Individual Flexible Purchase Payment Variable Deferred
Annuity Contract
This contract is issued in consideration of the payment of the initial Purchase
Payment. This is a variable annuity contract with Annuity Payments and Contract
Values increasing or decreasing depending on the experience of the Variable
Account shown in the Contract Schedule. We will make Annuity Payments as set
forth in this contract beginning on the Income Date. Benefits available under
this contract are not less than those required by statute of the state in which
this contract is delivered.
Signed for the Company at its home office on the Issue Date.
[/s/ Xxxxxxx X. Xxxxx] [/s/ Xxxx Xxxxxxxx]
Xxxxxxx X. Xxxxx Xxxx Xxxxxxxx
Senior Vice President, Secretary, President
and Chief Legal Officer
RIGHT TO EXAMINE: This contract may be returned within 10 days after you receive
it. It can be mailed or delivered to either us or the representative who sold
it. Return of this contract by mail is effective on being postmarked, properly
addressed and postage prepaid. The returned contract will be treated as if we
had never issued it. We will promptly refund the Contract Value in states where
permitted. This may be more or less than the Purchase Payments.
We have the right to allocate Purchase Payments to the Money Market Investment
Option until the expiration of the Right to Examine period. If we so allocate
Purchase Payments, we will refund the greater of the Purchase Payments less any
withdrawals, or the Contract Value.
This is a legal contract between you and the Company.
READ YOUR CONTRACT CAREFULLY
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
[0000 Xxxxxx Xxxxx Xxxxx]
[Xxxxxxxxxxx, XX 00000-1297]
L40527
GUIDE TO CONTRACT PROVISIONS
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Contract Schedule..........................3
Definitions............................ 4, 5
Ownership..................................6
Purchase Payments..........................7
Variable Account.....................7, 8, 9
Variable Account
Accumulation Unit Value
Mortality and Expense Risk Charge
Contract Value
Transfers
Suspension or Deferral of Payments
Withdrawals................................9
Annuity Provisions................10, 11, 12
Death Benefit.........................13, 14
General Provisions........................15
Misstatement of Age or Gender/Sex
Income Date
L40527
2
DEFINITIONS
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This section provides the meaning of special terms used throughout this
contract. Most of these terms are capitalized throughout this contract to help
you easily recognize them. Provision titles, section titles, and terms used in
the Contract Schedule are also capitalized for your convenience.
Company
Allianz Life Insurance Company of North America. The terms we, our, and us also
refer to the Company.
Owner
The person(s) or non-individual entitled to the ownership rights stated in this
contract. The terms you and your also refer to the Owner.
Accumulation Phase
The period of time before you elect to apply the entire Contract Value to
Annuity Payments. You may make additional Purchase Payments during this time.
Accumulation Portion
The part of the contract that is in the Accumulation Phase. The Accumulation
Portion begins on the Issue Date and ends upon the earliest of: (a) the Business
Day before the Income Date if you take a full Annuitization; or (b) termination
of the contract.
Accumulation Unit
The units into which we convert amounts invested in the subaccount of your
selected Investment Options during the Accumulation Phase.
Adjusted Contract Value
The Contract Value less any deduction made that is an amount equal to the
applicable Premium Tax paid by the Company. Age The Annuitants age on his or her
last birthday unless otherwise specified.
Annuitant
The natural person upon whose continuation of life any Annuity Payments
involving life contingencies are based. The Annuitant is the person designated
by the Owner. The Annuitant is shown in the Contract Schedule.
Annuity Option
An arrangement under which Traditional Annuity Payments are made under this
contract.
Annuity Payments
The series of payments made to you or any named Payee after any Income Date.
Annuity Phase
The period of time beginning on the first Income Date during which Annuity
Payments are made.
Annuity Unit
The units into which we convert amounts invested in the subaccount of your
selected Investment Options during the Annuity Phase if we make Traditional
Annuity Payments.
Assumed Investment Return (AIR)
The investment return upon which we base the Traditional Annuity Payments.
Authorized Request
A request in a form that is satisfactory to the Company. This request must be
received by the Service Center.
Beneficiary
The person(s) or entity(ies) to whom we will pay the death benefit under this
contract. The Beneficiary is named in the application, or as later changed with
an Authorized Request, or upon the death of a Joint Owner. In the event that a
Joint Owner becomes the Beneficiary, their rights take precedence over any
primary and contingent Beneficiary(ies) previously named.
Business Day
Any day that the New York Stock Exchange is open for trading.
Contract Anniversary
A 12-month anniversary of the Issue Date of this contract. Any contract
functions that are scheduled to occur on a Contract Anniversary will occur on
the next Business Day if the Contract Anniversary does not occur on a Business
Day.
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DEFINITIONS (continued)
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Contract Value
The Contract Value for any Valuation Period is equal to the total dollar value
accumulated under this contract in the subaccounts for each of the Investment
Options.
Contract Year
A period of 12 consecutive months. The first Contract Year begins on the Issue
Date, and subsequent Contract Years begin on the Contract Anniversary. All
Contract Years end on the day before the next Contract Anniversary.
Full Annuitizaton
The application of all of the Contract Value to variable Annuity Payments
according to the Annuity Options in this contract and/or any attached
endorsements or riders.
Income Date
A date variable Annuity Payments begin. This date must be the first or the 15th
day of a calendar month. Because this contract allows for Partial Annuitizations
you may have multiple Income Dates.
Investment Options
The investment choices available under the Variable Account. The Investment
Options are shown in the Contract Schedule.
Issue Date
The first day of this contract. It is also the date when the first Contract Year
begins. The Issue Date is shown in the Contract Schedule and determines the
Contract Anniversaries, and the beginning of each Contract Year.
Joint Annuitant
A contract may have Joint Annuitants. If Joint Annuitants are named, Annuity
Payments will be based on the lives of both Joint Annuitants.
Joint Owner
A contract may be owned by Joint Owners. Joint Owners have equal contract
ownership rights and both Joint Owners must authorize the exercise of these
rights unless otherwise allowed by us. If Joint Owners are named, all references
to Owner shall mean Joint Owners.
Net Asset Value
The value of a share of the underlying Investment Options, less any investment
management and portfolio administration fees and expenses, as of the close of
trading on a Business Day.
Partial Annuitization
The application of a portion of the Adjusted Contract Value to variable Annuity
Payments according to the Annuity Provisions in this contract and/or any
attached endorsements or riders.
Payee
The person to whom Annuity Payments are made payable.
Premium Tax
Any premium taxes owed by the Company to any governmental entity. We assess
value equivalent to that tax against Purchase Payments or Contract Value.
Purchase Payment
Any payment made toward this contract.
Service Center
The office shown in the Contract Schedule of this contract. All notices,
requests and Purchase Payments must be sent to the Service Center.
Traditional Annuity Payment
The payment to the Payee made under the Annuity Provision in this contract.
Traditional Annuity Payments reflect the Investment Option performance during
the Annuity Phase. Traditional Annuity Payments are not guaranteed as to dollar
amount.
Traditional Annuity Portion
The part of the Adjusted Contract Value that you applied to Traditional Annuity
Payments. If you take Partial Annuitizations under the traditional Annuity
Options, you may have multiple Traditional Annuity Portions.
Valuation Period
The period commencing at the close of business of the New York Stock Exchange on
each Business Day and ending at the close of business for the next succeeding
Business Day.
Variable Account
A separate account maintained by us in which a portion of our assets have been
allocated for this contract and certain other contracts. The Variable Account is
shown in the Contract Schedule.
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OWNERSHIP
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Assignment of this Contract
You may assign or transfer all or specific ownership rights of this contract. An
Authorized Request specifying the terms of an assignment of this contract must
be provided to the Service Center and approved by us. We will record your
assignment. We will not be responsible for its validity or effect, including tax
consequences, nor will we be liable for actions taken on payments made before we
receive and record the assignment. Any assignment made after the death benefit
has become payable will be valid only with our consent. If this contract is
assigned, your rights may only be exercised with the consent of the assignee of
record.
Change of Ownership
You may change ownership of this contract to a new Owner at any time subject to
our approval. The change is effective as of the date the Authorized Request is
signed, subject to our underwriting guidelines at the time of the request. We
are not liable for any actions taken before receiving the request. A change of
ownership will automatically revoke any prior designation of Owner. A change of
ownership does not change the existing designated Annuitant(s) unless the new
Owner requests a change of Annuitant(s) by providing an Authorized Request. A
change of ownership also does not change the existing designated
Beneficiary(ies) unless the new Owner requests a change of Beneficiary(ies) by
providing an Authorized Request.
We will not be responsible for any tax consequence of any such change.
Non-Individual Owners
If the Owner is a non-individual, the Age of the Annuitant(s) will be used to
determine any death benefit or income benefit.
For purposes of any endorsement and/or rider, reference to death benefits,
income benefits, or the surrender or withdrawal provisions, any use of the term
non-natural owner is replaced with the term non-individual.
Change of Annuitant
You may change the Annuitant at any time before the Income Date by an Authorized
Request, unless the Owner is a non-individual. You may not request a change of
the Annuitant if a non-individual is the Owner of this contract.
Change of Beneficiary
Subject to the the rights of any irrevocable Beneficiary(ies), you may change
the primary Beneficiary(ies) or contingent Beneficiary(ies) at any time before
your death. You may change the named Beneficiary(ies) by providing an Authorized
Request. The change will take effect as of the date the Authorized Request is
signed. If the Authorized Request reaches our Service Center after the Owner
dies but before any payment is made, the change will be valid. We will not be
liable for any payment made or action taken before the Service Center records
the change.
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PURCHASE PAYMENTS
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Purchase Payments
The initial Purchase Payment is due on the Issue Date. We reserve the right to
decline any Purchase Payment. The Initial Purchase Payment, Minimum Additional
Purchase Payment and the Maximum Total Purchase Payments allowed are shown in
the Contract Schedule.
No Default
Unless you make a request for a full withdrawal, this contract remains in force
and will not be in default if you do not make additional Purchase Payments.
Allocation of Purchase Payments
Purchase Payments are allocated to one or more of the Investment Options in
accordance with your selection. The allocation of the initial Purchase Payment
is made in accordance with your selection made on the Issue Date. Unless you
inform us otherwise, additional Purchase Payments are allocated in the same
manner as the initial Purchase Payment. However, we reserve the right to
allocate the initial Purchase Payment to the Money Market Investment Option
until the expiration of the Right to Examine period.
All allocations of Purchase Payments are subject to the Allocation Guidelines
shown in the Contract Schedule. We guarantee that you will be allowed to select
at least three Investment Options for such allocations.
VARIABLE ACCOUNT
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Variable Account
The Variable Account is shown in the Contract Schedule. It consists of assets we
have set aside and have kept separate from the rest of our assets and those of
our separate accounts. The assets of the Variable Account, equal to reserves and
other liabilities of your contract and those of other Owners, will not be
charged with liabilities arising out of any other business we may conduct.
The Variable Account assets are divided into Investment Options as shown in the
Contract Schedule. We may add, substitute, or remove Investment Options shown in
the Contract Schedule.
We may limit further purchase in an Investment Option, or substitute subaccount
Accumulation Units of another Investment Option for the Investment Option you
already selected, subject to the requirements of applicable law.
Valuation of Assets
Assets of the subaccounts of the Investment Options will be valued at their Net
Asset Value on each Business Day, except when an Investment Option does not
value its shares.
Accumulation Units
The Purchase Payments you allocate to the Investment Options are placed into
subaccounts. Each subaccount invests exclusively in one Investment Option.
Accumulation Units shall be used to account for all amounts allocated to or
withdrawn from the Investment Options as a result of Purchase Payments,
withdrawals, transfers, or fees and charges.
The number of subaccount Accumulation Units are determined by dividing the
amount allocated to, or the amount withdrawn from, the subaccount of an
Investment Option by the dollar value of one subaccount Accumulation Unit as of
the end of the Valuation Period during which the transaction is processed at the
Service Center.
Purchase Payments, withdrawals and transfers from or to the subaccount of an
Investment Option will result in the addition or cancellation of subaccount
Accumulation Units.
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VARIABLE ACCOUNT (continued)
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Accumulation Unit Value
The subaccount Accumulation Unit value was initially arbitrarily set. Subsequent
subaccount Accumulation Unit values are determined by multiplying the subaccount
Accumulation Unit value for the immediately preceding Valuation Period by the
net investment factor for the Investment Option for the current period.
The subaccount Accumulation Unit value may increase or decrease from Valuation
Period to Valuation Period.
Net Investment Factor
The net investment factor for a subaccount is determined by dividing (a) by (b)
and multiplying the result by (1 (c)) where:
(a) is equal to the:
(1) Net Asset Value of a subaccount at the end of the current Valuation
Period;plus
(2) any dividend or capital gains declared on behalf of the subaccount that
xxxxx ex-dividend date within the current Valuation Period.
(b) is equal to the Net Asset Value of the subaccount for the immediately
preceding Valuation Period.
(c) is equal to the:
(1) the Valuation Period equivalent of the Mortality and Expense Risk Charge
shown in the Contract Schedule; plus
(2) a charge factor, if any, for any taxes or any tax reserve we have
established as a result of the operation or maintenance of the Investment
Option.
Mortality and Expense Risk Charge
Each Valuation Period we deduct a Mortality and Expense Risk Charge from the
assets in the subaccount that is equal, on an annual basis, to the amount shown
in the Contract Schedule. The Mortality and Expense Risk Charge compensates the
Company for assuming the mortality and expense risks under this contract.
Mortality and Expense Guarantee
We guarantee that the dollar amount of each Annuity Payment after the first will
not be affected by variations in mortality or expense experience.
Contract Value
The Contract Value for any Valuation Period is equal to the total dollar value
accumulated under this contract in the subaccounts for each of the Investment
Options. The Contract Value in the Variable Account is determined by multiplying
the number of Accumulation Units in each subaccount by the subaccount
Accumulation Unit value and then adding these results together.
Transfers
You may transfer all or a part of your interest in an Investment Option to
another Investment Option. Transfer instructions apply equally to all portions
of this contract. You cannot make transfers within only one part of this
contract. We reserve the right to charge for transfers if the number of free
transfers exceeds the amount shown in the Contract Schedule. All transfers are
subject to the following criteria.
(a) The deduction of any Transfer Fee that we may impose is detailed in the
Contract Schedule. We will deduct the Transfer Fee from the Investment Options
from which you make the transfer. If you transfer the entire amount in the
Investment Option, then we will deduct the Transfer Fee from the amount
transferred. If you are transferring from multiple Investment Options, we will
consider the transfer as a single transfer and we will deduct any Transfer Fee
proportionately from the Investment Options if you transfer less than the entire
amount in the accounts.
(b) We reserve the right to limit transfers until the
expiration of the Right to Examine period.
(c) Any transfer direction must
clearly specify:
(1) The amount you wish to transfer; and
(2) The Investment Options that are to be affected.
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VARIABLE ACCOUNT (continued)
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Transfers (continued)
Your right to make transfers is subject to modification if we determine, at our
sole discretion, that the exercise of the right by one or more Owners is, or
would be, to the disadvantage of other Owners. Restrictions may be applied in
any manner reasonably designed to prevent any use of the transfer right which we
consider to be to the disadvantage of other Owners, including rejecting a
transfer request. A modification could be applied to transfers to or from one or
more of the Investment Options, and could include, but is not limited to, the
following.
(a) Requiring a minimum time period between each transfer.
(b) Limiting the frequency of transfers.
(c) Not accepting a transfer request from a representative acting on behalf of
more than one Owner.
(d) Limiting the dollar amounts that an Owner may transfer
between the Investment Options at any one time.
(e) Not accepting telephone
transfer instructions or transfer instructions other than by U.S. mail.
(f) Prohibiting transfers into specific Investment Options.
We reserve the right to modify the transfer provisions subject to applicable
state law at any time and without prior notice to any party.
If you elect to use this transfer privilege, we will not be liable for transfers
made in accordance with your instructions. We will determine the number and
value of the subaccount Accumulation Units as of the end of the Valuation Period
during which the request for transfer is received at the Service Center.
Suspension or Deferral of Payments
The Company reserves the right to suspend or postpone payments from the Variable
Account for a withdrawal or transfer for any period when:
(a) the New York Stock Exchange is closed, other than customary weekend and
holiday closings;
(b) trading on the New York Stock Exchange is restricted;
(c) an emergency exists as a result of which disposal of the Investment Option
shares is not reasonably practicable or we cannot reasonably value the
Investment Option shares; or
(d) during any other period when the Securities and
Exchange Commission, by order, so permits for the protection of Owners.
Applicable rules and regulations of the Securities and Exchange Commission will
govern as to whether the conditions described in (b) and (c) exist.
WITHDRAWALS
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Full and Partial Withdrawals
During the Accumulation Phase, you may, upon an Authorized Request, make a full
or partial withdrawal of the Contract Value. Withdrawals will result in the
cancellation of Accumulation Units from each subaccount of your selected
Investment Options in the ratio that the value of each subaccount bears to the
total Contract Value.
The Company will pay the amount of any withdrawal from the Variable Account
within seven (7) days of receipt of an Authorized Request unless the Suspension
or Deferral of Payments provision of this contract is in effect.
Withdrawal Charge
Upon a full or partial withdrawal of this contract, we may assess a Withdrawal
Charge as shown in the Contract Schedule. Under certain circumstances, we allow
withdrawals without the Withdrawal Charge as set forth in the Contract Schedule
or any attached endorsements or riders.
Partial Withdrawal
The minimum Contract Value that must remain in this contract after a partial
withdrawal is shown in the Contract Schedule. Any request for a partial
withdrawal that would reduce the Contract Value below this minimum will be
treated as a request for a full withdrawal.
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ANNUITY PROVISIONS
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Annuitization
We will base Annuity Payments on the investment allocations that are in place on
the Income Date. Unless you designate another Payee, you will be the Payee of
the Annuity Payments.
Traditional Annuity Payments will depend on the following criteria.
(a) The amount of Adjusted Contract Value applied to the Traditional Annuity
Payments on the Income Date.
(b) Age of Annuitant and any Joint Annuitant on the
Income Date. (
c) Gender/sex of the Annuitant and any Joint Annuitant in states
where permitted.
(d) Annuity Option selected.
(e) The Assumed Investment Rate (AIR) and the mortality table specified in this
contract.
(f) The future performance of the Investment Options selected.
Full Annuitizaton
You may apply all of the Adjusted Contract Value to variable Annuity Payments
according to the Annuity Provisions in this contract and/or any attached
endorsement or rider.
Partial Annuitization
The Annuitant must be the Owner for each Partial Annuitization. Partial
Annuitizations are not allowed for contracts that have Joint Owners. We do not
allow you to appoint Joint Annuitants for Partial Annuitizations.
You may apply only part of the Adjusted Contract Value to variable Annuity
Payments according to the Annuity Provisions in this contract and/or any
attached endorsements or riders. The frequency with which you can take Partial
Annuitizations and the maximum number of Partial Annuitizations you can take is
shown in the Contract Schedule.
A Partial Annuitization will decrease the amounts available for withdrawals,
payments of the death benefit, and any additional Annuity Payments. Amounts
applied to a Partial Annuitization and Annuity Payments made under a Partial
Annuitization are not subject to a Withdrawal Charge.
The minimum amount you can apply to a Partial Annuitization is stated in the
Contract Schedule. You cannot allocate additional Adjusted Contract Value to an
existing stream of Annuity Payments. You also cannot transfer amounts allocated
to a Traditional Annuity Portion back to the Accumulation Portion.
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ANNUITY PROVISIONS (continued)
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Annuity Units
On the Income Date, Annuity Units will be purchased as follows.
The initial Traditional Annuity Payment is equal to (a) divided by $1,000, with
the result then multiplied by (b), where:
(a) is the amount of Adjusted Contract
Value applied to Traditional Annuity Payments; and
(b) is the appropriate Traditional Annuity Payment amount for each $1,000 of
value for the Annuity Option selected, as shown in the table in the Contract
Schedule.
We allocate the initial Traditional Annuity Payment to the subaccounts based on
the percentage of Contract Value in each subaccount on the Income Date. We
determine the number of Annuity Units by dividing the amount of the initial
Traditional Annuity Payment allocated to each subaccount by the Annuity Unit
value on the Income Date. All calculations will appropriately reflect the
Traditional Annuity Payment frequency selected.
On each subsequent Traditional Annuity Payment date, the total Traditional
Annuity Payment is the sum of the Traditional Annuity Payments for each
Investment Option. The Traditional Annuity Payment in each Investment Option is
determined by multiplying the number of subaccount Annuity Units for the
Investment Option by the subaccount Annuity Unit value.
On each subsequent Business Day, the value of a subaccount Annuity Unit is
determined as follows.
First: The net investment factor is determined as described under the Net
Investment Factor provision of this contract.
Second: The value of a subaccount Annuity Unit for a Valuation Period is equal
to the value of the Annuity Unit for the immediately preceding Valuation Period
multiplied by the net investment factor for the current Valuation Period then
divided by the assumed net investment factor for the Valuation Period.
The assumed net investment factor is equal to one plus the AIR, adjusted to
reflect the number of calendar days that have elapsed since the immediately
preceding Business Day.
The AIR that we will use for Traditional Annuity Payments is shown in the
Contract Schedule. A different value may be used with our permission.
Annuity Option Selection for Traditional Annuity Payments
This contract provides for Traditional Annuity Payments under one of the
following Annuity Options. The Company may make available other payment options.
You can select an Annuity Option by an Authorized Request. You may select and/or
change the Annuity Option by an Authorized Request, at least 30 days before any
Income Date.
Default Annuity Option for Traditional Annuity Payments
If no Annuity Option is selected, variable Annuity Option 2, which is a life
annuity with period certain, 120 monthly payments guaranteed, will be
automatically applied.
Option 1 Life Annuity
We will make monthly Traditional Annuity Payments during the life of the
Annuitant, ceasing with the last Traditional Annuity Payment due before the
Annuitants death.
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ANNUITY PROVISIONS (continued)
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Option 2 Life Annuity With Monthly Payments Over 10, 15 or 20 Years Guaranteed
We will make monthly Traditional Annuity Payments during the life of the
Annuitant. If you take one single Full Annuitization and the Annuitant dies
before the end of the selected guaranteed period, we will continue to make
payments to the Payee for the rest of the guaranteed period.
Alternatively, the Owner may elect to receive a lump sum payment. Under a
Partial Annuitization, if the Annuitant dies before the end of the selected
guaranteed period, we will make a lump sum payment to the Beneficiary. The lump
sum payment is equal to the present value of the remaining guaranteed monthly
Traditional Annuity Payments, as of the date we receive proof of the Annuitants
death and a payment election form at our Service Center. We base the remaining
guaranteed monthly Traditional Annuity Payments on the current value of the
Annuity Units and we use the AIR to calculate the present value. We require
proof of the Annuitants death and return of this contract before we will make
any lump sum payment.
Option 3- Joint and Last Survivor Annuity
Under this option we will make monthly Traditional Annuity Payments during the
joint lifetime of the Joint Annuitants. Upon the death of one Joint Annuitant,
payments will continue during the lifetime of the surviving Joint Annuitant at a
level of 100%, 75% or 50% of the previous amount, as selected by the Owner.
Monthly Traditional Annuity Payments will stop with the last payment that is due
before the last surviving Joint Annuitants death.
This Annuity Option is not available for Partial Annuitization.
Option 4 Joint and Last Survivor Annuity With Monthly Payments Over 10, 15 or 20
Years Guaranteed Under this option we will make monthly Traditional Annuity
Payments during the joint lifetimes of the Joint Annuitants. Upon the death of
one Joint Annuitant, payments will continue to the Payee during the lifetime of
the surviving Joint Annuitant at 100% of the amount that was paid when both
Joint Annuitants were alive. However, if the last Joint Annuitant dies before
the end of the selected guarantee period, we will continue to make Traditional
Annuity Payments to the Payee for the rest of the guarantee period.
Alternatively, the Owner may elect to receive a lump sum payment equal to the
present value of the remaining guaranteed monthly Traditional Annuity Payments,
as of the date we receive proof of the last surviving Joint Annuitants death at
the Service Center. We base the remaining guaranteed monthly Traditional Annuity
Payments on the current value of the Annuity Units and we use the AIR to
calculate the present value. We require proof of death of both Joint Annuitants
and return of this contract before we will make any lump sum payment.
Option 5 Refund Life Annuity
This Annuity Option is not available for Partial Annuitization.
We will make monthly Traditional Annuity Payments during the lifetime of the
Annuitant, and the last payment will be the one due before the Annuitants death.
After the Annuitants death, the Payee may receive a lump sum refund. The amount
of the refund will depend on the current Investment Option allocation and will
be the sum of refund amounts attributable to each Investment Option. We
calculate the refund amount for a given Investment Option using the formula of
(1) x {[(2) x (3) x (4)/(5)] [(4) x (6)]}, where:
(1) equals the Annuity Unit value of the subaccount for that given Investment
Option when due proof of the Annuitants death is received at the Service Center;
(2) equals the amount applied to variable Traditional Annuity Payments on the
Income Date;
(3) equals the allocation percentage in a given subaccount, in
decimal form, when due proof of the Annuitants death is received at the Service
Center;
(4) equals the number of Annuity Units used in determining each
Traditional Annuity Payment attributable to that given subaccount when due proof
of the Annuitants death is received at the Service Center;
(5) equals the dollar
value of first Traditional Annuity Payment; and
(6) equals the number of Traditional Annuity Payments made since the Income
Date.
We will base this calculation upon the allocation of Annuity Units in-force at
the time due proof of the Annuitants death is received at the Service Center. If
the total refund determined using the above calculation is less than or equal to
zero, no refund payment is due.
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DEATH BENEFIT
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Payment of Death Benefit During the Accumulation Phase
The Company will require due proof of death, selection of the death benefit
payment option, and any required governmental forms before any death benefit is
paid. Due proof of death will be any one of the following.
(a) A certified death certificate.
(b) A certified decree of a court of competent jurisdiction as to the finding of
death.
(c) Any other proof satisfactory to the Company.
All death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
Death of Owner During the Accumulation Phase
Upon the death of a single Owner during the Accumulation Phase, we will pay a
death benefit to the Beneficiary. If the Owner took a Partial Annuitization, the
death benefit payment must be distributed within five years of the date of his
or her death and, therefore, death benefit payment Option C, which allows for
payments of the death benefit under a traditional Annuity Option over the
lifetime of the Beneficiary, will not be available. Upon the death of any Joint
Owner, if the surviving Joint Owner is the spouse of the decedent, the surviving
Joint Owner becomes the sole Owner and he or she may elect to receive the death
benefit or to continue the contract as indicated in the Spousal Continuation
provision in this contract. Upon the death of any Joint Owner, if the surviving
Joint Owner is not the spouse of the decedent, we will consider the surviving
Joint Owner to be the primary Beneficiary. Any other Beneficiary designation
will be treated as a contingent Beneficiary unless otherwise indicated in an
Authorized Request.
Spousal Continuation During the Accumulation Phase
Upon the death of a single Owner where the sole Beneficiary is the spouse of the
decendent, or upon the death of a Joint Ownere where the surviving Joint Owner
is the spouse of the decendent, the spouse may elect to continue this contract
in his or her own name and exercise all the Owners rights under this contract.
An Authorized Request by the spouse to continue the contract must be made to the
Service Center before we pay the death benefit. In this event, the Contract
Value for the Valuation Period during which this election is implemented will be
adjusted to equal the death benefit.
Death of Annuitant During the Accumulation Phase
If the decedent was not an Owner, we will not pay a death benefit. The Owner can
name a new Annuitant subject to our approval. However, if the Owner is a
non-individual, we will treat the death of the Annuitant as the death of the
Owner, we will pay a death benefit to the Beneficiary, and another Annuitant
cannot be named.
Death Benefit Amount During the Accumulation Phase
The death benefit will be the Adjusted Contract Value determined as of the end
of the Valuation Period during which we receive both due proof of death and an
election of the death benefit payment option.
Any part of the death benefit amount that had been invested in the Variable
Account remains in the Variable Account until distribution begins. From the time
the death benefit is determined until complete distribution is made, any amount
in the Variable Account will be subject to investment risk, which is borne by
the Beneficiary.
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L40527
DEATH BENEFIT (continued)
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Death Benefit Payment Options During the Accumulation Phase
If the Owner has not previously designated a death benefit payment option, a
Beneficiary must request that the death benefit be paid by one of the payment
options below.
Option A - A lump sum payment of the death benefit.
Option B - The payment of the entire death benefit within five years of the date
of the death of the Owner or any Joint Owner.
Option C - Payment of the death benefit as a Traditional Annuity Payment under
an Annuity Option over the lifetime of the Beneficiary; or over a period not
extending beyond the life expectancy of the Beneficiary with distribution
beginning within one year of the date of death of the Owner or any Joint Owner.
This option is not available if you took a Partial Annuitization.
Any portion of the death benefit not applied to Traditional Annuity Payments
under an Annuity Option within one year of the date of the Owners death must be
distributed within five years of the date of death.
If a lump sum payment is requested, the amount from the Variable Account will be
paid within seven days of receipt of due proof of death and an election for the
death benefit payment option, including any required governmental forms, unless
the Suspension or Deferral of Payments provision in this contract is in effect.
Death Benefit Payment Options During the Accumulation Phase
If the Owner has not previously designated a death benefit payment option, a
Beneficiary must request that the death benefit be paid by one of the payment
options below.
Option A - A lump sum payment of the death benefit.
Option B - The payment of the entire death benefit within five years of the date
of the death of the Owner or any Joint Owner.
Option C - Payment of the death benefit as a Traditional Annuity Payment under
an Annuity Option over the lifetime of the Beneficiary; or over a period not
extending beyond the life expectancy of the Beneficiary with distribution
beginning within one year of the date of death of the Owner or any Joint Owner.
This option is not available if you took a Partial Annuitization.
Any portion of the death benefit not applied to Traditional Annuity Payments
under an Annuity Option within one year of the date of the Owners death must be
distributed within five years of the date of death.
If a lump sum payment is requested, the amount from the Variable Account will be
paid within seven days of receipt of due proof of death and an election for the
death benefit payment option, including any required governmental forms, unless
the Suspension or Deferral of Payments provision in this contract is in effect.
Death of Owner and/or Annuitant During the Annuity Phase
Upon the death of a single Owner, the Beneficiary becomes the Owner. Upon the
death of any Joint Owner, the surviving Joint Owner becomes the sole Owner.
If the decedent was not an Annuitant, we will not pay a death benefit and
Traditional Annuity Payments to the Payee will continue.
If the decedent was an Annuitant and there is a surviving Joint Annuitant,
Traditional Annuity Payments to the Payee will continue during the lifetime of
the Joint Annuitant. We will not pay a death benefit.
If the decedent was the only Annuitant, Traditional Annuity Payments will
continue as provided for in the selected Annuity Option. We will not pay a death
benefit under Xxxxxxx Options 1 through 4. However, there may be a lump sum
refund due to the Payee under Annuity Option 5. After all Traditional Annuity
Payments or lump sum refunds have been paid, all Traditional Annuity Portions of
the contract will terminate.
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GENERAL PROVISIONS
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Entire Contract
We have issued this contract in consideration of the initial Purchase Payment.
This contract, any attached application, endorsements, or riders, together are
the entire contract.
Incontestability of this Contract
We will not contest this contract.
Misstatement of Age or Gender/Sex
We may require proof of Age of the Annuitant before making any life contingent
Annuity Payment provided for by the Entire Contract provision. If there is a
misstatement of the Annuitants Age or gender/sex, we will adjust the Annuity
Payments to the amount that would have been provided at the correct Age or
gender/sex. Once Annuity Payments have begun, any underpayments will be made up
in one sum with the next Annuity Payment, and overpayments will be deducted from
the future Annuity Payments until the total is repaid.
Annual Report
We will send you a report at least once each calendar year showing the Contract
Value. This report will be sent to your last known address.
No Dividends are Payable
This is a nonparticipating contract. This contract does not participate in our
profits or surplus.
Modification of Contract
This contract may be modified by us in order to maintain compliance with state
and federal law. This contract may be changed or altered only by our President
or our Secretary. A change or alteration will be made in writing.
Income Date
The Income Date can be selected at contract issue. The Income Date must fall on
either the first or 15th day of a calendar month. If an Income Date was not
selected at contract issue, a default date is shown in the Contract Schedule.
You can make an Authorized Request for a different Income Date after the Issue
Date, however, any such request is subject to our approval.
The Income Date will not be later than the first day of the calendar month
following the later of the Annuitants 90th birthday, or 10 years from the Issue
Date. The Income Date will not be later than what is permitted by applicable
state or federal law. In order for Annuity Payments to begin, you must provide
an Authorized Request.
Taxes
Taxes paid to any governmental entity will result in an amount equivalent to the
tax charged against the Contract Value. We will, in our sole discretion,
determine when taxes have resulted from: the investment experience of the
Variable Account; receipt by us of the Purchase Payment(s); or commencement of
Annuity Payments. We may, at our discretion, pay taxes when due and deduct that
amount from the Contract Value at a later date. Payment at an earlier date does
not waive any right we may have to deduct amounts at a later date.
We reserve the right to establish a provision for federal income taxes if we
determine, in our sole discretion, that we will incur a tax as a result of the
operation of the Variable Account. We will deduct for any income taxes incurred
as a result of the operation of the Variable Account whether or not there was a
provision for taxes and whether or not it was sufficient. We will deduct any
withholding taxes required by applicable law.
Protection of Proceeds
No Beneficiaries may commute, encumber, alienate or assign any payments under
this contract before they are due. To the extent permitted by law, no payments
will be subject to the debts, contracts or engagements of any Beneficiaries or
to any judicial process to levy upon or attach the same for payment thereof.
Evidence of Survival
Where any benefits under this contract are contingent upon the recipient being
alive on a given date, we may require proof satisfactory to us that the
condition has been met.
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
[0000 Xxxxxx Xxxxx Xxxxx]
[Xxxxxxxxxxx, XX 00000-1297]
L40527 15
INDIVIDUAL FLEXIBLE PAYMENT VARIABLE DEFERRED ANNUITY
NON-PARTICIPATING
