[LOGO] John Hancock(R)
P.O Box 111
John Hancock Place
Variable Life Insurance Company Boston, Massachusetts 02117
[(800) -521-1234]
INSUREDS [John Hancock] TOTAL SUM INSURED AT ISSUE [$1,000,000]
[Dorothy Hancock]
POLICY NUMBER [999999999] DATE OF ISSUE [January 1, 2001]
DEATH BENEFIT [Option A]
PLAN [Variable Estate Protection Edge]
SURVIVORSHIP 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 Surviving 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 Servicing Office of the Company of due proof of the Surviving Insured's
death. Also, due proof of the death of the first Insured to die must be given to
us when such death occurs.
The policy, which includes the application and 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 as shown on page 3.
The Policy Specifications and the conditions and provisions on this and the
following pages are part of the policy.
THE POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE COMPANY. READ YOUR
POLICY CAREFULLY.
Signed for the Company at Boston, Massachusetts:
PRESIDENT SECRETARY
Variable Survivorship Life Insurance policy
Flexible Premiums
Death Benefit payable at death of Surviving Insured
Not eligible for dividends
Benefits, premiums, and the Premium Class are shown in Section 1.
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 provides a Guaranteed Death Benefit,
provided that premiums are paid on a timely basis and other conditions are met
as described in Sections 6 and 7.
Right to Cancel--The Owner may surrender this policy by delivering or mailing it
to the Company at its Servicing Office as shown on the back cover (or to the
agent or agency office through which it was delivered) within 10 days after
receipt by the Owner of the policy. Immediately on such delivery or mailing, the
policy shall be deemed void from the beginning. Any premium received on this
policy will be refunded within 10 days after timely surrender of the policy.
Policy Provisions
Section
1. Policy Specifications
2. Table Of Rates
3. Definitions
4. Death Benefit
5. Payments
6. Guaranteed Death Benefit Feature
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. Annual Report 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. Misstatements
25. Suicide Exclusion
26. The Contract
27. Settlement Provisions
2
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1. POLICY SPECIFICATIONS
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Insured [John Hancock] [DOROTHY QUINCY]
Issue Age [65] [62]
Sex [Male] [FEMALE]
Premium Class [STANDARD Non-TOBACCO] [STANDARD NON-TOBACCO]
Owner, Beneficiary As designated in the application subject to Section 18 of the policy
Policy Number [999999999] Plan [Variable Estate
Protection Edge]
Basic Sum Insured at Issue
$[1,000,000]
Additional Sum Insured at Issue[*]
$[ 0]
-----------------
Total Sum Insured at Issue $[1,000,000]
[* Amount includes any increase elected on the application]
Minimum Total Sum Insured [$250,000]
Minimum Basic Sum Insured [$250,000]
Death Benefit Option at Issue [Option A]
Definition of Life Insurance [Cash Value Accumulation Test]
Elected
Age 100 Adjustment Date [January 1, 2039]
Other Benefits and Specifications
---------------------------------
[Four Year Level Term Rider]
[Enhanced Cash Value Rider]
[Policy Split Option Rider]
PREMIUMS
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Planned Premium $[32,239.34] per year
Target Premium $[32,239.34] per year
Minimum Initial Premium $[9,615.79]
5 Year Guaranteed Death Benefit Premium $[801.32] per month
Age 100 Guaranteed Death Benefit Premium $[2,880.24] per month
Billing Interval [Annual]
Notice: The actual premiums paid will affect the Account Value, the duration of
insurance coverage, and the amount of Death Benefit as described in Section 4.
Even if the Planned Premiums shown above are paid as scheduled, they may not be
sufficient to continue the policy in force until the death of the Surviving
Insured. Unless the Guaranteed Death Benefit feature is in effect, the policy
will continue in force until the death of the Surviving Insured only if on each
Grace Period Testing Date the policy's Surrender Value (as defined in Section
11) is at least equal to all due and unpaid Policy Charges.
3
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1. POLICY SPECIFICATIONS, continued
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MAXIMUM POLICY CHARGES
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Deductions from Premium Payments
Sales Charge 5% on all Payments for all Policy Years.
Tax Charge 3.60% on all Payments for all Policy Years
Monthly Deductions from Account Value
Maintenance Charge $12.00 for all Policy Years
Issue Charge $[641.95] for the first four 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
Asset-Based Risk 0.0501% of Separate Account assets deducted
Charge monthly for all Policy Years.
Rider Charges as shown on page 3C
Contingent Deferred Sales Charge
Policy Year 1 [100.00%] of paid premium in the first Policy Year
up to one year's Target Premium
Policy Year 2 [93.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 3 [86.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 4 [79.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 5 [71.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 6 [64.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 7 [57.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 8 [50.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 9 [43.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 10 [36.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 11 [29.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 12 [21.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 13 [14.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Year 14 [7.00%] of paid premium in the first two Policy Years
up to one year's Target Premium
Policy Years 15 and [0 %]
after
3B
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1. POLICY SPECIFICATIONS, continued
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Insured [John Hancock] Plan [Variable Estate
Protection Edge]
Policy Number [999999999]
Rider Date of Issue [January 1, 2001]
[Rider Information
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A. Enhanced Cash Value Rider Additional cash value available upon
surrender during the first 5 Policy
Years, equal to the following
percentages of the cumulative Premiums
paid in the first and second Policy
Years, up to one year's Target Premium:
Policy Year Enhanced Cash Value
Percentage
1 [10]%
2 [8]%
3 [6]%
4 [ 4]%
5 [ 2%]
6+ [ 0%]
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B. 4 Year Level Term Benefit Table of Monthly Charges
Policy Number: [999999999] Benefit Amount [$1,230,000]
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4 Year Level Term
Monthly Rate per 1,000 of Benefit Amount
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Policy Year
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1 [0.0194]
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2 [0.0194]
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3 [0.0194]
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4 [0.0194]
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3C
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2. TABLE OF RATES
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A. RATE TABLE
Maximum Monthly
Rates per $1,000 of Required Additional Optional Extra Death
Policy Year Net Amount at Risk Death Benefit Factor Benefit Factor
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1 0.0175 2.3456 5.1344
2 0.0590 2.2560 4.8005
3 0.1116 2.1710 4.4923
4 0.1768 2.0907 4.2078
5 0.2566 2.0148 3.9453
6 0.3523 1.9431 3.7032
7 0.4694 1.8755 3.4799
8 0.6005 1.8120 3.2740
9 0.7617 1.7521 3.0838
10 0.9556 1.6958 2.9083
11 1.1885 1.6431 2.7466
12 1.4671 1.5939 2.5975
13 1.7958 1.5480 2.4604
14 2.1756 1.5054 2.3341
15 2.6082 1.4659 2.2179
16 3.0960 1.4293 2.1107
17 3.6423 1.3955 2.0117
18 4.2570 1.3642 1.9200
19 4.9539 1.3353 1.8349
20 5.7409 1.3086 1.7557
21 6.6251 1.2841 1.6838
22 7.6104 1.2617 1.6189
23 8.6813 1.2413 1.5604
24 9.8286 1.2226 1.5075
25 11.0383 1.2056 1.4598
26 12.3140 1.1899 1.4164
27 13.6455 1.1753 1.3769
28 15.0512 1.1616 1.3406
29 16.5364 1.1485 1.3069
30 18.1612 1.1358 1.2752
31 20.0111 1.1233 1.2451
32 22.2256 1.1108 1.2160
33 25.0592 1.0982 1.1879
34 28.8327 1.0854 1.1605
35 33.6707 1.0724 1.1337
36 39.5162 1.0588 1.1067
37 54.5649 1.0429 1.0765
38 83.1973 1.0257 1.0450
39+ 0.0000 1.0000 1.0000
Maximum Monthly Rates and Minimum Values are based on the 1980
Commissioners Standard Ordinary Sex-distinct, Smoker-distinct Mortality
Table.
4
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3. DEFINITIONS
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The term "Account Value" is as defined in Section 8.
The term "Age" means on any policy anniversary, the age of the person in
question at his or her birthday nearest that date. The term "Age 100 Adjustment
Date" means the policy anniversary nearest the 100th birthday of the younger
Insured and is shown in Section 1. The Age 100 Adjustment Date will occur
whether or not the younger Insured is actually alive on that date.
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 that 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 General Account consists of assets owned by us other
than those in the separate investment accounts established by us pursuant to
applicable law.
The term "Fund" means each division of a Series Fund with a specific investment
objective. The term "Grace Period Testing Date" means a Processing Date on which
we make the determination described in Section 7. We will determine how often a
Grace Period Testing Date will occur, but it will occur no less frequently than
every 3rd Processing Date. .
The term "in full force" means that the policy has not lapsed in accordance with
Section 7 or terminated in accordance with Section 10. The term "indebtedness"
means the unpaid balance of a policy loan, including any accrued and unpaid
interest. The term "Minimum Initial Premium" is the amount shown in Section 1.
The term "Net Premium" is as defined in Section 5.
The term "Payment" means, unless otherwise stated, payment at our Servicing
Office in Boston, Massachusetts. The term "Planned Premium" is the amount shown
in Section 1. 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 that 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 that
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 Company's Office that administers this
policy. As of the policy's Date of Issue, the address of the Servicing Office is
as shown on the back cover of this policy. The address may be changed from time
to time by us. We will send you a written notice of any such change to your last
known address. The term "Subaccount" means a Variable Account or a Fixed
Account.
The term "Surviving Insured" means the Insured who is living upon the death of
the other Insured. If both Insureds die simultaneously, then the term "Surviving
Insured" shall mean the younger of the two Insureds. The term "Target Premium"
is the amount shown in Section 1.
The term "Valuation Date" means any date on which we are open for business, the
New York Stock Exchange is open for trading, and on which a Series Fund values
the shares of its Funds. 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, with a specific investment
objective, of a Separate Account. The assets of each Variable Account are
invested solely in shares of the corresponding Fund of a Series Fund.
5
The terms "we", "us", and "our" refer only to the Company.
The term "written notice" means, unless otherwise stated, a written notice
received at our Servicing Office or, if permitted by our administrative
practices, an electronic mail message ("e-mail") received by us at the internet
address specified by us for receipt of such messages.
The terms "you" and "your" refer only to the Owner(s) of this policy.
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4. DEATH BENEFIT
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The Death Benefit is payable if (i) the Surviving Insured dies prior to the
Surrender Date while the policy is in full force and (ii) we receive due proof
of death prior to the payment of the Surrender Value. The Death Benefit will
equal the death benefit of the policy minus any indebtedness on the date of
death of the Surviving Insured. If the Surviving Insured dies during a grace
period as described in Section 7, we will also deduct any unpaid charges under
Section 9.
The death benefit of the policy depends in part on which of the following
Options is in effect. The Option as of the Date of Issue 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: Level Death Benefit: The death benefit of the policy is the Total
Sum Insured on the date of death of the Surviving Insured, plus any
Optional Extra Death Benefit (if elected) and the Required Additional Death
Benefit as described below.
Option B: Variable Death Benefit: The death benefit of the policy is the
Total Sum Insured plus the Account Value on the date of death of the
Surviving 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.
Change of Death Benefit Option
You may change from Option B to Option A on any policy anniversary. 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 Additional Sum Insured by the Account Value at the time
the new Option takes effect.
Optional Extra Death Benefit Feature
If Option A is elected, the Owner may also elect an Optional Extra Death Benefit
feature. If this feature is elected at issue, then on each Processing Date, the
death benefit of the policy will be divided by the Account Value, with the
result compared to the applicable Optional Extra Death Benefit Factor shown in
Section 2. If the result is less than the Optional Extra Death Benefit Factor,
then Optional Extra Death Benefit will be purchased so that the death benefit of
the policy divided by the Account Value will equal the applicable Factor.
The amount of Optional Extra Death Benefit will be recalculated on each monthly
processing date and on the date of death of the Surviving Insured, and will be
paid for through monthly deductions from the Account Value, using the Cost of
Insurance Rates in effect on each Monthly Processing Date.
Required Additional Death Benefit Feature
Current federal tax law requires a minimum death benefit in relation to cash
value for a policy to qualify as life insurance. On any date, the death benefit
of the policy will be increased if necessary to ensure that the policy will
continue to qualify as life insurance. The Total Required Death Benefit will be
the Account Value on the Processing Date, times the applicable Required
Additional Death Benefit Factor shown in Section 2.
The Required Additional Death Benefit on any such date will be the Total
Required Death Benefit minus the sum of the Total Sum Insured and any Optional
Extra Death Benefit, and, if Death Benefit Option A is elected.
The monthly deductions for the Required Additional Death Benefit will be based
on the Cost of Insurance Rates then in effect.
If you have elected the Cash Value Accumulation Test we reserve the right to
modify the Required Additional Death Benefit Factors, (or the Optional Extra
Death Benefit Factors, if applicable) 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.
6
Death Benefit At and After the Age 100 Adjustment Date
If this policy is in full force, on the Age 100 Adjustment Date, Death Benefit
Options A and B described above will cease to apply. We will automatically set
the Additional Sum Insured equal to zero, and discontinue deduction of the
Maintenance Charge, the Cost of Insurance Charge, and the sum of the charges for
ratings and riders which are part of the policy, if applicable, from the Account
Value. As a result of such changes, the death benefit of the policy will
thereafter be equal to the greater of (a) the Basic Sum Insured plus a
percentage of the Account Value on the date of death of the Surviving Insured or
(b) the Account Value. The percentage of the Account Value added to the Basic
Sum Insured will be determined by (i) dividing any Additional Sum Insured in
effect immediately before the Age 100 Adjustment Date by the Total Sum Insured
in effect immediately before the Age 100 Adjustment Date and (ii) multiplying
the result in (i) by 100. The Optional Extra Death Benefit feature and the
Required Additional Death Benefit Feature will cease to apply. As stated
previously, the Death Benefit will equal the death benefit of the policy minus
any indebtedness on the date of death of the Surviving Insured. In no event will
premium payments be accepted after the Age 100 Adjustment Date.
Reduction of Total Sum Insured
You may request a reduction in the Additional Sum Insured at any time. There is
no charge for a reduction of Additional Sum Insured. However, the Applied
Monthly Rates used to calculate the Cost of Insurance Charges in Section 9 will
increase.
If there is no Additional Sum Insured in effect, you may request a reduction in
the Basic Sum Insured. The Basic Sum Insured generally can not be reduced below
the minimum as shown in Section 1. A proportionate part of any applicable
Contingent Deferred Sales Charge will be deducted from the Account Value as a
result of any such reduction in Basic Sum Insured. The proportion will be equal
to the amount of the reduction in Basic Sum Insured divided by the amount of
Basic Sum Insured in effect before the reduction.
Any reduction in Additional Sum Insured or Basic Sum Insured will be effective
on the next monthly processing date after we approve your request.
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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 10 and any amount specified as
loan repayment. The remainder will constitute Premium. We then deduct the Tax
Charge and the applicable Sales Charge. 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 end of the
Valuation Period in which the payment is received at our Servicing Office,
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 preceding 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 preceding 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;
7
(iv) If our receipt of any premium payment (or portion thereof) would cause a
problem for the policy to qualify as a "life insurance contract" under the
Federal income tax laws, we will not process such payment or portion.
However, in the case of certain other tax problems, we will process the
payment or portion on the first Valuation Date after we have received
written instructions satisfactory to us from you 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.
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 Death Benefit Factors shown in Section 2,
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.
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6. GUARANTEED DEATH BENEFIT FEATURE
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There are two levels of the Guaranteed Death Benefit feature. They are the
5-Year Guaranteed Death Benefit and the Age 100 Guaranteed Death Benefit. The
5-Year Guaranteed Death Benefit is a guarantee that the Basic Sum Insured, any
Additional Sum Insured and any rider benefits of your policy will not terminate,
regardless of Surrender Value if the "Cumulative Premium Balance" equals or
exceeds the applicable "Guaranteed Death Benefit Premium Target" on the
------
applicable Grace Period Testing Date. The Age 100 Guaranteed Death Benefit is a
- ------------------------------------
guarantee that the Basic Sum Insured portion of your policy will not terminate,
regardless of Surrender Value if the "Cumulative Premium Balance" equals or
exceeds the applicable "Guaranteed Death Benefit Premium Target" on the
------
applicable Grace Period Testing Date. If there are monthly charges that remain
- ------------------------------------
unpaid because of this feature, we will deduct such charges when there is
sufficient Account Value to pay them. The Age 100 Guaranteed Death Benefit
Feature is not available with Death Benefit Option B.
If at any point the Total Sum Insured exceeds the Total Sum Insured at issue,
other than as a result of an increase to maintain tax qualification, then the
Guaranteed Death Benefit feature will terminate on the date such excess occurs
or on the fifth policy anniversary date, if later.
Your policy contains a Guaranteed Death Benefit feature only if the Premiums
shown in Section 1 include amounts for a "5 Year Guaranteed Death Benefit
Premium", and/or an "Age 100 Guaranteed Death Benefit Premium." These amounts
are used to determine the "Guaranteed Death Benefit Premium Target" as explained
below.
The Funding Requirement
At the beginning of each Grace Period Testing Date, we will determine whether
the Cumulative Premium Balance (as defined below) equals or exceeds the
Guaranteed Death Benefit Premium Target (as defined below). If it does, the
Guaranteed Death Benefit feature will be in effect on that Grace Period Testing
Date until the next Grace Period Testing Date.
----------------------------------------
8
The "Cumulative Premium Balance" is equal to the sum of all Premiums paid
prior to a Grace Period Testing Date, less the sum of all withdrawals made prior
to that date and less the policy indebtedness as of that date. The "Guaranteed
Death Benefit Premium Target" is equal to the applicable Guaranteed Death
Benefit Premium (as indicated below) times the number of elapsed policy months
from the Date of Issue to the Grace Period Testing Date in question.
. On each Grace Period Testing Date that occurs on or prior to the fifth
policy anniversary, the 5 Year Guaranteed Death Benefit Premium will be
used to determine the Guaranteed Death Benefit Premium Target.
. On each Grace Period Testing Date that occurs thereafter and prior to the
Age 100 Adjustment Date, the Age 100 Guaranteed Death Benefit Premium will
be used to determine the Guaranteed Death Benefit Premium Target.
The Age 100 Guaranteed Death Benefit feature will terminate on the earlier of
(i) the Age 100 Adjustment Date, and (ii) the effective date of any increase in
the Total Sum Insured.
The amounts shown in Section 1 for the Guaranteed Death Benefit Premiums may
change in the event of any decrease in Sum Insured or any change in the death
benefit option. For the number of months after any such decrease or change, we
will use the new Guaranteed Death Benefit Premium amounts to determine the
Guaranteed Death Benefit Premium Target.
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7. GRACE PERIOD
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On each Grace Period Testing Date, we will determine if the total of all unpaid
Section 9 charges as of such date are greater than the Surrender Value as of
such date. If that is the case one of the following will apply, depending upon
when the Grace Period Testing Date occurs:
. During the first five Policy Years, -- If the 5 Year Guaranteed Death
Benefit feature is in effect, then the Basic Sum Insured, any Additional
Sum Insured and any rider benefits will remain in effect.
. During Policy Year 6 and thereafter, -- If the Age 100 Guaranteed Death
Benefit feature is in effect, then the Basic Sum Insured will remain in
effect, but any Additional Sum Insured and any rider benefits (unless
otherwise stated therein) will be in default as of that Grace Period
Testing Date (referred to below as an "ASI Default"); and
. During any Policy Year, -- If the applicable Guaranteed Death Benefit
feature is not in effect, then the Basic Sum Insured, any Additional Sum
Insured and any rider benefits will be in default as of that Grace Period
Testing Date (referred to below as 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) the amount, if any, by which the Surrender
Value is less than zero on the date of default plus (ii) any and all Section 9
charges unpaid prior to the date of default plus (iii) 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 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 that are past due and unpaid will be deducted
from the Account Value.
9
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,
and any riders (unless otherwise stated therein), 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 Surviving Insured dies during a Policy Default or during an ASI Default,
then we will deduct from the proceeds all Section 9 charges due and unpaid on
the date of the Surviving Insured's death.
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.
(e) 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.
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.
10
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9. CHARGES
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On the Date of Issue and on every Processing Date, we will deduct, in order,
each of the charges (a) through (f) from the Account Value, where:
(a) is the Asset-Based Risk Charge;
(b) is the Issue Charge, if any; and
(c) is the Maintenance Charge;
(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; and
(f) 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 Total Sum Insured divided by 1.0032737 for death benefit
Option A; or (ii) is the Total 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 Death
Benefit Factors described in Section 4.
The Applied Monthly Rates are the actual rates used to calculate the Cost of
Insurance Charge. We will determine the Applied Monthly Rates to be used for
this policy. 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.
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10. LOANS
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You may borrow money from us on receipt at our Servicing 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.
The Loan Value while the policy is in full force will be an amount equal to (i)
the Surrender Value, less (ii) 12 times the monthly charges then being deducted
from the Account Value, less (iii) an amount determined as follows:
. Deduct(ii) above from (i) above.
. Multiply the result by the difference between the effective annual
rate then being charged on loans and the effective annual rate then
being credited on Loan Assets.
Values will be determined, subject to Section 20, at the end of the Valuation
Period in which the loan application is received at our Servicing Office.
The interest charged on any loan will be at an effective annual rate of 4.75%
for Policy Years 1-10, 4.5% for Policy Years 11-20 and 4.00% thereafter.
However, we reserve the right to increase the effective annual rate after Policy
Year 20 to as much as 4.25%. Loan interest will accrue and be added to the loan
daily and will bear interest from the date of accrual. Loan interest will be
payable on each Annual Processing Date and on the date the loan is settled.
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.
11
If excess indebtedness occurs on any date, one of the following will apply:
. During the first five Policy Years -- If the 5 Year Guaranteed Death
Benefit feature is in effect, then the Basic Sum Insured, any Additional
Sum Insured and any rider benefits will remain in effect.
. During Policy Year 6 and thereafter -- If the Age 100 Guaranteed Death
Benefit feature is in effect, then the Basic Sum Insured will remain in
effect, but any Additional Sum Insured and any rider benefits (unless
otherwise stated therein) will be in default as of the date in question;
and
. During any Policy Year -- If the applicable Guaranteed Death Benefit
feature is not in effect, then all policy benefits (i.e., the Basic Sum
Insured, any Additional Sum Insured and any rider benefits) will be in
default as of the date in question.
The benefits that are in default will terminate on the 31st day after the Notice
Date occurs if such excess indebtedness 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 less any applicable Contingent Deferred Sales
Charge. "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.
Loan Assets are equal to the total of all loans advanced plus interest credited
on each loan amount measured from the date of the loan. When a loan is made, the
amount of the loan will be transferred to Loan Assets. The interest rate
credited to Loan Assets is fixed. The interest credited to Loan Assets will be
added daily and will bear interest from that date at the same rate.
The effective annual rate of interest credited to Loan Assets is 4%. The amount
transferred to Loan Assets 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, 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 current Subaccount Investment
Option (unless our then current rules allow you to designate a different
allocation with your repayment and you in fact do so).
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11. SURRENDERS AND WITHDRAWALS
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We will determine the Surrender Value of the policy, subject to Section 20, if
we receive written notice requesting full surrender of this policy while this
policy is in full force. We will process the request and pay the Surrender Value
only if we have not received due proof that the Surviving Insured died prior to
the Surrender Date. The Surrender Value will be calculated as of the Surrender
Date. The Surrender Date is the end of the day in which we have received at our
Servicing Office written notice requesting full surrender of this policy.
While the policy is in full force, the Surrender Value will be an amount equal
to the Account Value less any indebtedness less the Contingent Deferred Sales
Charge as shown in Section 1.
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 a different allocation of your withdrawal and you in fact do so). For
each withdrawal, we reserve the right to make a charge to the Account Value in
the amount of $20. If the withdrawal results in a decrease to the Basic Sum
Insured then a proportionate part of any applicable Contingent Deferred Sales
Charge will be deducted from the Account Value as a result of the reduction in
Basic Sum Insured. The proportion will be equal to the amount of the reduction
in Basic Sum Insured divided by the amount of Basic Sum Insured in effect before
the reduction. Generally, each withdrawal must be at least $1,000. No withdrawal
can be made unless the resulting Total Sum Insured is at least equal to the
Minimum Total Sum Insured shown in Section 1 and the Surrender Value is equal to
or greater than three times the Section 9 charges at the time of withdrawal.
12
All amounts withdrawn will be subtracted from the Cumulative Premium Balance as
described in Section 6 and will also be subtracted from your Account Value.
Further, your Death Benefit will be affected as follows:
. With respect to determining the death benefit of the policy under Death
Benefit Option A (Level Death Benefit), an amount equal to any withdrawal
and its related charge will be deducted from the Account Value until the
Account Value multiplied by the applicable Death Benefit Factors becomes
equal to the Total Sum Insured. After that point is reached, both the Total
Sum Insured and the Account Value will each be reduced by an amount equal
to any remaining withdrawal amounts. Your Death Benefit will continue to be
determined in accordance with Section 4.
. With respect to determining the death benefit of the policy under Death
Benefit Option B (Variable Death Benefit), an amount equal to any
withdrawal and its related charge will be deducted from the Account Value.
Withdrawals will not affect the Total Sum Insured. Your Death Benefit will
continue to be determined in accordance with Section 4.
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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 Sex-distinct Smoker-distinct Mortality Tables with percentage ratings,
if applicable, and based on the underwriting classes of the Insureds 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. 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.
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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 also 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 Funds 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 and other expenses 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 reserves and other 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.
13
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 shares held in any
Subaccount, another class of shares of the investment company or the
shares 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.
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14. ALLOCATION TO SUBACCOUNTS
- --------------------------------------------------------------------------------
Any Net Premium credited to the Account Value prior to the 20th day after the
Date of Issue will automatically 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. The initial Subaccount Investment
Option is chosen in the application. 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. We reserve the
right to impose a limit on the number and frequency of such changes. All
percentages you elect must be whole numbers. 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. Unless we agree otherwise, 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.
Account Transfer Restrictions
General Restrictions
- --------------------
Subject to the limitations in this Section, 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 to any number equal to or greater than 12, (ii) impose limits on the
frequency of such transfers, and (iii) impose a charge for each transfer that
exceeds any policy year limit equal to or greater than 12. Such charge will not
exceed $25 per transfer. 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
administrative rules in effect at the time of transfer.
Restrictions on Transfers to or from Subaccounts
- ------------------------------------------------
Without our prior approval, the maximum amount that 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. 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.
14
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15. INVESTMENT POLICY CHANGE
- --------------------------------------------------------------------------------
The investment policy of the Variable Accounts shall not be materially changed
unless a statement of the change is filed with any jurisdiction requiring such a
filing. 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 such change and 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 end of
the Valuation Period in which we receive the notice.
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16. REPORTS TO OWNER
- --------------------------------------------------------------------------------
While the policy is in full force, we will send you a statement at least
annually and for no charge, setting forth the following information:
(a) The Death Benefit, in accordance with the Death Benefit Option elected, and
the Account Value, both 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.
On request, we will furnish other reports of projected future values. We may
charge a reasonable fee, not to exceed $50, for such report. We will furnish any
other reports that may be required by law or regulation.
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17. REINSTATEMENT
- --------------------------------------------------------------------------------
If there is a Policy Default or ASI Default under Section 7, the policy or the
Additional Sum Insured (as the case may be) may be reinstated within 3 years
after the beginning of the grace period. The date of reinstatement of the policy
or the Additional Sum Insured is the date on which we determine that all 3
requirements below have been satisfied:
(l) Receipt a written application for reinstatement.
(2) Receipt of evidence of insurability satisfactory to us.
(3) Receipt of a payment which, after deduction of all Section 5 charges
(i.e., the Tax Charge, and applicable Sales Charges), 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%, compounded annually, plus (ii) the total of all Section 9
charges for the three Processing Dates next following the date of
reinstatement, where the Section 9 charges for the three Processing
Dates next following the date of reinstatement are assumed to be
equal to such charges on the date of default.
Requirements (2) and (3) must be satisfied within 60 days after the date we
receive the application for reinstatement.
On the date of reinstatement of the policy (i) the 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 of the policy 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%, compounded annually, from the date such
charge would have been due up to and including the date of reinstatement.
15
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18. OWNER AND BENEFICIARY
- --------------------------------------------------------------------------------
The Owner 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 there is no surviving Beneficiary upon the death of the Surviving
Insured, then the following will apply: If the Surviving Insured is the
sole Owner, then the Surviving Insured's estate will be the beneficiary,
unless you direct otherwise.
In all other cases, the Owner(s) remaining after the death of the Surviving
Insured's estate will be the Beneficiary. If there is more than one
remaining Owner, they will share proceeds in the same proportions in which
their ownership interest is held.
While at least one Insured is alive, you may change the Owner and Beneficiary by
written notice. You may also revoke any change of 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 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 either
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.
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19. INTEREST ON PROCEEDS
- --------------------------------------------------------------------------------
We will pay interest on proceeds paid in one sum in the event of the Surviving
Insured's death from the date of death to the date of payment. The rate will be
the same as declared for Option 1 in Section 27, Settlement Provisions, or such
greater rate as is required by law.
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20. DEFERRAL OF DETERMINATIONS AND PAYMENTS
- --------------------------------------------------------------------------------
We reserve the right to defer payment of the Surrender Value from the Fixed
Account for a period of up to six months. 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
Total Sum Insured.
(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.
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.
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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.
16
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22. ASSIGNMENT
- --------------------------------------------------------------------------------
Your interest in this policy may be assigned without the consent of any
revocable Beneficiary. Your interest, any interest of the Insureds 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.
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23. INCONTESTABILITY
- --------------------------------------------------------------------------------
This policy, except any provision for reinstatement or policy change requiring
evidence of insurability, shall be incontestable after it has been in force
during the lifetime of each Insured for two Policy Years from its Date of Issue,
except for fraud, policy lapse under Section 7 or policy termination under
Section 10.
A reinstatement and any policy change requiring evidence of insurability shall
be incontestable after it has been in force during the lifetime of each Insured
for two years from the effective date of such reinstatement or policy change,
except for fraud, policy lapse under Section 7 or policy termination under
Section 10.
Any premium payment which we accept under Section 5 subject to insurability
shall be considered a policy change for purposes of this Section. Any increase
in the Death Benefit resulting from such payment shall be governed by the
immediately preceding paragraph.
During the second Policy Year, we will mail you a notice reminding you that due
proof of death of the first Insured must be given to us when such death occurs
at any time while this policy is in force.
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24. MISSTATEMENTS
- --------------------------------------------------------------------------------
If the age or sex of either 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.
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25. SUICIDE EXCLUSION
- --------------------------------------------------------------------------------
If either Insured commits suicide, while sane or insane, within 2 Policy 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 either Insured commits suicide, while sane
or insane, after 2 Policy 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.
If there is a Surviving Insured who was not classified as uninsurable on a
single life basis when this policy was issued, and due proof of death of the
other Insured is provided to us within 60 days of the suicide, we will make a
new policy available on the life of the Surviving Insured. The issue age, date
of issue, and the Insured's underwriting classification under the new policy
will be the same as when this policy was issued. The amount of coverage under
the new policy will not be greater than the amount of coverage under this
policy. The new policy will include any of the Riders that were included in this
policy, if such Riders were available on a single life basis on the date of
issue of this policy. We will set the premiums for the new policy in accordance
with our regular rules in use on the date of issue of this policy. The new
policy will not take effect unless we receive a written application for it and
all premiums due since its date of issue are paid to us within 31 days after we
notify you of the availability of the new policy. If the person eligible to be
insured under the new policy dies prior to the end of such 31 day period, we
will pay the death benefit under the new policy less all premiums that would
have been due under the new policy from its date of issue to the date of such
person's death.
17
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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 requests or applications
for policy changes or acceptance of excess payment under Section 5 may be
submitted to us after issue and such additional requests 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.
18
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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 either 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 Surviving Insured; or (b) 2 months after the date on which the
proceeds, if any, are payable in any case except death.
Your annuity payment for Options 1, 2A, and 2B will be the greater of (a) the
rate guaranteed in the policy or (b) the current rate (declared annually) by the
Company. For Options 3, 4, and 5, once annuity payments have begun, the amount
of the annuity payments will not change.
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 Beneficiary or either of the Insureds, if
living.
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 Policy 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.
Options 3, 4, and 5 are available only if the Payee's age is 40 or older.
19
Table for Settlement Options 2B, 3, 4, and 5
(Monthly payments for each $1,000 of proceeds applied)
- ------------------------------------------------------------------------------------------------------------
Option 2B Age of Payee at Option 3 Option 4 Option 5
Income for a Fixed Period Birthday Nearest Life Income with Guaranteed Life Income Life Income
Date of First Period without with Cash
Payment Refund Refund
- ------------------------- ---------------------------
Period of Payment 10 Years 20 Years
Years
- ------------------------- ------------------------------------------------------------------------------
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 4.18 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
- -------------------------- 70 6.27 5.19 6.69 5.73
Annual, Semi-annual, or 71 6.44 5.24 6.94 5.88
quarterly payments under 72 6.61 5.28 7.20 6.04
Option 2B are 11.839, 73 6.79 5.32 7.48 6.20
5.963, and 2.993 74 6.98 5.36 7.79 6.38
respectively times the 75 7.16 5.38 8.11 6.56
monthly payments. 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.
------------------------------------------------------------------------------
20
Communications about this policy may be sent to the Company's Servicing Office,
which is currently at [P.O. Box 111, John Hancock Place, Boston, Massachusetts
02117].
Variable Survivorship Life Insurance policy
Flexible Premiums
Death Benefit payable at death of Surviving Insured
Not eligible for dividends
Benefits, premiums and the Premium Class are shown in Section 1.