INDIVIDUAL LIMITED PURCHASE PAYMENT VARIABLE DEFERRED ANNUITY CONTRACT
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THIS CONTRACT IS ISSUED IN CONSIDERATION OF THE PAYMENT OF THE INITIAL PURCHASE
PAYMENT. THIS IS A VARIABLE ANNUITY CONTRACT WITH ANNUITY PAYMENTS AND CONTRACT
VALUES INCREASING OR DECREASING DEPENDING ON THE EXPERIENCE OF THE VARIABLE
ACCOUNT SHOWN 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/ Xxxx Xxxxxxxx
Xxxxx X Xxxxxxxx Xxxx 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. WE
HAVE THE RIGHT TO ALLOCATE PURCHASE PAYMENTS TO THE MONEY MARKET INVESTMENT
OPTION UNTIL THE EXPIRATION OF THE RIGHT TO EXAMINE PERIOD. IF WE SO ALLOCATE
PURCHASE PAYMENTS, WE WILL REFUND THE GREATER OF THE PURCHASE PAYMENTS LESS ANY
WITHDRAWALS, OR THE CONTRACT VALUE.
This is a legal contract between you and the Company.
READ YOUR CONTRACT CAREFULLY
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
[0000 XXXXXX XXXXX XXXXX]
[XXXXXXXXXXX, XX 00000-1297]
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GUIDE TO CONTRACT PROVISIONS
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Contract Schedule.......................................................3
Definitions.......................................................4, 5, 6
Ownership...............................................................6
Purchase Payments.......................................................7
Variable Account................................................. 7, 8, 9
Variable Account
Accumulation Unit Value
Mortality and Expense Risk Charge
Contract Maintenance Charge
Contract Value
Transfers
Suspension or Deferral of Payments
Withdrawals.............................................................9
Annuity Provisions.............................................10, 11, 12
Death Benefit .............................................13, 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: (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; or (c) Upon
the death of any Owner, if the contract is not continued by
the deceased Owner's spouse, the Accumulation Period 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. If any portion of the death
benefit is paid out as Annuity Payments, then that Annuity
Portion will terminate as indicated in the definition of
Annuity Portion.
ACCUMULATION UNIT
The units into which we convert amounts invested in the
subaccount of your selected Investment Options during the
Accumulation Phase.
ADJUSTED CONTRACT VALUE
The Contract Value less any deduction made that is an amount
equal to the applicable Premium Tax paid by the Company.
AGE
The age as of the immediately preceding birthday unless
otherwise specified.
ANNUITANT
The natural person upon whose continuation of life any
Annuity Payments involving life contingencies are based. The
Annuitant is the person designated by the Owner. The
Annuitant is shown 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:
1) under Annuity Options 1 and 3, the death of the last
surviving Annuitant.
2) 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.
3) 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 of your selected Investment Options during the
Annuity Phase.
ASSUMED INVESTMENT RATE
The investment rate upon which we base variable Traditional
Annuity Payments. (AIR)
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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 person(s) or entity(ies) designated by the Owner to whom
we will pay the death benefit under this contract. The
Beneficiary is named at issue, but may be later changed with
an Authorized Request as described in the Change of
Beneficiary provision of this contract. Upon the death of a
Joint Owner, the surviving Joint Owner becomes the
Beneficiary and their rights take precedence over any
primary and contingent Beneficiary(ies) previously named.
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.
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 Joint Annuitants are named, Annuity
Payments will be based on the lives of both Joint
Annuitants.
JOINT OWNER
A contract may be owned by Joint Owners. Joint Owners have
equal contract ownership rights. 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.
NET ASSET VALUE
The value of a share of the underlying Investment Options,
less any investment management and portfolio administration
fees and expenses, as of the close of trading on a Business
Day.
PARTIAL ANNUITIZATION
The application of a portion of the Adjusted Contract Value
to 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.
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DEFINITIONS (CONTINUED)
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PURCHASE PAYMENT
Any payment made toward this contract. You cannot make any
Purchase Payments to the contract after the first Contract
Year.
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.
TRADITIONAL ANNUITY PAYMENT
A payment to the Payee made under the Annuity Provisions in
this contract. This contract allows both fixed and variable
Traditional Annuity Payments.
VARIABLE ACCOUNT
A separate account maintained by us in 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 CONTRACT
You may assign or transfer all or specific ownership rights
of this contract. An Authorized Request specifying the terms
of an assignment of this contract must be provided to the
Service Center and approved by us. We will record your
assignment. We will not be responsible for its validity or
effect; including tax consequences, nor will we be liable
for actions 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 this
contract is assigned, your rights may only be exercised 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); unless the new Owner requests a
change of Annuitant(s) by providing an Authorized Request. A
change of ownership also does not change the existing
designated Beneficiary(ies); unless the new Owner requests a
change of Beneficiary(ies) by providing an Authorized
Request.
We will not be responsible for any tax consequence of any
such change.
NON-INDIVIDUAL OWNERS
If the Owner is a non-individual, the Age of the
Annuitant(s) will be used to determine any death benefit or
income benefit.
If the Contract is owned by a non-individual, then the
Annuitant is treated as the Owner for purposes of any death
benefit, income benefit; or reference to the waiver of
withdrawal charge in the contract or any endorsement or
rider.
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. You may not request a change of the
Annuitant if a non-individual is the Owner of this contract.
CHANGE OF BENEFICIARY
Subject to the the rights of any irrevocable
Beneficiary(ies), you may change the primary
Beneficiary(ies) or contingent Beneficiary(ies) at any time
before your death. You may change the named Beneficiary(ies)
by providing an Authorized Request. The change will take
effect as of the date the Authorized Request is signed. If
the Authorized Request reaches our Service Center after the
Owner dies but before any payment is made, the change will
be valid. We will not be liable for any payment 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 PAYMENTS
We allocate your Purchase Payments to one or more of the
Investment Options according to your instructions. However,
we reserve the right to allocate the initial Purchase
Payment to the Money Market Investment Option until the
expiration of the Right to Examine period. Unless you inform
us otherwise, we allocate additional Purchase Payments in
the same manner as the initial Purchase Payment.
All allocations of Purchase Payments 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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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 as shown on the
Contract Schedule. We may add, substitute, or remove
Investment Options shown in 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
are placed into subaccounts. Each subaccount invests
exclusively in one Investment Option. Accumulation Units
shall be used to account for all amounts allocated to or
withdrawn from the Investment Options as a result of
Purchase Payments, withdrawals, transfers, 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, 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 the:
(1) the Net Asset Value of a subaccount at the
end of the current Business Day; plus
(2) 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 the:
(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; plus
(2) a charge for any tax liability related to the
contracts or the Variable Account.
MORTALITY AND EXPENSE RISK CHARGE
Each Business Day we deduct a Mortality and 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 GUARANTEE
We guarantee that the dollar amount of Annuity Payments
after the first will not be affected by variations in
mortality or expense experience.
CONTRACT MAINTENANCE CHARGE
We deduct an annual Contract Maintenance Charge during both
the Accumulation and Annuity Phases. This charge is shown on
the Contract Schedule.
CONTRACT VALUE
The Contract Value in the Variable Account is determined by
multiplying the number of Accumulation Units in each
subaccount by the subaccount Accumulation Unit value and
then adding these results together.
TRANSFERS
You may transfer all or a part of your interest in an
Investment Option to another Investment Option 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 amount
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 pro
rata 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, transfers may not be made 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 and
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 state law at any time and without
prior notice to any party.
If you elect to use this transfer privilege, we will not be
liable for transfers made in accordance with your
instructions. We will determine the number and value of the
subaccount Accumulation Units as of the end of the Business
Day during which the Authorized Request for transfer is
received.
SUSPENSION OR DEFERRAL OF PAYMENTS
The Company reserves the right to suspend or postpone
payments from the Variable Account for a withdrawal or
transfer for any period when:
(a) the New York Stock Exchange is closed, other than
customary weekend and holiday closings;
(b) trading on the New York Stock Exchange is restricted;
(c) an emergency exists as a result of which disposal of
the Investment Option shares is not reasonably
practicable or we cannot reasonably value the
Investment Option shares; or
(d) during any other period when the Securities and
Exchange Commission, by order, so permits for the
protection of Owners.
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WITHDRAWALS
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FULL AND PARTIAL WITHDRAWALS
During the Accumulation Phase, you may, upon an Authorized
Request, make a full or partial withdrawal of the Contract
Value. Withdrawals will result in the cancellation of
Accumulation Units from each subaccount of your selected
Investment Options in the ratio that the value of each
subaccount bears to the total Contract Value.
The Company will pay the amount of any withdrawal from the
Variable Account within seven (7) days of receipt of an
Authorized Request unless the Suspension or Deferral of
Payments provision of this contract is in effect.
WITHDRAWAL CHARGE
Upon a full or partial withdrawal of this contract we may
assess a Withdrawal Charge as shown 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
Traditional Annuity Payments will depend on the following
criteria.
(a) The amount of Adjusted Contract Value applied to the
Traditional Annuity Payments on the Income Date.
(b) 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 Traditional Annuity Payments as
variable, or fixed, or a combination of both variable and
fixed Annuity Payments.
Variable Traditional Annuity Payments will depend also on
the investment allocations that are in place on the Income
Date; the Assumed Investment Rate (AIR); the mortality table
shown on the Contract Schedule; and the future performance
of your selected Investment Options.
Fixed Traditional 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
Traditional 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 Traditional
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 Traditional Annuity Payment. The initial
variable Traditional Annuity Payment is equal to (a) divided
by $1,000, with the result then multiplied by (b), where:
(a) is the amount of Adjusted Contract Value applied to
variable Traditional Annuity Payments; and
(b) is the appropriate variable Traditional 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
Traditional 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 Traditional 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 (CONTINUED)
On each Business Day after the Income Date, the value of a
subaccount Annuity Unit is determined as follows.
Multiply the value of the Annuity Unit for the immediately
preceding Business Day by the net investment factor for the
current Business Day then divided 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 Traditional Annuity
Payments is shown on the Contract Schedule. A different
value may be used with our permission.
All calculations will appropriately reflect the variable
Traditional Annuity Payment frequency selected.
On each subsequent variable Traditional Annuity Payment
date, the total variable Traditional Annuity Payment is the
sum of the variable Traditional Annuity Payments for each
Investment Option. The variable Traditional 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 FOR TRADITIONAL ANNUITY PAYMENTS
This contract provides for variable or fixed Traditional
Annuity Payments under one of the following Annuity Options.
The Company may make available other payment options. You
can select an Annuity Option by an Authorized Request. You
may select and/or change the Annuity Option by an Authorized
Request, at least 30 days before any Income Date.
DEFAULT ANNUITY OPTION FOR TRADITIONAL ANNUITY PAYMENTS
If you do not select an Annuity Option by the Income Date,
we will make variable Traditional 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 WITH PAYMENTS OVER 5, 10, 15 OR 20 YEARS GUARANTEED
We will make Annuity Payments during the life of the
Annuitant. If you take one single Full Annuitization and the
Annuitant dies before the end of the selected guaranteed
period we will continue to make 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 Traditional Annuity Payments, we base the
remaining guaranteed Traditional 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 lump sum 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 SURVIVOR ANNUITY
We will make Annuity Payments during the joint 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 SURVIVOR ANNUITY WITH PAYMENTS OVER
5, 10, 15 OR 20 YEARS GUARANTEED
We will make Annuity Payments during the joint 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 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 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 Traditional Annuity Payments, we base the
remaining guaranteed Traditional 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 lump sum 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 ANNUITY
We will make Annuity Payments during the 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 Traditional 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
formula of (a) x {[(b) x (c) x (d)/(e)] - [(d) x (f)]}
where:
(a) equals 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) equals the amount applied to variable Traditional
Annuity Payments on the Income Date;
(c) equals 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) equals the number of Annuity Units used in determining
each variable Traditional 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) equals the dollar value of first variable Traditional
Annuity Payment; and
(f) equals the number of variable Traditional 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 DURING THE ACCUMULATION PHASE
The Company will require due proof of death; selection of a
death benefit payment option, and any required governmental
forms before any death benefit is paid. Due proof of death
will be any one of the following.
(a) A copy of the certified 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 THE ACCUMULATION PHASE
Upon the death of a sole Owner during the Accumulation
Phase, we will pay a death benefit to the Beneficiary. If
the Owner took a Partial Annuitization prior to his or her
death, the death benefit payment must be distributed within
five years of the date of death. Therefore, death benefit
payment Option C, which allows for payments of the death
benefit as Traditional Annuity Payments over the lifetime of
the Beneficiary, will not be available.
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 DURING THE ACCUMULATION PHASE
Upon the death of any Joint Owner during the Accumulation
Phase, any surviving Joint Owner becomes the primary
Beneficiary, any primary Beneficiary previously designated
becomes a contingent Beneficiary; and any contingent
Beneficiary previously named is removed from the contract.
As the Beneficiary, the surviving Joint Owner will receive
the death benefit, unless he or she makes an Authorized
Request to have the death benefit paid to another person.
If the surviving Joint Owner dies before receiving the death
benefit, it will be paid to his or her estate, unless we
receive an Authorized Request to have the death benefit paid
to another person, signed by the surviving Joint Owner prior
to death. We will not be responsible for any action we take,
or any payment we make, prior to our receipt of the
Authorized Request.
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.
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DEATH BENEFIT (CONTINUED)
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CONTINUATION OF CONTRACT BY SURVIVING SPOUSE
A surviving spouse who is either the Beneficiary of a sole
Owner or a surviving Joint Owner may elect to continue this
contract as a sole Owner, instead of receiving payment of
the death benefit, by making an Authorized Request to the
Service Center before we pay the death benefit. As of the
Business Day we receive such a request, we will adjust the
Contract Value to equal the death benefit. Any part of the
Contract Value in the Investment Options will be subject to
investment risk.
If the surviving spouse elects to continue the contract, he
or she may exercise all the Owner's rights under this
contract, including naming a new Beneficiary or
Beneficiaries. If no new primary Beneficiary is named at the
time we are notified of the election to continue the
contract:
(1) any person who was a contingent Beneficiary at the time
of the death of a sole Owner will become a primary
Beneficiary, and there will be no contingent
Beneficiary, unless later changed by the Owner; and
(2) any person who was a primary Beneficiary at the time of
the death of a Joint Owner will become a primary
Beneficiary once again, and any person who was a
contingent Beneficiary at the time of the death of a
Joint Owner will become a contingent Beneficiary once
again, unless later change by the Owner.
An election to continue the contract by a surviving spouse
who was either a Joint Owner or the Beneficiary of a sole
Owner is not treated as a distribution for tax purposes.
DEATH OF ANNUITANT DURING THE ACCUMULATION PHASE
No death benefit is payable upon the death of an Annuitant
who was not an Owner. The Owner can name a new Annuitant
subject to our approval. If the Owner is a non-individual,
however, 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.
TRADITIONAL GUARANTEED MINIMUM DEATH BENEFIT AMOUNT DURING
THE ACCUMULATION PHASE
The death benefit is equal to the greater of (a) or (b),
where:
(a) is the Contract Value determined as of the end of the
Business Day during which we received at the Service
Center both due proof of death and an election of the
payment method; or
(b) is the Traditional Guaranteed Minimum Death Benefit
(GMDB) value, which is equal to the total of all
Purchase Payments received, not including any
applicable bonus, reduced as follows:
(1) Proportionately by the percentage of Contract Value
taken as a withdrawal, including any withdrawal charge,
for each withdrawal taken. If you have an endorsement
or rider that provides a Guaranteed Partial Withdrawal
Benefit (GPWB) then GPWB Payments and Excess
Withdrawals are included in the meaning of the term
"withdrawals".
(2) Proportionately by the percentage of Contract Value
applied to Traditional Annuity Payments under a Partial
Annuitization, for each traditional Partial
Annuitization taken.
(3) If you have an endorsement or rider that provides a
Guaranteed Minimum Income Benefit (GMIB),
proportionately by the percentage of PB Value applied
to a GMIB Payment under a Partial Annuitization, for
each GMIB Partial Annuitization taken.
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DEATH BENEFIT (CONTINUED)
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TRADITIONAL GUARANTEED MINIMUM DEATH BENEFIT AMOUNT DURING
THE ACCUMULATION PHASE (CONTINUED)
If Joint Owners are named, the Age of the older Owner will
be used to determine the death benefit. If a non-individual
owns the Contract, the Annuitant will be considered the
Owner, and the Annuitant's Age will be used to determine the
death benefit.
Any part of the death benefit amount that had been invested
in the Variable Account remains in the Variable Account
until distribution begins. From the time the death benefit
is determined until complete distribution is made; any
amount in the Variable Account will be subject to investment
risk, which is borne by the Beneficiary.
DEATH BENEFIT PAYMENT OPTIONS DURING THE ACCUMULATION PHASE
If the Owner has not previously designated a death benefit
payment option, a Beneficiary must request that the death
benefit be paid by one of the payment options below.
Option A - A lump sum payment of the death benefit. 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 pro rata 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 a Traditional
Annuity Payment under an Annuity Option over the lifetime of
the Beneficiary; or over a period not extending beyond the
life expectancy of the Beneficiary with distribution
beginning within one year of the date of death of the Owner
or any Joint Owner. We will continue to assess the full
contract maintenance charge on each Beneficiary's portion
pro rata over the Traditional Annuity Payments. This option
is not available if the Owner took a Partial Annuitization.
Any part of the death benefit applied to variable
Traditional Annuity Payments will be subject to investment
risk, which is borne by the Beneficiary.
Any portion of the death benefit not applied to Traditional
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, the amount from the
Variable Account will be paid within seven days of receipt
of due proof of death and an election for the death benefit
payment option, including any required governmental forms,
unless the Suspension or Deferral of Payments provision in
this contract is in effect.
DEATH OF OWNER AND/OR ANNUITANT DURING THE ANNUITY PHASE
Upon the death of a sole Owner, the Beneficiary becomes the
Owner. Upon the death of any Joint 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 in the Annuity Option(s) in effect. 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.
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DEATH BENEFIT (CONTINUED)
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CONDITIONS FOR TERMINATION OF THE TRADITIONAL GUARANTEED MINIMUM DEATH BENEFIT
This benefit will terminate on the earliest of:
(a) the Business Day before the Income Date that you take a
Full Annuitization;
(b) the Business Day that the Traditional GMDB value and
the Contract Value are both zero; or
(c) contract termination.
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GENERAL PROVISIONS
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ENTIRE CONTRACT
We have issued this contract in consideration of the initial
Purchase Payment. This contract, any attached application,
endorsements, or riders, together are the entire contract.
INCONTESTABILITY OF THIS CONTRACT
We will not contest this contract.
MISSTATEMENT OF AGE OR SEX
We may require proof of Age of the Annuitant before making
any life contingent Annuity Payment provided for by the
Entire Contract provision. If there is a misstatement of the
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 Contract Value. This report will be sent to your
last known address.
NO DIVIDENDS ARE PAYABLE
This is a nonparticipating contract. This contract does not
participate in our profits or surplus.
MODIFICATION OF CONTRACT
This contract may be modified by us in order to maintain
compliance with state and federal law. This contract may be
changed or altered only by our President or our Secretary. A
change or alteration will be made in writing.
INCOME DATE
The Income Date 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; however, any such request is
subject to our approval.
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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 a tax as a result of the operation of the
Variable Account. We will deduct for any income taxes
incurred as a result of the operation of the Variable
Account whether or not there was a provision for taxes and
whether or not it was sufficient.
We will deduct any withholding taxes 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 OF THE CONTRACT
The contract will terminate when:
(a) the Accumulation Portion terminates; and
(b) all Annuity Portions terminate; and
(c) all applicable death benefit payments have been made.
L40528 17
ALLIANZ LIFE INSURANCE COMPANY OF NORTH AMERICA
[0000 XXXXXX XXXXX XXXXX]
[XXXXXXXXXXX, XX 00000-1297]
INDIVIDUAL LIMITED PAYMENT VARIABLE DEFERRED ANNUITY
NON-PARTICIPATING
L40528
