation
Amount (see Specifications page). If the Owner
requests the transfer of a smaller amount to
the Guarantee Period Account, the Company may
transfer that amount to the Money Market
Sub-Account.
Any transfer from a Guarantee Period Account
prior to the end of its Guarantee Period will
be subject to a Market Value Adjustment. In
the case of a partial transfer from a Guarantee
Period Account, the Market Value Adjustment
will be applied to the value remaining in the
account.
There is no charge for the first twelve
transfers per contract year. A transfer charge
of up to $25 may be imposed on each additional
transfer.
The Company reserves the right to establish and
impose reasonable rules restricting transfers.
All transfers are subject to the Company's
consent.
XXXXXXXXXX AND SURRENDER
Prior to the Annuity Date, the Owner may, by
Written Request, withdraw a part of the
Accumulated Value or surrender the contract for
its Surrender Value.
Any withdrawal must be at least the Minimum
Withdrawal Amount (see Specifications page). A
withdrawal will not be permitted if the
Accumulated Value remaining in the contract
would be less than the Minimum Accumulated
Value After Withdrawal (see Specifications
page). The Written Request must indicate the
dollar amount to be paid and the accounts from
which it is to be withdrawn. A withdrawal from
a Guarantee Period Account will be subject to a
Market Value Adjustment. The Market Value
Adjustment will be applied to the value
remaining in the Guarantee Period Account.
When surrendered, this contract terminates and
the Company has no further liability under it.
The Surrender Value will be based on the
Accumulated Value on the Valuation Date.
10
Amounts taken from the Variable Account will be
paid within 7 days of the date a Written
Request is received. The Company reserves the
right to delay payments subject to the
requirements of applicable laws, rules and
regulations governing variable annuities.
Amounts taken from the Fixed Account or the
Guarantee Period Accounts will normally be paid
within 7 days of receipt of a Written Request.
The Company may defer payment for up to six
months from the receipt date. If deferred for
30 days or more, the amount payable will be
credited interest at a rate of at least 3% or
the appropriate rate mandated by the State.
MARKET VALUE ADJUSTMENT A transfer, withdrawal or surrender from a
Guarantee Period Account after the expiration
of its Guarantee Period will not be subject to
a Market Value Adjustment. A Market Value
Adjustment will apply to all other transfers or
withdrawals, or to a surrender. Amounts
applied under an annuity option are treated as
withdrawals when calculating the Market Value
Adjustment. The Market Value Adjustment will
be determined by multiplying the amount taken
from each Guarantee Period Account by the
market value factor. The market value factor
for each Guarantee Period Account is equal to:
(1+i)/(1+j)n/365 -1
where:
i - is the Guaranteed Interest Rate
expressed as a decimal (for example: 3% =
0.03) being credited to the current
Guarantee Period;
j - is the new Guaranteed Interest Rate,
expressed as a decimal, for a Guarantee
Period with a duration equal to the number
of years remaining in the current
Guarantee Period, rounded to the next
higher number of whole years. If that rate
is not available, the Company will use a
suitable rate or index allowed by the
Department of Insurance; and
n - is the number of days remaining from
the Effective Valuation Date to the end of
the current Guarantee Period.
If the Guaranteed Interest Rate being credited
is lower than the new Guaranteed Interest Rate,
the Market Value Adjustment will decrease the
Guarantee Period Account value. Similarly, if
the Guaranteed Interest Rate being credited is
higher than the new Guaranteed Interest Rate,
the Market Value Adjustment will increase the
Guarantee Period Account value. The Market
Value Adjustment will never result in a change
to the value more than the interest earned in
excess of the Minimum Guarantee Period Account
Interest Rate (see Specifications page)
compounded annually from the beginning of the
current Guarantee Period.
DEATH BENEFIT
At the death of an Owner prior to the Annuity
Date, the Company will pay to the Beneficiary a
death benefit determined as of the Valuation
Date upon receipt at the Principal Office of
proof of death. If the Owner is a non-natural
person, then a death benefit is paid on the
death of an Annuitant prior to the Annuity Date.
11
OWNER'S DEATH BENEFIT If an Owner dies before the Annuity Date, the
death benefit will be the greater of:
(a) the Accumulated Value increased by any
positive Market Value Adjustment; or
(b) the sum of the gross payments made under
this contract reduced proportionately to
reflect all partial withdrawals. For each
withdrawal, the proportionate reduction is
calculated as the death benefit under this
option immediately prior to the withdrawal
multiplied by the withdrawal amount and
divided by the Accumulated Value
immediately prior to the withdrawal.
PAYMENT OF THE DEATH The death benefit will be paid to the
BENEFIT Beneficiary within 7 days of the Effective
Valuation Date unless the Owner has specified a
death benefit annuity option. Instead, the
Beneficiary may, by Written Request, elect to:
(a) defer distribution of the death benefit
for a period no more than 5 years from the
date of death; or
(b) receive a life annuity or an annuity for a
period certain not extending beyond the
Beneficiary's life expectancy. Annuity
benefit payments must begin within one
year from the date of death.
If distribution of the death benefit is
deferred under (a) or (b), any value in
Guarantee Period Accounts will be transferred
to the Money Market Sub-Account. The excess,
if any, of the death benefit over the
Accumulated Value will also be transferred to
the Money Market Sub-Account. The Beneficiary
may, by Written Request, effect transfers and
withdrawals, but may not make additional
payments. If there are multiple Beneficiaries,
the consent of all is required.
If the sole Beneficiary is the deceased Owner's
spouse, the Beneficiary may, by Written
Request, continue the contract and become the
new Owner and Annuitant subject to the
following:
(a) any value in the Guarantee Period Accounts
will be transferred to the Money Market
Sub-Account;
(b) the excess, if any, of the death benefit
over the contract's Accumulated Value will
also be added to the Money Market
Sub-Account;
(c) additional payments may be made; and
(d) any subsequent spouse of the new Owner, if
named as the Beneficiary, may not continue
the contract.
ANNUITY BENEFIT
ANNUITY OPTIONS Annuity options are available on a fixed,
variable or combination fixed and variable
basis. The annuity options described below or
any alternative option offered by the Company
may be chosen. If no option is chosen, monthly
benefit payments under a variable life annuity
with payments guaranteed for 10 years will be
made.
The Owner may also elect to have the death
benefit applied under a life annuity or a
period certain annuity not extending beyond the
Beneficiary's life expectancy. Such an
election may not be altered by the Beneficiary.
12
Fixed annuity options are funded through the
Fixed Account. Variable annuity options may be
funded through one or more of the Sub-Accounts.
Not all Sub-Accounts may be made available.
ANNUITY BENEFIT PAYMENTS Annuity benefit payments may be received on a
monthly, quarterly, semiannual or annual basis.
If the first payment would be less than the
Minimum Annuity Benefit Payment (see
Specifications page), a single payment will be
made instead. Satisfactory proof of the date
of birth of the Annuitant or Beneficiary,
whichever it applicable, must be received at
the Principal Office before life annuity
benefit payments begin. Where a life annuity
option has been elected, the Company may
require satisfactory proof that the Annuitant
or Beneficiary, whichever is applicable, is
alive before any payment is made.
PAYMENT OF ANNUITY If an Owner, who is not also an Annuitant, dies
BENEFIT PAYMENTS UPON on or after the Annuity Date, any remaining
OWNER DEATH annuity benefit payments continue in accordance
with the terms of the annuity option selected.
Upon the death of the Owner, the Beneficiary
becomes the Owner of the contract.
ANNUITY VALUE The amount of the first annuity benefit payment
under all available options except period
certain options will depend on the age of the
Annuitant and/or Beneficiary on the Annuity
Date and the annuity value applied. Period
certain options are based on the duration of
payments and the annuity value.
For life annuity options and non-commutable
period certain options with a duration of 10
years or more, the annuity value will be the
Accumulated Value, including any applicable
Market Value Adjustment less any applicable
premium tax. For commutable period certain
options or any period certain option less than
10 years, the annuity value will be the
Surrender Value less any applicable premium
tax. For a death benefit annuity, the annuity
value will be the amount of the death benefit.
The annuity value applied under a variable
annuity option is based on the Accumulation
Unit Value on a Valuation Date not more than
four weeks, uniformly applied, before the
Annuity Date.
ANNUITY UNIT VALUES A Sub-Account Annuity Unit value on any
Valuation Date is equal to its value on the
preceding Valuation Date multiplied by the
product of:
(a) a discount factor equivalent to the
assumed interest rate; and
(b) the net investment factor of the
Sub-Account funding the annuity benefit
payments for the applicable Valuation
Period.
The value of an Annuity Unit as of any date
other than a Valuation Date is equal to its
value as of the preceding Valuation Date.
Each variable annuity benefit payment is equal
to the number of Annuity Units multiplied by
the applicable value of an Annuity Unit, except
that under a Joint and Two-Thirds Option,
payments after the first death are based on
two-thirds the number of Annuity Units that
applied when both individuals on whose lives
the payments were based were living. Variable
annuity benefit payments will increase or
decrease with the value of annuity units. The
Company guarantees that the amount of each
variable annuity benefit payment will not be
affected by changes in mortality and expense
experience.
NUMBER OF ANNUITY UNITS The number of Annuity Units determining the
benefit payable is equal to the amount of the
first annuity benefit payment divided by the
value of the Annuity Unit as of the Valuation
Date used to calculate the amount of the first
payment. Once annuity benefit payments begin,
the number of Annuity Units will not change
unless a split is made.
13
ANNUITY BENEFIT VARIABLE OR FIXED LIFE ANNUITY WITH PAYMENTS
PAYMENT OPTIONS GUARANTEED FOR 10 YEARS: Periodic annuity
benefit payments during the Annuitant's life.
If the Annuitant dies before all guaranteed
payments have been made, the remaining
guaranteed payments will continue to the Owner.
VARIABLE OR FIXED LIFE ANNUITY: Periodic
annuity benefit payments during the Annuitant's
life.
UNIT REFUND VARIABLE OR FIXED LIFE ANNUITY:
Periodic annuity benefit payments during the
Annuitant's life. If the Annuitant dies and
the annuity value initially applied to purchase
the option, divided by the first payment,
exceeds the number of payments made before the
Annuitant's death, payments will continue to
the Owner until the number of payments equals
the Annuity Value divided by the first payment.
JOINT AND SURVIVOR VARIABLE OR FIXED LIFE
ANNUITY: Periodic annuity benefit payments
during the joint lifetime of the Annuitant and
another individual (i.e. the Beneficiary or a
Joint Annuitant) with payments continuing
during the lifetime of the survivor.
JOINT AND TWO-THIRDS SURVIVOR VARIABLE OR FIXED
LIFE ANNUITY: Periodic annuity benefit
payments during the joint lifetime of the
Annuitant and one other individual (i.e. the
Beneficiary or a joint Annuitant) with payments
continuing during the lifetime of the survivor
at two-thirds the amount payable when both
individuals were living.
VARIABLE OR FIXED ANNUITY FOR A PERIOD CERTAIN:
Periodic annuity benefit payments for a chosen
number of years. The number of years selected
may be from 1 to 30. If the payee dies before
the end of the period, remaining payments will
continue to the Owner.
ANNUITY TABLES The first annuity benefit payment will be based
on the greater of the guaranteed annuity rates
shown in the following tables or the Company's
non-guaranteed current annuity option rates
applicable to this class of contracts. Second
and subsequent annuity benefit payments, when
based on the investment experience of the
Variable Account, may increase or decrease.
14
ANNUITY OPTION TABLES
FIRST MONTHLY ANNUITY BENEFIT PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE APPLIED
Age Life Annuity with
Nearest Payments Guaranteed Life Unit Refund
Birthday for 10 Years Annuity Life Annuity
50 4.20 4.22 4.12
51 4.26 4.28 4.17
52 4.32 4.35 4.23
53 4.38 4.42 4.29
54 4.45 4.49 4.35
55 4.53 4.57 4.41
56 4.60 4.65 4.48
57 4.68 4.73 4.55
58 4.77 4.83 4.63
59 4.86 4.92 4.71
60 4.95 5.03 4.79
61 5.05 5.14 4.88
62 5.16 5.26 4.97
63 5.27 5.38 5.07
64 5.39 5.52 5.17
65 5.51 5.66 5.28
66 5.64 5.82 5.39
67 5.78 5.98 5.51
68 5.92 6.16 5.64
69 6.07 6.35 5.78
70 6.23 6.56 5.92
71 6.39 6.77 6.07
72 6.56 7.01 6.23
73 6.73 7.26 6.40
74 6.91 7.54 6.57
75 7.09 7.83 6.76
These tables are based on an annual interest rate of 3 1/2%
and the Annuity 2000 Mortality Table.
15
ANNUITY OPTION TABLES (Continued)
FIRST MONTHLY ANNUITY BENEFIT PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE APPLIED
Joint and Survivor Life Annuity
Older Age
50 55 60 65 70 75 80
Y 50 3.82 3.90 3.96 4.01 4.05 4.08 4.09
O
U 55 4.06 4.16 4.25 4.32 4.36 4.39
N
G 60 4.38 4.52 4.64 4.72 4.78
E
R 65 4.82 5.01 5.17 5.28
70 5.42 5.69 5.91
A
G 75 6.28 6.67
E
80 7.52
Joint and Two-Thirds Survivor Life Annuity
Older Age
50 55 60 65 70 75 80
Y 50 4.09 4.23 4.38 4.55 4.74 4.93 5.13
O
U 55 4.40 4.58 4.78 5.00 5.22 5.45
N
G 60 4.81 5.05 5.31 5.58 5.86
E
R 65 5.37 5.70 6.04 6.38
A 70 6.16 6.59 7.04
G
E 75 7.27 7.87
80 8.86
These tables are based on an annual interest rate of 3 1/2%
and the Annuity 2000 Mortality Table.
16
FIRST MONTHLY ANNUITY BENEFIT PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE APPLIED
Variable or Fixed Variable or Fixed
Number of Annuity for a Number of Annuity for a
Years Period Certain Years Period Certain
1 84.65 16 6.76
2 43.05 17 6.47
3 29.19 18 6.20
4 22.27 19 5.97
5 18.12 20 5.75
6 15.35 21 5.56
7 13.38 22 5.39
8 11.90 23 5.24
9 10.75 24 5.09
10 9.83 25 4.96
11 9.09 26 4.84
12 8.46 27 4.73
13 7.94 28 4.63
14 7.49 29 4.53
15 7.10 30 4.45
These tables are based on an annual interest rate of 3 1/2%.
17
GENERAL PROVISIONS
ENTIRE CONTRACT The entire contract consists of this contract,
any application attached at issue and any
endorsements.
MISSTATEMENT OF AGE If the age of an individual is misstated, the
Company will adjust all benefits payable to
that which would be available at the correct
age. Any under payments already made by the
Company will be paid immediately. Any
overpayments will be deducted from future
annuity benefits.
MODIFICATIONS Only the President, a Vice President or
Secretary of the Company may modify or waive
any provisions of this contract. Agents or
Brokers are not authorized to do so.
INCONTESTABILITY The Company cannot contest this contract after
it has been in force for more than two years
from the date of issue.
CHANGE OF ANNUITY DATE The Owner may change the Annuity Date by
Written Request at any time after the contract
has been issued. The request must be received
at the Principal Office at least one month
before the new Annuity Date. The new Annuity
Date must be the first of any month prior to
the Maximum Alternative Annuity Date shown on
the Specifications page.
MINIMUMS All values, benefits or settlement options
available under this contract equal or exceed
those required by the state in which the
contract is delivered.
ANNUAL REPORT The Company will furnish an annual report to
the Owner containing a statement of the number
and value of Accumulation Units credited to the
Sub-Accounts, the value of the Fixed Account
and the Guarantee Period Accounts and any other
information required by applicable law, rules
and regulations.
ADDITION, DELETION, OR The Company reserves the right, subject to
SUBSTITUTION OF compliance with applicable law, to add to,
INVESTMENTS delete from, or substitute for the shares of a
Fund that are held by the Sub-Accounts or that
the Sub-Accounts may purchase. The Company
also reserves the right to eliminate the shares
of any Fund no longer available for investment
or if the Company believes further investment
in the Fund is no longer appropriate for the
purposes of the Sub-Accounts.
The Company will not substitute shares
attributable to any interest in a Sub-Account
without notice to the Owner and prior approval
of the Securities and Exchange Commission as
required by the Investment Company Act of 1940.
This will not prevent the Variable Account
from purchasing other securities for other
series or classes of contracts, or from
permitting a conversion between series or
classes of contracts on the basis of requests
made by Owners.
The Company reserves the right, subject to
compliance with applicable laws, to establish
additional Separate Accounts, Guarantee Period
Accounts and Sub-Accounts and to make them
available to any class or series of contracts
as the Company considers appropriate. Each new
Separate Account or Sub-Account will invest in
a new investment company, or in shares of
another open-end investment company, or such
other investments as may be permitted under
applicable law. The Company also reserves the
right to eliminate or combine existing
Sub-Accounts and to transfer the assets of any
Sub-Accounts to any other Sub-Accounts. In the
event of any substitution or change, the
Company may, by appropriate notice, make such
changes in this and other contracts as may be
necessary or appropriate to reflect the
substitution or change. If the Company
considers it to be in the best interests of
contract Owners, the Variable Account or any
Sub-Account may be operated as a management
company under the Investment Company Act of
1940 or in any other form permitted by law, or
may be de-registered under that Act in the
event registration is no longer required, or
may be combined with other accounts of the
Company.
18
CHANGES IN LAW The Company reserves the right to make any
changes to provisions of the contract to comply
with, or give Owners the benefit of, any
federal or state statute, rule, or regulation.
CHANGE OF NAME Subject to compliance with applicable law, the
Company reserves the right to change the names
of the Variable Account or the Sub-Accounts.
FEDERAL TAX CONSIDERATIONS The Variable Account is not currently subject
to tax, but the Company reserves the right to
assess a charge for taxes if the Variable
Account becomes subject to tax.
SPLITTING OF UNITS The Company reserves the right to split the
value of a unit, either to increase or decrease
the number of units. Any splitting of units
will have no material effect on the benefits,
provisions or investment return of this
contract or upon the Owner, the Annuitant, any
Beneficiary, or the Company.
INSULATION OF The investment performance of Separate Account
SEPARATE ACCOUNT assets is determined separately from the other
assets of the Company. The assets of a
Separate Account equal to the reserves and
liabilities of the contracts supported by the
account will not be charged with liabilities
from any other business that the Company may
conduct.
19
Flexible Payment Deferred Variable and Fixed Annuity
Annuity Benefits Payable on the Annuity Date
Death Benefit Payable to Beneficiary if Owner Dies prior to Annuity Date
Non-Participating
20
ALLMERICA FINANCIAL LIFE INSURANCE AND ANNUITY COMPANY
ENHANCED DEATH BENEFIT RIDER
This Rider is part of the contract to which it is attached and is effective
on the Date of Issue of the contract.
BENEFIT - The "Owner's Death Benefit" provision on page 12 of the contract is
replaced by the following:
I. If an Owner dies before the Annuity Date and before the oldest
Owner's [90th] birthday, the death benefit will be the greater of:
(a) the Accumulated Value increased by any positive Market Value
Adjustment;
(b) gross payments accumulated daily at the Death Benefit
Effective Annual Yield shown on the Specifications page,
starting on the Effective Valuation Date of each gross
payment, reduced proportionately to reflect withdrawals. For
each withdrawal, the proportionate reduction is calculated as
the death benefit immediately prior to the withdrawal
multiplied by the withdrawal amount and divided by the
Accumulated Value immediately prior to the withdrawal; or
(c) The highest Accumulated Value on any prior contract
anniversary as determined after positive adjustments have been
made for any positive Market Value Adjustment and subsequent
payments and negative adjustments have been made for
subsequent withdrawals.
II. If an Owner dies before the Annuity Date but after the oldest Owner's
[90th] birthday, the death benefit will be the greater of:
(a) the Accumulated Value increased by any positive Market Value
Adjustment or
(b) the death benefit, as calculated under Section I, that would
have been payable on the contract anniversary prior to the
oldest Owner's [90th] birthday, increased for subsequent
payments and reduced proportionately for subsequent
withdrawals.
CHARGE - The Company will assess a monthly rider charge which will be
deducted Pro Rata on the last day of each month and on the date the Rider
terminates. The charge will be equal to the Accumulated Value on that date
multiplied by 1/12th of the Enhanced Death Benefit Annual Percentage Rate
shown on the Specifications Page.
TERMINATION - This Rider will terminate on the earliest of the following:
- the Annuity Date;
- payment of the death benefit;
- surrender of the contract; or
- receipt of the Owner's Written Request to terminate the Rider.
Signed for the Company at Dover, Delaware
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxxxxxxx
---------------------- --------------------
President Secretary
