Exhibit 1.A.(5)(a)
UNITED INVESTORS LIFE INSURANCE COMPANY
A Missouri Stock Company
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FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Adjustable Death Benefit
Death Benefit payable at Insured's death prior to the Maturity Date.
Premium payments are flexible, subject to the limits described herein.
Policy Value, less Loan Balance, payable on the Maturity Date.
This Policy is Nonparticipating. Dividends are not payable.
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WE WILL PAY the proceeds of this Policy to:
1. you if the Insured is living on the Maturity Date; or
2. the Beneficiary when we receive due proof satisfactory to us that the Insured
died while this Policy was in force; and
WE WILL PROVIDE the other rights and benefits of this Policy.
Payment of any benefits and all other rights are subject to the terms of this
Policy. This Policy is issued in consideration of the application and payment of
the Initial Premium.
"FREE LOOK" PERIOD - You may cancel this Policy by returning it by the later of:
(a) the 20th day after you receive it; or (b) the 45th day after the application
is signed. You may return it to us or to the agent who sold it to you. When we
receive the Policy, we will cancel it and refund any premiums that were paid. It
will then be void from the beginning.
DEATH BENEFIT - THE AMOUNT AND THE DURATION OF THE DEATH BENEFIT MAY VARY AS
DESCRIBED IN SECTIONS 6 AND 7 OF THE POLICY. ADDITIONAL PREMIUM PAYMENTS MAY BE
REQUIRED TO KEEP THIS POLICY IN FORCE.
POLICY VALUE - The Policy Value of this Policy prior to maturity is equal to the
Variable Account Value plus the Fixed Account Value. THE VARIABLE ACCOUNT VALUE
OF THIS POLICY MAY INCREASE OR DECREASE DAILY DEPENDING ON THE INVESTMENT
EXPERIENCE OF THE SUBACCOUNTS SELECTED AS DESCRIBED IN SECTIONS 12 AND 13 OF THE
POLICY. THE VARIABLE ACCOUNT VALUE IS NOT GUARANTEED AS TO FIXED DOLLAR AMOUNTS.
Signed for United Investors Life Insurance Company at Birmingham, Alabama.
Secretary President
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THIS POLICY IS A LEGAL CONTRACT
BETWEEN YOU AND UNITED INVESTORS LIFE INSURANCE COMPANY
READ YOUR POLICY CAREFULLY
INSURED: JOHN DOE POLICY NUMBER: U000001
POLICY DATE: JAN 01, 2000 ISSUE AGE AND SEX: 35 MALE
MATURITY DATE: JAN 01, 2065 INITIAL BASE FACE
AMOUNT: $100,000
GUIDE TO POLICY PROVISIONS
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PROVISIONS SECTION
Additional Premiums............................................... 7
Age and Sex....................................................... 2
Amount of Insurance............................................... 2
Amount of Proceeds................................................ 5
Assignment........................................................ 3
Automatic Continuation of Benefits................................ 19
Beneficiary....................................................... 3
Cash Surrender Value.............................................. 15
Change of Beneficiary............................................. 3
Charges and Deductions............................................ 8
Death Benefit..................................................... 6
Definitions....................................................... 1
Delay or Suspension of Payments................................... 18
Errors in Age or Sex.............................................. 4
Fixed Account..................................................... 10
Fixed Account Value............................................... 11
Incontestability.................................................. 4
Initial Premium................................................... 2
Loans............................................................. 17
Payment of Proceeds............................................... 21
Policy Date....................................................... 2
Policy Exchange Option............................................ 20
Policy Value...................................................... 9
Premium Provisions................................................ 7
Subaccounts....................................................... 13
Suicide........................................................... 4
Transfers......................................................... 14
Variable Account Value............................................ 12
Withdrawals....................................................... 16
1. DEFINITIONS
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Adjustable Term Insurance Rider - This rider is available to add death benefit
coverage to your Policy. The initial amount of this rider, if any, is shown
under Policy Data. The amount of the rider will vary as necessary to keep the
sum of the rider amount and the Base Death Benefit equal to the Target Face
Amount, when the Base Death Benefit varies due to Internal Revenue Code
requirements.
Age - The Insured's age on the birthday nearest the Policy Date, increased by
the number of Policy Years elapsed since the Policy Date.
Base Death Benefit - The Base Face Amount shown in the Policy Data, adjusted for
the Death Benefit Option chosen, Internal Revenue Code requirements and any
subsequent increases or decreases we approve.
Beneficiary - The person to whom the Death Benefit is paid.
Cash Surrender Value - The Policy Value less any Surrender Charges.
Death Benefit - The amount to be paid to the Beneficiary upon death of the
Insured. The Death Benefit equals the Base Death Benefit plus any additional
life insurance proceeds provided by the Adjustable Term Insurance Rider and any
other riders payable upon the death of the Insured.
Fixed Account - Part of the General Account of United Investors Life Insurance
Company to which you may allocate all or a portion of your Premiums or Policy
Values, and which provides guarantees of principal and interest.
General Account - The General Account consists of all assets of United Investors
Life Insurance Company other than those in any separate account.
Gross Withdrawal - A Withdrawal plus any applicable Withdrawal Transaction
Charge and any applicable Surrender Charge.
In Force - The Insured's life remains insured under the terms of this Policy.
Insured - The person whose life is insured by this Policy.
Loan Balance - All existing loans on this Policy plus Policy loan interest which
has been either accrued or been added to the Policy loan.
Maturity Date - The date on which proceeds, as defined herein, are payable if
the Insured is living. The Maturity Date is shown under Policy Data. This date
is the Policy Anniversary nearest the Insured's 100/th/ birthday.
Monthly Processing Date - The same day in each month as the Policy Date. If the
Monthly Processing Date falls on a date other than a Valuation Date, the Monthly
Processing Date will occur on the next Valuation Date.
Net Premium - The Premium received less the sales and tax charges shown in the
Policy Data.
Net Amount at Risk - The excess of the Death Benefit over the Policy Value on
the Monthly Processing Date before the cost of insurance is deducted.
Net Cash Surrender Value - The Cash Surrender Value minus any Loan Balance.
No-Lapse Guarantee - Our guarantee to keep the Policy in force during the first
three Policy Years, regardless of the sufficiency of the Net Cash Surrender
Value, as long as the total premiums paid, less Gross Withdrawals and any Loan
Balance, is at least equal to the cumulative amount of No-Lapse Monthly Premiums
for the number of Policy Months the Policy has been in force.
No-Lapse Monthly Premium - The minimum premium shown under Policy Data, which is
required to maintain the No-Lapse Guarantee. It is calculated at issue based on
the Age, sex and risk class of the Insured, the initial Base Face Amount, and
any additional benefits provided by riders. The No-Lapse Monthly Premium will
change if the Base Face Amount or riders benefits change.
Policy Anniversary - The same day and month as the Policy Date each year the
Policy remains in force. If the Policy Anniversary falls on a date other than a
Valuation Date, the Policy Anniversary will occur on the next Valuation Date.
Policy Date - The date from which Policy Anniversaries and Policy Years are
determined. Your Policy Date is shown under Policy Data.
Policy Month - The first Policy Month starts on the Policy Date. Subsequent
Policy Months start on the Monthly Processing Date.
Policy Value -The Policy Value is equal to the Fixed Account Value plus the
Variable Account Value.
Portfolio - A division of an underlying mutual fund in which assets of a
corresponding Subaccount are invested.
Subaccounts - The Subaccounts named under Policy Data. Each is a subdivision of
the Variable Account, the assets of which are invested in a corresponding
Portfolio.
Target Premium - The premium amount we use to calculate the sales load charge
and the sales surrender charge. A Target Premium is determined for the initial
Base Face Amount on the Policy Date, and an additional Target Premium is
determined for each increase in Base Face Amount based on the Insured's Age, sex
and risk class. The Target Premium is not based on the amount you plan to pay.
It may be more or less than the No-Lapse Monthly Premium depending on any
additional benefits that have been added to the Policy.
Target Face Amount - The sum of the Base Face Amount and the initial amount of
the Adjustable Term Insurance Rider, which are shown under Policy Data. The
Target Face Amount will change when we approve a request for any change to the
Base Face Amount or the Adjustable Term Insurance Rider amount.
Valuation Date - Each day that the New York Stock Exchange is open for trading,
except for local or regional holidays declared by United Investors Life
Insurance Company.
Valuation Period - The interval of time between a Valuation Date and the next
Valuation Date. It is measured from the closing of the New York Stock Exchange.
Variable Account - A separate account maintained by us. The Variable Account
available as of the Policy Date is shown in the Policy Data.
We, our, us, United Investors and the Company - United Investors Life Insurance
Company.
Written Request - A request in writing in a form satisfactory to us signed by
you and received at our Customer Service Center.
You, your - The Owner of this Policy. The Owner may be someone other than the
Insured. The Owner is shown in the application unless the Owner has been changed
as provided in this Policy.
2. POLICY DATA
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POLICY NUMBER: V000010001 POLICY DATE: JAN 01, 2000
INSURED: JOHN DOE ISSUE AGE AND SEX: 35 MALE
OWNER: JOHN DOE RISK CLASS: STD. NONTOBACCO
MATURITY DATE: JAN 01, 2065 RISK FACTOR: 1.00
Due to the variable nature of this Flexible Premium Variable Life Policy, it is
possible that this Policy will terminate before the Maturity Date (See
Termination and Grace Period in Section 7).
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INITIAL PREMIUM: $ 100.00
NO-LAPSE MONTHLY PREMIUM: $ 50.00
TARGET PREMIUM: $ 1,200.00
PLANNED PERIODIC PREMIUM: $ 100.00 MODE: MONTHLY BANK DRAFT
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INITIAL BASE FACE AMOUNT: $ 100,000
INITIAL ADJUSTABLE TERM
INSURANCE RIDER AMOUNT: $ 50,000
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TARGET FACE AMOUNT: $ 150,000
MINIMUM BASE FACE AMOUNT: $ 50,000
MINIMUM FACE AMOUNT CHANGE: $ 10,000
DEATH BENEFIT OPTION: A (LEVEL FACE AMOUNT)
[B (FACE AMOUNT PLUS POLICY VALUE)]
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POLICY LOANS
MAXIMUM LOAN AMOUNT: 90% OF CASH SURRENDER VALUE LESS CURRENT
LOAN BALANCE
LOAN INTEREST RATE CHARGED: 4.75%
MINIMUM INTEREST RATE CREDITED
ON LOANED AMOUNTS: 4.00%
CURRENT ADDITIONAL INTEREST RATE
CREDITED ON PREFERRED LOAN AMOUNTS: 0.75%
2. POLICY DATA (CONTINUED)
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VARIABLE ACCOUNT: TITANIUM UNIVERSAL LIFE VARIABLE ACCOUNT
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SUBACCOUNTS
EACH MUTUAL FUND PORTFOLIO REPRESENTS A SEPARATE SUBACCOUNT OF THE VARIABLE
ACCOUNT. ASSETS OF EACH SUBACCOUNT ARE INVESTED IN A CORRESPONDING MUTUAL FUND
PORTFOLIO.
INITIAL
PREMIUM
PORTFOLIO ALLOCATION
Aim VI Capital Appreciation 0%
Aim VI Growth 10%
Aim VI Growth and Income 0%
Aim VI International Equity 0%
Aim VI Value 0%
Alger American Growth 0%
Alger American Income and Growth 0%
Alger American Leveraged All Cap 0%
Alger American Mid-Cap Growth 0%
Alger American Small Capitalization 10%
BT Funds Trust EAFE Equity 10%
BT Funds Trust Small Cap 0%
Fidelity VIP II Balanced 0%
Fidelity VIP II Contrafund 0%
Fidelity VIP Equity Income 0%
Fidelity VIP II Fund 10%
Fidelity VIP Growth 0%
Fidelity VIP Growth and Income 0%
Fidelity VIP Growth Opportunities 0%
Fidelity VIP High Income 0%
Fidelity VIP II Index 500 0%
Fidelity VIP Money Market 10%
Fidelity VIP Overseas 0%
Invesco VIF Equity Income 0%
Invesco VIF Technology Fund 10%
Invesco VIF Utilities 0%
Strong VIF Discovery Fund II 10%
Strong VIF Mid Cap Growth 0%
Strong VIF Opportunity Fund II 0%
FIXED ACCOUNT 30%
FIXED ACCOUNT GUARANTEED INTEREST RATE: 3.50% for all Policy Years
2. POLICY DATA (CONTINUED)
EXPENSE CHARGES
PERCENTAGE OF PREMIUM EXPENSE CHARGES
PREMIUM TAX 2.5% of each Premium
FEDERAL TAX ON DEFERRED ACQUISITION COSTS 1.5% of each Premium
GUARANTEED MAXIMUM SALES LOAD 4.0% of each Premium, until
Premiums paid equal 10 Target
Premiums
MONTHLY ADMINISTRATIVE EXPENSE CHARGES
MAXIMUM:
ISSUE EXPENSE CHARGE (1/ST/ POLICY YEAR ONLY) $20 per month for 1/st/ 12 months
MONTHLY POLICY CHARGE (ALL POLICY YEARS) $10 per month in every month
CURRENT:
ISSUE EXPENSE CHARGE (1/ST/ POLICY YEAR ONLY) $20 per month for 1/st/ 12 months
MONTHLY POLICY CHARGE(ALL POLICY YEARS) $ 6 per month in every month
CHARGE TO VARIABLE ACCOUNTS
MORTALITY AND EXPENSE RISK CHARGE (charged daily on the net assets of each
subaccount)
POLICY YEARS 1-10 .002055% daily (equivalent to .75% per year)
POLICY YEARS 11-20 .001370% daily (equivalent to .50% per year)
POLICY YEARS 21 & LATER .000685% daily (equivalent to .25% per year)
GUARANTEED MAXIMUM POLICYHOLDER TRANSACTION CHARGES
WITHDRAWALS Lesser of $25 or 2% of Withdrawal
Amount for each withdrawal after
1st in a Policy Year
TRANSFERS BETWEEN SUBACCOUNTS
AND/OR FIXED ACCOUNT $25 each after 12/th/ in a Policy Year
POLICY ILLUSTRATIONS $25 each after 1/st/ in a Policy Year
2. POLICY DATA (CONTINUED)
EXPENSE CHARGES (CONTINUED)
GUARANTEED MAXIMUM SURRENDER CHARGES
ADMINISTRATIVE SURRENDER CHARGE PER $1,000 OF BASE FACE AMOUNT
POLICY YEAR AMOUNT OF CHARGE
1-9 $4.00
10 $3.33
11 $2.67
12 $2.00
13 $1.33
14 $0.67
15 and later $0.00
PERCENTAGE OF PREMIUM SALES SURRENDER CHARGES
POLICY YEAR AMOUNT OF CHARGE
1-2 26% of Premium Paid up to one Target Premium, plus
6% of Premium Paid above one Target up to two Target
Premiums, plus
5% of Premium Paid above two Target Premiums
3-9 46% of Premium Paid up to one Target Premium, plus
44% of Premium Paid above one Target up to two Target
Premiums
The Sales Surrender Charge at the end of Policy Year 9 (SC9) will be
reduced to 0 by applying the following percentages in Policy Years 10 to
15:
10 SC9 x 83 1/3%
11 SC9 x 66 2/3%
12 SC9 x 50%
13 SC9 x 33 1/3%
14 SC9 x 16 2/3%
15 and later 0
Increases in the Base Face Amount will increase the Maximum Administrative and
Sales Surrender Charges during the fourteen years following the effective date
of the increase. We will produce additional data pages showing the Target
Premium for the increase. Premiums paid after the effective date of the
increase will be allocated in proportion to the Target Premium for each
portion of the Base Face Amount.
2. POLICY DATA (CONTINUED)
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1,000
MALE FEMALE
ATTAINED PREFERRED & MALE PREFERRED & FEMALE
AGE NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO
0 0.34900 0.24115
1 0.08921 0.07253
2 0.08254 0.06753
3 0.08170 0.06586
4 0.07920 0.06419
5 0.07503 0.06336
6 0.07169 0.06085
7 0.06669 0.06002
8 0.06336 0.05835
9 0.06169 0.05752
10 0.06085 0.05668
11 0.06419 0.05752
12 0.07086 0.06002
13 0.08254 0.06252
14 0.09588 0.06669
15 0.10756 0.13760 0.07003 0.07837
16 0.11924 0.15597 0.07336 0.08254
17 0.12842 0.17099 0.07670 0.08671
18 0.13343 0.18018 0.07920 0.09088
19 0.13844 0.18853 0.08170 0.09422
20 0.14011 0.19270 0.08421 0.09672
21 0.13927 0.19437 0.08504 0.09839
22 0.13677 0.19187 0.08671 0.10089
23 0.13427 0.18853 0.08754 0.10256
24 0.13093 0.18435 0.09004 0.10589
25 0.12675 0.17851 0.09088 0.10756
26 0.12342 0.17350 0.09338 0.11174
27 0.12175 0.17183 0.09505 0.11507
28 0.12008 0.17016 0.09755 0.11841
29 0.12008 0.17183 0.10006 0.12342
30 0.12008 0.17517 0.10339 0.12926
31 0.12258 0.18101 0.10589 0.13427
32 0.12509 0.18686 0.10923 0.14011
33 0.12926 0.19604 0.11257 0.14595
34 0.13427 0.20690 0.11841 0.15513
35 0.14094 0.21943 0.12258 0.16181
36 0.14762 0.23447 0.13309 0.17433
37 0.15680 0.25369 0.13927 0.19020
38 0.16682 0.27542 0.14929 0.20774
39 0.17851 0.30050 0.16098 0.22779
40 0.19103 0.32893 0.17350 0.25034
41 0.20607 0.36239 0.18853 0.27792
42 0.22110 0.39670 0.20356 0.30384
43 0.23865 0.43604 0.21860 0.33060
44 0.25619 0.47708 0.23363 0.35737
45 0.27709 0.52401 0.24951 0.38498
46 0.29966 0.57096 0.26622 0.41344
47 0.32391 0.62212 0.28461 0.44358
48 0.34984 0.67584 0.30468 0.47457
49 0.37912 0.73631 0.32558 0.50808
50 0.41009 0.80018 0.34984 0.54664
WE GUARANTEE THAT THE COST OF INSURANCE RATES WE CHARGE WILL NOT EXCEED THE
ABOVE RATES, EXCEPT THAT FOR A RATED RISK CLASS, THE RATES WILL NOT EXCEED THE
RISK FACTOR TIMES THE ABOVE RATES AND/OR A FLAT ADDITION TO THE ABOVE RATES. THE
MONTHLY COST OF INSURANCE CHARGE AND COST OF INSURANCE RATES ARE DESCRIBED IN
SECTION 8 OF THE POLICY.
2. POLICY DATA (CONTINUED)
GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES PER $1,000 (CONTINUED)
MALE FEMALE
ATTAINED PREFERRED & MALE PREFERRED & FEMALE
AGE NON-TOBACCO TOBACCO NON-TOBACCO TOBACCO
51 0.44693 0.87419 0.37578 0.58521
52 0.48965 0.95668 0.40507 0.62884
53 0.53742 1.05105 0.43939 0.68004
54 0.59276 1.15734 0.47457 0.73211
55 0.65401 1.27051 0.51227 0.78673
56 0.72203 1.39312 0.55083 0.84138
57 0.79429 1.52015 0.58941 0.89354
58 0.87251 1.65583 0.62632 0.94237
59 0.96090 1.79682 0.66577 0.99290
60 1.05949 1.95335 0.71195 1.04853
61 1.16916 2.12977 0.76656 1.12021
62 1.29417 2.32876 0.83550 1.20715
63 1.43714 2.55476 0.92216 1.32461
64 1.59899 2.80452 1.02492 1.45577
65 1.77812 3.07567 1.13624 1.60323
66 1.97123 3.35886 1.25614 1.74923
67 2.18097 3.65683 1.37789 1.90143
68 2.40660 3.96448 1.50066 2.03939
69 2.65338 4.29327 1.63207 2.19463
70 2.93268 4.65747 1.78407 2.35955
71 3.30181 5.06279 1.96612 2.57362
72 3.61779 5.52571 2.19207 2.83977
73 4.04199 6.04980 2.46823 3.16536
74 4.52073 6.62444 2.79421 3.54671
75 5.03724 7.26414 3.16450 3.97231
76 5.59039 7.92842 3.57271 4.43318
77 6.17549 8.60587 4.01324 4.91927
78 6.78686 9.28569 4.48657 5.42834
79 7.44038 9.98835 5.00641 5.97677
80 8.16249 10.74534 5.59571 6.58859
81 8.97320 11.57692 6.27546 7.28491
82 9.89814 12.50906 7.06752 8.08683
83 10.95204 13.55162 7.98847 9.00541
84 12.11846 14.66820 9.02014 10.09637
85 13.37460 15.82369 10.16441 11.19977
86 14.69860 16.98122 11.40375 12.46983
87 16.08129 18.12337 12.74961 13.71056
88 17.49682 19.38671 14.19103 15.13413
89 18.96601 20.65144 15.75519 16.50860
90 20.51212 21.93652 17.44624 18.11827
91 22.16549 23.26852 19.30510 19.86655
92 23.98724 24.70635 21.39679 21.81429
93 26.06643 26.58833 23.84043 24.07436
94 28.78427 29.07200 26.92636 26.92636
95 32.81758 32.81758 31.31011 31.31011
96 39.64294 39.64294 38.50479 38.50479
97 53.06605 53.06605 52.27571 52.27571
98 83.33333 83.33333 83.33333 83.33333
99 83.33333 83.33333 83.33333 83.33333
WE GUARANTEE THAT THE COST OF INSURANCE RATES WE CHARGE WILL NOT EXCEED THE
ABOVE RATES, EXCEPT THAT FOR A RATED RISK CLASS, THE RATES WILL NOT EXCEED THE
RISK FACTOR TIMES THE ABOVE RATES AND/OR A FLAT ADDITION TO THE ABOVE RATES. THE
MONTHLY COST OF INSURANCE CHARGE AND COST OF INSURANCE RATES ARE DESCRIBED IN
SECTION 8 OF THE POLICY.
3. OWNER AND BENEFICIARY
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OWNER - The Owner as of the Policy Date is shown in the Policy Data. The Owner
may receive all benefits and exercise all rights granted by this Policy during
the Insured's lifetime. If there is more than one Owner at a given time, all
must exercise the rights of ownership by joint action.
BENEFICIARY - The Beneficiary of this Policy is as stated in the application,
unless subsequently changed by the Owner. Unless otherwise provided, the
interest of any Beneficiary who dies before the Insured will be paid in equal
shares to any surviving Beneficiaries. If no Beneficiary is living at the death
of the Insured, the proceeds will be paid to you, if you are living, or to your
estate.
CHANGE IN POLICY OWNER AND BENEFICIARY - Unless you provide otherwise in writing
to us, you may change the Owner or Beneficiary during the lifetime of the
Insured. Changes must be made by Written Request filed with us. The change will
take effect on the date the request was signed, but it will not apply to
payments made by us before we accept the request in writing. A change of
ownership may result in adverse tax consequences. You should consult you tax
advisor prior to making any change.
ASSIGNMENT - You may assign this Policy. However, no assignment will bind us
until it is filed in writing at our Administrative Office in a form acceptable
to us. When it is filed, your rights and the rights of any Beneficiary will be
subject to it. We will not be responsible for the validity of any assignment.
Assignment of this policy may result in adverse tax consequences. You should
consult your tax advisor prior to making any assignment.
4. GENERAL PROVISIONS
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THE CONTRACT - This Policy, including the application, and any Riders,
Amendments or Endorsements attached hereto, is the entire contract between you
and us. Any change must be made in writing by one of our officers.
All statements in the application are representations and not warranties. No
statement of the applicant shall be used to void this Policy or to defend
against a claim unless contained in the application.
PAYMENT OF BENEFITS - All benefits are payable at our Administrative Office. We
may require you to submit this Policy before we approve changes or pay benefits.
ERRORS IN AGE AND SEX - If the Insured's age or sex is misstated on the
application, the benefits under this Policy will be those which the last Monthly
Cost of Insurance Charge would have provided at the correct age and sex.
SUICIDE EXCLUSION - If the Insured dies by suicide, while sane or insane, within
two years from the Policy Date, our liability will be limited to the total
premiums paid less any Gross Withdrawals and any Loan Balance. If the Insured
dies by suicide, while sane or insane, within two years from the effective date
of any Face Amount increase, the proceeds under this Policy shall be reduced by
the excess, if any, of the Net Amount At Risk on the date of death over the
corresponding amount in effect just prior to the date of increase, and increased
by the total Monthly Cost of Insurance Charges deducted for this excess.
INCONTESTABILITY - This Policy will be incontestable after it has been in force
during the lifetime of the Insured for two years from the Policy Date.
A new two year contestability period shall apply to each increase in insurance
amount that requires evidence of good health beginning on the effective date of
each increase, and will apply only to statements made in the application for the
increase.
4. GENERAL PROVISIONS (CONTINUED)
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If this Policy is reinstated, a new two year contestability period (apart from
any remaining contestability period) shall apply from the date of the
application for reinstatement and will apply only to statements made in the
application for reinstatement.
ANNUAL REPORT - We will send you a report within 30 days following your Policy
Anniversary which shows the following information: the current Policy Value; any
payments since the last report; all charges since the last report; any
Withdrawals since the last report; any Loan Balance on this Policy; the current
Cash Surrender Value; the current Net Cash Surrender Value; and the current
Death Benefit.
STATE LAWS - This Policy is governed by the law of the state in which it is
delivered. The values and benefits of this Policy are at least equal to those
required by such state.
OPTIONAL EXTENSION OF MATURITY DATE - If the Insured survives to Age 100 and you
make a Written Request to continue this Policy, we will extend the Maturity Date
if in doing so this Policy still qualifies as life insurance according to the
Internal Revenue Service and your state. In order to continue this Policy beyond
the Maturity Date, the Death Benefit at any time will be the Policy Value less
any Loan Balance. No further Monthly Deductions will be made, and no further
premium payments will be accepted.
5. AMOUNT OF PROCEEDS
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The proceeds payable by this Policy are:
. Upon the death of the Insured prior to the Maturity Date, the Death Benefit
less any Loan Balance and any overdue Monthly Deductions.
. On the Maturity Date, unless the Maturity Date has been extended, the Policy
Value less any Loan Balance.
. On surrender of the Policy prior to the Maturity Date, the Net Cash Surrender
Value.
The proceeds may be taken in a lump sum or applied under one of the Payment
Options listed in the Payment of Proceeds Provision.
6. DEATH BENEFIT
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AMOUNT OF DEATH BENEFIT - The Death Benefit equals the Base Death Benefit plus
the Adjustable Term Rider Amount and the amounts of any other riders payable
upon the death of the Insured. The amount of the Base Death Benefit depends on
the Base Face Amount, the Policy Value on the date of the Insured's death, and
the Death Benefit Option in effect at that time. The Initial Base Face Amount
and the Death Benefit Option are shown in the Policy Data. The Base Face Amount
may be increased or decreased after issue as described under Change in Face
Amount.
Option A - The amount of the Base Death Benefit under Option A is the greater
of:
a. the Base Face Amount at the beginning of the Policy Month when the death
occurs; or
b. the Policy Value on the date of death multiplied by the applicable factor
from the Table of Death Benefit Factors below.
Option B - The amount of the Base Death Benefit under Option B is the greater
of:
6. DEATH BENEFIT (CONTINUED)
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a. the Base Face Amount at the beginning of the Policy Month when the death
occurs plus the Policy Value on the date of death; or
b. the Policy Value on the date of death multiplied by the applicable factor
from the Table of Death Benefit Factors below.
Table of Death Benefit Factors
Age Factor Age Factor Age Factor
0-40 2.50 54 1.57 68 1.17
41 2.43 55 1.50 69 1.16
42 2.36 56 1.46 70 1.15
43 2.29 57 1.42 71 1.13
44 2.22 58 1.38 72 1.11
45 2.15 59 1.34 73 1.09
46 2.09 60 1.30 74 1.07
47 2.03 61 1.28 75-90 1.05
48 1.97 62 1.26 91 1.04
49 1.91 63 1.24 92 1.03
50 1.85 64 1.22 93 1.02
51 1.78 65 1.20 94 1.01
52 1.71 66 1.19 95-100 1.00
53 1.64 67 1.18
CHANGE IN DEATH BENEFIT OPTION - The Owner may change the Death Benefit Option
after this Policy has been in force for at least one year, subject to the
following requirements:
1. the Owner must request the change in writing;
2. once the Death Benefit Option has been changed, it cannot be changed again
for one year;
3. if Death Benefit Option A is changed to Option B, the total Death Benefit
will remain the same, and the Base Face Amount will be decreased by an amount
equal to the Policy Value on the date of the change;
4. if Death Benefit Option B is changed to Option A, the total Death Benefit
will remain the same, and the Base Face Amount will be increased by an amount
equal to the Policy Value on the date of the change. The Risk Class for the
last face amount portion to go into effect that is still in force will apply
to the Base Face Amount increase.
Any change in Death Benefit Option will take effect on the Monthly Processing
Date on or following the date we approve the request for the change. We will
provide you with revised Policy Data pages reflecting the change. We do not
impose a surrender charge for any decrease in your Base Face Amount due to a
change in Death Benefit Option, and there is no change to the Target Premium.
CHANGE IN FACE AMOUNT - You may change the Base Face Amount or the Adjustable
Term Insurance Rider Amount of this Policy on any Monthly Processing Date after
the Policy has been in force at least one year, subject to the following
requirements. Once either amount has been changed, no other face amount changes
may be made for the next twelve months.
Face Amount Increase - You may increase the Base Face Amount or the Adjustable
Term Insurance Rider Amount by making a Written Request for an increase. If you
do not tell us otherwise, we will treat the request as an increase to the Base
Face Amount. To increase either amount you must:
1. submit an application for the increase;
6. DEATH BENEFIT (CONTINUED)
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2. submit proof satisfactory to us that the Insured is an insurable risk;
3. pay any additional premium which is required.
No increases can be made after the Insured exceeds Age 75. Each increase must be
at least as large as the Minimum Face Amount Change shown in the Policy Data. An
increase will take effect on the Monthly Processing Date on or following the day
we approve the application for the increase. The Risk Class that applies for any
increase may be different from the original Risk Class.
A Target Premium will be established for an increase in Base Face Amount, and
the portion of premiums paid thereafter allocated to the increase will be
subject to a new percentage of premium sales load charge.
We will furnish a supplement to the Policy Data that shows:
1. the Risk Class and the amount of the increase;
2. the new No-Lapse Monthly Premium, if applicable; and
3. the new Surrender Charges and the new Target Premium for any increase in the
Base Face Amount.
Face Amount Decrease - The Owner must make a Written Request for any decrease in
the Base Face Amount or Adjustable Term Insurance Rider amount. The decrease
will take effect on the later of:
1. the Monthly Processing Date on or following the day we receive the Owner's
request for the decrease; or
2. the Monthly Processing Date one year after the last change in face amount
was made.
A requested decrease will be used to reduce the face amount in the following
order:
1. the amount of any Adjustable Term Insurance Rider will be reduced until it
is equal to zero;
2. any previous Base Face Amount increases which are in effect will be reduced,
starting with the latest increase and continuing in the reverse order in
which the increases were made;
3. the Initial Base Face Amount will be reduced.
Each decrease must be at least as large as the Minimum Face Amount Change shown
in the Policy Data. We will not permit a decrease that would reduce the Base
Face Amount below the Minimum Base Face Amount shown in the Policy Data.
The No-Lapse Monthly Premium will be reduced to reflect the decrease. The new
No-Lapse Monthly Premium will be shown on a supplement to the Policy Data.
We may deduct a surrender charge from the Policy Value when the Base Face Amount
is decreased. The amount of the charge is described in Section 8, Charges and
Deductions.
7. PREMIUM PROVISIONS
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PREMIUMS - Premiums are payable in advance at our Administrative Office or to an
authorized agent. The Policy will not take effect until the following both occur
while the Insured is alive and prior to any change in health as shown in the
application: (a) the Policy has been delivered, and (b) the first premium has
been paid.
ALLOCATION OF PREMIUMS - You may choose to allocate premiums to the Subaccounts
of the VariableAccount, the Fixed Account, or a combination thereof. You may
choose any whole percentage from 0% to 100%. You may change the allocation of
future premiums at any time by sending Written Notice.
INITIAL PREMIUM - The Initial Premium is shown in the Policy Data. On the Policy
Date the initial Net Premium will be allocated among the Subaccounts and the
Fixed Account according to the premium allocation percentages you specified in
your application.
PLANNED PERIODIC PREMIUMS - Planned Periodic Premiums may be paid annually,
semi-annually, quarterly or monthly by bank draft. The Planned Periodic Premium
and the payment interval in effect on the Policy Date are shown in the Policy
Data. The Owner may change the amount and frequency of premiums. We have the
right to limit the amount of any increase. Each premium after the Initial
Premium must be at least $25.00. We may increase this minimum limit 90 days
after we send the Owner written notice of such increase.
ADDITIONAL PREMIUMS - Additional unscheduled premium payments can be made at any
time while this Policy is in force. We reserve the right to refund or limit the
number and amount of any premiums paid so this Policy will continue to be
treated as a life insurance policy for federal income tax purposes. If we limit
premiums, future premium payments may still be required at a later date. No
Planned Periodic Premiums or additional premiums will be accepted after the
original Maturity Date.
On the date we receive an Additional Premium or a Planned Periodic Premium, or
the next Valuation Date thereafter, the Net Premium will be allocated according
to the allocation percentage you specified in your application; or, if
subsequently changed, according to your instructions currently in effect.
MINIMUM PAYMENTS TO AVOID POLICY TERMINATION - You may make additional premium
payments to maintain the Policy in force to avoid Policy termination, as
described in the Grace Period Provision. Such payments may not exceed the limit
established by law to qualify your Policy as a contract of life insurance for
federal income tax purposes.
TERMINATION - This Policy will terminate on the earliest of the following dates:
1. the date you surrender the Policy;
2. the date the Policy terminates because any Loan Balance exceeds the Cash
Surrender Value;
3. the date of the Insured's death;
4. the Maturity Date, unless the Maturity Date has been extended; or
5. the end of the Grace Period.
Payment of the amount required, as described in the Grace Period Provision, will
keep the Policy in force with respect to items 2 and 5 above.
NO-LAPSE GUARANTEE - The Policy will continue in force each month as long as the
Net Cash Surrender Value on the Monthly Processing Date at the beginning of that
month is large enough to cover the Monthly Deductions made for that month. If
the Net Cash Surrender Value at the beginning of a Policy Month during the first
three Policy Years is less than the Monthly Deduction for that month, this
Policy will still continue in force if:
7. PREMIUM PROVISIONS (CONTINUED)
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a. the total premiums paid, less Gross Withdrawals and any Loan Balance, are
greater than or equal to
b. the cumulative amount of No-Lapse Monthly Premiums for the number of Policy
Months the Policy has been in force.
If the No-Lapse Monthly Premium has changed since the Policy Date, the total
premium amount required will be based on the various No-Lapse Monthly Premiums
required and the number of months for which each applied.
GRACE PERIOD - If: (1) the Loan Balance exceeds the Cash Surrender Value; or (2)
the Net Cash Surrender Value is less than the Monthly Deduction on a Monthly
Processing Date, a Grace Period of 61 days will be allowed for the payment of
additional premium so the Monthly Deduction can be made. During the first three
Policy Years, this Policy will not enter the Grace Period even though the Net
Cash Surrender Value is insufficient if the premiums paid meet the requirement
described in the No-Lapse Guarantee provision.
At least 30 days before this Policy ends without value we will mail to your last
known address a notice of the amount of premium needed. We will send a copy of
the notice to the last known address of any assignee of record. The additional
premium will be due on the Monthly Processing Date on which the Net Cash
Surrender Value was first insufficient.
The payment required will not exceed: (a) the amount by which the Loan Balance
exceeds the Cash Surrender Value; plus (b) any accrued and unpaid Monthly
Deductions as of the date of notice; plus (c) an amount sufficient to cover the
next two Monthly Deductions.
If such payment is not made by the end of the Grace Period, the Policy will
terminate without value. If the Insured dies during the Grace Period, any Loan
Balance or overdue Monthly Deductions will be deducted from the Death Benefit to
determine the proceeds payable.
REINSTATEMENT - This Policy may be reinstated (coverage restored) any time
within five years after it has terminated at the end of a Grace Period, provided
that, to reinstate this Policy, the Owner must:
1. submit an application for reinstatement;
2. provide evidence of insurability satisfactory to us;
3. agree to the reduction of the Policy Value by any Loan Balance; and
4. pay the premium required to reinstate the Policy, as described below.
The premium required to reinstate the Policy equals the total of the following
amounts:
1. the amounts that would have been required for this Policy to continue in
force without entering a Grace Period, and for each month during the Grace
Period at the end of which the Policy terminated; and
2. the amount that will be required for this Policy to continue in force
without entering a Grace Period for next two months after the Reinstatement
Date.
The Reinstatement Date will be the Monthly Processing Date on or following the
day we approve the application for reinstatement. The reinstated Policy will be
based on your Risk Class as of the Reinstatement Date, and may be different from
the Risk Class assigned to any portion of the Policy before termination. The
Policy Value on the Reinstatement Date will be equal to the Policy Value on the
Monthly Processing Date when the Grace Period ended plus the premium paid to
reinstate the Policy minus any outstanding Loan Balance. The Policy will have no
Loan Balance on the Reinstatement Date. The Surrender Charge on the
Reinstatement Date will be counted from the original Policy Date.
7. PREMIUM PROVISIONS (CONTINUED)
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This Policy may not be reinstated after: (1) it has been surrendered for its Net
Cash Surrender Value; or (2) the Insured's death; or (3) the Maturity Date.
8. CHARGES AND DEDUCTIONS
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PERCENTAGE OF PREMIUM EXPENSE CHARGES - The Premium Expense Charges for taxes
and sales loads are deducted from each premium payment as it is received to
determine the Net Premium. The Premium Expense Charge percentages are shown in
the Policy Data.
MONTHLY DEDUCTION - At the beginning of each Policy Month we make a deduction
from the Policy Value. The Monthly Deduction will be deducted from the
Subaccounts of the Variable Account and the Fixed Account in the same proportion
that their values bear to the total Policy Value, excluding amounts transferred
to the Fixed Account to secure Policy loans. The Monthly Deduction is equal to:
a. the Monthly Cost of Insurance Charge described below; plus
b. the Monthly Administrative Charges described in the Policy Data; plus
c. the cost of any additional benefits added by Riders to the Policy.
MONTHLY COST OF INSURANCE CHARGE - The Monthly Cost of Insurance for a Policy
Month is calculated as (a) multiplied by the result of (b) minus (c) where:
a. is the Cost of Insurance Rate divided by 1,000;
b. is the Death Benefit at the beginning of the Policy Month; and
c. is the Policy Value at the beginning of the Policy Month.
The Policy Value used in this calculation is the Policy Value before deduction
of the Monthly Cost of Insurance Charge (for both the Base Face Amount and the
Adjustable Term Insurance Rider) and the cost of any Disability Waiver of
Monthly Deductions Rider, but after deductions for any other Riders and charges.
If there is any Adjustable Term Insurance Rider amount or if there have been any
increases in the Base Face Amount, separate charges will be calculated for each
portion of the Death Benefit. The Policy Value will be deducted from the Initial
Base Face Amount in determining the charges. If the Policy Value exceeds the
Initial Base Face Amount, the excess will be considered part of the increases in
Base Face Amount in the order of the increases.
COST OF INSURANCE RATE - The Cost of Insurance Rate is the rate applied to the
insurance under this Policy to determine the Monthly Cost of Insurance Charge.
It is based on the Age, sex and Risk Class of the Insured, the size of the Base
Face Amount, and the duration since issue or effective date of an increase. The
Risk Class on the Policy Date will apply for the Base Face Amount and any
Adjustable Term Insurance Rider amount at issue. For any subsequent Face Amount
increase, the Cost of Insurance Rate will be based on the Risk Class applicable
to that increase.
Our current scale of Cost of Insurance Rates is subject to change based on our
expectations as to future mortality, expenses, lapses and taxes. Any change will
be on a uniform basis for all Policies issued to Insureds of the same age, sex,
policy duration, face amount band and Risk Class. No change will occur as a
result of change in the health, occupation, or avocations of the Insured. The
rates will not exceed the Maximum Cost of Insurance Rates shown in the Policy
Data which are the 1980 Commissioners Standard Ordinary Mortality Tables, Male
or Female, Smoker or Non-Smoker. The guaranteed rates for substandard Risk
Classes are based on multiples of or additions to the tables.
8. CHARGES AND DEDUCTIONS (CONTINUED)
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MORTALITY AND EXPENSE RISK CHARGE DEDUCTION - This is a deduction from each of
the Subaccounts of the Variable Account, computed on a daily basis starting on
the Policy Date. This charge compensates us for the mortality and expense risks
assumed by us under this Policy. The daily deduction rates are shown in the
Policy Data. The mortality and expense risk charge is not deducted from the
Fixed Account.
PORTFOLIO EXPENSES - There are fees and charges deducted from the Portfolios in
determining the net asset values per Portfolio share. The prospectus provided
prior to issuance of this Policy provides detail on these expenses.
POLICYHOLDER TRANSACTION CHARGES - Certain policyholder transactions that exceed
a maximum number in a Policy Year may incur a charge. These charges will not
exceed the maximums shown under Policy Data.
SURRENDER CHARGES - We assess a surrender charge against your Policy Value upon
surrender, reduction in Base Face Amount or lapse of your Policy during the
Surrender Charge Period. The Surrender Charge Period is the first fourteen
Policy Years after issue, or the first fourteen years following an increase in
the Base Face Amount. The surrender charge consists of two charges: an
administrative surrender charge and a sales surrender charge.
If you request a decrease to the Base Face Amount during the Surrender Charge
Period, or take a Withdrawal which decreases the Base Face Amount, we will
deduct a portion of the surrender charge from your Policy Value. The amount of
the surrender charge that will be deducted from your Policy Value is described
below for each type of charge.
Decreases in the Base Face Amount as a result of a change to your Death Benefit
Option do not cause a surrender charge deduction from your Policy Value and
future surrender charges will not be reduced. Increases in the Base Face Amount
as a result of changes in Death Benefit Option do not result in an increase in
the maximum surrender charges. All other increases in Base Face Amount will
increase the maximum surrender charges.
Administrative Surrender Charge - The administrative surrender charge is shown
under Policy Data. During the Surrender Charge Period, if you request a decrease
to the Base Face Amount or take a Withdrawal which causes the Base Face Amount
to decrease, your administrative surrender charge will decrease in the same
proportion that the Base Face Amount decreases. The amount of the surrender
charge that will be deducted from your Policy Value as a result of the decrease
will equal the surrender charge in effect before the reduction minus the
surrender charge in effect after the reduction.
Sales Surrender Charge - The sales surrender charge is a percentage of actual
premiums paid up to a maximum based on Target Premiums. The sales surrender
charge percentages and the Target Premium for your Policy are shown under Policy
Data. Upon a decrease in the Base Face Amount other than due to a Death Benefit
Option change, the Target Premium for each portion of the Base Face Amount will
be reduced in the same proportion that the Base Face Amount is reduced.
If the new Target Premium for each Base Face Amount portion is greater than or
equal to the premiums which are allocated to that portion, the maximum sales
surrender charge you may pay in the future will be reduced, but a sales
surrender charge will not be deducted from your Policy Value. If the new Target
Premium for each Base Face Amount portion is less than the premiums which are
allocated to that portion, the maximum sales surrender charge you may pay in the
future will be reduced and a sales surrender charge will be deducted from your
Policy Value. The new sales surrender charge will be recalculated as if the new
Target Premium was always in effect for that portion of the Base Face Amount. A
deduction equal to the difference between the sales surrender charge as
calculated before and after the decrease will be taken from your Policy Value.
9. POLICY VALUE
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BASIS USED FOR POLICY VALUES - The methods and factors used to calculate your
Policy Values and reserves are based on certain mortality tables and interest
rates required by state law. We use the 1980 Commissioners Standard Ordinary
Mortality Tables, Male or Female, Smoker or Non-Smoker. All values are equal to
or greater than those required by law. Where required, we have filed a statement
with the insurance officials of the state where this Policy was delivered. The
statement outlines the methods used to determine the Policy Values.
10. FIXED ACCOUNT
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INTEREST RATES - The Guaranteed Interest Rate is shown in the Policy Data. This
interest rate is the minimum effective annual rate at which interest will be
credited to amounts allocated to the Fixed Account of your Policy.
The Company may credit interest to the Fixed Account of your Policy at a rate
greater than the Guaranteed Interest Rate. Any interest credited to the Fixed
Account of your Policy in excess of the Guaranteed Interest Rate will be
determined at the sole discretion of the Company. The rate of interest credited
may be different for unloaned values, Preferred Loan Values, and Non-Preferred
Loan Values. (See the Policy Loans Provision.) We will credit interest on
amounts in the Fixed Account as follows:
a. on amounts that remain in the Fixed Account for the entire Policy Month, from
the beginning to the end of the month;
b. on amounts allocated to the Fixed Account during the Policy Month that are
Net Premiums or loan repayments, from the date we receive them to the end of
the Policy Month;
c. on amounts transferred to the Fixed Account during the Policy Month, from the
date of the transfer to the end of the Policy Month; and
d. on amounts deducted, transferred, or surrendered from the Fixed Account
during the Policy Month, from the beginning of the Policy Month to the date
of the deduction or Surrender.
11. FIXED ACCOUNT VALUE
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On the Policy Date, the value of the Fixed Account is equal to the initial Net
Premium allocated to the Fixed Account minus the portion of the first month's
Monthly Deduction allocated to the Fixed Account.
On any Monthly Processing Date thereafter the Fixed Account is equal to:
a. the Fixed Account Value on the preceding Monthly Processing Date; plus
b. the sum of all Net Premiums allocated to the Fixed Account since the
previous Monthly Processing Date; plus
c. the sum of all loan repayments allocated to the Fixed Account since the
previous Monthly Processing Date; plus
d. total interest credited to the Fixed Account since the previous Monthly
Processing Date; plus
e. the amount of any transfers from the Variable Account to the Fixed Account,
including amounts transferred to secure a loan, since the previous Monthly
Processing Date; minus
f. the amount of any transfers from the Fixed Account to the Variable Account
since the previous Monthly Processing Date; minus
g. the portion of any Gross Withdrawals, policyholder transaction charges, or
surrender charges for any Face Amount decreases allocated to the Fixed
Account since the previous Monthly Processing Date; minus
h. the portion of the Monthly Deduction allocated to the Fixed Account since
the previous Monthly Processing Date.
12. VARIABLE ACCOUNT VALUE
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The Variable Account Value is the sum of the values of the Subaccounts under
this Policy. On the Policy Date, the value of each Subaccount is equal to the
initial Net Premium allocated to the Subaccount minus the portion of the first
month's Monthly Deduction allocated to the Subaccount.
On any Valuation Date thereafter, the value of each Subaccount is equal to:
a. the value of the Subaccount on the preceding Valuation Date, multiplied by
the appropriate Net Investment Factor (described in the Subaccounts
Provision) since the previous Valuation Date; plus
b. the sum of all Net Premiums allocated to the Subaccount since the previous
Valuation Date; plus
c. the sum of all loan repayments allocated to the Subaccount since the previous
Valuation Date; plus
d. the amount of any transfers from other Subaccounts or from the Fixed Account
to the Subaccount since the previous Valuation Date; minus
e. the amount of any transfers to other Subaccounts or to the Fixed Account,
including amounts transferred to secure a loan, from the Subaccount since the
previous Valuation Date; minus
f. the portion of any Gross Withdrawals, policyholder transaction charges, or
surrender charges for any Face Amount decreases allocated to the Subaccount
since the previous Valuation Date; minus
g. the portion of the Monthly Deduction allocated to the Subaccount since the
previous Valuation Date.
13. SUBACCOUNTS
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THE SUBACCOUNTS - Each of the Subaccounts is part of a variable account of ours.
Those available as of the Policy Date are named under Policy Data. We have
allocated a part of our assets for this and certain other policies to the
Subaccounts. Such assets remain our property. They cannot be charged, however,
with liabilities from any other business in which we may take part.
ALLOCATIONS TO, AND INVESTMENTS OF THE SUBACCOUNTS - Premiums (excluding Grace
Period premiums) and transfers will be allocated as you specify. All other
additions to or deductions from the Subaccounts will be allocated as specified
under Charges and Deductions in Section 8 and Policy Loans in Section 17. Each
Subaccount will buy or liquidate shares or units of the Portfolio shown for that
Subaccount under the Policy Data or as later added or changed.
DETERMINING INVESTMENT RESULTS - The Policy Value will change due to the
investment results of the Subaccounts. We use an index to measure these changes
in investment results. The index is called a unit value. Each Subaccount has its
own unit value.
For each Subaccount the unit value was initially set at $10.00. Thereafter, the
unit value for a given Valuation Period is equal to the unit value for the prior
Valuation Period multiplied by the Net Investment Factor for the given Valuation
Period.
For any Subaccount, the number of units credited or deducted during a Valuation
Period is determined by dividing the dollar amount directed to or from the
Subaccount by the unit value for the Valuation Period. At the end of any
Valuation Period, the value of a Subaccount is equal to the number of units
multiplied by the unit value.
13. SUBACCOUNTS (CONTINUED)
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NET INVESTMENT FACTOR/HOW IT IS DETERMINED - The Net Investment Factor is an
index applied to measure the investment performance of a Subaccount from one
Valuation Period to the next. The Net Investment Factor may be greater or less
than one; therefore, the value of a unit may increase or decrease.
The Net Investment Factor of a Subaccount for any Valuation Period is determined
by dividing (1) by (2) and subtracting (3) from the result, where:
1. is the result of:
a. the net asset value per share of the Portfolio shares held in the
Subaccount, determined at the end of the current Valuation Period; plus
b. the per share amount of any dividend or capital gain distributions on the
Portfolio shares held in the Subaccount, if the "ex-dividend" date occurs
during the current Valuation Period; plus or minus
c. a per share charge or credit for any taxes reserved for the current
Valuation Period which we determine to have resulted from the investment
operations of the Subaccount;
2. is the result of:
a. the net asset value per share of the Portfolio shares held in the
Subaccount, determined at the end of the last prior Valuation Period; plus
or minus
b. the charge or credit for any taxes reserved for the last prior Valuation
Period; and
3. is a deduction for the current Mortality and Expense Risk Charge shown in the
Policy Data for the number of days in the Valuation Period.
CHANGES IN THE SUBACCOUNTS - Changes in the Subaccounts may occur if laws or
regulations changed, we added Subaccounts, the mutual fund became unavailable
or, in our judgment, the mutual fund was no longer suitable for investment. If
any of these situations occurred, we would have the right to add or substitute
Subaccounts other than those shown under Policy Data. We would first seek
approval of the Securities and Exchange Commission and, where required, the
insurance regulator of the state where this Policy is delivered.
OTHER CHANGES - To the extent permitted by applicable laws and regulations
(including any order of the SEC), we may make changes as follows:
1. The variable account may be operated as a management company under the
Investment Company Act of 1940, or in any other form permitted by law, if we
deem it to be in the best interest of the Policy Owners
2. The variable account may be deregistered under the Investment Company Act of
1940 in the event registration is no longer required.
3. The variable account may be combined with other separate investment accounts.
4. The provisions of this and other Policies may be modified to comply with any
other applicable federal or state laws; or to take advantage of any benefits
allowed by changes in applicable laws.
In the event of such changes, we may make appropriate endorsement on this and
other policies having an interest in the variable account and take other actions
as may be necessary to effect such a change.
14. TRANSFERS
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TRANSFERS - By Written Request or other request acceptable to us, you may
transfer all or a part of the values held in a Subaccount to one or more
Subaccounts or to the Fixed Account up to twelve times in a Policy Year free of
charge. After twelve transfers in a Policy Year, we will deduct the charge shown
in the Policy Data from the Subaccounts and the Fixed Account in the same
proportion that their values bear to the total Policy Value.
Any transfers for Dollar Cost Averaging or Automatic Asset Rebalancing are not
counted against the twelve free transfers. Dollar Cost Averaging is a transfer
option that allows you to automatically transfer an amount periodically from
selected Subaccounts or the Fixed Account to other Subaccounts. Automatic Asset
Rebalancing allows you to set up transfers to occur at selected intervals that
will match your Policy Value allocation between Subaccounts to your allocation
percentage for new premiums. Both programs are subject to Company guidelines and
restrictions detailed in the prospectus you received prior to the issuance of
this Policy.
You may make transfers from the Fixed Account to one or more of the Subaccounts
of the Variable Account only once per Policy Year. We reserve the right to limit
the amount transferred from the Fixed Account to a Subaccount to the greater of:
(a) 25% of the prior Policy Anniversary's unloaned Fixed Account Value; or (b)
the amount of the prior Policy Year's transfer. These restrictions will not
apply to transfers for Dollar Cost Averaging or Automatic Rebalancing.
Each transfer must be for a minimum of $100. The value remaining in the
Subaccount or the Fixed Account after a transfer must not be less than $100. If
the value remaining would be less than $100, we will treat the transfer request
as a request for a transfer of the total value.
We may further suspend or modify this transfer privilege at any time with the
necessary approval of the Securities and Exchange Commission.
15. CASH SURRENDER VALUE
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CASH SURRENDER VALUE - The Cash Surrender Value of this Policy equals the Policy
Value minus the Surrender Charges described in Section 8, Charges and
Deductions.
When this Policy terminates, the Policy Value may be less than the Surrender
Charge. If so, the Owner will not have to pay the difference to us. If this
Policy is reinstated, the Surrender Charge will also be reinstated as described
in the Reinstatement Provision.
NET CASH SURRENDER VALUE - The Net Cash Surrender Value of this Policy is equal
to the Cash Surrender Value less any Loan Balance on this Policy. You may
surrender this Policy for its Net Cash Surrender Value at any time upon Written
Notice. Upon surrender this Policy will terminate.
16. WITHDRAWALS
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You may make a Withdrawal from the Net Cash Surrender Value at any time during
the Insured's lifetime and before the Policy has terminated. The Minimum
Withdrawal Amount is $500. The Withdrawal Amount may not exceed the Net Cash
Surrender Value minus $500.
We will deduct a Surrender Charge when a Withdrawal is made as described in
Section 8, Charges and Deductions. In addition, there is a transaction charge
for each Withdrawal after the first in each Policy Year as shown in the Policy
Data. The amount of the Withdrawal plus any applicable Surrender Charge and
transaction charge is called the Gross Withdrawal.
The Gross Withdrawal will be made from the Subaccounts of the Variable Account
and from the unloaned value in the Fixed Account in the same proportion that
their values bear to the total unloaned Policy Value, unless you instruct us
otherwise.
The Base Face Amount will be reduced if Death Benefit Option A is in effect when
a Withdrawal is made. Such a reduction will be equal to the amount of the Gross
Withdrawal. Any Base Face Amount reduction will be used first to reduce any Base
Face Amount increases then in effect starting with the latest increase and
continuing in the reverse order in which the increases were made. If any of the
reduction is left after all Base Face Amount increases have been reduced to
zero, it will be used to reduce the Initial Base Face Amount.
We will not permit a Withdrawal that would reduce the Base Face Amount below the
Minimum Base Face Amount shown in the Policy Data. We may limit the number of
Withdrawals in a Policy Year; but this limit will not be less than one.
17. POLICY LOANS
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HOW LOANS MAY BE MADE - You may obtain a policy loan from us by submitting a
Written Request or other request acceptable to us. This Policy is the only
security required for the loan.
The amount of your loan and any loan interest must remain in the Fixed Account.
If there is insufficient value in the Fixed Account to equal the Loan Balance,
an amount will be transferred from the Subaccounts of the Variable Account to
the Fixed Account. We will allocate the amount transferred in the proportion
that the value of each Subaccount bears to the Variable Account Value unless you
specify one or more Subaccounts from which the loan is to be made.
Each Policy Year after the tenth Policy Anniversary, a Preferred Loan Amount is
available equal to 10% of the net Policy Value, which is the Policy Value minus
any existing Loan Balance. The Policy Value will be determined at the time of
the loan. If the Preferred Loan Amount borrowed during any Policy Year is less
than the maximum allowed, the balance may not be carried over to increase the
eligible Preferred Loan Amount of any subsequent Policy Year.
The Minimum Interest Rate Credited on Loaned Amounts is shown in the Policy
Data. This rate is the minimum effective annual rate at which interest will be
credited to loaned amounts. We may also credit additional interest on the
Preferred Loan Amount. The Additional Interest Rate we are currently crediting
on Preferred Loan Amounts is shown in the Policy Data. We will send you a new
Policy Data Page whenever this Additional Interest Rate changes.
LOAN INTEREST CHARGED - The Loan Interest Rate Charged is shown in the Policy
Data. We calculate the Policy Value as of the date of the loan.
Interest is charged daily, and payable at the end of the Policy Year. If
interest is not paid when it is due, it will be added to your Loan Balance and
charged interest at the Loan Interest Rate Charged shown in the Policy Data.
AMOUNT OF LOAN AVAILABLE - You may borrow up to the Maximum Loan Amount shown in
the Policy Data. Outstanding loans, including accrued interest, reduce the
amount available for new loans. The minimum amount you may borrow is $100.
LIMIT ON POLICY LOANS - This Policy will terminate without value, as described
in the Grace Period Provision, if the total Loan Balance is greater than the
Cash Surrender Value.
REPAYMENT - All or part of a loan may be repaid at any time while the Insured is
alive and this Policy is in force. Repayment must be in amount of at least $200
or the outstanding Loan Balance if less. Repayments will be allocated to the
Fixed Account and the Subaccounts of the Variable Account based on the premium
allocation instructions then in effect, unless you specify otherwise.
18. DELAY OR SUSPENSION OF PAYMENTS
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We will normally pay any Withdrawal, Policy Loan amount, or the Net Cash
Surrender Value within 7 days after we receive your Written Request in our
Administrative Office. The Company may defer payment of any amounts from the
Fixed Account, except for a loan used to pay a premium to us, for up to six
months from the date of receipt of your Written Request to surrender. If the
Company defers payment for more than 30 days, the Company will pay interest on
the amount deferred. Interest will be paid at a rate not less than the
Guaranteed Interest Rate shown in the Policy Data. We may also defer payment of
any amounts derived from premiums paid by check until such time as the check has
cleared.
We have the right, to suspend or delay the payment of any amounts from any
Subaccount of the Variable Account for any period:
1. When the New York Stock Exchange is closed.
2. When trading on the New York Stock Exchange is restricted.
3. When an emergency exists, and as a result:
a. disposal of securities held in the Subaccounts is not reasonably
practicable; or
b. it is not reasonably practicable to fairly determine the value of the
Subaccounts; or
4. During any other period when the Securities and Exchange Commission by order,
so permits for the protection of security holders.
Rules and regulations of the Securities and Exchange Commission will govern as
to whether the conditions set forth in the above items 2 and 3 exist.
19. AUTOMATIC CONTINUATION OF BENEFITS
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If premium payments cease, insurance under this Policy and any benefits provided
by a Rider attached to this Policy will continue as provided in the Grace Period
Provision in Section 7. This Policy will not continue beyond the Maturity Date,
unless the Maturity Date has been extended. Any Riders attached to this Policy
will not continue beyond the termination date described in the Rider.
20. POLICY EXCHANGE OPTION
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For two years after the Policy is issued, you can exchange it for one that
provides benefits that do not vary with the investment return of the Subaccounts
of the Variable Account. Since the Policy itself offers a fixed return option,
all you need to do is transfer all of the Policy Value in the Subaccounts of the
Variable Account to the Fixed Account. Any restrictions on transfers to the
Fixed Account will be waived. We will automatically credit all future premium
payments to the Fixed Account. There will be no effect on the Policy's Death
Benefit, Face Amount, Net Amount at Risk, Risk Class, or Issue Age. Only the
method of funding the Policy Value will be affected.
21. PAYMENT OF PROCEEDS
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PAYMENT - Any amount payable at the death of the Insured will be paid in one
sum, unless you provide otherwise. All or part of this sum may be applied under
any Payment Option, subject to the following conditions:
1. No option may be selected unless the proceeds are payable to a natural person
in that person's own right.
2. Payment may not be less than $25.00 each or less than $120.00 in a year.
3. If you have not elected an option when a Beneficiary becomes entitled to
proceeds, the Beneficiary may elect the option.
4. The election must be filed with us in writing.
5. We may require exchange of this Policy for a contract covering the election.
CLAIMS OF CREDITORS - So far as permitted by law, the proceeds will not be
subject to any claims of the Beneficiary's creditors.
PAYMENT OPTIONS -
Option 1 - Fixed Amount - Payment of a fixed amount, but not less than 7% of the
proceeds each year, until the proceeds are fully paid.
Option 2 - Fixed Period - Payment for a fixed period, not exceeding 30 years.
The payment amount for each $1,000 of Proceeds applied under Option 2 will be
based on our Payment Rates in effect on the settlement date. These rates are
guaranteed not to be less than the Guaranteed Minimum Monthly Payment For Each
$1,000 Proceeds Applied Under Option 2 shown in the tables on page 19.
Option 3 - Life Income - Payment for a fixed period and life thereafter. No
payment will become due after death, except payment for any remaining fixed
period. The payment amount for each $1,000 of Proceeds applied under Option 3
will be based on our Payment Rates in effect on the settlement date. These rates
are guaranteed not to be less than the Guaranteed Minimum Monthly Life Income
Payment For Each $1,000 Proceeds Applied Under Option 3 shown in the tables on
page 19. These payments are based on the Annuity 2000 Mortality Table with
interest at 3%.
Option 4 - Proceeds Left at Interest - Payment of interest on proceeds left with
us for any period agreed upon. The interest may be paid at selected intervals or
allowed to accumulate.
Other Payment Options - The proceeds may be paid in any other manner to which we
agree in writing.
More Favorable Payment Options - When proceeds become payable, we may be
offering payment contracts with higher guaranteed minimum payments. If so, these
more favorable contracts will be available subject to any conditions in effect
at that time.
INTEREST RATE - The interest rate on funds held under all options will be at
least 3% compounded annually.
WITHDRAWAL AND CHANGES - Except as to Option 3, if the payee selected the
option, this payee with our consent may modify the terms of the option or select
another option at any time.
DEATH OF PAYEE - If the payee dies, the value of any remaining guaranteed
payments will be paid to the payee's estate, unless otherwise provided in the
election of the option. The value will be based on the guaranteed interest rate
for the Payment Option Selected.
GUARANTEED MINIMUM MONTHLY PAYMENT
FOR EACH $1,000 PROCEEDS APPLIED UNDER OPTION 2
- -------------------------------------------------------------------------------------------------
Years Payment Years Payment Years Payment Years Payment Years Payment Years Payment
- -------------------------------------------------------------------------------------------------
1 84.47 6 15.14 11 8.86 16 6.53 21 5.32 26 4.59
2 42.86 7 13.16 12 8.24 17 6.23 22 5.15 27 4.47
3 28.99 8 11.68 13 7.71 18 5.96 23 4.99 28 4.37
4 22.06 9 10.53 14 7.26 19 5.73 24 4.84 29 4.27
5 17.91 10 9.61 15 6.87 20 5.51 25 4.71 30 4.18
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To obtain the minimum payments for other intervals, multiply the monthly payment
by 11.839 for annual, by 5.963 for semi-annual or by 2.993 for quarterly
payments
GUARANTEED MINIMUM MONTHLY LIFE INCOME PAYMENT
FOR EACH $1,000 PROCEEDS APPLIED UNDER OPTION 3
GUARANTEED PERIOD GUARANTEED PERIOD
----------------- ------------------
MALE 10 15 20 FEMALE 10 15 20
AGE YEARS YEARS YEARS AGE YEARS YEARS YEARS
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20 2.98 2.98 2.98 20 2.91 2.91 2.91
25 3.08 3.08 3.07 25 2.99 2.99 2.99
30 3.20 3.19 3.19 30 3.09 3.09 3.09
35 3.34 3.34 3.33 35 3.22 3.21 3.21
40 3.53 3.52 3.50 40 3.37 3.36 3.35
45 3.76 3.74 3.70 45 3.57 3.55 3.54
50 4.05 4.01 3.95 50 3.81 3.79 3.76
55 4.41 4.34 4.24 55 4.13 4.09 4.03
60 4.88 4.75 4.56 60 4.54 4.46 4.35
61 4.99 4.84 4.62 61 4.63 4.55 4.42
62 5.10 4.93 4.69 62 4.73 4.64 4.49
63 5.23 5.03 4.75 63 4.84 4.73 4.57
64 5.35 5.13 4.82 64 4.95 4.83 4.64
65 5.48 5.22 4.88 65 5.07 4.93 4.71
66 5.62 5.33 4.94 66 5.20 5.03 4.78
67 5.77 5.43 5.00 67 5.33 5.14 4.85
68 5.92 5.53 5.06 68 5.47 5.25 4.92
69 6.07 5.63 5.11 69 5.62 5.36 4.99
70 6.23 5.73 5.16 70 5.78 5.47 5.05
71 6.39 5.83 5.21 71 5.94 5.58 5.11
72 6.56 5.93 5.25 72 6.11 5.70 5.17
73 6.73 6.02 5.29 73 6.29 5.81 5.22
74 6.90 6.11 5.33 74 6.48 5.92 5.27
75 7.08 6.20 5.36 75 6.67 6.03 5.31
76 7.25 6.28 5.39 76 6.86 6.13 5.35
77 7.43 6.35 5.41 77 7.06 6.22 5.38
78 7.61 6.42 5.43 78 7.26 6.31 5.40
79 7.78 6.49 5.45 79 7.46 6.39 5.43
80 7.95 6.55 5.46 80 7.66 6.47 5.45
81 8.11 6.60 5.47 81 7.86 6.53 5.46
82 8.27 6.65 5.48 82 8.05 6.59 5.48
83 8.42 6.69 5.49 83 8.23 6.64 5.49
84 8.56 6.72 5.50 84 8.40 6.69 5.49
85 8.69 6.75 5.50 85 8.55 6.73 5.50
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Rates for other ages will be furnished upon request.
UNITED INVESTORS LIFE INSURANCE COMPANY
ADMINISTRATIVE OFFICE
2001 Third Avenue South (35233)
Post Office Box 10287
Birmingham, Alabama 35202-0287
800-340-3787
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
Adjustable Death Benefit
Death Benefit payable at Insured's death prior to the Maturity Date.
Premium Payments are flexible, subject to the limits described herein.
Policy Value, less Loan Balance, payable on the Maturity Date.
This Policy is Nonparticipating. Dividends are not payable.