EXHIBIT 1.A.(5)(a)
[LOGO TO COME]
PROTECTIVE LIFE INSURANCE COMPANY / P. O. BOX 2606 / BIRMINGHAM, ALABAMA 35202
A STOCK COMPANY (205-879-9230)
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VARIABLE LIFE INSURANCE POLICY
POLICY NUMBER:
This is a Last Survivor Flexible Premium Variable and Fixed Life Insurance
Policy ("Policy") which has been issued to the Owner. This Policy provides a
death benefit.
THE OWNER HAS THE RIGHT TO RETURN THIS POLICY. The Owner may cancel this
Policy after receipt by returning the Policy to the Company's Home Office, or to
any Agent of the Company, with a written request for cancellation within (a) 10
days after receipt; or (b) 45 days after the Application was signed; or (c) 10
days after the Company mails or delivers a Notice of Right of Withdrawal,
whichever is later. Return of this Policy by mail is effective on receipt by the
Company. The returned Policy will be treated as if the Company had never issued
it. In states where permitted, the Company will promptly refund an amount equal
to the sum of: (a) the difference between the premiums paid (after deduction of
any policy fees and other charges) and the amounts allocated to the Fixed
Account or the Sub-Accounts, plus (b) the value of the amounts allocated to the
Fixed Account, including any interest credited on such amounts accumulated to
the date that this Policy is returned to the Company, plus (c) the value of the
amounts allocated to the Sub-Accounts, adjusted to reflect the net investment
experience of such Sub-Accounts, to the date that this Policy is returned to the
Company. This amount may be more or less than the premium payment(s). In states
where required, the Company will promptly refund the premium payment(s).
[Signature to come] [Signature to come]
PRESIDENT SECRETARY
THE POLICY VALUES, THE AMOUNT OF THE DEATH BENEFIT PROVIDED IN THIS
CONTRACT, OR THE DURATION OF THE INSURANCE COVERAGE, MAY BE FIXED OR VARIABLE
WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT, MAY INCREASE OR
DECREASE IN ACCORDANCE WITH THE FLUCTUATIONS IN THE NET INVESTMENT FACTOR, AND
ARE NOT GUARANTEED AS TO DOLLAR AMOUNTS. THERE IS NO GUARANTEED MINIMUM FOR THE
PORTION OF THE POLICY VALUE IN THE SUB-ACCOUNTS. PLEASE REFER TO THE VARIABLE
ACCOUNT SECTION OF THIS POLICY FOR MORE INFORMATION REGARDING THE VARIABLE
ACCOUNT. PLEASE REFER TO THE DEATH BENEFIT SECTION OF THIS POLICY FOR A
DESCRIPTION OF THE DEATH BENEFIT.
READ THE CONTRACT CAREFULLY
THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE COMPANY
LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Death Benefit Payable at the Death of the Last Survivor of the Joint
Insureds
No Death Benefit Payable on the Death of the First to Die of the Joint
Insureds
NON-DIVIDEND PAYING
VUL-07 1-00 Page 1
INDEX
POLICY SPECIFICATIONS PAGES............. 3
DEFINITIONS............................. 4
GENERAL PROVISIONS...................... 6
Entire Contract....................... 6
Modification of the Contract.......... 6
Misstatement of Age or Sex............ 6
Non-Participating..................... 7
Notification of First Death........... 7
Suicide Exclusion..................... 7
Termination........................... 7
Representations and Contestability.... 7
Reports............................... 7
Arbitration........................... 8
CONTROL PROVISIONS...................... 8
The Parties Involved.................. 8
Rights of Owner....................... 8
Contingent Owner...................... 8
Beneficiary........................... 9
Changing the Owner.................... 9
Assignment............................ 9
Protection of Proceeds................ 9
Suspension or Delay in Payment........ 9
Tax Considerations.................... 9
Changes in Policy Cost Factors........ 10
Coverage Limitations.................. 10
PREMIUMS................................ 10
Premium Payments...................... 10
Planned Premium Payments.............. 10
Unscheduled Premium Payments.......... 10
Minimum Monthly Premium Guarantee..... 10
Allocation of Net Premiums............ 11
Grace Period.......................... 11
Reinstatement......................... 11
Minimum Values........................ 12
DEDUCTIONS FROM POLICY VALUE............ 12
COST OF INSURANCE....................... 12
Cost of Insurance Charge.............. 12
Cost of Insurance Rates............... 12
Method of Computing Cost of Insurance
Rates............................... 12
BASIS OF COMPUTATION.................... 12
FIXED ACCOUNT........................... 12
Calculation of the Fixed Account
Value............................... 12
Interest Credited..................... 13
VARIABLE ACCOUNT........................ 13
General Description................... 13
Sub-Accounts of the Variable
Account............................. 13
Valuation of Assets................... 14
Calculation of Sub-Account Values..... 14
Net Investment Factor................. 14
Transfers............................. 15
DEATH BENEFIT........................... 15
Death Benefit Proceeds................ 15
Amount of Death Benefit Proceeds...... 15
Payment of Death Benefit Proceeds..... 16
Suspension of Payment................. 16
Creditor Claims....................... 16
SURRENDERS AND WITHDRAWALS.............. 16
Surrenders............................ 16
Withdrawals........................... 17
POLICY LOANS............................ 17
Right to Make Loans, Policy Debt...... 17
Maximum Loan.......................... 17
Interest.............................. 17
Collateral............................ 17
Repaying Policy Debt.................. 18
CHANGING THIS POLICY.................... 18
Increasing The Face Amount............ 18
Premium Payments Required for a Face
Amount Increase..................... 18
Cancellation of a Face Amount
Increase............................ 18
Decreasing the Face Amount............ 18
Changing the Death Benefit Option..... 19
Change Approval....................... 19
SETTLEMENT OPTIONS...................... 19
Availability of Options............... 19
Minimum Amounts....................... 19
Electing A Settlement Option.......... 19
Effective Date and Payment Date....... 19
Description of Options................ 20
VUL-07 1-00 Page 2
POLICY SPECIFICATIONS
POLICY NUMBER: SPECIMEN POLICY EFFECTIVE DATE: MAY 1, 2000
POLICY ISSUE DATE: MAY 1, 2000 MONTHLY ANNIVERSARY DAY: 1
JOINT INSURED 1: JOHN Q. DOE JOINT INSURED 2: MARY Q. DOE
AGE: 35 SEX: MALE AGE: 35 SEX: FEMALE
RATE CLASS: STANDARD NON-SMOKER RATE CLASS: STANDARD NON-SMOKER
INITIAL FACE AMOUNT: $250,000 MINIMUM BASIC FACE AMOUNT: $250,000
INITIAL BASIC FACE AMOUNT: $250,000 MINIMUM SUPPLEMENTAL FACE
INITIAL SUPPLEMENTAL FACE AMOUNT: NONE
AMOUNT: NONE
MINIMUM MONTHLY PREMIUM PAYMENT: $39.30 INITIAL PREMIUM PAYMENT: $471.60
MINIMUM MONTHLY PREMIUM GUARANTEE PERIOD: 5 YEARS
PLANNED PREMIUM PAYMENT: $471.60 PAYABLE ANNUALLY
DEATH BENEFIT OPTION: LEVEL
OWNER: JOHN Q. DOE
MARY Q. DOE
MONTHLY CHARGE
FORM DURING FIRST
NUMBER SCHEDULE OF ADDITIONAL BENEFITS YEAR
- --------------------- ------------------------------------------------------------ ----------------
- ------------------------
GUARANTEED INTEREST RATE FOR FIXED ACCOUNT [4% ANNUALLY (.3274% MONTHLY)]
INITIAL ANNUAL EFFECTIVE INTEREST RATE FOR FIXED ACCOUNT [5.75%]
MAXIMUM LOAN INTEREST RATE 6% YEARS 1-10 - 4.25% YEARS 11+
THIS POLICY PROVIDES LIFE INSURANCE COVERAGE ON THE JOINT INSUREDS UNTIL
TERMINATION, SUBJECT TO THE TERMS OF THIS POLICY. THERE MAY BE LITTLE OR NO
SURRENDER VALUE PAYABLE ON CONTRACT TERMINATION.
VUL-07 1-00 Page 3
POLICY SPECIFICATIONS (CONTINUED)
DEDUCTION FROM PREMIUM PAYMENTS
PREMIUM EXPENSE CHARGE. A Premium Expense Charge will be deducted from each
Premium Payment. The maximum Premium Expense Charge is 12.5% in Policy Years 1
though 5, 6% in Policy Years 6 through 10, and 2.5% thereafter. The Company
reserves the right to charge less than the maximum charge. [Accordingly, the
Premium Expense Charge is currently 10% in Policy Years 1 through 5, 5% in
Policy Years 6 through 10, and 2% thereafter (subject to the maximum charges
outlined above).]
MONTHLY DEDUCTIONS
Beginning as of the Policy Effective Date and continuing on each Monthly
Anniversary Day thereafter, the Company will deduct the charges listed below.
With the exception of the Mortality and Expense Risk Charge, each charge will
reduce the Sub-Account Value(s) and Fixed Account Value in the proportion that
each Sub-Account Value and the Fixed Account Value bears to the Unloaned Policy
Value. The Mortality and Expense Risk Charge will reduce only the Sub-Account
Value(s).
ADMINISTRATION CHARGE FOR INITIAL BASIC FACE AMOUNT. The maximum monthly
Administration Charge for Initial Basic Face Amount is equal to $.075 per every
$1,000 of Initial Basic Face Amount in Policy Years 1 through 9. This charge is
not assessed after the ninth Policy Year.
THE COMPANY RESERVES THE RIGHT TO CHARGE LESS THAN THE MAXIMUM
CHARGE. [Accordingly, the monthly charge is currently equal to $.06 per every
$1,000 of Initial Basic Face Amount in Policy Years 1 through 9 (subject to the
maximum charge outlined above).]
ADMINISTRATION CHARGE FOR INCREASE IN SUPPLEMENTAL FACE AMOUNT. The monthly
Administration Charge for Increase in Supplemental Face Amount is equal to the
lesser of $250 or the sum of (a) plus (b) where:
(a) is $23.50; and
(b) is $.06 per every $1,000 of increase in Supplemental Face Amount.
This monthly charge applies during the twelve month period following the
effective date of each increase in Supplemental Face Amount.
CHARGE FOR BENEFITS UNDER RIDERS. The Company will deduct a monthly charge
for any riders.
COST OF INSURANCE CHARGE. The Company will deduct a monthly Cost of
Insurance Charge for the Basic Face Amount and any Supplemental Face Amount.
This charge varies and is calculated in accordance with the policy provisions.
See the Cost of Insurance section of this Policy for details. The Maximum
Monthly Cost of Insurance Rates are set forth in the table on the following
page.
MORTALITY AND EXPENSE RISK CHARGE. The maximum monthly Mortality and
Expense Risk Charge is equal to .075% multiplied by the Variable Account Value,
which is equivalent to an annual rate of .90% of such amount. The Company
reserves the right to charge less than the maximum charge. [Accordingly, in
Policy Years 11 and thereafter, the monthly Mortality and Expense Risk Charge is
currently .021% multiplied by the Variable Account Value, which is equivalent to
an annual rate of .25% of such amount (subject to the maximum charge outlined
above).] This charge compensates the Company for assuming the mortality and
expense risks under this Policy.
OTHER DEDUCTIONS
WITHDRAWAL CHARGE. A Withdrawal Charge equal to the lesser of: (a) 2% of
the amount withdrawn; or (b) $25 is deducted from the Fixed Account and Variable
Account Value(s) whenever the Owner makes a withdrawal. See the Surrenders and
Withdrawals section of this Policy for additional details.
TRANSFER FEE. A $25 charge may be deducted from the Fixed Account and
Variable Account Value(s) being transferred for each transfer request in excess
of 12 during a Policy Year. See the Variable Account section of this Policy for
additional details.
VUL-07 1-00 Page 3A
SURRENDER CHARGES
If this Policy is surrendered, lapses at the end of a Grace Period or the
Owner reduces the Basic Face Amount during the first twelve Policy Years, the
Company will deduct a Surrender Charge from the Fixed Account and Variable
Account Value(s). The Maximum Surrender Charge on surrender or lapse of this
Policy is shown in the table below.
If the Basic Face Amount of this Policy is decreased during the first twelve
Policy Years, the partial Surrender Charge imposed will equal the portion of the
Surrender Charge (shown in the table below and reduced by any previous partial
Surrender Charge(s)) that corresponds to the percentage by which the Basic Face
Amount is reduced. In the event of such a reduction in the Basic Face Amount,
the Company will allocate the partial Surrender Charge to each Sub-Account and
the Fixed Account based on the proportion that the value of the Fixed Account
and the value of the Sub-Account(s) bear to the total Unloaned Policy Value.
POLICY SURRENDER POLICY SURRENDER
YEARS CHARGE YEARS CHARGE
- ----- --------- -------- ---------
1 $792.43 8 $452.82
2 792.43 9 396.21
3 735.83 10 339.61
4 679.22 11 283.01
5 622.62 12 226.41
6 566.02 13+ 0
7 509.42
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES
PER $1,000 OF BASIC AND SUPPLEMENTAL NET AMOUNT AT RISK
POLICY POLICY POLICY POLICY
YEAR RATE YEAR RATE YEAR RATE YEAR RATE
---- ---- ---- ---- ---- ---- ---- ----
1 .00021 21 .07386 41 2.13509 61 27.23936
2 .00067 22 .08791 42 2.52034 62 32.36967
3 .00121 23 .10399 43 2.95311 63 41.22764
4 .00186 24 .12222 44 3.43292 64 57.81227
5 .00266 25 .14354 45 3.96928 65 83.33333
6 .00360 26 .16880 46 4.57967 66+ 0
7 .00476 27 .19886 47 5.28097
8 .00613 28 .23566 48 6.09291
9 .00775 29 .28112 49 7.03013
10 .00962 30 .33660 50 8.07993
11 .01184 31 .40218 51 9.23437
12 .01443 32 .47863 52 10.47303
13 .01748 33 .56607 53 11.79230
14 .02104 34 .66492 54 13.17161
15 .02522 35 .77835 55 14.62345
16 .03014 36 .91240 56 16.14868
17 .03602 37 1.08192 57 17.77017
18 .04311 38 1.26981 58 19.53103
19 .05167 39 1.50994 59 21.50762
20 .06184 40 1.79853 60 23.92732
VUL-07 1-00 Page 3B
POLICY SPECIFICATIONS (CONTINUED)
ALLOCATION OF PREMIUM PAYMENTS:
Protective Variable Life Separate Account
Sub-Accounts:
Goldman Sachs/PIC Growth & Income 20.00%
Goldman Sachs/CORE U.S. Equity 10.00%
Calvert Social Small Cap Growth 10.00%
Calvert Social Balanced 10.00%
MFS Emerging Growth 10.00%
MFS Growth with Income 10.00%
Oppenheimer Aggresive Growth/VA 10.00%
Oppenheimer Strategic Bond/VA 10.00%
Protective Life General Account:
Fixed Account 10.00%
VUL-07 1-00 Page 3C
DEFINITIONS
APPLICATION. The paperwork completed to apply for this Policy.
ATTAINED AGE. The Age of Joint Insured 1 or Joint Insured 2 as shown on the
Policy Specifications Page plus the number of complete Policy Years since the
Policy Effective Date.
BENEFICIARY. The Beneficiary is the person entitled to receive the Death
Benefit Proceeds upon receipt of due proof of both Joint Insureds' deaths. If
more than one beneficiary is named in the Application, the Company will use the
beneficiary percentages shown in the Application to calculate each beneficiary's
portion of the Death Benefit Proceeds.
PRIMARY. Where a Primary Beneficiary is living, such person is the
Beneficiary. The Primary Beneficiary is the person named as the "Primary
Beneficiary" in the Application, unless changed.
CONTINGENT. Where no Primary Beneficiary is living, the "Contingent
Beneficiary", as named in the Application, is the Beneficiary, unless
changed.
IRREVOCABLE. An Irrevocable Beneficiary is one whose consent is
necessary to change the Beneficiary or exercise certain other rights.
CASH VALUE. The Cash Value is equal to the Policy Value minus any
applicable Surrender Charge.
COMPANY. Protective Life Insurance Company, also referred to herein as "it"
or "its".
DEATH BENEFIT. The amount of insurance provided under the Policy as
determined by the Death Benefit Option selected.
DEATH BENEFIT OPTION. One of two options (Level Death Benefit or Increasing
Death Benefit) that an Owner may select for the computation of Death Benefit
Proceeds.
DEATH BENEFIT PROCEEDS. The amount payable to the Beneficiary if both Joint
Insureds die while the Policy is in force. The amount is equal to the Death
Benefit, plus any death benefit under any rider or endorsement to the Policy,
less any Policy Debt, less unpaid Monthly Deductions if the Last Survivor of the
Joint Insureds dies during a Grace Period.
FACE AMOUNT. The Face Amount is the Basic Face Amount, plus any
Supplemental Face Amounts. The Initial Face Amount is shown on the Policy
Specifications Page. Thereafter, the Face Amount may be increased or decreased
in accordance with the terms of this Policy.
FIXED ACCOUNT. Part of the Company's General Account to which Policy Value
may be transferred or Net Premiums allocated under a Policy.
FIXED ACCOUNT VALUE. The Policy Value in the Fixed Account.
FUND. An investment portfolio of Protective Investment Company or any other
open-end management investment company or unit investment trust in which a
Sub-Account invests.
GENERAL ACCOUNT. The assets of the Company other than those allocated to
the Variable Account or another separate account.
HOME OFFICE. 2801 Highway 280 South, Birmingham, Alabama, 35223.
ISSUE DATE. The date the Policy is issued. The Issue Date may be a later
date than the Policy Effective Date if the initial premium payment is received
at the Home Office before the Issue Date.
JOINT INSUREDS. The two persons whose lives are covered by the Policy.
LAPSE. Termination of the Policy at the expiration of the Grace Period
while at least one of the Joint Insureds is still living.
VUL-07 1-00 Page 4
LAST SURVIVOR OF THE JOINT INSUREDS. The Joint Insured who survives after
the death of the other Joint Insured.
LOAN ACCOUNT. An account within the Company's General Account to which the
Fixed Account Value and/or Variable Account Value is transferred as collateral
for policy loans.
LOAN ACCOUNT VALUE. The Policy Value in the Loan Account.
MINIMUM MONTHLY PREMIUM. The Minimum Monthly Premium is used in a
calculation that is described under the Minimum Monthly Premium Guarantee
section of this Policy.
MONTHLY ANNIVERSARY DAY. The same day of the month as the Policy Effective
Date. The Monthly Anniversary Day is shown on the Policy Specifications Page.
MONTHLY DEDUCTIONS. The charges deducted monthly from the Sub-Account
value(s) and/or Fixed Account value as described on the Policy Specifications
Page.
NET AMOUNT AT RISK. The Net Amount at Risk as of any Monthly Anniversary
Day is (a) minus (b) where:
(a) is the Death Benefit discounted at one plus the monthly guaranteed
interest rate; and
(b) is the Policy Value (prior to deducting the Cost of Insurance), if the
Death Benefit Option is Level, or Policy Value (discounted at one plus
the monthly guaranteed interest rate and prior to deducting the Cost of
Insurance), if the Death Benefit Option is Increasing.
The Net Amount at Risk is allocated between the Basic Net Amount at Risk and
any Supplemental Net Amount at Risk as follows:
BASIC NET AMOUNT AT RISK. The Basic Net Amount at Risk is equal to the
greater of zero or the Death Benefit discounted at one plus the monthly
guaranteed interest rate, minus the sum of (c) and (d) where:
(c) is the Policy Value (prior to deducting the Cost of Insurance), if
the Death Benefit Option is Level, or Policy Value (discounted at one
plus the monthly guaranteed interest rate and prior to deducting the
Cost of Insurance), if the Death Benefit Option is Increasing.
(d) is the sum of all Supplemental Face Amounts.
SUPPLEMENTAL NET AMOUNT AT RISK. The Supplemental Net Amount at Risk is
equal to the Net Amount at Risk minus the Basic Net Amount at Risk. The
Supplemental Net Amount at Risk is computed separately for the Supplemental
Initial Face Amount and for each increase in Supplemental Face Amount, in the
order such supplemental coverage is issued.
NET ASSET VALUE PER SHARE. The value per share of any Fund as computed on
any Valuation Day as described in the Fund prospectus.
NET PREMIUM. The premium payment after deduction of the Premium Expense
Charge.
OWNER. The person(s) who own the Policy.
POLICY ANNIVERSARY. The same day in each Policy Year as the Policy
Effective Date.
POLICY DEBT. The sum of all outstanding policy loans plus accrued interest.
POLICY EFFECTIVE DATE. The date shown on the Policy Specifications
Page and on which coverage takes effect. Policy Years are measured from the
Policy Effective Date. For any increase, decrease, additions, or changes to
coverage, the effective date shall be the Monthly Anniversary Day on or next
following the date the supplemental application is approved by the Company. The
Policy Effective Date will never be the 29th, 30th or the 31st of a month.
VUL-07 1-00 Page 5
POLICY VALUE. The sum of the Variable Account Value, the Fixed Account
Value and the Loan Account Value.
POLICY YEAR. Each period of 12 months commencing with the Policy Effective
Date.
SETTLEMENT OPTIONS. Alternatives to a lump sum payment by the Company. See
the Settlement Options section of this Policy for details.
SIMULTANEOUS DEATH. If both Joint Insureds die simultaneously, the Company
shall consider the Last Survivor of the Joint Insureds to be the Joint Insured 1
shown on the Policy Specifications Page. When the Last Survivor of the Joint
Insureds and a named Beneficiary die within a period of 120 hours of each other
and the order of death is unknown, the Company shall assume that the Beneficiary
died before the Last Survivor of the Joint Insureds.
SUB-ACCOUNT. A separate division of the Variable Account. Each Sub-Account
invests in a corresponding Fund.
SUB-ACCOUNT VALUE. The Policy Value in a Sub-Account as defined in the
Variable Account section of this Policy.
SURRENDER VALUE. The Cash Value minus any outstanding Policy Debt.
UNIT. A unit of measurement used to calculate the Sub-Account Values.
UNLOANED POLICY VALUE. The sum of the Variable Account Value and the Fixed
Account Value, minus any policy debt.
VALUATION DAY. Each day the New York Stock Exchange and the Home Office are
open for business except for a day that a Sub-Account's corresponding Fund does
not value its shares.
VALUATION PERIOD. The period commencing at the close of regular trading on
the New York Stock Exchange on any Valuation Day and ending at the close of
regular trading on the New York Stock Exchange on the next succeeding Valuation
Day.
VARIABLE ACCOUNT. The Protective Variable Life Separate Account, a separate
investment account of the Company to which Policy Value may be transferred or
into which Net Premiums may be allocated.
VARIABLE ACCOUNT VALUE. The sum of all Sub-Account Values.
WITHDRAWAL. A Withdrawal by the Owner of an amount of Cash Value that is
less than the Surrender Value.
WRITTEN NOTICE. A written notice or request that is received by the Company
at the Home Office.
GENERAL PROVISIONS
ENTIRE CONTRACT. This Policy, any riders and/or endorsements attached
hereto, and the Application, a copy of which is attached, and all subsequent
applications, copies of which are attached, constitute the entire contract. Any
application for reinstatement becomes part of this Policy if the reinstatement
is approved by the Company. The Policy is issued in consideration of payment of
the Initial Premium Payment shown on the Policy Specifications Page.
MODIFICATION OF THE CONTRACT. No change or waiver of the terms of this
Policy is valid unless made by the Company, in writing, and approved by the
President, Secretary or a Vice President of the Company. The Company reserves
the right to change the provisions of this Policy to conform to any applicable
laws, or applicable regulations or rulings issued by a government agency.
MISSTATEMENT OF AGE OR SEX. Questions in the Application concern the Joint
Insureds' dates of birth and sex. If the date of birth or sex given in the
Application or any Application for riders is not correct for either
VUL-07 1-00 Page 6
Joint Insured, the Death Benefit and any benefits provided under any riders to
this Policy will be adjusted to those which would be purchased by the most
recent deduction for the cost of insurance and the cost of any benefits provided
by such riders, at the correct ages or sex.
NON-PARTICIPATING. This Policy does not share in the Company's surplus or
profits and does not pay dividends.
NOTIFICATION OF FIRST DEATH. The Company must be provided due proof of the
first death of the Joint Insureds within a reasonable time, but in no event
later than one year after the date of the first death.
SUICIDE EXCLUSION. If either of the Joint Insureds commits suicide, while
sane or insane, within two years from the Policy Effective Date and while this
Policy is in force, the Company's total liability shall be limited to the
premium payments made before death, less any Policy Debt and less any
Withdrawals and this Policy will be terminated as of the date of such suicide.
If either of the Joint Insureds commits suicide, while sane or insane, within
two years from the effective date of any increase in the Face Amount, the
Company's total liability with respect to such increase shall be limited to the
sum of the monthly Cost of Insurance Charges deducted for such increase.
TERMINATION. All coverage under this Policy shall terminate when any one of
the following events occurs:
(1) The Owner requests a full surrender. A surrender will require a return
of this Policy.
(2) The Last Survivor of the Joint Insureds dies.
(3) Suicide of either of the Joint Insureds within two years from the Date
of Issue.
(4) The Policy lapses, as described in the sub-section entitled "Grace
Period" under "Premiums" and the sub-section entitled "Collateral" under
"Policy Loans".
REPRESENTATIONS AND CONTESTABILITY. In issuing this Policy, the Company
relies on all statements made by or for the Joint Insureds in the Application or
in a supplemental application. Legally, these statements are considered to be
representations and not warranties, unless fraud is involved. The Company can
contest the validity of this Policy or resist a claim for any material
misrepresentation of a fact made on the Application or in a supplemental
application for this Policy. The Company also has the right to contest the
validity of any policy change based on material misstatements made in any
application for that change. To do so, however, the representation must have
been made in the Application, or in a supplemental application. Also, a copy of
such application must have been attached to this Policy when issued or made a
part of the Policy when changes in coverage became effective.
The Company cannot bring any legal action to contest the validity of this
Policy after it has been in force during the lifetime of both Joint Insureds for
two years from the Policy Effective Date unless fraud is involved.
If there was a rider or endorsement added to this Policy after the Issue
Date, or benefits added by a supplemental Policy Specifications Page, the
Company cannot contest the validity of any benefits so added after the benefits
have been in force during the lifetime of both Joint Insureds for two years from
the effective date of the addition of the benefits unless fraud is involved.
The Company cannot contest the validity of any reinstated benefits after the
reinstated benefits have been in force during the lifetime of both Joint
Insureds for two years from the date the Company approves the reinstatement
application unless fraud is involved.
REPORTS. At least once a year the Company will send to the Owner at the
Owner's last known address, a report for this Policy. The report will show as of
the end of the report period: (1) the current Death Benefit; (2) the current
Policy Value; (3) the current Fixed Account Value; (4) the current Variable
Account Value; (5) the current Loan Account Value; (6) the current Sub-Account
Values; (7) premium payments made since the last report; (8) any Withdrawals
since the last report; (9) any policy loans and
VUL-07 1-00 Page 7
accrued interest; (10) the current Surrender Value; (11) the Owner's current
premium allocations; (12) charges deducted since the last report; and (13) any
other information required by law.
In addition, the Company will provide a Report for this Policy at any time
upon the Owner's written request. If the Owner requests this information more
frequently than annually, the Company may charge a fee which shall not exceed
$50.
ARBITRATION. The parties hereby acknowledge that the provision of insurance
pursuant to this Policy takes place in and substantially affects interstate
commerce and that the Federal Arbitration Act permits and promotes the use of
arbitration as a means of dispute resolution in matters arising from interstate
commerce.
Any controversy, dispute or claim by any Owner, Joint Insureds or
Beneficiary, or their respective assigns (each referred to herein as
"Claimant"), arising out of or relating in any way to this Policy or the
solicitation or sale thereof shall be submitted to binding arbitration pursuant
to the provisions of the Federal Arbitration Act, 9 U.S.C. Section 1, et seq.
Absent consolidation of arbitration as provided for below, such arbitration
shall be governed by the rules and provisions of the Dispute Resolution Program
for Insurance Claims of the American Arbitration Association ("AAA"). The
arbitration panel shall consist of three (3) arbitrators, one (1) selected by
the Company, one (1) selected by the Claimant and one (1) selected by the
arbitrators previously selected.
If a Claimant, the Company or a third-party have any dispute between or
among them or any of them that is directly or indirectly related to any dispute
governed by this arbitration provision, the Claimant and the Company consent to
the consolidation of the dispute governed by this arbitration provision with
such other dispute; if such other dispute is governed by an arbitration
agreement that selects the forum and rules of the National Association of
Securities Dealers, Inc. or the New York Stock Exchange, Inc., the Claimant and
the Company shall be deemed to have consented to the jurisdiction of such other
forum to the extent allowed by law and will abide by the rules, provisions and
interpretations thereof, including those for selection of arbitrators.
It is understood and agreed that the arbitration shall be binding upon the
parties, that the parties are waiving their right to seek remedies in court,
including the right to jury trial; and that an arbitration award may not be set
aside in later litigation except upon the limited circumstances set forth in the
Federal Arbitration Act.
Judgment upon the award rendered by the arbitrator(s) may be entered in any
Court having jurisdiction thereof. The arbitration expenses shall be borne by
the losing party or in such proportion as the arbitrator(s) shall decide.
CONTROL PROVISIONS
THE PARTIES INVOLVED. The Owner is the person(s) who owns this Policy as
shown on the Policy Specifications Page, on an endorsement or on an amendment to
the Application. The Owner is the Joint Insureds unless someone else is named as
the Owner.
RIGHTS OF OWNER. While either of the Joint Insureds are living, the Owner
may exercise all rights and benefits contained in the Policy or allowed by the
Company. These rights include assigning this Policy, changing Beneficiaries,
changing ownership, enjoying all benefits and exercising all policy provisions.
The use of these rights may be subject to the consent of any Assignee or
Irrevocable Beneficiary.
If a Partnership has any rights under this Policy, such rights shall belong
to the Partnership as it exists when the right is exercised.
CONTINGENT OWNER. If the Owner is not the Joint Insureds, the Owner may
name a Contingent Owner provided such request is made in writing on a form
acceptable to the Company. The Contingent Owner
VUL-07 1-00 Page 8
will become the Owner if the Owner dies. If there is not a Contingent Owner
named when the Owner dies, the estate of the last Owner to die will become the
Owner.
BENEFICIARY. A Beneficiary is any person named by the Owner on the
Company's records to receive the Death Benefit Proceeds on the death of the Last
Survivor of the Joint Insureds. There may be different classes of Beneficiaries
such as primary and contingent. These classes set the order of payment of the
Death Benefit. The Owner may change the Beneficiary at any time prior to the
death of the Last Survivor of the Joint Insureds. To make a change, a written
request satisfactory to the Company must be received at the Company's Home
Office. If an Irrevocable Beneficiary has been designated however, such
designation cannot be changed or revoked without the Irrevocable Beneficiary's
written consent. Any change of Beneficiaries is effective on the date the
request was signed, provided, however, the Company will not be liable for any
payment made before such request has been received and acknowledged at the
Company's Home Office.
CHANGING THE OWNER. The Owner may be changed at any time prior to the death
of the Last Survivor of the Joint Insureds. To make a change, the Company must
receive from the Owner a written request satisfactory to the Company at the Home
Office. Any such change will be effective on the date the request was signed,
provided, however, the Company will not be liable for any payment made before
such request has been received and acknowledged at the Company's Home Office.
ASSIGNMENT. Upon notice to the Company, the Owner may assign his or her
rights under this Policy. However, for this assignment to be binding on the
Company, it must be in writing and filed at the Home Office. The Company assumes
no responsibility for the validity of any assignment. Any claim under any
assignment shall be subject to proof of interest and the extent of assignment.
Once the Company receives a signed copy of the assignment, the Owner's rights
and the interest of any Beneficiary or any other person will be subject to the
assignment. An assignment is subject to any Policy Debt.
PROTECTION OF PROCEEDS. To the extent permitted by law, any payment of
Death Benefit Proceeds, Surrender Value or any Withdrawal shall be free from
legal process from the claim of any creditor of the person entitled to them.
SUSPENSION OR DELAY IN PAYMENT. The Company has the right to suspend or
delay the date of payment of a Withdrawal, Loan, Surrender, or the Death Benefit
Proceeds for any period:
(1) when the New York Stock Exchange is closed; or
(2) when trading on the New York Stock Exchange is restricted; or
(3) when an emergency exists (as determined by the Securities & Exchange
Commission) as a result of which (a) the disposal of securities in the
Variable Account is not reasonably practicable; or (b) it is not
reasonably practicable to determine fairly the value of the net assets of
the Variable Account; or
(4) when the Securities & Exchange Commission, by order, so permits for the
protection of security holders.
As to amounts allocated to the Fixed Account, the Company may defer payment
of Death Benefit proceeds for up to two months and any Withdrawal, Surrender or
the making of a Policy Loan (unless the amount of the loan is for payment of a
premium to the Company) for up to six months after the Company receives a
written request.
If the Company delays payment of surrender benefits under this Policy, the
Owner will be paid interest at the rate specified under applicable state law as
required, if any, at the time of the surrender request.
TAX CONSIDERATIONS. In order to receive the tax treatment afforded to life
insurance contracts under federal tax laws, this Policy must qualify and
continue to qualify as a life insurance contract under the
VUL-07 1-00 Page 9
Internal Revenue Code of 1986, as amended. The Company reserves the right to
decline to: (a) accept a premium payment; or (b) change the Death Benefit
Option; or (c) process a Withdrawal. The Company also reserves the right to
refund a premium payment, including any earnings thereon, if such refund is
necessary to prevent this Policy from failing to qualify as a life insurance
contract.
The Company also reserves the right to make changes to this Policy or to any
endorsements or to any riders or to make distributions from this Policy to the
extent the Company considers necessary for this Policy to continue to qualify as
a life insurance contract. Such changes will apply uniformly to all affected
policies. The Owner will receive advance written notification of such changes.
CHANGES IN POLICY COST FACTORS. Changes in non-guaranteed credited rates,
cost of insurance charge rates, mortality and expense risk charge rates,
administration charge rates, or expense charge rates, if any, will be by class
and will be based upon changes in future expectations of such factors as
investment earnings, mortality, persistency, expenses, and taxes.
COVERAGE LIMITATIONS. Unless the health and other conditions of the Joint
Insureds on the date that the Policy is delivered to the Owner is the same as
that indicated in the Application, the Company reserves the right to cancel the
Policy or re-underwrite the Policy and make appropriate adjustments to the
monthly Cost of Insurance Charge.
PREMIUMS
PREMIUM PAYMENT(S). Premium payment(s) are payable at the Company's Home
Office or to any Agent of the Company. Premium payment(s) must be made by check
payable to Protective Life Insurance Company or by any other method which the
Company deems acceptable. The minimum premium payment(s) that the Company will
accept is: (1) $50 if paid by a monthly pre-authorized payment arrangement; or
(2) $150 for any other mode of payment accepted by the Company.
The Company has the right not to accept any premium payment in the event
that it is determined in the Company's discretion that the premium payment will
cause the Policy to fail to qualify as a life insurance contract under federal
tax laws.
No insurance will take effect until the initial premium payment is paid and
the health and other conditions of the Joint Insureds is determined to be the
same as that described in the Application on the date the Policy is delivered.
PLANNED PREMIUM PAYMENTS. The amounts and frequency of the planned premium
payments in effect on the Policy Effective Date are shown on the Policy
Specifications Page. The Owner does not have to make the planned premium
payment. Subject to the limits described above, the Owner may change the
frequency and amount of the planned premium payments at any time.
The Company will send planned premium payment reminder notices to the Owner
unless otherwise requested. The Owner can choose to have them sent at 12, 6, or
3 month intervals. If desired, the Company will also arrange for planned premium
payments to be made on a monthly basis under a pre-authorized payment
arrangement.
UNSCHEDULED PREMIUM PAYMENTS. Subject to the limits described above, while
this Policy is in force, premium payment(s) other than the planned premium
payments will be accepted by the Company at any time. The Owner may specify in
writing that all unscheduled premium payments are to be applied against Policy
Debt, if any, as a loan repayment.
MINIMUM MONTHLY PREMIUM GUARANTEE. In return for paying the Minimum Monthly
Premium shown on the Policy Specifications Page or an amount equivalent thereto
by the Monthly Anniversary Day, the Company guarantees, to the extent outlined
herein, that the Policy and any riders or endorsements attached hereto will not
Lapse during the Minimum Monthly Premium Guarantee Period, which is shown
VUL-07 1-00 Page 10
on the Policy Specifications Page, if for each month that the policy has been in
force (a) equals or exceeds (b), where:
(a) is the total premiums paid less any Withdrawals and Policy Debt; and
(b) is the Minimum Monthly Premium as shown on the Policy Specifications
Page multiplied by the number of complete policy months since the Policy
Effective Date, including the current month.
Any change in the benefits provided by this Policy or any riders attached
hereto, made subsequent to the Policy Effective Date and during the Minimum
Monthly Premium Guarantee Period, may result in a change to the Minimum Monthly
Premium. However, the changes will not extend the time period for the guarantee.
The new Minimum Monthly Premium and its effective date will be shown in a
supplemental Policy Specifications Page.
ALLOCATION OF NET PREMIUMS. Net Premiums will be allocated to the
Sub-Accounts and the Fixed Account on the date the Company receives them
according to the instructions of the Owner in the Application or subsequent
Written Notice. The Owner may change the allocations in effect at any time by
Written Notice. Allocations must be made in whole percentages. The sum of
allocations must add up to 100%. The Company reserves the right to establish
(a) a limitation on the number of Sub-Accounts to which Net Premiums may be
allocated and/or (b) a minimum allocation requirement for the Sub-Accounts and
the Fixed Account.
If the Contract is issued in a state where, upon cancellation and within the
cancellation period, the Company returns the premium payment(s) made, the
Company reserves the right to allocate the initial premium payment and any
additional premium payments made during the cancellation period to the Fixed
Account or Money Market Sub-Account. Thereafter, allocations will be made as
shown in the Policy Specifications Page in accordance with the selections made
by the Owner.
GRACE PERIOD. Unless this Policy is otherwise continued under the Minimum
Monthly Premium Guarantee, if the Surrender Value on a Monthly Anniversary Day
is insufficient to cover the Monthly Deductions due on that Monthly Anniversary
Day, this Policy will stay in force for 61 days. This 61 day period is called
the Grace Period.
If the Owner does not pay sufficient Net Premiums to cover the current and
past due Monthly Deductions by the end of the Grace Period, this Policy will
terminate without value and all coverage under this Policy will terminate. At
the beginning of the Grace Period, the Company will mail a notice of such
premiums due to the Owner's last known address and to the address of any
assignee of record. Coverage continues during the Grace Period. The Company will
deduct unpaid Monthly Deductions and Policy Debt from any Death Benefit payable
if death occurs during the Grace Period.
REINSTATEMENT. Prior to the death of the Last Survivor of the Joint
Insureds and any Surrender of this Policy, if this Policy has Lapsed, it can be
reinstated. Reinstatement means to restore the Policy when the Policy has
terminated at the end of the Grace Period. The Company will reinstate the Policy
if the Company receives:
(1) the Owner's written request within five years after the end of the Grace
Period,
(2) evidence of insurability satisfactory to the Company,
(3) payment of Net Premium equal to all Monthly Deductions that were due and
unpaid during the Grace Period with interest at a rate not to exceed 6%
per annum compounded annually, if required by the Company, and payment of
premium payments at least sufficient to keep this Policy in force for
three months (The Company may accept premium payments larger than this
amount), and
(4) payment of or reinstatement of any Policy Debt which existed at the end
of the Grace Period.
VUL-07 1-00 Page 11
The effective date of a reinstated policy will be the day the Company
approves the reinstatement and all of the above requirements have been received.
MINIMUM VALUES. The values and benefits of this Policy shall not be less
than the minimum benefits required by the statutes of the state in which this
Policy was delivered.
DEDUCTIONS FROM POLICY VALUE
Monthly Deductions, Other Deductions and Surrender Charges are described on
the Policy Specifications Page.
COST OF INSURANCE
COST OF INSURANCE CHARGE. The monthly Cost of Insurance Charge for the
Basic Face Amount is computed at the beginning of each policy month by
multiplying the Basic Net Amount at Risk (divided by $1,000) by the cost of
insurance rate as described in the Cost of Insurance Rate section. The monthly
Cost of Insurance Charge for any Supplemental Face Amount is computed at the
beginning of each policy month by multiplying the Supplemental Net Amount at
Risk (divided by $1,000) by the cost of insurance rate as described in the Cost
of Insurance Rate section. The monthly Cost of Insurance Charge for any
Supplemental Face Amount is computed separately for the Initial Supplemental
Face Amount and for each increase in Supplemental Face Amount.
COST OF INSURANCE RATES. The monthly cost of insurance rate is based on the
age nearest birthday, sex and rate class of each Joint Insured on the Policy
Effective Date or effective date of a Face Amount increase, type of Face Amount
(Basic or Supplemental), Method of Computing Cost of Insurance Rates described
below and on the number of years that a Policy has been in force since the
Policy Effective Date or effective date of a Face Amount increase. Monthly cost
of insurance rates will be determined by the Company, based on its expectations
as to future mortality experience, investment earnings, persistency, expenses
and taxes.
Any change in the monthly cost of insurance rates will be on a uniform basis
for Joint Insureds of the same class such as age, sex, rate class, and policy
year. However, the cost of insurance rates will never be greater than those
shown in the Guaranteed Maximum Monthly Cost of Insurance Rates Table on the
Policy Specifications Page or Supplemental Policy Specification Page.
METHOD OF COMPUTING COST OF INSURANCE RATES. The Company has filed a
detailed statement of the method the Company uses to compute cost of insurance
rates with the State where this Policy was delivered.
BASIS OF COMPUTATIONS
Minimum Surrender Values and Maximum Cost of Insurance Rates are based on
the 1980 Commissioners Standard Ordinary Smoker or Non-Smoker, Male or Female,
Mortality Table (age nearest birthday), and the age, sex and rate class of each
Joint Insured. Surrender Values are at least equal to those required by law.
Reserves are computed by the Commissioner's Reserve Valuation Method.
FIXED ACCOUNT
CALCULATION OF THE FIXED ACCOUNT VALUE. The value of the Fixed Account at
any time is equal to:
(a) the Net Premiums allocated to the Fixed Account; plus
(b) Policy Value transferred to the Fixed Account; plus
(c) interest credited to the Fixed Account; less
VUL-07 1-00 Page 12
(d) any Withdrawals including any Withdrawal Charges deducted or transfers
from the Fixed Account including any transfer fees deducted from the
Fixed Account; less
(e) any Surrender Charges deducted in the event of a decrease of Face
Amount; less
(f) Monthly Deductions.
INTEREST CREDITED. The Company guarantees that the interest credited during
the first Policy Year to the initial Net Premiums allocated to the Fixed Account
will be at a rate not less than the Initial Annual Effective Interest Rate for
the Fixed Account shown on the Policy Specifications Page.
For subsequent Net Premiums allocated to the Fixed Account or Policy Value
transferred to the Fixed Account, the guaranteed interest rate applicable will
be the annual effective interest rate in effect on the date the subsequent Net
Premium is received by the Company or the date the transfer is made. Such
guaranteed interest rate will apply to such amounts for a twelve month period
which begins on the date the Net Premium is allocated or the date the transfer
is made.
After the guaranteed interest rate expires, (i.e., 12 months after the Net
Premium or transfer is placed in the Fixed Account) the Company will credit
interest on the Fixed Account Value attributable to such Net Premiums and
transfers at the current interest rate in effect. New current interest rates are
effective for such Fixed Account Value for 12 months from the time they are
first applied. The Initial Annual Effective Interest Rate and the current
interest rates the Company will credit are annual effective interest rates of
not less than the annual Guaranteed Interest Rate for Fixed Account shown on the
Policy Specifications Page. For purposes of crediting interest, amounts
deducted, transferred or withdrawn from the Fixed Account will be accounted for
on a "first-in, first-out" (FIFO) basis.
The Company reserves the right to apply different interest rate guarantees
to certain amounts credited to the Fixed Account.
VARIABLE ACCOUNT
GENERAL DESCRIPTION. The variable benefits under the Policy are provided
through the Variable Account. The Variable Account is registered with the
Securities and Exchange Commission as a unit investment trust under the
Investment Company Act of 1940.
The portion of the assets of the Variable Account equal to the reserves and
other contract liabilities of the Variable Account are not chargeable with the
liabilities arising out of any other business the Company may conduct. The
Company has the right to transfer to its General Account any assets of the
Variable Account which are in excess of such reserves and other liabilities. The
assets of the Variable Account are available to cover the liabilities of the
General Account of the Company only to the extent that the assets of the
Variable Account exceed the liabilities of the Variable Account arising under
the policies supported by the Variable Account.
SUB-ACCOUNTS OF THE VARIABLE ACCOUNT. The assets of the Variable Account
are divided into a series of Sub-Accounts that are listed on the Policy
Specifications Page and in the current Prospectus the Owner received. Each
Sub-Account invests exclusively in shares of a corresponding Fund. Any amounts
of income, dividends, and gains distributed from the shares of a Fund will be
reinvested in additional shares of that Fund at its Net Asset Value Per Share.
When permitted by law, the Company may:
(1) create new variable accounts;
(2) combine variable accounts, including the Variable Account;
(3) add new Sub-Accounts to or remove existing Sub-Accounts from the
Variable Account or combine Sub-Accounts;
VUL-07 1-00 Page 13
(4) make new Sub-Accounts or other Sub-Accounts available to such classes of
the Policies as the Company may determine;
(5) add new Funds or remove existing Funds;
(6) if shares of a Fund are no longer available for investment or if the
Company determines that investment in a Fund is no longer appropriate in
light of the purposes of the Variable Account, substitute a different
Fund for any existing Fund;
(7) deregister the Variable Account under the Investment Company Act of 1940
if such registration is no longer required;
(8) operate the Variable Account as a management investment company under
the Investment Company Act of 1940 or in any other form permitted by law;
and
(9) make any changes to the Variable Account or its operations as may be
required by the Investment Company Act of 1940 or other applicable law or
regulations.
The investment policy of the Variable Account will not be changed without
approval pursuant to the insurance laws of the State of Tennessee. If required,
approval of or change of investment policy will be filed with the insurance
department of the state where this Policy is delivered.
The values and benefits of this Policy provided by the Variable Account
depend on the investment performance of the Funds in which the Owner's selected
Sub-Accounts are invested. The Company does not guarantee the investment
performance of the Funds. The Owner bears the full investment risk for Net
Premiums allocated or Policy Value transferred to the Sub-Accounts.
VALUATION OF ASSETS. Assets of Funds held by each Sub-Account will be
valued at their Net Asset Value per share on each Valuation Day. The Prospectus
the Owners received for the Funds defines the Net Asset Value per share of the
Funds and describes each Fund.
CALCULATION OF SUB-ACCOUNT VALUES. The Sub-Account Value for any
Sub-Account is equal to the number of Units this Policy then has in that
Sub-Account multiplied by the value of such units at that time. Amounts
allocated, transferred or added to a Sub-Account are used to purchase Units of
that Sub-Account. Units are redeemed when amounts are deducted, transferred, or
withdrawn. The number of Units in a Sub-Account at any time is equal to the
number of Units purchased minus the number of Units redeemed up to such time.
For each Sub-Account, the Net Premiums allocated to the Sub-Account or
Policy Value transferred to the Sub-Account are converted into Units. The number
of Units credited is determined by dividing the dollar amount directed to each
Sub-Account by the value of the Unit for that Sub-Account for the Valuation Day
on which the Net Premiums allocated to or Policy Value transferred are credited
to the Sub-Account. The Unit value at the end of every Valuation Day is the Unit
value at the end of the previous Valuation Day times the Net Investment Factor,
as described below.
NET INVESTMENT FACTOR. The Unit value for each Sub-Account for any
Valuation Period is determined by the Net Investment Factor. The Net Investment
Factor is an index applied to measure the investment performance of a
Sub-Account from one Valuation Period to the next. The Net Investment Factor for
a Sub-Account for any Valuation Period is determined by dividing (1) by
(2) where
(1) is the result of:
a. the Net Asset Value per share of the Fund held in the Sub-Account,
determined at the end of the current Valuation Period; plus
b. the per share amount of any dividend or capital gain distributions
made by the Fund to the Sub-Account, if the "ex-dividend" date occurs
during the current Valuation Period; plus or minus
VUL-07 1-00 Page 14
c. a per share charge or credit for any taxes reserved for, which is
determined by the Company to have resulted from the operations of the
Sub-Account.
(2) is the Net Asset Value per share of the Fund held in the Sub-Account,
determined at the end of the last prior Valuation Period.
TRANSFERS. On or after the later of thirty days after the Policy Effective
Date or six days after the ten-day cancellation period, or such other period as
required by law, upon receipt of Written Notice, the Owner may transfer the
Fixed Account Value or any Sub-Account Value to other Sub-Accounts and/or the
Fixed Account. The transfer will be effected as of the date the Company receives
Written Notice from the Owner.
The amount transferred must be at least $100 or, if less, the entire amount
in the Fixed Account or the Sub-Account(s) each time a transfer is made. If,
after the transfer, the amount remaining in the Fixed Account or Sub-Account(s)
from which the transfer is made is less than $100, the Company reserves the
right to transfer the entire amount instead of the requested amount. The Company
reserves the right to limit the maximum amount which may be transferred from the
Fixed Account in any Policy Year. This maximum is currently the greater of
$2,500 or 25% of the Fixed Account Value.
The Policy Value on the effective date of the transfer will not be affected
except to the extent of the transfer fee. The Company reserves the right to
limit transfer requests to no more than 12 per year. For each additional
transfer request over 12 during each Policy Year, the Company reserves the right
to charge a Transfer Fee which is indicated on the Policy Specifications Page.
The Transfer Fee, if any, will be deducted from the amount being transferred.
The Company reserves the right, at any time and without prior notice, to
terminate, suspend or modify the transfer privileges described above.
DEATH BENEFIT
DEATH BENEFIT PROCEEDS. The Company will, subject to the terms of this
Policy, pay the Death Benefit Proceeds to the Beneficiary after receipt of due
proof of death of both Joint Insureds.
AMOUNT OF DEATH BENEFIT PROCEEDS. The Death Benefit Proceeds will be
determined as of the date of the death of the Last Survivor of the Joint
Insureds and will be equal to: (1), plus (2), minus (3), minus (4), where:
(1) is the Death Benefit under the Death Benefit option selected;
(2) is any additional death benefits due under any riders or endorsements
attached to this Policy;
(3) is any Policy Debt; and
(4) is any unpaid Monthly Deductions if the Last Survivor of the Joint
Insureds dies during the Grace Period.
The Death Benefit Proceeds shall be determined under the Level Death Benefit
Option or Increasing Death Benefit Option, whichever is chosen by the Owner and
indicated on the Policy Specifications Page, or any supplemental Policy
Specifications Page.
LEVEL DEATH BENEFIT OPTION -- The Death Benefit will be the greater of:
(a) the Face Amount of insurance on the date of death of the Last Survivor
of the Joint Insureds; or
(b) the Policy Value on the date of death of the Last Survivor of the Joint
Insureds, plus a specified percentage of the Policy Value on the date of
death of the Last Survivor of the Joint Insureds. The percentage, as
indicated on the Table of Percentages below, varies with the Attained Age
of
VUL-07 1-00 Page 15
the younger Joint Insured on the Policy Anniversary on or prior to the
date of death of the Last Survivor of the Joint Insureds.
INCREASING DEATH BENEFIT OPTION -- The Death Benefit will be the greater of:
(a) the Face Amount of insurance on the date of death of the Last Survivor
of the Joint Insureds plus the Policy Value on the Last Surviving Joint
Insured's date of death; or
(b) the Policy Value on the date of death of the Last Survivor of the Joint
Insureds, plus a specified percentage of the Policy Value on the date of
death of the Last Survivor of the Joint Insureds. The percentage, as
indicated on the Table of Percentages below, varies with the Attained Age
of the younger Joint Insured on the Policy Anniversary on or prior to the
date of death of the Last Survivor of the Joint Insureds.
TABLE OF PERCENTAGES
ATTAINED CORRIDOR ATTAINED CORRIDOR ATTAINED CORRIDOR
AGE* PERCENTAGE AGE* PERCENTAGE AGE* PERCENTAGE
- -------- ---------- -------- ---------- -------- ----------
0-40 150% 54 57% 68 17%
41 143% 55 50% 69 16%
42 136% 56 46% 70 15%
43 129% 57 42% 71 13%
44 122% 58 38% 72 11%
45 115% 59 34% 73 9%
46 109% 60 30% 74 7%
47 103% 61 28% 75-90 5%
48 97% 62 26% 91 4%
49 91% 63 24% 92 3%
50 85% 64 22% 93 2%
51 78% 65 20% 94 1%
52 71% 66 19% 95+ 0%
53 64% 67 18%
- ------------------------
*Attained Age of younger Joint Insured
PAYMENT OF DEATH BENEFIT PROCEEDS. The Company will pay the Death Benefit
Proceeds to the Beneficiary in a lump sum, unless a Settlement Option has been
selected. If the Primary or Contingent Beneficiary is not living, or if no
Beneficiary has been designated, the Company will pay the Owner or Owner's
estate.
SUSPENSION OF PAYMENT. Payment of the Death Benefit Proceeds may be
suspended or delayed under the circumstances described herein for suspension or
delay of payment of surrenders or Withdrawals.
CREDITOR CLAIMS. To the extent permitted by applicable laws, no right or
benefit under this Policy shall be subject to claims of creditors, except as may
be provided by an assignment.
SURRENDERS AND WITHDRAWALS
SURRENDERS. Prior to the death of the Last Survivor of the Joint Insureds,
and while the Policy is in force, this Policy may be surrendered for its
Surrender Value. The surrender will be effective as of the Valuation Day on
which the Company receives a Written Notice requesting surrender of the Policy.
If the Policy is surrendered, any applicable Surrender Charge as described on
the Policy Specifications Page will be imposed. Once the surrender is effective,
all benefits provided by the Policy cease and the Policy cannot be reinstated.
VUL-07 1-00 Page 16
WITHDRAWALS. After the first Policy Year, the Owner may make a written
request for a Withdrawal, subject to certain restrictions. The minimum
Withdrawal request is $500. The maximum Withdrawal request may be for an amount
less than the Surrender Value. As of the date the Company receives Written
Notice from the Owner, the Sub-Account Value(s) and Fixed Account Value will be
reduced by the amount withdrawn (including the Withdrawal Charge as described on
the Policy Specifications Page). The Owner may specify how the Withdrawal and
Withdrawal Charge are to be deducted from the Sub-Account Value(s) and Fixed
Account Value. In the event an allocation is not specified, the Company will
allocate the Withdrawal and Withdrawal Charge based on the proportion that the
value in the Fixed Account and the value in the Sub-Accounts bear to the
Unloaned Policy Value.
If a Level Death Benefit Option is in effect, the Company reserves the right
to reduce the Face Amount of the Policy by the amount of the Withdrawal
(exclusive of the Withdrawal Charge). Face Amount reductions will be effective
on the Monthly Anniversary Day that falls on or next following the date the
Company receives and accepts a written request for a Withdrawal. The order of
Face Amount reductions will be as provided in the provision "Decreasing the Face
Amount". There will be no Surrender Charge for a Face Amount reduction resulting
from a Withdrawal.
The Company reserves the right to decline a Withdrawal request if the
remaining Basic or Supplemental Face Amount would be below the minimum amount
for which the Company would then issue the Policy under its rules; or the
Company determines that the Withdrawal would cause this Policy to fail to
qualify as a life insurance contract under applicable tax laws, as interpreted
by the Company.
POLICY LOANS
RIGHT TO MAKE LOANS, POLICY DEBT. After the first Policy Anniversary and
prior to the death of the Last Survivor of the Joint Insureds and while this
Policy is in force, loans can be made on this Policy provided it has Surrender
Value greater than zero. However, the Policy must be properly assigned to the
Company before any policy loan is made. No other collateral is needed. Any
policy loan must be for at least a minimum loan amount of $500. The Company may
delay making any policy loan from the Fixed Account for up to six months (unless
the amount of the loan is for payment of a premium to the Company).
MAXIMUM LOAN. The most the Owner can borrow is an amount that equals 90% of
the Cash Value of the Policy minus any Policy Debt on the date the policy loan
request is received.
INTEREST. The interest charged on any policy loan is at an effective annual
rate, shown on the Policy Specifications Page, compounded yearly on the Policy
Anniversary. Interest payments are due for the prior Policy Year on each Policy
Anniversary. If interest is not paid when due, it will be added to the amount of
the policy loan and will bear interest at the rate payable on the policy loan.
Interest is charged in arrears from the date of the policy loan. Interest, as it
accrues from day to day, is considered part of the Policy Debt.
COLLATERAL. When a policy loan is made, an amount sufficient to secure the
policy loan is transferred out of the Sub-Account(s) and the Fixed Account and
into the Policy's Loan Account. The Owner can specify how to allocate the amount
to be transferred to the Loan Account as collateral from among the
Sub-Account(s) and the Fixed Account. If an allocation is not specified, the
amount will be allocated in the same proportion that the value of the Owner's
Fixed Account and the value of the Owner's Sub-Account(s) bear to the total
Unloaned Policy Value on the date the Company makes the policy loan. An amount
equal to any unpaid policy loan interest will also be transferred on each Policy
Anniversary to the Loan Account. The Company will allocate the unpaid interest
based on the proportion that the value of the Owner's Fixed Account and the
value of the Owner's Sub-Account(s) bear to the total Unloaned Policy Value. The
Loan Account Value will be recalculated (1) when policy interest is added to the
amount of the loan, (2) when a loan repayment is made or (3) when a new policy
loan is made.
VUL-07 1-00 Page 17
The Company will credit the Loan Account with interest at an effective
annual rate of not less than the Guaranteed Interest Rate for the Fixed Accounts
shown on the Policy Specifications Page. On each Policy Anniversary, the
interest earned on the Loan Account since the preceding Policy Anniversary will
be transferred to the Sub-Account(s) and the Fixed Account. The interest will be
transferred to the Sub-Account(s) and the Fixed Account in the same proportion
that premium payments are allocated.
If the Loan Account Value exceeds the Cash Value, the Owner must pay the
excess. The Company will send the Owner a notice of the amount the Owner must
pay. This amount must be paid within 31 days after the Company sends the notice,
or the Policy will Lapse. The Company will send the notice to the Owner and to
any assignee of record at their last known address.
REPAYING POLICY DEBT. Policy Debt can be repaid in part or in full any time
during the lifetime of both Joint Insureds while this Policy is in force. When a
loan repayment is made, Policy Value in the Loan Account in an amount equal to
that payment will be transferred to the Sub-Account(s) and the Fixed Account.
The Owner may tell the Company how to allocate this transfer among the
Sub-Account(s) and the Fixed Account. If no allocation is specified, the Company
will allocate that amount among the Sub-Account(s) and the Fixed Account in the
same proportion that premium payments are allocated.
CHANGING THIS POLICY
The Owner can request any one of the following changes subject to certain
conditions. The Owner's request must be received in writing at the Company's
Home Office.
INCREASING THE FACE AMOUNT. On or after the first Policy Anniversary during
the lifetime of both Joint Insureds, the Owner may submit an application for an
increase in Supplemental Face Amount. The Company reserves the right to require
proof of insurability, satisfactory to the Company, in connection with
evaluating any requested increase in Supplemental Face Amount. The Attained Age
of the older Joint Insured must be less than the maximum issue age. The amount
of any increase must be at least $25,000. Any increase approved by the Company
will be effective on the effective date shown on the supplemental Policy
Specifications Page which will be issued and attached to the Policy and will be
subject to monthly cost of insurance deductions for the increase from the Policy
Value of this Policy. The Basic Face Amount cannot be increased.
PREMIUM PAYMENTS REQUIRED FOR A FACE AMOUNT INCREASE. Additional premium
payments may be required in connection with an increase in Supplemental Face
Amount. The Company will notify the Owner if additional premium payments are
required and specify the premium payments required on the supplemental Policy
Specifications Page.
CANCELLATION OF A FACE AMOUNT INCREASE. The cancellation provision on the
cover of the Policy applies equally to any increase in Supplemental Face Amount
except that where no additional premium payments are required in order to
increase the Supplemental Face Amount, the cost of insurance and administration
charge deductions for increases in Supplemental Face Amount will be credited
back to the sub-accounts and fixed account in the proportion that each
Sub-Account Value and the Fixed Account Value bears to the Unloaned Policy Value
if the increase is canceled.
DECREASING THE FACE AMOUNT. On or after the first Policy Anniversary, the
Owner can request in writing a decrease in Face Amount subject to the following
rules. Any decrease will go into effect on the Monthly Anniversary Day that
falls on or next following the date the Company receives and accepts the request
for change. The decrease will first be applied against any Supplemental FACE
AMOUNT IN THE REVERSE ORDER IN WHICH Supplemental Face Amount increases
occurred, if any. It will then be applied against the Basic Face Amount of the
Policy. The Company reserves the right to prohibit any decrease: (1) for the
three Policy Years following an increase in Supplemental Face Amount; and
(2) for one Policy Year following the last decrease in the Basic or Supplemental
Face Amount of the Policy.
VUL-07 1-00 Page 18
The Supplemental Face Amount remaining in effect after any decrease cannot
be less than the Minimum Supplemental Face Amount shown on the Policy
Specifications Page or supplemental Policy Specifications Page. The Basic Face
Amount remaining in effect after any decrease cannot be less than the Minimum
Basic Face Amount shown on the Policy Specifications Page. Decreasing the Face
Amount may result in lower Monthly Deductions or a refund in premiums and
earnings thereon. Decreasing the Basic Face Amount may result in a partial
Surrender Charge. The Company reserves the right to refuse a decrease in Face
Amount if such decrease would cause this Policy to fail to qualify as a life
insurance contract under applicable tax laws, as interpreted by the Company.
CHANGING THE DEATH BENEFIT OPTION. On or after the first Policy
Anniversary, the Owner may request in writing a change in the Death Benefit
Option. The change will go into effect on the Monthly Anniversary Day that falls
on or next following the date the Company receives and accepts the request for
change. If the Owner requests a change from Increasing Death Benefit Option to
Level Death Benefit Option, the Face Amount will be increased to equal the Death
Benefit on the effective date of change. The increase in the Face Amount will be
deemed an increase in the Supplemental Face Amount. There will be no
administration charge for a Face Amount increase resulting from a Death Benefit
Option change. If the Owner requests, during the lifetime of both Joint
Insureds, a change from Level Death Benefit Option to Increasing Death Benefit
Option, the Face Amount will be decreased so that it equals the Death Benefit
less the Policy Value on the effective date of the change. There will be no
Surrender Charge for a Face Amount reduction resulting from a Death Benefit
Option change. The Company reserves the right to require satisfactory proof of
insurability before permitting a change in Death Benefit options.
CHANGE APPROVAL. All changes must be approved by the Company at the Home
Office. No agent has the authority to make any changes or waive any of the terms
of this Policy.
SETTLEMENT OPTIONS
Settlement Options provide alternative ways in which payment can be made.
Payment under these Settlement Options will not be affected by the investment
experience of any Sub-Account after the proceeds are applied under such option.
AVAILABILITY OF OPTIONS. Upon written request, all or part of the Death
Benefit Proceeds or Surrender Value may be applied under any Settlement Option
the Company offers on the option date. The option date is any date this Policy
terminates under the termination provision. If this Policy is assigned, either
before or after the choice of an option, any amount due to the assignee will be
paid in one sum. The balance, if any, may be applied under any Settlement
Option.
MINIMUM AMOUNTS. If the amount to be applied under any Settlement Option
for any one person is less than $5,000, the Company may pay that amount in one
sum instead. If the payments under any option come to less than $50 each, the
Company has the right to make payments at less frequent intervals.
ELECTING A SETTLEMENT OPTION. To elect any Settlement Option, the Company
requires that a Written Request, satisfactory to it. The Owner may elect a
Settlement Option during the lifetime of either of the Joint Insureds. If the
Death Benefit Proceeds are payable in a single sum when the Last Survivor of the
Joint Insureds dies, the Beneficiary may elect a Settlement Option with the
Company's consent.
EFFECTIVE DATE AND PAYMENT DATE. The effective date of a Settlement Option
is the date the amount is applied under that option. For Death Benefit Proceeds,
this is the date that due proof of the death of both Joint Insureds is received
at the Company's Home Office. For the Surrender Value, it is the effective date
of surrender.
A later date for the first payment may be requested in the Settlement Option
election. All payment dates will fall on the same day of the month as the first
one. No payment will become due until a payment date. No partial payment will be
made for any period shorter than the time between payment dates.
VUL-07 1-00 Page 19
If the Surrender Value is applied under any option, the Company may delay
payment for up to six months. Interest at the rate in effect for Option 3 during
this period will be paid on the Surrender Value.
DESCRIPTION OF OPTIONS. The Company's Settlement Options are described
below. Any other Settlement Option agreed to by the Company may be elected. The
Settlement Options are described in terms of monthly payments.
OPTION 1 -- PAYMENT FOR A FIXED PERIOD. Equal monthly payments will be made
for any period selected up to 30 years. The amount of each payment depends on
the total amount applied, the period selected and the monthly payment rates the
Company is using when the first payment is due. The rate of any payment for each
$1,000 of proceeds applied will not be less than shown in the Option 1 Table.
The payments shown in this table are based on an interest rate of 3% per year.
OPTION 1 TABLE
MINIMUM MONTHLY PAYMENT RATES FOR EACH $1,000 APPLIED
- ---------------------------------------------------------------
MONTHLY MONTHLY MONTHLY
YEARS PAYMENT YEARS PAYMENT YEARS PAYMENT
- -------- -------- -------- -------- -------- --------
1 $84.47 11 $8.86 21 $5.32
2 42.86 12 8.24 22 5.15
3 28.99 13 7.71 23 4.99
4 22.06 14 7.26 24 4.84
5 17.91 15 6.87 25 4.71
6 15.14 16 6.53 26 4.59
7 13.16 17 6.23 27 4.47
8 11.68 18 5.96 28 4.37
9 10.53 19 5.73 29 4.27
10 9.61 20 5.51 30 4.18
OPTION 2 -- LIFE INCOME WITH PAYMENTS FOR A GUARANTEED PERIOD. Equal
monthly payments are based on the life of the named person. Payments will
continue for the lifetime of that person with payments guaranteed for 10 or 20
years. Payments stop at the end of the selected guaranteed period or when the
named person dies, whichever is later.
VUL-07 1-00 Page 20
The Option 2 Table shows the minimum monthly payment for each $1,000
applied. The actual payments will be based on the monthly payment rates the
Company is using when the first payment is due. They will not be less than shown
in the Table, which is based on the 1983 Individual Annuity Mortality Table A
projected 13 years with interest at 3% per annum. One year will be deducted from
the Attained Age of the named person for every completed three years beyond the
year 1996. The Age of the payee is the age at the birthday nearest to the
effective date of the option.
OPTION 2 TABLE
AGE MALE GUARANTEED FEMALE GUARANTEED AGE MALE GUARANTEED FEMALE GUARANTEED
OF PERIOD PERIOD OF PERIOD PERIOD
PAYEE 10 YRS 20 YRS 10 YRS 20 YRS PAYEE 10 YRS 20 YRS 10 YRS 20 YRS
0-30 3.08 3.07 2.95 2.95 56 4.33 4.16 3.93 3.86
31 3.10 3.09 2.97 2.96 57 4.42 4.22 4.00 3.92
32 3.13 3.12 2.99 2.98 58 4.51 4.29 4.08 3.98
33 3.16 3.15 3.01 3.00 59 4.61 4.36 4.16 4.04
34 3.19 3.17 3.03 3.03 60 4.71 4.43 4.24 4.11
35 3.22 3.20 3.06 3.05 61 4.82 4.49 4.33 4.18
36 3.25 3.23 3.08 3.07 62 4.94 4.57 4.42 4.25
37 3.28 3.26 3.11 3.10 63 5.06 4.64 4.52 4.32
38 3.32 3.29 3.13 3.12 64 5.19 4.71 4.63 4.40
39 3.35 3.33 3.16 3.15 65 5.32 4.77 4.74 4.47
40 3.39 3.36 3.19 3.18 66 5.46 4.84 4.86 4.55
41 3.43 3.40 3.22 3.21 67 5.61 4.91 4.98 4.63
42 3.48 3.44 3.25 3.24 68 5.76 4.97 5.12 4.70
43 3.52 3.48 3.29 3.27 69 5.91 5.03 5.26 4.78
44 3.57 3.52 3.32 3.31 70 6.08 5.09 5.41 4.86
45 3.61 3.56 3.36 3.34 71 6.25 5.15 5.56 4.93
46 3.67 3.61 3.40 3.38 72 6.42 5.20 5.73 5.00
47 3.72 3.66 3.44 3.42 73 6.59 5.24 5.90 5.06
48 3.77 3.70 3.49 3.46 74 6.77 5.29 6.08 5.13
49 3.83 3.75 3.53 3.50 75 6.96 5.33 6.27 5.18
50 3.89 3.81 3.58 3.55 76 7.14 5.36 6.46 5.23
51 3.96 3.86 3.63 3.59 77 7.32 5.39 6.66 5.28
52 4.02 3.92 3.69 3.64 78 7.51 5.42 6.87 5.32
53 4.10 3.97 3.74 3.69 79 7.69 5.44 7.08 5.36
54 4.17 4.03 3.80 3.74 80 & 7.87 5.46 7.29 5.39
55 4.25 4.10 3.87 3.80 Over
OPTION 3 -- INTEREST INCOME. The Company will hold any amount applied under
this option. Interest on the unpaid balance will be paid each month at a rate
determined by it. This rate will be not less than the equivalent of 3% per year.
OPTION 4 -- PAYMENTS OF A FIXED AMOUNT. Equal monthly payments will be for
an agreed fixed amount. The amount of each payment may not be less than $10 for
each $1,000 applied. Interest will be credited each month on the unpaid balance
and added to it. This interest will be at a rate set by the Company, but not
less than an effective interest rate of 3% per year. Payments continue until the
amount the Company holds runs out. The last payment will be for the balance
only.
DEATH OF PAYEE. If the payee dies while there are any unpaid installments
under Option 1 or before the end of the guaranteed period under Option 2, the
Company will pay the commuted value of the remaining payments in a lump sum. The
commuted value or any balance held under Option 3 or Option 4 will be paid to
the payee's executors or administrators unless the written election of the
Option directed the Company differently. Any commuted value will be calculated
using 3% interest per year.
VUL-07 1-00 Page 21
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VUL-07 1-00 Page 22
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VUL-07 1-00
LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Death Benefit Payable at the Death of the Last Survivor of the Joint Insureds
No Death Benefit Payable on the Death of the First to Die of the Joint Insureds
NON-DIVIDEND PAYING
VUL-07 1-00