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Definitions of key terms
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ANNUAL ROLL-UP RATE -- The "Annual Roll-up rate" is the rate used to calculate
the Annual withdrawal amount. It is also used to calculate amounts credited to
your GIB benefit base and Roll-up to age 85 benefit base (for contracts with
the "Greater of" guaranteed minimum death benefit).
ANNUAL WITHDRAWAL AMOUNT -- For contracts with the GIB, beginning in the
second contract year after you fund your Protection with Investment Performance
account, the "Annual withdrawal amount" is the amount that can be withdrawn
from your contract without reducing your GIB benefit base. For contracts with
the "Greater of " guaranteed minimum death benefit, withdrawals up to the
Annual withdrawal amount will not reduce the Roll-up to age 85 benefit base
until the owner (or annuitant) reaches age 85.
ANNUITANT -- The "annuitant" is the person who is the measuring life for
determining the contract's maturity date. The annuitant is not necessarily the
contract's owner. Where the owner of the contract is a non-natural, the
annuitant is the measuring life for determining benefits under the contract.
AUTOMATIC INVESTMENT PROGRAM ("AIP") -- The "Automatic investment program"
allows you to make on-going contributions to your contract through electronic
fund transfers from your financial institution.
BUSINESS DAY -- Our "business day" is generally and day the New York Stock
Exchange ("NYSE") is open for regular trading and generally ends at 4:00 p.m.
Eastern Time (or as of an earlier close of regular trading). If the Securities
and Exchange Commission determines the existence of emergency conditions on any
day, and consequently, the NYSE does not open, then that day is not a business
day.
CASH VALUE -- At any time before annuity payments begin, your contract's "cash
value" is equal to the Total account value.
CONTRACT DATE -- The "contract date" is the effective date of the contract.
This usually is the business day we receive the properly completed and signed
application, along with any other required documents, and your initial
contribution. Your contract date will be shown in your contract.
CONTRACT DATE ANNIVERSARY -- The end of each 12-month period is your "contract
date anniversary." For example, if your contract date is May 1st, your contract
date anniversary is April 30th.
CONTRACT YEAR -- The "contract year" is the 12-month period beginning on your
contract date and each 12-month period after that date.
CUSTOMIZED PAYMENT PLAN -- For contracts with GIB, our "Customized payment
plan" allows you to request amounts up to your Annual withdrawal amount as
scheduled payments to you through one of five customized options.
CUSTOM SELECTION RULES -- The "Custom Selection Rules" are rules for the
allocation of contributions and for transfers to, and transfers among, the
Protection with Investment Performance account. These rules require that
allocations be made according to certain categories and investment option
limits.
DEFERRAL BONUS ROLL-UP RATE -- The "Deferral bonus Roll-up rate" is used to
calculate amounts credited to your GIB benefit base and the Roll-up to age 85
benefit base (used in the calculation of the "Greater of" death benefit).
EXCESS WITHDRAWAL -- For contracts with the GIB, an "Excess withdrawal" is a
withdrawal in excess of your Annual withdrawal amount.
FREE LOOK -- If for any reason you are not satisfied with your contract, you
may exercise your cancellation right under the contract to receive a refund.
This is your "Free look" right under the contract.
GIB BENEFIT BASE -- The GIB benefit base is an amount used to determine your
Annual withdrawal amount and your Lifetime GIB payments. Your GIB benefit base
is created and increased by allocations and transfers to your Protection with
Investment Performance account. The GIB benefit base is not an account value or
cash value. The GIB benefit base is also used to calculate the charge for the
GIB.
GENERAL DOLLAR COST AVERAGING -- Our "General dollar cost averaging program"
is a program that allows for the systematic transfers of amounts in the
EQ/Money Market variable investment option to the Investment Performance
variable investment options.
"GREATER OF" DEATH BENEFIT -- The "Greater of" death benefit is an optional
guaranteed minimum death benefit in connection with your Protection with
Investment Performance account value only. The death benefit is calculated
using the greater of two benefit bases -- the greater of the Roll-up to age 85
benefit base and the Highest Anniversary Value benefit base. There is an
additional charge for the "Greater of" death benefit under the contract.
GUARANTEED INCOME BENEFIT ("GIB") -- The GIB is a benefit that guarantees,
subject to certain restrictions, annual lifetime payments or "Lifetime GIB
payments". The GIB also allows you to take certain withdrawals prior to the
beginning of your Lifetime GIB payments that do not reduce your GIB benefit
base (your "Annual withdrawal amount"). There is an additional charge for the
GIB under the contract.
HIGHEST ANNIVERSARY VALUE DEATH BENEFIT -- The "Highest Anniversary Value
death benefit" is an optional guaranteed minimum death benefit in connection
with your Protection with Investment Performance account value only. The death
benefit is calculated using the value of your Protection with Investment
Performance account on your contract date anniversary. There is an additional
charge for the Highest Anniversary Value death benefit under the contract.
INVESTMENT PERFORMANCE ACCOUNT VALUE -- The "Investment Performance account
value" is the total value in: (i) the Investment Performance variable
investment options, (ii) the Guaranteed interest option, and (iii) amounts in
the account for special dollar cost averaging designated for the Investment
Performance variable investment options.
Definitions of key terms 5
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Retirement Cornerstone(SM) -- Series ADV at a glance -- key features
--------------------------------------------------------------------------------
PROFESSIONAL INVESTMENT The Retirement Cornerstone(SM) -- Series ADV variable investment options invest in different Portfolios
MANAGEMENT managed by professional investment advisers.
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GUARANTEED INTEREST o Principal and interest guarantees.
OPTION
o Interest rates set periodically.
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TAX ADVANTAGES o No tax on earnings inside the contract until you make withdrawals from your contract or receive
annuity payments.
--------------------------------------------------------------------------------------------------------
o No tax on transfers among investment options inside the contract.
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If you are purchasing or contributing to an annuity contract which is an Individual Retirement Annuity
(IRA), you should be aware that such annuities do not provide tax deferral benefits beyond those already
provided by the Internal Revenue Code for these types of arrangements. Before purchasing or contributing
to one of the contracts, you should consider whether its features and benefits beyond tax deferral meet
your needs and goals. You may also want to consider the relative features, benefits and costs of these
annuities compared with any other investment that you may use in connection with your retirement plan or
arrangement. Depending on your personal situation, the contract's Guaranteed benefits may have limited
usefulness because of required minimum distributions ("RMDs").
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GUARANTEED INCOME BENEFIT The GIB guarantees, subject to certain restrictions, annual lifetime payments ("Lifetime GIB payments"),
("GIB") which will begin automatically at the earliest of: (i.) the contract date anniversary following the date
your Protection with Investment Performance account value falls to zero, except as the result of a
withdrawal in excess of your Annual withdrawal amount ("Excess withdrawal"); (ii.) the contract date
anniversary following your 95th birthday; and (iii.) your contract's maturity date. Lifetime GIB
payments can be on a single or joint life basis. YOUR LIFETIME GIB PAYMENTS ARE CALCULATED BY APPLYING A
PERCENTAGE (WHICH IS BASED ON YOUR AGE AT THE TIME YOUR PAYMENTS BEGIN) TO YOUR GIB BENEFIT BASE. SEE
"GIB BENEFIT BASE" IN "CONTRACTS FEATURES AND BENEFITS" LATER IN THIS PROSPECTUS.
AN EXCESS WITHDRAWAL THAT REDUCES YOUR PROTECTION WITH INVESTMENT PERFORMANCE ACCOUNT VALUE TO ZERO WILL
CAUSE YOUR GIB TO TERMINATE. EVEN IF AN EXCESS WITHDRAWAL DOES NOT CAUSE YOUR GIB TO TERMINATE, IT CAN
GREATLY REDUCE YOUR GIB BENEFIT BASE AND THE VALUE OF YOUR BENEFIT.
The GIB is issued with all eligible contracts unless you opt out at the time you apply for your
Retirement Cornerstone(SM) -- Series ADV contract. See "Lifetime GIB payments" and "Annual withdrawal
amount" under "Guaranteed income benefit" in "Contract features and benefits" later in this Prospectus.
ANY AMOUNTS YOU WISH TO BE CREDITED TOWARD YOUR GIB MUST BE ALLOCATED TO THE PROTECTION WITH INVESTMENT
PERFORMANCE VARIABLE INVESTMENT OPTIONS. AMOUNTS INVESTED IN THE PROTECTION WITH INVESTMENT PERFORMANCE
VARIABLE INVESTMENT OPTIONS MUST BE ALLOCATED IN ACCORDANCE WITH CERTAIN INVESTMENT RESTRICTIONS.
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GUARANTEED MINIMUM o Return of Principal death benefit
DEATH BENEFITS ("GMDBS")
o Highest Anniversary Value death benefit
o "Greater of" death benefit
The GMDBs are funded through contributions and transfers to the Protection with Investment Performance
account.
All three GMDBs are available in combination with the GIB. The Return of Principal death benefit and the
Highest Anniversary Value death benefit are available without the GIB. However, the "Greater of" death
benefit can only be selected in combination with the GIB. If you do not select either the Highest
Anniversary Value death benefit or the "Greater of" death benefit, the Return of Principal death benefit
will automatically be issued with all eligible contracts. Eligible contracts are those that meet the
owner and annuitant issue age requirements described under "How you can purchase and contribute to your
contract" in "Contract features and benefits."
The death benefit in connection with your Investment Performance account value is equal to your
Investment Performance account value as of the day we receive satisfactory proof of death.
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Retirement Cornerstone(SM) -- Series ADV at a glance -- key features 11
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DROPPING OR CHANGING YOUR You have the option to drop or change your Guaranteed benefits subject to our rules. In some cases,
GUARANTEED BENEFITS you may have to wait four contract years in order to drop your benefits. Please see "Dropping or
changing your Guaranteed benefits" in "Contract features and benefits," as well as Appendix I, for more
information.
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CONTRIBUTION AMOUNTS The chart below shows the minimum initial and, in parenthesis, subsequent contribution amounts under the
contracts. Please see "How you can purchase and contribute to your contract" in "Contract features and
benefits" for more information, including important limitations on contributions.
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NQ $10,000 ($500)*
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Traditional or Roth IRA $10,000 ($50)*
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Inherited IRA Beneficiary continuation contract (traditional IRA or Roth IRA)
("Inherited IRA") $10,000 ($1,000)
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* $100 monthly and $300 quarterly under our automatic investment program.
o Maximum contribution limitations apply to all contracts. For more information, please see "How you
can purchase and contribute to your contract" in "Contract features and benefits" later in this
Prospectus.
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Upon advance notice to you, we may exercise certain rights we have under the contract regarding
contributions, including our rights to: (i) change minimum and maximum contribution requirements and
limitations, and (ii) discontinue acceptance of contributions. Further, we may at any time exercise our
rights to limit or terminate your contributions and transfers to any of the variable investment options
(including the Protection with Investment Performance variable investment options) and to limit the
number of variable investment options which you may select.
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ACCESS TO YOUR MONEY o Partial withdrawals
o Several options for withdrawals on a periodic basis
o Contract surrender
o Maximum payment plan (only under contracts with GIB)
o Customized payment plan (only under contracts with GIB)
Any income you receive may be subject to tax; also may be subject to an additional 10% income tax
penalty unless you are age 59-1/2 or another exception applies. Also, certain withdrawals will diminish
the value of any Guaranteed benefits you have funded.
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PAYOUT OPTIONS o Fixed annuity payout options
o Other payout options through other contracts
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ACCOUNT VALUES INVESTMENT PERFORMANCE ACCOUNT VALUE
o Investment Performance variable investment options
o Guaranteed interest option
o Amounts in the account for special money market dollar cost averaging designated for Investment
Performance variable investment options or the guaranteed interest option
PROTECTION WITH INVESTMENT PERFORMANCE ACCOUNT VALUE
o Protection with Investment Performance variable investment options
o Amounts in the account for special money market dollar cost averaging designated for Protection with
Investment Performance variable investment options
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12 Retirement Cornerstone(SM) -- Series ADV at a glance -- key features
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the minimum fees and expenses (before expense limitations). Each example should
not be considered a representation of past or future expenses for each option.
Actual expenses may be greater or less than those shown. Similarly, the annual
rate of return assumed in each example is not an estimate or guarantee of
future investment performance. Although your actual costs may be higher or
lower, based on these assumptions your costs would be:
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SERIES ADV
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IF YOU SURRENDER OR DO NOT SURRENDER YOUR
IF YOU ANNUITIZE AT THE END OF THE APPLICABLE CONTRACT AT THE END OF THE APPLICABLE
TIME PERIOD TIME PERIOD
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1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
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(a) assuming maximum fees and
expenses of any of the Portfolios N/A $2,635 $4,173 $8,103 $760 $2,285 $3,823 $7,753
(b) assuming minimum fees and
expenses of any of the Portfolios N/A $1,463 $2,309 $4,865 $352 $1,113 $1,959 $4,515
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The next example shows the expenses that a hypothetical contract owner who has
opted out of all optional benefits that have fees associated with them would
pay in the situations illustrated. These examples use an estimated average
annual administrative charge based on anticipated sales and contract sizes,
which results in an estimated annual administrative charge of 0.010%,
calculated as a percentage of contract value.
The example assumes amounts are allocated to the most expensive and least
expensive Portfolio. Amounts allocated to the guaranteed interest option and
the account for special money market dollar cost averaging are not covered by
these examples. The annual administrative charge does apply to amounts
allocated to the guaranteed interest option, and the account for special money
market dollar cost averaging.
The example assumes that you invest $10,000 in the Investment Performance
variable investment options for the time periods indicated, and that your
investment has a 5% return each year. Other than the annual administrative
charge (which is described immediately above), the example also assumes maximum
contract charges and total annual expenses of the Portfolios (before expense
limitations) invested in by the Investment Performance variable investment
options set forth in the previous charts. Each example should not be considered
a representation of past or future expenses for each option. Actual expenses
may be greater or less than those shown. Similarly, the annual rate of return
assumed in each example is not an estimate or guarantee of future investment
performance. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
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SERIES ADV
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IF YOU SURRENDER OR DO NOT SURRENDER YOUR
IF YOU ANNUITIZE AT THE END OF THE APPLICABLE CONTRACT AT THE END OF THE APPLICABLE
TIME PERIOD TIME PERIOD
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1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
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(a) assuming maximum fees and
expenses of any of the Portfolios N/A $2,004 $3,092 $5,760 $554 $1,654 $2,742 $5,410
(b) assuming minimum fees and
expenses of any of the Portfolios N/A $ 694 $ 946 $1,667 $110 $ 344 $ 596 $1,317
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For information on how your contract works under certain hypothetical
circumstances, please see Appendix III at the end of this Prospectus.
CONDENSED FINANCIAL INFORMATION
Because the contracts offered by this Prospectus have not yet been sold, no
class of accumulation units have yet been derived from the contracts offered by
this Prospectus.
16 Fee table
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1. Contract features and benefits
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HOW YOU CAN PURCHASE AND CONTRIBUTE TO YOUR CONTRACT
You may purchase a contract by making payments to us that we call
"contributions." We can refuse to accept an application from you or any
contribution from you at any time, including after you purchase the contract.
We require a minimum contribution amount for each type of contract purchased.
Maximum contribution limitations also apply. The following tables summarize our
current rules regarding contributions to your contract, which are subject to
change. In some states, our rules may vary. Both the owner and annuitant named
in the contract must meet the issue age requirements shown in the table, and
contributions are based on the age of the older of the original owner and
annuitant. Subsequent contributions may not be permitted in your state. For a
state-by-state description of all material variations of this contract, see
Appendix IV later in this Prospectus.
--------------------------------------------------------------------------------
We reserve the right to change our current limitations on your contributions
and to discontinue acceptance of contributions.
--------------------------------------------------------------------------------
We currently do not accept any contribution to your contract if: (i) the
aggregate contributions under one or more Retirement Cornerstone(SM) Series
contracts with the same owner or annuitant would then total more than
$1,500,000, or (ii) the aggregate contributions under all AXA Equitable annuity
accumulation contracts with the same owner or annuitant would then total more
than $2,500,000. We may waive these and other contribution limitations based on
certain criteria that we determine, including Guaranteed benefits, issue age,
aggregate contributions, variable investment option allocations and selling
broker-dealer compensation. These and other contribution limitations may not be
applicable in your state. For a state-by-state description of all material
variations of this contract, see Appendix IV later in this Prospectus.
You may not contribute or transfer more than $1,500,000 to your Protection with
Investment Performance variable investment options and the account for special
money market dollar cost averaging with amounts designated for the Protection
with Investment Performance variable investment options.
Once a withdrawal is taken from your Protection with Investment Performance
account, you cannot make additional contributions to your Protection with
Investment Performance account, either directly or through a new special money
market dollar cost averaging program. You can, however, continue to make
transfers from your Investment Performance account to the Protection with
Investment Performance variable investment options until such time you make a
subsequent contribution to your Investment Performance account. Scheduled
transfers from an existing special money market dollar cost averaging program
will continue through to the program's conclusion.
We may accept less than the minimum initial contribution under a contract if an
aggregate amount of Retirement Cornerstone(SM) Series contracts, respectively,
are purchased at the same time by an individual (including spouse) meets the
minimum.
--------------------------------------------------------------------------------
The "owner" is the person who is the named owner in the contract and, if an
individual, is the measuring life for determining contract benefits. The
"annuitant" is the person who is the measuring life for determining the
contract's maturity date. The annuitant is not necessarily the contract owner.
Where the owner of a contract is non-natural, the annuitant is the measuring
life for determining contract benefits.
--------------------------------------------------------------------------------
Upon advance notice to you, we may exercise certain rights we have under the
contract regarding contributions, including our rights to:
o Change our contribution requirements and limitations and our transfer rules,
including to:
-- increase or decrease our minimum contribution requirements and increase
or decrease our maximum contribution limitations;
-- discontinue the acceptance of subsequent contributions to the contract;
-- discontinue the acceptance of subsequent contributions and/or transfers
into one or more of the variable investment options and/or guaranteed
interest option; and
-- discontinue the acceptance of subsequent contributions and/or transfers
into the Protection with Investment Performance variable investment
options.
o Default certain contributions and transfers designated for a Protection with
Investment Performance variable investment option(s) to the corresponding
Investment Performance variable investment option(s), which invests in the
same underlying Portfolio(s). See "Automatic Quarterly Rebalancing" under
"Allocating your contributions" later in this section.
o Further limit the number of variable investment options you may invest in at
any one time.
o Limit or terminate new contributions or transfers to an investment option.
WE RESERVE THE RIGHT IN OUR SOLE DISCRETION TO DISCONTINUE THE ACCEPTANCE OF,
AND/OR PLACE LIMITATIONS ON CONTRIBUTIONS INTO THE CONTRACT AND/OR CERTAIN
INVESTMENT OPTIONS. IF YOU HAVE ONE OR MORE GUARANTEED BENEFITS AND WE EXERCISE
OUR RIGHT TO DISCONTINUE THE ACCEPTANCE OF, AND/OR PLACE ADDITIONAL LIMITATIONS
ON, CONTRIBUTIONS TO THE CONTRACT AND/OR CONTRIBUTIONS AND/OR TRANSFERS INTO
THE PROTECTION WITH INVESTMENT PERFORMANCE VARIABLE INVESTMENT OPTIONS, YOU MAY
NO LONGER BE ABLE TO FUND YOUR
Contract features and benefits 17
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AVAILABLE FOR OWNER AND ADDITIONAL LIMITATIONS ON
CONTRACT TYPE ANNUITANT ISSUE AGES MINIMUM CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS TO THE CONTRACT*
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NQ 0-85 $10,000 (initial) o After-tax money. o You may make subsequent
contributions to your Pro-
$500 (if subsequent contribu- o Paid to us by check or tection with Investment
tions are permitted) transfer of contract Performance account until
value in a tax-deferred attained age 75, or if
$100 monthly and $300 quar- exchange under Section later, the first contract
terly under the automatic 1035 of the Internal date anniversary. However,
investment program (if subse- Revenue Code. once you make a withdrawal
quent contributions are from your Protection with
permitted) Investment Performance
account, subsequent
contributions to your
Protection with Investment
Performance account will no
longer be permitted.
o You may make subsequent
contributions to your In-
vestment Performance account
until the later of attained
age 86 or the first contract
date anniversary.
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* Subsequent contributions may not be permitted under certain conditions in
your state. For a state-by-state description of all material variations
of this contract, including information on contribution limitations in your
state, see Appendix IV later in this Prospectus. In addition to the
limitations described here, we also reserve the right to refuse to accept
any contribution under the contract at any time or change our contribution
limits and requirements. We further reserve the right to discontinue the
acceptance of, or place additional limitations on, contributions to the
contract or contributions and/or transfers into your Protection with
Investment Performance account at any time.
Contract features and benefits 19
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AVAILABLE FOR OWNER ADDITIONAL LIMITATIONS ON
CONTRACT TYPE ISSUE AGES MINIMUM CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS TO THE CONTRACT*
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Traditional IRA 20-85 $10,000 (initial) o Eligible rollover distribu- o You may make subsequent
tions from 403(b) plans, contributions to your
$50 (if subsequent contribu- qualified plans and govern- Protection benefit account
tions are permitted) mental employer 457(b) value until attained age
plans. 75, or if later, the first
$100 monthly and $300 quar- contract date anniversary.
terly under the automatic o Rollovers from another However, once you make a
investment program (if subse- traditional individual withdrawal from your Pro-
quent contributions are retirement arrangement. tection with Investment
permitted) Performance account,
o Direct custodian-to- subsequent contributions
custodian transfers from to your Protection with
another traditional indi- Investment Performance
vidual retirement account will no longer
arrangement. be permitted.
o Regular IRA contributions. o You may make subsequent
contributions to your In-
o Additional catch-up contri- vestment Performance
butions. account until the later
of attained age 86 or
the first contract date
anniversary.
o Contributions made after
age 70-1/2 must be net of
required minimum distri-
butions; you also cannot
make regular IRA contri-
butions after age 70-1/2.
o Although we accept regular
IRA contributions (limited
to $5,000 per calendar
year) under traditional
IRA contracts, we intend
that the contract be used
primarily for rollover
and direct transfer
contributions.
o Subsequent catch-up contri-
butions of up to $1,000 per
calendar year where the
owner is at least age 50
but under age 70-1/2 at any
time during the calendar
year for which the contri-
bution is made.
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* Subsequent contributions may not be permitted under certain conditions in
your state. For a state-by-state description of all material variations
of this contract, including information on contribution limitations in your
state, see Appendix IV later in this Prospectus. In addition to the
limitations described here, we also reserve the right to refuse to accept
any contribution under the contract at any time or change our contribution
limits and requirements. We further reserve the right to discontinue the
acceptance of, or place additional limitations on, contributions to the
contract or contributions and/or transfers into your Protection with
Investment Performance account at any time.
20 Contract features and benefits
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AVAILABLE FOR OWNER AND ADDITIONAL LIMITATIONS ON
CONTRACT TYPE ANNUITANT ISSUE AGES MINIMUM CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS TO THE CONTRACT*
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Roth IRA 20-85 $10,000 (initial) o Rollovers from another o You may make subsequent
Roth IRA. contributions to your
$50 (if subsequent contribu- Protection with Invest-
tions are permitted) o Rollovers from a "desig- ment Performance account
nated Roth contribution until attained age 75,
$100 monthly and $300 quar- account" under a 401(k) or if later, the first
terly under the automatic plan or 403(b) plan. contract date anni-
investment program (if subse- versary. However, once
quent contributions are o Conversion rollovers from you make a withdrawal
permitted) a traditional IRA or other from your Protection
eligible retirement plan. with Investment Per-
formance account, sub-
o Direct custodian-to- sequent contributions
custodian transfers from to your Protection with
another Roth IRA. Investment Performance
account will no longer
be permitted.
o Regular Roth IRA contri-
butions. o You may make subsequent
contributions to your
Investment Performance
o Additional catch-up con- account until the later
tributions. of attained age 86 or
the first contract date
anniversary.
o Conversion rollovers after
age 70-1/2 must be net of
required minimum distribu-
tions for the traditional
IRA or other eligible re-
tirement plan that is the
source of the conversion
rollover.
o Although we accept Roth
IRA contributions (limited
to $5,000 per calendar
year) under Roth IRA
contracts, we intend that
the contract be used
primarily for rollover and
direct transfer
contributions.
o Subsequent catch-up contri-
butions of up to $1,000 per
calendar year where the
owner is at least 50 at any
time during the calendar
year for which the contri-
bution is made.
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* Subsequent contributions may not be permitted under certain conditions in
your state. For a state-by-state description of all material variations
of this contract, including information on contribution limitations in your
state, see Appendix IV later in this Prospectus. In addition to the
limitations described here, we also reserve the right to refuse to accept
any contribution under the contract at any time or change our contribution
limits and requirements. We further reserve the right to discontinue the
acceptance of, or place additional limitations on, contributions to the
contract or contributions and/or transfers into your Protection with
Investment Performance account at any time.
Contract features and benefits 21
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AVAILABLE FOR OWNER AND ADDITIONAL LIMITATIONS ON
CONTRACT TYPE ANNUITANT ISSUE AGES MINIMUM CONTRIBUTIONS SOURCE OF CONTRIBUTIONS CONTRIBUTIONS TO THE CONTRACT*
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Inherited IRA 0-70 $10,000 (initial) o Direct custodian-to- o Any subsequent contribu-
Beneficiary custodian transfers of tions must be from the
continuation $1,000 (if subsequent con- your interest as a death same type of IRA of the
contract tributions are permitted) beneficiary of the same deceased owner.
(traditional deceased owner's
IRA or Roth traditional individual o You may make subsequent
IRA) retirement arrangement contributions to your
or Roth IRA to an IRA Protection benefit
of the same type. account until attained
age 75, or if later,
o Non-spousal beneficiary the first contract date
direct rollover contri- anniversary. However,
butions from qualified once you make a with-
plans, 403(b) plans and drawal from your Pro-
governmental employer tection with Invest
457(b) plans may be ment Performance account,
made to an Inherited subsequent contributions
IRA contract under to your Protection with
specified circumstances. Investment Performance
account will no longer
be permitted.
o You may make subsequent
contributions to your
Investment Performance
account until the later
of attained age 86 or
the first contract
date anniversary.
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* Subsequent contributions may not be permitted under certain conditions in
your state. For a state-by-state description of all material variations
of this contract, including information on contribution limitations in your
state, see Appendix IV later in this Prospectus. In addition to the
limitations described here, we also reserve the right to refuse to accept
any contribution under the contract at any time or change our contribution
limits and requirements. We further reserve the right to discontinue the
acceptance of, or place additional limitations on, contributions to the
contract or contributions and/or transfers into your Protection with
Investment Performance account at any time.
22 Contract features and benefits
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GUARANTEED INTEREST OPTION
The guaranteed interest option is part of our general account and pays interest
at guaranteed rates. We discuss our general account under "More information"
later in this Prospectus. Any amounts allocated to the guaranteed interest
option will not be included in your Protection with Investment Performance
account value.
We assign an interest rate to each amount allocated to the guaranteed interest
option. This rate is guaranteed for a specified period. Therefore, different
interest rates may apply to different amounts in the guaranteed interest
option.
We credit interest daily to amounts in the guaranteed interest option. There
are three levels of interest in effect at the same time in the guaranteed
interest option:
(1) the minimum interest rate guaranteed over the life of the contract,
(2) the yearly guaranteed interest rate for the calendar year, and
(3) the current interest rate.
We set current interest rates periodically, based on our discretion and
according to our procedures that we have in effect at the time. We reserve the
right to change these procedures. All interest rates are effective annual
rates, but before the deduction of annual administrative charges. For a
state-by-state description of all material variations of this contract,
including information on the guaranteed interest option in your state, see
Appendix IV later in this Prospectus.
Depending on the state where your contract is issued, your lifetime minimum
rate ranges from 1.00% to 3.00%. The data page for your contract shows the
lifetime minimum rate. Check with your financial professional as to which rate
applies in your state. The minimum yearly rate will never be less than the
lifetime minimum rate. The minimum yearly rate for 2010 is 1.25% or 3.00%,
depending on your lifetime minimum rate. Current interest rates will never be
less than the yearly guaranteed interest rate.
Generally, contributions and transfers into and out of the guaranteed interest
option are limited. See "Transferring your money among the investment options"
later in this Prospectus for restrictions on transfers from the guaranteed
interest option.
ALLOCATING YOUR CONTRIBUTIONS
You may allocate your contributions to the Investment Performance variable
investment options, the guaranteed interest option, or the account for special
money market dollar cost averaging. If you are eligible to have one or more
Guaranteed benefits and you wish to fund them, you may allocate contributions
to the Protection with Investment Performance variable investment options.
Also, we limit the number of variable investment options which you may select.
Only amounts you allocate to the Protection with Investment Performance
variable investment options and amounts in the account for special money market
dollar cost averaging designated for future transfers to the Protection with
Investment Performance variable investment options will fund your Guaranteed
benefits. These amounts will be used to calculate your Guaranteed benefit bases
and will become part of your Protection with Investment Performance account
value.
For example:
You purchase a contract with an initial contribution of $100,000 and have the
GIB and the Highest Anniversary Value death benefit. You allocate $60,000 to
the Protection with Investment Performance variable investment options and
$40,000 to the Investment Performance variable investment options. The $60,000
will be included in your Protection with Investment Performance account value
and will be used to calculate your GIB and Highest Anniversary Value benefit
bases. $40,000 will be included in your Investment Performance account value.
Allocations must be whole percentages and you may change your allocations at
any time. No more than 25% of any contribution to the contract may be allocated
to the guaranteed interest option. The total of your allocations into all
available investment options must equal 100%. We reserve the right to
discontinue, and/or place additional limitations on, contributions to any of
the variable investment options, including the Protection with Investment
Performance variable investment options. We also reserve the right to
discontinue acceptance of contributions into the contract. See "Additional
limitations on contributions to the contract" in the table in "How you can
purchase and contribute to your contract" under "Contract features and
benefits."
It is important to note that the contract is between you and AXA Equitable. The
contract is not an investment advisory account, and AXA Equitable is not
providing any investment advice or managing the allocations under your
contract. In the absence of a specific written arrangement to the contrary,
you, as the owner of the contract, have the sole authority to make investment
allocations and other decisions under the contract. If your financial
professional is with AXA Advisors, he or she is acting as a broker-dealer
registered representative, and is not authorized to act as an investment
advisor or to manage the allocations under your contract. If your financial
professional is a registered representative with a broker-dealer other than AXA
Advisors, you should speak with him or her regarding any different arrangements
that may apply.
CUSTOM SELECTION RULES (APPLICABLE TO YOUR PROTECTION WITH INVESTMENT
PERFORMANCE ACCOUNT ONLY)
For allocations to your Protection with Investment Performance account, you
must allocate your contributions and transfers in accordance with our Custom
Selection Rules. The Custom Selection Rules require that all of your Protection
with Investment Performance account value be allocated according to the
category and investment option limits described below. Allocations to the
Protection with Investment Performance account may be made through
contributions and transfers from your Investment Performance account. Those
programs are discussed later in this section. These Custom Selection Rules do
not apply to amounts allocated to your Investment Performance account.
Your Protection with Investment Performance account value must be allocated
among the Protection with Investment Performance variable investment options in
the following three categories:
CATEGORY 1 -- AXA STRATEGIC ALLOCATION
36 Contract features and benefits
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AXA Balanced Strategy
AXA Conservative Growth Strategy
AXA Conservative Strategy
AXA Moderate Growth Strategy
CATEGORY 2 -- FIXED INCOME
EQ/Core Bond Index
EQ/Intermediate Government Bond Index
CATEGORY 3 -- EQUITY
AXA Growth Strategy
AXA Tactical Manager International
AXA Tactical Manager 400
AXA Tactical Manager 500
AXA Tactical Manager 2000
Your contributions in the three categories must also generally be allocated
according to the following category and investment option limits.
CATEGORY AND INVESTMENT OPTION LIMITS. The chart below sets forth the general
category and investment option limits for allocations to your Protection with
Investment Performance account only. The categories and investment option
limits described here do not apply to amounts allocated to your Investment
Performance account.
--------------------------------------------------------------------------
Category
-------------------------------------------------
1. AXA
Strategic 2. Fixed
Allocation Income 3. Equity
--------------------------------------------------------------------------
Maximum for category None(1) None 60%
Minimum for category None 40%(2) None
Maximum for each None None 10%(3)
option
-------------------------------------------------------------------------
(1) IF THERE IS ANY ALLOCATION TO CATEGORY 3, THERE IS A 40% MINIMUM
ALLOCATION REQUIREMENT TO CATEGORY 2, THUS LIMITING THE AMOUNT THAT MAY BE
ALLOCATED TO CATEGORY 1.
(2) Applies only if there is any allocation to Category 3.
(3) AXA Tactical Manager 400 and AXA Tactical Manager 2000 have a 10% maximum
limit individually. AXA Growth Strategy, AXA Tactical Manager International
and AXA Tactical Manager 500 are not subject to a per fund maximum.
There are no minimum allocations for any one Protection with Investment
Performance variable investment option. Allocations must be in whole
percentages. Your ability to allocate contributions to investment options may
be subject to restrictions in certain states. For a state-by-state description
of all material variations of this contract, including information on your
ability to allocate contributions to investment options, see Appendix IV later
in this Prospectus.
We reserve the right to change our Custom Selection Rules at any time. We also
reserve the right to discontinue and/or place additional limitations on
contributions and transfers into any or all Protection with Investment
Performance variable investment options, either directly or through the special
money market dollar cost averaging program. IF YOU HAVE ONE OR MORE GUARANTEED
BENEFITS AND WE EXERCISE OUR RIGHT TO DISCONTINUE THE ACCEPTANCE OF, AND/OR
PLACE ADDITIONAL LIMITATIONS ON, CONTRIBUTIONS TO THE CONTRACT AND/OR
CONTRIBUTIONS AND/OR TRANSFERS INTO THE PROTECTION WITH INVESTMENT PERFORMANCE
VARIABLE INVESTMENT OPTIONS, YOU MAY NO LONGER BE ABLE TO FUND YOUR GUARANTEED
BENEFIT(S). THIS MEANS THAT IF YOU HAVE NOT YET ALLOCATED AMOUNTS TO THE
PROTECTION WITH INVESTMENT PERFORMANCE VARIABLE INVESTMENT OPTIONS, YOU MAY NOT
BE ABLE TO FUND YOUR GUARANTEED BENEFIT(S). THIS ALSO MEANS THAT IF YOU HAVE
ALREADY FUNDED YOUR GUARANTEED BENEFITS BY ALLOCATING AMOUNTS TO THE PROTECTION
WITH INVESTMENT PERFORMANCE VARIABLE INVESTMENT OPTIONS, YOU MAY NO LONGER BE
ABLE TO INCREASE YOUR GUARANTEED BENEFIT ACCOUNT VALUE AND THE BENEFIT BASES
ASSOCIATED WITH YOUR GUARANTEED BENEFITS THROUGH CONTRIBUTIONS AND TRANSFERS.
POSSIBLE CHANGES TO THE CUSTOM SELECTION RULES. We may in the future revise the
category limits, the categories themselves, the investment option limits, and
the variable investment options within each category as well as combine the
variable investment options within the same or in different categories
(collectively, "category and investment option limitations").
If we change our Custom Selection Rules, please note the following:
o Any existing monies that you have allocated among the Protection
with Investment Performance variable investment options will not be
automatically reallocated to conform with the new Custom Selection Rules.
Subject to market performance and any subsequent transfer(s) and/or
withdrawals you make, those monies will remain invested as allocated at
the time of the change;
o If your allocation instructions on file prior to a change to our Custom
Selection Rules do not comply with our new Custom Selection Rules, you
will not be automatically required to change your allocation instructions;
o If your allocation instructions on file prior to a change to our Custom
Selection Rules do not comply with our new Custom Selection Rules, and
you make a subsequent contribution, we will allocate your contribution
pursuant to those instructions, and you will not be required to change
your allocation instructions;
o If your allocation instructions on file prior to a change to our Custom
Selection Rules do not comply with our new Custom Selection Rules, and
you initiate a transfer, you will be required to change your instructions;
and
o Any change to your allocation instructions must comply with our new
Custom Selection Rules. Your new allocation instructions will apply to
all future transactions, including subsequent contributions, transfers
from your Investment Performance account and rebalancing.
AUTOMATIC QUARTERLY REBALANCING Other than amounts attributable to the account
for special money market dollar cost averaging that are designated for your
Protection with Investment Performance variable investment options, your
Protection with Investment Performance account value will be rebalanced
automatically every three months. Rebalancing will occur on the same day of the
month as your contract date. If that date is after the 28th of a month,
rebalancing will occur on the first business day of the following month. If the
date occurs on
Contract features and benefits 37
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a date other than a business day, the rebalancing will occur on the next
business day. Rebalancing for the last quarter of a contract year will occur on
the contract date anniversary. If this date occurs on a day other than a
business day, the rebalance will occur on the business day immediately
preceding the contract date anniversary. When we rebalance, we will transfer
amounts among the Protection with Investment Performance variable investment
options so that the percentage of your Protection with Investment Performance
account value in each option at the end of the rebalancing date matches the
most recent allocation instructions that we have received from you. Rebalancing
does not assure a profit or protect against loss, so you should periodically
review your allocation percentages as your needs change. You may request a
rebalancing on the transaction date of a subsequent contribution.
A transfer among the Protection with Investment Performance variable investment
options does not automatically change your allocation instructions for the
rebalancing of your Protection with Investment Performance account value on a
quarterly basis. This means that upon the next scheduled rebalancing, we will
transfer amounts among your Protection with Investment Performance variable
investment options pursuant to the allocation instructions on file. If you wish
to change allocation instructions for the quarterly rebalancing, these
instructions must meet our then current category and investment option limits
and must be in writing on a form we provide.
If we change our Custom Selection Rules, your quarterly rebalancing will
continue in accordance with your existing allocation instructions, unless you
submit new allocation instructions.
If we discontinue contributions and transfers to the Protection with Investment
Performance variable investment options, we reserve the right to default any
subsequent contribution or scheduled transfer in a special money market dollar
cost averaging program to the corresponding Investment Performance variable
investment option, which invests in the same underlying Portfolio.
We may offer an optional rebalancing program for amounts allocated to your
Investment Performance variable investment options and the guaranteed interest
option. For more information, see "Rebalancing among your Investment
Performance variable investment options and guaranteed interest option" in
"Transferring your money among investment options" later in this Prospectus.
ALLOCATION INSTRUCTION CHANGES. You may change your instructions for
allocations of future contributions. Any revised allocation instructions will
also be used for quarterly rebalancing. Any revised allocation instructions
must meet the category and investment option limits in place at the time that
the instructions are received.
TRANSFERS. Once you allocate amounts to the Protection with Investment
Performance variable investment options, such amounts may be transferred among
the Protection with Investment Performance variable investment options in
accordance with our Custom Selection Rules, but may not be transferred to the
Investment Performance variable investment options or the guaranteed interest
option. See "Transferring your account value" in "Transferring your money among
investment options."
DOLLAR COST AVERAGING
We offer a variety of dollar cost averaging programs. You may only participate
in one program at a time. Each program allows you to gradually allocate amounts
to available investment options by periodically transferring approximately the
same dollar amount to the investment options you select. Regular allocations to
the variable investment options will cause you to purchase more units if the
unit value is low and fewer units if the unit value is high. Therefore, you may
get a lower average cost per unit over the long term.
All amounts in a dollar cost averaging program will be transferred at the
completion of the time period you select. Currently, the time periods for the
special money market dollar cost averaging program do not extend beyond 12
months. These plans of investing do not guarantee that you will earn a profit
or be protected against losses.
--------------------------------------------------------------------------------
Units measure your value in each variable investment option.
--------------------------------------------------------------------------------
We offer the following dollar cost averaging programs in the Retirement
Cornerstone(SM) -- Series ADV contracts:
o Special money market dollar cost averaging
o General dollar cost averaging
o Investment simplifier
The only dollar cost averaging program that is available to fund your amounts
allocated to the account for special money market dollar cost averaging are
included in the benefit bases for your Guaranteed benefits. The program allows
you to gradually transfer amounts to the Protection with Investment Performance
account through systematic transfers to the Protection with Investment
Performance variable investment options. Also, you may make systematic
transfers to the Investment Performance variable investment options and the
guaranteed interest option. Amounts in special money market dollar cost
averaging are immediately invested in the EQ/Money Market variable investment
option. Only new contributions may be allocated to the special money market
dollar cost averaging program. For information on how the special money market
dollar cost averaging program may affect certain Guaranteed benefits, see
"Guaranteed income benefit" and "Guaranteed minimum death benefits" later in
this section.
General dollar cost averaging and Investment simplifier, on the other hand, can
only be used for systematic transfers to your Investment Performance variable
investment options. Our Investment simplifier program is available for
scheduled transfers from the guaranteed interest option to the Investment
Performance variable investment options. Our General dollar cost averaging
program is available for scheduled transfers from the EQ/Money Market variable
investment option to the Investment Performance variable investment options.
Below, we provide detail regarding each of the programs.
We do not deduct a transfer charge for any transfer made in connection with our
dollar cost averaging programs. Not all dollar cost averaging programs are
available in all states. For a state-by-state description of all material
variations of this contract, including information on the availability of our
dollar cost averaging programs in your state, see Appendix IV later in this
Prospectus.
38 Contract features and benefits
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SPECIAL MONEY MARKET DOLLAR COST AVERAGING
Under the special money market dollar cost averaging program, you may dollar
cost average from the account for special money market dollar cost averaging,
which is part of the EQ/Money Market variable investment option. We will
transfer amounts from the account for special money market dollar cost
averaging into both the Protection with Investment Performance account and
Investment Performance variable investment options and guaranteed interest
option over an available time period that you select. One of the primary
benefits of the special money market dollar cost averaging program is that
amounts in the program designated for the Protection with Investment
Performance variable investment options count toward your Guaranteed benefits
on the Business Day you establish the program.
----------------------
Under the special money market dollar cost averaging program, each of the
following applies:
o Initial contributions to the program must be at least $2,000; subsequent
contributions to an existing program must be at least $250;
o Contributions into the program must be new contributions; you may not make
transfers from amounts allocated to other investment options to initiate a
program;
o We offer time periods of 3, 6 or 12 months. We may also offer other time
periods;
o Contributions to the program may be designated for the Protection with
Investment Performance variable investment options, the Investment
Performance variable investment options and/or the guaranteed interest
option, subject to the following:
-- If you want to take advantage of our special money market dollar
cost averaging program, 100% of your contribution must be allocated
to the account for special money market dollar cost averaging. In other
words, your contribution cannot be split between the account for special
money market dollar cost averaging and any other investment options
available under the contract. The instructions for the program must
match your current allocation instructions;
-- If you want to dollar cost average into the guaranteed interest
option, up to 25% of your special money market dollar cost averaging
program may be designated for the guaranteed interest option, even if
such a transfer would result in more than 25% of your Total account
value being allocated to the guaranteed interest option. See
"Transferring your account value" in "Transferring your money among
investment options" later in this Prospectus;
o Your Guaranteed benefit base(s) will be increased to reflect any contribution
to the account for special money market dollar cost averaging that you
have instructed us to transfer to the Protection with Investment
Performance variable investment options. The Annual Roll-up rate (or
Deferral bonus Roll-up rate, if applicable) in effect on your contract
will apply immediately to any contribution that is designated to be
transferred to the Protection with Investment Performance variable
investment options;
o IF WE EXERCISE OUR RIGHT TO DISCONTINUE THE ACCEPTANCE OF, AND/OR PLACE
ADDITIONAL LIMITATIONS ON, CONTRIBUTIONS AND TRANSFERS INTO THE PROTECTION
WITH INVESTMENT PERFORMANCE VARIABLE INVESTMENT OPTIONS, AND YOUR SPECIAL
MONEY MARKET DOLLAR COST AVERAGING PROGRAM HAS TRANSFERS SCHEDULED TO THE
PROTECTION WITH INVESTMENT PERFORMANCE VARIABLE INVESTMENT OPTIONS, THE
PROGRAM WILL CONTINUE FOR ITS DURATION. HOWEVER, SUBSEQUENT CONTRIBUTIONS
TO ANY PROTECTION WITH INVESTMENT PERFORMANCE VARIABLE INVESTMENT OPTIONS
UNDER THE SPECIAL MONEY MARKET DOLLAR COST AVERAGING PROGRAM WILL NOT BE
PERMITTED;
O IF YOU HAVE ONE OR MORE GUARANTEED BENEFITS AND WE EXERCISE OUR RIGHT TO
DISCONTINUE THE ACCEPTANCE OF, AND/OR PLACE ADDITIONAL LIMITATIONS ON,
CONTRIBUTIONS TO THE CONTRACT AND/OR CONTRIBUTIONS AND/OR TRANSFERS INTO
THE PROTECTION WITH INVESTMENT PERFORMANCE VARIABLE INVESTMENT OPTIONS,
YOU MAY NO LONGER BE ABLE TO FUND YOUR GUARANTEED BENEFIT(S). THIS MEANS
THAT IF YOU HAVE NOT YET ALLOCATED AMOUNTS TO THE PROTECTION WITH
INVESTMENT PERFORMANCE VARIABLE INVESTMENT OPTIONS, YOU MAY NOT BE ABLE TO
FUND YOUR GUARANTEED BENEFIT(S). THIS ALSO MEANS THAT IF YOU HAVE ALREADY
FUNDED YOUR GUARANTEED BENEFITS BY ALLOCATING AMOUNTS TO THE PROTECTION
WITH INVESTMENT PERFORMANCE VARIABLE INVESTMENT OPTIONS, YOU MAY NO LONGER
BE ABLE TO INCREASE YOUR GUARANTEED BENEFIT ACCOUNT VALUE AND THE BENEFIT
BASES ASSOCIATED WITH YOUR GUARANTEED BENEFITS THROUGH CONTRIBUTIONS AND
TRANSFERS.
o We will transfer all amounts by the end of the chosen time period. The
transfer date will be the same day of the month as the contract date, but
not later than the 28th day of the month. If a special money market dollar
cost averaging program is selected after application, the first transfer
date and each subsequent transfer date for the time period selected will
be one month from the date the first contribution is made into the special
money market dollar cost averaging program, but not later than the 28th
day of the month. The only transfers that will be made are your regularly
scheduled transfers to the variable investment options. If you request to
transfer any other amounts from your special money market dollar cost
averaging program, we will transfer all of the value that you have
remaining in the account to the investment options according to the
allocation percentages for the special money market dollar cost averaging
program that we have on file for you;
o Except for withdrawals made under our Automatic RMD withdrawal service or for
the assessment of contract charges, any unscheduled partial withdrawal
from your account for special money market dollar cost averaging will
terminate your special money market dollar cost averaging program. Any
amounts remaining in the account after the program terminates will be
transferred to the destination investment options according to your
special money market dollar cost averaging program allocation
instructions. Any withdrawal which results in a reduction in the special
money market dollar cost averaging program amount previously included in
your Guaranteed benefit bases will reduce the Guaranteed benefit bases as
described
Contract features and benefits 39
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later in this Prospectus. See "How withdrawals affect your Guaranteed
benefits" later in this section;
o If you elect any dollar cost averaging program, rebalancing Option II is not
available. If you elect a general dollar cost averaging program or special
money market dollar cost averaging, rebalancing Option I is not available.
See "Rebalancing among your Investment Performance variable investment
options and guaranteed interest option" in "Transferring your money among
investment options" later in this Prospectus;
o All of our dollar cost averaging programs are available if you enrolled in
our Systematic transfer program. However, no amounts will be transferred
out of the account for special money market dollar cost averaging as part
of the Systematic transfer program.
o A special money market dollar cost averaging program may not be in effect at
the same time as a general dollar cost averaging program;
o The only dollar cost averaging program available to fund your Guaranteed
benefits is our special money market dollar cost averaging program;
o You may cancel your participation at any time but you may not change your
allocation instructions on file during the selected time period. If you
terminate your special money market dollar cost averaging program, we will
allocate any remaining amounts in your account for special money market
dollar cost averaging pursuant to your program allocations on file;
o If you are dollar cost averaging into the Protection with Investment
Performance variable investment options when you decide to drop all
Guaranteed benefits ("post-funding drop"), we will default future
transfers designated for the Protection with Investment Performance
variable investment options to the corresponding Investment Performance
variable investment options that invest in the same underlying Portfolios.
Also, you can cancel your special money market dollar cost averaging
program and accelerate all transfers to the corresponding Investment
Performance variable investment options. See "Dropping or changing your
Guaranteed benefits" later in this section and Appendix I for more
information.
o We may offer these programs in the future with transfers on a different
basis. Your financial professional can provide information in the time
periods and interest rates currently available in your state, or you may
contact our processing office.
GENERAL DOLLAR COST AVERAGING PROGRAM
If your value in the EQ/Money Market variable investment option is at least
$5,000, you may choose, at any time, to have a specified dollar amount or
percentage of your value transferred from that option to any of the Investment
Performance variable investment options. For a state-by-state description of
all material variations of this contract, including information on the
availability of our general dollar cost averaging program, see Appendix IV
later in this Prospectus.
You can select to have transfers made on a monthly, quarterly or annual basis.
The transfer date will be the same calendar day of the month as the contract
date, but not later than the 28th day of the month. You can also specify the
number of transfers or instruct us to continue making the transfers until all
amounts in the EQ/Money Market variable investment option have been transferred
out. The minimum amount that we will transfer each time is $250. The
instructions for the program may differ from your allocation instructions on
file.
If, on any transfer date, your value in the EQ/Money Market variable investment
option is equal to or less than the amount you have elected to have
transferred, the entire amount will be transferred. The general dollar cost
averaging program will then end. You may change the transfer amount once each
contract year or cancel this program at any time.
You may not participate in our optional rebalancing programs if you elect the
general dollar cost averaging program.
INVESTMENT SIMPLIFIER
FIXED-DOLLAR OPTION. Under this option, you may elect to have a fixed-dollar
amount transferred out of the guaranteed interest option and into the
Investment Performance variable investment options of your choice. Transfers
may be made on a monthly, quarterly or annual basis. You can specify the number
of transfers or instruct us to continue to make transfers until all available
amounts in the guaranteed interest option have been transferred out.
In order to elect the fixed-dollar option, you must have a minimum of $5,000 in
the guaranteed interest option on the date we receive your election form at our
processing office. The transfer date will be the same calendar day of the month
as the contract date but not later than the 28th day of the month. The minimum
transfer amount is $50. Unlike the account for special dollar cost averaging,
the fixed dollar option does not offer enhanced rates. Also, this option is
subject to the guaranteed interest option transfer limitations described under
"Transferring your account value" in "Transferring your money among investment
options" later in this Prospectus. While the program is running, any transfer
that exceeds those limitations will cause the program to end for that contract
year. You will be notified if this occurs. You must send in a request form to
resume the program in the next or subsequent contract years.
If, on any transfer date, your value in the guaranteed interest option is equal
to or less than the amount you have elected to have transferred, the entire
amount will be transferred, provided the transfer complies with the same
guaranteed interest option transfer limitations referenced above. If the
transfer does not comply with the transfer limitations, the transfer will not
be made and the program will end. You may change the transfer amount once each
contract year or cancel this program at any time.
INTEREST SWEEP OPTION. Under this option, you may elect to have monthly
transfers from amounts in the guaranteed interest option into the Investment
Performance variable investment options of your choice. The transfer date will
be the last business day of the month. The amount we will transfer will be the
interest credited to amounts you have in the guaranteed interest option from
the last business day of the prior month to the last business day of the
current month. You must have at least $7,500 in the guaranteed interest option
on the date we receive your election. If the amount in the guaranteed interest
40 Contract features and benefits
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option falls below $7,500 at the beginning of the month, no transfer will be
made that month. We will automatically cancel the interest sweep program if the
amount in the guaranteed interest option is less than $7,500 on the last day of
the month for two months in a row. For the interest sweep option, the first
monthly transfer will occur on the last business day of the month following the
month that we receive your election form at our processing office. Transfers
under the Interest sweep option are subject to the guaranteed interest option
transfer limitations described under "Transferring your account value" in
"Transferring your money among investment options" later in this Prospectus.
GUARANTEED INCOME BENEFIT
This section describes the Guaranteed income benefit, or "GIB". The GIB
guarantees, subject to certain restrictions, annual lifetime payments
("Lifetime GIB payments") that are calculated by applying a percentage (which
is based on your age at the time your payments begin) to your GIB benefit base.
The GIB also allows you to take certain withdrawals (your "Annual withdrawal
amount") prior to the beginning of your Lifetime GIB payments. Your Annual
withdrawal amount is calculated each contract date anniversary by applying a
percentage ("the Annual Roll-up rate") to your GIB benefit base. Lifetime GIB
payments and your Annual withdrawal amount are described later in this section.
With respect to your GIB, it is important to note the following:
o Once a withdrawal is taken from your Protection with Investment Performance
account, you cannot make additional contributions to your Protection with
Investment Performance account, either directly or through a new special
money market dollar cost averaging program; and
o Withdrawals in excess of your Annual withdrawal amount (an "Excess
withdrawal") can greatly reduce the value of your GIB. An Excess
withdrawal that reduces your Protection with Investment Performance
account value to zero will cause your GIB to terminate.
In order to fund your Guaranteed income benefit, you must make contributions or
transfers to the Protection with Investment Performance account. All
allocations to the Protection with Investment Performance account must be made
in accordance with our Custom Selection Rules. The Custom Selection Rules
require that all of your Protection with Investment Performance account value
be allocated according to certain category and investment option limits. ANY
ALLOCATION TO THE "EQUITY" CATEGORY REQUIRES THAT THERE BE A 40% MINIMUM
ALLOCATION TO THE "FIXED INCOME" CATEGORY. This will also limit the amount that
may be allocated to the "AXA Strategic Allocation" Category. For detailed
information on how our Custom Selection Rules work, see "Allocating your
contributions" in "Contract features and benefits" earlier in this Prospectus.
The GIB is issued with all eligible contracts unless you tell us you do not
want it (or "opt out") at the time you apply for your Retirement Cornerstone(SM)
-- Series ADV contract. Currently, the GIB is issued to owners age 20-75 and
with all contract types except Inherited IRA. If the contract is jointly owned,
eligibility for the GIB will be issued based on the older owner's age. The GIB
cannot be added to your contract later if you decide to opt-out.
You can drop your GIB at any time prior to funding your Protection with
Investment Performance account. IF YOU FUND THE PROTECTION WITH INVESTMENT
PERFORMANCE ACCOUNT AT ISSUE, YOU CAN DROP YOUR GIB IF YOUR CONTRACT HAS BEEN
IN FORCE FOR AT LEAST FOUR CONTRACT YEARS. It is important to note that if you
decide to drop your GIB, either before or after funding your Protection with
Investment Performance account, your Guaranteed minimum death benefit may be
affected. Please see "Dropping or changing your Guaranteed benefits" later in
this section and Appendix I for more information.
--------------------------------------------------------------------------------
The GIB is issued with all eligible contracts unless you tell us you do not
want it (or "opt out") at the time you complete your application.
--------------------------------------------------------------------------------
When you purchase a contract with the GIB, you can combine it with one of our
Guaranteed minimum death benefits: (i) the Return of Principal death benefit,
(ii) the Highest Anniversary Value death benefit, or (iii) the "Greater of"
death benefit.
There is an additional charge for the GIB which is described under "Guaranteed
income benefit charge" in "Charges and expenses" later in this Prospectus.
If you have the GIB and change ownership of the contract, this benefit will
automatically terminate, except under certain circumstances. See "Transfers of
ownership, collateral assignments, loans and borrowing" in "More information,"
later in this Prospectus.
--------------------------------------------------------------------------------
The Guaranteed income benefit should be regarded as a safety net only.
--------------------------------------------------------------------------------
GIB BENEFIT BASE
Your GIB has a benefit base. Your GIB benefit base is not an account value or
cash value. The GIB benefit base is used to calculate your Lifetime GIB
payments, your Annual withdrawal amount and the charge for the benefit. Your
GIB benefit base is equal to:
o Your initial contribution and any subsequent contributions to the Protection
with Investment Performance variable investment options, either directly
or through a special money market dollar cost averaging program; plus
o Any amounts in the account for special money market dollar cost averaging
that are designated for future transfers to the Protection with Investment
Performance variable investment options; plus
o Any transfers to the Protection with Investment Performance variable
investment options; less
o A deduction that reflects any "Excess withdrawal" amounts; plus
o Any "Deferral bonus Roll-up amount" OR any "Annual Roll-up amount", minus a
deduction that reflects any withdrawals up to the Annual withdrawal
amount.
-OR--
Contract features and benefits 41
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The "reset" value for every third contract date anniversary from the contract
date up to your 95th birthday. (The GIB benefit base reset is described below.)
--------------------------------------------------------------------------------
The Deferral bonus Roll-up amount and the Annual Roll-up amounts are amounts
credited to the benefit bases of your Guaranteed benefits on each contract date
anniversary. These amounts are calculated by taking into account your GIB
benefit base from the preceding contract date anniversary, the applicable
Roll-up rate under your contract, contributions and transfers to the Protection
with Investment Performance account during the contract year and any
withdrawals of the Annual withdrawal amount during the contract year. The
calculation of both the Deferral bonus Roll-up amount and the Annual Roll-up
amount are discussed later in this section.
--------------------------------------------------------------------
It is important to note that withdrawals up to your Annual withdrawal amount
will not reduce your GIB benefit base. However, those same withdrawals will
reduce the Annual Roll-up amount that would otherwise be applied to the GIB
benefit base at the end of the contract year. Remember that the Roll-up amount
applicable under your contract does not become part of your GIB benefit base
until the end of the contract year.
Every three contract years from your contract issue date up to your 95th
birthday, your GIB benefit base will automatically reset to equal your
Protection with Investment Performance account value if your Protection with
Investment Performance account value is greater than the calculation described
above. The GIB benefit base reset is described in more detail below.
GIB BENEFIT BASE RESET
Your GIB benefit base will automatically "reset" to equal the Protection with
Investment Performance account value, if higher, every three contract years
from your contract issue date, up to the contract date anniversary following
your 95th birthday. If you choose to fund your Protection with Investment
Performance account after issue, the eligibility for resets every three years
is still based on the contract issue date and not the date that you first
funded the Protection with Investment Performance account.
If a reset is not applicable on any eligible contract date anniversary, the GIB
benefit base will not be eligible to be reset again until the next eligible
contract date anniversary. For example, even if the GIB benefit base did not
reset on the third contract date anniversary, it will not be eligible again for
a reset until the sixth contract date anniversary. For jointly-owned contracts,
eligibility to reset the GIB benefit base is based on the age of the older
owner. For non-naturally owned contracts, eligibility is based on the age of
the annuitant or older joint annuitant.
--------------------------------------------------------------------------------
Whether you fund your GIB at contract issue or some later date, the contract
date anniversaries on which your GIB benefit base is eligible for a reset are
the same.
--------------------------------------------------------------------------------
WE RESERVE THE RIGHT TO INCREASE THE FEE FOR THE GIB IF THE GIB BENEFIT BASE
RESETS. Please see the "Fee table" earlier in this Prospectus and "Charges and
expenses" later in this Prospectus for more information about the charge. Your
GIB benefit base will reset automatically unless you opt out. We will notify
you at least 45 days prior to your contract date anniversary if your GIB
benefit base is eligible for a reset and if a fee increase has been declared.
If you do not want your fee to increase, you must notify us in writing at least
30 days prior to the contract date anniversary on which your GIB benefit base
could reset that you want to opt out of the reset. You can send us a written
request to opt back in to automatic resets at a later date. The current fee
will apply upon the next reset. Your GIB benefit base would be eligible for
resets based on the same schedule: every three contract years from the contract
issue date.
If we do not increase the charge for the GIB when a benefit base resets, the
total dollar amount charged on future contract date anniversaries may still
increase as a result of the reset since the charges may be applied to a higher
GIB benefit base than would have been otherwise applied. See "Charges and
expenses" later in this Prospectus for more information.
Only amounts you allocate to the Protection with Investment Performance
variable investment options and amounts in the account for special money market
dollar cost averaging designated for the Protection with Investment Performance
variable investment options will fund your GIB. These amounts will be included
in your GIB benefit base and will become part of your Protection with
Investment Performance account value. See "Allocating your contributions"
earlier in this section for more information.
For example:
You purchase a Retirement Cornerstone(SM) -- Series ADV contract with an initial
contribution of $100,000 and allocate $60,000 to the Protection with Investment
Performance variable investment options and $40,000 to the Investment
Performance variable investment options. Your initial GIB benefit base will be
$60,000.
Provided you did not opt out of the GIB, you can fund your GIB benefit by
allocating money to the Protection with Investment Performance variable
investment options (either directly or through a special money market dollar
cost averaging program) immediately or at some later date. Allocations to the
Protection with Investment Performance variable investment options also fund
your Guaranteed minimum death benefit. Please note that all allocations to your
Protection with Investment Performance account must comply with our Custom
Selection Rules. See "Allocating your contributions" earlier in this section.
Your "Deferral bonus Roll-up amount" and "Annual Roll-up amount" are described
below. Your GIB benefit base stops "rolling up" on the contract date
anniversary following the owner's (or older joint owner's, if applicable) 95th
birthday. If the annuitant is older than the owner, the contract maturity date
(the point at which Lifetime GIB payments must begin and Roll-ups will end)
will precede the owner's 95th birthday.
For contracts with non-natural owners, the GIB benefit base will be based on
the annuitant's (or older joint annuitant's) age.
The amount of the deduction for an "Excess withdrawal" and the deduction for
the Annual withdrawal amount are described under "How withdrawals affect your
Guaranteed benefits later in this section.
42 Contract features and benefits
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As discussed earlier in this section, your GIB benefit base is not an account
value or cash value. As a result, the GIB benefit base cannot be split or
divided in any proportion in connection with a divorce. See "How divorce may
affect your Guaranteed benefits" in "More information."
Please see Appendix II later in this Prospectus for an example of how the GIB
benefit base is calculated.
You do not have an Annual withdrawal amount in the first contract year in which
you fund your Protection with Investment Performance account. A withdrawal from
your Protection with Investment Performance account in the first contract year
in which you fund the Protection with Investment Performance account will
reduce your GIB benefit base on a pro-rata basis. Beginning in the second
contract year after you fund your Protection with Investment Performance
account, if your Lifetime GIB payments have not begun, withdrawals up to your
Annual withdrawal amount will not reduce your GIB benefit base. Withdrawals in
excess of your Annual withdrawal amount will reduce your GIB benefit base on a
pro-rata basis. See "Annual withdrawal amount" later in this section.
ANNUAL WITHDRAWAL AMOUNT
(APPLICABLE PRIOR TO THE BEGINNING OF LIFETIME GIB PAYMENTS)
Your Annual withdrawal amount is calculated on the first day of each contract
year, beginning in the second contract year, and is equal to:
o the Annual Roll-up rate in effect at the time, multiplied by;
o the GIB benefit base as of the most recent contract date anniversary.
Beginning in the second contract year after you fund your Protection with
Investment Performance account, if your Lifetime GIB payments have not begun,
you may withdraw up to your Annual withdrawal amount without reducing your GIB
benefit base and adversely affecting your Lifetime GIB payments. IT IS
IMPORTANT TO NOTE THAT WITHDRAWALS IN EXCESS OF YOUR ANNUAL WITHDRAWAL AMOUNT
WILL HAVE A HARMFUL EFFECT ON BOTH YOUR GIB BENEFIT BASE AND LIFETIME GIB
PAYMENTS. AN EXCESS WITHDRAWAL THAT REDUCES YOUR PROTECTION WITH INVESTMENT
PERFORMANCE ACCOUNT TO ZERO WILL CAUSE YOUR GIB TO TERMINATE. You do not have
an Annual withdrawal amount in the first contract year in which you fund the
Protection with Investment Performance account.
If you have the "Greater of" death benefit, beginning in the second contract
year after you fund your Protection with Investment Performance account and
until the contract owner (or annuitant) reaches age 85, if your Lifetime GIB
payments have not begun, withdrawals up to your Annual withdrawal amount will
not reduce your Roll-up to age 85 benefit base. Beginning at annuitant's age
85, withdrawals will reduce your Roll-up to age 85 benefit base on a
dollar-for-dollar basis up to your Annual withdrawal amount. Withdrawals in
excess of your Annual withdrawal amount will likely have a harmful effect on
your "Greater of" Guaranteed minimum death benefit.
A withdrawal from your Protection with Investment Performance account in the
first contract year in which the Protection with Investment Performance account
is funded will reduce your GIB benefit base and Roll-up to age 85 benefit base
on a pro-rata basis. A withdrawal in excess of your Annual withdrawal amount
will always reduce these benefit bases on a pro-rata basis. This is referred to
as an "Excess withdrawal". The reduction of your Guaranteed benefit bases on a
pro-rata basis means that we calculate the percentage of your current
Protection with Investment Performance account value that is being withdrawn
and we reduce your current Guaranteed benefit bases by the same percentage. A
pro-rata withdrawal will have a significant adverse effect on those benefit
bases in cases where the Protection with Investment Performance account value
is less than the benefit bases. For an example of how a pro-rata reduction
works, see "How withdrawals affect your Guaranteed benefits" later in this
section. A WITHDRAWAL FROM YOUR PROTECTION WITH INVESTMENT PERFORMANCE ACCOUNT
IN THE FIRST CONTRACT YEAR IN WHICH THE PROTECTION WITH INVESTMENT PERFORMANCE
ACCOUNT IS FUNDED IS TREATED JUST LIKE AN EXCESS WITHDRAWAL.
For more information, see "Example of how your Annual withdrawal amount; Annual
Roll-up amount and annual benefit base adjustment; and the effect of an Excess
withdrawal is calculated" below in this section. See also "How withdrawals
affect your Guaranteed benefits" later in this section and see Appendix VI
later in this Prospectus for examples of how withdrawals affect your Annual
withdrawal amount.
Your Annual withdrawal amount is always calculated using the Annual Roll-up
rate in effect at the time. The Deferral bonus Roll-up rate, described below,
is never used for the purposes of calculating the Annual withdrawal amount.
Your Annual withdrawal amounts are not cumulative. If you withdraw less than
your Annual withdrawal amount in any contract year, you may not add the
remainder to your Annual withdrawal amount in any subsequent year. Your Annual
withdrawal amount may be more than or less than your Lifetime GIB payments. See
"Lifetime GIB payments" later in this section.
ANNUAL ROLL-UP RATE
The Annual Roll-up rate is used to calculate your Annual withdrawal amount. It
is also used to calculate amounts credited to your GIB benefit base and Roll-up
to age 85 benefit base (used in the calculation of the "Greater of" death
benefit) for the contract year in which the first withdrawal is made from your
Protection with Investment Performance account and all subsequent contract
years. A different Roll-up rate is used to calculate amounts credited to these
Guaranteed benefit bases in the contract years prior to the first withdrawal
from your Protection with Investment Performance account -- it is called the
"Deferral bonus Roll-up rate". The Deferral bonus Roll-up rate is described
below.
The Annual Roll-up rate is variable and is tied to the Ten-Year Treasuries
Formula Rate described below, but will never be less than 4% or greater than 8%
in all contract years. The Annual Roll-up rate will be set at our discretion,
subject to the stated minimum. We reserve the right, however, to declare an
Annual Roll-up rate that is greater than 8%.
o TEN-YEAR TREASURIES FORMULA RATE. For each calendar quarter,
this rate is the average of the rates for the ten-year U.S. Treasury
notes on each day for which such rates are reported
Contract features and benefits 43
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during the 20 calendar days ending on the 15th day of the last month
of the preceding calendar quarter, plus 1.00%, rounded to the nearest
0.10%. U.S. Treasury rates will be determined from the Federal Reserve
Board Constant Maturity Series or such comparable rates as may be
published by the Federal Reserve Board or generally available
reporting services if the Federal Reserve Board Constant Maturity
Series is discontinued.
DEFERRAL BONUS ROLL-UP RATE
The Deferral bonus Roll-up rate is only used to calculate amounts credited to
your GIB benefit base and Roll-up to age 85 benefit base (used in the
calculation of the "Greater of" death benefit) until a withdrawal is made from
your Protection with Investment Performance account. The Deferral bonus Roll-up
rate is never used to calculate your Annual withdrawal amount under the GIB.
Beginning in the first contract year in which you fund your Protection with
Investment Performance account, the Roll-up amount credited to your GIB benefit
base at the end of the contract year (the "Deferral bonus Roll-up amount") will
be calculated using the Deferral bonus Roll-up rate. Once you take a withdrawal
from your Protection with Investment Performance account, the Deferral bonus
Roll-up rate will not be applied at that end of the contract year in which the
withdrawal was taken and will terminate for the life of the contract.
The Deferral bonus Roll-up rate is designed as an incentive to defer taking
your first withdrawal from your Protection with Investment Performance account
until later contract years while potentially building greater Guaranteed
benefit bases with a higher Roll-up rate.
The Deferral bonus Roll-up rate is variable and is tied to the Deferral Bonus
Ten-Year Treasuries Formula Rate described below. The Deferral bonus Roll-up
rate will never be less than 4% or greater than 8% in all contract years up
until the first withdrawal from the Protection with Investment Performance
account value. The Deferral bonus Roll-up rate will be set at our discretion,
subject to the stated minimum. We reserve the right, however, to declare a
Deferral bonus Roll-up rate that is greater than 8%.
o DEFERRAL BONUS TEN-YEAR TREASURIES FORMULA RATE. For each
calendar quarter, this rate is the average of the rates for the
ten-year U.S. Treasury notes on each day for which such rates are
reported during the 20 calendar days ending on the 15th day of the
last month of the preceding calendar quarter, plus 1.50%, rounded to
the nearest 0.10%. U.S. Treasury rates will be determined from the
Federal Reserve Board Constant Maturity Series or such comparable
rates as may be published by the Federal Reserve Board or generally
available reporting services if the Federal Reserve Board Constant
Maturity Series is discontinued.
As described above, both the Annual Roll-up rate and the Deferral bonus Roll-up
rate will never be less than 4% or greater than 8% in all contract years. Based
on the underlying formula rates that are used in arriving at the two Roll-up
rates, it is expected that the Deferral bonus Roll-up rate will generally be
0.50% greater than the Annual Roll-up rate. However, this is not guaranteed. In
certain interest rate environments, the Deferral bonus Roll-up rate may not
always be 0.50% greater than the Annual Roll-up rate. In some cases, it may be
more than 0.50% greater than the Annual Roll-up rate.
Examples:
o Assume the calculation of Ten-Year Treasuries Formula Rate results
in an Annual Roll-up rate of 3.75% and the calculation of the
Deferral Bonus Ten-Year Treasuries Formula Rate results in a Deferral
bonus Roll-up rate of 4.25%. Since the Annual Roll-up rate is subject
to a guaranteed minimum of 4%, the Annual Roll-up rate would be 4%.
The Deferral bonus Roll-up rate would remain 4.25% having met the same
guaranteed minimum.
o Assume the calculation of Ten-Year Treasuries Formula Rate results
in an Annual Roll-up rate of 7.75% and the calculation of the
Deferral Bonus Ten-Year Treasuries Formula Rate results in a Deferral
bonus Roll-up rate of 8.25%. Since the Annual Roll-up rate is below
the guaranteed maximum of 8%, the Annual Roll-up rate would remain
7.75%. The Deferral bonus Roll-up rate would be 8% because it would
have exceeded our guaranteed maximum.
It is important to note that on each contract anniversary, we will apply either
the Annual Roll-up rate or the Deferral bonus Roll-up rate to your GIB benefit
base and Roll-up to age 85 benefit base (used in the calculation of the
"Greater of" death benefit) based on whether you have taken a withdrawal from
the Protection with Investment Performance account value. In statements we
provide you, we will show you the Roll-up amounts under both rate scenarios.
Once you take a withdrawal from your Protection with Investment Performance
account value, the Deferral bonus Roll-up rate will no longer be shown on your
statements.
NEW BUSINESS RATES. Your initial Annual Roll-up rate will not be less than 4%
or, if greater, the Ten-Year Treasuries Formula Rate. Your initial Deferral
bonus Roll-up rate will not be less than 4% or, if greater, the Deferral bonus
Ten-Year Treasuries Formula Rate. Once a contract is issued with the Annual
Roll-up and Deferral bonus rates that are then in effect for new business,
those rates will be applicable for one contract year even if you fund your
Guaranteed benefits later in that contract year.
75 DAY RATE LOCK-IN. If your initial contribution is received within 75 days
of the date you sign your application, your initial Annual Roll-up rate and
Deferral bonus Roll-up rate will be the greater of the rates in effect on the
date of the application or the rates in effect on the date your contract is
issued. If we do not receive your initial contribution within 75 days of the
date you sign your application, your initial Annual Roll-up rate and Deferral
bonus Roll-up rate will be the rates in effect on the date we issue your
contract. For a state-by-state description of all material variations of this
contract, including whether a longer rate lock-in period applies in your state,
see Appendix IV later in this Prospectus.
Example:
You sign your application for Retirement Cornerstone(SM) -- Series ADV on
September 15th. On that date the Annual Roll-up rate and Deferral bonus
Roll-up rates are 4.50% and 6.00%, respec-
44 Contract features and benefits
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o a pro rated Deferral bonus Roll-up amount for any contribution amounts in
the account for special money market dollar cost averaging that are
designated for future transfers to the Protection with Investment
Performance variable investment options, during the contract year pro rated
based on the number of days in the contract year after the contribution.
--------------------------------------
THE GIB BENEFIT BASE STOPS ROLLING UP ON THE CONTRACT DATE ANNIVERSARY
FOLLOWING THE OWNER'S (OR OLDER JOINT OWNER, IF APPLICABLE) 95TH BIRTHDAY. THE
ROLL-UP TO AGE 85 BENEFIT BASE, USED IN CONNECTION WITH THE "GREATER OF" DEATH
BENEFIT, STOPS ROLLING UP ON THE CONTRACT DATE ANNIVERSARY FOLLOWING THE
OWNER'S (OR OLDER JOINT OWNER, IF APPLICABLE) 85TH BIRTHDAY.
For more information, see the example immediately below.
EXAMPLE OF HOW YOUR ANNUAL WITHDRAWAL AMOUNT; ANNUAL ROLL-UP AMOUNT; DEFERRAL
BONUS ROLL-UP AMOUNT AND ANNUAL BENEFIT BASE ADJUSTMENT; AND THE EFFECT OF AN
EXCESS WITHDRAWAL IS CALCULATED.
Annual withdrawal amount. Assume you make a contribution of $200,000 and
allocate $100,000 to your Protection with Investment Performance variable
investment options and $100,000 to your Investment Performance variable
investment options at issue. At the beginning of contract year three, assume
you transfer $5,000 to your Protection with Investment Performance variable
investment options. Also assume that your Annual Roll-up rate is 4% and your
Deferral bonus rate is 4.50% in each contract year. Accordingly, your GIB
benefit base on your fifth contract date anniversary is $130,323.
The GIB benefit base of $130,323 is calculated as follows:
You start with $100,000 allocated to the Protection with Investment Performance
variable investment options. This amount is your initial GIB benefit base.
-- The first Deferral bonus Roll-up amount increases your GIB benefit base to
$104,500. ($100,000 + $4,500)
$100,000 (GIB Benefit Base) x 4.50% (Deferral bonus Roll-up rate) =
$4,500 (Deferral bonus Roll-up amount)
-- The second Deferral bonus Roll-up amount increases your GIB benefit base to
$109,202. ($104,500 + $4,702)
$104,500 (GIB Benefit Base) x 4.50% (Deferral bonus Roll-up rate) =
$4,702 (Deferral bonus Roll-up amount)
-- Your $5,000 transfer from the Investment Performance account at the
beginning of contract year three increases your GIB Benefit base to
$114,202 ($109,202 + $5,000)
-- The third Deferral bonus Roll-up amount increases your GIB benefit base to
$119,341. ($114,202 + $5,139)
$114,202 (GIB Benefit Base) x 4.50% (Deferral bonus Roll-up rate) =
$5,139 (Deferral bonus Roll-up amount)
-- The fourth Deferral bonus Roll-up amount increases your GIB benefit base to
$124,711. ($119,341 + $5,370)
$119,341 (GIB Benefit Base) x 4.50% (Deferral bonus Roll-up rate) =
$5,370 (Deferral bonus Roll-up amount)
-- The fifth Deferral bonus Roll-up amount increases your GIB benefit base to
$130,323. ($124,711 + $ 5,612)
$124,711 (GIB Benefit Base) x 4.50% (Deferral bonus Roll-up rate) =
$5,612 (Deferral bonus Roll-up amount)
Your Annual withdrawal amount as of the beginning of contract year six is equal
to $5,213, calculated as follows:
o $130,323 (GIB benefit base as of your most recent contract date
anniversary MULTIPLIED BY:
o 4% (your current Annual Roll-up rate) EQUALS:
o $5,213
Please note that your Annual Roll-up rate is used to calculate your Annual
withdrawal amount. The Deferral bonus Roll-up rate is never used to calculate
your Annual withdrawal amount.
Annual Roll-up amount and annual benefit base adjustment. Further assume that
during contract year six (on the 146th day of the contract year), you make a
contribution of $10,000 to your Protection with Investment Performance variable
investment options, making your current GIB benefit base after contribution
$140,323. Also assume that you withdraw your full Annual withdrawal amount of
$5,213 during contract year six.
On your sixth contract date anniversary, your Annual Roll-up amount is equal to
$240, calculated as follows:
o 4% (your current Annual Roll-up rate) MULTIPLIED BY
o $130,323 (your GIB benefit base as of your most recent contract date
anniversary) PLUS
o $240 (the daily pro rated Roll-up amount for the contribution:
$10,000 x 4% x 219/365* = $240) MINUS
o $5,213 (the Annual withdrawal amount, which was withdrawn)
o equals $240
------------------------------
* This fraction represents the number of days in a 365-day contract
year that contribution would have received credit toward the Roll-up
amount.
Please note that the withdrawal in contract year six terminated the Deferral
bonus Roll-up rate. Therefore on the sixth contract date anniversary, the
Annual Roll-up rate was used to calculate the Annual Roll-up amount.
Your adjusted GIB benefit base is $140,563.
Effect of an Excess withdrawal. In contract year six, assume instead that you
make a withdrawal of $8,213. This would result in an Excess withdrawal of
$3,000 because your Annual withdrawal amount is only $5,213 ($8,213 - $5,213 =
$3,000). Further, assume that your Protection with Investment Performance
account value at the time of this withdrawal is $100,000. As described earlier
in this section, Excess withdrawals reduce your GIB benefit base on a pro-rata
basis. Accordingly, your GIB benefit base is reduced by $4,209 at the time of
the withdrawal, calculated as follows:
46 Contract features and benefits
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o Your initial contribution and any subsequent contributions to the Protection
with Investment Performance variable investment options, either directly
or through a special money market dollar cost averaging program; plus
o Any amounts in the account for special money market dollar cost averaging
that are designated for future transfers to the Protection with Investment
Performance variable investment options; plus
o Any amounts transferred to the Protection with Investment Performance
variable investment options, less
o A deduction that reflects any withdrawals you make from the Protection with
Investment Performance variable investment options or from amounts in a
special money market dollar cost averaging program designated for the
Protection with Investment Performance variable investment options. The
amount of this deduction is described under "How withdrawals affect your
Guaranteed benefits" later in this section.
Please see Appendix II later in this Prospectus for an example of how the
Return of Principal benefit base is calculated.
HIGHEST ANNIVERSARY VALUE DEATH BENEFIT
Your Highest Anniversary Value guaranteed minimum death benefit is equal to
your Highest Anniversary Value benefit base. The benefit base is not an account
value or cash value. The calculation of your Highest Anniversary Value benefit
base will depend on whether you have taken a withdrawal from your Protection
with Investment Performance account value.
If you have not taken a withdrawal from your Protection with Investment
Performance account, your Highest Anniversary Value benefit base is equal to
one of the following -- whichever provides a higher amount:
o Your initial contribution and any subsequent contributions to the Protection
with Investment Performance variable investment options, either directly
or through a special money market dollar cost averaging program; plus
o Any amounts in the account for special money market dollar cost averaging
that are designated for future transfers to the Protection with Investment
Performance variable investment options; plus
o Any amounts transferred to the Protection with Investment Performance
variable investment options.
-OR-
o Your highest Protection with Investment Performance account value on any
contract date anniversary up to the contract date anniversary following
the owner's (or older joint owner's, if applicable) 85th birthday (plus
any transfers to the Protection with Investment Performance variable
investment options and contributions to a special money market dollar cost
averaging program designated for the Protection with Investment
Performance variable investment options, made since the most recent
"reset" of the Highest Anniversary Value benefit base that established
your Protection with Investment Performance account value as your new
Highest Anniversary Value benefit base).
If you take a withdrawal from your Protection with Investment Performance
account, your Highest Anniversary Value benefit base will be reduced on a
pro-rata basis. Reduction on a pro-rata basis means that we calculate the
percentage of your Protection with Investment Performance account value that is
being withdrawn and we reduce your Highest Anniversary Value benefit base by
the same percentage.
At any time after a withdrawal, your Highest Anniversary Value benefit base is
equal to one of the following -- whichever provides a higher amount:
o Your Highest Anniversary Value benefit base immediately following the most
recent withdrawal (plus any transfers to the Protection with Investment
Performance variable investment options made since the most recent "reset"
of the Highest Anniversary Value benefit base that established your
Protection with Investment Performance account value as your new Highest
Anniversary Value benefit base).
-OR-
o Your highest Protection with Investment Performance value on any contract
date anniversary after the withdrawal up to the contract date anniversary
following the owner's (or older joint owner's, if applicable) 85th
birthday (plus any transfers to the Protection with Investment Performance
variable investment options and contributions to the account for special
money market dollar cost averaging designated for the Protection with
Investment Performance variable investment options, made since the most
recent "reset" of the Highest Anniversary Value benefit base).
Please see Appendix II later in this Prospectus for an example of how the
Highest Anniversary Value benefit base is calculated.
"GREATER OF" DEATH BENEFIT
Your "Greater of" guaranteed minimum death benefit has a benefit base. The
benefit base is not an account value or cash value. It is equal to the greater
of:
o The benefit base computed for the Highest Anniversary Value death benefit
(described immediately above); and
o The Roll-up to age 85 death benefit base.
The Roll-up to age 85 benefit base is used only in connection with the "Greater
of" death benefit. It is equal to:
o Your initial contribution and any subsequent contributions to the Protection
with Investment Performance variable investment options, either directly
or through the account for special money market dollar cost averaging;
plus
o Any amounts in the account for special money market dollar cost averaging
that are designated for future transfers to the Protection with Investment
Performance variable investment options; plus
o Any transfers to the Protection with Investment Performance variable
investment options; less
o A deduction that reflects any "Excess withdrawal" amounts; plus
o Any "Deferral bonus Roll-up amount" OR "Annual Roll-up amount" minus a
deduction that reflects any withdrawals up to the Annual withdrawal
amount.
50 Contract features and benefits
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o You may make transfers among the investment options, as permitted.
o You may choose at any time to withdraw all or a portion of the account
value. Any partial withdrawal must be at least $300. Withdrawal charges will
apply as described in "Charges and expenses" later in this Prospectus.
o If you have the Return of Principal death benefit or the Highest Anniversary
Value death benefit, amounts withdrawn from the contract to meet RMDs will
reduce the benefit base and may limit the utility of the benefit(s).
o The GIB, Spousal continuation, automatic investment program, automatic
payment plans and systematic withdrawals are not available under the
Inherited IRA beneficiary continuation contract.
o Upon your death, your beneficiary has the option to continue taking RMDs
based on your remaining life expectancy or to receive any remaining
interest in the contract in a lump sum. The option elected will be
processed when we receive satisfactory proof of death, any required
instructions for the method of payment and any required information and
forms necessary to effect payment. If your beneficiary elects to continue
to take distributions, withdrawal charges (if applicable) will no longer
apply. If you have a Guaranteed minimum death benefit, it will no longer
be in effect and any applicable charge for such benefit will stop.
o When you die, we will pay your beneficiary the Investment Performance
account value and the greater of the Protection with Investment Performance
account value or the applicable death benefit.
YOUR RIGHT TO CANCEL WITHIN A CERTAIN NUMBER OF DAYS
If for any reason you are not satisfied with your contract, you may exercise
your cancellation right under the contract to receive a refund. To exercise
this cancellation right, you must notify us with a signed letter of instruction
electing this right, to our processing office within 10 days after you receive
your contract. If state law requires, this "free look" period may be longer.
Other state variations may apply. For a state-by-state description of all
material variations of this contract, including specific information on your
"free look" period, see Appendix IV later in this Prospectus.
Generally, your refund will equal your Total account value under the contract
on the day we receive notification of your decision to cancel the contract and
will reflect (i) any investment gain or loss in the variable investment options
(less the daily charges we deduct), and (ii) any guaranteed interest in the
guaranteed interest option, through the date we receive your contract. Some
states, however, require that we refund the full amount of your contribution
(not reflecting (i) or (ii) above). For any IRA contract returned to us within
seven days after you receive it, we are required to refund the full amount of
your contribution.
We may require that you wait six months before you may apply for a contract
with us again if:
o you cancel your contract during the free look period; or
o you change your mind before you receive your contract whether we have
received your contribution or not.
Please see "Tax information" later in this Prospectus for possible consequences
of cancelling your contract.
If you fully convert an existing traditional IRA contract to a Roth IRA
contract, you may cancel your Roth IRA contract and return to a traditional IRA
contract. Our processing office, or your financial professional, can provide
you with the cancellation instructions.
In addition to the cancellation right described above, you have the right to
surrender your contract, rather than cancel it. Please see "Surrendering your
contract to receive its cash value" in "Accessing your money," later in this
Prospectus. Surrendering your contract may yield results different than
canceling your contract, including a greater potential for taxable income. In
some cases, your cash value upon surrender may be greater than your
contributions to the contract. Please see "Tax information," later in this
Prospectus.
54 Contract features and benefits
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of falling to zero, you will not have the ability to fund the contract and any
Guaranteed benefits in order to avoid contract and/or Guaranteed benefit
termination.
Withdrawals and/or deductions of charges during or following a period of poor
market performance in which your account values decrease, increases the
possibility that such a withdrawal or deduction could cause your account values
to fall to zero.
For a state-by-state description of all material variations of this contract,
including information on the termination of your contract in your state, see
Appendix IV later in this Prospectus.
56 Determining your contract's value
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Protection with Investment Performance account value is greater than your
Annual withdrawal amount remaining for that year. If your cash value is not
greater than your Annual withdrawal amount remaining for that year, then you
will receive your cash value and a supplementary life annuity contract under
which we will pay you Lifetime GIB payments. For more information, please see
"Effect of your account values falling to zero" in "Determining your contract's
value" and "Guaranteed income benefit" in "Contract features and benefits"
earlier in this Prospectus.
You may receive your cash value in a single sum payment or apply it to one or
more of the annuity payout options. See "Your annuity payout options" below.
For the tax consequences of surrenders, see "Tax information" later in this
Prospectus.
WHEN TO EXPECT PAYMENTS
Generally, we will fulfill requests for payments out of the variable investment
options within seven calendar days after the business day the transaction
request is received by us in good order. These transactions may include
applying proceeds to a payout annuity, payment of a death benefit, payment of
any amount you withdraw and, upon surrender, payment of the cash value. We may
postpone such payments or applying proceeds for any period during which:
(1) the New York Stock Exchange is closed or restricts trading,
(2) the SEC determines that an emergency exists as a result of
sales of securities or determination of the fair value of a variable
investment option's assets is not reasonably practicable, or
(3) the SEC, by order, permits us to defer payment to protect
people remaining in the variable investment options.
We can defer payment of any portion of your value in the guaranteed interest
option, (other than for death benefits) for up to six months while you are
living. We also may defer payments for a reasonable amount of time (not to
exceed 10 days) while we are waiting for a contribution check to clear.
All payments are made by check and are mailed to you (or the payee named in a
tax-free exchange) by U.S. mail, unless you request that we use an express
delivery or wire transfer service at your expense.
YOUR ANNUITY PAYOUT OPTIONS
Deferred annuity contracts such as the Retirement Cornerstone(SM) -- Series ADV
provide for conversion to annuity payout status at or before the contract's
"maturity date." This is called "annuitization." Upon annuitization, your
account value is applied to provide periodic payments as described in this
section; the contract and all its benefits terminate; and you receive a
supplementary contract for the periodic payments ("payout option"). The
supplementary contract does not have an account value or cash value. If you
choose a variable payout option, you will receive a separate prospectus related
to the contract you select.
We currently offer you several choices of annuity payout options. The options
available directly under the contract entitle you to receive fixed annuity
payments. Options available under separate contracts and described in separate
prospectuses enable you to receive variable annuity payments. For a
state-by-state description of all material variations of this contract,
including information on your available annuity payout options, see Appendix IV
later in this Prospectus.
You may choose to annuitize your contract at any time, which generally is at
least 13 months after the contract issue date. The contract's maturity date is
the latest date on which annuitization can occur. If you do not annuitize
before the maturity date and at the maturity date have not made an affirmative
choice as to the type of annuity payments to be received, we will convert your
contract to the default annuity payout option described in "Annuity maturity
date" later in this section. If you have the GIB or a Guaranteed minimum death
benefit, your contract may have both a Protection with Investment Performance
account value and a Investment Performance account value. If there is a
Protection with Investment Performance account value and you choose to
annuitize your contract before the maturity date, the GIB will terminate
without value even if your GIB benefit base is greater than zero. The payments
that you receive under the payout annuity option you select may be less than
you would have received under GIB. See "Guaranteed income benefit" in "Contract
features and benefits" earlier in this Prospectus for further information. Any
Guaranteed minimum death benefit terminates upon annuitization. Please note
that the contract is not treated as annuitized unless all amounts remaining
under the contract have been converted to annuity payments; there is no partial
annuitization. See "Annuity payments" in "Taxation of nonqualified annuities"
under "Tax information" later in this Prospectus. You may choose a partial
withdrawal of cash value to purchase a life annuity at any time at or before
the maturity date, but the guaranteed annuity purchased rates described below
will not apply.
In general, your periodic payment amount upon annuitization is determined by
your Total account value, the form of the annuity payout option you elect as
described below, the timing of your purchase, and the applicable annuity
purchase rate to which that value is applied. Once begun, annuity payments
cannot be stopped unless otherwise provided in the supplementary contract. Your
contract guarantees that upon annuitization, your account value will be applied
to a guaranteed annuity purchase rate for a life annuity. We reserve the right,
with advance notice to you, to change guaranteed annuity purchase rates any
time after your fifth contract date anniversary and at not less than five-year
intervals after the first change. (Please see your contract and SAI for more
information.) In the event that we exercise our contractual right to change the
guaranteed annuity purchase factors, we would segregate the account value based
on contributions and earnings received prior to and after the change. When your
contract is annuitized, we would calculate the payments by applying the
applicable purchase factors separately to the value of the contributions
received before and after the rate change. We will provide you with 60 days
advance written notice of such a change.
In addition, you may apply your Total account value or cash value, whichever is
applicable, to any other annuity payout option that we may offer at the time of
annuitization. We have the right to require you to provide any information we
deem necessary to provide an annuity
Accessing your money 65
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If you divorce, Spousal continuation does not apply.
BENEFICIARY CONTINUATION OPTION
This feature permits a designated individual, on the contract owner's death, to
maintain a contract with the deceased contract owner's name on it and receive
distributions under the contract, instead of receiving the death benefit in a
single sum. We make this option available to beneficiaries under traditional
IRA, Roth IRA and NQ contracts, subject to state availability. Please speak
with your financial professional for further information. For a state-by-state
description of all material variations of this contract, including information
on the availability of the Beneficiary continuation option in your state, see
Appendix IV later in this Prospectus.
Where an IRA contract is owned in a custodial individual retirement account,
the custodian may reinvest the death benefit in an individual retirement
annuity contract, using the account beneficiary as the annuitant. Please speak
with your financial professional for further information.
BENEFICIARY CONTINUATION OPTION FOR TRADITIONAL IRA AND ROTH IRA CONTRACTS
ONLY. The Beneficiary continuation option must be elected by September 30th of
the year following the calendar year of your death and before any other
inconsistent election is made. Beneficiaries who do not make a timely election
will not be eligible for this option. If the election is made, then, as of the
date we receive satisfactory proof of death, any required instructions,
information and forms necessary to effect the Beneficiary continuation option
feature, we will increase the Protection with Investment Performance account
value to equal the applicable death benefit if such death benefit is greater
than such account value, adjusted for any subsequent withdrawals.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy (determined in the calendar year after your death
and determined on a term certain basis). These payments must begin no later
than December 31st of the calendar year after the year of your death. For sole
spousal beneficiaries, payments may begin by December 31st of the calendar year
in which you would have reached age 701/2, if such time is later. For
traditional IRA contracts only, if you die before your Required Beginning Date
for Required Minimum Distributions, as discussed later in this Prospectus in
"Tax information" under "Individual retirement arrangements (IRAs)," the
beneficiary may choose the "5-year rule" option instead of annual payments over
life expectancy. The "5-year rule" is always available to beneficiaries under
Roth IRA contracts. If the beneficiary chooses this option, the beneficiary may
take withdrawals as desired, but the entire account value must be fully
withdrawn by December 31st of the calendar year which contains the fifth
anniversary of your death.
Under the Beneficiary continuation option for IRA and Roth IRA contracts:
o The contract continues with your name on it for the benefit of your
beneficiary.
o The beneficiary replaces the deceased owner as annuitant.
o This feature is only available if the beneficiary is an individual. Certain
trusts with only individual beneficiaries will be treated as individuals
for this purpose.
o If there is more than one beneficiary, each beneficiary's share will be
separately accounted for. It will be distributed over the beneficiary's
own life expectancy, if payments over life expectancy are chosen.
o The minimum amount that is required in order to elect the Beneficiary
continuation option is $5,000 for each beneficiary.
o The beneficiary may make transfers among the Investment Performance variable
investment options and the guaranteed interest option (subject to our
rules) but no subsequent contributions will be permitted.
o The Protection with Investment Performance variable investment options will
no longer be available and no value can be allocated to those investment
options.
o If any Guaranteed benefits are in effect under the contract, they will no
longer be in effect and charges for such benefits will stop.
o The beneficiary may choose at any time to withdraw all or a portion of the
Total account value.
o Any partial withdrawal must be at least $300.
o Your beneficiary will have the right to name a beneficiary to receive any
remaining interest in the contract.
o Upon the death of your beneficiary, the beneficiary he or she has named has
the option to either continue taking required minimum distributions based
on the remaining life expectancy of the deceased beneficiary or to receive
any remaining interest in the contract in a lump sum. The option elected
will be processed when we receive satisfactory proof of death, any
required instructions for the method of payment and any required
information and forms necessary to effect payment.
BENEFICIARY CONTINUATION OPTION FOR NQ CONTRACTS ONLY. This feature, also known
as Inherited annuity, may only be elected when the NQ contract owner dies
before the annuity maturity date, whether or not the owner and the annuitant
are the same person. For purposes of this discussion, "beneficiary" refers to
the successor owner. This feature must be elected within 9 months following the
date of your death and before any other inconsistent election is made.
Beneficiaries who do not make a timely election will not be eligible for this
option.
Generally, payments will be made once a year to the beneficiary over the
beneficiary's life expectancy, determined on a term certain basis and in the
year payments start. These payments must begin no later than one year after the
date of your death and are referred to as "scheduled payments." The beneficiary
may choose the "5-year rule" instead of scheduled payments over life
expectancy. If the beneficiary chooses the 5-year rule, there will be no
scheduled payments. Under the 5-year rule, the beneficiary may take withdrawals
as desired, but the entire account value must be fully withdrawn by the fifth
anniversary of your death.
Under the Beneficiary continuation option for NQ contracts:
o This feature is only available if the beneficiary is an individual. It is
not available for any entity such as a trust, even if all of the
beneficiaries of the trust are individuals.
Payment of death benefit 73
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8. More information
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ABOUT SEPARATE ACCOUNT NO. 49
Each variable investment option is a subaccount of Separate Account No. 49. We
established Separate Account No. 49 in 1996 under special provisions of the New
York Insurance Law. These provisions prevent creditors from any other business
we conduct from reaching the assets we hold in our variable investment options
for owners of our variable annuity contracts. We are the legal owner of all of
the assets in Separate Account No. 49 and may withdraw any amounts that exceed
our reserves and other liabilities with respect to variable investment options
under our contracts. For example, we may withdraw amounts from Separate Account
No. 49 that represent our investments in Separate Account No. 49 or that
represent fees and charges under the contracts that we have earned. Also, we
may, at our sole discretion, invest Separate Account No. 49 assets in any
investment permitted by applicable law. The results of Separate Account No.
49's operations are accounted for without regard to AXA Equitable's other
operations. The amount of some of our obligations under the contracts is based
on the assets in Separate Account No. 49. However, the obligations themselves
are obligations of AXA Equitable.
Separate Account No. 49 is registered under the Investment Company Act of 1940
and is registered and classified under that act as a "unit investment trust."
The SEC, however, does not manage or supervise AXA Equitable or Separate
Account No. 49. Although Separate Account No. 49 is registered, the SEC does
not monitor the activity of Separate Account No. 49 on a daily basis. AXA
Equitable is not required to register, and is not registered, as an investment
company under the Investment Company Act of 1940.
Each subaccount (variable investment option) within Separate Account No. 49
invests solely in Class IA/A or Class IB/B shares issued by the corresponding
Portfolio of its Trust.
We reserve the right subject to compliance with laws that apply:
(1) to add variable investment options to, or to remove variable investment
options from, Separate Account No. 49, or to add other separate accounts;
(2) to combine any two or more variable investment options;
(3) to transfer the assets we determine to be the shares of the class of
contracts to which the contracts belong from any variable investment
option to another variable investment option;
(4) to operate Separate Account No. 49 or any variable investment option as a
management investment company under the Investment Company Act of 1940 (in
which case, charges and expenses that otherwise would be assessed against
an underlying mutual fund would be assessed against Separate Account No.
49 or a variable investment option directly);
(5) to deregister Separate Account No. 49 under the Investment Company Act of
1940;
(6) to restrict or eliminate any voting rights as to Separate Account No. 49;
and
(7) to cause one or more variable investment options to invest some or all of
their assets in one or more other trusts or investment companies.
If the exercise of these rights results in a material change in the underlying
investment of Separate Account No. 49, you will be notified of such exercise,
as required by law.
ABOUT THE TRUSTS
The Trusts are registered under the Investment Company Act of 1940. They are
classified as "open-end management investment companies," more commonly called
mutual funds. Each Trust issues different shares relating to each Portfolio.
The Trusts do not impose sales charges or "loads" for buying and selling their
shares. All dividends and other distributions on the Trusts' shares are
reinvested in full. The Board of Trustees of each Trust may establish
additional Portfolios or eliminate existing Portfolios at any time. More
detailed information about each Trust, its Portfolio investment objectives,
policies, restrictions, risks, expenses, its Rule 12b-1 Plan and other aspects
of its operations, appears in the prospectuses for each Trust, which generally
accompany this Prospectus, or in their respective SAIs, which are available
upon request.
ABOUT THE GENERAL ACCOUNT
Our general obligations and any Guaranteed benefits under the contract are
supported by AXA Equitable's general account and are subject to AXA Equitable's
claims paying ability. An owner should look to the financial strength of AXA
Equitable for its claims-paying ability. Assets in the general account are not
segregated for the exclusive benefit of any particular contract or obligation.
General account assets are also available to the insurer's general creditors
and the conduct of its routine business activities, such as the payment of
salaries, rent and other ordinary business expenses. For more information about
AXA Equitable's financial strength, you may review its financial statements
and/or check its current rating with one or more of the independent sources
that rate insurance companies for their financial strength and stability. Such
ratings are subject to change and have no bearing on the performance of the
variable investment options. You may also speak with your financial
representative.
The general account is subject to regulation and supervision by the Insurance
Department of the State of New York and to the insurance laws and regulations
of all jurisdictions where we are authorized to do business. Interests under
the contracts in the general account have not been registered and are not
required to be registered under the Securities Act of 1933 because of
exemptions and exclusionary provisions that apply. The general account is not
required to register as an investment company under the Investment Company Act
of 1940 and it is
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not registered as an investment company under the Investment Company Act of
1940. The contract is a "covered security" under the federal securities laws.
We have been advised that the staff of the SEC has not reviewed the portions of
this Prospectus that relate to the general account . The disclosure with regard
to the general account, however, may be subject to certain provisions of the
federal securities laws relating to the accuracy and completeness of statements
made in the prospectuses.
ABOUT OTHER METHODS OF PAYMENT
WIRE TRANSMITTALS AND ELECTRONIC TRANSACTIONS
We accept initial and subsequent contributions sent by wire to our processing
office by agreement with certain broker-dealers. Such transmittals must be
accompanied by information we require to allocate your contribution. Wire
orders not accompanied by complete information may be retained as described
under "How you can make your contributions" under "Contract features and
benefits" earlier in this Prospectus.
Even if we accept the wire order and essential information, a contract
generally will not be issued until we receive and accept a properly completed
application. In certain cases we may issue a contract based on information
provided through certain broker-dealers with which we have established
electronic facilities. In any such cases, you must sign our Acknowledgement of
Receipt form.
Where we require a signed application, the above procedures do not apply and no
transactions will be permitted until we receive the signed application and have
issued the contract. Where we issue a contract based on information provided
through electronic facilities, we require an Acknowledgement of Receipt Form.
We may also require additional information. Until we receive the
Acknowledgement of Receipt Form, (i.e. withdrawals and surrenders) financial
transactions will not be permitted unless you request them in writing, sign the
request and have it signature guaranteed. After your contract has been issued,
additional contributions may be transmitted by wire.
In general, the transaction date for electronic transmissions is the date on
which we receive at our regular processing office all required information and
the funds due for your contribution. We may also establish same-day electronic
processing facilities with a broker-dealer that has undertaken to pay
contribution amounts on behalf of its customers. In such cases, the transaction
date for properly processed orders is the business day on which the
broker-dealer inputs all required information into its electronic processing
system. You can contact us to find out more about such arrangements.
After your contract has been issued, subsequent contributions may be
transmitted by wire.
AUTOMATIC INVESTMENT PROGRAM
You may use our automatic investment program, or "AIP," to have a specified
amount automatically deducted from a checking account, money market account, or
credit union checking account and contributed as a subsequent contribution into
a contract on a monthly or quarterly basis. AIP is available for NQ traditional
IRA and Roth IRA contracts, AIP is not available for Inherited IRA Beneficiary
Continuation (traditional IRA or Roth IRA) contracts. For a state-by-state
description of all material variations of this contract, including information
regarding restrictions on AIP in your state, see Appendix IV later in this
Prospectus.
The minimum amounts we will deduct are $100 monthly and $300 quarterly. AIP
subsequent contributions may be allocated to any of the variable investment
options, but not to the account for special money market dollar cost averaging.
You choose the day of the month you wish to have your account debited. However,
you may not choose a date later than the 28th day of the month. For contracts
with a Guaranteed benefit, AIP contributions with allocations to the Protection
with Investment Performance variable investment options will be allocated to
corresponding Investment Performance variable investment options that invest in
the same Portfolios after the date the first withdrawal is taken from the
Protection with Investment Performance account.
You may cancel AIP at any time by notifying our processing office. We are not
responsible for any debits made to your account before the time written notice
of cancellation is received at our processing office.
DATES AND PRICES AT WHICH CONTRACT EVENTS OCCUR
We describe below the general rules for when, and at what prices, events under
your contract will occur. Other portions of this Prospectus describe
circumstances that may cause exceptions. We generally do not repeat those
exceptions below.
BUSINESS DAY
Our "business day" is generally any day the New York Stock Exchange ("NYSE") is
open for regular trading and generally ends at 4:00 p.m. Eastern Time (or as of
an earlier close of regular trading). A business day does not include a day on
which we are not open due to emergency conditions determined by the Securities
and Exchange Commission. We may also close early due to such emergency
conditions. Contributions will be applied and any other transaction requests
will be processed when they are received along with all the required
information unless another date applies as indicated below.
o If your contribution, transfer or any other transaction request containing
all the required information reaches us on any of the following, we will
use the next business day:
- on a non-business day;
- after 4:00 p.m. Eastern Time on a business day; or
- after an early close of regular trading on the NYSE on a business
day.
o If your transaction is set to occur on the same day of the month as the
contract date and that date is the 29th, 30th or 31st of the month, then
the transaction will occur on the 1st day of the next month.
o When a charge is to be deducted on a contract date anniversary that is a
non-business day, we will deduct the charge on the next business day.
o If we have entered into an agreement with your broker-dealer for automated
processing of contributions upon receipt of customer order, your
contribution will be considered received at the time your
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Account No. 49, nor would any of these proceedings be likely to have a material
adverse effect upon the Separate Account, our ability to meet our obligations
under the contracts, or the distribution of the contracts.
FINANCIAL STATEMENTS
The financial statements of Separate Account No. 49, as well as the
consolidated financial statements of AXA Equitable, are in the SAI. The
financial statements of AXA Equitable have relevance to the contracts only to
the extent that they bear upon the ability of AXA Equitable to meet its
obligations under the contracts. The SAI is available free of charge. You may
request one by writing to our processing office or calling 1-800-789-7771.
TRANSFERS OF OWNERSHIP, COLLATERAL ASSIGNMENTS, LOANS AND BORROWING
You can transfer ownership of an NQ contract at any time before annuity
payments begin. We will continue to treat you as the owner until we receive
notification of any change at our processing office.
Any Guaranteed benefit in effect, will generally terminate if you change
ownership of the contract. A Guaranteed benefit will not terminate if the
ownership of the contract is transferred from a non-natural owner to an
individual but the contract will continue to be based on the annuitant's life.
It will also not terminate if you transfer your individually-owned contract to
a trust held for your (or your and your immediate family's) benefit; it will
continue to be based on your life. If you were not the annuitant under the
individually-owned contract, you will become the annuitant when ownership is
changed. Please speak with your financial professional for further information.
For a state-by-state description of all material variations of this contract,
including information regarding the termination of benefits under your
contract, see Appendix IV later in this Prospectus.
In general, you cannot assign or transfer ownership of an IRA contract except
by surrender to us. If your individual retirement annuity contract is held in
your custodial individual retirement account, you may only assign or transfer
ownership of such an IRA contract to yourself. Loans are not available and you
cannot assign IRA contracts as security for a loan or other obligation.
For limited transfers of ownership after the owner's death see "Beneficiary
continuation option" in "Payment of death benefit" earlier in this Prospectus.
You may direct the transfer of the values under your IRA contract to another
similar arrangement under federal income tax rules. In the case of such a
transfer, which involves a surrender of your contract, we will impose a
withdrawal charge, if one applies.
Loans are not available under your NQ contract.
In certain circumstances, you may collaterally assign all or a portion of the
value of your NQ contract as security for a loan with a third party lender. The
terms of the assignment are subject to our approval. The amount of the
assignment may never exceed your Total account value on the day prior to the
date we receive all necessary paperwork to effect the assignment. Only one
assignment per contract is permitted, and any such assignment must be made
prior to the first contract date anniversary. You must indicate that you have
not purchased, and will not purchase, any other AXA Equitable (or affiliate's)
NQ deferred annuity contract in the same calendar year that you purchase the
contract.
A collateral assignment does not terminate your benefits under the contract.
However, all withdrawals, distributions and benefit payments, as well as the
exercise of any benefits, are subject to the assignee's prior approval and
payment directions. We will follow such directions until AXA Equitable receives
written notification satisfactory to us that the assignment has been
terminated. If the owner or beneficiary fails to provide timely notification of
the termination, it is possible that we could pay the assignee more than the
amount of the assignment, or continue paying the assignee pursuant to existing
directions after the collateral assignment has in fact been terminated. Our
payment of any death benefit to the beneficiary and any payment of the Lifetime
GIB amount will also be subject to the terms of the assignment until we receive
written notification satisfactory to us that the assignment has been
terminated.
In some cases, an assignment or change of ownership may have adverse tax
consequences. See "Tax information" earlier in this Prospectus.
ABOUT CUSTODIAL IRAS
For certain custodial IRA accounts, after your contract has been issued, we may
accept transfer instructions by telephone, mail, facsimile or electronically
from a broker-dealer, provided that we or your broker-dealer have your written
authorization to do so on file. Accordingly, AXA Equitable will rely on the
stated identity of the person placing instructions as authorized to do so on
your behalf. AXA Equitable will not be liable for any claim, loss, liability or
expenses that may arise out of such instructions. AXA Equitable will continue
to rely on this authorization until it receives your written notification at
its processing office that you have withdrawn this authorization. AXA Equitable
may change or terminate telephone or electronic or overnight mail transfer
procedures at any time without prior written notice and restrict facsimile,
internet, telephone and other electronic transfer services because of
disruptive transfer activity.
HOW DIVORCE MAY AFFECT YOUR GUARANTEED BENEFITS
Our optional benefits do not provide a cash value or any minimum account value.
In the event that you and your spouse become divorced after you purchase a
contract with a Guaranteed benefit, we will not divide the benefit base(s) used
to calculate the benefits as part of the divorce settlement or judgment. As a
result of the divorce, we may be required to withdraw amounts from the
Protection with Investment Performance account to be paid an ex-spouse. Any
such withdrawal will be considered a withdrawal from the contract even if the
withdrawal is made to fund an AXA Equitable contract owned by your ex-spouse.
This means that your Guaranteed benefit will be reduced.
DISTRIBUTION OF THE CONTRACTS
The Retirement Cornerstone(SM) Series contracts are distributed by both AXA
Advisors, LLC ("AXA Advisors") and AXA Distributors, LLC ("AXA
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GUARANTEED BENEFIT
COMBINATION PRE-FUNDING DROP OF: YOUR OPTION(S) OR RESULT FOLLOWING THE DROP OR CHANGE
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o Highest Anniversary Highest Anniversary o The Return of Principal death o You can drop the Return
Value death benefit Value death benefit benefit will automatically of Principal death benefit
become your new guaranteed post-funding only.
minimum death benefit.
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o Return of Principal death Not Applicable: The Return of
Principal death benefit cannot be
dropped prior to funding the
benefit Protection with Investment
Performance account
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POST-FUNDING DROP
The following table is designed to show your options if you decide to drop your
Guaranteed benefit(s) after you have funded your Protection with Investment
Performance account. In general, you can drop both your GIB and Guaranteed
minimum death benefit or, in some cases, drop your GIB and retain your
Guaranteed minimum death benefit. However, your Guaranteed minimum death
benefit cannot be dropped without first dropping your GIB. All requests to drop
a Guaranteed benefit must be submitted on an administrative form we provide for
this specific purpose. Please see "Dropping or changing your Guaranteed
benefits" in "Contracts features and benefits" for information on when you are
eligible to drop your Guaranteed benefits after having funded your Protection
with Investment Performance account.
------------------------------------------------------------------------------------------------------------------------------------
GUARANTEED BENEFIT
COMBINATION PRE-FUNDING DROP OF:(*) YOUR OPTION(S) OR RESULT FOLLOWING THE DROP
------------------------------------------------------------------------------------------------------------------------------------
o GIB GIB o The Return of Principal death o You can drop the Return of
benefit will remain in effect. Principal death benefit by
o Return of Principal notifying us and taking a full
death benefit withdrawal of your Protection
with Investment Performance
account value or making a
one-time transfer to the
Investment Performance
variable investment options
and the guaranteed interest
option.
------------------------------------------------------------------------------------------------------------------------------------
o GIB o Your Guaranteed benefits will Not Applicable.
terminate by notifying us and
o Return of Principal Both benefits taking a full withdrawal of
death benefit your Protection with
Investment Performance
death benefit account value or making a
one-time transfer to the
Investment Performance
variable investment options
and the guaranteed interest
option.
------------------------------------------------------------------------------------------------------------------------------------
A-2 Appendix I: Dropping or changing your Guaranteed benefits
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------------------------------------------------------------------------------------------------------------------------------------
GUARANTEED BENEFIT
COMBINATION POST-FUNDING DROP OF:(*) YOUR OPTION(S) OR RESULT FOLLOWING THE DROP
------------------------------------------------------------------------------------------------------------------------------------
o GIB GIB o Your Highest Anniversary o You can drop the Highest
Value death benefit remains Anniversary Value death
in effect. benefit by notifying us and
o Highest Anniversary taking a full withdrawal of
Value death benefit your Protection with
Investment Performance
account value or making a
one-time transfer to the
Investment Performance
variable investment options
and the guaranteed interest
option.
------------------------------------------------------------------------------------------------------------------------------------
o GIB o Your Guaranteed benefits will Not Applicable.
terminate by notifying us and
o Highest Anniversary Both benefits taking a full withdrawal of
Value death benefit your Protection with
Investment Performance
account value or making a
one-time transfer to the
Investment Performance
variable investment options
and the guaranteed interest
option.
------------------------------------------------------------------------------------------------------------------------------------
o GIB GIB o By dropping your GIB, you You can drop the Return of
are no longer eligible to have Principal death benefit at a
o "Greater of" death benefit the "Greater of" death later date.
benefit.
o The Return of Principal death
benefit will become your new
Guaranteed minimum death
benefit. The Return of
Principal benefit base will
equal all contributions and
transfers to your Protection
with Investment Performance
account, adjusted for
withdrawals.
------------------------------------------------------------------------------------------------------------------------------------
o GIB o Your Guaranteed benefits will Not Applicable.
terminate by notifying us and
o "Greater of" death benefit Both benefits taking a full withdrawal of
your Protection with
Investment Performance
account value or making a
one-time transfer to the
Investment Performance
variable investment options
and the guaranteed interest
option.
Appendix I: Dropping or changing your Guaranteed benefits A-3
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------------------------------------------------------------------------------------------------------------------------------------
GUARANTEED BENEFIT
COMBINATION POST-FUNDING DROP OF:(*) YOUR OPTION(S) OR RESULT FOLLOWING THE DROP
------------------------------------------------------------------------------------------------------------------------------------
o Highest Anniversary Highest Anniversary o Your Guaranteed benefit will Not Applicable.
Value death benefit Value death benefit terminate by notifying us and
taking a full withdrawal of
your Protection with
Investment Performance
account value or making a
one-time transfer to the
Investment Performance
variable investment options
and the guaranteed interest
option.
------------------------------------------------------------------------------------------------------------------------------------
o Return of Principal Return of Principal o Your Guaranteed benefit will Not Applicable.
death benefit death benefit terminate by notifying us and
taking a full withdrawal of
your Protection with
Investment Performance
account value or making a
one-time transfer to the
Investment Performance
variable investment options
and the guaranteed interest
option.
------------------------------------------------------------------------------------------------------------------------------------
* When a Guaranteed benefit (other than the Return of Principal death
benefit) is dropped on any date other than a contract date anniversary, we
will deduct a pro-rata portion of
the charge for that year.
A-4 Appendix I: Dropping or changing your Guaranteed benefits
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Appendix II: Guaranteed benefit base examples
--------------------------------------------------------------------------------
Assuming $100,000 is invested in the Protection with Investment Performance
variable investment options, with no additional contributions, no transfers and
no withdrawals, the Guaranteed minimum death benefit bases and Guaranteed
income benefit base for an owner age 60 would be calculated as follows:
----------------------------------------------------------------------------------------------------------------------------
GUARANTEED MINIMUM DEATH BENEFIT
PROTECTION WITH
END OF INVESTMENT PERFOR- ROLL-UP TO
CONTRACT MANCE ACCOUNT RETURN OF PRINCIPAL HIGHEST ANNIVERSARY AGE 85 "GREATER OF" BENEFIT
YEAR VALUE BENEFIT BASE VALUE BENEFIT BASE BENEFIT BASE BASE
----------------------------------------------------------------------------------------------------------------------------
1 $103,000 $ 100,000 (1) $ 103,000 (2) $ 104,000 $ 104,000 (5)
2 $107,120 $ 100,000(1) $ 107,120(2) $ 108,160 $ 108,160(5)
3 $113,547 $ 100,000(1) $ 113,547(2) $ 113,547(4) $ 113,547(5)
4 $120,360 $ 100,000(1) $ 120,360(2) $ 118,089 $ 120,360(6)
5 $128,785 $ 100,000(1) $ 128,785(2) $ 122,813 $ 128,785(6)
6 $126,210 $ 100,000(1) $ 128,785(3) $ 127,725 $ 128,785(6)
7 $128,734 $ 100,000(1) $ 128,785(3) $ 132,834 $ 132,834(5)
----------------------------------------------------------------------------------------------------------------------------
----------------------------------
GUARANTEED INCOME
BENEFIT
END OF
CONTRACT GIB BENEFITS
YEAR BASE
----------------------------------
1 $104,000
2 $108,160
3 $113,547
4 $118,089
5 $122,813
6 $127,725
7 $132,834
----------------------------------
The Protection with Investment Performance account values for contract years 1
through 7 are based on hypothetical rates of return of 3.00%, 4.00%, 6.00%,
6.00%, 7.00%, (2.00)%, and 2.00%. Respectively, we are using these rates solely
to illustrate how the benefit is calculated. The rates of return bear no
relationship to past or future investment results. For example, at the end of
contract year 1, the Protection with Investment Performance account value =
$103,000 = $100,000 x (1+3.00%).
Your applicable death benefit in connection with the Protection with Investment
Performance variable investment options is equal to the Protection with
Investment Performance account value or the Guaranteed minimum death benefit
base, if greater.
GUARANTEED INCOME BENEFIT
GIB BENEFIT BASE
The example assumes no withdrawals under the contract, therefore the Deferral
bonus Roll-up rate would apply. At the end of contract year 1, the GIB benefit
base is equal to the initial contribution to the Protection with Investment
Performance variable investment options, multiplied by [1 + the Deferral bonus
Roll-up rate of 4.00%]. For contract years 2, and 4 through 7, the GIB benefit
base is equal to the previous year's GIB benefit base multiplied by [1 + the
Deferral bonus Roll-up rate of 4.00%]. At the end of contract year 3, the GIB
benefit base is reset to the current Protection with Investment Performance
account value. For contract year 6, the GIB benefit base is equal to the
previous year's GIB benefit base, multiplied by [1 + the Deferral bonus Roll-up
rate of 4.00%]. Please note that the GIB benefit base was eligible for a reset
on the 6th contract date anniversary, but the Protection with Investment
Performance account value was less than the GIB benefit base. As a result,
there was no reset of the GIB benefit base.
For example:
o At the end of contract year 3, the GIB benefit base = $113,547
The GIB benefit base is being "reset" to equal the Protection with
Investment Performance account value of $113,547.
o At the end of contract year 4, the GIB benefit base = $118,089
Calculated as follows: $113,547 x (1 + 4.00%) = $118,089
GUARANTEED MINIMUM DEATH BENEFIT
RETURN OF PRINCIPAL BENEFIT BASE
(1) At the end of contract years 1 through 7, the Return of Principal death
benefit base is equal to the initial contribution to the Protection with
Investment Performance account variable investment options.
HIGHEST ANNIVERSARY VALUE BENEFIT BASE
(2) At the end of contract years 1 through 5, the Highest Anniversary Value
benefit base is equal to the current Protection with Investment
Performance account value.
Appendix II: Guaranteed benefit base examples B-1
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Appendix VI: Examples of how withdrawals affect your Guaranteed benefit bases
--------------------------------------------------------------------------------
EXAMPLE #1
This example assumes the Protection with Investment Performance account value
is LESS THAN the GIB benefit base at the time of the first withdrawal. Assuming
$100,000 is invested in the Protection with Investment Performance variable
investment options, with no additional contributions, no transfers, the GIB
benefit base and the Guaranteed minimum death benefit base for an owner age 60
would be calculated as follows:
ASSUMED
DEFERRAL
PROTECTION WITH BONUS
INVESTMENT ROLL-UP RATE/
END OF ASSUMED PERFORMANCE ANNUAL
CONTRACT NET ACCOUNT ROLL-UP
YEAR RETURN VALUE WITHDRAWAL RATE
---------- ----------- ----------------- ----------------- ---------------
0 $100,000
1 3.0% $103,000 $ 0 4.0%
2 4.0% $107,120 $ 0 4.0%
3 6.0% $113,547 $ 0 4.0%
4 6.0% $120,360 $ 0 4.0%
5 7.0% $128,785 $ 0 4.0%
Alternative #1: Owner withdraws the Annual withdrawal amount, which equals $4,913
--------------------------------------------------------------------------
Year 6 (5.0)% $122,346 $ 4,913 4.0%
YEAR 7 ANNUAL WITHDRAWAL AMOUNT: $ 4,913(7)
Alternative #2: Owner withdraws $7,000, which is in excess of the Annual withdrawal amount
------------------------------------------------------------------------------------------
Year 6 (5.0)% $122,346 $ 7,000 4.0%
YEAR 7 ANNUAL WITHDRAWAL AMOUNT: $ 4,829(11)
GUARANTEED
INCOME
BENEFIT GUARANTEED MINIMUM DEATH BENEFITS
------------------- ---------------------------------------------------------------------
HIGHEST
RETURN OF ANNIVERSARY ROLL-UP TO
END OF GIB PRINCIPAL VALUE AGE 85 "GREATER OF"
CONTRACT BENEFIT BENEFIT BENEFIT BENEFIT BENEFIT
YEAR BASE BASE BASE BASE BASE
---------- ------------------- ----------------- ----------------- ------------------- -------------
0 $ 100,000(3) $ 100,000(1) $ 100,000(2) $ 100,000(3) $100,000
1 $ 104,000(3) $ 100,000(1) $ 103,000(2) $ 104,000(3) $104,000
2 $ 108,160(3) $ 100,000(1) $ 107,120(2) $ 108,160(3) $108,160
3 $ 113,547(3) $ 100,000(1) $ 113,547(2) $ 113,547(3) $113,547
4 $ 118,089(3) $ 100,000(1) $ 120,360(2) $ 118,089(3) $120,360
5 $ 122,813(3) $ 100,000(1) $ 128,785(2) $ 122,813(3) $128,785
Alternative #1: Owner withdraws the Annual withdrawal amount, which equals $4,913
---------------------------------------------------------------------------------
Year 6 $ 122,813(6) $ 95,985(4) $ 123,615(5) $ 122,813(6) $123,615
YEAR 7 ANNUAL WITHDRAWAL AMOUNT: $4,913(7)
Alternative #2: Owner withdraws $7,000, which is in excess of the Annual withdrawal amount
------------------------------------------------------------------------------------------
Year 6 $ 120,717(10) $ 94,279(8) $ 121,417(9) $ 120,717(10) $121,417
YEAR 7 ANNUAL WITHDRAWAL AMOUNT: $4,829(11)
CONTRACT YEARS 1-5:
At the end of contract years 1-5, the Guaranteed benefit bases are as follows:
(1) The RETURN OF PRINCIPAL BENEFIT BASE is equal to the initial
contribution to the Protection with Investment Performance variable
investment options, or $100,000.
(2) The HIGHEST ANNIVERSARY VALUE BENEFIT BASE is equal to the greater of
the Protection with Investment Performance account value and the
Highest Anniversary Value benefit base as of the last contract date
anniversary.
For example:
o At the end of contract year 3, the Highest Anniversary Value benefit
base is $113,547. This is because the Protection with Investment Per
formance account value ($113,547) is greater than the Highest
Anniversary Value benefit base as of the last contract date anniversary.
(3) The ROLL-UP TO AGE 85 BENEFIT BASE AND THE GIB BENEFIT BASE (the
"Roll-up benefit bases") are equal to the Roll-up benefit bases as of the
last contract date anniversary plus the Deferral bonus Roll-up amount (the
Roll-up benefit bases as of the last contract date anniversary multiplied by
the assumed Deferral bonus Roll-up rate). On the third contract date
anniversary, the Roll-up benefit bases will equal the Protection with
Investment Performance account value, if higher than the prior Roll-up
benefit bases as of the last contract date anniversary, plus the Deferral
bonus Roll-up amount.
For example:
o At the end of contract year 2, the Roll-up benefit bases are equal to
$108,160. This is calculated by taking the Roll-up benefit bases as of
the last contract date anniversary $104,000, and multiplying it by the
assumed Deferral bonus Roll-up rate of 4%. ($104,000 x 1.04 = $108,160).
--------------
For both Alternatives below, the Annual withdrawal amount in contract year 6
equals $4,913 (the assumed Annual Roll-up rate (4%) x $122,813 (the GIB benefit
base)).
Appendix VI: Examples of how withdrawals affect your Guaranteed benefit bases
F-1
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ALTERNATIVE #1: CONTRACT YEAR 6 (OWNER WITHDRAWS ANNUAL WITHDRAWAL AMOUNT)
The pro-rata calculation for the Return of Principal benefit base and the
Highest Anniversary Value benefit base is as follows: Since the withdrawal
amount of $4,913 equals 4.015% of the Protection with Investment Performance
account value ($4,913 divided by $122,346 = 4.015%), each benefit base would be
reduced by 4.015%.
At the end of contract year 6, the Guaranteed benefit bases are as follows:
(4) The RETURN OF PRINCIPAL BENEFIT BASE is reduced pro-rata, as follows:
$100,000 (benefit base as of the last contract date anniversary) - $4,015
(4.015% x $100,000) = $95,985;
(5) The HIGHEST ANNIVERSARY VALUE BENEFIT BASE is reduced pro-rata, as
follows: $128,785 (Highest Anniversary Value benefit base as of the last
contract date anniversary) - $5,170 (4.015% x $128,785) = $123,615;
(6) The ROLL-UP TO AGE 85 BENEFIT BASE AND THE GIB BENEFIT BASE are equal to
$122,813, (the Roll-up benefit bases as of the last contract date
anniversary). Since the full Annual withdrawal amount was taken, the
Roll-up benefit bases neither decrease nor increase;
(7) As a result of the withdrawal in contract year 6, the Annual withdrawal
amount in contract year 7 is $4,913 [4% (the assumed Annual Roll-up
rate) x $122,813 (the Roll-up benefit bases as of the sixth contract
anniversary)].
ALTERNATIVE #2: CONTRACT YEAR 6 (OWNER TAKES AN "EXCESS WITHDRAWAL")
The pro-rata calculation for the reduction in the Return of Principal benefit
base and the Highest Anniversary Value benefit base is as follows: Since the
withdrawal amount of $7,000 equals 5.721% of the Protection with Investment
Performance account value ($7,000 divided by $122,346 = 5.721%), each benefit
base would be reduced by 5.721%.
The pro-rata calculation for the reduction in the Roll-up benefit bases is as
follows: $7,000 (the amount of the withdrawal) - $4,913 (the Annual withdrawal
amount) = $2,087 (the "Excess withdrawal" amount). Since the amount of the
Excess withdrawal equals 1.706% of the Protection with Investment Performance
account value ($2,087 divided by $122,346 = 1.706%), the Roll-up benefit bases
would be reduced by 1.706%.
At the end of contract year 6, the Guaranteed benefit bases are as follows:
(8) The RETURN OF PRINCIPAL BENEFIT BASE is reduced pro-rata, as follows:
$100,000 (benefit base as of the last contract date anniversary) - $5,721
(5.721% x $100,000) = $94,279;
(9) The HIGHEST ANNIVERSARY VALUE BENEFIT BASE is reduced pro-rata, as
follows: $128,785 (Highest Anniversary Value benefit base as of the last
contract date anniversary) - $7,368 (5.721% x $128,785) = $121,417;
(10) The ROLL-UP TO AGE 85 BENEFIT BASE AND THE GIB BENEFIT BASE are reduced
pro-rata, as follows: $122,813 (the Roll-up benefit bases as of the
last contract date anniversary) - $2,095 (1.706% x $122,813) = $120,717.
(11) As a result of the Excess withdrawal in contract year 6, the Annual
withdrawal amount in contract year 7 is $4,829 [4% (the assumed Annual
Roll-up rate) x $120,717 (the Roll-up benefit bases as of the sixth
contract anniversary)].
F-2 Appendix VI: Examples of how withdrawals affect your Guaranteed benefit
bases
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EXAMPLE #2
This example assumes the the Protection with Investment Performance account
value is GREATER THAN the GIB benefit base at the time of the first withdrawal.
Assuming $100,000 is invested in the Protection with Investment Performance
variable investment options, with no additional contributions, no transfers,
the GIB benefit base and the Guaranteed minimum death benefit base for an owner
age 60 would be calculated as follows:
PROTECTION WITH
INVESTMENT
END OF ASSUMED PERFORMANCE
CONTRACT NET ACCOUNT
YEAR RETURN VALUE
------------ ----------- -------------------
0 $100,000
1 3.0% $103,000
2 4.0% $107,120
3 6.0% $113,547
4 6.0% $120,360
5 7.0% $128,785
Alternative #1: Owner withdraws Annual withdrawal amount, which equals $4,913
----------------------------------------------------------------------------------
Year 6 5.0% $135,224
YEAR 7 ANNUAL WITHDRAWAL AMOUNT:
Alternative #2: Owner withdraws $7,000, which is in excess of the Annual withdrawal amount
-------------------------------------------------------------------------------------------
Year 6 5.0% $135,224
YEAR 7 ANNUAL WITHDRAWAL AMOUNT:
ASSUMED
ANNUAL
DEFERRAL
BONUS
END OF ROLL-UP RATE/
CONTRACT ROLL-UP
YEAR WITHDRAWAL RATE
------------ ---------------- ----------------
0
1 $ 0 4.0%
2 $ 0 4.0%
3 $ 0 4.0%
4 $ 0 4.0%
5 $ 0 4.0%
Alternative #1: Owner withdraws Annual withdrawal amount, which equals $4,913
-----------------------------------------------------------------------------
Year 6 $ 4,913 4.0%
YEAR 7 ANNUAL WITHDRAWAL AMOUNT: $ 4,913(7)
Alternative #2: Owner withdraws $7,000, which is in excess of the Annual withdrawal amount
------------------------------------------------------------------------------------------
Year 6 $ 7,000 4.0%
YEAR 7 ANNUAL WITHDRAWAL AMOUNT: $ 4,837(11)
GUARANTEED GUARANTEED
INCOME MINIMUM DEATH
BENEFIT BENEFIT
------------------- -----------------
RETURN OF
END OF GIB PRINCIPAL
CONTRACT BENEFIT BENEFIT
YEAR BASE BASE
------------ -------------------- -----------------
0 $ 100,000(3) $ 100,000(1)
1 $ 104,000(3) $ 100,000(1)
2 $ 108,160(3) $ 100,000(1)
3 $ 113,547(3) $ 100,000(1)
4 $ 118,089(3) $ 100,000(1)
5 $ 122,813(3) $ 100,000(1)
Alternative #1: Owner withdraws Annual withdrawal amount, which equals $4,913
-----------------------------------------------------------------------------
Year 6 $ 122,813(6) $ 96,367(4)
YEAR 7 ANNUAL WITHDRAWAL AMOUNT:
Alternative #2: Owner withdraws $7,000, which is in excess of the Annual withdrawal amount
------------------------------------------------------------------------------------------
Year 6 $ 120,916(10) $ 94,823(8)
YEAR 7 ANNUAL WITHDRAWAL AMOUNT:
GUARANTEED MINIMUM DEATH BENEFIT
------------------------------------------------------
HIGHEST
ANNIVERSARY ROLL-UP TO
END OF VALUE AGE 85 "GREATER OF"
CONTRACT BENEFIT BENEFIT BENEFIT
YEAR BASE BASE BASE
------------ ------------------ -------------------- -------------
0 $ 100,000(2) $ 100,000(3) $100,000
1 $ 103,000(2) $ 104,000(3) $104,000
2 $ 107,120(2) $ 108,160(3) $108,160
3 $ 113,547(2) $ 113,547(3) $113,547
4 $ 120,360(2) $ 118,089(3) $120,360
5 $ 128,785(2) $ 122,813(3) $128,785
Alternative #1: Owner withdraws Annual withdrawal amount, which equals $4,913
-----------------------------------------------------------------------------
Year 6 $ 124,106(5) $ 122,813(6) $124,106
YEAR 7 ANNUAL WITHDRAWAL AMOUNT:
Alternative #2: Owner withdraws $7,000, which is in excess of the Annual withdrawal amount
------------------------------------------------------------------------------------------
Year 6 $ 122,118(9) $ 120,916(10) $122,118
YEAR 7 ANNUAL WITHDRAWAL AMOUNT:
CONTRACT YEARS 1-5:
At the end of contract years 1-5, the Guaranteed benefit bases are as follows:
(1) The RETURN OF PRINCIPAL BENEFIT BASE is equal to the initial
contribution to the Protection with Investment Performance variable
investment options, or $100,000.
(2) The HIGHEST ANNIVERSARY VALUE BENEFIT BASE is equal to the greater of
the Protection with Investment Performance account value and the
Highest Anniversary Value benefit base as of the last contract date
anniversary.
For example:
o At the end of contract year 4 the Highest Anniversary Value benefit
base is $120,360. This is because the Protection with Investment Per
formance account value ($120,360) is greater than the Highest Anniversary
Value benefit base as of the last contract date anniversary ($113,547).
(3) The ROLL-UP TO AGE 85 BENEFIT BASE AND THE GIB BENEFIT BASE (the
"Roll-up benefit bases") are equal to the Roll-up benefit bases as of the
last contract date anniversary plus the Deferral bonus Roll-up amount (the
Roll-up benefit bases as of the last contract date anniversary multiplied by
the assumed Deferral bonus Roll-up rate). On the third contract date
anniversary, the Roll-up benefit bases will equal the Protection with
Investment Performance account value, if higher than the Roll-up benefit
bases as of the last contract date anniversary plus the Deferral bonus
Roll-up amount.
For example:
o At the end of contract year 3, the Roll-up benefit bases are equal to
$113,547. This is because the Protection with Investment Performance
account value ($113,547) is greater than the Roll-up benefit bases as the
last contract date anniversary ($108,160) plus the Deferral bonus Roll-up
amount ($4,326).
For both Alternatives below, the Annual withdrawal amount in contract year 6
equals $4,913 (the assumed Annual Roll-up rate (4%) x $122,813 (the GIB benefit
base)).
ALTERNATIVE #1: CONTRACT YEAR 6 (OWNER WITHDRAWS ANNUAL WITHDRAWAL AMOUNT)
The pro-rata calculation for the Return of Principal death benefit base and the
Highest Anniversary Value benefit base is as follows: Since the withdrawal
amount of $4,913 equals 3.633% of the Protection with Investment Performance
account value ($4,913 divided by $135,224 = 3.633%), each benefit base would be
reduced by 3.633%.
Appendix VI: Examples of how withdrawals affect your Guaranteed benefit bases
F-3
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At the end of contract year 6, the Guaranteed benefit bases are as follows:
(4) The RETURN OF PRINCIPAL BENEFIT BASE is reduced pro-rata, as follows:
$100,000 (benefit base as of the last contract date anniversary) - $3,633
(3.633% x $100,000) = $96,367;
(5) The HIGHEST ANNIVERSARY VALUE BENEFIT BASE is reduced pro-rata, as
follows: $128,785 (Highest Anniversary Value benefit base as of the last
contract date anniversary) - $4,679 (3.633% x $128,785) = $124,106;
(6) The ROLL-UP TO AGE 85 BENEFIT BASE AND THE GIB BENEFIT BASE are equal to
$122,813, (the Roll-up benefit bases as of the last contract date
anniversary). Since the full Annual withdrawal amount was taken, the
Roll-up benefit bases neither decrease nor increase;
(7) As a result of the withdrawal in contract year 6, the Annual withdrawal
amount in contract year 7 is $4,913 [4% (the assumed Annual Roll-up
rate) x $122,813 (the Roll-up benefit bases as of the sixth contract
anniversary)].
ALTERNATIVE #2: CONTRACT YEAR 6 (OWNER TAKES AN "EXCESS WITHDRAWAL")
The pro-rata calculation for the reduction in the Return of Principal benefit
base and the Highest Anniversary Value benefit base is as follows: Since the
withdrawal amount of $7,000 equals 5.177% of the Protection with Investment
Performance account value ($7,000 divided by $135,224 = 5.177%), each benefit
base would be reduced by 5.177%.
The pro-rata calculation for the reduction in the Roll-up benefit bases is as
follows: $7,000 (the amount of the withdrawal) - $4,913 (the Annual withdrawal
amount) = $2,087 (the "Excess withdrawal" amount). Since the amount of the
Excess withdrawal equals 1.544% of the Protection with Investment Performance
account value ($2,087 divided by $135,224 = 1.544%), the Roll-up benefit bases
would be reduced by 1.544%.
At the end of contract year 6, the Guaranteed benefit bases are as follows:
(8) The RETURN OF PRINCIPAL BENEFIT BASE is reduced pro-rata, as follows:
$100,000 (benefit base as of the last contract date anniversary) - $5,177
(5.177% x $100,000) = $94,823;
(9) The HIGHEST ANNIVERSARY VALUE BENEFIT BASE is reduced pro-rata, as
follows: $128,785 (Highest Anniversary Value benefit base as of the last
contract date anniversary) - $6,667 (5.177% x $128,785) = $122,118;
(10) The ROLL-UP TO AGE 85 BENEFIT BASE AND THE GIB BENEFIT BASE are reduced
pro-rata, as follows: $122,813 (the Roll-up benefit bases as of the
last contract date anniversary) - $1,897 (1.544% x $122,813) = $120,916.
(11) As a result of the Excess withdrawal in contract year 6, the Annual
withdrawal amount in contract year 7 is $4,837 [4% (the assumed Annual
Roll-up rate) x $120,916 (the Roll-up benefit bases as of the sixth
contract anniversary)].
F-4 Appendix VI: Examples of how withdrawals affect your Guaranteed benefit
bases