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Exhibit (4)(a)
PROVIDENTMUTUAL LIFE AND ANNUITY COMPANY OF AMERICA
A STOCK LIFE INSURANCE COMPANY
NEWARK, DELAWARE
ANNUITANT CONTRACT DATE
CONTRACT NUMBER MATURITY DATE
In this Contract, Providentmutual Life and Annuity Company of America will be
referred to as "we," "us" or "our." The Owner ("you," "your") is the Annuitant,
unless another person is named in the application or later becomes the Owner as
allowed by this Contract.
We agree to pay the proceeds as described in this Contract, subject to its
provisions.
ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, INCLUDING ANY DEATH
BENEFIT THAT MAY BE PAYABLE, WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE
VARIABLE ACCOUNT MAY INCREASE OR DECREASE DAILY, DEPENDING UPON THE INVESTMENT
PERFORMANCE OF THE FUND PORTFOLIOS IN WHICH YOUR CHOSEN SUBACCOUNTS ARE
INVESTED, AND ARE NOT GUARANTEED AS TO FIXED DOLLAR AMOUNTS. NO MINIMUM CONTRACT
ACCOUNT VALUE IS GUARANTEED EXCEPT FOR ANY AMOUNTS IN THE GUARANTEED ACCOUNT.
PLEASE READ THIS CONTRACT CAREFULLY
It is a legal contract between you and us.
NOTICE OF 10 DAY RIGHT TO EXAMINE CONTRACT
PLEASE EXAMINE THIS CONTRACT CLOSELY. IF FOR ANY REASON YOU ARE NOT SATISFIED
WITH THIS CONTRACT, YOU MAY RETURN IT TO US FOR CANCELLATION BY DELIVERING OR
MAILING IT TO:
1. OUR SERVICE CENTER, 000 XXXXXXXXXXX XXXXX, XXXXXX, XXXXXXXX
00000;
2. ONE OF OUR AGENCY OFFICES; OR
3. THE AGENT THROUGH WHOM IT WAS PURCHASED.
THIS CONTRACT MUST BE RETURNED TO US NO LATER THAN 10 DAYS AFTER YOU FIRST
RECEIVE IT. UPON SUCH DELIVERY OR MAILING, THIS CONTRACT WILL BE VOID AS OF THE
DATE WE RECEIVE YOUR CONTRACT AND REQUEST. WE WILL RETURN THE CONTRACT ACCOUNT
VALUE PLUS ANY CHARGES WE DEDUCTED, EXCEPT THE MORTALITY AND EXPENSE RISK
CHARGE, THE ADMINISTRATION CHARGE, AND THE ADVISORY FEES AND EXPENSES OF THE
FUND.
Signed for the Company in Newark, Delaware
----------------------------- -----------------------------------
Secretary President
FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
Flexible premiums as stated in the Premiums
Provision. Contract values are variable, except for amounts
in the Guaranteed Account.
After the Maturity Date, Payment Options are on a
guaranteed basis. Death benefit payable upon death of
Annuitant before Maturity Date.
Non-participating -- Contract does not pay dividends.
FOR INQUIRIES, INFORMATION AND RESOLUTION OF COMPLAINTS CALL: 0-000-000-0000
2
A GUIDE TO THE PROVISIONS OF THIS CONTRACT
Page
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CONTRACT SCHEDULE................................................................................................ 3
DEFINITIONS...................................................................................................... 7
GENERAL PROVISIONS............................................................................................... 8
PREMIUMS......................................................................................................... 10
THE VARIABLE ACCOUNT............................................................................................. 10
DESCRIPTION OF SUBACCOUNTS....................................................................................... 11
THE GUARANTEED ACCOUNT........................................................................................... 14
ALLOCATIONS AND TRANSFERS........................................................................................ 14
CONTRACT VALUES.................................................................................................. 15
PAYMENT OF PROCEEDS.............................................................................................. 18
PAYMENT OPTIONS.................................................................................................. 21
A COPY OF THE APPLICATION AND ANY RIDERS ARE INCLUDED AFTER PAGE 24.
ENDORSEMENTS
(To be made by the Company only.)
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CONTRACT SCHEDULE
ANNUITANT XXXX XXX JUNE 1, 1994 CONTRACT DATE
CONTRACT NUMBER 123,456 JUNE 1, 2024 MATURITY DATE
Initial Premium Payment: $ 2,000
Minimum Additional Premium Amount: $ 100
[$ 50 for Qualified Contracts]
Planned Periodic Premium: $ 100 monthly
Minimum Withdrawal Amount: $ 500
Minimum Transfer Amount: $ 500
Minimum Remaining Cash Surrender Value
After Withdrawal: $ 2,000
CHARGES AND FEES
Annual Mortality and Expense Risk Charge: 1.25%
Administration Charge: Current: 0.15% of assets
Maximum: 0.25% of assets
Annual Administration Fee: Current: $30.00
Maximum: $40.00
CONTRACT YEAR CHARGE
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Surrender Charge:* 1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
8 0%
* For the first Contract Year, applies to amount withdrawn or
surrendered; after the first Contract Year, applies to amount withdrawn
or surrendered as described under the Surrender Charge provision. In no
event will the Surrender Charge exceed 8.5% of the total premiums
received under the Contract. CERTAIN RESTRICTIONS APPLY. (SEE
"SURRENDER CHARGE" ON PAGE 16.)
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THIS PAGE INTENTIONALLY LEFT BLANK
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CONTRACT SCHEDULE
(CONTINUED)
ALLOCATION OPTIONS
SCHEDULE A-1
THE MARKET STREET FUND, INC.:
Providentmutual Variable Growth Subaccount
Providentmutual Variable Aggressive Growth Subaccount
Providentmutual Variable Bond Subaccount
Providentmutual Variable Managed Subaccount
Providentmutual Variable Money Market Subaccount
Providentmutual Variable International Subaccount
THE XXXXX AMERICAN FUND:
Xxxxx American Small Capitalization Subaccount
VARIABLE INSURANCE PRODUCTS FUND (VIP) OR THE
VARIABLE INSURANCE PRODUCTS FUND II (VIP II)
Fidelity Asset Manager Subaccount (VIP II)
Fidelity Contractual Subaccount (VIP II)
Fidelity Equity Income Subaccount (VIP)
Fidelity Growth Subaccount (VIP)
Fidelity High Income Subaccount (VIP)
Fidelity Index 500 Subaccount (VIP II)
Fidelity Investment Grade Bond Subaccount (VIP II)
Fidelity Overseas Subaccount (VIP)
XXXXXXXXX & XXXXXX ADVISERS MANAGEMENT TRUST:
Xxxxxxxxx & Xxxxxx Balanced Subaccount
Xxxxxxxxx & Xxxxxx Growth Subaccount
Xxxxxxxxx & Xxxxxx Limited Maturity Bond Subaccount
TCI PORTFOLIOS, INC.:
TCI Growth Subaccount
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CONTRACT SCHEDULE
(CONTINUED)
XXX XXX WORLDWIDE INSURANCE TRUST:
Xxx Xxx Gold and Natural Resources Subaccount
Xxx Xxx Worldwide Bond Subaccount
Xxx Xxx Worldwide Emerging Markets Subaccount
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DEFINITIONS
ANNUITANT. The person whose life determines the annuity benefits payable under
this Contract and whose death determines the death benefit.
BENEFICIARY. The person to whom we will pay the proceeds payable on your death
or on the death of the Annuitant. If the Contract has Joint Owners, the
surviving Joint Owner will be the designated beneficiary.
CASH SURRENDER VALUE. The Contract Account Value less any applicable surrender
charge.
CONTRACT ACCOUNT VALUE. The sum of the Variable Account Value and the Guaranteed
Account Value.
CONTRACT YEARS, MONTHS, ANNIVERSARIES. Are measured from the Contract Date shown
in the Contract Schedule.
GUARANTEED ACCOUNT. This account is part of our General Account and is not part
of nor dependent upon the investment performance of the Variable Account.
JOINT OWNERS. Joint Owners must be husband and wife as of the Contract Date.
MATURITY DATE. The date when the Contract Account Value will be applied under a
Payment Option, unless you have elected to receive a lump sum payment of the
Cash Surrender Value. The latest Maturity Date is the later of: the Contract
Anniversary nearest Annuitant's age 85; or 10 years after the Contract Date.
NET PREMIUM. The premium paid less any premium tax levied for the year the
premium is paid.
OWNER. The person entitled to exercise all rights and privileges provided in
this Contract.
SERVICE CENTER. Our Service Center at 000 Xxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxx
00000.
SUBACCOUNT. The Variable Account has Subaccounts; the assets of each Subaccount
are invested in a corresponding portfolio of the designated fund listed in the
Contract Schedule.
VALUATION DAY. Each day on which valuation of the assets of a Subaccount is
required by applicable law.
VALUATION PERIOD. The period that starts at the close of business on one
Valuation Day and ends at the close of business on the next succeeding Valuation
Day.
VARIABLE ACCOUNT. Providentmutual Variable Annuity Separate Account which is not
part of our General Account. The Variable Account has Subaccounts each of which
is invested
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in a corresponding portfolio of the designated fund listed in the Contract
Schedule. Other Subaccounts may be established in the future and will invest in
specified portfolios of designated funds.
WRITTEN NOTICE. A written request or notice in a form satisfactory to us which
is signed by you and received at our Service Center.
GENERAL PROVISIONS
THE CONTRACT. We have issued this Contract in consideration of your application
and your payment of the Initial Premium. The entire contract is made up of this
Contract and the attached copy of the application. The statements made in the
application are, in the absence of fraud, deemed representations and not
warranties. We cannot use any statement in defense to a claim or to void this
Contract unless it is contained in the attached application. Only our President,
a Vice President, or Secretary may modify this Contract or waive any of our
rights or requirements. No agent may bind us by making any promise not contained
in this Contract.
INCONTESTABILITY. We will not contest this Contract after it has been in force
during the Annuitant's lifetime for two years from the Contract Date.
OWNER. During the Annuitant's lifetime and before the Maturity Date, you have
all the rights and privileges granted by this Contract. During the Annuitant's
lifetime and before the Maturity Date, you may name a new Owner by giving us
Written Notice. If you are not the Annuitant and you die before the Maturity
Date and before the Annuitant, ownership will pass:
1. to your designated beneficiary, if any (as defined in
"Proceeds On Death of Owner"); otherwise
2. to your estate.
BENEFICIARY. We will pay the Beneficiary any proceeds payable on your death or
the death of the Annuitant. During the Annuitant's lifetime and before the
Maturity Date, you may change the named Beneficiary by giving us Written Notice
of such change.
We will pay the proceeds under the beneficiary designation in effect at
the date of death. The proceeds will be paid to the surviving Beneficiaries
equally unless you have indicated otherwise. If no Beneficiary is living when
the Annuitant dies, or if none has been named, the proceeds will be paid to you
or to your estate. If no Beneficiary is living when you die, any proceeds will
be paid to your estate.
CHANGE OF OWNER OR BENEFICIARY. Written Notice must be signed by you, dated, and
of a form and content acceptable to us. Your Written Notice will not be
effective until we receive and file it at our Service Center. However, the
change provided in your Written Notice will then be effective as of the date you
signed such notice:
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1. subject to any payments made or other action we take before we
receive and file your Written Notice; and
2. whether or not you or the Annuitant are alive when we receive
and file your Written Notice.
ASSIGNMENT. You may assign this Contract or an interest in it at any time before
the Maturity Date during the lifetime of the Annuitant. An assignment must be in
a Written Notice acceptable to us. It will not be binding on us until we receive
and file it at our Service Center. We are not responsible for the validity or
sufficiency of any assignment. Your rights and the rights of any Beneficiary
will be affected by an assignment.
MISSTATEMENT OF AGE OR SEX. If the age or sex of the Annuitant has been
misstated, we will pay the amount which the proceeds would have purchased at the
correct age and sex.
If we make an overpayment because of an error in age or sex, the
overpayment plus interest at 3% compounded annually will be a debt against this
Contract. If the debt is not repaid, future payments will be reduced
accordingly.
If we make an underpayment because of an error in age or sex, any
annuity payments will be recalculated at the correct age and sex, and future
payments will be adjusted. The underpayment with interest at 3% compounded
annually will be paid in a single sum.
PERIODIC REPORTS. We will mail you a report showing the following items:
1. the number of units credited to this Contract and the dollar
value of a unit;
2. the Contract Account Value and Cash Surrender Value;
3. any premiums paid, withdrawals, and charges made since the
last report; and
4. any other information required by law.
The information in the report will be as of a date not more than two
months before the date of the mailing. We will mail the report to you:
1. at least annually, or more often as required by law; and
2. to your last address known to us.
MODIFICATION. Upon notice to you, we may modify the Contract, but only if such
modification:
1. is necessary to make the Contract or the Variable Account
comply with any law or regulation issued by a governmental
agency to which we are subject; or
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2. is necessary to assure continued qualification of the Contract
under the Internal Revenue Code or other federal or state laws
relating to retirement annuities or variable annuity
contracts; or
3. is necessary to reflect a change in the operation of the
Variable Account; or
4. provides additional variable account and/or fixed accumulation
options.
In the event of any such modification, we may make appropriate
endorsement to the Contract.
NON-PARTICIPATION. This Contract is non-participating and does not share in our
profits or surplus earnings.
PROTECTION OF PROCEEDS. No Beneficiary may commute, encumber or alienate any
payments under this Contract before they are due. No annuity payments shall be
subject to the debts, contract or engagements of any Beneficiary nor to any
judicial process to levy upon or attach the same for payment of such debts.
CREDITOR CLAIMS. To the extent permitted by applicable laws, no right or benefit
under this Contract shall be subject to claims of creditors, except as may be
provided by an Assignment.
DISCHARGE OF LIABILITY. We shall be discharged from all liability to the extent
of any withdrawal, surrender or death benefit paid. Any payments made by us
under any Payment Option shall discharge our liability to the extent of each
such payment.
PREMIUMS
INITIAL PREMIUM. The Initial Premium is shown in the Contract Schedule, and is
payable on or before the Contract Date.
ADDITIONAL PREMIUMS. You may make additional premium payments at any time during
the Annuitant's lifetime and before the Maturity Date. The amount of additional
premium payments may vary. The minimum additional premium that we will accept is
shown in the Contract Schedule.
NET PREMIUM. The Net Premium is the premium paid less any premium tax levied on
us relating to this Contract for the year the premium is paid.
THE VARIABLE ACCOUNT
VARIABLE ACCOUNT. We have established the Providentmutual Variable Annuity
Separate Account (the "Variable Account"). The Variable Account is registered
with the Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940. The Variable Account is also subject to the laws
of the State of Delaware.
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DESCRIPTION OF SUBACCOUNTS
Although we own the assets in the Variable Account, these assets are
held separately from our other assets and are not part of our General Account.
The assets in the Variable Account are used to support the operation of and
provide the variable values and benefits for this Contract and similar
Contracts.
The portion of the assets of the Variable Account equal to the reserves
and other contract liabilities or the Variable Account will not be charged with
liabilities that arise from any other business that we conduct. We have the
right to transfer to our General Account any assets of the Variable Account
which are in excess of such reserves and other liabilities.
SUBACCOUNTS. The Variable Account currently consists of the Subaccounts listed
in the Contract Schedule and in the current prospectus you received. Each
subaccount invests in shares of a corresponding series of the designated
investment fund, as shown in the Contract Schedule (referred to as the "Fund").
Shares of a series are purchased and redeemed for a Subaccount at their net
asset value. Any amounts of income, dividends and gains distributed from the
shares of a series will be reinvested in additional shares of that series at its
net asset value. The Fund prospectus you received defines the net asset value
and describes each portfolio of the Fund.
The dollar amounts of values and benefits of this Contract provided by
the Variable Account depend on the investment performance of the portfolios of
the Fund in which your selected Subaccounts are invested. We do not guarantee
the investment performance of the portfolios. You bear the full investment risk
for amounts applied to the selected Subaccounts.
VARIABLE ACCOUNT VALUE. This Contract's Variable Account Value for any Valuation
Period before the Maturity Date is determined by multiplying:
1. the amount of units credited to this Contract for each
Subaccount as of the end of the Valuation Period; by
2. the current unit value for each Subaccount.
The sum of these amounts equals the Variable Account Value.
UNITS. We credit Net Premiums in the form of units. We will credit units for the
Initial Net Premium on the Contract Date. The number of units of each Subaccount
credited under this contract is determined by dividing:
1. the Net Premium allocated to that Subaccount; by
2. the unit value for that Subaccount at the end of the Valuation
Period during which we receive and accept the premium at our
Service Center.
We will adjust the units for any transfers in or out of a Subaccount.
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We will cancel the appropriate number of units based on the unit value
at the end of the Valuation Period in which any of the following events occurs:
1. the Annual Administration Fee shown in the Contract Schedule
is assessed;
2. the date we receive and file your Written Notice for a
withdrawal or a cash surrender;
3. the Maturity Date occurs;
4. the date we receive due proof of the Annuitant's death; or
5. the date the Contract Account Value is distributed upon your
death.
UNIT VALUE. The unit value for each Subaccount for its first Valuation Period is
set at $500. The unit value for each subsequent Valuation Period is determined
by multiplying:
1. the unit value at the end of the immediately preceding
Valuation Period; by
2. the net investment factor for the Valuation Period for which
the value is being determined.
The unit value for a Valuation Period applies to each day in that
period. The unit value may increase or decrease from one Valuation Period to the
next.
NET INVESTMENT FACTOR. The Net Investment Factor is an index that measures the
investment performance of a Subaccount from one Valuation Period to the next.
Each Subaccount has a Net Investment Factor for each Valuation Period, which may
be greater than or less than one.
The Net Investment Factor for each Subaccount for a Valuation Period
equals 1 plus the fraction obtained by dividing (a) by (b) where:
(a) is the net result of:
1. the investment income, dividends and capital gains,
realized or unrealized, credited during the current
Valuation Period; plus
2. any amount credited or released from reserves for
taxes attributable to the operation of the
Subaccount; minus
3. the capital losses, realized or unrealized, charged
during the current Valuation Period; minus
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4. any amount charged for taxes or any amount we set
aside during the Valuation Period as a reserve for
taxes attributable to the operation or maintenance of
the Subaccount; minus
5. the amount charged for mortality and expense risk for
that Valuation Period as shown in the Contract
Schedule; minus
6. the amount charged for administration for that
Valuation Period, as shown in the Contract Schedule;
and
(b) is the value of the assets in the Subaccount at the end of the
preceding Valuation Period, adjusted for allocations and
transfers to and withdrawals and transfers from the Subaccount
occurring during that preceding Valuation Period.
RESERVED RIGHTS. When permitted by law, we reserve the right to:
1. create new variable accounts;
2. combine variable accounts, including the Variable Account;
3. remove, combine or add Subaccounts and make the new
Subaccounts available to contractowners at our discretion;
4. substitute shares of another portfolio of the Fund or shares
of another investment company for those of the Fund;
5. add new portfolios to the Fund;
6. deregister the Variable Account under the Investment Company
Act of 1940 if registration is no longer required;
7. make any changes required by the Investment Company Act of
1940; and
8. operate the Variable Account as a managed investment company
under the Investment Company Act of 1940 or any other form
permitted by law.
If a change is made, we will send you a revised prospectus and any
notice required by law.
CHANGE IN INVESTMENT POLICY. The investment policy of a Subaccount may not be
changed unless:
1. the change is approved, if required, by the Delaware Insurance
Department; and
2. a statement of such approval is filed, if required, with the
insurance department of the state in which this Contract is
delivered.
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THE GUARANTEED ACCOUNT
GUARANTEED ACCOUNT. Amounts in the Guaranteed Account are part of our General
Account. The Guaranteed Account is not part of and does not depend on the
investment performance of the Variable Account.
We credit interest to amounts in the Guaranteed Account at rates we
determine. We guarantee that the effective annual interest rate will not be less
than 3%. We may credit a higher current interest rate. For the amount in the
Guaranteed Account at the beginning of a calendar year, we will determine such
interest rates in advance of each calendar year. Such rates will apply to the
calendar year which follows the date of determination. For amounts allocated or
transferred to the Guaranteed Account during a calendar year, we will determine
interest rates applicable to such amounts in advance of the date such amount is
received or transferred. Such rates will apply to the end of the calendar year
in which the payment is received or the transfer is made.
GUARANTEED ACCOUNT VALUE. This Contract's Guaranteed Account Value for any
Valuation Period before the Maturity Date is:
1. the sum of the Net Premiums, allocated to the Guaranteed
Account; plus
2. any amounts transferred to the Guaranteed Account from a
Subaccount of the Variable Account; minus
3. any amounts withdrawn or transferred from the Guaranteed
Account together with any associated charges; minus
4. any Annual Administration Fee deducted from the amount in the
Guaranteed Account; plus
5. interest we credit to the amount in the Guaranteed Account.
For the purpose of crediting interest, amounts deducted, transferred
and withdrawn from the Guaranteed Account will be accounted for on a last-in,
first-out basis.
ALLOCATIONS AND TRANSFERS
NET PREMIUM ALLOCATION. In your application you selected how you wanted your
Initial Net Premium to be allocated among the Subaccounts and the Guaranteed
Account.
We will allocate the Initial Net Premium to the Subaccounts and the
Guaranteed Account based on the premium allocation schedule in your application.
You may change the allocation schedule by Written Notice. Any
additional Net Premiums will be allocated in accordance with the allocation
schedule in effect when such
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premium is received, unless at the time of payment we receive Written Notice to
the contrary. The portion of a Net Premium to be applied to each selected
Subaccount and the Guaranteed Account must be a whole percentage.
TRANSFER PRIVILEGE. Before the Maturity Date, you may transfer all or part of
the amount in the Subaccount(s) to another Subaccount(s) or to the Guaranteed
Account, or transfer a part of the amount in the Guaranteed Account to the
Subaccount(s), subject to the availability of a Subaccount or shares of a
portfolio.
The minimum transfer amount is shown in the Contract Schedule.
If a transfer amount reduces the amount in a Subaccount or the
Guaranteed Account to less than $500, we reserve the right to treat the transfer
request as a request to transfer the entire amount in that Subaccount or
Guaranteed Account.
RESTRICTIONS ON TRANSFERS FROM GUARANTEED ACCOUNT. You may transfer a part of
the amount in the Guaranteed Account to the Subaccount(s) of the Variable
Account, subject to these additional restrictions:
1. we allow only one transfer each year and this transfer must be
within the period that is 30 days before and 30 days after the
Contract Anniversary. An unused transfer option does not carry
over to the next year; and
2. the maximum transfer amount is 25% of the Contract's
Guaranteed Account Value on the date of the transfer, unless
the balance after the transfer is less than $500.
We will make the transfer on the Contract Anniversary if your Written
Notice is received prior to the Contract Anniversary, if your Written Notice is
received after the Contract Anniversary, we will make the transfer as of the
date we receive your request at our Service Center.
CONTRACT VALUES
CONTRACT ACCOUNT VALUE. The Contract Account Value is the sum of the Variable
Account Value and the Guaranteed Account Value.
CASH SURRENDER VALUE. The Cash Surrender Value is the Contract Account Value,
less any applicable Surrender Charge. The Cash Surrender Value will be
determined on the date we receive your Written Notice for surrender and this
Contract at our Service Center.
You may surrender this Contract for its Cash Surrender Value at any
time before the earlier of the death of the Annuitant or the Maturity Date. You
may elect to have the Cash Surrender Value (less any applicable deduction for
premium tax) paid in a single sum or under a Payment Option. This Contract ends
when we pay the Cash Surrender Value or apply such sum under a Payment Option.
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WITHDRAWALS. You may withdraw part of the Cash Surrender Value at any time
before the earlier of the death of the Annuitant or the Maturity Date, subject
to these limits:
1. the minimum withdrawal amount is shown in the Contract
Schedule;
2. the maximum withdrawal is the amount that would leave a
minimum Cash Surrender Value of the amount shown in the
Contact Schedule; and
3. a withdrawal request which would reduce the amount in a
Subaccount or the Guaranteed Account below $500 will be
treated as a request for a full withdrawal of the amount in
that Subaccount or Guaranteed Account.
On the date we receive your Written Notice for a withdrawal at our
Service Center we will withdraw the amount of the withdrawal from the Contract
Account Value. We will then deduct any applicable Surrender Charge from the
amount withdrawn, unless you request in advance that any applicable Surrender
Charge be deducted from the remaining Contract Account Value. In that event, the
amount that will be withdrawn from the Contract Account Value will equal the
amount of the withdrawal request plus any applicable Surrender Charge.
You may specify the amount to be withdrawn from certain Subaccounts or
the Guaranteed Account for your partial withdrawal. If you do not specify this
information to us, or the amount in the designated Subaccounts or Guaranteed
Account is inadequate to comply with your request, we will make the withdrawal
based on the proportion that your Subaccount Values and the Guaranteed Account
Value bear to the Contract Account Value prior to the withdrawal.
SURRENDER CHARGE. The applicable percentage from the Surrender Charge Table in
the Contract Schedule will be deducted upon any withdrawal or surrender and will
be applied as follows:
a. to the entire withdrawal or surrender amount if such
withdrawal or surrender occurs during the first Contract Year;
or
b. to the portion of the withdrawal or surrender which is in
excess of the percentage listed in the table below for the
applicable Contract Year:
% OF CONTRACT
CONTRACT YEAR ACCOUNT VALUE
------------- -------------
1 0%
2 20%
3 30%
4 40%
5 50%
6 60%
7 70%
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Amounts up to the Contract Account Value percentage shown above are
available for withdrawal in the applicable Contract Year without the imposition
of a surrender charge. However, starting in Contract Year 3 and in each
subsequent Contract Year listed above, the applicable percentage for each year
will be reduced by the total percentage withdrawn without imposition of
surrender charge from the Contract Account Value in the prior years.
There is no limit on the number of withdrawals occurring in any
Contract Year.
If the Contract is being surrendered, the applicable Surrender Charge
will be deducted from the Contract Account Value in determining the Cash
Surrender Value.
For a partial withdrawal, any applicable Surrender Charge will be
deducted from the amount withdrawn, unless you request in advance that the
Surrender Charge be deducted from the remaining Contract Account Value.
In no event will the Surrender Charge exceed 8.5% of the total premiums
received under the Contract.
ANNUAL ADMINISTRATION FEE. We will assess the Annual Administration Fee shown in
the Contract Schedule:
1. for the prior Contract Year, on the Contract Anniversary; or
2. for the current Contract Year on the date this Contract is
surrendered for its Cash Surrender Value or on the Maturity
Date (unless the Contract is surrendered on a Contract
Anniversary or the Maturity Date is a Contract Anniversary and
the fee is assessed under 1 above).
The fee will be assessed against the Subaccount(s) and Guaranteed
Account based on the proportion that your Subaccount Values and the Guaranteed
Account Value bear to the Contract Account Value.
If the fee is obtained from the Subaccounts, we will cancel the
appropriate number of units credited to this Contract based on the Unit Value at
the end of the Valuation Period when the fee is assessed. If the fee is obtained
from the Guaranteed Account, we will reduce this Contract's Guaranteed Account
Value by the amount of the fee.
MATURITY DATE. No Surrender Charge will be applied to the Contract Account Value
on the Maturity Date if the proceeds are applied under a Payment Option. If the
proceeds are paid in a lump sum on the Maturity Date, the proceeds will equal
the Cash Surrender Value on such date.
You may change the Maturity Date subject to these limitations:
1. we must receive your Written Notice at our Service Center at
least 30 days before the current Maturity Date;
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2. the requested Maturity Date must be a date that is at least 30
days after we receive your Written Notice; and
3. the requested Maturity Date must be not later than the first
day of the month after the Annuitant's 90th birthday, or any
earlier date required by law.
TERMINATION. We may pay you the Cash Surrender Value and end this Contract if,
before the Maturity Date, all of these events simultaneously exist:
1. you have not paid any premiums for at least two years;
2. the Contract Account Value is less than $2,000; and
3. the total premiums paid, less any partial withdrawals, is less
than $2,000.
We will mail you a notice of our intention to end this Contract at
least six months in advance. This Contract will automatically terminate on the
date specified in the notice, unless we receive an additional premium payment
before the termination date specified in the notice. This additional premium
payment must be for at least the minimum additional premium amount specified in
the Contract Schedule.
BASIS OF VALUES. Any paid-up annuity, cash surrender or death benefits that may
be available are at least equal to the minimum required by law in the state in
which this Contract is delivered. A detailed statement of the method used to
compute the minimum values has been filed, where required, with the insurance
officials of the jurisdiction in which this Contract is delivered.
PAYMENT OF PROCEEDS
PROCEEDS. Proceeds means the amount we will pay when the first of the following
events occurs: the Maturity Date; the Contract is surrendered; or we receive due
proof of death of the Annuitant or the Owner. This Contract ends when we pay the
proceeds.
"Due Proof of Death" is proof of death that is satisfactory to us. Such
proof may consist of:
1. a certified copy of the death certificate; and/or
2. a certified copy of the decree of a court of competent
jurisdiction as to the finding of death.
We will deduct any applicable premium tax from the proceeds described
below, unless we already deducted the tax from the premiums when paid. (See the
"Net Premium" provision.)
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PROCEEDS ON MATURITY DATE. If you have not elected to receive the proceeds in a
lump sum, the proceeds we will pay is the Contract Account Value, which we will
apply under a Payment Option on the Maturity Date. (See the "Maturity Date"
provision and the "Payment Options" section.) If the proceeds are paid in a lump
sum, we will pay the Cash Surrender Value.
PROCEEDS ON SURRENDER. If you surrender this Contract before the earlier of the
death of the Annuitant or the Maturity Date, the proceeds we will pay is the
Cash Surrender Value. (See the "Maturity Date" provision concerning changing the
Maturity Date and having the Contract Account Value applied under a Payment
Option.)
PROCEEDS ON DEATH OF ANNUITANT BEFORE MATURITY DATE. If the Annuitant dies
before the Maturity Date, the proceeds we will pay to the Beneficiary is the
death benefit.
If the Annuitant dies before the end of the seventh Contract Year, the
death benefit will equal the greater of:
1. the premiums paid, less any withdrawals including applicable
surrender charges; or
2. the Contract Account Value on the date we receive due proof of
the Annuitant's death.
If the Annuitant dies after the end of the seventh Contract Year, the
death benefit will equal the greatest of:
1. the Contract Account Value as of the end of the seventh
Contract Year plus any subsequent deposits less any subsequent
withdrawals; or
2. the Contract Account Value on the date we receive due proof of
the Annuitant's death; or
3. the premiums paid less any withdrawals including applicable
surrender charges.
The proceeds will be paid in a lump sum or under a Payment Option. If
you are the Annuitant, the proceeds must be distributed in accordance with the
rules set forth in "Proceeds on Death of an Owner" for an Owner's death before
the Maturity Date. No death benefit is payable if this Contract is surrendered
before the Annuitant's death.
PROCEEDS ON DEATH OF AN OWNER. If any Owner dies before the Maturity Date, the
Contract Account Value (or if the deceased Owner is the Annuitant, the proceeds
payable on the Annuitant's death) must be distributed to the Beneficiary within
five years after the date of such death.
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If any Owner dies on or after the Maturity Date, any remaining payments
must be distributed at least as rapidly as under the Payment Option in effect on
the date of such death.
These distribution requirements will be considered satisfied as to any
portion of the proceeds:
1. payable to or for the benefit of a designated beneficiary; and
2. which is distributed over the life (or period not exceeding
the life expectancy) of that Beneficiary, provided that such
distributions begin within one year of the Owner's death.
The designated beneficiary is the person designated by the Owner as
Beneficiary and to whom the ownership of the Contract passes by reason of an
Owner's death and must be a natural person. However, if the Owner's spouse is
the designated beneficiary, the Contract may be continued with the surviving
spouse as the new Owner. If the Contract has Joint Owners, the surviving Joint
Owner will be the designated beneficiary.
If you are not an individual, the Annuitant as determined in accordance
with section 72(s) of the Internal Revenue Code (i.e. the individual the events
in the life of whom are of primary importance in effecting the timing or amount
of the payout under the Contract) will be treated as Owner for purposes of these
distribution requirements, and any change in the Annuitant will be treated as
the death of the Owner.
PAYMENTS. We will usually pay any proceeds, withdrawals, or cash surrenders
within seven business days after:
1. we receive and file your Written Notice for a withdrawal or a
cash surrender; or
2. we receive and file due proof of death of the Owner or
Annuitant.
However, we can postpone the payment of proceeds, withdrawals, or cash
surrenders or the transfer of amounts between Subaccounts if:
1. the New York Stock Exchange is closed, other than customary
weekend and holiday closings, or trading on the exchange is
restricted as determined by the Securities and Exchange
Commission; or
2. the Securities and Exchange Commission permits by an order the
postponement for the protection of contractholders; or
3. the Securities and Exchange Commission determines that an
emergency exists that would make the disposal of securities
held in the Variable Account or the determination of their
value not reasonably practicable; or
4. the Fund is permitted by law or regulation to postpone payment
of proceeds.
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If a recent check or draft has been submitted, we have the right to
defer payment of the Contract Account Value, Cash Surrender Value or death
benefit until such check or draft has been honored.
We have the right to defer payment of any withdrawal, transfer or Cash
Surrender Value from the Guaranteed Account for up to six months from the date
we receive your Written Notice for a withdrawal or surrender.
INTEREST ON PROCEEDS. We will pay interest on proceeds if we do not pay the
proceeds in a single sum or begin paying the proceeds under a Payment Option:
1. within 30 days after the proceeds become payable; or
2. within the time required by the applicable jurisdiction, if
less than 30 days.
This interest will accrue from the date the proceeds become payable to
the date of payment, but not for more than one year, at an annual rate of 3%, or
the rate and time required by law, if greater.
CONFORMITY WITH LAWS. To the extent this Contract conflicts with any applicable
laws or the requirements of the Internal Revenue Service concerning
distributions on death, this Contract shall be considered to be amended to
conform with such requirements.
PAYMENT OPTIONS
ELECTION OF OPTION. The following options are available to you during your
lifetime. They are also available to the Beneficiary after your death, if you
have not selected an option for such Beneficiary.
You may elect to have the Cash Surrender Value, Contract Account Value
or death benefit paid in accordance with any one of the options described below
or in any other manner acceptable to us and permissible under applicable law. If
no election has been made, the automatic option shall be Option B. The amount
paid under these options is fixed and does not depend on the investment
performance of the Variable Account.
OPTION A - LIFE ANNUITY: An income payable during the lifetime of the Payee,
ceasing with the last payment due prior to the death of the Payee according to
the Option Table, Life Only column.
OPTION B - LIFE ANNUITY WITH 10 YEARS GUARANTEED: An income payable during the
lifetime of the Payee with the guarantee that payments shall be made for a
period of not less than 10 years according to the Option Table, 10 Year Period
Certain column.
Under Option B, if any Beneficiary dies while receiving payment, the
present value of the current dollar amount on the date of death of any remaining
guaranteed payments shall be paid in
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one sum to the executors or administrators of the Beneficiary unless otherwise
provided in writing. Calculation of such present value shall be at 3% which is
the rate of interest assumed in computing the amount of annuity payments.
ALTERNATE INCOME OPTION. In lieu of one of the above options you may elect to
settle the Cash Surrender Value, Contract Account Value or death benefit under
an alternate income option based on our single premium immediate annuity rates
in effect at the time of settlement. Such rates will be adjusted to a due basis
and the income thus produced will be increased by 4%. In no case will the
resulting income be less than that which would be payable if the amount were
used to purchase a single premium immediate annuity adjusted to a due basis.
GENERAL PROVISIONS. Annuity payments shall commence and continue subject to the
following provisions:
A. This Contract shall be surrendered to us at our Service
Center. We shall issue a Supplementary Contract stating the
terms of payment under the option elected.
B. Proof satisfactory to us of the identity, birth date and sex
of any person on whose life an annuity depends shall be
provided to us before any annuity payments will be made.
C. We shall make each annuity payment by check which shall be
personally endorsed by the person upon whose life the annuity
depends, or other evidence must be furnished that such person
is alive.
D. No election of any option may be made under this Contract for
any Payee unless such election would produce a periodic
payment of at least $50 to that Payee. If at any time payments
to be made become less than $50 each, we shall have the right
to change the frequency of payments to such interval as shall
result in the payment of at least $50. Subject to this
condition, payments may be made annually, semi-annually,
quarterly or monthly.
E. If the Payee is other than you, the election of a Payment
Option shall require our consent.
F. We shall deduct from the Cash Surrender Value or the Contract
Account Value any Premium Tax at the time income payments
commence.
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GUARANTEED AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000 OF
ANNUITY VALUE APPLIED
GUARANTEED MONTHLY PAYMENTS GUARANTEED MONTHLY PAYMENTS
10 Year Age of Payee 10 Year
Age of Payee Period Period
Life Only Certain Life Only Certain
Male Female (Option A) (Option B) Male Female (Option A) (Option B)
---- ------ ---------- ---------- ---- ------ ---------- ----------
5* $2.70 $2.70 45 50 $3.59 $3.58
6 2.71 2.71 46 51 3.63 3.62
7 2.72 2.72 47 52 3.68 3.67
8 2.72 2.73 48 53 3.73 3.72
9 2.73 2.73 49 54 3.78 2.76
5* 10 2.74 2.74 50 55 3.83 3.82
6 11 2.75 2.75 51 56 3.89 3.87
7 12 2.76 2.76 52 57 3.95 3.93
8 13 2.77 2.77 53 58 4.01 3.99
9 14 2.78 2.78 54 59 4.07 4.05
10 15 2.79 2.79 55 60 4.14 4.11
11 16 2.80 2.80 56 61 4.21 4.18
12 17 2.81 2.81 57 62 4.29 4.25
13 18 2.82 2.83 58 63 4.37 4.33
14 19 2.83 2.84 59 64 4.46 4.41
15 20 2.85 2.85 60 65 4.55 4.50
16 21 2.86 2.86 61 66 4.64 4.58
17 22 2.87 2.88 62 67 4.75 4.68
18 23 2.89 2.89 63 68 4.86 4.78
19 24 2.90 2.90 64 69 4.97 4.88
20 25 2.92 2.92 65 70 5.09 4.99
21 26 2.93 2.93 66 71 5.22 5.10
22 27 2.95 2.95 67 72 5.36 5.21
23 28 2.96 2.97 68 73 5.51 5.34
24 29 2.98 2.98 69 74 5.67 5.46
25 30 3.00 3.00 70 75 5.83 5.60
26 31 3.02 3.02 71 76 6.01 5.73
27 32 3.04 3.04 72 77 6.19 5.87
28 33 3.06 3.06 73 78 6.39 6.02
29 34 3.08 3.08 74 79 6.60 6.17
30 35 3.10 3.10 75 80 6.82 6.32
31 36 3.13 3.13 76 81 7.06 6.48
32 37 3.15 3.15 77 82 7.31 6.64
33 38 3.18 3.18 78 83 7.58 6.80
34 39 3.20 3.20 79 84 7.87 6.97
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GUARANTEED MONTHLY PAYMENTS GUARANTEED MONTHLY PAYMENTS
10 Year Age of Payee 10 Year
Age of Payee Period Period
Life Only Certain Life Only Certain
Male Female (Option A) (Option B) Male Female (Option A) (Option B)
---- ------ ---------- ---------- ---- ------ ---------- ----------
35 40 3.23 3.23 80 85** 8.17 7.13
36 41 3.26 3.26 81 8.49 7.29
37 42 3.29 3.29 82 8.83 7.45
38 43 3.32 3.32 83 9.19 7.61
39 44 3.35 3.35 84 9.57 7.77
40 45 3.39 3.39 85** 9.96 7.92
41 46 3.42 3.42
42 47 3.46 3.46
43 48 3.50 3.50
44 49 3.54 3.54
* Payment shown applies to all younger ages.
** Payment shown applies to all older ages.
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FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT
Flexible premiums as stated in the Premiums Provision.
Contract values are variable, except for amounts in the Guarantee Account.
After the Maturity Date, Payment Options are on a guaranteed basis.
Death benefit payable upon death of Annuitant before Maturity Date.
Non-participating - Contract does not pay dividends.
PROVIDENTMUTUAL LIFE AND ANNUITY COMPANY OF AMERICA
A STOCK LIFE INSURANCE COMPANY
000 XXXXXXXXXXX XXXXX, XXXXXX DELAWARE 19713
