EXHIBIT 1.A.(5)
SPECIMEN FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
PFL PFL Life Insurance Company
LIFE A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids,
Iowa 52499
(Heearafter called the Company,we, our or us) (319) 398-8511
IN THIS POLICY the Insured is named on the Policy Schedule page. PFL Life
Insurance Company will be referred to as We, Our, Us or the Company.
IF THE INSURED DIES before the Maturity Date and while this policy is In Force,
WE WILL PAY the Death Benefit Proceeds to the Beneficiary upon receipt of due
proof, satisfactory to Us, of the Insured's death. THE PORTION OF THE DEATH
BENEFIT PROCEEDS ATTRIBUTABLE TO ASSETS MAINTAINED IN THE SEPARATE ACCOUNT WILL
INCREASE OR DECREASE IN ACCORDANCE WITH THE INVESTMENT PERFORMANCE OF EACH
SUBACCOUNT OF THE SEPARATE ACCOUNT.
IF THE INSURED IS ALIVE on the Maturity Date and this policy is In Force, WE
WILL PAY the death benefit as of the Maturity Date. THE VALUE OF EACH SUBACCOUNT
OF THE SEPARATE ACCOUNT WILL INCREASE OR DECREASE IN ACCORDANCE WITH THE
INVESTMENT PERFORMANCE OF EACH SUCH SUBACCOUNT AND ARE NOT GUARANTEED AS TO
DOLLAR AMOUNT.
THE PROVISIONS on the following pages are part of this policy.
FREE LOOK PERIOD
You may cancel this policy by returning it to Us at 4333 Edgewood Road, N.E.,
Cedar Rapids, Iowa 52499 or to the representative / agent through whom it was
purchased within 10 days after receipt. If the policy is returned within this
period, it will be void from the beginning and a refund will be made to You. The
refund will equal the sum of:
1) The difference between the Initial Premium paid and the amount
allocated to any Accounts under the policy; plus
2) The total amount of monthly deductions made and any other charges
imposed on amounts allocated to the Accounts; plus
3) The value of amounts allocated to the Accounts on the date We or
Our agent receive the returned policy.
Signed for Us at our Home Office.
/S/ [SIGNATURE ILLEGIBLE]^^ /S/ [SIGNATURE ILLEGIBLE]^^
- ----------------------------------- -------------------------------
SECRETARY PRESIDENT
This policy is a legal contract between the policy owner and the company.
READ YOUR POLICY CAREFULLY
COMPLAINT NOTICE
To obtain information or to make further inquiries regarding this policy, you
may call our toll-free num 1-800-732-7754. You may also write to us at our
Home Office.
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT PROCEEDS PAYABLE AT DEATH OF INSURED PRIOR TO MATURITY DATE
CASH SURRENDER VALUE PAYABLE AT MATURITY DATE
NON-PARTICIPATING - NO DIVIDENDS
SOME BENEFITS REFLECT INVESTMENT RESULTS
WL851136 58 699
TABLE OF CONTENTS
Policy Schedule............................................. 3
Definitions................................................. 4
Accounts.............................................. 4
Attained Age.......................................... 4
Beneficiary........................................... 4
Cash Surrender Value.................................. 4
Death Benefit Proceeds................................ 4
Fixed Account......................................... 4
In Force.............................................. 4
Initial Premium....................................... 4
Issue Age............................................. 4
Loan Reserve.......................................... 4
Maturity Date......................................... 4
Monthly Date.......................................... 4
Net Premium........................................... 4
Office................................................ 4
Payee................................................. 4
Payment Commencement Date............................. 4
Policy Date........................................... 4
Portfolios............................................ 4
Premium............................................... 5
SEC................................................... 5
Separate Account...................................... 5
Subaccount............................................ 5
Termination........................................... 5
Valuation Date........................................ 5
Valuation Period...................................... 5
Written Notice........................................ 5
You, Your............................................. 5
Guaranteed Monthly Cost of
Insurance Rates............................................. 6
Net Single Premium.......................................... 7
General Provisions.......................................... 8
Entire Contract....................................... 8
Ownership............................................. 8
Beneficiary........................................... 8
Assignment............................................ 8
Incontestability...................................... 8
Suicide............................................... 8
Misstatement of Age and Sex........................... 8
Periodic Report ...................................... 8
Termination........................................... 8
Delay of Payments and Transfers....................... 9
Protection of Proceeds................................ 9
Premium Provisions.......................................... 9
Initial Premium....................................... 9
Additional Premiums................................... 9
Additional Premiums - No Underwriting................. 9
Allocation of Net Premiums............................ 9
Grace Period.......................................... 10
Death Benefit Provisions.................................... 10
Death Benefit......................................... 10
Basic Death Benefit................................... 10
Guaranteed Minimum Death Benefit...................... 10
Death Benefit Proceeds................................ 10
Policy Value Provisions..................................... 11
Fixed Account Value................................... 11
Guaranteed Interest Rate in Fixed Account............. 11
Subaccount Value...................................... 11
Cash Value............................................ 11
Cash Surrender Value.................................. 11
Growth Accelerator Benefit............................ 11
Surrender Provisions........................................ 12
Surrender............................................. 12
Partial Surrenders.................................... 12
Surrender Charge...................................... 12
Policy Deductions and
Charges Provisions.......................................... 12
Premium Expense Charge................................ 12
Monthly Deductions.................................... 12
Monthly Cost of Insurance............................. 12
Monthly Policy Charge................................. 13
Daily Charge.......................................... 13
Policy Loans Provision...................................... 13
Policy Loans.......................................... 13
Continuation of Insurance Provisions........................ 14
Continuation of Insurance............................. 14
No Lapse.............................................. 14
Extended Maturity..................................... 14
Basis of Computations................................. 14
Separate Account Provisions................................. 14
The Separate Account.................................. 14
Subaccounts........................................... 15
Addition, Deletion or Substitution of
Investments........................................... 15
Change of Investment Objective........................ 15
Subaccount Units...................................... 16
Transfer Provisions......................................... 16
Transfers............................................. 16
Transfer Limitations.................................. 16
Transfer Allocation................................... 16
Dollar Cost Averaging................................. 17
Asset Rebalancing..................................... 17
Payment of Proceeds Provimions.............................. 18
Election by Owner..................................... 18
Payment of Proceeds................................... 18
Optional Methods of Settlement........................ 18
Fixed Payment Option.................................. 18
Rate of Interest...................................... 18
Variable Payment Option............................... 18
Determination of the First Variable Payment........... 19
Determination of Subsequent
Variable Payments..................................... 20
Other Settlement Options.............................. 20
Conditions............................................ 20
Proceeds Exempt From Claim of Creditors............... 20
Table of Guaranteed Fixed
Payment Options............................................. 21
Table of Variable Payment Options........................... 21
2
Policy Schedule
- -------------------------------------------------------------------------------
Insured: (John Doe) Owner: (John Doe)
Issue Age and Sex: (35 - Male) Policy Number: (01-12345678)
Specified Amount: ($204,416) Policy Date: (December 01, 1998)
Initial Premium: ($20,000) Maturity Date: (December 01, 2063)
Rate Class: (Standard (Preferred))
Additional Premium Allowance: ($20,000)
Separate Account: (Legacy Builder Variable Life Separate Account)
Premium Expense Charge: (2)% of each Premium received.
Monthly Policy Charge:
Monthly Administrative Charge: $2.50
Monthly Asset Based Charge: 0.55% (expressed as an annual percentage and
applied to the Separate Account only) for the
first ten (10) policy years.
Daily Charge: 0.75% for all durations (expressed as an annual
percentage and applied to Separate Account
only)
Deferred Surrender Charges: Surrender Charges of 7% are applied to each
premium for the first six years following the
payment of each premium.
AT SOME FUTURE TIME, THE CASH SURRENDER VALUE MAY NOT COVER THE NEXT MONTHLY
DEDUCTION. IN SUCH A SITUATION, EXCEPT AS OTHERWISE PROVIDED IN THE POLICY, THE
POLICY WILL ENTER THE GRACE PERIOD AND WILL TERMINATE AT THE END OF THAT PERIOD
IF SUFFICIENT PREMIUM TO COVER THE MONTHLY DEDUCTION IS NOT PAID.
3
DEFINITIONS
Accounts
The Fixed Account and the Subaccounts of the Separate Account.
Attained Age
Attained Age refers to the Issue Age plus the number of completed policy years.
Beneficiary
The person or persons specified by the Owner to receive the Death Benefit
Proceeds.
Cash Surrender Value
The amount payable upon surrender of this policy in accordance with the Policy
Value Provisions.
Death Benefit Proceeds
The amount payable upon the death of the Surviving Insured in accordance with
the Death Benefit Provisions.
Fixed Account
Allocation option(s) other than the Separate Account.
In Force
Condition under which the coverage is active and the Surviving Insured's life
remains insured.
Initial Premium
The amount which must be paid before coverage begins. The amount is shown on the
Policy Schedule page.
Issue Age
Issue Age refers to the age on the Insured's last birthday prior to the Policy
Date.
Loan Reserve
A portion of the Fixed Account used as collateral for any policy loan.
Maturity Date
The date when coverage under the policy will terminate if the Insured is living
and the policy is In Force. The Maturity Date is shown on the Policy Schedule
page.
Monthly Date
The same day of each month as the Policy Date. If there is no day in a calendar
month which coincides with the Policy Date, the Monthly Date will be the next
Valuation Date.
Net Premium
A Net Premium is the amount received by Us as premium less the Premium Expense
Charge shown on the Policy Schedule page.
Office
Refers to Our Home Office at 4333 Edgewood Road, N.E., Cedar Rapids, Iowa 52499.
Payee
The person or persons specified by the Owner to receive the payment upon
Termination of this policy.
Payment Commencement Date
If You choose to receive the proceeds through a Settlement Option (as described
in the Payment of Proceeds Provisions), the Payment Commencement Date is the
date we begin to make the payment.
Policy Date
The date coverage is effective and monthly deductions commence under the policy.
Policy years, policy anniversaries, and Monthly Dates are measured from the
Policy Date, as shown on the Policy Schedule page.
Portfolios
Designated mutual fund(s) from which each Subaccount of the Separate Account
will buy shares.
4
DEFINITIONS - CONTINUED
Premium
An amount paid to Us as consideration for the benefits provided by this policy.
SEC
The United States Securities and Exchange Commission.
Separate Account
A separate investment account established and maintained by Us for the
investment of a portion of Our assets pursuant to Section 508A.1 of the Iowa
Insurance Code. The Separate Account contains several Subaccounts to which
premiums, or portions thereof, may be allocated.
Subaccount
A sub-division of the Separate Account investing solely in shares of a specified
Portfolio. The investment performance of each Subaccount is linked directly to
the investment performance of the Portfolio.
Termination
Condition under which the insurance coverage under this policy is no longer In
Force.
Valuation Date
Each day that both the New York Stock Exchange and PFL Life Insurance Company
are open for business, except for any days when a Subaccount's corresponding
investment portfolio does not value its shares.
Valuation Period
The period beginning at the close of business of the New York Stock Exchange on
one Valuation Date and continuing to the close of business on next Valuation
Date.
Written Notice
Written Notice means a notice by the Owner to Us requesting a right of the Owner
as provided in the General Provisions. In order for a notice to be considered a
Written Notice, it must be in writing, signed by the Owner; be in a form
acceptable to Us; and contain the information and documentation, as determined
in Our sole discretion, necessary for Us to take the action requested, or for
the Owner to exercise the right specified. A Written Notice will not be
considered complete until all necessary supporting documentation required or
requested by Us has been received at Our Office.
You, Your
The Owner of this policy.
5
GUARANTEED MONTHLY COST OF INSURANCE RATES PER $1,000
Attained Non-Tobacco Use Tobacco Use Attained Non-Tobacco Use Tobacco Use
Age Male Female Male Female Age Male Female Male Female
--- ---- ------ ---- ------ --- ---- ------ ---- ------
30 0.1208 0.1042 0.1775 0.1317 65 1.8542 1.1883 3.1583 1.6600
31 0.1233 0.1075 0.1833 0.1367 66 2.0517 1.3067 3.4383 1.8067
32 0.1267 0.1108 0.1908 0.1425 67 2.2633 1.4275 3.7283 1.9483
33 0.1317 0.1150 0.2008 0.1500 68 2.4933 1.5525 4.0325 2.0917
34 0.1375 0.1200 0.2125 0.1583 69 2.7483 1.6917 4.3625 2.2475
35 0.1442 0.1258 0.2267 0.1675 70 3.0367 1.8550 4.7267 2.4317
36 0.1517 0.1342 0.2433 0.1817 71 3.3658 2.0542 5.1358 2.6650
37 0.1617 0.1442 0.2642 0.1983 72 3.7458 2.2983 5.5983 2.9508
38 0.1725 0.1550 0.2875 0.2175 73 4.1758 2.5908 6.1108 3.2908
39 0.1842 0.1667 0.3142 0.2383 74 4.6483 2.9275 6.6725 3.6783
40 0.1983 0.1808 0.3450 0.2633 75 5.1533 3.3033 7.2725 4.1017
41 0.2133 0.1958 0.3783 0.2900 76 5.6867 3.7100 7.8858 4.5517
42 0.2292 0.2108 0.4150 0.3167 77 6.2442 4.1458 8.5017 5.0217
43 0.2467 0.2258 0.4550 0.3433 78 6.8292 4.6175 9.1242 5.5183
44 0.2658 0.2408 0.4992 0.3700 79 7.4600 5.1400 9.7750 6.0592
45 0.2875 0.2575 0.5458 0.3983 80 8.1567 5.7342 10.4758 6.6650
46 0.3108 0.2750 0.5942 0.4275 81 8.9375 6.4175 11.2467 7.3525
47 0.3358 0.2942 0.6467 0.4575 82 9.8183 7.2050 12.1008 8.1342
48 0.3633 0.3142 0.7033 0.4900 83 10.7950 8.0933 13.0242 9.0367
49 0.3933 0.3367 0.7650 0.5258 84 11.8483 9.0725 13.9858 10.0150
50 0.4275 0.3617 0.8333 0.5642 85 12.9542 10.1317 14.9533 11.0542
51 0.4667 0.3892 0.9108 0.6050 86 14.0983 11.2633 15.9033 12.1458
52 0.5117 0.4208 0.9983 0.6517 87 15.2633 12.4658 16.8783 13.2792
53 0.5633 0.4558 1.0975 0.7033 88 16.4442 13.7400 17.8942 14.4600
54 0.6208 0.4917 1.2058 0.7558 89 17.6575 15.0958 18.9042 15.6875
55 0.6850 0.5300 1.3217 0.8100 90 18.9208 16.5442 19.9233 17.0483
56 0.7550 0.5683 1.4442 0.8633 91 20.2633 18.1183 20.9833 18.5133
57 0.8292 0.6058 1.5733 0.9133 92 21.7350 19.8775 22.2125 20.1383
58 0.9117 0.6433 1.7092 0.9625 93 23.4792 21.9458 23.7892 22.0467
59 1.0042 0.6858 1.8550 1.0150 94 25.8192 24.6025 25.9392 24.6025
60 1.1075 0.7358 2.0175 1.0775 95 29.3217 28.4183 29.3217 28.4183
61 1.2225 0.7975 2.2008 1.1558 96 35.0825 34.4900 35.0825 34.4900
62 1.3550 0.8742 2.4075 1.2567 97 45.0833 44.7700 45.0833 44.7700
63 1.5050 0.9683 2.6383 1.3792 98 62.0958 61.9967 62.0958 61.9967
64 1.6717 1.0742 2.8908 1.5158 99 83.3333 83.3333 83.3333 83.3333
The guaranteed monthly cost of insurance rates shown above are for standard risk
only and are based on the Commissioners 1980 Standard Ordinary Tobacco User and
Non Tobacco User Mortality Table. When any insurance is not sold on the standard
risk, the guaranteed cost of insurance rates are increased by 30%, 100% and 220%
for rating classes Approved, Approved Rated and Approved Rated-II respectively.
C800 6
NET SINGLE PREMIUM PER $1,000
Attained Non-Tobacco Use Tobacco Use Attained Non-Tobacco Use Tobacco Use
Age Male Female Male Female Age Male Female Male Female
--- ---- ------ ---- ------ --- ---- ------ ---- ------
30 198.30 176.99 242.61 201.25 65 585.00 529.43 640.57 559.30
31 205.07 183.03 250.70 208.02 66 599.15 543.87 652.75 572.89
32 212.09 189.29 259.06 215.02 67 613.28 558.46 664.77 586.57
33 219.36 195.77 267.71 222.26 68 627.36 573.25 676.66 600.41
34 226.89 202.48 276.63 229.73 69 641.40 588.26 688.43 614.46
35 234.67 209.41 285.82 237.44 70 655.34 603.47 700.06 628.71
36 242.72 216.57 295.27 245.38 71 669.13 618.81 711.49 643.09
37 251.03 223.95 304.98 253.51 72 682.70 634.18 722.66 657.47
38 259.59 231.54 314.93 261.84 73 695.96 649.48 733.50 671.72
39 268.41 239.34 325.10 270.35 74 708.84 664.61 743.93 685.73
40 277.50 247.36 335.50 279.04 75 721.32 679.50 753.93 699.43
41 286.84 255.58 346.10 287.87 76 733.43 694.12 763.49 712.80
42 296.46 264.02 356.91 296.87 77 745.19 708.48 772.68 725.87
43 306.35 272.69 367.91 306.03 78 756.64 722.60 781.58 738.69
44 316.51 281.59 379.10 315.37 79 767.83 736.50 790.24 751.30
45 326.95 290.75 390.47 324.90 80 778.74 750.14 798.69 763.68
46 337.66 300.15 402.03 334.62 81 789.34 763.46 806.90 775.81
47 348.65 309.82 413.79 344.55 82 799.56 776.37 814.81 787.60
48 359.93 319.74 425.72 354.69 83 809.31 788.80 822.36 798.98
49 371.49 329.93 437.84 365.04 84 818.57 800.68 829.53 809.85
50 383.33 340.38 450.13 375.59 85 827.33 812.03 836.35 820.20
51 395.44 351.09 462.56 386.35 86 835.65 822.86 842.93 830.10
52 407.81 362.06 475.11 397.30 87 843.62 833.24 849.38 839.61
53 420.41 373.27 487.75 408.43 88 851.35 843.26 855.77 848.84
54 433.24 384.73 500.43 419.72 89 859.00 853.02 862.22 857.93
55 446.27 396.44 513.15 431.21 90 866.72 862.67 868.93 867.04
56 459.49 408.43 525.91 442.89 91 874.71 872.36 876.12 876.26
57 472.91 420.70 538.70 454.81 92 883.18 882.27 884.05 885.79
58 486.52 433.30 551.53 467.01 93 892.38 892.63 892.89 895.86
59 500.29 446.24 564.40 479.52 94 902.52 903.63 902.82 906.72
60 514.22 459.51 577.29 492.34 95 913.69 915.40 913.92 918.42
61 528.27 473.08 590.17 505.45 96 925.81 927.91 926.04 930.86
62 542.41 486.92 602.99 518.78 97 938.68 940.98 938.90 943.87
63 556.60 500.95 615.69 532.24 98 952.41 954.67 952.63 957.35
64 570.81 515.13 628.22 545.76 99 970.22 971.51 970.35 973.03
The net single premiums shown above are for standard risk only and are based on
the guaranteed cost of insurance rates shown on page 6. When any policy is not
sold through a standard risk, its net single premium will be calculated by using
its specific guaranteed cost of insurance rates.
CB800 7
GENERAL PROVISIONS
Entire Contract
This policy is issued in consideration of the attached application and payment
of the Initial Premium. This policy, including the attached application and any
attached riders and endorsements, constitute the entire contract. All statements
made in an application, in the absence of fraud, will be deemed representations
and not warranties. No statement can be used to void this policy or be used in
defense of a claim unless it is contained in the written application. No policy
provision can be waived or changed except by endorsement. Such endorsement must
be signed by Our President or Secretary.
Ownership
The Insured is the Owner of this policy unless otherwise stated on the
application or later changed. The Owner may exercise all rights under this
policy during the Insured's lifetime including the right to transfer ownership.
If the Owner should die during the Insured's lifetime, ownership of this policy
will pass to the Owner's estate if no contingent owner is named.
We will not be bound by any change in the ownership designation unless it is
made by Written Notice. The change will be effective on the date the Written
Notice is accepted by Us. If We request, this policy must be returned to Our
Office for endorsement.
Beneficiary
The Beneficiary, as named in the application or subsequently changed, will
receive the benefits payable upon the Insured's death. If the Beneficiary dies
before the Insured, the Contingent Beneficiary, if named, becomes the
Beneficiary. If no Beneficiary or Contingent Beneficiary survives the Insured,
the benefits payable upon the Insured's death will be paid to the Owner or the
Owner's estate.
We will not be bound by any change in the Beneficiary designation unless it is
made by Written Notice. The change will be effective on the date the Written
Notice was signed; however, no change will apply to any payment We made before
the Written Notice is received. If We request, this policy must be returned to
Our Office for endorsement.
Assignment
This policy may be assigned. We will not be bound by any assignment unless made
by Written Notice. The assignment will be effective on the date the Written
Notice is received at Our Office and accepted by Us. We assume no responsibility
for the validity of any assignment.
The rights of the Beneficiary and Owner are subject to the rights of the
assignee, unless the Beneficiary was effectively designated as an irrevocable
beneficiary prior to the assignment.
Incontestability
This policy shall be incontestable after it has been In Force, while the Insured
is still alive, for two years from the Policy Date.
Suicide
If the Insured dies by suicide, while sane or insane, within two years from the
Policy Date, this policy shall terminate and Our total liability, including all
riders attached to this policy, will be limited to the total premiums paid, less
any loans and prior partial surrenders, during such period.
Misstatement of Age and Sex
If the Insured's age and/or sex is not correctly stated, the death benefit will
be adjusted based on what the premiums would have purchased based on the
Insured's correct age and/or sex.
Periodic Report
We will send a periodic report to You at least once each policy year. The
periodic report will show:
1. The current Cash Value;
2. The current Cash Surrender Value;
3. The current death benefit;
4. Any current policy loans;
5. Activity since last report.
Additional activity within each Subaccount showing investment experience will
also be provided.
Termination
This policy will terminate on the earliest of:
1. The Maturity Date;
2. The date of the Insured's death;
3. The end of the grace period;
4. The date of surrender.
H751 8
Delay of Payments and Transfers
All payments and transfers from the Subaccounts will be processed as provided in
this policy unless one of the following situations exists:
1. The New York Stock Exchange is closed; or
2. The SEC requires that trading be restricted or declares an emergency; or
3. The SEC allows Us to defer payments to protect Our policyowners.
We reserve the right to defer the payment of any Fixed Account values for the
period permitted by law, but not for more than six months.
Protection of Proceeds
Unless You direct by filing Written Notice, no Beneficiary may assign any
payments under this policy before the same are due. To the extent permitted by
law, no payments under this policy will be subject to the claims of creditors of
any Beneficiary.
PREMIUM PROVISIONS
Initial Premium
The Initial Premium shown on the Policy Schedule page must be paid on or before
the Policy Date. The minimum Initial Premium is $10,000. The policy will not be
in effect and there will be no death benefit before the Initial Premium is paid.
Additional Premiums
While this policy is In Force, additional premiums may be paid at any time prior
to the Maturity Date. The minimum additional premium is $5,000. Unless the
premium is paid in accordance with the "Additional Premiums - No Underwriting"
provision below, We reserve the right to require underwriting satisfactory to Us
as a condition for accepting additional premium.
We also reserve the right to reject an additional premium if that additional
premium would disqualify this policy as a life insurance contract as defined by
the United States Internal Revenue Code and applicable regulations.
Additional Premiums - No Underwriting
During each of the first two policy years, additional premiums up to the limits
defined in this provision may be paid without any underwriting requirement. In
the first policy year, the limit on premiums acceptable to Us without
underwriting is equal to the additional premium allowance shown on the Policy
Schedule page. In the second policy year, the limit on premiums acceptable to Us
without additional underwriting is the lesser of: (1) the additional premium
allowance shown on the Policy Schedule page less any additional premiums paid in
the first policy year, or (2) total premiums paid in the first policy year. If
You surrender a portion of the policy in accordance with the Partial Surrender
provision, we reserve the right to require underwriting on all subsequent
premium payments.
Allocation of Net Premiums
Net premiums may be allocated to the Fixed Account or to one or more Subaccounts
of the Separate Account, as directed by You.
Any net premium, or portion thereof, allocated to the Fixed Account, will be
credited immediately upon receipt of the premium by Us at Our Office.
Any net premium, or portion thereof, allocated to one or more Subaccounts, will
be credited to that Subaccount on the first Valuation Date on or following the
date the premium is received.
Any net premium, or portion thereof, designated to a Subaccount, will be
allocated to one or more Subaccounts of the Separate Account in accordance with
Your current premium allocation instructions.
We limit any allocation to any Account to no less than 1%. No fractional
percentages may be permitted. The allocation may be changed by You. The request
for change of allocations must be in a form satisfactory to Us. The allocation
change will be effective on the date the request for change is recorded by Us.
J751 9
Grace Period
If the Cash Surrender Value on any Monthly Date is not sufficient to cover the
monthly deductions on such day, We will mail a notice to the last known address
of the Owner and any assignee of record. A grace period of 61 days after the
mailing date of the notice will be allowed for the payment. The notice will
specify the minimum payment and the final date on which such payment must be
received by Us to keep the policy In Force. The policy will remain In Force
during the grace period. If the amount due is not received by Us within the
grace period, all coverage under the policy will terminate without value at the
end of the grace period.
DEATH BENEFIT PROVISIONS
Death Benefit
The death benefit is the greater of:
1. The Basic Death Benefit amount; or
2. The Guaranteed Minimum Death Benefit.
Basic Death Benefit
The Basic Death Benefit is the minimum amount that must be payable at the
Insured's death, before reduction for any outstanding loan, for the policy to be
treated as a life insurance policy. We determine the Basic Death Benefit by
dividing the Cash Value by the Net Single Premium. The Net Single Premium is
calculated using guaranteed cost of insurance rates with 4.5% interest. The
Basic Death Benefit will change monthly due to the changes in the Cash Value.
The Net Single Premium will change annually.
The Specified Amount shown on the Policy Schedule page is the Basic Death
Benefit on the Policy Date.
Guaranteed Minimum Death Benefit
The calculation of the Guaranteed Minimum Death Benefit is based on the age of
the Insured on the Policy Date. If the Insured's age is less than 75 on the
Policy Date, the Guaranteed Minimum Death Benefit is equal to the greater of
premium(s) paid or highest Cash Value on any policy anniversary (adjusted for
partial surrenders). When the Insured reaches age 75 on a policy anniversary,
the Guaranteed Minimum Death Benefit will be calculated for the last time. The
Guaranteed Minimum Death Benefit calculated then will be the Guaranteed Minimum
Death Benefit for the remainder of the policy.
If the Insured's age is equal to or greater than 75 on the Policy Date, the
Guaranteed Minimum Death Benefit will be equal to the premium(s) paid (adjusted
for partial surrenders).
If the policy has an outstanding loan, the Guaranteed Minimum Death Benefit will
not apply. The death benefit will equal the Required Death Benefit. However, the
Guaranteed Minimum Death Benefit will be reinstated if the policy loan is fully
repaid.
Death Benefit Proceeds
The Death Benefit Proceeds is the amount payable by Us under this policy upon
the death of the Insured, provided this policy has not terminated prior to the
Insured's death. Except as provided in the Suicide provision, the Death Benefit
Proceeds will be equal to:
1. The death benefit; minus
2. Any monthly deductions due during the grace period; minus
3. Any outstanding policy loan; minus
4. Any accrued policy loan interest.
As long as the policy is In Force, we will pay the Death Benefit Proceeds to the
Beneficiary once we receive due proof of the Insured's death.
D325 10
POLICY VALUE PROVISIONS
Fixed Account Value
The Fixed Account Value on the Policy Date is the net premiums, or portions
thereof, received to date.
The Fixed Account Value on a Monthly Date will be equal to:
1. The Fixed Account Value on the last Monthly Date; plus
2. Net premiums, or portions thereof, allocated to the Fixed Account since the
last Monthly Date; plus
3. Amounts transferred from one or more Subaccounts to the Fixed Account since
the last Monthly Date; plus
4. Growth Accelerator Benefit (as described below) credited to the Fixed
Account since the last Monthly Date; plus
5. Interest credited to the Fixed Account; minus
6. Amounts charged to pay for monthly deductions for the last Monthly Date;
minus
7. Amounts withdrawn to pay for partial surrenders, or transfers from the
Fixed Account, including transfers to the Loan Reserve since the last
Monthly Date; minus
8. Amounts transferred from the Fixed Account to one or more Subaccounts.
On any day other than a Monthly Date, the Fixed Account Value will be equal to
(1) plus (2) plus (3) plus (4) plus, (5) minus (7), minus (8) using the
definitions above.
Guaranteed Interest Rate in Fixed Account
Interest on the Fixed Account will be compounded daily at a minimum guaranteed
effective annual interest rate of 3% per year. We may use current interest rates
greater than the guaranteed interest rate to calculate the value in the Fixed
Account. These interest rates will be declared by Us. We may also apply a rate
of interest less than the current rate to separate portions of the value in the
Fixed Account including the amount equal to any outstanding loan(s). However,
each rate cannot be less than the guaranteed interest rate.
Subaccount Value
At the end of any Valuation Period, the value of each Subaccount is equal to the
number of units multiplied by the unit value of that Subaccount on the Valuation
Date.
The number of units in each Subaccount is equal to:
1. The initial units purchased on the Policy Date; plus
2. Units purchased as a result of any additional net premiums; plus
3. Units purchased through transfers from another Account; plus
4. Units purchased as a result of Growth Accelerator Benefit (as described
below), minus
5. Units redeemed to pay for monthly deductions as they are due; minus
6. Units redeemed to pay for partial surrenders; minus
7. Units redeemed as part of a transfer to another Account.
Cash Value
The Cash Value on any date is equal to the sum of the Fixed Account Value and
the value of each Subaccount of the Separate Account.
Cash Surrender Value
The Cash Surrender Value is the amount payable upon surrender of this policy.
The Cash Surrender Value as of any date is equal to:
1. the Cash Value as of such date; minus
2. any Surrender Charge as of such date; minus
3. any outstanding policy loan(s); minus
4. any accrued loan interest.
Growth Accelerator Benefit
If the Cash Value on any policy anniversary exceeds $50,000 and is also greater
than 200% of the total premiums paid, the Cash Value will be credited with
additional interest. The additional interest will be allocated to the Separate
Account and Fixed Account on a pro rata basis at the end of each month for the
following year. This interest is 0.04167% multiplied by the Cash Value at the
end of each month. This benefit is guaranteed; however, the policy needs to meet
the requirements stated in the first sentence of this provision each year.
DB325 11
SURRENDER PROVISIONS
Surrender
While this policy is In Force, You may surrender this policy for its Cash
Surrender Value.
Partial Surrenders
You may request the surrender of a portion of the Cash Surrender Value. The
amount surrendered must be at least $500 and must not cause the Cash Surrender
Value after the partial surrender to be less than $5,000.
After the first policy year, an amount up to the earnings of the policy may be
surrendered free of any Surrender Charges. Amounts surrendered in excess of
earnings will be subject to Surrender Charges.
Partial surrenders will reduce the Cash Value and the Guaranteed Minimum Death
Benefit by the amount withdrawn plus surrender charge, if applicable.
We may defer payment of any partial surrender of values in the Fixed Account by
not more than six months.
For the purposes of determining Surrender Charges, the amount of partial
surrender is considered to be deducted from the oldest premium first. If the
amount withdrawn exceeds the oldest premium, the next oldest premium is
considered to be deducted next, and so until the last premium is deducted. (this
is a "First-In, First-Out" or FIFO procedure).
The Accounts from which the partial surrender will be made may be specified in
the Written Notice. If no Account is specified, the withdrawal amount will be
made from each subaccount of the Separate Account and Fixed Account on a pro
rata basis.
Surrender Charge
If You surrender the policy, You will incur a Surrender Charge if any premium
payments are made within 6 years before the surrender. This charge will be based
upon the Deferred Surrender Charges shown on the Policy Schedule page.
POLICY DEDUCTIONS AND CHARGES PROVISIONS
Premium Expense Charge
The Premium Expense Charge for the policy is shown on the Policy Schedule page
and represents a percentage of each premium paid. The Premium Expense Charge is
deducted from each premium received by Us before such premium is allocated to
the various Accounts.
Monthly Deductions
On the Policy Date and on each Monthly Date thereafter, a monthly deduction will
be made from the Cash Value in an amount equal to the sum of the following:
1. The Monthly Cost of Insurance, if any; plus
2. The Monthly Policy Charge, if any; plus
Unless specified otherwise, deductions will be withdrawn from each Subaccount of
the Separate Account and Fixed Account on a pro rata basis.
If the policy remains In Force after the Maturity Date, no Monthly Deductions
will be deducted.
Monthly Cost of Insurance
The Monthly Cost of Insurance is determined by multiplying the difference
between the Death Benefit divided by 1.00247 and the Cash Value on the Monthly
Date by the monthly per dollar cost of insurance rate.
The guaranteed cost of insurance per $1,000 is based on the Insured's:
- Sex, unless prohibited by law
- Attained age; and
- Rate Class shown on the Policy Schedule page.
We may use cost of insurance rates lower than the guaranteed rates but will
never charge rates in excess of the guaranteed cost of insurance rates.
P1041 12
Monthly Policy Charge
The Monthly Policy Charge consists of the following two components:
1. Monthly Administrative Charge - A Monthly Administrative Charge shown on
the Policy Schedule page will be deducted from each subaccount of the
Separate Account and the Fixed Account on a pro-rata basis. The Monthly
Administrative Charge will be waived for the following year if the Cash
Value on the Policy Date of any policy anniversary is equal to or greater
than $50,000.
2. Monthly Asset Based Charge - A Monthly Asset Based Charge shown on the
Policy Schedule page is applied to the Separate Account for the first 10
policy years. The Monthly Asset Based Charge will be deducted from each
subaccount of the Separate Account on a pro rata basis.
The Monthly Asset Based Charge will be calculated as (1) multiplied by (2),
where:
1 is the Monthly Asset Based Charge shown on the Policy Schedule page divided
by 12; and
2 is the sum of the values of each Subaccount on the Valuation Date of each
monthly deduction.
Daily Charge
Each Valuation Date, We deduct a Daily Charge which is equivalent to the annual
rate shown on the Policy Schedule page. We will deduct this charge from the
assets in each Subaccount as part of the calculation of the Subaccount Units for
that Subaccount. The Daily Charge will not exceed the equivalent of the annual
rate shown on the Policy Schedule page.
POLICY LOANS PROVISION
Policy Loans
While this Policy is In Force, You can borrow against this Policy an amount
which is not greater than 90% of the Cash Value net of Surrender Charge, minus:
1. any outstanding policy loan; minus
2. any accrued policy loan interest.
The amount of any policy loan may be limited to no less than $500, except as
noted below.
When a loan is made, an amount equal to the loan will be withdrawn from the
Accounts and transferred to the Loan Reserve. The Loan Reserve is a portion of
the Fixed Account used as collateral for any policy loan. You may specify the
Account or Accounts from which the policy loan will be made. If no Account is
specified, the policy loan will be made from each Subaccount of the Separate
Account and Fixed Account on a pro rata basis.
The loan date is the date We process a loan request. This policy will be the
sole security for the loan.
Any loan may be repaid while this policy is In Force. The existence of an
outstanding policy loan will terminate the application of the Guaranteed Minimum
Death Benefit (as described in the Minimum Death Benefit provision). However,
the Guaranteed Minimum Death Benefit will be reinstated if the loan is repaid.
Interest on any loan will be at the maximum policy loan rate of 6% payable in
arrears. We reserve the right to charge a lower loan rate on all or a portion of
any loan. Interest is due at each calendar quarter. Interest not paid when due
will be added to the loan on each calendar quarter.
At each calendar quarter, We will compare the amount of the outstanding loan to
the amount in the Loan Reserve. We will also make this comparison any time You
repay all or part of the loan. At each such time, if the amount of the
outstanding loan exceeds the amount in the Loan Reserve, We will withdraw the
difference from the Accounts and transfer it to the Loan Reserve, in the same
fashion as when a loan is made. If the amount in the Loan Reserve exceeds the
amount of the outstanding loan, We will withdraw the difference from the Loan
Reserve and transfer it to the Separate Account and Fixed Account on a pro rata
basis. However, We reserve the right to require the transfer to the Fixed
Account if such loans were originally transferred from the Fixed Account.
We may defer making a loan from values in the Fixed Account for not more than
six (6) months after application for the loan is made unless the loan is to pay
premiums on policies with Us.
PB1041 13
CONTINUATION OF INSURANCE PROVISIONS
Continuation of Insurance
Insurance coverage under this policy will be continued In Force until the Cash
Surrender Value is insufficient to cover the monthly deductions. If the Cash
Surrender Value on any Monthly Date is not sufficient to cover the monthly
deductions then due, this policy shall terminate subject to the Grace Period
provision. However, if there are no outstanding policy loans, we will guarantee
the policy will never lapse subject to the No Lapse provision. This provision
shall not continue this policy beyond the Maturity Date.
No Lapse
If there are no outstanding policy loans, we will guarantee the policy will
never lapse. The death benefit will be paid upon the death of the Insured
regardless of policy performance. A partial surrender will reduce the death
benefit guaranteed under this provision. If the policy has a loan, and the loan
amount exceeds the available Cash Value, less any Surrender Charges, the policy
would be subject to lapse.
Extended Maturity
You may request that the Maturity Date be extended. The request must be in
writing and received by Us at least 90 days, but no more than 180 days, prior to
the scheduled Maturity Date. After you extend the Maturity Date, we will
automatically extend your Maturity Date every year unless you direct us to do
otherwise. Any riders In Force on the scheduled Maturity Date will terminate on
that date and will not be extended. Interest on any outstanding policy loan will
continue to accrue during the period for which the Maturity Date is extended.
The Cash Value at the Maturity Date will be equal to the Death Benefit, less any
indebtedness. If You choose to extend the Maturity Date, the Cash Value will
continue to earn interest and no monthly deductions will be deducted from the
Cash Value.
Basis of Computations
Policy values and reserves are at least equal to those required by law. A
detailed statement of the method of computation of values and reserves has been
filed with the insurance supervisory official of the state in which this policy
is delivered.
SEPARATE ACCOUNT PROVISIONS
The Separate Account
The Separate Account is a separate investment account established and maintained
by Us for the investment of a portion of Our assets pursuant to Section 508A. 1
of the Iowa Insurance Code. We will use the assets of the Separate Account to
buy shares in the various Portfolios. Net premiums, or portions thereof
allocated to one or more Subaccounts of the Separate Account will become a part
of the Separate Account.
We are not, and do not claim to be, a trustee with respect to the Separate
Account, the assets of which are owned absolutely and exclusively by Us. The
assets in the Separate Account shall not be chargeable with liabilities arising
out of any other business of the Company, except to the extent that they exceed
the reserves and other liabilities of the Separate Account. The assets of the
Separate Account maintained under this policy and under all other policies of
this type will be kept separate from the assets held in our general account and
are not subject to the claims of the general creditors of the Company.
Income, gains and losses, whether or not realized, from assets in the Separate
Account are credited to, or charged against, the Separate Account without regard
to other income, gains or losses of the Company.
We will hold assets in the Separate Account with a value at least equal to the
total liability for the Separate Account under this and all other policies of
this type. To the extent those assets do not exceed this total, We will use them
to support only those policies and will not use those assets to support any
other business. We may use any excess over this amount at Our sole discretion.
For all purposes under this policy, we will determine the value of assets in the
Separate Account at the end of each Valuation Date. To determine the value of an
asset on a day that is not a Valuation Date, we will use the value of that asset
as of the end of the next Valuation Date.
V1081 14
Subaccounts
The Separate Account contains several Subaccounts, each of which invests solely
in shares of a corresponding Portfolio Income, gains and losses, whether or not
realized, from assets in the Subaccounts are credited to, or charged against,
the Subaccounts without regard to other income, gains or losses of the Company.
Any amount charged against the investment base for federal or state income taxes
will be deducted from that Subaccount.
Addition, Deletion or Substitution of Investments
We cannot and do not guarantee that any of the Subaccounts of the Separate
Account will always be available for investment. We reserve the right, subject
to compliance with applicable federal or state law, rules or regulations, and
further subject to the prior approval of any insurance supervisory official, to
make additions to, deletions from, or substitutions for, the Subaccounts, or the
portfolio shares held by a Subaccount of the Separate Account if such portfolio
shares are no longer available for investment, or if We determine that continued
investment in such portfolio would be inappropriate or inconsistent with the
purposes of the Separate Account. We will not substitute any shares attributable
to the Owner's interest in a Subaccount without advance written notice to the
Owner and prior approval of the Securities and Exchange Commission, to the
extent required by the Investment Company Act of 1940.
We reserve the right to establish additional Subaccounts, each of which would
invest solely in shares of other portfolios. If We decide to make those
Subaccounts available under this policy, We will send written notification to
the Owner. The Owner may instruct Us to allocate future net premiums, or
portions thereof, to those Subaccounts, or transfer all or a portion of each
Subaccount Value to those Subaccounts, subject to the terms and conditions
described under the Transfer Provisions and by the portfolio.
In the event of any addition, deletion or substitution of any Subaccount of the
Separate Account, We may, by appropriate endorsement, make such changes to the
policy as may be necessary to reflect such addition, deletion or substitution.
We reserve the right, if federal securities law changes and when permitted by
law, to:
1. Deregister the Separate Account under the Investment Company Act of 1940;
2. Manage the Separate Account under the direction of a committee at any time;
3. Restrict or eliminate any voting privileges of You or other persons who
have voting privileges as to the Separate Account; 4. Combine the Separate
Account or any Subaccount(s) with one or more other Separate Accounts or
Subaccounts;
5. Operate the Separate Account as a management investment company;
6. Establish additional Subaccounts to invest in either a new shares of the
Portfolio, or in shares of another diversified, open-end registered
investment company; and
7. Fund additional classes of variable life insurance contracts through the
Separate Account.
Change of Investment Objective
We reserve the right to change the investment objective of a Subaccount. If
required by law or regulation, an investment objective of the Separate Account,
or of a Portfolio designated for a Subaccount, will not be materially changed
unless a statement of the change is filed with and approved by the appropriate
insurance supervisory official of the state of Our domicile or deemed approved
in accordance with such law or regulation. If required, approval of or change of
any investment objective will be filed with the insurance supervisory official
of the state where this Policy is delivered.
VB1081 15
Subaccount Units
Net premiums, or portions thereof, and transfers allocated to a Subaccount are
used to purchase units in that Subaccount. The number of units to be credited to
each Subaccount will be determined by dividing the portion of each net premium,
or portion thereof or transfer allocated to the Subaccount by that Subaccounts
unit value for the Valuation Date on which the premium was received by Us at Our
Office or for the Valuation Date on which the transfer was made.
The unit value of each Subaccount was originally established at $10 per unit.
The unit value may increase or decrease from one Valuation Period to the next.
Unit values will also vary between Subaccounts. The unit value of any Subaccount
at the end of a Valuation Period is the result of:
1. The total value of the assets held in the Subaccount. This value is
determined by multiplying the number of shares of the designated Portfolio
owned by the Subaccount times the net asset value per share; minus
2. A charge equal to the daily net assets of the Sub-Account multiplied by the
daily equivalent of the Daily Charge is shown on the Policy Schedule page;
minus
3. The accrued amount of reserve for any taxes or other economic burden
resulting from the application of tax laws that are determined by Us to be
properly attributable to the Subaccount; and the result divided by
4. The number of outstanding units in the Subaccount.
TRANSFER PROVISIONS
Transfers
You may transfer a portion of the Fixed Account Value to one or more Subaccounts
of the Separate Account, or all or any portion of the value of one or more
Subaccounts to the Fixed Account or to any other Subaccount. The amount allowed
for transfer will be subject to the Transfer Limitations provision.
Transfer Limitations
On transfers from the Fixed Account to one or more Subaccounts, We reserve the
right to impose the following limitations:
1. If a transfer is made, twelve (12) months need to pass before the next
transfer is available.
2. The maximum amount that may be transferred is the greater of: (a) 25% of
the Fixed Account Value; or (b) $1,000.
3. If a transfer amount reduces the value of the Fixed Account to less than
$1,000, We will transfer the remaining value of the Fixed Account.
We reserve the right to impose a transfer charge of $10 for each transfer in
excess of twelve (12) made during a single policy year (including transfers
within Separate Account and transfers between Separate Account and Fixed
Account). If imposed, the transfer charge will be deducted from the amount
transferred.
Transfer Allocation
Transfers will generally take effect on the first Valuation Date on or following
the date the request for the transfer, in a form satisfactory Us, is received at
Our Office. The transfer request must specify: (a) the Account(s) from which the
transfer is to be made; (b) the amount of the transfer, subject to the maximum
transfer amount described in the Transfer Limitations provision; and (c) the
Account(s) to receive the transferred amount.
Transfers from the Fixed Account to one or more Subaccounts or transfers among
the Subaccounts, will result in the purchase and/or cancellation of Subaccount
Units having a total value equal to the dollar amount being transferred to or
from a particular Subaccount. The purchase and/or cancellation of such units
generally shall be made using the unit value of the applicable Subaccount on the
Valuation Date on which the transfer is effective.
T843 16
Dollar Cost Averaging
We will automatically transfer pre-determined amounts from the designated
Account to any other Subaccount in accordance with Your current allocation
instructions. The transfers will be made on a monthly basis after We receive
proper written election of this option on a form provided by Us;
The first transfer must occur within thirty (30) after the Policy Date. You can
select the date to begin the transfer. However, if You do not select a date, the
first transfer will occur on the Monthly Date following the Policy Date. Each
transfer which occurs under the Dollar Cost Averaging option will be without
charge and will not be counted toward the number of transfers allowed without
charge under the Policy.
Dollar Cost Averaging will terminate if We receive:
1. Written instruction from You for cancellation;
2. Election to participate in any Asset Rebalancing Program; or
3. Notification of election to participate in any asset allocation service
provided by a third party.
We reserve the right to discontinue, modify or suspend Dollar Cost Averaging at
any time following prior written notification to all policyowners.
Asset Rebalancing
You may instruct Us to automatically transfer Cash Values among the Subaccounts
for purposes of maintaining a particular percentage allocation among the
Subaccounts.
The Cash Value allocated to each Subaccount will grow or decline in value at
different rates. The Asset Rebalancing Program automatically reallocates the
Cash Value in the Subaccounts at the end of each period to pro-rata match Your
current Subaccount allocation schedule.
1. We must receive written election of this option on a form provided by Us;
2. Asset Rebalancing is only available prior to the Maturity Date;
3. Cash Values in the Fixed Account are not eligible for Asset Rebalancing.
You may elect for rebalancing to occur on each quarter, semi-annual or annual
Anniversary. You may select a date to begin Asset Rebalancing. However, if You
do not select a date, the Asset Rebalancing will occur on the Monthiversary
following the Policy Date.
Asset Rebalancing is not available and will terminate if:
1. Dollar Cost Averaging is elected;
2. You participate in any asset allocation service provided by a third party;
3. We receive a request to discontinue participation; or
4. A transfer is made to, or from, any Subaccount other than under a scheduled
rebalancing.
Each reallocation which occurs under Asset Rebalancing will not be counted
towards the number of transfers allowed without charge.
We reserve the right to limit re-entry into the Asset Rebalancing Program
following termination to once per Policy Year.
We reserve the right to discontinue, modify or suspend the Asset Rebalancing
Program at any time, following proper written notification to all policyholders.
TB843 17
PAYMENT OF PROCEEDS PROVISIONS
Election by Owner
During the lifetime of the Insured, You may elect to have the proceeds paid
either in one sum or under the settlement options described in this section.
Payment of Proceeds
All proceeds to be paid upon Termination will be paid in one sum unless an
optional method of settlement is elected. Instead of a one sum payment, the
payee may elect to receive the proceeds as described under the Optional Methods
of Settlement provision.
Optional Methods of Settlement
At the time that any proceeds are payable in single sum, if requested in
writing, We will inform the payee of all other forms of settlement including
annuities, with or without life contingencies. Interest will be at an annual
rate that We declare, but not less than the rate required by law.
Payments under a combination of options, or payment to joint or successive
payees, or payment to a Beneficiary that is not a natural person may be elected
only with Our consent. Any election must be made in a Written Notice to Us. We
may require the policy for endorsement.
Fixed Payment Option
The fixed payment option provides for payment that will remain constant in
accordance with the terms of the settlement option chosen. Such payments will
not be affected by the investment performance of any Subaccount of the Separate
Account. The settlement options available under the fixed payment option are
described below.
Option 1 - Interest Payments - (Payment of interest on the proceeds at such
times and for a period that is agreeable to You and Us.) Withdrawal of proceeds
may be made in amounts of at least $100. At the end of the period, any remaining
proceeds will be paid in either a single sum or under any other method we
approve.
Option 2 - Payments for a Specified Period - (Payments for a specified number of
years.) The amount of each monthly payment for each $1,000 of proceeds applied
under this option is shown in Option 2 Table. The monthly payments for any
period not shown will be furnished upon request.
Option 3 - Life Income - (Monthly payments for the life of the person who is to
receive the income.) We will require satisfactory proof of the person's age and
sex, (unless required by law to use unisex rates). Payments can be guaranteed
for 10 or 20 years or as "Guaranteed Return of Policy Proceeds". The amount of
each monthly payment for each $1,000 of proceeds applied under this option is
shown in Option 3 Table. The monthly payments for any ages not shown will be
furnished upon request
Option 4 - Payments of a Specified Amount - (Monthly payments of a specified
amount until the proceeds and interest are fully paid.)
Option 5 - Joint and Survivor Life Income - (Monthly payments during the joint
lifetime of two persons and continued during the lifetime of the survivor.) We
will pay the amount retained, with interest, in equal monthly payments. See
Option 5 Table for example. We will furnish the income for other combinations of
age or sex, (unless required by law to use unisex rates), if requested.
Rate of Interest
Settlement options 1 through 5 under the Fixed Payment Option are based on a
guaranteed interest rate of 3.0% using the "1983 Table a" (male, female, and
unisex if required by law) Mortality Table improved to the year 2000 with
projection scale G. The amounts shown in the tables under the Guaranteed Fixed
Payment Options are the guaranteed amounts for each $1,000 of policy proceeds.
Higher current amounts may be available at the time of payment.
Variable Payment Option
The variable payment option provides for payments that will vary based on the
investment performance of the Subaccount(s) from which such payments are made.
Therefore, the dollar amount of each payment payable under the variable payment
option may increase, decrease or remain the same. The settlement options
available under the variable payment option are described below.
S980 18
Option 3V - Life Income An election may be made between:
1. "No Period Certain" - Payments will be made during the lifetime of the
payee
2. "10 Years Certain" - Payments will be made for the longer of the payee's
lifetime or 10 years.
The amount of each monthly payment for each $1,000 or proceeds applied under
this option is shown in Option 3V Table.
Option 5V - Joint and Survivor Life Income - Payments are made as long as either
the payee or the joint payee is living. See Option 5V Table for example. We will
furnish the income for other combinations of age or sex, (unless required by law
to use unisex rates), if requested.
The policy proceeds applied to a settlement option under the variable payment
option will be used to purchase units in the chosen Subaccounts. The dollar
value of units in the chosen Subaccounts will increase or decrease reflecting
the investment experience of that Subaccount. The unit value in a particular
Subaccount on any Valuation Day is equal to (a) multiplied by (b) multiplied by
(c), where:
(a) is the unit value for that Subaccount on the immediately preceding
Valuation Day;
(b) is the net investment factor for that Subaccount for the Valuation Period;
and
(c) is the Assumed Investment Return adjustment factor for the Valuation
Period.
The Assumed Investment Return adjustment factor for the valuation period is the
product of discount factors of .99988634 per day to recognize the 5.0% effective
annual Assumed Investment Return.
The net investment factor used to calculate the unit value in each Subaccount
for the Valuation Period is determined by dividing (a) by (b) and subtracting
(c) from the result, where:
(a) is the net result of:
(1) the net asset value of a Portfolio's shares held in that Subaccount
determined as of the end of the current Valuation Period; plus
(2) the per share amount of any dividend or capital gain distributions
made by the Portfolio for shares held in that Subaccount if the ex-
dividend date occurs during the Valuation Period; plus or minus
(3) a per share credit or charge for any taxes reserved for, which We
determine to have resulted from the investment operations of the
Subaccount
(b) is the net asset value of a portfolio share held in that Subaccount
determined as of the end of immediately preceding Valuation Period.
(c) is a factor representing the Daily Charge. This factor is less than or
equal to, on an annual basis, the percentage of Daily Charge shown on the
Policy Schedule page of the daily net asset value of a Portfolio share held
in the Separate Account for that Subaccount
Determination of the First Variable Payment
The amount of the first variable payment is determined by multiplying each
$1,000 of policy proceeds allocated to a variable payment option by the amounts
shown in the tables under the Variable Payment Options. The tables are based on
a 5% effective annual Assumed Investment Return and the "1983 Table a" (male and
female) mortality table improved to the year 2000 with projection scale G. The
"1983 Table a" mortality rates are adjusted based on improvements in mortality
since 1983 to more appropriately reflect increased longevity. This is
accomplished using a set of improvement factors referred to as projection scale
G.)
The amount of the first payment depends upon the adjusted age of the payee. The
adjusted age is the payee's actual age on the payee's nearest birthday, at the
Payment Commencement Date, adjusted as follows:
Payment
Commencement Date Adjusted Age
- ----------------- ------------
Before 2001 Actual Age
2001 - 2010 Actual Age minus 1
2011 - 2020 Actual Age minus 2
2021 - 2030 Actual Age minus 3
2031 - 2040 Actual Age minus 4
After 2040 as determined by us.
SB980 19
Determination of Subsequent Variable Payments
The amount of each variable payment after the first will increase or decrease
according to the unit value which reflects the investment experience of the
selected Subaccounts. Each variable payment after the first will be equal to the
number of units in the selected Subaccounts multiplied by the unit value on the
date the payment is made. The number of units in each selected Subaccount is
determined by dividing the first variable payment allocated to the Subaccount by
the unit value of that Subaccount on the Payment Commencement Date.
Other Settlement Options
Proceeds can be paid under any other settlement option not described in this
section, subject to Our agreement.
Conditions
1. Proceeds of less than $1,000 may not be applied under any settlement
option. We may change the payment frequency if payments under an option
become less than $20.
2. A corporation may receive payments under a life income option only if the
payments are based on the life of the Insured, or a surviving spouse or
dependent of the Insured.
If a settlement option is requested, We will prepare an agreement to be signed
which will state the terms and conditions under which the payments will be made.
This agreement will include a statement regarding the withdrawal value, if any,
and to whom any remaining proceeds will be paid following the death of the payee
receiving the payments.
A Beneficiary may select a settlement option only after the Insured's death.
However, You may provide that the Beneficiary will not be permitted to change
the settlement option You have selected.
Proceeds Exempt From Claim of Creditors
To the extent permitted by law, no payment of proceeds or interest We make will
be subject to the claims of any creditors.
Also, if You provide that the settlement option selected cannot be changed after
the Insured's death, the payments will not be subject to the debts or contracts
of the payee receiving the payments. If garnishment or any other attachment of
the payments is attempted, We will make those payments to a trustee We name. The
trustee will apply those payments for the maintenance and support of the payee
You named to receive the payments.
L920 20
Guaranteed Fixed Payment Options
Option 2 Table
- --------------------------------------------------
PAYMENTS FOR A SPECIFIED PERIOD
- --------------------------------------------------
Number of Amount of Monthly
Years Payable Payments
- --------------------------------------------------
5 $17.91
10 9.61
15 6.87
20 5.51
25 4.71
30 4.18
- --------------------------------------------------
Option 3 Table
- --------------------------------------------------
LIFE INCOME
- --------------------------------------------------
MONTHLY INCOME PAYMENTS
- --------------------------------------------------
Guaranteed For Life Guaranteed For
10 Years
- --------------------------------------------------
M Age F M Age F
- --------------------------------------------------
$3.87 50 $3.55 $3.84 50 $2.54
4.23 55 3.83 4.19 55 3.82
4.72 60 4.21 4.63 60 4.18
5.40 65 4.73 5.22 65 4.66
5.34 70 5.45 5.95 70 5.30
- --------------------------------------------------
Guaranteed Return of Guaranteed For
Policy Proceeds 20 Years
- --------------------------------------------------
M Age F M Age F
- --------------------------------------------------
$3.73 50 $3.49 $3.76 50 $3.51
4.03 55 3.73 4.05 55 3.75
4.40 60 4.04 4.37 60 4.06
4.88 65 4.45 4.72 65 4.41
5.51 70 4.99 5.04 70 4.80
- --------------------------------------------------
Option 5 Table
- --------------------------------------------------
JOINT AND SURVIVOR LIFE INCOME
- --------------------------------------------------
MONTHLY PAYMENT FOR EACH
$1,000 OF AMOUNT RETAINED
- --------------------------------------------------
Age Age of Other Payee
Of (Female)*
----------------------------------------
One 15 10 5
Payee Years Years Years
(Male) Less Less Less Same
than than than As
Male Male Male Male
Payee's Payee's Payee's Payee's
- --------------------------------------------------
50 $2.99 $3.09 $3.20 $3.32
55 3.11 3.24 3.38 3.53
60 3.27 3.43 3.62 3.82
65 3.47 3.69 3.94 4.22
70 3.74 4.04 4.38 4.77
- --------------------------------------------------
* Age nearest birthday
- --------------------------------------------------
Variable Payment Options
Based on Assumed Investment Return
Option 3V Table
- --------------------------------------------------
LIFE INCOME
- --------------------------------------------------
MONTHLY INCOME PAYMENTS
- --------------------------------------------------
Guaranteed For Life Guaranteed For
10 Years
- --------------------------------------------------
M Age F M Age F
- --------------------------------------------------
$5.11 50 $4.81 $5.07 50 $4.79
5.46 55 5.06 5.39 55 5.04
5.93 60 5.42 5.81 60 5.37
6.60 65 5.91 6.37 65 5.82
7.55 70 6.63 7.07 70 6.43
- --------------------------------------------------
Option 5V Table
- --------------------------------------------------
JOINT AND SURVIVOR LIFE INCOME
- --------------------------------------------------
MONTHLY PAYMENT FOR EACH
$1,000 OF AMOUNT RETAINED
- --------------------------------------------------
Age Age of Other Payee
Of (Female)*
----------------------------------------
One 15 10 5
Payee Years Years Years
(Male) Less Less Less Same
than than than As
Male Male Male Male
Payee's Payee's Payee's Payee's
- --------------------------------------------------
50 $4.32 $4.39 $4.48 $4.57
55 4.42 4.51 4.62 4.75
60 4.54 4.67 4.83 5.01
65 4.71 4.90 5.12 5.37
70 4.95 5.21 5.52 5.89
- --------------------------------------------------
* Age nearest birthday
- --------------------------------------------------
21
PFL PFL Life Insurance Company
LIFE A Stock Company
Home Office located at 4333 Edgewood Road N.E., Cedar Rapids,
Iowa 52499
(Heearafter called the Company,we, our or us) (319) 398-8511
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
DEATH BENEFIT PROCEEDS PAYABLE AT DEATH OF INSURED PRIOR TO MATURITY DATE
CASH SURRENDER VALUE PAYABLE AT MATURITY DATE
NON-PARTICIPATING - NO DIVIDENDS
SOME BENEFITS REFLECT INVESTMENT RESULTS