SUN LIFE ASSURANCE
COMPANY OF CANADA (U.S.)
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
Insured Xxxx Xxx
Policy Number VL0000001
This Policy is a legal contract
in which We, Sun Life Assurance Company Signed at
of Canada (U.S.), promise to provide the Wellesley Hills
kind of insurance described below. Upon Massachusetts, on
death of the Insured prior to Maturity, the Issue Date.
We agree to pay the Beneficiary such
amounts as then become due and payable. Xxxxxx X. Xxxxxxx, President
Until that time, We agree to provide
You, as Owner, the other rights and
benefits of the Policy. These rights Xxxxx X. Xxxx
and benefits are subject to the Secretary
provisions on the pages which follow.
THE AMOUNT OF THE DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY
INCREASE OR DECREASE TO REFLECT THE INVESTMENT EXPERIENCE OF THE VARIABLE
ACCOUNT, AS DESCRIBED IN SECTION 8.
THE ACCOUNT VALUE IN EACH SUB-ACCOUNT OF THE VARIABLE ACCOUNT MAY INCREASE OR
DECREASE IN ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THAT SUB-ACCOUNT OF THE
VARIABLE ACCOUNT. THERE IS NO MINIMUM GUARANTEED ACCOUNT VALUE FOR AMOUNTS IN
THE SUB-ACCOUNTS OF THE VARIABLE ACCOUNT.
THE POLICY PROCEEDS ARE PAYABLE AT THE DEATH OF THE INSURED PRIOR TO MATURITY
AND WHILE THE POLICY IS IN FORCE. THE CASH SURRENDER VALUE, IF ANY, IS PAYABLE
ON THE DATE OF MATURITY.
THE POLICY DOES NOT PARTICIPATE IN DIVIDENDS.
FLEXIBLE PREMIUMS ARE PAYABLE DURING THE LIFETIME OF THE INSURED PRIOR TO
MATURITY.
RIGHT TO RETURN POLICY.
PLEASE READ YOUR POLICY CAREFULLY. IF YOU ARE NOT SATISFIED WITH IT, YOU MAY
RETURN IT BY DELIVERING OR MAILING IT TO US AT ONE SUN LIFE EXECUTIVE PARK,
WELLESLEY HILLS, MASSACHUSETTS 02481, OR TO THE SALES REPRESENTATIVE THROUGH
WHOM YOU PURCHASED THE POLICY WITHIN 10 DAYS FROM THE DATE OF RECEIPT OR WITHIN
45 DAYS AFTER THE APPLICATION IS SIGNED, WHICHEVER PERIOD ENDS LATER (THE "FREE
LOOK PERIOD"). THE POLICY WILL THEN BE DEEMED VOID AS THOUGH IT HAD NEVER BEEN
APPLIED FOR. YOU WILL RECEIVE A REFUND EQUAL TO THE SUM OF (1) THE DIFFERENCE
BETWEEN ANY PREMIUM PAYMENTS MADE, INCLUDING FEES AND CHARGES, AND THE AMOUNTS
ALLOCATED TO THE VARIABLE ACCOUNT, (2) THE VALUE OF THE AMOUNTS ALLOCATED TO THE
VARIABLE ACCOUNT ON THE DATE THE CANCELLATION REQUEST IS RECEIVED BY THE COMPANY
OR THE SALES REPRESENTATIVE THROUGH WHOM YOU PURCHASED THE POLICY, AND (3) ANY
FEES OR CHARGES IMPOSED ON AMOUNTS ALLOCATED TO THE VARIABLE ACCOUNT.
TABLE OF CONTENTS
1. POLICY SPECIFICATIONS...........................................................................Page 4
2. TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1,000 OF NET AMOUNT AT RISK....Page 5
3. DEFINITIONS.....................................................................................Page 6
Account Value..................................................................................Page 6
Anniversary....................................................................................Page 6
Application....................................................................................Page 6
Attained Age...................................................................................Page 6
Beneficiary....................................................................................Page 6
Business Day...................................................................................Page 6
Cash Value.....................................................................................Page 6
Cash Surrender Value...........................................................................Page 6
Class..........................................................................................Page 6
Company........................................................................................Page 6
Daily Risk Percentage..........................................................................Page 6
Due Proof......................................................................................Page 6
Effective Date of Coverage.....................................................................Page 6
Expense Charge Applied to Premium..............................................................Page 6
Fixed Account Value............................................................................Page 6
Fund...........................................................................................Page 6
General Account................................................................................Page 6
Initial Premium................................................................................Page 6
Insured........................................................................................Page 6
Investment Start Date..........................................................................Page 6
Issue Age......................................................................................Page 6
Issue Date.....................................................................................Page 6
Maturity.......................................................................................Page 6
Minimum Monthly Premium........................................................................Page 7
Monthly Anniversary Day........................................................................Page 7
Monthly Cost of Insurance......................................................................Page 7
Monthly Expense Charge.........................................................................Page 7
Mortality and Expense Risk Percentage..........................................................Page 7
Net Premium....................................................................................Page 7
Our Principal Office...........................................................................Page 7
Owner..........................................................................................Page 7
Partial Surrender..............................................................................Page 7
Policy.........................................................................................Page 7
Policy Debt....................................................................................Page 7
Policy Month...................................................................................Page 7
Policy Proceeds................................................................................Page 7
Policy Year....................................................................................Page 7
Premium........................................................................................Page 7
Specified Face Amount..........................................................................Page 7
Sub-Accounts...................................................................................Page 7
Unit...........................................................................................Page 7
Unit Value.....................................................................................Page 7
Valuation Date.................................................................................Page 8
Valuation Period...............................................................................Page 8
Variable Account...............................................................................Page 8
We, Our and Us................................................................................Page 8
You , Your and Yourself........................................................................Page 8
4. GENERAL PROVISIONS..............................................................................Page 9
Entire Contract................................................................................Page 9
Alteration.....................................................................................Page 9
Modification...................................................................................Page 9
TABLE OF CONTENTS (CONTINUED)
Assignments.........................................................................................Page 9
Nonparticipating....................................................................................Page 9
Misstatement of Age or Sex (Non-Unisex Policy)......................................................Page 9
Suicide.............................................................................................Page 9
Incontestability...................................................................................Page 10
Report to Owner....................................................................................Page 10
Illustrations......................................................................................Page 10
Maturity Date Extension............................................................................Page 10
5. RIGHTS OF OWNERS AND BENEFICIARIES..............................................................Page 11
Rights of Owner...............................................................................Page 11
Procedure.....................................................................................Page 11
Rights of Beneficiary.........................................................................Page 11
6. THE VARIABLE ACCOUNT...........................................................................Page 12
Sub-Accounts..................................................................................Page 12
Addition, Deletion or Substitution of Investments.............................................Page 12
Transfers Between Sub-Accounts................................................................Page 12
7. PREMIUMS.......................................................................................Page 13
Premium.......................................................................................Page 13
Net Premiums..................................................................................Page 13
Allocation of Net Premium.....................................................................Page 13
Planned Periodic Premiums.....................................................................Page 14
8. DEATH BENEFIT..................................................................................Page 14
Death Benefit and Death Benefit Option........................................................Page 14
Changes in Specified Face Amount..............................................................Page 14
Decreases in Specified Face Amount............................................................Page 14
Increases in Specified Face Amount............................................................Page 14
Changes in the Death Benefit Option...........................................................Page 14
9. ACCOUNT VALUE..................................................................................Page 15
Account Value.................................................................................Page 15
Variable Account Value........................................................................Page 15
Variable Account Value in the Sub-Accounts....................................................Page 15
Net Investment Factor.........................................................................Page 16
Mortality and Expense Risk Charge.............................................................Page 16
Fixed Account Value...........................................................................Page 17
Monthly Expense Charge........................................................................Page 17
Monthly Cost of Insurance.....................................................................Page 18
Monthly Cost of Insurance Rates...............................................................Page 18
Basis of Computation..........................................................................Page 18
Insufficient Value............................................................................Page 18
Minimum Premium Test..........................................................................Page 19
Grace Period..................................................................................Page 19
Splitting Units...............................................................................Page 19
10. POLICY BENEFITS...............................................................................Page 19
Benefits at Death.............................................................................Page 19
Cash Surrender Value..........................................................................Page 19
Surrender Charges.............................................................................Page 19
Surrender Charge on Decrease in Specified Face Amount.........................................Page 20
Partial Surrender.............................................................................Page 20
Allocation of Partial Surrender...............................................................Page 20
Policy Loan...................................................................................Page 21
Deferral of Payment...........................................................................Page 21
Termination...................................................................................Page 21
Reinstatement.................................................................................Page 22
RIDERS AND ENDORSEMENTS...................................................................................
APPLICATION...............................................................................................
1. POLICY SPECIFICATIONS
Insured Xxxx Xxx
Policy Number VL0000001
Office ABC Insurance Agency
Issue Age, Sex 35 Male
Class Non Tobacco Preferred
Specified Face Amount $250,000
Minimum Specified Face Amount $100,000
Initial Premium $ 360
Planned Periodic Premium $1,500
Billing Period Annual
Issue Date January 1, 1999
Policy Date January 1, 1999
Maturity January 1, 2054
Protected Period 60 Months
Minimum Monthly Premium $ 120
Currency United States Dollars
Owner Xxxx Xxx
Beneficiary As stated in the Application unless
subsequently changed
Death Benefit Option Option A: Specified Face Amount
Variable Account
Name Sun Life of Canada (U.S.) Variable Account I
Securities & Exchange Commission Registration Unit Investment Trust
Allocation of premiums during Free Look Period Sun Capital Money Market Fund
Expense Charge Applied to Premium
Current Charge 5.25%
Guaranteed Maximum Charge 7.25%
Monthly Expense Charge in All Months $8.00
Mortality and Expense Risk Percentage
Current percentage .80% (annual effective rate) during Policy Years 1-10
Current percentage .50% (annual effective rate) during Policy Years 11 and after
Maximum guaranteed percentage .90% (annual effective rate)
Daily Risk Percentage
Current percentage .0021831% (daily effective rate) during Policy Years 1-10
Current percentage .0013665% (daily effective rate) during Policy Years 11 and after
Maximum guaranteed percentage .0024548% (daily effective rate)
Policy Loan Interest Rate (payable in arrears) 4.00% annually during Policy
years 1-10 3.25% annually in Policy years 11 and after Interest Credited
on Fixed Account 3.00% annually
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Supplemental Benefits and Changes
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THE PLANNED PERIODIC PREMIUM SHOWN ABOVE MAY BE INSUFFICIENT TO CONTINUE
COVERAGE TO MATURITY. THE PERIOD FOR WHICH THE POLICY WILL REMAIN IN FORCE
DEPENDS ON THE AMOUNT AND TIMING OF PREMIUMS PAID, DEDUCTIONS FOR
BENEFITS AND RIDERS, CHANGES IN THE SPECIFIED FACE AMOUNT AND DEATH
BENEFIT OPTION, SUB-ACCOUNT PERFORMANCE, POLICY LOANS, PARTIAL
SURRENDERS AND FEES.
1. POLICY SPECIFICATIONS (CONTINUED)
Xxxx Xxx VL0000001
SURRENDER CHARGE ON THE SPECIFIED FACE AMOUNT ON THE POLICY DATE
SURRENDER
POLICY YEAR CHARGE
1 1,442.50
2 1,442.50
3 1,442.50
4 1,442.50
5 1,442.50
6 1,202.08
7 961.67
8 721.25
9 480.83
10 240.42
11 and after none
NET PREMIUM ALLOCATION PERCENTAGE
SUB- ACCOUNTS
MFS/Sun Life Series Trust
____% MFS/Sun Life Capital Appreciation Series
AIM Variable Insurance Funds, Inc. ____% MFS/Sun Life Conservative Growth Series
____% AIM V.I. Capital Appreciation Fund ____% MFS/Sun Life Emerging Growth Series
____% AIM V.I. Growth Fund ____% MFS/Sun Life Government Securities Series
____% AIM V.I. Growth and Income Fund ____% MFS/Sun Life High Yield Series
____% AIM V.I. International Equity Fund ____% MFS/Sun Life Investors Growth Stock Series
____% MFS/Sun Life New Discovery Series
The Xxxxx American Fund ____% MFS/Sun Life Total Return Series
____% OCC Accumulation Trust Equity Portfolio ____% MFS/Sun Life Utilities Series
____% OCC Accumulation Trust Mid Cap Portfolio
____% OCC Accumulation Trust Small Cap Portfolio
____% OCC Accumulation Trust Managed Portfolio OOC Accumulation Trust
____% Xxxxx American Growth Portfolio
____% Xxxxx American Income and Growth Portfolio
____% Xxxxx American Small Capitalization Portfolio
Xxxxxxx Xxxxx Variable Insurance Trust
____% Xxxxxxx Xxxxx V.I.T. CORE Large Cap Growth Fund Sun Capital Advisers Trust, Inc.
____% Xxxxxxx Xxxxx V.I.T. CORE Small Cap Equity Fund ____% Sun Capital Money Market Fund
____% Xxxxxxx Xxxxx V.I.T. CORE U.S. Equity Fund ____% Sun Capital Investment Grade Bond Fund
____% Xxxxxxx Xxxxx V.I.T. Growth and Income Fund ____% Sun Capital Real Estate Fund
____% Xxxxxxx Xxxxx V.I.T. International Equity Fund
SUN LIFE OF CANADA (U.S.) FIXED ACCOUNT GUARANTEE
OPTION
____% One-Year Fixed
1. POLICY SPECIFICATIONS (CONTINUED)
Xxxx Xxx VL0000001
DESCRIPTION OF VARIABLE ACCOUNT I SUB-ACCOUNTS
Variable Account I is divided into 24 Sub-Accounts. Each Sub-Account invests in
a series, portfolio or fund of AIM Variable Insurance Funds, Inc., The Xxxxx
American Fund, Xxxxxxx Xxxxx Variable Insurance Trust, MFS/Sun Life Series
Trust, OCC Accumulation Trust, Sun Capital Advisers Trust, Inc. The names and
investment objectives of these series, portfolios or funds follow:
AIM VARIABLE INSURANCE FUNDS, INC. (advised by AIM Advisors, Inc.) (AIM) is a
wholly owned subsidiary of AIM Management. Established in 1976, AIM Management
Group, Inc. (AIM Management) is headquartered in Houston , Texas. AIM Management
is an indirect wholly owned subsidiary of AMVESCAP PLC. AMVESCAP PLC and its
subsidiary are an independent investment management group engaged in
institutional investment management and retail mutual fund businesses in the
United States, Europe and the Pacific Region. AIM and its subsidiaries act as
manager or advisor of 55 investment company portfolios.
AIM V.I. CAPITAL APPRECIATION FUND seeks to provide capital
appreciation through investments in common stocks, with emphasis on
medium-sized and smaller emerging growth companies.
AIM V.I. GROWTH FUND seeks to provide growth of capital through
investments primarily in common stocks of seasoned and better
capitalized U.S. companies considered by AIM to have strong earnings
momentum.
AIM V.I. GROWTH AND INCOME FUND seeks to provide growth of capital,
with current income as a secondary objective by investing primarily in
dividend paying common stocks which have prospects for both growth of
capital and dividend income.
AIM V.I. INTERNATIONAL EQUITY FUND seeks to provide long-term growth of
capital by investing in diversified international equity securities,
the issuers of which are considered by AIM to have strong earnings
momentum.
THE XXXXX AMERICAN FUND (advised by Xxxx Xxxxx Management, Inc.) Founded in
1964, Xxxx Xxxxx Management is committed to investing in America's fastest
growing companies. Xxxxx believes in bottom-up research and gives its large and
talented team of research analysts a key role in making investment decisions.
The firm strives for superior long-term performance, and feels that the
self-reliance and decision-making capabilities of its research analysts will
help it achieve that goal.
XXXXX AMERICAN GROWTH PORTFOLIO seeks long-term capital appreciation
by investing primarily in equity securities of companies with market
capitalizations of $1 billion or more.
XXXXX AMERICAN INCOME AND GROWTH PORTFOLIO seeks primarily to provide a
high level of dividend income by investing in dividend paying equity
securities. Capital appreciation is a secondary objective.
XXXXX AMERICAN SMALL CAPITALIZATION PORTFOLIO seeks long-term capital
appreciation by investing primarily in equity securities of companies
with market capitalizations within the range of the Xxxxxxx 2000 Growth
Index or the S&P SmallCap 600 Index
XXXXXXX XXXXX VARIABLE INSURANCE TRUST (advised by Xxxxxxx Xxxxx Asset
Management, a separate operating division of Xxxxxxx, Xxxxx & Co., except for
Xxxxxxx Xxxxx International Equity Fund, which is advised by Xxxxxxx Xxxxx Asset
Management International, an affiliate of Xxxxxxx, Xxxxx & Co.). Since its
founding in 1869, Xxxxxxx Xxxxx has served many of the world's largest
corporations and governments, as well as numerous high net worth individuals.
Its investment management arm utilizes the worldwide resources, fundamental
research and sophisticated risk management capabilities of one of the world's
premier global financial services firms to meet the investment and wealth
management needs of its clients.
XXXXXXX XXXXX V.I.T. CORE LARGE CAP GROWTH FUND seeks long-term growth
of capital through a broadly diversified portfolio of equity
securities of large cap U.S. issuers that are expected to have better
prospects for earnings growth than the growth rate of the general
domestic economy. Dividend income is a secondary consideration.
XXXXXXX XXXXX V.I.T. CORE SMALL CAP EQUITY FUND seeks long-term growth
of capital through a broadly diversified portfolio of equity
securities of U.S. issuers which are included in the Xxxxxxx 2000
Index at the time of investment.
XXXXXXX XXXXX V.I.T. CORE U.S. EQUITY FUND seeks long-term growth
of capital and dividend income through a broadly diversified portfolio
of large cap and blue chip equity securities representing all major
sectors of the U.S. economy.
XXXXXXX XXXXX V.I.T. GROWTH AND INCOME FUND seeks long-term growth of
capital and growth of income through investments in equity securities
that are considered to have favorable prospects for capital
appreciation and/or dividend paying ability.
XXXXXXX XXXXX V.I.T. INTERNATIONAL EQUITY FUND seeks long-term capital
appreciation through investments in equity securities of companies
that are organized outside the U.S. or whose securities are principally
traded outside the U.S.
MFS/SUN LIFE SERIES TRUST (advised by our affiliate Massachusetts Financial
Services Company) . MFS is an indirect subsidiary of Sun Life Assurance Company
of Canada, the parent company of Sun Life of Canada (U.S.), and has been in the
Sun Life of Canada family since 1982. MFS has a long history of money management
dating back to 1924 - when it established the nation's first mutual fund - and
is the oldest fund company in the United States. This Boston-based firm
emphasizes research and site visits in its securities selections.
MFS/SUN LIFE CAPITAL APPRECIATION SERIES seeks capital appreciation by
investing in securities of all types, with a major emphasis on common
stocks.
MFS/SUN LIFE EMERGING GROWTH SERIES seeks to provide long-term growth
of capital by investing primarily (i.e. at least 80% of all its assets
under normal circumstances) in common stocks of emerging growth
companies, including companies that the series' investment adviser
believes are early in their life cycle but which have the potential to
become major enterprises. Dividend and interest income from portfolio
securities, if any, is incidental to its objective of long-term growth
of capital.
MFS/SUN LIFE GOVERNMENT SECURITIES SERIES seeks current income and
preservation of capital by investing in U.S. Government and U.S.
Government-related Securities.
MFS/SUN LIFE HIGH YIELD SERIES seeks high current income and capital
appreciation by investing primarily in fixed income securities of U.S.
and foreign issuers which may be in the lower rated categories or
unrated (commonly known as "junk bonds") and which may include equity
features. The series may invest up to 100% of its net assets in these
securities, which generally involve greater risks, including volatility
of price, risk of principal and income, default risks and less
liquidity, than securities in the higher rated categories.
MFS/SUN LIFE UTILITIES SERIES seeks capital growth and current income
(income above that available from a portfolio invested entirely in
equity securities) by investing under normal market conditions, at
least 65% of its assets in equity and debt securities issued by both
domestic and foreign utility companies.
OCC ACCUMULATION TRUST (advised by OpCap Advisors). OpCap Advisors is a
subsidiary of Xxxxxxxxxxx Capital. All investment management services performed
by OpCap Advisors are performed by employees of Xxxxxxxxxxx Capital. OpCap
Advisors is a well-known value investor employing a disciplined philosophy which
seeks to achieve both superior long-term performance and capital preservation.
OpCap Advisors employs a bottom-up style which it uses across market
capitalizations. It focuses on individual companies rather than particular
industries or sectors, and seeks to invest in companies that are
shareholder-oriented, generate high returns on assets, and have excess free cash
flows.
OCC ACCUMULATION TRUST EQUITY PORTFOLIO seeks long-term capital
appreciation through investment in a diversified portfolio of equity
securities selected on the basis of a value oriented approach to
investing.
OCC ACCUMULATION TRUST MID CAP PORTFOLIO seeks long-term capital
appreciation through investment in a diversified portfolio of equity
securities. The portfolio will invest primarily in companies with
market capitalizations of between $500 million and $5 billion.
OCC ACCUMULATION SMALL CAP PORTFOLIO seeks capital appreciation through
investment in a diversified portfolio of equity securities of companies
with market capitalizations of under $1 billion.
OCC ACCUMULATION TRUST MANAGED PORTFOLIO seeks to achieve growth of
capital over time through investment in a portfolio consisting of
common stocks, bonds and cash equivalents, the percentages of which
will vary based on the portfolio manager's assessments of the relative
outlook for such investments.
SUN CAPITAL ADVISERS TRUST, INC. (advised by our affiliate Sun Capital Advisers,
Inc.) Drawing on over 70 years of combined investment management experience,
the five portfolio managers of Sun Capital Advisers, Inc. provide investment
research and portfolio management for the Sun Capital Funds. Sun Capital
Advisers, Inc. is an indirect wholly owned subsidiary of Sun Life of Canada,
which is a diversified financial services organization with total assets under
management of $144 billion as of September 30, 1998. Sun Life provides a broad
range of financial products and services to individuals and groups located in
the United States, Canada, the United Kingdom and the Asia Pacific Region.
SUN CAPITAL MONEY MARKET FUND seeks to maximize current income,
consistent with maintaining liquidity and preserving capital, by
investing exclusively in high quality U.S. dollar-denominated money
market securities, including those issued by U.S. and foreign banks
corporate issuers, the U.S. Government and its agencies and
instrumentalities, foreign governments and multinational organizations
such as the World Bank. The fund may invest in all types of money
market securities, including commercial paper, certificates of deposit,
bankers' acceptances, mortgage-backed and asset-backed securities,
repurchase agreements and other short-term debt securities.
SUN CAPITAL INVESTMENT GRADE BOND FUND seeks high current income
consistent with relative stability of principal by investing primarily
in investment grade bonds, including those issued by U.S. and foreign
companies (including companies in emerging market countries), the U.S.
Government and its agencies and instrumentalities (including those
which issue mortgage-backed securities), foreign governments (including
those of emerging market countries), and multinational organizations
such as the World Bank.
SUN CAPITAL REAL ESTATE FUND primarily seeks long-term capital growth
and, secondarily, seeks current income and growth of income. The Fund
invests at least 80% of its assets in securities of real estate trusts
and other real estate companies. The Fund generally focuses its
investments in equity REITs, which invest most of their assets directly
in U.S. or foreign real property, receive most of their income from
rents and may also realize gains by selling appreciated properties.
1. POLICY SPECIFICATIONS (CONTINUED)
TABLE OF DEATH BENEFIT PERCENTAGES
APPLICABLE APPLICABLE
AGE PERCENTAGE AGE PERCENTAGE
20 250% 60 130%
21 250% 61 128%
22 250% 62 126%
23 250% 63 124%
24 250% 64 122%
25 250% 65 120%
26 250% 66 119%
27 250% 67 118%
28 250% 68 117%
29 250% 69 116%
30 250% 70 115%
31 250% 71 113%
32 250% 72 111%
33 250% 73 109%
34 250% 74 107%
35 250% 75 105%
36 250% 76 105%
37 250% 77 105%
38 250% 78 105%
39 250% 79 105%
40 250% 80 105%
41 243% 81 105%
42 236% 82 105%
43 229% 83 105%
44 222% 84 105%
45 215% 85 105%
46 209% 86 105%
47 203% 87 105%
48 197% 88 105%
49 191% 89 105%
50 185% 90 105%
51 178% 91 104%
52 171% 92 103%
53 164% 93 102%
54 157% 94 101%
55 150% 95 100%
56 146% 96 100%
57 142% 97 100%
58 138% 98 100%
59 134% 99 100%
2. TABLE OF GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1,000 OF
NET AMOUNT AT RISK.
Guaranteed Bi Monthly Rates per $1,000 NAR
POLICY MONTHLY POLICY MONTHLY
Year Rate Year Rate
1 0.14083 36 2.89417
2 0.14750 37 3.25333
3 0.15667 38 3.55917
4 0.16667 39 3.96917
5 0.17833 40 4.42917
6 0.19083 41 4.92417
7 0.20583 42 5.45083
8 0.22083 43 6.00583
9 0.23833 44 6.58250
10 0.25583 45 7.19500
11 0.27667 46 7.86750
12 0.29917 47 8.61667
13 0.32333 48 9.46583
14 0.34917 49 10.42333
15 0.37833 50 11.47250
16 0.40917 51 12.59000
17 0.44583 52 13.75333
18 0.48833 53 14.95250
19 0.53583 54 16.16500
20 0.59083 55 17.40500
21 0.65250 56 18.69250
22 0.72000 57 20.04750
23 0.79167 58 21.51583
24 0.86917 59 23.16000
25 0.95667 60 25.26000
26 1.05417 61 28.27417
27 1.16333 62 33.10667
28 1.28667 63 41.68500
29 1.42750 64 58.01250
30 1.58750 65 83.33333
31 1.76417
32 1.95417
33 2.16000
34 2.38083
35 2.62167
3. DEFINITIONS
ACCOUNT VALUE: The sum of the amounts in each Sub-Account of the Variable
Account with respect to the Policy plus the amount of the Fixed Account Value.
ANNIVERSARY: The same day in each succeeding year as the day of the year
corresponding to the policy date shown in section 1.
APPLICATION: Your application for the Policy, a copy of which is attached
hereto and incorporated herein.
ATTAINED AGE: The Insured's Issue Age plus the number of completed Policy
Years.
BENEFICIARY: The person or entity entitled to receive the Policy Proceeds as
they become due at death.
BUSINESS DAY: Any day that We are open for business.
CASH VALUE: The Account Value less any Surrender Charges.
CASH SURRENDER VALUE: The Cash Value decreased by the balance of any
outstanding Policy Debt.
CLASS: The risk and underwriting classification of the Insured, as specified
in Section 1.
COMPANY: Sun Life Assurance Company of Canada (U.S.).
DAILY RISK PERCENTAGE: The daily rate for deduction of the mortality and
expense risk charge as specified in Section 1.
DUE PROOF: Such evidence as we may reasonably require in order to establish
that Policy Proceeds or any other benefits are due and payable.
EFFECTIVE DATE OF COVERAGE: Initially, the Investment Start Date; with respect
to any increase in the Specified Face Amount, the Anniversary that falls on or
next follows the date We approve the supplemental application for such increase;
with respect to any decrease in the Specified Face Amount, the Monthly
Anniversary Day that falls on or next follows the date We receive Your request.
EXPENSE CHARGE APPLIED TO PREMIUM: The expense charge applied to Premium
specified in Section 1.
FIXED ACCOUNT VALUE: The portion of the Account Value funded by the assets
of the General Account.
FUND: A mutual fund portfolio in which a Sub-Account invests.
GENERAL ACCOUNT: The assets held by Us, other than those allocated to the
Sub-Accounts of the Variable Account or any other separate account of the
Company.
INITIAL PREMIUM: The Premium amount specified as such in Section 1.
INSURED: The person on whose life the Policy is issued.
INVESTMENT START DATE: The date the first Premium is applied, which will be
the later of the Issue Date, the Policy Date or the Valuation Date We receive
a Premium equal to or in excess of the Initial Premium.
ISSUE AGE: The Insured's age as of the Insured's birthday nearest the policy
date shown in Section 1.
ISSUE DATE: The date We produce this policy from our systems and specified
as such in Section 1,
Page 6
MATURITY: The Anniversary on which the Insured's Attained Age is 100. If the
Insured is living and the Policy is in force on this date, the Cash Surrender
Value is payable to You. It is possible that insurance coverage may not
continue to Maturity as described in the Insufficient Value Provision of
Section 9, even if Planned Periodic Premiums are paid in a timely manner.
MINIMUM MONTHLY PREMIUM: The premium amount specified as such in Section 1.
MONTHLY ANNIVERSARY DAY: The same day in each succeeding month as the day of
the month corresponding to the policy date shown in Section 1.
MONTHLY COST OF INSURANCE: An amount deducted from the Account Value on a
monthly basis for the insurance coverage provided by the Policy, as specified
in Section 9.
MONTHLY EXPENSE CHARGE: An amount deducted from the Account Value on a
monthly basis for administration and other expenses, as specified in Section
1.
MORTALITY AND EXPENSE RISK CHARGE : An amount deducted from the Account Value
in the Sub-Accounts for the mortality and expense risk charge annual rate
specified in Section 1. This annual rate is converted to a daily rate, the
Daily Risk Percentage, and deducted from the Unit Values of the Sub Accounts
on a daily basis.
NET PREMIUM: A Premium less the Expense Charge Applied to Premium.
OUR PRINCIPAL OFFICE: Sun Life Assurance Company of Canada (U.S.) One Sun
Life Executive Park, Wellesley Hills, Massachusetts, 02481, or such other
address as We may hereafter specify to You by written notice.
OWNER: The person, persons or entity entitled to the ownership rights stated
in the Policy while the Insured is alive.
PARTIAL SURRENDER: A surrender of a portion of the Account Value in exchange
for a payment to the Owner in accordance with the terms of Section 10.
POLICY: This life insurance contract, including the attached copy of the
Application and any attached copies of supplemental applications for
increases in the face amount.
POLICY DATE: The date specified as such in Section 1.
POLICY DEBT: The principal amount of any outstanding loan against the
Policy, plus accrued but unpaid interest on such loan.
POLICY MONTH: A one-month period commencing on the policy date or any
Monthly Anniversary Day and ending on the next Monthly Anniversary Day.
POLICY PROCEEDS: The amount determined in accordance with the terms of the
Policy which is payable at the death of the Insured prior to Maturity. This
amount is the Death Benefit as described in Section 8, decreased by the
amount of any outstanding Policy Debt, and increased by the amounts payable
under any supplemental benefits.
POLICY YEAR: A one-year period commencing on the policy date or any
Anniversary and ending on the next Anniversary.
PREMIUM: An amount paid to Us by the Owner or on the Owner's behalf as
consideration for the benefits provided by the Policy.
PROTECTED PERIOD: The period during which the Policy will not terminate
without value as long as it satisfies the minimum premium test described in
Section 9. The Protected Period begins on the Policy Date
Page 7
shown in Section 1.
SPECIFIED FACE AMOUNT: The amount of life insurance coverage You request as
specified in Section 1.
SUB-ACCOUNTS: Sub-accounts into which the assets of the Variable Account are
divided, each of which corresponds to an investment choice available to You.
UNIT: A unit of measurement that We use to calculate the value of each
Sub-Account.
UNIT VALUE: The value of each Unit of assets in a Sub-Account.
UNPAID POLICY CHARGES: The amounts by which the Monthly Expense Charges plus
the Monthly Costs of Insurance plus the Policy Debt exceed the Account Value.
VALUATION DATE: Any day on which the New York Stock Exchange, We, and the
relevant Fund are open for business. A Valuation Date will also include any
day that may be required by any applicable Securities and Exchange Commission
Rules and Regulations.
VALUATION PERIOD: The period of time from one determination of Unit Values to
the next, subsequent determination of Unit Values. We will determine Unit
Values for each Valuation Date as of the close of the New York Stock Exchange
on that Valuation Date.
VARIABLE ACCOUNT: Sun Life Assurance Company of Canada (U.S.) Variable
Account I , a separate account of the Company consisting of assets set aside
by the Company, the investment performance of which is kept separate from
that of the general assets of the Company (also referred to as "Variable
Account I").
WE, OUR and US: We, Our and Us refer to Sun Life Assurance Company of
Canada (U.S.).
YOU, YOUR and YOURSELF: In this Policy, You, Your and Yourself refer to the
Owner of the Policy.
Page 8
4. GENERAL PROVISIONS
ENTIRE CONTRACT. Your entire contract with Us consists of the Policy,
including the attached copy of the Application and any attached copies of
supplemental applications for increases in the face amount.
ALTERATION. Sales Representatives do not have the authority either to alter
or modify the Policy or to waive any of its provisions. The only persons
with this authority are Our president, actuary, secretary, or one of Our
vice presidents.
MODIFICATION. Upon notice to You, We may modify the Policy if such
modification (1) is necessary to make the Policy or the Variable Account
comply with any law or regulation issued by a governmental agency to which
the Company or the Variable Account is subject; or (2) is necessary to
assure continued qualification of the Policy under the Internal Revenue Code
or other federal or state laws as a life insurance policy; or (3) is
necessary to reflect a change in the operation of the Variable Account or
the Sub-Accounts; or (4) adds, deletes or otherwise changes Sub-Account
options. We also reserve the right to modify certain provisions of the
Policy as stated in those provisions. We may make appropriate amendment to
the Policy to reflect any such modification.
ASSIGNMENTS. During the lifetime of the Insured, You may assign all or some
of Your rights under the Policy. All Assignments must be filed at Our
Principal Office and must be in written form satisfactory to Us. The
Assignment will then be effective as of the date You signed the form,
subject to any action taken before it was received by Us. We are not
responsible for the validity or legal effect of any Assignment.
NONPARTICIPATING. The Policy does not pay dividends.
MISSTATEMENT OF AGE OR SEX (NON-UNISEX POLICY). If the age or sex (in the
case of a non-unisex Policy) of the Insured is stated incorrectly, the
amounts payable by Us will be adjusted as follows:
- Misstatement discovered at death: The Death Benefit will be recalculated
to that which would be purchased by the most recently charged Monthly Cost
of Insurance Rate for the correct age or sex (for a non-unisex Policy).
- Misstatement discovered prior to death: The Account Value will be
recalculated from the Policy Date using the Monthly Cost of Insurance Rates
based on the correct age or sex (for a non-unisex Policy).
If Your Policy is unisex, it is so indicated in Section 1.
SUICIDE. If the Insured, whether sane or insane, commits suicide within two
years after the Issue Date, We will not pay any part of the Policy Proceeds.
We will refund to You the Premiums paid, less the amount of any Policy Debt
and any Partial Surrenders.
If the Insured, whether sane or insane, commits suicide within two years
after the effective date of an increase in the specified amount, then our
liability as to that increase will be the cost of insurance for that
increase.
INCONTESTABILITY. All statements made in the Application or in a supplemental
application are representations and not warranties. We relied and will rely
on these statements when approving the issuance, increase in face amount,
increase in Death Benefit over Premium paid, or change in Death Benefit
Option of the Policy. No statement can be used by Us in defense of a claim
unless the statement was made in the Application or in a supplemental
application. In the absence of fraud, after the Policy has been in force
during the lifetime of the Insured for a period of two years from its Issue
Date, We cannot contest it except for non-payment of Premiums in accordance
with the Insufficient Value provision of Section 9. However, any increase in
the face amount which is effective after the Issue Date will be incontestable
only after such increase has been in force during the lifetime of the Insured
for two years from the Effective Date of Coverage of such increase. Any
increase in Death Benefit over Premium paid or increase in Death Benefit due to
a Death Benefit Option change will be incontestable only after such increase
has been in force during the lifetime of the Insured for two years from the
date of the increase.
Page 9
REPORT TO OWNER. We will send You a report at least once each Policy Year.
The report will show current Policy values, Premiums paid, and deductions
made since the last report. It will also show the balance of any outstanding
Policy loans and accrued interest on such loans. There is no charge for this
report.
ILLUSTRATIONS. Upon request, after the first Policy Year, We will provide
You with an illustration of future Account Value and Death Benefits. We may
charge a nominal fee (not to exceed $25) for this illustration.
MATURITY DATE EXTENSION. The maturity date of this policy will be extended
beyond the maturity date shown in section 1 (the original maturity date), if
you so request and this policy has a Cash Value on the original maturity
date. The new maturity date will be the one you request.
After the original maturity date (if you have requested a new maturity date):
1. We will not accept any more premium payments for this policy.
2. No more deductions for the Monthly Expense Charge or for the Monthly Cost
of Insurance will be made from the Account Value.
3. The Death Benefit will be the Account Value on the Date of Death.
4. The Reinstatement provision will not apply.
Except as provided in this Maturity Date Extension provision, an extension of
the maturity date does not alter this policy.
Page 10
5. RIGHTS OF OWNERS AND BENEFICIARIES
RIGHTS OF OWNER. While the Insured is alive, unless You have assigned any of
these rights, You may:
1. transfer ownership to a new Owner;
2. name a contingent Owner who will automatically become the Owner of the
Policy if You die before the Insured;
3. change or revoke a contingent Owner;
4. change or revoke a Beneficiary;
5. exercise all other rights in the Policy;
6. increase or decrease the Specified Face Amount, subject to the other
Provisions of the Policy;
7. change the Death Benefit Option, subject to the Changes in the Death
Benefit Option Provisions of Section 8 of the Policy.
When You transfer Your rights to a new Owner, You automatically revoke any
prior contingent Owner designation. When You want to change or revoke a prior
Beneficiary designation, You have to specify that action. You do not affect a
prior Beneficiary when You merely transfer ownership, or change or revoke a
contingent Owner designation.
PROCEDURE. You do not need the consent of a Beneficiary or a contingent Owner
in order to exercise any of Your rights. However, You must give Us written
notice satisfactory to Us of the requested action. Your request will then,
except as otherwise specified, be effective as of the date You signed the
form, subject to any action taken before We received it.
RIGHTS OF BENEFICIARY. The Beneficiary has no rights in the Policy until the
death of the Insured. If a Beneficiary is alive at that time, the Beneficiary
will be entitled to payment of the Policy Proceeds as they become due.
Page 11
6. THE VARIABLE ACCOUNT
The assets of the Variable Account shall be kept separate from Our other
assets. We have the right to transfer to the General Account any assets of
the Variable Account which are in excess of the reserves and other Policy
liabilities of the Variable Account. The income, gains and losses, realized
or unrealized, from assets allocated to the Variable Account shall be
credited to or charged against the Variable Account without regard to any
other income, gains or losses. Also, the income gains and losses, realized or
unrealized, from assets allocated to any Sub-Account shall be credited to or
charged against that Sub-Account, without regard to other income, gains or
losses of Us or of any other Sub-Account. The portion of the assets of the
Variable Account equal to the reserves and other Policy liabilities with
respect to the Variable Account will not be chargeable with liabilities
arising out of any other business the Company may conduct. Although the
assets maintained in the Variable Account will not be charged with any
liabilities arising out of any other business conducted by Us, all
obligations arising under the Policy, including the promise to make all
benefit payments, are Our general corporate obligations.
At Our election, and subject to any necessary vote by those having voting
rights, the Variable Account may be operated as a unit investment trust or a
management company under the Investment Company Act of 1940. It may be
registered under the Investment Company Act of 1940 or de-registered in the
event registration is no longer required. In the event of any change in the
operation of the Variable Account pursuant to this provision, We may make
appropriate amendment to the contract to reflect the change and take such
other action as may be necessary and appropriate to effect the change.
SUB-ACCOUNTS. The assets of the Variable Account are divided into
Sub-Accounts. Each Sub-Account corresponds to an investment choice described
in Section 1. Each Sub-Account invests exclusively in a different investment
portfolio. Income, gains and losses, whether or not realized, from the assets
of each Sub-Account are credited or charged against that Sub-Account without
regard to income, gains or losses in other Sub-Accounts of the Variable
Account. All amounts allocated to the Variable Account will be used to
purchase shares of one or more of the Funds, as You designate. Deductions and
surrenders from the Variable Account will, in effect, be made by redeeming
the number of Fund shares at net unit value equal in total value to the
amount to be deducted. The Variable Account will be fully invested in Fund
shares at all times.
ADDITION, DELETION OR SUBSTITUTION OF INVESTMENTS. We may decide to add
Sub-Accounts at any time. Also, shares of any or all of the portfolios may
not always be available for purchase by the Sub-Accounts of the Variable
Account, or We may decide that further investment in any such shares is no
longer appropriate. In either event, shares of other registered open-end
investment companies or unit investment trusts may be substituted both for
portfolio shares already purchased by the Variable Account and/or as the
security to be purchased in the future, provided that to the extent necessary
these substitutions have been approved by the Securities and Exchange
Commission. The investment policies of the Sub-Accounts will not be changed
without the approval of the Insurance Commissioner of the State of Delaware.
We also reserve the right to eliminate or combine existing Sub-Accounts or to
transfer assets between Sub-Accounts. In the event of any act pursuant to
this provision, We may make appropriate amendment to the Policy to reflect
the substitution.
TRANSFERS BETWEEN SUB-ACCOUNTS. Subject to Our rules as they may exist from
time to time and to any limits that may be imposed by the Funds, including
those set forth in Section 1, You may at any time transfer to another
Sub-Account all or a portion of the Account Value allocated to a Sub-Account.
We will make transfers pursuant to an authorized written or telephone request
to Us. Telephone requests will be honored only if We have a properly
completed telephone authorization form for You on file. We, our affiliates
and the representative from whom You purchased Your Policy will not be
responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. We will use reasonable procedures to
confirm that instructions communicated by telephone are genuine. The
procedures We follow for transactions initiated by telephone include
requirements that You identify Yourself by name and identify a personal
identification number.
Transfers may be requested by indicating the transfer of either a specified
dollar amount or a specified percentage of the Sub-Account's value from which
the transfer will be made. If You request a transfer
Page 12
based on a specified percentage of the Sub-Account's value, that percentage
will be converted into a request for the transfer of a specified dollar
amount based on application of the specified percentage to the Sub-Account's
value at the time the request is received. We reserve the right to limit the
number of Sub Accounts to which you may allocate your Account Value to not
more than 20 Sub Accounts.
Transfer privileges are subject to Our consent. We reserve the right to
impose limitations on transfers, including, but not limited to: (1) the
minimum amount that may be transferred; and (2) the minimum amount that may
remain in a Sub-Account following a transfer from that Sub-Account.
We reserve the right to restrict amounts transferred to the Variable Account
from the Fixed Account to 20% of that portion of the Account Value
attributable to the Fixed Account Value as of the end of the previous Policy
Year.
We reserve the right to restrict amounts transferred to the Fixed Account
Value from the Variable Account to 20% of that portion of the Account Value
attributable to the Variable Account as of the end of the previous Policy
Year. We further reserve the right to restrict amounts transferred to the
Fixed Account Value from the Variable Account in the event the portion of the
Account Value attributable to the Fixed Account Value would exceed 30% of the
Account Value.
7. PREMIUMS
All Premium payments are payable to Us, and should be mailed to Our Principal
Office. The Initial Premium is due and payable as of the Issue date of the
Policy. Subsequent premiums may be paid to Us subject to the limitations
described below. All premiums are to be paid to us at Our Principal Office.
PREMIUM. We reserve the right to limit the number of Premium payments We
accept during a year . No Premium payment may be less than $50 without Our
consent, although We will accept any Premium payment if it is necessary to
keep Your Policy in force. We reserve the right not to accept a Premium
payment that causes the Death Benefit to increase by an amount that exceeds
the Premium received. Evidence of insurability satisfactory to Us may be
required before We accept such a Premium.
We will not accept Premium payments that would, in Our opinion, cause the
Policy to fail to qualify as life insurance under applicable tax law. If a
Premium payment is made in excess of these limits, We will accept only that
portion of the Premium within those limits, and will refund the remainder to
You.
NET PREMIUMS. The Net Premium is the amount paid as the Premium less the
Expense Charge Applied to Premium. The Expense Charge Applied to Premium will
be determined by Us from time to time based on Our expectations of future
expenses and taxes. However, the Expense Charge Applied to Premium will not
be greater than that specified in Section 1.
ALLOCATION OF NET PREMIUM. Except as otherwise provided herein, Net Premium
will be allocated to the Sub-Accounts in accordance with the allocation
percentages specified by You. Your initial allocation percentages are shown
in Section 1. The minimum allocation for any Sub-Account to which You choose
to allocate Account Value is 5% of Net Premium, and percentages must be in
whole numbers. We reserve the right to limit the number of Sub Accounts to
which you may allocate your Account Value to not more than 20 Sub Accounts.
Net Premiums will first be applied to reduce any Unpaid Policy Charges.
Premiums received prior to the end of the Right to Return Policy Period will
be credited to the sub-account shown in Section 1 for allocation of Premiums
during the Free Look Period. Your initial allocation percentages will take
effect at the end of the Right to Return Policy Period.
Page 13
You may change the allocation percentages at any time pursuant to written or
telephone request to Our Principal Office. Telephone requests will be honored
only if We have a properly completed telephone authorization form for You on
file. We, our affiliates and the representative from whom You purchased Your
Policy will not be responsible for losses resulting from acting upon
telephone requests reasonably believed to be genuine. We will use reasonable
procedures to confirm that instructions communicated by telephone are
genuine. The procedures We follow for transactions initiated by telephone
include requirements that You identify Yourself by name and identify a
personal identification number.
An allocation change will be effective as of the date We receive the request
for that change.
PLANNED PERIODIC PREMIUMS. While You are not required to make subsequent
Premium payments according to a fixed schedule, You may select a planned
periodic Premium schedule and corresponding billing period, subject to Our
limits. We will send You reminder notices for the planned periodic Premium at
each billing period as specified in Section 1 unless reminder notices have
been suspended as described below. However, You are not required to pay the
planned periodic Premium; You may increase or decrease the planned periodic
Premium subject to Our limits, and You may skip a planned payment or make
unscheduled payments. You may change Your planned payment schedule or the
billing period, subject to Our approval. Depending on the investment
performance of the Sub-Accounts You select, the planned periodic Premium may
not be sufficient to keep the Policy in force, and You may need to change
Your planned payment schedule or make additional payments in order to prevent
termination of Your Policy. We will suspend reminder notices at Your written
request, and We reserve the right to suspend reminder notices if Premiums are
not being paid (except for notices in connection with the grace period). We
will notify You prior to suspending reminder notices.
8. DEATH BENEFIT
DEATH BENEFIT and DEATH BENEFIT OPTION. The death benefit depends upon the
death benefit option in effect at that time. The death benefit option in
effect on the Issue Date is specified in Section 1. The two options are:
Option A - Specified Face Amount. The death benefit is the greater of:
1) the Specified Face Amount; or 2) the Account Value multiplied by the
applicable death benefit percentage shown in Section 1.
Option B - Specified Face Amount plus Account Value. The death benefit is
the greater of: 1) the Specified Face Amount plus the Account Value; or 2)
the Account Value multiplied by the applicable death benefit percentage
shown in Section 1.
The death benefit will be determined based on the Account Value on the date
of death. The actual Policy Proceeds payable on the death of the Insured
will be the death benefit described above less any Policy Debt and less any
Unpaid Policy Charges. Under certain circumstances the Policy Proceeds may
be adjusted (see "Incontestability", "Misstatement of Age or Sex" and
"Suicide" in Section 4).
CHANGES IN SPECIFIED FACE AMOUNT. After the end of the first Policy Year,
You may request a change in the Specified Face Amount. You must send Your
request for a change to Our Principal Office in writing. Each such change
will be effective on the Effective Date of Coverage for the change.
DECREASES IN SPECIFIED FACE AMOUNT. The Specified Face Amount may not be
decreased to less than the Minimum Specified Face Amount specified in
Section 1. A decrease in Specified Face Amount will be applied to the initial
Specified Face Amount and to each increase in Specified Face Amount in the
following order:
1. first, to the most recent increase;
2. second, to the next most recent increases, in reverse chronological
order; and
3. finally, to the initial Specified Face Amount.
INCREASES IN SPECIFIED FACE AMOUNT. An increase in the Specified Face Amount
is subject to Our underwriting rules in effect at the time of the increase.
You may be required to submit evidence of the
Page 14
Insured's insurability satisfactory to Us. We will not accept a request for
an increase if the age of the Insured is greater than 80 at the next
Anniversary following the request.
CHANGES IN THE DEATH BENEFIT OPTION. After the end of the first Policy Year
You may request a change in the death benefit option. Changes in the death
benefit option are subject to Our underwriting rules in effect at the time of
change. Requests for a change must be made in writing to Us. The effective
date of the change will be the Anniversary on or next following the date We
receive Your request.
If the death benefit option change is from option A to option B, the
Specified Face Amount will be reduced by the Account Value. The Specified
Face Amount after a reduction may not be less than the Minimum Specified Face
Amount shown in section 1. If the death benefit option change is from option
B to option A, the Specified Face Amount will be increased by the Account
Value. In any case, the amount of the death benefit at the time of change
will not be altered, but the change in death benefit option will affect the
determination of the death benefit from that point on.
9. ACCOUNT VALUE
ACCOUNT VALUE. The Account Value is the sum of the amounts in each
Sub-Account of the Variable Account with respect to the Policy plus the
amount of the Fixed Account Value. The Account Value varies depending upon
the Premiums paid, Expense Charge Applied to Premium, Mortality and Expense
Risk Percentage deductions, Monthly Expense Charges, Monthly Cost of
Insurance charges, Partial Surrenders, fees, policy loans and the Net
Investment Factor for the Sub-Accounts to which Your Account Value is
allocated.
VARIABLE ACCOUNT VALUE. We measure the amounts in the Sub-Accounts in terms
of Units and Unit Values. On any given date, the amount You have in a
Sub-Account is equal to the Unit Value multiplied by the number of Units
credited to You in that Sub-Account. Amounts allocated to a Sub-Account will
be used to purchase Units of that Sub-Account. Units are redeemed when You
make Partial Surrenders, undertake Policy loans or transfer amounts from a
Sub-Account, and for the deductions of the Monthly Expense Charge, fees and
the Monthly Cost of Insurance charge. The number of Units of each Sub-Account
purchased or redeemed is determined by dividing the dollar amount of the
transaction by the Unit Value for the Sub-Account. The Unit Value for each
Sub-Account is established at $10.00 for the first Valuation Date of the
Sub-Account. The Unit Value for any subsequent Valuation Date is equal to the
Unit Value for the preceding Valuation Date multiplied by the Net Investment
Factor (determined as provided below). The Unit Value of a Sub-Account for
any Valuation Date is determined as of the close of the Valuation Period
ending on that Valuation Date.
Transactions are processed on the date We receive a Premium at Our Principal
Office or any acceptable written or telephonic request is received at Our
Principal Office. If Your Premium or request is received on a date that is
not a Valuation Date, or after the close of the New York Stock Exchange on a
Valuation Date, the transaction will be processed on the next subsequent
Valuation Date.
VARIABLE ACCOUNT VALUE IN THE SUB-ACCOUNTS. The Variable Account Value
attributable to each Sub-Account of the Variable Account on the Investment
Start Date equals:
1. that portion of Net Premium received and allocated to the Sub-Account,
less
2. that portion of the Monthly Expense Charges due on the policy date and
subsequent Monthly Anniversary Days through the Investment Start Date
charged to the Sub-Account, less
3. that portion of the Monthly Cost of Insurance deductions due from the
policy date through the Investment Start Date charged to the Sub-Account.
Page 15
The Account Value attributable to each Sub-Account of the Variable Account on
subsequent Valuation Dates is equal to:
1. the Account Value attributable to the Sub-Account on the preceding
Valuation Date multiplied by that Sub-Account's Net Investment Factor,
plus
2. that portion of Net Premium received and allocated to the Sub-Account
during the current Valuation Period, plus
3. any amounts transferred by You to the Sub-Account from another Sub-
Account or from the Fixed Account Value during the current Valuation
Period, less
4. any amounts transferred by You from the Sub-Account to another
Sub-Account or to the Fixed Account Value during the current Valuation
Period, less
5. that portion of any Partial Surrenders deducted from the Sub-Account
during the current Valuation Period, less
6. that portion of any Policy loan transferred from the Sub-Account to the
Fixed Account Value during the current Valuation Period, less
7. that portion of any surrender charges associated with a decrease in the
Specified Face Amount charged to the Sub-Account during the current
Valuation Period, less
8. if a Monthly Anniversary Day occurs during the current Valuation Period,
that portion of the Monthly Expense Charge for the Policy Month just
beginning charged to the Sub-Account, less
9. if a Monthly Anniversary Day occurs during the current Valuation Period,
that portion of the Monthly Cost of Insurance for the Policy Month just
ending charged to the Sub-Account.
NET INVESTMENT FACTOR. The Net Investment Factor for each Sub-Account for any
Valuation Period is determined by deducting the Mortality and Expense Risk
Charge for each day in the Valuation Period from the quotient of (1) divided
by (2) where:
(1) is the net result of:
(a) the net asset value of a Fund share held in the Sub-Account
determined as of the end of the Valuation Period, plus
(b) the per share amount of any dividend or other distribution
declared on Fund shares held in the Sub-Account if the "ex-dividend"
date occurs during the Valuation Period, plus or minus
(c) a per share credit or charge with respect to any taxes reserved
for by the Company, or paid by the Company if not previously
reserved for, during the Valuation Period which are determined by the
Company to be attributable to the operation of the Sub-Account; and
(2) is the net asset value of a Fund share held in the Sub-Account
determined as of the end of the preceding Valuation Period.
The Mortality and Expense Risk Charge for the Valuation Period is the Daily
Risk Charge times the number of days in the Valuation Period.
The Net Investment Factor may be greater or less than one.
MORTALITY AND EXPENSE RISK CHARGE. The Mortality and Expense Risk Charge will
be determined by Us from time to time based on Our expectations of future
interest, mortality costs, persistency, expenses and taxes. However, the
Mortality and Expense Risk Charge will not be greater than that specified in
Section 1.
Page 16
FIXED ACCOUNT VALUE. The Fixed Account Value on the Investment Start Date
equals:
1. that portion of Net Premium received and allocated to the Fixed Account
Value and accrued at interest, less
2. that portion of the Monthly Expense Charges due on the policy date and
subsequent Monthly Anniversary Days through the Investment Start Date
charged to the Fixed Account Value and accrued at interest, less
3. that portion of the Monthly Cost of Insurance deductions due from the
policy date through the Investment Start Date charged to the Fixed Account
Value and accrued at interest.
The Fixed Account Value on subsequent Valuation Dates is equal to:
1. the Fixed Account Value on the preceding Valuation Date accrued at
interest, plus
2. that portion of Net Premium received and allocated to the Fixed Account
Value during the current Valuation Period and accrued at interest, plus
3. any amounts transferred by You to the Fixed Account Value from the
Variable Account during the current Valuation Period and accrued at
interest, less
4. any amounts transferred by You from the Fixed Account Value to the
Variable Account during the current Valuation Period and accrued at
interest, less
5. that portion of any Partial Surrenders deducted from the Fixed Account
Value during the current Valuation Period and accrued at interest, plus
6. any Policy loan transferred from the Variable Account to the Fixed
Account Value during the current Valuation Period and accrued at
interest, less
7. that portion of any surrender charges associated with a decrease in the
Specified Face Amount charged to the Fixed Account Value during the
current Valuation Period, less
8. if a Monthly Anniversary Day occurs during the current Valuation Period,
that portion of the Monthly Expense Charge for the Policy Month just
beginning charged to the Fixed Account Value and accrued at interest, less
9. if a Monthly Anniversary Day occurs during the current Valuation Period,
that portion of the Monthly Cost of Insurance for the Policy Month just
ending charged to the Fixed Account Value and accrued at interest.
The guaranteed effective annual interest rate applicable to the Fixed Account
Value is specified in section 1. Interest in excess of the guaranteed rate
may be applied in the calculation of the Fixed Account Value at such increased
rates and in such manner as we may determine, based on our expectations of
future interest, mortality costs, persistency, expenses and taxes. Interest
credited will be computed on a compound interest basis.
MONTHLY EXPENSE CHARGE. The Monthly Expense Charge is shown in Section 1. The
Monthly Expense Charge deduction will be charged proportionally to the
amounts in the Sub-Accounts and the amount of the Fixed Account Value in
excess of the Policy Debt.
Page 17
MONTHLY COST OF INSURANCE. We deduct a Monthly Cost of Insurance charge from
Your Account Value to cover anticipated costs of providing insurance coverage.
the Monthly Cost of Insurance deduction will be charged proportionally to the
amounts in the Sub-Accounts and of the Fixed Account Value in excess of the
Policy Debt .
The Monthly Cost of Insurance equals the sum of (1), (2) and (3) where
(1) is the Cost of Insurance Charges equal to the Monthly Cost of
Insurance Rate (described below) multiplied by the Net Amount at Risk
divided by 1,000;
(2) is the monthly rider cost (as described in the riders) for any
riders which are a part of the Policy; and
(3) is the Flat Extra specified in Section 1, if applicable, multiplied
by the Net Amount at Risk divided by 1,000.
The Net Amount at Risk equals:
(1) the Death Benefit divided by 1.00247 ; less
(2) the Account Value on the Valuation Date prior to assessing the
Monthly Expense Charge and the Monthly Cost of Insurance Charges.
If there are increases in the Specified Face Amount other than increases
caused by changes in the Death Benefit Option, the Cost of Insurance Charges
described above are determined separately for the initial Specified Face
Amount and each increase in the Specified Face Amount. In calculating the Net
Amount at Risk the Account Value will first be allocated to the initial
Specified Face Amount and then to each increase in the Specified Face Amount
in the order in which the increases were made.
MONTHLY COST OF INSURANCE RATES. The Monthly Cost of Insurance Rates (except
for any such rate applicable to an increase in the Specified Face Amount) are
based on the length of time the Policy has been in force and the Insured's
sex (in the case of a non-unisex Policy), Issue Age, Class and table rating,
if any. The Monthly Cost of Insurance Rates will be determined by Us from
time to time based on Our expectations of future experience with respect to
mortality costs, persistency, interest rates, expenses and taxes. However,
the Monthly Cost of Insurance Rates will not be greater than those shown in
Section 2.
The Monthly Cost of Insurance Rates applicable to each increase in the
Specified Face Amount are based on the length of time the increase has been
in force and the Insured's sex (in the case of a non-unisex Policy), Issue
Age, Class and table rating, if any. The Monthly Cost of Insurance Rates will
be determined by Us from time to time based on Our expectations of future
experience with respect to mortality costs, persistency, interest rates,
expenses and taxes. However, the Monthly Cost of Insurance Rates will not be
greater than the maximum cost of insurance rates provided by Us in Section 2
for each increase.
BASIS OF COMPUTATION. Guaranteed Maximum Monthly Cost of Insurance Rates are
based on the 1980 Commissioner's Standard Ordinary Smoker and Nonsmoker
Mortality Table (Table B applies if the Policy is issued on a unisex basis).
The Guaranteed Maximum Monthly Cost of Insurance Rates reflect any table
rating shown in Section 1. We have filed a detailed statement of Our methods
for computing Cash Values with the insurance department in the jurisdiction
where the Policy was delivered. These values are equal or exceed the minimum
required by law.
INSUFFICIENT VALUE. If on a Valuation Date a Monthly Anniversary Day occurred
during the Valuation Period and the Cash Surrender Value is equal to or less
than zero, then the Policy will terminate for no value, subject to the Grace
Period provision. During the Protected Period shown in Section 1 the Policy
will not terminate by reason of insufficient value if the Policy satisfies
the minimum premium test as described below. The Protected Period begins on
the policy date shown in Section 1.
If on a Valuation Date a Monthly Anniversary Day occurred during the
Valuation Period and the Monthly Expense Charge plus the Monthly Cost of
Insurance plus the Policy Debt exceed the Account Value then the Unpaid
Policy Charges will be increased by the excess of these amounts over the
Account Value. Any
Page 18
Unpaid Policy Charges will accumulate at interest at the Fixed Account
interest rate.
MINIMUM PREMIUM TEST. The Policy satisfies the minimum premium test if the
Premiums paid less any Partial Surrenders and less any Policy Debt exceed the
sum of the minimum monthly premiums which applied to the Policy in each
Policy Month from the policy date to the Valuation Date on which the test is
applied.
The minimum monthly premium applicable to the Policy is shown in Section 1.
The minimum monthly premium will be revised as a result of any of the
following changes to the Policy:
1. an increase in the Specified Face Amount;
2. an increase in supplemental benefits ;
3. when requested by You, the addition of any supplemental benefits.
The revised minimum monthly premium will be effective as of the effective
date of the change to the Policy and will remain in effect until again
revised by any of the above changes.
GRACE PERIOD. If, on a Valuation Date, the Policy will terminate by reason of
insufficient value, We will allow a grace period. This grace period will
allow 61 days from that Valuation Date for the payment of a Premium
sufficient to keep the policy in force. Notice of Premium due will be mailed
toYour last known address or the last known address of any assignee of
record. We will assume that Your last known address is the address shown on
the Application (or notice of assignment), unless We receive notice of a
change in address in a form satisfactory to Us. If the Premium due is not
paid within 61 days after the beginning of the Grace Period, then the Policy
and all rights to benefits will terminate without value at the end of the 61
day period. The Policy will continue to remain in force during this Grace
Period. If the Policy Proceeds become payable by Us during the Grace Period,
then any overdue Monthly Cost of Insurance and Monthly Expense Charge will be
deducted from the amount payable by Us.
SPLITTING UNITS. We reserve the right to split or combine the value of Units.
In effecting any such change, strict equity will be preserved and no change
will have a material effect on the benefits or other provisions of the Policy.
10. POLICY BENEFITS
BENEFITS AT DEATH. The Policy Proceeds will be paid as they become due upon
the death of the Insured prior to Maturity, in accordance with Section 8. We
will make payment when we receive Due Proof of that death.
CASH SURRENDER VALUE. You may surrender the Policy for its Cash Surrender
Value at any time. The Cash Surrender Value is the Account Value decreased by
any surrender charges and by the balance of any Policy Debt. We will
determine the Cash Surrender Value at the end of the first Valuation Date
after we receive Your written request for surrender.
SURRENDER CHARGES. If this policy is surrendered for its Cash Surrender
Value, a surrender charge will be applied to the initial Specified Face
Amount and to each increase in the Specified Face Amount, except that a
surrender charge will not be applied to an increase in the Specified Face
Amount resulting from a change in the death benefit option. The surrender
charge will be calculated separately for the initial Specified Face Amount
and each increase in the Specified Face Amount. The surrender charges for the
initial Specified Face Amount and each increase in the Specified Face Amount
are shown in the current Section 1. We will send You a current table of
revised surrender charges resulting from an increase in the Specified Face
Amount that affects the surrender charges.
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SURRENDER CHARGE ON DECREASE IN SPECIFIED FACE AMOUNT. A surrender charge
will be deducted from the Account Value for each decrease in the Specified
Face Amount, except for a decrease in the Specified Face Amount resulting
from a change of death benefit option or from a Partial Surrender. A
surrender charge will be determined for the initial Specified Face Amount and
for each increase in the Specified Face Amount . These surrender charges will
be applied in the following order:
1. first, to the most recent increase;
2. second, to the next most recent increases, in reverse chronological
order; and
3. finally, to the initial Specified Face Amount.
The amounts of the surrender charges applied will be equal to the surrender
charges shown in the current section 1, revised for any increases in the
Specified Face Amount, for the Policy Year in which the decrease is made
multiplied by (a) over (b), where: (a) is the decrease in the initial
Specified Face Amount or any subsequent increase in the Specified Face
Amount; and (b) is the Initial Specified Face Amount or any subsequent
increase in the Specified Face Amount immediately prior to the decrease.
Future surrender charges for the initial Specified Face Amount and any
increase in the Specified Face Amount will be reduced by the surrender
charges applied because of the decrease in the initial Specified Face Amount
or any subsequent increases in the Specified Face Amount. We will send You a
current table of revised surrender charges reflecting the decrease in the
initial Specified Face Amount or any subsequent increases in the Specified
Face Amount.
The surrender charge will be deducted from the Account Value. You may
allocate the surrender charges applied among the Sub-Accounts and the Fixed
Account Value pursuant to written or telephone request to Our Principal
Office. Telephone requests will be honored only if We have a properly
completed telephone authorization form for You on file. We, our affiliates
and the representative from whom You purchased Your Policy will not be
responsible for losses resulting from acting upon telephone requests
reasonably believed to be genuine. We will use reasonable procedures to
confirm that instructions communicated by telephone are genuine. The
procedures We follow for transactions initiated by telephone include
requirements that You identify Yourself by name and identify a personal
identification number. If You do not specify the allocation, then the
surrender charge will be allocated among the Sub-Accounts in the proportion
the amounts in the Sub-Account and the Fixed Account Value in excess of the
Policy Debt bear to the Account Value in excess of the Policy Debt .
PARTIAL SURRENDER. You may make a Partial Surrender of the Policy once each
Policy Year after the first Policy Year by written request to Us. The amount
of any Partial Surrender must be at least $200. During the first ten Policy
Years the maximum amount of each Partial Surrender is 20% of the Cash
Surrender Value at the end of the first Valuation Date after We receive Your
request. After the first ten Policy years, the maximum amount of any Partial
Surrender is the Cash Surrender Value. If the policy's death benefit option
is option A, the Specified Face Amount will be decreased by the amount of the
Partial Surrender. The decrease in Specified Face Amount will be applied to
the initial Specified Face Amount and to each increase in Specified Face
Amount in the following order:
1. first, to the most recent increase;
2. second, to the next most recent increases, in reverse chronological
order; and
3. finally, to the initial Specified Face Amount.
The Specified Face Amount remaining in force after the Partial Surrender must
be no lower than the Minimum Specified Face Amount shown in Section 1.
We will effect a Partial Surrender at the end of the first Business Day after
we receive Your written request for surrender.
ALLOCATION OF PARTIAL SURRENDER. You may allocate the Partial Surrender among
the Sub-Accounts of the Variable Account and the Fixed Account Value. If You
do not specify the allocation, then the Partial Surrender will be allocated
among the Sub-Accounts in the proportion the amounts in the Sub-Account and
the Fixed Account Value in excess of the Policy Debt bear to the Account
Value in excess of the Policy Debt.
Page 20
POLICY LOAN. You may request a Policy loan of up to 90% of the Policy's Cash
Value, decreased by the amount of any outstanding Policy Debt on the date the
Policy loan is made. You may allocate the Policy loan among the Sub-Accounts
and the Fixed Account Value. If You do not specify the allocation, then the
Policy loan will be allocated among the Sub-Accounts in the proportion the
amounts in the Sub-Account and the Fixed Account Value in excess of the
Policy loan bear to the Account Value in excess of the Policy loan. Loan
amounts allocated to the Sub-Accounts will be transferred to the Fixed
Account Value. A grace period will begin on any Monthly Anniversary Day on
which the Policy Debt exceeds the Cash Value. After the end of the protected
period shown in Section 1, the Policy will terminate without value upon the
expiration of the grace period.
Interest on the Policy Debt will accrue daily at the Policy loan interest
rate specified in Section 1. This interest shall be due and payable to Us in
arrears on each Policy Anniversary. Any unpaid interest will be added to the
principal amount of the Policy Loan.
All funds We receive from You will be credited to Your Policy as Premium
unless We have received written notice, in form satisfactory to Us, that the
funds are for loan repayment. Loan repayments will first reduce the
outstanding balance of the Policy loan and then accrued but unpaid interest
on such loans. We will accept repayment of any Policy loan at any time.
DEFERRAL OF PAYMENT. We will usually pay any amount due within seven days
after the Valuation Date following Our receipt of written notice in a form
satisfactory to us giving rise to such payment or, in the case of death of
the Insured, due proof of such death. Any special conditions that apply to a
Sub-Account are specified in the description of the Sub-Account in Section 1.
Payment of any amount payable from the Variable Account on death, surrender,
Partial Surrender, or Policy loan may be postponed whenever:
1. the New York Stock Exchange ("NYSE") is closed other than customary
weekend and holiday closing, or trading on the NYSE is otherwise
restricted,
2. the Securities and Exchange Commission, by order, permits postponement
for the protection of Policy Owners, or
3. an emergency exists as determined by the Securities and Exchange
Commission, as a result of which disposal of securities is not reasonably
practicable, or it is not reasonably practicable to determine the value of
the assets of the Variable Account.
We reserve the right to defer payment of any portion of the Cash Surrender
Value, Policy loan or Partial Surrender payable from the Fixed Account Value
for a period not exceeding six months from the date We receive Your request.
We will not defer payment of a Policy loan if the loan is to be used to pay
any premium to Us.
TERMINATION. The Policy terminates on the earlier of the date We receive Your
request to surrender it for the Cash Surrender Value, the expiration date of
the Grace Period due to insufficient value, the date of death of the Insured,
or the date of Maturity.
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12. REINSTATEMENT
Prior to the death of the Insured, the Policy may be reinstated prior to the
Maturity Date, provided the Policy has not been surrendered for the Cash
Surrender Value, and provided that:
1. You make Your reinstatement request within five years from the
Policy termination date;
2. You submit satisfactory evidence of the Insured's insurability to Us;
3. You pay an amount sufficient to put the Policy in force;
An amount sufficient to put the Policy in force is not less than:
1. the Unpaid Policy Charges at the end of the grace period; plus
2. any excess of the Policy Debt over the Cash Value at the end of the
grace period; plus
3. three times the Monthly Cost of Insurance charges applicable at the
date of reinstatement; plus
4. three times the Monthly Expense Charge.
During the protected period shown in Section 1 an amount is sufficient to put
the Policy in force if it meets the minimum premium test.
The Specified Face Amount of the reinstated Policy cannot exceed the
Specified Face Amount at the time of termination. The Account Value on the
Policy reinstatement date will reflect:
1. the Account Value at the time of termination; plus
2. Net Premiums attributable to Premiums paid to reinstate the Policy;
less
3. the Monthly Expense Charge; less
4. the Monthly Cost of Insurance charge applicable on the date of
reinstatement.
The effective date of reinstatement will be the Monthly Anniversary Day that
falls on or next follows the date We approve Your request.
Any Policy Debt at the time of termination must be repaid upon the
reinstatement of the Policy or carried over to the reinstated policy.
If the Policy was subject to surrender charges when it lapsed, the reinstated
Policy will be subject to surrender charges as if the Policy had not
terminated.
The Incontestability provision of the Policy will apply to the Policy after
reinstatement as regards statements made in the application for
reinstatement. The Suicide provision of the Policy will apply to the Policy
after reinstatement. In those provisions in the reinstated Policy, "Issue
Date" means the effective date of reinstatement.
Page 22
RIDERS AND ENDORSEMENTS
APPLICATION
Page 23
SUN LIFE ASSURANCE
COMPANY OF CANADA (U.S.)
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.) U.S HEADQUARTERS OFFICE:
One Sun Life Executive Park
Wellesley Hills, MA 02481
HEAD OFFICE:
Toronto, Canada
FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE INSURANCE POLICY
THE AMOUNT OF THE DEATH BENEFIT OR THE DURATION OF THE DEATH BENEFIT MAY
INCREASE OR DECREASE TO REFLECT THE INVESTMENT EXPERIENCE OF THE VARIABLE
ACCOUNT, AS DESCRIBED IN SECTION 8.
THE ACCOUNT VALUE IN EACH SUB-ACCOUNT OF THE VARIABLE ACCOUNT MAY INCREASE OR
DECREASE IN ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THAT SUB-ACCOUNT OF
THE VARIABLE ACCOUNT. THERE IS NO MINIMUM GUARANTEED ACCOUNT VALUE FOR
AMOUNTS IN THE SUB-ACCOUNTS OF THE VARIABLE ACCOUNT.
THE POLICY PROCEEDS ARE PAYABLE AT THE DEATH OF THE INSURED PRIOR TO MATURITY
AND WHILE THE POLICY IS IN FORCE. THE CASH SURRENDER VALUE, IF ANY, IS
PAYABLE ON THE DATE OF MATURITY.
THE POLICY DOES NOT PARTICIPATE IN DIVIDENDS.
FLEXIBLE PREMIUMS ARE PAYABLE DURING THE LIFETIME OF THE INSURED PRIOR TO
MATURITY.
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