EXHIBIT 1.A (5)(a)
SECURITY LIFE OF DENVER
INSURANCE COMPANY
INSURED (1): JOHN DOE
INSURED (2): MARY DOE
POLICY DATE: August 1, 1999
POLICY NUMBER: 67000001
WE AGREE TO PAY the death benefit to the beneficiary upon the second death of
the two insureds while this policy is in force.
WE ALSO AGREE to provide the other rights and benefits of the policy. These
agreements are subject to the provisions of the policy.
RIGHT TO EXAMINE PERIOD. You have the right to examine and return this policy
within 10 days after receipt. The policy may be returned by delivering or
mailing it to us at our Customer Service Center or to your registered
representative. Immediately upon return it will be deemed void as of the policy
date. Upon return of the policy to us, we will refund all premiums paid. If this
policy is a replacement policy as defined by state law where this policy is
delivered, you have the right to examine and return this policy within 10 days.
/s/ Gary W. Waggoner /s/ Stephen M. Christopher
Secretary President
In this policy "you" and "your" refer to the owner of the policy. "We", "us" and
"our" refer to Security Life of Denver Insurance Company.
THIS IS A NON-PARTICIPATING POLICY.
THIS POLICY IS A LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
POLICY.
THIS POLICY INCLUDES PERSISTENCY BONUS.
DEATH BENEFITS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE. THESE VALUES MAY
INCREASE OR DECREASE BASED ON INVESTMENT EXPERIENCE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. DEATH BENEFITS ARE PAYABLE BY US UPON THE SECOND DEATH OF
THE TWO INSUREDS. THERE IS NO MATURITY DATE. FLEXIBLE PREMIUMS ARE PAYABLE BY
YOU DURING THE LIFETIME OF EITHER INSURED UNTIL THE POLICY ANNIVERSARY NEAREST
THE YOUNGER INSURED'S 100TH BIRTH DATE.
The death benefit is payable following the second death. However, you should
give us notice of the first death at the time it occurs.
SECURITY LIFE OF DENVER INSURANCE COMPANY
A Stock Company
Customer Service Center, P.O. Box 173888, Denver, Colorado 80217
Toll Free Number: 1(800) 848-6362
Form 2504 (JTVUL)-8/99
TABLE OF CONTENTS
SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
DEFINITION OF TERMS . . . . . . . . . . . . . . . . . . . . . . . . 6
INSURANCE COVERAGE PROVISIONS . . . . . . . . . . . . . . . . . . . 7
EFFECTIVE DATE OF COVERAGE . . . . . . . . . . . . . . . . . . 7
BASE DEATH BENEFIT . . . . . . . . . . . . . . . . . . . . . . 7
CHANGE IN REQUESTED INSURANCE COVERAGE . . . . . . . . . . . . 7
Requested Increases in Coverage . . . . . . . . . . . . . 8
Requested Decreases in Coverage . . . . . . . . . . . . . 8
Death Benefit Option Changes . . . . . . . . . . . . . . 8
CONTINUATION OF COVERAGE AFTER AGE 100 . . . . . . . . . . . . 9
PAYOUT OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . 10
PREMIUM PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 10
INITIAL PREMIUM ALLOCATION . . . . . . . . . . . . . . . . . . 10
SUBSEQUENT PREMIUM ALLOCATION . . . . . . . . . . . . . . . . 11
CHANGES TO PREMIUM ALLOCATIONS . . . . . . . . . . . . . . . . 11
SCHEDULED PREMIUMS . . . . . . . . . . . . . . . . . . . . . . 11
UNSCHEDULED PREMIUMS . . . . . . . . . . . . . . . . . . . . . 11
NET PREMIUM . . . . . . . . . . . . . . . . . . . . . . . . . 11
PREMIUM LIMITATION . . . . . . . . . . . . . . . . . . . . . . 12
FAILURE TO PAY PREMIUM . . . . . . . . . . . . . . . . . . . . 12
VARIABLE ACCOUNT PROVISIONS . . . . . . . . . . . . . . . . . . . . 12
THE VARIABLE ACCOUNT . . . . . . . . . . . . . . . . . . . . . 12
VARIABLE ACCOUNT DIVISIONS . . . . . . . . . . . . . . . . . . 12
CHANGES WITHIN THE VARIABLE ACCOUNT. . . . . . . . . . . . . . 13
GENERAL ACCOUNT PROVISIONS . . . . . . . . . . . . . . . . . . . . 14
THE GENERAL ACCOUNT . . . . . . . . . . . . . . . . . . . . . 14
GUARANTEED INTEREST DIVISION . . . . . . . . . . . . . . . . . 14
LOAN DIVISION . . . . . . . . . . . . . . . . . . . . . . . . 14
Form 2504 (JTVUL)-8/99
Page 2
TRANSFER PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 14
ACCOUNT VALUE PROVISIONS . . . . . . . . . . . . . . . . . . . . . 14
ACCOUNT VALUES ON THE INVESTMENT DATE . . . . . . . . . . . . 15
ACCUMULATION UNIT VALUE . . . . . . . . . . . . . . . . . . . 15
ACCUMULATION EXPERIENCE FACTOR . . . . . . . . . . . . . . . . 15
ACCOUNT VALUE OF THE DIVISIONS OF THE VARIABLE ACCOUNT . . . . 16
ACCOUNT VALUE OF THE GUARANTEED INTEREST DIVISION. . . . . . . 16
ACCOUNT VALUE OF THE LOAN DIVISION . . . . . . . . . . . . . . 17
MONTHLY DEDUCTION AND REFUND . . . . . . . . . . . . . . . . . . . 17
MONTHLY DEDUCTION. . . . . . . . . . . . . . . . . . . . . . . 17
COST OF INSURANCE. . . . . . . . . . . . . . . . . . . . . . . 18
PERSISTENCY REFUND . . . . . . . . . . . . . . . . . . . . . . 18
LOAN PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 19
POLICY LOANS . . . . . . . . . . . . . . . . . . . . . . . . . 19
LOAN INTEREST . . . . . . . . . . . . . . . . . . . . . . . . 19
LOAN DIVISION . . . . . . . . . . . . . . . . . . . . . . . . 19
PARTIAL WITHDRAWAL PROVISIONS . . . . . . . . . . . . . . . . . . . 19
SURRENDER PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . 21
SURRENDER VALUE. . . . . . . . . . . . . . . . . . . . . . . . 21
SURRENDER CHARGES. . . . . . . . . . . . . . . . . . . . . . . 21
BASIS OF COMPUTATIONS. . . . . . . . . . . . . . . . . . . . . 21
FULL SURRENDERS. . . . . . . . . . . . . . . . . . . . . . . . 21
GRACE PERIOD, TERMINATION AND REINSTATEMENT PROVISIONS. . . . . . . 22
GRACE PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . 22
SPECIAL CONTINUATION PERIOD. . . . . . . . . . . . . . . . . . 22
GUARANTEE PERIOD . . . . . . . . . . . . . . . . . . . . . . . 23
TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . 23
REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 23
DEFERRAL OF PAYMENT. . . . . . . . . . . . . . . . . . . . . . 24
Form 2504 (JTVUL)-8/99
Page 3
GENERAL POLICY PROVISIONS . . . . . . . . . . . . . . . . . . . . . 25
THE POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . 25
CONTRACT CHANGES . . . . . . . . . . . . . . . . . . . . . . . 25
PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . 25
OWNERSHIP. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
BENEFICIARIES. . . . . . . . . . . . . . . . . . . . . . . . . 25
EXCHANGE RIGHT . . . . . . . . . . . . . . . . . . . . . . . . 26
POLICY SPLIT . . . . . . . . . . . . . . . . . . . . . . . . . 26
COLLATERAL ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . 27
INCONTESTABILITY . . . . . . . . . . . . . . . . . . . . . . . 27
MISSTATEMENT OF AGE OR SEX . . . . . . . . . . . . . . . . . . 28
SUICIDE EXCLUSION. . . . . . . . . . . . . . . . . . . . . . . 28
PERIODIC REPORTS . . . . . . . . . . . . . . . . . . . . . . . 28
ILLUSTRATION OF BENEFITS AND VALUES. . . . . . . . . . . . . . 28
NONPARTICIPATING . . . . . . . . . . . . . . . . . . . . . . . 29
CUSTOMER SERVICE CENTER . . . . . . . . . . . . . . . . . . . 29
PAYOUTS OTHER THAN AS ONE SUM . . . . . . . . . . . . . . . . . . . 29
ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
PAYOUT OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . 29
CHANGE AND WITHDRAWAL. . . . . . . . . . . . . . . . . . . . . 30
EXCESS INTEREST. . . . . . . . . . . . . . . . . . . . . . . . 30
MINIMUM AMOUNTS. . . . . . . . . . . . . . . . . . . . . . . . 30
SUPPLEMENTARY POLICY . . . . . . . . . . . . . . . . . . . . . 30
INCOME PROTECTION. . . . . . . . . . . . . . . . . . . . . . . 31
DEATH OF PRIMARY PAYEE . . . . . . . . . . . . . . . . . . . . 31
PAYMENTS OTHER THAN MONTHLY. . . . . . . . . . . . . . . . . . 31
SETTLEMENT OPTION TABLES. . . . . . . . . . . . . . . . . . . . . . 32
ADDITIONAL BENEFITS OR RIDERS, IF ANY, WILL BE LISTED IN THE SCHEDULE. THE
ADDITIONAL PROVISIONS WILL BE INSERTED IN THE POLICY.
Form 2504 (JTVUL)-8/99
Page 4
SCHEDULE
(Schedule Effective Date: August 1,1999)
POLICY INFORMATION
Policy Number 67000001 Initial Stated Death Benefit $250,000.00
Adjustable Term Insurance Death Benefit $250,000.00*
Policy Date August 1, 1999 Target Death Benefit $500,000.00**
ADDITIONAL BENEFITS:
INSURED (1) JOHN DOE Single Life Term Insurance, Insured #1 $150,000.00***
Issue Age and Sex 35, Male Single Life Term Insurance, Insured #2 $150,000.00***
Guaranteed Minimum Death Benefit Not elected
INSURED (2) MARY DOE Guarantee Period Annual Premium $2,188.94
Issue Age and Sex 35, Female Guarantee Period Monthly Charge: $0.005 per $1000 of Stated Death Benefit
Death Benefit Option OPTION 1
Joint Equivalent Issue Age 35 Minimum Annual Premium $514.44
Scheduled Premium $1,200.00, Annually
Definition of Life Insurance Test: Guideline Premium Test/Cash Value Corridor Test
Coverage will expire if premiums are insufficient to continue coverage. Coverage
will also be affected by partial withdrawals, policy loans, changes in the
current cost of insurance rates, the actual credited interest rate for the
Guaranteed Interest Division and the investment experience of the Variable
Account.
CUSTOMER SERVICE CENTER: P.O. BOX 173888, DENVER, COLORADO 80217
TOLL FREE NUMBER 1(800) 848-6362
* This amount is the amount of adjustable term death benefit on the policy
date. These death benefits will vary from time to time, and may depend on
your account value. See the rider and policy for details.
** This amount is the target death benefit on the policy date. It may change
at the beginning of each policy year. See the schedule and rider for
details.
*** The term death benefit may change at the beginning of each policy year. See
the schedule and rider for details.
Form 2504 (JTVUL)-8/99
Page 5
SCHEDULE (CONTINUED)
SEGMENT BENEFIT PROFILE
(SCHEDULE EFFECTIVE DATE: AUGUST 1, 1999)
- ---------------------------------------------------------------------------------------------------------
Segment Segment Stated Segment Segment Segment
Death Benefit Effective Target Premium Premium Class
Date Insured #1 Insured #2
- ---------------------------------------------------------------------------------------------------------
(Segment #1) $250,000.00 August 1, 1999 $800.00 Std NonSmkr Std NonSmkr
- ---------------------------------------------------------------------------------------------------------
A segment is a block of death benefit coverage. The stated death benefit shown
on the schedule page at issue is Segment #1. Additional segments may be added to
the policy after issue to increase the death benefit. Each individual segment
added to the policy has its own cost of insurance charges and expense loads as
shown in the schedule. This is further defined in the Definition section of your
policy.
Form 2504 (JTVUL)-8/99
Page 5A
SCHEDULE (CONTINUED)
EXPENSE CHARGES
A. PREMIUM EXPENSE CHARGE. This charge will equal the sum of a sales load
plus a tax charge. See Net Premium provision for details.
1. SALES LOAD:
Segment Premium Paid up to Segment Premium Paid in Excess
Segment Target Premium Of Segment Target Premium
Segment Years 1-5 5.5% 2.0%
Segment Years 6+ 2.0% 2.0%
2. FEDERAL DEFERRED ACQUISITION COST TAX CHARGE AND OTHER CHARGES (TAX
CHARGE): 4.0% of each premium.
We reserve the right to increase or decrease the tax charges due to any change
in tax laws. We further reserve the right to increase or decrease the tax charge
for federal deferred acquisition cost tax due to any change in the cost to us.
B. MONTHLY EXPENSE CHARGES: The monthly expense charges will equal the sum of
the following two charges:
PER POLICY CHARGE: $15 per month for the first 120 months (10 policy
years).
$ 9 per month thereafter.
MONTHLY ADMINISTRATIVE CHARGE: $0.XXX per unit for the first 10 policy
years (120 months).
$0.023 per unit for each policy month
thereafter.
Unit is the greater of stated death benefit or target death benefit then
inforce for the policy, divided by 1000.
ANNUAL MORTALITY AND EXPENSE RISK CHARGE
ANNUAL MORTALITY AND EXPENSE RISK CHARGE: 0.75% (0.002055% per day)
Form 2504 (JTVUL)-8/99
Page 5B
SCHEDULE (CONTINUED)
SURRENDER CHARGES
TOTAL SURRENDER CHARGE TABLE
The surrender charges which pertain to the insurance coverage shown in the
Schedule are shown in the following table. This table may change upon any
increase or decrease in the policy's stated death benefit.
SURRENDERS SEGMENT #1
DURING THE TOTAL SURRENDER
POLICY YEAR CHARGE
ENDING
2000 $1077.39
2001 $1077.39
2002 $1077.39
2003 $1077.39
2004 $1077.39
2005 $861.91
2006 $646.43
2007 $430.96
2008 $215.48
2009 $0.00
Surrender charges for each Segment are level in durations 1 through 5. They
decrease each year after the 5th duration until they reach zero at the beginning
of duration 10. Surrender charges shall not exceed the applicable amount shown
in this table.
Form 2504 (JTVUL)-8/99
Page 5C
SCHEDULE (CONTINUED)
POLICYHOLDER TRANSACTION CHARGES
Requests for Sales Illustrations: We reserve the right to charge a
$25 fee for each policy
illustration over one illustration
per policy year.
Partial Withdrawal Service Fee: See below.
Other Policy Transaction Charges: The charges for transfers between
divisions of the Variable Account
or between the Guaranteed Interest
Division and the Variable Account
Divisions; charges for allocation
changes; and charges for other
Variable Account management
functions are governed by the
prospectus in effect at the time
of the transaction.
POLICY LOANS
Policy Loan Interest Rate: 3.75% per year
Guaranteed Interest Rate
Credited To Loan Division: 3.00% per year
Minimum Loan Amount: $100
Maximum Loan Amount: See the Loan Provisions section.
PARTIAL WITHDRAWALS
Minimum Partial Withdrawal Amount: $100
Maximum Partial Withdrawal Amount: Amount which will leave $500 as
the net cash surrender value
Partial Withdrawal Service Fee: $25
Limit On Partial Withdrawals: One per policy year
GUARANTEED INTEREST DIVISION
Guaranteed Interest Rate For
Guaranteed Interest Division: 3.00% per year
PERSISTENCY REFUND FACTOR
Persistency Refund Factor: .0005 monthly
Form 2504 (JTVUL)-8/99
Page 5D
SCHEDULE (CONTINUED)
The policy's base death benefit at any time will be at least equal to the
account value times the appropriate factor from this table.
DEFINITION OF LIFE INSURANCE
GUIDELINE PREMIUM TEST/CASH VALUE CORRIDOR TEST
DEATH BENEFIT FACTORS
Younger Factor Younger Factor Younger Factor Younger Factor
Insured's Insured's Insured's Insured's
Attained Age Attained Age Attained Age Attained Age
0-40 2.50
41 2.43 56 1.46 71 1.13 86 1.05
42 2.36 57 1.42 72 1.11 87 1.05
43 2.29 58 1.38 73 1.09 88 1.05
44 2.22 59 1.34 74 1.07 89 1.05
45 2.15
60 1.30 75 1.05 90 1.05
46 2.09 61 1.28 76 1.05 91 1.04
47 2.03 62 1.26 77 1.05 92 1.03
48 1.97 63 1.24 78 1.05 93 1.02
49 1.91 64 1.22 79 1.05 94 1.01
50 1.85
65 1.20 80 1.05 95 1.00
51 1.78 66 1.19 81 1.05 96 1.00
52 1.71 67 1.18 82 1.05 97 1.00
53 1.64 68 1.17 83 1.05 98 1.00
54 1.57 69 1.16 84 1.05 99 1.00
55 1.50 70 1.15 85 1.05 100 and older 1.00
Form 2504 (JTVUL)-8/99
Page 5E
SCHEDULE (CONTINUED)
TABLE OF GUARANTEED RATES-SEGMENT #1
Guaranteed Maximum Cost of Insurance Rates Per $1000 of Net Amount at Risk
(These rates apply to the Base Policy.)
Segment Monthly Cost of Segment Monthly Cost of Segment Monthly Cost of Segment Monthly Cost of
Year Insurance Rate Year Insurance Rate Year Insurance Rate Year Insurance Rate
0 0.00029 26 0.27881 51 10.56782 76
1 0.00094 27 0.32514 52 11.82596 77
2 0.00174 28 0.38176 53 13.14547 78
3 0.00270 29 0.44922 54 14.52703 79
4 0.00390 30 0.52778 55 15.97964 80
5 0.00537 31 0.61724 56 17.52244 81
6 0.00720 32 0.71747 57 19.19650 82
7 0.00937 33 0.82806 58 21.07894 83
8 0.01195 34 0.95316 59 23.37773 84
9 0.01498 35 1.09872 60 26.51949 85
10 0.01858 36 1.27190 61 31.35742 86
11 0.02272 37 1.48191 62 39.59830 87
12 0.02754 38 1.73698 63 54.65492 88
13 0.03315 39 2.04020 64 83.33333 89
14 0.03974 40 2.39109 65 90
15 0.04741 41 2.78822 66 91
16 0.05649 42 3.22853 67 92
17 0.06725 43 3.71109 68 93
18 0.08016 44 4.24541 69 94
19 0.09527 45 4.84859 70 95
20 0.11272 46 5.53770 71 96
21 0.13268 47 6.33237 72 97
22 0.15492 48 7.24554 73 98
23 0.17972 49 8.26516 74 99
24 0.20783 50 9.37750 75
25 0.24032
The above Table of Guaranteed Rates is based on the 1980 U.S. Commissioner's
Standard Ordinary Sex Distinct Mortality Table. These rates include
substandard rates, if applicable.
Form 2504 (JTVUL)-8/99
Page 5F
DEFINITION OF TERMS
ACCOUNT VALUE - The sum of the amounts allocated to the Divisions of the
Variable Account and to the Guaranteed Interest Division, as well as any amount
set aside in the Loan Division to secure a policy loan.
ACCUMULATION UNIT - A unit of measurement used to calculate the account value in
each Division of the Variable Account.
ACCUMULATION UNIT VALUE - The value of an accumulation unit of each Division of
the Variable Account. The accumulation unit value is determined as of each
valuation date.
AGE/JOINT EQUIVALENT ISSUE AGE/YOUNGER INSURED'S BIRTH DATE -
AGE - The policy is issued at the ages shown in the Schedule. Each issue
age is the age nearest birthday on the policy date.
JOINT EQUIVALENT ISSUE AGE - This age is determined on the policy date. The
attained joint equivalent age is the joint equivalent issue age on the
policy date increased by the number of completed policy years.
YOUNGER INSURED'S BIRTH DATE - The younger insured's 100th birth date is
the date on which the younger of the two insureds reaches attained age 100
or the date the younger insured would have reached attained age 100 if that
insured dies before actually reaching that date. Any other birth date of
the younger insured is determined in the same manner. The younger insured's
attained age is the issue age of the younger of the two insureds as shown
in the Schedule, increased by the number of completed policy years.
BASE DEATH BENEFIT - The base death benefit is defined in the Base Death Benefit
provision of the policy.
CASH SURRENDER VALUE - The amount of your account value minus the surrender
charge, if any.
CUSTOMER SERVICE CENTER - Our administrative office whose address is P. O. Box
173888, Denver, CO 80217.
DIVISION(S) OF THE VARIABLE ACCOUNT - The investment options available, each of
which invests in shares of one of the portfolios.
FIRST DEATH - The first death is the death of the first to die of the two
insureds.
GENERAL ACCOUNT - The account which contains all of our assets other than those
held in the Variable Account or our other separate accounts.
GUARANTEED INTEREST DIVISION - Part of our General Account to which a portion of
the account value may be allocated and which provides guarantees of principal
and interest.
INITIAL PERIOD - The initial period ends on the earlier of: a) the date this
policy was delivered to you plus the Right to Examine Period, so long as we
receive notice of the delivery date at our Customer Service Center before the
date defined in (b), or (b) the date this policy is mailed from our Customer
Service Center plus five days plus the Right to Examine Period.
INVESTMENT DATE -The date we allocate funds to your policy. We will allocate
the initial net premium to your policy on the valuation date immediately
following the latest of the date: 1) we receive the amount of premium
required for coverage to begin under the policy; 2) we have approved the
policy for issue, and 3) all issue requirements have been met and received in
our Customer Service Center.
LOAN DIVISION - Part of our General Account in which funds are set aside to
secure any outstanding policy loan and accrued loan interest when due.
Form 2504 (JTVUL)-8/99
Page 6
MONTHLY PROCESSING DATE - The date each month on which the monthly deductions
from the account value are due. The first monthly processing date will be the
policy date or the investment date, if later. Subsequent monthly processing
dates will be the same date as the policy date each month thereafter unless this
is not a valuation date, in which case the monthly processing date occurs on the
next valuation date.
NET ACCOUNT VALUE - The amount of the account value minus any policy loan and
accrued loan interest.
NET CASH SURRENDER VALUE - The amount of the cash surrender value minus any
policy loan and accrued loan interest.
NET PREMIUM - The net premium equals the premium paid minus the premium expense
charges shown in the Schedule. These charges are deducted from the premium
before the premium is applied to your account value.
PARTIAL WITHDRAWAL - The withdrawal of a portion of your net cash surrender
value from the policy. The partial withdrawal may reduce the amount of base
death benefit in force, which in turn may cause a surrender charge to be
incurred.
POLICY LOAN - The sum of amounts you have borrowed from your policy, increased
by any policy loan interest capitalized when due, and reduced by any policy loan
repayments.
RIGHT TO EXAMINE PERIOD - The period of time within which the owner may examine
the policy and return it for a refund.
SCHEDULED PREMIUM - The premium amount that you specify on the application as
the amount you intend to pay at fixed intervals over a specified period of time.
Premiums may be paid on a monthly, quarterly, semiannual, or annual basis, as
you determine. You need not pay the scheduled premium and you may change it at
any time. Also, within limits, you may pay less or more than the scheduled
premium.
SECOND DEATH - The second death is the death of the second to die of the two
insureds.
SEGMENT - The stated death benefit shown on the Benefit Profile of the Schedule
is the initial segment, or Segment 1. Each increase in the stated death benefit
(other than due to an option change) is a new segment. Each new segment will be
shown separately on the Benefit Profile of the Schedule. The first year for a
segment begins on the effective date of the segment and ends one year later.
Each subsequent year begins at the end of the prior segment year. Each new
segment may be subject to a new minimum annual premium, new sales load, new
surrender charges, new cost of insurance charges and new incontestability and
suicide exclusion periods.
STATED DEATH BENEFIT -The sum of the segments under the policy. The stated death
benefit changes when there is an increase or a decrease or when a transaction on
the policy causes it to change (for example, a partial withdrawal under an
Option 1 base death benefit may cause the stated death benefit to change).
SURRENDER CHARGE - The charge made against your account value in the event of
surrender, policy lapse, requested reductions in the stated death benefit, or
certain partial withdrawals
TARGET DEATH BENEFIT - The target death benefit for your policy is defined in
the Adjustable Term Insurance Rider, if any, attached to the policy.
VALUATION DATE - Each date as of which the net asset value of the shares of the
portfolios and unit values of the divisions are determined. Except for days that
a division's corresponding portfolio does not value its shares, a valuation date
is any day:
(a) The New York Stock Exchange ("NYSE") is open for trading
and on which Security Life's Customer Service Center is open
for business; or
(b) as may be required by law.
VALUATION PERIOD - The period which begins at 4:00 p.m. Eastern Time on a
valuation date and ends at 4:00 p.m. Eastern Time on the next succeeding
valuation date.
Form 2504 (JTVUL)-8/99
Page 6a
INSURANCE COVERAGE PROVISIONS
EFFECTIVE DATE
The policy date shown in the Schedule is the effective date for all coverage
provided in the original application. The policy date is the date from which we
measure policy years and determine the monthly processing date. The first
monthly processing date is the investment date. Future monthly processing dates
are the same calendar day of each month as the policy date unless this is not a
valuation date in which case the monthly processing date occurs on the next
valuation date. A policy anniversary occurs each year on the same month and day
as the policy date unless this is not a valuation date in which case the policy
anniversary occurs on the next valuation date. The effective date for new
segments and additional benefits is shown in the Schedule.
BASE DEATH BENEFIT
The base death benefit will be, at any time, determined as follows:
Option 1: Under Option 1, the base death benefit is the greater of:
(a) The stated death benefit; or
(b) The account value multiplied by the appropriate factor from the Death
Benefit Factors shown in the Schedule.
Option 2: Under Option 2, the base death benefit is the greater of:
(a) The stated death benefit plus the account value, or
(b) The account value multiplied by the appropriate factor from the
Death Benefit Factors shown in the Schedule.
The stated death benefit and the death benefit option are shown in the Schedule.
This policy is designed to qualify as a life insurance contract under the
Internal Revenue Code. All terms and provisions of the policy shall be construed
in a manner consistent with that design. The base death benefit in force at any
time shall not be less than the amount of insurance necessary to achieve such
qualification under the applicable provisions of the Internal Revenue Code in
existence at the time the policy is issued. We reserve the right to amend the
policy or adjust the amount of insurance when required. We will send you a copy
of any policy amendment.
CHANGE IN REQUESTED INSURANCE COVERAGE
You may request that the insurance coverage be increased or decreased. Decreases
are not allowed before the first policy anniversary. The change in coverage may
not be for an amount less than $1,000. The effective date of the change will be
the monthly processing date immediately following the
Form 2504 (JTVUL)-8/99
Page 7
date your written application is approved by us. After any change to the stated
death benefit, you will receive an amended Schedule reflecting the change, the
benefit under any riders, if applicable, the guaranteed cost of insurance rates,
the new target premium and the new surrender charge.
REQUESTED INCREASES IN COVERAGE
Subject to our limits, you may request an increase in the stated death benefit
through attained joint equivalent age 85. An increase will become effective as
of the monthly processing date immediately following the date your written
application is approved by us. You must provide evidence satisfactory to us that
the insureds are insurable according to our normal rules of underwriting for the
applicable premium class for this type of policy. This evidence will include an
application and may include required medical information. An increase will
consist of a new segment of stated death benefit . Each new segment will result
in a new sales load which will be deducted from the premium allocated to the new
segment. The new segment may also be subject to a new minimum annual premium,
new surrender charges, new per thousand of stated death benefit charges, new
cost of insurance charges and new incontestability and suicide exclusion
periods.
REQUESTED DECREASES IN COVERAGE
After the first policy anniversary, you may request a decrease in the stated
death benefit. We will limit the decrease such that, immediately after the
requested decrease:
a) The stated death benefit is at least $250,000 if there is no adjustable
term insurance on the policy.
b) If there is adjustable term insurance on the policy, the stated death
benefit is at least $100,000 and the target death benefit is at least
$250,000.
A decrease will be effective as of the monthly processing date immediately
following the date your written application is approved by us. A decrease will
first reduce Adjustable Term Insurance Rider coverage, if attached to your
policy, and will then reduce each of the stated death benefit segments in the
same proportion as the stated death benefit is reduced. A surrender charge will
apply if the stated death benefit is decreased and the decrease occurs during
the 9 years following the policy date or the date of the prior increase. If a
surrender charge applies, it will be deducted from your account value and future
surrender charges will be reduced.
DEATH BENEFIT OPTION CHANGES
Beginning with the first policy anniversary and ending with the policy
anniversary nearest the younger insured's 100th birth date, you may request to
change the death benefit option. This change will be effective as of the monthly
processing date next following approval. A death benefit option change applies
to the entire stated death benefit. We may not allow any change if it would
reduce the stated death benefit below the minimum we require to issue this
policy at the time of reduction. After the effective date of the change, the
stated death benefit will be changed according to the following table:
Form 2504 (JTVUL)-8/99
Page 8
OPTION CHANGE
FROM TO STATED DEATH BENEFIT FOLLOWING THE OPTION CHANGE
EQUALS:
Option 1 Option 2 Stated death benefit prior to such change minus
your account value as of the effective date of
the change.
Option 2 Option 1 Stated death benefit prior to such change plus
your account value as of the effective date of
the change.
To determine the segment stated death benefit after an option change, your
account value will be allocated to each segment in the same proportion that
segment bears to the stated death benefit as of the effective date of the
change.
CONTINUATION OF COVERAGE AFTER AGE 100
If the policy is in force on the policy anniversary nearest the younger
insured's 100th birth date, the policy will continue pursuant to the terms of
the policy. On this date, the following will occur:
(a) The target death benefit on the policy anniversary nearest the younger
insured's 100th birth date will then become the stated death benefit for
the policy and any remaining death benefit in force under the Adjustable
Term Insurance Rider will terminate.
(b) All other riders attached to the policy also will terminate.
(c) The portion of your account value invested in the Divisions of the
Variable Account will be transferred into the Guaranteed Interest
Division and no further investment in the Divisions of the Variable
Account will be allowed.
(d) If the death benefit option in force on the policy is Option 2, the
policy will be converted to death benefit Option 1 in accordance with the
procedures outlined in the Death Benefit Option Changes provision of the
policy. No further changes will be allowed to the death benefit option.
After the policy anniversary nearest the younger insured's 100th birth date, no
further premiums will be accepted and no monthly deductions will be made.
However, a one-time administrative fee of $400 will be charged against the
policy's account value. We will continue to credit interest to the account value
in the Guaranteed Interest Division. Policy loans and withdrawals continue to be
available. Any existing policy loan will continue. Policy loan interest will
continue to accrue. Payments on policy loans and policy loan interest will be
accepted. The policy will enter the 61-day grace period if the net cash
surrender value is zero or less.
If you do not want coverage to continue past the policy anniversary nearest the
younger insured's 100th birth date, the policy may be surrendered at that time,
or earlier.
Form 2404 (JTVUL)-8/99
Page 9
PAYOUT OF PROCEEDS
Proceeds refer to the amount we will pay:
a) Upon surrender of the policy; or
b) Upon the second death of the two insureds.
The proceeds upon surrender of this policy will be the net cash surrender value.
The amount of proceeds payable upon the second death will be the base death
benefit in effect on the date of the second death, plus any amounts payable from
any additional benefits provided by rider, minus any outstanding policy loan
including accrued but unpaid interest, minus any unpaid monthly deductions
incurred prior to the date of the second death. The calculation of the death
proceeds will be computed as of the date of the second death. The second death
is the death of the second to die of the two insureds.
We will determine the amount of proceeds payable upon the second death when we
have received due proof of both deaths and any other information which is
necessary to process the claim. Any proceeds we pay are subject to adjustments
as provided in the Misstatement of Age or Sex, Suicide Exclusion and
Incontestability provisions.
We will pay proceeds in one sum unless you request an alternate form of payment.
There are many possible methods of payment. The available payout options are
described in the Payouts Other Than As One Sum provision. Contact us or your
registered representative for additional information. Interest will be paid on
the one sum death proceeds from the date of second death to the date of payment,
or until a payout option is selected. Interest will be at the rate we declare,
or at any higher rate required by law.
PREMIUM PROVISIONS
INITIAL PREMIUM ALLOCATION
If the initial period has not ended on the investment date, net premium amounts
designated for allocation to Divisions of the Variable Account will be allocated
to the Money Market Division and any net premium amount designated for
allocation to the Guaranteed Interest Division will be allocated to that
division. On the valuation date immediately following the end of the initial
period, the balance of the amount in the Money Market Division will be
transferred to the other Divisions of the Variable Account according to the
allocations shown in the latest instructions received from you at our Customer
Service Center. The amounts allocated to the Guaranteed Interest Division will
remain in that division.
If the initial period has ended on the investment date, net premium amounts will
be allocated to Divisions of the Variable Account and/or to the Guaranteed
Interest Division in accordance with the allocation shown in the latest
instructions received at our Customer Service Center.
Form 2504 (JTVUL)-8/99
Page 10
SUBSEQUENT PREMIUM ALLOCATIONS
After the initial premium allocation, all future scheduled and unscheduled
premiums will be allocated to the investment divisions in accordance with the
allocation shown in the latest instructions received at our Customer Service
Center (unless you otherwise specify in writing). This allocation will occur on
the valuation date immediately following our receipt of the premium at our
Customer Service Center.
CHANGES TO PREMIUM ALLOCATIONS
You may change your premium allocation in accordance with instructions included
in your annual policy prospectus. If the change causes a premium allocation
charge to be incurred according to the Schedule, we will deduct a charge from
the Divisions of the Variable Account and from the Guaranteed Interest Division
as described in the prospectus in effect at the time of the transaction.
SCHEDULED PREMIUMS
The scheduled premium as shown in the Schedule may be paid while this policy is
in force prior to the policy anniversary nearest the younger insured's 100th
birth date. You may increase or decrease the amount of the scheduled premium,
subject to limits we may set and provisions in the Premium Limitation section.
Under conditions provided in the Grace Period provision and the Guarantee Period
provision you may be required to make premium payments to keep the policy in
force. You may pay premiums on a monthly basis through an automated payment
facility. All payment modes are subject to our minimum requirements for the
payment mode selected.
UNSCHEDULED PREMIUMS
You may make unscheduled premium payments at any time the policy is in force
prior to the policy anniversary nearest the younger insured's 100th birth date,
subject to the Premium Limitation section. Unless you tell us otherwise, these
premium payments will first be applied to reduce or pay off any existing policy
loan and, as such, premium expense charges will not be deducted. We may limit
the amount of such unscheduled premium payments if the payment would result in
an increase in the base death benefit. If the net amount at risk is increased as
a result of an unscheduled premium, we may require evidence of insurability
satisfactory to us that the insureds are insurable according to our normal rules
of underwriting for the applicable premium class for this type of policy. This
evidence will include an application and may include required medical
information. The net amount at risk is the difference between the base death
benefit and your account value.
NET PREMIUM
The net premium equals the premium paid minus the premium expense charge shown
in the Schedule. The premium expense charge is the sales load plus the tax
charge. The tax charge is the applicable tax percentage times the premium.
To determine the sales load, we multiply the applicable percentage sales load
times the premium allocated to the segment. There is a different percentage
sales load for the allocated premium that is below the segment target premium
and that above that segment target premium. The
Form 2504 (JTVUL)-8/99
Page 11
applicable percentage sales load also depends on the segment year the premium is
received. Each premium received is allocated to the existing segments. (If there
is only one segment the entire premium is allocated to that segment.) Premiums
are allocated in the same proportion that the target premium of each segment
bears to the sum of the target premiums of all segments.
The Schedule shows: (1) the target premium for each segment; (2) the
percentage sales loads; and (3) the tax percentage.
PREMIUM LIMITATION
We will refund any premium that causes your policy not to qualify as a life
insurance policy under the Internal Revenue Code. No premium may be paid after
the second death. No premium may be paid after the policy anniversary nearest
the younger insured's 100th birth date.
FAILURE TO PAY PREMIUM
If you stop paying premiums prior to the policy anniversary nearest the younger
insured's 100th birth date, your coverage may lapse. See your Grace Period
provision for details.
VARIABLE ACCOUNT PROVISIONS
THE VARIABLE ACCOUNT
The Variable Account is an account established by us, pursuant to the laws of
the State of Colorado, to separate the assets funding the benefits for the class
of policies to which this policy belongs from the other assets of Security Life
of Denver Insurance Company.
The Variable Account is registered as a unit investment trust under the
Investment Company Act of 1940. All income, gains and losses, whether or not
realized, from assets allocated to the Variable Account are credited to or
charged against the Variable Account without regard to income, gains or losses
of our General Account. The assets of the Variable Account are our property but
are separate from our General Account and our other Variable Accounts. That
portion of the assets of the Variable Account which is equal to the reserves and
other policy liabilities with respect to the Variable Account is not chargeable
with liabilities arising out of any other business we may conduct or subject to
creditor claims against us.
VARIABLE ACCOUNT DIVISIONS
The Variable Account is divided into divisions, each of which invests in a fund
portfolio designed to meet the objectives of the division. The current eligible
divisions are shown in your annual policy prospectus. We may, from time to time,
add additional divisions. If we do, you may be permitted to select from these
other divisions subject to the terms and conditions we may impose on those
allocations.
Form 2504 (JTVUL)-8/99
Page 12
We reserve the right to limit the number of divisions in which you may invest
over the life of the policy. This limit, if any, will be listed in the updated
policy prospectus provided to you each year.
CHANGES WITHIN THE VARIABLE ACCOUNT
When permitted by law, and subject to any required notice to you and approval of
the Securities and Exchange Commission ("SEC"), state regulatory authorities or
policy owners, we may from time to time make the following changes to the
Variable Account:
* Make additional divisions available. These divisions will invest in
investment portfolios we find suitable for the policy.
* Eliminate divisions from the Variable Account or combine 2 or more
divisions.
* Substitute a new portfolio for the portfolio in which a division invests.
A substitution may become necessary if, in our judgment, a portfolio no
longer suits the purposes of the policy. This may happen due to a change in
laws or regulations, or a change in a portfolio's investment objectives or
restrictions. This may also happen if the portfolio is no longer available
for investment, or for some other reason, such as a declining asset base.
* Transfer assets of the Variable Account, which we determine to be
associated with the class of policies to which your policy belongs, to
another Variable Account.
* Withdraw the Variable Account from registration under the Investment
Company Act of 1940.
* Operate the Variable Account as a management investment company under the
Investment Company Act of 1940.
* Invest one or more divisions in a mutual fund other than, or in addition
to, the portfolios.
* Discontinue the sale of policies.
* Terminate any employer or plan trustee agreement with us pursuant to
its terms.
* Restrict or eliminate any voting rights as to the Variable Account.
* Make any changes required by the Investment Company Act of 1940 or the
rules or regulations thereunder.
Form 2504 (JTVUL)-8/99
Page 13
GENERAL ACCOUNT PROVISIONS
THE GENERAL ACCOUNT
The General Account holds all of our assets other than those held in the
Variable Account or our other separate accounts. The Guaranteed Interest
Division is a part of our General Account.
GUARANTEED INTEREST DIVISION
The Guaranteed Interest Division is another division to which you may allocate
premiums or make transfers. The account value of the Guaranteed Interest
Division is equal to the net premium allocated to this division plus any earned
interest minus deductions taken from this division. Interest is credited at the
guaranteed rate shown in the schedule or may be credited at a higher rate. Any
higher rate is guaranteed to be in effect for at least a 12 month period.
LOAN DIVISION
The Loan Division is the account that is set aside to secure the policy loan, if
any. See the Loan Provisions section for information.
TRANSFER PROVISIONS
After the initial period and until the policy anniversary nearest the younger
insured's 100th birth date, your account value in each division may be
transferred to any other Division of the Variable Account or to the Guaranteed
Interest Division upon your request. One transfer from the Guaranteed Interest
Division into the variable divisions may be made during the first 30 days of
each policy year. Additional limitations, requirements and charges for transfers
will be listed in and governed by your annual policy prospectus in effect at the
time of the transfer. We reserve the right to modify these limitations,
requirements and charges from time to time. On the policy anniversary nearest
the younger insured's 100th birth date, your account value in each Division of
the Variable Account will be transferred into the Guaranteed Interest Division
and no further transfers will be allowed.
ACCOUNT VALUE PROVISIONS
The account value is the sum of the current amounts allocated to the Divisions
of the Variable Account and to the Guaranteed Interest Division plus your
balance in the Loan Division.
Form 2504 (JTVUL)-8/99
Page 14
The account value is based on the premiums paid, policy and rider charges
assessed, loans and withdrawals taken, monthly deductions, premium expense
charges, transaction charges, any surrender charges, and the investment
experience or credited interest of the division to which your account value is
allocated.
Your net account value is equal to your account value minus any policy loan and
accrued but unpaid loan interest.
ACCOUNT VALUES ON THE INVESTMENT DATE
The account value of each division of the Variable Account and the Guaranteed
Interest Division as of the investment date is equal to:
a) The allocation to that division of the first net premium paid;
minus
b) The portion of any monthly deductions due on the investment date allocated
to that division.
ACCUMULATION UNIT VALUE
The investment experience of a division of the Variable Account is determined as
of each valuation date. We use an accumulation unit value to measure the
experience of each of the Variable Account Divisions during a valuation period.
We set the accumulation unit value at $10 on the valuation date when the first
investments in each division of the Variable Account are made. The accumulation
unit value for a valuation period equals the accumulation unit value for the
preceding valuation period multiplied by the accumulation experience factor
defined below for the valuation period.
The number of units for a given transaction related to a division of the
Variable Account as of a valuation date is determined by dividing the dollar
value of that transaction by that division's accumulation unit value for that
date.
ACCUMULATION EXPERIENCE FACTOR
For each Division of the Variable Account, the accumulation experience factor
reflects the investment experience of the portfolio in which that division
invests and the charges assessed against that division for a valuation period.
The accumulation experience factor is calculated as follows:
a) The net asset value of the portfolio in which that division invests as
of the end of the current valuation period; plus
b) The amount of any dividend or capital gains distribution declared and
reinvested in the portfolio in which that division invests during the
current valuation period; minus
c) A charge for taxes, if any.
d) The result of (a), (b) and (c) is then divided by the net asset value of
the portfolio in which that division invests as of the end of the
preceding valuation period.
e) The daily equivalent of the annual mortality and expense risk charge
shown in the Schedule for each day in the current valuation period is then
subtracted from the result obtained in (d).
Form 2504 (JTVUL)-8/99
Page 15
ACCOUNT VALUE OF THE DIVISIONS OF THE VARIABLE ACCOUNT
On subsequent valuation dates after the investment date, your account value of
each Division of the Variable Account is calculated as follows:
a) The number of accumulation units in that division as of the beginning of
the current valuation period multiplied by that division's accumulation
unit value for the current valuation period; plus
b) Any additional net premiums allocated to that division during the current
valuation period; plus
c) Any account value transferred to or minus any account value transferred
from the Variable Division during the current valuation period (including
the applicable portion of any transfer fee); minus
d) Any partial withdrawals allocated to that division and any applicable
withdrawal service fees which are allocated to the Variable Division
during the current valuation period; plus
e) Any amounts released from the Loan Division as a result of a loan or loan
interest payment, or minus amounts transferred to the Loan Division as a
result of any loans which are allocated to the Variable Division during
the current valuation period; minus
f) The portion of any surrender charge resulting from a decrease in stated
death benefit allocated to the division; minus
g) The portion of the monthly deduction allocated to the Variable Division,
if a monthly processing date occurs during the current valuation period.
ACCOUNT VALUE OF THE GUARANTEED INTEREST DIVISION
On valuation dates after the investment date, your account value of the
Guaranteed Interest Division is calculated as follows:
a) The account value of the Guaranteed Interest Division at the end of the
preceding valuation period plus interest at the declared rate credited
during the current valuation period; plus
b) Any additional net premiums allocated to the Guaranteed Interest Division
plus interest credited to these premiums during the current valuation
period; plus
c) Any account value transferred to or minus any account value transferred
from the Guaranteed Interest Division during the current valuation period
(including the applicable portion of any transfer fee); minus
d) Any partial withdrawals taken and any applicable withdrawal service fees
which are allocated to the Guaranteed Interest Division during the current
valuation period; plus
e) Any amounts released from the Loan Division as a result of a loan or loan
interest payment, or minus amounts transferred to the Loan Division as a
result of any loans which are allocated to the Guaranteed Interest
Division during the current valuation period; minus
f) The portion of any surrender charge resulting from a decrease in stated
death benefit allocated to the Guaranteed Interest Division; minus
g) The portion of the monthly deduction allocated to the division, if a
monthly processing date occurs during the current valuation period.
Form 2504 (JTVUL0-8/99
Page 16
ACCOUNT VALUE OF THE LOAN DIVISION
On valuation dates after the investment date, your account value of the Loan
Division is equal to:
a) The account value of the Loan Division on the prior valuation date;
plus
b) Any interest credited to the Loan Division during the valuation period;
plus
c) An amount equal to any additional loans since the prior valuation date;
minus
d) Any loan repayments, including payment of loan interest in cash; plus
e) The amount of accrued loan interest if the valuation date is a policy
anniversary; minus
f) The amount of interest credited to the Loan Division during the year if
the valuation date is a policy anniversary.
On policy anniversaries, any amount of interest credited to the Loan Division
during the year is transferred from the Loan Division to the Variable Account
and Guaranteed Interest Division according to your premium allocation then in
effect.
MONTHLY DEDUCTION AND REFUND
MONTHLY DEDUCTION The monthly deduction is equal to:
a) The cost of insurance charges for this policy; plus
b) The monthly charges for any other additional benefits provided by riders
in force under the policy; plus
c) The monthly expense charges shown in the Schedule;
d) The charge for the Guaranteed Minimum Death Benefit option; if elected
e) The policyholder transaction charges as described in the Schedule.
The monthly deductions are allocated to the divisions of the Variable Account
and Guaranteed Interest Division as described in the prospectus in effect at the
time of the transaction. This deduction is taken from your account value as of
the monthly processing date. After the policy anniversary nearest the younger
insured's 100th birth date no further monthly deductions will be made, except
policy transaction charges incurred after this date.
Form 2504 (JTVUL)-8/99
Page 17
COST OF INSURANCE
The cost of insurance for the policy is the sum of the cost of insurance for all
segments. A segment's cost of insurance is the cost of insurance rate for the
premium class for the segment multiplied by the net amount at risk allocated to
the segment. It is determined on a monthly basis.
The net amount at risk is (a) minus (b) where:
a) Is the base death benefit for all segments as of the monthly processing
date after the monthly deductions (other than cost of insurance charges for
the base death benefit, any Adjustable Term Insurance Rider and any Single
Life Term Insurance Rider), divided by the result of 1 plus the monthly
equivalent of the guaranteed interest rate for the Guaranteed Interest
Division as shown in the Schedule; and
b) Is your account value as of the monthly processing date after the monthly
deductions (other than the cost of insurance charges for the base death
benefit, any Adjustable Term Insurance Rider and any Single Life Term
Insurance Rider).
The net amount at risk will be allocated to a segment in the same proportion as
that segment's stated death benefit bears to the sum of the stated death
benefits for all segments.
The cost of insurance rate for each segment will be determined by us from time
to time. Different rates will apply to each segment. They will be based on the
sex and age of each of the insureds as of the effective date of segment
coverage, the duration since the coverage began and the segment premium classes.
Any change in rates will apply to all individuals of the same premium class and
whose policies have been in effect for the same length of time. The rates will
never exceed those rates shown in the Table of Guaranteed Rates for the segment.
These tables are in the Schedule.
PERSISTENCY REFUND
We will calculate a monthly persistency refund by multiplying the monthly
persistency refund factor times the account value allocated to the Loan Division
and Divisions of the Variable Account. The persistency refund factor is shown in
the Schedule. We may increase this persistency refund by an amount based on the
amount in the Guaranteed Interest Division.
Beginning with the first month of policy year 11 and each month thereafter, we
will credit the net account value held in the Divisions of the Variable Account
and in the Guaranteed Interest Division with a persistency refund. The monthly
persistency refund will be allocated to the divisions of the Variable Account
and the Guaranteed Interest Division in the same proportion that your account
value in each division bears to your net account value as of the monthly
processing date.
Form 2504 (JTVUL)-8/99
Page 18
LOAN PROVISIONS
POLICY LOANS
You may obtain a policy loan on or after the first monthly processing date. The
maximum amount you may borrow at any time equals the net cash surrender value on
the date of the loan request less all monthly deductions to the next policy
anniversary. The policy loan is a first lien on your policy. The minimum amount
you may borrow is shown in the Schedule. The outstanding policy loan amount is
equal to the loan amount as of the beginning of the policy year plus new loans
and minus loan repayments, plus accrued interest.
LOAN INTEREST
The annual policy loan interest rate is shown in the Schedule. If a loan is
made, interest is due and payable at the end of the policy year. Thereafter,
interest on the loan amount is due annually at the end of each policy year until
the loan is repaid. If interest is not paid when due, it is added to the policy
loan.
If the policy loan amount and any accrued interest equals or exceeds the cash
surrender value, a premium sufficient to keep this policy in force must be paid
as provided in the Grace Period provision.
LOAN DIVISION
When a policy loan is taken or when interest is not paid in cash when due, an
amount equal to the loan or unpaid loan interest respectively, is transferred
from the Divisions of the Variable Account and the Guaranteed Interest Division
to the Loan Division to secure the loan. This amount will be deducted from the
Divisions of the Variable Account and the Guaranteed Interest Division in the
same proportion that your account value in each division bears to your net
account value as of the date the transfer is effective unless otherwise
specified in your instructions to us. Your account value in the Loan Division
will be credited with interest at the interest rate for the Loan Division shown
in the Schedule.
When a loan repayment is made, an amount equal to the repayment is transferred
from the Loan Division to the Guaranteed Interest Division and the Divisions of
the Variable Account in the same proportion as your current premium allocation
unless you request a different allocation in writing.
PARTIAL WITHDRAWAL PROVISIONS
You may apply for a partial withdrawal from your account value on any monthly
processing date after the first policy anniversary by writing to us at our
Customer Service Center. The minimum and maximum partial withdrawal amounts are
shown in the Schedule. When a partial withdrawal is made, the amount of the
withdrawal plus a service fee is deducted from your account value. The amount of
the service fee is shown in the Schedule. We limit the number of partial
withdrawals in a policy year. This number is shown in the Schedule.
Form 2504 (JTVUL)-8/99
Page 19
The stated death benefit is reduced by the amount of the partial withdrawal
unless one of the following exceptions applies.
The stated death benefit is not reduced by a partial withdrawal taken when the
base death benefit has been increased to qualify your policy as life insurance
under the Internal Revenue Code and the amount withdrawn is not greater than
that which reduces your account value to the level which no longer requires the
base death benefit to be increased for Internal Revenue Code purposes.
For a policy under an Option 1 death benefit, the stated death benefit is not
reduced by a partial withdrawal:
a) If no more than 15 years have elapsed since the policy date;
b) If the joint equivalent age is not yet age 81; and
c) If the partial withdrawal taken is less than the greater of 10% of your
account value or 5% of the stated death benefit, calculated immediately
before the partial withdrawal. Any additional amount withdrawn reduces your
stated death benefit by that additional amount.
For a policy under an Option 2 death benefit, a partial withdrawal does not
reduce your stated death benefit.
If the stated death benefit is reduced by a partial withdrawal during the first
9 years following the policy date or following an increase in the stated death
benefit, a surrender charge will be deducted from your account value.
(See your Surrender Charges provision.)
Any reduction in death benefit or account value will occur as of the date the
partial withdrawal occurs.
We will limit the amount of the partial withdrawal such that, immediately after
the requested withdrawal:
a) The stated death benefit is at least $250,000 if there is no adjustable
term insurance on the policy.
b) If there is adjustable term insurance on the policy, the stated death
benefit is at least $100,000 and the target death benefit is at least
$250,000.
You may specify how much of the withdrawal you wish taken from each division of
the Variable Account or from the Guaranteed Interest Division. You may not
withdraw from the Guaranteed Interest Division more than the total withdrawal
times the ratio of your account value in the Guaranteed Interest Division to
your net account value immediately prior to the withdrawal. Unless you indicate
otherwise, we will make the withdrawal from the amounts in the Guaranteed
Interest Division and the Divisions of the Variable Account in the same
proportion that your account value in each division bears to your net account
value immediately prior to the withdrawal. The withdrawal service fee and any
surrender charge deducted from your account value are deducted from each
Variable Division and the Guaranteed Interest Division as described in the
prospectus in effect at the time of the transaction.
We may send you a new Schedule to reflect the effect of the withdrawal if there
is any change to the stated death benefit and surrender charges. We may ask you
to return your policy to our Customer Service Center to make this change. The
withdrawal and the reductions in death benefits will be effective as of the
valuation date after we receive your request.
Form 2504 (JTVUL)-8/99
Page 20
SURRENDER PROVISIONS
SURRENDER VALUE
The net cash surrender value on any date will be your account value minus any
applicable surrender charge and minus any policy loan including accrued but
unpaid loan interest.
SURRENDER CHARGES
A separate surrender charge will apply to each stated death benefit segment for
each policy year. The surrender charge for this policy is the sum of the
surrender charge for each segment of stated death benefit. The surrender charge
is shown in the Schedule.
Upon a decrease in the stated death benefit, a portion of the surrender charge
will be deducted from your account value; unless the stated death benefit is
decreased because the death benefit option is changed.
The amount we deduct will equal the applicable surrender charge for the policy
year of the decrease times the percentage reduction in the stated death benefit.
The surrender charges after the decrease will equal the surrender charges shown
in the Schedule less the amount deducted from your account value. If the amount
deducted from your account value causes your net cash surrender value to become
zero or less, you may enter the grace period. (See Grace Period provision.)
We will send you a new Schedule to reflect the effect of any transaction that
changes the stated death benefit or the surrender charges.
BASIS OF COMPUTATIONS
The cash surrender value under the policy is not less than the minimums required
as of the policy date by the state in which your policy was delivered. A
detailed statement of the method of computation of policy values under the
policy has been filed with the insurance department of the state in which the
policy was delivered, if required.
FULL SURRENDERS
You may surrender your policy after the Right to Examine Period or at any time
before the second death and receive the net cash surrender value. We will
compute the net cash surrender value as of the next valuation date after we
receive both your request and the policy at our Customer Service Center. This
policy will be canceled as of the date we receive your request, and there will
be no further benefits under this policy. Once you surrender this policy, it
cannot be reinstated.
Form 2504 (JTVUL)-8/99
Page 21
GRACE PERIOD, TERMINATION AND REINSTATEMENT PROVISIONS
GRACE PERIOD
If the following three conditions occur on a monthly processing date, the policy
will enter into a 61-day grace period:
a) The net cash surrender value is zero or less; and
b) The special continuation period described below has expired or the
required premium for the special continuation period has not been paid;
and
c) The guarantee period described below was not elected, has expired or been
terminated.
We will give you a 61-day grace period from this monthly processing date to make
the required premium payment. The required premium payment then due must be
paid to keep the policy in force. If this amount is not received in full by the
end of the grace period, the policy will lapse without value. The required
premium payment will be equal to past due charges plus an amount we expect to be
sufficient to keep the policy and any riders in force for 2 months following
receipt of the required premium payment. If we receive at least the required
premium payment during the grace period, we will make deductions from the net
premium payment for the past due amounts and apply any remaining amount as
premium to the policy.
Notice of the amount of the required premium payment will be mailed to you or
any assignee at the last known address at least 30 days before the end of the
grace period. If the second death occurs during the grace period, we will deduct
any overdue monthly charges from the death proceeds of the policy.
SPECIAL CONTINUATION PERIOD
During the first 5 policy years your policy will remain in force regardless of
the net cash surrender value if, on a monthly processing date, the sum of your
premiums paid minus the sum of your partial withdrawals, policy loans and
accrued but unpaid policy loan interest is not less than the sum of the
applicable minimum monthly premiums for each policy month starting with the
first policy month to and including the policy month which begins on the current
monthly processing date. Each minimum monthly premium equals 1/12 of the minimum
annual premium. The minimum annual premium is shown in the Schedule. We use this
premium for each policy month until the effective date of a change in the stated
death benefit. If there is a change, the new Schedule will show the applicable
minimum annual premium for subsequent policy years during the 5-year period.
If, during the first 5 policy years, any charges are not deducted in order to
keep the policy from lapsing under the special continuation period, these
charges are not permanently waived. At the end of the special continuation
period, the aggregate amount of the charges not previously deducted will be due
and will be deducted from your account value at the beginning of policy year
six. Once the continuation feature has terminated, it cannot be reinstated.
Form 2504 (JTVUL)-8/99
Page 22
GUARANTEE PERIOD
If you elect the Guaranteed Minimum Death Benefit option, the policy will not
terminate during the guarantee period even if the net account value is zero
except as provided below. When your policy is kept in force under this option,
all riders will terminate.
Each monthly guarantee period premium equals 1/12 of the guarantee period annual
premium. The guarantee period annual premium is shown in the Schedule. We use
this premium for each policy year until the effective date of a change in the
stated death benefit. If there is a change, a new Schedule will show the
applicable minimum guarantee period annual premium for subsequent policy years.
The guarantee period will expire on the policy anniversary nearest the younger
insured's 100th birth date. The guarantee period will terminate prior to the
guarantee period expiration date if, on any monthly processing date, the actual
premiums paid (minus the amount of any partial withdrawals and any policy loan
including accrued but unpaid interest) are less than the sum of the guarantee
monthly premiums for each policy month starting with the first policy month to,
and including, the policy month that begins on the current monthly processing
date.
The guarantee period will also terminate if your account value, on any monthly
processing date, is not diversified. Diversification requires that no more than
35% of your net account value is invested in any one division, and that your net
account value is invested in at least 5 divisions.
You will satisfy these diversification requirements if: (i) you are
participating in the automatic rebalancing feature defined in and governed by
the policy prospectus in effect on the policy effective date and your automatic
rebalancing allocations comply with the diversifications specified above; or
(ii) you elect dollar cost averaging and direct the resulting transfers into at
least four other divisions with no more than 35% of any transfer being to any
one division.
If, at the end of the guarantee period, the net account value of your policy is
negative, your policy will terminate without value. The charge for this option
is shown in the Schedule.
TERMINATION
All coverage provided by this policy will end as of the earliest of:
a) The date the policy is surrendered;
b) The date of the second death; or
c) The date the grace period ends without payment of the required premium.
REINSTATEMENT
The policy and its riders may be reinstated within five years after the
beginning of the grace period. The reinstatement will be effective as of the
monthly processing date on or next following the date we approve your written
application.
Form 2504 (JTVUL)-8/9923
Page 23
We will reinstate the policy and any riders if the following conditions are met:
a) You have not surrendered the policy for its net cash surrender value;
b) You submit evidence satisfactory to us that the insureds and those insured
under any riders are still insurable according to our normal rules of
underwriting for the applicable underwriting class for this type of policy;
and
c) We receive payment of the amount of premium sufficient to keep the policy
and any riders in force from the beginning of the grace period to the end
of the expired grace period and for 2 months after the date of
reinstatement. We will let you know, at the time you request reinstatement,
the amount of premium needed for this purpose.
The surrender charge as of the date of reinstatement will equal the surrender
charge as of the beginning of the grace period.
We will reinstate any policy loan, with accrued loan interest to the end of the
grace period, which existed when coverage ended.
Upon reinstatement, the net premium received minus past due amounts will be
allocated to the Divisions of the Variable Account and the Guaranteed Interest
Division according to the premium allocation percentages in effect at the start
of the grace period or as directed by you in writing at the time of
reinstatement.
DEFERRAL OF PAYMENT
Requests for transfers, withdrawals, policy loans or payment of proceeds for a
full surrender will be mailed within 7 days of receipt of the request in a form
acceptable to us. However, we may postpone the processing of any such Variable
Account transactions for any of the following reasons:
a) The New York Stock Exchange (NYSE) is closed, other than customary weekend
and holiday closings.
b) Trading on the NYSE is restricted by the Securities and Exchange
Commission (SEC).
c) The SEC declares that an emergency exists as a result of which disposal of
securities in the Variable Account is not reasonably practicable to
determine your account value in the divisions.
d) A governmental body having jurisdiction over the Variable Account by order
permits such suspension.
Rules and regulations of the SEC, if any, are applicable and will govern as to
whether conditions described in (b), (c), or (d) exist.
Death proceeds will be paid within 7 days of determination of the proceeds and
are not subject to deferment. We may defer for up to 6 months payment of any
surrender proceeds, withdrawal or loan amounts from the Guaranteed Interest
Division.
Form 2504 (JTVUL)-8/99
Page 24
GENERAL POLICY PROVISIONS
THE POLICY
The policy, including the original application and applications for any
increases, decreases, riders, endorsements, any Schedule pages, and any
reinstatement applications make up the entire contract between you and us. A
copy of the original application will be attached to the policy at issue or at
delivery. A copy of any application as well as a new Schedule will be attached
or furnished to you for attachment to the policy at the time of any change in
coverage. In the absence of fraud, all statements made in any application will
be considered representations and not warranties. No statement will be used to
deny a claim unless it is in an application.
CONTRACT CHANGES
All changes made by us must be signed by our president or an officer and by our
secretary or assistant secretary. No other persons can change any of this
policy's terms and conditions.
PROCEDURES
We must receive any election, designation, assignment or any other change
request you make in writing, except those specified on the application. It must
be in a form acceptable to us. We may require a return of the policy for any
change or for a full surrender. We are not liable for any action we take before
we receive and record the written request at our Customer Service Center.
In the event of the death of an insured, please let us or our agent know as soon
as possible. This includes the first and second death. Upon notification to us
or our agent, instructions will be sent to you or the beneficiary immediately.
We may require proof of age and a certified copy of the death certificate. We
may require the beneficiary and next of kin to sign authorizations as part of
due proof. These authorization forms allow us to obtain information about the
decedent, including, but not limited to, medical records of physicians and
hospitals used by the decedent. Settlement will be made upon receipt of due
proof of death.
OWNERSHIP
The original owner is the person named as the owner in the application. You, as
the owner, can exercise all rights and receive the benefits until the second
death. This includes the right to change the owner, beneficiaries, and methods
for the payment of proceeds. All rights of the owner are subject to the rights
of any assignee and any irrevocable beneficiary.
You may name a new owner by sending written notice to us. The effective date of
the change to the new owner will be the date you sign the notice. The change
will not affect any payment made or action taken by us before recording the
change at our Customer Service Center.
Form 2504 (JTVUL)-8/99
Page 25
BENEFICIARIES
The primary beneficiary surviving the second death will receive any death
proceeds which become payable. Surviving contingent beneficiaries are paid death
proceeds only if no primary beneficiary has survived the second death. If more
than one beneficiary in a class survives the second death, they will share the
death proceeds equally, unless your designation provides otherwise. If there is
no designated beneficiary surviving, you or your estate will be paid the death
proceeds. The beneficiary designation will be on file with us or at a location
designated by us. Until the second death, you may name a new beneficiary. The
effective date of the change will be the date the request was signed. We will
pay proceeds to the most recent beneficiary designation on file. We will not be
subject to multiple payments.
EXCHANGE RIGHT
If, for any reason within the first 2 policy years you want to exchange this
policy for a policy in which values do not vary with the investment experience
of the Variable Account, we will exchange this policy. This transfer will not be
subject to the excess transfer charge. The exchange will be implemented by
transferring your account value in all the Divisions of the Variable Account to
the Guaranteed Interest Division and removing your future right to choose to
allocate funds to the Divisions of the Variable Account. We will require a
return of this policy before this change will be processed.
POLICY SPLIT
This benefit is available unless either insured is rated 10.0 times the standard
premium class, or higher. Any rating is shown on the Segment Benefit Profile
page of the Schedule. If this benefit is available, you may exchange this policy
for two individual policies, upon the occurrence of at least one of the
contingent events listed below. The exchange must be to two single whole life or
flexible premium universal life policies of the kind made available by us for
exchange. One policy will be on Insured #1 and the other policy will be on
Insured #2. No evidence of insurability will be required.
On the effective date of the exchange, you must split the available death
benefit provided by this policy between the two single life policies. The
maximum you may allocate to each single life policy is 50% of the available
death benefit. The sum of the face amounts of two single life policies cannot
exceed the available death benefit; however, there is no requirement that the
maximum available amount on each life be used. The available death benefit is
the amount of base death benefit plus any term insurance provided by the
Adjustable Term Insurance Rider on the effective date of the exchange.
The policy split may be exercised upon the occurrence of any of the following
contingent events:
a) Three months following the effective date of a final divorce decree with
respect to the marriage of the insureds.
b) The effective date of a change to Federal Estate Tax Law which results in
either:
1) Removal of the unlimited marital deduction provision; or
2) A reduction in the current maximum Federal Estate Tax or at least 50%
after the policy effective date.
c) The effective date of a dissolution of any business which is being
conducted or owned by the two insureds covered under this policy at the
time this policy is issued.
Form 2504 (JTVUL)-8/99
Page 26
You must send us written notice of your election to split the policy within 180
days following the occurrence of any contingent event. Your notice must provide
satisfactory evidence to us that the contingent event has occurred. The
insurance under the two individual policies will start on the effective date of
the exchange only if both insureds are alive on the effective date of the
exchange. The new policies will not provide any insurance until such time. If
either insured is not alive on that date, the exchange shall be void.
The effective date of the exchange will be the first monthly processing date
after we have approved the exchange.
The premiums under each new policy will be based on each insured's attained age
and premium class at the time of the split. Premiums will be due for each new
policy in accordance with the terms of the new policy as of the effective date
of the exchange. The surrender value of the old policies will be allocated to
the new policies in the same proportion that the face amount was divided between
the two policies unless we agree to a different allocation. Such allocation will
be made to each new policy on the effective date of the exchange. If such
allocation would cause an increase in the face amount of the new policy, we
reserve the right to limit the amount of surrender value that may be applied to
the new policies. Any remaining surrender value will be paid to you in cash.
Any loan on the policy will be divided and transferred to each new policy in the
same proportion as the cash value is apportioned. Any remaining outstanding loan
balance must be paid in cash prior to the effective date of the exchange. Any
assignee must agree to the exchange. Any assignment of the policy will apply to
each new policy.
If there is a Single Life Term Insurance Rider on the original policy on the
date of the exchange, you may have a term insurance rider insuring that life on
the new policy if such a rider is available on the new policy. The amount of the
insurance cannot be more than the amount under the Single Life Term Insurance
Rider on that life under the original policy. Any other riders on the new
policies are subject to availability and satisfactory evidence of insurability.
This policy provision ends on the earliest of:
a) The policy anniversary nearest the younger insured's 100th birth date;
or
b) The death of the first of the two insureds; or c) The expiration of the
grace period of the policy; or d) The termination or surrender of the
policy.
COLLATERAL ASSIGNMENT
You may assign this policy as collateral security by written notice to us. Once
it is recorded with us, the rights of the owner and beneficiary are subject to
the assignment. It is your responsibility to make sure the assignment is valid.
INCONTESTABILITY
After this policy has been in force while both insureds are alive for 2 years
from the policy date, we will not contest the statements in the application
attached at issue.
Form 2504 (JTVUL)-8/99
Page 27
After this policy has been in force while both insureds are alive for 2 years
from the effective date of any new segment or from the effective date of an
increase in any other benefit, we will not contest the statements in the
application for the new segment or other increase.
After this policy has been in force while both insureds are alive for 2 years
from the effective date of any reinstatement, we will not contest the statements
in the application for such reinstatement.
MISSTATEMENT OF AGE OR SEX
If either insured's age or sex has been misstated, the death benefit will be
adjusted. The death benefit will be that which the cost of insurance, which was
deducted from your Account Value on the last monthly processing date prior to
the second death of the two insureds, would have purchased for the insured's
correct age and sex. If the death benefit adjustment is made prior to the second
death, the adjusted benefit will be to an equitable amount determined by us.
This adjustment will reflect the death benefit for the correct age or sex.
SUICIDE EXCLUSION
If either insured commits suicide, while sane or insane, within 2 years of the
policy date, we will make a limited payment to the beneficiary. We will pay in
one sum the amount of all premiums paid to us during that time, minus any
outstanding policy loan (including accrued but unpaid interest) and partial
withdrawals. If either insured commits suicide, while sane or insane, within 2
years of the effective date of a new segment or of an increase in any other
benefit, we will make a limited payment to the beneficiary for the new segment
or other increase. This payment will equal the cost of insurance and any
applicable monthly expense charges deducted for such increase. Coverage under
the policy and all riders then terminate.
PERIODIC REPORTS
We will send you, without charge, at least once each year a report that shows
the current account value, cash surrender value and premiums paid since the last
report. The report will also show the allocation of your account value as of the
date of the report and the amounts added to or deducted from your account value
of each division since the last report. The report will include any other
information that may be currently required by the insurance supervisory official
of the jurisdiction in which this policy is delivered.
ILLUSTRATION OF BENEFITS AND VALUES
We will send you, upon written request, a hypothetical illustration of future
death benefits and account values. This illustration will include the
information as required by the laws or regulations where this policy is
delivered. If you request more than one illustration during a policy year, we
reserve the right to charge a reasonable fee for each additional illustration.
The maximum amount of this fee is shown in the Schedule.
Form 2504 (JTVUL)-8/99
Page 28
NONPARTICIPATING
The policy does not participate in our surplus earnings.
CUSTOMER SERVICE CENTER
Our Customer Service Center is at the address shown in the Schedule. Unless you
are otherwise notified:
a) All requests and payments should be sent to us at our Customer
Service Center; and
b) All transactions are effective as of the valuation date the required
information is received at our Customer Service Center.
PAYOUTS OTHER THAN AS ONE SUM
ELECTION
Before the second death, you may elect to have the beneficiary receive the
proceeds other than in one sum. If you have not made an election, the
beneficiary may do so within 60 days after we receive due proof satisfactory to
us of the second death. You may also elect to take the net cash surrender value
of the policy upon its surrender other than in one sum. Satisfactory written
request must be received at our Customer Service Center before payment can be
made. A payee that is not a natural person may not be named without our consent.
The various methods of settlement are described in the following Payout Options
section.
PAYOUT OPTIONS
OPTION I. PAYOUTS FOR A DESIGNATED PERIOD. Payouts will be made in 1, 2, 4,
or 12 installments per year as elected for a designated period, which may be
5 to 30 years. The installment dollar amounts will be equal except for any
excess interest as described below. The amount of the first monthly payout
for each $1,000 of account value applied is shown in Settlement Option Table
I.
OPTION II. LIFE INCOME WITH PAYOUTS FOR A DESIGNATED PERIOD. Payouts will be
made in 1, 2, 4, or 12 installments per year throughout the payee's lifetime,
or if longer, for a period of 5, 10, 15 or 20 years as elected. The
installment dollar amounts will be equal except for any excess interest as
described below. The amount of the first monthly payout for each $1,000 of
account value applied is shown in Settlement Option Table II. This option is
available only for ages shown in the table.
Payouts for Payout Option II will be determined by using the 1983 Individual
Annuity Mortality Table for the appropriate sex at 3 ½% interest.
OPTION III. HOLD AT INTEREST. Amounts may be left on deposit with us
to be paid upon the death of the payee or at any earlier date elected.
Interest on any unpaid balance will be at the rate declared by us or at
any higher rate required by law. Interest may be accumulated or paid in
1, 2, 4, or 12 installments per year, as elected. Money may not be left
on deposit for more than 30 years.
Form 2504 (JVUL)-8/99
Page 29
OPTION IV. PAYOUTS OF A DESIGNATED AMOUNT. Payouts will be made until
proceeds, together with interest which will be at the rate declared by us
or at any higher rate required by law, are exhausted. Payouts will be made
in 1, 2, 4, or 12 equal installments per year, as elected.
OPTION V. OTHER. Settlement may be made in any other manner as agreed
upon in writing between you (or the beneficiary) and us.
CHANGE AND WITHDRAWAL
You may change an election at any time before the second death. If you have
given the beneficiary the right to make changes or withdrawals, or if the
beneficiary has elected the option, the beneficiary (as primary payee) may take
the actions below.
a) Changes may be made from Payout Options I, III, and IV to another option.
b) Full withdrawals may be made under Payout Option III or IV. Partial
withdrawals of not less than $300 may be made under Payout Option III.
c) Remaining installments under Payout Option I may be commuted at 3½%
interest and received in one sum.
d) Changes in any contingent payee designation may be made.
A written request must be sent to our Customer Service Center in writing to make
a change or withdrawal. We also may require that you send in the supplementary
policy. We may defer payment of commuted and withdrawable amounts for a period
up to 6 months.
EXCESS INTEREST
If we declare that Payout Options are to be credited with an interest rate above
that guaranteed, it will apply to Payout Options I, II, III, and IV. The
crediting of excess interest for one period does not guarantee the higher rate
for other periods. Any declared interest rate will be in effect for at least 12
months.
MINIMUM AMOUNTS
The minimum amount which may be applied under any option is $2,000. If the
payments to the payee are ever less than $20, we may change the frequency of
payments so as to result in payments of at least that amount.
SUPPLEMENTARY POLICY
When a payout option becomes effective, the policy will be surrendered in
exchange for a supplementary policy. It will provide for the manner of
settlement and rights of the payees. The supplementary policy's effective date
will be the date of the second death or the date of other settlement. The first
payment under Options I, II, and IV will be payable as of the effective date.
The first interest payment under Option III will be made as of the end of the
interest payment period elected. Subsequent payments will be made in accordance
with the frequency of payment elected. The supplementary policy may not be
assigned or payments made to another without our consent.
Form 2504 (JTVUL)-8/99
Page 30
INCOME PROTECTION
Unless otherwise provided in the election, a payee does not have the right to
commute, transfer or encumber amounts held or installments to become payable. To
the extent provided by law, the proceeds, amount retained, and installments are
not subject to any payee's debts, policies, or engagements.
DEATH OF PRIMARY PAYEE
Upon the primary payee's death, any payments certain under Option I or II,
interest payments under Option III, or payments under Option IV will be
continued to the contingent payee; or, amounts may be released in one sum if
permitted by the policy. The final payee will be the estate of the last to die
of the primary payee and any contingent payee.
PAYMENTS OTHER THAN MONTHLY
The tables that follow show monthly installments for Options I and II. To arrive
at annual, semiannual, or quarterly payments, multiply the appropriate figures
by 11.813, 5.957 or 2.991 respectively. Factors for other periods certain or for
other options that may be provided by mutual agreement will be provided upon
reasonable request.
Form 2504 (JTVUL)-8/99
Page 31
SETTLEMENT OPTION TABLES
SETTLEMENT OPTION TABLE I
(Per $1,000 of Net Proceeds)
No. of Monthly No. of Monthly
Years Payable Installments Years Payable Installments
1 $84.65 16 6.76
2 43.05 17 6.47
3 29.19 18 6.20
4 22.27 19 5.97
5 18.12 20 5.75
6 15.35 21 5.56
7 13.38 22 5.39
8 11.90 23 5.24
9 10.75 24 5.09
10 9.83 25 4.96
11 9.09 26 4.84
12 8.46 27 4.73
13 7.94 28 4.63
14 7.49 29 4.53
15 7.10 30 4.45
Form 2504 (JTVUL)-8/99
Page 32
SETTLEMENT OPTION TABLE II
FEMALE
(Per $1,000 of Net Proceeds)
Age of Payee Nearest Monthly Age of Payee Nearest Monthly
Birth Date When First Installment Birth Date When First Installments
Installment is Payable Installment is Payable
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Female Certain Certain Certain Certain Female Certain Certain Certain Certain
15 3.19 3.19 3.19 3.19 41 3.76 3.76 3.75 3.73
16 3.20 3.20 3.20 3.20 42 3.80 3.80 3.78 3.77
17 3.22 3.22 3.21 3.21 43 3.84 3.84 3.82 3.81
18 3.23 3.23 3.23 3.23 44 3.88 3.88 3.86 3.84
19 3.24 3.24 3.24 3.24 45 3.93 3.92 3.91 3.88
20 3.26 3.26 3.26 3.25 46 3.98 3.97 3.95 3.92
21 3.27 3.27 3.27 3.27 47 4.03 4.02 4.00 3.97
22 3.29 3.29 3.29 3.28 48 4.08 4.07 4.05 4.01
23 3.31 3.30 3.30 3.30 49 4.13 4.12 4.10 4.06
24 3.32 3.32 3.32 3.32 50 4.19 4.18 4.15 4.11
25 3.34 3.34 3.34 3.33 51 4.25 4.24 4.21 4.16
26 3.36 3.36 3.35 3.35 52 4.32 4.30 4.26 4.21
27 3.38 3.38 3.37 3.37 53 4.38 4.36 4.33 4.27
28 3.40 3.40 3.39 3.39 54 4.46 4.43 4.39 4.32
29 3.42 3.42 3.41 3.41 55 4.53 4.51 4.46 4.38
30 3.44 3.44 3.43 3.43 56 4.61 4.58 4.53 4.44
31 3.46 3.46 3.46 3.45 57 4.70 4.66 4.60 4.51
32 3.49 3.48 3.48 3.48 58 4.79 4.75 4.68 4.57
33 3.51 3.51 3.51 3.50 59 4.88 4.84 4.76 4.64
34 3.54 3.54 3.53 3.52 60 4.99 4.93 4.84 4.70
35 3.57 3.56 3.56 3.55 61 5.09 5.03 4.93 4.77
36 3.60 3.59 3.59 3.58 62 5.21 5.14 5.02 4.84
37 3.63 3.62 3.62 3.61 63 5.33 5.25 5.12 4.91
38 3.66 3.65 3.65 3.64 64 5.46 5.37 5.21 4.98
39 3.69 3.69 3.68 3.67 65 5.60 5.50 5.31 5.05
40 3.73 3.72 3.71 3.70 66 5.75 5.63 5.42 5.12
Form 2504 (JTVUL)-8/99
Page 33
SETTLEMENT OPTION TABLE II/FEMALE
(Continued)
(Per $1,000 of Net Proceeds)
Age of Payee Nearest Monthly Age of Payee Nearest Monthly
Birth Date When First Installment Birth Date When First Installment
Installment is Payable Installment is Payable
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Female Certain Certain Certain Certain Female Certain Certain Certain Certain
67 5.91 5.77 5.53 5.19 92 14.45 9.61 7.09 5.75
68 6.08 5.91 5.63 5.25 93 14.81 9.66 7.10 5.75
69 6.26 6.07 5.74 5.32 94 15.16 9.70 7.10 5.75
70 6.46 6.23 5.86 5.37 95 15.49 9.73 7.10 5.75
71 6.67 6.40 5.97 5.43 96 15.80 9.76 7.10
72 6.89 6.58 6.08 5.48 97 16.11 9.79 7.10
73 7.13 6.76 6.18 5.52 98 16.40 9.80 7.10
74 7.39 6.95 6.29 5.57 99 16.68 9.82 7.10
75 7.67 7.14 6.39 5.60 100 16.95 9.82 7.10
76 7.96 7.34 6.48 5.63 101 17.20 9.83
77 8.28 7.54 6.57 5.66 102 17.43 9.83
78 8.61 7.74 6.65 5.68 103 17.62 9.83
79 8.97 7.94 6.72 5.70 104 17.78 9.83
80 9.34 8.13 6.79 5.71 105 17.91 9.83
81 9.73 8.32 6.84 5.72 106 18.00
82 10.14 8.50 6.89 5.73 107 18.06
83 10.57 8.67 6.94 5.74 108 18.09
84 11.01 8.83 6.97 5.74 109 18.11
85 11.46 8.97 7.00 5.75 110 18.11
86 11.91 9.10 7.02 5.75
87 12.36 9.22 7.04 5.75
88 12.81 9.32 7.06 5.75
89 13.25 9.41 7.07 5.75
90 13.67 9.48 7.08 5.75
91 14.07 9.55 7.09 5.75
Form 2504 (JTVUL)-8/99
Page 34
SETTLEMENT OPTION TABLE II
MALE
(Per $1,000 of Net Proceeds)
Age of Payee Nearest Monthly Age of Payee Nearest Monthly
Birth Date When First Installment Birth Date When First Installment
Installment is Payable Installment is Payable
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Male Certain Certain Certain Certain Male Certain Certain Certain Certain
15 3.28 3.28 3.27 3.27 41 4.01 4.00 3.97 3.94
16 3.29 3.29 3.29 3.28 42 4.06 4.04 4.01 3.98
17 3.31 3.31 3.30 3.30 43 4.11 4.09 4.06 4.02
18 3.32 3.32 3.32 3.32 44 4.16 4.14 4.11 4.06
19 3.34 3.34 3.34 3.33 45 4.22 4.20 4.16 4.11
20 3.36 3.36 3.35 3.35 46 4.28 4.25 4.21 4.16
21 3.38 3.38 3.37 3.37 47 4.34 4.31 4.27 4.21
22 3.40 3.40 3.39 3.39 48 4.41 4.38 4.33 4.26
23 3.42 3.42 3.41 3.41 49 4.48 4.44 4.39 4.31
24 3.44 3.44 3.43 3.43 50 4.55 4.51 4.45 4.36
25 3.46 3.46 3.45 3.45 51 4.62 4.58 4.52 4.42
26 3.49 3.48 3.48 3.47 52 4.70 4.66 4.58 4.48
27 3.51 3.51 3.50 3.49 53 4.79 4.74 4.65 4.54
28 3.54 3.53 3.53 3.52 54 4.88 4.82 4.73 4.60
29 3.56 3.56 3.55 3.54 55 4.97 4.91 4.80 4.66
30 3.59 3.59 3.58 3.57 56 5.07 5.00 4.88 4.72
31 3.62 3.62 3.61 3.60 57 5.17 5.10 4.97 4.78
32 3.65 3.65 3.64 3.62 58 5.29 5.20 5.05 4.85
33 3.68 3.68 3.67 3.65 59 5.41 5.31 5.14 4.91
34 3.72 3.71 3.70 3.68 60 5.53 5.42 5.23 4.97
35 3.75 3.75 3.73 3.72 61 5.67 5.54 5.33 5.04
36 3.79 3.78 3.77 3.75 62 5.81 5.67 5.42 5.10
37 3.83 3.82 3.81 3.78 63 5.97 5.80 5.52 5.16
38 3.87 3.86 3.85 3.82 64 6.13 5.94 5.62 5.22
39 3.92 3.90 3.89 3.86 65 6.31 6.08 5.72 5.28
40 3.96 3.95 3.93 3.90
Form 2504 (JTVUL)-8/99
Page 35
SETTLEMENT OPTION TABLE II/MALE
(Continued)
(Per $1,000 of Net Proceeds)
Age of Payee Nearest Monthly Age of Payee Nearest Monthly
Birth Date When First Installment Birth Date When First Installment
Installment is Payable Installment is Payable
5 Years 10 Years 15 Years 20 Years 5 Years 10 Years 15 Years 20 Years
Male Certain Certain Certain Certain Male Certain Certain Certain Certain
66 6.49 6.23 5.82 5.33 91 14.64 9.64 7.09 5.75
67 6.69 6.38 5.92 5.38 92 15.00 9.68 7.10 5.75
68 6.90 6.54 6.02 5.43 93 15.34 9.72 7.10 5.75
69 7.12 6.71 6.12 5.48 94 15.68 9.75 7.10 5.75
70 7.35 6.87 6.21 5.52 95 16.00 9.78 7.10 5.75
71 7.60 7.05 6.30 5.55 96 16.30 9.80 7.10
72 7.86 7.22 6.39 5.59 97 16.59 9.81 7.10
73 8.13 7.40 6.47 5.62 98 16.86 9.82 7.10
74 8.42 7.57 6.55 5.64 99 17.11 9.83 7.10
75 8.72 7.75 6.62 5.66 100 17.33 9.83 7.10
76 9.04 7.92 6.69 5.68 101 17.53 9.83
77 9.37 8.09 6.75 5.70 102 17.69 9.83
78 9.72 8.26 6.81 5.71 103 17.82 9.83
79 10.08 8.42 6.86 5.72 104 17.92 9.83
80 10.44 8.57 6.90 5.73 105 18.00 9.83
81 10.82 8.71 6.94 5.74 106 18.05
82 11.21 8.85 6.97 5.74 107 18.08
83 11.59 8.97 7.00 5.75 108 18.10
84 11.99 9.09 7.02 5.75 109 18.11
85 12.38 9.20 7.04 5.75 110 18.11
86 12.76 9.29 7.05 5.75
87 13.15 9.38 7.07 5.75
88 13.53 9.46 7.08 5.75
89 13.91 9.53 7.08 5.75
90 14.28 9.59 7.09 5.75
Form 2504 (JTVUL)-8/99
Page 36
THIS IS A NON-PARTICIPATING POLICY
THIS POLICY IS A LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE
INSURANCE POLICY THIS POLICY INCLUDES PERSISTENCY BONUS.
DEATH BENEFITS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE. THESE VALUES MAY
INCREASE OR DECREASE BASED ON INVESTMENT EXPERIENCE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. DEATH BENEFITS ARE PAYABLE BY US UPON THE SECOND DEATH OF
THE TWO INSUREDS. THERE IS NO MATURITY DATE. FLEXIBLE PREMIUMS ARE PAYABLE BY
YOU DURING THE LIFETIME OF EITHER INSURED UNTIL THE POLICY ANNIVERSARY NEAREST
THE YOUNGER INSURED'S 100TH BIRTH DATE.
TO OBTAIN INFORMATION OR MAKE A COMPLAINT, CONTACT SECURITY LIFE
OF DENVER INSURANCE COMPANY AT:
Customer Service Center
P. O. Box 173888
Denver, Colorado 80217
Toll Free Number: 1(800)848-6362
SECURITY LIFE OF DENVER INSURANCE COMPANY
A Stock Company
Form 2504 (JTVUL)-8/99