AETNA LIFE INSURANCE AND ANNUITY COMPANY
ENDORSEMENT
This Contract, and the Certificate, if applicable, are endorsed as follows.
Subject to the provisions below, loans are available under the Contract.
During the Accumulation Phase, loans are available (1) as permitted under
applicable law, and (2) subject to our standard terms and conditions.
THE LOAN ACCOUNT
For each loan, an amount equal to the loan amount is transferred from the
Investment Options in which the Individual Account is invested and is credited
to the loan account. [The loan account is then credited with interest at a rate
which is not less than the loan interest rate (which is the rate we charge on a
loan as defined below), less [3.0%], on an annual basis.]
LOAN EFFECTIVE DATE
The loan effective date is the date we receive a loan request in Good Order at
our Home Office. [For loan requests received in Good Order on the 29th, 30th, or
31st day of the month, however, the loan effective date is the first business
day of the following month.]
AMOUNT AVAILABLE FOR LOAN
The amount available for loan is limited to the Individual Account value
attributable to employee contributions, plus any additional amounts allowed by
the Plan as determined by the Contract Holder (the vested Individual Account
value).
[For plans subject to ERISA, the minimum loan amount is $1,000; for plans not
subject to ERISA, the minimum loan amount is $1,000 for non-residential loans
and $2,500 for residential loans.]
The maximum loan amount is the lesser of:
(1) Fifty percent of the vested Individual Account value, including
the amount, if any, in the loan account, reduced by the amount
of any outstanding loan balance on the date we receive a loan
request in Good Order at our Home Office; or
(2) Fifty thousand dollars reduced by the highest outstanding loan
balance for the preceding 12 months.
The total amount of all outstanding loans cannot exceed $50,000.
Amounts available from some Investment Options may be subject to the following
limitations:
(1) Amounts used to satisfy loan requests will be withdrawn
proportionately from the investment options under the Individual
Account unless otherwise specified by the Participant. However,
amounts may not be withdrawn from [the Guaranteed Accumulation
Account (GAA) or from] the Aetna GET fund (GET Fund). Amounts
withdrawn do not share in the investment experience of the
options from which they were withdrawn; and
[(2) If the loan amount requested exceeds the amount held in the
Individual Account (excluding amounts held in GAA or GET Fund),
funds must be transferred from GAA and/or GET Fund to one of the
other investment options in order to be available for loan.
Requests for transfers of funds from GAA or GET Fund will be
honored only if the value in the other investment options is
insufficient to satisfy the loan request. Funds transferred from
GAA prior to the end of a Guaranteed Term will be subject to a
Market Value Adjustment, which may be positive or negative. The
amount available for transfer from GET Fund may be more or less
than the amount initially deposited into GET Fund.]
To obtain the loan amount requested, these limitations may require transfer of
funds among Investment Options. [A market value adjustment may apply to amounts
transferred from the Guaranteed Accumulation Account.] The amount, if any, from
the Fixed Plus Account may be subject to a default charge if the Participant
defaults on the loan.
E-MMLOAN-01(NY)
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LOAN INTEREST RATE
FOR PLANS SUBJECT TO ERISA: We set a loan interest rate on the first calendar
day of each month. The rate will be equal to the Monthly Average Corporates
(which is Moody's Corporate Bond Yield Average-Monthly Average Corporates
published by Xxxxx'x Investor Service or its successor, or a substantially
similar average that may be allowed by law or regulation) for the calendar month
beginning two months before the loan interest rate is effective. The initial
rate for each loan is the rate for the calendar month in which the Loan
Effective Date occurs. The initial interest rate is effective for not less than
three months and not more than one year. For each subsequent period, the
interest rate is adjusted if the new rate is at least 0.5% higher or lower than
the current rate. We provide reasonable notification in writing of any change to
the loan interest rate. For Contracts issued to fund Code Section 403(b)(1)
programs where payments are derived solely from salary reduction agreements, or
other retirement programs where benefits under the Contract are funded solely by
Participant Contributions, the loan interest rate credited will be equal to or
greater than the minimum guaranteed interest rate.
FOR PLANS NOT SUBJECT TO ERISA: The loan interest rate will be not greater than
8% on an annual basis. For Contracts issued to fund Code Section 403(b)(1)
programs where payments are derived solely from salary reduction agreements, or
other retirement programs where benefits under the Contract are funded solely by
Participant Contributions, the loan interest rate credited will be equal to or
greater than the minimum guaranteed interest rate.
LOAN REPAYMENT
A loan may be repaid in full at any time, or repaid as follows:
(1) Principal and interest must be amortized and repaid quarterly.
The repayment period is selected by the Participant. The
repayment period for non-residential loans is from one (1) to
five (5) years. For residential loans, the repayment period is
from one (1) to (20) years. Once a repayment period has been
selected, it cannot be extended; however, a loan may be repaid
in full at any time;
(2) The first quarterly payment will be due three months after the
loan effective date, with subsequent quarterly payments due in
three month intervals. [Payments not received by our Home Office
within 31 days following the due date will be considered in
default]; and
(3) The principal portion of each loan payment will be allocated
among the same investment options and in the same proportion [as
when the loan was taken]. If Aetna receives a payment that is in
excess of the amount due, the excess will be applied to the
principal portion of the outstanding loan. Any payment that is
less than the amount due will be returned to the Participant.
PARTIAL WITHDRAWAL(S) WHILE A LOAN IS OUTSTANDING
While a loan is outstanding, the amount available for partial withdrawal is
equal to the vested Individual Account value, including the loan account, minus
110% of the outstanding loan balance.
FULL WITHDRAWAL WHILE A LOAN IS OUTSTANDING
When a full withdrawal is requested while a loan is outstanding, one of the
following occurs:
(1) If the amount of the vested Individual Account value available
for distribution is sufficient to repay (a) the outstanding loan
balance, plus (b) any applicable Fixed Plus Account default
charge, and (c) any applicable withdrawal charge due on the
outstanding loan balance, that amount (the total of a, b, and
c,), minus the loan account balance, is deducted from the vested
Individual Account value and the loan is canceled. The
outstanding loan balance, if not previously reported, will be
reported to the Internal Revenue Service as a distribution.
(2) If the amount of the vested Individual Account value available
for distribution is not sufficient to repay (a) the outstanding
loan balance, plus (b) any applicable Fixed Plus Account default
charge, and (c) any applicable withdrawal charge due on the
outstanding loan balance, the withdrawal cannot be made until
the loan is repaid in full.
ELECTING AN ANNUITY OPTION WHILE A LOAN IS OUTSTANDING
Before all or any portion of the vested Individual Account value is used to
purchase Annuity payments, the Participant may repay any outstanding loan
balance, or the vested Individual Account value is adjusted to cancel the loan
as described in "Full Withdrawal While a Loan Is Outstanding" above.
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DEATH OF THE PARTICIPANT WHILE A LOAN IS OUTSTANDING
If a death benefit claim is submitted for an Individual Account with an
outstanding loan, the vested Individual Account value, including the amount of
the loan account, is reduced by the amount of the outstanding loan balance
before the death benefit amount is determined.
[LOAN DEFAULT: If we do not receive a loan payment when it is due, the defaulted
payment is treated as follows:
(1) If the amount of the vested Individual Account value available
for distribution is sufficient to repay (a) the defaulted
payment, plus (b) any applicable Fixed Plus Account default
charge, and (c) any withdrawal charge due on the defaulted
payment, then that amount (the total of a, b, and c) is deducted
from the vested Individual Account value. The amount of the
defaulted payment is reported to the Internal Revenue Service as
a distribution.
(2) If the amount of the vested Individual Account value available
for distribution is not sufficient to repay (a) the defaulted
payment, plus (b) any applicable Fixed Plus Account default
charge, and (c) any withdrawal charge due on the defaulted
payment, until such time that the amount due (the total of a, b
and c) can be distributed, the loan account continues to earn
interest, and interest is charged on the defaulted payment. The
amount of the defaulted payment is reported to the Internal
Revenue Service as a deemed distribution. At the time the amount
due can be distributed, it is withdrawn from the vested
Individual Account value.]
Endorsed and made part of this Contract, and the Certificate, if applicable, on
the Effective Date of the Contract and Certificate.
/s/Xxxxxx X. XxXxxxxxx
President
Aetna Life Insurance and Annuity Company
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