EXHIBIT (5)
07/10/01
AMERICAN GENERAL LIFE
Insurance Company
Home Office:
Houston, Texas
2727-A Allen Parkway POLICY NUMBER: [AMERICAN GENERAL LOGO]
P.O. Box 4880 A STOCK COMPANY
Houston, Texas 77210
(888) 325-9315 Subsidiary of American General Corporation
WE WILL PAY THE DEATH BENEFIT PROCEEDS to the designated Beneficiary if the last
surviving Contingent Insured named on the Policy Schedule dies prior to the
Maturity Date and while this policy is in force. Payment will be made after We
receive due proof of the deaths of both Contingent Insureds, and will be subject
to the terms of this policy. The method for determining the amount payable is
stated in the Death Benefit Proceeds provision.
WE WILL PAY THE CASH SURRENDER VALUE of this policy to the Owner on the Maturity
Date if one or both Contingent Insureds are living on that date.
NO BENEFITS UNDER THE BASIC POLICY WILL BE PAID UPON THE DEATH OF THE FIRST
CONTINGENT INSURED.
THE AMOUNT OR DURATION OF THE DEATH BENEFIT PROCEEDS AND THE ACCUMULATION VALUES
PROVIDED BY THIS POLICY WHEN BASED ON THE INVESTMENT EXPERIENCE OF A SEPARATE
ACCOUNT, ARE VARIABLE AND NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
ACCUMULATION VALUES MAY INCREASE OR DECREASE.
The consideration for this policy is the application and payment of the first
premium. The first premium must be paid on or before delivery of this policy.
This is a JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY. An adjustable Death Benefit is payable upon the LAST SURVIVING
Contingent Insured's death prior to the Maturity Date. Investment results are
reflected in policy benefits. ACCUMULATION VALUES are flexible and will be
based on the amount and frequency of premiums paid and the investment results of
the Separate Account. NONPARTICIPATING - NOT ELIGIBLE FOR DIVIDENDS.
NOTICE OF TEN DAY RIGHT TO EXAMINE POLICY
You may return this policy within 10 days after delivery if You are not
satisfied with it for any reason. The policy may be returned to Us or to the
registered representative through whom it was purchased. Upon surrender of this
policy within the 10 day period, it will be deemed void from the Date of Issue,
and We will refund the greater of: (1) any premiums received by Us; or (2) Your
Accumulation Value as of the first Valuation Date occurring on or next following
the date on which Your request is received plus any charges that have been
deducted.
SIGNED AT THE HOME OFFICE ON THE DATE OF ISSUE.
/s/ Pauletta P. Cohn /s/ Donald W. Britton
---------------------- ----------------------
Secretary President
JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
READ YOUR POLICY CAREFULLY
01206
INDEX
Annual Report 27 Last Surviving Contingent Insured 5
Automatic Rebalancing 20 Maturity Date 3
Beneficiary and Proceeds 22 Monthly Administration Fee 15
Cash Surrender Value 14 Monthly Expense Charge 15
Cash Value 14 Monthly Guarantee Premium 16
Changing Your Insurance Policy 8 Owner 5
Change of Ownership or Beneficiary 23 Payment Options 23
Changing the Death Benefit Option 9 Policy Loans 21
Changing the Specified Amount 8 Policy Values 12
Contract 5 Premium Class 2
Cost of Insurance Rate Table 4B Premium Expense Charge 6
Date of Issue 5 Premium Payments 5
Death Benefit and Death Benefit Options 7 Reinstatement 28
Death Benefit Corridor Rates 4A Separate Account 9
Dollar Cost Averaging 19 Specified Amount 8
Exchange Option 28 Suicide 26
First Death, Notification of 5 Surrender Charges 14
General Account 12 Surrender, Full and Partial 17
General Provisions 26 Suspension and Deferral of
Grace Period 16 Payments Provision 20
Incontestability 26 Transfer Provision 18
Investment Advisor or Valuation of Assets 10
Investment Objective, Change of 11 Valuation Dates 10
Investments of the Separate Account 10 Valuation Units 10
When This Policy Terminates 27
COMPANY REFERENCE. We, Our, Us, or Company means American General Life
Insurance Company.YOU, YOUR. The words You or Your mean the Owner of this
policy.
HOME OFFICE. Our office at 2727-A Allen Parkway, Houston, Texas 77019; Mailing
Address P. O. Box 4880, Houston, Texas 77210-4880.
WRITTEN, IN WRITING. A written request or notice in acceptable form and
content, which is signed and dated, and received at Our Home Office.
PREMIUM CLASS. One or a combination of the following terms will be used to
describe the Premium Class for each Contingent Insured:
PREFERRED. The term "Preferred" means the cost of insurance is based on the
Contingent Insured being a better than average mortality risk.
STANDARD. The term "Standard" means "Substandard" or "Rated". This means the
cost of insurance is based on the Contingent Insured being an average mortality
risk.
TOBACCO. The term "Tobacco" means the cost of insurance is based on the
Contingent Insured being a user of tobacco.
NON-TOBACCO. The term "Non-Tobacco" means the cost of insurance is based on the
Contingent Insured being a non-user of tobacco.
SPECIAL. The term "Special" means "Substandard" or "Rated". This means an
extra amount is being charged due to the health, occupation or avocation of a
Contingent Insured.
UNINSURABLE. The term "Uninsurable" means the Contingent Insured would not
pass the Underwriting requirements for a single life policy.
NOTICE
This Policy Is A Legal Contract Between
The Policy Owner And the Company.
01206 Page 2
POLICY SCHEDULE
BASIC POLICY YEARS PAYABLE MONTHLY COST
LAST SURVIVOR VARIABLE LIFE 65 SEE PAGE 4B
ADDITIONAL BENEFITS PROVIDED BY RIDERS
NONE
SCHEDULE OF PREMIUMS
INITIAL PREMIUM: $1,011.06
PLANNED PERIODIC PREMIUM: $1,011.60 PAYABLE ANNUALLY
MONTHLY DEDUCTION DAY: 1ST DAY OF EACH MONTH
MONTHLY GUARANTEE PREMIUM (SEE MONTHLY $80.60
GUARANTEE PREMIUM PROVISION THAT GUARANTEES
THIS POLICY WILL NOT TERMINATE DURING THE GUARANTEE
PERIOD UNDER CERTAIN CIRCUMSTANCES)
MINIMUM PARTIAL SURRENDER: $500
MINIMUM VALUE THAT MAY BE RETAINED IN A
DIVISION AFTER A PARTIAL SURRENDER
OR TRANSFER: $500
MINIMUM DEATH BENEFIT AMOUNT (AFTER A
DECREASE IN SPECIFIED AMOUNT): $500,000
DEATH BENEFIT COMPLIANCE TEST: CASH VALUE ACCUMULATION
COVERAGE MAY EXPIRE PRIOR TO THE MATURITY DATE SHOWN WHERE EITHER NO PREMIUMS
ARE PAID FOLLOWING PAYMENT OF THE INITIAL PREMIUM, OR SUBSEQUENT PREMIUMS ARE
INSUFFICIENT TO CONTINUE COVERAGE TO SUCH DATE.
POLICY DATA
CONTINGENT INSURANCE PREMIUM
INSUREDS AGES CLASSES
JOHN DOE 35 PREFERRED/NON TOBACCO
JIM DOE 35 PREFERRED/NON TOBACCO
BASE COVERAGE: $100,000 DEATH BENEFIT OPTION: 1
SUPPLEMENTAL COVERAGE: $0
INITIAL SPECIFIED AMOUNT: $100,000 DATE OF ISSUE JULY 1, 2001
POLICY NUMBER: 0000000000 MATURITY DATE: JULY 1, 2066
THIS IS A (STATE NAME) POLICY
01206 Page 3
POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000
MORTALITY AND EXPENSE CHARGES:
DEDUCTIONS FROM THE SEPARATE ACCOUNT WILL BE MADE AT AN ANNUAL RATE NOT TO
EXCEED THE RATES STATED BELOW. THE ACTUAL DEDUCTION WILL BE MADE ON A
DAILY BASIS.
POLICY YEARS CURRENT ANNUAL RATE GUARANTEED ANNUAL RATE
1-15 [0.75%] 0.75%
16-30 [0.50%] 0.50%
THEREAFTER [0.15%] 0.15%
EXPENSE CHARGES:
PREMIUM TAX (IF APPLICABLE). DEPENDING ON THE LAWS OF THE JURISDICTION IN
WHICH THIS POLICY WAS ISSUED, AND SUBJECT TO FUTURE CHANGES IN RESIDENCE, A
PERCENTAGE OF EACH PREMIUM MAY BE DEDUCTED FOR PREMIUM TAX. PREMIUM TAX
RATES ARE SUBJECT TO CHANGE. THE PREMIUM TAX RATE FOR THIS POLICY ON THE
DATE OF ISSUE IS [0%].
PREMIUM EXPENSE CHARGE: CURRENT GUARANTEED
(ADJUSTABLE PREMIUM EXPENSE CHARGE [5.0%] 5.0%
PERCENTAGE)
MONTHLY ADMINISTRATION FEE: CURRENT GUARANTEED
[$10.00] $10.00
MONTHLY EXPENSE CHARGE FOR FIRST FOUR YEARS: [ ]
BASIC POLICY CHARGES AND FEES
COST OF INSURANCE CHARGES.
GUARANTEED MAXIMUM COST OF INSURANCE RATE PER $1,000 OF NET AMOUNT AT
RISK ARE SHOWN ON PAGE 4B.
SURRENDER CHARGES.
SURRENDER CHARGES WILL APPLY IF THIS POLICY IS SURRENDERED OR THE BASE
COVERAGE IS REDUCED DURING THE SURRENDER CHARGE PERIOD FOLLOWING THE
DATE OF ISSUE. SURRENDER CHARGES WILL ALSO APPLY DURING THE SURRENDER
CHARGE PERIOD FOLLOWING AN INCREASE IN BASE COVERAGE. SURRENDER
CHARGES APPLICABLE TO THIS POLICY APPEAR ON PAGE 4C
01206 Page 4
DEATH BENEFIT CORRIDOR RATES
BASED ON CASH VALUE ACCUMULATION TEST
POLICY POLICY
YEAR RATE YEAR RATE
1 6.0982 36 1.6787
2 5.8637 37 1.6303
3 5.6385 38 1.5851
4 5.4220 39 1.5425
5 5.2140 40 1.5028
6 5.0142 41 1.4659
7 4.8222 42 1.4317
8 4.6378 43 1.4000
9 4.4607 44 1.3706
10 4.2906 45 1.3434
11 4.1272 46 1.3180
12 3.9703 47 1.2944
13 3.8197 48 1.2726
14 3.6751 49 1.2525
15 3.5363 50 1.2341
16 3.4031 51 1.2174
17 3.2753 52 1.2023
18 3.1527 53 1.1885
19 3.0351 54 1.1759
20 2.9225 55 1.1642
21 2.8146 56 1.1530
22 2.7113 57 1.1423
23 2.6125 58 1.1315
24 2.5179 59 1.1206
25 2.4276 60 1.1089
26 2.3412 61 1.0963
27 2.2588 62 1.0828
28 2.1803 63 1.0684
29 2.1054 64 1.0539
30 2.0342 65 1.0400
31 1.9666
32 1.9026
33 1.8418
34 1.7844
35 1.7301
FOR DEATH BENEFIT CORRIDOR RATES BETWEEN POLICY ANNIVERSARIES:
1. DETERMINE THE DIFFERENCE IN RATES BETWEEN THE TWO ANNIVERSARIES;
2. ADD TO THE EARLIER RATE 1/12 OF THE DIFFERENCE IN RATES FOR EACH
MONTH THAT HAS PASSED THE EARLIER POLICY ANNIVERSARY.
01206 Page 4A
DEATH BENEFIT CORRIDOR RATES
BASED ON GUIDELINE PREMIUM TEST
ATTAINED ATTAINED
AGE OF AGE OF
YOUNGER YOUNGER
CONTINGENT CONTINGENT
INSURED RATE INSURED RATE
0-40 2.50 60 1.30
41 2.43 61 1.28
42 2.36 62 1.26
43 2.29 63 1.24
44 2.22 64 1.22
45 2.15 65 1.20
46 2.09 66 1.19
47 2.03 67 1.18
48 1.97 68 1.17
49 1.91 69 1.16
50 1.85 70 1.15
51 1.78 71 1.13
52 1.71 72 1.11
53 1.64 73 1.09
54 1.57 74 1.07
55 1.50 75-90 1.05
56 1.46 91 1.04
57 1.42 92 1.03
58 1.38 93 1.02
59 1.34 94 1.01
95+ 1.00
01206 Page 4A
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
POLICY POLICY
YEAR RATE YEAR RATE
1 0.00021 36 0.91157
2 0.00067 37 1.08075
3 0.00121 38 1.26820
4 0.00186 39 1.50766
5 0.00266 40 1.79530
6 0.00360 41 2.13054
7 0.00476 42 2.51400
8 0.00613 43 2.94442
9 0.00775 44 3.42118
10 0.00962 45 3.95359
11 0.01184 46 4.55879
12 0.01443 47 5.25323
13 0.01748 48 6.05602
14 0.02104 49 6.98106
15 0.02522 50 8.01516
16 0.03014 51 9.14987
17 0.03602 52 10.36448
18 0.04311 53 11.65487
19 0.05167 54 13.00037
20 0.06184 55 14.41268
21 0.07386 56 15.89204
22 0.08791 57 17.45991
23 0.10398 58 19.15687
24 0.12221 59 21.05478
25 0.14352 60 23.36818
26 0.16877 61 26.51705
27 0.19882 62 31.35472
28 0.23560 63 39.59522
29 0.28104 64 54.65267
30 0.33649 65 83.33000
31 0.40202
32 0.47841
33 0.56575
34 0.66447
35 0.77774
THE RATES SHOWN ABOVE REPRESENT THE GUARANTEED (MAXIMUM) MONTHLY COST OF
INSURANCE FOR EACH $1,000 OF NET AMOUNT AT RISK
01206 Page 4B
TABLE OF SURRENDER CHARGES
PER $1,000 OF INITIAL BASE COVERAGE
THE FOLLOWING CHARGES APPLY TO EACH $1000 OF INITIAL BASE COVERAGE SURRENDERED
DURING THE SURRENDER CHARGE PERIOD. THE CHARGE FOR THE SURRENDER OF ALL OR ANY
PORTION OF THE INITIAL BASE COVERAGE WILL BE EQUAL TO THE RATE SHOWN BELOW FOR
THE YEAR OF SURRENDER MULTIPLIED BY THE NUMBER OF THOUSANDS OF BASE COVERAGE
BEING SURRENDERED. IN ADDITION, THERE WILL BE A CHARGE NOT TO EXCEED THE LESSER
OF 2.0% OF THE AMOUNT WITHDRAWN OR $25.00 FOR EACH PARTIAL SURRENDER.
POLICY SURRENDER
YEAR CHARGE
1 14.63
2 14.55
3 14.46
4 14.37
5 14.27
6 14.17
7 14.06
8 13.95
9 13.84
10 13.71
11 12.87
12 11.33
13 9.81
14 8.31
A NEW SURRENDER CHARGE SCHEDULE WILL BE FURNISHED IF THERE IS AN INCREASE IN
BASE COVERAGE
01206 Page 4C
CONTRACT. Your policy is a legal contract that You have entered into with Us.
You have paid the first premium and have submitted an application, a copy of
which is attached. In return, We promise to provide the insurance coverage
described in this policy.
The entire contract consists of:
1. The basic policy;
2. The riders that add benefits to the basic policy, if any;
3. Endorsements, if any; and
4. The attached copies of the applications, and any amendments or supplemental
applications.
DATE OF ISSUE. The Date of Issue of this policy is the date from which the
first policy charges are due. The Date of Issue is also the date from which all
policy years, anniversaries, and monthly deduction dates are determined.
OWNER. The Owner is as stated in the application unless later changed. During
the last surviving Contingent Insured's lifetime, the Owner may exercise every
right the policy confers or We allow (subject to the rights of any assignee of
record). You may have multiple Owners of the policy. In that case, the
authorizations of all Owners are required for all policy changes except for
transfers, premium allocations and deduction allocations. We will accept the
authorization of one Owner for transfers and changes in premium and deduction
allocations. The Owner or Owners may be the same as one or both Contingent
Insureds, but this is not required. If an Owner dies while the policy is in
force and a Contingent Insured is living, ownership rights pass on to a
successor owner, if any, or to the estate of the Owner.
LAST SURVIVING CONTINGENT INSURED. Payment of a death benefit under this policy
will be made upon the death of the last survivor of the Contingent Insureds
named on the Policy Schedule. As used in this policy, the terms "last survivor"
and "second to die" mean "last surviving Contingent Insured."
NOTIFICATION OF FIRST DEATH. While Death Benefit Proceeds will be payable upon
the death of the second to die, We must receive proof of the death of both
Contingent Insureds before payment will be made. Therefore, it is important
that Written proof of the first death be furnished to the Company at the time of
such death.
PREMIUM PAYMENTS
All premiums after the first are payable in advance. Premium payments are
flexible. This means You may choose the amount and frequency of payments.
The actual amount and frequency of premium payments will affect the Accumulation
Value and the amount and duration of insurance. Please refer to the Policy
Values Provision for a detailed explanation.
01206 Page 5
PLANNED PERIODIC PREMIUMS. The amount and frequency of the Planned Periodic
Premiums You selected are shown on the Policy Schedule. You may request a change
in the amount and frequency. We may limit the amount of any increase. (See
"Maximum Premium").
UNSCHEDULED ADDITIONAL PREMIUMS. You may pay additional premiums at any time
before the Maturity Date shown on the Policy Schedule. We may limit the number
and amount of additional premiums. (See "Maximum Premium" and "Maximum Net
Amount at Risk").
MAXIMUM PREMIUM. We reserve the right to refund any premium that would cause
this policy to fail to qualify as life insurance under the Death Benefit
Compliance Test selected, and under applicable tax laws. The test selected is
shown on the Policy Schedule.
MAXIMUM NET AMOUNT AT RISK. We reserve the right to refund any premium that
would cause an immediate increase in the Net Amount at Risk unless both
Contingent Insureds are living and provide evidence of insurability satisfactory
to Us. Net Amount at Risk is an amount equal to the Death Benefit Amount under
the basic policy less the Accumulation Value.
PREMIUM EXPENSE CHARGE. The Premium Expense Charge is calculated by multiplying
the premium paid (after deduction of any state premium tax) by the Premium
Expense Charge Percentage shown on the Policy Schedule.
NET PREMIUM. The Net Premium is the premium paid less any applicable state
premium tax and the Premium Expense Charge.
ALLOCATION OF NET PREMIUMS. The initial allocation of Net Premiums is shown
in the application for this policy and will remain in effect until changed by
Written notice from the Owner. The percentage allocation for future Net Premiums
may be changed at any time by Written Notice.
The initial Net Premium will be allocated to the Money Market Division on the
later of the following dates:
1. The Date of Issue; or
2. The date all requirements needed to place the policy in force have been
satisfied, including underwriting approval and receipt in the Home Office of
the necessary premium.
The initial Net Premium will remain in the Money Market Division until the first
Valuation Date following the 15th day after it was applied. Any additional
Net Premiums received prior to the first Valuation Date which follows the 15th
day after the initial Net Premium was applied will be allocated to the Money
Market Division until such Valuation Date. At that time, We will transfer the
Accumulation Value to the selected Investment Option(s). Each Net Premium
received after such Valuation Date will be applied directly to the elected
Investment Option(s) as of the Business Day received.
Changes in the allocation of Net Premiums will be effective on the date we
receive the Owner's notice. The allocation may be 100% to any available
Division or may be divided among these options in whole percentage points
totaling 100%.
01206 Page 6
WHERE TO PAY. You may make Your payments to Us at Our Home Office or to an
authorized agent. A receipt signed by an officer of the Company will be
furnished upon request.
DEATH BENEFIT AND DEATH BENEFIT OPTIONS
DEATH BENEFIT PROCEEDS. If both Contingent Insureds die prior to the Maturity
Date and while this policy is in force, We will pay the Death Benefit Proceeds
to the Beneficiary. The Death Benefit Proceeds will be subject to:
1. The Death Benefit Option in effect on the date of the second death; and
2. Any increases or decreases made to the Specified Amount. The Initial
Specified Amount is shown on the Policy Schedule.
You can find guidelines for changing the Death Benefit Option or the Specified
Amount in the section entitled "Changing Your Insurance Policy."
Any premium received after the date of the second death will be refunded and
will not be included in the Accumulation Value for purposes of calculating the
Death Benefit Amount.
The Death Benefit Proceeds will be the Death Benefit Amount, after reversing any
premium received after the date of the second death, less any outstanding policy
loan and will be subject to the other provisions of the Beneficiary and Proceeds
section.
DEATH BENEFIT COMPLIANCE TEST. Death benefit compliance tests are used to
determine if a policy will qualify as life insurance under applicable tax laws.
There are two compliance tests which may be used: The Guideline Premium Test and
the Cash Value Accumulation Test. The test which You selected when this policy
was issued is shown on the Policy Schedule. You cannot change Your election of
the death benefit compliance test after the Date of Issue.
DEATH BENEFIT OPTION. The Death Benefit Option which You have chosen is shown
on the Policy Schedule as either Option 1 or Option 2.
OPTION 1. If You have chosen Option 1, the Death Benefit Amount will be the
greater of:
1. The Specified Amount on the date of the second death; or
2. The Accumulation Value on the date of the second death multiplied by the
applicable Death Benefit Corridor Rate.
OPTION 2. If You have chosen Option 2, the Death Benefit Amount will be the
greater of:
1. The Specified Amount plus the Accumulation Value on the date of the second
death; or
2. The Accumulation Value on the date of the second death multiplied by the
applicable Death Benefit Corridor Rate.
Death Benefit Corridor Rates are shown in the table for the Death Benefit
Compliance Test which You selected.
01206 Page 7
SPECIFIED AMOUNT. The Specified Amount is the total of two types of coverage:
Base Coverage and Supplemental Coverage. Base Coverage is subject to surrender
charges and a four year Monthly Expense Charge, but Supplemental Coverage is
not. If Supplemental Coverage is made a part of the Specified Amount, policy
costs will be lower (during the first 4 policy years, and the first 4 years of
an increase) than if the same Specified Amount is issued without Supplement
Coverage. However, realizing the benefits of the Monthly Guarantee Premium
provision will require a higher Monthly Guarantee Premium if Supplemental
Coverage is included. The amounts of Base Coverage, Supplemental Coverage (if
any) and Specified Amount are shown on the Policy Schedule.
CHANGING YOUR INSURANCE POLICY
You may request a change in the Specified Amount or Death Benefit Option at any
time except that:
1. A decrease in the Specified Amount may not become effective prior to the end
of the first policy year; and
2. Increases in the Specified Amount will be considered only while both
Contingent Insureds are living.
Your request must be submitted to Our Home Office In Writing.
INCREASING THE SPECIFIED AMOUNT. You may apply for an increase in Specified
Amount by submitting for each Contingent Insured:
1. A supplemental application; and
2. Evidence of insurability satisfactory to Us.
The proportion of Base to Supplemental Coverage following an increase may be in
any proportion as long as Base Coverage is at least 10% of the total Specified
Amount.
An increase will be effective on the Monthly Deduction Day on or next following
the date the applications for increase are approved by Us. The effective date
will appear in an endorsement to this policy.
DECREASING THE SPECIFIED AMOUNT. Any decrease will go into effect on the
Monthly Deduction Day following the Business Day We receive the request. The
Death Benefit Amount remaining in effect after any decrease cannot be less than
the greater of:
1. The Minimum Death Benefit Amount shown on the Policy Schedule; and
2. Any Death Benefit Amount required to qualify this policy as life insurance
under applicable tax laws.
Any such decrease will be applied in the following order:
01206 Page 8
1. Against the Specified Amount provided by the most recent increase, with the
decrease applying first to the entire Supplemental Coverage portion of such
increase, if any, followed by the Base Coverage portion;
2. Against the next most recent increases successively, with the decrease of
each prior increase applying first to the entire Supplemental Coverage
portion of such increase, if any, followed by the Base Coverage portion;
3. Against the Specified Amount provided under the original application, with
the decrease applying first to the entire Supplemental Coverage portion of
such amount, if any, followed by the Base Coverage portion.
Any reduction in Base Coverage will be subject to any applicable surrender
charges on a pro-rata basis with the Surrender Charge prior to the reduction in
Specified Amount being reduced proportionately. However, if such charge is
greater than the Accumulation Value, the Specified Amount decrease will not be
allowed.
CHANGING THE DEATH BENEFIT OPTION. You may request a change in the Death
Benefit Option You have chosen. The change will go into effect on the Monthly
Deduction Day following the date We receive Your request for change.
1. If You request a change from Option 1 to Option 2: The new Specified Amount
will be the Specified Amount, prior to change, less the Accumulation Value
as of the effective date of the change, but not less than zero. Any such
decrease in Specified Amount will be subject to the same guidelines and
restrictions as outlined in the Decreasing the Specified Amount provision.
2. If You request a change from Option 2 to Option 1: The new Specified Amount
will be the Death Benefit Amount as of the effective date of the change. The
entire increase in Specified Amount will be applied to the last coverage
added (either Base or Supplemental) which has not been removed. For the
purpose of this calculation, if the Base and Supplemental Coverages were
issued on the same date, We will consider the Supplemental Coverage to have
been issued later.
CHANGING THE TERMS OF YOUR POLICY. Any change in Your policy must be approved
by the President, a Vice President, an Administrative Officer or the Secretary
of the Company. No agent has the authority to make any changes or waive any of
the terms of Your policy.
SEPARATE ACCOUNT PROVISIONS
SEPARATE ACCOUNT. Separate Account VL-R is a segregated investment account
established by the Company under Texas law to separate the assets funding the
variable benefits for the class of policies to which this policy belongs from
the other assets of the Company. That portion of the assets of the Separate
Account equal to the reserves and other policy liabilities with respect to the
Separate Account shall not be chargeable with liabilities arising out of any
other business We may conduct. Income, gains and losses, whether or not
realized from assets allocable to the Separate Account, are credited to or
charged against such Account without regard to Our other income, gains or
losses.
01206 Page 9
INVESTMENTS OF THE SEPARATE ACCOUNT. The Separate Account is segmented into
Divisions. Each Division invests in a single Investment Option. Net Premiums
will be applied to the Separate Account and allocated to one or more Divisions.
The assets of the Separate Account are invested in the Investment Option(s)
listed on the application for this policy. From time to time, We may add
additional Divisions. We may also discontinue offering one or more Divisions as
provided in the Rights Reserved by Us provision. You may make a change in
investment selections by filing a Written change form with Our Home Office. You
may make transfers to the additional Divisions subject to the rules stated in
the Transfer Provision section and any new rules or limitations which may apply
to such additional Divisions.
If shares of any of the Investment Options become unavailable for investment by
the Separate Account, or the Company's Board of Directors deems further
investment in these shares is inappropriate, the Company may limit further
investment in the shares or may substitute shares of another Investment Option
for shares already purchased under this policy as provided in the Rights
Reserved by Us provision.
VALUATION OF ASSETS. The assets of the Separate Account are valued as of each
Valuation Date at their fair market value in accordance with Our established
procedures. The Separate Account Value as of any Valuation Date prior to the
Maturity Date is the sum of Your account values in each Division of the Separate
Account as of that date.
VALUATION UNITS. In order to determine policy values in the Divisions, We use
Valuation Units which are calculated separately for each Division. The
Valuation Unit value for each Division will vary to reflect the investment
experience of the applicable Investment Option. The Valuation Unit for a
Division will be determined on each Valuation Date for the Division by
multiplying the Valuation Unit value for the Division on the preceding Valuation
Date by the Net Investment Factor for that Division for the current Valuation
Date.
NET INVESTMENT FACTOR. The Net Investment Factor for each Division is
determined by dividing (1) by (2) and subtracting (3), where:
1. Is the net asset value per share of the applicable Investment Option as of
the current Valuation Date (plus any per share amount of any dividend or
capital gains distribution paid by the Investment Option since the last
Valuation Date); and
2. Is the net asset value per share of the shares held in the Division as
determined as of the previous Valuation Date; and
3. Is a factor representing the Mortality and Expense Charge.
The net asset value of an Investment Option's shares held in each Division shall
be the value reported to Us by that Investment Option.
VALUATION DATES. Valuation of the various Divisions will occur on each Business
Day during each month. If the underlying Investment Option is unable to value
or determine the Division's investment in an Investment Option due to any of the
reasons stated in the Suspension and Deferral of Payments Provision, the
Valuation Date for the Division with respect to the unvalued portion shall be
the first Business Day that the assets can be valued or determined.
01206 Page 10
BUSINESS DAY. A Business Day is each day during which the New York Stock
Exchange is open for business. We will treat any information or Written
communications We receive after the close of a Business Day to have been
received as of the next Business Day. For the purpose of collecting daily
charges, a Business Day immediately preceded by one or more non-business
calendar days will include those non-business days as a part of that Business
Day. For example, a Business Day which falls on a Monday will consist of a
Monday and the immediately preceding Saturday and Sunday.
MINIMUM VALUE. The Minimum Value that may be retained in a Division after a
partial surrender or transfer is shown on the Policy Schedule. If a partial
surrender causes the balance in any Division to drop below such minimum amount,
the Company reserves the right to transfer the remaining balance to the Money
Market Division. If a transfer causes the balance in any Division to drop below
the minimum amount, the Company reserves the right to transfer the remaining
balance in proportion to the transfer request.
CHANGE OF INVESTMENT ADVISOR OR INVESTMENT OBJECTIVE. Unless otherwise
required by law or regulation, the investment advisor or any investment
objective may not be changed without Our consent. If required, approval of or
change of any investment objective will be filed with the Insurance Department
of the state where the policy is being delivered.
RIGHTS RESERVED BY US. Upon notice to You, this policy may be modified by Us,
but only if such modification is necessary to:
1. Operate the Separate Account in any form permitted under the Investment
Company Act of 1940 or in any other form permitted by law;
2. Transfer any assets in any Division to another Division, or to one or more
other separate accounts;
3. Add, combine or remove Divisions in the Separate Account, or combine the
Separate Account with another separate account;
4. Make any new Division available to You on a basis to be determined by Us;
5. Substitute for the shares held by any Division the shares of another
Division or the shares of another investment company or any other investment
permitted by law;
6. Make any changes as required by the Internal Revenue Code, or by any other
applicable law, regulation or interpretation in order to continue treatment
of this policy as life insurance;
7. Make any changes required to comply with the requirements of any underlying
Investment Option; or
8. Make other changes in this policy that in Our judgment are necessary or
appropriate to ensure that this policy continues to qualify for tax
treatment as life insurance, or that do not reduce any Cash Surrender Value,
Death Benefit Amount, Accumulation Value or other accrued right or benefit.
When required by law, We will obtain Your approval of changes and We will gain
approval from any appropriate regulatory authority.
01206 Page 11
GENERAL ACCOUNT
The General Account is a fixed account within Our general assets which We have
established for:
1. Any amounts transferred from the Divisions as a result of a loan; or
2. Any amounts the Owner allocated to such Account.
The guaranteed interest rate used in calculating Accumulation Values of amounts
allocated to the General Account is .3274% per month compounded monthly. This
is equivalent to 4.0% per year, compounded annually, and is not based on the
investment experience of any Division of the Separate Account. We can use
interest rates greater than the guaranteed rates to calculate Accumulation
Values of amounts allocated to the General Account.
POLICY VALUES PROVISION
Accumulation Value. The Accumulation Value of Your policy is the total of all
values in the Divisions of the Separate Account and in the General Account.
The Accumulation Value reflects:
1. Net Premiums paid;
2. Monthly deductions;
3. The investment experience of the Divisions selected less the Mortality and
Expense Charge;
4. Amounts allocated to the General Account, including interest earned on
amounts in the General Account;
5. Deductions due to partial surrenders and any charges for partial surrenders;
and
6. Deductions, if any, resulting from decreases in Specified Amount.
Net premiums are allocated, in accordance with Your instructions, to the General
Account or allocated to the selected Divisions of the Separate Account and
converted to Valuation Units.
On each Monthly Deduction Day, a Monthly Deduction will be made by reducing the
unloaned portion of the General Account or redeeming Valuation Units from each
applicable Division in the same ratio as the allocation of policy deductions in
effect on the Monthly Deduction Day. You must state In Writing in advance how
Monthly Deductions should be made if other than this method is to be used.
If the unloaned portion of the General Account or the balance in any Division of
the Separate Account is insufficient to make a Monthly Deduction in this
manner, We will cancel Valuation Units from each applicable Division and reduce
the unloaned portion of the General Account in the same ratio the Monthly
Deduction bears to the unloaned Accumulation Value of Your policy.
01206 Page 12
The Accumulation Value in any Division is determined by multiplying the value of
a Valuation Unit by the number of Valuation Units held under the policy in that
Division.
The value of the Valuation Units equal to the amount being borrowed from the
Separate Account will be transferred to the General Account as of the Business
Day that the loan request is received In Writing.
Valuation Units are surrendered to reflect a partial surrender as of the
Business Day that the request for partial surrender is received In Writing.
ON THE DATE OF ISSUE. The Accumulation Value on the Date of Issue is:
1. The Net Premium received; less
2. The Monthly Deduction for the first policy month. (See "How We Calculate a
Monthly Deduction.")
The first deduction day is the Date of Issue. The Monthly Deduction Day is shown
on the Policy Schedule.
ON EACH MONTHLY DEDUCTION DAY. On each Monthly Deduction Day after the Date of
Issue, We will determine the Accumulation Value as follows:
1. We will take the Accumulation Value as of the last Monthly Deduction Day;
2. Add the interest earned for the month on the excess of the General Account
value on the last Monthly Deduction Day over any partial surrenders and
transfers made from the General Account since the last Monthly Deduction
Day;
3. Add all Net Premiums received since the last Monthly Deduction Day;
4. Add any investment gain (or subtract any investment loss) on the Divisions
of the Separate Account since the last Monthly Deduction Day as measured by
the change in the value of the Valuation Units;
5. Subtract any partial surrender made and any charges for partial surrenders
since the last Monthly Deduction Day; and
6. Subtract the Monthly Deduction for the policy month following the Monthly
Deduction Day. (See "How We Calculate a Monthly Deduction.")
ON ANY VALUATION DATE OTHER THAN A MONTHLY DEDUCTION DAY. The Accumulation
Value on any Valuation Date other than a Monthly Deduction Day will be the sum
of:
1. The value of the General Account as of the last Monthly Deduction Day;
2. Less any partial surrenders and any charges for partial surrenders since the
last Monthly Deduction Day;
3. Plus all Net Premiums received since the last Monthly Deduction Day; and
01206 Page 13
4. Plus the sum of the values of the Divisions of the Separate Account as of
the last Monthly Deduction Day, plus the amount of any investment gain (or
minus any investment loss) on the Divisions since the last Monthly Deduction
Day as measured by the change in the value of the Valuation Units.
CASH VALUE. The Cash Value of this policy will be equal to the Accumulation
Value less the Surrender Charge, if any.
CASH SURRENDER VALUE. The Cash Surrender Value of this policy will be equal to
the Cash Value less any indebtedness.
MONTHLY DEDUCTIONS MAY BE MADE ONLY IF THERE IS SUFFICIENT CASH SURRENDER VALUE
(UNLESS THE POLICY IS BEING CONTINUED UNDER THE MONTHLY GUARANTEE PREMIUM
PROVISION). Unless this policy is being continued in force under the Monthly
Guarantee Premium provision, a Monthly Deduction from the Accumulation Value may
be made only if the Cash Surrender Value is equal to or greater than the Monthly
Deduction. The Accumulation Value will be reduced by the amount of each Monthly
Deduction which will cause an equal reduction in the Cash Surrender Value. If
the Cash Surrender Value on a Monthly Deduction Day is not sufficient to meet
the Monthly Deduction for the current month, this policy will be subject to the
Grace Period and Monthly Guarantee Premium provisions.
SURRENDER CHARGES. The Surrender Charge applies only to the Base Coverage
portion of the Specified Amount. The Surrender Charge for the amount of Base
Coverage on the Date of Issue will apply if such Base Coverage is surrendered or
reduced during the Surrender Charge Period. Surrender Charges for any increases
in Base Coverage will apply if such increases are surrendered or reduced during
the Surrender Charge Period of each increase. The Surrender Charge Period will
be based on the age at issue of the younger Contingent Insured (or the younger
Contingent Insured's age on the date of an increase).
You may make a request for surrender at any time during the last surviving
Contingent Insured's lifetime before the Maturity Date.
The amount being surrendered or reduced will terminate on or next following the
date We receive a Written request for surrender or reduction.
HOW WE CALCULATE A MONTHLY DEDUCTION. Each Monthly Deduction includes:
1. The cost of insurance provided by the basic policy;
2. The cost of insurance for benefits provided by riders, if any; and
3. The Monthly Administration Fee; and
4. During the first four policy years, a Monthly Expense Charge. (This charge
also applies to the amount of any increase in Base Coverage during the first
four years of such increase.
01206 Page 14
HOW WE CALCULATE THE COST OF INSURANCE FOR THE BASIC POLICY. We calculate the
cost of insurance at the beginning of each policy month on the Monthly Deduction
Day. The cost of insurance is determined as follows:
1. Reduce the Death Benefit Amount by the amount of Accumulation Value on the
Monthly Deduction Day before the cost of insurance deduction is taken, and
after the Monthly Expense Charge, if any, and the Monthly Administration Fee
are deducted;
2. Multiply the difference by the cost of insurance rate per $1,000 of Net
Amount at Risk as provided in the Cost of Insurance Rate provision; and
3. Divide the result by 1,000.
Net Amount at Risk is an amount equal to the Death Benefit Amount under the
basic policy less the Accumulation Value.
COST OF INSURANCE FOR BENEFITS PROVIDED BY RIDERS. The cost of insurance for
benefits provided by riders, if any, will be as stated on the Policy Schedule or
in an endorsement to this policy.
MONTHLY ADMINISTRATION FEE. An administration fee will be deducted monthly. The
amount of the monthly fee may be adjusted, but will never be greater than the
guaranteed Monthly Administration Fee shown on the Policy Schedule.
FIRST FOUR YEARS MONTHLY EXPENSE CHARGE. A Monthly Expense Charge will be
deducted during the first four policy years, and during the first four years of
any increase in Base Coverage. The Monthly Expense Charge for the first four
years for the initial amount of Base Coverage is shown on the Policy Schedule.
The Monthly Expense Charge for the first four years for any increase in Base
coverage will be provided in an endorsement to this policy. Any decrease in
Base Coverage will not change the Monthly Expense Charge then in effect.
COST OF INSURANCE RATE. The cost of insurance rate for the Initial Specified
Amount, and for each Specified Amount increase, is based on each Contingent
Insured's:
1. Gender;
2. Age nearest birthday on each policy anniversary; and
3. Premium class associated with the Initial Specified Amount and each increase
in the Specified Amount. The premium class is shown on the Policy Schedule.
A table of guaranteed monthly cost of insurance rates is included in this
policy. We can use cost of insurance rates that are lower than the guaranteed
rates. Any change in rates will apply to all policies in the same rate class as
this policy. The rate class of this policy is determined on its Date of Issue
according to:
1. The calendar year of issue and policy year;
2. The plan of insurance;
3. The amount of insurance; and
01206 Page 15
4. The age, gender and premium class of each Contingent Insured.
CHANGES IN RATES, CHARGES AND FEES. This policy does not participate in Our
profits or surplus. Any redetermination of the cost of insurance rates,
Mortality and Expense Charges, Premium Expense Charge Percentage or Monthly
Administration Fee will be based on Our future expectations as to mortality,
persistency, expenses, reinsurance costs and state and federal taxes. Any
redetermination of interest rates used in calculating Accumulation Values of
amounts allocated to the General Account will be based only on Our expectations
of future investment earnings. We will not change these charges in order to
recoup any prior losses.
GRACE PERIOD. If the Cash Surrender Value on a Monthly Deduction Day is not
enough to meet the Monthly Deduction for the current month, this policy will
remain in force during the 61-day period that follows. If the Cash Surrender
Value on a policy anniversary is not enough to pay any loan interest due, this
policy will remain in force during the 61-day period that follows. Such 61-day
period is referred to in this policy as the "Grace Period." There is no Grace
Period for the initial Monthly Deduction.
If the amount We require to keep Your policy in force is not paid by the end of
the Grace Period, this policy will terminate without value. However, We will
give You at least 31 days notice prior to termination that Your policy is in the
Grace Period and advise You of the amount required to keep Your policy in force.
Such 31 days prior notice will be sent to You at Your last known address, and to
the assignee of record, if any. If the last surviving Contingent Insured dies
during the Grace Period, Monthly Deductions through the policy month in which
the death occurred will be deducted from the proceeds.
If a surrender request is received within 31 days after the Grace Period
commences, the Cash Surrender Value payable will not be less than the Cash
Surrender Value on the Monthly Deduction Day the Grace Period commenced. The
Monthly Deduction for the policy month following such Monthly Deduction Day will
not be subtracted in the calculation of such Cash Surrender Value.
MONTHLY GUARANTEE PREMIUM. The Monthly Guarantee Premium for the Initial
Specified Amount and any benefit riders in force on the Date of Issue is shown
on the Policy Schedule. The Monthly Guarantee Premium Period (Guarantee Period)
will be the first 5 policy years. This policy will not terminate during the
Guarantee Period if, on each Monthly Deduction Day within the Guarantee Period
the sum of premiums paid equals or exceeds:
1. The sum of the Monthly Guarantee Premiums from the start of the Guarantee
Period, including the current month; plus
2. Any partial surrenders and any increase in the loan amount since the start of
the Guarantee Period.
If the Specified Amount is increased, during the Guarantee Period, a new Monthly
Guarantee Premium for the amount of the increase will be calculated as a
combined rate based on each Contingent Insured's age and premium class at the
time of such increase. The new Monthly Guarantee Premium will be calculated
using the combined rate for the amount of the increase, plus any Monthly
Guarantee Premium(s) previously calculated for the initial Specified Amount, and
each prior increase, plus the cost of any benefit riders. If the Specified
Amount is decreased, the Monthly Guarantee Premium will be decreased.
01206 Page 16
If a benefit rider is added or increased, during the Guarantee Period the
Monthly Guarantee Premium will be increased. If a benefit rider is removed or
decreased during the Guarantee Period the Monthly Guarantee Premium will be
decreased accordingly.
If a policy is reinstated with no change to the Specified Amount, Premium Class
or benefit riders, if any, the Monthly Guarantee Premium upon reinstatement will
be the same as it was when the policy lapsed.
The Guarantee Period will not be extended or otherwise changed by changes in the
Specified Amount, the addition, deletion or change in benefit riders, or by
reinstatement of the policy.
The policy value at the end of the Guarantee Period may be insufficient to keep
the policy in force unless an additional payment is made at that time.
FULL SURRENDER. Subject to the Beneficiary and Proceeds section, You may return
Your policy to Us and request its Cash Surrender Value at any time during the
last surviving Contingent Insured's lifetime before the Maturity Date. The Cash
Surrender Value will be determined as of the Business Day the policy and the
Written request for surrender are received. The Company may delay payment if
the Suspension and Deferral of Payments Provision is in effect.
PARTIAL SURRENDER. At any time after the first policy year, You may request a
portion of the Cash Surrender Value of the policy. Your request must be made In
Writing during the last surviving Contingent Insured's lifetime before the
Maturity Date. The minimum partial surrender is shown on the Policy Schedule.
Valuation Units are surrendered to reflect a partial surrender as of the
Business Day We receive the Written request for partial surrender.
A partial surrender will result in a reduction of the Cash Value, Accumulation
Value and the Death Benefit Amount. The Cash and Accumulation Values will be
reduced by the amount of the partial surrender. The reduced Death Benefit Amount
will be determined in accordance with the Death Benefit Option provision. If
Your Death Benefit Option is Option 1, the Specified Amount will be reduced by
the amount of the partial surrender. The reduction in Specified Amount will be
subject to the same guidelines and restrictions as outlined in the Decreasing
the Specified Amount provision. The Death Benefit Amount remaining after this
reduction must be no less than the Minimum Death Benefit Amount after a Decrease
in Specified Amount shown on the Policy Schedule.
A partial surrender will result in the cancellation of Valuation Units from each
applicable Division and a reduction of the unloaned portion of the General
Account in the same ratio as the allocation of policy deductions in effect on
the date of partial surrender. If the number of Valuation Units in any Division
or in the unloaned portion of the General Account is insufficient to make a
partial surrender in this manner, We will cancel Valuation Units from each
applicable Division and reduce the unloaned portion of the General Account in
the ratio the partial surrender request bears to the Cash Surrender Value of
Your policy. You must state In Writing in advance how partial surrenders should
be made if other than this method is to be used.
There will be a charge for each partial surrender not to exceed the lesser of 2%
of the amount withdrawn or $25 in addition to the amounts shown in the Table of
Surrender Charges.
01206 Page 17
The Company may delay payment if the Suspension and Deferral of Payments
Provision is in effect.
PERIOD OF INSURANCE COVERAGE IF AMOUNT OR FREQUENCY OF PREMIUM PAYMENTS IS
REDUCED OR IF PREMIUM PAYMENTS ARE DISCONTINUED. If You reduce the amount or
frequency of premium payments, or if You discontinue payment of premiums and do
not surrender this policy, We will continue making Monthly Deductions (as long
as there is sufficient Cash Surrender Value to make such deductions) until the
Maturity Date. During the Guarantee Period, this policy will remain in force as
long as the Monthly Guarantee Premium requirements are met. After the Guarantee
Period, this policy will remain in force until the earliest of the following
dates:
1. The Maturity Date (if there is sufficient Cash Surrender Value to make
Monthly Deductions to that date);
2. Full surrender of the policy;
3. The end of the Grace Period; or
4. Death of the last surviving Contingent Insured.
TRANSFER PROVISION
TRANSFER OF ACCUMULATION VALUE. Transfers will be made as of the Business Day
We receive the Written transfer request, subject to the restrictions that
follow. If You elect to use the transfer privilege, We will not be liable for a
transfer made in accordance with Your instructions. We reserve the right to
terminate, suspend or modify the transfer privilege, and to charge a $25 fee for
each transfer in excess of 12 in a policy year. Transfers under the Dollar Cost
Averaging or Automatic Rebalancing programs will not count toward the 12 free
transfers.
TRANSFER OF ACCUMULATION VALUE (SEPARATE ACCOUNT) AS OF THE MATURITY DATE. Your
interest in each of the Separate Account Divisions will be transferred to the
General Account on the Maturity Date, and the resulting Cash Surrender Value
paid to the Owner if one or both Contingent Insureds are living on that date. If
the underlying investment Option is unable to value or determine the Division's
investment in an Investment Option on the scheduled Maturity Date, the unvalued
portion shall be valued and transferred on the first Business Day that the
assets can be valued or determined. Transfer of Your interest in a Separate
Account Division on the Maturity Date will not be subject to a Transfer Fee.
Our right to deter payment of values allocated to the General Account for up to
six months will not apply to values transferred to the General Account under
this provision.
TRANSFER OF ACCUMULATION VALUE (SEPARATE ACCOUNT). You may transfer all or part
of Your interest in a Division of the Separate Account subject to the following:
1. The minimum amount which may be transferred is $500.
2. If the entire amount in a Division of the Separate Account is not being
transferred, the minimum which must remain is $500.
01206 Page 18
Transfers between Separate Account Divisions result in the redemption of
Valuation Units in one Division and the purchase of Valuation Units in the
Division to which the transfer is made. We will not honor Your request for a
transfer if the Separate Account is unable to purchase shares of an Investment
Option for any reason.
TRANSFER OF ACCUMULATION VALUE (GENERAL ACCOUNT). A transfer from the General
Account to a Division of the Separate Account may be made during the 60 day
period following each policy anniversary. The amount that may be transferred
will be the greatest of the following amounts:
1. Twenty-five percent (25%) of the unloaned portion of the General Account as
of the policy anniversary;
2. The total dollar amount withdrawn from the General Account during the prior
policy year (whether the amount withdrawn was a partial surrender for cash
or was being transferred to the Separate Account);
3. $500.
TELEPHONE TRANSFER AND ALLOCATION PRIVILEGE. If We have on file a completed
telephone authorization form (Telephone Transaction), We will allow transfers
and the percentage allocation for future Net Premiums and Policy Deductions to
be changed at any time by telephone. We will honor instructions for Telephone
Transactions from any person who provides the correct information. There is a
risk of possible loss to You if unauthorized persons use this service in Your
name. Under Telephone Transactions, We are not liable for any acts or omissions
based upon instructions that We reasonably believe to be genuine, including
losses arising from errors in the communication of telephone instructions.
DOLLAR COST AVERAGING. Dollar Cost Averaging (DCA) is an automatic transfer of
funds made periodically prior to the Maturity Date in accordance with
instructions from the Owner. Transfers will be made in accordance with the
Transfer provisions, except as provided below:
1. DCA transfers may be made:
(a) On any day of the month except the 29th, 30th or 31st;
(b) On a monthly, quarterly, semi-annual or annual basis; and
(c) From the Money Market Division to one or more of the other Separate
Account Divisions.
2. DCA may be elected only if the Accumulation Value at the time of election is
$5,000 or more.
3. The minimum amount of each DCA transfer is $100, or the remaining amount in
the Money Market Division, if less.
4. DCA may not begin prior to the first Valuation Date following the 15th day
after the initial Net Premium is applied.
5. DCA will end when there is no longer any value in the Money Market Division,
or when You request that DCA end.
01206 Page 19
6. Amounts applied to the Money Market Division while DCA is active will be
available for future dollar cost averaging in accordance with the current
DCA request.
7. There is no charge for DCA.
8. DCA is not available if Automatic Rebalancing is active.
AUTOMATIC REBALANCING. Automatic Rebalancing occurs when funds are transferred
by the Company between the Separate Account Divisions so that the values in each
Division match the premium allocation percentages then in effect. You may choose
Automatic Rebalancing on a quarterly, semi-annual or annual basis if your
Accumulation Value is $5,000 or more. The date Automatic Rebalancing occurs will
be based on the Date of Issue of Your policy. For example, if Your policy is
dated January 17, and You have requested Automatic Rebalancing on a quarterly
basis, Automatic Rebalancing will start on April 17, and will occur quarterly
thereafter. After Automatic Rebalancing is elected, it will continue until We
are notified In Writing that it is to be discontinued. There is no charge for
Automatic Rebalancing. Automatic Rebalancing is not available if DCA is active.
SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION
We reserve the right to defer payment of any Death Benefit Amount, loan or other
distribution that comes from that portion of Your Accumulation Value that is
allocated to Separate Account VL-R, if:
1. The New York Stock Exchange is closed other than customary weekend and
holiday closings, or trading on the New York Stock Exchange is restricted;
2. An emergency exists, as a result of which disposal of securities is not
reasonably practicable or it is not reasonably practicable to fairly
determine the Accumulation Value; or
3. The U.S. Securities and Exchange Commission by order permits the delay for
the protection of Owners.
As to amounts allocated to the General Account, We may defer payment of any Cash
Surrender Value withdrawal or loan amount for up to six months, or the period
allowed by law, whichever is less, after We receive the request In Writing.
Written notice of both the imposition and termination of any such suspension
will be given to the Owners, assignees of record and any irrevocable
Beneficiaries.
Payments which were due to have been made and which were deferred following the
suspension of the calculation of the Cash Surrender Value will be made within
thirty (30) days following the lifting of the suspension, and will be calculated
based on the Valuation Date which immediately follows termination of the
suspension.
01206 Page 20
POLICY LOANS
You may borrow from Us at any time while this policy is in force, an amount
which is equal to or less than the policy loan value. The policy loan value
will be the Cash Surrender Value, less interest on the amount to be borrowed
(including interest on any prior outstanding policy loan) to the next policy
anniversary.
The value of Valuation Units equal to the amount You borrow from the Separate
Account will be transferred to the General Account as of the Business Day that
We receive Your Written loan request.
OBTAINING A LOAN. You may obtain a policy loan by Written request and
assignment of the policy as sole security for the loan. The Company may delay
processing the loan requested if the Suspension and Deferral of Payments
Provision is in effect.
EFFECT OF A LOAN. When a loan is made, an amount equal to the amount being
borrowed from the Separate Account will be transferred to the General Account.
A loan will result in cancellation of units from each applicable Division and
reduction of the unloaned portion of the General Account according to the
allocation of policy deductions then in effect. The resulting amount will be
added to the loaned portion of the General Account. If the number of Valuation
Units in any Division or unloaned portion of the General Account is insufficient
for a loan to be made in this manner, We will cancel Valuation Units from each
applicable Division and reduce the unloaned portion of the General Account in
the same ratio the loan bears to the unloaned Accumulation Value of Your policy.
You must state In Writing in advance which Division units are to be canceled if
a different method is to be used.
Repayment of a loan will first be allocated to the General Account until You
have repaid any loaned amounts that were allocated to the General Account. You
may tell Us how to allocate repayments above that amount. If You do not tell
Us, an amount equal to the loan repayment will be transferred from the General
Account to the Divisions in the same ratio currently in effect for the
allocation of Net Premiums.
A loan, whether or not repaid, will have a permanent effect on the Cash
Surrender Values and on the death benefits. If not repaid, any indebtedness
will reduce the amount of Death Benefit Proceeds and the amount available upon
surrender of the policy.
LOAN INTEREST. Except for Preferred Loans, loan interest will accrue daily at
an annual effective rate of 4.54% payable in advance. (This is equivalent to an
annual effective rate of 4.75% paid in arrears.) On each policy anniversary,
loan interest for the next year is due. Unpaid loan interest will be deducted
from the various accounts according to the Allocation of Policy Deductions then
in effect, and added to the loaned portion of the General Account. You must
state In Writing in advance how unpaid loan interest should be deducted if other
than this method is to be used.
If the number of Valuation Units in any Division or unloaned portion of the
General Account is insufficient to deduct unpaid loan interest in this manner,
We will cancel Valuation Units from each applicable Division and reduce the
unloaned portion of the General Account in the same ratio the unpaid loan
interest bears to the unloaned Accumulation Value of Your policy.
01206 Page 21
We will credit interest monthly on the loaned portion of the General Account at
an annual effective rate of 4.0%.
PREFERRED LOANS. A "Preferred Loan" is a policy loan that is made at a net cost
to the Owner that is less than the net cost of other policy loans. By "net
cost" We mean the amount of interest charged for the loan less interest credited
to the amount of the Accumulation Value offset by a loan. Starting on the tenth
policy anniversary, this policy will be eligible for "Preferred Loans" subject
to the following guidelines:
1. The maximum amount of the loan value eligible for Preferred Loans during a
policy year is restricted to the lesser of the following values on the first
day of such policy year:
a) The policy loan value; or
b) 10% of the Accumulation Value.
2. When a Preferred Loan is made, loan interest to the next policy anniversary
will accrue daily at an annual effective rate of not less than 3.85% nor
more than 4.08%. (This is equivalent to an effective rate of not less than
4.0% nor more than 4.25% respectively, paid in arrears.)
HOW YOU MAY REPAY A POLICY LOAN. You may repay all or part of a policy loan at
any time, except that;
1. Repayment may be made only while this policy is in force and prior to the
death of the last surviving Contingent Insured;
2. A partial repayment must be at least $10; and
3. At the time You repay all or part of a policy loan, You must specify the
payment is to repay all or part of the policy loan.
Except as provided in the Grace Period provision, at any time Your policy loan
exceeds the Cash Value, this policy will lapse. However, at least 31 days prior
notice must be mailed by Us to Your last known address and to the assignee of
record, if any.
WE CAN DELAY PAYMENT. We can delay lending You money for up to 6 months, or the
period allowed by law, whichever is less. However, We cannot delay lending You
money if the amount is to be used to pay a premium to Us.
BENEFICIARY AND PROCEEDS
BENEFICIARY. The Beneficiary of the last surviving Contingent Insured, will be
as named in the application, or later changed by the Owner. Unless the Owner
provides otherwise, upon the death of the last surviving Contingent Insured We
will pay proceeds in equal shares to the named Beneficiaries that survive such
Contingent Insured. Unless otherwise provided by the beneficiary designation,
proceeds will be paid as follows:
1. If any Beneficiary of the last surviving Contingent Insured dies while the
last surviving Contingent Insured is living, that Beneficiary's interest
will pass to any other Beneficiaries of the last surviving Contingent
Insured according to their respective interests.
01206 Page 22
2. If there is no Beneficiary upon the death of the last surviving Contingent
Insured (and there is no provision to the contrary), proceeds will be paid
in one sum to the Owner, if living; otherwise, proceeds will be paid to the
Owner's estate.
COMMON DISASTER. If We cannot determine whether a Beneficiary or the last
surviving Contingent Insured died first in a common disaster, We will assume
that the Beneficiary died first. We will pay proceeds on this basis unless an
endorsement to this policy provides otherwise.
SIMULTANEOUS DEATH OF CONTINGENT INSUREDS. If We are unable to determine to Our
satisfaction that one of the Contingent Insureds predeceased the other, it will
be assumed that the Contingent Insureds died simultaneously. Thereupon, one-
half of the Death Benefit Proceeds will be payable with respect to each of the
Contingent Insureds.
PROCEEDS. Proceeds means the amount payable on:
1. The Maturity Date;
2. Exercise of the full surrender benefit; or
3. The death of the last surviving Contingent Insured.
The Proceeds on the Maturity Date will be the Cash Surrender Value. The
Proceeds on the last surviving Contingent Insured's death will be the Death
Benefit Amount less any outstanding policy loan.
All Proceeds and partial surrender benefits are subject to the provisions of the
Payment Options section and the other provisions of this policy.
CHANGE OF OWNERSHIP OR BENEFICIARY
You may change the Owner or the Beneficiary at any time prior to the death of
the last surviving Contingent Insured unless the previous designation provides
otherwise. To do so, send a Written request to Our Home Office. The change
will go into effect when We have recorded the change.
However, after the change is recorded, it will be deemed effective as of the
date of Your Written request for change. The change will be subject to any
payment made or action We take before the request is recorded.
PAYMENT OPTIONS
Instead of being paid in one sum, all or part of the proceeds may be applied
under any of the Payment Options described in this provision. In addition to
these options other methods of payment may be chosen with Our consent.
01206 Page 23
PAYMENT CONTRACT. When proceeds become payable under a Payment Option, a
Payment Contract will be issued to each payee. The Payment Contract will state
the rights and benefits of the payee. It will also name those who are to
receive any balance unpaid at the death of the payee.
ELECTION OF OPTIONS. The Owner may elect or change any Payment Option prior to
the death of the last surviving Contingent Insured, subject to the provisions of
this policy. This election or change must be In Writing.
Within 60 days after We receive Written notification of the last surviving
Contingent Insured's death, a payee entitled to proceeds in one sum may elect to
receive proceeds under any Payment Option (subject to the limitations stated in
the Availability of Options provision).
OPTION 1. PAYMENTS FOR A SPECIFIED PERIOD: Equal monthly payments will be made
for a specified period. The Option 1 Table in this policy shows the monthly
income for each $1,000 of proceeds applied.
OPTION 2. PAYMENTS OF A SELECTED AMOUNT: Equal monthly payments of a selected
amount will be made. Each payment must be at least $60 a year for each $1,000
of proceeds applied. Payments will continue until the amount applied, with
interest, has been paid in full.
OPTION 3. MONTHLY PAYMENTS FOR LIFE WITH PERIOD CERTAIN: Equal monthly payments
will be made for a specified period, and will continue after that period for as
long as the payee lives. The specified period may be 10, 15 or 20 years.
The Option 3 Table in this policy shows the monthly income for each $1,000 of
proceeds applied. The tables are based on the Annuity 2000 Male or Female
Tables adjusted by 50% of projection scale G for females and 100% of projection
scale G for males for 20 years, with interest at the rate of 3% per year.
At the time payments are to begin under this option, the payee may choose one of
the following:
1. Monthly payments based on the Option 3 Table; or
2. Monthly payments equal to a monthly annuity based on Our single premium
immediate annuity rates then in use.
OPTION 4. PROCEEDS LEFT AT INTEREST: Proceeds may be left on deposit with Us for
any period up to 30 years. Interest earned on the proceeds may be:
1. Left on deposit to accumulate at the rate of 3% compounded annually; or
2. Paid in installments at the rate for each $1,000 of proceeds of $30
annually, $14.89 semiannually, $7.42 quarterly or $2.47 monthly.
Upon the death of the payee, or at the end of the specified period, any balance
left on deposit will be paid in a lump sum or under Payment Options 1, 2 or 3.
01206 Page 24
INTEREST RATES. The guaranteed rate of interest for proceeds held under Payment
Options 1, 2, 3 and 4 is 3% compounded annually. We may credit interest at a
higher rate. Any higher rate will be determined by Us.
PAYMENTS. The first payment under Options 1, 2 and 3 will be made when the
claim for payment of proceeds has been approved. Payments after the first will
be made according to the manner of payment chosen. Interest under Option 4 will
be credited from the date We receive Written notification of death and paid or
added to the proceeds as provided in the Payment Contract.
AVAILABILITY OF OPTIONS. If the proposed payee is not a natural person, payment
options may be chosen only with Our consent.
If this policy is assigned, We will have the right to pay the assignee in one
sum the amount to which the assignee is entitled. Any balance will be applied
according to the option chosen.
The amount to be applied under any one option must be at least $2,000. The
payment elected under any one option must be at least $25. If the total policy
proceeds are less than $2,000, payment will be made in one lump sum.
EVIDENCE THAT PAYEE IS ALIVE. Before making any payment under a Payment Option,
We may ask for proof that the payee is alive. If We request proof, no payment
will be made or considered due until We receive proof.
DEATH OF A PAYEE. If a payee dies, any unpaid balance will be paid as stated in
the Payment Contract. If there is no surviving payee named in the Payment
Contract, We will pay the estate of the payee:
1. Under Options 1 and 3, the value, as of the date We receive Written
notification of death, of the remaining payments for the specified period
discounted at the rate of interest, compounded annually, that was used in
determining the amount of the monthly payment;
2. Under Options 2 and 4, the balance of any proceeds remaining unpaid with
accrued interest, if any.
WITHDRAWAL OF PROCEEDS UNDER OPTIONS 1 OR 2. If provided in the Payment
Contract, a payee will have the right to withdraw the entire unpaid balance
under Options 1 or 2. Under Option 1, the amount will be the value of the
remaining payments for the specified period discounted at the rate of interest
used in determining monthly income. Under Option 2, the amount will be the
entire unpaid balance.
WITHDRAWAL OF PROCEEDS UNDER OPTION 4. A payee will have the right to withdraw
proceeds left under Option 4 subject to the following rules:
1. The amount to be withdrawn must be $500 or more; and
2. A partial withdrawal must leave a balance on deposit of $1,000 or more.
WITHDRAWALS MAY BE DEFERRED. We may defer payment of any withdrawal for up to 6
months from the date We receive a Written withdrawal request.
01206 Page 25
ASSIGNMENT. Payment Contracts may not be assigned.
CHANGE IN PAYMENT. The right to make any change in payment is available only if
the Payment Contract provides for a change in payment.
CLAIMS OF CREDITORS. To the extent permitted by law, proceeds will not be
subject to any claims of a Beneficiary's creditors.
GENERAL PROVISIONS
ASSIGNING YOUR POLICY. Prior to the death of the last surviving Contingent
Insured, You may assign this policy as security for an obligation. We will not
be bound by an assignment unless it is received In Writing at the Home Office.
Two copies of the assignment must be submitted. We will retain one copy and
return the other. We will not be responsible for the validity of any
assignment.
INCONTESTABILITY. We rely on the statements made in the application for the
policy and applications for any reinstatements or increases in Specified Amount.
These statements, in the absence of fraud, are considered representations and
not warranties. No statement may be used in defense of a claim under the policy
unless it is in such applications.
We cannot contest this policy after it has been in force during the last
surviving Contingent Insured's lifetime for 2 years from the Date of Issue.
However, We can contest an increase in Specified Amount before such increase has
been in effect during the last surviving Contingent Insured's lifetime for 2
years.
Additionally, if this policy is reinstated, We cannot contest the reinstated
policy after it has been in force during the last surviving Contingent Insured's
lifetime for 2 years from the date of reinstatement. However, We can contest a
reinstatement or an increase in Specified Amount based solely on the information
provided in the application for such reinstatement or increase.
These 2 year limitations do not apply to any Disability or Accidental Death
Benefit, or to the nonpayment of premium.
SUICIDE EXCLUSION. If either Contingent Insured takes his or her own life,
while sane or insane, within 2 years from the Date of Issue, We will refund all
premiums paid, less any policy loans, and less any partial cash surrenders paid,
and this policy will be terminated as of the Date of Issue.
If there are any increases in the Specified Amount (See the section entitled
"Changing Your Insurance Policy") a new 2-year period shall apply to each
increase beginning on the date of each increase.
If death due to suicide occurs during the 2-year period following an increase,
but after the policy has been in force for 2 years or more, We will refund the
costs of insurance that were deducted for the increase, and that increase will
be terminated. The Initial Specified Amount, and any increases in Specified
Amount that have been in force for 2 years or more, will remain in force on the
life of the last surviving Contingent Insured.
01206 Page 26
When the laws of the state in which this policy is delivered require less than
these 2 year periods, the periods will be as stated in such laws.
AGE OR GENDER INCORRECTLY STATED. If the age or gender of a Contingent Insured
has been misstated to Us, We will adjust the excess of the Death Benefit Amount
over the Accumulation Value on the date of death to that which would have been
purchased by the Monthly Deduction for the policy month of death at the correct
cost of insurance rate. By age, We mean age nearest birthday as of the Date of
Issue.
STATUTORY BASIS OF POLICY VALUES. The Cash Values of the policy are not less
than the minimum values required by the law of the state where this policy is
delivered. The calculation of the Cash Values includes a charge for the cost of
insurance, as shown in the Table of Guaranteed Monthly Cost of Insurance Rates
and for the General Account interest at the annual effective rate of 4.0%.
Calculation of minimum Cash Values, nonforfeiture benefits and Guaranteed Cost
of Insurance Rates are based on the 1980 Male or Female, Smoker or Nonsmoker
Commissioners Standard Ordinary Mortality Table for the appropriate gender and
age nearest birthday.
A detailed statement of the method of computing values has been filed with the
state insurance department where required.
NO DIVIDENDS. This policy will not pay dividends. It will not participate in
any of Our surplus or earnings.
ANNUAL REPORT. We will send to You at least once a year, without charge, an
annual report which will show a summary of all transactions since the last
report, including:
1. Premiums paid;
2. Transfers;
3. Expense charges deducted;
4. The cost of insurance deducted;
5. Partial surrender benefits deducted including partial surrender fees;
6. The amount of any outstanding policy loan;
7. Separate Account Unit Values;
8. The current Cash Surrender Value and Accumulation Values; and
9. The Death Benefit Amount.
WHEN THIS POLICY TERMINATES. This policy will terminate if:
1. You request that this policy be terminated;
2. The last surviving Contingent Insured dies;
01206 Page 27
3. Premiums are refunded due to suicide of either Contingent Insured;
4. The policy matures; or
5. The Grace Period ends; and
a. There is not sufficient Cash Surrender Value to cover a Monthly
Deduction; or
b. The necessary Monthly Guarantee Premiums to keep the policy in force have
not been paid.
REINSTATEMENT. "Reinstating" means placing Your policy in force after it has
terminated at the end of the Grace Period. We will reinstate this policy if We
receive:
1. Your Written request within 5 years after the end of the Grace Period and
before the Maturity Date;
2. Current evidence of insurability satisfactory to Us for each Contingent
Insured who was living on the date the policy terminated;
3. Payment of enough premium to keep the policy in force for 2 months; and
4. Payment or reinstatement of any indebtedness.
The reinstated policy will be in force from the Monthly Deduction Day on or
following the date We approve the reinstatement application.
The original surrender charge schedule will apply to a reinstated policy. The
Accumulation Value at the time of reinstatement will be:
1. The Surrender Charge deducted at the time of lapse (such charge not being
greater than the Accumulation Value at the time of lapse before the
Surrender Charge was applied); plus
2. The Net Premium allocated in accordance with the premium allocation
percentages at time of lapse unless the reinstatement application provides
otherwise, using Unit Values as of the date of reinstatement; plus
3. Any loan, repaid or reinstated; less
4. The Monthly Deduction for one month.
The dollar amount of any Surrender Charge reinstated will be the same as the
dollar amount of Surrender Charge at the time of lapse, and will be applied to
the funds from which the Surrender Charge was deducted at the time of lapse
using Unit Values as of the date of reinstatement.
EXCHANGE OPTION
At any time while both Contingent Insureds are living this policy may be
exchanged for two individual policies covering the Contingent Insureds
separately subject to the following:
1. The total amount of coverage under the new policies will be an amount equal
to:
01206 Page 28
a) The Death Benefit Amount in effect on the effective date of exchange;
less
b) The amount of any policy loan.
Except as stated in number 10, the Death Benefit Amount of this policy may
be split into two individual policies in any proportion, the total of which
does not exceed the Death Benefit Amount of this policy.
2. After repayment of any loan against the Cash Surrender Value of this policy,
the remaining Cash Surrender Value will be transferred to the new policies
in the same ratio as the division of the Death Benefit Amount;
3. The new policies will be issued on any flexible premium adjustable whole
life or level premium whole life or endowment plan regularly issued by the
Company on the date of exchange;
4. Except as stated in number 10, evidence of insurability satisfactory to the
Company must be furnished (This option is not available unless both
Contingent Insureds are found to be insurable.);
5. The new policies will be issued as of the date of exchange at the then
attained age of each Contingent Insured;
6. The plan of insurance selected will be subject to Our standard minimum
amount requirement for such plan;
7. If, on or after the Date of Issue of this policy:
a) A rider providing waiver of monthly deduction or waiver of premium
coverage is made available, and is added to this policy; and
b) Monthly deductions or premiums for this policy are being waived as
provided in such a rider,
then, neither monthly deductions nor premiums for the new policies will be
waived and We will not include a waiver benefit in the new policies;
8. The Suicide Exclusion and Incontestability provisions of the new policies
will run from the Date of Issue of the new policies;
9. This policy will terminate on the Date of Issue of the new policies;
10. We will not require evidence of insurability at the time this option is
elected if:
a) The Contingent Insureds divorce and a period of at least 24 months has
elapsed since the date the divorce decree was finalized; or
b) The Federal unlimited marital deduction is repealed, or there is a
reduction of at least 50% of the tax rate in the maximum Federal
estate bracket.
In these cases the amount of coverage under each new policy will be 50% of
an amount equal to:
01206 Page 29
a) The Death Benefit Amount in effect on the effective date of exchange;
less
b) The amount of any policy loan.
After repayment of any loan against the Cash Surrender Value of this policy,
50% of any remaining Cash Surrender Value will be transferred to each of the
new policies.
To apply for an exchange, the Owner must submit:
1. Applications for the new policies (including evidence of insurability
satisfactory to Us);
2. Payment of the first premium for each new policy; and
3. This policy for cancellation.
This Exchange Option is not available if the premium class of either Contingent
Insured was "Uninsurable" on the Date of Issue.
There may be income tax consequences if You exercise the Exchange Option.
Consult with Your tax advisor before exercising he right.
01206 Page 30
TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
OPTION 1 TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
-------------------------------------------------------------------------------------------------------------------------
Number Amount of Number Amount of Number Amount of Number Amount of
of Years Monthly of Years Monthly of Years Monthly of Years Monthly
Payable Installments Payable Installments Payable Installments Payable Installments
-------------------------------------------------------------------------------------------------------------------------
1 $84.47 11 $8.86 21 $5.32 31 $4.10
2 42.86 12 8.24 22 5.15 32 4.02
3 28.99 13 7.71 23 4.99 33 3.95
4 22.06 14 7.26 24 4.84 34 3.88
5 17.91 15 6.87 25 4.71 35 3.82
6 15.14 16 6.53 26 4.59 36 3.76
7 13.16 17 6.23 27 4.47 37 3.70
8 11.68 18 5.96 28 4.37 38 3.65
9 10.53 19 5.73 29 4.27 39 3.60
10 9.61 20 5.51 30 4.18 40 3.55
-------------------------------------------------------------------------------------------------------------------------
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
-------------------------------------------------------------------------------------------------------------------------
AGE OF PAYEE GUARANTEED PERIOD AGE OF PAYEE GUARANTEED PERIOD
-------------------------------------------------------------------------------------------------------------------------
Female 10 Years 15 Years 20 Years Female 10 Years 15 Years 20 Years
-------------------------------------------------------------------------------------------------------------------------
10 $2.77 $2.77 $2.77 50 $3.73 $3.72 $3.69
11 2.78 2.78 2.78 51 3.78 3.77 3.74
12 2.79 2.79 2.79 52 3.84 3.82 3.79
13 2.80 2.80 2.80 53 3.90 3.88 3.84
14 2.81 2.81 2.81 54 3.96 3.93 3.89
15 2.82 2.82 2.82 55 4.03 4.00 3.95
16 2.83 2.83 2.83 56 4.09 4.06 4.01
17 2.85 2.85 2.84 57 4.17 4.13 4.07
18 2.86 2.86 2.86 58 4.24 4.20 4.13
19 2.87 2.87 2.87 59 4.32 4.27 4.19
20 2.89 2.88 2.88 60 4.41 4.35 4.26
21 2.90 2.90 2.90 61 4.50 4.43 4.33
22 2.91 2.91 2.91 62 4.59 4.52 4.40
23 2.93 2.93 2.93 63 4.69 4.60 4.47
24 2.95 2.94 2.94 64 4.80 4.70 4.54
25 2.96 2.96 2.96 65 4.91 4.79 4.61
26 2.98 2.98 2.98 66 5.03 4.89 4.68
27 3.00 3.00 2.99 67 5.15 4.99 4.75
28 3.02 3.02 3.01 68 5.28 5.10 4.83
29 3.04 3.03 3.03 69 5.42 5.21 4.90
30 3.06 3.05 3.05 70 5.57 5.32 4.96
31 3.08 3.08 3.07 71 5.72 5.43 5.03
32 3.10 3.10 3.09 72 5.88 5.54 5.09
33 3.12 3.12 3.12 73 6.05 5.66 5.15
34 3.15 3.15 3.14 74 6.23 5.77 5.20
35 3.17 3.17 3.17 75 6.41 5.88 5.25
36 3.20 3.20 3.19 76 6.60 5.99 5.29
37 3.23 3.22 3.22 77 6.79 6.09 5.33
38 3.26 3.25 3.25 78 6.99 6.18 5.36
39 3.29 3.28 3.28 79 7.19 6.27 5.39
40 3.32 3.31 3.31 80 7.39 6.36 5.42
41 3.35 3.35 3.34 81 7.58 6.43 5.44
42 3.39 3.38 3.37 82 7.78 6.50 5.45
43 3.42 3.42 3.40 83 7.96 6.56 5.47
44 3.46 3.45 3.44 84 8.14 6.62 5.48
45 3.50 3.49 3.48 85 8.31 6.66 5.49
46 3.54 3.53 3.52 86 8.47 6.70 5.50
47 3.59 3.58 3.56 87 8.62 6.74 5.50
48 3.63 3.62 3.60 88 8.75 6.77 5.51
49 3.68 3.67 3.64 89 8.88 6.79 5.51
90 8.99 6.81 5.51
-------------------------------------------------------------------------------------------------------------------------
Payments are based upon the age, nearest birthday, of the Payee on the date the first payment is due. If monthly
installments for two or more specified periods for a given age are the same, the specified period of longer duration
will apply.
-------------------------------------------------------------------------------------------------------------------------
01206 Page 31
TABLES OF MONTHLY INSTALLMENTS FOR EACH $1,000 OF PROCEEDS
OPTION 1 TABLE
INSTALLMENTS FOR A SPECIFIED PERIOD
-------------------------------------------------------------------------------------------------------------------------
Number Amount of Number Amount of Number Amount of Number Amount of
of Years Monthly of Years Monthly of Years Monthly of Years Monthly
Payable Installments Payable Installments Payable Installments Payable Installments
-------------------------------------------------------------------------------------------------------------------------
1 $84.47 11 $8.86 21 $5.32 31 $4.10
2 42.86 12 8.24 22 5.15 32 4.02
3 28.99 13 7.71 23 4.99 33 3.95
4 22.06 14 7.26 24 4.84 34 3.88
5 17.91 15 6.87 25 4.71 35 3.82
6 15.14 16 6.53 26 4.59 36 3.76
7 13.16 17 6.23 27 4.47 37 3.70
8 11.68 18 5.96 28 4.37 38 3.65
9 10.53 19 5.73 29 4.27 39 3.60
10 9.61 20 5.51 30 4.18 40 3.55
-------------------------------------------------------------------------------------------------------------------------
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
------------------------------------------------------------------------------------------------------------------------
AGE OF PAYEE GUARANTEED PERIOD AGE OF PAYEE GUARANTEED PERIOD
-------------------------------------------------------------------------------------------------------------------------
Male 10 Years 15 Years 20 Years Male 10 Years 15 Years 20 Years
-------------------------------------------------------------------------------------------------------------------------
10 $2.81 $2.80 $2.80 50 $3.87 $3.85 $3.81
11 2.82 2.81 2.81 51 3.93 3.90 3.86
12 2.83 2.83 2.82 52 3.99 3.96 3.91
13 2.84 2.84 2.83 53 4.06 4.02 3.96
14 2.85 2.85 2.85 54 4.12 4.08 4.02
15 2.86 2.86 2.86 55 4.19 4.15 4.07
16 2.88 2.87 2.87 56 4.27 4.22 4.13
17 2.89 2.89 2.89 57 4.35 4.29 4.19
18 2.90 2.90 2.90 58 4.43 4.36 4.25
19 2.92 2.92 2.91 59 4.52 4.44 4.32
20 2.93 2.93 2.93 60 4.61 4.52 4.38
21 2.95 2.95 2.94 61 4.71 4.60 4.45
22 2.97 2.96 2.96 62 4.81 4.69 4.51
23 2.98 2.98 2.98 63 4.92 4.78 4.58
24 3.00 3.00 2.99 64 5.03 4.87 4.64
25 3.02 3.02 3.01 65 5.15 4.96 4.71
26 3.04 3.03 3.03 66 5.27 5.06 4.78
27 3.06 3.05 3.05 67 5.40 5.16 4.84
28 3.08 3.07 3.07 68 5.53 5.26 4.90
29 3.10 3.10 3.09 69 5.67 5.36 4.96
30 3.12 3.12 3.11 70 5.82 5.46 5.02
31 3.14 3.14 3.14 71 5.97 5.56 5.08
32 3.17 3.17 3.16 72 6.12 5.66 5.13
33 3.19 3.19 3.19 73 6.28 5.76 5.18
34 3.22 3.22 3.21 74 6.44 5.88 5.22
35 3.25 3.25 3.24 75 6.61 5.96 5.26
36 3.28 3.27 3.27 76 6.78 6.05 5.30
37 3.31 3.31 3.30 77 6.95 6.14 5.34
38 3.34 3.34 3.33 78 7.13 6.22 5.37
39 3.38 3.37 3.36 79 7.30 6.30 5.39
40 3.41 3.41 3.39 80 7.48 6.37 5.42
41 3.45 3.44 3.43 81 7.65 6.44 5.44
42 3.49 3.48 3.46 82 7.82 6.50 5.45
43 3.53 3.52 3.50 83 7.99 6.56 5.47
44 3.57 3.56 3.54 84 8.15 6.61 5.48
45 3.62 3.60 3.58 85 8.30 6.66 5.49
46 3.66 3.65 3.62 86 8.45 6.70 5.50
47 3.71 3.69 3.66 87 8.59 6.73 5.50
48 3.76 3.74 3.71 88 8.72 6.76 5.51
49 3.82 3.79 3.76 89 8.84 6.79 5.51
90 8.95 6.81 5.51
------------------------------------------------------------------------------------------------------------------------
Payments are based upon the age, nearest birthday, of the Payee on the date the first payment is due. If monthly
installments for two or more specified periods for a given age are the same, the specified period of longer duration
will apply.
------------------------------------------------------------------------------------------------------------------------
01206 Page 32
AMERICAN GENERAL LIFE
INSURANCE COMPANY
This is a JOINT AND LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY. An adjustable Death Benefit is payable upon the LAST SURVIVING
Contingent Insured's death prior to the Maturity Date. Investment results are
reflected in policy benefits. ACCUMULATION VALUES are flexible and will be based
on the amount and frequency of premiums paid and the investment results of the
Separate Account. NONPARTICIPATING - NOT ELIGIBLE FOR DIVIDENDS.
For Information, Service or to make a Complaint
Contact Your Registered Representative, or Our VUL Administration.
2727-A ALLEN PARKWAY
P.O. BOX 4880
HOUSTON, TEXAS 77210-4880
1-888-325-9315
01206