SECURITY BENEFIT LIFE INSURANCE COMPANY
A MUTUAL COMPANY/FOUNDED IN 1892/TOPEKA, KS
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
THE COMPANY'S PROMISE
In consideration for the Purchase Payments and the attached application,
Security Benefit Life Insurance Company (the "Company") will pay the benefits of
this Contract according to its provisions.
LEGAL CONTRACT
PLEASE READ YOUR CONTRACT CAREFULLY. It is a legal Contract between the Owner
and the Company. The Contract's table of contents is on page 2.
FREE LOOK PERIOD-RIGHT TO CANCEL
IF FOR ANY REASON THE OWNER IS NOT SATISFIED WITH THIS CONTRACT, HE OR SHE MAY
RETURN IT TO THE COMPANY WITHIN 10 DAYS FROM THE DATE OF RECEIPT. IT MAY BE
RETURNED BY DELIVERING OR MAILING IT TO THE COMPANY. IF RETURNED, THIS CONTRACT
SHALL BE DEEMED VOID FROM THE CONTRACT DATE. THE COMPANY WILL REFUND ANY
PURCHASE PAYMENTS MADE AND ALLOCATED TO THE FIXED ACCOUNT AND WILL REFUND
SEPARATE ACCOUNT CONTRACT VALUE AS OF THE DATE THE RETURNED POLICY IS RECEIVED
BY THE COMPANY.
Signed for Security Benefit Life Insurance Company on the Contract Date.
XXXXX X. XXXXX XXXXXX X. XXXXXX
Secretary President
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
* Purchase Payments may be made until the earlier of the Annuity Start Date or
termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Start Date according to the
Contract provisions.
* Annuity Payments begin on the Annuity Start Date using the method specified in
this Contract.
* This Contract is Participating.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE ARE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
P.O. Box 750497, Topeka, KS 66675-0497
000 XX Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0001
0-000-000-0000
Form V6022 (10-94)
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TABLE OF CONTENTS
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Page
CONTRACT SPECIFICATIONS................................................ 3
DEFINITIONS............................................................ 4-6
GENERAL PROVISIONS..................................................... 7,8
The Contract...................................................... 7
Compliance........................................................ 7
Misstatement of Age and Sex....................................... 7
Evidence of Survival.............................................. 7
Incontestability.................................................. 7
Assignment........................................................ 7
Transfers...................... .................................. 8
Claims of Creditors............................................... 8
Nonforfeiture Values.............................................. 8
Participation..................................................... 8
Statements........................................................ 8
OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS........................ 9
Ownership......................................................... 9
Joint Ownership................................................... 9
Annuitant......................................................... 9
Primary and Secondary Beneficiaries............................... 9
Ownership and Beneficiary Changes................................. 9
PURCHASE PAYMENT PROVISIONS............................................ 10
Flexible Purchase Payments........................................ 10
Purchase Payment Limitations...................................... 10
Purchase Payment Allocation....................................... 10
Place of Payment.................................................. 10
CONTRACT VALUE AND EXPENSE PROVISIONS.................................. 10-12
Contract Value.................................................... 10
Fixed Account Contract Value...................................... 10
Fixed Account Interest Crediting.................................. 11
Separate Account Contract Value................................... 11
Accumulation Unit Value........................................... 11
Determining Accumulation Units.................................... 11
Mortality and Expense Risk Charge................................. 12
Premium Tax Expense............................................... 12
Administrative Charge............................................. 12
Mutual Fund Expenses.............................................. 12
WITHDRAWAL PROVISIONS.................................................. 12,13
Withdrawals....................................................... 12,13
Withdrawal Value.................................................. 13
Systematic Withdrawals............................................ 13
Date of Request................................................... 13
Payment of Withdrawal Benefits.................................... 13
DEATH BENEFIT PROVISIONS............................................... 14,15
Death Benefit..................................................... 14
Proof of Death.................................................... 14
Distribution Rules................................................ 14,15
ANNUITY PAYMENT PROVISIONS
Annuity Start Date................................................ 15
Change of Annuity Start Date...................................... 15
Annuity Start Amount.............................................. 15
Annuity Tables.................................................... 16
Annuity Payments.................................................. 16
Change of Annuity Option.......................................... 16
Fixed Annuity Payments............................................ 16
Variable Annuity Payments......................................... 16
Annuity Units..................................................... 16,17
Net Investment Factor............................................. 17
Alternate Annuity Option Rates.................................... 17
Annuity Options................................................... 18
ANNUITY TABLES......................................................... 19
AMENDMENTS OR ENDORSEMENTS, if any
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VARIFLEX LS VARIABLE ANNUITY CONTRACT SPECIFICATIONS
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OWNER NAME: Xxxx X. Xxx CONTRACT NUMBER: Specimen
OWNER DATE OF BIRTH: 10-30-1953 CONTRACT DATE: 6-30-1993
JOINT OWNER NAME: Xxxx X. Xxx ISSUE DATE: 6-30-1993
JOINT OWNER DATE OF BIRTH: 7-18-1981 ANNUITY START DATE: 7-1-2025*
ANNUITANT NAME: Xxxxx X. Xxx PLAN: Non-Qualified
ANNUITANT DATE OF BIRTH: 5-13-1987 ASSIGNMENT: This policy may be assigned.
See Assignment Provision of your Policy.
ANNUITANT'S SEX: Female
PRIMARY BENEFICIARY NAME:
Xxxxx X. Xxx
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INITIAL PURCHASE PAYMENT............... $25,000
MINIMUM SUBSEQUENT PURCHASE PAYMENTS... $1,000
MINIMUM SYSTEMATIC WITHDRAWAL.......... $100
MORTALITY AND EXPENSE RISK CHARGE...... 1.25% Annually
ADMINISTRATION CHARGE.................. .15% Annually
GUARANTEED FIXED ACCOUNT RATE.......... 3%
ANNUITY OPTION......................... Life with 10-Year Fixed Period Option*
SUBACCOUNTS:
Money Market Subaccount
High Grade Income Subaccount
Global Aggressive Subaccount
Growth-Income Subaccount
Equity Income Subaccount
Managed Asset Allocation Subaccount
Specialized Asset Allocation Subaccount
Growth Subaccount
Worldwide Equity Subaccount
Social Awareness Subaccount
Emerging Growth Subaccount
METHOD FOR DEDUCTIONS:
Deductions for Premium Taxes, and any unallocated partial withdrawals,
including Systematic Withdrawals, will be made sequentially from the Contract
Value in descending order of the Subaccounts listed above. The value of each
account will be depleted before the next is charged. The Fixed Account is the
last Account charged.
* The Owner may select the Annuity Start Date and the Annuity Option. If no
Annuity Start Date or Annuity Option is selected by the Owner, they will be
assigned automatically.
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V6022 A (R5-95)
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DEFINITIONS
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ACCOUNT
An Account is one of the Subaccounts or the Fixed Account.
ACCUMULATION UNIT
The Accumulation Unit is a unit of measure. It is used to compute the
Separate Account Contract Value prior to the Annuity Start Date. It is also
used to compute the Variable Annuity Payments for Annuity Options 5 and 6.
ANNUITANT
The Annuitant is the person named by the Owner on whose life the Annuity
Payments depend for Annuity Options 1 through 4. The Annuitant receives
Annuity Payments under this Contract. Please see "Annuitant" provisions on
page 9.
ANNUITY OPTION
An Annuity Option is a set of provisions that form the basis for making
Annuity Payments. The Annuity Option is set prior to the Annuity Start
Date. Please see "Annuity Options" on page 18.
ANNUITY START DATE
The Annuity Start Date is the date on which Annuity Payments are scheduled
to begin. This date may be changed by the Owner. The Annuity Start Date is
shown on Page 3. Please see "Annuity Start Date" on page 15.
ANNUITY UNIT
The Annuity Unit is a unit of measure used to compute Variable Annuity
Payments for Annuity Options 1 through 4.
AUTOMATIC TRANSFERS
Automatic Transfers are Transfers among the Subaccounts and the Fixed
Account. Such transfers are made automatically on a periodic basis by the
Company at the written request of the Owner. The Company reserves the right
to discontinue, modify or suspend Automatic Transfers.
COMPANY
The Company is Security Benefit Life Insurance Company, P.O. Box 750497,
Topeka, Kansas 66675-0497.
CONTRACT ANNIVERSARY
A Contract Anniversary is a 12-month anniversary of the Contract Date.
CONTRACT DATE
The Contract Date is the date the Contract begins. The Contract Date is
shown on page 3.
CONTRACT YEAR
Contract Years are measured from the Contract Date.
CURRENT INTEREST
The Company may in its discretion pay Current Interest on the Fixed Account
at a rate that exceeds the Guaranteed Rate shown on page 3. The Company
will declare the rate of Current interest, if any, from time to time.
DESIGNATED BENEFICIARY
Upon the death of the Owner or Joint Owner, the Designated Beneficiary will
be the first person on the following list who is alive on the date of
death:
1. Owner;
2. Joint Owner;
3. Primary Beneficiary;
4. Secondary Beneficiary;
5. Annuitant; and
6. the Owner's estate if no one listed above is alive.
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V6022 B (10-94)
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DEFINITIONS (Continued)
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DESIGNATED BENEFICIARY (Continued)
The Designated Beneficiary receives a death benefit upon the death of the
Owner prior to the Annuity Start Date. Please see "Ownership, Annuitant,
and Beneficiary Provisions" on page 9 and "Death Benefit Provisions" on
pages 14 and 15.
FIXED ACCOUNT
The Fixed Account is part of the Company's general account. The Company
manages the general account and guarantees that it will credit interest on
Fixed Account Contract Value at an annual rate at least equal to the
Guaranteed Rate. This Rate is shown on page 3.
GUARANTEE PERIOD
Current interest, if declared, is fixed for rolling periods of one or more
years, referred to as Guarantee Periods. The Company may offer Guarantee
Periods of different durations. The Guarantee Period that applies to any
Fixed Account Contract Value: (1) starts on the date that such Contract
Value is allocated to the Fixed Account pursuant to: (a) a Purchase Payment
Received by the Company; or (b) a Transfer to the Fixed Account; and (2)
ends on the last day of the same month in the year in which the Guarantee
Period expires. When any Guarantee Period expires, a new Guarantee Period
shall start for such Contract Value on the date that follows such
expiration date. Such period shall end on the immediately preceding date in
the year in which the Guarantee Period expires. For example, assuming a
one-year Guarantee Period, Contract Value transferred to the Fixed Account
on June 1 would have a Guarantee Period starting on that date and ending on
June 30 of the following year. A new Guarantee Period for such Contract
Value would start on July 1 of that year and end on June 30 of the
following year.
HOME OFFICE
The address of the Company's Home Office is Security Benefit Life Insurance
Company, P.O. Box 750497, Topeka, Kansas 66675-0497.
ISSUE DATE
The Issue Date is the date the Company uses to determine the date the
Contract becomes incontestable. The Issue Date is shown on Page 3. Please
see "Incontestability" on page 7.
JOINT OWNER
The Joint Owner, if any, shares an undivided interest in the entire
Contract with the Owner. The Joint Owner, if any, is named on page 3.
Please see "Joint Ownership" provisions on page 9.
NONNATURAL PERSON
Any group or entity that is not a living person, such as a trust or
corporation.
OWNER
The Owner is the person who possesses all rights under the Contract. The
Owner is named on page 3. Please see "Ownership" provisions on page 9.
PREMIUM TAX
Any Premium Taxes levied by a state or other governmental entity will be
charged against this Contract. When Premium Tax is assessed after the
Purchase Payment is applied, it will be deducted as described on page 3.
PURCHASE PAYMENT
A Purchase Payment is money Received by the Company and applied to the
Contract.
RECEIVED BY THE COMPANY
The phrase "Received by the Company" means receipt by the Company in good
order at its Home Office, P.O. Box 750497, Topeka, Kansas 66675-0497.
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DEFINITIONS (Continued)
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SEPARATE ACCOUNT
Variable Annuity Account VIII (the "Separate Account") is a separate
account established and maintained by the Company under Kansas law. The
Separate Account is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940 as a Unit Investment Trust. It was
established by the Company to support variable annuity contracts. The
Company owns the assets of the Separate Account and maintains them apart
from the assets of its general account and its other separate accounts. The
assets held in the Separate Account equal to the reserves and other
Contract liabilities with respect to the Separate Account may not be
charged with liabilities arising from any other business the Company may
conduct.
Income and realized and unrealized gains and losses from assets in the
Separate Account are credited to, or charged against, the Separate Account
without regard to the income, gains or losses from the Company's general
account or its other separate accounts. The Separate Account is divided
into Subaccounts shown on page 3. Income and realized and unrealized gains
and losses from assets in each Subaccount are credited to, or charged
against, the Subaccount without regard to income, gains or losses in the
other Subaccounts. The Company has the right to transfer to its general
account any assets of the Separate Account that are in excess of the
reserves and other Contract liabilities with respect to the Separate
Account. The value of the assets in the Separate Account on each Valuation
Date are determined at the end of each Valuation Date.
SUBACCOUNT NET ASSET VALUE
The Subaccount Net Asset Value is equal to: (1) the net asset value of all
shares of the underlying mutual fund held by the Subaccount; plus (2) any
cash or other assets; less (3) all liabilities of the Subaccount.
SUBACCOUNTS
The Separate Account is divided into Subaccounts which invest in shares of
mutual funds. Each Subaccount may invest its assets in a separate class or
series of a designated mutual fund or funds. The Subaccounts are shown on
page 3. Subject to the regulatory requirements then in force, the Company
reserves the right to:
1. change or add designated mutual funds or other investment vehicles;
2. add, remove or combine Subaccounts;
3. add, delete or make substitutions for securities that are held or
purchased by the Separate Account or any Subaccount;
4. operate the Separate Account as a management investment company;
5. combine the assets of the Separate Account with other Separate
Accounts of the Company or an affiliate thereof;
6. restrict or eliminate any voting rights of the Owner with respect to
the Separate Account or other persons who have voting rights as to the
Separate Account; and
7. terminate and liquidate any Subaccount.
If any of these changes result in a material change to the Separate Account
or a Subaccount, the Company will notify the Owner of the change. The
Company will not change the investment policy of any Subaccount in any
material respect without complying with the filing and other procedures of
the insurance regulators of the state of issue.
VALUATION DATE
A Valuation Date is each day the New York Stock Exchange and the Company's
Home Office are open for business.
VALUATION PERIOD
A Valuation Period is the interval of time from one Valuation Date to the
next Valuation Date.
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V6022 C (10-94)
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GENERAL PROVISIONS
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THE CONTRACT
The entire Contract between the Owner and the Company consists of this
Contract, the attached Application, and any Amendments, Endorsements or
Riders to the Contract. All statements made in the Application will, in the
absence of fraud, as ruled by the a court of competent jurisdiction, be
deemed representations and not warranties. The Company will use no
statement made by or on behalf of the Owner or the Annuitant to void this
Contract unless it is in the written Application. Any change in the
Contract can be made only with the written consent of the President, a Vice
President, or the Secretary of the Company.
The Purchase Payment(s) and the Application must be acceptable to the
Company under its rules and practices. If they are not, the Company's
liability shall be limited to a return of the Purchase Payment(s).
COMPLIANCE
The Company reserves the right to make any change to the provisions of this
Contract to comply with or give the Owner the benefit of any federal or
state statute, rule or regulation. This includes, but is not limited to,
requirements for annuity contracts under the Internal Revenue Code or the
laws of any state. The Company will provide the Owner with a copy of any
such change and will also file such a change with the insurance regulatory
officials of the state in which the Contract is delivered.
MISSTATEMENT OF AGE AND SEX
If the age or sex of the Annuitant has been misstated, payments shall be
adjusted, when allowed by law, to the amount which would have been provided
for the correct age or sex. Proof of the age of an Annuitant may be
required at any time, in a form suitable to the Company. If payments have
already commenced and the misstatement has caused an underpayment, the full
amount due will be paid with the next scheduled payment. If the
misstatement has caused an overpayment, the amount due will be deducted
from one or more future payments.
EVIDENCE OF SURVIVAL
When any payments under this Contract depend on the payee being alive on a
given date, proof that the payee is living may be required by the Company.
Such proof must be in a form accepted by the Company, and may be required
prior to making the payments.
INCONTESTABILITY
This Contract will not be contested after it has been in force for two
years from the Issue Date during the life of the Owner.
ASSIGNMENT
Please refer to page 3 to see if the Contract may be assigned. If it may be
assigned, no Assignment under this Contract is binding unless Received by
the Company in writing. The Company assumes no responsibility for the
validity, legality, or tax status of any Assignment. The Assignment will be
subject to any payment made or other action taken by the Company before the
Assignment is Received by the Company. Once filed, the rights of the Owner,
Annuitant and Beneficiary are subject to the Assignment. Any claim is
subject to proof of interest of the assignee.
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GENERAL PROVISIONS (Continued)
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TRANSFERS
The Owner may Transfer Contract Value among the Fixed Account and
Subaccounts subject to the following.
Transfers are not allowed within 30 days of the Annuity Start Date. After
the Annuity Start Date, for Annuity Options 1 through 4, the Owner may
Transfer Contract Value only among Subaccounts.
The Company reserves the right to: (1) limit the amount that may be subject
to Transfer to $1,000,000 per Transfer without Home Office approval; (2)
limit the number of Transfers allowed each Contract Year to 14; and (3)
suspend Transfers. Transfers must be at least $1,000.00 or, if less; (i)
the remaining balance in a Subaccount, or (ii) the amount of Fixed Account
Contract Value the Guarantee Period of which expires in the calendar month
in which the Transfer is effected.
Contract Value may be transferred from the Fixed Account only: (1) during
the calendar month in which the applicable Guarantee Period expires; (2)
pursuant to an Automatic Transfer. Transfers of Fixed Account Contract
Value shall be made: (1) first from Fixed Account Contract Value for which
the Guarantee Period expires during the calendar month in which the
Transfer is effected; (2) then in the order that starts with Fixed Account
Contract Value which has the longest amount of time before its Guarantee
Period expires; and (3) ends with that which has the least amount of time
before its Guarantee Period expires.
The Company will effect a Transfer to or from a Subaccount on the basis of
Accumulation Unit Value (or Annuity Unit Value) determined at the end of
the Valuation Period in which the Transfer is effected. The Company will
effect a Transfer from the Fixed Account on the basis of Fixed Account
Contract Value at the end of the Valuation Period in which the Transfer is
effected.
The Company reserves the right to delay Transfers from the Fixed Account
for up to 6 months as required by most states. The Company will notify you
if there will be a delay.
CLAIMS OF CREDITORS
The Contract Value and other benefits under this Contract are exempt from
the claims of creditors of the Owner to the extent allowed by law.
NONFORFEITURE VALUES
The Death Benefits, Withdrawal Values and Annuity Payout Values will at
least equal the minimum required by law.
PARTICIPATION
The Company is a mutual life insurance company. Therefore, it pays
dividends on some of its contracts. However, the Company does not expect
dividends to become payable on this Contract. At the end of each Contract
Year the Company will determine the Contract's dividend, if any. The Owner
may choose to have it: (1) added to the Contract Value; or (2) paid in
cash. If no choice is made, any dividend will be added to the Contract
Value.
STATEMENTS
At least once each Contract Year the Owner shall be sent a statement
including the current Contract Value and any other information required by
law. The Owner may send a written request for a statement at other
intervals. The Company may charge a reasonable fee for such statements.
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V6022 D (R6-96)
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OWNERSHIP, ANNUITANT AND BENEFICIARY PROVISIONS
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OWNERSHIP
During the Owner's lifetime, all rights and privileges under the Contract
may be exercised only by the Owner. If the purchaser names someone other
than himself or herself as Owner, the purchaser has no rights in the
Contract. No Owner may be older than age 90 on the Contract Date.
JOINT OWNERSHIP
If a Joint Owner is named in the application, then the Owner and Joint
Owner share an undivided interest in the entire Contract as joint tenants
with rights of survivorship. When an Owner and Joint Owner have been named,
the Company will honor only requests for changes and the exercise of other
Ownership rights made by both the Owner and Joint Owner. When a Joint Owner
is named, all references to "Owner" throughout this Contract should be
construed to mean both the Owner and Joint Owner, except for the
"Statements" provision on page 8 and the "Death Benefit Provisions" on
pages 14 and 15.
ANNUITANT
The Annuitant is named on page 3. The Owner may change the Annuitant prior
to the Annuity Start Date. The request for this change must be made in
writing and Received by the Company at least 30 days prior to the Annuity
Start Date. No annuitant may be named who is more than 90 years old on the
Contract Date. When the Annuitant dies prior to the Annuity Start Date, the
Owner must name a new Annuitant within 30 days or, if sooner, by the
Annuity Start Date, except where the Owner is a Nonnatural Person. If a new
Annuitant is not named, the Owner becomes the Annuitant.
PRIMARY AND SECONDARY BENEFICIARIES
The Primary Beneficiary is named on page 3. The Owner may change any
Beneficiary as described in "Ownership and Beneficiary Changes" below. If
the Primary Beneficiary dies prior to the Owner, the Secondary Beneficiary
becomes the Primary Beneficiary. Unless the Owner directs otherwise, when
there are two or more Primary Beneficiaries, they will receive equal
shares.
OWNERSHIP AND BENEFICIARY CHANGES
Subject to the terms of any existing Assignment, the Owner may name a new
Owner, a new Primary Beneficiary or a new Secondary Beneficiary. Any new
choice of Owner, Primary Beneficiary or Secondary Beneficiary will revoke
any prior choice. Any change must be made in writing and recorded at the
Home Office. The change will become effective as of the date the written
request is signed, whether or not the Owner is living at the time the
change is recorded. A new choice of Primary Beneficiary or Secondary
Beneficiary will not apply to any payment made or action taken by the
Company prior to the time it was recorded. The Company may require the
Contract be returned so these changes may be made.
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PURCHASE PAYMENT PROVISIONS
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FLEXIBLE PURCHASE PAYMENTS
The Contract becomes in force when the initial Purchase Payment is applied.
The Owner is not required to continue Purchase Payments in the amount or
frequency originally planned. The Owner may: (1) increase or decrease the
amount of Purchase Payments, subject to any Contract limits; or (2) change
the frequency of Purchase Payments. A change in frequency or amount of
Purchase Payments does not require a written request.
PURCHASE PAYMENT LIMITATIONS
Purchase Payments exceeding $1,000,000 will not be accepted without prior
approval by the Company. The Minimum Subsequent Purchase Payment amount is
shown on page 3.
PURCHASE PAYMENT ALLOCATION
Purchase Payments may be allocated among the Fixed Account and the
Subaccounts. Purchase Payments will be allocated according to the Owner's
instructions in the Application or more recent instructions, if any. Each
allocation to the Fixed Account and the Subaccounts must be at least 1% of
the Purchase Payment. The allocations must be whole percentage amounts and
must total 100%. The Owner may change the allocations by written notice to
the Company.
PLACE OF PAYMENT
All Purchase Payments under this Contract are to be paid to the Company at
its Home Office. Purchase Payments after the initial Purchase Payment are
applied as of the end of the Valuation Period during which they are
Received by the Company.
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CONTRACT VALUE AND EXPENSE PROVISIONS
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CONTRACT VALUE
On any Valuation Date, the Contract Value is the sum of: (1) the Separate
Account Contract Value; and (2) the Fixed Account Contract Value. At any
time after the first Contract Year and before the Annuity Start Date, the
Company reserves the right to pay to the Owner the Contract Value as a lump
sum if it is below $5,000.
FIXED ACCOUNT CONTRACT VALUE
On any Valuation Date, the Fixed Account Contract Value is equal to the
first Purchase Payment allocated under the Contract to the Fixed Account:
PLUS:
1. any other Purchase Payments allocated under the Contract to the Fixed
Account;
2. any Transfers from the Separate Account to the Fixed Account; and
3. any interest credited to the Fixed Account.
LESS:
1. any Withdrawals deducted from the Fixed Account;
2. any Transfers from the Fixed Account to the Separate Account;
3. any applicable Premium Taxes;
4. any Fixed Account Contract Value which is applied to any of Annuity
Options 1 through 4; and
5. any Annuity Payments made under Annuity Options 5 and 6.
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V6022 E (10-94)
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CONTRACT VALUE AND EXPENSE PROVISIONS (Continued)
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FIXED ACCOUNT INTEREST CREDITING
The Company shall credit interest on Fixed Account Contract Value at an
annual rate at least equal to the Guaranteed Rate shown on page 3. Also,
the Company may in its sole judgment credit Current Interest at a rate in
excess of the Guaranteed Rate. The rate of Current Interest, if declared,
shall be fixed during the Guarantee Period. Fixed Account Contract Value
shall earn Current Interest during each Guarantee Period at the rate, if
any, declared by the Company on the first day of the Guarantee Period.
The Company may credit Current Interest on Contract Value that was
allocated or transferred to the Fixed Account during one period at a
different rate than amounts allocated or transferred to the fixed Account
in another period. Also, the Company may credit Current Interest on Fixed
Account Contract Value at different rates based upon the length of the
Guarantee Period. Therefore, at any time, portions of Fixed Account
Contract Value may be earning Current Interest at different rates based
upon the period during which such portions were allocated or transferred to
the Fixed Account and the length of the Guarantee Period.
SEPARATE ACCOUNT CONTRACT VALUE
On any Valuation Date, the Separate Account Contract Value is the sum of
the then current value of the Accumulation Units allocated to each
Subaccount for this Contract.
ACCUMULATION UNIT VALUE
The initial Accumulation Unit Value for each Subaccount was set at $10.
Other Accumulation Unit Values are found on each Valuation Date by dividing
(1) by (2) where:
1. is the equal to:
a. the Subaccount Net Asset Value determined at the end of the
current Valuation Period; plus
b. any dividends declared by the Subaccount's underlying mutual fund
that are not part of the Subaccount Net Asset Value; less the
accrued Mortality and Expense Risk Charge; and
c. the accrued Mortality and Expense Risk Charge; and
d. the accrued Administration Charge; and
e. any taxes for which the Company has reserved which the Company
deems to have resulted from the operation of the Subaccount.
2. is the number of Accumulation Units at the start of the Valuation
Period.
The Accumulation Unit Value may increase or decrease from one Valuation
Period to the next.
DETERMINING ACCUMULATION UNITS
The number of Accumulation Units allocated to a Subaccount under this
Contract is found by dividing: (1) the amount allocated to the Subaccount;
by (2) the Accumulation Unit Value for the Subaccount at the end of the
Valuation Period during which the amount is applied under the Contract. The
number of Accumulation Units allocated to a Subaccount under the Contract
will not change as a result of investment experience. Events that change
the number of Accumulation Units are:
1. Purchase Payments that are applied to the Subaccount;
2. Contract Value that is Transferred into or out of the Subaccount;
3. Withdrawals that are deducted from the Subaccount; and
4. Premium Taxes that are deducted from the Subaccount.
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CONTRACT VALUE AND EXPENSE PROVISIONS (Continued)
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MORTALITY AND EXPENSE RISK CHARGE
The Company will deduct the Mortality and Expense Risk Charge shown on page
3. This charge will be computed and deducted from each Subaccount on each
Valuation Date. This charge is factored into the Accumulation Unit and
Annuity Unit Values on each Valuation Date.
PREMIUM TAX EXPENSE
The Company reserves the right to deduct Premium Tax when due or any time
thereafter. Any applicable Premium Taxes will be allocated as described on
page 3.
ADMINISTRATION CHARGE
The Company will deduct the Administration Charge shown on page 3. This
charge will be computed and deducted from each Subaccount on each Valuation
Date. This charge is factored into the Accumulation Unit Value on each
Valuation Date.
MUTUAL FUND EXPENSES
Each Subaccount invests in shares of a mutual fund. The net asset value per
share of each underlying fund reflects the deduction of any investment
advisory and administration fees and other expenses of the fund. These fees
and expenses are not deducted from the assets of a Subaccount, but are paid
by the underlying funds. The Owner indirectly bears a pro rata share of
such fees and expenses. An underlying fund's fees and expenses are not
specified or fixed under the terms of this Contract.
--------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS
--------------------------------------------------------------------------------
WITHDRAWALS
A full Withdrawal of the Contract Value or partial Withdrawal of Separate
Account Contract Value is allowed at any time. Partial Withdrawals of Fixed
Account Contract Value are, however, restricted as described below. This
provision is subject to any federal or state Withdrawal restrictions.
A partial Withdrawal of Fixed Account Contract Value may be made only: (1)
pursuant to Systematic Withdrawals over a period of at least 36 months; (2)
during the calendar month in which the applicable Guarantee Period expires;
and (3) once per Contract Year in an amount up to the greater of $5,000 or
10% of the Contract Value in the Fixed Account at the time of the partial
Withdrawal.
Upon the Owner's request for a full Withdrawal, the Company will pay the
Withdrawal Value in a lump sum.
All Withdrawals must meet the following conditions.
1. The request for Withdrawal must be Received by the Company in writing
or under other methods allowed by the Company.
2. The Owner must apply: (a) while this Contract is in force; and (b)
prior to the Annuity Start Date of Options 1-4.
3. The amount Withdrawn must be at least $1,000.00, except that a
Withdrawal of less than $1,000.00 is allowed: (i) for Systematic
Withdrawals, as discussed on page 13, (ii) for Fixed Account Contract
Value the Guarantee Period of which expires during the calendar month
of the Withdrawal, or (iii) when terminating the Contract.
-12-
V6022 F (10-94)
--------------------------------------------------------------------------------
WITHDRAWAL PROVISIONS (Continued)
--------------------------------------------------------------------------------
WITHDRAWALS (Continued)
A partial Withdrawal request must state the allocations for deducting the
Withdrawal from each Account. If no allocation is specified, the partial
Withdrawal will be deducted from the Accounts in the order described on
page 3, "Method for Deductions." Withdrawals of Fixed Account Contract
Value shall be made: (1) first from Fixed Account Contract Value for which
the Guarantee Period expires during the calendar month in which the
Withdrawal is effected; (2) then in the order that starts with Fixed
Account Contract Value which has the longest amount of time before its
Guarantee Period expires; and (3) ends with that which has the least amount
of time before its Guarantee Period expires.
WITHDRAWAL VALUE
The Withdrawal Value at any time will be: (1) the Contract Value; less (2)
any Premium Taxes due or paid by the Company.
SYSTEMATIC WITHDRAWALS
Systematic Withdrawals are automatic periodic distributions from the
Contract in substantially equal amounts prior to the Annuity Start Date. In
order to start Systematic Withdrawals, the Owner must make the request in
writing. The Minimum Systematic Withdrawal is shown on page 3. The Owner
must choose the type of payment and its frequency. The Systematic
Withdrawal request must state the allocations for deducting the Withdrawals
from each Account. If no allocation is specified, the Withdrawals will be
deducted from the Accounts in the order described on page 3, "Method for
Deductions." The payment type may be: (1) a percentage of Contract Value;
(2) a specified dollar amount; (3) all earnings in the Contract; (4) over a
fixed period of time; or (5) based upon the life expectancy of the Owner or
the Owner and a Beneficiary. The payment frequency may be: (1) monthly; (2)
quarterly; (3) semiannually; or (4) annually. Systematic Withdrawals of
Fixed Account Contract Value must provide for payments over a period of not
less than 36 months. Systematic Withdrawals may be stopped by the Owner
upon proper written request Received by the Company at least 30 days in
advance. The Company reserves the right to stop, modify, suspend or charge
a fee for Systematic Withdrawals at any time.
DATE OF REQUEST
The Company will effect a Withdrawal of Separate Account Contract Value on
the basis of Accumulation Unit Value determined at the end of the Valuation
Period in which all the required information is Received by the Company.
PAYMENT OF WITHDRAWAL BENEFITS
The Company reserves the right to suspend a Transfer or delay payment of a
Withdrawal from the Separate Account for any period:
1. when the New York Stock Exchange is closed; or
2. when trading on the New York Stock Exchange is restricted; or
3. when an emergency exists as a result of which: (a) disposal of
securities held in the Separate Account is not reasonably practicable;
or (b) it is not reasonably practicable to fairly value the net assets
of the Separate Account; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits to protect owners of securities.
Rules and regulations of the Securities and Exchange Commission will govern
as to whether the conditions set forth above exist.
The Company further reserves the right to delay payment of a Withdrawal
from the Fixed Account for up to six months as required by most states. The
Company will notify you if there will be a delay.
-13-
--------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS
--------------------------------------------------------------------------------
DEATH BENEFIT
If any Owner dies prior to the Annuity Start Date, a Death Benefit will be
paid to the Designated Beneficiary when due Proof of Death and instructions
regarding payment are Received by the Company. If an Owner is a Nonnatural
Person, then the Death Benefit will be paid in the event of the death of
the Annuitant or any joint Owner that is a natural person prior to the
Annuity Start Date. Further, if an Owner is a Nonnatural Person, the amount
of the death benefit is based on the age of the Annuitant or any joint
Owner that is a natural person on the Issue Date.
If the age of each Owner was 75 or younger on the Issue Date, the Death
Benefit will be the greatest of: (1) the sum of all Purchase Payments, less
any Premium Taxes due or paid by the Company and less the sum of all
partial Withdrawals; (2) the Contract Value on the date due Proof of Death
and instructions regarding payment are Received by the Company, less any
Premium Taxes due or paid by the Company; or (3) the Stepped-Up Death
Benefit described below.
The Stepped-Up Death Benefit is:
1. the largest Death Benefit on any Contract Anniversary that is both an
exact multiple of five and occurs prior to the oldest Owner reaching
age 76; plus
2. any Purchase Payments received since the applicable fifth Contract
Anniversary; less
3. any reductions caused by Withdrawals since the applicable fifth
Contract Anniversary; less
4. any Premium Taxes due or paid by the Company.
If the age of any Owner on the Issue Date was 76 or older, or if due proof
of death (regardless of the age of any Owner on the Issue Date) and
instructions regarding payment are not Received by the Company within six
months of the date of the Owner's death, the Death Benefit will be: (1) the
Contract Value on the date due Proof of Death and instructions regarding
payment are Received by the Company; less (2) any Premium Taxes due or paid
by the Company.
If a lump sum payment is requested, the payment will be made in accordance
with any laws and regulations that govern the payment of Death Benefits.
PROOF OF DEATH
Any of the following will serve as Proof of Death:
1. certified copy of the death certificate;
2. certified decree of a court of competent jurisdiction as to the
finding of death;
3. written statement by a medical doctor who attended the deceased Owner;
or
4. any proof accepted by the Company.
DISTRIBUTION RULES
The entire Death Benefit with any interest shall be paid within 5 years
after the death of any Owner, except as provided below. In the event that
the Designated Beneficiary elects an Annuity Option, the length of time for
the payment period may be longer than 5 years if: (1) the Designated
Beneficiary is a natural person; (2) the Death Benefit is paid out under
Annuity Options 1 through 6; (3) payments are made over a period that does
not exceed the life or life expectancy of the Designated Beneficiary; and
(4) Annuity Payments begin within one year of the death of the Owner. If
the deceased Owner's spouse is the sole Designated Beneficiary, the spouse
shall become the sole Owner of the Contract. He or she may elect to: (1)
keep the Contract in force until the sooner of the spouse's death or the
Annuity Start Date; or (2) receive the Death Benefit.
-14-
V6022 G (R6-96)
--------------------------------------------------------------------------------
DEATH BENEFIT PROVISIONS (Continued)
--------------------------------------------------------------------------------
DISTRIBUTION RULES (Continued)
If any Owner dies after the Annuity Start Date, Annuity Payments shall
continue to be paid at least as rapidly as under the method of payment
being used as of the date of the Owner's death.
If the Owner is a Nonnatural Person, the distribution rules set forth above
apply in the event of the death of, or a change in, the Annuitant. This
Contract is deemed to incorporate any provision of Section 72(s) of the
Internal Revenue Code of 1986, as amended (the "Code"), or any successor
provision. This Contract is also deemed to incorporate any other provision
of the Code deemed necessary by the Company, in its sole judgment, to
qualify this Contract as an annuity. The application of the distribution
rules will be made in accordance with Code section 72(s), or any successor
provision, as interpreted by the Company in its sole judgment.
The foregoing distribution rules do not apply to a Contract which is: (1)
provided under a plan described in Code Section 401(a); (2) described in
Code section 403(b); (3) an individual retirement annuity or provided under
an individual retirement account or annuity; or (4) otherwise exempt from
the Code section 72(s) distribution rules.
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS
--------------------------------------------------------------------------------
ANNUITY START DATE
The Owner may choose the Annuity Start Date at the time of application. If
no Annuity Start Date is chosen, the Company will use the later of: (1) the
oldest Annuitant's seventieth birthday; or (2) the tenth Contract
Anniversary. The Annuity Start Date must be prior to the oldest Annuitant's
ninety-fifth birthday.
The Annuity Start Date is the date the first payment will be made to the
Annuitant under any of the Annuity Options.
CHANGE OF ANNUITY START DATE
The Owner may change the Annuity Start Date. A request for the change must
be made in writing. The written request must be Received by the Company at
least 30 days prior to the new Annuity Start Date as well as 30 days prior
to the previous Annuity Start Date.
ANNUITY START AMOUNT
The Annuity Start Amount is applied to one or more of the Annuity Options
listed on page 18. The Annuity Start Amount is: (1) the Contract Value on
the Annuity Start Date; less (2) any Premium Taxes due or paid by the
Company. Unless otherwise directed by the Owner, Annuity Start Amount
derived from Fixed Account Contract Value will be applied to purchase a
Fixed Annuity Option; that derived from Separate Account Contract Value
will be applied to purchase a Variable Annuity Option.
-15-
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (Continued)
--------------------------------------------------------------------------------
ANNUITY TABLES
Annuity Tables A and B show the guaranteed minimum amount of monthly
Annuity Payment per $1,000 of Annuity Start Amount for annuity options 1
through 4 that applies to the first Variable Annuity Payment and to each
payment for Fixed Annuity Payments. The amount of each Annuity Payment for
Annuity Options 1 through 4 will depend on the Annuitant's sex and age on
the Annuity Start Date.
Tables A and B assume 1900 as the year of birth of the annuitant. To use
Table A and B for an Annuitant born after 1900, the actual age is reduced
by 0.1 (one-tenth) of a year for each year the year of birth exceeds 1900.
For an annuitant with a birth year prior to 1900, the actual age is
increased in a like manner. The actual age (in completed months) reduced or
increased becomes the "adjusted age of the Annuitant". The guaranteed
payout rate is then found by interpolating the Annuitant's adjusted age
between the ages shown in Tables A and B. Tables A and B are based on the
1983 Table "A" mortality table and an interest rate of 3.5% per year. On
request the Company will furnish the amount of monthly Annuity Payment per
$1,000 applied for any ages not shown.
For Annuity Options 5 and 6, annuity rates based on age and sex are not
used to calculate annuity payments. Annuity Payments for these options are
computed without reference to the Annuity Tables.
ANNUITY PAYMENTS
The Annuity Option is shown on page 3. The Owner may choose any form of
Annuity Option that is allowed by the Company. The Owner may choose an
Annuity Option by written request. This request must be Received by the
Company at least 30 days prior to the Annuity Start Date. Several Annuity
Options are listed on page 18. No Annuity Option can be selected that
requires the Company to make periodic payments of less than $100.00. If no
Annuity Option is chosen prior to the Annuity Start Date, the Company will
use Life with 10-Year Fixed Period Option. Each Annuity Option allows for
making Annuity Payments annually, semiannually, quarterly or monthly.
CHANGE OF ANNUITY OPTION
Prior to the Annuity Start Date, the Owner may change the Annuity Option
chosen. The Owner must request the change in writing. This request must be
Received by the Company at least 30 days prior to the Annuity Start Date.
FIXED ANNUITY PAYMENTS
With respect to Fixed Annuity Payments, the amounts shown on the Tables are
the guaranteed minimum for each Annuity Payment for Annuity Options 1
through 4.
VARIABLE ANNUITY PAYMENTS
With respect to Variable Annuity Payments, the amount shown on the Tables
is the guaranteed minimum first Annuity Payment, based on the assumed
interest rate of 3.5% for Annuity Options 1 through 4. The amount of each
Annuity Payment after the first for these options is computed by means of
Annuity Units.
ANNUITY UNITS
The number of Annuity Units is found by dividing the first Annuity Payment
by the Annuity Unit Value for the selected Subaccount on the Annuity Start
Date. The number of Annuity Units for the Subaccount then remains constant,
unless a Transfer of Annuity Units is made. After the first Annuity
Payment, the dollar amount of each subsequent Annuity Payment is equal to
the number of Annuity Units times the Annuity Unit Value for the Subaccount
on the due date of the Annuity Payment.
-16-
V6022 H (10-94)
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (Continued)
--------------------------------------------------------------------------------
ANNUITY UNITS (Continued)
The Annuity Unit Value for each Subaccount was first set at $1.00. The
Annuity Unit Value for any subsequent Valuation Date is equal to (a) times
(b) times (c), where:
(a) is the Annuity Unit Value on the immediately preceding Valuation Date;
(b) is the Net Investment Factor for the day;
(c) is a factor used to adjust for an assumed interest rate of 3.5% per
year used to determine the Annuity Payment amounts. The assumed
interest rate is reflected in the Annuity Tables.
NET INVESTMENT FACTOR
The Net Investment Factor for any Subaccount at the end of any Valuation
Period is determined by dividing (1) by (2) and subtracting (3) from the
result, where:
1. is equal to:
a. the net asset value per share of the mutual fund held in the
Subaccount, found at the end of the current Valuation Period;
plus
b. the per share amount of any dividend or capital gain
distributions paid by the Subaccount's underlying mutual fund
that is not included in the net asset value per share; plus or
minus
c. a per share charge or credit for any taxes reserved for, which
the Company deems to have resulted from the operation of the
Subaccount.
2. is the net asset value per share of the Subaccount's underlying mutual
fund as found at the end of the prior Valuation Period.
3. is a factor representing the Mortality and Expense Risk Charge which
is deducted from the Separate Account.
Underlying mutual funds may declare dividends on a daily basis and pay such
dividends once a month. The Net Investment Factor allows for the monthly
reinvestment of these daily dividends. As described above, the gains and
losses from each Subaccount are credited or charged against the Subaccount
without regard to the gains or losses in the Company or other Subaccounts.
ALTERNATE ANNUITY OPTION RATES
The Company may, at the time of election of an Annuity Option, offer more
favorable rates in lieu of the guaranteed rates shown in the Annuity
Tables.
-17-
--------------------------------------------------------------------------------
ANNUITY PAYMENT PROVISIONS (Continued)
--------------------------------------------------------------------------------
ANNUITY OPTIONS
OPTION 1
LIFE OPTION: This option provides payments for the life of the
Annuitant. Table A shows some of the guaranteed rates for this option.
OPTION 2
LIFE WITH FIXED PERIOD OPTION: This option provides payments for the
life of the Annuitant. A fixed period of 5, 10, 15 or 20 years may be
chosen. Payments will be made to the end of this period even if the
Annuitant dies prior to the end of the period. If the Annuitant dies
before receiving all the payments during the fixed period. If the
Annuitant dies before receiving all the payments during the fixed
period, the remaining payments will be made to the Designated
Beneficiary. Table A shows some of the guaranteed rates for this
option.
OPTION 3
LIFE WITH INSTALLMENT OR UNIT REFUND OPTION: This option provides
payments for the life of the Annuitant, with a period certain
determined by dividing the Annuity Start Amount by the amount of the
first payment. A fixed number of payments will be made even if the
Annuitant dies. If the Annuitant dies before receiving the fixed
number of payments, any remaining payments will be made to the
Designated Beneficiary. Table A shows some of the guaranteed rates for
this option.
OPTION 4
JOINT AND LAST SURVIVOR OPTION: This option provides payments for the
life of the Annuitant and Joint Annuitant. Payments will be made as
long as either is living. Table B shows some of the guaranteed rates
for this option.
OPTION 5
FIXED PERIOD OPTION: This option provides payments for a fixed number
of years between 5 and 20. If the Contract Value is held in the Fixed
Account, then the amount of the payments will vary as a result of the
interest rate (as adjusted periodically) credited on the Fixed
Account. This rate is guaranteed to be no less than the Guaranteed
Rate shown on page 3. If the Contract Value is held in the Separate
Account, then the amount of the payments will vary as a result of the
investment performance of the Subaccounts chosen. If all the
Annuitants die before receiving the fixed number of payments, any
remaining payments will be made to the Designated Beneficiary.
OPTION 6
FIXED PAYMENT OPTION: This option provides a fixed payment amount.
This amount is paid until the amount applied, including daily interest
adjustments, is paid. If the Contract Value is held in the Fixed
Account, then the number of payments will vary as a result of the
interest rate (as adjusted periodically) credited on the Fixed
Account. This rate is guaranteed to be no less than the Guaranteed
Rate shown on page 3. If the Contract Value is held in the Separate
Account, then the number of payments will vary as a result of the
investment performance of the Subaccounts chosen. If all the
Annuitants die before receiving all the payments, any remaining
payments will be made to the Designated Beneficiary.
-18-
V6022 I (10-94)
ANNUITY TABLES
--------------------------------------------------------------------------------
TABLE A
SETTLEMENT OPTIONS ONE, TWO, AND THREE
MINIMUM INITIAL MONTHLY INSTALLMENTS PER $1,000 OF AMOUNT APPLIED
Option Two
Adjusted Option One Year Fixed Period Ends Option Three
Age Life 5 10 15 20 Unit
of Annuitant Only Years Years Years Years Refund
--------------------------------------------------------------------------------
MALE
55 4.99 4.97 4.91 4.80 4.66 4.73
56 5.09 5.07 5.00 4.88 4.72 4.81
57 5.20 5.17 5.10 4.97 4.78 4.90
58 5.32 5.29 5.20 5.05 4.85 4.99
59 5.44 5.41 5.31 5.14 4.91 5.08
60 5.57 5.53 5.42 5.23 4.97 5.18
61 5.71 5.67 5.54 5.33 5.04 5.29
62 5.86 5.81 5.67 5.42 5.10 5.40
63 6.02 5.97 5.80 5.52 5.16 5.51
64 6.20 6.13 5.94 5.62 5.22 5.63
65 6.38 6.31 6.08 5.72 5.28 5.76
66 6.58 6.49 6.23 5.82 5.33 5.90
67 6.79 6.69 6.38 5.92 5.38 6.04
68 7.02 6.90 6.54 6.02 5.43 6.19
69 7.26 7.12 6.71 6.12 5.48 6.35
70 7.52 7.35 6.87 6.21 5.52 6.52
71 7.80 7.60 7.05 6.30 5.55 6.69
72 8.09 7.86 7.22 6.39 5.59 6.88
73 8.41 8.13 7.40 6.47 5.62 7.07
74 8.75 8.42 7.57 6.55 5.64 7.27
75 9.12 8.72 7.75 6.62 5.66 7.49
FEMALE
55 4.54 4.53 4.51 4.46 4.38 4.40
56 4.62 4.61 4.58 4.53 4.44 4.47
57 4.71 4.70 4.66 4.60 4.51 4.54
58 4.80 4.79 4.75 4.68 4.57 4.62
59 4.90 4.88 4.84 4.76 4.64 4.70
60 5.00 4.99 4.93 4.84 4.70 4.78
61 5.11 5.09 5.03 4.93 4.77 4.87
62 5.23 5.21 5.14 5.02 4.84 4.96
63 5.36 5.33 5.25 5.12 4.91 5.06
64 5.49 5.46 5.37 5.21 4.98 5.17
65 5.64 5.60 5.50 5.31 5.05 5.28
66 5.79 5.75 5.63 5.42 5.12 5.39
67 5.95 5.91 5.77 5.53 5.19 5.52
68 6.13 6.08 5.91 5.63 5.25 5.65
69 6.32 6.26 6.07 5.74 5.32 5.79
70 6.53 6.46 6.23 5.86 5.37 5.94
71 6.75 6.67 6.40 5.97 5.43 6.09
72 6.99 6.89 6.58 6.08 5.48 6.26
73 7.26 7.13 6.76 6.18 5.52 6.44
74 7.54 7.39 6.95 6.29 5.57 6.63
75 7.85 7.67 7.14 6.39 5.60 6.83
Values not shown will be provided upon request. Annual, semiannual, or
quarterly installments can be determined by multiplying the monthly installments
by 11.812853, 5.9572227, and 2.9914196 respectively.
--------------------------------------------------------------------------------
TABLE B
SETTLEMENT OPTION FOUR
MINIMUM INITIAL MONTHLY INSTALLMENT PER $1,000 OF AMOUNT APPLIED
Adjusted Age of Adjusted Age of Male Annuitant
Female Annuitant 55 60 62 65 70 75
--------------------------------------------------------------------------------
55 4.16 4.27 4.30 4.35 4.42 4.47
60 4.34 4.51 4.57 4.66 4.78 4.86
62 4.41 4.61 4.68 4.79 4.94 5.04
65 4.51 4.76 4.85 4.99 5.20 5.35
70 4.66 4.99 5.13 5.34 5.67 5.95
75 4.78 5.19 5.37 5.66 6.16 6.63
Values not shown will be provided upon request. Annual, semiannual, or
quarterly installments can be determined by multiplying the monthly installments
by 11.812853, 5.9572227, and 2.9914196 respectively.
-19-
A BRIEF DESCRIPTION OF THIS CONTRACT
This is a FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
* Purchase Payments may be made until the earlier of the Annuity Start Date
or termination of the Contract.
* A Death Benefit may be paid prior to the Annuity Start Date according to
the Contract provisions.
* Annuity Payments begin on the Annuity Start Date using the method as
specified in this Contract.
* This Contract is Participating.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND MAY INCREASE OR DECREASE IN
ACCORDANCE WITH THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT. THERE ARE NO
GUARANTEED MINIMUM PAYMENTS OR CASH VALUES. (SEE "CONTRACT VALUE AND EXPENSE
PROVISIONS" AND "ANNUITY PAYMENT PROVISIONS" FOR DETAILS.)
[SBL LOGO]
SECURITY BENEFIT LIFE INSURANCE COMPANY
A Member of The Security Benefit Group of Companies
P.O. Box 750497, Topeka, KS 66675-0497
000 XX Xxxxxxxx Xxxxxx, Xxxxxx, XX 00000-0001
0-000-000-0000
ENDORSEMENT
--------------------------------------------------------------------------------
ANNUITY LOAN PROVISIONS
--------------------------------------------------------------------------------
LOAN ENDORSEMENT
This endorsement is attached to and made part of your Contract as of
its Issue Date or, if later, the date shown below. Notwithstanding any
other provision of the Contract to the contrary, the following
provisions shall apply.
GENERAL PROVISIONS
Prior to the start of retirement annuity installments (the "maturity
date"), the Company shall lend an amount applied for to the Owner
subject to the limitations, interest rates, and repayment procedures
set forth herein and in the loan agreement between the Owner and the
Company. Any loan applied for must be for a minimum of $1,000. Only two
loans shall be permitted per contract year. All loans must be repaid as
specified herein before the maturity date. Except for loans that
qualify under the Code for a longer repayment period, as determined by
the Company, all loans must be repaid within five years of approval.
All loan repayments must be scheduled to be paid in equal amounts on
the same day of each month or quarter. For monthly repayments the first
scheduled repayment may not be later than 30 days after the date of
approval of the loan application by the Company. For quarterly
repayments the first scheduled repayment may not be later than 90 days
after the date of approval of the loan application by the Company.
Before a loan is permitted a written application and loan agreement on
a form acceptable to the Company must be Received by the Company. The
Company may postpone final approval or disapproval of a loan for up to
six months after the application for a loan is received.
TAX CONSEQUENCES
The Company makes no representations or guarantees as to the tax
consequences of a loan to the Owner. The Owner should consult his or
her tax counsel for specific advice.
MAXIMUM LOAN AMOUNT
The maximum loan amount for all contracts combined, is generally equal
to the lesser of: (1) $50,000 reduced by the excess of: (a) the highest
outstanding loan balance within the preceding 12-month period ending on
the day before the date the loan is made; over (b) the outstanding loan
balance on the date the loan is made; or (2) 50% of your account value
or $10,000, whichever is greater. However, in no case can you borrow
more than your account value.
LOAN ACCOUNT, AND INTEREST EARNED ON LOAN ACCOUNT
When your loan is approved, the Company will transfer to an account
within the Fixed Amount, referred to as the Loan Account, an amount
equal to the loan amount. Amounts allocated to the Loan Account earn
the Minimum Guaranteed Interest Rate specified in the Contract.
LOAN INTEREST RATE
The Owner must pay interest on the outstanding loan balance. Interest
shall accrue on the loan balance from the effective date of any loan.
The loan interest rate shall be the Minimum guaranteed Interest Rate
plus 2.5%
LOAN PAYMENTS
Each loan payment must be labeled as such. If not labeled as a loan
payment, amounts received by the Company will be treated as Purchase
Payments. Each loan payment will reduce the Loan Account by the amount
the payment reduces the outstanding loan balance. Amounts which are no
longer needed in the Loan Account will be transferred to the Fixed
Account and/or the Subaccounts in accordance with current allocation
instructions for purchase payments. The loan may be repaid in full at
any time, in which event, the Loan Account shall be reduced to $0.
V 6846 (R1-97) NON-ERISA
--------------------------------------------------------------------------------
ANNUITY LOAN PROVISIONS (Continued)
--------------------------------------------------------------------------------
FAILURE TO MAKE PAYMENTS
If any required loan payment is not paid, within 30 days of the due
date for loans with a monthly repayment schedule or within 90 days of
the due date for loans with a quarterly repayment schedule, the TOTAL
OUTSTANDING LOAN BALANCE will be deemed to be in default. The entire
loan balance, with any accrued interest, will be reported to the
Internal Revenue Service ("IRS") on Form 1099-R for the year the
default occurred. Once a loan has gone into default, regularly
scheduled payments will not be accepted. However, the principal plus
accrued interest may be paid in full at any time. Notwithstanding any
other provision of the Contract or this endorsement to the contrary,
no new loans will be allowed when there is a loan in default.
Interest will continue to accrue on a loan in default. You may pay
accrued interest each year when notified by SBL. If such interest is
not paid by December 31st of each year, it will be added to the
outstanding balance of the loan and will be reported to the IRS on Form
1099-R. Account value equal to the amount of the accrued interest will
be transferred to the Loan Account. If a loan continues to be in
default when you attain age 59 1/2, the total outstanding balance will
be deducted from your account value. The Contract will be automatically
terminated if the outstanding loan balance on a loan in default equals
or exceeds the amount for which the Contract may be surrendered. The
proceeds from the Contract will be used to repay the debt.
WITHDRAWAL VALUE, ANNUITY PAYOUT AMOUNT, AND DEATH BENEFIT
If the Contract is surrendered, or if a death benefit becomes payable,
the amount otherwise receivable will be reduced by the amount of the
outstanding loan, plus any accrued interest. In addition, no partial
withdrawal request will be processed which would result in the
withdrawal of account value from the Loan Account.
SECURITY BENEFIT LIFE INSURANCE COMPANY
XXXXX X. XXXXX
Secretary
----------------------------
Endorsement Effective Date
(If Other Than Issue Date)
ENDORSEMENT
--------------------------------------------------------------------------------
ANNUITY LOAN PROVISIONS
--------------------------------------------------------------------------------
LOAN ENDORSEMENT
This endorsement is attached to and made part of your Contract as of its
Issue Date or, if later, the date shown below. Notwithstanding any other
provision of the Contract to the contrary, the following provisions shall
apply.
GENERAL PROVISIONS
Prior to the Annuity Start Date, the Company shall lend an amount applied
for to the Owner subject to the limitations, interest rates, and repayment
procedures set forth herein and in the loan agreement between the Owner and
the Company. Any loan applied for must be for a minimum of $1,000. Only two
loans shall be permitted per Contract Year. All loans must be repaid as
specified herein before the Annuity Start Date. The Annuity Start Date may
not be changed so that it would occur prior to the time that any
outstanding loan balance is scheduled to be repaid in full. Except for
loans that qualify under the Code for a longer repayment period, as
determined by the Company, all loans must be repaid within five years of
approval. All loan repayments must be scheduled to be paid in equal amounts
on the same day of each month or quarter. For monthly repayments the first
scheduled repayment may not be later than 30 days after the date of
approval of the loan application by the Company. For quarterly repayments
the first scheduled repayment may not be later than 90 days after date of
approval of the loan application by the Company. Before a loan is permitted
a written application and loan agreement on a form acceptable to the
Company must be Received by the Company. The Company may postpone final
approval or disapproval of a loan for up to six months after the
application for a loan is received.
TAX CONSEQUENCES
The Company makes no representations or guarantees as to the tax
consequences of a loan to the Owner. The Owner should consult his or her
tax counsel for specific advice.
MAXIMUM LOAN AMOUNT
For Contracts with Contract Value of $20,000 or less, the maximum loan that
may be taken is the amount that produces a loan balance immediately after
the loan that is the lesser of $10,000 or 75% of the Contract Value. For
Contracts with Contract Value over $20,000 the maximum loan that may be
taken is the amount that produces a loan balance immediately after the loan
that is the lesser of: (1) $50,000 reduced by the excess of (a) the highest
outstanding loan balance during the preceding 12 month period ending on the
day before the date the loan is made over (b) the outstanding loan balance
on the date the loan is made; or (2) 50% of the Contract Value. The
aggregate of all loans may not exceed the limitations set forth above.
LOAN ACCOUNT, AND INTEREST EARNED ON LOAN ACCOUNT
When your loan is approved, the Company will transfer Contract Value from
the Subaccounts or allocate Fixed Account Contract Value to an account
called the Loan Account in an amount equal to the loan amount. Any such
transfer shall be allocated proportionately to the Owner's Contract Value
in the Subaccounts and the Fixed Account, unless otherwise directed by the
Owner. The Loan Account is part of the Fixed Account and amounts allocated
to the Loan Account earn the Minimum Guaranteed Interest Rate specified in
the Contract.
LOAN INTEREST RATE
The Owner must pay interest on the outstanding loan balance. Interest shall
accrue on the loan balance from the effective date of any loan. The loan
interest rate shall be the Minimum Guaranteed Interest Rate plus 2.5%.
V6846 (10-94)
--------------------------------------------------------------------------------
ANNUITY LOAN PROVISIONS (Continued)
--------------------------------------------------------------------------------
LOAN PAYMENTS
Each loan payment must be labeled as such. If not labeled as a loan
payment, amounts received by the Company will be treated as Purchase
Payments. Loan payments will be applied first to accrued interest and then
to the principal amount of the outstanding loan balance. Upon receipt of a
loan payment, we will transfer Contract Value from the Loan Account to the
Fixed Account and/or the Subaccounts according to the Owner's current
allocation instructions with respect to Purchase Payments. The amount of
Contract Value transferred from the Loan Account shall be equal to the
amount by which the payment reduces the outstanding principal loan balance,
plus the amount of accrued interest credited on the Loan Account at the
Minimum Guaranteed Interest Rate as of the date of the payment. The loan
may be repaid in full at any time, in which event, the Loan Account shall
be reduced to $0.
FAILURE TO MAKE PAYMENTS
If a loan payment is not made when due, the loan payment may be treated as
a taxable distribution and may be subject to a tax penalty for early
withdrawal. If a loan payment is not made as specified and scheduled herein
and in the loan agreement, the Company shall withdraw the amount of
Contract Value necessary to make the payment, including interest accrued
thereon. The amount withdrawn will be treated as a loan payment as
described above. Any such withdrawal shall be deducted from the Accounts in
the order described on page 3, "Method for Deductions." In the event that
the amount of a loan repayment equals or exceeds the Owner's Contract Value
less the amount in the Loan Account at any time, the full amount of the
outstanding loan balance, including accrued interest, shall become due and
payable on the next scheduled repayment date.
WITHDRAWAL VALUE, ANNUITY PAYOUT AMOUNT, AND DEATH BENEFIT
Before calculating the Withdrawal Value, the Annuity Start Amount or the
Death Benefit under the Contract, the Company shall withdraw that amount of
Contract Value necessary to reduce the outstanding loan balance to $0. As a
result, the Contract Value shall be reduced by the amount of the
withdrawal. The Contract Value remaining after the withdrawal shall be used
to calculate the Withdrawal Value, Annuity Start Amount or Death Benefit as
set forth in the Contract. In addition, no partial withdrawal request will
be processed which would result in the withdrawal of Contract Value from
the Loan Account.
SECURITY BENEFIT LIFE INSURANCE COMPANY
XXXXX X. XXXXX
Secretary
-------------------------------
Endorsement Effective Date
(If Other Than Issue Date)
ENDORSEMENT
--------------------------------------------------------------------------------
INDIVIDUAL RETIREMENT ANNUITY PROVISIONS
--------------------------------------------------------------------------------
INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT
This Contract is established as an Individual Retirement Annuity ("IRA") as
defined in Section 408 of the Internal Revenue Code of 1986, as amended
(the "Code") or any successor provision pursuant to the Owner's request in
the Application. Accordingly, this endorsement is attached to and made part
of the Contract as of its Issue Date or, if later, the date shown below.
Notwithstanding any other provisions of the Contract to the contrary, the
following provisions shall apply.
RESTRICTIONS ON INDIVIDUAL RETIREMENT ANNUITY
To ensure treatment as an IRA, this Contract will be subject to the
requirements of Code Section 408, which are briefly summarized below:
1. The Contract is established for the exclusive benefit of the Owner or
his or her beneficiaries. The Owner shall be the Annuitant.
2. The Contract shall be nontransferable and the entire interest of the
Owner in the Contract is nonforfeitable.
3. Notwithstanding any provision of the Contract to the contrary, the
distribution of the Owner's interest shall be made in accordance with
the minimum distribution requirements of Section 401(a)(9) of the
Internal Revenue Code and the regulations thereunder, including the
incidental death benefit provisions of Section 1.401(a)(9)-2 of the
proposed regulations, all of which are herein incorporated by
reference.
The Owner's entire interest in the Contract must be distributed, or
begin to be distributed, by the Owner's required beginning date, which
is the April 1 following the calendar year in which the Owner reaches
age 70 1/2. For each succeeding year, a distribution must be made on
or before December 31. By the required beginning date, the Owner may
elect to have the balance in the account distributed in one of the
following forms:
1) A single lump sum payment;
2) Equal or substantially equal monthly, quarterly, or annual
payments over the life of the Owner or over the joint and last
survivor lives of the Owner and his or her Designated
Beneficiary; or
3) Equal or substantially equal annual payments over a specified
period that may not be longer than the Owner's life expectancy
or the joint and last survivor life expectancy of the Owner
and his or her Designated Beneficiary.
An Annuity Option may not be elected with a Fixed Period that will
guarantee Annuity Payments beyond the life expectancy of the Annuitant
and Beneficiary and Annuity Payments must be made at least annually
and in equal amounts.
4. If the Owner dies before his or her entire interest is distributed,
the entire remaining interest will be distributed as follows:
a. If the Owner dies on or after distributions have begun under
Section 3, the entire remaining interest must be distributed at
least as rapidly as provided under Section 3.
V6849A (1-97)
--------------------------------------------------------------------------------
INDIVIDUAL RETIREMENT ANNUITY PROVISIONS (Continued)
--------------------------------------------------------------------------------
RESTRICTIONS ON INDIVIDUAL RETIREMENT ANNUITY (continued)
b. If the Owner dies before distributions have begun under Section 3
the entire remaining interest must be distributed as elected by
the Owner or, if the Owner has not so elected, as elected by the
Designated Beneficiary or Beneficiaries as follows:
1) by December 31 of the year containing the fifth anniversary
of the Owner's death; or
2) in equal or substantially equal payments over the life or
life expectancy of the Designated Beneficiary or
Beneficiaries starting by December 31 of the year following
the year of the Owner's death. If, however, the Designated
Beneficiary is the Owner's surviving spouse, then this
Distribution is not required to begin until December 31 of
the later of: (1) the calendar year immediately following
the calendar year in which the Owner died; or (2) the
calendar year in which the Owner would have attained age 70
1/2.
5. An individual may satisfy the minimum distribution requirements under
Section 401(a)(9) of the Code by receiving a distribution from one IRA
that is equal to the amount required to satisfy the minimum
distribution requirements for two or more IRAs. For this purpose, the
Owner of two or more IRAs may use the "alternative method" described
in Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum distribution
requirements described above.
6. Any refund of premiums (other than those attributable to excess
contributions) will be applied before the close of the calendar year
following the year of the refund toward the payment of future premiums
or the purchase of additional benefits.
7. The annual premium shall not exceed the lesser of $2,000 or 100
percent of compensation ($4,000 or 100 percent of compensation for
Spousal IRAs however, no more than $2,000 can be contributed to either
spouse's IRA), except for plans defined in Section 408(k) of the Code,
for which annual premiums shall not exceed $30,000.
8. Rollover contributions from other qualified plans permitted by the
Internal Revenue Code Sections 402(c), 403(a)(4), 403(b)(8), and
408(d)(3), are excluded from the limit set forth in Section 8.
9. Notwithstanding any Contract provisions to the contrary, no amount may
be borrowed under the Contract and no portion may be used as security
for a loan.
10. Annuity Payments may not begin before the Annuitant attains the age of
59 1/2 without incurring a penalty tax except in the situations
described in Section 72(t) of the Code.
SECURITY BENEFIT LIFE INSURANCE COMPANY
XXXXX X. XXXXX
Secretary
------------------------------
Endorsement Effective Date
(If Other Than Issue Date)
ENDORSEMENT
--------------------------------------------------------------------------------
SIMPLE INDIVIDUAL RETIREMENT ANNUITY PROVISIONS
--------------------------------------------------------------------------------
SIMPLE INDIVIDUAL RETIREMENT ANNUITY ENDORSEMENT
This Contract is established as a Savings Incentive Match Plan for
Employees of Small Employers Individual Retirement Annuity ("SIMPLE
IRA") as defined in Section 408 of the Internal Revenue Code of 1986,
as amended (the "Code") or any successor provision pursuant to the
Owner's request in the Application. Accordingly, this endorsement is
attached to and made part of the Contract as of its Issue Date or, if
later, the date shown below. Notwithstanding any other provisions of
the Contract to the contrary, the following provisions shall apply.
RESTRICTIONS ON SIMPLE INDIVIDUAL RETIREMENT ANNUITY
To ensure treatment as a SIMPLE IRA, this Contract will be subject to
the applicable requirements of Code Section 408, which are briefly
summarized below:
1. The Contract is established for the exclusive benefit of the Owner
or his or her beneficiaries. The Owner shall be the Annuitant.
2. The Contract shall be nontransferable and the entire interest of
the Owner in the Contract is nonforfeitable.
3. Notwithstanding any provision of the Contract to the contrary, the
distribution of the Owner's interest shall be made in accordance
with the minimum distribution requirements of Section 401(a)(9) of
the Internal Revenue Code and the regulations thereunder,
including the incidental death benefit provisions of Section
1.401(a)(9)-2 of the proposed regulations, all of which are herein
incorporated by reference.
The Owner's entire interest in the Contract must be distributed,
or begin to be distributed, by the Owner's required beginning
date, which is the April 1 following the calendar year in which
the Owner reaches age 70 1/2. For each succeeding year, a
distribution must be made on or before December 31. By the
required beginning date, the Owner may elect to have the balance
in the account distributed in one of the following forms:
1) A single lump sum payment;
2) Equal or substantially equal monthly, quarterly, or annual
payments over the life of the Owner or over the joint and
last survivor lives of the Owner and his or her Designated
Beneficiary; or
3) Equal or substantially equal annual payments over a specified
period that may not be longer than the Owner's life
expectancy or the joint and last survivor life expectancy of
the Owner and his or her Designated Beneficiary.
An Annuity Option may not be elected with a Fixed Period that will
guarantee Annuity Payments beyond the life expectancy of the
Annuitant and Beneficiary and Annuity Payments must be made at
least annually and in equal amounts.
4. If the Owner dies before his or her entire interest is
distributed, the entire remaining interest will be distributed as
follows:
a. If the Owner dies on or after distributions have begun under
Section 3, the entire remaining interest must be distributed
at least as rapidly as provided under Section 3.
4453C-5S (2-97)
--------------------------------------------------------------------------------
SIMPLE INDIVIDUAL RETIREMENT ANNUITY PROVISIONS (Continued)
--------------------------------------------------------------------------------
RESTRICTIONS ON SIMPLE INDIVIDUAL RETIREMENT ANNUITY (continued)
b. If the Owner dies before distributions have begun under
Section 3, the entire remaining interest must be distributed
as elected by the Owner or, if the Owner has not so elected,
as elected by the Designated Beneficiary or Beneficiaries as
follows:
1) By December 31 of the year containing the fifth
anniversary of the Owner's death; or
2) In equal or substantially equal payments over the life
or life expectancy of the Designated Beneficiary or
Beneficiaries starting by December 31 of the year
following the year of the Owner's death. If, however,
the Designated Beneficiary is the Owner's surviving
spouse, then this Distribution is not required to begin
until December 31 of the later of (1) the calendar year
immediately following the calendar year in which the
Owner died; or (2) the calendar year in which the Owner
would have attained age 70 1/2.
5. An individual may satisfy the minimum distribution requirements
under Section 401(a)(9) of the Code by receiving a distribution
from one IRA that is equal to the amount required to satisfy the
minimum distribution requirements for two or more IRAs. For this
purpose, the Owner of two or more IRAs may use the "alternative
method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy the
minimum distribution requirements described above.
6. Any refund of premiums (other than those attributable to excess
contributions) will be applied before the close of the calendar
year following the year of the refund toward the payment of future
premiums or the purchase of additional benefits.
7. The annual premium shall not exceed amounts allowable under the
terms of the SIMPLE plan described in Section 408(p) of the Code
or any successor provision in which the Owner is a participant.
8. Transfers and rollovers from other SIMPLE IRAs are permitted and
are excluded from the limit set forth in Section 7.
9. Notwithstanding any Contract provisions to the contrary, no amount
may be borrowed under the Contract and no portion may be used as
security for a loan.
10. Annuity Payments may not begin before the Annuitant attains the
age of 59 1/2 without incurring a penalty tax except in the
situations described in Section 72(t) of the Code.
SECURITY BENEFIT LIFE INSURANCE COMPANY
XXXXX X. XXXXX
Secretary
----------------------------
Endorsement Effective Date
(If Other Than Issue Date)
TAX-SHELTERED ANNUITY
ENDORSEMENT
TAX-SHELTERED ANNUITY ENDORSEMENT
This Contract is established as a Tax-Sheltered Annuity ("TSA") under
Section 403(b) of the Internal Revenue Code of 1986, as amended (the
"Code") or any successor provision, pursuant to the Owner's request in
the application. Accordingly, this Endorsement is attached to and made
part of the Contract as of its issue date or, if later, the date shown
below. If this is a group contract, references to the "Owner" and to
the "Contract" shall, respectively, be deemed to include the
Participant and the Participant's Certificate where appropriate.
TAX-SHELTERED ANNUITY PROVISIONS
To ensure treatment as a TSA, this Contract will be subject to the
requirements of Code Section 403(b), which are briefly summarized
below:
(a) Purchase Payments made on behalf of the Owner pursuant to a
salary reduction agreement when added to "elective deferral"
contributions under all other plans, contracts or arrangements
in which the Owner participates, may not exceed the annual
limitation on such contributions as provided in Code Section
401(a)(30).
(b) Purchase Payments applied to the Contract on behalf of the
Owner which exceed the applicable "exclusion allowance"
(within the meaning of Code Section 403(b)(2)) or the
limitations contained in Code Section 415 shall not be
excludable from gross income.
(c) Purchase Payments that exceed any of the foregoing limitations
may be returned, distributed or otherwise corrected using any
method permissible under the Code.
NONDISCRIMINATION REQUIREMENTS
(a) Except if this Contract is purchased by a "church" (within the
meaning of Code Section 3121(w)), the Plan must satisfy the
nondiscrimination requirements of Code Section 403(b)(12).
(b) Purchase Payments not made pursuant to a salary reduction
agreement will satisfy the nondiscrimination requirements of
Code Section 403(b)(12) provided they satisfy the requirements
of Code Section 401(a)(4) (nondiscrimination in
contributions), Code Section 401(a)(5) (permitted disparity),
Code Section 401(a)(17) (annual limit on compensation), Code
Section 401(m) (average contribution percentage test) and Code
Section 410(b) (coverage).
(c) Purchase Payments made pursuant to a salary reduction
agreement will satisfy the nondiscrimination requirements of
Code Section 403(b)(12) provided that every employee of the
Employer sponsoring the Plan, may elect to make Purchase
Payments of more than $200 pursuant to a salary reduction
agreement.
6832 A (R9-96) -1-
DISTRIBUTION RESTRICTIONS AND REQUIREMENTS
(a) Distributions attributable to Purchase Payments made pursuant
to a salary reduction agreement may be made only when the
Owner attains age 59 1/2, separates from service, dies,
becomes "disabled" (within the meaning of Code Section
403(b)(11)) or incurs a hardship. A distribution made due to a
hardship may not include income attributable to such Purchase
Payments.
(b) Distributions from this Contract must comply with the minimum
distribution and incidental death benefit requirements of Code
Section 403(b)(10). Accordingly, an Owner's entire interest
under the Contract generally must be distributed (or begin to
be distributed) by April 1 of the calendar year following the
later of (i) the calendar year in which the Owner attains age
70 1/2, or (ii) the calendar year in which the Owner retires
(the "Required Beginning Date").
Distributions commencing not later than the Required Beginning
Date may be made over the life of the Owner or over the lives
of the Owner and his or her Designated Beneficiary (or over a
period not extending beyond the life expectancy of the Owner
or the life expectancy of the Owner and his or her Designated
Beneficiary).
(c) If the Owner dies before distribution of his or her interest
in the Contract has begun in accordance with paragraph (b)
above, the Owner's entire interest must be distributed within
five years, unless: (i) such interest is distributed to a
Designated Beneficiary over his or her life (or over a period
not extending beyond such Designated Beneficiary's life
expectancy); and (ii) such distribution begins not later than
one year after the Owner's death. If the Designated
Beneficiary is the Owner's surviving spouse, the date on which
the distributions are required to begin shall not be earlier
than the date on which the Owner would have attained age 70
1/2.
(d) If the Owner dies after distribution of his or her interest in
this Contract has begun in accordance with paragraph (b) above
but before his or her entire interest has been distributed,
the remaining interest must be distributed at least as rapidly
as under the method of distribution being used prior to the
Owner's death.
(e) All distributions must comply with a method of distribution
offered by the Company under this Contract.
(f) If the Owner receives a distribution from this Contract that
qualifies as an "eligible rollover distribution" (within the
meaning of Code Section 402(f)(2)(A)) and elects to have such
distribution paid directly to an "eligible retirement plan"
(within the meaning of Code Section 402(c)), such distribution
shall be made in the form of a direct transfer to the eligible
retirement plan. The Company may establish reasonable
administrative rules applicable to such direct transfers.
NONFORFEITABILITY
(a) The Owner's rights under this Contract shall be nonforfeitable
except for failure to pay future Premiums.
(b) This Contract may not be transferred, sold, assigned or
pledged as collateral for a loan or as security for the
performance of an obligation or for any other purposes to any
person other than the Company.
MULTIPLE CONTRACTS
(a) If for any taxable year an Owner is covered by this Contract
and any other TSA, all such contracts shall be treated as a
single contract.
PLAN PROVISIONS
The Plan, including certain Plan provisions required by the Employee
Retirement Income Security Act of 1974 or other applicable law, may
limit the Owner's rights under this Contract. The Plan provisions may:
(a) Limit the Owner's right to make Purchase Payments;
(b) Restrict the time when the Owner may elect to receive payments
under this Contract;
(c) Require the consent of the Owner's spouse before the Owner may
elect to receive payments under this Contract;
(d) Require that all distributions be made in the form of a joint
and survivor annuity for the Owner and the Owner's spouse
unless both consent to a different form of distribution;
(e) Require that the Owner's spouse be the Designated Beneficiary;
(f) Require that the Owner remain employed by the Employer
sponsoring the Plan for a specified period of time before the
Owner's rights under this Contract become fully vested; or
(g) Otherwise restrict the Owner's exercise of rights under the
Contract or give the Employer sponsoring the Plan (or a Plan
representative) the right to exercise certain rights on the
Owner's behalf.
No such Plan provision shall limit an Owner's rights under this
Contract, unless the Employer sponsoring the Plan has provided the
Company with written notification of such provision. In no event shall
any such Plan provision enlarge the Company's obligations under this
Contract.
TAX CONSEQUENCES
(a) The Company will not incur any liability or be responsible for
the timing, purpose or propriety of any contribution or
distribution; any tax or penalty imposed on account of any
such contribution or distribution; or any other failure, in
whole or in part, by the Owner or the Employer to comply with
the provisions set forth in the Code or any other law.
ADMINISTRATION
The Company does not act as the Administrator of the Plan. Accordingly,
the Company will not incur any liability or be responsible for
interpreting the Plan or deciding any question arising thereunder.
SECURITY BENEFIT LIFE INSURANCE COMPANY
XXXXX X. XXXXX
Secretary
----------------------------
Endorsement Effective Date
(If Other Than Issue Date)
