Exhibit 1(5)
LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE POLICY
POLICY AMENDMENT
This amendment is hereby added to the policy as of its issue date. It amends the
Surrender Value provision of the policy.
We agree to waive the surrender charge defined in the policy, subject to the
provisions of this amendment if at any time during the first fourteen policy
years, the actual cost of insurance rate charged is greater than the rate
provided by the rate scale in effect on the issue date for the issue age, sex,
and payment class of the insured.
The cost of insurance rate can never be greater than those shown on Page 5.
The offer to waive surrender charges will expire 60 days after we notify you
that the above has occurred. If you ask to surrender the policy for its
surrender value before this offer expires, we will pay you the policy value less
any loan and accrued loan interest but we will not deduct the surrender charge.
If you ask to surrender the policy more than 60 days after the offer to waive
surrender charges is made, we will deduct the surrender charge as shown in the
policy.
LINCOLN BENEFIT LIFE COMPANY
B. EUGENE WRAITH
PRESIDENT
Exhibit 1(5)
INDIVIDUAL INSURED TERM RIDER
BENEFIT
We will pay the death benefit provided by this rider if we pay the policy death
benefit and this rider was in force when the insured died. The insured and the
death benefit for this rider are shown in the Policy Data.
BENEFICIARY
You may name a different beneficiary to receive the benefit for this rider.
Otherwise we will pay it to the beneficiary for the policy death benefit.
WHEN THIS RIDER STOPS
This rider will stop:
1. on the policy anniversary next following the insured's 99th birthday; or
2. when this rider is exchanged as provided; or
3. on the monthly activity day after you make a written request; or
4. when the policy stops.
EXCHANGE OF THIS RIDER
Prior to the insured's 75th birthday, you may exchange this rider for a new
policy. The date of exchange is the next monthly activity day after we receive
your request. The exchange will be made on the following conditions:
1. This rider must be in force when you make the exchange.
2. The request for exchange must be written.
3. The new policy selected by you must be a whole life plan, a flexible
premium adjustable life plan, or a flexible premium variable life plan then
sold by us.
4. The death benefit of the new policy will not be greater than the death
benefit of this rider on the date of exchange, but never less than $50,000.
5. The issue date of the new policy will be the date of exchange.
6. The premium for the new policy will be based on the insured's sex, attained
age and the payment class applicable to this rider. No new evidence of
insurability will be required.
7. Any benefit riders providing additional benefits in the event of disability
or death will be made a part of the new policy only with our consent.
BASIS OF COMPUTATIONS
The reserves for this rider are computed upon the Commissioners 1980 Standard
Ordinary Mortality Table, interest as prescribed in the Standard Valuation Law,
the insured's age last birthday, and the assumption that deaths occur at the end
of policy years.
OTHER TERMS OF THIS RIDER
1. This rider is made a part of the policy on the issue date, and except as
provided is subject to all terms of the policy.
2. The cost of this rider is included in the monthly deductions. The amount of
deductions required will never exceed the rates shown in the Policy Data.
The issue date of this rider is the issue date of the policy unless a later date
is stated here:
LINCOLN BENEFIT LIFE COMPANY
B. EUGENE WRAITH
PRESIDENT
Exhibit 1(5)
LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE POLICY
AGE 100 NO LAPSE RIDER
BENEFIT
The policy to which this rider is attached will remain in force through the Age
100 No Lapse expiry date as long as the cumulative premium test is met. The Age
100 No Lapse expiry date is stated in the Policy Data.
CUMULATIVE PREMIUM TEST
The cumulative premium test is met if total payments, less partial withdrawals
and policy debt, are greater than or equal to the monthly Age 100 No Lapse
Premium as stated in the policy data times the number of months elapsed since
the issue date.
If at any time the cumulative premium test is not met, we will let you know and
you will be given 61 days to satisfy any shortfall. If the cumulative premium
test remains unmet at the end of this period, this rider will no longer be in
effect. Once it is not in effect it cannot be reinstated.
POLICY CHANGES
Increases, decreases, partial withdrawals, and other additions or deletions of
benefit riders may affect the monthly Age 100 No Lapse Premium.
This rider is not applicable to policies under Death Benefit Option 2. If the
death benefit of the policy to which this rider is attached ever changes from
Death Benefit Option 1 to Death Benefit Option 2, this rider will no longer be
in effect.
LINCOLN BENEFIT LIFE COMPANY
B. EUGENE WRAITH
PRESIDENT
Exhibit 1(5)
LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE POLICY
SURVIVOR PROTECTION RIDER
BENEFIT
We will credit the policy to which this rider is attached with payments equal to
monthly benefit amount shown in the Policy Data on each monthly deduction day
after the covered insured dies. The benefit will be payable until the earliest
of:
1. the Age 100 No Lapse expiry date stated in the policy data; or
2. the surviving insured dies; or
3. the policy stops.
NOTICE OF PROOF OF CLAIM
We will begin benefit payments when we have received due proof of death of the
covered insured. When we approve a claim for this benefit, we will also credit
the policy with payments of the monthly benefit amount since the insured's
death; however, no benefit payments will be credited for months more than 1 year
prior to the time we receive proof of claim.
WHEN THIS RIDER STOPS
This rider will stop:
1. On the monthly activity day after you make a written request;
2. On the monthly activity day after notification of the death of the other
insured covered under the base policy; or
3. when the policy stops.
OTHER TERMS OF THIS RIDER
1. This rider is made a part of the policy and except as provided is subject
to all the terms of the policy.
2. The charges for this rider are deducted from the policy value on the
monthly activity day. the amount of the charge is shown in the policy data.
These charges will be made until the anniversary following the covered
insured's 86th birthday.
3. The monthly benefit amount may be limited by the amount that can be paid
under the federal internal revenue code definition for life insurance.
4. If you make changes to your policy prior to the first benefit payment, the
benefit amount of this rider may change as well.
The start date of this rider is the issue date unless a later date is stated
here:
LINCOLN BENEFIT LIFE COMPANY
B. EUGENE WRAITH
PRESIDENT
Exhibit 1(10)
LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
OWNER [JOHN DOE
INSURED: [JOHN DOE]
PAYMENT CLASS: [STANDARD NON-SMOKER]
ISSUE AGE [35]
INSURED [JANE DOE]
PAYMENT CLASS [STANDARD NON-SMOKER]
ISSUE AGE: [35] FACE AMOUNT [$250,000]
POLICY NUMBER [SPECIMEN] ISSUE DATE: [03/01/1999]
THIS IS A LEGAL CONTRACT - READ IT CAREFULLY
LINCOLN BENEFIT LIFE COMPANY promises to pay the death benefit to the
beneficiary upon death of the last surviving insured upon receipt of due proof
of death of the insured.
PLEASE EXAMINE THE APPLICATION. We issued this contract based upon the answers
in the application (copy included) and receipt of your initial premium. If all
answers are not complete and true, the contract may be affected.
RIGHT TO CANCEL YOUR CONTRACT. You may cancel this contract by returning it
Lincoln Benefit Life Company, PO Box 82532, Lincoln, NE 68501-2532, or our
agent, before midnight of the 10th day after the day you receive the policy.
Return of the contract by mail is effective on being postmarked, properly
addressed and postage prepaid. We will refund any premiums allocated to the
separate account, adjusted to reflect investment gain or loss from the date of
allocation to the date of cancellation, in addition to any premium allocated to
the fixed account.
Executed for the company at its home office in Lincoln, Nebraska on its issue
date.
John J. Morris B. Eugene Wraith
Vice President and Secretary President
LINCOLN BENEFIT LIFE COMPANY
Lincoln Benefit Life Centre
Lincoln, NE 68501
800-525-9287
A Legal Reserve Stock Life Insurance Company
LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE POLICY
Minimum Premium Required in the First Year
Death Benefit Payable on the Last Surviving Insured's Death
Flexible Premiums Payable During Lifetime of Either Insured
The Death Benefit and other Values provided by this contract are
based on the investment experience of the separate account, the
fixed account interest and other flexible factors.
These values may vary based on investment and earnings
experience and are not guaranteed as to a fixed
dollar amount.
Nonparticipating
Page 1
SUMMARY OF POLICY
This policy insures the life of both insureds. If the last surviving insured
dies while this policy is in force, the death benefit will be paid to the
beneficiary.
Payments for this contract are flexible. They may be made during the lifetime of
either insured.
During the lifetime of either insured, you may:
... change the planned payments and time between payments;
... obtain policy loans;
... change the beneficiary;
... change the death benefit option;
... surrender the policy for its net surrender value;
... exercise the other rights provided.
This is only a summary of the contract terms. The detailed provisions of the
policy will control. The provisions are set forth in the following sections:
Policy Data Page 3
Definitions Page X
Death Benefit Page X
Beneficiary Page X
Ownership Page X
Premium Payments Page X
Account Provisions Page X
Policy Value Page X
Surrender Value Page X
Loans Page X
Other Terms of your Contract Page X
Exchange of Plan Page X
Application Insert
Benefit Riders (if any) Insert
READ YOUR POLICY CAREFULLY
Page 2
POLICY DATA
OWNER: [JOHN DOE]
INSURED [JOHN DOE]
PAYMENT CLASS: [STANDARD NON-SMOKER]
ISSUE AGE: [35]
INSURED: [JANE DOE]
PAYMENT CLASS: [STANDARD NON-SMOKER]
ISSUE AGE: [35] FACE AMOUNT: [$250,000]
POLICY NUMBER: [SPECIMEN] ISSUE DATE: [03/01/1999]
Monthly Deduction Day [01]
Benefit Description
Year of Expiry
or Maturity
Flexible Premium Variable Life Life
Insurance - (Death Benefit Option 1)
Payment Information
Required Payment [XXXX]
Planned Payment [XXXX]
The payment of a monthly SAFETY NET premium of {XXX.XX} is guaranteed to keep
this policy in force for {10} years, assuming no loans or withdrawals are taken.
See SAFETY NET Premium Provision on Page XX for details.
{The payment of a monthly Age 100 No Lapse Premium of {xxx.xx} is guaranteed to
keep this policy in force until the Age 100 No Lapse expiry date of
{xx/xx/xxxx}. See Age 100 No Lapse Rider for details.}
Page 3
Allocations
Separate Account: Lincoln Benefit Life Variable Life Account
Payment
Subaccount Allocation%
---------- -----------
{Janus Worldwide Subaccount} {20}
{Fidelity VIPFII Asset Manager Subaccount} {75}
{Fixed Account} {5}
Fixed Account
-------------
Minimum Guaranteed Annual Interest Rate {4.00%}
Minimum Guaranteed Monthly Interest Rate {.32737%}
Minimum Withdrawal Amount {$500}
Minimum Transfer Amount {$100}
Loan Credited Rate {4.00%}
Maximum Loan Interest Rate Charged:
On preferred loans {4.00%}
On standard loans {6.00%}
Expense Deductions and Charges
------------------------------
Annual Mortality and Expense Risk Charge
Contract Years 1-14 {0.72%}
Contract Years 15+ Current{0.36%}
Guaranteed 0.48%
Monthly Policy Fee {$7.50}
Monthly Administrative Expense Charge Year 1-7 {$0.12}
per $1000 of face amount
Years 8+ {$0.00}
Premium Tax Charge {2.5%}
Premium Expense Charge Year 1-10 {3.5%}
Year 11+ {1.5%}
Partial Withdrawal Service Fee {$10}
Page 3A
Surrender Charge Schedule
Surrender Charges for Initial Face Amount
The following represents the maximum surrender charges which may be assessed
against your policy, assuming no elective increases in face amount.
Policy Amount of Policy Amount of
Year Charge Year Charge
1 {$XXXX} 9 {$XXXX}
2 {XXXX} 10 {XXXX}
3 {XXXX} 11 {XXXX}
4 {XXXX} 12 {XXXX}
5 {XXXX} 13 {XXXX}
6 {XXXX} 14 {XXXX}
7 {XXXX} 15 {0}
8 {XXXX}
Page 4
GUARANTEED MONTHLY COST OF INSURANCE
Policy Rate Policy Rate
Year Per $1000 Year Per $1000
---- --------- ---- ---------
1 x.xxxxx 34 x.xxxxx
2 x.xxxxx 35 x.xxxxx
3 x.xxxxx 36 x.xxxxx
4 x.xxxxx 37 x.xxxxx
5 x.xxxxx 38 x.xxxxx
6 x.xxxxx 39 x.xxxxx
7 x.xxxxx 40 x.xxxxx
8 x.xxxxx 41 x.xxxxx
9 x.xxxxx 42 x.xxxxx
10 x.xxxxx 43 x.xxxxx
11 x.xxxxx 44 x.xxxxx
12 x.xxxxx 45 x.xxxxx
13 x.xxxxx 46 x.xxxxx
14 x.xxxxx 47 x.xxxxx
15 x.xxxxx 48 x.xxxxx
16 x.xxxxx 49 xx.xxxxx
17 x.xxxxx 50 xx.xxxxx
18 x.xxxxx 51 xx.xxxxx
19 x.xxxxx 52 xx.xxxxx
20 x.xxxxx 53 xx.xxxxx
21 x.xxxxx 54 xx.xxxxx
22 x.xxxxx 55 xx.xxxxx
23 x.xxxxx 56 xx.xxxxx
24 x.xxxxx 57 xx.xxxxx
25 x.xxxxx 58 xx.xxxxx
26 x.xxxxx 59 xx.xxxxx
27 x.xxxxx 60 xx.xxxxx
28 x.xxxxx 61 xx.xxxxx
29 x.xxxxx 62 xx.xxxxx
30 x.xxxxx 63 xx.xxxxx
31 x.xxxxx 64 xx.xxxxx
32 x.xxxxx 65 xx.xxxxx
33 x.xxxxx
Page 5
DEFINITIONS
When these words are used in this contract, they have the meaning stated:
"APP"
The application which you completed requesting this policy.
"BENEFIT RIDER"
An additional benefit we are providing.
"DUE PROOF OF DEATH"
(1) a certified original copy of the death certificate or
(2) a certified copy of a decree of a court of competent jurisdiction as to the
finding of death; or
(3) a written statement by a medical doctor who attended the deceased at the
time of death; or (4) any other proof satisfactory to the company.
"FACE AMOUNT"
The initial death benefit, shown on page 3, adjusted for any changes in
accordance with the terms of this policy.
"FIXED ACCOUNT"
The portion of policy value invested in our general account.
"FUND"
A series mutual fund.
"IN FORCE"
A term used to describe when the insured's life is covered under the terms of
this contract.
"INCREASE AGE"
The age of the insured as of the effective date of an increase in face amount,
determined by the insured's last birthday.
"INCREASE YEAR"
A twelve month period beginning on the effective date of an increase in face
amount.
"INSURED(S)"
The person or persons whose life is covered by this policy as shown on Page 3.
"ISSUE AGE"
The age of the insured at the time this policy was issued (issue date)
determined by the insured's last birthday.
"ISSUE DATE"
The date the policy is issued, as shown on Page 3. It is used to determine
policy years and policy months in the policy.
"LOAN ACCOUNT"
An account established for amounts transferred from the subaccounts and the
fixed account as security for outstanding policy loans.
"MONTHLY-AUTOMATIC PAYMENT"
A method of making payments each month automatically; for example, by bank draft
or salary deduction.
"MONTHLY DEDUCTION DAY"
The same day in each month, as shown on Page 3, as the issue date. The day of
the month on which deductions are made.
"NET"
Used in reference to the death benefit, policy value or surrender value. This
means that this item has been reduced by any policy debt.
"NET INVESTMENT FACTOR"
An index applied to measure the net investment performance of a subaccount from
one valuation date to the next. It is used to determine the policy value of a
subaccount in any valuation period.
"NET PREMIUM"
The gross premium less the sum of the premium expense charge and the premium tax
charge.
"PAYMENT CLASS"
The class into which the insured is placed, determined by our rules for
providing insurance coverage.
"POLICY ANNIVERSARY"
The same day and month as your issue date for each subsequent year your policy
remains in force.
"POLICY DATA"
The pages of this policy which identify specific information about the insured
and the benefits.
"POLICY DEBT"
The sum of all unpaid policy loans and accrued interest thereon.
"POLICY MONTH"
A one month period beginning on the same day of the month as the issue date of
the policy.
"POLICY VALUE"
The sum of the values of your interests in the subaccounts of the separate
account plus the value of the fixed account and the loan account. The amount
from which monthly deductions are made and the death benefit is determined.
"POLICY YEAR"
A twelve month period beginning on an anniversary of the issue date.
"PORTFOlIO(S)"
The underlying mutual fund(s) (or investment series thereof) in which the
subaccounts invest.
"REQUIRED PAYMENT"
The minimum premium which must be paid to keep the policy in force for the first
year.
"SECOND DEATH"
The death of the last surviving insured.
"SEPARATE ACCOUNT"
A segregated investment account of the Company entitled Lincoln Benefit Life
Variable Life Account.
"SUBACCOUNT"
A subdivision of the separate account invested wholly in shares of one of the
portfolios.
"SURRENDER VALUE"
The policy value less any applicable surrender charges.
"VALUATION DATE"
Each day the New York Stock Exchange ("NYSE") is open for business.
"VALUATION PERIOD"
The period commencing at the close of normal trading on the NYSE (currently 4:00
p.m. Eastern time) on each valuation date and ending at the close of the NYSE on
the next succeeding valuation date.
"WE", "US", "OUR"
Our Company, Lincoln Benefit Life Company.
"YOU"
The person(s) having the privilege of ownership defined in the policy.
DEATH BENEFIT
If the second death occurs while this policy is in force, we will pay the death
benefit when we have received due proof of death. The death benefit will be
based on:
1. The death benefit option in effect on the date of death;
2. Any increases or decreases to the face amount.
The death benefit will be reduced by any policy debt less any unpaid monthly
deduction amounts occurring during a grace period. If the proceeds are not paid
within 30 days after we receive due proof of the death of the insured, we will
pay interest on the proceeds. Interest will accrue at the legal rate of interest
and will accrue from the date of death until the claim is paid.
DEATH BENEFIT OPTION
While both insureds are alive you may choose between two death benefit options:
If you select Option 1, the death benefit will be the greater of:
a. The face amount on the date of death; or
b. The percentage of the policy value shown in the Compliance with Federal
Laws Provision.
If you select Option 2, the death benefit will be the greater of:
a. The face amount plus the policy value on the date of death; or
b. The percentage of the policy value shown in the Compliance with Federal
Laws Provision.
The initial death benefit option selected by you is stated in the app.
CHANGE OF DEATH BENEFIT OPTION
At any time after the first policy year, you may request us to change the death
benefit option by writing to us. If you ask to change from Option 2 to Option 1,
the face amount will be increased by the amount of the policy value. If you ask
to change from Option 1 to Option 2, the face amount will be decreased by the
amount of the policy value. We will require due proof that both insureds are
still insurable to change from Option 1 to Option 2. The change will take effect
on the monthly deduction day on or following the date we receive the written
request. We will provide to you an endorsement showing the actual start date of
the death benefit option change and the new face amount. We reserve the right to
limit the frequency of the death benefit option changes made under this policy.
CHANGE OF FACE AMOUNT
At any time after the first policy year, you may request either of the following
changes by writing us. The request will take effect on the monthly deduction day
on or following the date we approve the request:
1. Increasing the face amount. You must submit a new app for an increase in
face amount. We will require due proof that both insureds are still
insurable. We reserve the right to limit the amount of any increases made
under this policy. The face amount may not be increased more than once in
any 12 month period.
2. Decreasing the face amount. A decrease in face amount will first be applied
against the most recent increase, then to the next most recent increase
successively, and finally to the initial face amount. The face amount in
effect after any decrease may not be less than $250,000.
We will provide you an endorsement showing the start date of any increase or
decrease and the new face amount. We reserve the right to limit the amount and
frequency of any increase or decrease in face amount.
BENEFICIARY
The beneficiary will receive the death benefit upon the second death and when we
have received due proof of death of both insureds. The beneficiary is as stated
in the app unless changed.
The beneficiaries will receive the death benefit in the following order:
...Primary beneficiary, who will receive the death benefit if living at the time
of the second death.
...Contingent beneficiary, who will receive the death benefit if the primary
beneficiary dies before the death of the last surviving insured.
If a beneficiary dies at the same time as the second death or within fifteen
days thereafter, we will pay the death benefit as if that beneficiary were not
living when the second insured died. If none of the named beneficiaries are
living when the second insured dies, the death benefit will be paid to you. We
will pay the death benefit to the beneficiaries according to the most recent
written instruction we have received from you. If we do not have any written
instructions, we will pay the death benefit in equal shares to the beneficiaries
who are to share the funds. If there is more than one beneficiary in a class and
one of the beneficiaries predeceases you, the death benefit will be paid to the
surviving beneficiaries in that class.
You may name new beneficiaries. We will provide a form to be signed. You must
file it with us. Upon receipt, it is effective as of the date you signed the
form, subject to any action we have taken before we received it.
If you name one or more irrevocable beneficiaries, no change in the
beneficiaries and no changes which affect policy values may be made without
their consent. No beneficiary has any rights in this policy until the insured
dies.
OWNERSHIP
The youngest insured is the owner if no other person is named in the app as
owner. The owner controls the policy during the lifetime of the insured. Unless
you provide otherwise, as owner, you may exercise all rights granted by the
policy without the consent of anyone else. If the named owner dies before the
second death, then the contingent owner named in the app is the new owner. If a
joint owner dies before the second death, the surviving joint owner(s) will
succeed to ownership by right of survivorship. If no owner named in this policy
is living, then the owner will be the executor or administrator of the estate of
the last named owner to die.
You may name a new owner. We will provide a form to be signed. You must file it
with us. Upon receipt, it is effective as of the date you signed the form,
subject to any action we have taken before we received it.
You may assign this policy or an interest in it to another. You must do so in
writing and file the assignment with us. No assignment is binding on us until we
receive it. When we receive it your rights and those of the beneficiary will be
subject to the assignment.
We are not responsible for the validity of any assignment you make.
PREMIUM PAYMENTS
PAYMENTS
Premiums for this policy are referred to as payments. The planned payment,
required payment and the time between payments are shown on Page 3.
Payments are flexible. This means you may change the amount of planned payments
and the time between payments. During the first year, you must pay an amount at
least as great as the required payment.
We must have received the first payment on or before the policy is placed in
force. This policy will not be in effect before this amount is received.
We will send you a reminder notice if you pay annually, semi-annually or
quarterly. You may also make a monthly-automatic payment. We may establish
limits on both the amount of payment and the time between payments.
Payments must be sent to our home office. The amount you pay will affect the
policy value. If you pay too little, the policy will stop subject to the grace
period.
ALLOCATION OF PREMIUM PAYMENTS
We will invest the net premium payments in the fixed account and the subaccounts
you select. You must specify your allocations on the app, in whole percents from
0% to 100%. The total allocation must equal 100%. You initially may choose up to
twenty-one options for allocating your policy value, counting each subaccount
and the fixed account as one option. All net premium payments not requiring
underwriting will be allocated to the subaccounts and fixed account as of the
date payments are received at our home office. Premium payments requiring
underwriting will not be credited with interest or earnings prior to the issue
date. We will allocate such net premium payments, plus earnings and less monthly
deductions, once underwriting approval is received, to the subaccounts and fixed
account specified on the app or your most recent instructions. You may change
the allocation percentages at any time by writing us. Any change will be
effective when we receive it. We reserve the right to allocate premium payments
to the fixed account during the Right To Cancel Your Policy period described on
Page 1 of this policy. Transfer of premiums from the fixed account at the end of
the Right To Cancel Your Policy period will not be considered one of your free
transfers.
GRACE PERIOD
Except as provided in the safety net premium provision below, if on any monthly
deduction day the net surrender value is determined to be less than the monthly
deduction for the current policy month, you will be given a grace period of 61
days. This policy will be in force during the grace period. If you do not make
sufficient payment by the end of the grace period, the policy will stop. If the
insured dies during the grace period, we will deduct any monthly deductions from
the amounts we pay. We will send a written notice to the most recent address we
have for you and any assignee at least 30 days prior to the day coverage stops.
SAFETY NET PREMIUMS
If total payments, less partial withdrawals and policy debt are greater than or
equal to the sum of monthly safety net premium times the number of months
elapsed since the issue date, then the policy is guaranteed to stay in force for
a predetermined time period as shown on Page 3, even if the net surrender value
becomes insufficient to cover monthly deductions. The safety net premium is
equal to the required payment for the first policy year.
If, at any time the total payments, less partial withdrawals and policy debt,
are less than the monthly safety net premium times the number of months elapsed,
the safety net premium provision will not be in effect.
Increases, decreases, partial withdrawals, death benefit option changes, and
additions or deletions of benefit riders, may affect the monthly safety net
premium.
REINSTATEMENT
Prior to the death of either insured, and if this contract has not been
surrendered, you may ask us to reinstate it - that is, put the policy back in
full force.
We will reinstate the policy if you:
1. Make your request within five years of the date the policy entered the
grace period;
2. Give us the proof we require that both insureds are still insurable in the
same payment class that the policy was issued;
3. Pay an amount large enough to cover the unpaid monthly deductions for the
grace period;
4. Make a payment sufficient to keep the policy in force for 3 policy months;
and
5. Repay or ask us to reinstate any loan.
The policy value on the reinstatement date will reflect the policy value at the
time of termination and premiums applied at the time of reinstatement. Surrender
charges will continue to be based on the original policy date.
When this policy is reinstated, a new two year contestable period will apply
with respect to statements made in the application for reinstatement. The
contestable period is explained in the incontestability provision on Page xx.
ACCOUNT PROVISIONS
ASSETS OF THE SePARATE ACCOUNT
The separate account, shown on page 3, is a separate investment account to which
we allocate assets contributed under this and certain other life insurance
contracts. We will have exclusive and absolute ownership and control of the
assets of our separate accounts. The assets of the separate account will be
available to cover the liabilities of our general account only to the extent
those assets exceed the liabilities of that separate account arising under the
variable life policies supported by that separate account.
The assets of the separate account will be valued at least as often as any
contract benefits vary, but at least monthly.
ASSETS OF THE FIXED ACCOUNT
At any time while this contract is in force, you may allocate premiums, or
transfer from an existing subaccount, to the fixed account. The fixed account
will earn interest at the current rate declared by us, on the monthly deduction
day. The rates we declare are effective annual interest rates. This means we
credit interest at a rate which compounds over one year to the interest rate we
declare. The minimum guaranteed monthly interest rate used to compute policy
values in the fixed account is shown on page 3A. Compounded monthly, this is the
same as the minimum guaranteed annual interest rate shown on page 3A. We may use
an interest rate greater than the minimum guaranteed interest rate, but are not
obligated to do so.
TRANSFERS AND TRANSFER FEES
You may transfer amounts between subaccounts and/or the fixed account. We
reserve the right to impose a $10 transfer fee on the second and subsequent
transfers within a calendar month, and to impose a minimum size on transfer
amounts as shown on page 3A. Additional restrictions apply to transfers from/to
the fixed account as discussed below.
Transfers from the fixed account to the subaccounts may only be made during the
60 day period beginning on the issue date or the policy anniversary. Transfer
requests received at any other time will not be processed. The maximum amount
which may be transferred from the fixed account during a policy year is the
greater of :
1. 30% of the fixed account balance as of the last policy anniversary; or
2. the greatest amount of any prior transfer from the fixed account.
SEPARATE ACCOUNT MODIFICATIONS
We reserve the right, subject to applicable law, to make additions to, deletions
from, or substitutions for the mutual fund shares underlying the subaccounts of
the separate account. We will not substitute any share attributable to your
interest in a subaccount without notice to you and prior approval of the
Securities and Exchange Commission, to the extent required by the Investment
Company Act of 1940, and the Nebraska Insurance Commissioner. The approval
process is on file with the insurance commissioner of the state where this
policy is delivered.
We reserve the right to establish additional subaccounts of the separate
account, each of which would invest in shares of another portfolio of the mutual
fund or another mutual fund. You may then instruct us to allocate premium
payments or transfers to such subaccounts, subject to any terms set by us or the
mutual fund.
In the event of any such substitution or change, we may by endorsement make such
changes as may be necessary or appropriate to reflect such substitution or
change.
If we deem it to be in the best interests of persons having voting rights under
the contracts, the separate account may be operated as a management company
under the Investment Company Act of 1940 or it may be deregistered under such
Act in the event such registration is no longer required.
POLICY VALUE
On the issue date or, if later, the date the first premium is received, the
policy value is the net premium less the monthly deduction for the first policy
month.
On any other day, the policy value is the sum of the values in each subaccount,
plus the value of the fixed account and the loan account.
On each valuation date, the value in a subaccount is:
1. The value of the subaccount of the preceding valuation date, multiplied by
the net investment factor for the subaccount for the current valuation
period, plus
2. Any net premium received and allocated to the subaccount during the current
valuation period, plus
3. Any policy value transferred to the subaccount during the current valuation
period, minus
4. Any policy value transferred from the subaccount during the current
valuation period, minus
5. Any partial withdrawals from the subaccount during the current valuation
period, minus
6. The portion of any transfer fee allocated to the subaccount during the
current valuation period, minus
7. The portion of any monthly deduction allocated to the subaccount during the
current valuation period for the policy month following the monthly
deduction day.
The value in the fixed account equals:
1. Any net premiums allocated to it, plus
2. Any policy value transferred to it from the subaccounts, plus
3. Interest credited to it, minus
4. Any policy value transferred out of it, minus,
5. Any partial withdrawals taken from it, minus
6. Any transfer fee taken from it, minus
7. Any monthly deduction taken from it.
All policy values equal or exceed those required by law. Detailed explanations
of methods of calculation are on file with appropriate regulatory authorities.
NET INVESTMENT FACTOR
The net investment factor measures investment performance of a subaccount during
a valuation period. The net investment factor is (1) divided by (2) where:
1. is the net result of:
a. the net asset value per share of the portfolio held in the
subaccount at the end of the current valuation period, plus
b. the per share amount of any dividend or capital gain distribution
made by the portfolio during the current valuation period, plus
or minus
c. a per share credit or charge with respect to any taxes which we
paid or for which we reserved during the valuation period which
are determined by us to be attributable to the operation of the
subaccount (no federal income taxes are applicable under present
law.)
2. is the net asset value per share of the portfolio held in the
subaccount at the end of the last prior valuation period.
PREMIUM TAX CHARGE
Upon receipt of each payment and before allocation of the payment to the
subaccounts or fixed account, we will deduct a premium tax charge. This charge,
shown on Page 3A, is a percentage of the premium received.
PREMIUM EXPENSE CHARGE
Upon receipt of each payment and before allocation of the payment to the
subaccounts or fixed account, we will deduct a premium expense charge. This
charge, shown on Page 3A, is a percentage of the premium received.
MONTHLY DEDUCTIONS
The monthly deduction is the sum of:
1. A policy fee as shown on Page 3A;
2. The administrative expense charge;
3. Mortality and expense risk charge ;
4. The cost of insurance for the policy; and
5. The cost of any benefit riders attached to the policy.
ADMINISTRATIVE EXPENSE CHARGE
The monthly administrative expense charge is equal to the administrative expense
charge rate shown on Page 3A for the appropriate year, times the current face
amount, including any increases or decreases, divided by 1000.
RISK CHARGE
The monthly mortality and expense risk charge is equal to the annual mortality
and expense risk rate shown on Page 3A for the appropriate policy year, divided
by 12, times the total value in the subaccount on the monthly deduction day.
We bear the risk that the total amount of death benefit payable will be greater
than anticipated, and we also assume the risk that the actual cost we incur to
administer the policy will not be covered by administrative charges assessed.
COST OF INSURANCE
The cost of insurance is determined as follows:
1. Divide the death benefit as of the prior monthly deduction day by
1.00327374;
2. Subtract the policy value as of the prior monthly deduction day;
3. Multiply the results by the current cost of insurance rate divided by
1,000. The cost of insurance rate is based on the insured's sex, issue age,
policy year, and payment class. The rates will be determined by us, but
they will never be more than the guaranteed rates shown on Page 5.
No cost of insurance will be charged once the number of completed policy years
plus the youngest insured's issue age equals 100.
SURRENDER VALUE
You may terminate your policy for its net surrender value, which may be paid in
cash or under an income plan.
The net surrender value of this policy is the amount we will pay you if you ask
us to stop this policy. It is equal to the policy value less the surrender
charge less any policy debt. If the surrender charge is greater than the policy
value, the surrender value is zero
Termination will be effective on the date we receive your written request. We
may require that your policy accompany your written request before making any
payment.
SURRENDER CHARGE
The maximum surrender charges we will assess, based on the face amount at issue,
are shown in the Surrender Charge Schedule on Page 4. An additional layer of
surrender charges will apply to an elective increase in face amount. The new
layer of surrender charges will be positive for fourteen years from the
effective date of the increase and will be stated on the endorsement sent to you
if your policy's face amount is increased.
CONTINUATION OF COVERAGE
If you stop making payments, this policy and any riders will remain in effect as
long as the net surrender value covers the monthly deductions or the policy is
still in force as defined in the monthly guarantee premiums provision. This
provision does not continue any riders beyond their normal termination dates.
PARTIAL WiTHDRAWAL
You may request a partial withdrawal of your net surrender value after the first
policy year by writing to us. Your partial withdrawal will be effective on the
next valuation date. You may specify how much of your partial withdrawal you
wish taken from each subaccount or from the fixed account. However, you may not
withdraw from the fixed account more than the total withdrawal times the ratio
of the fixed account to your total policy value immediately prior to the
withdrawal. The partial withdrawal service fee, as shown on Page 3A, may be
deducted from the subaccounts and fixed accounts in the same proportion as the
partial withdrawal.
The policy value will be reduced by the amount of any partial withdrawal. Any
policy with Death Benefit Option 1 will also have a reduction in the face
amount. The minimum partial withdrawal amount is shown on Page 3A and the
maximum partial withdrawal amount may not reduce the net surrender value below
$500.
BASIS OF VALUES
Minimum surrender values are based on the 1980 CSO Mortality Table, modified for
last survivor mortality, age last birthday, male or female, smoker or nonsmoker,
as appropriate with interest of 4.0%. The minimums are not less than those
required by the state in which the app is signed.
LOANS
You may have a loan if you assign this contract to us as sole security. The
total amount of your loan and loan interest may not exceed 90% of the surrender
value.
We will ordinarily disburse proceeds of policy loans within seven days from the
date of receipt of a request for a loan at our home office, although payments
may be postponed under certain circumstances as detailed in the "deferment of
payments" section on Page XX. As long as the policy remains in force, the loan
may be repaid in whole or in part without penalty at any time while the insured
is living.
LOAN INTEREST
An amount equal to your policy value less all premiums paid may be taken as a
preferred loan. The annual loan interest rate charged for preferred loans is
shown on Page 3A. A standard loan is the amount that may be borrowed from the
sum of premiums paid. The annual loan interest rate for standard loans is shown
on Page 3A.
Interest on policy loans accrues daily and is due at the end of each policy
year. Any interest not paid when due becomes part of the policy loan and will
bear interest at the rates described in this provision.
When a policy loan is made, a portion of the policy value sufficient to secure
the loan will be transferred to the loan account reducing the policy value in
the separate account. Any loan interest that is due and unpaid will also be so
transferred. All loan amounts will be transferred from the subaccounts and the
fixed account to the loan account in the same allocation percentages as
specified for premium payments. However, we will not withdraw loan amounts from
the fixed account equaling more than the total loan multiplied by the ratio of
the fixed account to your total policy value immediately prior to the loan.
Amounts transferred to the loan account will no longer be affected by the
investment experience of the separate account and will instead accrue interest
at the annual loan credited rate as shown on Page 3A.
LOAN REPAYMENT
You may pay back your loan and loan interest at any time. If you do not, we will
deduct the loan and loan interest from the amounts we pay. If your loan and loan
interest exceed the surrender value, this contract will stop except as provided
in the grace period section. We must mail a notice to you and all assignees at
least 30 days before the contract stops.
OTHER TERMS OF YOUR POLICY
OUR CONTRACT WITH YOU
These pages and the signed app are your entire contract with us. We issued it
based upon your app and the payment made by you. A copy of the app is included.
Any supplemental app will also be attached to and made a part of the contract.
We will not use any statements, except those made in the app and any
supplemental app, to challenge any claim or to avoid any liability under this
policy. The statements made in the app will be treated as representations and
not as warranties. Only our officers have authority to change this contract. No
agent may do this. Any change must be written.
WHEN PROTECTION STARTS
The issue date is the date when this policy becomes effective if the insureds
are then living and the first payment has been made.
NOTIFICATION OF FIRST DEATH
We must receive proof of death for both insureds before the death benefit will
be paid. Proof of the first insured's death should be furnished to us at the
time of such death.
TERMINATION
This policy will terminate upon the earliest of the following events:
1. Surrender of the policy; or
2. End of the grace period; or
3. Upon the death of the last surviving insured.
MISSTATEMENT OF AGE OR SEX
If the age or sex of either insured shown on the app has been misstated, any
proceeds will be adjusted to the amount which would be purchased by the most
recent deduction for the cost of insurance at the insured's correct age and sex.
INCONTESTABILITY
Except as provided in the next provision or in any attached rider with an
incontestability provision, we may not contest this contract once it has been in
force while the insureds are alive for 2 years from its issue date except for
failure to make payments that cause the net surrender value to be too small to
cover the monthly deductions required to keep this contract and its riders in
force.
We may not contest any increase in face amount once it has been in force while
the insureds are alive for 2 years from the effective date of the increase. We
may not contest any reinstatement of this policy or any benefit riders after
they have been in force while the insureds are alive for two years from the
reinstatement date.
SUICIDE OR SELF-DESTRUCTION
If either insured dies by suicide while sane or self destruction while insane
within 2 years from the issue date of the contract: 1. We will only pay an
amount equal to the policy value less any policy debt; and 2. The policy will
stop.
If either insured dies by suicide while sane or self-destruction while insane
within two years of the effective date of any increase in face amount, our
liability with respect to the increase will be limited to the cost of insurance
for the increase.
ANNUAL REPORT
Each year we will send you an annual report following the policy anniversary.
Each report will provide information on various transaction that took place
during the policy year just completed, as well as information on the current
status of the policy.
This information will include items such as:
1. The policy value as of the end of the current and prior year.
2. Payments and withdrawals made during the year.
3. The monthly deductions and expense charges made during the year.
4. Earnings during the year.
5. The current death benefit.
6. The current surrender charges and surrender value.
7. The amount of policy debt.
8. Such additional information as required by applicable law and regulation.
If you ask us, we will send you an additional report, at any time during the
policy year. We may charge you for this extra report, but the charge will be no
more than $25. We will tell you what the current charge is before sending the
report.
CONFORMITY WITH STATE LAW
This policy is subject to the laws of the state where the app was signed. If any
part of the policy does not comply with the law, it will be treated by us as if
it did.
NONPARTICIPATING
This policy in nonparticipating. It does not share in our profits or surplus
earnings. We will pay no dividends on this policy.
COMPLIANCE WITH FEDERAL LAWS
The two requirements below are intended to maintain the status of this policy as
life insurance under the current Internal Revenue Code: First, the amount of
payments that you may pay is limited by law. We will conduct a test no less
frequently than annually, and return any excess payments.
Second, the death benefit payable may not be less than the applicable percentage
of your policy value. This percentage is based on the youngest insured's age as
shown in the table below:
Attained Applicable
Age Percentage
0 to 40 250
41 243
42 236
43 229
44 222
45 215
46 209
47 203
48 197
49 191
50 185
51 178
52 171
53 164
54 157
55 150
56 146
57 142
58 138
59 134
60 130
61 128
62 126
63 124
64 122
65 120
66 119
67 118
68 117
69 116
70 115
71 113
72 111
73 109
74 107
75 to 90 105
91 104
92 103
93 102
94 and above 101
We will conduct a test monthly and increase the death benefit, subject to our
then current underwriting limits, to be equal to the applicable percentage of
your policy value, if necessary. The death benefit will remain at that level
unless it has to be increased again. If we cannot increase the death benefit due
to underwriting limits, we will return the amount of policy value necessary so
that the death benefit will be equal to the applicable percentage of your policy
value after returning the amount.
We will perform any necessary action within 60 days of the end of the policy
year in which the requirement has not been met.
We reserve the right to amend the policy to comply with: 1. Future changes in
the Internal Revenue Code; 2. Any regulations or rulings issued under the code;
and 3. Any other requirements imposed by the Internal Revenue Service.
We will give you a copy of any such amendment.
PAYMENT OF PROCEEDS
The net death benefit, or the net surrender value in the event you withdraw it,
will be paid in one sum or applied to any settlement option we then provide.
When we pay the proceeds, we may ask that you give this policy back to us. No
surrenders or partial withdrawals are permitted after payments under a
settlement option have started.
Settlement options will include:
1. We will hold the proceeds at interest, and pay out the funds when the
person entitled to them requests.
2. We will pay a selected monthly income until the proceeds, with interest,
are exhausted.
3. We will pay a monthly income, based upon the amount of proceeds, interest
rate and the age and sex of the person or persons receiving the funds, for
a selected period or the lifetime of the person or persons to whom the
funds are being paid.
At the time the proceeds are payable, we will inform you concerning the rate of
interest to be paid on funds left with us. We guarantee that the rate of
interest will not be less than 3-1/2%. We may pay interest in excess of the
guaranteed rate. We will issue a supplementary contract setting forth the
benefits to be paid and the rights of the beneficiary. Each election must
include at least $5,000.00 of policy proceeds and must result in installment
payments of not less then $50.00.
DEFERMENT OF PAYMENTS
We will pay any amounts due under the separate account of this contract within
seven days, unless:
- - The New York Stock Exchange is closed for other than usual weekends or
holiday, or trading on such exchange is restricted;
- - An emergency exists as defined by the Securities and Exchange Commission;
or
- - The Securities and Exchange Commission permits delay for the protection of
contract holders.
In addition, we may defer payment of any net surrender value in the fixed
account for up to 6 months after you ask for it. If we defer payment for more
than 30 days we will add interest at our current rate from the time you asked
for such surrender value.
EXCHANGE OF PLAN
If this policy is in force, you may exchange it during the first two years after
the policy date or within two years of an increase in face amount, for a policy
in which values do not vary with the investment experience of the separate
account. This exchange will be implemented by transferring your policy value to
the fixed account and removing your future right to allocate funds to the
separate account. We may require you to return this contract to us for us to
amend before this exchange will be processed. This transfer will not be subject
to the excess transfer fee.