INDIVIDUAL FLEXIBLE PURCHASE PAYMENT VARIABLE DEFERRED ANNUITY CONTRACT
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THIS CONTRACT IS ISSUED IN CONSIDERATION OF THE INITIAL PURCHASE
PAYMENT. THIS IS A VARIABLE ANNUITY CONTRACT WITH ANNUITY PAYMENTS,
CONTRACT VALUES AND BONUS VALUES INCREASING OR DECREASING DEPENDING
ON THE EXPERIENCE OF THE VARIABLE ACCOUNT SHOWN ON 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.
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
/s/Xxxxx X. Xxxxxxxx /s/Xxxxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx
Secretary President
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.
WE WILL PROMPTLY REFUND THE CONTRACT VALUE IN STATES WHERE PERMITTED.
THIS MAY BE MORE OR LESS THAN THE PURCHASE PAYMENTS AND IT WILL NOT
INCLUDE ANY BONUS AMOUNTS. WE HAVE THE RIGHT TO ALLOCATE PURCHASE
PAYMENTS AND ANY BONUS TO THE MONEY MARKET INVESTMENT OPTION UNTIL THE
EXPIRATION OF THE RIGHT TO EXAMINE PERIOD. IF WE SO ALLOCATE PURCHASE
PAYMENTS AND ANY BONUS, WE WILL REFUND THE GREATER OF THE PURCHASE
PAYMENTS LESS ANY WITHDRAWALS AND ANY BONUS, 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]
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GUIDE TO CONTRACT PROVISIONS
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Contract Schedule......................................................3
Definitions......................................................4, 5, 6
Ownership...........................................................6, 7
Purchase Payments......................................................7
Bonus..................................................................8
Variable Account.............................................. 8, 9, 10
Variable Account
Accumulation Unit Value
Mortality and Expense Risk Charge
Contract Maintenance Charge
Bonus Value
Transfers
Suspension or Deferral of Payments
Withdrawals...........................................................10
Annuity Provisions........................................... 11, 12, 13
Death Benefit ............................................... 14, 15, 16
General Provisions............................................... 16, 17
Misstatement of Age or Sex
Income Date
Conditions for Termination of the Contract
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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.
The term "Contract Owner" may also be used to
mean Owner in some endorsements or riders.
ACCUMULATION PHASE The period of time before you elect to apply the
entire Contract Value to Annuity Payments.
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 the
following.
(a) The Business Day before the Income Date
if you take a Full Annuitization.
(b) The Business Day we process your request
for a full withdrawal.
(c) Upon the death of any Owner, unless the
contract is continued by the deceased
Owner's spouse,the Accumulation Portion
will terminate on the Business Day that
the Service Center receives both due
proof of death and an election of the
death benefit payment option.
ACCUMULATION UNIT The units into which we convert amounts
invested in the subaccount(s) of your selected
Investment Option(s) 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 age as of the immediately preceding birthday
unless otherwise specified.
ANNUITANT The natural person upon whose continuation of
life we base any Annuity Payments involving life
contingencies. The Annuitant is the person
designated by the Owner. The Annuitant is shown
on the Contract Schedule.
ANNUITY OPTION An arrangement under which Annuity Payments are made
under this contract.
ANNUITY PAYMENTS The series of payments made to you or any Payee you
name beginning on any Income Date.
ANNUITY PHASE The period of time beginning on the first Income
Date during which Annuity Payments are made.
ANNUITY PORTION The part of the contract that is in the Annuity
Phase. If you take Partial Annuitizations, you
may have multiple Annuity Portions. Each
Annuity Portion begins on an Income Date and ends
upon the earliest of the following.
(a) Under Annuity Options 1 and 3, the death
of the last surviving Annuitant.
(b) Under Annuity Options 2 and 4, the death
of the last surviving Annuitant and the
expiration of the guaranteed period, or
payment of the lump sum payment of the
remaining guaranteed Annuity Payments.
(c) Under Annuity Option 5, death of the
Annuitant and payment of any lump sum
refund.
ANNUITY RESERVE The assets which support the Annuity Option you
have selected during the Annuity Phase.
ANNUITY UNIT The units into which we convert amounts
invested in the subaccount(s) of your selected
Investment Option(s) during the Annuity Phase.
ASSUMED INVESTMENT RATE The investment rate upon which we base variable
(AIR) Annuity Payments.
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DEFINITIONS (CONTINUED)
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AUTHORIZED REQUEST A request that is received by the Service
Center in good order (that is, in a form
that is satisfactory to the Company).
BENEFICIARY The designated person(s) or entity(ies) to whom
we will pay the death benefit under this
contract. You name the Beneficiary(ies) at
issue. You may later change the Beneficiary(ies)
by Authorized Request as described in the Change
of Beneficiary provision of this contract.
For jointly owned contracts, the surviving Joint
Owner is the sole primary Beneficiary. Spousal
Joint Owners may also name contingent
Beneficiaries. For tax reasons, non-spousal
Joint Owners cannot name contingent
Beneficiaries.
BONUS VALUE The Bonus Value for any Business Day is
equal to the dollar value accumulated in the
Investment Choices excluding amounts applied to
Annuity Payments. The Bonus Value includes
unvested bonus amounts.
BUSINESS DAY Each day on which the New York Stock
Exchange is open for trading, except when an
Investment Option does not value its shares. Our
Business Day closes when regular trading on the
New York Stock Exchange closes, which is usually
at 4:00 p.m. Eastern Time. We will process any
instructions received after the close of any
Business Day on the next Business Day.
CONTRACT ANNIVERSARY A 12-month anniversary of the Issue Date of this
contract.
CONTRACT VALUE The Contract Value for any Business Day is
equal to the total dollar value accumulated in
the investment choices under this contract,
excluding amounts applied to Annuity Payments
and any unvested bonus amounts.
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
Adjusted Contract Value to Annuity Payments
according to the Annuity Options in this
contract and/or any attached endorsements or
riders.
GENERAL ACCOUNT Our general investment account which contains
all the assets of the Company with the exception
of the Variable Account and other separate
accounts.
INCOME DATE A date that Annuity Payments begin. The date
Annuity Payments are scheduled to begin is
shown on the Contract Schedule.
INVESTMENT OPTIONS The investment choices available under the
Variable Account. The Investment Options are
shown on 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 on the Contract Schedule
and determines the Contract Anniversaries, and
the beginning of each Contract Year.
JOINT ANNUITANT You can add a Joint Annuitant for the
Annuity Phase subject to our approval. If we
allow Joint Annuitants, we will base Annuity
Payments on the lives of both Joint Annuitants.
JOINT OWNER A contract may be owned by Joint Owners.
Joint Owners have equal contract ownership
rights. Both Joint Owners must authorize the
exercise of these rights in writing unless
otherwise allowed by us. If Joint Owners are
named, all references to Owner shall mean Joint
Owners.
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DEFINITIONS (CONTINUED)
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NET ASSET VALUE The value of a share an underlying
Investment Option, 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 Annuity Payments
according to the Annuity Options in this
contract and/or any attached endorsements or
riders.
PAYEE The person to whom Annuity Payments are made
payable. Unless you designate another Payee,
you will be the Payee of the Annuity Payments.
PREMIUM TAX Any Premium Taxes owed by the Company to any
governmental entity.
PURCHASE PAYMENT Any payment made toward this contract.
SERVICE CENTER The office shown on the Contract Schedule
of this contract. All notices, requests and
Purchase Payments must be sent to the Service
Center.
VARIABLE ACCOUNT A separate account we maintain to which a
portion of our assets have been allocated for
this contract and certain other variable
annuity contracts. The Variable Account is
shown on the Contract Schedule.
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OWNERSHIP
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ASSIGNMENT OF THIS You may assign or transfer all of your ownership
CONTRACT 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.
We will also not be liable for actions we take or
payments we make 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 you assign this contract, you can
exercise your rights only with the written
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 we
take before we receive 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) or
Beneficiary(ies). The new Owner may request a
change of Annuitant(s) and/or 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 Contract is owned by a
non-individual, then we treat the Annuitant as
the Owner for purposes of any bonus, death
benefit, income benefit, or any endorsement or
rider.
We will use the Age of the Annuitant to determine
any death benefit or income benefit.
The term "non-natural owner" may also be used to
mean "non-individual owner" in any endorsement
and/or rider.
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.
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OWNERSHIP (CONTINUED)
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CHANGE OF BENEFICIARY For solely owned contracts, you
may change the primary Beneficiary(ies) or
contingent Beneficiary(ies) at any time before
your death.
For jointly owned contracts the surviving Joint
Owner is the sole primary Beneficiary and cannot
be changed. However, if the Joint Owners are
spouses, you may change the contingent
Beneficiary(ies) at any time before your death.
For tax reasons we do not allow non-spousal Joint
Owner(s) to appoint contingent Beneficiaries.
Changes are subject to the rights of any
irrevocable Beneficiary(ies). 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 an Owner dies but before we make any
payment, the change will be valid. We will not be
liable for any payment we make or action we take
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 on the Contract Schedule.
NO DEFAULT This contract will not be in default if you do
not make additional Purchase Payments.
ALLOCATION OF PURCHASE We allocate your Purchase Payment to one or more
PAYMENTS of the Investment Options according to your
instructions. We will allocate bonus
amounts in the same way as the corresponding
Purchase Payment. However, we reserve the right
to allocate the initial Purchase Payment and
bonus amounts to the Money Market Investment
Option until the expiration of the Right to
Examine period. Unless you inform us otherwise,
we allocate additional Purchase Payments and
bonus amounts in the same manner as the initial
PurchasePayment.
All allocations of Purchase Payments and bonus
amounts are subject to the Allocation Guidelines
shown on the Contract Schedule. We guarantee that
you will be allowed to select at least five
Investment Options for such allocations.
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BONUS
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BONUS As of the Business Day we receive your Purchase
Payment, we will credit each Purchase Payment
received before the older Owner's 81st birthday
with a bonus.
The bonus rate and vesting schedule are shown on
the Contract Schedule. We will credit the bonus
to this contract under the following terms.
(a) Bonus amounts will become available for
withdrawal, annuitization, or payment of
the death benefit only when such amounts
become vested. You will receive the
benefit of the bonus in any guaranteed
benefits that are based on Contract
Value only as it becomes vested. You
will not receive benefit of the bonus in
any guaranteed benefits that are based
on Purchase Payments.
(b) All bonus amounts and gains or losses
attributable to such amounts are treated
as earnings under the contract for
purposes of the withdrawal charge.
(c) All gains and losses attributable to the
bonus are part of the Contract Value and
are always 100% vested.
We will pay all bonus amounts from the General
Account assets of the Company.
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VARIABLE ACCOUNT
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VARIABLE ACCOUNT The Variable Account is shown on 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 other separate
accounts. The assets of the Variable Account,
equal to reserves and other liabilities of your
contract and all other contracts issued through
the Variable Account, will not be charged with
liabilities arising out of any other business we
may conduct.
The Variable Account assets are divided into
subaccounts corresponding to the Investment
Options shown on the Contract Schedule. We may
add, substitute, or remove Investment Options
shown on the Contract Schedule. We may limit
further Purchase Payment allocations to an
Investment Option, or substitute subaccount
Accumulation Units of another Investment Option
for an Investment Option you previously selected,
subject to the requirements of applicable law.
VALUATION OF ASSETS Assets of the subaccounts 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 and any bonus amounts are
placed into subaccounts. Each subaccount invests
exclusively in one Investment Option.
Accumulation Units are used to account for all
amounts allocated to or withdrawn from the
Investment Options as a result of Purchase
Payments, bonus amounts, withdrawals, transfers,
Partial Annuitizations, or fees and charges.
The number of subaccount Accumulation Units is
determined by dividing the amount allocated to,
or withdrawn from, the subaccount by the dollar
value of one subaccount Accumulation Unit at the
end of the Business Day as of which the
transaction is processed at the Service Center.
Purchase Payments, bonus amounts, withdrawals and
transfers to or from a subaccount will result in
the increase or decrease in the number of
subaccount Accumulation Units.
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 Business Day by the subaccount's net
investment factor for the current Business Day.
The subaccount Accumulation Unit value may
increase or decrease from Business Day to
Business Day.
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VARIABLE ACCOUNT (CONTINUED)
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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:
(1) the Net Asset Value of a
subaccount at the end of the
current Business Day;
(2) plus any dividend or capital
gains declared on behalf of
the subaccount that has an
ex-dividend date after the
immediately preceding Business
Day and before the close of
business on the current
Business Day.
(b) is equal to the Net Asset Value of the
subaccount at the end of the immediately
preceding Business Day.
(c) is equal to :
(1) the Mortality and Expense Risk
Charge as shown on the
Contract Schedule for the
current Business Day and any
additional calendar days since
the immediately preceding
Business Day;
(2) plus a charge for any tax
liability related to the
contracts or the Variable
Account.
MORTALITY AND EXPENSE RISK Each Business Day we deduct a Mortality and
CHARGE Expense Risk Charge from the assets in each
subaccount that is equal, on an annual basis, to
the amount shown on 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 We guarantee that the dollar amount of Annuity
GUARANTEE Payments after the first will not be affected by
variations in mortality or expense experience.
CONTRACT MAINTENANCE CHARGE We may deduct an annual
Contract Maintenance Charge during both the
Accumulation and Annuity Phases. This charge is
shown on the Contract Schedule.
BONUS VALUE We determine the Bonus Value in the
Variable Account 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 by making an Authorized Request. Transfer
instructions apply equally to the Accumulation
Portion and any Annuity Portions of this
contract. You cannot make transfers within only
one portion of this contract. We reserve the
right to charge for transfers if the number of
free transfers exceeds the number shown on the
Contract Schedule. All transfers are subject to
the following criteria.
(a) Any Transfer Fee that we may impose is
shown on the Contract Schedule. We will
deduct the Transfer Fee proportionately
from the balance in the Investment
Options from which you make the transfer
if you transfer less than the entire
amount in the Investment Options. If you
transfer the entire amount in the
Investment Options, 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 for the purpose of any Transfer
Fee.
(b) We reserve the right to limit transfers
until the expiration of the Right to
Examine period.
(c) Any transfer request must clearly
specify:
(1) the amount you wish to transfer;
and
(2) the investment choices that are to
be affected.
(d) After the Income Date, you cannot make
transfers from a fixed Annuity Payment
stream to a variable Annuity Payment
stream.
(e) After the Income Date you can make
transfers from a variable Annuity
Payment stream to establish a new fixed
Annuity Payment stream. The number of
Annuity Units canceled from a subaccount
will be equal in value to the amount of
Annuity Reserve transferred out of the
subaccount. The amount transferred will
purchase fixed Annuity Payments under
the Annuity Option in effect based on
the Annuitant's sex (where permitted)
and Age at the time of the transfer.
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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. We may apply
restrictions 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.
We may apply restrictions on transfers to or
from one or more of the Investment Options,
which could include, but are 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,
or made on your behalf by, a third
party.
(d) Limiting the dollar amounts that an
Owner may transfer between the
Investment Options at any one time.
(e) Not accepting transfer instructions
other than by first class U.S. mail.
(f) Prohibiting transfers into specific
Investment Options.
We reserve the right to modify the transfer
provisions subject to applicable 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 to be transferred as of the
end of the Business Day immediately following
our receipt of the Authorized Request for
transfer.
SUSPENSION OR DEFERRAL The Company reserves the right to suspend or
OF PAYMENTS postpone payments from the Variable Account for
a withdrawal or transfer for any of the
following.
(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.
(d) During any other period when the
Securities and Exchange Commission, by
order, so permits for the protection of
Owners.
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WITHDRAWALS
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FULL AND PARTIAL During the Accumulation Phase, you may, upon an
WITHDRAWALS Authorized Request, make a full or partial
withdrawal from this contract. 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 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 on the Contract Schedule. Under certain
circumstances, we allow withdrawals without the
Withdrawal Charge as set forth on the Contract
Schedule or any attached endorsements or riders.
PARTIAL WITHDRAWAL The minimum amount that you can take as a
partial withdrawal and the minimum Contract
Value that must remain in this contract after a
partial withdrawal is shown on 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 Annuity Payments will depend on the following
criteria.
(a) The amount of Adjusted Contract Value
applied to the Annuity Payments on the
Income Date.
(b) The Age of the Annuitant and any Joint
Annuitant on the Income Date.
(c) The sex of the Annuitant and any Joint
Annuitant, where permitted.
(d) The Annuity Option selected.
You can elect to receive Annuity Payments as
variable, or fixed, or a combination of both
variable and fixed Annuity Payments.
Variable Annuity Payments will also depend on
the following.
(a) The investment allocations that are in
place on the Income Date.
(b) The Assumed Investment Rate (AIR).
(c) The mortality table shown on the
Contract Schedule.
(d) The future performance of your selected
Investment Options.
Fixed Annuity Payments are guaranteed to be at
least equal to the Adjusted Contract Value,
divided first by $1000 and then multiplied by
the appropriate fixed Annuity Payment amount for
each $1000 of value for the Annuity Option
selected, as shown on the Contract Schedule.
FULL ANNUITIZATON You may apply all of the Adjusted
Contract Value to 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. We do not allow Partial
Annuitizations for contracts that have Joint
Owners. We do not allow you to appoint a Joint
Annuitant for Partial Annuitizations.
You may take a Partial Annuitization by applying
only part of the Adjusted Contract Value to
Annuity Payments according to the Annuity
Provisions in this contract and/or any attached
endorsements or riders.
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.
You can take one Partial Annuitization every 12
months. The maximum number of annuitizations we
allow at any one time is five. You cannot
allocate additional Adjusted Contract Value to
an existing stream of Annuity Payments. You also
cannot transfer amounts allocated to an Annuity
Portion back to the Accumulation Portion.
ANNUITY UNITS On the Income Date, if you select variable
Annuity Payments, we purchase Annuity Units of
each subaccount for your selected Investment
Options. Thereafter, the number of Annuity Units
in each subaccount generally remains unchanged
unless you make a transfer.
We determine how many Annuity Units of each
subaccount to purchase as follows. We first
determine the amount of the initial variable
Annuity Payment. The initial variable 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 variable Annuity Payments;
and
(b) is the appropriate variable Annuity
Payment amount for each $1,000 of value
for the Annuity Option selected, as
shown in the table on the Contract
Schedule.
We then determine the amount of the initial
variable Annuity Payment that will come from
each of the subaccounts based on your most
recent allocation instructions. We determine the
number of Annuity Units to purchase for each
subaccount by dividing the amount of the initial
variable Annuity Payment that will come from
each subaccount by the subaccount's Annuity Unit
value on the Income Date.
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ANNUITY PROVISIONS (CONTINUED)
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ANNUITY UNITS On each Business Day after the Income Date, we
(CONTINUED) determine the value of a subaccount Annuity Unit
as follows.
We multiply the value of the Annuity Unit for
the immediately preceding Business Day by the
net investment factor for the current Business
Day and then divide by the assumed net
investment factor for the current Business Day.
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 variable Annuity
Payments is shown on the Contract Schedule. A
different value may be used with our permission.
All calculations will appropriately reflect the
variable Annuity Payment frequency selected.
On each subsequent variable Annuity Payment
date, the total variable Annuity Payment is the
sum of the variable Annuity Payments for each
Investment Option. The variable Annuity Payment
for each Investment Option is determined by
multiplying the number of subaccount Annuity
Units for the Investment Option by the
subaccount Annuity Unit value.
ANNUITY OPTION SELECTION This contract provides for variable or fixed
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 If you do not select an Annuity Option by the
Income Date shown on the Contract Schedule, we
will make variable Annuity Payments to the Payee
under Annuity Option 2, a life annuity, with
monthly payments over five years guaranteed.
OPTION 1 - LIFE ANNUITY We will make Annuity Payments during the life of
the Annuitant. The last payment will be the one
that is due before the Annuitant's death.
OPTION 2 - LIFE ANNUITY We will make Annuity Payments during the life of
WITH PAYMENTS OVER 5, 10, the Annuitant. If you take one single Full
15 OR 20 YEARS GUARANTEED Annuitization and the Annuitant dies before the
end of the selected guaranteed period we will
continue to make Annuity 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.
A lump sum payment under this Annuity Option is
equal to the present value of the remaining
guaranteed Annuity Payments, as of the date we
receive proof of the Annuitant's death and a
payment election form at our Service Center.
For variable Annuity Payments, we base the
remaining guaranteed Annuity Payments on the
current value of the Annuity Units and we use
the AIR to calculate the present value.
For fixed Annuity Payments, we calculate the
present value of the remaining guaranteed
Annuity Payments using the Statutory Calendar
Year Interest Rate based on the NAIC Standard
Valuation Law for Single Premium Immediate
Annuities corresponding to the Income Date.
We require due proof of the Annuitant's death
and return of this contract before we will make
any lump sum payment.
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ANNUITY PROVISIONS (CONTINUED)
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OPTION 3- JOINT AND LAST We will make Annuity Payments during the joint
SURVIVOR ANNUITY lifetimes of the Annuitant and the Joint
Annuitant. Upon the death of one Annuitant,
Annuity Payments to the Payee 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. The
last payment will be the one that is due before
the last surviving Joint Annuitant's death.
This Annuity Option is not available for Partial
Annuitization.
OPTION 4 - JOINT AND LAST We will make Annuity Payments during the joint
SURVIVOR ANNUITY WITH lifetimes of the Annuitant and the Joint
PAYMENTS OVER 5, 10, 15 OR Annuitant. Upon the death of one Annuitant,
20 YEARS GUARANTEED Annuity Payments to the Payee will continue
during the lifetime of the surviving Joint
Annuitant at 100% of the amount that was paid
when both Annuitants were alive. However, if
both Joint Annuitants die before the end of the
selected guaranteed period, we will continue to
make Annuity Payments to the Payee for the rest
of the guaranteed period.
Alternatively, the Owner may elect to receive a
lump sum payment. This Annuity Option's lump sum
payment is equal to the present value of the
remaining guaranteed Annuity Payments as of the
date we receive due proof of the last surviving
Joint Annuitant's death at the Service Center.
For variable Annuity Payments, we base the
remaining guaranteed Annuity Payments on the
current value of the Annuity Units and we use
the AIR to calculate the present value.
For fixed Annuity Payments, we calculate the
present value of the remaining guaranteed
Annuity Payments using the Statutory Calendar
Year Interest Rate based on the NAIC Standard
Valuation Law for Single Premium Immediate
Annuities corresponding to the Income Date.
We require due proof of death of both Joint
Annuitants and return of this contract before we
will make any lump sum payment.
This Annuity Option is not available for Partial
Annuitization.
OPTION 5 - REFUND LIFE We will make Annuity Payments during the
ANNUITY lifetime of the Annuitant; and the last payment
will be the one due before the Annuitant's
death. After the Annuitant's death, the Payee
may receive a lump sum refund.
For a fixed Annuity Payment, the amount of the
refund will equal the amount applied to this
Annuity Option minus the total of all Annuity
Payments made under this option.
For variable Annuity Payments, 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 following formula:
(a) x {[(b) x (c) x (d)/(e)] - [(d) x (f)]},
where
(a) is the Annuity Unit value of the
subaccount for that Investment Option as
of the Business Day when due proof of
the Annuitant's death is received at the
Service Center.
(b) is the amount applied to variable
Annuity Payments on the Income Date.
(c) is the allocation percentage in that
subaccount, in decimal form, as of the
Business Day when due proof of the
Annuitant's death is received at the
Service Center.
(d) is the number of Annuity Units used in
determining each variable Annuity
Payment attributable to that subaccount
as of the Business Day when due proof of
the Annuitant's death is received at the
Service Center.
(e) is the dollar value of first variable
Annuity Payment.
(f) is the number of variable Annuity
Payments made since the Income Date.
We will base this calculation upon the
allocation of Annuity Units in-force as of the
Business Day when due proof of the Annuitant's
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 The Company will require due proof of death,
DURING THE ACCUMULATION selection of a death benefit payment option, and
PHASE any required governmental forms before we pay
any death benefit. Due proof of death will be
any one of the following.
(a) A certified copy of the death
certificate.
(b) A 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 SOLE OWNER DURING Upon the death of a sole Owner during the
THE ACCUMULATION PHASE Accumulation Phase, we will pay a death benefit
to the Beneficiary.
If the Beneficiary is the spouse of the
decedent, he or she may elect instead to
continue the contract as described below in the
Continuation of Contract by Surviving Spouse
provision.
DEATH OF JOINT OWNER(S) The surviving Joint Owner is the sole primary
DURING THE ACCUMULATION PHASE Beneficiary on a jointly owned contract. Upon
the death of any Joint Owner during the
Accumulation Phase, the surviving Joint Owner
will receive the death benefit.
If the surviving Joint Owner is the spouse of
the decedent, he or she may elect instead to
continue the contract as described below in the
Continuation of Contract by Surviving Spouse
provision.
If the Joint Owners were spouses and the
surviving Joint Owner dies before receiving the
death benefit, we will pay the death benefit to
any contingent Beneficiaries. If the spousal
Joint Owners did not name any contingent
Beneficiaries we will pay the death benefit to
the estate of the Joint Owner who died last.
If the Joint Owners were not spouses and the
surviving Joint Owner dies before receiving the
death benefit, we will pay it to the estate of
the Joint Owner who died last.
CONTINUATION OF CONTRACT During the Accumulation Phase, a surviving
BY SURVIVING SPOUSE spouse who is either a surviving Joint Owner or
the Beneficiary of a sole Owner may elect to
continue this contract as a sole Owner, instead
of receiving payment of the death benefit. The
surviving spouse can continue the contract by
making an Authorized Request to the Service
Center before we pay the death benefit. We will
then adjust the Contract Value to equal the
death benefit if the death benefit is greater
than the Contract Value. We will make this
change as the end of the Business Day during
which we receive in good order at the Service
Center both due proof of death and an election
of the death benefit payment option. Any part of
the Contract Value in the Investment Options
will be subject to investment risk.
If the surviving spouse continues the contract,
he or she may exercise all the Owner's rights
under this contract, including naming a new
Beneficiary or Beneficiaries.
An election to continue the contract by a
surviving spouse who is either a surviving Joint
Owner or the Beneficiary of a sole Owner is not
treated as a distribution for tax purposes.
DEATH OF ANNUITANT DURING No death benefit is payable upon the death of an
THE ACCUMULATION PHASE Annuitant who was not an Owner. The Owner can
name a new Annuitant subject to our approval. 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.
L40530 14
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DEATH BENEFIT (CONTINUED)
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TRADITIONAL DEATH BENEFIT The death benefit is equal to the greater of (a)
AMOUNT DURING THE or (b) less any deduction we make to reimburse
ACCUMULATION PHASE ourselves for any applicable Premium Tax; where
(a) is the Contract Value determined as of
the end of the Business Day during which
we receive in good order at the Service
Center both due proof of death and an
election of the death benefit payment
option.
(b) is the Traditional Death Benefit value,
which is equal to the total of all
Purchase Payments received reduced
proportionately by:
(1) the percentage of Contract
Value taken as a withdrawal,
including any withdrawal
charge, for each withdrawal
taken. If your contract
includes the Lifetime Plus
Benefit Rider then withdrawals
include Lifetime Plus Payments
and any Excess Withdrawals;
and
(2) the percentage of Contract
Value applied to Annuity
Payments under a Partial
Annuitization, for each
Partial Annuitization taken.
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 we determine the death benefit
until we make complete distribution, any amount
in the Variable Account will be subject to
investment risk, which is borne by the
Beneficiary.
If the Owner has not previously designated a
death benefit payment option, a Beneficiary must
DEATH BENEFIT PAYMENT request that the death benefit be paid by one of
OPTIONS DURING THE the payment options below.
ACCUMULATION PHASE
Option A - A lump sum payment of the death
benefit. We will not deduct the Contract
Maintenance Charge under this option.
Option B - Deferral of payment of the death
benefit for up to five years from the date of
the death of any Owner. We will assess the
Contract Maintenance Charge on each
Beneficiary's portion proportionately on each
Contract Anniversary. Any part of the death
benefit that is in the Variable Account will be
subject to investment risk, which is borne by
the Beneficiary.
Option C - Payment of the death benefit as an
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. Distribution must begin within one
year of the date of death of the Owner or any
Joint Owner. We will continue to assess the full
Contract Maintenance Charge on each
Beneficiary's portion proportionately over the
Annuity Payments. Any part of the death benefit
applied to variable Annuity Payments will be
subject to investment risk, which is borne by
the Beneficiary.
Any portion of the death benefit not applied to
Annuity Payments under an Annuity Option within
one year of the date of the Owner's death must be
distributed within five years of the date of
death.
If a lump sum payment is requested, we will pay
the amount from the Variable Account within seven
days of receipt of due proof of death and an
election of 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 Upon the death of a sole Owner, the Beneficiary
AND/OR ANNUITANT DURING becomes the Owner. Upon the death of any Joint
THE ANNUITY PHASE Owner, the surviving Joint Owner becomes the
sole Owner. We will not pay a death benefit in
either case, but any remaining Annuity Payments
to the Payee will continue as provided in the
Annuity Option(s) in effect.
If the decedent was an Annuitant and there is a
surviving Joint Annuitant, any remaining Annuity
Payments to the Payee will continue during the
lifetime of the Joint Annuitant, as provided by
the selected Annuity Option(s). We will not pay a
death benefit.
If the decedent was the only Annuitant, any
remaining Annuity Payments will continue as
provided for in the selected Annuity Option(s).
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 remaining Annuity Payments or lump
sum refunds have been paid, all Annuity Portions
of the contract will terminate.
L40530 15
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DEATH BENEFIT (CONTINUED)
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This benefit will terminate on the earliest of
CONDITIONS FOR the following.
TERMINATION OF THE (a) The Business Day before the Income Date
TRADITIONAL DEATH that you take a Full Annuitization;
BENEFIT (b) The Business Day that the Traditional
Death Benefit value and the Contract
Value are both zero.
(c) The Business Day that the Accumulation
Portion terminates.
(d) The Business Day that the Contract
terminates.
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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 We will not contest this contract.
CONTRACT
MISSTATEMENT OF AGE OR SEX We may require proof of Age of the Annuitant
before making any life contingent Annuity
Payment provided for in the Contract. If there
has been a misstatement of the Annuitant's Age
and/or sex, we will adjust the Annuity Payments
to the amount that would have been provided at
the correct Age and 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 Bonus Value and
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 We may modify this contract 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 must be made in writing.
INCOME DATE The Income Date must fall on the first day of
the calendar month. The earliest Income Date
that you can select is two years after the Issue
Date. The latest Income Date that you can select
is the later of the first day of the first
calendar month following the Annuitant's 90th
birthday or ten years from the Issue Date. The
Income Date will not be later than what is
permitted by applicable state or federal law.
You have the right to select the Income Date at
contract issue. Unless you select a different
Income Date, the Income Date shown on the
Contract Schedule is the latest Income Date
allowed for your contract. In order for Annuity
Payments to begin, you must make an Authorized
Request.
You can make an Authorized Request for a
different Income Date after the Issue Date. Any
such request is subject to our approval.
L40530 16
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GENERAL PROVISIONS (CONTINUED)
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TAXES Taxes paid to any governmental entity will result
in an amount equivalent to the tax being charged
against the Contract Value. We will, in our sole
discretion, determine whether taxes have resulted
from the investment experience of the Variable
Account, our receipt 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. This will not waive any right we may have
to deduct previously paid 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 such 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 from any
payment we make, as required by applicable law.
PROTECTION OF PROCEEDS No Beneficiary may commute, encumber,
alienate or assign any payment under this
contract before it is due. To the extent
permitted by law, no payment will be subject to
the debts, contracts or engagements of any
Beneficiary 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 a person being alive on a given
date, we may require proof satisfactory to us
that the condition has been met.
CONDITIONS FOR TERMINATION The contract will terminate when:
OF THE CONTRACT (a) the Accumulation Portion terminates; and
(b) all Annuity Portions terminate; and
(c) all applicable death benefit payments
have been made.
L40530 17
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
[0000 XXXXXX XXXXX XXXXX]
[XXXXXXXXXXX, XX 00000-1297]
INDIVIDUAL FLEXIBLE PURCHASE PAYMENT VARIABLE DEFERRED ANNUITY
NON-PARTICIPATING
L40530
