EXHIBIT (4)(a)
THE UNITED STATES LIFE INSURANCE COMPANY
IN THE CITY OF NEW YORK
SINGLE PREMIUM IMMEDIATE VARIABLE ANNUITY CONTRACT
THE UNITED STATES LIFE INSURANCE COMPANY IN THE CITY OF NEW YORK (the
"Company"), a stock company, issues this Single Premium Immediate Variable
Annuity Contract to the Owner based on the completed Application and the payment
of the Premium Payment. The Company agrees to make Income Payments to the Payee
designated by the Owner beginning on the Income Start Date and continuing
thereafter, subject to the terms and conditions of this Contract.
This is a Single Premium Immediate Variable Annuity Contract. Income Payments
paid from the Divisions are not guaranteed as to dollar amount and may increase
or decrease depending on the investment experience of the Investment Options
selected by the Owner. The Owner of the Contract may also select a fixed income
investment within this Immediate Variable Annuity Contract.
RIGHT TO CANCEL. If after reading this Contract, the Owner is not satisfied for
any reason, the Owner may return the Contract to the Company at its Home Office
or to any agent authorized by the Company within 10 calendar days after
receiving it (or a longer period if required by the laws of the Issue State). If
mailed in the United States in a properly addressed envelope with sufficient
first class postage, it will be deemed to be received by the Company on the date
of postmark, registration or certification. The Company will refund the Single
Premium including any expenses and charges, less any prior payments made, and
this Contract will be void.
Executed for the Company on the Contract Date.
/s/ XXXXX X. XXXXX /s/ XXXXXXXXX X. XXXX
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President Secretary
THIS CONTRACT IS NON-PARTICIPATING -
DIVIDENDS ARE NOT PAYABLE.
PLEASE READ THIS CONTRACT CAREFULLY.
THE CONTRACT IS IRREVOCABLE UPON THE END OF THE RIGHT TO CANCEL PERIOD.
THIS CONTRACT IS A LEGAL CONTRACT BETWEEN THE OWNER AND
AMERICAN GENERAL LIFE INSURANCE COMPANY.
Home Office: Home Office: 000 Xxxxx Xxxxxx, 0/xx/ Floor . New York,
New York 10022-4684
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TABLE OF CONTENTS
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ARTICLES PAGE
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CONTRACT DATA PAGE..................................................... 3, 3A
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ARTICLE 1: DEFINITIONS................................................. 4 - 7
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ARTICLE 2: PARTIES INVOLVED IN THE CONTRACT
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2.01 General......................................................... 7
2.02 The Owner and Joint Owner....................................... 7
2.03 The Annuitant and Joint Annuitant............................... 8
2.04 The Beneficiary................................................. 8
2.05 The Payee....................................................... 9
ARTICLE 3: INCOME PAYMENTS
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3.01 General......................................................... 9
3.02 Liability for Income Payments................................... 9
3.03 Separate Account................................................ 9
3.04 Divisions....................................................... 9
3.05 Annuity Income Units............................................ 10
3.06 Initial Allocation of the Net Single Premium Payment............ 10
3.07 Income Payments................................................. 11
3.08 First Variable Income Payment................................... 11
3.09 Subsequent Variable Income Payments............................. 11
3.10 Fixed Income Payments........................................... 12
3.11 Delay of Income Payments........................................ 12
3.12 Semi-Annual Benefit Leveling.................................... 12
3.13 Misstatement of Age or Sex...................................... 13
3.14 Income Payments to Guardian..................................... 13
ARTICLE 4: INVESTMENT TRANSFERS
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4.01 Transfer among investment options............................... 13
4.02 Automatic rebalancing........................................... 13
4.04 Transfer restrictions........................................... 14
ARTICLE 5: WITHDRAWALS
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5.01 Withdrawal options.............................................. 15
5.02 Effect of withdrawals on future Income Payments................. 15
5.03 Restrictions on withdrawals..................................... 15
5.04 Determining the withdrawal amount............................... 16
5.05 Withdrawal charges.............................................. 16
ARTICLE 6: DISTRIBUTION UPON DEATH
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6.01 Rights of ownership succession.................................. 16
6.02 Notification of death........................................... 17
6.03 Death of the Owner who is the Annuitant prior to the
Annuity Starting Date........................................... 17
6.04 Death of the Owner who is not the Annuitant prior to the
Annuity Starting Date........................................... 17
6.05 Death of the Annuitant who is not the Owner prior to the
Annuity Starting Date........................................... 17
6.06 Death of the Owner or Joint Owner after the Annuity
Starting Date................................................... 18
6.07 Death of the Annuitant after the Annuity Starting Date.......... 18
6.08 Death of the Payee.............................................. 18
6.09 Status of Income Payments upon notification of any death........ 18
6.10 Lifetime Income Payout Option................................... 18
ARTICLE 7: TAXATION
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7.01 General......................................................... 18
7.02 Status as an annuity contract................................... 19
7.03 Taxation on Premium Payment..................................... 19
ARTICLE 8: GENERAL PROVISIONS
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8.01 Contract issue requirements..................................... 19
8.02 Single Premium Payment.......................................... 19
8.03 Entire Contract................................................. 19
8.04 Conformity with laws............................................ 19
8.05 Evidence of survival............................................ 20
8.06 Validity of trust............................................... 20
8.07 Termination of the Contract..................................... 20
8.08 Modification of the Contract.................................... 20
8.09 Annuity is not a "Plan"......................................... 20
8.10 Incontestability................................................ 20
8.11 Non-participating............................................... 20
8.12 Assignment...................................................... 20
8.13 Reliance on information by the Company.......................... 21
8.14 Protection of proceeds.......................................... 21
8.15 Notification.................................................... 21
8.16 Disclaimer...................................................... 21
8.17 Liability of the Company........................................ 21
8.18 Indemnification of the Company.................................. 22
8.19 Reports......................................................... 22
8.20 Rights reserved by the Company.................................. 22
ARTICLE 9: EXPENSES
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9.01 Mortality and expense risk charge............................... 22
9.02 Administrative expense charge................................... 23
9.03 Fund expenses................................................... 23
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CONTRACT DATA PAGE
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Income Payment Option: Single Lifetime Income with a Certain Period
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Contract Number: SPECIMEN Contract Date: April 7, 2003
Premium Payment: $ 110,046.26 Modal Period: Monthly
Income Payment Date: 7th
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Issue State: [ ] Income Start Date: April 07, 2003
Contract Type: Income End Date: The later of March
[IRA/Nonqualified/Qualified] 07, 2018 or the death of the Annuitant
[Allocation Date:]
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Maximum Mortality and Expense Fixed Income Payment: $xxx.xx*
Risk Charge: 1.20% Assumed Investment Return: [3.5%
Maximum Administrative Expense or 5%]
Charge: .15% [Fixed Income Increasing/decreasing
Withdrawal Charge: 1% in years 1-8 Percentage: [1%-5%]]
0% thereafter
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Owner: XXXX XXX Annuitant: XXXX XXX
Age at Issue: 30
Payee: XXXX XXX Date of Birth: February 18, 1973
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Income Payments: Certain Period Income Payments will be paid for the Certain
Period of [180 Monthly payments]. When the Certain Period ends, Income Payments
will continue during the lifetime of the Annuitant.
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Income Payment Description: Single Lifetime Income with Certain Period Payout
Option provides Income Payments to the Payee for the longer of the life of the
Annuitant or the Certain Period. Income Payments will continue to the Payee
until the Income End Date.
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* The fixed Income Payment amount is based upon the amounts allocated to the
Fixed Account on the Contract Date. This amount may change if transfers are
later made to the Fixed Account.
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ARTICLE 1:
DEFINITIONS
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Definitions used within this Contract are generally shown in this section;
however, certain terms may be defined in other portions of this Contract.
Caption, article and section headings appearing in this Contract are included
solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Contract.
Age: Xx Xxxxxxxxx's age as set forth on the Contract Data Page. This age is used
in the calculation of Income Payments for any Payout Option containing a life
contingency.
Allocation Date: The Valuation Date that the funds are transferred from the
Money Market Division into one or more of the Contract's other Divisions as set
forth on the Contract Data page.
Annuitant: Any natural person named in the Application and shown on the Contract
Data Page whose life is used to determine the amount and duration of any Income
Payments made under the Contract involving life contingencies. Unless the text
clearly indicates otherwise, the term Annuitant also includes the Primary
Annuitant and/or Joint Annuitant. For IRA Contracts the Annuitant and the Owner
must be the same person.
Annuity Starting Date: The later of the Contract Date or the first day of the
Modal Period (month, quarter, half year or year depending on whether Income
Payments will be made monthly, quarterly, semi-annually or annually) which ends
on the date of the first Income Payment.
Annuity Income Unit: An accounting unit of measure used to calculate variable
Income Payments.
Annuity Income Unit Value: The value of one Annuity Income Unit.
Application: The form required by the Company to be completed by the Owner that,
along with the Single Premium Payment, provides the consideration for this
Contract. The Application is made a part of this Contract.
Assumed Investment Return (AIR): A factor used in calculating the initial and
subsequent variable Income Payments. The AIR selected by the Owner is set forth
on the Contract Data Page.
Beneficiary: The natural or Non-Natural Person named by the Owner. The
Beneficiary may succeed to ownership of the Contract in certain circumstances.
Certain Period: The non-life contingent portion of certain Payout Options which
guarantee to make Income Payments regardless of any Annuitant being alive on the
Income Payment Date.
Code: The Internal Revenue Code of 1986, as amended. References to specific
sections of the Code include any applicable regulations issued according to such
sections.
Company: The United States Life Insurance Company In the City of New York, the
issuer of this Contract.
Contract: This written agreement between the Owner and the Company.
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Contract Data Page: Page 3 (and 3A, if applicable) of this Contract which
details information about the following: 1) the Payout Option selected; 2) the
frequency of Income Payments; 3) the Certain Period Income Payments, if
applicable; 4) the parties to this Contract; 5) the Income Payment dates; 6) the
Contract Date; 7) the Assumed Investment Return; and 8) Contract charges and
expenses.
Contract Date: The date the Contract is issued by the Company and becomes
effective after receiving: 1) the Premium Payment; 2) the Application; and 3)
all necessary paperwork required by the Company.
Division: A separate and distinct division of the Separate Account to which
underlying shares of a Fund are allocated. The cumulative performance of the
selected divisions determines the value of variable Income Payments.
ERISA: Employee Retirement Income Security Act of 1974, as amended. References
to specific sections of ERISA include any applicable regulations issued
according to such sections.
Fixed Account: The portion of the Net Single Premium Payment allocated to the
Company's general account. During the term of the Payout Option selected and
regardless of investment results achieved by any funds allocated to the Separate
Account, the Company guarantees payment of the fixed Income Payment amount shown
on the Contract Data Page based on the amount allocated to the Fixed Account,
the Payout Option selected and the age of the Annuitant and Joint Annuitant, if
applicable. Funds allocated to the Fixed Account cannot be reallocated to
provide for variable Income Payments or be subject to an Article 5 "Withdrawal".
Income Payment: The series of periodic annuity payments that are paid to the
Payee. Income Payments may be variable and fixed, variable only, or fixed only
based upon the investment options selected by the Owner.
Income Payment Date: The day of the month or date that Income Payments will be
made as set forth on the Contract Data Page.
Income End Date: The date guaranteed Income Payments end as set forth on the
Contract Data Page.
Income Start Date: The date Income Payments begin. The Income Start Date
selected must be set no later than one year from the Contract Date.
IRA Contract: A Contract issued as an Individual Retirement Annuity (IRA) as
defined under section 408(b) of the Code or as a Xxxx XXX as defined under
section 403A(b) of the Code.
Investment Options: Together, the Fixed Account and the Divisions make up the
Investment Options.
Joint Annuitant: A natural person other than the Primary Annuitant upon whose
continuation of life is used to determine any Income Payments involving life
contingencies. A Joint Annuitant can be selected only if one of the joint life
Payout Options is selected.
Joint Owner: A co-owner who possesses an undivided interest in the entire
Contract with the Owner. Joint Ownership is not permitted for Qualified
Contracts or IRA Contracts.
Modal Period: The period of time (mode), at the end of which an Income Payment
is made. Such period is set forth on the Contract Data Page.
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Net Asset Value: The daily value of the underlying funds after charges and
expenses of the fund have been deducted.
Net Single Premium Payment: The Single Premium Payment less state premium taxes,
and any charges or expenses, if applicable.
Non-Natural Person: A corporation, trust or other non-living entity.
Non-Qualified Contract: A Contract which is not defined as a Qualified Contract
or an IRA Contract.
Owner: The natural or Non-Natural Person named in the Application to hold this
Contract and to exercise all rights and privileges under it. For purposes of
Code section 72(s), the Owner is the "holder" of this Contract.
Payee: The natural or Non-Natural Person named in the Application, or as
subsequently changed by the Owner, to receive the Income Payments under a Payout
Option.
Payout Option: The Income Payment option selected by the Owner and set forth on
the Contract Data Page.
Plan: Pension plan as defined in ERISA section 3(2).
Primary Annuitant: The natural person on whose life the amount and timing of
Income Payments is based.
Qualified Contract: A Contract purchased with funds from a retirement Plan that
meets the requirements of Code sections 401(a), 403(a), 403(b), or certain
deferred compensation plans under Code section 457.
Required Minimum Distribution: If a Contract is purchased as an IRA Contract or
Qualified Contract, the Owner's benefits under the Contract must satisfy the
Required Minimum Distribution rules as provided for by various provisions of the
Code.
Semi-Annual Benefit Leveling: The semi-annual adjustment to monthly variable
Income Payments to make Income Payments made during the following six (6) months
equal in amount.
Separate Account: A segregated investment account entitled "Separate Account D"
established by the Company to separate assets into divisions that fund the
variable benefits for the class of contracts to which this Contract belongs.
Simultaneous Death: The death of both the Owner and any successor Owner that
occurs within a period of 30 calendar days.
Single Premium Payment: The amount shown on the Contract Data Page paid to the
Company for the purchase of this Contract. This amount may be cumulative and
come from one or more sources.
Spouse: A party to a legal union between two natural persons recognized under
the laws of the applicable jurisdiction, where the other party to the legal
union is either an Annuitant, Beneficiary or Owner under the terms and
conditions of the Contract.
Surviving Spouse: The surviving natural person among an Annuitant and a Joint
Annuitant, if a Joint Annuitant is named in the Application and the Joint
Annuitant also meets the definition of Spouse based on his/her legal union to
the Annuitant.
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Valuation Date: Any day the New York Stock Exchange is open for trading. The
Valuation Date ends when the New York Stock Exchange closes.
Written, In Writing: A written request or notice, signed, dated and received at
an address designated by the Company in a form the Company accepts. The Owner
may ask the Company for the acceptable format(s). For certain types of written
requests, the Company reserves the right to require that the signature be
notarized and/or guaranteed by a member firm of a major stock exchange or other
institution qualified to give such a guaranty.
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ARTICLE 2:
PARTIES INVOLVED IN THIS CONTRACT
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2.01 GENERAL
Unless otherwise provided, all references in the Contract in the singular form
will include the plural form and all references in the plural form will include
the singular form.
Several persons may play a role in this Contract. These include: 1) the Owner;
2) the Annuitant; 3) the Beneficiary; and 4) the Payee.
2.02 THE OWNER AND JOINT OWNER
Unless otherwise provided, the Owner has all the rights and duties set forth in
this Contract. For Qualified Contracts the Owner may be a natural or Non-Natural
Person. For IRA Contracts the Owner must be the Annuitant.
Upon application, the Owner may designate or elect:
1) An Annuitant and Joint Annuitant, if applicable;
2) A Beneficiary and a contingent Beneficiary;
3) A Payee;
4) The income payment features to include: Modal Period, Payout Option, and
Income Start Date;
5) The initial allocation of the Net Single Premium Payment to the
Divisions and/or the Fixed Account;
6) Semi-Annual Benefit Leveling;
7) Automatic Rebalancing.
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X Note: Once elected on the Application, the Annuitant, Joint Annuitant, and
Income Payment features cannot be changed.
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On and after the Income Start Date, the Owner has the right to:
1) Name a different Owner or Joint Owner for Non-Qualified Contracts;
2) Change the Beneficiary and/or the Contingent Beneficiary;
3) Change the Payee for Non-Qualified Contracts;
4) Elect, discontinue or change the Electronic Funds Transfer (EFT) of
Income Payments;
5) Modify income tax withholding from Income Payments;
6) Transfer funds to the Fixed Account and between the Divisions, subject
to the Transfer Restrictions found in Article 4, section 4.04;
7) Elect or discontinue Semi-Annual Benefit Leveling;
8) Elect or discontinue Automatic Rebalancing.
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X Tax Note: Any Changes in the Owner, Joint Owner or Payee could have tax
consequences. The Owner should consult a tax advisor before any changes are
requested. The Company is not responsible for the tax consequences of any
ownership or payee changes.
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Most changes the Owner makes will be legally binding on the Company and take
effect after the Company receives the Owner's Written request. If the Owner
makes an ownership, Beneficiary or Payee change, the change will take effect as
of the date the Owner signs the change document. The Company is not liable,
however, for any payment the Company makes or other action it takes before
receiving the Owner's Written request or change document.
Nonqualified Contracts: If a Joint Owner is named, a Joint Owner will have an
undivided interest in the Contract. Unless otherwise permitted by the Company,
the exercise of any ownership right shall require a Written request by all
Owners.
Qualified Contracts: Certain Plan provisions required by the Code, ERISA or
other applicable laws may limit the Owner's rights under this Contract. The
provisions may:
1) Require consent of the Owner's Spouse before the Owner may elect to
receive Income Payments.
2) Require that the Owner's Spouse be designated as Beneficiary.
3) Require that Income Payments be made in the form of a Joint and Survivor
Annuity for the Owner and the Owner's Spouse unless both consent to a
different form of Payout Option.
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X Tax Note: The Owner or Joint Owner remains liable for any and all federal tax
consequences under this Contract. This includes, but is not limited to income
and gift tax consequences for Income Payments made to Payees other than
themselves. Unless otherwise directed, the Company will mail all tax forms to
the Owner of this Contract. The Company reserves the right to refuse to send tax
forms to someone other than the Owner, such as the Annuitant or Payee.
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2.03 THE ANNUITANT AND JOINT ANNUITANT
The Annuitant's (and any Joint Annuitant's, if applicable) life expectancy is
used to determine the amount and duration of any Income Payments made under
Payout Options involving life contingencies. Once designated, the Annuitant (and
any Joint Annuitant, if applicable) cannot be changed. A Joint Annuitant is
permitted only if one of the joint life Payout Options is selected.
IRA Contracts: The Owner must be the Annuitant and the entire interest in the
Contract is nonforfeitable.
Qualified Contracts: The Primary Annuitant must be the employee. If one of the
Joint Life Payout Options is elected, the Joint Annuitant must be the Spouse of
the Annuitant unless both consent otherwise.
2.04 THE BENEFICIARY
The Beneficiary may succeed to ownership in accordance with the Rights of
Succession section (Article 6, section 6.01) of the Contract.
Ownership succession may occur upon the death of both the Owner and Xxxxxxxxx or
as directed by the Owner on the application. The Owner may name
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one or more Beneficiaries. If more than one Beneficiary succeeds to ownership of
the Contract, each will share ownership equally unless otherwise specified.
2.05 THE PAYEE
The Owner may name one or more Payee(s). Multiple Payees will share equally,
unless otherwise designated. If no Payee is designated on the Application, the
Annuitant will be the Payee.
In no event will any Payee who is not also an Owner have any ownership rights
under this Contract. For Qualified and IRA Contracts the Payee must be the
Annuitant while the Annuitant is living.
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ARTICLE 3:
INCOME PAYMENTS
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3.01 GENERAL
The Company reserves the right to use a less frequent Payment Mode to make
Income Payments at least equal to one hundred dollars ($100.00) per Payee. All
Income Payments will be made in U.S. dollars. The Company reserves the right to
refuse to send Income Payments to an address other than a U.S. address.
The Company will not pay interest on amounts represented by uncashed Income
Payment checks if the postal service or delivery service is unable to deliver
checks to the Payee's address of record. Uncashed variable Income Payments will
not participate in the performance of the Divisions.
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X Note: The Owner is responsible for keeping the Company informed of the Payee's
current address of record.
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3.02 LIABILITY FOR INCOME PAYMENTS
The Owner and any successor Owner assume all responsibility for claims against
the Company arising out of any Income Payments made as directed by the Owner.
The Owner agrees to indemnify, defend and hold the Company harmless for such
claims. Anyone who receives Income Payments that should not have been made will
be liable to the Company for those payments.
3.03 SEPARATE ACCOUNT
The Separate Account is established and maintained by the Company for the
purpose of investing amounts allocated to it from variable contracts issued by
the Company. The assets of the Separate Account are owned by the Company, are
held separately from other assets of the Company and are not chargeable with
liabilities arising out of any other business of the Company.
Nothing contained in this Contract shall be construed as to give the Owner any
rights, title or interest in any of the assets held by the Separate Account. The
Company has the right to transfer to the Company's general account any assets of
the Separate Account which are in excess of the liabilities of the Separate
Account.
3.04 DIVISIONS
The Separate Account is made up of one or more Divisions, each of which invests
in a specific underlying fund available under this Contract. The Company
reserves the right, subject to compliance with applicable law, to make additions
to, deletions from or substitutions for the shares that are held by any Division
or that the Division may purchase. The Owner will be given notice of the
Company's intention to make a substitution.
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X Note: The Company does not guarantee the investment performance of the
Divisions. The Owner bears the full investment risk for amounts allocated to the
Divisions.
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Interests in a Division are purchased at their Net Asset Value and are valued on
each Valuation Date. The Owner shares in the income, gains and losses of the
Divisions for which the Net Single Premium Payment has been allocated.
3.05 ANNUITY INCOME UNITS
Upon applying the Net Single Premium Payment, the Company calculates the number
of Annuity Income Units associated with each Payout Option (for variable Income
Payments) as determined by the currently used annuity rate factors. The Annuity
Income Unit Value for each Division will vary from one Valuation Date to the
next based on the investment experience of the assets in the Division and the
deduction of certain Separate Account charges and expenses.
In determining the Annuity Income Unit Values, the Company applies a Mortality
and Expense Charge (Article 9, section 9.01) and an Administrative Expense
Charge (Article 9, section 9.02) against the daily value of the assets of each
Division. The amounts of these charges is shown as a percentage on the Contract
Data Page.
The number of Annuity Income Units for each Division will generally remain
constant, subject to the following exceptions:
1) If value is transferred from one investment option to another.
2) If value is withdrawn from the Contract
3) Upon the death of the Primary Annuitant after the Certain Period ends, if
applicable, if the Owner selects a joint and survivor Payout Option where
the surviving Annuitant's Income Payments are reduced (such as a joint and
50% survivor). The percentage reduction in the Income Payments will be
achieved through a reduction in the number of Annuity Income Units.
3.06 INITIAL ALLOCATION OF THE NET SINGLE PREMIUM PAYMENT
The Owner determines the initial allocation of the Net Single Premium Payment
between the Fixed Account and the Divisions of the Separate Account. The Owner
may choose to allocate the Net Single Premium Payment to all variable, all fixed
or a combination of fixed and variable Income Payments.
Allocation percentages to the Divisions must be in whole percents. The initial
allocation to the Divisions of the Separate Account cannot be less than [5%] per
Division and the total of all allocations must be equal to 100%.
The initial allocation to the Fixed Account cannot be less than [5%] of the Net
Single Premium Payment. The Net Single Premium Payment allocated to the Fixed
Account will be placed in the Company's general account.
The Net Single Premium Payment initially allocated to the Separate Account will
be applied within two (2) Valuation Dates from the later of the receipt of the
Premium Payment or the date all requirements to put the contract in force are
satisfied.
If any requirement is not satisfied within five (5) Valuation Dates, the Premium
Payment and all paperwork will be returned to its source unless the Contract
Owner provides the Company with Written authorization to hold the paperwork
and/or
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the Premium Payment (in a non-interest bearing account) until all requirements
are satisfied.
For Premium Payments in excess of [$1,000,000.00] the Company reserves the right
to restrict the Investment Options and/or allocate the Net Single Premium
Payment to the Money Market Division for a period of 15 days (or the end of the
Right to Cancel period if longer). On the Allocation Date, the Company will
transfer the value of the funds from the Money Market Division into the
Investment Option(s) selected on the Application by the Owner.
3.07 INCOME PAYMENTS
The Company will guarantee the dollar amount of any fixed portion of each Income
Payment; however, the amount of the variable Income payments will depend upon
the investment experience of the underlying funds and IS NOT guaranteed by the
Company.
For variable only Income Payments the Income Payments will vary with the
investment performance of the Divisions during each Modal Period
For fixed only Income Payments the Income Payments will be as determined on the
Contract Data Page, unless funds are transferred from the Divisions to the Fixed
Account during the Modal Period.
For a combination of fixed and variable Income Payments a portion of each Income
Payment will vary and a portion will remain as determined on the Contract Data
Page.
3.08 FIRST VARIABLE INCOME PAYMENT
The following factors may determine the amount of the first variable Income
Payment:
- The portion of the Net Single Premium Payment allocated to the variable
Investment Options;
- The value of the annuity unit on the Valuation Date prior to the Income Start
Date;
- The Allocation Date, if applicable;
- The Age and sex of the Annuitant (and Joint Annuitant, if any);
- The Payout Option elected;
- The frequency of Income Payments;
- The Income Start Date;
- The deduction of applicable premium taxes and fees;
- The Contract Date; and
- The Assumed Investment Return (AIR).
3.09 SUBSEQUENT VARIABLE INCOME PAYMENTS
All variable Income Payments will be valued on a Valuation Date prior to the
Income Payment Date. This Valuation Date is the date in which funds are
extracted from the Divisions in order to timely deliver the Income Payment to
the Payee.
On the Income Start Date and during each Modal Period thereafter, the Company
will calculate the variable Income Payments to reflect the investment
performance of each Division selected by the Owner. The dollar amount of the
variable Income Payment is determined as follows:
1) Determine the Annuity Income Units:
The portion of the first Income Payment funded by a particular Division is
divided by the Annuity Income Unit Value for that Division as of the
Contract Date.
2) The Annuity Income Units remain constant, subject to the following
exceptions:
a) If value is transferred from one investment option to another.
b) Upon the death of the Primary Annuitant under a joint annuity contract
and after the
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end of the Certain Period if the Income Payments to the Joint
Annuitant reduce, as indicated on the Contract Data Page.
c) A withdrawal.
3) The number of Annuity Income Units for each Division is multiplied by the
Annuity Income Unit value for that Division on the Valuation Date for which
the payment is being calculated. The sum of these figures for all the
Divisions in which the Owner invests establishes the dollar amount of the
variable Income Payments.
If net performance for each Modal Period (after deducting all charges) is
exactly equal to the AIR, the variable Income Payments will not change. If net
performance is less than the AIR, Income Payments will decrease. If net
performance is more than the AIR, Income payments will increase.
3.10 FIXED INCOME PAYMENTS
Fixed Income Payments represent obligations of the Company's General account.
The Owner may designate all or a portion of the Net Single Premium Payment to
fixed Income Payments. The fixed Income Payment amount, if selected, is shown on
the Contract Data Page. At any time after the Right to Cancel period (as
designated on the cover page of this Contract), an Owner may elect to transfer
any or all of the Contract's variable Income Payments to provide for fixed
Income Payments.
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X Note: Once amounts are allocated for fixed Income Payments they cannot be
reallocated for variable Income Payments.
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3.11 DELAY OF INCOME PAYMENTS
The Company reserves the right to suspend or postpone any type of payment or
reallocation from the Separate Account for any period when:
1. The New York Stock Exchange is closed for other than customary weekend and
holiday closings;
2. Trading on the New York Stock Exchange is restricted;
3. An emergency exists as a result of which it is not reasonable or
practicable to dispose of securities held in the Separate Account or
determine their value; or
4. The Securities and Exchange Commission permits delay for the protection of
the Owner.
3.12 SEMI-ANNUAL BENEFIT LEVELING
If the Owner elects Semi-Annual Benefit Leveling, monthly variable Income
Payments will be adjusted to reflect the performance of the Investment Options
once every six (6) months, instead of with every payment. On the semi-annual
benefit leveling start date, the number of Annuity Income Units necessary to
make the payments for the following six (6) months will be calculated. The level
payments calculated on each subsequent Semi-Annual Benefit Leveling start date
anniversary could be higher or lower than the level payments for the previous
semi-annual period.
An election to start Semi-Annual Benefit Leveling will take effect on the
Semi-Annual Benefit Leveling start date which is only on the next Income Payment
Date following receipt by the Company of the Owner's request to begin
Semi-Annual Benefit Leveling.
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--------------------------------------------------------------------------------
X Note: Once selected, benefit leveling will automatically renew at the end of
each six (6) month period. The Owner must notify the Company at least five (5)
business days prior to this renewal in order to discontinue benefit leveling.
--------------------------------------------------------------------------------
An election to discontinue Semi-Annual Benefit Leveling will take effect no
sooner than the end of the current Semi-Annual Benefit Leveling period. During
any Semi-Annual Benefit Leveling period, no withdrawals will be allowed from any
Payout Options other than Certain Period Only. The Company reserves the right to
discontinue Semi-Annual Benefit Leveling at any time. If this feature is
discontinued, leveled Income Payments will continue until the end of the current
Semi-Annual Benefit Leveling period.
--------------------------------------------------------------------------------
X Note: Depending upon the Payout Option selected, partial withdrawals will not
be allowed while Income Payments are leveled.
--------------------------------------------------------------------------------
3.13 MISSTATEMENT OF AGE OR SEX
If an Annuitant's Age or sex was misstated on the Application, Income Payments
will be adjusted to the correct amount for the true Age and sex. If this
misstatement caused the Company to make an overpayment, the company will deduct
the amount of the overpayment from succeeding Income Payment. The Owner will be
liable to the Company for the difference between the amount of any overpayments
made and the amount of any remaining Income Payments. If the misstatement caused
the Company to make an underpayment, the Company will make up the difference
immediately. Overpayments and underpayments will be made up with interest at 6%
per year.
3.14 INCOME PAYMENTS TO GUARDIAN
Income Payments may be made at the Company's discretion to the Owner's or
Xxxxx's duly authorized or qualified representative. This includes without
limitation, guardian, committee or attorney-in-fact, during any period that the
Owner or Payee is incapable of executing a valid receipt for such payments. Any
payments made according to this paragraph shall completely discharge the Company
from any liability for the responsibility of making payments under this
Contract.
================================================================================
ARTICLE 4:
INVESTMENT TRANSFERS
================================================================================
4.01 TRANSFERS AMONG INVESTMENT OPTIONS
Subject to the "Transfer Restrictions" (Article 4, section 4.04), amounts
allocated to Divisions for variable Income Payments may be transferred among
available Investment Options at any time.
The Owner either In Writing or over the telephone can make transfers. If the
Contract contains a Joint Owner, the Company will accept transfer instructions
from either owner, unless instructed otherwise. The Owner will need to notify
the Company In Writing if someone other than the Owner is authorized to make
transfers.
--------------------------------------------------------------------------------
X Note: Any transfer requests that are received after the close of the New York
Stock Exchange will be valued based upon the next Valuation Date.
--------------------------------------------------------------------------------
4.02 AUTOMATIC REBALANCING
The Owner may select automatic rebalancing on the Application or at a later
date. This feature allows the Company to automatically rebalance the
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current proportional value of the Net Single Premium Payment allocated to each
variable investment option under this Contract to correspond with allocation
designated on the Application, or as later changed by the Owner. Automatic
rebalancing does not guarantee gains, nor does it assure that there will not be
investment losses. During automatic rebalancing the Company will take assets
from the better performing Divisions and reallocate them to the lesser
performing Divisions.
Automatic rebalancing of the Separate Account Divisions can occur quarterly,
semi-annually or annually on the Contract Date anniversary, the automatic
rebalancing date. Annuity Income Units for automatic rebalancing will generally
be priced as of the date of the transaction. However, if the scheduled date of
the transfer falls on a non-Valuation Date, it will be priced as of the
preceeding Valuation Date.
The Company reserves the right to discontinue offering automatic rebalancing at
any time. Certain restrictions may apply based upon the Payout Option selected,
the amount of the Net Single Premium Payment, and the frequency of payments.
--------------------------------------------------------------------------------
X Note: Automatic rebalancing will continue until the Company is notified by the
Owner that it is to be discontinued. Notification must be received at least five
(5) business days prior to the next automatic rebalancing date.
--------------------------------------------------------------------------------
4.03 TRANSFER RESTRICTIONS
1. The Company reserves the right to limit the number of transfers among the
Divisions to no more than [one (1) ] on any Valuation Date (excluding
transfers resulting from automatic rebalancing).
2. The Company reserves the right to suspend an Owner's Transfer privilege.
3. Transfers will take effect as of the next Valuation Date on which the Company
receives the transfer request, unless the request is received after the close
of the New York Stock Exchange. Then, the transfer will take effect on the
next Valuation Date.
4. The allocation of variable Income Payments after any transfer must result in
at least [the greater of $50 or 5%] of the total variable Income Payments
being derived from each of the utilized Divisions.
5. Amounts allocated for fixed Income Payments may not be reallocated for
variable Income Payments.
6. Transfers cannot be made during the Right to Cancel period while funds are
held in the Money Market Division, if applicable.
7. The Company reserves the right to charge a [$25.00] transfer fee for each
transfer over [12] transfers per contract year.
The Contract is not designed for professional market timing organizations or
other entities using programmed or frequent transfers involving large amounts.
The Company may not unilaterally terminate or discontinue transfer privileges;
however, the Company reserves the right to suspend such privilege indefinitely
with notice to prevent market timing efforts that could disadvantage or be
harmful to other Owners, Annuitants or Beneficiaries.
================================================================================
ARTICLE 5:
WITHDRAWALS
================================================================================
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5.01 WITHDRAWAL OPTIONS:
After the right to cancel period (refer to the cover page of this Contract) the
Owner may take a partial or full withdrawal of the present value of the
remaining variable Income Payments. Withdrawals are subject to the restrictions
of the following Payout Options:
--------------------------------------------------------------------------------
X Note: At no time will funds invested in the Fixed Account be available for
withdrawal.
--------------------------------------------------------------------------------
Lifetime Income (including Joint life) with Certain Period Payout Options: The
Owner may take a partial withdrawal of the present value of the variable Income
Payments in the Certain Period portion of the contract. There must be at least
five (5) years of Certain Period payments remaining after the withdrawal is
taken.
Certain Period Only Payout Options: The Owner may take a full withdrawal of all
remaining variable Income Payments.
The withdrawal requests must be In Writing to the Company in a form acceptable
by the Company. The Company will pay any amounts withdrawn to the Owner within
[5] days of receipt if the Company deems the request to be complete. Withdrawals
may be requested only after the Right to Cancel period.
5.02 EFFECT OF WITHDRAWALS ON FUTURE INCOME PAYMENTS
A withdrawal involves a transfer of assets out of a Division. As assets decrease
in the Division, the number of Annuity Income Units in the Division must also
decrease to reflect the withdrawal of those assets. A full or partial withdrawal
will reduce all remaining variable Income Payments (both the life contingent and
the Certain Period portions), in addition to the length of the Certain Period.
If funds are transferred from one or more Divisions, providing for variable
Income Payments, to the Fixed Account, providing for fixed Income Payments, at
any time after a withdrawal from the Contract has been taken, the Certain
Period, if any, related to those transferred funds, will remain shortened (as
described in the preceding paragraph). The Certain Period applicable to any
pre-existing funds in the Fixed Account, providing for fixed Income Payments,
will not be affected.
When the Owner requests a withdrawal, the Company will take amounts from the
Divisions in which this Contract is then invested in the same proportion as the
value invested in each Division on the date of the withdrawal. Since the amount
of Income Payments changes during the next Modal Period, the reduction in Income
Payments due to the withdrawal will be delayed until that time.
--------------------------------------------------------------------------------
X Note: Withdrawals will reduce future variable Income Payments and will reduce
the remaining number of Certain Period Income Payments.
--------------------------------------------------------------------------------
5.03 RESTRICTIONS ON WITHDRAWALS
1) Withdrawals are limited to one (1) per Contract year.
2) The minimum withdrawal amount is $2,500.00.
2) No withdrawals are permitted for Lifetime Income Only Payout Options
(single or joint life).
4) Withdrawals are allowed only from the variable Income Payment portion of
the Contract.
5) With exception to full withdrawals from Certain Period Only Contracts,
withdrawals are not permitted if Semi-Annual Benefit Leveling is currently
in effect.
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6) With the exception of full withdrawals from Certain Period Only Contracts,
there must be at least five (5) years of Certain Period Income Payments
remaining after the withdrawal has been made.
5.04 DETERMINING THE WITHDRAWAL AMOUNT
In determining the amount of the withdrawal, only the present value of the
variable Income Payments will be used.
--------------------------------------------------------------------------------
X Note: No fixed Income Payments will be used in determining the withdrawal
values.
--------------------------------------------------------------------------------
The Company will calculate the present value of the variable Income Payments
during the Certain Period by discounting the payments at the AIR less any fees,
if applicable. The future variable Income Payment amount used in this
calculation is determined by multiplying the Annuity Income Unit Value next
computed after receipt of the withdrawal request by the current number of
Annuity Income Units for each Division.
--------------------------------------------------------------------------------
X Tax Note: Non-periodic partial or full withdrawals, not including periodic
Income Payments, may not receive annuity tax treatment. Before taking a
withdrawal from this Contract a tax advisor should be consulted.
--------------------------------------------------------------------------------
5.05 WITHDRAWAL CHARGES:
Any non-periodic full or partial withdrawal (subject to the restrictions and
requirements of Article 5), will be assessed the following withdrawal charge:
Contract Year Charge
------------------------------------------------
1-8 [1%] of amount withdrawn
9-Contract End Date 0%
================================================================================
ARTICLE 6:
DISTRIBUTION UPON DEATH
================================================================================
6.01 RIGHTS OF OWNERSHIP SUCCESSION
Upon the death of any Owner, ownership rights, if any, under this Contract will
succeed to the following persons in the following order unless otherwise
indicated on the Application and approved by the Company:
. the surviving Owner or Joint Owner, if any.
. the Annuitant(s), if any.
. the Beneficiary(ies).
. the estate or successors of the last Owner or Joint Owner to die.
If a Simultaneous Death occurs, the Company will assume that the successor Owner
(as determined by the Rights of Succession, Article 6, section 6.01) died first.
Ownership succession will be subject to the Payout Option elected. Proceeds will
be paid on this basis unless an endorsement to this Contract provides otherwise.
6.02 NOTIFICATION OF DEATH
The death of any Owner, Annuitant or Xxxxx must be reported to the Company
immediately. The Company will require certified proof of death in the following
form:
1. A certified copy of the death certificate; and/or
2. A certified copy of a decree from a court of competent jurisdiction as
to the finding of death; and/or
3. Other form as may be required by the Issue State indicated on the
Contract Data Page
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The Company is entitled to recover any overpayments made because of failure to
timely notify the Company of death. The Owner or any successor Owner is liable
to the Company for any overpayments, including any overpayments made to a Payee
other than the Owner. The Company is not responsible for any mispayments that
result from failure to timely notify the Company of such death.
6.03 DEATH OF THE OWNER WHO IS THE ANNUITANT PRIOR TO THE ANNUITY STARTING DATE
Upon the death of any Owner, who is named in the Application as the Annuitant,
the account value of the Certain Period portion (the entire interest) of this
Contract must be paid by the end of the calendar year containing the fifth
anniversary of that Owner's death. However, each person who is or becomes an
Owner in accordance with the Rights of Succession (Article 6, section 6.01) may
elect to have this entire interest paid over his or her lifetime or over a
period not exceeding his or her life expectancy.
Payments are to begin on or before the end of the calendar year immediately
following the year in which the Owner or Joint Owner died.
--------------------------------------------------------------------------------
X Note: If a life contingent Payout Option was selected, the life contingent
Income Payments will be forfeited and retained by the Company. Refer to Article
6, section 6.10 for additional restrictions on Lifetime Only Payout Options.
--------------------------------------------------------------------------------
6.04 DEATH OF THE OWNER WHO IS NOT THE ANNUITANT PRIOR TO THE ANNUITY STARTING
DATE
Upon the death of any Owner, who is not the same as the Annuitant, the account
value of the Net Single Premium Payment must be paid by the end of the calendar
year containing the fifth anniversary of that Owner's death. However, each
person who is or becomes an Owner in accordance with the Rights of Succession
(Article 6, section 6.01) may elect to have the entire interest paid over his or
her lifetime or over a period not exceeding his or her life expectancy.
Payments are to begin on or before the end of the calendar year immediately
following the year in which the Owner or Joint Owner died. Refer to Lifetime
Income Payout Option (Article 6, section 6.10) for additional restrictions on
Lifetime Only Payout Options.
6.05 DEATH OF THE ANNUITANT WHO IS NOT THE OWNER PRIOR TO THE ANNUITY STARTING
DATE
Upon the death of the Annuitant who is not also the Owner, the Contract remains
in force and makes Income Payments according the Certain Period portion of the
Payout Option, if applicable, selected on the application and found on the
Contract Data Page of this Contract. For a Joint Annuitant Contract, the Income
Payments continue for the longer of (1) the life of the Joint Annuitant or (2)
the Certain Period, if applicable. If the Contract is a Lifetime Income Only
Payout Option, then this Contract terminates and no payments are made.
Upon the death of both annuitants under a Joint Annuity Contract, only the
Certain Period Income Payments are made prior to the Contract termination; if
there are no Certain Period Income Payments, then the Contract terminates
immediately and no payments will be made.
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6.06 DEATH OF THE OWNER OR JOINT OWNER AFTER THE ANNUITY STARTING DATE
Upon the death of any Owner after the Annuity Starting Date, any remaining
Income Payments will be made as specified by the terms of the Payout Option
selected, as set forth on the Contract Data Page. Payments will be made at least
as rapidly as under the distribution method being used prior to the death of the
Owner or Joint Owner. Ownership rights under the Contract will succeed in
accordance with the Rights of Succession (Article 6, section 6.01).
6.07 DEATH OF THE ANNUITANT AFTER THE ANNUITY STARTING DATE
If the death of the Annuitant occurs after the Annuity Starting Date, any
remaining Certain Period Income Payments, if applicable, will be paid. Under a
Joint Annuity Payout Option, upon the death of one Annuitant Income Payments
will be paid according to the Payout Option selected on the Application. Upon
the death of all Annuitants, any remaining Certain Period Income Payments, if
applicable, will be paid. If no Annuitant survives and there are no Certain
Period Income Payments remaining, then Income Payments will cease and this
contract will terminate.
6.08 DEATH OF A PAYEE
If a Payee dies while receiving Income Payments, the Company will make any
required Income Payments to the Owner or the successor Owner as set forth in the
Rights of Succession (Article 6, section 6.01), pending instructions to make
payments to a new Payee.
6.09 STATUS OF INCOME PAYMENTS UPON NOTIFICATION OF ANY DEATH
Upon learning of the death of an Annuitant, Owner, Payee, or Beneficiary, the
Company may suspend future Income Payments until proof of death and/or any other
forms as may be required by the Company are received in the Home Office. All
suspended Income Payments due and owing will remain invested as last instructed
by the Owner.
6.10 LIFETIME INCOME PAYOUT OPTION
Notwithstanding other provisions in this Contract to the contrary, if the Payout
Option set forth on the Contract Data Page is a Lifetime Income (or Joint
Lifetime Income) with no guaranteed payments after the death of the
Annuitant(s), then this Contract will terminate if all Annuitants die prior to
or after the Annuity Starting Date. Neither the Single Premium Payment nor any
other interest nor benefit in the Contract will be owed or payable to any person
by the Company.
================================================================================
ARTICLE 7:
TAXATION
================================================================================
7.01 GENERAL
The tax information contained in this Contract is intended to be general and
such information is NOT intended to offer legal or tax advice. The Owner should
consult with his or her professional tax advisor concerning matters relating to:
1) Minimum Distribution Requirements;
2) Taxation of Income Payments;
3) Income tax penalties applied to premature distributions;
4) Federal estate laws;
5) Gift tax laws;
6) State inheritance tax laws; and
7) Non-periodic withdrawals
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The Company will be under no obligation for any tax or tax penalties imposed by
the Code or by any other applicable federal or state law, rule or regulation.
7.02 STATUS AS AN ANNUITY CONTRACT
On the Contract Date, this Contract is intended to qualify as an "annuity
contract" under the Code. Accordingly, all provisions of this Contract shall be
interpreted and administered in accordance with the requirements of Code section
72(s) and other relevant Code sections. In no event shall any payment be
deferred beyond the time limits permitted by Code section 72(s). The Company
reserves the right to amend this Contract to comply with requirements set out in
the Code and regulations and rulings thereunder, as may exist from time to time.
7.03 TAXATION ON PREMIUM PAYMENT
Some states and other government entities impose a premium tax on annuities. The
Company reserves the right to deduct charges for any state premium or other tax
that the Company determines may be applicable to this Contract.
================================================================================
ARTICLE 8:
GENERAL PROVISIONS
================================================================================
8.01 CONTRACT ISSUE REQUIREMENTS:
The Company will not issue a Contract unless the Company has received all the
information necessary to issue the Contract; and the Company receives the entire
Single Premium Payment. If the information needed to issue the contract is not
received within five (5) Valuation Dates, the Company will return the premium
unless the Owner allows the Company to keep the Single Premium Payment until the
necessary information is received, in accordance with the Initial Allocation of
the Net Single Premium Payment (Article 3, section 3.06).
8.02 SINGLE PREMIUM PAYMENT
The minimum premium for a contract is [$25,000.00]. Amounts less than
[$25,000.00] may be accepted with prior home office approval. This is a Single
Premium Payment Contract; no additional premiums will be accepted.
8.03 ENTIRE CONTRACT
The entire contract is made up of: 1) this Contract; 2) the Application; and 3)
any approved endorsements added to this Contract.
A copy of the application is attached to this Contract at delivery and evidences
the original application. The Company relies on all statements made in the
application and the amendment to application, if applicable. All statements made
in the application will be deemed representations and not warranties. If any
part of this Contract is found to be invalid, all other parts will remain in
effect.
No insertion in or other alteration of any written application can be made by
any person other than the applicant without his written consent, except that
insertions may be made by the insurer for administrative purposes only in such
manner as to indicate clearly that the insertions are not to be ascribed to the
applicant.
8.04 CONFORMITY WITH LAWS
To the extent the Contract conflicts with any applicable federal or state law,
regulation or ruling, the Contract shall be deemed to conform with the minimum
requirements of such law, regulation or
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ruling and the Contract shall be administered accordingly.
8.05 EVIDENCE OF SURVIVAL
Where any payments under this Contract depend on a person being alive on a given
date, the Company may require proof that such person is living. Such proof may
be required before making Income Payments.
8.06 VALIDITY OF A TRUST
The Company is not required to verify the validity or effect of a trust, the
scope of the trustee's authority, or a trust's use of payments according to the
terms of the trust agreement. Payment made to a trust will release the Company
of all contractual obligations to the extent of the payment.
8.07 TERMINATION OF THE CONTRACT
This Contract terminates:
1) On the date indicated as the Income End Date on the Contract Data Page
for Contracts with a Payout Option that is Certain Period with no life
contingencies
2) For all other Contracts, on the date that all Certain Period Income
Payments, if applicable, have been made and no Annuitant is living.
8.08 MODIFICATIONS TO THE CONTRACT
Only the President, a Vice President, an Administrative Office, or Secretary of
the Company can change or waive any provisions of this Contract. Any such change
or waiver must be in writing. No other person can change or waive any Contract
provision. The Company may modify the Contract if required to by state, federal
or other relevant law. No change will be made that adversely affects the Owner's
rights unless law requires such a change.
The Company may also find it necessary to modify this Contract in order to
maintain its status as an annuity, an IRA Contract or Qualified Contract under
the provisions of the Code, ERISA, or to comply with state law. Such changes
will be made by endorsement that will be filed with the applicable state
insurance department(s) before its use. The Owner will be provided with a copy
of any such endorsement affecting this Contract.
8.09 ANNUITY IS NOT A "PLAN"
This Contract is not a "plan" as defined in ERISA section 3(3). The Company is
not a "fiduciary" under ERISA section 3(21).
8.10 INCONTESTABILITY
The Company relies on all statements made in the application and the amendment
to application, if applicable. All statements made in the application will be
deemed representations and not warranties. If any part of this Contract is found
to be invalid, all other parts will remain in effect. The Company will not
contest this Contract after the Contract Date.
8.11 NON-PARTICIPATING
This Contract is non-participating. It will not share in the distribution of any
divisible surplus of the Company. No dividends are payable.
8.12 ASSIGNMENT
Non-Qualified Contracts: The Owner may assign the Contract, the Income Payments
or an interest in the Contract. The Company is not responsible for the validity,
effect, or tax treatment of any such assignment. No assignment will bind the
Company until the Company has received it and recorded it at
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its Home Office. Once recorded, such assignment shall be effective the date
signed by the Owner. The Owner's rights under this Contract may be affected by
an assignment.
--------------------------------------------------------------------------------
X Tax Note: Adverse federal income tax consequences may result from an
assignment of the Contract. The Owner should consult with a professional tax
advisor concerning the tax implications of assigning this Contract.
--------------------------------------------------------------------------------
IRA Contracts and Qualified Contracts: The Owner may not sell, assign, or pledge
as security for a loan, or transfer his or her interest in this Contract except
as otherwise provided in the Code and other applicable law. Any attempt to do so
will be void. The offsetting of any fees, administrative, or other expenses owed
to the Company against any payments under this Contract will not be considered a
transfer or assignment.
Notwithstanding the above, all or a portion of this Contract may be transferred
to the Owner's Spouse or former Spouse under a divorce or separation instrument
pursuant to the Code [sections 71(b)(2), 401(a)(13), 414(p), 1041, and ERISA
section 206(d)].
8.13 RELIANCE ON INFORMATION BY THE COMPANY
The Owner agrees to provide information to the Company at such time, in such
manner, and containing such data as may be necessary for the Company to prepare
any reports required of the Company, as insurer, or by the Code. The Company may
rely on information furnished to it by the Owner to fulfill its obligations
under this Contract and shall incur no liability for acting in reliance on such
information.
8.14 PROTECTION OF PROCEEDS
To the extent permitted by applicable law, the benefits, values and rights under
this Contract are not subject to the claims of creditors or to legal process.
8.15 NOTIFICATION
Any notification required by this Contract will be sent to the Owner by regular
mail to the address that the Owner has provided the Company, and this will
constitute effective notification. The Owner agrees to immediately notify the
Company In Writing of any change in his or her name or address.
8.16 DISCLAIMER
The Company will be under no obligation for any of the following:
1) For any tax or tax penalties incurred under the Code or by any other
applicable federal or state law, rule or regulation; or
2) To determine whether any contribution, distribution, or transfer under
the Contract complies with the provisions, terms, and conditions of any
Plan or with applicable law;
3) To administer any Plan, including, without limitation, any provisions
required by ERISA; or
4) To provide any notifications or reports required to be made by an
employer or any other entity.
8.17 LIABILITY OF THE COMPANY
Action or inaction by the Company based on a reasonable interpretation of the
law as to whether the Annuitant has met the Minimum Distribution Requirements or
other distribution requirements under the Code or other federal or state law
shall create no liability on behalf of the Company if it is subsequently
determined that such interpretation is incorrect.
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8.18 INDEMNIFICATION OF THE COMPANY
The Company and its representatives will be indemnified and held harmless for
any liabilities or costs (including any legal fees incurred by them) which may
arise in the performance of the Company's duties under this Contract except for
liabilities arising from the Company's or its representatives' negligence or
willful misconduct.
8.19 REPORTS
IRA Contracts: The Company will submit annual calendar year reports concerning
the status of this Contract, if applicable.
If variable Income Payments are being made, the Company will send to the Owner,
a report showing the number of Annuity Units in each Division and the value of
each Annuity Unit at least once per year. In addition, the Owner will be sent a
confirmation statement each time there is transfer of Annuity Units among
Divisions or to the General account.
All reports will be sent to the Owner's last known address.
8.20 RIGHTS RESERVED BY THE COMPANY
The Company reserves the following rights to:
1) Reflect a change in the Separate Account or any Division thereunder;
2) Create new Separate Accounts;
3) Operate the Separate Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law;
4) Transfer any assets in any Division in the Separate Account, or combine the
Separate Account with another Separate Account;
5) Add, combine or remove Divisions in the Separate Account, or combine the
Separate Account with another Separate Account;
6) Make any new Divisions available to the Owner on a basis to be determined by
the company;
7) Substitute for the shares held in any Division the shares of another
underlying fund or the shares of another investment company or any other
investment permitted by law;
8) Make any changes as required by the Code or by any other applicable law,
regulation or interpretation in order to continue treatment of this Contract
as an annuity;
9) Make any changes to comply with the rules of any Fund.
================================================================================
ARTICLE 9:
EXPENSES
================================================================================
9.01 MORTALITY AND EXPENSE RISK CHARGE
This charge is equal, on an annual basis, to a percentage of the average daily
value of the Contract invested in the Variable Investment Option. This charge
compensates the Company for the insurance benefits provided by the Contract. The
amount of the Mortality and Expense Risk Charge may be adjusted by the Company,
but will never be greater than the Maximum Mortality and Expense Risk Charge
shown on the Contract Data Page. Neither expenses actually incurred, other than
taxes on the investment return, nor mortality actually experienced, shall
adversely affect the dollar amount of variable Income Payments after such
payments have commenced.
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9.02 ADMINISTRATIVE EXPENSE CHARGE
This charge is equal, on an annual basis, to a percentage of the average daily
value of the Contract invested in the Variable Investment Option. This charge is
for expenses associated with the administration of the Contract. These expenses
may include, but are not limited to, preparation of the Contract, confirmation
statements, annual statements, legal fees, and the maintenance of Contract
records. The amount of the Administrative Expense Charge may be adjusted by the
Company, but will never be greater than the Maximum Administrative Expense
Charge shown on the Contract Data Page.
9.03 FUND EXPENSES
There are deductions from the assets of the various funds for operating expenses
(including management fees).
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THE UNITED STATES LIFE INSURANCE COMPANY
IN THE CITY OF NEW YORK
This is a Single Premium Immediate Variable Annuity Contract. Important details
concerning this Immediate Variable Annuity are stated on the Contract Data Page,
page 3 (or 3A, if applicable) of this Contract.
READ THIS CONTRACT CAREFULLY. This Contract explains how the annuity performs,
and is a legal contract between the Owner and the Company. All Income Payments
and benefits will be payable subject to the terms of this Contract. Examine the
Contract, the Contract Data Page (page 3) and attached application. If any
errors or omissions are found, immediately contact the Company.
THIS CONTRACT IS NON-PARTICIPATING -
DIVIDENDS ARE NOT PAYABLE.
PLEASE READ THIS CONTRACT CAREFULLY.
THIS CONTRACT IS A LEGAL CONTRACT BETWEEN THE OWNER AND
AMERICAN GENERAL LIFE INSURANCE COMPANY.
================================================================================
For information, service or to make a complaint, contact your servicing agent or
the Company's Administrative Office at:
The United States Life Insurance Company In The City of New York
0000-X Xxxxx Xxxxxxx . P. O. Box 3018 . Houston, TX 77253-3018
Toll Free Customer Service Number
(000) 000-0000
================================================================================
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