EXHIBIT 4(b)
Pruco Life Insurance Company of New Jersey
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
a stock Prudential Financial company
[PRUDENTIAL FINANCIAL LOGO]
This is an annuity contract. Subject to the provisions of the Contract, and in
consideration of any Purchase Payments you make and we accept, we will make
Annuity Payments starting on the Annuity Date shown on the Contract Data pages.
Please read the Contract carefully; it is a legal contract between you and Pruco
Life Insurance Company of New Jersey. Expense charges applicable to the Contract
are shown on the Contract Data pages. If you have a question about the Contract,
or a claim, see your representative or contact the Annuity Service Center.
BENEFITS AND VALUES UNDER THIS CONTRACT MAY BE ON A VARIABLE BASIS. AMOUNTS
DIRECTED INTO ONE OR MORE OF THE VARIABLE INVESTMENT OPTIONS WILL REFLECT THE
INVESTMENT EXPERIENCE OF THOSE INVESTMENT OPTIONS. THEY ARE SUBJECT TO CHANGE
BOTH UP AND DOWN AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
RIGHT TO CANCEL CONTRACT
This Contract may be returned within 10 days after you receive it. It can be
mailed or delivered to either the Annuity Service Center, or the representative
who sold it to you. Return of this Contract by mail is effective on being
postmarked, properly addressed and postage prepaid. The returned Contract will
be canceled upon our receipt, and we will return an amount equal to the sum of
(i) the difference between Purchase Payments received (including any fees or
other charges deducted from gross considerations) and the amount(s) allocated to
the Allocation Options under the Contract, and (ii) the Contract Value as of the
date the Contract is mailed or delivered to us or to the representative who sold
it to you. Under certain circumstances, we have the right to allocate Purchase
Payment(s) to the Money Market Subaccount until the expiration of the Right to
Cancel period. If we so allocate Purchase Payment(s), we will refund the
Purchase Payments(s), less any withdrawals, in the event of cancellation under
the terms of this paragraph.
READ YOUR CONTRACT CAREFULLY
Signed for Pruco Life Insurance Company of New Jersey,
a New Jersey Corporation.
/s/ Xxxxxxxx X. Xxxxxx /s/ Xxxxxx Xxxxx
Secretary President
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED FIXED AND VARIABLE ANNUITY CONTRACT
NONPARTICIPATING
ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT.
VFLEX-2003-NY
TABLE OF CONTENTS
CONTRACT DATA PAGES 3
DEFINITIONS 4
PURCHASE PAYMENTS 7
CONTRACT VALUE 7
CONTRACT MAINTENANCE CHARGE 9
VARIABLE SEPARATE ACCOUNT 9
FIXED RATE ACCOUNT 10
DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION 11
TRANSFERS 12
WITHDRAWALS 13
CREDIT ELECTION 14
GUARANTEED MINIMUM DEATH BENEFIT 15
SPOUSAL CONTINUANCE 17
ANNUITY AND SETTLEMENT OPTIONS 18
BENEFICIARY 19
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS 19
GENERAL PROVISIONS 20
VALUES AND BENEFITS 21
ANNUITY SETTLEMENT TABLES 21
2
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CONTRACT DATA
OWNER: [Xxxx Xxx] SEX: [M] AGE AT ISSUE: [35]
JOINT OWNER: [Xxxx Xxx] SEX: [F] AGE AT ISSUE: [35]
ANNUITANT: [Xxxx Xxx] SEX: [M] AGE AT ISSUE: [35]
CO-ANNUITANT: [Xxxx Xxx] SEX: [F] AGE AT ISSUE: [35]
CONTRACT NUMBER: [12345] CONTRACT DATE: [May 1, 2003]
PLAN TYPE: [Non-Qualified] ANNUITY DATE: [May 1, 2058]
PURCHASE PAYMENTS:
INITIAL PURCHASE PAYMENT: [$10,000.00]
MINIMUM SUBSEQUENT PURCHASE PAYMENT: $500. A lesser Minimum Subsequent
Purchase Payment may apply to any available payroll deduction plan or other
automatic purchase plan.
ANNUAL PURCHASE PAYMENT LIMITS: The total of all Purchase Payments (net of
Purchase Payments withdrawn) made into this Contract in the first Contract
Year may not exceed $7,000,000. The total of all Purchase Payments (net of
Purchase Payments withdrawn) made into this Contract in any Contract Year
after the first Contract Year may not exceed $2,000,000. Purchase Payments
of greater value may be allowed with our prior approval.
AGGREGATE PURCHASE PAYMENT LIMIT: The total of all Purchase Payments (net
of Purchase Payments withdrawn) made into this Contract may not exceed
$7,000,000. Purchase Payments of greater value may be allowed with our
prior approval.
BENEFICIARY:
[As designated by Owner at Contract Date unless changed in accordance with
the Contract provisions.]
INSURANCE CHARGE:
The Insurance Charge depends on whether you have elected the Guaranteed
Minimum Death Benefit ("GMDB") feature. This charge is deducted daily from
the assets in each of the Subaccounts. If you do not elect the GMDB
feature, your death benefit is equal to the base death benefit as described
in the Guaranteed Minimum Death Benefit section of the Contract.
[ ] You have not elected the GMDB feature. The daily rate is 0.00448376%,
which is equivalent to an annual rate of 1.65%.
[ ] You have elected the GMDB feature and the GMDB Protected Value option
of the GMDB Step-Up. The daily rate is 0.00515678%, which is equivalent to
an annual rate of 1.90%.
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CONTRACT MAINTENANCE CHARGE
If your Contract Value is less than $100,000, we will charge a Contract
Maintenance Charge of the lesser of $30 or 2% of the Contract Value. The
charge is deducted on the Contract Anniversary and when a surrender of the
Contract occurs, if the Contract Value at the time is then less than
$100,000. We reserve the right to raise the Contract Value amount over
which we will waive the Contract Maintenance Charge.
VARIABLE SEPARATE ACCOUNT: [The Pruco Life of New Jersey Flexible Premium
Variable Annuity Account]
INTEREST RATE INVESTMENT OPTIONS:
The following interest rate investment options are currently available. We
may add other options in the future.
DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION:
MINIMUM GUARANTEED INTEREST RATE: 3%
INITIAL INTEREST SEGMENT INTEREST RATE FOR 6 MONTH OPTION: [7%]
INITIAL INTEREST SEGMENT INTEREST RATE FOR 12 MONTH OPTION: [8%]
FIXED RATE ACCOUNT:
MINIMUM GUARANTEED INTEREST RATE: 3%
INITIAL INTEREST SEGMENT INTEREST RATE: [5%]
INITIAL BASE INTEREST CREDITING RATE: [4%]
INITIAL ADDITIONAL INTEREST CREDITING RATE: [1%]
The Initial Interest Segment Interest Rate is the sum of the Initial Base
Interest Crediting Rate and the Initial Additional Interest Crediting Rate.
The Initial Additional Interest Crediting rate is credited on the portion,
if any, of the Initial Purchase Payment allocated to the Fixed Rate
Account. It is credited for one year from the date the initial allocation
is made. It is NOT credited on subsequent Purchase Payments or transfers to
the Fixed Rate Account.
[THE INITIAL BASE INTEREST CREDITING RATE CREDITED WILL BE [0.15%] LESS
THAN THE RATE THAT WOULD BE CREDITED IF THE CONTRACT DID NOT CONTAIN AN
INITIAL ADDITIONAL INTEREST CREDITING RATE. THIS REDUCTION IN BASE INTEREST
CREDITING RATE WILL REMAIN IN EFFECT THROUGHOUT THE ACCUMULATION PERIOD.]
ALLOCATION GUIDELINES:
Currently, you may select any Allocation Option which is available at the
time the Purchase Payment or transfer is made. Allocations to the DCA Fixed
Rate Investment Option may only be made from the Initial Purchase Payment
and must be at least $2,000. Allocations to any other Allocation Option
must be at least 1% of the Invested Purchase Payment. Allocations made
pursuant to automatic rebalancing or dollar cost averaging (not part of the
DCA Program) are not subject to these limitations. We reserve the right to
limit the availability of the Allocation Options, if necessary, in order to
comply with federal or state law.
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WITHDRAWALS:
WITHDRAWAL CHARGE: The Withdrawal Charge is a percentage of the amount
withdrawn that is subject to a charge, and depends on the Contract Year in
which the withdrawal is made.
Contract Year Withdrawal Charge
------------- -----------------
1 7%
2 7%
3 7%
4 or later 0%
CHARGE-FREE AMOUNT: A certain amount (the Charge-Free Amount) may be
withdrawn during the Withdrawal Charge Period without incurring a
Withdrawal Charge. The Withdrawal Charge Period is the maximum number of
Contract Years during which a Withdrawal Charge will apply, as shown in the
above table. Prior to the first Contract Anniversary, the Charge-Free
Amount is equal to 10% of the initial Purchase Payment. The Charge-Free
Amount available in any subsequent Contract Year during the Withdrawal
Charge Period is calculated as of the immediately preceding Contract
Anniversary date, and is equal to 10% of the sum of gross Purchase Payments
as of that Contract Anniversary date.
MINIMUM AMOUNT WHICH MAY BE WITHDRAWN: The minimum amount which may be
withdrawn is $250. The minimum amount which may be withdrawn under a
systematic withdrawal plan is $100.
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN THE CONTRACT AFTER A
WITHDRAWAL: The minimum Contract Value which must remain in the Contract in
order to keep the Contract inforce after a withdrawal is $2,000.
CREDIT
If you elect to receive the Credit, we will add a Credit Amount to your
Contract Value. The Credit Amount is equal to 1% of the Contract Value on
the applicable Credit Date.
If you elect to receive the Credit at your First Credit Date, we will make
this same offer again prior to your Second Credit Date. IF YOU DO NOT ELECT
TO RECEIVE THE CREDIT AT THE FIRST CREDIT DATE, WE WILL NOT MAKE THIS OFFER
AGAIN, AND ANY SUBSEQUENT CREDIT OFFERS WILL NOT BE AVAILABLE TO YOU.
FIRST CREDIT DATE: Third Contract Anniversary
SECOND CREDIT DATE: Sixth Contract Anniversary
CREDIT ELECTION WITHDRAWAL CHARGE: A percentage of the amount withdrawn
after a Credit Date that is subject to a charge, and depends on the number
of Contract years that have elapsed since the most recent Credit Date.
Contract Years Since Credit Date Credit Election Withdrawal Charge
-------------------------------- ---------------------------------
0 7%
1 7%
2 7%
3 0%
The Credit is not available if the Annuitant or Co-Annuitant is age 81 or older
on the Contract Date, or if your Contract has been continued under the "Spousal
Continuance" provision.
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3B
TRANSFERS:
NUMBER OF TRANSFERS PERMITTED: You will always be allowed at least 12
transfers among Allocation Options in a Contract Year. We may allow more
transfers. If we do so, we will notify you in writing.
TRANSFER CHARGE: The Maximum Transfer Charge for each transfer after the
first 12 in a Contract Year is $25. Transfer Charges are taken pro-rata
from the Allocation Options from which the transfer is made. Transfers made
due to automatic rebalancing and dollar cost-averaging (whether or not part
of a DCA Program) will not be counted for purposes of the Transfer Charge.
MINIMUM AMOUNT TO BE TRANSFERRED: Subject to the restrictions contained in
the Contract on transfers, the minimum transfer amount is $250 or your
entire interest in any Allocation Option, if less. This requirement is
waived if the transfer is pursuant to automatic rebalancing. The minimum
monthly transfer amount for amounts transferred pursuant to the dollar cost
averaging feature or from the DCA Fixed Rate Investment Option under a DCA
Program is $100.
ENDORSEMENTS:
[Individual Retirement Annuity Endorsement]
ANNUITY SERVICE CENTER:
[Annuity Service Center
P.O. Box 7960
Philadelphia, PA 19101
1-888-PRU-2888]
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DEFINITIONS
ACCUMULATION PERIOD: The period from, and including, the Contract Date to, but
excluding, the Annuity Date.
ADDITIONAL INTEREST CREDITING RATE: A rate of interest credited to any portion
of the Initial Purchase Payment allocated to the Fixed Rate Account. The
Additional Interest Crediting Rate will only be credited for one year from the
date the allocation is made. The Additional Interest Crediting Rate will not
apply to subsequent Purchase Payments or to amounts transferred to the Fixed
Rate Account from any other Allocation Option.
ADJUSTED CONTRACT VALUE: The Contract Value as of the Annuity Date, less any
applicable charges for any type of tax (or component thereof) measured by or
based on the amount of Purchase Payment we receive. The applicable Annuity Table
is applied to this amount to determine the initial Annuity Payment.
ALLOCATION OPTIONS: Those investment options available under the Contract as of
any given time to which Contract Value may be allocated.
ANNUITANT: The person named on the first page upon whose continuation of life
any Annuity Payment involving life contingencies depends. You may only change
the Annuitant with our prior approval. If the Annuitant dies before the Annuity
Date, the Co-Annuitant, if applicable, becomes the Annuitant, if the
requirements for changing the Annuity Date are met (see definition of Annuity
Date). If there is no surviving or eligible Co-Annuitant, and the Annuitant was
not the Owner, the Owner becomes the Annuitant. You then have 60 days from the
date we receive due proof of death of the Annuitant or Co-Annuitant to name a
new Annuitant. If no new Annuitant is named during that 60-day period, the Owner
will remain the Annuitant.
ANNUITY DATE: The date the first Annuity or Settlement Payment to the Payee is
due. The Annuity Date is shown on the original Contract Data pages. You may
change the Annuity Date only with our permission. Any such changed Annuity Date
must be earlier than the date shown on the Contract Data pages, cannot precede
the first Contract Anniversary, and must be consistent with applicable law at
the time. If there is a new Annuitant due to the death of the Annuitant or the
assignment of the Contract, and the new Annuitant is older than the prior
Annuitant, the Annuity Date will be based on the age of the new Annuitant;
however any such changed Annuity Date must be earlier than the date shown on the
Contract Data pages, cannot be later than the Contract Anniversary next
following the new Annuitant's 90th birthday, or, if later, the tenth Contract
Anniversary and must be consistent with applicable law at the time. The maximum
annuity age is the later of age 90 or the tenth Contract Anniversary.
ANNUITY OR SETTLEMENT PAYMENTS: The series of payments made to you or any named
payee after the Annuity Date as described under the Annuity or Settlement Option
selected.
ANNUITY PERIOD: The period of time, beginning on the Annuity Date, during which
Annuity or Settlement Payments are made.
ANNUITY SERVICE CENTER: The office indicated on the Contract Data pages to which
notices, requests and Purchase Payments must be sent. The Annuity Service Center
address may be changed at any time. You will be notified in advance and in
writing of any change in address.
BASE INTEREST CREDITING RATE: A rate of interest credited to amounts allocated
or transferred to the Fixed Rate Account. The Base Interest Crediting Rate will
be declared on or before the date on which allocations or transfers are made.
BENEFICIARY: The person(s) or entity(ies) who has the right to receive the death
benefit upon the death of the first to die of the Owner or Joint Owner. The
Owner must be the primary Beneficiary of the Joint Owner, and the Joint Owner
must be the primary Beneficiary of the Owner.
BUSINESS DAY: Any day the New York Stock Exchange and the Company are open for
business.
CHARGE-FREE AMOUNT: The Charge-Free Amount is a portion of the Contract Value
that may be withdrawn without incurring a Withdrawal Change.
CO-ANNUITANT: The person shown on the Contract Data pages who becomes the
Annuitant upon the death of the Annuitant before the Annuity Date. No
Co-Annuitant may be designated if the Owner is a non-natural person.
COMPANY: Pruco Life Insurance Company of New Jersey, a New Jersey corporation.
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CONTRACT ANNIVERSARY: The same day and month as the Contract Date in each later
year.
CONTRACT DATE: The date shown on the Contract Data pages on which the first
Contract Year begins.
CONTRACT SURRENDER VALUE: The Contract Value less any applicable Withdrawal
Charge, Credit Election Withdrawal Charge, Contract Maintenance Charge, charge
for any optional benefit added by endorsement, or charge for any type of tax (or
component thereof) measured by or based on the amount of Purchase Payment we
receive.
CONTRACT VALUE: The dollar value as of any Business Day prior to the Annuity
Date of all amounts accumulated under this Contract.
CONTRACT YEAR: A year which starts on the Contract Date or on a Contract
Anniversary.
CREDIT: An amount we add to your Contract Value if you elect to receive a
Credit.
CREDIT ELECTION: Your election to have a Credit amount added to your Contract
Value in accordance with the "Credit" provision of this Contract. At least 30
calendar days prior to the applicable Credit Date, we will notify you of your
option to make a Credit Election. In order to have the Credit amount added to
your Contract Value, we must receive your Credit Election in Good Order no later
than the applicable Credit Date.
DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION: A portion of the
General Account into which you may allocate all or part of the Initial Purchase
Payment. It does not share in the investment experience of any Subaccount of the
Variable Separate Account.
DOLLAR COST AVERAGING (DCA) INTEREST SEGMENT: A DCA Interest Segment is a
portion of the DCA Option that is created if you allocate all or part of the
Initial Purchase Payment to the DCA Option.
DOLLAR COST AVERAGING (DCA) PROGRAM: A DCA Program permits you to allocate all
or part of the Initial Purchase Payment to the DCA Option and automatically
transfer amounts on a monthly basis from the DCA Option to selected Allocation
Options for a given period of time.
DUE PROOF OF DEATH: An original certified copy of an official death certificate,
an original certified copy of a decree of a court of competent jurisdiction as
to the finding of death, and/or any other proof of death satisfactory to us.
EARNINGS: The excess of the Contract Value over the sum of all Purchase Payments
made and not yet withdrawn.
FIXED RATE ACCOUNT: A portion of the General Account into which you may allocate
Invested Purchase Payments or transfer Contract Value. It does not share in the
investment experience of any Subaccount of the Variable Separate Account. The
Fixed Rate Account is only available during the Accumulation Period.
GENERAL ACCOUNT: Our general investment account which contains all of our assets
with the exception of the Variable Separate Account and other segregated asset
accounts.
GOOD ORDER: Any instruction received at the Annuity Service Center, utilizing
such forms, signatures and datings as we require, that is sufficiently complete
and clear that we do not need to exercise any discretion to follow such
instructions. We will notify you if an instruction is not in Good Order.
INTEREST RATE INVESTMENT OPTIONS: Those interest rate option(s) available under
the Contract as of any given time. Interest Rate Investment Option(s) as of the
Contract Date are shown on the Contract Data pages.
INTEREST SEGMENT INTEREST RATE: The rate at which interest is credited to a
One-Year Interest Segment under the Fixed Rate Account. It is equal to the sum
of the Base Interest Crediting Rate and any applicable Additional Interest
Crediting Rate.
INVESTED PURCHASE PAYMENTS: The balance of each Purchase Payment after we make
any applicable deduction for charges for any type of tax (or component thereof)
measured by or based upon the amount of the Purchase Payment we receive.
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JOINT OWNER: The person, if named on the Contract Data pages as the Joint Owner,
who shares ownership rights with the Owner, as defined under this Contract, and
has the right to receive a death benefit upon the death of the Owner. You may
add, change, or remove a Joint Owner, subject to our rules. The Contract may
never have more than one Joint Owner. No Joint Owner is allowed for IRAs or
other tax-qualified contracts. Unmarried persons who wish to own the Contract
jointly should consult with their tax advisor.
OWNER: The person or entity named on the Contract Data pages who has ownership
rights as defined under the Contract provided that, if a Joint Owner is named,
the Owner shares ownership rights with the Joint Owner, as defined under this
Contract, and has the right to receive a death benefit upon the death of the
Joint Owner. You may change the Owner subject to our rules. Any change of an
Owner will take effect on the date the change request form is signed, provided
we receive such request in Good Order.
PAYEE: The person who has a right to receive Annuity or Settlement Payments
under the Annuity and Settlement Options provision of this Contract. The Payee
can be designated as revocable or irrevocable at your discretion. If you do not
designate a Payee at least 5 Business Days before the Annuity Date, the Owner
will become the Payee.
PURCHASE PAYMENT: A payment you make to this Contract.
SPOUSAL CONTINUANCE: A feature under the Contract that allows the surviving
spouse of a deceased Owner to continue the Contract, in lieu of receiving a
death benefit.
SUBACCOUNT: Variable Separate Account assets are divided in Subaccounts. Assets
of each Subaccount will be invested in shares of Variable Investment Options.
VARIABLE INVESTMENT OPTION: Those investment options available under the Contact
through the Subaccounts as of any given time.
VARIABLE SEPARATE ACCOUNT: A segregated asset account maintained by us to
support this and certain other contracts. The segregated asset account(s)
available as of the Contract Date is shown on the Contract Data pages.
WE, OUR AND US: Pruco Life Insurance Company.
WITHDRAWAL CHARGES: A charge assessed on partial or full withdrawals during the
Withdrawal Charge Period. The Withdrawal Charge equals a percentage, shown on
the Contract Data pages, of the amount subject to the charge.
WITHDRAWAL CHARGE PERIOD: The number of Contract Years during which Withdrawal
Charges are applied to withdrawals of amounts in the Contract. The Withdrawal
Charge Period is shown on the Contract Data pages.
YOU AND YOUR: The Owner of the Contract if there is no Joint Owner; if there is
a Joint Owner; the Owner and Joint Owner acting jointly. If we receive written
authorization from both the Owner and Joint Owner in Good Order, then, upon our
consent, we will allow either to represent the entire ownership interest in the
Contract, until that authorization has been revoked by either party. This
Contract will treat the Owner as having contributed 100% of the Purchase
Payments. Therefore, we will treat the Owner as the taxpayer with respect to all
distributions made under the Contract while he or she is the Owner, whether or
not a Joint Owner is also named.
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PURCHASE PAYMENTS
PURCHASE PAYMENTS: The initial Purchase Payment must be paid on the Contract
Date. In general, subsequent Purchase Payments may be made at any time before
the Annuity Date. However, no Purchase Payments may be made on or after the sole
or older of the Owner's or Joint Owner's, or Annuitant's 86th birthday. The
Minimum Subsequent Purchase Payment, Annual Purchase Payment Limits and
Aggregate Purchase Payment Limit are shown on the Contract Data pages.
ALLOCATION OF PURCHASE PAYMENTS: Invested Purchase Payments are allocated to one
or more of the Allocation Options in accordance with your selection. The
allocation of the initial Invested Purchase Payment is made in accordance with
your selection made on the Contract Date. You may change the allocation of
future Invested Purchase Payments at any time. If, after the Initial Purchase
Payment, we receive a Purchase Payment without allocations instructions, we will
allocate the corresponding Invested Purchase Payment in the same proportion as
the most recent Purchase Payment you made (unless that was a Purchase Payment
you directed us to allocate on a one-time only basis.) If the only previous
Purchase Payment made under the Contract was the Initial Purchase Payment and
any part of it had been allocated to the DCA Option, then no part of the current
Purchase Payment will be allocated to the DCA Option and the proportional
allocation to the other Allocation Options will be adjusted to reflect this.
Assuming that all other requirements are received in Good Order, we reserve the
right to allocate your initial Invested Purchase Payment to the Money Market
Subaccount until we receive your allocation selection. In addition, the Company
has reserved the right to allocate the initial Invested Purchase Payment to the
Money Market Subaccount under the Right to Cancel Contract provision shown on
the cover page of this Contract. All allocations of Invested Purchase Payments
are subject to the Allocation Guidelines shown on the Contract Data pages.
Currently, you may select as many of the available Allocation Options as you
wish. However, we reserve the right to limit this in the future, if necessary,
in order to comply with federal or state law, subject to regulatory approval. If
the Purchase Payment and forms required to issue a Contract are in Good Order,
the initial Invested Purchase Payment will be credited to your Contract within
two (2) Business Days after receipt at the Annuity Service Center. Additional
Invested Purchase Payments will be credited to your Contract as of the Business
Day they are received.
CONTRACT VALUE
Your Contract Value is the total of all amounts credited to your Contract as of
any Business Day as a result of your initial Invested Purchase Payment and the
increases and decreases described below.
On the Contract Date, the Contract Value is equal to the initial Invested
Purchase Payment. After that, the Contract Value as of any Business Day is
determined by starting with the Contract Value at the end of the previous day
and adjusting it for items that increase it or decrease it.
Items that increase the Contract Value are: Invested Purchase Payments, interest
credited under any Interest Rate Investment Option, any Credits, positive
investment performance in a Subaccount, and any Spousal Continuance adjustment.
Items that decrease the Contract Value are: withdrawals and the charges
associated with them, negative investment performance in a Subaccount, the
Insurance Charge, and any Contract Maintenance Charge, Transfer Charge, charge
for any optional benefit added by endorsement, or charges for any type of tax
(or component thereof) measured by or based on the amount of Purchase Payment we
receive.
Investment results and interest credited under any Interest Rate Investment
Option are applied daily. The Insurance Charge is deducted daily. The Contract
Maintenance Charge is deducted annually as of the Contract Anniversary and upon
a total withdrawal. Other charges are assessed only if the appropriate event
occurs.
To determine the investment performance of a Subaccount, we use a unit of
measure called an accumulation unit. Each day we determine the value of an
accumulation unit for each of the Variable Investment Options. We do this by:
(1) adding up the total amount of money allocated to a specific investment
option; (2) subtracting from that amount insurance charges and any other
applicable charges, such as for taxes; and (3) dividing this amount by the
number of outstanding accumulation units.
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When you make a Purchase Payment, we allocate the Invested Purchase Payment
among the Allocation Options you have selected. If you have selected any
Variable Investment Option(s), then we credit your Contract with accumulation
units of the subaccount or subaccounts selected. The number of accumulation
units credited to your Contract is determined by dividing the amount of the
Invested Purchase Payment allocated to an investment option by the unit price of
the accumulation unit for that investment option. The number of accumulation
units cancelled by withdrawals or charges (other than those expressed as a
percent of Contract Value) is equal to the amount of the withdrawal or charge
divided by the unit price of the accumulation unit for the investment option(s)
from which the withdrawal or charge is made. We calculate the unit price for
each investment option after the New York Stock Exchange closes each day and
then credit your Contract. The value of the accumulation units can increase,
decrease, or remain the same from day to day.
The value of a Variable Investment Option equals the unit value for that option
as of a particular date times the number of accumulation units allocated to that
option. Amounts transferred, and Invested Purchase Payments allocated, to a
Variable Investment Option increase the number of accumulation units by an
amount equal to the dollar amount of the transfer or payment divided by the unit
value for that option as of the effective date of the transfer or payment.
Amounts withdrawn or transferred from a Variable Investment Option, and any
applicable charges associated with them, decrease the number of units by an
amount equal to the dollar amount of the withdrawal or transfer plus the amount
of any charge associated with the transaction divided by the unit value of that
option as of the effective date of the withdrawal or transfer. The Contract
Maintenance Charge, any charge for any optional benefit, and any applicable
federal or state taxes also decrease the number of accumulation units by an
amount equal to the dollar amount of the charge or tax divided by the unit value
of the option(s) as of the date the charge or tax is assessed.
The value of an Interest Rate Investment Option is equal to the sum of all
Invested Purchase Payments credited to such Option, plus the sum of the interest
credited to such Option and plus any amounts transferred to such Option, less a
pro-rated portion of any Withdrawals and Withdrawal Charges (unless you
specified the withdrawal to be taken from a specific Allocation Option), and
less any transfers from such Option and any expense charges and any applicable
federal or state taxes.
Withdrawal Charges are taken from the Allocation Option(s) from which the
withdrawal is taken. Transfer Charges are taken pro-rata from the Allocation
Options from which the transfers are being made. The Contract Maintenance Charge
and any charge for any optional benefit are taken pro-rata from all of the
Allocation Options in which you are invested at the time of the charge.
Investment results do not change the number of accumulation units; they are
reflected in the increase or decrease in the unit value.
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CONTRACT MAINTENANCE CHARGE
We deduct an annual Contract Maintenance Charge shown on the Contract Data
pages. We determine your Contract Value as of your Contract Anniversary and make
any deductions required on a pro-rata basis from all Allocation Options to which
your Contact Value is allocated. If a total withdrawal is made on other than a
Contract Anniversary, we will determine your Contract Value and make a deduction
for the Contract Maintenance Charge the same as we would if it were a Contract
Anniversary.
VARIABLE SEPARATE ACCOUNT
THE VARIABLE SEPARATE ACCOUNT: The Variable Separate Account is designated on
the Contract Data pages. 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 Separate Account, equal to reserves and other
liabilities of your Contract and those of other owners, will not be charged with
liabilities arising out of any other business we may conduct. The operation of
the Variable Separate Account is subject to the laws of the state in which the
Contract is delivered.
The Variable Separate Account assets are divided into Subaccounts. The assets of
the Subaccount are allocated to Variable Investment Options. We may restructure,
eliminate or combine Subaccounts or add to or eliminate Variable Investment
Option(s). You may be permitted to transfer your Contract Value or allocate
Invested Purchase Payments to the additional Subaccount(s). However, the right
to make such transfers or allocations will be limited by any terms and
conditions imposed to comply with federal or state law, subject to regulatory
approval.
Should the shares of any Variable Investment Option(s) become unavailable for
investment by the Variable Separate Account, we deem further investment in the
shares inappropriate, or if required for tax reasons, we may limit further
purchase of such shares or substitute shares of another Variable Investment
Option for shares already purchased.
VALUATION OF ASSETS: The value of the shares held by the Subaccounts in the
Variable Investment Options will be based on the net asset value of the
Investment Option on each Business Day.
INSURANCE CHARGE: Each Business Day, we deduct an Insurance Charge from the
Subaccounts of the Variable Separate Account. The amount of the Insurance Charge
is based on whether you have elected the GMDB feature.
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FIXED RATE ACCOUNT
INTEREST RATES: The Initial Interest Segment Interest Rate applicable to the
Fixed Rate Account on the Contract Date is shown on the Contract Data page. It
is equal to the sum of the Initial Base Interest Crediting Rate and any
applicable Initial Additional Interest Crediting Rate. The Initial Base Interest
Crediting Rate and the Initial Additional Interest Crediting Rate are shown on
the Contract Data page. We will credit interest to the portion of the initial
Purchase Payment, if any, allocated to the Fixed Rate Account at the daily
equivalent of these rates.
The Base Interest Crediting Rate is credited on allocations and transfers to the
Fixed Rate Account. The rate will be declared when allocations or transfers are
made. The declared Base Interest Crediting Rate will never be less than the
Minimum Guaranteed Interest Rate for the Fixed Rate Account, as shown on the
Contract Data pages.
The Additional Interest Crediting Rate is in addition to the Base Interest
Crediting Rate we credit. The Additional Interest Crediting Rate is credited on
any portion of the Initial Purchase Payment allocated to the Fixed Rate Account.
This rate will only be credited for one year from the date such allocation is
made. We reserve the right to limit the availability of the Additional Interest
Crediting Rate. Transfers or allocations of subsequent Purchase Payments to the
Fixed Rate Account are not eligible to receive the Additional Interest Crediting
Rate.
ONE-YEAR INTEREST SEGMENT: A one-year interest segment is created whenever you
allocate or transfer an amount to the Fixed Rate Account. We credit interest to
the amount in each interest segment daily at a specific rate declared for that
interest segment until the earliest of: 1) the date it is withdrawn; 2) the date
it is transferred to another Allocation Option; 3) the maturity date of the
one-year interest segment; 4) the date as of which a death benefit is
determined; and 5) the Annuity Date.
TRANSFERS FROM FIXED RATE ACCOUNT: At the maturity date of a one-year interest
segment, you have 30 days during which you may elect to transfer the amount in
that interest segment into any other Allocation Option available on that date,
other than a DCA Option. Once you have made an election, and we have received
it, it may not be reversed.
Amounts that you withdraw or transfer into another Allocation Option during the
30-day period will receive interest from the maturity date to the date of
withdrawal or transfer at the rate that would have applied to those amounts had
you taken no action within the 30-day period. If you do not make an election to
transfer within 30 days following the maturity date of the interest segment, we
will transfer the amount in the interest segment on the maturity date to another
one-year interest segment. Amounts that are transferred to another one-year
interest segment during the 30-day period will receive the rate that is
effective as of the maturity date for that interest segment.
You may only make transfers from a one-year interest segment within the 30-day
period immediately following the maturity date of that interest segment.
However, we reserve the right to permit transfers from a one-year interest
segment prior to the maturity date of that interest segment.
TRANSFERS INTO FIXED RATE ACCOUNT: At our discretion you may make transfers from
any other Allocation Option into the Fixed Rate Account. Each transfer will
create a new one-year interest segment. We credit interest to the amount in each
interest segment daily at a specific rate declared for that interest segment.
Transfers into the Fixed Rate Account from any of the other Allocation Options
will not be eligible for an Additional Interest Crediting Rate amount.
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DOLLAR COST AVERAGING (DCA) FIXED RATE INVESTMENT OPTION
DCA PROGRAM: If a DCA Program is elected, you may allocate all or part of the
Initial Purchase Payment to the DCA Fixed Rate Investment Option ("DCA Option").
The DCA Program provides for a systematic transfer of the funds allocated to the
DCA Option on a monthly basis from the DCA Option to selected Allocation Options
for a given number of payments. However, you may not transfer any funds to the
DCA Option from the other Allocation Options.
INTEREST TO BE CREDITED: A DCA Interest Segment is a portion of the DCA Option
that is created when you allocate all or part of the Initial Purchase Payment to
the DCA Option. We credit interest to the amount in any DCA Interest Segment
daily at the daily equivalent of a specific rate declared for that DCA Interest
Segment until the earliest of: 1) the date the amount in the DCA Interest
Segment is transferred out of the DCA Interest Segment; 2) the date the amount
in the DCA Interest Segment is withdrawn; 3) the date as of which any death
benefit payable is determined, and 4) the Annuity Date. The Initial Interest
Segment Interest Rate applicable for any portion of the Initial Purchase Payment
allocated to the DCA Option on the Contract Date is shown on the Contract Data
pages. The Initial Interest Segment Interest Rates for a DCA Interest Segment
will never be less than the Minimum Guaranteed Interest Rate for the DCA Option,
as shown on the Contract Data pages.
TRANSFERS: Invested Purchase Payments allocated to the DCA Option are
transferred systematically on a monthly basis to the other Allocation Options
that you have specified. We will transfer the amount allocated in a series of
equal payments on each transfer date such that the amount of each payment
corresponds to the number of payments for the period selected for the transfers.
The final transfer includes the interest credited during the period (but see
below for the effect of withdrawals). The first monthly transfer from the DCA
Option is made as of the date of the allocation of the Initial Purchase Payment.
Subsequent transfers are made monthly on the anniversary of the first transfer.
The final transfer amount includes the interest credited during the elected
period. Once the initial transfer has been processed, the transfer period may
not be changed. The other Allocation Options to which the transfers are being
made may be changed. Transfers from the DCA Option do not count toward the
maximum number of free transfers permissible under the Contract.
EFFECT OF WITHDRAWALS ON TRANSFERS: Withdrawals from the DCA Option are
permitted. We will recalculate the monthly transfer amount to reflect the
reduction in the DCA Option caused by the withdrawal. This recalculation may
include some or all of the interest credited to the date of the next scheduled
transfer. Any interest that is not included in the recalculated transfer amount
will be paid with the final transfer amount, unless there is another subsequent
withdrawal. Deductions of the Contract Maintenance Charge, Insurance Charge, or
charges for any optional benefits are treated as withdrawals for this purpose.
If a withdrawal reduces the monthly transfer amount to below $100, the remaining
balance in the DCA Option will be transferred to the other Allocation Options
that you had most recently selected for the DCA Program on the next scheduled
transfer date. If a withdrawal request does not specify the Allocation Options
from which the withdrawal is to be made, we will take the withdrawals on a
pro-rata basis from all Allocation Options to which your Contract Value is then
allocated. Systematic withdrawals from the DCA Option are permitted.
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TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD: A transfer is subject to the
following:
1. the maximum number of transfers which may be made, the maximum number of
transfers which are not subject to a Transfer Charge and the minimum amount
which may be transferred are shown on the Contract Data pages;
2. a Transfer Charge is deducted if a transfer exceeds the maximum number of
free transfers. The Transfer Charge is shown on the Contract Data pages. The
Transfer Charge is deducted from the amount which is transferred;
3. a transfer will be effected as of the end of the Business Day when we receive
a request in Good Order;
4. we are not responsible for the consequences resulting from a transfer made in
accordance with your instructions;
5. your right to make transfers is subject to modification if we determine, in
our sole opinion, that the exercise of the right by one or more Owners is, or
would be, to the disadvantage of other Owners or if required to do so by
applicable laws or regulations. Restrictions may be applied in any manner
reasonably designed to prevent any use of the transfer right which is
considered by us to be to the disadvantage of other Owners or to ensure
compliance with such laws or regulations. A modification could be applied to
transfers to or from one or more of the Subaccounts and could include, but
not limited to:
a. the requirement of a minimum time period between each
transfer;
b. not accepting a transfer request of an agent acting
under a power of attorney on behalf of more than one
Owner;
c. limiting the dollar amount that may be transferred
among the Subaccounts by an Owner at any one time; or
d. restricting the number of transfers per year.
No transfers are permitted after the Annuity Date.
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WITHDRAWALS
WITHDRAWALS: During the Accumulation Period, you may, upon a request in Good
Order, make a total or partial withdrawal of the Contract Surrender Value. You
may specify the Allocation Option(s) from which a withdrawal will be taken. If
you do not specify, we will take the withdrawal on a pro-rata basis from all
Allocation Option(s) to which your Contract Value is allocated.
We will pay the amount of any withdrawal within 7 days of receipt of request in
Good Order unless the "Suspension or Deferral of Payments or Transfers"
provision is in effect. If we postpone payment of a withdrawal for more than 7
days after we receive your withdrawal request, we will pay interest. The
interest will be calculated daily from the date we receive your request, at a
rate not less than that specified by New York statute. No interest will be paid
if the amount of interest calculated is less than $25.
Each partial withdrawal must be for an amount which is not less than the amount
shown on the Contract Data pages. The minimum Contract Value which must remain
in the Contract after a partial withdrawal in order to keep the Contract inforce
is shown on the Contract Data pages. If the amount of the withdrawal requested
would reduce the Contract Value below this minimum, we will give you the maximum
amount available that, with the Withdrawal Charge, would not reduce the Contract
Value below such minimum. Special rules may apply for IRAs.
WITHDRAWAL CHARGE: A Withdrawal Charge may apply if you make a withdrawal during
the Withdrawal Charge Period. The amount of the Withdrawal Charge is a
percentage, shown on the Contract Data pages, of the amount withdrawn that is
subject to the charge. If a withdrawal is effective on the day before a Contract
Anniversary, the Withdrawal Charge percentage used will be the one as of the
following Contract Anniversary. If you request a partial withdrawal, we will
deduct an amount from the Contract Value that is sufficient to pay the
Withdrawal Charge, and provide you the amount requested.
In determining the Withdrawal Charge, withdrawals of the Charge-Free Amount will
be taken first. Withdrawals in excess of the Charge-Free Amount may be subject
to a Withdrawal Charge. Once all Purchase Payments have been withdrawn, further
withdrawals will be taken from any Earnings. Earnings are not subject to
Withdrawal Charges.
When a withdrawal is taken from a tax-qualified Contract in order to satisfy a
mandatory distribution requirement with respect to the Contract Value in this
Contract, Withdrawal Charges will be waived on any amount that exceeds the
Charge-Free Amount.
Withdrawal Charges will never be greater than that permitted by any applicable
law or regulation.
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CREDIT
At least 30 calendar days prior to your First Credit Date shown on the Contract
Data pages, we will notify you of your option to have a Credit added to your
Contract Value. The Minimum Guaranteed Interest Rate stated in the Contract for
any of the Fixed Rate Investment Options is not affected by whether or not you
elect to receive a Credit.
If you elect to receive a Credit, it will be allocated to the Allocation Options
in the same proportion as the Contract Value on the applicable Credit Date. If
we do not receive a Credit Election request in Good Order by your applicable
Credit Date, no Credit will be added to your Contract Value. If you do elect to
receive the Credit at your First Credit Date, we will make this same offer
again, at least 30 calendar days prior to your Second Credit Date.
IF YOU DO NOT ELECT TO RECEIVE THE CREDIT AT THE FIRST CREDIT DATE, WE WILL NOT
MAKE THIS OFFER AGAIN AND ANY SUBSEQUENT CREDIT OFFERS WILL NOT BE AVAILABLE TO
YOU.
If you elect to receive a Credit, a new Withdrawal Charge Period will begin. You
will be subject to a Credit Election Withdrawal Charge (as shown on the Contract
Data pages) on withdrawals you make which are subject to the charge. The
Charge-Free Amount will apply to withdrawals made on or after the applicable
Credit Date, and will be calculated as described in the Contract Data pages.
Withdrawals which do not exceed the Charge-Free Amount will not be subject to a
Credit Election Withdrawal Charge. Credits and any applicable earnings resulting
from the Credits will be considered Earnings and are not subject to a Credit
Election Withdrawal Charge.
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GUARANTEED MINIMUM DEATH BENEFIT
The Guaranteed Minimum Death Benefit (GMDB) is a feature providing for the
option to receive an enhanced death benefit upon the death of the sole Owner or
the first to die of the Owner or Joint Owner during the Accumulation Period. The
GMDB feature must be elected at the time you purchase your Contract. If you
elect the GMDB feature, the GMDB Protected Value option is equal to the the GMDB
Step-Up. The Contract Data pages indicate whether you have elected the GMDB
feature. The GMDB Protected Value is calculated daily.
GMDB STEP-UP:
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS LESS THAN AGE 80
ON THE CONTRACT DATE, the GMDB Step-Up before the first Contract Anniversary is
the initial Invested Purchase Payment increased by subsequent Invested Purchase
Payments and proportionally reduced by the effect of withdrawals. The GMDB
Step-Up on each Contract Anniversary will be the greater of the previous GMDB
Step-Up and the Contract Value as of such Contract Anniversary. Between Contract
Anniversaries, the GMDB Step-Up will be increased by Invested Purchase Payments
and reduced by the effect of withdrawals.
We stop increasing the GMDB Protected Value by any appreciation in the Contract
Value on the later of: the Contract Anniversary coinciding with or next
following the sole or older Owner's 80th birthday, or the 5th Contract
Anniversary. However we still increase the GMDB Protected Value by subsequent
Invested Purchase Payments and reduce it by the effect of withdrawals.
IF THE SOLE OWNER OR THE OLDER OF THE OWNER AND JOINT OWNER IS AGE 80 OR MORE ON
THE CONTRACT DATE, the GMDB Step-Up before the third Contract Anniversary is the
sum of Invested Purchase Payments, reduced by the effect of withdrawals. On the
third Contract Anniversary the GMDB Step-Up will be adjusted to the greater of
the then current GMDB Step-Up or the Contract Value as of that Contract
Anniversary. Thereafter the GMDB Protected Value is only increased by subsequent
Invested Purchase Payments and reduced by the effect of withdrawals.
Where the words "reduced by the effect of withdrawals" are used in connection
with the GMDB Step-Up, withdrawals from the Contract will reduce the GMDB
Protected Value in the same proportion as they reduce the Contract Value. We
calculate the proportion by dividing the Contract Value after the withdrawal by
the Contract Value immediately prior to the withdrawal. The resulting percentage
is multiplied by the GMDB Protected Value (before the withdrawal) in determining
the GMDB Protected Value.
DEATH OF FIRST TO DIE OF THE OWNER AND JOINT OWNER DURING THE ACCUMULATION
PERIOD:
If you have elected the GMDB feature, and if the Owner or Joint Owner dies
before Xxxxxxx Date, upon receipt of due proof of death and any other
documentation we need, the beneficiary is entitled to receive a death benefit
equal to the greater of:
(a) the Contract Value as of the date we receive due proof of death and any
other documentation we need; and
(b) the GMDB Protected Value as of the date we receive due proof of death
and any other documentation we need.
If you do not elect the GMDB feature, and if the Owner or Joint Owner dies
before Annuity Date, upon receipt of due proof of death and any other
documentation we need, the beneficiary is entitled to receive a base death
benefit equal to the greater of:
(a) the Contract Value as of the date we receive due proof of death and any
other documentation we need; and
(b) the sum of all Invested Purchase Payments, reduced by the effect of
withdrawals.
If the ownership of the Contract changes as a result of an assignment, the value
of the death benefit will be reset to the Contract Value as of the date of the
assignment. Such value will be treated as a Purchase Payment made on that date
for purposes of computing the death benefit.
The Beneficiary may, within 60 days of providing proof of death, elect to take
the death benefit under one of the death benefit payout options listed below,
provided that any payout option shall not include a period certain that exceeds
the life expectancy of the Beneficiary. The Beneficiary will be the sole
measuring life in determining the amount of any such payout option. If no payout
option is selected within the 60 days, the death benefit will be payable as a
lump sum.
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Spousal Continuance is available if: (1) there is only one Owner of the Contract
and there is only one Beneficiary who is the Owner's spouse, or (2) there are an
Owner and Joint Owner of the Contract and each is the other's spouse and
Beneficiary under the Contract, on the date we receive due proof of the Owner's
or Joint Owner's death. (See the "Spousal Continuance" provision of the
Contract.)
If: (1) the spouse is not the sole primary Beneficiary of the sole Owner, or (2)
the Owner and Joint Owner are not each other's spouse at the time we receive due
proof of the Owner's or Joint Owner's death, the Contract will not continue, and
the Beneficiary will be required to choose one of the death benefit payout
options described below.
The death benefit payout options are:
Choice 1 - lump sum payment of the death benefit; or
Choice 2 - the payment of the entire death benefit within a period of 5 years
from the date of death of the first to die of the Owner or Joint Owner. The
entire death benefit will include any increases or losses resulting from the
performance of the Allocation Options during this period. During this period the
Beneficiary may: reallocate the Contract Value among the Allocation Options;
name a Beneficiary to receive any remaining death benefit in the event of the
Beneficiary's death; and make withdrawals from the Contract Value, in which
case, any such withdrawals will not be subject to any Withdrawal Charges.
However, the Beneficiary may not make any Purchase Payments to the Contract.
During this 5 year period, existing charges and costs will be deducted from the
death benefit as though the Contract had continued; or
Choice 3 - payment of the death benefit under an Annuity or Settlement 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 first to die of the Owner or Joint Owner.
If the Owner and Joint Owner are spouses at the death of the first to die of the
Owner and Joint Owner, any portion of the death benefit not applied under Choice
3 within one year of the date of death of the survivor must be distributed
within 5 years of the survivor's date of death.
If the Owner and Joint Owner are NOT spouses at the death of the first to die of
the Owner and Joint Owner:
- the payout described in Choice 2 and the beginning of the distribution
described in Choice 3 will be based on the date of death of the first to
die of the Owner or Joint Owner, and
- any portion of the death benefit not applied under Choice 3 within one year
of the date of death of the first to die must be distributed within 5 years
of the date of death of the first to die.
Once a death benefit becomes payable, the Payee's interest in any Annuity
Benefit under the Contract will cease.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the "Suspension or
Deferral of Payments" provision is in effect.
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD: If the Annuitant dies before
the Annuity Date, the Co-Annuitant, if applicable, becomes the Annuitant. If
there is no surviving Co-Annuitant, and the Annuitant was not the Owner, the
Owner becomes the Annuitant. You have right to name a new Annuitant within 60
days. If the Owner is a non-natural person, the death of the Annuitant will be
treated as the death of the Owner, a new Annuitant may not be designated, and
the Annuitant will be the Owner for purposes of determining the death benefit.
DEATH OF ANNUITANT DURING THE ANNUITY PERIOD: If the Annuitant dies on or after
the Annuity Date, the Settlement Option then in effect will govern whether or
not we will continue to make any payments. The death of a non-Annuitant Owner or
Joint Owner has no effect on the payout during the Annuity Period.
PAYMENT OF DEATH BENEFIT: We will require due proof of death and any other
documentation we request in Good Order before any death benefit paid. All death
benefits will be paid in accordance with applicable law or regulations governing
death benefit payments.
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TAX CONSIDERATIONS: There are tax rules that apply to IRA and other qualified
contracts during both the Accumulation Period and Annuity Period governing
distributions upon the death of the Owner. These rules are contained in
provisions in the attached endorsements and supersede any other distribution
rules contained in the Contract.
The preceding provisions regarding the death of the Owner are intended to
satisfy the distribution at death requirements of section 72(s) of the Internal
Revenue Code of 1986, as amended. We reserve the right to amend this Contract by
subsequent endorsement as necessary to comply with applicable tax requirements,
if any, which are subject to change from time to time. Such additional
endorsements, if necessary to comply with amended tax requirements, will be
mailed to you and become effective within 30 days of mailing, unless you notify
us in writing, within that time frame, that you reject the endorsement.
If the Internal Revenue Service determines that the deductions for one or more
benefits under this Contract, including, without limitation, the GMDB feature
and any optional benefit added by endorsement, are taxable withdrawals, then the
sole or surviving Owner may cancel the affected benefit(s) within 90 days after
written notice from us.
SPOUSAL CONTINUANCE
This feature is available if, on the date we receive due proof of death in Good
Order of: (1) the sole Owner, there is only one Beneficiary who is the Owner's
spouse; or (2) the first to die of the Owner and Joint Owner, each is the
other's spouse and primary Beneficiary under the Contract. In the case of (1)
and (2) above, if the Annuitant is age 90 or less on the date we receive due
proof of death, the surviving spouse will become the new sole Owner under the
Contract. The surviving spouse can elect Spousal Continuance, but must do so no
later than 60 days after furnishing due proof of death. If the surviving spouse
does not elect Spousal Continuance within the 60-day period, the Contract will
end and a lump sum death benefit will be paid.
Under Spousal Continuance, we waive any potential Withdrawal Charges applicable
to Purchase Payments made prior to or after activation of Spousal Continuance.
Upon activation of Spousal Continuance, the Contract Value is adjusted to equal
the amount of the death benefit to which the surviving spouse would have been
entitled. The amount of the adjustment will be prorated among the Allocation
Options to which your Contract Value is then allocated. The adjusted Contract
Value will serve as the basis for calculating any death benefit payable upon the
death of the surviving spouse.
IF YOU ELECTED THE BASE DEATH BENEFIT, then upon activation of Spousal
Continuance, we will adjust the Contract Value to equal the greater of:
1. the Contract Value and
2. the sum of all Invested Purchase Payments (reduced by withdrawals).
IF YOU ELECTED THE GMDB FEATURE, we will adjust the Contract Value to equal the
greater of:
1. the Contract Value and
2. the GMDB Protected Value originally elected.
After we have made the adjustment to Contract Value described in the preceding
paragraphs, we will continue to compute any applicable GMDB Protected Value
under the surviving spousal Owner's Contract in accordance with the "Guaranteed
Minimum Death Benefit" provisions of the Contract. The attained age of the
surviving spouse will be the basis used in determining the death benefit payable
under the Contract.
DEATH OF THE SURVIVING SPOUSAL OWNER DURING THE ACCUMULATION PERIOD AFTER
ACTIVATING SPOUSAL CONTINUANCE -- If a surviving spousal Owner dies after
activating Spousal Continuance but before the Annuity Date, a death benefit will
be payable, based on the applicable death benefit option elected under the
Contract.
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ANNUITY AND SETTLEMENT OPTIONS
GENERAL: On the Annuity Date, the Adjusted Contract Value will be transferred
into our General Account and applied under the Annuity or Settlement Option you
have selected. The amount of each subsequent annuity payment will be equal to
the initial annuity payment. If the Adjusted Contract Value is less than $2,000
or if the payment under any option selected would be less than $20 per month, we
reserve the right to pay out the Adjusted Contract Value in a lump sum. We
guarantee that the dollar amount of each payment, once determined, will not be
affected by variations in mortality or expense experience.
SELECTION OF AN ANNUITY OR SETTLEMENT OPTION: You may select an Annuity or
Settlement Option by notifying us of the selected option in Good Order. If no
Annuity or Settlement Option is selected, or if the chosen Option is not
received in Good Order, Option 2, Life Income Annuity Option, will automatically
be applied. You may, at any time prior to the Annuity Date, by a request in Good
Order 30 days in advance, select and/or change the Annuity or Settlement Option.
If an annuity option is selected, the payment amount will be calculated using
the Annuity Settlement Tables shown on Pages 21 and 22. The annuity benefits at
the time of their commencement will not be less than those that would be
provided by the application of "an amount" to purchase any single consideration
immediate annuity contract offered by the company at the time to the same class
of annuitants. "An amount" is defined as the greater of the Contract Surrender
Value or 95% of what the Contract Surrender Value would be if there were no
Withdrawal Charge.
ANNUITY AND SETTLEMENT OPTIONS: This Contract provides for payments under one of
the Annuity or Settlement Options described below. Any other Annuity or
Settlement Option acceptable to us may be selected.
OPTION 1 - FIXED PERIOD ANNUITY OPTION. We will make equal payments for a period
you choose, from 10 years up to 25 years. At your choice, we will make such
payments annually, semi-annually, quarterly, or monthly. Table 1 shows the
minimum amounts we will pay.
OPTION 2 - LIFE INCOME ANNUITY OPTION. We will make payments for as long as the
Annuitant lives, with payments certain for 120 months. At your choice, we will
make such payments annually, semi-annually, quarterly or monthly. Table 2 shows
the minimum amounts we will pay.
OTHER ANNUITY OR SETTLEMENT OPTIONS: We may offer or consent to other settlement
options, including life income annuity options with payments certain for a
period of other than 120 months. Contact the representative who sold you the
Contract or call the toll-free number listed on your quarterly statement for
information.
ANNUITY: Unless you designate another Payee, you will be the Payee of the
Annuity Payments. The Adjusted Contract Value will be applied to the applicable
Annuity Table contained in this Contract based upon the Annuity Option you have
selected. The amount of the first payment for each $1,000 of Adjusted Contact
Value is shown in the Annuity Tables. If when Annuity Payments begin we are
using tables of annuity rates for these Contracts which result in larger Annuity
Payments, we will use those tables instead. Annuity Payments will depend on the
age and sex of the Annuitant, where permitted
WITHDRAWAL CHARGES: Any amount used to provide income under Option 1 or under
Option 2, will be applied without a Withdrawal Charge.
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BENEFICIARY
BENEFICIARY: The Beneficiary designation in effect on the Contract Date will
remain in effect until changed. The Beneficiary is entitled to receive the
benefits to be paid at the death of the first to die of the Owner or Joint Owner
during the Accumulation Period. The Owner must be the primary Beneficiary of the
Joint Owner, and the Joint Owner must be the primary Beneficiary of the Owner.
Other than primary Beneficiaries, Beneficiaries must be the same for both the
Owner and Joint Owner.
When a Beneficiary is designated, any relationship shown is to the Owner unless
otherwise specified.
To show priority among Beneficiaries, we will label the classes, so that the
class with first priority is called the primary class, the class with next
priority is called the secondary class, and so on. The following statements
apply to Beneficiaries unless the Contract Data pages, Contract endorsement or
any change request that we have processed specifies otherwise:
One who survives the first to die of the Owner and Joint Owner will have
the right to be paid only if no one in a prior class survives the first
to die of the Owner and Joint Owner.
One who has the right to be paid will be the only one paid if no one else
in the same class survives the first to die of the Owner and Joint Owner.
Two or more in the same class who have the right to be paid in equal
shares.
If no one survives the sole Owner, we will pay in one sum to the Owner's
estate.
Where there is insufficient evidence to determine the order of death
then, unless state law prohibits, we will deem the Owner to be the last
survivor and make payment to the Owner's Beneficiary.
Before we make a payment, we have the right to decide what proof we need
of the identity, age or any other facts about any persons designated as
Beneficiaries. If Beneficiaries are not designated by name and we make
payment(s) based on that proof, we will not have to make the payment(s)
again.
CHANGE OF BENEFICIARY: To initiate a change of Beneficiary, call the toll-free
number listed on your statement or contact the representative who sold you
Contract. We will send you a change request form. We may also ask you to send us
the Contract. The change of Beneficiary will take effect on the date you sign
the change request form, provided such request is received in Good Order. Then,
any previous Beneficiary's interest will end as of the date the change request
form is signed and we receive it in Good Order, even if the Owner or Joint Owner
is not living when we process the request. We will not be liable for any payment
made or action taken before we record the change.
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANFERS
FROM THE VARIABLE INVESTMENT OPTIONS: We reserve the right to suspend or defer
payments from the Variable Investment Options for a withdrawal or transfer for
any period when:
1. the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of shares of the
Variable Investment Options held in the Separate Account is not
reasonably practicable or it is not reasonably practicable to determine
the value of such shares; or
4. during any other period when the Securities and Exchange Commission, by
order, so permits for the protection of Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
FROM THE INTEREST RATE INVESTMENT OPTIONS: We reserve the right to suspend or
defer payments from the Interest Rate Investment Options for a withdrawal or
transfer for the period permitted by law, but for not more than six months after
a request in Good Order is received at the Annuity Service Center.
VFLEX-2003-NY
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GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of this Contract, and any attached
endorsement or riders. This Contract may be changed or altered only by our
President or Secretary. Any change, modification or waiver must be made in
writing. This Contract may not be modified by us without your consent except as
may be required by applicable law, including changes necessary to comply with
IRS requirements for annuity contracts, or as set forth in this Contract.
ASSIGNMENT OF A CONTRACT: A request in Good Order specifying the terms of an
assignment of a Contract must be provided to the Annuity Service Center. We are
under no obligation to verify the assignment's validity or sufficiency. We will
not be liable for any payment made or action taken before we record the
assignment. If any Owner is living on the Annuity Date and an assignment is in
effect on that date, we have the right to pay the Contract Surrender Value in
one lump sum to the assignee where notice in Good Order is received. Partial
assignments, collateral or otherwise, are not allowed without our approval. We
reserve the right to restrict or refuse any assignment.
An assignment which results in a change of ownership will affect the value of
the death benefit. Please see the "Guaranteed Minimum Death Benefits" provision
for more information.
We will not be responsible for the validity or tax consequence of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with our consent.
If the Contract is assigned, your rights may only be exercised with consent of
the assignee of record.
NON-PARTICIPATING IN SURPLUS: This Contract does not share in any distribution
of our profits or surplus.
INCONTESTABILITY: We will not contest this Contract. We will not contest any
statement made in the application which is used as a basis for issuing this
Contract. We consider all statements made in the application for this Contract
to be representations, not warranties.
MISSTATEMENT OF AGE OR SEX: We may require proof of age of the Annuitant before
making any life contingent Annuity Payment provided for by this Contract. If the
age or sex of the Annuitant has been misstated, the amount payable will be the
amount that the Contract Value would have provided at the true age or sex.
Once Annuity Payments have begun, any underpayments, with interest at 5% will be
made up in one sum with the next Annuity Payment, and overpayments, with
interest at 5%, will be deducted from the future Annuity Payments until the
total is repaid.
CONTRACT SETTLEMENT: This Contract must be returned to us upon any settlement.
REPORTS: We will send you a report four times each calendar year until the
Annuity Date showing your Contract Value and other relevant information about
your Contract. We will also furnish an annual report of the Separate Account.
These reports will be sent to your last known address.
TAXES: Any taxes, including any type of tax (or component thereof) measured by
or based upon any portion of the Purchase Payment we receive, paid to any
governmental entity will be charged against the Contract Value, unless a
deduction was made for this tax in calculating the Invested Purchase Payment
amount. We will, in our sole discretion, determine when taxes have resulted
from: the investment experience of the Separate Account; receipt by us of the
Purchase Payment(s); or commencement of Annuity Payments. We may, at our
discretion, pay taxes when due and deduct that amount from the Contract Value at
a later date. Payment at an earlier date does not waive any right we may have to
deduct amounts at a later date. We reserve the right to establish a provision
for federal income taxes if we determine, in our sole discretion, that we will
incur a tax as a result of the operation of the Separate Account. We will deduct
for any income taxes incurred by it as a result of the operation of the Separate
Account whether or not there was a provision for taxes and whether or not it was
sufficient. We will deduct any withholding taxes required by applicable law.
EVIDENCE OF SURVIVAL: Before we make a payment, we have the right to require
proof of continued life and any other documentation we need to make a payment.
We can require this proof for any person whose life or death determines whether
or to whom we must make the payment.
PROTECTION OF PROCEEDS: No beneficiary may commute, encumber, alienate, or
assign any payments under this Contract before they are due. To the extent
permitted by law, no payments will be subject to the debts, contracts or
engagements of any Beneficiary or to any judicial process to levy upon or attach
the same for payments thereof.
VFLEX-2003-NY
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VALUES AND BENEFITS
Any cash values, paid up annuities and death benefits that may be available
under this Contract are not less than the minimum benefits required by the law
of any state in which this Contract is delivered.
ANNUITY SETTLEMENT TABLES
Tables 1 and 2 below are applied to the Adjusted Contract Value to compute the
minimum amount of the annuity payment. Table 1 is used to compute the minimum
annuity payment under Option 1 (Fixed Period Annuity Option). Table 2 is used to
compute the minimum annuity payment under Option 2 (Life Income Annuity Option).
The rates in Table 1 and 2 are applied per $1,000 of Adjusted Contract Value. We
used an interest rate of 1.5% per year in preparing Table 1, and an interest
rate of 3% per year in preparing Table 2. Table 2 assumes 120 payments certain.
The annuity payments in Table 2 are based on the Annuitant's Adjusted Age and
sex. The Adjusted Age is the Annuitant's age last birthday prior to the date on
which the first Annuity payment is due, adjusted as shown in the "Translation of
Adjusted Age" Table. When we computed the amounts shown in Table 2, we adjusted
the Annuity 2000 Mortality Table to an age last birthday basis, less two years,
with projected mortality improvements (modified Scale G).
--------------------------------------------------------------------------------------------------------------
TABLE 1
--------------------------------------------------------------------------------------------------------------
Number of Monthly Number of Monthly Number of Monthly Number of Monthly
Years Payment Years Payment Years Payment Years Payment
--------------------------------------------------------------------------------------------------------------
10 $ 8.96 14 $ 6.59 18 $ 5.27 22 $ 4.44
--------------------------------------------------------------------------------------------------------------
11 8.21 15 6.20 19 5.03 23 4.28
--------------------------------------------------------------------------------------------------------------
12 7.58 16 5.85 20 4.81 24 4.13
--------------------------------------------------------------------------------------------------------------
13 7.05 17 5.55 21 4.62 25 3.99
--------------------------------------------------------------------------------------------------------------
In using Table 1, multiply the monthly payment by 2.996 for quarterly payments,
5.981 for semi-annual Payments, or 11.919 for annual payments
-------------------------------------------------------------------------------------------------------------
TABLE 2
-------------------------------------------------------------------------------------------------------------
Adjusted Adjusted Adjusted
Age Male Female Age Male Female Age Male Female
-------------------------------------------------------------------------------------------------------------
41 $3.40 $3.25 61 $4.66 $4.32 81 $7.67 $7.33
-------------------------------------------------------------------------------------------------------------
42 3.44 3.29 62 4.76 4.41 82 7.85 7.53
-------------------------------------------------------------------------------------------------------------
43 3.48 3.32 63 4.87 4.50 83 8.02 7.73
-------------------------------------------------------------------------------------------------------------
44 3.53 3.35 64 4.98 4.60 84 8.18 7.93
-------------------------------------------------------------------------------------------------------------
45 3.57 3.39 65 5.10 4.71 85 8.33 8.12
-------------------------------------------------------------------------------------------------------------
46 3.62 3.43 66 5.23 4.82 86 8.48 8.29
-------------------------------------------------------------------------------------------------------------
47 3.67 3.47 67 5.36 4.94 87 8.62 8.46
-------------------------------------------------------------------------------------------------------------
48 3.72 3.51 68 5.49 5.06 88 8.75 8.61
-------------------------------------------------------------------------------------------------------------
49 3.77 3.56 69 5.64 5.19 89 8.87 8.75
-------------------------------------------------------------------------------------------------------------
50 3.83 3.61 70 5.78 5.33 90 8.98 8.88
-------------------------------------------------------------------------------------------------------------
51 3.88 3.66 71 5.94 5.48 91 9.08 8.99
-------------------------------------------------------------------------------------------------------------
52 3.95 3.71 72 6.10 5.63 92 9.16 9.09
-------------------------------------------------------------------------------------------------------------
53 4.01 3.76 73 6.26 5.79 93 9.24 9.18
-------------------------------------------------------------------------------------------------------------
54 4.08 3.82 74 6.43 5.96 94 9.32 9.26
-------------------------------------------------------------------------------------------------------------
55 4.15 3.88 75 6.60 6.14 95 9.38 9.33
-------------------------------------------------------------------------------------------------------------
56 4.22 3.94 76 6.78 6.33
-------------------------------------------------------------------------------------------------------------
57 4.30 4.01 77 6.95 6.52
-------------------------------------------------------------------------------------------------------------
58 4.38 4.08 78 7.13 6.71
-------------------------------------------------------------------------------------------------------------
59 4.47 4.16 79 7.31 6.92
-------------------------------------------------------------------------------------------------------------
60 4.56 4.24 80 7.49 7.12
-------------------------------------------------------------------------------------------------------------
VFLEX-2003-NY
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-------------------------------------------------------------------------------------------------------
Translation of Adjusted Age
-------------------------------------------------------------------------------------------------------
Calendar Year in Which First Calendar Year in Which First
Payment Is Due Adjusted Age Payment Is Due Adjusted Age
-------------------------------------------------------------------------------------------------------
Prior to 2010 Actual Age 2050 through 2059 Actual Age minus 5
-------------------------------------------------------------------------------------------------------
2010 through 2019 Actual Age minus 1 2060 through 2069 Actual Age minus 6
-------------------------------------------------------------------------------------------------------
2020 through 2029 Actual Age minus 2 2070 through 2079 Actual Age minus 7
-------------------------------------------------------------------------------------------------------
2030 through 2039 Actual Age minus 3 2080 through 2089 Actual Age minus 8
-------------------------------------------------------------------------------------------------------
2040 through 2049 Actual Age minus 4 2090 through 2099 Actual Age minus 9
-------------------------------------------------------------------------------------------------------
VFLEX-2003-NY
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INDIVIDUAL FLEXIBLE PREMIUM DEFERRED FIXED AND VARIABLE ANNUITY CONTRACT.
NON-PARTICIPATING. ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN
BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE
NOT GUARANTEED AS TO DOLLAR AMOUNT.
VFLEX-2003-NY
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