EXHIBIT 1.(5)(a)(ii)
AMERICAN GENERAL LIFE
Insurance Company
Home Office:
Houston, Texas
2727-A Allen Parkway JOHN DOE American
P.O. Box 1931 POLICY NUMBER: 000000000 General
Houston, Texas 77251 [Graphic Omitted]
A STOCK COMPANY
(713) 522-1111 A Subsidiary of American
General Corporation
WE WILL PAY THE DEATH BENEFIT PROCEEDS to the Beneficiary if the Insured dies
prior to the Maturity Date and while this policy is in force. Payment will be
made after We receive due proof of the Insured's death, and will be subject to
the terms of this policy.
WE WILL PAY THE CASH SURRENDER VALUE of this policy to the Owner on the
Maturity Date if the Insured is living on that date.
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.
The consideration for this contract 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 FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An adjustable Death
Benefit is payable upon the 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 ANY PREMIUMS PAID ADJUSTED TO REFLECT INVESTMENT
EXPERIENCE.
SIGNED AT THE HOME OFFICE ON THE DATE OF ISSUE.
_____________ _____________
Secretary President
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
READ YOUR POLICY CAREFULLY
97610
INDEX
Allocation of Policy Deductions 4
Allocation of Net Premiums 4
Annual Report 19
Automatic Rebalancing 14
Beneficiary and Proceeds 16
Cash Surrender Value 10
Cash Value 10
Changing Your Insurance Policy 7
Change of Ownership or Beneficiary 16
Changing the Death Benefit Option 7
Changing the Specified Amount 7
Contract 5
Cost of Insurance Rate Table 21
Date of Issue 3,5
Death Benefit and Death Benefit Options 6
Dollar Cost Averaging 14
Expense Charges
Monthly Administration Fee 3A,11
Premium Expense Charge 3A
Premium Tax 3
General Account 9
General Provisions 18
Grace Period 12
Incontestability 18
Investment Advisor, Change of 9
Investments of the Separate Account 8
Maturity Date 3
Monthly Guarantee Premium 12
Owner 5
Payment Options 17
Policy Loans 15
Policy Values 9
Premium Class 2
Premium Payments 5
Separate Account 7
Surrender, Full and Partial 12
Transfer Provision 13
Valuation of Assets 8
Valuation Dates 8
Valuation Units 8
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. The Premium Class of this policy is shown on Page 3 as one or a
combination of the following terms:
SELECT. The term "Select" means the Insured qualifies as a better than average
mortality risk. PREFERRED. The term "Preferred" means the cost of insurance is
based on the Insured being a nonuser of tobacco. STANDARD. The term "Standard"
means the cost of insurance is based on the Insured being a tobacco user.
JUVENILE. All policies issued to Insureds at issue age 17 or less are
designated as "Juvenile". This means that cost of insurance rates stated in
the policy for insurance ages 18 and above are Standard rates. (Rates are not
classified on the basis of the Insured being a user or non-user of tobacco at
ages 0 through 17.) SPECIAL. The term "Special" means an extra premium is
being charged due to the Insured's health, occupation or avocation. RATES ON
POLICY ANNIVERSARY NEAREST INSURED'S 18TH BIRTHDAY (FOR INSURED'S AGE 17 OR
LESS ON DATE OF ISSUE). If the Insured's age, nearest birthday, is 17 or less
on the Date of Issue of this policy, Standard rates will be used starting on
the policy anniversary nearest the Insured's 18th birthday, except as follows.
Prior to the anniversary nearest the Insured's 18th birthday, a written
statement, signed by the Insured, may be submitted to the Company requesting
that Preferred rates be made effective. The statement must include the date
the Insured last used tobacco, or state that the Insured as never used
tobacco, whichever applies. If the request is approved, Preferred rates will
be made effective on the policy anniversary nearest the Insured's 18th
birthday. Otherwise, Standard rates will apply. We will send a notice to the
Owner at lest 30 days prior to the policy anniversary nearest the Insured's
18th birthday that an application for Preferred rates may be submitted.
NOTICE
This Policy Is A Legal Contract Between
The Policy Owner And The Company.
97610 Page 2
POLICY SCHEDULE
BASIC POLICY MONTHLY COST YEARS PAYABLE
VARIABLE LIFE SEE PAGE 21 60
ADDITIONAL BENEFITS PROVIDED BY RIDERS
NONE
PREMIUM CLASS: SELECT PREFERRED
INITIAL PREMIUM: $1,528.90
PLANNED PERIODIC PREMIUM: $1,528.90 PAYABLE ANNUALLY
MONTHLY DEDUCTION DAY: 1ST DAY OF EACH MONTH
MINIMUM DEATH BENEFIT AMOUNT (AFTER
A DECREASE IN SPECIFIED AMOUNT) $100,000
MINIMUM PARTIAL SURRENDER $ 500.00
MINIMUM VALUE THAT MAY BE RETAINED IN A
DIVISION AFTER A PARTIAL SURRENDER $ 500.00
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.
INSURED: JOHN DOE POLICY NUMBER: 0000000000
INSURANCE AGE: 35 DATE OF ISSUE: NOVEMBER 1, 1997
INITIAL SPECIFIED AMOUNT: $100,000 MATURITY DATE: NOVEMBER 1, 2057
DEATH BENEFIT OPTION: 1 THIS IS A (SEX DISTINCT) POLICY
THIS IS A (STATE NAME) POLICY
97610 Page 3
POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000
CHARGES DEDUCTED FROM THE SEPARATE ACCOUNT
MORTALITY AND EXPENSE CHARGE. DEDUCTIONS FROM THE SEPARATE ACCOUNT WILL
BE MADE AT AN ANNUAL RATE NOT TO EXCEED .90%. AFTER THE 10TH POLICY
YEAR, THE CURRENT MORTALITY AND EXPENSE CHARGES WILL BE REDUCED BY
.25% IN EACH POLICY YEAR THAT THE CURRENT MORTALITY AND EXPENSE
CHARGE ANNUAL RATE WITHOUT THE REDUCTION IS LESS THAN .90%. THE
CURRENT RATE ON THE DATE OF ISSUE IS [.75%]. THE ACTUAL DEDUCTION
WILL BE MADE ON A DAILY BASIS. THE CURRENT RATE ON A DAILY BASIS IS
[.002055%].
EXPENSE CHARGES
PREMIUM EXPENSE CHARGE: CURRENT GUARANTEED
(ADJUSTABLE PREMIUM EXPENSE
CHARGE PERCENTAGE) [2.5%] 5.0%
PREMIUM TAX (IF APPLICABLE). DEPENDING ON THE LAWS OF THE JURISDICTION IN
WHICH THIS POLICY WAS ISSUED, A PERCENTAGE OF EACH PREMIUM MAY BE
DEDUCTED FOR PREMIUM TAX. THE PREMIUM TAX RATE FOR THIS POLICY IS
[0%].
MONTHLY EXPENSE CHARGE:
MONTHLY EXPENSE CHARGE FOR FIRST TWO YEARS: $19.59
(SEE MONTHLY EXPENSE CHARGE TABLE FOR RATES
APPLYING TO INCREASES IN SPECIFIED AMOUNT)
MONTHLY ADMINISTRATION FEE: CURRENT GUARANTEED
[$6.00] $12.00
BASIC POLICY CHARGES AND FEES
COST OF INSURANCE CHARGES. GUARANTEED MAXIMUM COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK ARE SHOWN ON PAGE 21.
97610 Page 3A
POLICY SCHEDULE CONTINUED - POLICY NUMBER 0000000000
INITIAL ALLOCATION OF NET PREMIUMS AND POLICY DEDUCTIONS
INVESTMENT OPTIONS INITIAL ALLOCATION INITIAL ALLOCATIONS
OF NET PREMIUMS OF POLICY DEDUCTIONS
GENERAL ACCOUNT:
(125) AGL Declared Fixed Interest Account 100% 100%
SEPARATE ACCOUNT: VL-R
[(126) AIM V.I. International Equity Fund 0% 0%
(127) AIM V.I. Value Fund 0% 0%
(128) International Equities Fund 0% 0%
(129) MidCap Index Fund 0% 0%
(130) Money Market Fund 0% 0%
(131) Stock Index Fund 0% 0%
(132) Quality Bond Portfolio 0% 0%
(133) Small Cap Portfolio 0% 0%
(134) MFS Emerging Growth Series 0% 0%
(135) Equity Growth Portfolio 0% 0%
(136) High Yield Portfolio 0% 0%
(137) Putnam VT Diversified Income Fund 0% 0%
(138) Putnam VT Growth and Income Fund 0% 0%
(139) Putnam VT International Growth and Income Fund 0% 0%
(140) Equity Portfolio 0% 0%
(141) Growth Portfolio 0% 0%
(142) Strategic Stock Portfolio 0% 0%]
97610 Page 3B
TABLE OF MONTHLY EXPENSE CHARGES FOR THE FIRST TWO YEARS
PER $1,000 OF SPECIFIED AMOUNT
(Also applies to an increase in Specified Amount during
first two years of the Increase)
ISSUE ISSUE
AGE AGE
35 0.1959 58 0.5084
36 0.2047 59 0.5363
37 0.2140 60 0.5662
38 0.2238 61 0.5982
39 0.2340 62 0.6323
40 0.2449 63 0.6688
41 0.2564 64 0.7078
42 0.2685 65 0.7495
43 0.2812 66 0.7800
44 0.2946 67 0.8200
45 0.2647 68 0.8600
46 0.2775 69 0.9000
47 0.2912 70 0.9500
48 0.3056 71 1.0000
49 0.3209 72 1.0600
50 0.3371 73 1.1100
51 0.3544 74 1.1700
52 0.3727 75 1.2400
53 0.3921 76 1.3000
54 0.4126 77 1.3700
55 0.4345 78 1.4500
56 0.4576 79 1.5300
57 0.4822 80 1.6100
The MONTHLY EXPENSE CHARGE FOR THE INITIAL SPECIFIED AMOUNT for the first two
years is shown on page 3A of the policy. To determine the Monthly Expense
Charge for an increase in Specified Amount, multiply the appropriate rate
shown above by the number of thousands of increase in Specified Amount. The
result will be deducted from the Accumulation Value monthly during the first
two years of the increase.
97610 Page 4
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 copy of Your application, and any amendments or
supplemental applications.
DATE OF ISSUE. The Date of Issue of this policy is the date on which the first
premium is 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 Insured's lifetime, the Owner may exercise every right the policy confers
or we allow (subject to the rights of any assignee of record, and to any
endorsement on this policy limiting such rights). You may have Joint Owners of
the policy. In that case, the authorization of both Joint Owners is required
for all policy changes except for transfers, premium allocations and deduction
allocations. We will accept the authorization of either Joint Owner for
transfers and changes in premium and deduction allocations. The Owner and the
Insured may be the same person but do not have to be. If the Owner dies while
the policy is in force and the Insured is living, ownership rights pass on to
a successor owner, if any, or to the estate of the Owner.
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.
PLANNED PERIODIC PREMIUMS. The amount and frequency of the Planned Periodic
Premiums You selected are shown on page 3. 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 page 3. We may limit the number and amount
of additional premiums. (See Maximum Premium).
MAXIMUM PREMIUM. The sum of the premiums paid under this policy may not exceed
the guideline premium limitation as defined by Section 7702, Internal Revenue
Code of 1986 (or as later amended). Any portion of any premium paid which is
determined to be in excess of the limit will be refunded.
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. The Premium Expense Charge Percentage is
adjustable, but will never be more than the guaranteed 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 PREMIUMS. The initial allocation of Net Premiums is shown on the
Policy Schedule 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.
97610 Page 5
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 premium received after such Valuation date will be reduced by
any applicable state premium tax and the Premium Expense Charge and applied
directly to the selected Investment Option(s) as of the Business Day received.
Changes in the allocation 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%. We reserve the
right to limit the number of Divisions which you may select.
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 the Insured dies 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 death; and
2. Any increases or decreases made to the Specified Amount. The Initial
Specified Amount is shown on page 3.
Guidelines for changing the Death Benefit Option or the Specified Amount will
be found in the section entitled "Changing Your Insurance Policy."
The Death Benefit Proceeds will be the Death Benefit Amount reduced by any
outstanding policy loan and will be subject to the other provisions of the
"Beneficiary and Proceeds" section.
DEATH BENEFIT OPTION. The Death Benefit Option which You have chosen is shown
on page 3 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 death; or
2. The Accumulation Value on the date of death multiplied by the Death
Benefit Percentage Factor for the Insured's age nearest birthday as
shown in the table that follows.
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 death;
or
2. The Accumulation Value on the date of death multiplied by the Death
Benefit Percentage Factor for the Insured's age nearest birthday as
shown in the table that follows.
TABLE OF DEATH BENEFIT PERCENTAGE FACTORS
Att'd Percentage Att'd Percentage Att'd Percentage Att'd Percentage
Age Factor Age Factor Age Factor Age Factor
0-40 250% 50 185% 60 130% 70 115%
41 243 51 178 61 128 71 113
42 236 52 171 62 126 72 111
43 229 53 164 63 124 73 109
44 222 54 157 64 122 74 107
45 215 55 150 65 120 75-90 105
46 209 56 146 66 119 91 104
47 203 57 142 67 118 92 103
48 197 58 138 68 117 93 102
49 191 59 134 69 116 94 101
95+ 100
97610 Page 6
CHANGING YOUR INSURANCE POLICY
You may request a change in the Specified Amount or Death Benefit Option at
any time except that a decrease in the Specified Amount may not become
effective prior to the end of the first policy year. Your request must be
submitted to Our Home Office in writing in a form acceptable to Us.
INCREASING THE SPECIFIED AMOUNT. We will require a supplemental application
and evidence of insurability satisfactory to Us for any increase in the
Specified Amount. An increase will be effective on the monthly deduction day
on or next following the date the application for increase is 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 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 page 3; or
2. Any Death Benefit Amount which, upon comparing such amount to the sum of
premiums already paid, would result in an excess of premium payments.
(See the "Maximum Premium" provision.)
Any such decrease will be applied in the following order:
1. Against the Specified Amount provided by the most recent increase;
2. Against the next most recent increases successively;
3. Against the Specified Amount provided under the original application.
CHANGING THE DEATH BENEFIT OPTION. You may request a change in the Death
Benefit Option you have chosen.
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.
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.
We will not require evidence of insurability for a change in the Death Benefit
Option. The change will go into effect on the monthly deduction day following
the date We receive Your request for change.
CHANGING THE TERMS OF YOUR POLICY. Any change in Your policy must be approved
by one of Our officers. 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.
97610 Page 7
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
Options listed on the Policy Schedule Pages. From time to time, We may add
additional Divisions to those shown on the Policy Schedule pages. We may also
discontinue offering one or more Divisions. Any change in Divisions available
or selected are shown on the Policy Schedule or on an amended Policy Schedule.
Any change in investment selection shall be pursuant to a duly executed change
form filed with Our Home Office. Transfers may be made to the additional
Divisions subject to the rules stated in the Transfer Provision and any new
rules or limitations tied 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 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.
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.
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 at the end of the previous valuation period; and
(3) is a factor representing the Mortality and Expense Charge.
The net asset value of an investment company's shares held in each investment
division shall be the value reported by Us by that investment company.
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.
BUSINESS DAY. A business day is each day that the New York Stock Exchange and
the Company are open for business. A business day immediately preceded by one
or more non-business calendar days will include those non-business days as
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 BALANCE. If a partial surrender causes the balance in any Division to
drop below $500, 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 $500, the Company reserves the right to transfer the
remaining balance in proportion to the transfer request.
97610 Page 8
CHANGE OF INVESTMENT ADVISOR OR INVESTMENT POLICY. Unless otherwise required
by law or regulation, the investment advisor or any investment policy 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 this policy is being is 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 in 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; or
7. Make any changes required to comply with rules of any Division.
When required by law, We will obtain Your approval of changes and We will gain
approval from any appropriate regulatory authority.
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 allocated by the Owner to such Account.
The General Account is credited with interest at an annual rate of not less
than 4%, and is not based on the investment experience of any Division of the
Separate Account. Interest applied to that portion of the General Account
equal to a policy loan will be at an annual effective rate of not less than 4%
nor more than 4.75%.
POLICY VALUES PROVISION
ACCUMULATION VALUE. The Accumulation Value of Your policy is the total of all
values in the General Account and in the Divisions of the Separate Account.
The Accumulation Value reflects:
1. Premiums paid;
2. Deductions for Expense Charges;
3. Monthly deductions;
4. The investment experience of the Divisions selected;
5. The value of amounts allocated to the General Account, including
interest earned on amounts allocated to the General Account;
6. Deductions due to partial withdrawals; and
7. 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.
97610 Page 9
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. If the number of Valuation
Units in any Division, or in the unloaned portion of the General 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. You must state In Writing in
advance how Monthly Deductions should be made if other than this method is to
be used.
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 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 will be
determined as follows:
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 page 3.
ON EACH DEDUCTION DAY. On each deduction day after the Date of Issue, we will
determine the Accumulation Value as follows:
1. First, we will take the Accumulation Value as of the last deduction day;
and
2. Add the interest earned for the month on the excess of the General
Account value on the last deduction day over any withdrawals and
transfers made from the General Account since the last deduction day;
and
3. Add any investment gain (or subtract any investment loss) on the
Divisions of the Separate Account since the last deduction day as
measured by the change in the value of the Valuation Units; and
4. Add all Net Premiums received since the last deduction day; and
5. Subtract any partial surrender made since the last 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 DEDUCTION DAY. The Accumulation Value on
any Valuation Date other than a deduction day will be the sum of:
1. The value of the General Account as of the last deduction day;
2. Less any withdrawals since the last deduction day;
3. Plus all Net Premiums received since the last deduction day;
4. Plus the sum of the values of the Divisions of the Separate Account as
of the last deduction day, plus the amount of any investment gain (or
minus any investment loss) on the Divisions since the last deduction day
as measured by the change in value of the Valuation Units.
CASH SURRENDER VALUE. The Cash Surrender Value of this policy will be equal to
the Accumulation Value less any indebtedness.
97610 Page 10
HOW WE CALCULATE A MONTHLY DEDUCTION. Each Monthly Deduction includes:
1. The cost of insurance provided by the basic policy; and
2. The cost of insurance for benefits provided by riders; and
3. The Monthly Administration Fee; and
4. During the first two policy years, a Monthly Expense Charge. (This
charge also applies to the amount of any increase in Specified Amount
during the first two years of such increase.)
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 deduction day.
The cost of insurance is determined as follows:
1. Reduce the Death Benefit Amount by the amount of Accumulation Value on
the deduction day before the cost of insurance deduction is taken, and
after the Monthly Expense Charge, if any, the Monthly Administration Fee
and Cost of Insurance for riders are deducted;
2. Multiply the difference by the cost of insurance rate per $1,000 of net
risk amount as provided in the Cost of Insurance Rate provision; and
3. Divide the result by 1000.
If Option 1 is in effect, and there have been increases in the Specified
Amount, the Accumulation Value will first be considered part of the Initial
Specified Amount. If the Accumulation Value exceeds the Initial Specified
Amount, the excess will be considered part of prior Specified Amount increases
in the order of the increases.
COST OF INSURANCE FOR BENEFITS PROVIDED BY RIDERS. The cost of insurance for
benefits provided by riders 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.
FIRST TWO YEARS MONTHLY EXPENSE CHARGE. A Monthly Expense Charge will be
deducted during the first two policy years, and during the first two years of
any increase in Specified Amount. The Monthly Expense Charge for the first two
years for the Initial Specified Amount is shown onpage 3. The Monthly Expense
Charge for the first two years of any increase in Specified Amount will be
calculated by multiplying the appropriate rate shown on page 4 by the number
of thousands of such increase.
COST OF INSURANCE RATE. The cost of insurance rate for the Initial Specified
Amount, and for each Specified Amount increase, is based on the Insured's:
1. Sex (if issued on a Sex Distinct basis);
2. Age nearest birthday on each policy anniversary; and
3. Premium class shown on the Policy Schedule, associated with the Initial
Specified Amount and each increase in the Specified Amount.
The guaranteed monthly cost of insurance rates are shown in the table on page
21. 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
4. The age, sex and premium class of the Insured if issued on a Sex
Distinct basis. The age and premium class if issued on a Unisex basis.
CHANGES IN RATES, CHARGES AND FEES. This policy does not participate in Our
profits or surplus. Any redetermination of the cost of insurance rates,
interest rates, mortality and expense charges, percentage of premium charges
or the Monthly Administration Fee will be based on Our expectations as to
investment earnings, mortality, persistency and expenses. We will not change
these charges in order to recoup any prior losses.
97610 Page 11
INTEREST RATE. 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.
We can use interest rates greater than the guaranteed rates to calculate
Accumulation Values.
GRACE PERIOD. If the Cash Surrender Value on a 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 required premium 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 of premium 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 death occurs during the Grace Period,
Monthly Deductions through the policy month in which 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.
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 Insured's lifetime before the Maturity Date. The Cash Surrender
Value will be determined as of the Business Day the policy and the signed
request for surrender are received In Writing in the Home Office. 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
withdrawal of a portion of the Cash Surrender Value of the policy. Your
request must be made in writing prior to the Maturity Date during the
Insured's lifetime. The minimum partial surrender is $500.00.
Valuation Units are surrendered to reflect a partial surrender as of the
Business Day the request for partial surrender is received In Writing in the
Home Office.
A partial surrender will result in a reduction of the Accumulation Value and
the Death Benefit Amount. The Accumulation Value will be reduced by the amount
of partial surrender benefit. 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 reduced amount will not be less than
zero.) The Death Benefit Amount remaining after this reduction must be no less
than the Minimum Death Benefit Amount shown on page 3.
A partial surrender will result in the cancellation of Valuation Units from
each applicable Division and 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 each 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 unloaned
Accumulation 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 $25.00 charge for each partial surrender.
The Company may delay payment if the Suspension and Deferral of Payments
Provision is in effect.
97610 Page 12
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. This policy will remain in force until the earlier of
the following dates:
1. The Maturity Date (if there is sufficient Cash Surrender Value to make
Monthly Deductions to that date); or
2. The end of the Grace Period.
TRANSFER PROVISION
TRANSFER OF ACCUMULATION VALUE. You may transfer all or part of Your interest
in a Division of the Separate Account or the General Account subject to the
following:
1. Transfers will be made as of the Business Day that the transfer request
is received in good order.
2. The minimum which may be transferred is $500.00.
3. A transfer from the General Account to a Separate Account Division may
only be made during the 60 day period that begins on a policy
anniversary. The total amount transferred during the 60 day period is
limited in any policy year to 25% of the unloaned portion of the General
Account as of the policy anniversary.
4. We reserve the right to terminate, suspend or modify the transfer
privilege described above.
If You elect to use the transfer privilege, We will not be liable for a
transfer made in accordance with Your instructions.
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.
DOLLAR COST AVERAGING. Dollar Cost Averaging is an automatic transfer of funds
made periodically prior to the Maturity Date in accordance with the Transfers
provision, except as provided below, and instructions from the Owner. Dollar
Cost Averaging (DCA) is subject to the following guidelines:
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;
(c) From the Money Market Division to one or more of the other
Separate Account Divisions. (The General Account is not eligible
for DCA)
97610 Page 13
TRANSFER PROVISION (CONT'D)
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. (You will be notified if the
value of Your Money Market Division reaches zero).
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
Dollar Cost Averaging is active.
SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION
We may suspend the calculation and payment of the policy's Cash Surrender
Value in the following circumstances:
1. If there is a failure in any of the means normally employed in
ascertaining the prices or values of investments, properties or assets;
or
2. If, for any reason the prices or values of investments, properties or
assets in the Separate Account cannot be reasonably ascertained; or
3. If circumstances exist as a result of which it is not reasonably
practicable to realize any of the Separate Account's investment or to
determine fairly the net asset value of the Separate Account; or
4. If the remittance of funds involved in the realization of, or in the
payment for investment or payment due under this policy cannot be
carried out without undue delay and at normal rates of exchange; or
5. The U.S. Securities and Exchange Commission (SEC) determines that a
state of emergency exists; or
6. An order of the SEC permits a delay for the protection of policyholders.
97610 Page 14
SUSPENSION AND DEFERRAL OF PAYMENTS PROVISION (CONT'D)
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 after We
receive a request for it.
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 of the lifting of the suspension, and will be
calculated based on the Valuation Date which immediately follows termination
of the suspension.
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's loan value. The loan value will be
the Cash Surrender Value less an amount equal to 3 Monthly Deductions, and
less interest on the amount to be borrowed to the next policy anniversary.
The value of 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 good order.
LOAN INTEREST. 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 in advance. Unpaid loan interest will be deducted from the various
accounts according to the deduction percentages then in effect, and added to
the loaned portion of the General Account. If the number of Valuation Units in
any Division, or in the 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 inteest bears to the
unloaned Accumulation Value of your policy. You must state In Writing in
advance how unpaid loan interst should be deducted if other than this method
is to be used.
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 Insured; and,
2. A partial repayment must be at least $100.00.
At any time Your policy loan exceeds the Cash Surrender 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.
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
a loan 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 the cancellation of Units from each applicable Division
and reduction of the unloaned portion of the General Account in the ratio that
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.
97610 Page 15
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.
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.
Starting on the tenth policy anniversary, this policy will be eligible for
"Preferred Loans" subject to the following guidelines:
1. The maximum amount 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, interest to the next policy anniversary
will be charged at the rate shown in the Loan Interest provision.
3. Interest credited to the amount of the Accumulation Value offset by a
Preferred Loan:
a. Will be at an annual effective rate that is equal to or less than
the Policy Loan annual effective interest rate; and
b. Will be at a higher rate than the rate used to credit interest to
values offset by any other policy loan. BENEFICIARY AND PROCEEDS
BENEFICIARY. The Beneficiary as named in the application, or later changed by
You, will receive the proceeds upon the death of the Insured. Unless You have
stated otherwise, proceeds will be paid as follows:
1. If any Beneficiary dies before the Insured, that Beneficiary's interest
will pass to any other Beneficiaries according to their respective
interests.
2. If no Beneficiary survives the Insured, proceeds will be paid to You, as
Owner, if You are then living; otherwise proceeds will be paid to Your
estate.
CHANGE OF OWNERSHIP OR BENEFICIARY. You may change the Owner or the
Beneficiary at any time during the lifetime of the Insured unless the previous
designation provides otherwise. To do so, send a Written request to Our Home
Office in a form acceptable to Us. 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 taken by Us before the request is
recorded.
COMMON DISASTER. If We cannot determine whether a Beneficiary or the Insured
died first in a common disaster, We will assume that the Beneficiary died
first. Proceeds will be paid on this basis unless an endorsement to this
policy provides otherwise.
PROCEEDS. Proceeds means the amount payable on:
1. The Maturity Date;
2. Exercise of the full surrender benefit; or
3. The Insured's death.
The proceeds on the Maturity Date will be the Cash Surrender Value. The
proceeds on the 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.
97610 Page 16
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 below. In addition to these
options, other methods of payment may be chosen with Our
consent.
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 while
the Insured is living, subject to the provisions of this policy. This election
or change must be In Writing. Within 60 days after the Insured's death, a
payee entitled to proceeds in one sum may elect to receive proceeds under any
option.
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 SPECIFIED AMOUNT: Equal monthly payments of a
specified 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: 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. If
issued on a Sex Distinct basis, tables are based on the 1983a Male or Female
Mortality Tables adjusted by projection scale G for 9 years, interest at the
rate of 3% per year, and a 2% load. If issued on a Unisex basis, tables are
based on the 1983a Male or Female Tables, adjusted by projection scale G for 9
years, with unisex rates based on 60% female and 40% male, and interest at the
rate of 3% per year, and a 2% load.
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 Options 1, 2 or 3.
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. The amount of any increase will be determined by
Us.
PAYMENTS. The first payment under Options 1, 2 and 3 will be made when the
claim for settlement 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 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.
97610 Page 17
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.
EVIDENCE THAT PAYEE IS ALIVE. Before making any payment under a Payment
Option, We may ask for proof that the payee is alive. If proof is requested,
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 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;
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 withdrawal request.
ASSIGNMENT. Payment Contracts may not be assigned.
CHANGE IN PAYMENT. The right to make any change in payment is available only
if it is provided in the Payment Contract.
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. During the lifetime of the Insured, You may assign this
policy as security of an obligation. We will not be bound by an assignment
unless it is received In Writing at Our 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.
Except as stated below, We cannot contest this policy after it has been in
force during the Insured's lifetime for 2 years from the Date of Issue.
97610 Page 18
Exceptions: We cannot contest any claim related to an increase in Specified
Amount after such increase has been in effect during the Insured's lifetime
for 2 years.
If this policy is reinstated, We cannot contest this policy after it has been
in force during the Insured's lifetime for 2 years from the date of
reinstatement.
We can contest a reinstatement or an increase in Specified Amount only on the
basis of the information furnished in the application for such reinstatement
or increase.
This 2-year limitation does not apply to any Disability or Accidental Death
Benefit, or to the nonpayment of premium.
SUICIDE EXCLUSION. If the Insured takes his or her own life, while sane or
insane, within 2 years from the Date of Issue, We will limit the Death Benefit
Proceeds to the premiums paid less any policy loans and less any partial cash
surrenders paid.
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. The Death Benefit Proceeds
will be the costs of insurance associated with each increase.
When the laws of the state in which this policy is delivered require less than
this 2 year period, the period will be as stated in such laws.
AGE OR SEX INCORRECTLY STATED (AGE INCORRECTLY STATED IF ISSUED ON A UNISEX
BASIS). If the (1) age or sex of the Insured (if this policy was issued on a
Sex Distinct Basis) or (2) age of the Insured (if this policy was issued on a
Unisex basis) 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 Accumulation 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 Accumulation Values includes a
charge for the cost of insurance, as shown in the Table of Guaranteed Monthly
Cost of Insurance Rates. Calculation of minimum Accumulation Values,
nonforfeiture benefits and Guaranteed Cost of Insurance Rates are based on the
Composite 1980 Commissioners Standard Ordinary Male/Female/Unisex (Table B)
Mortality Table for the appropriate sex 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 You at least once a year an annual report which
will show a summary of all transactions since the last report, including:
1. Premiums paid since the last report;
2. Transfers since the last report;
3. Expense charges deducted since the last report;
4. The cost of insurance deducted since the last report;
5. Partial surrender benefits paid to You since the last report;
6. The amount of any outstanding policy loan;
7. Separate Account Unit Values;
8. The current Cash Surrender and Accumulation Values; and
9. The Death Benefit Amount.
97610 Page 19
WHEN THIS POLICY TERMINATES. This policy will terminate if:
1. You request that this policy be terminated;
2. The Insured dies;
3. The policy matures; or
4. The Grace Period ends and there is not sufficient Cash Surrender Value
to cover a Monthly Deduction.
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 five years after the end of the Grace Period
and before the Maturity Date; and
2. Evidence of insurability satisfactory to Us; and
3. Payment of enough premium to keep the policy in force for two 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 Accumulation Value at the time of reinstatement will be:
1. 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
2. Any loan repaid or reinstated; less
3. The monthly deduction for one month.
If a person other than the Insured is covered by a rider attached to this
policy, coverage will be reinstated according to that rider.
97610 Page 20
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
ATTAINED AGE ATTAINED AGE
Nearest Birthday MALE Nearest Birthday MALE
(On Each Policy (On Each Policy
Anniversary) Anniversary)
0 0.35 50 0.56
1 0.09 51 0.61
2 0.08 52 0.67
3 0.08 53 0.73
4 0.08 54 0.80
5 0.08 55 0.88
6 0.07 56 0.96
7 0.07 57 1.05
8 0.06 58 1.14
9 0.06 59 1.24
10 0.06 60 1.35
11 0.06 61 1.48
12 0.07 62 1.62
13 0.08 63 1.78
14 0.10 64 1.95
15 0.11 65 2.15
16 0.13 66 2.36
17 0.14 67 2.58
18 0.15 68 2.82
19 0.16 69 3.07
20 0.16 70 3.36
21 0.16 71 3.70
22 0.16 72 4.08
23 0.16 73 4.52
24 0.15 74 5.01
25 0.15 75 5.54
26 0.14 76 6.11
27 0.14 77 6.71
28 0.14 78 7.33
29 0.14 79 7.99
30 0.14 80 8.71
31 0.15 81 9.52
32 0.15 82 10.45
33 0.16 83 11.50
34 0.17 84 12.67
35 0.18 85 13.93
36 0.19 86 15.25
37 0.20 87 16.63
38 0.22 88 18.06
39 0.23 89 19.55
40 0.25 90 21.11
41 0.27 91 22.80
42 0.30 92 24.66
43 0.32 93 26.82
44 0.35 94 29.67
45 0.38
46 0.41
47 0.44
48 0.48
49 0.52
The rates shown above represent the guaranteed (maximum) monthly cost of
insurance for each $1,000 of net amount at risk. If this policy has been
issued in a special (rated) premium class, the guaranteed monthly
cost will be calculated as shown on page 3.
97610M Page 21
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
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
11 8.86 21 5.32 31 4.10
12 8.24 22 5.15 32 4.02
13 7.71 23 4.99 33 3.95
14 7.26 24 4.84 34 3.88
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------]
AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years
Male
20* $2.95 $2.94 $2.94 50 $4.05 $4.00 $3.93
21 2.97 2.96 2.96 51 4.11 4.06 3.99
22 2.98 2.98 2.98 52 4.18 4.13 4.04
23 3.00 3.00 3.00 53 4.26 4.19 4.10
24 3.02 3.02 3.02 54 4.34 4.27 4.16
25 3.05 3.04 3.04 55 4.42 4.34 4.22
26 3.07 3.06 3.06 56 4.51 4.42 4.28
27 3.09 3.09 3.08 57 4.60 4.50 4.35
28 3.12 3.11 3.11 58 4.69 4.58 4.41
29 3.14 3.14 3.13 59 4.79 4.66 4.47
30 3.17 3.16 3.16 60 4.90 4.75 4.54
31 3.20 3.19 3.18 61 5.01 4.84 4.60
32 3.22 3.22 3.21 62 5.13 4.94 4.67
33 3.25 3.25 3.24 63 5.26 5.03 4.73
34 3.29 3.28 3.27 64 5.39 5.13 4.79
35 3.32 3.31 3.00 65 5.52 5.23 4.85
36 3.35 3.35 3.33 66 5.66 5.33 4.91
37 3.39 3.38 3.36 67 5.81 5.43 4.97
38 3.43 3.42 3.40 68 5.96 5.53 5.02
39 3.47 3.46 3.44 69 6.12 5.63 5.07
40 3.51 3.50 3.47 70 6.28 5.73 5.11
41 3.55 3.54 3.51 71 6.44 5.82 5.15
42 3.60 3.58 3.55 72 6.61 5.91 5.19
43 3.65 3.63 3.59 73 6.78 6.00 5.23
44 3.70 3.67 3.64 74 6.96 6.08 5.26
45 3.75 3.72 3.68 75 7.13 6.16 5.28
46 3.80 3.77 3.73 76 7.30 6.24 5.31
47 3.86 3.83 3.78 77 7.47 6.31 5.33
48 3.92 3.88 3.83 78 7.64 6.37 5.34
49 3.98 3.94 3.88 79 7.81 6.42 5.36
80** 7.97 6.48 5.37
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.
*Also applies to younger ages.
**Also applies to older ages.
97610M Page 22
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
ATTAINED AGE ATTAINED AGE
Nearest Birthday FEMALE Nearest Birthday FEMALE
(On Each Policy (On Each Policy
Anniversary) Anniversary)
0 0.24 50 0.41
1 0.07 51 0.44
2 0.07 52 0.48
3 0.07 53 0.51
4 0.06 54 0.55
5 0.06 55 0.59
6 0.06 56 0.63
7 0.06 57 0.67
8 0.06 58 0.71
9 0.06 59 0.75
10 0.06 60 0.79
11 0.06 61 0.85
12 0.06 62 0.92
13 0.06 63 1.01
14 0.07 64 1.11
15 0.07 65 1.23
16 0.08 66 1.35
17 0.08 67 1.47
18 0.08 68 1.59
19 0.09 69 1.72
20 0.09 70 1.86
21 0.09 71 2.05
22 0.09 72 2.27
23 0.09 73 2.55
24 0.10 74 2.88
25 0.10 75 3.25
26 0.10 76 3.67
27 0.10 77 4.11
28 0.11 78 4.59
29 0.11 79 5.11
30 0.11 80 5.71
31 0.12 81 6.39
32 0.12 82 7.19
33 0.13 83 8.12
34 0.13 84 9.18
35 0.14 85 10.34
36 0.15 86 11.60
37 0.16 87 12.97
38 0.17 88 14.45
39 0.19 89 16.05
40 0.20 90 17.79
41 0.22 91 19.72
42 0.24 92 21.89
43 0.26 93 24.44
44 0.28 94 27.67
45 0.30
46 0.32
47 0.34
48 0.36
49 0.39
The rates shown above represent the guaranteed (maximum) monthly cost of
insurance for each $1,000 of net amount at risk. If this policy has been
issued in a special (rated) premium class, the guaranteed monthly cost will be
calculated as shown on page 3.
97610F Page 21
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
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
11 8.86 21 5.32 31 4.10
12 8.24 22 5.15 32 4.02
13 7.71 23 4.99 33 3.95
14 7.26 24 4.84 34 3.88
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------]
AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years
Female
20* $2.85 $2.85 $2.85 50 $3.75 $3.73 $3.69
21 2.87 2.87 2.87 51 3.80 3.78 3.74
22 2.89 2.88 2.88 52 3.86 3.84 3.79
23 2.90 2.90 2.90 53 3.92 3.89 3.85
24 2.92 2.92 2.91 54 3.99 3.96 3.90
25 2.94 2.93 2.93 55 4.06 4.02 3.96
26 2.95 2.95 2.95 56 4.13 4.09 4.02
27 2.97 2.97 2.97 57 4.21 4.16 4.08
28 2.99 2.99 2.99 58 4.29 4.23 4.15
29 3.01 3.01 3.01 59 4.37 4.31 4.21
30 3.03 3.03 3.03 60 4.46 4.39 4.28
31 3.06 3.05 3.05 61 4.56 4.47 4.35
32 3.08 3.08 3.07 62 4.66 4.56 4.42
33 3.10 3.10 3.10 63 4.76 4.65 4.49
34 3.13 3.13 3.12 64 4.88 4.75 4.56
35 3.16 3.15 3.15 65 4.99 4.85 4.63
36 3.19 3.18 3.17 66 5.12 4.95 4.70
37 3.21 3.21 3.20 67 5.25 5.05 4.77
38 3.24 3.24 3.23 68 5.39 5.16 4.83
39 3.28 3.27 3.26 69 5.53 5.27 4.90
40 3.31 3.30 3.29 70 5.69 5.38 4.96
41 3.35 3.34 3.33 71 5.85 5.49 5.02
42 3.38 3.37 3.36 72 6.02 5.60 5.08
43 3.42 3.41 3.40 73 6.19 5.71 5.13
44 3.46 3.45 3.43 74 6.37 5.82 5.17
45 3.50 3.49 3.47 75 6.56 5.92 5.21
46 3.55 3.53 3.51 76 6.75 6.02 5.25
47 3.59 3.58 3.56 77 6.95 6.11 5.28
48 3.64 3.63 3.60 78 7.14 6.20 5.30
49 3.69 3.67 3.65 79 7.34 6.28 5.32
80** 7.54 6.35 5.34
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.
* Also applies to younger ages.
** Also applies to older ages.
97610F Page 22
TABLE OF GUARANTEED MONTHLY COST OF INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
ATTAINED AGE ATTAINED AGE
Nearest Birthday RATE Nearest Birthday RATE
(On Each Policy (On Each Policy
Anniversary) Anniversary)
0 0.33 50 0.53
1 0.09 51 0.58
2 0.08 52 0.63
3 0.08 53 0.69
4 0.08 54 0.75
5 0.07 55 0.82
6 0.07 56 0.89
7 0.07 57 0.97
8 0.06 58 1.05
9 0.06 59 1.14
10 0.06 60 1.24
11 0.06 61 1.35
12 0.07 62 1.47
13 0.08 63 1.61
14 0.09 64 1.77
15 0.10 65 1.95
16 0.12 66 2.14
17 0.13 67 2.34
18 0.14 68 2.54
19 0.14 69 2.77
20 0.15 70 3.02
21 0.15 71 3.32
22 0.14 72 3.66
23 0.14 73 4.05
24 0.14 74 4.49
25 0.14 75 4.98
26 0.14 76 5.50
27 0.13 77 6.04
28 0.13 78 6.60
29 0.14 79 7.21
30 0.14 80 7.87
31 0.14 81 8.63
32 0.15 82 9.49
33 0.15 83 10.49
34 0.16 84 11.59
35 0.17 85 12.78
36 0.18 86 14.05
37 0.19 87 15.39
38 0.21 88 16.80
39 0.22 89 18.30
40 0.24 90 19.89
41 0.26 91 21.63
42 0.29 92 23.60
43 0.31 93 25.88
44 0.33 94 28.87
45 0.36
46 0.39
47 0.42
48 0.46
49 0.49
The rates shown above represent the guaranteed (maximum) monthly cost of
insurance for each $1,000 of net amount at risk. If this policy has been
issued in a special (rated) premium class, the guaranteed monthly cost will be
calculated as shown on page 3.
97610U Page 21
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
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
11 8.86 21 5.32 31 4.10
12 8.24 22 5.15 32 4.02
13 7.71 23 4.99 33 3.95
14 7.26 24 4.84 34 3.88
OPTION 3 TABLE
INSTALLMENTS FOR LIFE WITH SPECIFIED MINIMUM PERIOD
[---------- GUARANTEED PERIOD ---------] [---------- GUARANTEED PERIOD ---------]
AGE OF PAYEE 10 Years 15 Years 20 Years AGE OF PAYEE 10 Years 15 Years 20 Years
20* $2.89 $2.89 $2.89 50 $3.87 $3.84 $3.79
21 2.91 2.91 2.90 51 3.93 3.90 3.85
22 2.93 2.92 2.92 52 3.99 3.96 3.90
23 2.94 2.94 2.94 53 4.06 4.02 3.95
24 2.96 2.96 2.96 54 4.13 4.08 4.01
25 2.98 2.98 2.98 55 4.21 4.15 4.07
26 3.00 3.00 3.00 56 4.28 4.22 4.13
27 3.02 3.02 3.02 57 4.37 4.30 4.19
28 3.04 3.04 3.04 58 4.45 4.38 4.26
29 3.07 3.06 3.06 59 4.55 4.46 4.32
30 3.09 3.09 3.08 60 4.64 4.54 4.39
31 3.11 3.11 3.11 61 4.74 4.63 4.46
32 3.14 3.14 3.13 62 4.85 4.72 4.52
33 3.17 3.16 3.16 63 4.97 4.81 4.59
34 3.20 3.19 3.18 64 5.08 4.91 4.66
35 3.22 3.22 3.21 65 5.21 5.01 4.73
36 3.26 3.25 3.24 66 5.34 5.11 4.79
37 3.29 3.28 3.27 67 5.48 5.21 4.85
38 3.32 3.31 3.30 68 5.62 5.32 4.92
39 3.36 3.35 3.33 69 5.77 5.42 4.97
40 3.39 3.38 3.37 70 5.93 5.53 5.03
41 3.43 3.42 3.40 71 6.09 5.63 5.08
42 3.47 3.46 3.44 72 6.26 5.73 5.13
43 3.51 3.50 3.48 73 6.44 5.84 5.17
44 3.56 3.54 3.52 74 6.62 5.93 5.21
45 3.60 3.59 3.56 75 6.80 6.03 5.24
46 3.65 3.63 3.60 76 6.98 6.12 5.27
47 3.70 3.68 3.65 77 7.17 6.20 5.30
48 3.76 3.73 3.70 78 7.35 6.27 5.32
49 3.81 3.78 3.74 79 7.54 6.34 5.34
80** 7.72 6.41 5.35
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.
* Also applies to younger ages.
** Also applies to older ages.
97610U Page 22
AMERICAN GENERAL LIFE
INSURANCE COMPANY
This is a FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY. An Adjustable Death
Benefit is payable upon the 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 Servicing Agent, or our VUL Administration
2727-A ALLEN PARKWAY
P.O. BOX 4880
HOUSTON, TEXAS 77210-4880
1-888-325-9315
[AMERICAN GENERAL LOGO]
A STOCK COMPANY
A Subsidiary of American General Corporation
97610