VLI-SVIND (11/97)-01
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
ONE CORPORATE DRIVE, P. O. BOX 883
SHELTON, CONNECTICUT 06484
(A Stock Company)
We pay the Death Proceeds to the Beneficiary upon receipt at our Office of due
proof, satisfactory to us, of the death of the last surviving Insured while this
Policy is in force and subject to the terms and conditions on the following
pages.
This Policy is issued in consideration of any Application, a copy of which may
be attached to and made a part of this Policy, and receipt at our Office of good
funds as payment of the Premium.
RIGHT TO CANCEL
You may return this Policy to our Office or to the representative who solicited
its purchase within ten days after you receive it for a refund. The amount of
the refund will be the greater of: (a) the Premium paid; and (b) the Account
Value plus any charges and fees deducted from the Account Value as of the date
we receive the cancellation request In Writing.
Any portion of Premium you choose to allocate to the variable investment options
initially is allocated to the Automatic Sub-account shown in the Schedule. As of
the Reallocation Date shown in the Schedule, we reallocate such Account Value to
the Sub-accounts you select in the proportions you indicate in your most recent
allocation instructions to us. Should you notify us that you intend to cancel
this Policy prior to the Reallocation Date, any amount then maintained in the
Automatic Sub-account will remain in that Sub-account until cancellation of this
Policy. Any portion of Premium you choose to allocate to the Fixed Allocation
will be allocated as of the Issue Date and will not be allocated to the
Automatic Sub-account.
Signed for American Skandia Life Assurance Corporation:
President
MODIFIED SINGLE PREMIUM LIFE LAST SURVIVOR INSURANCE.
NON-PARTICIPATING.
VARIABLE INVESTMENT OPTIONS AND FIXED ALLOCATION.
DEATH BENEFIT PAYABLE UPON DEATH OF AN INSURED WHILE THIS POLICY IS IN FORCE.
ANY PAYMENTS AND VALUES, INCLUDING THE DEATH BENEFIT, BASED ON THE ACCOUNT
VALUE IN THE VARIABLE INVESTMENT OPTIONS DEPEND ON THEIR INVESTMENT
PERFORMANCE, AND MAY INCREASE OR DECREASE AND ARE, THEREFORE, NOT GUARANTEED.
PLEASE REFER TO THE SECTIONS ENTITLED "ACCOUNT VALUE IN THE SUB-ACCOUNTS" AND
"DEATH BENEFIT" FOR A MORE COMPLETE EXPLANATION. ANY ACCELERATED DEATH
BENEFIT OPTION, MAY REDUCE YOUR POLICY BENEFITS.
THERE IS NO MINIMUM GUARANTEED CASH VALUE.
LESS THAN 100% OF THE CASH VALUE IS AVAILABLE FOR A LOAN.
2
VLI-SVIND (11/97)-02
TABLE OF CONTENTS
DEFINITIONS.......................................................................................... 7
DEATH BENEFIT...........................................................................................10
ACCELERATED DEATH BENEFIT...............................................................................11
INVESTMENT OF ACCOUNT VALUE.............................................................................11
OPERATIONS OF THE SEPARATE ACCOUNT......................................................................12
GENERAL ACCOUNT.........................................................................................13
CHARGES .........................................................................................13
PREMIUM PAYMENT.........................................................................................14
ALLOCATION RULES........................................................................................14
ACCOUNT VALUE AND CASH VALUE............................................................................15
CASH VALUE CREDIT.......................................................................................17
TRANSFERS...............................................................................................17
SURRENDER AND PARTIAL WITHDRAWAL........................................................................18
POLICY LOANS............................................................................................18
GRACE PERIOD AND REINSTATEMENT..........................................................................19
YOUR RIGHTS, OWNERSHIP AND DESIGNATIONS.................................................................20
GENERAL PROVISIONS......................................................................................20
POLICY PAYMENT OPTIONS..................................................................................22
PAYMENT OPTION TABLES...................................................................................23
A copy of any Application and any riders and endorsements are attached.
3
VLI-SVIND (11/97)-03
SCHEDULE
POLICY NUMBER: [001-00001] FACE AMOUNT: [ ]
ISSUE DATE: [JUNE 1, 1998] POLICY DATE: [MAY 1, 1998]
REALLOCATION DATE: [JUNE 15, 1998]
OWNER: [JOHN DOE]
OWNER: [MARY DOE]
FIRST INSURED: [JOHN DOE] FIRST INSURED'S DATE OF BIRTH: [APRIL 01,1935]
FIRST INSURED'S GENDER: [MALE] FIRST INSURED'S RISK CLASS: [NON-SMOKER]
SECOND INSURED: [MARY DOE] COND INSURED'S DATE OF BIRTH: [APRIL 01, 1935]
SECOND INSURED'S GENDER: [FEMALE] SECOND INSURED'S RISK CLASS: [NON-SMOKER]
TYPE OF BUSINESS: [NON-QUALIFIED]
PREMIUM PAID AS OF THE ISSUE DATE: $[10,000]
MINIMUM PARTIAL WITHDRAWAL AMOUNT: $500.00
MINIMUM CASH VALUE AFTER A PARTIAL WITHDRAWAL: $1,000
MINIMUM AMOUNT REQUIRED TO BE IN AN INVESTMENT OPTION IMMEDIATELY AFTER A
TRANSFER: $500
CASH VALUE CREDIT PERCENTAGE: 0.25%
CASH VALUE TRIGGER: 200% OF PREMIUM
CONTINGENT DEFERRED SALES CHARGE AND CONTINGENT DEFERRED TAX CHARGE:
POLICY PERCENTAGE OF PREMIUM BEING LIQUIDATED
YEAR CONTINGENT DEFERRED CONTINGENT DEFERRED TOTAL
SALES CHARGE TAX CHARGE
1 7.75% 2.25% 10.00%
2 7.50% 2.00% 9.50%
3 7.25% 1.75% 9.00%
4 6.50% 1.50% 8.00%
5 5.75% 1.25% 7.00%
6 5.00% 1.00% 6.00%
7 4.25% 0.75% 5.00%
8 3.50% 0.50% 4.00%
9 2.75% 0.25% 3.00%
10 + 0.00% 0.00% 0.00%
AUTOMATIC SUB-ACCOUNT: AST MONEY MARKET
4
VLI-SVIND (11/97)-04
SCHEDULE (CONTINUED)
TARGET DATE: THE POLICY ANNIVERSARY ON OR AFTER WHICH THE YOUNGER INSURED TURNS
AGE 75 OR WOULD HAVE TURNED AGE 75 IF THE YOUNGER INSURED
PREDECEASES THE OLDER INSURED.
TRANSFER FEE: $10 PER TRANSFER AFTER THE TWELFTH IN EACH POLICY YEAR.
MAINTENANCE FEE: $2.50 PER POLICY MONTH IN ADVANCE. IF THE ACCOUNT VALUE IS AT
LEAST $75,000 THIS CHARGE WILL BE WAIVED.
MORTALITY AND EXPENSE RISK CHARGE: 0.90% PER YEAR
ADMINISTRATION CHARGE: 0.25% PER YEAR
TAX CHARGE: 0.25% OF ACCOUNT VALUE PER POLICY YEAR DURING THE FIRST 10 POLICY
YEARS, ASSESSED EACH POLICY MONTH IN ADVANCE.
SALES CHARGE: 0.40% OF ACCOUNT VALUE PER POLICY YEAR DURING THE FIRST 10 POLICY
YEARS, ASSESSED EACH POLICY MONTH IN ADVANCE.
FIXED OPTION INTEREST RATE MINIMUM: 3.0% PER POLICY YEAR, COMPOUNDED YEARLY
LOANS:
LOAN INTEREST RATE: 6.0% PER POLICY YEAR, COMPOUNDED YEARLY IN ARREARS
INTEREST RATE CREDITED TO COLLATERAL FOR A STANDARD LOAN: 4.0% PER
POLICY YEAR, COMPOUNDED YEARLY
INTEREST RATE CREDITED TO COLLATERAL FOR A PREFERRED LOAN: 6.0% PER
POLICY YEAR, COMPOUNDED YEARLY
MAXIMUM LOAN VALUE PERCENTAGE: 90.0% OF THE ACCOUNT VALUE LESS THE
CONTINGENT DEFERRED SALES CHARGE AND LESS THE CONTINGENT DEFERRED TAX
CHARGE
MINIMUM LOAN AMOUNT: $500.00
VARIABLE SEPARATE ACCOUNT: AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
SEPARATE ACCOUNT F
OFFICE: [AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
P.O. BOX 290698
WETHERSFIELD, CONNECTICUT 06129-0698
Telephone: 1-888-554-3348]
5
VLI-SVIND (11/97)-05
SCHEDULE (CONTINUED)
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 NET AMOUNT AT RISK
This table shows the guaranteed cost of insurance rates applicable to this
Policy. The rates apply to the Net Amount at Risk. These guaranteed rates are
for each $1,000 of the Net Amount at Risk. The rates are based on the Ages and
genders of the Insureds, and their risk classes, as indicated in the Schedule.
The rates shown below are for the Policy Date and subsequent Policy
Anniversaries. The rates change each month and they are interpolated from the
values shown below.
[
- ---------------- ---------------------- ----------------- ----------------------
Policy Year Rate Policy Year Rate
- ---------------- ---------------------- ----------------- ----------------------
1 .20986 18 54.09982
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
2 .71008 19 63.28262
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
3 1.34596 20 73.85959
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
4 2.13290 21 85.84778
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
5 3.08255 22 99.13124
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
6 4.21183 23 113.52272
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
7 5.55941 24 128.85642
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
8 7.18494 25 144.97805
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
9 9.17230 26 161.79672
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
10 11.62686 27 179.38304
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
11 14.63913 28 197.83733
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
12 18.26241 29 217.49914
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
13 22.52106 30 239.01818
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
14 27.41205 31 263.94364
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
15 32.93267 32 295.78723
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
16 39.12328 33 341.40176
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ---------------------
17 46.11410
- ---------------- ---------------------- ----------------- ----------------------
]
6
VLI-SVIND (11/97)-06
SCHEDULE (CONTINUED)
TABLE OF INSURANCE FACTORS
The following Insurance Factors are based on the Ages and genders of the
Insureds and their risk classes as shown in the Schedule. The Insurance Factors
shown below are for the Policy Date and subsequent Policy Anniversaries. These
Factors change each month and they are interpolated from the values shown below.
[
- ---------------- ---------------------- ----------------- ----------------------
Policy Year Insurance Factor Policy Year Insurance Factor
- ---------------- ---------------------- ----------------- ----------------------
1 .436413 18 .753363
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
2 .453751 19 .770064
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
3 .471513 20 .786169
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
4 .489662 21 .801598
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
5 .508161 22 .816304
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
6 .526973 23 .830295
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
7 .546063 24 .843645
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
8 .565388 25 .856495
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
9 .584890 26 .869056
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
10 .604491 27 .881627
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
11 .624088 28 .894603
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
12 .643566 29 .908549
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
13 .662817 30 .924288
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
14 .681751 31 .943091
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
15 .700304 32 .967045
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
16 .718441 33 1.000000
- ---------------- ---------------------- ----------------- ----------------------
- ---------------- ---------------------- ----------------- ----------------------
17 .736138
- ---------------- ---------------------- ----------------- ----------------------
]
7
VLI-SVIND (11/97)-07
DEFINITIONS
Account Value: The value of each allocation to any Sub-account and any Fixed
Allocation, plus any earnings and less any losses, distributions and charges
thereon, plus the value of amounts transferred to the Loan Account, plus any
earnings less any distributions and charges thereon, all before assessment of
any contingent deferred sales charge, any contingent deferred tax charge, or any
Debt. Account Value is determined separately for each Sub-account and each Fixed
Allocation, as well as for any amounts in the Loan Account, and then totaled to
determine Account Value for your entire Policy.
Age: Initially, and for the first Policy Year, an Insured's age last birthday on
the Policy Date. In each following Policy Year, it is the age last birthday of
an Insured as of the Policy Anniversary. If an Insured's birthday falls on the
Policy Date, an Insured's Age will be the Age on that Policy Date.
Anniversary Value: The Account Value on any previous Policy Anniversary less any
Reduction Due to a Withdrawal since that previous Policy Anniversary.
Application: The form or combination of forms we require you to submit when you
are seeking this Policy.
Beneficiary: The person or entity you designate on whose behalf any Death
Proceeds are payable. Unless otherwise specified, Beneficiary refers to all
persons or entities so designated.
Cash Value: The Account Value less any contingent deferred sales charge,
contingent deferred tax charge and any outstanding Debt.
Cash Value Credit: The amount we credit to your Account Value if your Cash Value
on a Policy Anniversary equals or exceeds the Cash Value trigger as shown in the
Schedule.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Death Benefit: The amount payable as a result of the last surviving Insured's
death before any applicable reduction for any Debt and before the addition of
any interest due pursuant to law.
Death Proceeds: The amount payable as a result of the last surviving Insured's
death after any applicable reduction for Debt and after the addition of any
interest due pursuant to law.
Debt: The total of all Policy loans and loan interest, if applicable.
Face Amount: The Death Benefit as of the Policy Date.
Fixed Allocation: An allocation of Account Value that is to be credited a fixed
rate of interest.
Growth: A portion of the Account Value. It equals (a) less (b) less (c), where:
(a) is the total current Account Value; (b) is any Debt; and (c) is the Premium
less any partial withdrawals treated as a withdrawal of Premium.
Guaranteed Minimum Death Benefit: The minimum amount we guarantee is due as a
result of the last surviving Insured's death, prior to any reduction for Debt,
even if it is higher than the Required Death Benefit.
In Writing: In a written form, in a manner we accept, that is satisfactory to us
and filed at our Office. We retain the right to specifically agree in advance to
accept communication regarding a specific matter by telephone or by some other
form of electronic transmission, in a manner we prescribe.
Insurance Factors: The amount by which the Account Value is divided to determine
the minimum amount due under the Code as a result of the last surviving
Insured's death, ignoring any Debt.
Insured: The persons named in the Schedule upon whose lives coverage is issued.
The Death Proceeds are payable upon the death of the last surviving Insured.
Issue Date: The date we issue this Policy. The Issue Date is shown in the
Schedule.
8
VLI-SVIND (11/97)-08
Loan Account: That portion of the Account Value that is used as collateral for a
loan from us.
Maturity Date: The Policy Anniversary on or immediately following the 95th
birthday of the younger Insured or what would have been the younger Insured's
95th birthday if the younger Insured predeceases the older Insured.
Monthly Processing Date: The Valuation Day each month we deduct charges taken
from the Account Value. The first Monthly Processing Date is the Policy Date.
After that, the Monthly Processing Dates generally occur on the same day of the
month as the Policy Date. In any month that date is not a Valuation Day, the
Monthly Processing Date that month will be the next following Valuation Period.
Net Amount at Risk: As of the date for which this amount is calculated, the Net
Amount at Risk is the Death Benefit then in effect minus the then current
Account Value.
Office: This is our administrative office. The location is shown in the Schedule
where all requests regarding this Policy are to be sent.
Owner: The person(s) or entity(ies) who may exercise the ownership rights
provided by this Policy. The Owner is shown in the Schedule unless later
changed.
Policy: The insurance contract we issue as evidence of our commitment to pay the
Death Proceeds upon the death of the last surviving Insured.
Policy Anniversary: The yearly anniversary of the Policy Date.
Policy Date: The effective date of your Policy.
Policy Years: The continuous 12-month periods that begin on the Policy Date and
each Policy Anniversary thereafter.
Portfolio: An underlying mutual fund or a portfolio of an underlying mutual
fund.
Premium: The cash consideration you give to us for the rights, privileges and
benefits provided by this Policy according to its terms. This includes the
Premium paid as of the Issue Date, as shown in the Schedule, and any additional
consideration we agree to accept. This acceptance must occur before completion
of the underwriting for this Policy.
Reallocation Date: The date on which we reallocate Account Value from the
Automatic Sub-account to the Sub-accounts you select in the proportions you have
indicated in your most recent allocation instructions to us.
Reduction Due to a Withdrawal: A proportional reduction in the Guaranteed
Minimum Death Benefit. It equals the proportional reduction in the Account Value
as of the Valuation Period of: (a) a partial withdrawal; or (b) payment under
the accelerated death benefit provision.
Required Death Benefit: The minimum amount due as a result of the last surviving
Insured's death pursuant to the applicable test we apply in accordance with the
Code, prior to any reduction for Debt.
Separate Account: The variable separate account, shown in the Schedule, to which
we allocate assets in relation to our obligations for benefits based on the
variable investment options.
Sub-account: A division of the Separate Account shown in the Schedule.
Target Date: The last Policy Anniversary, as shown in the Schedule, that the
Guaranteed Minimum Death Benefit may increase.
9
VLI-SVIND (11/97)-09
Unit: A measure used to calculate Account Value in a Sub-account.
Unit Price: The Unit Price is used for calculating: (a) the number of Units
allocated to a Sub-account; and (b) the value of transactions into or out of a
Sub-account or benefits based on Account Value in a Sub-account. Each
Sub-account has its own Unit Price, which will vary each Valuation Period to
reflect the investment experience of that Sub-account.
Valuation Day/Date: Every day the New York Stock Exchange is open for trading or
any other day that the Securities and Exchange Commission requires mutual funds
or unit investment trusts to be valued.
Valuation Period: The period of time between the close of business of the New
York Stock Exchange on successive Valuation Days.
"we", "us", "our" means American Skandia Life Assurance Corporation.
"you" or "your" means the Owner(s) shown in the Schedule.
10
VLI-SVIND (11/97)-10
DEATH BENEFIT
Death Benefit: The amount of Death Benefit under this Policy is equal to the
greater of the Required Death Benefit and the Guaranteed Minimum Death Benefit.
Required Death Benefit: The Required Death Benefit is determined by dividing the
Account Value as of the date the Death Proceeds become payable by the applicable
Insurance Factor shown in the Schedule.
Guaranteed Minimum Death Benefit: The Guaranteed Minimum Death Benefit is
determined as follows:
a)On the Policy Date: The Guaranteed Minimum Death Benefit equals the
Premium.
b) After the Policy Date and before the first Policy Anniversary: The
Guaranteed Minimum Death Benefit equals the Premium less every
Reduction Due to a Withdrawal.
c) After the first Policy Anniversary but before the Target Date shown in
the Schedule: The Guaranteed Minimum Death Benefit is the greater of
(1) and (2), where:
(1) is the Premium less every Reduction Due to a Withdrawal; and
(2) is the highest Anniversary Value.
d) On or after the Target Date shown in the Schedule: The Guaranteed
Minimum Death Benefit is the greater of (1) and (2), where:
(1) is the Premium less every Reduction Due to a Withdrawal; and
(2) is the highest Anniversary Value as of the Target Date, less
every Reduction Due to a Withdrawal, since the Target Date.
Death Proceeds. The Death Proceeds become payable to the Beneficiary upon our
receipt, at our Office, of: (1) due proof satisfactory to us that both Insureds
died while this Policy was in force; (2) all representations we require or which
are mandated by applicable law or regulation in relation to the death claim and
the payment of Death Proceeds; and (3) any applicable election of the mode of
payment, if not previously elected by you. The Death Proceeds payable, are equal
to:
(a) the Death Benefit; plus
(b) any insurance on the last surviving Insured's life provided by any
additional benefit riders under this Policy; minus
(c) any Debt; minus
(d) any due and unpaid monthly deductions, including those charges
that would be required to keep this Policy from lapsing if the
last surviving Insured dies during any grace period; plus
(e) any interest required by law.
The Death Proceeds may be paid in a lump sum or may be applied under one of the
payment options described in this Policy. It also may be applied under any other
payment option selected by the Beneficiary and agreed upon by us, if not elected
by you before we receive due proof of both Insureds' deaths.
Due Proof of Death: Due proof of death consists of one of the following: (1) a
certified copy of a death certificate; (2) a certified copy of a decree of a
court of competent jurisdiction as to the finding of death; and; (3) any other
proof satisfactory to us.
11
VLI-SVIND (11/97)-11
ACCELERATED DEATH BENEFIT
General: The accelerated Death Benefit is pre-payment to the last surviving
Insured, not to you or the Beneficiary, of a portion of the Death Proceeds. Only
one such payment is permitted.
Amount of the Accelerated Death Benefit: The amount of the accelerated Death
Benefit payment is subject to a maximum, but you may request that less than the
maximum be paid. The amount will be paid in a lump sum. The maximum amount
payable before any reductions is the lesser of $250,000 and 50% of the Required
Death Benefit as of the Valuation Period we approve such payment. The actual
amount payable will be reduced by the following:
(1) 12 months of interest on that amount. The applicable interest rate
equals the loan interest rate shown in the Schedule.
(2) A pro-rata portion of any outstanding Debt, based on the ratio by
which the Required Death Benefit is being reduced as a result of
the accelerated Death Benefit payment.
Requirements for Payment of the Accelerated Death Benefit: The accelerated Death
Benefit is payable only when all our requirements are met. The requirements are:
(a) You and any person or entity with a vested interest in this
Policy, including, but not limited to, an irrevocable Beneficiary
or an assignee, must make the request that we make such a payment.
We will not agree to such a payment based on a request from the
last surviving Insured unless you are the last surviving Insured.
(b) Such a request must be In Writing.
(c) We receive In Writing proof satisfactory to us that the last
surviving Insured became terminally ill, as defined below, at
least 30 days after the Issue Date or as a result of an accident
that occurred after the Issue Date.
(d) We must receive all required information in order to meet our
obligations for tax or other regulatory reporting before we make
such a payment.
(e) We must receive all information needed to enable us to make the
payment directly to an account for the benefit of the last
surviving Insured.
Terminally ill, for purposes of this provision, means a condition diagnosed by a
physician, as defined below, which is expected to result in death within 12
months for 80% of the diagnosed cases. Physician, for purposes of this
provision, is a person other than you, the last surviving Insured, or a member
of either your or the last surviving Insured's family who meets the definition
of physician as defined in the Code as amended from time to time. We may change
the definition of terminally ill or physician to the extent needed to make any
payment pursuant to this provision exempt from federal or state income taxation.
Consequences to the Policy of an Accelerated Death Benefit Payment: An
accelerated Death Benefit payment reduces the Account Value, the Guaranteed
Minimum Death Benefit and any Debt in the same ratio as the Required Death
Benefit is reduced as of the Valuation Period such a payment is made.
INVESTMENT OF ACCOUNT VALUE
General: We offer a range of variable investment options and a Fixed Allocation
as ways to invest your Account Value. You may maintain Account Value in multiple
investment options, subject to the limits set out in the Allocation Rules
section of this Policy. You may transfer Account Value between investment
options, subject to the requirements set out in the Transfers section of this
Policy. Transfers may be subject to a fee, as shown in the Schedule.
Variable Investment Options: We offer a number of Sub-accounts as variable
investment options. These are all Sub-accounts of the Separate Account shown in
the Schedule.
The investment policy of the Separate Account will not be changed without the
approval of the Insurance Commissioner of the State of Connecticut. Any such
approval will be on file with the Commissioner.
12
VLI-SVIND (11/97)-12
Fixed Allocation: We credit interest to Fixed Allocations. From time to time we
declare interest rates applicable to new Fixed Allocations. If you make a Fixed
Allocation, we credit the rate then in effect to that Fixed Allocation until the
next Policy Anniversary. Once that Policy Anniversary is reached, we credit, for
the next Policy Year, the then current rate applicable to new Fixed Allocations.
This applies to all your Fixed Allocations then in effect. During each
subsequent Policy Year, the rate we credit for each Policy Year is the one in
effect for new Fixed Allocations at the beginning of the Policy Year. The
interest rates we credit are determined by us and are subject to a minimum. The
minimum is shown in the Schedule.
You may allocate part or all of the Premium to the Fixed Allocation. You may
transfer all or part of the Account Value attributable to the variable
investment options into the Fixed Allocation. Transfers from the Fixed
Allocations are subject to the limitations discussed in the Transfers section of
this policy.
OPERATIONS OF THE SEPARATE ACCOUNT
General: The assets supporting our obligations under this Policy may be held in
various accounts, depending on the obligation being supported. Assets supporting
obligations based on the Account Value allocated to the variable investment
options are maintained in the Separate Account shown in the Schedule. This
Separate Account consists of multiple Sub-accounts. This Separate Account was
established by us pursuant to Connecticut law. This Separate Account also holds
assets of other policies issued by us with values and benefits that vary
according to the investment performance of this Separate Account. The assets of
the Separate Account will be valued at least monthly.
We are the legal owner of assets in the Separate Account. Income, gains and
losses, whether or not realized, from assets allocated to the Separate Account,
are credited to, or charged against, the Separate Account in accordance with the
terms of the policies supported by such assets without regard to our other
income, gains or losses or to the income, gains or losses in any other of our
separate accounts. We will maintain assets in the Separate Account with a total
market value at least equal to the reserve and other liabilities we must
maintain in relation to the policy obligations supported by such assets. These
assets may only be charged with liabilities which arise from such policies.
Values and benefits based on allocations to the Sub-accounts will vary with the
investment performance of the Portfolios, as applicable. We reserve the right to
transfer assets of the Separate Account, which we determine to be associated
with the class of policies to which this Policy belongs, to another Separate
Account. If this type of transfer is made, the term "Separate Account" as used
in this Policy shall mean the Separate Account to which the assets were
transferred.
The assets of the Separate Account will be available to cover the liabilities of
our general account only to the extent that the assets of the Separate Account
exceed the liabilities of the Separate Account arising under the policies
supported by the Separate Account.
The Separate Account is registered with the Securities and Exchange Commission
(the "SEC") under the Investment Company Act of 1940 as a unit investment trust
which is a type of investment company. This does not involve any supervision by
the SEC of the investment policies, management or practices of the Separate
Account or of us.
GENERAL ACCOUNT
We maintain assets in our general account to support our obligations: (1) for
that portion of the Account Value allocated to any Fixed Allocation; (2) equal
to the Account Value in the Loan Account; (3) for that portion of the Death
Proceeds greater than the Account Value; (4) for any settlement option; and (5)
for any other obligation we may have in relation to a Policy for which assets
are not maintained in the Separate Account.
13
VLI-SVIND (11/97)-13
CHARGES
General: There are certain charges assessable against your Policy. There are
also certain charges that are assessed against the Sub-accounts of the Separate
Account, as noted below.
The charges which are or may be assessed against your Policy are: (1) the cost
of insurance charge; (2) the sales charge; (3) the tax charge, (4) the
maintenance fee, if applicable; (5) the contingent deferred sales charge; (6)
the contingent deferred tax charge; and (7) any transfer fee.
The charges assessed against the Sub-accounts of the Separate Account are: (1)
the administration charge; and (2) the mortality and expense risk charge. A
charge for taxes also may be assessed against the Sub-accounts.
Cost of Insurance Charge: The cost of insurance charge is deducted on each
Monthly Processing Date. It is deducted on a pro-rata basis from your variable
investment options and any Fixed Allocations. It is a percentage of your Account
Value on the Monthly Processing Date. The percentage depends on the age of the
Insureds on the Policy Date and the Insureds' risk classes. Subject to any
requirement for prior approval of the applicable jurisdiction, we have the right
to change the current cost of insurance from time to time. However, the amount
deducted will never exceed the amount that would be deducted if we calculated
the charge as (a) multiplied by the result of (b) divided by (c) where:
(a) is the applicable guaranteed monthly cost of insurance rate per
$1,000 in effect on that Monthly Processing Date;
(b) is the Net Amount at Risk on that Monthly Processing Date; and (c)
is $1,000.
Any change in the cost of insurance rates will be based on changes in our future
expectations of mortality, expenses, persistency, investment earnings and any
taxes. Changes in cost of insurance rates will not be made because of a
deterioration in an Insured's health, nor will they be made to recoup any prior
losses. The changes will be determined only prospectively and will comply with
the procedures and standards on file with the insurance department for the
jurisdiction where this policy is delivered.
Sales Charge: The sales charge is deducted on Monthly Processing Dates. It is
deducted on a pro-rata basis from your variable investment options and any Fixed
Allocations. It is a percentage of your Account Value on the Monthly Processing
Date. The percentage and the period during which the sales charge applies are
shown in the Schedule.
Tax Charge: The tax charge is deducted on Monthly Processing Dates. It is
deducted on a pro-rata basis from your variable investment options and any Fixed
Allocations. It is a percentage of your Account Value on the Monthly Processing
Date. The percentage and the period during which the tax charge applies are
shown in the Schedule.
Maintenance Fee: The maintenance fee may be deducted on Monthly Processing
Dates. When applicable, it is deducted on a pro-rata basis from your variable
investment options and any Fixed Allocations. The amount of the fee and any
conditions such that the fee does not apply are shown in the Schedule.
Contingent Deferred Sales Charge: The contingent deferred sales charge may be
deducted from amounts receivable upon surrender or a partial withdrawal. It is a
percentage of the Premium being distributed. The percentage and period to which
it applies are shown in the Schedule. It only applies to that portion of a
partial withdrawal or surrender we deem a distribution of Premium. The Surrender
and Partial Withdrawal section of this Policy describes the sources for
distribution upon a partial withdrawal or surrender, and the order in which
amounts are deemed to be withdrawn.
Contingent Deferred Tax Charge: The contingent deferred tax charge may be
deducted from amounts receivable upon surrender or a partial withdrawal. It is a
percentage of the Premium being distributed. The percentage and period to which
it applies are shown in the Schedule. It only applies to that portion of a
partial withdrawal or surrender we deem a distribution of the Premium. The
Surrender and Partial Withdrawal section of this Policy describes the sources
for distribution upon a partial withdrawal or surrender, and the order in which
amounts are deemed to be withdrawn.
14
VLI-SVIND (11/97)-14
Transfer Fee: The transfer fee may be deducted at the time of transfer. This
includes transfers into the Fixed Allocation and any transfers from a Fixed
Allocation. For this purpose, all transfers occurring during the same Valuation
Period are considered one transfer. We deduct the charge from the amounts
transferred pro-rata in the same ratio as Account Value is being transferred.
The amount of this charge and the circumstances when it applies are shown in the
Schedule. The following transfers are not taken into consideration in
determining whether any transfer fee applies: (a) a transfer from a Fixed
Allocation on a Policy Anniversary; (b) transfers to or from the Loan Account in
relation to loans and loan repayments.
Administration Charge: We charge for administering each Sub-account. We assess
this charge each day at the daily equivalent of the annual rate shown in the
Schedule against the assets in each Sub-account. We deduct the charge each
Valuation Period.
Mortality and Expense Risk Charges: We charge for bearing certain mortality and
expense risks related to the investment performance of the Sub-accounts. We
assess this charge each day at the daily equivalent of the annual rate shown in
the Schedule against the assets in each Sub-account. We deduct the charge each
Valuation Period.
PREMIUM PAYMENT
Premium: Issuance of this Policy represents our acceptance of both the Premium
and any Application. The amount of Premium is shown in the Schedule. Allocation
of Premium is subject to our allocation rules (see "Allocation Rules").
Additional Premiums: We will not accept any additional Premium payments under
this Policy unless we are informed on or before the date we approve the
Application for this Policy of the approximate amount of such additional
Premiums, and such additional Premiums are received not later than 6 months
after the Issue Date.
ALLOCATION RULES
You may allocate your Account Value among the investment options we make
available. We may limit the number of investment options to which Account Value
may be allocated at one time. This limit will not be less than 10 investment
options.
Until the Reallocation Date shown in the Schedule, that portion of your Premium
you designated to be allocated to variable investment options will be allocated
to the Automatic Sub-account. As of the Reallocation Date, the Account Value of
the Automatic Sub-account will be allocated per your most recent instruction to
us. If the Reallocation Date is not a Valuation Day, the Premiums will be
transferred on the Valuation Day immediately following. Any portion of the
Premium you designated to be allocated to the Fixed Allocation will be allocated
directly to the Fixed Allocation and will not be allocated to the Automatic
Sub-account.
Withdrawals of any type are taken pro-rata from the investment options based on
the then current Account Values in such investment options unless we receive
other instructions from you prior to such withdrawal. If there are multiple
Fixed Allocations as of the date of such partial withdrawal, amounts are taken
from the Fixed Allocations on a last in, first out basis.
Deductions for charges and fees are as noted above in the section entitled
"Charges," except that if there are multiple Fixed Allocations as of the
applicable Monthly Processing Date, amounts are deducted from the Fixed
Allocations on a last in, first out basis.
Should you request a transaction that would leave less than any minimum amount
we then require in an investment option, we reserve the right, to the extent
permitted by law, to add the balance of your Account Value in the applicable
Sub-account or Fixed Allocation to the transaction and close out your balance in
that investment option.
15
VLI-SVIND (11/97)-15
ACCOUNT VALUE AND CASH VALUE
General: Your Policy has an Account Value and a Cash Value. Your Account Value
is the sum of values in: (1) any Sub-account; (2) each Fixed Allocation, if any;
and (3) the Loan Account, if any. The Cash Value is the Account Value less any
Debt and less any applicable: (1) contingent deferred sales charge; and (2)
contingent deferred tax charge.
Account Value in the Sub-accounts: We determine your Account Value separately
for each Sub-account. To determine the Account Value in each Sub-account we
multiply the Unit Price as of the Valuation Period for which the calculation is
being made times the number of Units attributable to your Account Value in that
Sub-account as of that Valuation Period.
Units: The number of Units attributable to this Policy in a Sub-account is the
number of Units purchased for you as a result of an allocation to that
Sub-account less the number of Units transferred or withdrawn. We determine the
number of Units involved in any transaction specified in dollars by dividing the
dollar value of the transaction by the Unit Price of the affected Sub-account as
of the Valuation Period applicable to such transaction.
Unit Price: For each Sub-account the initial Unit Price was $10.00. The Unit
Price for each subsequent period is the net investment factor for that period,
multiplied by the Unit Price for the immediately preceding Valuation Period. The
Unit Price for a Valuation Period applies to each day in the period.
Net Investment Factor: Each Sub-account has a net investment factor. The net
investment factor is an index that measures the investment performance of and
charges assessed against a Sub-account from one Valuation Period to the next.
The net investment factor for a Valuation Period is (a) divided by (b), less
(c); where:
(a) is the net result of :
(1) the net asset value per share of the Portfolio shares
held in the Sub-account at the end of the current
Valuation Period plus the per share amount of any
dividend or capital gain distribution declared and
unpaid by the underlying mutual fund during that
Valuation Period; plus or minus
(2) any per share charge or credit during the Valuation
Period as a provision for taxes attributable to the
operation or maintenance of the Sub-account.
(b) is the net result of :
(1) the net asset value plus any declared and unpaid
dividends per share of the Portfolio shares held in
the Sub-account at the end of the preceding Valuation
Period; plus or minus
(2) any per share charge or credit during the preceding
Valuation Period as a provision for taxes
attributable to the operation or maintenance of the
Sub-account;
(c) is the mortality and expense risk charge and the administration
charge.
We value the assets in the Sub-accounts at their fair market value in accordance
with accepted accounting practices and applicable laws and regulations. The net
investment factor may be greater than, equal to, or less than one.
16
VLI-SVIND (11/97)-16
Account Value For Fixed Allocations: We determine the Account Value separately
for each Fixed Allocation, other than a Fixed Allocation made on a Policy
Anniversary, from the date of such Fixed Allocation to the subsequent Policy
Anniversary. All amounts to be allocated to the fixed investment option as of
the same day are treated as one Fixed Allocation, irrespective of the source of
the Account Value being allocated to the fixed option. As of each Policy
Anniversary, all prior Fixed Allocations are combined and treated as an
allocation to a new Fixed Allocation.
The Account Value in each Fixed Allocation equals:
(a) The Account Value initially allocated to a Fixed Allocation; less (b)
Charges and fees deducted from that Fixed Allocation; less (c) Transfers
from that Fixed Allocation; less (d) Distributions from that Fixed
Allocation, for any reason; plus (e) Interest credited to that Fixed
Allocation.
Interest is credited daily on each Fixed Allocation. On any day, interest is
credited to the Account Value in a Fixed Allocation after any deductions made as
of that day and after any transfers or distributions from that Fixed Allocation
as of that day.
Account Value in the Loan Account The Account Value in the Loan Account equals:
(a) The amounts transferred to the Loan Account; less (b) Reductions from
the Loan Account as a result of loan repayments; plus (c) Interest credited
to the Loan Account.
Interest is credited daily to the Loan Account. On any day, interest is credited
to the Account Value in the Loan Account after any deductions made as of that
day and after any transfers from that Fixed Allocation as of that day.
When you take a policy loan, we transfer Account Value equal to the amount of
the policy loan from the investment options to the Loan Account. Unless you give
us prior instructions before the transfer, we transfer Account Value from the
investment options pro-rata based on the Account Value in the investment options
as of the Valuation Day of such transfer.
A preferred loan is any loan for which the transferred Account Value is deemed
to be drawn from Growth. A standard loan is any loan for which the transferred
Account Value is deemed to be drawn from Premium. Account Value moved to the
Loan Account is deemed to come first from Growth.
Account Value maintained in the Loan Account remains in the Loan Account until
the loan is repaid. Amounts in the Loan Account earn interest from the Valuation
Day of the transfer at an annual interest rate shown in the Schedule.
Monthly Deduction: Account Value is reduced by monthly deductions. On each
Monthly Processing Date, we will take the monthly deduction. The monthly
deduction consists of the then applicable amounts for the following charges and
fees:
(a) the cost of insurance charge;
(b) the sales charge;
(c) the tax charge;
(d) the maintenance fee;
(e) the charge for any benefits provided by rider.
17
VLI-SVIND (11/97)-17
CASH VALUE CREDIT
We add a Cash Value Credit to your Account Value on each Policy Anniversary that
the Cash Value of your Policy equals or exceeds the Cash Value trigger. The Cash
Value trigger is shown in the Schedule. Eligibility for the Cash Value Credit at
one Policy Anniversary does not mean you are eligible on any other Policy
Anniversary.
The Cash Value Credit is equal to (a) multiplied by (b); where
(a) is the Cash Value on the applicable Policy Anniversary; and (b) is the
Cash Value Credit percentage shown in the Schedule.
The Cash Value Credit, if any, due on the applicable Policy Anniversary is
applied pro-rata based on the Account Value in the investment options.
TRANSFERS
General: You may transfer Account Value between investment options, subject to
the allocation rules herein and any applicable transfer fee. The amount of such
fee and when it applies is shown in the Schedule. Your transfer request must be
In Writing unless we receive a prior written authorization from you permitting
transfers based on instructions we receive over the phone or through electronic
means. The minimum amount required to be in any investment option after a
transfer is as shown in the Schedule.
Where permitted by law, we may accept your authorization of a third party to
transfer Account Values on your behalf. We may suspend or cancel such acceptance
at any time. We give you prior notification of any such suspension or
cancellation. We may restrict the investment options that will be available to
you for transfers during any period in which you authorize such third party to
act on your behalf. We give the third party you authorize prior notification of
any such restrictions. However, we will not enforce such a restriction if we are
provided evidence satisfactory to us that: (a) such third party has been
appointed by a court of competent jurisdiction to act on your behalf; or (b)
such third party has been appointed by you to act on your behalf for all your
financial affairs.
We reserve the right to limit the number of transfers in any Policy Year for all
existing or new Owners. We also reserve the right to limit the number of
transfers in any Policy Year or to refuse any transfer request for an Owner or
certain Owners if we believe that: (a) excessive trading by such Owner or Owners
or a specific transfer request or group of transfer requests may have a
detrimental effect on Unit Values or the share prices of the Portfolios; or (b)
we are informed by one or more of the Portfolios that the purchase or redemption
of shares is to be restricted because of excessive trading or a specific
transfer or group of transfers is deemed to have a detrimental effect on share
prices of affected Portfolios, or (c) we believe there may be adverse
consequences to other Owners as a result of excess transfers.
Unless we limit the number of transfers in any Policy Year, there is no limit on
the number of transfers that only involve variable investment options, or the
number of transfers from variable investment options to make Fixed Allocations.
However, we limit each transfer from Fixed Allocations that are to be effective
on any day other than a Policy Anniversary to the greater of 25% of the Account
Value in your Fixed Allocations or $1,000. If you make such a transfer from your
Fixed Allocations, you cannot make another such transfer until either 90 days
have passed or the next Policy Anniversary, if earlier.
18
VLI-SVIND (11/97)-18
SURRENDER AND PARTIAL WITHDRAWAL
Surrender: You may surrender your Policy for its Cash Value at any time. You
must send your Policy and surrender request In Writing to our Office.
Partial Withdrawals: You may withdraw part of your Account Value. The minimum
partial withdrawal amount is as shown in the Schedule. The Cash Value that must
remain in the Policy as of the Valuation Day of a partial withdrawal is as shown
in the Schedule. If the amount of the partial withdrawal request exceeds the
maximum amount available, we reserve the right to treat your request as one for
a full surrender.
The contingent deferred sales charge and/or the contingent deferred tax charge
may apply to all or a portion of a partial withdrawal. The period during which
such charges may apply and the applicable charges are shown in the Schedule.
These charges only apply to the portion of any partial withdrawal deemed to be a
withdrawal of Premium. For these purposes, partial withdrawal amounts are deemed
to be withdrawn from your Policy first from the amount available as a free
withdrawal, as described below.
Free Withdrawals: During the period any contingent deferred sales charge or any
contingent deferred tax charge may apply, you may withdraw a limited amount of
Account Value without application of any applicable contingent deferred sales
charges or contingent deferred tax charge. The minimum withdrawal amount is as
shown in the Schedule. The maximum amount available as a free withdrawal in a
Policy Year is the greater of this Policy's Growth or 10% of the Premium.
Effect of a Partial Withdrawal: Each partial withdrawal reduces the Account
Value and, as a result, the Cash Value and the Required Death Benefit as of the
Valuation Day of the partial withdrawal. As of that Valuation Day it also
reduces the Guaranteed Minimum Death Benefit by the same proportion as the
Account Value is reduced. As a result of the reductions to the Required Death
Benefit and the Guaranteed Minimum Death Benefit, the Death Benefit as of that
Valuation Day is reduced.
POLICY LOANS
General: You may borrow against your Policy. The Policy is the only collateral
we require for the loan. During the first Policy Year, the only available loan
is an amount equal to the loan in effect on any life insurance policy exchanged
for this Policy. Any such loan takes effect as of the Issue Date or, if later,
the date we apply the surrender proceeds of such exchanged policy as Premium.
After the first Policy Year, a loan may be taken at any time while the Insured
is alive and this Policy is in force. We allow one loan per Policy Year. The
loan may be repaid at any time while the Insured is living. The Debt resulting
from a loan affects the Death Proceeds, Cash Value and Accelerated Death
Benefit.
Loan Value: The loan value is the maximum amount of Account Value you may
borrow. The maximum loan value is the Account Value less the Contingent Deferred
Sales Charge and less the Contingent Deferred Tax Charge multiplied by the
maximum loan value percentage shown in the Schedule. The amount available for a
loan at any time is equal to the then maximum loan value minus any Debt. The
minimum loan amount is shown in the Schedule.
Loan Interest: Loan interest accrues daily at an effective annual interest rate
shown in the Schedule. It is payable on each Policy Anniversary. Interest not
paid when due will be added to the Account Value maintained in the Loan Account
and will be charged interest at the same rate. If you do not pay the interest
when due, we transfer Account Value from the investment options to the Loan
Account. This Account Value is taken pro-rata from the investment options based
on the Account Value in the investment options as of the Valuation Day of the
transfer. If there is inadequate Account Value in the investment options to make
such a transfer, we reserve the right to transfer the deficiency to the Loan
Account as of any subsequent Valuation Date such an amount equal to the
deficiency is available in the investment options.
19
VLI-SVIND (11/97)-19
Loan Repayment: Debt may be repaid in whole or in part at any time while an
Insured is living and this Policy is in force, except when an amount is due to
keep the Policy in force or upon reinstatement. Any standard loan is repaid
before a preferred loan. As of the Valuation Day of the repayment:
(a) we reduce the loan principal and outstanding loan interest
proportionately based on the ratio between loan principal and
loan interest as of that Valuation Day;
(b) we reduce the Account Value in the Loan Account by an amount
equal to the lesser of the amount of the loan repayment and the
total Account Value in the Loan Account as of that Valuation Day;
and
(c) we allocate the repayment to the investment options pro-rata
based on the Account Value in the investment options as of that
Valuation Day. Any amount then allocated to the Fixed Allocation
will be treated as a separate Fixed Allocation.
GRACE PERIOD AND REINSTATEMENT
Grace Period: We keep the Policy in force during a grace period that begins on
the Monthly Processing Date on which it is determined that the Cash Value is
zero or less than zero.
If there is no Debt as of the date the grace period begins, the Policy remains
in force with the Death Benefit equal to the Guaranteed Minimum Death Benefit as
of the Monthly Processing Date the grace period begins. We will notify you if
this occurs. During such grace period, you may at any time an Insured is alive
send us one payment, although none is required. This payment is equal to three
months' charges, based on: (a) the Net Amount at Risk as of the Monthly
Processing Date the grace period begins; and (b) the guaranteed monthly cost of
insurance rates per thousand as shown in the Schedule for the Insureds' then
attained Ages. We will inform you of this amount.
If there is any Debt as of the date the grace period begins, we allow a 60-day
grace period. We will send you a notice indicating the minimum payment required
to keep the Policy from lapsing. The amount equals the minimum amount needed for
the Cash Value to exceed the Debt, plus the amount equal to three months'
charges, based on: (a) the Net Amount at Risk as of the Monthly Processing Date
which began the grace period preceding the lapse; and (b) the guaranteed monthly
cost of insurance rate per thousand as shown in the Schedule for the Insureds'
then attained Ages. The Policy lapses without value if the minimum payment is
not made by the end of the 61st day. This Policy will remain in force during the
grace period.
Reinstatement: If the Policy lapses, we may reinstate the Policy at any time
within a three-year period after the end of the grace period provided we receive
the following:
(a) Written Application to reinstate;
(b) Evidence of insurability satisfactory to us;
(c) Payment of an amount equal to the then current Debt plus the amount
equal to three months' charges, based on: (i) the Net Amount at Risk as
of the Monthly Processing Date which began the grace period preceding
the lapse; and (ii) the guaranteed monthly cost of insurance rate per
thousand as shown in the Schedule for the Insureds' attained Ages as of
the date of reinstatement.
After any reinstatement, the period during which certain charges apply may be
extended. If the lapse occurred during the period the sales charge and the tax
charge were payable, then the period during which these charges are payable is
extended by the period between the date of the lapse and the date of
reinstatement. If the lapse occurred during the period the contingent deferred
sales charge and the contingent deferred tax charge were payable upon a
withdrawal or a surrender, the Policy Years shown in the Schedule to which such
charges apply are extended by the period between the date of the lapse and the
date of reinstatement.
20
VLI-SVIND (11/97)-20
YOUR RIGHTS, OWNERSHIP, AND DESIGNATIONS
Ownership Rights and Beneficiary Designations: You may exercise the rights,
options and privileges granted in this Policy or permitted by us. Your rights
are subject to the rights of any assignee recorded by us and of any irrevocably
designated Beneficiary.
If more than one Owner is named, the Owners will own this Policy as joint
tenants with rights of survivorship unless otherwise stated. We require the
consent In Writing of all joint Owners for any transaction for which we require
the written consent of an Owner.
You may name a contingent Owner. You must do so In Writing. The contingent Owner
will become the Owner on your death. If there is more than one Owner, the
contingent Owner will become the Owner on the death of the last surviving Owner
unless otherwise stated In Writing. If you do not name a contingent Owner, the
estate of the last surviving Owner will own the Policy upon the last surviving
Owner's death.
Death Proceeds are payable to the Beneficiary. You may designate more than one
primary or contingent Beneficiary. If you make such a designation, the proceeds
are payable in equal shares to the survivors in the appropriate Beneficiary
class, unless you request otherwise In Writing.
If the primary Beneficiary dies before Death Proceeds become payable, the
proceeds will become payable to the contingent Beneficiary. If no Beneficiary is
alive when Death Proceeds become payable or in the absence of any Beneficiary
designation, the proceeds will vest in you or your estate.
Changing Revocable Designations: Unless you indicated that a prior choice was
irrevocable or your Policy has been endorsed to limit certain changes, you may
request to change Owner and Beneficiary designations by sending a request In
Writing.
Common Disaster: If any Beneficiary dies with the last surviving Insured in a
common disaster, it must be proved to our satisfaction that the last surviving
Insured died first. Unless information provided and satisfactory to us indicates
otherwise, the Policy is treated as though the Beneficiary died first. If both
Insureds die either simultaneously or in circumstances where it is not clear
which Insured died first, the older of the two Insureds will be deemed to be the
last surviving Insured.
GENERAL PROVISIONS
Entire Contract: This Policy, any attached riders or endorsements, and the
attached copy of any Application form the entire contract. All statements made
in any Application are deemed to be representations and not warranties.
Only our President, a Vice President or Secretary may change or waive any
provisions of this Policy. Any change or waiver must be In Writing. We are not
bound by any promises or representations made by or to any other person.
Misstatement of Age or Sex: If there has been a misstatement of the age and/or
sex of an Insured, we will make adjustments to conform to the facts. As to
payments under any payment options: (a) any underpayments by us will be remedied
on the next payment following correction; and (b) any overpayments by us will be
charged against future amounts payable by us under this Policy.
Incontestability: This Policy will be incontestable after it has been in force
during either of the Insureds' lifetime for two years from its Issue Date. If
the Policy is reinstated, the Policy will be incontestable after it has been in
force for a period of two years from the date of the reinstatement. The
contestable period for any additional benefit provided by a rider attached to
this Policy is stated in the rider.
Suicide: If the First or Second Insured as shown in the Schedule dies by
suicide, while sane or insane, within two years from the Issue Date and while
the Policy is in force, the Policy will terminate as of the first death by
suicide. The Death Benefit will be limited to the greater of (a) and (b) where:
a) is the Premium paid less any outstanding Debt, and any partial withdrawals as
of the date Death Proceeds would otherwise have become payable; and
b) is the Cash Value as of the date Death Proceeds would otherwise become
payable.
21
VLI-SVIND (11/97)-21
Transfers, Assignments or Pledges: Generally, your rights in this Policy may be
transferred, assigned or pledged for loans at any time. You may transfer, assign
or pledge your rights to another person at any time, prior to an Insured's
death. You must request a transfer or provide us with a copy of the assignment
In Writing. A transfer or assignment is subject to our acceptance. We will not
be deemed to know of or be obligated under any assignment prior to our receipt
and acceptance thereof. We assume no responsibility for the validity or
sufficiency of any assignment. A transfer, assignment or pledge may have adverse
tax consequences for you.
Nonparticipation: The Policy does not share in our profits or surplus earnings.
Deferral of Transactions: We may defer any payment for a period not to exceed
the lesser of 6 months and the period permitted by law. If we defer a
distribution or transfer from the Fixed Allocation for more than thirty days, we
pay interest of at least 3% per year on the amount deferred. We may defer any
distribution from any Sub-account or any transfer from a Sub-account for a
period not to exceed 7 calendar days from the date the transaction is effected.
Any other deferral period begins on the date such distribution or transfer would
otherwise have been transacted.
All transactions into, out of or based on any Sub-account may be postponed
whenever (1) the New York Stock Exchange is closed (other than customary
holidays or weekends) or trading on the New York Stock Exchange is restricted as
determined by the SEC; (2) the SEC permits postponement and so orders; or (3)
the SEC determines that an emergency exists making valuation or disposal of
securities not reasonably practical.
Elections, Designations, Changes and Requests: All elections, designations,
changes and requests must be In Writing and are effective only after they have
been approved by us, subject to any transactions made by us before receipt of
such notices. We inform you of any changes that materially affect your rights.
We reserve the right to require that this Policy be returned to our Office for
endorsement of any change.
Claims of Creditors: To the extent permitted by law, no payment under this
Policy is subject to the claims of the creditors of any Owner, Insured or
Beneficiary.
Tax Reporting: We intend to make all required regulatory reports regarding
taxable events in relation to this Policy. Such events may include, but are not
limited to: (a) loans; (b) payment of death benefits; (c) surrender of value
from the Policy; and (d) assignments.
Facility of Payment: We reserve the right, in settlement of full liability, to
make payments to a guardian, relative or other person if a payee is legally
incompetent.
Participation and Termination of Certain Programs We May Offer: To elect to
participate or to terminate participation in any program we may offer, we may
require receipt at our Office of a request In Writing on a form satisfactory to
us.
Reports to You: We provide reports to you while this Policy is in force. We
provide you with reports at least once each quarter that you maintain Account
Values in the Sub-accounts. We provide you with reports once a year if you
maintain Account Value only in the Fixed Allocation. You may request additional
reports. We reserve the right to charge up to $50 for each such additional
report.
Reserved Rights: In addition to rights specifically reserved elsewhere in this
Policy, we reserve the right to any or all of the following: (a) combine a
Sub-account with other Sub-accounts; (b) combine the Separate Account shown in
the Schedule with other separate accounts; (c) deregister the Separate Account
shown in the Schedule under the Investment Company Act of 1940; (d) operate the
Separate Account shown in the Schedule as a management investment company under
the Investment Company Act of 1940 or in any other form permitted by law; (e)
make changes required by any change in the Securities Act of 1933, the Exchange
Act of 1934 or the Investment Company Act of 1940; (f) make changes that are
necessary to maintain the tax status of your Policy under the Code; and (g) make
changes required by any change in other federal or state laws relating to life
insurance policies.
22
VLI-SVIND (11/97)-22
We may eliminate Sub-accounts, or substitute one or more Portfolios for the one
in which a Sub-account is invested. Substitutions may be necessary if we believe
a Portfolio no longer suits the purpose of the Policy. This may happen due to a
change in laws or regulations, or a change in the investment objectives or
restrictions of a Portfolio, or because the Portfolio is no longer available for
investment, or for some other reason. We would obtain prior approval from the
insurance department of our state of domicile, if so required by law, before
making such a substitution, combination, deletion or addition. We also would
obtain prior approval from the SEC as required by law, and any other required
approvals before making such a substitution, combination, deletion or addition.
Maturity Date: This Policy matures on the Policy Anniversary on or immediately
following the 95th birthday of the younger Insured or what would have been the
younger Insured's 95th birthday if the younger Insured predeceases the older
Insured. This day will be the Maturity Date. At maturity, coverage under this
Policy ends. The Cash Value will be paid to you on the Maturity Date.
POLICY PAYMENT OPTIONS
Payment Options: Partial withdrawals, surrender amounts and Death Proceeds may
be paid as a lump sum or pursuant to any other payment option we offer. If you
choose any of our payment options, you must request your choice In Writing.
Payment options can be guaranteed for life, for a certain period, for joint
lives or for a certain period and life as described below. We make available
fixed payments. We reserve the right to require that the payments be payable on
the first or the fifteenth day of a calendar month. Except for lump sum
payments, we will only make payments directly to an account with a financial
institution in the United States of America.
In the absence of an election In Writing prior to Death Proceeds becoming due,
the Beneficiary may elect to receive the Death Proceeds under one of the payment
options described below. However, if you made an election, the Beneficiary may
not alter such election.
For purposes of the payment options described below, the term "key life" means
the person or persons upon whose life any payments dependent upon the
continuation of life are based.
(a) Option 1 - Payments for Life: Under this option, income is payable
periodically prior to the death of the key life, terminating with the last
payment due prior to such death.
(b) Option 2 - Payments for Life with 10, 15, or 20 Years Certain:
Under this option, income is payable periodically for 10, 15, or 20 years, as
selected, and thereafter until the death of the key life. Should the death of
the key life occur before the end of the period selected, the remaining payments
are paid to the Beneficiary to the end of such period.
(c) Option 3 - Payments Based on Joint Lives: Under this option, income
is payable periodically during the joint lifetime of two key lives, and
thereafter during the remaining lifetime of the survivor, ceasing with the last
payment prior to the survivor's death.
(d) Option 4 - Payments for a Certain Period: Under this option, income
is payable periodically for a specified number of years. The number of years is
subject to our then current rules. Should the payee die before the end of the
specified number of years, the remaining payments are paid to the Beneficiary to
the end of such period.
The first periodic payment is determined by multiplying the amount applied to
purchase payment options (expressed in thousands of dollars) by the amount of
the first periodic payment per $1,000 obtained from our then current payment
rates for that type of payment option and for the frequency of payment selected.
These rates will not be less than those shown in the Payment Option Tables shown
herein.
We reserve the right to require submission prior to commencement of any payment
option of evidence satisfactory to us of the age of any key life upon whose life
payment amounts are calculated.
Proof of Survival: Any payment is subject to evidence satisfactory to us that
the payee is alive on the date such payment is otherwise due.
23
VLI-SVIND (11/97)-23
PAYMENT OPTION TABLES
The attached tables show the minimum dollar amount of each monthly payment for
each $1,000 applied under the options. The amounts payable when payments
commence may be higher, based on our then current assumptions as to interest,
expenses and mortality, but will not be lower.
Under options one and two, the amount of each payment depends on the age and
sex, if applicable, of the payee at the time the first payment is due. Under
option three, the amount of each payment depends on the age and sex, if
applicable, of both payees at the time the first payment is due. No election can
be changed once payments begin.
The tables shown are based on interest at 3% per year compounded annually and
the 1983a Individual Annuity Mortality Table set back one year for males and two
years for females or the appropriate variation of such table with genderless
rates when applicable to the Payment Option in order to meet state or Federal
requirements in relation to the usage of such Payment Option.
The payee's settlement age is the payee's age, on the date of the first payment,
minus the age adjustment. The age adjustments are shown below. They are based on
the date of the first payment. The age adjustment does not exceed the age of the
payee.
Attained Age
Year Set Back
2000 - 2009 1
2010 - 2019 2
2020 and later 3
Amount of Monthly Payment For Each $1,000 Applied
(Based on 3% Annual Interest Rate)
First and Second Options - Single Life Annuities with:
Male Payee with Female Payee with
Monthly Payments Guaranteed Monthly Payments Guaranteed
--------------------------- ---------------------------
None 120 180 240 None 120 180 240
Age $ $ $ $ $ $ $ $
---
50 4.19 4.15 4.10 4.03 3.79 3.78 3.76 3.73
55 4.61 4.54 4.45 4.32 4.10 4.08 4.04 3.99
60 5.15 5.03 4.87 4.65 4.52 4.47 4.40 4.30
65 5.91 5.67 5.36 4.97 5.08 4.98 4.85 4.65
70 6.98 6.44 5.87 5.23 5.85 5.65 5.38 5.00
75 8.46 7.32 6.31 5.40 6.98 6.50 5.94 5.28
80 10.57 8.18 6.62 5.48 8.66 7.50 6.41 5.43
Third Option - Joint and Last Survivor Annuity
Age of Female Payee
Age of 35 40 45 50 55 60 65 70 75 80
Male Payee $ $ $ $ $ $ $ $ $ $
----------
50 3.15 3.27 3.39 3.53 3.67 3.79 3.91 4.00 4.07 4.12
55 3.17 3.29 3.44 3.60 3.78 3.96 4.13 4.27 4.39 4.47
60 3.18 3.31 3.47 3.66 3.88 4.11 4.35 4.57 4.76 4.91
65 3.19 3.33 3.50 3.70 3.95 4.23 4.55 4.87 5.18 5.44
70 3.19 3.34 3.52 3.74 4.01 4.33 4.72 5.16 5.62 6.05
75 3.20 3.34 3.53 3.76 4.04 4.40 4.85 5.39 6.02 6.68
80 3.20 3.35 3.53 3.77 4.07 4.45 4.94 5.57 6.35 7.26
24
VLI-SVIND (11/97)-24
Fourth Option - Payments for a Designated Period
Amount of Amount of Amount of Amount of
No. of Monthly No. of Monthly No. of Monthly No. of Monthly
Years Payments Years Payments Years Payments Years Payments
----- -------- ----- -------- ----- -------- ----- --------
10 9.61 16 6.53 22 5.15 28 4.37
11 8.86 17 6.23 23 4.99 29 4.27
12 8.24 18 5.96 24 4.84 30 4.18
13 7.71 19 5.73 25 4.71
14 7.26 20 5.51 26 4.59
15 6.87 21 5.32 27 4.47
25
VLI-SVIND (11/97)-25
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
Shelton, Connecticut
(A Stock Company)
MODIFIED SINGLE PREMIUM LAST SURVIVOR LIFE INSURANCE.
NON-PARTICIPATING.
VARIABLE INVESTMENT OPTIONS AND FIXED ALLOCATION.
DEATH BENEFIT PAYABLE UPON DEATH OF THE INSURED WHILE THIS POLICY IS IN FORCE.
ANY PAYMENTS AND VALUES, INCLUDING THE DEATH BENEFIT, BASED ON THE ACCOUNT VALUE
IN THE VARIABLE INVESTMENT OPTIONS DEPEND ON THEIR INVESTMENT PERFORMANCE, AND
MAY INCREASE OR DECREASE AND ARE, THEREFORE, NOT GUARANTEED. PLEASE REFER TO THE
SECTIONS ENTITLED "ACCOUNT VALUE IN THE SUB-ACCOUNTS" AND "DEATH BENEFIT" FOR A
MORE COMPLETE EXPLANATION. ANY ACCELERATED DEATH BENEFIT OPTION MAY REDUCE YOUR
POLICY BENEFITS.
THERE IS NO MINIMUM GUARANTEED CASH VALUE.
LESS THAN 100% OF THE CASH VALUE IS AVAILABLE FOR A LOAN.