PLEASE READ THIS CONTRACT CAREFULLY
Annuity benefit payments and other values provided by this contract, when based
on the investment performance of the Variable Account, may increase or decrease
and are not guaranteed as to fixed dollar amount. Please refer to the Value of
the Variable Account section for additional information.
VALUES REMOVED FROM A GUARANTEE PERIOD ACCOUNT PRIOR TO THE END OF ITS GUARANTEE
PERIOD MAY BE SUBJECT TO A MARKET VALUE ADJUSTMENT THAT MAY INCREASE OR DECREASE
THE VALUES. A NEGATIVE MARKET VALUE ADJUSTMENT WILL NEVER BE APPLIED TO THE
DEATH BENEFIT. A POSITIVE MARKET VALUE ADJUSTMENT, IF APPLICABLE, WILL BE ADDED
TO THE DEATH BENEFIT WHEN THE BENEFIT PAID IS THE CONTRACT'S ACCUMULATED VALUE.
PLEASE REFER TO THE MARKET VALUE ADJUSTMENT SECTION FOR ADDITIONAL INFORMATION.
RIGHT TO EXAMINE CONTRACT
The Owner may cancel this contract by returning it to the Company or one of its
authorized representatives within ten days after receipt. If returned, the
Company will refund an amount equal to the Accumulated Value, after application
of the Market Value Adjustment, plus any fees or other charges imposed. If,
however, the contract is issued as an Individual Retirement Annuity (IRA), the
Company will refund gross payments.
FIRST ALLMERICA FINANCIAL LIFE INSURANCE COMPANY
Home Office: Worcester, Massachusetts
Principal Office: 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000
This contract is a legal contract between First Allmerica Financial Life
Insurance Company (the Company) and the Owner and is issued in consideration of
the Initial Payment shown on the Specifications page. Additional Payments are
permitted. Payments may be allocated to Variable Sub-Accounts, the Fixed Account
or Guarantee Period Accounts. While this contract is in effect, the Company
agrees to pay annuity benefit payments beginning on the Annuity Date or to pay a
Death Benefit to the Beneficiary if an Owner dies prior to the Annuity Date.
President Secretary
Flexible Payment Deferred Variable and Fixed Annuity
Annuity Benefit Payments Payable on the Annuity Date
Death Benefit Payable to Beneficiary if Owner Dies prior to Annuity Date
Non-Participating
1
TABLE OF CONTENTS (CHANGE WHEN FINALIZED)
SPECIFICATONS 3
DEFINITIONS 7
OWNER, ANNUITANT AND BENEFICIARY 9
THE ACCUMULATION PHASE
PAYMENTS 11
VALUES 11
TRANSFER 14
XXXXXXXXXX AND SURRENDER 14
DEATH BENEFIT 17
THE PAYOUT PHASE
ANNUITY BENEFIT 19
TRANSFER 21
WITHDRAWAL 21
PRESENT VALUE OF ANNUITY BENEFIT PAYMENTS 23
DEATH OF THE ANNUITANT 23
ANNUITY BENEFIT PAYMENT OPTIONS 24
ANNUITY BENEFIT PAYMENT GUARANTEE OPTIONS 24
ANNUITY OPTION RATE TABLES 24
GENERAL PROVISIONS 28
2
SPECIFICATIONS
(TO BE ISSUED ON THE ISSUE DATE)
Contract Type: Non-Qualified Contract Number: zz00600000
Issue Date: 01/01/02 Annuity Date: 01/01/2035
(Must be at least 30 days after issue date)
Owner: Xxxx Xxx Owner Date of Birth: 01/01/1950
Joint Owner: Xxxx Xxx Joint Owner Date of Birth: 01/01/1950
Annuitant: Xxxx Xxx Xxxxxxxxx Date of Birth: 01/01/1950
Joint Annuitant: Xxxx Xxx Joint Annuitant Date of Birth: 01/01/1950
Annuitant Sex: Male Beneficiary(ies):
Joint Annuitant Sex: Male Primary: Surviving Joint Owner, if any
1st Contingent: Xxxx Xxx
2nd Contingent: Xxx Xxx
Minimum Fixed Account Minimum Additional Payment
Guaranteed Interest Rate: 3% Amount: $50.00
Guarantee Period Account Guarantee Period Account
Minimum Interest Rate: 3% Minimum Allocation Amount: $1,000.00
Minimum Withdrawal Maximum Alternative Annuity Date: 01/01/2035
Amount: $100.00 (Must be at least 30 days after issue date)
Minimum Annuity
Benefit Payment: $20.00
Surrender Charge Table:
YEARS FROM SURRENDER CHARGE AS A
DATE OF PAYMENT PERCENT OF THE PAYMENTS
TO DATE OF WITHDRAWAL WITHDRAWN
--------------------------------------------
Less Than: 1 7 %
2 6 %
3 4 %
Thereafter 0%
Withdrawal Without Surrender Charge Percentage: 10% of Gross Payment Base
(reduced by any prior Withdrawal Without Surrender Charge in the same calendar
year)
Mortality and Expense Risk Charge: 1.60% on an annual basis of the daily value
of the Sub-Account assets.
Administrative Charge: .15% on an annual basis of the daily value of the
Sub-Account assets.
Contract Fee: $30, if the Accumulated Value is less than $75,000.00. Waived
for 401(k)s.
Principal Office: 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000
[(0-000-000-0000)]
Monthly Variable Annuity Benefit Payment will not decrease if the annual
performance of the applicable Sub-Account(s) is 4.75% (if a 3% AIR is chosen)
or 6.75% (if a 5% AIR is chosen).
3
Owner: Xxxx Xxx Contract Number: zzz0000000
Joint Owner: Xxxx Xxx
Initial Payment: $10,000.00
Payment Allocation: The Initial Payment is allocated in the following manner:
VARIABLE SUB-ACCOUNTS:
---------------------
[ INSERT NAMES OF THE VARIABLE SUB-ACCOUNTS ]
FIXED ACCOUNT
-------------
Initial Interest Rate (applies only to Initial Payment) [3.0%]
4
Owner: Xxxx Xxx Contract Number: zz00000000
Joint Owner: Xxxx Xxx
GUARANTEE PERIOD ACCOUNTS:
--------------------------
GUARANTEE PERIOD INTEREST RATE EXPIRATION DATE
---------------- ------------- ---------------
[2 years [3.50% [1/01/2004
3 years 3.85% 1/01/2005
4 years 4.00% 1/01/2006
5 years 4.60% 1/01/2007
6 years 4.90% 1/01/2008
7 years 5.05% 1/01/2009
8 years 5.30% 1/01/2010
9 years 5.45% 1/01/2011
10 years] 5.65%] 1/01/2012]
Xxxx/Xxx--please check the rates listed here. Thanks!
--------------
100% TOTAL OF ALL ACCOUNTS
5
Owner: Xxxx Xxx Contract Number: zzz0000000
Joint Owner: Xxxx Xxx
APPLICABLE RIDER(S) :
[Enhanced Death Benefit Rider:
EDB Charge:
For amounts allocated to the variable Sub-Accounts: .25% on an annual
basis of the daily value of the Sub-Account Assets.
The EDB charge only applies during the Accumulation Phase.]
6
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7
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8
DEFINITIONS
Accumulated Value The aggregate value of all accounts in this
contract before the Annuity Date. As long as the
Accumulated Value is greater than zero, the
contract will stay in effect.
Accumulation Unit A measure used to calculate the value of a
Sub-Account before annuity benefit payments begin.
Annuitant On and after the Annuity Date, the person upon
whose continuation of life annuity benefit
payments involving life contingency depend. Joint
Annuitants are permitted and unless otherwise
indicated, any reference to Annuitant shall
include Joint Annuitants.
Annuity Date The date annuity benefit payments begin. The
Annuity Date is shown on the Specifications page.
The Annuity Date is based on the age of the oldest
Owner. If there is a non-natural Owner, the
Annuity Date is based upon the age of the oldest
Annuitant. The Annuity Date can be changed to the
maximum alternative Annuity Date (see
Specifications page), which can be no later than
the later of the oldest Owner's age ninety or ten
years after the Issue Date.
Annuity Unit A measure used to calculate annuity benefit
payments under a variable annuity option.
Beneficiary The person, persons or entity entitled to the
Death Benefit prior to the Annuity Date or any
annuity benefit payments upon the death of the
Owner on or after the Annuity Date.
Company First Allmerica Financial Life Insurance Company.
Contract Year A one-year period based on the issue date or an
anniversary thereof.
Effective Valuation Date The Valuation Date on or immediately following the
day a Payment, request for transfer, withdrawal or
surrender, or Proof of Death is received at the
Principal Office.
Fixed Account The part of the Company's General Account to which
all or a portion of a Payment or transfer may be
allocated.
Fund Each separate investment company, investment
series or portfolio eligible for investment by a
Sub-Account of the Variable Account.
General Account All assets of the Company that are not allocated
to a Separate Account.
Gross Payment Base Total gross payments made to the contract reduced
by withdrawals which exceed the Withdrawal Without
Surrender Charge amount.
Guarantee Period The number of years that a Guaranteed Interest
Rate may be credited to a Guarantee Period
Account. The Guarantee Period may range from two
to ten years.
Guarantee Period Account An account which corresponds to a Guaranteed
Interest Rate for a specified Guarantee Period and
is supported by assets in a Separate Account. The
Owner may only invest in a Guarantee Period
Account prior to the Annuity Date.
9
Guaranteed Interest Rate The annual effective rate of interest, after daily
compounding, credited to a Guarantee Period
Account.
Market Value Adjustment A positive or negative adjustment to earnings in a
Guarantee Period Account assessed if any portion
of a Guarantee Period Account is withdrawn or
transferred prior to the end of its Guarantee
Period.
Owner The person, persons or entity entitled to exercise
the rights and privileges of ownership under this
contract. Joint Owners are permitted and unless
otherwise indicated, any reference to Owner shall
include joint Owners.
Pro Rata How a Payment or withdrawal may be allocated among
the accounts. A Pro Rata allocation or withdrawal
will be made in the same proportion that the value
of each account bears to the Accumulated Value.
Proof of Death The date on which both the death certificate and
all necessary claim paperwork as determined by the
Company have been received at the Principal
Office.
Request A request or notice made by the Owner, in a manner
consistent with the Company's current procedures,
which is received by the Company.
Separate Account A segregated account established by the Company.
The assets in a Separate Account are not
commingled with the Company's general assets and
obligations. The assets of a Separate Account are
not subject to claims arising out of any other
business the Company may conduct. The amount of
assets held in the Separate Account will have a
value at least equal to the Accumulated Value of
the contracts that apply to the Separate Account
and the liabilities that vary with the experience
of the Separate Account for those contracts.
State The state or jurisdiction in which the contract is
issued.
Sub-Account A Variable Account subdivision that invests
exclusively in shares of a corresponding Fund.
Surrender Value The amount payable to the Owner on full surrender
equal to the Accumulated Value after application
of any Market Value Adjustment and less any
surrender charge and Contract Fee.
Survivor Annuity Benefit The number of Annuity Units (under a variable
Percentage joint life annuitization option) or the dollar
value of the annuity benefit payments (under a
fixed joint life annuitization option) paid during
the surviving Annuitant's life may be less than or
equal to the number of Annuity Units paid when
both individuals are living. The Survivor Annuity
Benefit Percentage is the percentage of total
Annuity Units or dollars paid in each annuity
benefit during the survivor's life. For example,
with a Joint and Two-thirds Survivor Option, the
Survivor Annuity Benefit Percentage is 66 2/3 %.
This percentage is only applicable after the death
of the first Annuitant.
Valuation Date A day the values of all units are determined.
Valuation Dates occur on each day the New York
Stock Exchange is open for trading, or such other
dates when there is sufficient trading in a Fund's
portfolio securities such that the current unit
value may be materially affected.
Valuation Period The interval between two consecutive Valuation
Dates.
10
Variable Account The Company's Separate Account, consisting of
Sub-Accounts that invest in the underlying Funds.
11
OWNER, ANNUITANT AND BENEFICIARY
Owner When the contract is issued, the Owner will be as
shown on the Specifications page. The Owner may be
changed in accordance with the terms of this
contract. Upon the death of an Owner prior to the
Annuity Date, a Death Benefit is paid and the
contract will no longer continue. The Maximum
Alternative Annuity Date is based upon the age of
the oldest Owner.
The Owner may exercise all rights and options
granted in this contract or by the Company,
subject to the consent of any irrevocable
Beneficiary. Where there are joint Owners, the
consent of both is required in order to exercise
any ownership rights.
Assignment Prior to the Annuity Date and prior to the death
of an Owner, the Owner may be changed at any time.
Only the Owner may assign this contract. An
absolute assignment will transfer ownership to the
assignee. This contract may also be collaterally
assigned as security. The limitations on ownership
rights while the collateral assignment is in
effect are stated in the assignment. Additional
limitations may exist for contracts issued under
provisions of the Internal Revenue Code.
An assignment will take place only when the
Company has actually received a written Request at
the Principal Office. The Company will not be
deemed to know of the assignment until such time.
When received, the assignment will take effect as
of the date it was signed. The assignment will be
subject to payments made or actions taken by the
Company before the change was received.
The Company will not be responsible for the
validity of any assignment nor the extent of any
assignee's interest. The interests of the
Beneficiary will be subject to any assignment.
Annuitant When the contract is issued, the Annuitant will be
as shown on the Specifications page. The Annuitant
may be changed in accordance with the terms of
this contract. Prior to the Annuity Date, an
Annuitant may be replaced or added unless the
Owner is a non-natural person. At all times there
must be at least one Annuitant. If the Annuitant
dies and a replacement is not named, the Owner
will be considered to be the new Annuitant. Upon
the death of an Annuitant prior to the Annuity
Date, a Death Benefit is not paid unless the Owner
is a non-natural person. If an annuitant is also
an Owner and dies, then the Owner death benefit
will apply.
A change of Annuitant will take place only when
the Company has actually received a Request
indicating the change at the Principal Office. The
Company will not be deemed to know of the change
of Annuitant until such time. When received, the
change of Annuitant will take effect as of the
date it was signed. The change of Annuitant will
be subject to payments made or actions taken by
the Company before the change was received.
12
Beneficiary The Beneficiary is as named on the Specifications
page unless subsequently changed. The Owner may
declare any Beneficiary to be revocable or
irrevocable. A revocable Beneficiary may be
changed at any time prior to the Annuity Date and
before the death of an Owner or after the Annuity
Date and before the death of the Annuitant. An
irrevocable Beneficiary must consent in writing to
any change. Unless otherwise indicated, the
Beneficiary will be revocable.
A Beneficiary change must be made in writing on a
Beneficiary designation form and will be subject
to the rights of any assignee of record. When the
Company receives the form, the change will take
place as of the date it was signed, even if an
Owner or the Annuitant dies after the form is
signed but prior to the Company's receipt of the
form. Any rights created by the change will be
subject to payments made or actions taken by the
Company before the change was received.
All benefits payable to the Beneficiary under this
contract will be divided equally among the
surviving Beneficiaries of the same class, unless
the Owner directs otherwise. If there is no
surviving Beneficiary in a particular class (e.g.,
1st Contingent Beneficiary, see Specifications
page), then the benefit is divided equally among
the surviving Beneficiaries of the next class. If
there is no surviving Beneficiary, the deceased
Beneficiary's interest will pass to the Owner or
the Owner's estate. At the death of the first
joint Owner prior to the Annuity Date, the
surviving joint Owner is the sole, primary
Beneficiary notwithstanding that the designated
Beneficiary may be different.
The Beneficiary can not assign, transfer, commute,
anticipate or encumber the proceeds or payments
unless given that right by the Owner.
Protection of Proceeds To the extent allowed by law, this contract and
any payments made under it will be exempt from the
claims of creditors.
13
THE ACCUMULATION PHASE
PAYMENTS
Payments Each Payment is equal to the gross payment less
the amount of any applicable premium tax.
Initial Payment The Initial Payment is shown on the Specifications
page.
Additional Payments Prior to the Annuity Date and before the death of
an Owner, the Owner may make additional Payments
of at least the Minimum Additional Payment Amount
(see Specifications page). Total Payments made may
not exceed $2,000,000 without the Company's
consent.
Payment Allocations Payments will be allocated in accordance with the
Payment Allocation, shown on the Specifications
page. Each subsequent Payment will be allocated in
the same manner unless allocation instructions
accompany the Payment or the Payment Allocation is
changed by the Owner.
The minimum amount that may be allocated to the
Guarantee Period Account is shown on the
Specifications page. If the Owner requests an
allocation less than the minimum amount, the
Company reserves the right to apply that amount to
the money market Sub-Account.
VALUES
Value of the Variable The value of a Sub-Account on a Valuation Date is
Account determined by multiplying the Accumulation Units
in that Sub-Account by the Accumulation Unit Value
as of the Valuation Date.
Accumulation Units are purchased when an amount is
allocated to a Sub-Account. The number of
Accumulation Units purchased equals that amount
divided by the applicable Accumulation Unit Value
as of the Valuation Date.
Accumulation Unit The value of a Sub-Account Accumulation Unit as of
Values any Valuation Date is determined by multiplying
the value of an Accumulation Unit for the
preceding Valuation Date by the Net Investment
Factor for that Valuation Period.
Net Investment Factor The Net Investment Factor measures the investment
performance of a Sub-Account from one Valuation
Period to the next. This factor is equal to
1.000000 plus the result (which may be positive or
negative) from dividing (a) by (b) and subtracting
(c) and (d) where:
(a) is the investment income of a
Sub-Account for the Valuation Period,
including realized or unrealized
capital gains and losses during the
Valuation Period, adjusted for
provisions made for taxes, if any;
(b) is the value of that Sub-Account's
assets at the beginning of the
Valuation Period;
(c) is the Mortality and Expense Risk
Charge applicable to the current
Valuation Period (see Specifications
page) plus any applicable Rider
charges; and
14
(d) is the Administrative Charge
applicable to the current Valuation
Period (see Specifications page).
The Company assumes the risk that its actual
mortality expense experience may exceed the
amounts provided under the contract. The Company
guarantees that the charge for mortality and
expense risks and the administrative charge will
not be increased. Subject to applicable State and
federal laws, these charges may be decreased or
the method used to determine the Net Investment
Factor may be changed.
Value of the Fixed Amounts allocated to the Fixed Account receive
Account interest at rates periodically set by the Company.
The Company guarantees that the initial rate of
interest in effect when an amount is allocated to
the Fixed Account will remain in effect for that
amount for one year or until such amount is
transferred out of the Fixed Account, whichever is
sooner. Thereafter, the rate of interest for that
amount will be the Company's current interest
rate, but no less than the Minimum Fixed Account
Guaranteed Interest Rate (see Specifications
page).
The value of the Fixed Account on any date is the
sum of amounts allocated to the Fixed Account plus
interest compounded and credited daily at the
rates applicable to those amounts. The value of
the Fixed Account will be at least equal to the
minimum required by law in the State.
Value of the Guarantee A Guarantee Period Account will be established on
Period Accounts the date a net Payment or transfer is allocated to
a specific Guarantee Period. Amounts allocated to
the same Guarantee Period Account on the same day
will be treated as one Guarantee Period Account.
The interest rate in effect when an amount is
allocated to a Guarantee Period Account is
guaranteed for the duration of the Guarantee
Period. Additional amounts allocated to Guarantee
Periods of the same or different durations will
result in additional Guarantee Period Accounts,
each with its own Guaranteed Interest Rate and
expiration date. Expiration dates for Guarantee
Period Accounts will be shown on the payment
confirmations and on annual reports to the Owner.
The value of a Guarantee Period Account on any
date is the sum of amounts allocated to that
Guarantee Period Account plus interest compounded
and credited daily at the rate applicable to that
amount.
Guaranteed Interest The Company will periodically set Guaranteed
Rates Interest Rates for each available Guarantee
Period. These rates will be guaranteed for the
duration of the respective Guarantee Periods. A
Guaranteed Interest Rate will never be less than
the Guarantee Period Account Minimum Interest Rate
(see Specifications page).
Renewal Guarantee At least 15 days (but not more than 45 days) prior
Periods to the end of a Guarantee Period, the Company will
notify the Owner in writing of the expiration of
that Guarantee Period and of the right to
reallocate and/or withdraw amounts without any
Market Value Adjustment during the 30 day period
following the expiration date. Following receipt
of the Guarantee Period Account expiration notice,
the Owner may submit a written Request to withdraw
the monies in the account and/or to transfer
amounts to the Sub-Accounts, the Fixed Account
and/or to a new Guarantee Period Account of any
duration then offered by the Company. Guaranteed
Interest Rates corresponding to the available
Guarantee Periods may be higher or lower than the
previous Guaranteed Interest Rate. The Owner's
reallocation is to be the date following the
Guarantee Period Account's expiration date. If the
Owner's reallocation/withdrawal request is not
received at the Principal Office by the expiration
date of a Guarantee Period Account, then the day
following the expiration date of the Guarantee
Period Account, the value will be
15
automatically applied to a new Guarantee Period
Account with the same duration as the expired
Guarantee Period Account unless:
(a) the Guarantee Period Account value is
less than the Guarantee Period Account
Minimum Allocation Amount (see
Specifications page) on its expiration
date; or
(b) the Guarantee Period would extend beyond
the Annuity Date or is no longer
available.
In such cases, the Guarantee Period Account value
will be transferred to the money market
Sub-Account. If, however, a
reallocation/withdrawal request for the prior
Guarantee Period Account is received within 10
days of the renewal date, the Company will
transfer and/or withdraw the payment as requested
without applying a Market Value Adjustment.
Contract Fee Prior to the Annuity Date on each contract
Anniversary and when the contract is surrendered,
the Company will deduct a Contract Fee (see
Specifications page) Pro Rata.
TRANSFER
Prior to the Annuity Date, the Owner may transfer
amounts among accounts by Request to the Principal
Office. Transfers to a Guarantee Period Account
must be at least equal to the Minimum Guarantee
Period Account Allocation Amount (see
Specifications page). If the Owner requests the
transfer of a smaller amount to the Guarantee
Period Account, the Company may transfer that
amount to the money market Sub-Account.
Any transfer from a Guarantee Period Account prior
to the end of its Guarantee Period will be subject
to a Market Value Adjustment.
There is no charge for the first twelve transfers
per contract year. A transfer charge of up to $25
may be imposed on each additional transfer.
The contract is not designed for use by
individuals, professional market timing
organizations, or other entities that do "market
timing," programmed transfers, frequent transfers,
or transfers that are large in relation to the
total assets of a Fund. If there is a pattern of
transfers that coincides with a market timing
strategy and/or that is disruptive to the Funds,
the Company reserves the right to refuse transfers
or to take other action (including, but not
limited to, limiting additional payments) to limit
the use of such activities.
Automatic Transfers Prior to the Annuity Date, by Request, the Owner
may elect automatic transfers (Dollar Cost
Averaging) of at least $100 on a periodic basis to
one or more Sub-Accounts from one of the following
source accounts: (1) the Fixed Account; (2) the
money market Sub-Account; or (3) any additional
Sub-Accounts that the Company may offer under its
then current rules. Automatic transfers may not be
made into the Fixed Account or into a Sub-Account
that is to be used as the source account.
Automatic transfers may be made on a monthly,
bi-monthly, quarterly, semi-annual or annual
basis. The first automatic transfer and any
subsequent transfers out of the source account in
the same or subsequent contract year(s) will be
treated as one transfer for purposes of the
Transfer Provision regardless of how many
Sub-Accounts are involved. (The Company reserves
the right to limit the number of Sub-Accounts that
may be utilized for automatic transfers and to
discontinue the arrangement after the Company
gives 30-day written notice to the Owner.) If an
automatic transfer would reduce the balance in the
source account to less than the automatic transfer
amount elected, the
16
entire balance will be transferred proportionately
to the chosen Sub-Account(s). Automatic transfers
will continue unless the amount in the source
account on the date an Automatic transfer is to
occur is zero or until the Owner's Request is
received at the Principal Office.
Automatic Account Prior to the Annuity Date, by Request, the Owner
Rebalancing may elect automatic rebalancing (Automatic Account
Rebalancing) of Sub-Account allocations to be made
at least as frequently as monthly, bi-monthly,
quarterly, semi-annually or annually. The Owner
will designate the percentage allocation for
amounts invested in each of the Sub-Accounts
chosen. On the periodic transfer dates specified
by the Owner, the Company will review the
percentage allocation in the various Sub-Accounts
and, as necessary, transfer funds in order to
reestablish the original designated percentage
allocation mix. The first automatic rebalancing
and any subsequent rebalancing in the same or
subsequent contract year(s) will be treated as one
transfer for purposes of the Transfer Provision
regardless of how many Sub-Accounts are involved.
The arrangement will terminate when the Owner's
Request is received at the Principal Office. (The
Company reserves the right to limit the number of
Sub-Accounts that may be utilized for automatic
rebalancing and to discontinue the arrangement
after the Company gives 30-day written notice to
the Owner).
XXXXXXXXXX AND SURRENDER
Prior to the Annuity Date, the Owner may, by
Request, withdraw a part of the Surrender Value or
surrender the contract for its Surrender Value.
Any withdrawal must be at least the Minimum
Withdrawal Amount (see Specifications page). The
Request must indicate the dollar amount to be
withdrawn and the accounts from which it is to be
withdrawn. A withdrawal from a Guarantee Period
Account will be subject to a Market Value
Adjustment.
When surrendered, this contract terminates and the
Company has no further liability under it. The
Surrender Value will be based on the Accumulated
Value on the Effective Valuation Date less any
surrender charge and Contract fee.
Amounts taken from the Variable Account will be
paid within 7 days of the date a Request is
received. The Company reserves the right to defer
surrenders and withdrawals of amounts in the
Variable Account for up to six months during any
period when (1) trading on the New York Stock
Exchange is closed for other than weekends and
holidays; (2) the Securities and Exchange
Commission by order has permitted such a
suspension; or (3) an emergency exists as
determined by the Securities and Exchange
Commission such that disposal of portfolio
securities or valuation of assets of the Separate
Account is not reasonably practicable.
Amounts taken from the Fixed Account or the
Guarantee Period Accounts will normally be paid
within 7 days of the date a Request is received.
The Company may defer payment for up to six months
from the date a Request is received. If deferred
for 10 days or more, the amount payable will be
credited interest at the rate(s) then being
credited by the Company. However, no interest will
be paid if it is less than $25 or if the delay is
pursuant to State law.
Systematic Withdrawal Prior to the Annuity Date, by Request, the Owner
may elect an automatic schedule of withdrawals
(Systematic Withdrawals) from amounts in the
Sub-Account(s) and/or the Fixed Account on a
monthly, bi-monthly, quarterly, semi-annual or
annual basis. The amount of each automatic
withdrawal must meet the minimum withdrawal
requirements discussed in the paragraph above. The
Owner must designate by written Request the
17
amount of each withdrawal and the percentage of
this amount which should be taken from each
designated Sub-Account and/or the Fixed Account,
or the Owner may elect to withdraw a specific
percentage of the Accumulated Value calculated as
of the withdrawal dates and may designate the
percentage of this amount which should be taken
from each account.
Systematic Withdrawals will automatically cease on
the Annuity Date. The Owner may change or
terminate Systematic Withdrawals by Request to the
Principal Office only.
Withdrawal Without Prior to the Annuity Date, in each calendar year,
Surrender Charge by Request, the Owner may take withdrawals up to
the Withdrawal Without Surrender Charge Amount
(see Specifications page) as of the Effective
Valuation Date.
The Withdrawal Without Surrender Charge will first
be deducted from cumulative earnings. To the
extent that it exceeds cumulative earnings, the
excess will be considered withdrawn on a last-in,
first-out basis from Payments not previously
withdrawn.
Withdrawal With Any amounts withdrawn or surrendered in excess of
Surrender Charge the Withdrawal Without Surrender Charge amount may
be subject to a surrender charge.
These amounts will be taken on a first-in,
first-out basis from Payments not previously
considered withdrawn. The Company will compute
applicable charges using the Surrender Charge
Table (see Specifications page).
Waiver of Surrender The surrender charge will be waived if an Owner,
Charge or the Annuitant if the Owner is a non-natural
person , is "physically disabled" after the issue
date and after being named Owner or Annuitant and
before attaining age 65. The Company may require
proof of continuing disability, and reserves the
right to obtain an examination by a licensed
"physician" of its choice and at its expense.
"Physically disabled" means the Owner or Annuitant
has been unable to engage in an occupation or to
conduct daily activities for a period of at least
12 consecutive months as a result of disease or
bodily injury. "Physician" means a person other
than the Owner, the Annuitant or a member of one
of their families who is State licensed to give
medical care or treatment and is acting within the
scope of that license.
No additional Payments are permitted after this
provision becomes effective.
Market Value Adjustment A transfer, withdrawal or surrender from a
Guarantee Period Account after the expiration of
its Guarantee Period will not be subject to a
Market Value Adjustment. A Market Value Adjustment
will apply to all other transfers, withdrawals, or
surrenders from a Guarantee Period Account.
Amounts in a Guarantee Period Account that are
applied under an Annuity Option are treated as
withdrawals and a Market Value Adjustment may
apply. The Market Value Adjustment will be
determined by multiplying the amount taken from
each Guarantee Period Account by the market value
factor. The market value factor for each Guarantee
Period Account is equal to:
n/365
[(1 + i) / (1 + j)] -1
where:
i - is the Guaranteed Interest Rate
expressed as a decimal being credited to the
current Guarantee Period ;
18
j - is the new Guaranteed Interest Rate,
expressed as a decimal, for a Guarantee
Period with a duration equal to the number
of years remaining in the current Guarantee
Period, rounded to the next nearest number
of whole years. If this rate is not
available, then the Company will employ a
method based on the U.S. Industrial BBB Bond
Indices published in Standard and Poor's
Credit Week. These indices are contained in
a table titled "Treasury and Corporate Bond
Yields". j will be equal to the index (at
the time of the calculation of the Market
Value Adjustment) at a duration equal to the
number of years remaining in the initial
guarantee period, rounded to the nearest
number of whole years less 2.55%. If a
duration is not available in the table, an
index will be calculated by linearly
interpolating between the next highest and
next lowest index in the table.
n - is the number of days remaining from the
Effective Valuation Date to the end of the
current Guarantee Period.
If the Guaranteed Interest Rate being credited is
lower than the new Guaranteed Interest Rate, the
Market Value Adjustment will decrease the
Guarantee Period Account value (negative Market
Value Adjustment). Similarly, if the Guaranteed
Interest Rate being credited is higher than the
new Guaranteed Interest Rate, the Market Value
Adjustment will increase the Guarantee Period
Account value (positive Market Value Adjustment).
A positive or negative Market Value Adjustment
will never result in a change to the Guarantee
Period Account Value more than the interest earned
in excess of the Minimum Guarantee Period Account
Interest Rate (see Specifications page) compounded
daily from the beginning of the current Guarantee
Period Account.
This calculation creates a ceiling (capped) and a
floor (uncapped) that limits the impact a Market
Value Adjustment will have when money is
withdrawn, transferred or surrendered prior to the
expiration of the Guarantee Period. Examples of
this are as follows:
The market value factor is:
n/365
[(1+i)/(1+j)] -1
The following examples assume:
- A payment of $50,000 was allocated to
a ten-year Guarantee Period Account
with a Guaranteed Interest Rate of
8%;
- The date of surrender is seven years
(2,555 days from the expiration date;
- The value of the Guarantee Period
Account is equal to $62,985.60 at the
end of three years;
- No transfers or withdrawals affecting
this Guarantee Period Account have
been made and
- the Guarantee Period Account Minimum
Interest Rate is 3%.
NEGATIVE MARKET VALUE ADJUSTMENT (UNCAPPED):
--------------------------------------------
Assume that on the date of surrender, the
current rate (j) is 10.00% or 0.10
The market value factor n/365
= [(1+i)/(1+j)] -1
2555/365
= [(1+.08)/(1+.10)] -1
7
= (.98182) -1
= -.12054
19
The market value adjustment = the market value factor multiplied by
the withdrawal
= -.12054 x $62,985.60
= -$7,592.11
POSITIVE MARKET VALUE ADJUSTMENT (UNCAPPED):
--------------------------------------------
Assume that on the date of surrender, the
current rate (j) is 7.00% or 0.07
The market value factor n/365
= [(1+i)/(1+j)] -1
2555/365
= [(1+.08)/(1+.07) -1
7
= (1.00935) -1
= .06728
The market value adjustment = the market value factor multiplied by
the withdrawal
= .06728 x $62,985.60
= $4,237.90
NEGATIVE MARKET VALUE ADJUSTMENT (CAPPED):
--------------------------------------------
Assume that on the date of surrender, the
current rate (j) is 11.00% or 0.11
The market value factor n/365
= [(1+i)/(1+j)] -1
2555/365
= [(1+.08)/(1+.11) -1
7
= (.97297) -1
= -.17454
The market value adjustment = Maximum of the market value factor
multiplied by the withdrawal or the
negative of the excess interest
earned over 3%
= Maximum (-.17454 x $62,985.60 or -
3 3
$50,000 x [(1.08) -(1.03) ]
= Maximum (- $10,992.38 or -$8,349.25)
= -$8,349.25
POSITIVE MARKET VALUE ADJUSTMENT (CAPPED):
--------------------------------------------
Assume that on the date of surrender, the
current rate (j) is 5.00% or 0.05
The market value factor n/365
= [(1+i)/(1+j)] -1
2555/365
= [(1+.08)/(1+.05) -1
7
= (1.02857) -1
= .21798
The market value adjustment = Minimum of the market value factor
multiplied by the withdrawal or the
excess interest earned over 3%
= Minimum of (.21978x$62,985.60 or
$8,349.25)
= Minimum of ($13,729.78 or $8,349.25)
= $8,349.25
DEATH BENEFIT
At the death of an Owner prior to the Annuity
Date, the Company will pay to the Beneficiary a
Death Benefit upon receipt at the Principal Office
of Proof of Death. If the Owner is a non-natural
person, prior to the Annuity Date, a Death Benefit
is paid on the death of an Annuitant, upon receipt
at the Principal Office of Proof of Death.
Death Benefit The Death Benefit will be the greater of:
20
(a) the Accumulated Value on the Effective
Valuation Date, increased by any positive
Market Value Adjustment; or
(b) the sum of the gross payments made under
this contract prior to the date of death,
proportionately reduced to reflect all
partial withdrawals.
For each withdrawal, the proportionate
reduction is calculated by multiplying
the Death Benefit under the (b) option,
immediately prior to the withdrawal, by
the following:
Amount of the withdrawal
------------------------
Accumulated Value immediately prior to
the withdrawal
For example assume:
- the amount of the withdrawal is $5,000
- the Accumulated Value immediately prior to the
withdrawal is $100,000
- the death benefit under (b) above, before the
withdrawal deduction, is $110,000.
Amount of the withdrawal $5,000
---------------------------- ------
Accumulated Value immediately = $100,000 = 5%
prior to the withdrawal
Therefore, the death benefit under (b) above,
after the withdrawal deduction, is reduced by 5%.
Thus, it would be equal to $110,000 times .05 =
$104,500.
Payment of the Death Unless the Owner has specified otherwise, the
Benefit Death Benefit will be paid to the Beneficiary
within 7 days of the Effective Valuation Date.
Alternatively, the Beneficiary may, by a Request
in writing, elect to:
(a) defer distribution of the Death Benefit
for a period no more than 5 years from
the date of death; or
(b) receive distributions over his/her life
expectancy (or over a period not
extending beyond such life expectancy).
Distributions must begin within one year
from the date of death.
If distribution of the Death Benefit is deferred
under (a) or (b), any value in the Guarantee
Period Accounts will be transferred to the money
market Sub-Account. The excess, if any, of the
Death Benefit over the Accumulated Value will also
be transferred to the money market Sub-Account.
The Beneficiary may, by Request, effect transfers
and withdrawals, but may not make additional
Payments. If there are multiple Beneficiaries, the
consent of all is required.
If the sole Beneficiary is the deceased Owner's
spouse, the Beneficiary may, by a Request in
writing, continue the contract and become the new
Owner and Annuitant subject to the following:
(a) any value in the Guarantee Period
Accounts will be transferred to the money
market Sub-Account;
(b) the excess, if any, of the Death
Benefit over the contract's Accumulated
Value will be also transferred to the
money market Sub-Account;
(c) additional Payments may be made; and
21
(d) any subsequent spouse of the new
Owner, if named as the Beneficiary, may
not continue the contract.
THE PAYOUT PHASE
22
ANNUITY BENEFIT
Annuity Options Annuity Options are available on a fixed, variable
or combination fixed and variable basis. The
Annuity Options described below or any alternative
option offered by the Company may be chosen. If no
option is chosen, monthly benefit payments will be
made under the Life Annuity with 10 Years Period
Certain option.
Fixed annuity options are funded through the
General Account. Variable annuity options may be
funded through one or more of the Sub-Accounts.
Not all Sub-Accounts may be made available.
Selection of Annuity The Owner must select an Annuity Benefit Payment
Benefit Payments Option prior to or after the issue date but before
the Annuity Date. Annuity benefit payments will be
paid monthly or at any other frequency currently
offered by the Company. If the first payment would
be less than the Minimum Annuity Benefit Payment
(see Specifications page), a single payment will
be made instead. If a life annuity option has been
elected, satisfactory proof of the date of birth
of the Annuitant must be received at the Principal
Office before any payment is made. Also, if a life
annuity option has been elected, from time to
time, the Company may require satisfactory proof
that the Annuitant is alive. The annuity benefit
payments provided under this contract are not less
than those required by the State.
Selection or Change The Owner must select an Annuity Date when
Of Annuity Date selecting an Annuity Benefit Payment Option. Prior
to such Annuity Date, the Owner may change the
Annuity Date by Request. The Request must be
received at the Principal Office at least one
month before the new Annuity Date. To the extent
permitted by applicable laws, rules and
regulations governing variable annuities, the new
Annuity Date must be no later than the Maximum
Alternative Annuity Date shown on the
Specifications page, which can be no later than
the later of the oldest Owner's age ninety or ten
years after the Issue Date.
Annuity Benefit Payment In the case of a variable annuity option, the
Change Frequency Owner must select an Annuity Benefit Payment
Change Frequency. This is the frequency of change
in the dollar value of the variable annuity
benefit payments. For example, if an annual
Annuity Benefit Payment Change Frequency is
chosen, the dollar value of variable annuity
benefit payments will remain constant within each
one-year period. The Owner must also select the
date of the first change.
Assumed Investment In the case of a variable annuity option, the
Return Owner must select an Assumed Investment Return
("AIR") from the options currently made available
by the Company. This rate is used to determine the
initial variable annuity benefit payment and how
the payment will change over time in response to
the performance of the selected Sub-Accounts. If
the actual performance of any selected Sub-Account
(as measured by the Net Investment Factor) is
equal to the AIR, the annuity benefit payment
attributable to that Sub-Account will be constant.
If the actual performance is greater than the AIR,
the annuity benefit payment will increase. If the
actual performance is less than the AIR, the
annuity benefit payment will decrease.
Annuity Value The Annuity Value will be the Accumulated Value,
after application of any Market Value Adjustment,
less any applicable premium tax. The Annuity Value
applied under a variable Annuity Option is based
on the Accumulation Unit Value on a Valuation Date
not more than four weeks, uniformly applied,
before the Annuity Date.
23
The amount of the first annuity benefit payment
under all available options except period certain
options will depend on the age and/or sex of the
Annuitant on the Annuity Date and the Annuity
Value applied. Period certain options are based
only on the duration of payments and the Annuity
Value.
The annuity benefit payments under the contract
will be equal to or greater than the annuity
benefit payments under a single premium immediate
variable annuity issued by the Company where the
initial payment is equal to the greater of:
(a) the Surrender Value of the contract;
or
(b) 95% of the Accumulated Value of the
contract.
In addition, the fixed annuity benefit payments
will be equal to or greater than the annuity
benefit payments produced when the Accumulated
Value is applied to the guaranteed rates.
Annuity Unit Values A Sub-Account Annuity Unit Value on any Valuation
Date is equal to its value on the preceding
Valuation Date multiplied by the product of:
(a) a discount factor equivalent to the
Assumed Investment Return, calculated on
a daily basis; and
(b) the Net Investment Factor of the
Sub-Account funding the annuity benefit
payments for the applicable Valuation
Period.
The value of an Annuity Unit as of any date other
than a Valuation Date is equal to its value as of
the preceding Valuation Date.
Each variable annuity benefit payment is equal to
the number of Annuity Units multiplied by the
applicable value of an Annuity Unit, except that
under a Joint and Survivor Option, after the first
death, the number of units in each payment is
equal to the total number of units multiplied by
the Survivor Annuity Benefit Percentage.
Variable annuity benefit payments will increase or
decrease with the value of the Annuity Units as of
the date of the first payment of each Annuity
Benefit Payment Change Frequency. The Company
guarantees that the amount of each variable
annuity benefit payment will not be affected by
changes in mortality and expense experience.
Number of Annuity Units For each Sub-Account the number of Annuity Units
determining the benefit payable is equal to the
amount of the first annuity benefit payment
divided by the value of the Annuity Unit as of the
Valuation Date used to calculate the amount of the
first payment. Once annuity benefit payments
begin, the number of Annuity Units will not change
unless a split, a withdrawal or a transfer is
made.
Payment of Annuity Annuity Benefit Payments are paid to the Owner. By
Benefit Payments Request in writing, the Owner may direct that
payments are made to another person, persons or
entity. If an Owner, who is not also an Annuitant,
dies on or after the Annuity Date, the following
occurs:
(a) If the deceased Owner was the sole Owner,
then the remaining annuity benefit
payments will be payable to the
Beneficiary in
24
accordance with the terms of the Annuity
Option selected. Upon the death of a sole
Owner, the Beneficiary becomes the Owner
of the contract.
(b) If the contract has joint Owners, then
the remaining annuity benefit payments
will be payable to the surviving joint
Owner in accordance with the terms of the
Annuity Option selected. Upon the death
of the surviving joint Owner, the
Beneficiary becomes the Owner of the
contract.
TRANSFER
After the Annuity Date and prior to the death of
the Annuitant, the Owner may transfer among
Sub-accounts by Request to the Principal Office.
Transfers may increase or decrease the number of
Annuity Units in each subsequent payment.
There is no charge for the first twelve transfers
per contract year. A transfer charge of up to $25
may be imposed on each additional transfer.
The contract is not designed for use by
individuals, professional market timing
organizations, or other entities that do "market
timing," programmed transfers, frequent transfers,
or transfers that are large in relation to the
total assets of a Fund. If there is a pattern of
transfers that coincides with a market timing
strategy and/or that is disruptive to the Funds,
the Company reserves the right to refuse transfers
or to take other action to limit the use of such
activities.
By Request, the Owner may elect automatic
rebalancing (Automatic Account Rebalancing) of
Sub-Account allocations to be made at least as
frequently as monthly, bi-monthly, quarterly,
semi-annually or annually. The Owner will
designate the percentage allocation for amounts
invested in each of the Sub-Accounts chosen. On
the periodic transfer dates specified by the
Owner, the Company will review the percentage
allocation in the various Sub-Accounts and, as
necessary, transfer funds in order to reestablish
the original designated percentage allocation mix.
If the amount necessary to reestablish the
designated mix on any transfer date is less than
$100, no transfer will be made. The first
automatic rebalancing and any subsequent
rebalancing in the same or subsequent contract
year(s) will be treated as one transfer for
purposes of the Transfer Provision regardless of
how many Sub-Accounts are involved. The
arrangement will terminate when the Owner's
Request is received at the Principal Office. (The
Company reserves the right to limit the number of
Sub-Accounts that may be utilized for automatic
rebalancing and to discontinue the arrangement
after the Company gives 30-day written notice to
the Owner).
WITHDRAWAL
Present Value Withdrawals may be made in
accordance with this provision after the Annuity
Date and prior to the death of the Annuitant.
Withdrawals are available if one of the following
Annuity Options is selected:
(a) Payments Guaranteed for a Specified Number
of Years Annuity or
(b) Life with Payments for a Guaranteed for a
Specified Number of Years Annuity Over the
life of the contract, the Owner may request
withdrawals that represent
25
a percentage of the Present Value of those
remaining guaranteed annuity benefit
payments. "Guaranteed annuity benefit
payments" refers to the non-life contingent
annuity benefit payments. Each year a
withdrawal is taken under this provision,
the Company records the percentage
withdrawn. Each withdrawal proportionately
reduces future annuity benefit payments.
(See proportionate reduction calculation
below.) The total percentage withdrawn over
the life of the contract cannot exceed the
Present Value Withdrawal Amount (see
Specifications page).
For the Life with Payments Guaranteed for a
Specified Number of Years Annuity Option,
only one Request for a withdrawal may be
made each calendar year.
For fixed Annuity Options, each withdrawal
proportionately reduces the dollar amount of
each future guaranteed annuity benefit
payment. The proportionate reduction is
calculated by multiplying the dollar amount
of each future guaranteed annuity benefit
payment by the following:
Amount of the withdrawal
------------------------
Present Value of all remaining fixed
guaranteed annuity benefit payments
immediately prior to the withdrawal.
For variable Annuity Options, each
withdrawal proportionately reduces any
remaining guaranteed payments. The
proportionate reduction is calculated by
multiplying the number of Annuity Units in
each future guaranteed annuity benefit
payment by the following:
Amount of the withdrawal
------------------------
Present Value of all remaining variable
guaranteed annuity benefit payments
immediately prior to the withdrawal.
If an Annuitant is still living after there
are no remaining guaranteed payments under a
Life with Payments Guaranteed for a
Specified Number of Years Annuity Option:
(a) for variable Annuity Options, the
number of Annuity Units will increase
to the number of Annuity Units payable
prior to any withdrawals, adjusted for
transfers.
(b) for fixed Annuity Options, the dollar
amount of the annuity benefit payments
will increase to the amount payable
prior to any withdrawals, adjusted for
transfers.
Amounts withdrawn that were applied under a
variable Annuity Option will be paid within
7 days of the date a Request is received.
The Company reserves the right to defer
surrenders and withdrawals of amounts
applied under a variable Annuity Option for
up to six months during any period when (1)
trading on the New York Stock Exchange is
closed for other than weekends and holidays;
(2) the Securities and Exchange Commission
by order has permitted such a suspension; or
(3) an emergency exists as determined by the
Securities and Exchange Commission such that
disposal of portfolio securities or
valuation of assets of the Separate Account
is not reasonably practicable.
Amounts withdrawn that were applied under a
fixed Annuity Option will normally be paid
within 7 days of the date a Request is
received. The Company may defer payment for
up to six months from the date a Request is
received. If deferred for 10 days or more,
the amount payable will be credited interest
at the rate(s) then being credited by the
Company. However, no interest will be paid
if it is less than $25 or if the delay is
pursuant to State law.
26
PRESENT VALUE OF ANNUITY BENEFIT PAYMENTS
For a variety of purposes, it is at times
necessary to determine the Present Value of
either all future annuity benefit payments
or of future guaranteed annuity benefit
payments. Present Values are calculated
based on the Annuity 2000 Mortality Table,
male, female or unisex rates as appropriate,
and the interest rate or AIR used to
determine the annuity benefit payments.
DEATH OF THE ANNUITANT
Unless otherwise indicated by the Owner,
upon the death of the Annuitant, the Present
Value of the remaining guaranteed annuity
benefit payments may be paid to the Owner.
27
ANNUITY BENEFIT PAYMENT OPTIONS
PERIOD CERTAIN ANNUITY:
Periodic annuity benefit payments for a
chosen number of years. The number of years
selected may be from 10 to 30, or any other
period currently made available by the
Company.
LIFE ANNUITY:
(a) Single Life - Periodic annuity
benefit payments during the
Annuitant's life. The annuity
benefit payments do not continue
after the death of the Annuitant.
(b) Joint and Survivor - Periodic
annuity benefit payments during
the joint lifetime of the Joint
Annuitants. For variable options,
after the first death, the number
of units in each payment during
the lifetime of the survivor is
equal to the total number of units
multiplied by the Survivor Annuity
Benefit Percentage. For fixed
options, after the first death,
the dollar amount of each payment
during the lifetime of the
survivor is equal to the dollar
value of each payment paid prior
to such death multiplied by the
Survivor Annuity Benefit
Percentage.
LIFE ANNUITY GUARANTEE OPTIONS
If a life Annuity Option has been elected,
the Owner may also select one of the
following guarantees:
PERIOD CERTAIN
Periodic guaranteed payments for a period of
10 to 30 years, or any other period
currently made available by the Company.
CASH BACK
Upon notification of the Annuitant's death,
any excess of the Annuity Value applied over
the total amount of the annuity benefit
payments will be paid to the Owner or
Beneficiary, whichever is applicable.
ANNUITY OPTION RATE TABLES
The first variable annuity benefit payment
will be based on the greater of the
guaranteed minimum Annuity Option Rates
shown in the tables on the following pages
or the Annuity Option Rates made available
by the Company on the rate basis available
at the time the Annuity Option is selected.
The fixed annuity benefit payments will be
based on the greater of the guaranteed
minimum Annuity Option Rates shown in the
tables on the following pages or the
Company's non-guaranteed current Annuity
Option Rates applicable to this class of
contracts. The Company guarantees that once
an Annuity Option is selected, the annuity
benefit payments will not be affected by
changes in mortality and expense experience.
28
ANNUITY OPTION TABLES
FIRST MONTHLY ANNUITY BENEFIT PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE APPLIED
AGE LIFE ANNUITY WITH LIFE LIFE ANNUITY
NEAREST 10 YEARS PERIOD CERTAIN ANNUITY WITH CASHBACK
PAYMENT
MALE FEMALE UNISEX MALE FEMALE UNISEX MALE FEMALE UNISEX
50 4.05 3.81 3.91 4.08 3.83 3.93 3.90 3.72 3.79
51 4.11 3.87 3.97 4.15 3.89 3.99 3.96 3.77 3.85
52 4.18 3.93 4.03 4.22 3.95 4.06 4.01 3.82 3.90
53 4.25 3.99 4.10 4.30 4.01 4.13 4.07 3.88 3.96
54 4.33 4.06 4.17 4.38 4.08 4.20 4.14 3.94 4.02
55 4.41 4.13 4.24 4.46 4.15 4.28 4.20 3.99 4.07
56 4.49 4.20 4.32 4.55 4.23 4.36 4.27 4.06 4.14
57 4.58 4.28 4.40 4.65 4.31 4.45 4.34 4.12 4.21
58 4.68 4.36 4.49 4.75 4.40 4.54 4.42 4.19 4.28
59 4.78 4.45 4.58 4.86 4.49 4.64 4.50 4.26 4.36
60 4.88 4.54 4.67 4.98 4.59 4.74 4.58 4.34 4.44
61 4.99 4.63 4.77 5.10 4.69 4.85 4.67 4.42 4.52
62 5.10 4.73 4.88 5.23 4.80 4.97 4.76 4.50 4.60
63 5.23 4.84 4.99 5.37 4.92 5.10 4.85 4.59 4.69
64 5.35 4.95 5.11 5.52 5.04 5.24 4.95 4.68 4.79
65 5.48 5.07 5.24 5.69 5.18 5.38 5.06 4.78 4.89
66 5.62 5.20 5.37 5.86 5.32 5.54 5.17 4.89 5.00
67 5.77 5.33 5.51 6.04 5.47 5.70 5.28 4.99 5.11
68 5.92 5.47 5.65 6.24 5.64 5.88 5.40 5.11 5.23
69 6.07 5.62 5.80 6.45 5.82 6.07 5.52 5.23 5.35
70 6.23 5.78 5.96 6.67 6.01 6.27 5.66 5.36 5.48
71 6.39 5.94 6.12 6.90 6.21 6.49 5.79 5.49 5.61
72 6.56 6.11 6.29 7.16 6.44 6.72 5.94 5.63 5.75
73 6.73 6.29 6.47 7.43 6.68 6.98 6.09 5.78 5.90
74 6.90 6.48 6.65 7.71 6.94 7.25 6.24 5.94 6.06
75 7.08 6.67 6.83 8.02 7.22 7.54 6.41 6.11 6.23
These tables are based on an annual interest rate of 3%
and the Annuity 2000 Mortality Table
29
FIRST MONTHLY ANNUITY BENEFIT PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE APPLIED
JOINT AND SURVIVOR LIFE ANNUITY
OLDER AGE
50 55 60 65 70 75 80
Y 50 3.53 3.61 3.68 3.73 3.76 3.79 3.80
O 55 3.77 3.88 3.97 4.04 4.08 4.11
U 60 4.10 4.25 4.36 4.45 4.50
N 65 4.55 4.74 4.90 5.01
G 70 5.16 5.43 5.64
E 75 6.02 6.41
R 80 7.25
A
G
E
JOINT AND TWO-THIRDS SURVIVOR LIFE ANNUITY
OLDER AGE
50 55 60 65 70 75 80
Y 50 3.80 3.93 4.09 4.25 4.43 4.61 4.80
O 55 4.11 4.29 4.49 4.70 .491 5.13
U 60 4.53 4.77 5.02 5.29 5.55
N 65 5.09 5.42 5.75 6.07
G 70 5.88 6.31 6.75
E 75 6.99 7.59
R 80 8.58
A
G
E
These tables are based on an annual interest rate of 3 %
and the Annuity 2000 Mortality Table
30
FIRST MONTHLY ANNUITY BENEFIT PAYMENT
FOR EACH $1,000 OF ANNUITY VALUE APPLIED
NUMBER OF VARIABLE OR FIXED ANNUITY FOR A
YEARS CERTAIN PERIOD
10 9.61
15 6.87
20 5.51
25 4.71
30 4.18
These tables are based on an annual interest rate of 3%
And the Annuity 2000 Mortality Tables.
31
GENERAL PROVISIONS
Entire Contract The entire contract consists of this
contract, any application attached at issue,
riders and any endorsements. All statements
made by the Owner shall be deemed
representations and not warranties and no
such statements shall be used in any contest
unless it is contained in a written signed
application nor, if such statement was made
by an Owner, unless a copy of the
application containing such statements is
attached to the contract when issued. This
contract is delivered in and governed by the
laws of the State.
Misstatement of Age If the age or sex of an individual is
or Sex misstated, the Company will adjust all
benefits payable to that which would be
available at the correct age or sex. Any
underpayments already made by the Company
will be paid immediately. Any overpayments
will be deducted from future annuity benefit
payments. Any overpayments or underpayments
will be charged or credited with interest as
applicable at a rate of 6%.
Failure to Notify Company
of Annuitant Death After the Annuity Date and once notified of
the Annuitant's death, the Company reserves
the right to recover any overpaid annuity
benefit payments.
Modifications Only the President or Vice President of the
Company, with prior approval of the
Superintendent of Insurance, may modify or
waive any provisions of this contract.
Agents or Brokers are not authorized to do
so. Modifications will not be affected by
written endorsement signed by the
appropriate officer.
Incontestability The Company cannot challenge the validity of
this contract after it has been in force for
more than two years from the date of issue.
Minimums All values and benefits available under this
contract equal or exceed those required by
the State in which the contract is
delivered.
Annual Report The Company will furnish an annual report to
the Owner containing a statement of the
number and value of Accumulation Units
credited to the Sub-Accounts, the value of
the Fixed Account and the Guarantee Period
Accounts, the amount of the death benefit,
the Surrender Value and any other
information required by applicable law,
rules and regulations.
Addition, Deletion, or The Company reserves the right, subject to
Substitution of compliance with applicable law and prior
Investments approval of the Superintendent of Insurance,
to add to, delete from, or substitute for
the shares of a Fund that are held by the
Sub-Accounts or that the Sub-Accounts may
purchase. The Company also reserves the
right to eliminate the shares of any Fund
no longer available for investment or if
the Company believes further investment
in the Fund is no longer appropriate for
the purposes of the Sub-Accounts.
The Company will not substitute shares
attributable to any interest in a
Sub-Account without notice to the Owner and
prior approval of the Securities and
Exchange Commission as required by the
Investment Company Act of 1940. This will
not prevent the Variable Account from
purchasing other securities for other series
or classes of contracts, or from permitting
a conversion between series or classes of
contracts on the basis of requests made by
Owners.
The Company reserves the right, subject to
compliance with applicable laws, to
establish additional Separate Accounts,
Guarantee Period Accounts and Sub-Accounts
and to make them available to any class or
series of contracts as the
32
Company considers appropriate. Each new
Separate Account or Sub-Account will invest
in a new investment company, or in shares of
another open-end investment company, or such
other investments as may be permitted under
applicable law. The Company also reserves
the right to eliminate or combine existing
Sub-Accounts and to transfer the assets of
any Sub-Accounts to any other Sub-Accounts.
In the event of any substitution or change,
the Company may, by appropriate notice, make
such changes in this and other contracts as
may be necessary or appropriate to reflect
the substitution or change. If the Company
considers it to be in the best interests of
the owners, the Variable Account or any
Sub-Account may be operated as a management
company under the Investment Company Act of
1940 or in any other form permitted by law,
or may be de-registered under the Act in the
event registration is no longer required, or
may be combined with other accounts of the
Company. No material changes in the
investment policy of a Variable Account or
any Sub-Account will be made without
approval pursuant to the applicable
insurance laws of the State.
Changes in Law The Company reserves the right, with prior
approval of the Superintendent of Insurance
and the Owner, to make any changes to
provisions of the contract to comply with,
or give Owners the benefit of, any federal
or State statute, rule, or regulation.
Change of Name Subject to compliance with applicable law
and with prior approval of the
Superintendent of Insurance and the Owner,
the Company reserves the right to change the
names of the Variable Account or the
Sub-Accounts.
Federal Tax The Variable Account is not currently
Considerations subject to tax, but the Company reserves the
right to assess a charge for taxes if the
Variable Account becomes subject to tax,
subject to prior notification to the
Superintendent of Insurance.
Splitting of Units The Company reserves the right to split the
value of a unit, either to increase or
decrease the number of units. Any splitting
of units will have no material effect on the
benefits, provisions or investment return of
this contract or upon the Owner, the
Annuitant, any Beneficiary, or the Company.
Prior to the Annuity Date, the number of
shares is determined by dividing the dollar
value of the Sub-Account Accumulation Units
by the net asset value of one Fund share.
After the Annuity Date, the number of Fund
shares is determined by dividing the
reserves held in each sub-account to meet
the annuity obligations by the net asset
value of one Fund share.
Insulation of Separate The investment performance of Separate
Account Account assets is determined separately from
the other assets of the Company. The assets
of a Separate Account equal to the reserves
and liabilities of the contracts supported
by the account will not be charged with
liabilities from any other business that the
Company may conduct.
Voting Rights The Company will notify Owners with voting
interest of any shareholders meeting at
which Fund shares held by each sub-account
will be voted and will provide proxy
materials, together with a form to be used
to give voting instructions to the Company.
The Company will vote Fund shares for which
no timely instructions have been received in
the same proportion as shares of that Fund
for which instructions have been received.
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Flexible Payment Deferred Variable and Fixed Annuity
Annuity Benefit Payments Payable on the Annuity Date
Death Benefit Payable to Beneficiary if Owner Dies prior to Annuity Date
Non-Participating
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