[LETTERHEAD OF JOHN HANCOCK]
INSURED JOHN HANCOCK TOTAL SUM INSURED AT ISSUE $100,000
POLICY NUMBER 50-000-000 DATE OF ISSUE SEPTEMBER 1, 2000
DEATH BENEFIT OPTION A: (See Section 4)
PLAN Majestic Variable COLI
INDIVIDUAL VARIABLE LIFE INSURANCE
The John Hancock Variable Life Insurance Company ("the Company") agrees, subject
to the conditions and provisions of this policy, to pay the Death Benefit to the
Beneficiary upon the death of the Insured if such death occurs while the policy
is in full force, and to provide the other benefits, rights, and privileges of
the policy. The Death Benefit (see Section 4) will be payable, subject to the
"Deferral of Determinations and Payments" provision, on receipt at the Home
Office of the Company of due proof of the Insured's death.
The Death Benefit of this policy will increase or decrease based on the
experience of the Separate Accounts. The policy, which includes any Riders which
are a part of the policy on delivery, is issued in consideration of the
application and payment of the Minimum Initial Premium.
The Policy Specifications and the conditions and provisions on this and the
following pages are part of the policy.
Signed for the Company at Boston, Massachusetts:
/s/ Michele G. Van Leer /s/ Peter Scavongelli
President Secretary
Variable Life Insurance policy
Flexible Premiums
Death Benefit payable at death of Insured
Not eligible for dividends
Benefits, premiums, and the policy class are shown in the Specifications Section
of the policy.
To the extent any benefit, payment, or value under this policy (including the
Account Value) is based on the investment experience of a Separate Account, such
benefit, payment, or value may increase or decrease in accordance with the
investment experience of the Separate Account and is not guaranteed as to fixed
dollar amount. However, this policy may provide a Guaranteed Minimum Death
Benefit, if such option is elected at issue and provided that premiums are paid
on a timely basis and other conditions are met as described in Sections 4, 6,
and 7.
Right to Cancel--The Owner may surrender this policy by delivering or mailing it
to the Company at Boston, Massachusetts (or to the agent or agency office
through which it was delivered) within 45 days after the date of Part A of the
application, or within 10 days after receipt by the Owner of the policy, or
within 10 days after mailing by the Company of the Notice of Withdrawal Right,
whichever is latest. Immediately on such delivery or mailing, the policy shall
be deemed void from the beginning. Any premium paid on this policy will be
refunded within 10 days after timely receipt from the Owner of appropriate
written notice (including the surrendered policy, if it has been delivered)
exercising the rights described above.
MAJ601 M60101
Policy Provisions
Section
1. Policy Specifications
2. Table Of Rates
3. Definitions
4. Death Benefit
5. Payments
6. Guaranteed Minimum Death Benefit Premium Target
7. Grace Period
8. Account Value
9. Charges
10. Loans
11. Surrenders and Withdrawals
12. Basis of Computations
13. Separate Account and Fixed Account
14. Allocation To Subaccounts
15. Investment Policy Change
16. Reports To Owner
17. Reinstatement
18. Owner and Beneficiary
19. Interest On Proceeds
20. Deferral Of Determinations And Payments
21. Claims Of Creditors
22. Assignment
23. Incontestability
24. Misstatement Of Age Or Sex
25. Suicide
26. The Contract
27. Settlement Provisions
2
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1. POLICY SPECIFICATIONS
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Insured [John Hancock]
Issue Age [35]
Sex [Male]
Premium Class [Standard]
[NonSmoker]
Owner, Beneficiary As designated in the application subject to Section 18 of the policy
Policy Number [50-000-000] Plan Majestic Variable COLI
Date of Issue [September 1, 2000] Sum Insured
Basic Sum Insured at Issue $[50,000]
Additional Sum Insured at Issue $[50,000]
----------
Total Sum Insured at Issue $[100,000]
Death Benefit Option [Option A] State of Issue [MA]
at Issue
Other Benefits and Specifications
---------------------------------
Minimum Total Sum Insured $100,000
Minimum Basic Sum Insured $50,000
Definition of Life Insurance Elected [Cash Value Accumulation Test]
PREMIUMS
--------
Planned Premium $[2,029.50] per year for [all] Policy
Years
Target Premium $[2,029.50] per year
Minimum Initial Premium $[1,014.75]
Billing Interval [Annual]
3 M0301V
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1. POLICY SPECIFICATIONS, continued
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CURRENT POLICY CHARGES*
Deductions from Premium Payments
--------------------------------
Sales Charge
-----------------------------------------------------
Policy Up to Target Excess
Years Premium
-----------------------------------------------------
1-10 6.5% 0%
-----------------------------------------------------
11+ 3.5% 0%
-----------------------------------------------------
[Enhanced Cash Value 1% of all Premiums paid in Policy Year 1
Rider Charge]
Monthly Deductions from Account Value
-------------------------------------
Asset-Based Risk Charge [.03]% of Separate Account assets in Policy Years
1-20 and [.0125]% in Policy Years 21 and thereafter
Administrative Charge $[2.50] plus $[0.03] per $1000 of Basic Sum Insured
at Issue for all Policy Years, where the per $1000
portion will not exceed $[30.00]
Issue Charge $[.066] per $1000 of Basic Sum Insured at Issue for
the first 10 Policy Years
Cost of Insurance Determined in accordance with Section 9, and
Charge deducted for all Policy Years
*We reserve the right to change the amount or percentage of any of these
charges, but no charge will exceed the amount or percentage shown in the Maximum
Policy Charges on page 3B.
3A M3A01V
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1. POLICY SPECIFICATIONS, continued
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MAXIMUM POLICY CHARGES
----------------------
Deductions from Premium Payments
--------------------------------
Sales Charge
-----------------------------------------------------
Policy Up to Target Excess
Years Premium
-----------------------------------------------------
1-10 10% 3.5%
-----------------------------------------------------
11+ 7% 3.5%
-----------------------------------------------------
[Enhanced Cash Value 1% of all Premiums paid in Policy Year 1
Rider Charge]
Monthly Deductions from Account Value
-------------------------------------
Asset-Based Risk .05% of Separate Account assets in all Policy Years
Charge
Administrative Charge $5.00 plus $0.06 per $1000 of Basic Sum Insured at
Issue for all Policy Years, where the per $1000
portion will not exceed $60.00.
Issue Charge $[.066] per $1000 of Basic Sum Insured at Issue for
the first 10 Policy Years.
Cost of Insurance Determined in accordance with Section 9, and
Charge deducted for all Policy Years; Maximum Monthly
Rates are shown in Section 2
3B M3B01V
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1. POLICY SPECIFICATIONS, continued
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Insured [JOHN HANCOCK] Plan Majestic Variable COLI
Policy Number [50-000-000]
Rider Date of Issue [September 1, 2000]
Rider Information
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Type Description
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Enhanced Cash Additional cash value available upon surrender during the first
Value Rider 7 Policy Years, equal to the following percentages of the
cumulative premiums paid, less cumulative Withdrawals:
Policy Year ECV Percentage
1 4.0%
2 3.5%
3 3.0%
4 2.5%
5 2.0%
6 1.5%
7 1.0%
8+ 0.0%
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3C M3C01V
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2. TABLE OF RATES
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A. RATE TABLE
Maximum Monthly
Rates per $1,000 of Required Additional
Age1 Net Amount at Risk2 Death Benefit Factor
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35 0.1760 3.9726
36 0.1869 3.8433
37 0.2002 3.7186
38 0.2153 3.5985
39 0.2328 3.4829
40 0.2520 3.3717
41 0.2746 3.2649
42 0.2972 3.1623
43 0.3231 3.0636
44 0.3498 2.9689
45 0.3800 2.8779
46 0.4109 2.7904
47 0.4444 2.7064
48 0.4796 2.6255
49 0.5190 2.5477
50 0.5609 2.4728
51 0.6104 2.4008
52 0.6658 2.3317
53 0.7287 2.2654
54 0.8002 2.2019
55 0.8767 2.1412
56 0.9601 2.0831
57 1.0468 2.0275
58 1.1396 1.9742
59 1.2392 1.9230
60 1.3500 1.8740
61 1.4736 1.8269
62 1.6134 1.7818
63 1.7722 1.7387
64 1.9491 1.6976
65 2.1434 1.6584
66 2.3510 1.6211
67 2.5728 1.5855
68 2.8088 1.5516
69 3.0653 1.5191
70 3.3537 1.4880
1. On a Policy anniversary, "age" means the age of the Insured at his or her
birthday nearest that date. That "age" will apply until the next
anniversary.
2. Maximum Monthly Rates and Minimum Values are based on the 1980
Commissioners Standard Ordinary Mortality Table.
4 M0401V
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2. TABLE OF RATES, continued
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A. RATE TABLE (cont'd.)
Age/1/ Maximum Monthly
Rates per $1,000 of Net Required Additional
Amount at Risk/2/ Death Benefit Factor
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71 3.6820 1.4583
72 4.0603 1.4301
73 4.4962 1.4033
74 4.9835 1.3781
75 5.5133 1.3546
76 6.0765 1.3325
77 6.6657 1.3117
78 7.2759 1.2922
79 7.9239 1.2737
80 8.6352 1.2560
81 9.4308 1.2392
82 10.3390 1.2232
83 11.3735 1.2082
84 12.5138 1.1942
85 13.7377 1.1812
86 15.0218 1.1692
87 16.3566 1.1580
88 17.7380 1.1475
89 19.1720 1.1374
90 20.6777 1.1277
91 22.2871 1.1181
92 24.0635 1.1082
93 26.1199 1.0979
94 28.8130 1.0869
95 32.8176 1.0748
96 39.6429 1.0616
97 53.0660 1.0476
98 83.3333 1.0334
99 83.3333 1.0198
1. On a Policy anniversary, "age" means the age of the Insured at his or her
birthday nearest that date. That "age" will apply until the next anniversary.
2. Maximum Monthly Rates and Minimum Values are based on the 1980 Commissioners
Standard Ordinary Mortality Table.
4A M4A01V
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3. DEFINITIONS
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The term "Account Value" is as defined in Section 8.
The term "Annual Processing Date" means every 12th Processing Date starting with
the Processing Date next after the Date of Issue.
The term "Excess Premium" means that portion of the total Premiums received
during any Policy Year that exceeds the Target Premium.
The term "Fixed Account" means an account established by us which accumulates at
rates which we will determine and declare from time to time, but which will not
be less than 4%. The assets of a Fixed Account are invested in a segment of our
General Account.
The term "Fund" means each division of a Series Fund which has a specific
investment objective.
The term "Guaranteed Death Benefit Premium" is as defined the amount defined is
Section 6.
The term "in full force" means that the policy has not lapsed in accordance with
Section 7.
The term "indebtedness" means the unpaid balance of a policy loan. As provided
in Section 10, the policy loan amount includes accrued interest.
The term "Minimum Initial Premium" means the amount shown on page 3.
The term "Modal Processing Date" means the first Processing Date of each premium
billing interval.
The term "Net Premium" is as defined in Section 5.
The term "Payment" means, unless otherwise stated, payment at our Servicing
Office.
The term "Planned Premium" means the amount shown on Page 3.
The term "Policy Year" means (a) or (b) below whichever is applicable:
(a) The first Policy Year is the period beginning on the Date of Issue and
ending on the Valuation Date immediately preceding the first Annual
Processing Date;
(b) Each subsequent Policy Year is the period beginning on an Annual
Processing Date and ending on the Valuation Date immediately preceding the
next Annual Processing Date.
The term Premium" is as defined in Section 5.
The term "Processing Date" means the first day of a policy month. A policy month
shall begin on the day in each calendar month which corresponds to the day of
the calendar month on which the Date of Issue occurred. If the Date of Issue is
the 29th, 30th, or 31st day of a calendar month, then for any calendar month
which has fewer days, the first day of the policy month will be the last day of
such calendar month. The Date of Issue is not a Processing Date.
The term "Separate Account", unmodified, means a separate investment account,
established by us pursuant to applicable law, in which you are eligible to
invest under this policy.
The term "Series Fund" means a series type mutual fund registered under the
Investment Company Act of 1940 as an open-end diversified management investment
company.
The term "Servicing Office" means the office of the Company that provides
administrative services with respect to this policy and others like it. The
address of the Servicing Office on this policy's Date of Issue is shown on the
back cover of this policy.
The term "Subaccount" means a Variable Account or a Fixed Account.
The term "Target Premium" means the amount shown on Page 3.
The term "Valuation Date" means any date on which the New York Stock Exchange is
open for trading.
The term "Valuation Period" means the period of time from the beginning of the
day following a Valuation Date to the end of the next following Valuation Date.
The term "Variable Account" means each division of a Separate Account which has
a specific investment objective. The assets of each Variable Account are
invested solely in shares of the corresponding Fund of a Series Fund.
The terms "we", "us", and "our" refer only to the Company.
The term "written notice" means, unless otherwise stated, a written notice filed
at our Servicing Office.
The terms "you" and "your" refer only to the Owner of this policy.
5 M0501V
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4. DEATH BENEFIT
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The Death Benefit is payable when the Insured dies while the policy is in full
force. The Death Benefit will equal the death benefit of the policy minus any
indebtedness on the date of death. We will also deduct any unpaid charges under
Section 9. In addition, if the Insured dies during a grace period as described
in Subsection A of Section 7, we will also deduct the amount of any unpaid
shortfall described in that subsection.
The death benefit of the policy depends on which of the following Options is
selected in the application for the policy.
The determination of the death benefit under each of these Options will be
affected by withdrawals as described in Section 11.
Option A: The death benefit is the Total Sum Insured, plus any Required
Additional Death Benefit as described below.
Option B: The death benefit is the Total Sum Insured plus the Account Value
on the date of death of the Insured, plus any Required Additional Death
Benefit as described below.
The Total Sum Insured equals the sum of the Basic Sum Insured and any Additional
Sum Insured, subject to the provisions on withdrawals in Section 11.
Required Additional Death Benefit
The death benefit of the policy will be increased if necessary to ensure that
the policy will continue to qualify as life insurance under federal tax law. The
amount of any such increase is the Required Additional Death Benefit.
With respect to Option A, the Required Additional Death Benefit on any given
date will be equal to the Total Required Death Benefit as of such date, as
defined below, minus the Total Sum Insured.
With respect to Option B, the Required Additional Death Benefit on any given
date will be equal to the Total Required Death Benefit as of such date, as
defined below, minus the sum of the Total Sum Insured and the Account Value.
The Total Required Death Benefit, if determined on a date during the first 3
Policy Years, will be equal to (i) the sum of the Account Value on such date
plus 50% of the amount of any Sales Charges which have been deducted from any
Target Premium payments received during the 365 days immediately preceding such
date multiplied by (ii) the applicable Required Additional Death Benefit factor
shown in Section 2.
The Total Required Death Benefit, if being determined on a date after the first
3 Policy Years, will equal (i) the Account Value multiplied by (ii) the
applicable Required Additional Death Benefit factor shown in Section 2.
A charge for any Required Additional Death Benefit in effect on any Processing
Date will be deducted from the Account Value on such date. Such charge will be
determined by applying the Cost of Insurance formulation described in Section 9
at the time the deduction is made.
Change of Death Benefit Option
You may change from Option B to Option A. At the time of a change from Option B
to Option A, the Death Benefit under the new Option will be the same as it was
under the old Option. A change from Option B will therefore increase the Basic
Sum Insured by the Account Value at the time the new Option takes effect.
Guaranteed Minimum Death Benefit
The Guaranteed Minimum Death Benefit Feature ("the GMDB Feature") is only
available if page 3 indicates that the GMDB Feature applies to this policy.
If the GMDB Feature is in effect, even though unpaid Section 9 charges exceed
the policy's Surrender Value, a Guaranteed Minimum Death Benefit will be
guaranteed upon the death of the Insured, provided that the funding requirements
described in Sections 6 and 7 continue to be met and there has not been a
failure to repay on a timely basis any excess indebtedness in accordance with
Section 10. The Guaranteed Minimum Death Benefit will be equal to the Basic Sum
Insured less withdrawals as described in Section 11, less any indebtedness on
the date of death and less any unpaid monthly charges under Section 9.
6
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5. PAYMENTS
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Payments under the policy shall be made only to us at our Servicing Office. A
premium reminder notice for Planned Premiums, as shown in the application for
the policy, will be sent to you at the beginning of each payment interval.
When we receive a payment, we first deduct any amount specified as payment of
accrued interest on loans then due under Section 11 and any amount specified as
loan repayment. The remainder will constitute Premium. We then deduct all of the
applicable charges listed under "Deductions from Premium Payments" in Section 1.
The remainder will constitute Net Premium.
If coverage under the policy takes effect in accordance with the provisions of
the application, we will process any premium payment as of the Valuation Period
in which we receive it, unless one of the following exceptions applies:
(i) We will process a payment received prior to the Date of Issue as if
received on the Date of Issue;
(ii) We will process the portion of any premium payment for which we require
evidence of the Insured's continued insurability on the first Valuation
Date after we have received such evidence and found it satisfactory to us;
(iii) If a payment equal to the Minimum Initial Premium is not received prior to
the Date of Issue, a portion of each payment subsequently received will be
processed as if received on the Date of Issue. Each such portion will be
equal to the (i) Minimum Initial Premium minus (ii) all payments
previously received. The remainder, if any, of each such payment will be
processed as of the date of receipt;
(iv) If our receipt of any premium payment (or portion thereof) would cause a
problem for the policy under the Federal income tax laws, we will not
process such payment or portion. However, in the case of certain tax
problems, we will process the payment or portion on the first Valuation
Date after we have received written instructions satisfactory to us from
the owner to process such payment or portion notwithstanding the existence
of the tax problem.
Premiums are payable in advance and a premium receipt will be furnished upon
request. Except as provided above, all payments will be processed as of the date
of receipt.
Subject to our maximum limits, you may pay Premiums in excess of the Planned
Premium while the policy is in full force. We may require evidence of
insurability for any such excess premium.
The following applies if the Tax Test elected for Federal income tax purposes is
"Guideline Premium Test", as shown in Section 1.
The provisions of this policy are to be interpreted to ensure or maintain
qualification as a life insurance contract for federal tax purposes,
notwithstanding any other provisions to the contrary. If at any time the
premiums paid under the Policy exceed the amount allowable for such tax
qualification, such excess amount shall be removed from the policy as of the
date of its payment, together with investment experience thereon from such date,
and any appropriate adjustment in the Death Benefit shall be made as of such
date. This excess amount (plus or minus any investment experience) shall be
refunded to you no later than 60 days after the end of the applicable Policy
Year. If this excess amount (plus or minus any investment experience) is not
refunded by then, the Sum Insured under the policy shall be increased
retroactively so that at no time is the Death Benefit ever less than the amount
necessary to ensure or maintain such tax qualification. In no event, however,
will we refuse to accept any premium necessary to prevent the policy from
terminating.
The following applies if the Tax Test elected for Federal income tax purposes is
"Cash Value Accumulation Test", as shown in Section 1.
We reserve the right to modify the Required Additional Death Benefit Factors
shown in Section 1, retroactively if necessary, to ensure or maintain
qualification of this policy as a life insurance contract for Federal tax
purposes, notwithstanding any other provisions of this policy to the contrary.
7 M0701A
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6. GUARANTEED MINIMUM DEATH BENEFIT PREMIUM TARGET
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If the Guaranteed Minimum Death Benefit ("GMDB") Feature described in Section 4
is in effect at the Date of Issue, it will only continue to be available if at
all times, other than a grace period described in Subsection A of Section 7, the
GMDB Premium Balance equals or exceeds the GMDB Premium Target described below.
The GMDB Premium Balance, as of any given Processing Date, equals (a) the sum of
all Premiums paid plus interest applied to each Premium payment from the date of
payment to such Processing Date (with interest calculated at an annual effective
rate of 4%) reduced by (b) the sum of all withdrawals as described in Section 11
plus interest applied to each withdrawal amount from the date of withdrawal to
such Processing Date (with interest calculated at an annual effective rate of
4%).
The GMDB Premium Target, as of any given Processing Date, equals (a) the
Monthly GMDB Premium times the number of GMDB Premium Monthly Due Dates that
have occurred since the Date of Issue (including the Date of Issue and such
Processing Date) plus (b) interest applied to each Monthly GMDB Premium from its
GMDB Premium Monthly Due Date to such Processing Date, with interest calculated
at an annual effective rate of 4%.
GMDB Premium Monthly Due Date shall mean the Date of Issue and each Processing
Date thereafter.
Monthly GMDB Premium shall equal the Guaranteed Minimum Death Benefit Premium
shown on page 3 (if the GMDB Feature is in effect) divided by 12.
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7. GRACE PERIOD
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On any Processing Date the provisions of Subsection A or Subsection B, or both,
will apply as described below.
The Policy will be tested under the Subsection A grace period provisions on any
Processing Date that the Guaranteed Minimum Death Benefit Feature is in effect
under the policy and there is no Additional Sum Insured in effect under the
policy.
The Policy will be tested under the Subsection B grace period provisions on any
Processing Date that there is an Additional Sum Insured in effect under the
policy or there is not a Guaranteed Minimum Death Benefit Feature in effect
under the policy.
A. If the Guaranteed Minimum Death Benefit Feature is in effect and if there
is no Additional Sum Insured in effect:
On each Processing Date, we will compare the GMDB Premium Balance on such
Processing Date to the GMDB Premium Target on such Processing Date. If, on any
such Processing Date, the GMDB Premium Balance is less than the GMDB Premium
Target, the GMDB Feature will be deemed to be in default as of such Processing
Date.
The amount by which the GMDB Premium Target exceeds the GMDB Premium Balance is
the "GMDB shortfall". In order to keep the Guaranteed Minimum Death Benefit
Feature in effect, a GMDB shortfall must be paid within a period which ends on
the second Processing Date after the date of default, which period shall be
referred to as "GMDB Grace Period". We will send notice to your last known
address and the last known address of any assignee of record with us at least 31
days before the end of the GMDB Grace Period specifying the minimum payment that
you must make to continue the Guaranteed Minimum Death Benefit Feature in force
beyond the end of the GMDB Grace Period.
If a payment at least equal to the GMDB shortfall is received before the end of
the GMDB Grace Period, the Guaranteed Minimum Death Benefit Feature will remain
in effect under the policy subject to the requirements described in Section 6
and this section. Any payment will be processed as of the date of receipt at our
Servicing Office.
If a payment at least equal to the GMDB shortfall is not received by the end of
the GMDB Grace Period, the Guaranteed Minimum Death Benefit Feature will be
discontinued and no longer be in effect. If such Feature is discontinued, then
on the Processing Date on which the GMDB Grace Period ends and on each
Processing Date thereafter, the policy will be tested as described in subsection
B and the provisions of that subsection will apply whether or not those
provisions have been applied previously.
If the Insured dies during the GMDB Grace Period, we will deduct from the
proceeds the GMDB shortfall.
8
B. If there is an Additional Sum Insured in effect or if the Guaranteed
Minimum Death Benefit Feature has not been elected or has been removed:
On each Processing Date, we will determine whether the total of all unpaid
Section 9 charges as of such date are greater than the Account Value minus
indebtedness as of such date. If, on any such Processing Date, the Account Value
minus indebtedness is less than the total of all Section 9 charges for that
Processing Date, there will be a default as of the Processing Date on which such
determination is made.
If on such date of default, there is both the Guaranteed Minimum Death Benefit
Feature in effect and an Additional Sum Insured in effect, then only the
Additional Sum Insured will be in danger of discontinuance and the default will
be an Additional Sum Insured Default (referred to below as an "ASI Default"). If
there is not a Guaranteed Minimum Death Benefit Feature in effect, the entire
policy will be in danger of lapsing and the default will be a "Policy Default".
The minimum amount you must pay to cure either type of default is "the Default
Payment". The Default Payment will be equal to a payment which, after deduction
of all Section 5 charges equals: (i) any and all Section 9 charges unpaid prior
to the date of default plus (ii) three times the total of all Section 9 charges
for the date of default.
An amount at least equal to the Default Payment must be received within a grace
period of 61 days after the date of default. We will send notice to your last
known address and to the last known address of any assignee of record with us at
least 31 days before the end of this grace period specifying whether there is an
ASI Default or a Policy Default and the Default Payment which you must make to
cure the default. If a payment at least equal to the Default Payment is received
before the end of the grace period, there will no longer be a default. Any
payment received will be processed as of the date of receipt at our Servicing
Office. When payment is received, any Section 9 charges which are past due and
unpaid will be deducted from the Account Value.
If there is an ASI Default and a payment at least equal to the Default Payment
is not received by the end of the grace period, then any Additional Sum Insured
will cease to be in effect and will be removed from the policy. If there is a
Policy Default and a payment at least equal to the Default Payment is not
received by the end of the grace period, then the policy will lapse and will no
longer be in full force. Upon a lapse of the policy the remaining Surrender
Value, if any, will be paid to the Owner.
If the Insured dies during a Policy Default, we will deduct the Default Payment
from the proceeds. The policy may also lapse due to excess indebtedness as
described in Section 10.
No Rider provisions will be in effect after the policy ceases to be in full
force.
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8. ACCOUNT VALUE
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The Account Value as of the end of any Valuation Period is derived as follows:
(a) We will determine the value of each Subaccount as of the close of
business on the last day of the Valuation Period in accordance with
Section 13. (Call our Servicing Office to determine when the "close
of business" currently occurs.)
(b) We will then determine the share of this policy in each Subaccount
and the total value of such shares.
(c) We will then add any amount of Loan Assets, as defined in Section
10.
(d) We will then add any Net Premium received during the Valuation
Period to the value derived in (c) above.
If applicable, we will then compute and deduct all Section 9 charges in the
manner specified in Section 9.
Number of Shares in Variable Accounts
When transactions are made which affect a Variable Account, dollar amounts are
converted to number of shares. The number of shares for a transaction is
determined by dividing the dollar amount of the transaction by the unit value of
the Variable Account as of the end of the Valuation Period in which the
transaction occurs.
The number of shares increases when:
(a) any portion of a Net Premium is credited to that Variable Account;
(b) transfers from the Fixed Account or other Variable Accounts are
credited to that Variable Account; or
(c) any portion of a loan is repaid to that Variable Account.
The number of shares in a Variable Account decreases when:
(a) any portion of a loan is taken from that Variable Account;
(b) any portion of the charges described in Section 9 is deducted from
that Variable Account;
(c) any portion of a partial withdrawal is made from that Variable
Account; or
(d) a transfer is made from that Variable Account to the Fixed Account
or other Variable Account.
9 M0901A
Unit Value of Variable Accounts
The unit value will vary from Valuation Date to Valuation Date to reflect the
investment performance of the Variable Account. The unit value in any Variable
Account is $10.00 (ten dollars) on the first Valuation Date for the Variable
Account. The unit value at the end of any subsequent Valuation Period is equal
to the unit value at the end of the preceding Valuation Period multiplied by the
Net Investment Factor for that Variable Account for that Valuation Period.
Net Investment Factor
The Net Investment Factor is determined for each Variable Account for each
Valuation Period. The Net Investment Factor equals the amount of investment
income and capital gains and losses (realized and unrealized) of the Variable
Account reduced by any amount charged against the Variable Account for taxes
paid, divided by the total assets of the Variable Account at the beginning of
the Valuation Period.
- --------------------------------------------------------------------------------
9. CHARGES
- --------------------------------------------------------------------------------
In computing the Account Value as of the end of the Date of Issue or any
Processing Date, we will compute and deduct, in order, each of the charges (a)
through (g), where:
(a) is the Asset-Based Risk Charge;
(b) is the Administrative Charge;
(c) is the Guaranteed Minimum Death Benefit Charge, if elected and if
the GMDB Feature is in effect;
(d) is the sum of the charges for Riders which are part of the policy,
if any, provided such charges are deducted from the Account Value;
(e) is the sum of all charges for ratings, if applicable;
(f) is the Issue Charge, if any; and
(g) is the Cost of Insurance Charge.
The Cost of Insurance Charge on the Date of Issue or on any Processing Date is
an amount equal to the applicable Applied Monthly Rate on that date divided by
1,000, multiplied by the Net Amount at Risk on that date.
Each Cost of Insurance Charge is deducted in advance of the insurance coverage
to which it applies.
The Net Amount at Risk is the amount determined by subtracting (a) from the
greater of (b) or (c) where:
(a) is the Account Value at the end of the immediately preceding
Valuation Period less all charges due on the Date of Issue or
Processing Date;
(b) (i)is the Sum Insured divided by 1.0032737 for death benefit Option
A; or
(ii) is the Sum Insured divided by 1.0032737, plus the Account Value
for death benefit Option B; and
(c) is the amount defined in (a) multiplied by the applicable Required
Additional Death Benefit Factor described in Section 4.
The Applied Monthly Rates are the actual rates used to calculate the Cost of
Insurance. We will determine the Applied Monthly Rates to be used for this
policy. They will not exceed the Maximum Monthly Rates shown in the applicable
Table of Rates in Section 2. The Applied Monthly Rates will be based on our
expectations of future mortality experience. They will be reviewed at least once
every 5 Policy Years. Any change in Applied Monthly Rates will be made on a
uniform basis for insureds of the same sex, Issue Age, and premium class,
including smoker status, and whose policies have been in force for the same
length of time.
- --------------------------------------------------------------------------------
10. LOANS
- --------------------------------------------------------------------------------
You may borrow money from us on receipt at our Home Office of a completed form
satisfactory to us assigning the policy as the only security for the loan.
Loans may be made if a Loan Value is available. Each loan must be for at least
$1,000. We may defer loans as provided by law or as provided in Section 20.
Loans may not be made if the policy is in a grace period.
The Loan Value while the Policy is in full force will be equal to (a) minus (b)
minus (c) where: (a) is the Account Value, (b) is twelve times the sum of all
monthly charges deducted from the Account Value for the policy month in which
the loan is obtained, and (c) is (a) above minus (b) above multiplied by .75% in
Policy Years 1-20 and .25% thereafter. The amount of loan available will be the
Loan Value less any existing indebtedness. Values will be determined, subject to
the "Deferral of Determinations and Payments" provision, at the end of the
Valuation Period in which the loan application is received at our Servicing
Office.
10
The effective annual rate of Loan Interest for Policy Years 1-20 is 4.75%. The
effective annual rate of Loan Interest for Policy Years 21 and after is 4.25%.
The Loan Interest will accrue daily and will be payable on each Annual
Processing Date and on the date the loan is settled. Accrued interest will be
added to the loan daily and will bear interest from that date at the same rate.
Interest may be paid in advance at the equivalent effective rate.
A loan may be repaid in full or in part at any time before the Insured's death,
and while the policy is in full force.
When excess indebtedness occurs, the policy will terminate on the 31st day after
the Notice Date occurs if such excess has not been repaid by that date. "Excess
indebtedness" is the amount, if any, by which indebtedness exceeds an amount
equal to the Account Value. "Notice Date" is the date on which notice of excess
indebtedness is mailed to you and any assignee of record with us at the address
last known to us.
When a loan is made, the amount of the loan will be transferred to Loan Assets.
The amount of the loan also will be removed from the Subaccounts in proportion
to your policy investment in each Subaccount on the date such loan is made
(unless our then current rules allow you to designate different proportions in
your loan request and you in fact do so). Upon loan repayment, Loan Assets will
be reduced by the amount of the repayment. The same proportionate amount of the
entire loan as was borrowed from the Fixed Account will be repaid to the Fixed
Account. The remainder of the loan repayment will be allocated to the
appropriate Subaccounts as stipulated in the then current Subaccount Investment
Option (unless our then current rules allow you to designate a different
allocation with your loan repayment and you do in fact do so).
Loan Assets are the total of all loans advanced plus interest credited on each
loan amount from the date of the loan at an effective annual rate of 4%.
- --------------------------------------------------------------------------------
11. SURRENDERS AND WITHDRAWALS
- --------------------------------------------------------------------------------
We will determine the Surrender Value of the policy if the Insured is then
alive, subject to Section 20, and if the policy is in full force. The policy
will terminate as of the Surrender Date. The Surrender Date is the end of the
day in which we have received at our Servicing Office (i) written notice
requesting full surrender of the policy, and (ii) the surrendered policy.
During the first 3 Policy Years, the Surrender Value will be an amount equal to
the Account Value less any indebtedness as of the Surrender Date, plus 50% of
any Sales Charges deducted from any Target Premium payments received during the
365 days immediately preceding the Surrender Date. After the first 3 Policy
Years, the Surrender Value will be an amount equal to the Account Value less any
indebtedness as of the Surrender Date.
When the policy ceases to be in full force under Subsection B of Section 7, we
will pay the Surrender Value, if any, to you.
You may request a withdrawal of part of the Surrender Value in accordance with
our rules then in effect. The amount of the withdrawal will be removed from the
Subaccounts in proportion to your policy investment in each Subaccount on the
date such withdrawal is made (unless our then current rules allow you to
designate different proportions in your withdrawal request and you do in fact do
so). For each withdrawal, we reserve the right to make a charge to the Account
Value of an amount not to exceed $20. Each withdrawal must be at least $1,000.
We will not permit the portion of any withdrawal and its related charge that
causes the Surrender Value to fall below 3 months' worth of Section 9 charges.
Nor will we permit the portion of any withdrawal that causes the policy to fail
qualification as a life insurance contract for federal tax purposes. We also
reserve the right to refuse the portion of any withdrawal and its related charge
that causes the Total Sum Insured to fall below the minimum amount shown in
Section 1.
All amounts withdrawn will be subtracted from the GMDB Premium Balance as
described in Section 6 and will also be subtracted from your Account Value.
Further, your death benefit will be affected as provided below.
With respect to determining the death benefit under Option A, the Total Sum
Insured will be reduced by the total of all withdrawals other than any
Terminated ASI Withdrawal Amounts. Your Death Benefit will continue to be
determined in accordance with Section 4, subject to these provisions.
With respect to determining the death benefit under Option B, the death benefit
will only be affected to the extent that the Account Value will be reduced by
all amounts withdrawn. However, withdrawals will not affect the Total Sum
Insured. Your Death Benefit will continue to be determined in accordance with
Section 4, subject to these provisions.
With respect to determining the death benefit under the Guaranteed Minimum Death
Benefit Feature, the Basic Sum Insured will be reduced by the total of all
withdrawals other than any Terminated ASI Withdrawal Amounts. Your Death Benefit
will continue to be determined in accordance with Section 4, subject to these
provisions.
11 M1101A
Terminated ASI Withdrawal Amounts are any withdrawals made while there is an
Additional Sum Insured in effect which is later discontinued under the policy
because a timely default payment has not been made in connection with an ASI
Default as described in subsection B of Section 7. Under no circumstances may
the total of Terminated ASI Withdrawal Amounts exceed the Additional Sum Insured
in effect at the time the Additional Sum Insured is discontinued under
subsection B of Section 7.
- --------------------------------------------------------------------------------
12. BASIS OF COMPUTATIONS
- --------------------------------------------------------------------------------
Minimum surrender values, reserves and net single premiums referred to in the
policy, if any, are computed on the basis of the Commissioners 1980 Standard
Ordinary Mortality Tables with percentage ratings, if applicable, and based on
the underwriting class of the Insured on the Date of Issue. The computations are
made using interest at the rate of 4% a year and using continuous functions.
The Account Value while the policy is in full force is computed as described in
Section 8. A detailed statement of the method of computation of values has been
filed with insurance supervisory officials of the jurisdiction in which this
policy has been delivered or issued for delivery. The values are not less than
the minimum values under the law of that jurisdiction.
Any values, reserves and premiums applicable to any provision for an additional
benefit shall be specified in the provision and have no effect in determining
the values available under the provisions of this Section 12.
- --------------------------------------------------------------------------------
13. SEPARATE ACCOUNT AND FIXED ACCOUNT
- --------------------------------------------------------------------------------
We will allocate Net Premiums, other credits, and charges to the Variable
Accounts and the Fixed Account in accordance with Section 14. We will allocate a
proportional share of the investment results of the Variable Accounts to your
policy. We reserve the right to make a charge for any applicable income taxes.
The assets of the Variable Accounts will be invested in shares of corresponding
Funds of a Series Fund. The Portfolios will be valued at the end of each
Valuation Period at a fair value in accordance with applicable law. We will
deduct liabilities attributable to a Variable Account when determining the value
of a Variable Account. The Variable Accounts available on the Date of Issue of
this policy are shown in the Prospectus for this policy, along with any
investment management fees associated with the corresponding Funds.
The assets of the Separate Account are the property of the Company. They shall
be available to cover liabilities of our general account only to the extent that
the assets of the Separate Account exceed the liabilities of the Separate
Account arising under the variable life insurance policies supported by the
Separate Account.
We reserve the right to make certain changes if, in our judgment, they would
best serve the interests of the owners of policies such as this or would be
appropriate in carrying out the purposes of such policies. Any changes will be
made only to the extent and in the manner permitted by applicable laws. Also,
when required by law, we will obtain your approval of the changes and approval
from any appropriate regulatory authority.
Examples of the changes we may make include the following:
(a) To operate a Separate Account in any form permitted under the
Investment Company Act of 1940, or in any other form permitted by
law.
(b) To take any action necessary to comply with or obtain and continue
any exemptions from the Investment Company Act of 1940.
(c) To transfer any assets in a Variable Account to another Variable
Account; or to add, combine or remove Subaccounts.
(d) To substitute, for the investment company stock held in any
Portfolio, another class of stock of the investment company or the
stock of another investment company or any other investment
permitted by law.
(e) To make any other necessary technical changes in this policy in
order to conform with any action this provision permits us to take.
If any of these changes results in a material change in the underlying
investments of Variable Accounts to which the reserves for this policy are
allocated, we will notify you of such change. You may then make a new election
under the Subaccount Investment Option and the Variable Account Transfer
Provision.
12
- --------------------------------------------------------------------------------
14. ALLOCATION TO SUBACCOUNTS
- --------------------------------------------------------------------------------
Any Net Premium processed prior to the 20th day after the Date of Issue will be
invested in the Money Market Subaccount. On the 20th day after the Date of Issue
(or on the date such Net Premium is received, if later), we will reallocate the
amount in the Money Market Subaccount attributable to any such Net Premium in
accordance with the Subaccount Investment Option then in effect. We will
allocate all other Net Premiums and all other credits among the Subaccounts in
accordance with the Subaccount Investment Option then in effect. You may elect
to change the Subaccount Investment Option at any time. A change will be
effective at the end of the Valuation Period in which we receive notice
satisfactory to us; however fund transfers will not be made if the policy is in
a grace period. We reserve the right to impose limits on the number and
frequency of such changes. The minimum percentage that may be allocated to any
Subaccount and the maximum number of Subaccounts in which assets may be held
will be subject to our administrative rules in effect at the time of election.
We will allocate any charges under Section 9 among the applicable Subaccounts in
proportion to the value of your policy investment in each Subaccount on the date
of the charge (unless our then current rules allow you to designate different
proportions and you do in fact do so).
Account Transfer Restrictions
General Restrictions
- --------------------
Subject to the limitations below, you may elect to transfer amounts among the
Subaccounts at any time while the policy is in full force. We reserve the right
to (i) impose limits on the number of such transfers in any Policy Year, (ii)
impose limits on the frequency of such transfers, and (iii) impose a charge for
each transfer that exceeds an annual limit in any Policy Year. Such charge will
not exceed $25 per transfer. The annual limits in items (i) and (iii) above will
not be less than 12. A transfer will be effective at the end of the Valuation
Period in which we receive notice satisfactory to us. The maximum number of
Subaccounts in which assets may be held will be subject to our rules in effect
at the time of transfer.
Restrictions on Transfers to and from Subaccounts
- -------------------------------------------------
Without our prior approval, the maximum amount which may be transferred to or
from a Subaccount in any Policy Year is $1,000,000.
Restrictions on Transfers to and from the Fixed Account
- -------------------------------------------------------
At any time during the first two Policy Years, you may elect to transfer all
assets held in the Variable Accounts to the Fixed Account. No charge will be
made for any such transfer, regardless of the number of transfers previously
made. We reserve the right to impose restrictions on transfers to the Fixed
Account after the first two Policy Years. Transfers from the Fixed Account will
be permitted only once in each Policy Year and, except as provided in Section
15, only once during the period beginning 60 days before each policy anniversary
and ending 30 days after such anniversary. If notice is served on or before the
anniversary, the transfer will be effective on the anniversary date. If notice
is received after the anniversary, the transfer will be effective on the day we
receive the notice. The maximum transfer amount in each Policy Year is 20% of
the value of the Fixed Account as of the effective date of the transfer, or
$500, if greater. We may defer the transfer for up to 6 months after the date
your election would have been effective.
- --------------------------------------------------------------------------------
15. INVESTMENT POLICY CHANGE
- --------------------------------------------------------------------------------
The investment policy of the Funds shall not be materially changed unless a
statement of the change is filed with, and not disapproved by, the Insurance
Commissioner of Massachusetts. In the event of such a change in investment
policy, and while this policy is in full force you may elect a transfer in
accordance with Section 14 within 60 days after (i) the effective date of the
material change or (ii) the receipt of a notice of the available options,
whichever is later. No charge will be made for any such transfer (regardless of
the number of transfers previously made). Any such transfer will be effective as
of the day we receive the notice. If required, any statement of material change
filed with the Insurance Commissioner of Massachusetts will be filed with the
insurance supervisory officials of the jurisdiction in which this policy is
delivered or issued for delivery.
13 M1301A
- --------------------------------------------------------------------------------
16. REPORTS TO OWNER
- --------------------------------------------------------------------------------
While the policy is in full force, we will send you a statement at least
annually, setting forth the following information:
(a) The Death Benefit, in connection with the Death Benefit Option elected,
the Account Value as of the date of the report and the Surrender Value as of
the date of the report;
(b) Payments received and charges made since the last report;
(c) Withdrawals since the last report; and
(d) Loan information.
We will furnish other reports if required by law or regulation.
- --------------------------------------------------------------------------------
17. REINSTATEMENT
- --------------------------------------------------------------------------------
A. Restoration of Guaranteed Minimum Death Benefit Feature
If the Guaranteed Minimum Death Benefit Feature (GMDB Feature) has been removed
from the policy under subsection A of Section 7, the GMDB Feature may be
restored within 5 policy years after the beginning of the grace period described
in subsection A of Section 7, provided that the policy continues to be in full
force.
The date of restoration of the GMDB Feature is the date on which we determine
that all 3 requirements below have been satisfied:
(1) Receipt of a written request to restore the GMDB Feature.
(2) Receipt of evidence of insurability satisfactory to us, unless
restoration is requested within 1 year after the beginning of the grace
period described in Subsection A of Section 7.
(3) Receipt of a payment equal to the difference between the then current
GMDB Premium Target and the then current GMDB Premium Balance.
Requirements (2) and (3) above must be satisfied within 30 days after the date
we receive the restoration request.
On the Processing Date on which the restoration takes effect or which next
follows the date of restoration, we will deduct from the Account Value any
unpaid Guaranteed Minimum Death Benefit charges under Section 9.
We reserve the right to disallow restoration of the GMDB Feature more than once
during the life of the policy.
B. Reinstatement of Policy
If the policy lapses under Subsection B of Section 7, it may be reinstated
within 1 year after the beginning of the grace period.
The date of reinstatement is the date on which we determine that all 3
requirements below have been satisfied:
(1) Receipt of a written application for reinstatement.
(2) Receipt of evidence of insurability satisfactory to us.
(3) Receipt of a payment which, after deduction of all applicable charges
listed under "Deductions from Premium Payments" in Section 1 is at
least equal to the sum of (i) all unpaid charges described in Section
9, plus interest on each such charge from the date due up to and
including the date of reinstatement at an annual effective rate of 6%,
plus (ii) the total of all Section 9 charges for the three Processing
Dates next following the date of reinstatement, where the charges for
each of the next three Processing Dates are assumed to be equal to
such charges on the date of default. If the Guaranteed Minimum Death
Benefit Feature had been elected at issue and had not been removed
more than 4 years prior to the beginning of the grace period described
in Subsection B of Section 7, it may be restored by paying the
difference between the then current GMDB Premium Target
and the then current GMDB Premium Balance.
Requirements (2) and (3) above must be satisfied within 60 days after the date
we receive the application for reinstatement. On the date of reinstatement (i) a
death benefit of the policy will be the same as if no lapse had occurred and
(ii) the policy will have indebtedness equal to any indebtedness at the end of
the day immediately preceding the date of reinstatement.
The Account Value on the date of reinstatement will be the payment received in
connection with the reinstatement less the sum of all Section 9 charges that
would have been made from the date of lapse to the date of reinstatement if the
policy had not lapsed and less interest on each such charge at an effective
annual rate of 6% from the date such charge would have been due to the date of
reinstatement.
14
- --------------------------------------------------------------------------------
18. OWNER AND BENEFICIARY
- --------------------------------------------------------------------------------
The Owner, the Contingent Owner (if any) and the Beneficiary will be as shown in
the application unless you change them or they are changed by the terms of this
provision.
You shall have the sole and absolute power to exercise all rights and privileges
without the consent of any other person unless you provide otherwise by written
notice. If you die, the Contingent Owner will become the Owner. If there is no
surviving Contingent Owner, the Insured will become the Owner.
If there is no surviving Beneficiary upon the death of the Insured, you will be
the Beneficiary, but if you were the Insured, your estate will be Beneficiary.
While the Insured is alive, you may change the Owner, the Contingent Owner (if
any) and Beneficiary by written notice.
You may also revoke any change of Owner or Contingent Owner prior to its
effective date by written notice. No change or revocation will take effect
unless we acknowledge receipt on the notice. If such acknowledgment occurs, then
(i) a change of Beneficiary will take effect on the date the notice is signed,
and (ii) a change or a revocation of Owner or Contingent Owner will take effect
as of the date specified in the notice, or if no such date is specified, on the
date the notice is signed. A change or revocation will take effect whether or
not you or the Insured is alive on the date we acknowledge receipt. A change or
revocation will be subject to the rights of any assignee of record with us and
subject to any payment made or other action taken by us before we acknowledge
receipt.
- --------------------------------------------------------------------------------
19. INTEREST ON PROCEEDS
- --------------------------------------------------------------------------------
We will pay interest on proceeds paid in one sum in the event of the Insured's
death from the date of death to the date of payment at a rate not less than
3 1/2 %.
- --------------------------------------------------------------------------------
20. DEFERRAL OF DETERMINATIONS AND PAYMENTS
- --------------------------------------------------------------------------------
During any period when the New York Stock Exchange is closed for trading (except
for normal holiday closings) or when the Securities and Exchange Commission
("the SEC") has determined that a state of emergency exists which may make
payment impractical, or the SEC by order permits postponement for the protection
of our policyholders, we reserve the right to do the following:
(1) To defer determination of the Account Value, and if such
determination has been deferred, to defer:
(a) determination of the values for a loan as of the end of the day
we receive the loan application at our Servicing Office, and
payment of the loan; and
(b) payment or application of any Death Benefit in excess of the
Guaranteed Minimum Death Benefit, if elected.
(2) To defer determination, application, processing, or payment of a
Surrender Value or any other policy transaction dependent upon Account
Value.
A deferral, as described above, will be applicable only if any portion of the
Account Value is invested in a Variable Account.
We reserve the right to defer payment of the Surrender Value from the Fixed
Account for a period of up to six months.
Except as provided in this provision we will make payment of the Death Benefit,
any Surrender Value, any withdrawal, or any loan amount within 7 days of the
date it becomes payable.
- --------------------------------------------------------------------------------
21. CLAIMS OF CREDITORS
- --------------------------------------------------------------------------------
The proceeds and any income payments under the policy will be exempt from the
claims of creditors to the extent permitted by law. These proceeds and payments
may not be assigned or withdrawn before becoming payable without our agreement.
- --------------------------------------------------------------------------------
22. ASSIGNMENT
- --------------------------------------------------------------------------------
Your interest in this policy may be assigned without the consent of any
revocable Beneficiary. Your interest, any interest of the Insured and of any
revocable Beneficiary shall be subject to the terms of the assignment.
We will not be on notice of any assignment unless it is in writing, nor will we
be on notice until a duplicate of the original assignment has been filed at our
Servicing Office. We assume no responsibility for the validity or sufficiency of
any assignment.
15 M1501A
- --------------------------------------------------------------------------------
23. INCONTESTABILITY
- --------------------------------------------------------------------------------
This policy, except any provision for a disability benefit, shall be
incontestable after it has been in force during the lifetime of the Insured for
2 years from its Date of Issue, except for nonpayment of premium or fraud.
However, if we require evidence of insurability with respect to any payment we
are authorized to refuse under Section 5, any increase in the Death Benefit
resulting from such payment shall be incontestable after such increase has been
in force during the lifetime of the Insured for 2 years from the effective date
of such increase.
Further, any reinstatement will be contestable as to material misrepresentations
in the reinstatement application for two years from the effective date of such
reinstatement.
- --------------------------------------------------------------------------------
24. MISSTATEMENT OF AGE OR SEX
- --------------------------------------------------------------------------------
If the age or sex of the Insured has been misstated, we will adjust the Basic
Sum Insured, any Additional Sum Insured, and every other benefit to that which
would have been purchased at the correct age or sex by the most recent Cost of
Insurance charge deducted under Section 9.
- --------------------------------------------------------------------------------
25. SUICIDE
- --------------------------------------------------------------------------------
If the Insured commits suicide, while sane or insane, within 2 years from the
Date of Issue, the policy will terminate on the date of such suicide and we will
pay (in place of all other benefits, if any) an amount equal to the premiums
paid less the amount of any indebtedness on the date of death and less any
withdrawals under Section 11. If the Insured commits suicide, while sane or
insane, after 2 years from the Date of Issue and within 2 years from the
effective date of any increase in the Death Benefit resulting from any payment
of Premium we are authorized to refuse under Section 5, the benefits payable
under the policy will not include the amount of such Death Benefit increase but
will include the amount of such Premium.
- --------------------------------------------------------------------------------
26. THE CONTRACT
- --------------------------------------------------------------------------------
The written application for the policy is attached at issue. The entire contract
between the applicant and us consists of the policy, such application and any
riders and endorsements. However, additional written applications for policy
changes or acceptance of excess payment under Section 5 may be submitted to us
after issue and such additional applications may become part of the policy. All
statements made in any application shall, in the absence of fraud, be deemed
representations and not warranties. We will use no statement made by or on
behalf of the Insured to defend a claim under the policy unless it is in a
written application.
Policy years, policy months, and policy anniversaries are measured from the Date
of Issue.
Any reference in this policy to a date means a calendar day ending at midnight
local time at our Servicing Office.
An exchange of this policy for a new policy on a different plan may be made by
agreement between you and us in accordance with our published rules in effect at
that time.
We reserve the right to make any changes necessary in order to keep this policy
in compliance with any changes in federal or state tax laws. Other changes in
this policy may be made by agreement between you and us. Only the President,
Vice President, the Secretary, or an Assistant Secretary of the Company has
authority to waive or agree to change in any respect any of the conditions or
provisions of the policy, or to extend credit or to make an agreement for us.
16
- --------------------------------------------------------------------------------
27. SETTLEMENT PROVISIONS
- --------------------------------------------------------------------------------
Optional Methods of Settlement
In place of a single payment, an amount of $1,000 or more payable under the
policy as a benefit or as the Surrender Value, if any, may be left with us,
under the terms of a supplementary agreement. The agreement will be issued when
the proceeds are applied through the choice of any one of the options below, or
any additional options we, in our sole discretion, may make available after
issue. We shall at least annually declare the rate of interest or amount of
payment for each option. Such declaration shall be effective until the date
specified in the next declaration.
Option 1--Interest income at the declared rate but not less than 3.5% a year on
proceeds held on deposit. The proceeds may be paid or withdrawn in whole or in
part at any time as elected.
Option 2A--Income of a Specified Amount, with payments each year totaling at
least 1/12th of the proceeds, until the proceeds plus interest is paid in full.
We will credit interest on unpaid balances at the declared rate but not less
than 3.5% a year.
Option 2B--Income for a Fixed Period with each payment as declared but not less
than that shown in the Table for Option 2B.
Option 3--Life Income with Payments for a Guaranteed Period, with each payment
as declared but not less than that shown in the Table for Option 3. If the Payee
dies within that period, we will pay the present value of the remaining
payments. In determining present value, we will use the same interest rate used
to determine the payments for this option.
Option 4--Life Income without Refund at the death of the Payee of any part of
the proceeds applied. The amount of each payment shall be as declared but not
less than that shown in the Table for Option 4.
Option 5--Life Income with Cash Refund at the death of the Payee of the amount,
if any, equal to the proceeds applied less the sum of all income payments made.
The amount of each payment shall be as declared but not less than that shown in
the Table for Option 5.
You may choose an option by written notice to us: (a) while the Insured is
alive; and (b) before the proceeds become payable. If you have made no effective
choice, the Payee may make one by written notice within: (a) 6 months after the
death of the Insured; or (b) 2 months after the date on which the proceeds, if
any, are payable in any case except death.
No choice of an option may provide for payments of less than $50.00. The first
payment will be payable as of the date the proceeds are applied, except that
under Option 1 it will be payable at the end of the first payment interval.
The Payee under an option shall be the Insured, if living, and otherwise the
Beneficiary.
No option may be chosen without our consent if the proceeds are payable: (1) in
any case, except death, before the policy has been in force on the same plan for
at least 5 years; or (2) in any case to an executor, administrator, trustee,
corporation, partnership, association, or assignee.
A Payee may, by written notice, name and change a Contingent Payee to receive
any final amount that would otherwise be payable to the Payee's estate.
17 M1701A
Table for Settlement Options 2B, 3, 4, and 5
(Monthly payments for each $1,000 of proceeds applied)
- ---------------------------- --------------------------------------------------------------------------------
Age of Payee on
Option 2B Birthday Nearest Option 3 Option 4 Option 5
Income for a Fixed Date of First Life Income with Life Life
Period Payment Guaranteed Period Income Income
- ---------------------------- ------------------------------------------------------
Period without with Cash
of Years Payment 10 Years 20 Years Refund Refund
- ---------------------------- --------------------------------------------------------------------------------
1 84.46 40 3.53 3.50 3.54 3.46
2 42.86 41 3.57 3.54 3.58 3.50
3 28.99 42 3.62 3.58 3.63 3.54
4 22.06 43 3.66 3.62 3.68 3.58
5 17.91 44 3.77 3.66 3.73 3.62
6 15.14 45 3.76 3.71 3.78 3.66
7 13.16 46 3.82 3.75 3.83 3.71
8 11.68 47 3.87 3.80 3.89 3.75
9 10.53 48 3.93 3.85 3.95 3.80
10 9.61 49 3.99 3.90 4.02 3.85
11 8.86 50 4.05 3.95 4.08 3.91
12 8.24 51 4.12 4.01 4.15 3.96
13 7.71 52 4.19 4.06 4.22 4.02
14 7.26 53 4.26 4.12 4.30 4.08
15 6.87 54 4.34 4.81 4.38 4.15
16 6.53 55 4.42 4.24 4.47 4.21
17 6.23 56 4.50 4.31 4.56 4.28
18 5.96 57 4.59 4.37 4.66 4.36
19 5.73 58 4.69 4.44 4.76 4.44
20 5.51 59 4.79 4.50 4.87 4.52
21 5.32 60 4.89 4.57 4.99 4.60
22 5.15 61 5.00 4.64 5.11 4.69
23 4.99 62 5.12 4.71 5.25 4.78
24 4.84 63 5.24 4.77 5.39 4.88
25 4.71 64 5.37 4.84 5.54 4.99
26 4.59 65 5.50 4.91 5.70 5.09
27 4.47 66 5.64 4.97 5.87 5.21
28 4.37 67 5.79 5.03 6.06 5.33
29 4.27 68 5.94 5.09 6.26 5.46
30 4.18 69 6.10 5.14 6.47 5.59
- ----------------------------
Annual, Semi-annual, or 70 6.27 5.19 6.69 5.73
quarterly payments under 71 6.44 5.24 6.94 5.88
Option 2B are 11.839, 72 6.61 5.28 7.20 6.04
5.963, and 2.993 73 6.79 5.32 7.48 6.20
respectively times the 74 6.98 5.36 7.79 6.38
monthly payments.
- ---------------------------- 75 7.16 5.38 8.11 6.56
76 7.35 5.41 8.47 6.75
77 7.54 5.43 8.84 6.96
78 7.72 5.45 9.25 7.17
79 7.91 5.46 9.69 7.39
80 8.08 5.48 10.17 7.64
81 8.25 5.49 10.68 7.88
82 8.41 5.49 11.23 8.13
83 8.56 5.50 11.82 8.43
84 8.71 5.50 12.46 8.70
85 & over 8.83 5.51 13.14 8.99
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Options 3, 4 and 5 are available only at the ages as shown
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18
Communications about this policy may be sent to the Company Servicing Office,
which is currently at [P.O. Box 111, John Hancock Place, Boston, Massachusetts
02117].
Variable Life Insurance policy
Flexible Premiums
Death Benefit payable at death of Insured
Not eligible for dividends
Benefits and premiums and the policy class are shown in the Specifications
Section of the policy.
MAJ601 M6BP01 Printed in U.S.A.