Exhibit 1A(5)
Policy Form, Commonwealth Four
P1250 CR 10/97
FLEXIBLE PREMIUM VARIABLE
LIFE INSURANCE POLICY
LIFE OF
VIRGINIA LOGO
To the owner:
Please read your Policy carefully. This Policy is a legal contract between
you and the Company. You, the Owner, have benefits and rights described in
this Policy. The Insured is named in the Policy. The Beneficiary is as named
in the attached application, unless later changed. We will pay the Life
Insurance Proceeds on this Policy when we receive due proof that the Insured
died while this Policy was in effect. This is a Flexible Premium Variable
Life Insurance Policy. You may increase or decrease the Specified Amount. We
will allocate Net Premiums to the Separate Account named on the policy data
pages.
THIS POLICY'S ACCOUNT VALUE IN THE SEPARATE ACCOUNT IS BASED ON THE
INVESTMENT EXPERIENCE OF THAT ACCOUNT, AND MAY INCREASE OR DECREASE DAILY.
IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. THE AMOUNT OF THE DEATH BENEFIT OR
THE DURATION OF THE DEATH BENEFIT MAY VARY. THE MAXIMUM LOAN AMOUNT IS
NINETY PERCENT OF THE DIFFERENCE BETWEEN THE ACCOUNT VALUE AND ANY SURRENDER
CHARGE ON THE DATE OF THE LOAN.
Refund Privilege. You may return this Policy to our Home Office or to our
agency within 10 days after its delivery for a refund. The amount of the
refund will equal the sum of all charges deducted from premiums paid, plus
the Net Premiums allocated to the Separate Account adjusted by investment
gains and losses.
For The Life Insurance Company of Virginia
/s/PAUL E. RUTLEDGE III
PRESIDENT
o Flexible Premium Variable Life Insurance Policy
o Life Insurance Proceeds payable at the Insured's death
o Adjustable death benefit
o Flexible premiums payable for the Insured's life
o Some benefits reflect investment results
o No dividends
THE LIFE INSURANCE
COMPANY OF VIRGINIA
6610 West Broad Street, Richmond, Virginia 23230
A Stock Company
TABLE OF CONTENTS
Policy Data Pages ........................................ 3
Definitions .............................................. 4
Introduction
The Policy and Its Parts ............................... 5
When This Policy Will Terminate ........................ 5
The Owner and the Beneficiary
The Owner .............................................. 6
The Beneficiary ......................................... 6
Changing the Owner or Beneficiary ...................... 6
Using the Policy as Collateral for a Loan ............ 6
Trustee ................................................. 6
Premium Payments
Premiums After the First Premium......................... 6
When and Where to Pay Premiums........................... 7
Allocation of Net Premiums ............................. 7
Continuation Amount and Continuation
Period ............................................... 7
Grace Period ........................................... 7
How This Policy Can Be Reinstated ...................... 8
Life Insurance Proceeds
How We Determine Proceeds .............................. 9
Corridor Percentage Chart .............................. 9
Compliance as Life Insurance ........................... 10
Change in Existing Coverage ............................ 10
Change in Death Benefit Options ......................... 10
The Separate Account
Insulation of Assets ................................... 11
Investment Subdivisions ................................ 11
Changes to the Separate Account and
Investment Subdivisions .............................. 11
Valuation of Separate Account Assets ................... 11
Policy Exchange ........................................ 12
Unit Value ............................................. 12
Transfers .............................................. 12
Account Value Benefits
How We Determine Account Value ......................... 13
How We Determine Net Premium ........................... 13
Monthly Deduction ...................................... 13
Cost of Insurance ...................................... 14
Insufficient Account Value ............................. 14
Continuation of Coverage ............................... 14
Surrender .............................................. 14
Receiving the Surrender Value .......................... 15
Postponement of Payments ............................... 15
Loan Benefits
Making a Policy Loan ................................... 15
Policy Loan Interest ................................... 16
Preferred Policy Debt .................................. 16
Repaying Policy Debt ................................... 16
Minimum Loan Payment ................................... 16
General Information
Annual Statement ....................................... 17
Calculation of Values .................................. 17
Exchange Provision ..................................... 17
Limits on Contesting This Policy ....................... 17
Misstatement of Age or Sex ............................. 18
Nonparticipating ....................................... 18
Suicide ................................................ 18
Written Notice ......................................... 18
Optional Payment Plans
Plan 1 ................................................. 19
Plan 2 ................................................. 19
Plan 3 ................................................. 19
Plan 4 ................................................. 19
Plan 5 ................................................. 19
Plan 1 Table ........................................... 20
Plan 2 Table ........................................... 20
Plan 5 Table ........................................... 20
Settlement Age Chart ................................... 20
A copy of the application and any riders and endorsements follow page 20.
POLICY DATA
SCHEDULE OF BENEFITS SCHEDULE OF PREMIUMS
AMOUNT PAYABLE
LIFE INSURANCE NONSMOKER
PLANNED PERIODIC PREMIUM $ 516.24 ANNUALLY
MINIMUM NET PREMIUM FACTOR: 0.90 (THE MINIMUM NET PREMIUM FACTOR REFLECTS
THE MAXIMUM DEDUCTION OF 10% OF EACH PREMIUM RECEIVED)
MAXIMUM MONTHLY POLICY CHARGE: $ 15.00 IN THE FIRST POLICY YEAR,
$ 12.00 THEREAFTER
INCREASE CHARGE PER $1,000: $1.50 PER $1000, MAXIMUM $300 PER INCREASE
TRANSFER CHARGE: $10.00
POLICY LOAN INTEREST RATE: 6.00 % PER ANNUM PAYABLE IN ARREARS
PREFERRED LOAN AVAILABILITY DATE: OCTOBER 1, 2007
MINIMUM SPECIFIED AMOUNT $100,000
NOTE: IT IS POSSIBLE THAT COVERAGE WILL EXPIRE IF SUFFICIENT PREMIUMS ARE NOT
PAID. SEE THE GRACE PERIOD PROVISION.
OWNER THE INSURED
INSURED JOHN DOE MALE 35 AGE NEAREST BIRTHDAY
POLICY NUMBER N00000000 NONSMOKER STANDARD RATING CLASS
POLICY DATE OCTOBER 1, 1997
MONTHLY ANNIVERSARY DAY 1
PLAN FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
$100,000 INSURED'S SPECIFIED AMOUNT - DEATH BENEFIT OPTION B
POLICY NUMBER [00000000]
SEPARATE ACCOUNT II
INVESTMENT SUBDIVISIONS ARE INVESTED IN
THE ALGER AMERICAN FUND
AAF SMALL CAPITALIZATION ALGER AMERICAN SMALL CAPITALIZATION
PORTFOLIO
AAF GROWTH ALGER AMERICAN GROWTH PORTFOLIO
FIDELITY VARIABLE INSURANCE PRODUCTS FUND
FID EQUITY - INCOME EQUITY - INCOME PORTFOLIO
FID GROWTH GROWTH PORTFOLIO
FID OVERSEAS OVERSEAS PORTFOLIO
FIDELITY VARIABLE INSURANCE PRODUCTS FUND II
FID ASSET MANAGER ASSET MANAGER PORTFOLIO
FID CONTRAFUND CONTRAFUND PORTFOLIO
FIDELITY VARIABLE INSURANCE PRODUCTS FUND III
FID GROWTH AND INCOME GROWTH & INCOME PORTFOLIO
FID GROWTH OPPORTUNITIES GROWTH OPPORTUNITIES PORTFOLIO
FEDERATED INSURANCE SERIES
FED UTILITY II FEDERATED UTILITY FUND II
FED HIGH INCOME BOND II FEDERATED HIGH INCOME BOND FUND II
FED AMERICAN LEADERS II FEDERATED AMERICAN LEADERS FUND II
JANUS ASPEN SERIES
JAN BALANCED BALANCED PORTFOLIO
JAN FLEXIBLE INCOME FLEXIBLE INCOME PORTFOLIO
JAN GROWTH GROWTH PORTFOLIO
JAN AGGRESSIVE GROWTH AGGRESSIVE GROWTH PORTFOLIO
JAN WORLDWIDE GROWTH WORLDWIDE GROWTH PORTFOLIO
JAN INTERNATIONAL GROWTH INTERNATIONAL GROWTH PORTFOLIO
JAN CAPITAL APPRECIATION CAPITAL APPRECIATION PORTFOLIO
GE INVESTMENTS FUNDS INC.
GEI MONEY MARKET MONEY MARKET FUND
GEI INCOME INCOME FUND
GEI S&P 500 INDEX * S&P 500 INDEX FUND
GEI TOTAL RETURN TOTAL RETURN FUND
GEI INTERNATIONAL EQUITY INTERNATIONAL EQUITY FUND
GEI REAL ESTATE SECURITIES REAL ESTATE SECURITIES FUND
GEI GLOBAL INCOME GLOBAL INCOME FUND
GEI VALUE EQUITY VALUE EQUITY FUND
OPPENHEIMER VARIABLE ACCOUNT FUNDS
OPP HIGH INCOME OPPENHEIMER HIGH INCOME FUND
OPP BOND OPPENHEIMER BOND FUND
OPP CAP APPRECIATION OPPENHEIMER CAPITAL APPRECIATION FUND
OPP GROWTH OPPENHEIMER GROWTH FUND
OPP MULTI STRATEGIES OPPENHEIMER MULTIPLE STRATEGIES FUND
PBHG INSURANCE SERIES FUND, INC.
PIL GROWTH II GROWTH II PORTFOLIO
PIL LARGE CAP GROWTH LARGE CAP GROWTH PORTFOLIO
YOU MAY ALLOCATE YOUR NET PREMIUMS AND ACCOUNT VALUE TO AS MANY AS SEVEN.
THE PORTION OF EACH NET PREMIUM ALLOCATED MUST BE AT LEAST 1%.
CONSULT YOUR PROSPECTUS FOR INVESTMENT DETAILS.
* "STANDARD & POOR'S," "S&P," "S&P 500," "STANDARD & POOR'S 500," AND "500" ARE
TRADEMARKS OF THE MCGRAW-HILL COMPANIES, INC. AND HAVE BEEN LICENSED FOR USE BY
GE INVESTMENT MANAGEMENT INCORPORATED. THE S&P 500 INDEX FUND IS NOT SPONSORED,
ENDORSED, SOLD OR PROMOTED BY STANDARD & POOR'S AND STANDARD & POOR'S MAKES NO
REPRESENTATION REGARDING THE ADVISABILITY OF INVESTING IN THE FUND.
POLICY NUMBER: N00000000
TABLE OF MAXIMUM PREMIUMS
POLICY MAXIMUM POLICY MAXIMUM
YEAR PREMIUM YEAR PREMIUM
1 15,142.55 36 48,326.40
2 15,142.55 37 49,668.80
3 15,142.55 38 51,011.20
4 15,142.55 39 52,353.60
5 15,142.55 40 53,696.00
6 15,142.55 41 55,038.40
7 15,142.55 42 56,380.80
8 15,142.55 43 57,723.20
9 15,142.55 44 59,065.60
10 15,142.55 45 60,408.00
11 15,142.55 46 61,750.40
12 16,108.80 47 63,092.80
13 17,451.20 48 64,435.20
14 18,793.60 49 65,777.60
15 20,136.00 50 67,120.00
16 21,478.40 51 68,462.40
17 22,820.80 52 69,804.80
18 24,163.20 53 71,147.20
19 25,505.60 54 72,489.60
20 26,848.00 55 73,832.00
21 28,190.40 56 75,174.40
22 29,532.80 57 76,516.80
23 30,875.20 58 77,859.20
24 32,217.60 59 79,201.60
25 33,560.00 60 80,544.00
26 34,902.40 61 81,886.40
27 36,244.80 62 83,228.80
28 37,587.20 63 84,571.20
29 38,929.60 64 85,913.60
30 40,272.00 65 & LATER 87,256.00
31 41,614.40
32 42,956.80
33 44,299.20
34 45,641.60
35 46,984.00
ACCORDING TO OUR UNDERSTANDING OF CURRENT FEDERAL TAX LAW, YOU MAY NOT PAY MORE
THAN THESE AMOUNTS AND MAINTAIN THE TAX STATUS OF THIS POLICY AS LIFE INSURANCE.
THIS TABLE IS SUBJECT TO CHANGE.
POLICY NUMBER: N00000000
TABLE OF CONTINUATION AMOUNTS
POLICY CONTINUATION POLICY CONTINUATION POLICY CONTINUATION
MONTH AMOUNT MONTH AMOUNT MONTH AMOUNT
1 43.02 41 1,763.82 81 3,484.62
2 86.04 42 1,806.84 82 3,527.64
3 129.06 43 1,849.86 83 3,570.66
4 172.08 44 1,892.88 84 3,613.68
5 215.10 45 1,935.90 85 3,656.70
6 258.12 46 1,978.92 86 3,699.72
7 301.14 47 2,021.94 87 3,742.74
8 344.16 48 2,064.96 88 3,785.76
9 387.18 49 2,107.98 89 3,828.78
10 430.20 50 2,151.00 90 3,871.80
11 473.22 51 2,194.02 91 3,914.82
12 516.24 52 2,237.04 92 3,957.84
13 559.26 53 2,280.06 93 4,000.86
14 602.28 54 2,323.08 94 4,043.88
15 645.30 55 2,366.10 95 4,086.90
16 688.32 56 2,409.12 96 4,129.92
17 731.34 57 2,452.14 97 4,172.94
18 774.36 58 2,495.16 98 4,215.96
19 817.38 59 2,538.18 99 4,258.98
20 860.40 60 2,581.20 100 4,302.00
21 903.42 61 2,624.22 101 4,345.02
22 946.44 62 2,667.24 102 4,388.04
23 989.46 63 2,710.26 103 4,431.06
24 1,032.48 64 2,753.28 104 4,474.08
25 1,075.50 65 2,796.30 105 4,517.10
26 1,118.52 66 2,839.32 106 4,560.12
27 1,161.54 67 2,882.34 107 4,603.14
28 1,204.56 68 2,925.36 108 4,646.16
29 1,247.58 69 2,968.38 109 4,689.18
30 1,290.60 70 3,011.40 110 4,732.20
31 1,333.62 71 3,054.42 111 4,775.22
32 1,376.64 72 3,097.44 112 4,818.24
33 1,419.66 73 3,140.46 113 4,861.26
34 1,462.68 74 3,183.48 114 4,904.28
35 1,505.70 75 3,226.50 115 4,947.30
36 1,548.72 76 3,269.52 116 4,990.32
37 1,591.74 77 3,312.54 117 5,033.34
38 1,634.76 78 3,355.56 118 5,076.36
39 1,677.78 79 3,398.58 119 5,119.38
40 1,720.80 80 3,441.60 120 5,162.40
CONTINUED
POLICY NUMBER: N00000000
TABLE OF CONTINUATION AMOUNTS
POLICY CONTINUATION POLICY CONTINUATION POLICY CONTINUATION
MONTH AMOUNT MONTH AMOUNT MONTH AMOUNT
121 5,205.42 161 6,926.22 201 8,647.02
122 5,248.44 162 6,969.24 202 8,690.04
123 5,291.46 163 7,012.26 203 8,733.06
124 5,334.48 164 7,055.28 204 8,776.08
125 5,377.50 165 7,098.30 205 8,819.10
126 5,420.52 166 7,141.32 206 8,862.12
127 5,463.54 167 7,184.34 207 8,905.14
128 5,506.56 168 7,227.36 208 8,948.16
129 5,549.58 169 7,270.38 209 8,991.18
130 5,592.60 170 7,313.40 210 9,034.20
131 5,635.62 171 7,356.42 211 9,077.22
132 5,678.64 172 7,399.44 212 9,120.24
133 5,721.66 173 7,442.46 213 9,163.26
134 5,764.68 174 7,485.48 214 9,206.28
135 5,807.70 175 7,528.50 215 9,249.30
136 5,850.72 176 7,571.52 216 9,292.32
137 5,893.74 177 7,614.54 217 9,335.34
138 5,936.76 178 7,657.56 218 9,378.36
139 5,979.78 179 7,700.58 219 9,421.38
140 6,022.80 180 7,743.60 220 9,464.40
141 6,065.82 181 7,786.62 221 9,507.42
142 6,108.84 182 7,829.64 222 9,550.44
143 6,151.86 183 7,872.66 223 9,593.46
144 6,194.88 184 7,915.68 224 9,636.48
145 6,237.90 185 7,958.70 225 9,679.50
146 6,280.92 186 8,001.72 226 9,722.52
147 6,323.94 187 8,044.74 227 9,765.54
148 6,366.96 188 8,087.76 228 9,808.56
149 6,409.98 189 8,130.78 229 9,851.58
150 6,453.00 190 8,173.80 230 9,894.60
151 6,496.02 191 8,216.82 231 9,937.62
152 6,539.04 192 8,259.84 232 9,980.64
153 6,582.06 193 8,302.86 233 10,023.66
154 6,625.08 194 8,345.88 234 10,066.68
155 6,668.10 195 8,388.90 235 10,109.70
156 6,711.12 196 8,431.92 236 10,152.72
157 6,754.14 197 8,474.94 237 10,195.74
158 6,797.16 198 8,517.96 238 10,238.76
159 6,840.18 199 8,560.98 239 10,281.78
160 6,883.20 200 8,604.00 240 10,324.80
CONTINUED
POLICY NUMBER: N00000000
TABLE OF CONTINUATION AMOUNTS
POLICY CONTINUATION POLICY CONTINUATION
MONTH AMOUNT MONTH AMOUNT
241 10,367.82 281 12,088.62
242 10,410.84 282 12,131.64
243 10,453.86 283 12,174.66
244 10,496.88 284 12,217.68
245 10,539.90 285 12,260.70
246 10,582.92 286 12,303.72
247 10,625.94 287 12,346.74
248 10,668.96 288 12,389.76
249 10,711.55 289 12,432.78
250 10,755.00 290 12,475.80
251 10,798.02 291 12,518.82
252 10,841.04 292 12,561.84
253 10,884.06 293 12,604.86
254 10,927.08 294 12,647.88
255 10,970.10 295 12,690.90
256 11,013.12 296 12,733.92
257 11,056.14 297 12,776.94
258 11,099.16 298 12,819.96
259 11,142.18 299 12,862.98
260 11,185.20 300 12,906.00
261 11,228.22
262 11,271.24
263 11,314.26
264 11,357.28
265 11,400.30
266 11,443.32
267 11,486.34
268 11,529.36
269 11,572.38
270 11,615.40
271 11,658.42
272 11,701.44
273 11,744.46
274 11,787.48
275 11,830.50
276 11,873.52
277 11,916.54
278 11,959.56
279 12,002.58
280 12,045.60
CONTINUATION AMOUNTS ARE DESCRIBED IN THE CONTINUATION AMOUNT AND CONTINUATION
PERIOD PROVISION
POLICY NUMBER: N00000000
TABLE OF SURRENDER CHARGES
POLICY SURRENDER POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE MONTH CHARGE
1 1,009.00 37 1,009.00 73 900.00
2 1,009.00 38 1,009.00 74 891.00
3 1,009.00 39 1,009.00 75 883.00
4 1,009.00 40 1,009.00 76 874.00
5 1,009.00 41 1,009.00 77 866.00
6 1,009.00 42 1,009.00 78 858.00
7 1,009.00 43 1,009.00 79 849.00
8 1,009.00 44 1,009.00 80 841.00
9 1,009.00 45 1,009.00 81 832.00
10 1,009.00 46 1,009.00 82 824.00
11 1,009.00 47 1,009.00 83 816.00
12 1,009.00 48 1,009.00 84 807.00
13 1,009.00 49 1,009.00 85 799.00
14 1,009.00 50 1,009.00 86 790.00
15 1,009.00 51 1,009.00 87 782.00
16 1,009.00 52 1,009.00 88 774.00
17 1,009.00 53 1,009.00 89 765.00
18 1,009.00 57 1,009.00 93 732.00
22 1,009.00 58 1,009.00 94 723.00
23 1,009.00 59 1,009.00 95 715.00
24 1,009.00 60 1,009.00 96 706.00
25 1,009.00 61 1,001.00 97 698.00
26 1,009.00 62 992.00 98 689.00
27 1,009.00 63 984.00 99 681.00
28 1,009.00 64 975.00 100 673.00
29 1,009.00 65 967.00 101 664.00
30 1,009.00 66 959.00 102 656.00
31 1,009.00 67 950.00 103 647.00
32 1,009.00 68 942.00 104 639.00
33 1,009.00 69 933.00 105 631.00
34 1,009.00 70 925.00 106 622.00
35 1,009.00 71 917.00 107 614.00
36 1,009.00 72 908.00 108 605.00
CONTINUED
POLICY NUMBER: N00000000
TABLE OF SURRENDER CHARGES
POLICY SURRENDER POLICY SURRENDER
MONTH CHARGE MONTH CHARGE
109 597.00 145 294.00
110 589.00 146 286.00
111 580.00 147 277.00
112 572.00 148 269.00
113 563.00 149 261.00
114 555.00 150 252.00
115 547.00 151 244.00
116 538.00 152 235.00
117 530.00 153 227.00
118 521.00 154 219.00
119 513.00 155 210.00
120 505.00 156 202.00
121 496.00 157 193.00
122 488.00 158 185.00
123 479.00 159 177.00
124 471.00 160 168.00
125 462.00 161 160.00
126 454.00 162 151.00
127 446.00 163 143.00
128 437.00 164 135.00
129 429.00 165 126.00
130 420.00 166 118.00
131 412.00 167 109.00
132 404.00 168 101.00
133 395.00 169 92.00
134 387.00 170 84.00
135 378.00 171 76.00
136 370.00 172 67.00
137 362.00 173 59.00
138 353.00 174 50.00
139 345.00 175 42.00
140 336.00 176 34.00
141 328.00 177 25.00
142 320.00 178 17.00
143 311.00 179 8.00
144 303.00 180 0.00
POLICY NUMBER: N00000000
TABLE OF GUARANTEED MAXIMUM INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
AGE LIFE
MONTHLY
RATE
35 0.14096
36 0.14764
37 0.15682
38 0.16684
39 0.17854
40 0.19107
41 0.20610
42 0.22115
43 0.23870
44 0.25625
45 0.27716
46 0.29974
47 0.32401
48 0.34996
49 0.37926
50 0.41025
51 0.44713
52 0.48988
53 0.53770
54 0.59311
55 0.65444
56 0.72254
57 0.79492
58 0.87327
59 0.96181
60 1.06060
61 1.17052
62 1.29584
63 1.43920
64 1.60154
65 1.78128
66 1.97512
67 2.18573
68 2.41240
69 2.66044
CONTINUED
POLICY NUMBER: N00000000
TABLE OF GUARANTEED MAXIMUM INSURANCE RATES
PER $1,000 OF NET AMOUNT AT RISK
AGE LIFE
MONTHLY
RATE
70 2.94130
71 3.31274
72 3.63092
73 4.54125
75 5.06274
76 5.62182
77 6.21386
78 6.83323
79 7.49615
80 8.22966
81 9.05444
82 9.99708
83 11.07331
84 12.26711
85 13.55590
86 14.91786
87 16.34412
88 17.80841
89 19.33266
90 20.94167
91 22.66794
92 24.57677
93 26.76406
94 29.63735
95 33.93111
96 41.27938
97 56.03985
98 83.33333
99 & OLDER 83.33333
DEFINITIONS
Account Value - The total amount under the Policy in each Investment Subdivision
and our General Account.
Age - The Insured's Age on his or her birthday nearest the Policy Date or a
policy anniversary.
Attained Age - The Insured's Age on the Policy Date plus the number of full
years since the Policy Date.
Beneficiary - The person or entity designated by the Owner to receive the Life
Insurance Proceeds payable at the death of the Insured.
Continuation Amount - A cumulative amount set forth on the policy data pages for
each month of the Continuation Period.
Continuation Period - The period during which the Policy will not lapse if the
Net Total Premium is at least equal to the Continuation Amount for the number of
Policy Months that the Policy has been inforce.
The Company - The Life Insurance Company of Virginia. "We", "us" or "our"
refers to the Company.
Fund - Any open-end management investment company or investment portfolio
thereof, or unit investment trust or series thereof, in which an Investment
Subdivision invests.
General Account - Assets of the Company other than those allocated to the
Separate Account or any other Separate Account of the Company.
Home Office - The Company's offices at 6610 West Broad Street, Richmond,
Virginia 23230.
Insured - The person upon whose life this Policy is issued.
Investment Subdivision - Subdivision of the Separate Account, the assets of
which are invested exclusively in a corresponding Fund.
Life Insurance Proceeds - The amount payable upon the death of the Insured.
Monthly Anniversary Day - The same day in each month as the Policy Date. This
day is shown on the policy data pages.
Net Premium - The portion of each premium paid which is used in determining the
Account Value. It is equal to the premium paid times the Net Premium Factor.
Net Premium Factor - The factor used in determining the Net Premium which
reflects a deduction from each premium paid.
Net Total Premium - On any date, Net Total Premium means the total of all
premiums paid to that date less (a) divided by (b), where:
(a) is any outstanding Policy Debt, plus the sum of any partial
surrenders to date; and
(b) is the Net Premium Factor.
Optional Payment Plan - A plan whereby any part of Life Insurance Proceeds or
Surrender Value proceeds can be left with us to provide a series of periodic
payments to an Owner or Beneficiary.
Owner - The Owner of the Policy as named in this Policy. "You" or "your" refers
to the Owner. Contingent owners may also be named.
Planned Periodic Premium - A level premium amount scheduled for payment at fixed
intervals over a specified period of time.
Policy - This Policy with any attached application(s), and any riders and
endorsements.
Policy Date - Date as of which the Company issues the Policy and as of which the
Policy becomes effective. Policy years and anniversaries are measured from the
Policy Date. The Policy Date is shown on the policy data pages.
Policy Debt - The amount of outstanding loans plus accrued interest. Policy Debt
is deducted from proceeds payable at the Insured's death or on surrender.
Policy Month - A one-month period beginning on a Monthly Anniversary Day and
ending on the day immediately preceding the next Monthly Anniversary Day.
Separate Account - The segregated asset account of the Company shown on the
policy data pages.
Specified Amount - An amount used in determining the insurance coverage on an
insured life. The original Specified Amount is shown on the policy data pages.
Surrender Value - The amount payable to the Owner upon surrender of the Policy.
Unit Value - Unit of measure used to calculate the Account Value for each
Investment Subdivision.
Valuation Day - For each Investment Subdivision, each day on which the New York
Stock Exchange is open for business except for days that the Investment
Subdivision's corresponding Fund does not value its shares.
Valuation Period - Period that starts at the close of regular trading on the New
York Stock Exchange on any Valuation Day and ends at the close of regular
trading on the next succeeding Valuation Day.
INTRODUCTION
This is a flexible premium variable life insurance policy. The first premium
payment is due on the Policy Date. Subsequent premiums may be paid at any time
while this Policy is in effect, subject to conditions specified in the Premium
Payments section. In return for these premiums and the insurance application, we
provide certain benefits.
The Policy provides Life Insurance Proceeds. Proceeds can be paid in a lump sum
or under an Optional Payment Plan.
During the Insured's life, the Policy has an Account Value. The Account Value
reflects the investment experience of the Separate Account. (See THE SEPARATE
ACCOUNT section.) This Account Value is the basis for certain benefits you can
use before the Insured's death.
We will provide a projection of illustrative future life insurance and Account
Value proceeds. To receive the illustration, send a written request to our Home
Office and pay any service fee in effect at that time, but not more than $25 per
illustration.
The illustration will assume:
o amounts of insurance;
o coverage options;
o future premium payments you specify; and
o other assumptions specified by you or by us.
The Policy and Its Parts
The Policy is a legal contract. It is the entire contract between you and us. An
agent cannot change this contract. Any change to it must be in writing and
approved by us. Only our President or one of our Vice-Presidents can give our
approval.
We will not use any statement in the original application to deny a claim unless
a copy of that application was attached to this Policy when issued or delivered.
We will not use any statement in a supplemental application to deny a claim
unless a copy of that application was sent to you when the change in coverage
went into effect. We will not use any statement in a reinstatement application
to deny a claim unless a copy of the reinstatement application was sent to you
when the Policy was reinstated.
READ YOUR POLICY CAREFULLY.
When This Policy Will Terminate
All coverage under this Policy will terminate when:
o you request that coverage terminate and you return this Policy;
o the Insured dies; or
o the grace period ends without sufficient premium being paid.
This Policy will also terminate as stated in the Suicide provision.
THE OWNER AND THE BENEFICIARY
The Owner
You have rights in the Policy during the Insured's life. The Policy names you or
someone else as the Insured. If you are not the Insured, you should name a
contingent owner who will become the Owner if you die before the Insured. If you
die before the Insured and there is no contingent owner, ownership passes to
your estate.
The Beneficiary
You may name primary and contingent Beneficiaries. Your original Beneficiary
choice is shown in the attached application. Unless an Optional Payment Plan is
chosen, the proceeds payable at the Insured's death will be paid in a lump sum
to the primary Beneficiary. If the primary Beneficiary dies before the Insured,
the proceeds will be paid to the contingent Beneficiary. If no Beneficiary
survives the Insured, the proceeds will be paid to you or your estate.
You may name more than one primary or contingent Beneficiary. If you do, the
proceeds will be paid in equal shares to the survivors in the appropriate
Beneficiary class, unless you have requested otherwise.
Changing the Owner or Beneficiary
During the Insured's life, you may change the Owner. You may also change the
Beneficiary during the Insured's life if you reserved this right.
How to Change the Owner or Beneficiary. To make a change, send a written request
to our Home Office. The request must be received by us in a form satisfactory to
us. The change will take effect as of the date you sign the request. The change
will be subject to any payment we make before we record the change.
Using the Policy as Collateral for a Loan
This Policy may be assigned as collateral security. We must be notified in
writing if you assign the Policy. Any payment we make before we record the
assignment at our Home Office will not be affected. We are not responsible for
the validity of an assignment. Your rights and the rights of a Beneficiary may
be affected by an assignment.
Trustee
If a trustee is named as the Owner or Beneficiary of this Policy and
subsequently exercises ownership rights or claims benefits hereunder, we will
have no obligation to verify that a trust is in effect or that the trustee is
acting within the scope of his/her authority. Payment of policy benefits to the
trustee will release us from all obligations under the Policy to the extent of
the payment. When we make a payment to the trustee, we will have no obligation
to ensure that such payment is applied according to the terms of the trust
agreement.
PREMIUM PAYMENTS
This Policy's first premium is due on the Policy Date.
Premiums After the First Premium
Any premium payments after the first premium may be made under a periodic plan
or at any time while this Policy is in effect.
Periodic Premium Plan. You may request that we send reminders of your Planned
Periodic Premium. You may choose to send premiums directly to us either
annually, semi-annually, or quarterly. We can also arrange for pre-authorized
payments from your bank account or similar facility either annually,
semi-annually, quarterly or monthly. Planned Periodic Premiums will be subject
to our rules on minimum amount.
You can change the frequency or amount of your Planned Periodic Premium. We
reserve the right to limit the amount of any increase in Planned Periodic
Premiums.
Unscheduled Payments. You can make an unscheduled premium payment at any time
while this Policy is in effect. Unscheduled payments are applied first to repay
any Policy Debt, unless you direct us otherwise. We reserve the right to limit
the number and amount of any unscheduled premium payments.
Maximum Premiums. We will limit the total of all premiums paid to date for this
Policy to the amounts shown in the table of maximum premiums in the policy data
pages. Any portion of a premium paid that causes the total of all premiums paid
to date to exceed the maximum premium will be returned to you along with any
earnings thereon. We reserve the right to change the table of maximum premiums
when necessary as a result of changes in coverage or to maintain compliance with
the Internal Revenue Code. If we do, we will send you a new table of maximum
premiums reflecting the adjusted amounts.
When and Where to Pay Premiums
Each premium is payable in advance. Send each premium to our Home Office. Make
the check or money order payable to The Life Insurance Company of Virginia.
Allocation of Net Premiums
You may allocate the Net Premium to one or more Investment Subdivisions of the
Separate Account, but not to more than the maximum number of allocations shown
in the policy data pages. The minimum percentage of each Net Premium which may
be allocated to any particular Investment Subdivision is shown on the policy
data pages. Net Premiums will initially be allocated in accordance with the
allocations requested by you. You may change the allocation of Net Premiums at
any time, without charge, simply by sending written notice to us at our Home
Office. The changed allocation will apply to premiums received after we record
the change.
Continuation Amount and Continuation Period
On any Monthly Anniversary Day during the Continuation Period, if the Surrender
Value of this Policy is not sufficient to cover the monthly deduction, this
Policy will remain in effect if the Net Total Premium is at least equal to the
Continuation Amount.
At the end of the Continuation Period, you may have to pay an additional premium
to keep the Policy inforce. (See Insufficient Account Value provision.)
An increase in Specified Amount will increase the Continuation Amounts while a
decrease in Specified Amount will reduce the Continuation Amounts. Any
termination and subsequent reinstatement of the Policy will reduce the
Continuation Amounts. We will send you a supplemental policy data page
reflecting the adjusted amounts. The Continuation Period will be as though the
Policy had been in effect continuously from its original Policy Date.
Grace Period
On any Monthly Anniversary Day during the Continuation Period, if (1) the
Surrender Value is not sufficient to cover the monthly deduction, and (2) the
Net Total Premium is less than the Continuation Amount, you must pay a premium
sufficient to keep the Policy in effect or coverage will terminate. The amount
of the sufficient premium will equal the lesser of (a) and (b), where:
(a) equals the monthly deduction due minus the Surrender Value, and
that result divided by the Net Premium Factor; and
(b) equals the Continuation Amount minus the Net Total Premium.
All amounts in (a) and (b) above are as of the Monthly Anniversary Day at the
beginning of the grace period. The monthly deduction is described in the ACCOUNT
VALUE BENEFITS section.
On any Monthly Anniversary Day after the Continuation Period, if the Surrender
Value is not sufficient to cover the monthly deduction, you must pay a premium
sufficient to keep the Policy in effect or coverage will terminate. In this
case, the amount of the sufficient premium will equal the monthly deduction due
minus the Surrender Value, and that result divided by the Net Premium Factor. As
used in this paragraph, the monthly deduction due and the Surrender Value are
both as of the Monthly Anniversary Day at the beginning of the grace period.
In either case, we will mail you written notice of the sufficient premium. This
notice will be sent to your last known address. You have a 61-day grace period
from the date we mail the notice to pay the sufficient premium.
Coverage continues during the 61-day grace period. If the Insured dies during
the grace period, proceeds will be reduced by the amount of the sufficient
premium (as described in this provision) that would have been required to keep
the Policy in effect.
If the sufficient premium is not paid by the end of the grace period, this
Policy will terminate without value.
How This Policy Can Be Reinstated
You may reinstate this Policy within three years of the end of the grace period
if:
(1) you submit an application for reinstatement;
(2) you provide required evidence of insurability satisfactory to us
that the Insured is insurable;
(3) the Policy has not been surrendered for cash; and
(4) you pay the premium as described in this section.
The Policy will be reinstated effective on the date we approve the
reinstatement. The surrender charge and the Continuation Period will be as
though the Policy had been in effect continuously from its original Policy Date.
On the date of reinstatement, the Account Value will be allocated to the
Investment Subdivisions of the Separate Account. Unless you tell us otherwise,
these allocations will be made in the same manner that Net Premiums are
allocated.
If this Policy terminates and is reinstated before the end of the Continuation
Period, you will have to pay an amount equal to (1) minus (2) minus (3) plus
(4), where:
(1) is the Continuation Amount as of the date of reinstatement; is
the sum of the monthly deductions that would have been made
during the period between termination and reinstatement,
divided by the Net Premium Factor; is the Net Total Premium on
the date of termination; and is an amount sufficient to keep
the Policy in effect for two Policy Months after the date of
reinstatement.
On the date of reinstatement, the Account Value will equal (a)
plus (b) minus (c), where:
(a) is the Account Value on the first day of the grace period;
(b) is the premium paid to reinstate multiplied by the Net Premium
Factor; and
(c) is the monthly deduction for the month following the date of
reinstatement.
If this Policy terminates before the end of the Continuation Period, and is
reinstated after the end of the Continuation Period, you will have to pay a
premium which, after multiplying by the Net Premium Factor, equals (1) plus (2)
minus (3), where:
(1) is the surrender charge on the date of termination; and
(2) is an amount equal to the monthly deductions for two months after
the date of reinstatement; and
(3) is the Account Value on the date of termination.
On the date of reinstatement, the Account Value will equal (a) plus (b) plus
(c), where:
(a) is the surrender charge in effect on the date of reinstatement;
(b) is an amount equal to the monthly deductions for the two months
after the date of reinstatement, minus the monthly deduction for
the month following the date of reinstatement; and
(c) is any premium paid in excess of the required reinstatement
premium, multiplied by the Net Premium Factor.
If this Policy terminates after the end of the Continuation Period and is
reinstated, you will have to pay a premium sufficient to keep the Policy in
effect for at least two months.
On the date of reinstatement, the Account Value will equal (a) plus (b) minus
(c), where:
(a) is the surrender charge in effect on the date of reinstatement;
(b) is the premium paid to reinstate multiplied by the Net Premium
Factor; and
(c) is the monthly deduction for the month following the date of
reinstatement.
LIFE INSURANCE PROCEEDS
Life Insurance Proceeds are payable at the death of the Insured. We will pay
the Life Insurance Proceeds on this Policy when we receive: this Policy; due
proof that the Insured died while this Policy was in effect; and proof of the
interest of the claimant.
Proceeds can be paid in a lump sum or under an Optional Payment Plan.
How We Determine Proceeds
In the application for original coverage, the Owner elected one of two death
benefit options.
Under Option A, Life Insurance Proceeds are based on the greater of (1) and (2),
where: (1) is the Specified Amount plus the Account Value; and (2) is the
Account Value multiplied by the corridor percentage.
Under Option B, Life Insurance Proceeds are based on the greater of (1) and (2),
where: (1) is the Specified Amount; and (2) is the Account Value multiplied by
the corridor percentage.
For both Option A and Option B, references to Specified Amount and Account Value
in items (1) and (2), are amounts in effect on the date of death.
In no event will Life Insurance Proceeds be less than the amount required to
keep the Policy qualified as life insurance.
The corridor percentage will depend on the Attained Age of the Insured on the
date of death. (See the corridor percentage chart in this section.)
Actual Amount of Proceeds. The actual amount of proceeds will depend on: the
Life Insurance Proceeds as determined in this section; the use of the Account
Value; any partial surrenders; any Policy Debt; any additional insurance
provided by rider; any increase or decrease in existing coverage; the Insured's
suicide during the first two policy years; and a misstatement of the Insured's
Age or sex.
- --------------------------------------------------------------------------------------------------------------
Table of Percentages of Account Value
- --------------------------------------------------------------------------------------------------------------
Corridor Corridor Corridor
Attained Age Percentage Attained Age Percentage Attained Age Percentage
0-40 250% 54 157% 68 117%
41 243% 55 150% 69 116%
42 236% 56 146% 70 115%
43 229% 57 142% 71 113%
44 222% 58 138% 72 111%
45 215% 59 134% 73 109%
46 209% 60 130% 74 107%
47 203% 61 128% 75 - 90 105%
48 197% 62 126% 91 104%
49 191% 63 124% 92 103%
50 185% 64 122% 93 102%
51 178% 65 120% 94+ 101%
52 171% 66 119%
53 164% 67 118%
- --------------------------------------------------------------------------------------------------------------
Compliance as Life Insurance
We reserve the right to amend this Policy as necessary to maintain compliance
with the Internal Revenue Code. We will send any such amendments to you. You
have the right to refuse such amendments and accept full responsibility for any
consequences as a result of such refusal.
Change in Existing Coverage
After the Policy has been in effect for one year, you can increase or decrease
the Specified Amount. To make a change, send a written request along with the
Policy to our Home Office.
Decrease in Specified Amount. Any decrease will become effective on the Monthly
Anniversary Day after the date we receive the request. The decrease will first
apply to coverage provided by the most recent increase, then to the next most
recent increases successively, then to the coverage provided under the original
application.
During the Continuation Period, we will not allow a decrease unless the Account
Value less any Policy Debt is greater than the surrender charge. A decrease may
not cause the Specified Amount to be less than the minimum Specified Amount
shown on the policy data pages. A decrease may cause a surrender charge to be
assessed and may require a payment to you to keep the Policy qualified as life
insurance.If this event occurs, we will send you revised policy data pages. (See
Surrender Charge on Decrease in Specified Amount in the Surrender provision.)
Increase in Specified Amount. You must apply for an increase in Specified Amount
on a supplemental application. You will have to submit evidence satisfactory to
us that the Insured is insurable.
Any approved increase will become effective on the date shown in the
supplemental policy data pages, provided that there is sufficient Account Value
to cover the first monthly deduction following the increase. (See Monthly
Deduction provision.)
Change in Death Benefit Options
If you elected death benefit Option A, you can request a change to death benefit
Option B. The Specified Amount after the change will equal the sum of (1) plus
(2), where:
(1) is the Specified Amount on the date your request becomes effective;
and
(2) is the Account Value on the date your request becomes effective.
If you elected death benefit Option B, you can request a change to death benefit
Option A. This will decrease the Specified Amount by the amount of Account
Value.
Any change in death benefit options will become effective on the first Monthly
Anniversary Day after the date we receive the request in our Home Office.
THE SEPARATE ACCOUNT
The Separate Account supports the operation of this Policy and certain other
variable life insurance policies we may offer. We will not allocate assets to
the Separate Account to support the operation of any contracts or policies that
are not variable life insurance.
We own the assets in the Separate Account. These assets are held separately from
our other assets and are not part of our General Account.
The Separate Account is registered with the Securities and Exchange Commission
as a unit investment trust under the Investment Company Act of 1940. The
Separate Account is also subject to laws of the Commonwealth of Virginia which
regulate the operations of insurance companies incorporated in Virginia. The
investment policy of the Separate Account will not be changed without the
approval of the Insurance Commissioner of the Commonwealth of Virginia. The
approval process is on file with the Insurance Commissioner of the state in
which this Policy was delivered.
Insulation of Assets
The portion of the assets of the Separate Account which equals the reserves and
other policy liabilities of the policies which are supported by the Separate
Account will not be charged with liabilities arising from any other business we
conduct. We have the right to transfer to our General Account any assets of the
Separate Account which are in excess of such reserves and other policy
liabilities.
Investment Subdivisions
The Separate Account is divided into Investment Subdivisions. The income, gains
and losses, realized or unrealized, from the assets allocated to an Investment
Subdivision are credited to or charged against such Investment Subdivision
without regard to other income, gains or losses of the Company.
The Investment Subdivisions available under this Policy are shown in the policy
data pages. Each Investment Subdivision in the Separate Account invests
exclusively in shares of a designated portfolio of a series type of mutual fund
(a "Fund"). Any amounts of income, dividends and gains distributed from the
shares of a Fund are reinvested in additional shares of that Fund.
Changes to the Separate Account and Investment Subdivisions
Where permitted by applicable law, the Company may:
1. create new separate accounts;
2. combine separate accounts, including the Separate Account;
3. transfer assets of the Separate Account, which we determine to be
associated with the class of policies to which this Policy belongs,
to another separate account;
4. add new Investment Subdivisions to or remove existing Investment
Subdivisions from the Separate Account or combine Investment
Subdivisions;
5. make Investment Subdivisions (including new Investment
Subdivisions) available to such classes of policies as we may
determine;
6. add new Funds or remove existing Funds;
7. substitute new Funds for any existing Fund whose shares are no
longer available for investment;
8. substitute new Funds for any existing Fund which we determine is no
longer appropriate in light of the purposes of the Separate
Account;
9. deregister the Separate Account under the Investment Company Act of
1940; and
10. operate the Separate Account under the direction of a committee or
in any other form permitted by law.
In the event of any substitution or change, we may, by appropriate endorsement,
make such changes in this and other policies as may be necessary or appropriate
to reflect the substitution or change.
Valuation of Separate Account Assets
We will value the assets of the Separate Account each Valuation Day at their
fair market value in accordance with accepted accounting practices and
applicable laws and regulations.
Policy Exchange
If you object to a material change in the investment policy of the Separate
Account or any Investment Subdivision, you have the right to exchange this
Policy for a fixed benefit policy. No evidence of insurability will be required.
We will notify you of the options available, and the procedures to follow if you
decide to make an exchange. You must make an exchange within sixty days after
the change in investment policy becomes effective. There will always be one
policy available for exchange.
Unit Value
Each Investment Subdivision has a Unit Value. When Net Premiums or other amounts
are transferred into an Investment Subdivision, a number of units are purchased
based on that Investment Subdivision's Unit Value as of the end of the Valuation
Period during which the transfer is made. Likewise, when amounts are transferred
out of an Investment Subdivision, units are redeemed in a similar manner.
The Unit Value of each Investment Subdivision was arbitrarily set when the
Investment Subdivision began operations. The Unit Value for each subsequent
Valuation Period is the net investment factor for that period, multiplied by the
Unit Value for the immediately preceding period. The Unit Value for a Valuation
Period applies to each day in the period.
Each Investment Subdivision has its own net investment factor. In the following
definition, "assets" refers to the assets in each Investment Subdivision. "Any
amount charged against the Separate Account" refers to those amounts that are
allocated to each Investment Subdivision.
The net investment factor for a Valuation Period is (a) divided by (b), minus
(c), where: (a) is the result of:
1. the value of the assets at the end of the preceding
Valuation Period; plus
2. the investment income and capital gains, realized or
unrealized, credited to those assets at the end of the
Valuation Period for which the net investment factor is
being determined; minus
3. the capital losses, realized or unrealized, charged against
those assets during the Valuation Period; minus
4. any amount charged against the Separate Account for taxes,
or any amount we set aside during the Valuation Period as a
provision for taxes attributable to the operation or
maintenance of the Separate Account; and
(b) is the value of the assets in the Investment
Subdivision at the end of the preceding Valuation
Period; and
(c) is a charge no greater than .0024769% for each day in
the Valuation Period. This corresponds to .90% per
year.
Transfers
You may transfer Account Value among the Investment Subdivisions of the Separate
Account. The transfer will be effective as of the end of the Valuation Period
during which we receive your request at our Home Office. You must request a
transfer in writing or in any other form acceptable to us. We reserve the right
to limit the number of transfers to twelve each calendar year. The first
transfer in each calendar month will be made without a transfer charge. A
transfer charge will be imposed for each subsequent transfer in a calendar
month. This transfer charge is shown on the policy data pages. When we make
transfers, the Account Value on the date of the transfer will not be affected by
the transfer except to the extent of the transfer charge. The transfer charge
will be taken from the amount transferred.
ACCOUNT VALUE BENEFITS
How We Determine Account Value
At the end of the Valuation Period during which the first premium is received,
the Account Value in each Investment Subdivision is equal to (a) minus (b),
where:
(a) is the portion of the Net Premium which has been paid and
allocated to that Investment Subdivision; and
(b) is the portion of any due and unpaid monthly deductions
allocated to the Account Value in that Investment
Subdivision.
At the end of each Valuation Period after such date, the Account Value allocated
to each Investment Subdivision of the Separate Account is (1) plus (2) plus (3)
minus (4) minus (5) minus (6), where:
(1) is the Account Value allocated to the Investment Subdivision at the
end of the preceding Valuation Period, multiplied by the Investment
Subdivision's net investment factor for the current Valuation
Period;
(2) is Net Premiums received during the current Valuation Period and
which are allocated to the Investment Subdivision;
(3) is any other amount transferred into the Investment Subdivision
during the current Valuation Period;
(4) is any partial surrender made from the Investment Subdivision
during the current Valuation Period;
(5) is any Account Value transferred out of the Investment Subdivision
during the current Valuation Period;
(6) any monthly deduction allocated to the Investment Subdivision
during the current Valuation Period.
How We Determine Net Premium
To calculate the Net Premium, multiply the premium paid times the Net Premium
Factor.
The minimum Net Premium Factor is shown on the policy data pages. We may use a
Net Premium Factor greater than the minimum Net Premium Factor at our sole
discretion.
Monthly Deduction
The monthly deduction is a charge made on the Policy Date and each Policy Month
thereafter against the Account Value. It is determined by adding the cost of
insurance, the cost of additional benefits provided by rider, and the monthly
policy charge. The monthly deduction for the month when an increase in the
Specified Amount becomes effective will include the increase charge per $1000
for each $1000 of increase.
The actual monthly policy charge will never be greater than the maximum monthly
policy charge shown on the policy data pages. The increase charge per $1,000 is
also shown on the policy data pages.
The monthly deduction for a Policy Month will be allocated among the Investment
Subdivisions of the Separate Account in the same proportion that the Policy's
Account Value in each Investment Subdivision bears to the total Account Value in
all Investment Subdivisions at the beginning of the Policy Month.
Cost of Insurance
The cost of insurance is calculated on each Monthly Anniversary Day and is based
on the net amount at risk. The net amount at risk is calculated by dividing the
Life Insurance Proceeds by 1.0032737, and then subtracting the Account Value. To
determine the cost of insurance for a particular Policy Month, we divide the net
amount at risk by 1000 and multiply that result by the applicable cost of
insurance rate. If Option B is in effect, and the Specified Amount has
increased, the Account Value is first considered part of the initial Specified
Amount. If the Account Value is more than the initial Specified Amount, it will
be considered part of the increased Specified Amounts resulting from increases
in the order of the increases.
Cost of Insurance Rate. The monthly rate is based on the Insured's sex, issue
age, policy duration and risk class. The risk class (and therefore the rates)
will be determined separately for the initial Specified Amount and for any
increase in the Specified Amount that requires evidence of insurability. The
rates are determined by us according to our expectations of future experience
for mortality, lapse, taxes, interest, and expenses. We can change the rates
from time to time, but they will never be more than the maximum rates shown in
the table of guaranteed maximum insurance rates. A change in rates will apply to
all persons of the same age, sex and risk class and whose policies have been in
effect for the same length of time.
Insufficient Account Value
On a Monthly Anniversary Day, if the Account Value less the surrender charge and
less any Policy Debt is not enough to cover the monthly deduction for that
Monthly Anniversary Day, the Grace Period provision will apply.
Continuation of Coverage
This Policy and any riders will remain in effect:
o as long as the Account Value less the surrender charge and less
any Policy Debt covers the monthly deduction; or
o as provided for in the Continuation Amount and Continuation
Period provision under PREMIUM PAYMENTS.
A rider attached to this Policy will not continue beyond its termination date
under any circumstances.
Surrender
You can make a full or partial surrender of this Policy by sending a written
request and the Policy to our Home Office. Unless an Optional Payment Plan is
chosen, any proceeds payable will be paid to you in a lump sum. A surrender must
take place during the Insured's life.
Amount Payable on Surrender. The Surrender Value of this Policy is the Account
Value on the date we receive your request for surrender in our Home Office less
any Policy Debt and less any surrender charge that applies.
Surrender Charge. We will charge a surrender charge during the surrender charge
period in the case of a full surrender of this Policy, and for decreases in
Specified Amount as described below. The amount of surrender charge is shown in
the policy data pages. The surrender charge period is the period of Policy
Months for which a surrender charge is shown in the policy data pages.
Surrender Charge on Decrease in Specified Amount. If the Specified Amount is
decreased to less than the smallest Specified Amount that had previously been in
effect, we may charge a surrender charge. The amount of surrender charge will be
the charge for a full surrender, multiplied by the ratio of (a) to (b), where:
(a) is the smallest Specified Amount that was in effect prior to the
current decrease, minus the Specified Amount after the current
decrease; and
(b) is the smallest Specified Amount that was in effect prior to the
current decrease.
Surrender charges in effect prior to the decrease will be adjusted to reflect
any assessments made.
Partial Surrender. You can make a partial surrender of this Policy. A partial
surrender cannot be less than $500. A partial surrender cannot exceed the
lesser of:
o the Surrender Value, less $500; or
o the available loan amount.
We generally will reduce both the Account Value and the Life Insurance Proceeds
by the amount of any partial surrender. A partial surrender will not be
permitted during the first policy year if death benefit Option B is in effect.
You may tell us how to allocate the partial surrender among the Investment
Subdivisions of the Separate Account. If you do not, the partial surrender will
be allocated among each Investment Subdivision in the same proportion that the
Policy's Account Value in each Investment Subdivision bears to the total Account
Value in all Investment Subdivisions on the date we receive the request in our
Home Office.
We will deduct a charge from the amount of each partial surrender. This charge
will equal the lesser of (i) $25, or (ii) 2% of the amount of the partial
surrender.
Receiving the Surrender Value
The Surrender Value is payable in one lump sum unless you choose to receive
periodic payments under an Optional Payment Plan.
Postponement of Payments
We will usually pay any amounts payable as a result of surrender, partial
surrender, or policy loan within seven days after we receive written request in
our Home Office, in a form satisfactory to us. We will usually pay any Life
Insurance Proceeds within seven days after we receive due proof of death.
Payment of any amount payable on surrender, partial surrender, policy loan or
Life Insurance Proceeds may be postponed whenever:
o the New York Stock Exchange is closed other than customary week-end
and holiday closings, or trading on the New York Stock Exchange is
restricted as determined by the Securities and Exchange Commission;
or
o the Securities and Exchange Commission by order permits postponement
for the protection of policyowners; or
o an emergency exists, as determined by the Securities and Exchange
Commission, as a result of which disposal of securities is not
reasonably practicable or it is not reasonably practicable to
determine the value of the net assets of the Separate Account.
We have the right to defer payment which is derived from any amount recently
paid to us by check or draft, until we are satisfied the check or draft has been
paid by the bank on which it is drawn.
LOAN BENEFITS
This Policy has loan benefits that are described below.
Making A Policy Loan
You may obtain a policy loan from us. This Policy is the only security required.
The maximum loan amount is 90% of the difference between (a) the Account Value
and (b) any surrender charge on the date of the loan. The available loan amount
is the maximum loan amount less any outstanding Policy Debt.
When a policy loan is made, an amount of Account Value sufficient to secure the
loan is transferred out of the Separate Account and into our General Account.
You may tell us how to allocate that Account Value among the Investment
Subdivisions of the Separate Account. If you do not, that Account Value will be
allocated among each Investment Subdivision in the same proportion that the
Policy's Account Value in each Investment Subdivision bears to the total Account
Value in all Investment Subdivisions on the date we make the loan.
Any loan transaction will permanently affect the values of the Policy.
Policy Loan Interest
The interest rate paid on policy loans is shown on the policy data pages.
Interest accrues daily, and is due and payable on each policy anniversary. If
interest is not paid when due, an amount equal to the amount owed will be
transferred out of the Separate Account to become part of the Policy Debt and
interest will be charged on that amount. Interest transferred out of the
Separate Account will be transferred from each Investment Subdivision in the
same proportion that the Account Value in that Investment Subdivision bears to
the total Account Value in all Investment Subdivisions at the time of interest
transfer.
Preferred Policy Debt
Account Value in the General Account will earn interest daily at a minimum
annual rate of 4%. On each policy anniversary day, the interest earned since the
preceding policy anniversary day will be transferred into the Separate Account.
Unless you tell us otherwise, this interest will be allocated to the Investment
Subdivisions in the same manner as Net Premiums.
A portion of policy loans taken and/or existing after the preferred loan
availability date (shown on the policy data pages) will be designated as
preferred policy debt. The amount of preferred policy debt is redetermined each
policy month. Borrowed Account Value that corresponds to preferred policy debt
will earn interest at no less than the minimum annual rate of 4%. At our sole
discretion, we may use an interest rate higher than the guaranteed interest
rate. Preferred policy debt will be at least as large as:
(a) the Account Value less any surrender charge that applies, minus
(b) the total premiums paid.
Repaying Policy Debt
You can repay Policy Debt in part or in full any time during the Insured's life
while this Policy is in effect. Loan payments will first be applied to reduce
the portion of Policy Debt that does not correspond to preferred policy debt.
When a loan repayment is made, Account Value in the General Account related to
that payment will be transferred into the Separate Account. You may tell us how
to allocate this Account Value among each Investment Subdivision of the Separate
Account. If you do not, we will allocate that amount among the Investment
Subdivisions in the same proportion that Net Premiums are being allocated.
If you do not repay Policy Debt, it will be deducted from any proceeds or
benefit payable at the Insured's death or on surrender. Any Policy Debt which
exists at the end of the 61-day grace period will be deducted from the Account
Value and considered repaid as of the date of termination.
Minimum Loan Payment
During the Continuation Period, if Policy Debt on any Monthly Anniversary Day
exceeds the Account Value less any surrender charge that applies, and the Net
Total Premium is less than the Continuation Amount, your Policy will enter a
61-day grace period. You will have the 61-day grace period to pay a minimum loan
payment equal to the lesser of (a) and (b), where:
(a) equals the amount by which Policy Debt exceeds the Account Value
less any surrender charge; and
(b) equals the Net Premium Factor times the difference between the
Continuation Amount and the Net Total Premium.
All amounts in (a) and (b) above are as of the Monthly Anniversary Day when
excess Policy Debt first occurs.
After the Continuation Period, if Policy Debt on any Monthly Anniversary Day
exceeds the Account Value less any surrender charge that applies, your Policy
will enter a 61-day grace period. In this case, you will have the 61-day grace
period to pay a minimum loan payment equal to the amount by which Policy Debt
exceeds the Account Value less any surrender charge. As used in this paragraph,
Policy Debt, Account Value and surrender charge are all as of the Monthly
Anniversary Day when excess Policy Debt first occurs.
We will send written notice of the minimum loan payment to you and any assignee
of record at our Home Office at least 30 days prior to the date of termination.
If you do not pay the minimum loan payment by the end of the grace period, your
Policy will terminate without value.
GENERAL INFORMATION
Annual Statement
On each policy anniversary, we will send you an annual statement. The statement
will show the Specified Amount, the Account Value, the Surrender Value and
Policy Debt as of the policy anniversary. The statement will also show premiums
paid and charges made during the policy year.
Calculation of Values
Our calculations of guaranteed maximum cost of insurance rates are based on the
Commissioners' 1980 Standard Ordinary Smoker or Nonsmoker Mortality Table for
issue ages 15 and above. For issue ages 0-14, they are based on the
Commissioner's 1980 Standard Ordinary Mortality Tables without distinction for
smoker or nonsmoker status, until attained age 15; then for attained ages 15 and
over, they are based on the Commissioner's 1980 Standard Ordinary Nonsmoker
Mortality Table.
If this Policy or an increased Specified Amount is in a special rating class,
the guaranteed maximum insurance rates are increased in the manner described in
the table of guaranteed maximum insurance rates.
If the net investment factor is always equivalent to an effective annual
interest rate of 4%, the values in this Policy will always at least equal the
account values required of an equivalent general account policy by the law where
this Policy was delivered. A detailed statement of how we calculate the values
in this Policy has been filed with the insurance department where this Policy
was delivered.
Exchange Provision
During the first 24 policy months, you have the right to exchange this Policy
for a permanent fixed benefit policy. We will not require evidence of
insurability. If you decide to make an exchange, we will notify you of the
policies available for exchange and the procedures to follow.
You may elect to have the amount of the new policy be either (a) or (b) where:
(a) is the Life Insurance Proceeds on the date of exchange, and
(b) is the Life Insurance Proceeds minus the Account Value on the date
of exchange.
The new policy will have the same policy date, sex, issue age and rating class
as this Policy. The new policy will include such riders and endorsements as were
included in this Policy, if such riders and endorsements are available with the
new policy.
The exchange is subject to an equitable adjustment in payments and Account
Values to reflect variances, if any, in the payments and Account Values under
the existing Policy and the new policy.
Limits on Contesting This Policy
In deciding to issue this Policy, we relied on statements in the application for
the Policy. If we increase the Specified Amount or reinstate the Policy after it
lapses, we rely on statements in a supplemental application or a reinstatement
application. The statements in all such applications are considered
representations and not warranties.
We can contest this Policy, an increase in Specified Amount and/or a
reinstatement of this Policy, if:
o any material misrepresentation of fact was made in the application,
a supplemental application or a reinstatement application; and
o a copy of that application was attached to the Policy when issued or
delivered, or was made a part of the Policy when a change in coverage
or Policy reinstatement went into effect.
With respect to the original Specified Amount, we will not contest this Policy
after it has been in effect during the lifetime of the Insured for two years
from its policy date. We will not contest an increase in Specified Amount after
that increase has been in effect during the lifetime of the Insured for two
years from the effective date of the increase. We will not contest a
reinstatement of this Policy after the reinstated Policy has been in effect
during the lifetime of the Insured for two years from the date of reinstatement.
This provision does not apply to riders that provide disability benefits.
Misstatement of Age or Sex
If the Insured's Age or sex was misstated in an application, Life Insurance
Proceeds will be adjusted. The Life Insurance Proceeds after adjustment will be
the sum of (a) and (b), where:
(a) is the Account Value at the time of the Insured's death; and
(b) is the unadjusted Life Insurance Proceeds, reduced by the Account
Value at the time of the Insured's death, and multiplied by the
ratio of (1) the most recent monthly deduction based on the Age
and sex shown in the application, to (2) the most recent monthly
deduction based on the true Age or sex.
All amounts are those in effect, with respect to the Insured, in the Policy
Month of the Insured's death.
In no event will Life Insurance Proceeds be less than the amount required to
keep the Policy qualified as life insurance.
Nonparticipating
This is not a participating policy. No dividends are payable.
Suicide
If the Insured commits suicide, while sane or insane, within two years of the
Policy Date, all coverage under the Policy will end, and we will pay a limited
amount of proceeds. The limited amount of proceeds will equal all premiums paid
on the Policy, less Policy Debt and partial surrenders.
If the Insured commits suicide, while sane or insane, more than two years after
the policy date and within two years after an increase in the Specified Amount
became effective, the Specified Amount will be reduced to the amount in effect
prior to the increase. The amount payable with respect to the increase will
equal the monthly deductions that were made for that increase.
Any limited amount payable will be treated as Life Insurance Proceeds and paid
to the Beneficiary under the same conditions as the original Specified Amount.
Written Notice
Any written notice to us should be sent to our Home Office at 6610 West Broad
Street, Richmond, Virginia 23230. Please include the policy number and the
Insured's full name.
Any notice we send to you will be sent to your address shown in the application.
Notify us of any change of address.
OPTIONAL PAYMENT PLANS
Life insurance or surrender value proceeds will be paid in one lump sum, unless
requested otherwise. Any part of the proceeds can be left with us and paid under
a payment plan. During the Insured's life, you can choose a plan. A Beneficiary
can choose a plan if you have not chosen one at the Insured's death.
There are several important payment plan rules:
o The payee under a plan cannot be a corporation, association or
fiduciary.
o If you change a Beneficiary, your plan selection will no longer be in
effect unless you request that it continue
o Any choice or change of a plan must be sent in writing to our Home
Office.
o The amount of each payment under a plan must be at least $50.
o Payments will begin either on the date of death or on lapse, except
for payments under Plan 4 which begin at the end of the first
interest period.
o Payments are backed by assets in our General Account.
Plan 1. Income for A Fixed Period. We will make equal periodic payments for a
fixed period, not longer than 30 years. Payments can be annual, semi-annual,
quarterly or monthly. Payments will be made according to the table in this
section. Guaranteed amounts payable under this plan will earn interest at 3%
compounded yearly. We may increase the interest and the amount of any payment.
If the payee dies, the amount of the remaining guaranteed payments will be
discounted to the date of the payee's death at a yearly rate of 3%. Discounted
means we will deduct the amount of interest each remaining payment would have
included had it not been paid out early. The discounted amount will be paid in
one sum to the payee's estate unless otherwise provided.
Plan 2. Life Income. `We will make equal monthly payments for a guaranteed
minimum period. If the payee lives longer than the minimum period, payments will
continue for his or her life. The minimum period can be 10, 15 or 20 years.
Payments will be according to the table in this section. Guaranteed amounts
payable under this plan will earn interest at 3% compounded yearly. We may
increase the interest rate and the amount of any payment. If the payee dies
before the end of the guaranteed period, the amount of remaining payments for
the minimum period will be discounted at the same interest rate used to
calculate the monthly income. The discounted amounts will be paid in one sum to
the payee's estate unless otherwise provided.
Plan 3. Income of A Definite Amount. We will make equal periodic payments of a
definite amount. Payments can be annual, semi-annual, quarterly or monthly. The
amount paid each year must be at least $120 for each $1,000 of proceeds.
Payments will continue until the proceeds are exhausted. The last payment will
equal the amount of any unpaid proceeds. Unpaid proceeds will earn interest at
3% compounded yearly. We may increase the interest rate. If we do, the payment
period will be extended. If the payee dies, the amount of the remaining proceeds
with earned interest will be paid in one sum to his or her estate unless
otherwise provided.
Plan 4. Interest Income. We will make periodic payments of interest earned from
the proceeds left with us. Payments can be annual, semi-annual, quarterly or
monthly, and will begin at the end of the first period chosen. Proceeds left
under this plan will earn interest at 3% compounded yearly. We may increase the
interest rate and the amount of any payment. If the payee dies, the amount of
remaining proceeds and any earned but unpaid interest will be paid in one sum to
his or her estate unless otherwise provided.
Plan 5. Joint Life and Survivor Income. We will make equal monthly payments to
two payees for a guaranteed minimum of 10 years. Each payee must be at least 35
years old when payments begin. The guaranteed amount payable under this plan
will earn interest at 3% compounded yearly. We may increase the interest rate
and the amount of any payment. Payments will continue as long as either payee is
living. If both payees die before the end of the minimum period, the amount of
the remaining payments for the 10 year period will be discounted at the same
interest rate used to calculate the monthly income. The discounted amount will
be paid in one sum to the survivor's estate unless otherwise provided.
Plan 1 Table: Monthly payment rates for each $1,000 of proceeds under Plan 1.
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Years 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Payable
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Monthly
Payment $84.47 $42.68 $28.99 $22.06 $17.91 $15.14 $13.16 $11.68 $10.53 $9.61 $8.86 $8.24 $7.71 $7.26 $6.87
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Years 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Payable
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Monthly
Payment $6.53 $6.23 $5.96 $5.73 $5.51 $5.32 $5.15 $4.99 $4.84 $4.71 $4.59 $4.47 $4.37 $4.27 $4.18
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Annual, semi-annual or quarterly payments are determined by multiplying the
monthly payment by 11.838, 5.963 or 2.992, respectively.
Plan 2 Table: Monthly payment rates for each $1,000 of proceeds under Plan 2.
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Settlement| Male Payee | Female Payee | Settlement| Male Payee | Female Payee
Age |---------------------------|---------------------------| Age |--------------------------|--------------------------
|10 Years 15 Years 20 Years |10 Years 15 Years 20 Years | |10 Years 15 Years 20 Years|10 Years 15 Years 20 Years
|Certain Certain Certain | Certain Certain Certain | |Certain Certain Certain |Certain Certain Certain
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20 2.90 2.89 2.89 2.80 2.80 2.80 65 5.44 5.17 4.83 4.85 4.72 4.54
25 2.99 2.98 2.98 2.88 2.87 2.87 66 5.58 5.28 4.89 4.97 4.83 4.62
30 3.10 3.10 3.09 2.96 2.96 2.96 67 5.74 5.38 4.96 5.10 4.93 4.69
35 3.24 3.24 3.23 3.08 3.07 3.07 68 5.89 5.49 5.02 5.24 5.04 4.77
40 3.43 3.41 3.39 3.22 3.21 3.20 69 6.05 5.60 5.08 5.39 5.16 4.84
45 3.66 3.64 3.60 3.40 3.39 3.37 70 6.22 5.70 5.13 5.55 5.28 4.92
50 3.95 3.91 3.85 3.63 3.61 3.59 71 6.39 5.81 5.18 5.71 5.39 4.99
51 4.02 3.97 3.91 3.68 3.66 3.63 72 6.57 5.91 5.23 5.88 5.51 5.05
52 4.09 4.04 3.96 3.74 3.72 3.68 73 6.75 6.01 5.27 6.06 5.63 5.12
53 4.16 4.11 4.02 3.80 3.77 3.74 74 6.93 6.10 5.31 6.25 5.75 5.17
54 4.24 4.18 4.08 3.86 3.83 3.79 75 7.12 6.19 5.35 6.44 5.87 5.22
55 4.32 4.25 4.15 3.93 3.90 3.85 76 7.30 6.28 5.38 6.64 5.98 5.27
56 4.41 4.33 4.21 4.00 3.96 3.91 77 7.49 6.35 5.40 6.85 6.09 5.31
57 4.50 4.41 4.28 4.07 4.03 3.97 78 7.67 6.43 5.42 7.06 6.19 5.35
58 4.60 4.49 4.34 4.15 4.10 4.03 79 7.85 6.49 5.44 7.27 6.28 5.38
59 4.70 4.58 4.41 4.23 4.18 4.10 80 8.02 6.55 4.46 7.48 6.37 5.41
60 4.81 4.67 4.48 4.32 4.26 4.17 81 8.18 6.61 5.47 7.68 6.45 5.43
61 4.92 4.77 4.55 4.42 4.35 4.24 82 8.34 6.65 5.48 7.88 6.52 5.45
62 5.04 4.86 4.62 4.52 4.53 4.39 84 8.63 6.73 5.50 8.26 6.63 5.48
64 5.30 5.06 4.76 4.73 4.62 4.46 85& 8.76 6.76 5.50 8.43 6.68 5.49
over
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Values for ages not shown will be furnished upon request.
Plan 5 Table: Monthly payment rates for each $1000 of proceeds under Plan 5.
Monthly payment rates for each $1,000 of proceeds under Plan 5.
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Male Settlement | Female Settlement Age
|-----------------------------------------------------------------------------------------
Age | 35 | 40 | 45 | 50 | 55 | 60 | 65 | 70 | 75 | 80 |85 & over
- ----------------------------------------------------------------------------------------------------------
35 $2.95 $3.00 $3.06 $3.11 $3.15 $3.18 $3.20 $3.22 $3.23 $3.24 $3.24
40 2.98 3.06 3.13 3.20 3.26 3.31 3.35 3.38 3.40 3.41 3.42
45 3.01 3.10 3.20 3.30 3.39 3.46 3.53 3.58 3.61 3.64 3.65
50 3.03 3.14 3.25 3.38 3.51 3.63 3.73 3.38 3.87 3.91 3.93
55 3.04 3.16 3.30 3.45 3.62 3.79 3.94 4.08 4.18 4.25 4.29
60 3.05 3.18 3.33 3.51 3.72 3.94 4.16 4.37 4.55 4.67 4.75
65 3.06 3.19 3.36 3.56 3.79 4.07 4.37 4.68 4.96 5.18 5.32
70 3.07 3.20 3.37 3.59 3.85 4.17 4.55 4.97 5.39 5.75 6.00
75 3.07 3.21 3.38 3.61 3.89 4.24 4.68 5.20 5.78 6.32 6.73
80 3.07 3.21 3.39 3.62 3.91 4.28 4.76 5.37 6.08 6.81 7.40
85 & over 3.07 3.22 3.39 3.62 3.92 4.31 4.81 5.47 6.28 7.15 7.91
- ----------------------------------------------------------------------------------------------------------
Figures for intermediate ages, for two males or two females will be furnished
upon request.
Settlement Age: The settlement age is the payee's age nearest birthday on the
date payments begin, minus an age adjustment from the table below. The age
adjustment cannot exceed the age of the payment.
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YEAR Payments Begin AGE
ADJUSTMENT
AFTER PRIOR TO
- -----------------------------------------------------------------------
----- 2001 0
2000 2026 3
2025 2051 7
2050 ---- 10
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