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EXHIBIT 4(b)
NATIONWIDE LIFE INSURANCE COMPANY
Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxx 00000
(Hereinafter called the Company)
X.X. XXX 000000
XXXXXXXX, XXXX 00000-0000
0-000-000-0000 (for any inquiries)
CERTIFICATE AGREEMENT
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Certificate Effective Date
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Certificate Owner Name Date of Birth Social Security Number
Nationwide Life Insurance Company issues this certificate of participation
("Certificate Agreement") to the Certificate Owner named below. The terms of the
Certificate Owner's rights, benefits, and options are shown in the following
pages.
This Certificate Agreement describes the Certificate Owner's rights and
benefits. It is not part of, nor does it modify any provisions of the Contract.
Group Contract Number:
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Group Contract Holder: Trustee of the Nationwide BEST OF AMERICA(R)Group Master
Trust
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Re:
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(Name of Firm or B/D) (Indicate NQ, XXX, 403(b) Non-ERISA, 401(a)
investment only, SEP XXX, SIMPLE XXX, Xxxx XXX)
TEN DAY LOOK
TO BE SURE THAT THE CERTIFICATE OWNER IS SATISFIED WITH THIS CERTIFICATE
AGREEMENT, THE CERTIFICATE OWNER HAS A "TEN DAY LOOK". WITHIN TEN DAYS OF THE
DAY THE CERTIFICATE AGREEMENT IS RECEIVED BY THE CERTIFICATE OWNER, IT MAY BE
RETURNED TO THE HOME OFFICE OF THE COMPANY OR THE AGENT THROUGH WHOM IT WAS
PURCHASED. WHEN THE CERTIFICATE AGREEMENT IS RECEIVED AT THE HOME OFFICE, THE
COMPANY WILL VOID THE CERTIFICATE AGREEMENT AS THOUGH IT HAD NEVER BEEN IN FORCE
AND THE CERTIFICATE ACCOUNT VALUE, INCLUDING ANY APPLICABLE MVA WILL BE REFUNDED
IN FULL. FOR IRAS, IF THE CERTIFICATE OWNER RETURNS THE CERTIFICATE AGREEMENT
WITHIN THE "TEN DAY LOOK" PERIOD, THE COMPANY WILL RETURN THE PURCHASE PAYMENT.
[/s/ Xxxxxxxx X. Xxxxxx /s/ Xxxxxx X. Xxxxxx]
Secretary President
READ YOUR CERTIFICATE AGREEMENT CAREFULLY
Group Flexible Purchase Payment Modified Guaranteed Annuity, Non-Participating
ANNUITY PAYMENTS, DEATH BENEFITS, SURRENDER VALUES, AND OTHER CERTIFICATE
ACCOUNT VALUES PROVIDED BY THIS CERTIFICATE AGREEMENT MAY INCREASE OR DECREASE
IN ACCORDANCE WITH THE APPLICATION OF A MARKET VALUE ADJUSTMENT AND ARE NOT
GUARANTEED AS TO FIXED-DOLLAR AMOUNT, UNLESS OTHERWISE SPECIFIED.
Details of the Market Value Adjustment are described on Pages 11, 12 and 15.
APO-4944
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CONTENTS
DATA PAGE..........................................................................INSERT
CONTENTS................................................................................2
DEFINITIONS.............................................................................4
GENERAL PROVISIONS......................................................................7
Certificate Account
Entire Certificate Agreement
Non-Participating
Incontestability
Certificate Agreement Settlement
Evidence of Survival
Alteration or Modification
Assignment
Protection of Proceeds
Misstatement of Age or Sex
Reports
Number
Deduction for Premium Taxes
OWNERSHIP PROVISIONS....................................................................8
Certificate Ownership
Joint Certificate Ownership
Contingent Certificate Ownership
Annuitant
Contingent Annuitant
Beneficiary
Changes of Parties Named in the Certificate Agreement
ACCUMULATION PROVISIONS................................................................10
Purchase Payments
Allocation of Purchase Payments
Transition Account
Guaranteed Period Options
Market Value Adjustment ("MVA") Formula
TRANSFERS, SURRENDERS, AND WITHDRAWALS.................................................12
Transfer Provisions
Surrenders
Restrictions on Surrenders for Certain Qualified Plans, TSAs, and IRAs
Surrender Value
Suspension or Delay of Surrender
Contingent Deferred Sales Charge ("CDSC")
Withdrawals Without CDSC Charge
Withdrawals Without Application of MVA
REQUIRED DISTRIBUTION PROVISIONS.......................................................15
Required Distribution-Non-Qualified Certificate Agreements
Required Distribution-TSAs, IRAs, and Certificate Agreements Issued under
Qualified Plans
DEATH PROVISIONS.......................................................................17
Death of Certificate Owner
Death of Certificate Owner/Annuitant
Death of Annuitant
Death Benefit Payment
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ANNUITIZATION PROVISIONS...............................................................18
Annuity Commencement Date
Change of Annuity Commencement Date and Annuity Payment Option
Annuitization
Fixed Payment Annuity-First and Subsequent Payments
Frequency and Amount of Payments
ANNUITY PAYMENT OPTIONS................................................................19
Selection of Annuity Payment Option
Life Annuity
Joint and Survivor Annuity
Life Annuity With 120 or 240 Monthly Payments Guaranteed
Any Other Option
Supplementary Agreement
TABLES.................................................................................21
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DEFINITIONS
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ANNUITANT - The person upon whose continuation of life any annuity payments
involving life contingencies depends.
ANNUITIZATION - The period during which annuity payments are received by the
Annuitant.
ANNUITIZATION DATE - The date the annuity payments actually commence.
ANNUITY COMMENCEMENT DATE - The date on which annuity payments are scheduled to
commence.
ANNUITY PAYMENT OPTION - The chosen form of annuity payments. Several options
are available under the Certificate Agreement.
BENEFICIARY - The person designated to receive certain benefits under the
Certificate Agreement upon the death of the Annuitant, if there is no surviving
Joint Certificate Owner, prior to the Annuitization Date.
CERTIFICATE AGREEMENT (CERTIFICATE) - The document which describes a Certificate
Owner's rights and benefits.
CERTIFICATE ACCOUNT - An account in which all financial transactions of the
Certificate Owner occurring under the Certificate Agreement prior to the
Annuitization Date are recorded.
CERTIFICATE ACCOUNT VALUE - With respect to each Certificate Account, the sum of
all Purchase Payments and applicable interest allocated to any of the Guaranteed
Period Options under the Certificate Agreement, plus the sum of Purchase
Payments and applicable interest allocated to the Transition Account.
CERTIFICATE ANNIVERSARY - Each 12-month anniversary of the Certificate Effective
Date.
CERTIFICATE EFFECTIVE DATE - The date the first Purchase Payment is applied to
the Certificate Account.
CERTIFICATE OWNER - The person who possesses all rights under the Certificate
Agreement, including the right to designate and change parties named in the
Certificate Agreement, Annuity Payment Option, and the Annuity Commencement
Date. The Certificate Owner is the person named as Certificate Owner on the
Enrollment Card unless a subsequent change is made.
CERTIFICATE YEAR - Each year the Certificate Agreement remains in force
commencing with the Certificate Effective Date.
CODE - The Internal Revenue Code of 1986, as amended.
COMPANY - Nationwide Life Insurance Company.
CONTINGENT ANNUITANT - The Contingent Annuitant may be the recipient of certain
rights or benefits under the Certificate Agreement when the Annuitant dies
before the Annuitization Date.
CONTINGENT BENEFICIARY - The person or entity designated to be the Beneficiary
if the named Beneficiary is not living at the time of the death of the
Annuitant.
CONTINGENT CERTIFICATE OWNER - A Contingent Certificate Owner succeeds to the
rights of a Certificate Owner upon the Certificate Owner's death before
Annuitization if there is no Joint Certificate Owner.
CONTRACT - The Group Flexible Purchase Payment Modified Guaranteed Annuity
issued to the Contract Holder.
CONTRACT HOLDER - The entity named on the face page. The Contract Holder
possesses no rights under the Certificate Agreement.
DEATH BENEFIT - The benefit that is payable upon the death of the Annuitant,
unless a Contingent Annuitant has been named. If the Annuitant dies after the
Annuitization Date, any benefit that may be payable shall be as specified in the
Annuity Payment Option elected.
DISTRIBUTION - Any payment of part or all of a Certificate Owner's Certificate
Account Value.
ENROLLMENT CARD - The form required for participation in the Contract.
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ERISA - The Employee Retirement Income Security Act of 1974, as amended.
FIXED PAYMENT ANNUITY - An annuity providing for payments which are guaranteed
by the Company as to dollar amount during Annuitization.
GUARANTEED PERIOD - The 3, 4, 5, 6, 7, 8, 9, or 10 year period corresponding
respectively to a 3, 4, 5, 6, 7, 8, 9, or 10 year Guaranteed Period Option.
GUARANTEED PERIOD OPTION - A separate account funding option offered under the
Certificate Agreement which provides a guaranteed interest rate (the Specified
Interest Rate), paid over certain maturity durations (the Guaranteed Period), so
long as certain conditions are met.
GUARANTEED PERIOD OPTION YEAR - Each 12 month period starting from the date a
new allocation is made to a Guaranteed Period Option. New allocations include
transfers into a Guaranteed Period Option or Purchase Payments allocated to a
Guaranteed Period Option.
HOME OFFICE - The main office of the Company located in Columbus, Ohio.
HOSPITAL - A state licensed facility which is: operated as a Hospital according
to the law of the jurisdiction in which it is located; operates primarily for
the care and treatment of sick or injured persons as inpatients; provides
continuous 24 hours a day nursing service by or under the supervision of a
registered graduate professional nurse (R.N.) or a licensed practical nurse
(L.P.N); is supervised by a staff of physicians; and has medical, diagnostic,
and major surgical facilities or has access to such facilities on a prearranged
basis.
INDIVIDUAL RETIREMENT ANNUITY (XXX) - An annuity which qualifies for favorable
tax treatment under Section 408 of the Internal Revenue Code which is
established for the exclusive benefit of the Certificate Owner or the
Certificate Owner's beneficiaries. This does not include Xxxx XXX - see
definition Xxxx XXX.
INTEREST RATE SWAP(S) - Interest rate quotations for 1, 2, 3, 5, 7 and 10 years
published by the Federal Reserve Board on a regular basis. The Company uses
Interest Rate Swaps in its Market Value Adjustment ("MVA") Formula because they
represent a readily available and consistently reliable interest rate benchmark
in financial markets.
INTERMEDIATE CARE FACILITY - A licensed facility which is: operated as an
Intermediate Care Facility according to the law of the jurisdiction in which it
is located; provides continuous 24 hours a day nursing service by or under the
supervision of a registered graduate professional nurse (R.N.) or a licensed
practical nurse (L.P.N.); and maintains a daily medical record of each patient.
INVESTMENT PERIOD - The period of time beginning with a declaration by the
Company of new Guaranteed Period Option interest rates (the different Specified
Interest Rates for each of the Guaranteed Period Options) and ending with the
subsequent declaration of new Specified Interest Rates by the Company.
JOINT CERTIFICATE OWNER - The Joint Certificate Owner, if any, possesses an
undivided interest in the entire Certificate Agreement in conjunction with the
Certificate Owner. If a Joint Certificate Owner is named, references to
Certificate Owner and Joint Certificate Owner will apply to both the Certificate
Owner and the Joint Certificate Owner, or either of them, unless the context
requires otherwise.
LONG TERM CARE FACILITY - A state Skilled Nursing Facility or Intermediate Care
Facility. Long Term Care Facility does not mean: a place that primarily treats
drug addicts or alcoholics; a home for the aged or mentally ill, a community
living center, or a place that primarily provides domiciliary, residency, or
retirement care; or a place owned or operated by a member of the Certificate
Owner's immediate family.
MARKET VALUE ADJUSTMENT ("MVA") - The upward or downward adjustment in value of
amounts allocated to a Guaranteed Period Option which prior to the Maturity Date
for the Guaranteed Period Option are: 1) distributed pursuant to a surrender; 2)
reallocated to another investment option available under this Certificate
Agreement; or 3) annuitized under this Certificate Agreement at any time other
than the Maturity Date.
MVA FACTOR - The value multiplied by the Specified Value or that portion of the
Specified Value being distributed from a Guaranteed Period Option, in order to
effect an MVA.
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MVA FORMULA - The MVA Formula is utilized when a distribution is made from a
Guaranteed Period Option during the Guaranteed Period which is subject to an
MVA.
MATURITY DATE - The date on which a particular Guaranteed Period Option matures.
Such date will be the last day of a calendar quarter in which the third, fourth,
fifth, sixth, seventh, eighth, ninth or tenth anniversary of the date on which
amounts are allocated to a 3, 4, 5, 6, 7, 8, 9 or 10 year Guaranteed Period
Option, respectively.
MINIMUM DISTRIBUTION - The amount that is required to be withdrawn from
Qualified Plans, Tax Sheltered Annuities (TSAs) and IRAs to meet distribution
requirements established by the Code.
NON-QUALIFIED CERTIFICATE - A Certificate Agreement which does not qualify for
favorable tax treatment under the provisions of Sections 403(a) (Qualified
Plans), 408 (IRAs), 403(b) (TSAs) or 408A (Xxxx IRAs) of the Code.
PHYSICIAN - A doctor of medicine or osteopathy legally authorized to practice
medicine and surgery by the state in which he performs such function or action.
This person cannot be the Certificate Owner, Contingent Certificate Owner,
Annuitant, Contingent Annuitant, Beneficiary, Contingent Beneficiary, nor a
member of the immediate family of these persons.
PURCHASE PAYMENT(S) - A deposit of new value into the Certificate Account. The
term Purchase Payment does not include transfers among the Guaranteed Period
Options and the Transition Account.
QUALIFIED PLAN(S) - A retirement plan that receives favorable tax treatment
under the provisions of Section 401(a) and 403(a) of the Code.
XXXX XXX - An individual retirement annuity meeting the requirements of Section
408A of the Code.
SKILLED NURSING FACILITY - A licensed facility which is operated as a Skilled
Nursing Facility according to the law of the jurisdiction in which it is
located; provides skilled nursing care under the supervision of a Physician;
provides continuous 24 hour a day nursing service by or under the supervision of
a registered graduate professional nurse (R.N.); and maintains a daily medical
record of each patient.
SPECIFIED INTEREST RATE - The interest rate guaranteed to be credited to amounts
allocated under a selected Guaranteed Period Option so long as such allocations
are not distributed for any reason from the Guaranteed Period Option prior to
the Guaranteed Period Option Maturity Date.
SPECIFIED VALUE - The amount of a Guaranteed Period Option allocation minus
withdrawals and transfers out of the Guaranteed Period Option, plus interest
accrued at the Specified Interest Rate. The Specified Value is subject to an MVA
at all times prior to the Maturity Date except for payment of the Death Benefit.
TAX SHELTERED ANNUITIES (TSA) - An annuity which qualifies for favorable tax
treatment under Section 403(b) of the Code.
TRANSITION ACCOUNT - An account with interest rates that are set monthly by the
Company.
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GENERAL PROVISIONS
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CERTIFICATE ACCOUNT
The Company shall establish and maintain a Certificate Account for each
Certificate Owner. The Certificate Agreement is established for the exclusive
benefit of the Certificate Owner or the Certificate Owner's beneficiaries. Each
Certificate Owner's Purchase Payments will be credited to the Certificate
Account.
ENTIRE CERTIFICATE AGREEMENT
The Certificate Agreement, riders, and endorsements, if any, make up the entire
agreement between the Company and the Certificate Owner. The Contract Holder
delegates rights to each Certificate Owner with respect to the Certificate
Owner's Certificate Account. Statements in the Certificate Agreement are deemed
representations and not warranties.
NON-PARTICIPATING
The Certificate Agreement is non-participating. It will not share in the surplus
of the Company.
INCONTESTABILITY
The Certificate Agreement, riders, and endorsements will not be contested.
CERTIFICATE AGREEMENT SETTLEMENT
The Company may require that the Certificate Agreement be returned to the Home
Office prior to making any payments. All sums payable to or by the Company under
this Certificate Agreement are payable at the Home Office.
EVIDENCE OF SURVIVAL
Where any payments under this Certificate Agreement depend on the recipient
being alive on a given date, the Company may require proof that such person is
living. Such proof may be required prior to making the payments.
ALTERATION OR MODIFICATION
All changes in or to the terms of the Certificate Agreement must be made in
writing and signed by the President or Secretary of the Company. No other person
can alter or change any of the terms or conditions of the Certificate Agreement.
Provisions of the Certificate Agreement may be modified or superseded as
required by the terms of the Qualified Plan or applicable law. Where required,
other changes to the Certificate Agreement will be made only with mutual
agreement of the Company and the Certificate Owner. As required, a copy of the
amendment will be furnished to the Certificate Owner.
ASSIGNMENT
If permitted, a Certificate Owner may assign some or all rights under the
Certificate Agreement. Such assignment must be made in writing and executed by
the Certificate Owner during the lifetime of the Annuitant and prior to the
Annuitization Date. The assignment will take effect on the date it is recorded
by the Company at its Home Office. The assignment will not be recorded until the
Company has received sufficient direction from the Certificate Owner and
assignee as to the proper allocation of Certificate Agreement rights under the
assignment.
The Company is not responsible for the validity of tax consequences of any
assignment or for any payment or other settlement made prior to the Company's
recording of the assignment.
Certificate Agreements issued to fund a retirement plan pursuant to Sections
403, 408 or 408A of the Code, may not be sold, discounted, assigned, pledged or
transferred for the performance of any obligation to any person other than the
Certificate Owner or other person exercising ownership rights under the terms of
the plan, or as otherwise allowed by applicable law.
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PROTECTION OF PROCEEDS
Proceeds under this Certificate Agreement are not assignable by any Beneficiary
prior to the time such proceeds become payable. To the extent permitted by
applicable law, proceeds are not subject to the claims of creditors or to legal
process.
MISSTATEMENT OF AGE OR SEX
If the age or sex of the Annuitant has been misstated, all payments and benefits
under the Certificate Agreement will be adjusted. Payments and benefits will be
made, based on the correct age or sex. Proof of age of an Annuitant may be
required at any time, in a form satisfactory to the Company. When the age or sex
of an Annuitant has been misstated, the dollar amount of any overpayment will be
deducted from the next payment or payments due under the Certificate Agreement.
The dollar amount of any underpayment made by the Company as a result of any
such misstatement will be paid in full with the next payment due under the
Certificate Agreement.
REPORTS
Prior to the Annuitization Date, a report showing the Certificate Account Value
will be provided to the Certificate Owner at least once each year.
NUMBER
Unless otherwise provided, all references in this Certificate Agreement which
are in the singular form will include the plural; all references in the plural
form will include the singular.
DEDUCTION FOR PREMIUM TAXES
The Company will charge against the Certificate Account Value the amount of any
premium taxes levied by a state or any other government entity upon Purchase
Payments received by the Company. The Company at its sole discretion and in
compliance with applicable state law will determine the method used to recoup
premium taxes. The Company currently deducts such charges from a Certificate
Account Value either (1) at the time the Certificate Agreement is surrendered,
(2) at the Annuitization Date, or (3) at such earlier date as the Company may be
subject to such taxes.
OWNERSHIP PROVISIONS
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CERTIFICATE OWNERSHIP
Unless otherwise provided, the Certificate Owner has all rights under the
Certificate Agreement. IF THE PURCHASER NAMES SOMEONE OTHER THAN HIMSELF AS
CERTIFICATE OWNER, THE PURCHASER WILL HAVE NO RIGHTS UNDER THE CERTIFICATE
AGREEMENT.
The Annuitant shall become the Certificate Owner on the Annuitization Date.
JOINT CERTIFICATE OWNERSHIP
Joint Certificate Owners must be spouses at the time joint ownership is
requested. If a Joint Certificate Owner is named, the Joint Certificate Owner
will possess an undivided interest in the Certificate Agreement. Unless
otherwise provided, the exercise of any ownership right in the Certificate
Agreement (including the right to surrender or partially surrender the
Certificate Account; or to change the parties to the Certificate Agreement, the
Payment Option, or the Annuitization Date) shall require written request signed
by both Certificate Owners.
If a Certificate Owner who is not also the Annuitant dies before the
Annuitization Date and there is a surviving Joint Certificate Owner, the Joint
Certificate Owner shall become the Certificate Owner.
If a Certificate Owner who is also the Annuitant dies before the Annuitization
Date and there is a surviving Joint Certificate Owner, all benefits under the
Certificate Agreement are payable to the Joint Certificate Owner.
Joint Certificate Owners may be selected only for a Certificate Agreement issued
as a Non-Qualified Certificate Agreement.
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CONTINGENT CERTIFICATE OWNERSHIP
The Contingent Certificate Owner is the person who may receive certain benefits
under the Certificate Agreement, if the Certificate Owner, who is not the
Annuitant, dies prior to the Annuitization Date and there is no surviving Joint
Certificate Owner. If more than one Contingent Certificate Owner survives the
Certificate Owner, each will share equally unless otherwise specified in the
Contingent Certificate Owner designation. If no Contingent Certificate Owner
survives a Certificate Owner and there is no surviving Joint Certificate Owner,
all rights, and interest of the Certificate Agreement will vest with the last
surviving Certificate Owner's estate.
If a Certificate Owner, who is also the Annuitant, dies before the Annuitization
Date, then the Contingent Certificate Owner does not have any rights in the
Certificate Agreement. However, a surviving Contingent Certificate Owner who is
also the Beneficiary will have all the rights of a Beneficiary.
Contingent Certificate Owners may be selected only for a Certificate Agreement
issued as a Non-Qualified Certificate.
ANNUITANT
The Annuitant is the person who will receive annuity payments upon
Annuitization. The Annuitant must be age [85] or younger at the time of
Certificate Agreement issuance unless the Company has approved a request for an
Annuitant of greater age. The Annuitant may be changed prior to the
Annuitization Date with the consent of the Company.
For Certificate Agreements that are issued as IRAs or TSAs the Certificate Owner
must be the Annuitant and the entire interest of the Annuitant in the
Certificate Agreement is nonforfeitable.
CONTINGENT ANNUITANT
If the Annuitant dies before the Annuitization Date, the Contingent Annuitant
becomes the Annuitant. The Contingent Annuitant must be age [85] or younger at
the time of Certificate Agreement issuance unless the Company has approved a
request for a Contingent Annuitant of greater age. All provisions of the
Certificate Agreement which are based on the death of the Annuitant prior to the
Annuitization Date will be based on the death of the last survivor of the
Annuitant and Contingent Annuitant.
A Contingent Annuitant may be selected only for a Certificate Agreement issued
as a Non-Qualified Certificate.
BENEFICIARY
If there is no surviving Joint Certificate Owner, or if the Annuitant is someone
other than a Certificate Owner, the Beneficiary is the person who will receive
benefits under the Certificate Agreement if the Annuitant dies prior to the
Annuitization Date. If a Certificate Owner who is also the Annuitant dies before
the Annuitization Date and there is a surviving Joint Certificate Owner, all
benefits under the Certificate Agreement are payable to the surviving Joint
Certificate Owner. If more than one Beneficiary survives the Annuitant, each
will share equally unless otherwise specified in the beneficiary designation. If
there is no surviving Joint Certificate Owner and no Beneficiary survives the
Annuitant, all rights and interest of such parties will vest in the Contingent
Beneficiary, and if more than one Contingent Beneficiary survives, each will
share equally unless otherwise specified in the Contingent Beneficiary
designation. If no Contingent Beneficiary survives the Annuitant, all rights and
interest of the Certificate Agreement will vest with the last surviving
Certificate Owner's estate.
CHANGES OF PARTIES NAMED IN THE CERTIFICATE AGREEMENT
Notwithstanding any other provisions in the Certificate Agreement, prior to the
Annuitization Date, and subject to any existing assignments, the Certificate
Owner may request a change in the Certificate Owner, Contingent Certificate
Owner, Joint Certificate Owner, Annuitant, Contingent Annuitant, Beneficiary, or
Contingent Beneficiary. Such change, upon receipt and recording by the Company
at its Home Office, will take effect as of the time the written notice was
signed, whether or not the Certificate Owner or Annuitant are living at the time
of record, but without further liability as to any payment or settlement made by
the Company before receipt of such change is recorded at the Home Office.
Any request for change of Certificate Owner must be recorded at the Home Office,
may require a signature guarantee, and must be signed by the Certificate Owner
and the person designated as the new Certificate Owner.
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Any change to the Annuitant or Contingent Annuitant is subject to underwriting
and approval by the Company. Notwithstanding any provisions in this Certificate
Agreement, for Non-Qualified certificates, if any Certificate Owner is not a
natural person, the change of the Annuitant will be treated as the death of the
Certificate Owner and will result in a distribution, regardless of whether a
Contingent Annuitant is also named. Distributions will be made as if the
Certificate Owner died at the date of such change.
For Certificate Agreements issued as IRAs, TSAs, or under Qualified Plans, the
Certificate Owner cannot transfer ownership or name someone other than him or
herself as Annuitant.
ACCUMULATION PROVISIONS
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PURCHASE PAYMENTS
The Certificate Agreement is provided in return for any Purchase Payments made.
The cumulative total of all Purchase Payments under this and any other annuity
certificate agreement and/or contract issued by the Company having the same
Annuitant may not exceed $1,500,000 without the prior written consent of the
Company.
The initial Purchase Payment is due on the Certificate Effective Date and may
not be less than [$10,000]. If a Certificate Agreement is issued as an XXX, Xxxx
XXX SIMPLE XXX, or SEP-XXX, the minimum initial Purchase Payment is [$2,000].
Purchase Payments, if any, after the initial Purchase Payment must be at least
[$1,000] and may be made at any time. Notwithstanding the foregoing, the Company
will reduce the required minimum subsequent Purchase Payment amount to [$100] if
made via automated clearinghouse.
No Purchase Payments are required after the first Purchase Payment. This
Certificate Agreement will not lapse for failure to pay subsequent Purchase
Payments.
If no Purchase Payments have been received in the Certificate Account for a
period of two full years and the paid-up annuity benefit at maturity would be
less than [$50] a month, the Company may, at its option, terminate the
Certificate Agreement by payment of the accumulated value and will by such
payment, be relieved of any obligation under the Certificate Agreement.
Except in the case of a Non-Qualified Certificate or a rollover contribution (as
permitted by Section 402(c), 403(a)(4), 403(b)(8), or 408 (d)(3)) of the Code or
a contribution made in accordance with the terms of a Simplified Employee
Pension (SEP) as described in Section 408(k) of the Code, no contributions will
be accepted unless they are in cash, and the total of such contributions do not
exceed the limit specified in Section 408(b) of the Code for any taxable year.
Any refund of Purchase Payments (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 Purchase Payments or the
purchase of additional benefits.
For certificate agreements issued as TSAs, Purchase Payments, exclusive of
rollovers, made during any taxable year shall not exceed the Section 402(g) of
the Code limit for the calendar year in which such taxable year begins. Section
402(g) of the Code limit applies to Purchase Payments that are elective
deferrals within the meaning of Section 402(g)(3) of the Code and made under
this Certificate Agreement and all other certificate agreements, contracts,
plans, or arrangements of the Certificate Owner's employer. However, the maximum
amount of Purchase Payments that may be made by the Certificate Owner may be
increased or decreased under the provisions of Sections 403(b) or 415 of the
Code.
ALLOCATION OF PURCHASE PAYMENTS
The Certificate Owner elects to have the Purchase Payments allocated among the
Guaranteed Period Options and the Transition Account. If the Certificate Owner
does not specify how the Purchase Payment is to be allocated, the entire
Purchase Payment will be allocated to the Transition Account. The minimum amount
that may be allocated to any one Guaranteed Period Option is [$1,000]. The
Certificate Owner may change the allocation of future Purchase Payments by a
proper submission that is received and recorded by the Company.
TRANSITION ACCOUNT
Amounts not allocated to a Guaranteed Period Option are held in the Transition
Account which is a short-term liquid investment account. The Company establishes
rates for all amounts in the Transition Account on a monthly basis, but the
Company does not guarantee that it will set monthly rates at any specific
minimum or "floor" rate.
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Amounts in the Transition Account may be transferred or surrendered without
restriction, charge, or application of a MVA. The Transition Account is not
designed for long term investing.
GUARANTEED PERIOD OPTIONS
At any particular time under this Certificate Agreement, eight Guaranteed Period
Options will be available: a three year Guaranteed Period Option, a four year
Guaranteed Period Option, a five year Guaranteed Period Option, a six year
Guaranteed Period Option, a seven year Guaranteed Period Option, an eight year
Guaranteed Period Option, a nine year Guaranteed Period Option, and a ten year
Guaranteed Period Option. Amounts allocated to a three year Guaranteed Period
Option will have a Guaranteed Period of three years, a four year Guaranteed
Period Option will have a Guaranteed Period of four years, and so on. Regardless
of the source from which a Guaranteed Period Option allocation is made, the
minimum for each allocation is [$1,000].
Guaranteed Period Options are not available as funding options when the
Certificate Account is annuitized. All investment amounts allocated to a
Guaranteed Period Option are transferred at the time of Annuitization. If a
Certificate Account is annuitized while a Guaranteed Period Option is in effect,
and prior to the Maturity Date, a Market Value Adjustment ("MVA") will apply.
For the duration of the Guaranteed Period of a Guaranteed Period Option, the
Company will credit a Specified Interest Rate on amounts remaining allocated
under the Guaranteed Period Option. The interest rates in effect during any
particular Investment Period will be guaranteed for Guaranteed Period Option
allocations (made during the Investment Period) for the duration of the
Guaranteed Period associated with the Guaranteed Period Option. Each Guaranteed
Period Option in the same Investment Period has its own Specified Interest Rate
for the Guaranteed Period relating to the selected Guaranteed Period Option. The
Company, however, reserves the right to change the Specified Interest Rate at
any time for prospective allocations to Guaranteed Period Option.
A MVA will apply against all amounts which are transferred or surrendered from
allocations under a Guaranteed Period Option prior to the Maturity Date for any
reason other than payment of the Death Benefit. A Contingent Deferred Sales
Charge ("CDSC") may apply as well. On the Maturity Date, unless instructed
otherwise by the Certificate Owner, amounts in the Guaranteed Period Option(s)
will be automatically transferred to the Transition Account. Amounts in the
Transition Account may be transferred, surrendered or distributed for any reason
without any CDSC or MVA.
Once each quarter, if Guaranteed Period Options are maturing in the next 90
days, the Company will send to the Certificate Owner notice of the impending
expiration of any such Guaranteed Period Option(s). Certificate Owners will have
the option of directing the withdrawal or transfer of the Guaranteed Period
Options specified in the notice without application of any MVA or CDSC on the
Maturity Date. If no such direction is received prior to the Maturity Date,
amounts in the Guaranteed Period Option(s) that have matured will be transferred
to the Transition Account.
Other than transfers made on a Maturity Date, the Company reserves the right to
restrict transfers into and out of the Guaranteed Period Options to one per
calendar year.
MARKET VALUE ADJUSTMENT ("MVA") FORMULA
The MVA Formula is a calculation expressing the relationship between three
factors: (1) the Interest Rate Swaps for a period equivalent to the Guaranteed
Period at the time of deposit in the Guaranteed Period Option; (2) the Interest
Rate Swap at the time of distribution for a period of time with maturity equal
to the time remaining in the Guaranteed Period; and (3) the number of days
remaining until the Maturity Date of the Guaranteed Period Option. An MVA
generally reflects the relationship between the prevailing interest rates at the
time of investment, prevailing interest rates at the time of distribution, and
the amount of time remaining in the Guaranteed Period of the Guaranteed Period
Option selected. Generally, if the Specified Interest Rate is lower than
prevailing interest rates, application of the MVA will result in a downward
adjustment of amounts allocated to a Guaranteed Period Option. If the Specified
Interest Rate is higher than prevailing interest rates, application of the MVA
will result in an upward adjustment of amounts allocated to a Guaranteed Period
Option. The MVA is applied only when amounts allocated to a Guaranteed Period
Option are distributed from the Guaranteed Period Option prior to a Maturity
Date. The result of the MVA Formula is the MVA Factor.
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The formula for determining the MVA Factor is:
1 + a t
[(---------------------) ]
1 + b + 0.0025
Where:
a = the Interest Rate Swap for a period equivalent to the Guaranteed Period
at the time of deposit in the Guaranteed Period Option;
b = the Interest Rate Swap at the time of distribution for a period of time
with maturity equal to the time remaining in the Guaranteed Period. In
determining the number of years to maturity, any partial year will be
counted as a full year, unless it would cause the number of years to
exceed the Guaranteed Period.
t = the number of days until the Maturity Date, divided by 365.25.
In the case of a above, the Interest Rate Swap utilized will be the rate
published by the Federal Reserve Board on the day prior to the date an
allocation to the Guaranteed Period Option was made. If no rate is published one
day prior to the date of an allocation to the Guaranteed Period Option, then the
most recent published rate available will be utilized.
In the case of b above, the Interest Rate Swap utilized will be the rate
published by the Federal Reserve Board on the day prior to the date of
withdrawal, transfer or distribution. If no rate is published one day prior to
the date of withdrawal, transfer or distribution, then the most recent published
rate available will be utilized.
For periods which do not coincide with the available Interest Rate Swap periods,
rates used in a and b will be linearly interpolated (where the difference in
rates is proportional to the difference in years).
The MVA Factor will be equal to 1 during the Investment Period. That is, for the
period of time following a Guaranteed Period Option allocation during which the
Specified Interest Rate for Guaranteed Period Options of the same duration is
not changed, the MVA Factor will be equal to 1.
The MVA Formula shown above also accounts for some of the administrative and
processing expenses incurred when fixed-interest investments are liquidated.
This is represented in the addition of [0.0025] in the MVA Formula. The result
of the MVA Formula shown above is the MVA Factor. The MVA Factor will either be
greater, less than or equal to 1 and will be multiplied by the Specified Value
or that portion of the Specified Value being withdrawn, transferred or
distributed for any other reason. If the result is greater than 1, a gain will
be realized by the Certificate Owner; if less than 1, a loss will be realized.
If the MVA Factor is exactly 1, no gain or loss will be realized.
If the Federal Reserve Board halts publication of Interest Rate Swaps and there
is no suitable alternative source of Interest Rate Swaps, or if, for any other
reason, Interest Rate Swaps are not available to be relied upon, the Company
will use appropriate rates based on treasury bond yields.
TRANSFERS, SURRENDERS, AND WITHDRAWALS
--------------------------------------
TRANSFER PROVISIONS
Transfers among the Guaranteed Period Options and the Transition Account must be
made prior to the Annuitization Date. Transfers of a Guaranteed Period Option
prior to its Maturity Date are subject to CDSC and MVA. Transfers from the
Transition Account may be made at any time without application of CDSC or MVA.
The minimum amount that may be transferred from or to a Guaranteed Period Option
is [$1,000].
SURRENDERS
Prior to the earlier of the Annuitization Date or the death of the Annuitant and
any Contingent Annuitant, the Certificate Owner may surrender part or all of the
Certificate Account Value. A surrender request must be in writing or in a form
otherwise acceptable to the Company. The Company reserves the right to require
that the signature(s) be guaranteed by a member firm of a major stock exchange
or other depository institution qualified to give such a guaranty.
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When written application and proof of interest are received, the Company will
surrender any amount from any Guaranteed Period Options and any amount from the
Transition Account under the Certificate Account needed to equal: (a) the dollar
amount requested, which may be subject to a MVA; less (b) any CDSC and premium
taxes which apply.
If a partial surrender is requested, unless the Certificate Owner has instructed
otherwise, amounts will be surrendered from the Transition Account first, until
it is exhausted. Amounts surrendered in excess of amounts in the Transition
Account will be surrendered from each Guaranteed Period Option. The amounts
surrendered from each of the Guaranteed Period Option will be in the same
proportion that the Certificate Owner's interest in each Guaranteed Period
Option bears to the total remaining Certificate Account Value.
The surrender value will be paid to the Certificate Owner within seven days of
receipt of proper request and proof of interest satisfactory to the Company are
received at the Home Office.
RESTRICTIONS ON SURRENDERS FOR CERTAIN QUALIFIED PLANS, TSAS AND IRAS
The surrender of Certificate Account Value attributable to contributions made
pursuant to a salary reduction agreement (within the meaning of Section
402(g)(3)(C) of the Code), or transfers from a Custodial Account described in
Section 403(b)(7) of the Code, may be executed only when the Certificate Owner
attains age 59 1/2, separates from service, dies, or becomes disabled (within
the meaning of Section 72(m)(7) of the Code).
These surrender limitations apply to the following portions of the Certificate
Account Value:
(1) salary reduction contributions to TSAs made for plan years
beginning after December 31, 1988;
(2) earnings credited to such contracts after the last plan year
beginning before January 1, 1989, on amounts attributable to
salary reduction contributions; and
(3) all amounts transferred from custodial accounts described in
Section 403(b)(7) of the Code (except that employer
contributions and earnings in such accounts as of December 31,
1988, may be withdrawn in the case of hardship).
Payments pursuant to a Qualified Domestic Relations Order will not violate any
surrender limitations included herein, but may be subject to restrictions found
in the employer's plan or the Code.
Any distribution other than the above, including exercise of a contractual ten
day look provision may result in the immediate application of taxes and
penalties under Section 72 of the Code. A premature distribution may not be
eligible for rollover treatment. To assist in preventing disqualification in the
event of a surrender during the ten day look period, the Company will agree to
transfer the proceeds to another contract or certificate agreement which meets
the requirements of Section 408 of the Code, upon proper direction by the
Certificate Owner.
SURRENDER VALUE
The surrender value is the amount that will be paid if the full Certificate
Account Value is surrendered. The surrender value at any time will be:
The Certificate Account Value, which may be subject to a MVA, less the sum of
any applicable;
1. Contingent Deferred Sales Charge ("CDSC"),
2. Premium taxes.
SUSPENSION OR DELAY OF SURRENDER
Payment of funds from the Guaranteed Period Options will be made within seven
days of receipt of both proper written application and proof of interest
satisfactory to the Company.
The Company has the right to suspend or delay the date of any surrender from the
Guaranteed Period Options for any period:
1. When the New York Stock Exchange is closed;
2. When trading on the New York Stock Exchange is restricted;
3. During any other period when the Securities and Exchange Commission, by
order, so permits for the protection of security holders.
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4. During any other period when the Securities and Exchange Commission, by
order, so permits for the protection of security holders.
Rules and regulations of the Securities and Exchange Commission may govern as to
whether certain conditions set forth above exist. Payment of funds from the
Guaranteed Period Options will be made within seven days of receipt of both
proper written application and proof of interest satisfactory to the Company.
The Company reserves the right to delay payment of a surrender of any portion of
the Certificate Account Value for up to 6 months from the date the request is
received by the Company.
CONTINGENT DEFERRED SALES CHARGE ("CDSC")
If part or all of the Certificate Account Value attributable to a Guaranteed
Period Option is surrendered or transferred prior to the Maturity Date, the
Company may assess a CDSC. The CDSC is designed to cover expenses relating to
the sale of the Certificate Agreement.
The CDSC is calculated by multiplying the applicable CDSC percentages noted
below by the amount withdrawn from each corresponding Guaranteed Period Option
(For federal income tax purposes, a full or partial withdrawal is treated as a
withdrawal of earnings first). The amount of the CDSC depends upon the
Guaranteed Period Option(s) in which you are invested and the number of
Guaranteed Period Option Years that have passed.
[ 3 YEAR GUARANTEED PERIOD OPTION
-------------------------------
Guaranteed Period Option Year 0 1 2 3
--------------------------------------------------------------
CDSC Percentage*: 5% 5% 4% 0%
4 YEAR GUARANTEED PERIOD OPTION
-------------------------------
Guaranteed Period Option Year 0 1 2 3 4
---------------------------------------------------------------------
CDSC Percentage*: 5% 5% 4% 4% 0%
5 YEAR GUARANTEED PERIOD OPTION
-------------------------------
Guaranteed Period Option Year 0 1 2 3 4 5
----------------------------------------------------------------------------
CDSC Percentage*: 5% 5% 4% 4% 3% 0%
6 YEAR GUARANTEED PERIOD OPTION
-------------------------------
Guaranteed Period Option Year 0 1 2 3 4 5 6
----------------------------------------------------------------------------------
CDSC Percentage*: 5% 5% 4% 4% 3% 3% 0%
7 YEAR GUARANTEED PERIOD OPTION
-------------------------------
Guaranteed Period Option Year 0 1 2 3 4 5 6 7
-----------------------------------------------------------------------------------------
CDSC Percentage*: 5% 5% 4% 4% 3% 3% 2% 0%
8 YEAR GUARANTEED PERIOD OPTION
-------------------------------
Guaranteed Period Option Year 0 1 2 3 4 5 6 7 8
-----------------------------------------------------------------------------------------------
CDSC Percentage*: 5% 5% 4% 4% 3% 3% 2% 2% 0%
9 YEAR GUARANTEED PERIOD OPTION
-------------------------------
Guaranteed Period Option Year 0 1 2 3 4 5 6 7 8 9
------------------------------------------------------------------------------------------------------
CDSC Percentage*: 5% 5% 4% 4% 3% 3% 2% 2% 1% 0%
10 YEAR GUARANTEED PERIOD OPTION
--------------------------------
Guaranteed Period Option Year 0 1 2 3 4 5 6 7 8 9 10
-------------------------------------------------------------------------------------------------------------
CDSC Percentage*: 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% ]
* The CDSC percentage will change to the next year's CDSC percentage on the last
day of the Guaranteed Period Option Year.
CDSC, if applicable, will be assessed against full or partial surrenders and
transfers from the Guaranteed Period Options. In addition to the application of
CDSC, amounts surrendered or transferred prior to the Maturity Date of a
Guaranteed Period Option will be subject to a MVA.
CDSC, as well as MVA, does not apply to amounts invested in the Transition
Account.
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WITHDRAWALS WITHOUT CDSC CHARGE
During each Certificate Year, the Certificate Owner may withdraw without CDSC a
total amount equal to 10% of the Certificate Account Value, less any amounts
previously withdrawn during that Certificate Year. This CDSC-free withdrawal
privilege is non-cumulative; that is, free amounts not taken during any given
Certificate Year cannot be taken as free amounts in any subsequent Certificate
Year. Withdrawals from Guaranteed Period Options are still subject to a MVA.
A CDSC will not be assessed against the withdrawal of any: (1) amounts held in
the Transition Account; (2) Death Benefit payments made upon the death of the
Annuitant prior to the Annuitization Date; (3) amounts applied to an Annuity
Payment Option two years after the Certificate Effective Date; (4) amounts
withdrawn to meet minimum distribution requirements under the Code.
In addition, a CDSC will not apply if the Certificate Owner is confined to a
Long Term Care Facility or Hospital for a continuous 180 day period commencing
while the Certificate Agreement is in-force. In the case of Joint Certificate
Ownership, the waiver will apply if either Joint Certificate Owner is confined.
Request for waiver must be received by the Company during the period of
confinement or no later than 90 days after the confinement period ends. If the
withdrawal request is received later than 90 days after the confinement period
ends, the surrender charge, if applicable, will be assessed. Written notice and
proof of confinement must be received in a form satisfactory to the Company and
be recorded at the Home Office prior to the waiver of surrender charges.
In addition, when this Certificate Agreement is exchanged for another contract
or certificate agreement issued by the Company or any of its affiliate insurance
companies, of the type and class, which the Company determines, is eligible for
such waiver, the Company will waive the CDSC on the first certificate agreement.
A CDSC may apply to the contract or certificate agreement received in the
exchange.
WITHDRAWALS WITHOUT APPLICATION OF MVA
A MVA is assessed on all withdrawals and transfers made from any Guaranteed
Period Option prior to its Maturity Date except for amounts withdrawn to pay the
Death Benefit. Amounts in the Transition Account are not subject to a MVA.
REQUIRED DISTRIBUTION PROVISIONS
--------------------------------
This Certificate Agreement is intended to be treated as an "annuity contract"
for federal income tax purposes. Accordingly, all provisions of this Certificate
Agreement shall be interpreted and administered in accordance with the
requirements of Section 72 of the Code. In no event shall any payment be
deferred beyond the time limits permitted by Section 72 of the Code. The Company
reserves the right to amend this Certificate Agreement to comply with
requirements set out in the Code and regulations and rulings thereunder, as they
may exist from time to time.
Payments will be calculated by use of the expected return multiples specified in
Tables V and VI of Section 1.72-9 of the Income Tax Regulations and calculated
in accordance with the calculation methods made available by the Company,
prescribed by the regulations and elected by the Certificate Owner.
REQUIRED DISTRIBUTION-NON-QUALIFIED CERTIFICATE AGREEMENTS
Upon the death of any Certificate Owner or Joint Certificate Owner (including an
Annuitant who becomes the Certificate Owner of the Certificate Agreement on the
Annuitization Date) (each of the foregoing "a deceased Certificate Owner"),
certain distributions for Non-Qualified Certificates are required by Section
72(s) of the Code. Notwithstanding any provision of the Certificate Agreement to
the contrary, the following distributions shall be made in accordance with such
requirements.
1. If any deceased Certificate Owner dies on or after the
Annuitization Date and before the entire interest under the
Certificate Account has been distributed, then the remaining
portion of such interest shall be distributed at least as
rapidly as under the method of distribution in effect as of
the date of such deceased Certificate Owner's death.
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2. If any deceased Certificate Owner dies prior to the
Annuitization Date, then the entire interest in the
Certificate Account (consisting of either the Death Benefit or
the Certificate Account Value reduced by certain charges as
set forth elsewhere in the Certificate Agreement) shall be
distributed within 5 years of the death of the deceased
Certificate Owner, provided however:
(a) If any portion of such interest is payable to or for
the benefit of a natural person who is a surviving
Certificate Owner, Contingent Certificate Owner,
Joint Certificate Owner, Annuitant, Contingent
Annuitant, Beneficiary, or Contingent Beneficiary as
the case may be (each a "designated beneficiary"),
such portion may, at the election of the designated
Beneficiary, be distributed over the life of such
designated beneficiary, or over a period not
extending beyond the life expectancy of such
designated beneficiary, provided that payments begin
within one year of the date of the deceased
Certificate Owner's death (or such longer period as
may be permitted by federal income tax regulations).
Life expectancy and the amount of each payment will
be determined as prescribed by federal income tax
regulations.
(b) If the designated beneficiary is the surviving spouse
of the deceased Certificate Owner, such spouse may
elect, in lieu of receiving the Death Benefit as a
lump sum, to become the Certificate Owner of this
Certificate Agreement, and the distributions required
under these Required Distribution Provisions will be
made upon the death of such spouse. If the spouse
elects to become the Certificate Owner and the Death
Benefit that would have been payable exceeds the
Certificate Account Value, then the Certificate
Account Value will be increased to be equal to the
amount that would have been paid as the Death
Benefit.
In the event that the Certificate Owner is a person that is not a natural person
(e.g., a trust or corporation), then, for purposes of these distribution
provisions, (i) the death of the Annuitant shall be treated as the death of any
Certificate Owner, (ii) any change of the Annuitant shall be treated as the
death of any Certificate Owner, and (iii) in either case the appropriate
distribution required under these distribution rules shall be made upon such
death or change, as the case may be. The Annuitant is the primary annuitant as
defined in Section 72(s)(6)(B) of the Code.
These distribution provisions shall not be applicable to any Certificate
Agreement that is not required to be subject to the provisions of Section 72(s)
of the Code by reason of Section 72(s)(5) or any other law or rule. Such
certificate agreements include, but are not limited to, any Certificate
Agreements (i) which is provided under a plan described in Section 401(a) of the
Code which includes a trust exempt from tax under Section 501 of the Code; (ii)
which is provided under a plan described in Section 403(a) of the Code; (iii)
which is described in Section 403(b) of the Code; (iv) which is an individual
retirement annuity or provided under an individual retirement account or annuity
as described in Section 408 of the Code; or (v) which is qualified funding asset
(as defined in Section 130(d) of the Code, but without regard to whether there
is a qualified assignment).
REQUIRED DISTRIBUTION-TSAS, IRAS, AND CERTIFICATE AGREEMENTS ISSUED UNDER
QUALIFIED PLANS
The entire interest of an Annuitant under a TSA, Qualified Plan, or XXX is
required to be distributed in a manner consistent with the provisions of Section
401(a)(9) of the Code, and regulations thereunder, and will be paid, as
requested by the Certificate Owner, notwithstanding anything else contained
herein, to the Certificate Owner over a period not exceeding:
A. the life of the Certificate Owner or the lives of the Certificate Owner
and the Certificate Owner's designated beneficiary; or
B. a period not extending beyond the life expectancy of the Certificate
Owner or the life expectancy of the Certificate Owner and the
Certificate Owner's designated beneficiary.
If the Certificate Owner's entire interest is to be distributed in equal or
substantially equal payments over a period described in A or B, then (1) for an
XXX, payments are required to commence not later than the first day of April
following the calendar year in which the Certificate Owner attains age 70 1/2,
and (2) if the Certificate Agreement is issued as a TSA or under a Qualified
Plan, payments are required to commence not later than the first day of April
following the later of the calendar year in which the Certificate Owner attains
the age of 70 1/2 or the Certificate Owner retires.
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If the Annuitant dies on or after the date Minimum Distributions have begun, the
remaining Certificate Account interest will continue to be distributed at least
as rapidly as under the method of distribution being used prior to the
Certificate Owner's death, unless otherwise permitted by the Code.
If the Annuitant dies prior to the commencement of required Minimum
Distributions, the interest in the Certificate Account must be distributed by
December 31 of the calendar year in which the fifth anniversary of the death
occurs unless:
A. the Annuitant names the surviving spouse as the Beneficiary and such
spouse elects to receive the Distribution in substantially equal
payments over the surviving spouse's life (or a period not exceeding
the surviving spouse's life expectancy) and commencing not later than
December 31 of the year in which the deceased Annuitant would have
attained 70 1/2. If such surviving spouse dies before distributions
begin under this provision, this section shall be applied as if the
surviving spouse were the Annuitant.
B. the Annuitant names a Beneficiary other than the surviving spouse and
such Beneficiary elects to receive a Distribution in substantially
equal payments over the Beneficiary's life (or a period not exceeding
the Beneficiary's life expectancy) commencing not later than December
31 of the year following the year in which the deceased Annuitant died.
For purposes of this requirement, any amount paid to a child of the Annuitant
will be treated as if it has been paid to the surviving spouse if the remainder
of the interest becomes payable to the surviving spouse when the child reaches
the age of majority.
If the Beneficiary under an XXX is the surviving spouse of the Annuitant, the
surviving spouse may elect to treat the Certificate Agreement as his or her own,
whether or not distributions had commenced prior to the death of the Certificate
Owner. If the spouse elects to become the Certificate Owner and the Death
Benefit that would have been payable exceeds the Certificate Account Value, then
the Certificate Account Value will be increased to be equal to the amount that
would have been paid as the death benefit. This election will be deemed to have
been made if such surviving spouse makes a regular XXX contribution to the
Certificate Account, makes a rollover to or from the Certificate Account, or
fails to elect any of the above provisions. The result of such an election is
that the surviving spouse will be considered the individual for whose benefit
the XXX is maintained.
For TSAs these provisions apply only to the portion of the Certificate Account
Value in a 403(b) TSA which accrued after December 31, 1986. Amounts accruing
prior to January 1, 1987, will be distributed in accordance with the rules in
effect prior to the Tax Reform Act of 1986.
DEATH PROVISIONS
----------------
DEATH OF CERTIFICATE OWNER
If any Certificate Owner and the Annuitant are not the same person and such
Certificate Owner dies prior to the Annuitization Date, the Death Benefit
provisions do not apply. The surviving Joint Certificate Owner, if any, becomes
the new Certificate Owner. If there is no surviving Joint Certificate Owner, the
Contingent Certificate Owner becomes the new Certificate Owner. If there is no
surviving Joint Certificate Owner or Contingent Certificate Owner, the last
surviving Certificate Owner's estate becomes the new Certificate Owner. The
entire interest in the Certificate Agreement must be distributed in accordance
with the "Required Distribution Provisions".
DEATH OF CERTIFICATE OWNER/ANNUITANT
If any Certificate Owner and the Annuitant are the same person, and such person
dies prior to the Annuitization Date, the Death Benefit shall be payable to the
surviving Joint Certificate Owner, the Beneficiary, the Contingent Beneficiary
or the last surviving Certificate Owner's estate, as specified in the
"Beneficiary" section and distributed in accordance with the "Required
Distribution Provisions".
DEATH OF ANNUITANT
If the Certificate Owner and the Annuitant are not the same person and the
Annuitant dies prior to the Annuitization Date, a Death Benefit will be payable
to the Beneficiary, the Contingent Beneficiary, or the estate of the last
surviving Certificate Owner, as specified in the "Beneficiary" section, unless
there is surviving Contingent Annuitant. In such case, the Contingent Annuitant
becomes the Annuitant.
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DEATH BENEFIT PAYMENT
The value of the Death Benefit will be determined as of the date the Company
receives in writing at the Home Office the following three items: (1) proper
proof of the Annuitant's death; (2) an election specifying distribution method;
and (3) any applicable state required form(s).
Proof of death is either:
(1) a copy of a certified death certificate;
(2) a copy of a certified decree of a court of competent jurisdiction as to the
finding of death;
(3) a written statement by a medical doctor who attended the deceased; or
(4) any other proof satisfactory to the Company.
The Beneficiary must elect a method of distribution, which complies, with the
"Distribution Provisions" of this Certificate Agreement. The Beneficiary may
elect to receive such Death Benefits in the form of: (1) a lump sum
distribution; (2) an annuity payout; or (3) any distribution that is permitted
under state and federal regulations and is acceptable by the Company. If such
election is not received by the Company within 60 days of the Annuitant's death,
the Beneficiary will be deemed to have elected a cash payment as of the last day
of the 60 day period.
Payment of the Death Benefit will be made or will commence within 30 days after
receipt of proof of death and notification of the election.
The Death Benefit is equal to the Certificate Account Value but is not subject
to a MVA.
ANNUITIZATION PROVISIONS
------------------------
Amounts allocated to a Guaranteed Period Options that are annuitized prior to
the Maturity Date are subject to application of a MVA. Annuitization is
permitted beginning two years after the Certificate Effective Date. A CDSC will
not be assessed on amounts applied to an Annuity Payment Option two years after
the Certificate Effective Date.
ANNUITY COMMENCEMENT DATE
The Annuity Commencement Date is a date chosen by the Certificate Owner and is
generally the first day of a calendar month. The date must be at least two years
after the Certificate Effective Date. If the Certificate Owner does not choose
an Annuity Commencement Date, a date will be established for the Certificate
Agreement. The Certificate Owner may change the Annuity Commencement Date prior
to the Annuitization Date at any time via a written request as outlined in the
"Change in Annuity Commencement Date and Annuity Payment Option" section.
For those Certificate Agreements issued under Qualified Plans, TSAs, or IRAs, if
the Annuity Commencement Date is not chosen by the Certificate Owner, the
Annuity Commencement Date established on the Certificate Effective Date will be
the date on which the Certificate Owner reaches 70 1/2. For Non-Qualified
Certificates, the Annuity Commencement Date established on the Certificate
Effective Date will be the date on which the Certificate Owner reaches age 90.
The Annuity Commencement Date may be changed but may not be later than the first
day of the first calendar month after the Annuitant's 90th birthday unless
otherwise agreed upon by the Certificate Owner and Company.
CHANGE OF ANNUITY COMMENCEMENT DATE AND ANNUITY PAYMENT OPTION
The Certificate Owner may change the Annuity Commencement Date and the Annuity
Payment Option prior to the Annuitization Date. Such changes must be in writing
and approved by the Company, and must comply with the "Annuity Commencement
Date" section above. A change will become effective as of the date requested,
but will not apply to any payment made or action taken by the Company before it
is recorded at Home Office.
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ANNUITIZATION
Annuitization is irrevocable once payments have begun. To annuitize the
Certificate Agreement, the Certificate Owner shall notify the Company in writing
of election of an Annuity Payment Option or any other combination of Annuity
Payment Options that may be available on the Annuitization Date.
FIXED PAYMENT ANNUITY - FIRST AND SUBSEQUENT PAYMENTS
The first payment of a Fixed Payment Annuity will be determined by applying the
portion of the total Certificate Account Value specified by the Certificate
Owner to the fixed annuity table in effect on the Annuitization Date for the
Annuity Payment Option elected. The purchase rates for any options guaranteed to
be available will be determined on a basis not less favorable than 3.0% minimum
interest and the applicable Annuity 2000 Mortality Table with Scale G, assuming
annuitization in the year 2000, and the following age adjustments.
ANNUITIZATION DATE ADJUSTED AGE
Before 2009 Actual Age Last Birthday minus 4 years
2009 - 2015 Actual Age Last Birthday minus 5 years
2016 - 2022 Actual Age Last Birthday minus 6 years
2023 - 2029 Actual Age Last Birthday minus 7 years
2030 - 2036 Actual Age Last Birthday minus 8 years
2037 - 2043 Actual Age Last Birthday minus 9 years
After 2043 Actual Age Last Birthday minus 10 years
The determination of the applicable Annuity 2000 Mortality Table and Scale G
will be based upon the type of Certificate Agreement issued: Non-Qualified, TSA,
or XXX.
The rates shown in the fixed annuity tables are calculated on this guaranteed
basis.
Subsequent fixed annuity payments will remain level unless the Annuity Payment
Option elected dictates otherwise.
FREQUENCY AND AMOUNT OF PAYMENTS
All annuity payments will be mailed within 10 working days of the scheduled
payment date. Payments will be made based on the Annuity Payment Option selected
and frequency selected. However, if the net amount to be applied to any Annuity
Payment Option at the Annuitization Date is less than [$5,000], the Company has
the right to pay such amount in one lump sum in lieu of periodic annuity
payments.
If any payment would be or becomes less than [$50], the Company has the right to
change the frequency of payments to an interval that will result in payments of
at least [$50]. In no event will the Company make payments under an annuity
option less frequently than annually.
ANNUITY PAYMENT OPTIONS
-----------------------
SELECTION OF ANNUITY PAYMENT OPTION
The Certificate Owner may select an Annuity Payment Option prior to
Annuitization. If an Annuity Payment Option is not selected, a life annuity with
a guarantee period of 240 months will be the automatic form of payment.
Options available may be limited based on the age of the Annuitant, and based on
Distribution requirements under the Code in the case of Certificate Agreements
issued as IRAs or TSAs.
The following are the annuity payment options, which are guaranteed to be
available by the Company subject to the restrictions set forth in the paragraph
above.
LIFE ANNUITY
The amount to be paid under this option will be paid during the lifetime of the
Annuitant. Payments will cease with the last payment due prior to the death of
the Annuitant.
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JOINT AND SURVIVOR ANNUITY
The amount to be paid under this option will be paid during the joint lifetimes
of the Annuitant and a designated second person. Payments will continue as long
as either is living.
LIFE ANNUITY WITH 120 OR 240 MONTHLY PAYMENTS GUARANTEED
The amount to be paid under this option will be paid during the lifetime of the
Annuitant. A guaranteed period of 120 or 240 months may be selected. If the
Annuitant dies prior to the end of this guaranteed period, the recipient chosen
by the Certificate Owner will receive the remaining guaranteed payments.
ANY OTHER OPTION
The amount and period under any other option will be determined by the Company.
Payment options not set forth in the Certificate Agreement are available only if
they are approved by both the Company and the Annuitant.
SUPPLEMENTARY AGREEMENT
A supplementary agreement will be issued within 30 days following the
Annuitization Date. The supplementary agreement will set forth the terms of the
Annuity Payment Option selected
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GUARANTEED ANNUITY TABLES FOR NON-QUALIFIED AND XXX CERTIFICATES
FIXED MONTHLY BENEFITS PER [$1000] APPLIED
JOINT AND SURVIVOR MONTHLY ANNUITY PAYMENTS
ADJUSTED AGE OF FEMALE ANNUITANT*
---------------------------------
50 55 60 65 70 80
-- -- -- -- -- --
ADJUSTED AGE OF [ 50 3.36 3.48 3.58 3.67 3.74
---------------
MALE ANNUITANT* 55 3.44 3.59 3.75 3.88 4.00
---------------
60 3.50 3.69 3.90 4.10 4.29 4.56
65 3.77 4.03 4.32 4.60 5.07
70 4.14 4.50 4.90 5.66
80 4.75 5.36 6.95 ]
LIFE ANNUITY: MONTHLY ANNUITY PAYMENTS
MALE GUARANTEED PERIOD FEMALE GUARANTEED PERIOD
ANNUITANT'S ANNUITANT'S
ADJUSTED AGE* NONE 120 MONTHS 240 MONTHS ADJUSTED AGE* NONE 120 MONTHS 240 MONTHS
---- ---- ---------- ---------- ------------- ---- ---------- ----------
[ 50 3.88 3.85 3.77 50 3.63 3.62 3.58
51 3.94 3.91 3.83 51 3.69 3.67 3.63
52 4.01 3.98 3.88 52 3.74 3.73 3.68
53 4.09 4.05 3.94 53 3.80 3.79 3.73
54 4.16 4.12 4.00 54 3.87 3.85 3.78
55 4.24 4.20 4.06 55 3.94 3.91 3.84
56 4.33 4.28 4.12 56 4.01 3.98 3.90
57 4.42 4.36 4.18 57 4.09 4.06 3.96
58 4.52 4.45 4.25 58 4.17 4.13 4.02
59 4.62 4.55 4.31 59 4.25 4.21 4.09
60 4.73 4.65 4.38 60 4.34 4.30 4.16
61 4.85 4.75 4.45 61 4.44 4.39 4.23
62 4.98 4.87 4.52 62 4.55 4.49 4.30
63 5.11 4.98 4.59 63 4.66 4.59 4.37
64 5.26 5.11 4.66 64 4.78 4.70 4.45
65 5.41 5.24 4.73 65 4.91 4.82 4.53
66 5.58 5.37 4.80 66 5.04 4.94 4.60
67 5.76 5.52 4.87 67 5.19 5.07 4.68
68 5.95 5.66 4.93 68 5.35 5.21 4.76
69 6.15 5.82 5.00 69 5.52 5.35 4.83
70 6.37 5.98 5.06 70 5.70 5.50 4.91
71 6.60 6.14 5.11 71 5.90 5.67 4.98
72 6.84 6.31 5.17 72 6.12 5.84 5.05
73 7.10 6.48 5.22 73 6.35 6.01 5.11
74 7.39 6.66 5.26 74 6.60 6.20 5.17
75 7.69 6.84 5.30 75 6.88 6.39 5.23
76 8.01 7.03 5.34 76 7.17 6.59 5.27
77 8.36 7.21 5.37 77 7.49 6.80 5.32
78 8.73 7.40 5.40 78 7.84 7.01 5.36
79 9.13 7.58 5.42 79 8.22 7.22 5.39
80 9.55 7.76 5.44 80 8.64 7.43 5.42
81 10.01 7.94 5.46 81 9.08 7.64 5.44
82 10.50 8.11 5.48 82 9.57 7.84 5.46
83 11.03 8.27 5.49 83 10.10 8.04 5.48
84 11.59 8.43 5.49 84 10.67 8.23 5.49
85 12.19 8.58 5.50 85 11.29 8.40 5.50 ]
*Adjusted Age is defined in the Fixed Payment Annuity - First and Subsequent
Payment" section of the Certificate Agreement.
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GUARANTEED ANNUITY TABLES FOR QUALIFIED PLANS
FIXED MONTHLY BENEFITS PER [$1000] APPLIED
JOINT AND SURVIVOR MONTHLY ANNUITY PAYMENTS
ADJUSTED AGE OF ANNUITANT
-------------------------
50 55 60 65 70 80
-- -- -- -- -- --
ADJUSTED AGE [ 50 3.31 3.40 3.47 3.52 3.56
------------- --
OF SURVIVOR 55 3.40 3.52 3.64 3.73 3.80
----------- --
60 3.47 3.64 3.81 3.96 4.09 4.25
--
65 3.73 3.96 4.20 4.41 4.72
--
70 4.09 4.41 4.74 5.30
--
80 4.72 5.30 6.71 ]
--
LIFE ANNUITY: MONTHLY ANNUITY PAYMENTS
GUARANTEED PERIOD
ANNUITANT'S
ADJUSTED AGE* NONE 120 MONTHS 240 MONTHS
[ 50 3.63 3.62 3.58
51 3.69 3.67 3.63
52 3.74 3.73 3.68
53 3.80 3.79 3.73
54 3.87 3.85 3.78
55 3.94 3.91 3.84
56 4.01 3.98 3.90
57 4.09 4.06 3.96
58 4.17 4.13 4.02
59 4.25 4.21 4.09
60 4.34 4.30 4.16
61 4.44 4.39 4.23
62 4.55 4.49 4.30
63 4.66 4.59 4.37
64 4.78 4.70 4.45
65 4.91 4.82 4.53
66 5.04 4.94 4.60
67 5.19 5.07 4.68
68 5.35 5.21 4.76
69 5.52 5.35 4.83
70 5.70 5.50 4.91
71 5.90 5.67 4.98
72 6.12 5.84 5.05
73 6.35 6.01 5.11
74 6.60 6.20 5.17
75 6.88 6.39 5.23
76 7.17 6.59 5.27
77 7.49 6.80 5.32
78 7.84 7.01
79 8.22 7.22
80 8.64 7.43
81 9.08 7.64
82 9.57 7.84
83 10.10 8.04
84 10.67 8.23
85 11.29 8.40 ]
*Adjusted Age is defined in the Fixed Payment Annuity - First and Subsequent
Payments sections of the Certificate Agreement.
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