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EXHIBIT B4.1
FORM OF FLEXIBLE PREMIUM VARIABLE ANNUITY CONTRACT FPIVA99
AS AMENDED BY SUBSTITUTE PAGES FOR FLEXIBLE PREMIUM VARIABLE
ANNUITY CONTRACT IVA2002
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AMERICAN UNITED LIFE INSURANCE COMPANY (R)
Xxx Xxxxxxxx Xxxxxx, X.X. Xxx 000, Xxxxxxxxxxxx, Xxxxxxx 00000-0000
NAME OF OWNER POLICY NUMBER
XXXX XXX 00000001
NAME OF ANNUITANT
XXXX XXX
AMERICAN UNITED LIFE INSURANCE COMPANY (R) (AUL) will begin an annuity on the
Annuity Date, in accordance with the Settlement provisions, if the Annuitant and
the Owner are both living. If either the Annuitant or the Owner dies before the
Annuity Date, AUL will provide benefits as described in the Death of Annuitant
or Death of Owner provisions.
10-DAY RIGHT TO EXAMINE THE POLICY
THIS POLICY MAY BE SENT BACK TO AUL OR ITS REPRESENTATIVE WITHIN 10 DAYS
AFTER IT IS RECEIVED. IN SUCH CASE, THIS POLICY WILL BE VOID FROM THE
BEGINNING. AUL WILL REFUND THE ACCOUNT VALUE WITHIN SEVEN DAYS AFTER THIS
POLICY IS RETURNED. NOTIFICATION OF THE RIGHT TO EXAMINE PERIOD WILL BE
SENT WITH THE POLICY WHEN ISSUED.
ALL BENEFITS, PAYMENTS, AND VALUES UNDER THIS CONTRACT WHICH ARE BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND MAY INCREASE OR
DECREASE. VARIABLE BENEFITS ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
______________________________________________________________________________
READ YOUR POLICY CAREFULLY
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY POLICY
PARTICIPATING
PERIOD OF COVERAGE NOT GUARANTEED
Annuity will begin on annuity date in accordance with the settlement
provisions. This policy is a legal contract between the owner and AUL.
______________________________________________________________________________
Signed for American United Life Insurance Company (R) by
/s/ Xxxxxxx X. Xxxxx
Secretary
/s/ Xxxxx X. Xxxxxx
Chairman of the Board, President, and
Chief Executive Officer
TABLE OF CONTENTS
Page No.
Policy Data Page ................................................... 3
Definitions......................................................... 4
Premium Provisions ................................................. 6
Premium .......................................................... 6
Net Purchase Payments............................................. 6
Allocation of Net Purchase Payments .............................. 6
Account Value Provisions ........................................... 6
Account Value .................................................... 6
Cash Value........................................................ 7
Net Cash Value.................................................... 7
Variable Account Provisions......................................... 7
Separate Account.................................................. 7
Investment Account................................................ 7
Variable Account Value............................................ 7
Crediting of Accumulation Units .................................. 7
Accumulation Unit Value........................................... 8
Net Investment Factor............................................. 8
Addition, Deletion and Substitution of Investments................ 8
Fixed Account Provisions ........................................... 9
Fixed Account Value .............................................. 9
MVA Fixed Accounts and Guaranteed Periods ........................ 9
Market Value Adjustment .......................................... 9
MVA Free Window and Reinvestment..................................10
MVA Adjustment Factor Formula ....................................10
Transfer Provision .................................................10
Contract Charges....................................................11
Premium Tax ......................................................11
Annual Contract Fee ..............................................11
Monthly Rider Charge..............................................11
Mortality and Expense Risk Charge ................................11
Monthly Administrative Charge ....................................11
Withdrawal Charge ................................................11
Taxes ............................................................11
Withdrawal Provisions...............................................11
Free Withdrawal Amount............................................11
Withdrawals.......................................................11
Deferral of Payments..............................................12
Death Benefit Provisions ...........................................12
Death Proceeds....................................................12
Death of the Owner................................................12
Death of the Annuitant ...........................................13
IVA2002-DP
Page 2
06-02
TABLE OF CONTENTS
Page No.
Loans...............................................................13
Interest Charged on Loans ........................................13
Loan Account......................................................13
Loan Payments ....................................................13
Ownership, Assignment and Beneficiary Provisions....................13
Ownership.........................................................13
Assignment........................................................14
Beneficiary.......................................................14
Change of Beneficiary ............................................14
Change of Annuitant...............................................14
Other Contract Provisions...........................................14
Contract..........................................................14
Incontestability..................................................14
Annual Report.....................................................15
Conformity with Laws..............................................15
Participation ....................................................15
Settlement Provisions...............................................15
Contract Proceeds ................................................15
Annuity Date......................................................15
Annuitization ....................................................15
Fixed Payment Annuity ............................................15
Variable Payment Annuity..........................................16
Annuity Units and Payment Amount ...............................16
Assumed Investment Rate ........................................16
Value of an Annuity Unit........................................16
Transfers ......................................................16
Payment Options ..................................................17
Adjusted Age......................................................17
Payee ............................................................17
Claims of Creditors...............................................17
Misstatement of Age or Sex........................................17
Evidence of Age and Sex...........................................17
Evidence that Annuitant is Alive..................................17
Settlement Option Tables ...........................................18
Page 2a
POLICY DATA PAGE
CONTRACT DATE: [Sept 01, 1997] POLICY NUMBER: [00000001]
NAME OF ANNUITANT: [Xxxx Xxx] ANNUITY DATE: [Sept 01, 2027]
NAME OF OWNER: [Xxxx Xxx]
CONTRACT SPECIFICATIONS
PLAN: [Flexible Premium Deferred Variable Annuity]
INITIAL PREMIUM: [$1,000.00]
PLANNED PREMIUM: [$1,000.00]
MODE: [Annual]
CONTRACT YEAR IN WHICH CONTRACT PROCEEDS EQUAL ACCOUNT VALUE: [5]
EXTRA CREDIT PREMIUM OPTION:[4%, 5%, 6% or 7% of premiums received in
first Contract Year]
CONTRACT MINIMUM AND MAXIMUM SPECIFICATIONS
Minimum Premium Payment Subsequent to the Initial Premium*:[$100 Monthly or
$1000 Annually]
*Must have deposited $5,000 by the end of the 5th policy year.
MINIMUM ACCOUNT VALUE REQUIRED TO CONTINUE CONTRACT:[ $2,500]
MINIMUM PREMIUM ALLOCATION TO ANY INVESTMENT ACCOUNT OR THE FIXED ACCOUNT:
1% of the premium payment. All allocations must be in whole percentages.
MAXIMUM PREMIUM ACCEPTABLE IN A CONTRACT YEAR:
[$1,000,000 in the first two Contract Years]
[$30,000 in any Contract Year thereafter for Qualified Plans]
[$15,000 in any Contract Year thereafter for Non-Qualified Plans]
CONTRACT CHARGE SPECIFICATIONS
PREMIUM TAX CHARGE: [ % varies by state]
ANNUAL CONTRACT FEE:
[$50, for Contracts with Account Value less than $20,000]
[$30, for Contract with Account Value between $20,000 and $50,000]
[$0, for Contracts with Account Value in excess of $50,000]
MONTHLY MORTALITY AND EXPENSE RISK CHARGE:
1/12 of the following percentage of the Variable Account Value:
[1.25% in all years]
MONTHLY ADMINISTRIVE CHARGE:
1/12 of the following percentage of the Variable Account Value:
[.15% in all years]
3
CONTRACT WITHDRAWAL CHARGE SPECIFICATIONS
WITHDRAWAL CHARGE AS A % OF PREMIUM PAID IN THE FIRST CONTRACT YEAR
CONTRACT WITHDRAWAL CONTRACT Withdrawal
Year Charge Year Charge
[1 8% 6 5%
2 8% 7 4%
3 8% 8 2%
4 7% 9 and 0%]
5 6% thereafter
[REVISED WITHDRAWAL CHARGE SCHEDULE FOR XXXXX XX-177]
CONTRACT WITHDRAWAL CONTRACT Withdrawal
Year Charge Year Charge
[1 8% 6 5%
2 8% 7 and 0%]
3 8% thereafter
4 7%
5 6%
MINIMUM PARTIAL WITHDRAWAL AMOUNT: [$200]
FREE WITHDRAWAL AMOUNT: [12%] of the Account Value as of the most recent
Contract Anniversary
CONTRACT LOAN SPECIFICATIONS
MINIMUM LOAN AMOUNT: [$1,000]
INTEREST RATES FOR LOANS (IF AVAILABLE):
RATE CHARGED ON LOAN BALANCES: [5%]
RATE CREDITED TO LOAN ACCOUNT: [3%]
CONTRACT FIXED AND SEPARATE ACCOUNT SPECIFICATIONS
MVA FIXED ACCOUNT GUARANTEED PERIODS: [1, 3, 5, 7, & 10 years]
MVA FREE WINDOW: [30 days prior to the end of the Guaranteed Period selected.]
MINIMUM DEPOSIT FOR ANY MVA ACCOUNT:[$1,000]
MVA ACCOUNT MINIMUM BALANCE:[$500]
GUARANTEED MINIMUM INTEREST RATE ON MVA FIXED ACCOUNTS: 3%
SEPARATE ACCOUNT: [AUL American Individual Variable Annuity Unit Trust]
MINIMUM TRANSFER AMOUNT: [$500]
TRANSFER CHARGE: [$0] for the first [12] transfers in any Policy Year
[$25] for each subsequent transfer in the Policy Year
RIDER SPECIFICATIONS
MONTHLY RIDER CHARGE (Sum of all Rider Charges):
FORM DESCRIPTION OF COVERAGE RIDER CHARGE
[LR-165 Long Term Care Facility And N/A
Terminal Illness Benefit Xxxxx
XX-162 Enhanced Death Benefit Rider [.15% of Account Value annually, deducted monthly]
LR- 175 Enhanced Earnings [.40% of Account Value annually, deducted monthly]
Benefit Rider
Earnings Benefit Cap is [250%
or $1,000,000 whichever is less].
Earnings Benefit Percentage
is [.35 (for Owners aged 0-69 on
the Contract Date) or .25 (for
Owners aged 70-75 on the
Contract Date), or 0 (for Owners
aged 76 or older on the Contract
Date)].
LR-176 Earnings Benefit Rider [.30% of Account Value annually, deducted monthly]
Earnings Benefit Cap is [250%
or $1,000,000 whichever is less].
Earnings Benefit Percentage
is [.35 (for Owners aged 0-69 on
the Contract Date) or .25 (for
Owners aged 70-75 on the
Contract Date), or 0 (for Owners
aged 76 or older on the Contract
Date)].
LR-177 Six Year Contract [.30% of Account Value annually, deducted monthly]
Withdrawal Charge RideCharge Xxxxx
XX-163 Guaranteed Minimum Annuitization [.40% of Account Value annually, deducted monthly]
Benefit Rider Interest Rate for
GMAB Benefit [7.2%]
LR-174 Extra Credit Premium Rider [ .55%, .60%, .70%, or .80%, monthly]
EXTRA CREDIT PREMIUM RECAPTURE SCHEDULE
[4% EXTRA CREDIT PREMIUM OPTION]
Contract Year Recapture %
------------- -----------
[1 100%
2 100%
3 100%
4 50%
5 50%
6 50%
7 0%]
3B
EXTRA CREDIT PREMIUM RECAPTURE SCHEDULE
[5% EXTRA CREDIT PREMIUM OPTION]
Contract Year Recapture %
------------- -----------
[1 100%
2 100%
3 80%
4 80%]
[5 60%
6 60%
7 40%
8 20%
9 0%]
EXTRA CREDIT PREMIUM RECAPTURE SCHEDULE
[6% EXTRA CREDIT PREMIUM OPTION]
Contract Year Recapture %
------------- -----------
[1 100%
2 100%
3 83.33%
4 83.33%
5 66.67%
6 50%
7 33.33%
8 16.67%
9 0%]
EXTRA CREDIT PREMIUM RECAPTURE SCHEDULE
[7% EXTRA CREDIT PREMIUM OPTION]
Contract Year Recapture %
------------- -----------
[1 100%
2 100%
3 85.71%
4 71.43%
5 57.14%
6 42.86%
7 28.57%
8 14.29%
9 0%]
GMAB ALLOWABLE INVESTMENT ACCOUNTS:
[OneAmerica Funds, Inc.
OneAmerica Investment Grade Bond Portfolio
OneAmerica Value Portfolio
OneAmerica Asset Director Portfolio
OneAmerica Money Market Portfolio
3c
American Century Variable Portfolios, Inc.
American Century VP Income & Growth Portfolio
Janus Aspen Series
Janus Flexible Income Portfolio
Janus Worldwide Growth Portfolio
Fidelity Variable Insurance Products Fund
Fidelity VIP High Income Portfolio
Fidelity VIP Equity-Income Portfolio
Fidelity VIP Growth Portfolio
Fidelity VIP Contrafund(R) Portfolio
Fidelity VIP Index 500 Portfolio
Fidelity VIP Asset Manager Portfolio
INVESCO Variable Investment Funds, Inc.
VIF-Utilities Fund
T Xxxx Price Equity Series, Inc.
T Xxxx Price Equity Income Portfolio
T Xxxx Price Mid-Cap Growth Portfolio
T Xxxx Price Fixed Income Series, Inc.
T Xxxx Price Limited-Term Bond Portfolio
Xxxxx American Fund
Xxxxx American Growth Portfolio
SAFECO Reinsurance Series Trust
SAFECO RST Equity Portfolio
SAFECO RST Growth Opportunities Portfolio
AUL Fixed Funds
Enhanced Averaging Fixed Account
Note: American United Life Insurance Company reserves the right to change the
GMAB Allowable Investment Accounts.
3d
DEFINITIONS
ACCOUNT VALUE - The Account Value is the sum of your interest in the Variable
Account, the Fixed Account, and the Loan Account.
ACCUMULATION PERIOD - The period beginning on the Contract Date and ending when
the Contract is surrendered or annuitized.
ANNUITANT - The person or persons upon whose life annuity payments depend.
ANNUITY DATE - The first day of any month in which an annuity begins. See Policy
Data Page.
CASH VALUE - The Cash Value is the Account Value plus or minus any applicable
Market Value Adjustment less any applicable Withdrawal Charge. The Net Cash
Value is the Cash Value less any outstanding loan and loan interest.
CONTRACT DATE - The date shown as the Contract Date in the Policy Data pages. It
will not be later than the date the initial premium is accepted under the
Contract, and it is the date used to determine Contract Months, Contract Years,
and Contract Anniversaries.
CONTRACT OWNER - see Owner
CONTRACT YEAR - A period beginning with one Contract Anniversary, or in the case
of the first Contract Year, beginning on the Contract Date, and ending the day
before the next Contract Anniversary.
DEATH PROCEEDS - The amount payable by reason of the death of the Annuitant or
Owner during the Accumulation Period in accordance with the terms of the Death
Benefit provisions.
FIXED ACCOUNT - An account which is part of our General Account, and is not part
of or dependent on the investment performance of the Variable Account.
FREE WITHDRAWAL AMOUNT - The amount that may be withdrawn without incurring
withdrawal charges.
GUARANTEED PERIOD - The period of time in years that the interest rate on an MVA
Fixed Account is guaranteed. Guaranteed Periods may be 1, 3, 5, 7, or 10 years
in length.
HOME OFFICE - The Variable Products Service Office at AUL's principal business
office, Xxx Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000.
INVESTMENT ACCOUNTS - One or more of the subdivisions of the Separate Account.
Each Investment Account is invested in a corresponding Portfolio of a particular
mutual fund.
4
LOAN ACCOUNT - A portion of the Account Value which is collateral
for loan amounts.
MARKET VALUE ADJUSTMENT - An upward or downward adjustment in the value of an
MVA Fixed Account if withdrawals or transfers are made prior to the expiration
of the Guaranteed Period.
MVA FIXED ACCOUNT - A subaccount of the Fixed Account, having a particular
Guaranteed Period, and subject to a Market Value Adjustment.
NET CASH VALUE - The Cash Value less outstanding loans and loan interest.
NET PURCHASE PAYMENTS - The premiums paid less any applicable premium tax.
OWNER - The person entitled to the ownership rights under the Contract and in
whose name the Contract is issued.
PARTIAL WITHDRAWAL - A withdrawal of a portion of the Account Value
POLICY DATA PAGE - The Policy Data Page or the supplemental Policy Data Page
most recently sent to You by Us.
PROPER NOTICE - Notice that is received at our Home Office in a form acceptable
to Us.
PREMIUMS - The amounts paid to AUL as considerations for the Contract.
SEPARATE ACCOUNT - The Separate Account of AUL identified on the Policy Data
Page. The Separate Account is segregated into several Investment Accounts.
VALUATION DATE - Valuation Dates are the dates on which the Investment Accounts
are valued. A Valuation Date is any date on which the New York Stock Exchange is
open for trading and we are open for business.
VALUATION PERIOD - A Valuation Period begins at the close of one Valuation Date
and ends at the close of the next succeeding Valuation Date.
VARIABLE ACCOUNT - The Account Value of this Contract which is invested in one
or more Investment Accounts.
WE - "We", "us" or "our" means AUL.
YOU - "You" or "your" means the Owner of this Contract.
5
PREMIUM PROVISIONS
PREMIUM - Premiums are payable at our home office. A receipt will be given upon
request. Premium payments are flexible and can be paid at any time and in any
amount subject to the following conditions:
1. Each premium payment must be at least the Minimum Premium Amount as stated on
the Policy Data Page.
2. All premiums received in any one Contract Year may not exceed the Maximum
Premium Amount listed on the Policy Data Page, unless a higher amount is agreed
to by us.
NET PURCHASE PAYMENTS - A Net Purchase Payment is equal to the premium paid LESS
any applicable state premium tax as shown on the Policy Data Page.
ALLOCATION OF NET PURCHASE PAYMENTS - The initial Net Purchase Payment is
allocated to the Fixed and/or Variable Accounts on the later of the Contract
Date or the date we receive the premium at our Home Office. Subsequent Net
Purchase Payments are allocated as of the end of the Valuation Period during
which we receive the premium at our Home Office.
All Net Purchase Payments are allocated to the Fixed Account (s) and the
Investment Accounts based on the percentages you have selected in the
application.
You may change the allocation of subsequent Net Purchase Payments at any time by
Proper Notice, or by telephone if written authorization is on file with us.
ACCOUNT VALUE PROVISIONS
Account Value - The Account Value is the sum of your interest in the Fixed
Account (s), the Variable Account, and the Loan Account, if available.
The Account Value on the Contract Date of this policy is the initial Net
Purchase Payment received for this policy as of the Contract Date.
The Account Value on each Valuation Date after the Contract Date will be:
1. the Account Value on the prior Valuation Date; plus
2. interest credited to amounts allocated to the Fixed Account (s) and the Loan
Account; plus
3. the positive or negative investment experience on amounts allocated to the
Variable Account, as reflected by the change in value of the Accumulation Units;
plus
4. any Net Purchase Payment for the policy allocated since the prior Valuation
Date; less
5. any Partial Withdrawal paid since the prior Valuation Date; less
6. any Mortality and Expense Charge, Annual Contract Fee, Monthly Rider Charge,
Monthly Administrative Charge, or transfer charges assessed.
6
CASH VALUE - The Cash Value of this Contract is:
1. the Account Value; plus
2. any positive or negative Market Value Adjustment on the amounts allocated to
the MVA Fixed Accounts, less
3. the Withdrawal Charge, if any, shown on the Policy Data Page.
NET CASH VALUE - The Net Cash Value is the Cash Value less any outstanding loan
and loan interest.
VARIABLE ACCOUNT PROVISIONS
SEPARATE ACCOUNT - The Separate Account is shown on the Policy Data Page. It is
a separate account established and owned by us. The assets of the Separate
Account will be used to provide values and benefits under this contract and
similar contracts. The assets of the Separate Account may not be charged with
liabilities arising from any other business in which we take part.
INVESTMENT ACCOUNTS - One or more of the subdivisions of the Separate Account.
Each Investment Account is invested in a corresponding Portfolio of a particular
mutual fund.
VARIABLE ACCOUNT VALUE - The Variable Account Value of this policy equals the
sum for all Investment Accounts of:
(a) the number of accumulation units credited to an Investment Account;
multiplied by
(b) the appropriate accumulation unit value.
CREDITING OF ACCUMULATION UNITS - We credit amounts allocated to the Investment
Accounts in the form of accumulation units. The number of accumulation units to
be credited is determined by dividing:
1. the dollar amount allocated to the particular Investment Account, by
2. the accumulation unit value for the particular Investment Account at the end
of the Valuation Period during which the allocation is made.
Accumulation units are credited when Net Purchase Payments are allocated or
amounts are transferred into an Investment Account. Accumulation units are
deducted when expense charges are assessed or when amounts are partially
withdrawn or transferred from an Investment Account.
7
ACCUMULATION UNIT VALUE - We determine the accumulation unit value for each
Investment Account on each Valuation Date. The accumulation unit value for the
Money Market account was initially set at one dollar ($1) and the value of each
of the other Investment Accounts was set at five dollars ($5) when operations
commenced. The value for any later Valuation Period is found by multiplying:
1. the net investment factor for the particular Investment Account, by
2. the accumulation unit value for the same Investment Account for the preceding
Valuation Period.
The accumulation unit value may increase or decrease from one Valuation Period
to the next.
NET INVESTMENT FACTOR - The net investment factor is used to measure the
investment performance of an Investment Account from one Valuation Period to the
next. For any Investment Account, the net investment factor for a Valuation
Period is determined by dividing (a) by (b), where:
(a) is equal to:
1. the net asset value per share of the mutual fund held in the
Investment Account determined at the end of the current Valuation
Period; plus
2. the per share amount of any dividend or capital gain distribution paid
by the mutual fund during the Valuation Period; plus
3. the per share credit or charge with respect to taxes, if any, paid or
reserved for by us during the Valuation Period that are determined by
us to be attributable to the operation of the Investment Account.
(b) is equal to:
1. the net asset value per share of the mutual fund held in the
Investment Account determined at the end of the preceding Valuation
Period; plus
2. the per share credit or charge for any taxes reserved for the
immediately preceding Valuation Period.
ADDITION, DELETION, OR SUBSTITUTION OF INVESTMENTS - We reserve the right,
subject to applicable law, to make additions to, deletions from, or
substitutions for the portfolio shares that are held by the Separate Account or
that the Separate Account may purchase. We reserve the right to eliminate the
shares of any of the eligible portfolios and to substitute shares of another
portfolio, or of another open-end, registered investment company, if the shares
of an eligible portfolio are no longer available for investment, or if in our
judgment further investment in any eligible portfolio should become
inappropriate in view of the purposes of the Separate Account. We will not
substitute any shares attributable to your interest in an Investment Account
without written notice to you and prior approval of the Securities and Exchange
Commission, to the extent required by the Investment Company Act of 1940.
8
We reserve the right to establish additional Investment Accounts, each of which
would invest in a new portfolio, or in shares of another open-end registered
investment company. We also reserve the right to eliminate existing Investment
Accounts. If deemed by us to be in the best interest of persons having voting
rights under the policies, the Separate Account may be operated as a management
company under the Investment Company Act of 1940, or it may be deregistered
under such Act in the event such registration is no longer required, or it may
be combined with other AUL Separate Accounts.
We may, by appropriate endorsement, make such changes in this Contract as may be
necessary to reflect any substitution or change.
The investment policy of the Separate Account will not be changed without the
approval of the Insurance Commissioner of the State of Indiana. If required, the
approval process is on file with the Commissioner of the state in which this
Contract is issued.
FIXED ACCOUNT PROVISIONS
FIXED ACCOUNT VALUE - The Fixed Account Value of this Contract at any time
equals:
(a) the total of all Net Purchase Payments allocated to the Fixed Account(s);
plus
(b) the total of all amounts transferred to the Fixed Account (s) from the
Variable Account or the Loan Account; plus
(c) interest credited to the Fixed Account (s); minus
(d) the total of all amounts transferred from the Fixed Account(s) to the
Variable Account or the Loan Account; minus
(e) the total of all charges deducted from the Fixed Account (s); minus
(f) the total of all Partial Withdrawals from the Fixed Account (s).
MVA FIXED ACCOUNTS AND GUARANTEED PERIODS - Amounts allocated to the Fixed
Account may be distributed among the available MVA Fixed Accounts as shown on
the Policy Data Page. All funds allocated to the MVA Fixed Accounts will earn a
guaranteed minimum interest rate as shown on the Policy Data Page. When funds
are allocated to a particular MVA Fixed Account, the declared interest rate on
such deposit will remain unchanged for the entire Guaranteed Period applicable
to that MVA Fixed Account.
MARKET VALUE ADJUSTMENT - In the event you transfer or withdraw amounts from an
MVA Fixed Account prior to the end of the Guaranteed Period and not in the MVA
Free Window, we will apply a Market Value Adjustment to the amounts so withdrawn
or transferred. The Market Value Adjustment may be positive, negative, or zero,
depending on current interest rates and the time remaining to the end of the
Guaranteed Period. In no event will the adjustment reduce the Cash Value
attributable to that MVA Fixed Account below a sum equal to the Net Purchase
Payments less prior withdrawals and charges, all accumulated at the guaranteed
minimum interest rate. In no event will the Cash Value attributable to the MVA
Fixed Accounts be less than that necessary to satisfy nonforfeiture
requirements.
9
MVA FREE WINDOW AND REINVESTMENT - During the MVA Free Window as shown on the
Policy Data Page, you may transfer or withdraw amounts from MVA Fixed Accounts
with expiring Guaranteed Periods without Market Value Adjustment. Such amounts
may be transferred to the Investment Accounts or reinvested in different MVA
Fixed Accounts for different Guaranteed Periods. If you take no such action, the
amount available at the end of the Guaranteed Period will be remain in the MVA
Fixed Account and a new Guaranteed Period will apply. We will notify you of the
interest rate declared on any such reinvestment.
MVA ADJUSTMENT FACTOR FORMULA - A formula will be used to determine the Market
Value Adjustment. Subject to the limitation described above, amounts withdrawn
or transferred from an MVA Fixed Account will be multiplied by the result of the
following formula to determine the Market Value Adjustment:
(N/12)
[ ( 1 + I ) /( 1 + J ) ]
where:
I is the current interest rate earned by the deposit.
J is the linearly interpolated interest rate applicable to new MVA Fixed
Accounts where N/12 falls between the next shortest and the next
longest in duration Guarantee Periods then currently available.
N is the number of completed months between the date of withdrawal or
transfer and the expiration of the Guaranteed Period.
TRANSFER PROVISION
Transfers - You may transfer amounts between the Fixed Account and Investment
Accounts or among Investment Accounts at any time after the Right to Examine
period. The transfer will be made as of the end of the Valuation Period during
which we receive the request.
The minimum transfer amount is shown on the Policy Data Page. The transfer must
be at least for the minimum amount, or, if less, the entire amount in the Fixed
Account or an Investment Account each time that a transfer is made. If after the
transfer, the amount remaining in any MVA account is less than the amount shown
on the Policy Data Page, we have the right to transfer the entire amount. If,
after the transfer, the amount remaining in an Investment Account is less than
$25, we have the right to transfer the entire amount. Any applicable transfer
charge shown on the Policy Data Page will be assessed. The charge will be
deducted from the account(s) from which the transfer is made on a prorata basis;
and, if those remaining account values are not sufficient, from account values
determined by us.
Transfers are made such that the Account Value on the date of transfer will not
be affected by the transfer, except for the deduction of any transfer charge.
We reserve the right to limit the number of transfers to 12 per year, or to
restrict transfers from being made on consecutive Valuation Dates.
10
If we determine that the transfers made by or on behalf of one or more Owners is
to the disadvantage of other Owners, we may restrict the rights of certain
Owners. Such restrictions would be applied in any manner reasonably designed to
prevent transfers of some Owners from being disadvantageous to other Owners. We
also reserve the right to limit the size of transfers and remaining balances, to
require a minimum time period between transfers, to limit the number and
frequency of transfers, and to discontinue telephone transfers.
CONTRACT CHARGES
PREMIUM TAX - The Premium Tax is shown on the Policy Data Page. The Net Purchase
Payment is the premium less any applicable Premium Tax.
ANNUAL CONTRACT FEE - The Annual Contract Fee is shown on the Policy Data Page.
If applicable, it will be deducted as of the Contract Anniversary from the Fixed
Account and Investment Accounts prorata based on your amounts in each account.
MONTHLY ADMINISTRATIVE CHARGE This charge will be deducted from the Investment
Accounts monthly prorata based on your amounts in each account. The amount of
this charge is shown on the Policy Data Page.
MONTHLY RIDER CHARGE - The Monthly Rider Charge is the sum of the Rider Charges
shown on the Policy Data Page.
MORTALITY AND EXPENSE RISK CHARGE - The Mortality and Expense Risk Charge is
compensation for our assumption of the mortality and expense risks. This charge
will be deducted from the Investment Accounts monthly prorata based on your
amounts in each account. The amount of this charge is shown on the Policy Data
Page.
WITHDRAWAL CHARGE - We will deduct the Withdrawal Charge from the Account Value
on the date this Contract is surrendered for cash. The Withdrawal Charge is
shown on the Policy Data Page.
TAXES - We reserve the right to deduct any taxes levied by any government entity
which, at our sole discretion, are determined to have resulted from the
establishment or maintenance or operation of the Separate Account, or from the
investment performance of the Separate Account.
WITHDRAWAL PROVISIONS
FREE WITHDRAWAL AMOUNT - The Free Withdrawal Amount for each Contract year is
shown on the Policy Data Page.
WITHDRAWALS - You may withdraw all or part of your Account Value at any time
after the end of the Right to Examine period by Proper Notice to us. The minimum
amount of any Partial Withdrawal is shown on the Policy Data Page. The
withdrawal will be made from the Investment Accounts and the Fixed Account(s) in
proportion to your amounts in each account, unless you request deduction from
specific Investment Accounts or Fixed Accounts.
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There may be a Withdrawal Charge. Whenever the total amount withdrawn in a
Contract Year exceeds the Free Withdrawal Amount, there is a Withdrawal Charge
on the excess. The charge will be a percentage of the excess as shown on the
Policy Data Page. In no event will the Withdrawal Charge exceed the limit set by
state or federal authority.
DEFERRAL OF PAYMENTS - For withdrawals from the Fixed Account, we may defer
payment for up to six months. If we do, interest on the Fixed Account will
continue to be earned at the declared rates. We will not defer any amounts
needed to pay premiums for other policies in force with us.
While payments will generally be made within 7 days of Proper Notice, we may
suspend or delay withdrawal payments or transfers from the Variable Account when
permitted under applicable federal laws, rules and regulations.
DEATH BENEFIT PROVISIONS
DEATH PROCEEDS - The Death Proceeds under this Contract are the greater of:
1.the Account Value less any outstanding loan and accrued interest, and
2.thetotal Premiums paid less an adjustment for prior withdrawals, less any
outstanding loan and accrued interest.
DEATH OF THE OWNER - If you die before the Annuity Date and the beneficiary is
your surviving spouse:
Your surviving spouse will become the new Owner. The policy will continue with
its terms unchanged and your spouse will assume all rights as its Owner. Within
120 days of your death, your spouse may elect to receive the Death Proceeds or
withdraw any of the Account Value without any early withdrawal penalty.
If you die before the Annuity Date and the beneficiary is not your surviving
spouse:
The Death Proceeds will be paid to the beneficiary in a lump sum no later than
120 days after your death, unless the beneficiary elects to have this value
applied under a settlement option. If a settlement option is elected, the
beneficiary must be named the Annuitant, and payments must begin within one year
of your death. The option must also have payments which are payable over the
life of the beneficiary or over a period which does not extend beyond the life
expectancy of the beneficiary.
Any amount payable hereunder will not be less than the minimum required by the
law of the state where this Contract is delivered.
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DEATH OF THE ANNUITANT - If the Annuitant dies before the Annuity Date and the
Annuitant is not also the Owner, then:
1. If the Owner is not an individual, the Death Proceeds will be paid to
the Owner in a lump sum no more than 120 days after the Annuitant's
death; or
2. If the Owner is an individual, a new Annuitant may be named and the
Contract will continue. If a new Annuitant is not named within 120
days of the former Annuitant's death, the Account Value, less any
Withdrawal Charge, will be paid to the Owner in a lump sum.
LOANS
Prior to the Annuity Date, Owners of Contracts qualified under section 403(b) of
the Internal Revenue Code may receive loans from the Contract. The plan and the
Internal Revenue Code may impose restrictions on loans. The minimum amount of a
new loan is shown on the Policy Data Page.
INTEREST CHARGED ON LOANS - Interest accrues daily from the date of the loan at
the rate shown on the Policy Data Page. Interest is due on each Contract
Anniversary. If you do not pay interest when due, we will add that amount to the
loan.
LOAN ACCOUNT - At the time any loan is issued, we transfer an amount equal to
the loan from the Investment Accounts and the Fixed Account(s) into a Loan
Account as collateral for the loan. On your loan request, you may specify that
the transfer is to be made from specific Investment Accounts or Fixed
Account(s). If you make no specification, this transfer is made from each
account in proportion to the Account Value in the Investment Accounts and the
Fixed Account.
The Loan Account will be credited with interest daily which will be at least
equal to the rate shown on the Policy Data Page. We may credit a higher rate.
LOAN PAYMENTS - Loans must be repaid in substantially level payments, not less
frequently than quarterly, within five years. Loans used to purchase the
principal residence of the Owner may be repaid within 15 years. If a loan
payment is not paid when due, interest will continue to accrue. If a loan
payment is not paid when due, the entire loan will be treated as a deemed
distribution, may be taxable to the borrower, and may result in a tax penalty.
OWNERSHIP, ASSIGNMENT AND BENEFICIARY PROVISIONS
OWNERSHIP - As the Owner of this Contract, you are entitled to all rights given
by its terms. You may exercise these rights without the consent of the
Annuitant, Beneficiary, or Payee. Your rights are subject to the interests of
any assignee or irrevocable beneficiary.
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ASSIGNMENT - You may assign this policy. Your rights and the rights of any
beneficiary will be secondary to the rights of the assignee. We assume no
responsibility for the validity of an assignment. Any assignment will not be
binding upon us until we receive Proper Notice. Because an assignment may be a
taxable event, you should consult competent tax advisors as to the tax
consequences resulting from such an assignment.
BENEFICIARY - The beneficiary is as named in the application unless later
changed by you. A beneficiary may only be named by the Owner if the Owner is an
individual. If the Owner is not an individual, the Owner will be the
Beneficiary.
The interests of a beneficiary who dies before the Owner will pass to any
surviving beneficiaries unless you specify otherwise. If no beneficiary survives
the Owner, the rights to Contract Proceeds will vest in your estate.
CHANGE OF BENEFICIARY - You may change the beneficiary of this Contract by
giving Proper Notice. A change will take effect on the date the notice is
signed. However, the change will not apply to any payments made or actions taken
by us before we received the notice. We reserve the right to require that this
Contract be presented for endorsement of any change. An irrevocable beneficiary
may be changed only with written consent of that beneficiary.
CHANGE OF ANNUITANT - If the Owner is an individual, the Annuitant may be
changed by Proper Notice any time prior to the Annuity Date. The Annuitant must
also be an individual and must be you, or someone chosen from among your spouse,
parents, brothers, sisters and children. Any other choice will need our consent.
If the Owner is not an individual, a change in the Annuitant will not be
permitted without our consent.
OTHER CONTRACT PROVISIONS
CONTRACT - The entire Contract consists of:
1. the basic contract;
2. riders and endorsements, if any;
3. the attached copy of your application.
This Contract is issued in consideration of the application and payment of the
initial premium.
Any change in this Contract must be approved by AUL's President, Vice President
or Secretary. No Representative is authorized to change or waive any Contract
provision.
INCONTESTABILITY - This Contract will not be contested after it has been in
force two years from the Contract Date.
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ANNUAL REPORT - At least once a year we will send you a report showing the
current Account Value, Cash Value, amount of interest credited to amounts in the
Fixed Account(s), change in value of amounts in the Variable Account, premiums
paid, loans, Partial Withdrawals, and expense charges since the prior report.
Any other information required by the Insurance Department of the state where
the application is signed will also be included in the annual report.
CONFORMITY WITH LAWS - This Contract is subject to the laws of the state where
the application is signed. We reserve the right to make any changes without your
consent which are necessary to comply with any federal or state statute, rule,
or regulation.
PARTICIPATION - While this Contract is in force prior to the Annuity Date,
dividends, if any, will be determined each year by AUL and credited to the Fixed
Account.
SETTLEMENT PROVISIONS
CONTRACT PROCEEDS - If the Contract is in the applicable Contract Year reflected
on the Policy Data Page or later and you select the life annuity or survivorship
annuity option, the Contract Proceeds are equal to the Account Value. Otherwise,
Contract Proceeds are equal to the Account Value less any applicable Withdrawal
Charge.
ANNUITY DATE - The Annuity Date is the date chosen for annuity payments to
begin. Such date will be the first day of a calendar month unless otherwise
agreed upon by us. During the Accumulation Period, you may change the Annuity
Date subject to approval by us.
ANNUITIZATION - Annuitization is irrevocable once payments have begun. When you
annuitize, you must choose:
1. an annuity payout option, and
2. either a fixed payment annuity, variable payment annuity, or any
available combination.
FIXED PAYMENT ANNUITY - The payment amount under a Fixed Payment Annuity option
will be determined by applying the selected portion of the Contract Proceeds to
the Fixed Payment Annuity table then in effect, after deducting applicable
premium taxes. The Settlement Option Tables show the guaranteed monthly payments
available for Fixed Payment Annuities. Payments under the Fixed Payment Annuity
are guaranteed as to dollar amount for the duration of the annuity period.
VARIABLE PAYMENT ANNUITY - The first payment amount under a Variable Payment
Annuity option is set at annuitization by applying the selected portion of the
Contract Proceeds to the Variable Payment Annuity table you select, after
deducting applicable premium taxes. Payments under the Variable Payment Annuity
option will vary depending on the performance of the underlying Investment
Accounts. The dollar amount of each variable payment may be higher or lower than
the previous payment.
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1. ANNUITY UNITS AND PAYMENT AMOUNT - The dollar amount of the first payment
is divided by the value of an Annuity Unit of the respective Investment
Accounts as of the Annuity Date to establish the number of Annuity Units of
each Investment Account representing each annuity payment. The number of
Annuity Units established remains fixed during the annuity payment period.
The dollar amount of subsequent annuity payments is determined by
multiplying the fixed number of Annuity Units by the Annuity Unit Value for
the Valuation Period in which the payment is due.
2. ASSUMED INVESTMENT RATE - The Assumed Investment Rate (AIR) is the
investment rate built into the Variable Payment Annuity table used to
determine your first annuity payment. You may select an AIR from 3% to 5%,
in 1% increments, when you annuitize. A higher AIR means you would receive
a higher initial payment, but subsequent payments would rise more slowly or
fall more rapidly. A lower AIR has the opposite effect. If actual
investment experience equals the AIR you choose, annuity payments will
remain level.
3. VALUE OF AN ANNUITY UNIT - The value of an Annuity Unit for an Investment
Account for any subsequent Valuation Period is determined by multiplying
the Annuity Unit Value for the immediately preceding Valuation Period by
the Net Investment Factor for the Valuation Period for which the Annuity
Unit Value is being calculated, and multiplying the result by an interest
factor to neutralize the AIR built into the Variable Payment Annuity table
which you selected.
4. TRANSFERS - During the Annuity Period, transfers between Investment
Accounts must be made in writing. We reserve the right to restrict such
transfers to one per year and to require that they take place on the
anniversary of the Annuity Date. Upon transfer, the number of Annuity Units
for each Investment Account will be redetermined as of the Valuation Date
of the transfer.
PAYMENT OPTIONS - All or any part of the proceeds paid at death or upon full
surrender of this Contract may be paid in one sum or according to one of the
following options:
1. INCOME FOR A FIXED PERIOD. Proceeds are payable in monthly installments for
a specified number of years, not to exceed 20.
2. LIFE ANNUITY. Proceeds are payable in monthly installments for as long as
the payee lives. A number of payments can be guaranteed, such as 120, or
the number of payments required to refund the proceeds applied.
3. SURVIVORSHIP ANNUITY. Proceeds are payable in monthly installments for as
long as either the first payee or surviving payee lives.
The Contract Proceeds may be paid in any other method or frequency of payment
acceptable by us.
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Contract Proceeds payable in one sum will accumulate at interest from the date
of death or surrender to the payment date at the rate of interest then paid by
us or at the rate specified by statute, whichever is greater.
ADJUSTED AGE - An adjusted age is calculated as follows:
(a) Determine a payee's actual age in years and full months on the date
payments are to begin.
(b) Subtract 1/2 months for each year the payee's year of birth exceeds
1900.
PAYEE - Payee means the person(s) designated by the Owner to receive annuity
payments. The Owner may change the payee at any time by giving us 30 days
written notice. Payees may be named regardless of whether the Owner is an
individual. If a payee dies and there is no surviving payee, the Owner must name
a new payee, or we will pay a single sum to the Owner. This single sum will be
the commuted value of any remaining guaranteed payments.
CLAIMS OF CREDITORS - Settlement option payments will be exempt from the claims
of creditors to the maximum extent permitted by law.
MISSTATEMENT OF AGE OR SEX - If the Annuitant's age or sex has been misstated,
we will adjust any amount payable under this Contract to that based on the
correct age and sex.
EVIDENCE OF AGE AND SEX - Evidence of age and sex for any Annuitant will be
required before payments begin.
EVIDENCE THAT THE ANNUITANT IS ALIVE - We may ask for evidence that the
Annuitant is still alive when any annuity payment is due.
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FIXED PAYMENT ANNUITY SETTLEMENT OPTION TABLES
Guaranteed Monthly Income Per
$1,000 of Proceeds
OPTION 1 - Income for Fixed Period
Number Monthly Number Monthly
of Years Income of Years Income
---------------------------------------------------
1 $84.47 11 $8.86
2 42.86 12 8.24
3 28.99 13 7.71
4 22.06 14 7.26
5 17.91 15 6.87
6 15.14 16 6.53
7 13.16 17 6.23
8 11.68 18 5.96
9 10.53 19 5.73
10 9.61 20 5.51
Quarterly Income is 2.993 times the monthly income and annual income is 11.839
times the monthly income.
OPTION 2 - LIFE ANNUITY
The amount of income is based on the adjusted age of the annuitant on the date
of the first payment.
Adjusted Number of Guaranteed Payments
Adjusted Number of Guaranteed Payments Adjusted Number of Guaranteed Payments
Age ----------------------------- Age -----------------------------
None 120 Refund* None 120 Refund*
55 $4.14 $4.11 $4.01 63 $4.90 $4.82 $4.63
56 4.21 4.19 4.07 64 5.02 4.93 4.72
57 4.30 4.26 4.14 65 5.15 5.05 4.83
58 4.38 4.34 4.21 66 5.30 5.18 4.93
59 4.47 4.43 4.29 67 5.45 5.31 5.05
60 4.57 4.52 4.37 68 5.61 5.45 5.17
61 4.67 4.61 4.45 69 5.79 5.60 5.30
62 4.78 4.72 4.54 70 5.98 5.76 5.43
*The sum of all guaranteed payments will equal the amount applied under this option.
OPTION 3 - SURVIVORSHIP ANNUITY
The amount of income is based on the adjusted age of each of the annuitants on
the date of the first payment.
50% to Survivor 100% to Survivor
120 Guaranteed Payments 120 Guaranteed Payments
Payee #0 Xxxxx #0 Xxx Xxxxx #0 Xxxxx #0 Age
Age ------------ Age ------------
50 55 60 65 70 50 55 60 65 70
------------------------------------------ -------------------------------------------
50 $3.80 $3.95 $4.13 $4.34 $4.58 50 $3.46 $3.56 $3.64 $3.69 $3.74
55 3.95 4.11 4.31 4.53 4.80 55 3.56 3.69 3.82 3.92 4.00
60 4.13 4.31 4.52 4.77 5.06 60 3.64 3.82 4.00 4.17 4.30
65 4.34 4.53 4.77 5.05 5.38 65 3.69 3.92 4.17 4.41 4.63
70 4.58 4.80 5.06 5.38 5.76 70 3.74 4.00 4.30 4.63 4.97
Income for other combinations of ages will be furnished on request.
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NOTICE OF ANNUAL MEETING
By-law, Art. II, Sec. 2: The regular annual meeting of the members of American
United Mutual Insurance Holding Company shall be held at its principal place of
business on the third Thursday in February each year at ten o'clock A.M. local
time or at such other location, place or time as may be designated by the Board
of Directors. The election of directors shall be held at the annual meeting.
American United Life Insurance Company (R)
Indianapolis, Indiana
______________________________________________________________________________
READ YOUR POLICY CAREFULLY
FLEXIBLE PREMIUM ADJUSTABLE VARIABLE ANNUITY
PARTICIPATING
PERIOD OF COVERAGE NOT GUARANTEED
THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND AUL.
