1.(5)(a)
Form of Policy
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INSUREDS FIELD(1)
FIELD(158)
POLICY NUMBER FIELD(3)
POLICY TYPE SURVIVORSHIP VARIABLE UNIVERSAL LIFE
---------------------------------------------------------
Survivorship Flexible Premium Variable Life Insurance Policy.
Death benefit proceeds payable upon the second death.
Flexible premiums payable until the second death.
Some benefits reflect investment results.
Non-participating.
THIS POLICY'S ACCUMULATION VALUE IN THE SEPARATE ACCOUNT IS BASED ON THE
INVESTMENT EXPERIENCE OF THAT ACCOUNT AND MAY INCREASE OR DECREASE DAILY.
IT IS NOT GUARANTEED AS TO DOLLAR AMOUNT. SEE SECTION 7.
THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) MAY BE FIXED OR
MAY VARY UNDER THE CONDITIONS DESCRIBED IN SECTIONS 9 AND 10.
Acacia National Life Insurance Company agrees to pay the death benefit
proceeds of this policy to the beneficiary on receipt of satisfactory proof
of death of both Insureds while this policy is in force.
/s/Robert W. Clyde /s/Robert-John H. Sands
President Secretary
"NOTICE OF TEN-DAY RIGHT TO EXAMINE POLICY"
You are urged to read this policy carefully. If, after examination, you are
dissatisfied with it for any reason, you may return it to the selling agent
or to the Administrative Offices of Acacia National Life Insurance Company
at P.O. Box 82579, Lincoln, Nebraska 68501-2579, for a refund within (1)
ten days from the date of delivery of the policy, (2) ten days after
mailing or delivery of a cancellation notice, or (3) forty-five days after
Part I of the application is signed, whichever is later. If allowed by
state law, the amount of the refund will equal the sum of all charges
deducted from premiums paid, plus the net premiums allocated to the Fixed
Account and to the Separate Account adjusted by investment gains and
losses. Otherwise, the amount of the refund will equal the gross premiums
paid.
Please read and carefully check the copy of the application attached to
this policy. This application is a part of your policy and this policy was
issued on the basis that the answers to all questions and the information
shown on this application are true and complete. If any information shown
on it is not true and complete, to the best of your knowledge, or if any
past medical history has been omitted, please notify Acacia National Life
Insurance Company, a Virginia domiciled life insurance company, within ten
days from the date of delivery of the policy to you.
ACACIA NATIONAL
LIFE INSURANCE COMPANY
Form 8065 A STOCK COMPANY LOGO
POLICY SCHEDULE
INSUREDS: John E Specimen POLICY NUMBER: 2100008065
Issue Age: 35 Sex: Male
POLICY DATE: May 1, 1999
Mary E Specimen
Issue Age: 35 Sex: Female *PLANNED ANNUAL
PERIODIC PREMIUM: $1,824.96
INITIAL SPECIFIED INITIAL PREMIUM: $1,824.96
AMOUNT OF INSURANCE: $500,000
OWNER: John E Specimen
INITIAL DEATH BENEFIT OPTION: A
MINIMUM PREMIUM: Monthly $ 99.35
GUARANTEED DEATH BENEFIT PREMIUM: Monthly $152.08
Guaranteed Death Benefit Period:
The Guaranteed Death Benefit Period will expire on May 1, 2049.
RATING CLASS: John E Specimen
Preferred, No Tobacco Use
Mary E Specimen
Preferred, No Tobacco Use
LOANS:
The maximum loan interest rate is 6.00%. The interest credited on
any loaned part of the values will be no less than 3.50%.
MODES OF PAYMENT FOR PLANNED PERIODIC PREMIUMS:
Annual Semi-Annual Quarterly Monthly
$1,824.96 $912.48 $456.24 $152.08
* This reflects the planned premium and mode you selected at issue. For
further information, see policy Section 3. PREMIUM PAYMENTS.
8065 1-PS
SCHEDULE OF BENEFITS
INSUREDS: John E Specimen POLICY NUMBER: 2100008065
Mary E Specimen
INITIAL
SPECIFIED AMOUNT MATURITY OR
BENEFIT OF INSURANCE EXPIRATION DATE*
------- ----------------- ----------------
Survivorship Flexible Premium $500,000 Second Death
Variable Life
Form 8065**
* NOTE: It is possible that coverage may not continue to the second death if
premium payments are not sufficient.
** Form number corresponds to form number in the lower left hand corner of
each benefit description.
8065 1.1-SB
SCHEDULE OF BENEFITS
(Continued)
INSUREDS: John E Specimen POLICY NUMBER: 2100008065
Mary E Specimen
INITIAL
SPECIFIED AMOUNT ANNUAL
BENEFIT OF INSURANCE PREMIUM COST *
(This page is used to show any riders that are a part of the policy.)
* For any rider, this is the annual rider cost of insurance at issue. (NOTE:
These amounts shown are not additional premiums due but are the amounts
deducted from the accumulation value.) See each rider for further
information.
** Form number corresponds to form number in the lower left hand corner of
each benefit description.
8065 1.2-SB
LIST OF SUBACCOUNTS AND PORTFOLIOS
Each subaccount of the Acacia National Life Insurance Company (ANLIC) Separate
Account I invests in a specific portfolio of the following funds:
Alger American Fund ("Alger")
Calvert Variable Series, Inc. ("Calvert")
Dreyfus Stock Index Fund ("Dreyfus")
Neuberger Berman Advisers Management Trust ("Neuberger Berman AMT")
Oppenheimer Variable Account Funds ("Oppenheimer")
Strong Variable Insurance Funds, Inc. ("Strong")
Van Eck Worldwide Insurance Trust ("Van Eck")
INITIAL
ALLOCATION OF
CORRESPONDING NET PREMIUMS
FUND PORTFOLIO SUBACCOUNT
Alger Growth Growth Subaccount 50%
MidCap Growth MidCap Growth Subaccount 0%
Small Capitalization Small Capitalization Subaccount 0%
Calvert Social Money Market Social Money Market Subacount 0%
Social Small Cap Social Small Cap Subaccount 0%
Social Mid Cap Growth Social Mid Cap Growth Subaccount 0%
Social International
Equity Social International Equity Subaccount 0%
Social Balanced Social Balanced Subaccount 0%
Dreyfus Dreyfus Stock Index Fund Dreyfus Stock Index Fund Subaccount 50%
Neuberger Limited Maturity Bond Limited Maturity Bond Subaccount 0%
Berman AMT Growth Growth Subacount 0%
Oppenheimer Aggressive Growth Aggressive Growth
Fund/VA Fund/VA Subaccount 0%
Capital Appreciation Capital Appreciation
Fund/VA Fund/VA Subaccount 0%
Main Street Growth & Main Street Growth &
Income Fund/VA Income Fund/VA Subaccount 0%
High Income Fund/VA High Income Fund/VA Subaccount 0%
Strategic Bond Fund/VA Strategic Bond Fund/VA Subaccount 0%
Strong Discovery Fund II Discovery Fund II Subaccount 0%
International Stock
Fund II International Stock Fund II Subaccount 0%
Van Eck Worldwide Hard Assets
Fund Worldwide Hard Assets Fund Subaccount 0%
Net premiums may also be allocated to the ANLIC Fixed Account.
INITIAL
ALLOCATION OF
NET PREMIUMS
ANLIC Fixed Account 0%
8065 1-LSP
SCHEDULE OF MAXIMUM CHARGES
ASSET-BASED ADMINISTRATIVE EXPENSE CHARGE:
The maximum daily asset-based administrative expense charge is .000409%
(.15% annually).
MORTALITY AND EXPENSE RISK CHARGE:
The maximum daily mortality and expense risk charge is .002050% (.75%
annually) for years 1-15 and .000820% (.30% annually) for years 16 and
over.
ADMINISTRATIVE EXPENSE CHARGE:
The maximum annual administrative expense charge is $192 plus $1.20 per
$1000 of Specified Amount.
PERCENT OF PREMIUM CHARGE FOR TAXES:
The maximum percent of premium charge for taxes is 3% of premiums received.
TRANSFER CHARGE:
The first 15 transfers between Subaccounts and/or the Fixed Account per
policy year are free. Thereafter, the maximum charge for each transfer is
$10.00
PARTIAL WITHDRAWAL CHARGE:
The maximum charge for each partial withdrawal is the lesser of $50 or 2%
of the amount withdrawn.
SURRENDER CHARGE:
The following table shows the surrender charge for the initial specified
amount based on the policy year of surrender.
For any increase in specified amount, a surrender charge based on the
increase will be imposed in addition to the surrender charges stated below.
POLICY YEAR
OF SURRENDER AMOUNT
-------------- -------------
1 $1,825.00
2 $1,825.00
3 $1,825.00
4 $1,825.00
5 $1,825.00
6 $1,640.00
7 $1,460.00
8 $1,275.00
9 $1,095.00
10 $910.00
11 $730.00
12 $545.00
13 $365.00
14 $180.00
15 $ 0.00
8065 1-SC
SCHEDULE OF GUARANTEED ANNUAL
COST OF INSURANCE RATES*
INSURED: John E Specimen POLICY NUMBER: 2100008065
ISSUE AGE - SEX: 35 Male
POLICY DATE: May 1, 1999
INSURED: Mary E Specimen
ISSUE AGE - SEX 35 Female
POLICY YEAR RATE PER $1,000 POLICY YEAR RATE PER $1,000
BEGINNING OF AMOUNT BEGINNING OF AMOUNT
MAY 1 AT RISK MAY 1 AT RISK
--------- --------------- ----------- --------------
1999 0.002550 2032 8.617181
2000 0.008379 2033 10.096144
2001 0.015407 2034 11.854523
2002 0.023848 2035 13.982464
2003 0.033935 2036 16.585187
2004 0.046379 2037 19.735962
2005 0.061287 2038 23.462341
2006 0.078827 2039 27.767980
2007 0.099432 2040 32.637921
2008 0.123471 2041 38.068816
2009 0.152095 2042 44.111370
2010 0.185551 2043 50.913181
2011 0.224785 2044 58.682210
2012 0.270573 2045 67.625490
2013 0.324602 2046 77.940066
2014 0.388968 2047 89.634942
2015 0.465843 2048 102.590276
2016 0.558910 2049 116.623334
2017 0.671000 2050 131.580191
2018 0.802654 2051 147.321578
2019 0.958487 2052 163.771527
2020 1.138720 2053 181.013310
2021 1.343382 2054 199.155246
2022 1.579127 2055 218.543189
2023 1.857247 2056 239.830634
2024 2.188113 2057 264.566071
2025 2.586999 2058 296.255483
2026 3.077971 2059 341.746492
2027 3.681623 2060 414.234856
2028 4.404184 2061 537.310477
2029 5.253551 2062 743.944811
2030 6.232875 2063 or 899.956253
2031 7.347192 later
* The rates shown are annual rates per $1000 of amount at risk. To
calculate the monthly rate, the annual rate is divided by 12 and
rounded to the nearest six decimal places. These rates apply to the
basic policy and do not include the cost for riders. The rates shown
have been adjusted if this policy was issued with a tabular and/or
flat rating as shown on the schedule page.
8065 1-COI
SCHEDULE OF SURRENDER CHARGES FOR INCREASES
The additional surrender charge imposed under this policy for each requested
increase in specified amount will be based on the table shown below. To
calculate the amount of the charge, multiply the appropriate rate times the
amount of the increase and divide by 1000.
POLICY YEARS ADDITIONAL SURRENDER CHARGE PER
SINCE INCREASE $1,000 OF INCREASE IN SPECIFIED AMOUNT
-------------- --------------------------------------
1 3.65
2 3.65
3 3.65
4 3.65
5 3.65
6 3.28
7 2.92
8 2.55
9 2.19
10 1.82
11 1.46
12 1.09
13 0.73
14 0.36
15 0.00
8065 1-SSCI
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TABLE OF CONTENTS
POLICY SCHEDULE PAGES
SECTION 1. DEFINITIONS 3
SECTION 2. GENERAL PROVISIONS.............................................5
2.1 Meaning of In Force.....................................5
2.2 When This Policy Terminates.............................6
2.3 Guaranteed Death Benefit................................6
2.4 Minimum Benefit.........................................6
2.5 The Policy and its Parts................................6
2.6 Representations and Contestability......................7
2.7 Misstatement of Age or Sex..............................7
2.8 Suicide.................................................7
2.9 The Owner...............................................7
2.10 The Beneficiary.........................................8
2.11 Changing the Beneficiary................................8
2.12 Assigning the Policy....................................8
2.13 Non-Participating.......................................8
SECTION 3. PREMIUM PAYMENTS...............................................8
3.1 Guaranteed Death Benefit Premium........................8
3.2 Minimum Premium.........................................8
3.3 Planned Periodic Premium................................9
3.4 Unscheduled Premiums....................................9
3.5 Premium Limits..........................................9
3.6 Where to Pay Premiums...................................9
3.7 Net Premium.............................................9
3.8 Percent of Premium Charge for Taxes.....................9
3.9 Allocation of Net Premiums.............................10
SECTION 4. GRACE PERIOD AND REINSTATEMENT................................10
4.1 Grace Period...........................................10
4.2 Continuation of Insurance..............................10
4.3 Reinstating the Policy.................................10
SECTION 5. SEPARATE ACCOUNT..............................................11
5.1 The Account............................................11
5.2 The Subaccounts........................................11
5.3 Valuation of Assets....................................11
5.4 Transfer Among Subaccounts.............................12
5.5 The Funds..............................................12
5.6 Portfolio Changes......................................12
SECTION 6. THE FIXED ACCOUNT.............................................12
6.1 The Fixed Account......................................12
6.2 Transfers Among the Fixed Account
and the Subaccounts....................................13
8065 1
SECTION 7. ACCUMULATION VALUE............................................13
7.1 How Accumulation Value of the Policy is Determined.....13
7.2 Accumulation Value of the Subaccounts..................13
7.3 Net Asset Value........................................14
7.4 Subaccount Unit Value..................................14
7.5 Accumulation Value of the Fixed Account................15
7.6 Interest Credits.......................................15
7.7 Administrative Expense Charge..........................15
7.8 Cost of Insurance......................................15
7.9 Cost of Insurance Rates................................16
7.10 Monthly Deduction......................................16
7.11 Annual Report..........................................16
7.12 Illustrative Reports...................................17
SECTION 8. POLICY SURRENDER
AND PARTIAL WITHDRAWALS................................17
8.1 Surrender of the Policy................................17
8.2 Net Cash Surrender Value...............................17
8.3 Surrender Charge.......................................17
8.4 Partial Withdrawal.....................................17
8.5 Postponement of Payments...............................18
SECTION 9. DEATH BENEFIT.................................................18
9.1 Death Benefit Proceeds.................................18
9.2 Interest on Proceeds...................................19
9.3 Death Benefit..........................................19
9.4 Postponement of Payment................................20
9.5 Death of the First Insured.............................20
9.6 Simultaneous Death.....................................20
SECTION 10. POLICY CHANGES
AND EXCHANGE OF POLICY.................................21
10.1 Change in Death Benefit Options........................21
10.2 Change in the Specified Amount.........................21
10.3 Decreasing the Specified Amount........................21
10.4 Increasing the Specified Amount........................21
10.5 Surrender Charge for Increases.........................22
10.6 Time Period for Special Transfer.......................22
SECTION 11. LOAN BENEFITS.................................................22
11.1 Making a Policy Loan...................................22
11.2 Loan Interest..........................................23
11.3 Reduced Loan Interest Rate.............................23
11.4 Other Borrowing Rules..................................23
11.5 Repaying a Policy Debt.................................23
SECTION 12. PAYMENT OPTIONS...............................................24
12.1 Payment Option Rules...................................24
12.2 Description of Options.................................24
SECTION 13. NOTES ON OUR COMPUTATIONS.....................................25
13.1 Basis of Computation...................................25
13.2 Methods of Computing Values............................25
8065 2
SECTION 1. DEFINITIONS
"ACCUMULATION VALUE" means the total amount of value held in your accounts at
any time. It is equal to the total of the accumulation value held in the
Account, the Fixed Account, and the accumulation value held in the general
account which secures outstanding policy debt.
"BENEFICIARY" means the person to whom the death benefit proceeds are payable
upon the second death. The beneficiary is named by the Owner in the application.
If changed, the beneficiary is as shown in the latest change filed and recorded
with us. If no beneficiary survives the second death, the Owner or the Owner's
estate will be the beneficiary. The interest of any beneficiary is subject to
that of any assignee.
"DEATH BENEFIT" means the total amount of insurance coverage provided under the
selected death benefit option of this policy.
"DEATH BENEFIT PROCEEDS" means the proceeds payable to the beneficiary upon
receipt by us of the satisfactory proof of the death of both Insureds while this
policy is in force. It is equal to: (1) the death benefit; plus (2) any
additional life insurance proceeds provided by any riders; minus (3) any
outstanding policy debt; minus (4) any overdue monthly deductions, including the
deduction for the month of the second death.
"GUARANTEED DEATH BENEFIT PERIOD" is the period during which the Guaranteed
Death Benefit is in effect and will end on the earliest of the following dates:
a. The expiration date shown on the schedule pages of this policy or any revised
schedule pages.
b. The date that the net policy funding is less than the Guaranteed Death
Benefit requirement. See Section 2.3.
c. The date on which this policy first terminates even if this policy is
reinstated.
"INSURED" AND "INSUREDS" mean the person or persons upon whose lives this policy
is issued.
"ISSUE DATE" means the date that all financial, contractual, and administrative
requirements have been completed and processed. The issue date will be shown in
a confirmation notice sent to you.
"MAXIMUM AVAILABLE LOAN AMOUNT" is equal to the net cash surrender value at the
time of the loan less the monthly deductions remaining for the balance of the
policy year, less interest on the policy debt including the requested loan to
the next policy anniversary date.
MINIMUM BENEFIT PERIOD" is the period during which the Minimum Benefit is in
effect and will end on the earliest of the following dates:
a. The end of the sixtieth (60th) month after the policy date.
b. The date that the net policy funding is less than the Minimum Benefit
requirements. See Section 2.
c. The date on which this policy first terminates even if this policy is
reinstated.
8065 3
"MINIMUM PREMIUM" is a monthly premium listed in this policy for the original
face amount and any increase made during the first sixty months that this policy
is in force. During the first sixty months that this policy is in force, the
policy is guaranteed not to lapse provided the net policy funding equals or
exceeds the sum of the scheduled Minimum Premiums since the policy date and any
increase date. Relying on the Minimum Benefit feature will reduce premium
flexibility.
"MONTHLY ACTIVITY DATE" means the same date in each succeeding month as the
policy date except that whenever the monthly activity date falls on a date other
than a valuation date, the monthly activity date will be deemed the next
valuation date.
"MONTHLY DEDUCTIONS" means the deductions taken from the accumulation value on
the monthly activity date. These deductions are equal to: 1) the current cost of
insurance for the basic policy plus the cost for any riders; and 2) the
administrative expense charge.
"NET CASH SURRENDER VALUE" means the accumulation value on any valuation date,
less any surrender charges and less any outstanding policy debt.
"NET POLICY FUNDING" is the sum of all premiums paid, less any partial
withdrawals and less any outstanding policy debt.
"NET PREMIUM" means the premium paid less the percent of premium charge for
taxes.
"OUTSTANDING POLICY DEBT" means the sum of all unpaid policy loans and accrued
interest on policy loans.
"OWNER" means the Owner or owners (if joint ownership is elected) of this
policy, as designated in the application or as subsequently changed. If a policy
has been absolutely assigned, the assignee is the Owner. A collateral assignee
is not the Owner. See Section 2.9 for the rights and privileges of the Owner.
"PERCENT OF PREMIUM CHARGE FOR TAXES" is an amount deducted from each premium
received to cover certain expenses. This charge is a percentage of the premium.
The maximum applicable percentage can be found on the schedule pages.
"PLANNED PERIODIC PREMIUM" means a selected scheduled premium of a level amount
at a fixed interval. The initial planned periodic premium you selected is shown
on the schedule pages. See Section 3.3 of this policy.
"POLICY DATE" means the effective date for all coverage provided in the
application. The policy date is used to determine policy anniversary dates,
policy years and monthly activity dates. Policy anniversaries are measured from
the policy date. The policy date and the issue date will be the same unless: 1)
an earlier policy date is specifically requested, or 2) additional premiums or
application amendments are required at the time of delivery, in which case the
policy date will be earlier.
"POLICY YEAR" means the period from one policy anniversary date until the next
policy anniversary date.
"SEC" means the Securities and Exchange Commission.
8065 4
"SATISFACTORY PROOF OF DEATH" means all of the following must be submitted:
a. Certified copy of the death certificates of both Insureds.
b. A Notice of Death Claim.
c. This policy.
d. Any other information that we may reasonably require to establish the
validity of the claim.
"SECOND DEATH" means the later of the dates of death of the Insureds. In the
event of simultaneous deaths, second death means the date of death of the
Insureds.
"SURVIVING INSURED" means the Insured who remains alive after one of the
Insureds has died.
"SPECIFIED AMOUNT" means the minimum death benefit under the policy while this
policy remains in force. The initial specified amount is shown on the schedule
pages. Adjustments and changes to the specified amount can occur as discussed in
Section 10.
"SURRENDER CHARGE" means the charge subtracted from the accumulation value on
the surrender of this policy. Refer to the SCHEDULE OF MAXIMUM CHARGES and the
SCHEDULE OF SURRENDER CHARGES FOR INCREASES on the schedule pages.
"SURRENDER" means the termination of this policy while at least one Insured is
alive for its net cash surrender value. See Section 8 of this policy.
"VALUATION DATE" is any day on which the New York Stock Exchange is open for
trading.
"YOU" AND "YOUR" refer to the Owner of this policy. The Insureds may or may not
be the Owner.
"WE", "US" AND "OUR" refer to Acacia National Life Insurance Company. Our
Administrative Office is at P.O. Box 82579, Lincoln, Nebraska 68501-2579.
SECTION 2. GENERAL PROVISIONS
2.1 MEANING OF IN FORCE
This policy will remain in force as long as on each monthly activity date the
net cash surrender value is sufficient to cover monthly deductions.
However, this policy will remain in force if the requirements of either the
Minimum Benefit or Guaranteed Death Benefit provision is in effect on this
policy, even if the net cash surrender value is insufficient to cover monthly
deductions. See Sections 2.3 and 2.4.
8065 5
2.2 WHEN THIS POLICY TERMINATES
This policy will terminate on the earliest of:
a. Any monthly activity date when the net cash surrender value is
insufficient to cover monthly deductions and the grace period ends without
sufficient premium being paid. However, this policy will not terminate if
the Minimum Benefit or Guaranteed Death Benefit is in effect, even if the
net cash surrender value is insufficient to cover monthly deductions.
b. The second death.
c. You request the coverage be terminated and you return this policy.
2.3 GUARANTEED DEATH BENEFIT
The Guaranteed Death Benefit is a benefit which applies to this policy at issue.
This benefit will ensure that the policy will remain in force as long as the net
policy funding meets or exceeds the Guaranteed Death Benefit requirement and the
policy is within the Guaranteed Death Benefit Period. The Guaranteed Death
Benefit requirement is the cumulative Guaranteed Death Benefit Premium to the
monthly activity date. The Guaranteed Death Benefit Premium and the Guaranteed
Death Benefit Period are shown on the schedule page. Any changes in the
Guaranteed Death Benefit Premium due to increases in specified amount or
additions of riders will be reflected in the requirement from the effective date
of the change.
If the net policy funding is less than the Guaranteed Death Benefit requirement,
the benefit is no longer in effect. You will be notified by mail and will have
61 days from the date we mail the notice to meet the Guaranteed Death Benefit
requirement. The Guaranteed Death Benefit can not be reinstated once this policy
has lapsed.
2.4 MINIMUM BENEFIT
The Minimum Benefit is a benefit which applies to this policy at issue. This
benefit will ensure that the policy will remain in force during the first sixty
(60) months from the policy date as long as the net policy funding meets or
exceeds the Minimum Benefit requirement. The Minimum Benefit requirement is the
cumulative Minimum Premiums to the monthly activity date. The Minimum Premium is
shown in the schedule page. Any changes in the Minimum Premium due to increases
in specified amount or additions of rider will be reflected in the requirement
from the effective date of the change.
If the net policy funding is less than the Minimum Benefit requirement, the
benefit is no longer in effect. You will be notified by mail and will have 61
days from the date we mail the notice to meet the Minimum Benefit requirement.
The Minimum Benefit can not be reinstated once this policy has lapsed.
2.5 THE POLICY AND ITS PARTS
This policy is a legal contract between you and us. It is issued in return for
the application and payment of the initial premium as described in Section 3.1.
This policy, the application, any supplemental applications, riders,
endorsements, and amendments are the entire contract. No change in this policy
will be valid unless it is in writing, attached to this policy, and approved by
either the president or secretary of the company. No agent may change this
policy or waive any of its provisions.
8065 6
2.6 REPRESENTATIONS AND CONTESTABILITY
We rely on statements made in the application. In the absence of fraud, they are
considered representations and not warranties. We can contest this policy for
any material misrepresentation of fact. The misrepresentation must have been
made in the application attached to this policy when issued or in a supplemental
application made a part of this policy when a change in coverage or
reinstatement went into effect.
We cannot contest this policy after it has been in force during the life time of
the Insureds for two years from the policy date. Nor can we contest any
increased benefits later than two years after the effective date of the
increased benefits during the lifetime of the Insureds. Any increase or
reinstatement will be contestable, within the two year period, only with regard
to statements made in the supplemental application. This provision does not
apply to riders with their own contestability provision.
We may require evidence that both Insureds are living during the first two years
from the policy date or from the effective date of any increase in benefits.
2.7 MISSTATEMENT OF AGE OR SEX
If the age or sex of either Insured or any person insured by rider has been
misstated on the application, the death benefit and any additional benefits
provided will be those which would have been purchased by the most recent
deduction for the cost of insurance and the cost of any additional benefits at
the insured person(s) correct ages and/or sexes.
2.8 SUICIDE
If either Insured commits suicide while sane or insane, within two years from
the policy date, we will limit the proceeds. The limited amount will equal all
premiums paid for this policy, less outstanding policy debt, partial
withdrawals, and the cost for riders.
If either Insured commits suicide, while sane or insane, within two years from
the effective date of any increase in the specified amount, we will limit the
proceeds payable with respect to the increase. The proceeds thus limited will
equal the total cost of insurance applicable to the increase. This provision
does not apply to riders with their own suicide provision.
2.9 THE OWNER
While either Insured is living you have all the benefits, rights and privileges
under this policy. These include naming a successor-owner, changing the
beneficiary, assigning this policy, enjoying all policy benefits, and exercising
all policy options. If there is more than one Owner at a given time, all must
exercise the right of ownership.
If you are not one of the Insureds, you should name a successor-owner who will
become the Owner if you die before the second death. If you die before the
second death and there is no successor-owner, ownership will pass to your
estate.
Unless otherwise designated in the application or subsequently changed under a
successor-owner designation, joint ownership will be joint tenants with rights
of survivorship. If a successor-owner has been named to be effective on the
first Owner's death, then any death benefit proceeds payable by rider attached
to this policy will be paid in accordance with rider provisions prior to any
ownership change. If no successor-owner has been named or is no longer living,
then the ownership will pass to the Executor or Administrator of the last
Owner's estate unless otherwise indicated.
8065 7
2.10 THE BENEFICIARY
You can name primary and contingent beneficiaries. Your original beneficiary
choice is shown in the attached application.
Unless a payment plan is chosen, the proceeds payable at the second death will
be paid in a lump sum to the primary beneficiary. If the primary beneficiary
dies before the second death, the proceeds will be paid to the contingent
beneficiary. If no beneficiary survives the second death, the proceeds will be
paid to your estate.
2.11 CHANGING THE BENEFICIARY
You may change the beneficiary during either Insured's lifetime. We do not limit
the number of changes that may be made. To make the change, we must receive a
completed Change of Beneficiary form and any other forms required by our
Administrative Office. The change will take effect as of the date we record it
at our Administrative Office, even if the second death occurs before we do so.
Each change will be subject to any payment we made or any other action we took
before the change is recorded.
2.12 ASSIGNING THE POLICY
You may assign this policy. For an assignment to bind us, we must receive a
signed copy in our Administrative Office. We are not responsible for the
validity of any assignment.
An assignment is subject to any policy debt. Policy debt is discussed in Section
11.
2.13 NON-PARTICIPATING
This policy is non-participating. In other words, no dividends will be paid
under this policy.
SECTION 3. PREMIUM PAYMENTS
3.1 GUARANTEED DEATH BENEFIT PREMIUM
You have the option to pay a planned premium based on the Guaranteed Death
Benefit Premium. The monthly premium is shown on the schedule pages.
During the Guaranteed Death Benefit Period, also shown on the schedule pages, if
net policy funding meets or exceeds the Guaranteed Death Benefit requirement,
this policy will remain in force, even if the net cash surrender value is
insufficient to cover monthly deductions.
3.2 MINIMUM PREMIUM
You have the option to pay a planned premium based on the Minimum Premium. The
monthly premium is shown on the schedule pages.
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During the first sixty months from the policy date shown on the schedule page,
when net policy funding meets or exceeds the Minimum Benefit requirement, the
policy will remain in force, even if the net cash surrender value is
insufficient to cover monthly deductions.
3.3 PLANNED PERIODIC PREMIUM
This is a flexible premium policy. You may choose to pay planned periodic
premiums, and as indicated in Sections 3.1 and 3.2, you may elect to base your
planned periodic premiums on the Guaranteed Death Benefit Premium or the Minimum
Premium. However, planned periodic premiums are not required. The amount and
frequency of the planned periodic premiums you selected when this policy was
issued is shown on the schedule pages. You may change the frequency of the
payments or the amount by sending a written request to our Administrative
Office. We reserve the right to limit the amount and frequency of the planned
periodic premiums you choose to pay.
3.4 UNSCHEDULED PREMIUMS
Any premium we receive under this policy in an amount different from the planned
periodic premium will be considered an unscheduled premium. Unscheduled premiums
can be made at any time while this policy is in force, subject to the premium
limits provision below.
3.5 PREMIUM LIMITS
We reserve the right to limit the amount and frequency of premium payments. We
will not accept that portion of a premium payment which affects the tax
qualifications of this policy as described in Section 7702 of the Internal
Revenue Code, as amended. This excess amount will be returned to you.
3.6 WHERE TO PAY PREMIUMS
Each premium after the first one is payable at our Administrative Office. Upon
request, a receipt signed by our Secretary or an Assistant Secretary will be
given for any premium payment.
3.7 NET PREMIUM
Before the premiums paid are allocated to the Subaccounts and/or Fixed Account,
a percent of premium charge for taxes is deducted. The amount of premium then
allocated is called the net premium.
3.8 PERCENT OF PREMIUM CHARGE FOR TAXES
The percent of premium charge for taxes is deducted from each premium payment
received. The percent of premium charge for taxes is shown on the schedule
pages.
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3.9 ALLOCATION OF NET PREMIUMS
Unless otherwise required by state law, the initial net premium will be
allocated on the issue date to the Subaccounts and/or the Fixed Account as you
have selected on the application. When state or other applicable law or
regulation requires return of at least your premium payments should you return
this policy pursuant to the "Notice of Ten-Day Right to Examine Policy"
provision shown on the policy cover, the initial net premium will be allocated
on the issue date to a money market Subaccount, unless you have allocated 100%
to the Fixed Account. Then, on the 13th day after the issue date, the
accumulation value will be reallocated to the Subaccounts and/or the Fixed
Account as you have selected on the application. If you have allocated 100% to
the Fixed Account, the accumulation value is immediately allocated to the Fixed
Account on the issue date. Any additional premium received will be allocated in
accordance with your instructions. You may change the allocation of later net
premiums without charge. The allocation will apply to future net premiums after
we receive the change. The Subaccounts and the Fixed Account are discussed in
Sections 5 and 6.
SECTION 4. GRACE PERIOD
AND REINSTATEMENT
4.1 GRACE PERIOD
This policy will begin a 61 day grace period when:
a. the net cash surrender value on any monthly activity date is not sufficient
to cover monthly deductions; and
b. the Guaranteed Death Benefit is no longer in effect; and
c. the Minimum Benefit is no longer in effect.
The 61 day grace period will begin on the day we mail a notice of the premium
necessary to keep this policy in force. We will mail this notice to you at your
last known address and to any assignee of record. If sufficient premium is not
paid by the end of the grace period, this policy will terminate without value.
If the second death occurs during the grace period, the overdue monthly
deductions will be deducted from the death proceeds.
4.2 CONTINUATION OF INSURANCE
Insurance coverage under this policy and any benefits provided by any rider(s)
will be continued through the grace period.
4.3 REINSTATING THE POLICY
If both Insureds are living and application is made within five years from the
beginning of any grace period, this policy can be considered for reinstatement
if it terminated because a grace period ended without sufficient premium being
paid.
To qualify for reinstatement, you must send evidence satisfactory to us that
both Insureds are insurable in the same rating classes that were in effect when
the grace period expired. The effective date of the reinstatement will be the
first monthly activity date on or next following the date the application for
reinstatement is approved.
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To reinstate the policy, you will have to pay a premium equal to the greater of:
a. a premium sufficient to bring the net cash surrender value as of the date of
reinstatement to an amount above zero; or
b. three times the current month's monthly deduction, adjusted for the percent
of premium charge for taxes.
We will accept a premium larger than the applicable amount described above.
This policy cannot be reinstated if it has been surrendered for its net cash
surrender value. Any policy debt will be reinstated. The Guaranteed Death
Benefit and Minimum Benefit provisions cannot be reinstated.
SECTION 5. SEPARATE ACCOUNT
5.1 THE ACCOUNT
The word Account, where we use it in this policy without qualification, means
the Acacia National Life Insurance Company Separate Account I. This is a unit
investment trust registered with the SEC under the Investment Company Act of
1940. It is also subject to the laws of Virginia. We own the assets of the
Account and keep them separate from the assets of our general account.
The Account is used only to fund the variable benefits provided under this
policy and any other variable life policies supported by the Account.
The assets of the Account will be available to cover the liabilities of our
general account only to the extent that the assets of the Account exceed the
liabilities of the Account arising under the variable life policies supported by
the Account.
5.2 THE SUBACCOUNTS
The Account has a number of Subaccounts. We list those available on the policy
date on the schedule pages. The available Subaccounts may change after the
policy date. Any changes will be disclosed by the prospectus. You determine,
using whole percentages, how the net premium will be allocated among the
Subaccounts. You may choose to allocate nothing to a particular Subaccount. The
allocations to the Subaccounts along with allocations to the Fixed Account must
total 100%. The assets of each Subaccount will be used to buy shares in a
corresponding portfolio of the funding vehicles designated on the schedule
pages. See Section 5.5. Income and realized and unrealized gains or losses from
the assets of each Subaccount are credited to or charged against that Subaccount
without regard to income, gains or losses in the other Subaccounts, our general
account or any other separate accounts.
5.3 VALUATION OF ASSETS
The value of the assets of each Subaccount will be determined at the end of each
valuation date.
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5.4 TRANSFER AMONG SUBACCOUNTS
You may transfer amounts among Subaccounts as often as you wish in a policy
year. The transfer will take effect on the later of the date designated in the
request or on the valuation date following receipt of the written request at our
Administrative Office.
Each transfer must be for a minimum of $100 or the balance in the Subaccount, if
less. The minimum amount which can remain in a Subaccount and/or in the Fixed
Account as a result of a transfer is $100. Any amount below this minimum must be
included in the amount transferred.
Transfers may be subject to additional restrictions by the Funds.
5.5 THE FUNDS
The word Funds, where we use it in this policy without qualification, means the
funding vehicles designated on the schedule pages. The available Funds may
change. Any changes will be disclosed in the prospectus. The Funds are
registered with the SEC under the Investment Company Act of 1940 as diversified
open-end management investment companies. The Funds bear their own expenses. The
Funds have several portfolios; there is a portfolio that corresponds to each of
the Subaccounts. We list those available on the policy date on the schedule
pages.
5.6 PORTFOLIO CHANGES
A portfolio of the Funds might, in our judgment, become unsuitable for
investment by a Subaccount. This might happen because of a change in investment
policy, because of a change in laws or regulations, because the shares are no
longer available for investment, or for some other reason. If that occurs, we
have the right to substitute another portfolio of the Funds, or to invest in
another fund. We would first notify and receive approval from the SEC and the
Virginia Insurance Department. This approval process is on file with the
insurance commissioner of the state where this policy is delivered. Any
portfolio changes will be disclosed in the prospectus. If the SEC requires that
such action receive approval from a majority of the policyholders in the
Account, then you will be notified of your right to vote. You will be notified
of any material change in the investment policy of any portfolio in which you
have an interest. If you are dissatisfied with any change, you always have the
option to transfer all or a portion of your accumulation value to the Fixed
Account (See Section 6.2) or to one of the other available Subaccounts (See
Section 5.4).
SECTION 6. THE FIXED ACCOUNT
6.1 THE FIXED ACCOUNT
Net premiums allocated to and transfers to the Fixed Account under this policy
become part of the general account assets of Acacia National Life Insurance
Company which support annuity and insurance obligations. The Fixed Account
includes all of Acacia National Life Insurance Company's assets, except those
assets segregated in separate accounts. Acacia National Life Insurance Company
maintains the sole discretion to invest the assets of the Fixed Account, subject
to applicable law.
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You determine, using whole percentages, how the premium will be allocated to the
Fixed Account. You may choose to allocate nothing to the Fixed Account. The
allocations to the Fixed Account along with allocations to the Subaccounts must
total 100%.
6.2 TRANSFERS AMONG THE FIXED ACCOUNT AND THE SUBACCOUNTS
You may transfer amounts into the Fixed Account from the Subaccounts at any time
during the policy year.
You may make one transfer out of the Fixed Account to any of the other
Subaccounts only during the 30 day period following each policy anniversary.
The allowable transfer amount out of the Fixed Account is limited to the greater
of:
a. 25% of the accumulation value in the Fixed Account; or
b. any Fixed Account transfer which occurred during the prior 13 months; or
c. $1,000.
SECTION 7. ACCUMULATION VALUE
7.1 HOW ACCUMULATION VALUE OF THE POLICY IS DETERMINED
The accumulation value of this policy on the issue date is:
a. The net premiums received by us on or before the issue date; minus
b. Any monthly deductions due on or before the issue date.
The accumulation value of this policy on a valuation date is equal to the total
of the values in each Subaccount and the Fixed Account, plus the accumulation
value impaired by policy debt which is held in the general account, plus any net
premium received on that valuation date but not yet allocated.
7.2 ACCUMULATION VALUE OF THE SUBACCOUNTS
To compute the accumulation value held in the Subaccounts on any valuation date,
we multiply each Subaccount's unit value (defined in Section 7.4 below) by the
number of Subaccount units allocated to this policy.
The number of Subaccount units will increase when:
a. Net premiums are credited to that Subaccount;
b. Transfers from other Subaccounts or the Fixed Account are credited to that
Subaccount;
c. Policy debt (principal or interest) is repaid and allocated to the
Subaccount, or interest is credited from the amount held in the general
account to secure the policy debt.
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The number of Subaccount units will decrease when:
a. A policy loan is taken from that Subaccount;
b. A partial withdrawal is taken from that Subaccount;
c. A portion of the monthly deduction is taken from that Subaccount;
d. A transfer is made from that Subaccount to other Subaccounts or the Fixed
Account;
e. Policy loan interest not paid when due is taken from that Subaccount; or
f. A portion of any transfer charge is taken from that Subaccount.
Each transaction above will increase or decrease the number of Subaccount units
allocated to this policy by an amount equal to the dollar value of the
transaction divided by the current unit value on the valuation date for that
transaction.
7.3 NET ASSET VALUE
The net asset value of the shares of each portfolio of the Fund is determined
once daily as of the close of business of the New York Stock Exchange on days
when the Exchange is open for business. The net asset value is determined by
adding the values of all securities and other assets of the portfolio,
subtracting liabilities and expenses and dividing by the number of outstanding
shares of the portfolio. Expenses, including the investment advisory fee, are
accrued daily.
7.4 SUBACCOUNT UNIT VALUE
For each Subaccount, the value of an accumulation unit (unit value) was set when
the Subaccount was established. The unit value of each Subaccount reflects the
investment performance of that Subaccount. The unit value may increase or
decrease from one valuation date to the next.
The unit value of each Subaccount on any valuation date shall be calculated as
follows:
a. The per share net asset value of the corresponding Fund portfolio on the
valuation date times the number of shares held by the Subaccount, before
the purchase or redemption of any shares on that date; minus
b. A daily charge for administrative expenses, called the asset-based
administrative expense charge, shown on the schedule page; minus
c. A daily charge for mortality and expense risk shown on the schedule
page; minus
d. Any taxes payable by the Separate Account; divided by
e. The total number of units held in the Subaccount on the valuation date
before the purchase or redemption of any units on that date.
When transactions are made, the actual dollar amounts are converted to
accumulation units. The number of accumulation units for a transaction is found
by dividing the dollar amount of the transaction by the current unit value on
the valuation date for that transaction.
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7.5 ACCUMULATION VALUE OF THE FIXED ACCOUNT
The accumulation value of the Fixed Account on a valuation date is equal to:
a. The net premiums credited to the Fixed Account; plus
b. Any transfers from the Subaccounts credited to the Fixed Account; plus
c. Any policy debt (principal or interest) repaid and allocated to the Fixed
Account, or interest credited from the amount held in the general account
to secure the policy debt; minus
d. Any policy loan taken from the Fixed Account; minus
e. Any partial withdrawal and its charge taken from the Fixed Account; minus
f. The portion of the monthly deduction taken from the Fixed Account; minus
g. Any transfer made from the Fixed Account; minus
h. The portion of any transfer charge taken from the Fixed Account; minus
i. Any policy loan interest not paid when due taken from the Fixed Account; plus
j. Interest credits.
7.6 INTEREST CREDITS
We guarantee that the accumulation value in the Fixed Account will be credited
with an effective annual interest rate of at least 3.5%. We may, at our
discretion, credit a higher current rate of interest.
7.7 ADMINISTRATIVE EXPENSE CHARGE
On each monthly activity date, one-twelfth of the annual administrative expense
charges will be deducted from the accumulation value. The maximum administrative
expense charge is shown on the schedule pages. We have the option of charging a
current administrative expense charge which can be less than the maximum. Any
current administrative expense charge will apply to all policies having the same
specified amount, policy year and policy month as this policy and whose Insureds
are the same issue age, sex and risk class as the Insureds covered by this
policy. The actual charges will be shown on your annual report.
7.8 COST OF INSURANCE
The cost of insurance will be figured each month. It is the cost of insurance
for the basic policy (including any increases in the specified amount) plus the
cost for any riders. The cost for this policy is equal to:
a. the death benefit on the monthly activity date, discounted at the guaranteed
rate of interest for the Fixed Account for one month;
b. less the accumulation value on the monthly activity date, after all monthly
deductions have been taken except for the cost of insurance;
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c. the above result multiplied by the monthly cost per $1,000 of insurance (as
described below in the Cost of Insurance Rates section);
d. divided by $1,000.
The charges made during the policy year will be shown on the annual report.
7.9 COST OF INSURANCE RATES
For the initial specified amount, the cost of insurance rates will not exceed
those shown on the SCHEDULE OF GUARANTEED ANNUAL COST OF INSURANCE RATES in the
schedule pages. To calculate the monthly rates, divide by 12 and round to the
nearest six decimal places.
The guaranteed rates shown on the schedule page have been adjusted for any table
rating and/or flat extra rating.
Each year, the annual cost of insurance rates will be declared for the next
policy year. These rates will be based on the issue age, sex, tobacco usage and
risk class of each Insured and the policy duration. The rates will be adjusted
for any table rating and/or flat extra rating.
Any change in the current cost of insurance rates will apply to all Insureds of
the same issue age, sex, tobacco usage and risk class and whose policies have
been in effect for the same length of time.
7.10 MONTHLY DEDUCTION
The monthly deduction is made each policy month against the accumulation value
allocated to the Account and to the Fixed Account. Monthly deductions will be
deducted from the Subaccounts and the Fixed Account in the same proportion as
the balances held in the Subaccounts and the Fixed Account. The monthly
deduction is equal to:
a. The monthly administrative expense charge for the current policy month; plus
b. The cost of insurance for the current policy month, including the cost for
any rider.
Refer to the SCHEDULE OF GUARANTEED ANNUAL COST OF INSURANCE RATES and the
SCHEDULE OF MAXIMUM CHARGES on the schedule pages for further details.
7.11 ANNUAL REPORT
Each year the Owner will be mailed an annual report that shows the progress of
this policy. This report will show for the last policy year:
a. premiums paid;
b. expense charges;
c. investment gains/losses; and
d. cost of insurance.
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As of the date of the report, the following values will be shown:
a. accumulation value;
b. specified amount of insurance;
c. death benefit; and
d. outstanding debt, if any.
7.12 ILLUSTRATIVE REPORTS
We will send you an illustration of projected future death benefits under both
guaranteed and current assumptions at any time if you send us a written request
for the illustration. If allowed by state law, a reasonable fee not to exceed
$50 may be charged for each report. The fee will be one that is in effect for
this service at the time you make the request.
The illustration will be based on assumptions as to:
a. Specified amount;
b. Type of death benefit option;
c. Future premium payments; and
d. Other necessary items.
SECTION 8. POLICY SURRENDER AND
PARTIAL WITHDRAWALS
8.1 SURRENDER OF THE POLICY
This policy may be surrendered for its net cash surrender value at any time
during the lifetimes of either Insured.
8.2 NET CASH SURRENDER VALUE
The amount payable upon surrender is the accumulation value on the valuation
date we receive your written request, less any surrender charges, and less any
outstanding policy debt. The net cash surrender value is payable in one lump sum
or under one of the payment options. See Section 12.
8.3 SURRENDER CHARGE
The surrender charge is based on the initial specified amount of insurance at
issue and any increase in specified amount.
8.4 PARTIAL WITHDRAWAL
A partial withdrawal of this policy may be made for any amount of at least $500
subject to the following rules:
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a. The net cash surrender value remaining after a partial withdrawal must be
at least $1,000 or an amount sufficient to maintain this policy in force
for the remainder of the policy year.
b. A partial withdrawal is irrevocable.
c. The request must be made to us in writing on a form approved by us.
d. A withdrawal charge will be deducted from the amount withdrawn. The charge
will not exceed the lesser of $50 or 2% of the amount withdrawn.
Partial withdrawals will affect other policy values. The accumulation value will
be reduced by the amount of the partial withdrawal. If Death Benefit Option A is
in effect on the date of a partial withdrawal, the specified amount will be
reduced by the amount of the partial withdrawal. These reductions will also
reduce the death benefits. See Section 9. The withdrawal will affect the net
policy funding used to determine if the Guaranteed Death Benefit or Minimum
Benefit is to remain in effect. See Sections 2.3 and 2.4.
You may tell us how to allocate the partial withdrawal among the Subaccounts
and/or the Fixed Account, provided that the minimum amount remaining in a
Subaccount and/or the Fixed Account as a result of the allocation is $100. If
you do not, or if there is not enough value in any Subaccount or in the Fixed
Account, the partial withdrawal will be allocated among the Subaccounts and the
Fixed Account in the same proportion as the balances held in each Subaccount and
the Fixed Account on the date we receive the request in our Administrative
Office.
8.5 POSTPONEMENT OF PAYMENTS
We will usually pay any amounts payable from the Subaccounts as a result of
surrender, partial withdrawal or policy loan within seven (7) days after we
receive written request in our Administrative Office on a form satisfactory to
us. We can postpone such payments or any transfers of amounts between
Subaccounts if:
a. The New York Stock Exchange is closed other than customary weekend and
holiday closings or trading on the New York Stock Exchange is restricted
as determined by the SEC; or
b. The SEC by order permits the postponement for the protection of
policyowners; or
c. An emergency exists as determined by the SEC, as a result of which
disposal of securities is not reasonable, practicable, or it is not
reasonable or practicable to determine the value of the net assets of the
Account.
We may defer the payment of a full surrender, partial withdrawal or policy loan
from the Fixed Account for up to six months from the date we receive your
written request.
SECTION 9. DEATH BENEFIT
9.1 DEATH BENEFIT PROCEEDS
The death benefit proceeds payable to the beneficiary upon our receipt of
satisfactory proof of the death of both Insureds while this policy is in force
will equal:
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a. The death benefit; plus
b. Any additional life insurance proceeds provided by any rider; minus
c. Any outstanding policy debt; minus
d. Any overdue monthly deductions including the deduction for the month of
the second death.
9.2 INTEREST ON PROCEEDS
Death benefit proceeds that are paid in one lump sum will include interest if we
do not pay the proceeds within 30 days of receiving satisfactory proof of death
of both Insureds. The rate of interest will be the greater of:
a. 3% per annum.
b. the current rate of interest payable on death benefit proceeds.
c. the rate required by state law.
Interest will accrue from the date we receive satisfactory proof of death of
both Insureds to the date of payment of the death benefit proceeds.
9.3 DEATH BENEFIT
Subject to the provisions of this policy, the death benefit option at any time
shall be either Option A or Option B. The initial death benefit option is shown
on the schedule pages. It may be changed as described in Section 10.1.
Option A: Basic Coverage
The death benefit will be the greater of:
a. The current specified amount; or
b. A percentage of the accumulation value on the second death, where the
applicable percentage is determined from the table shown below.
Option B: Basic Coverage Plus Accumulation Value
The death benefit will be the greater of:
a. The current specified amount plus the accumulation value on the second
death; or
b. A percentage of the accumulation value on the second death, where the
applicable percentage is determined from the table shown below.
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Younger Younger
Insured's Applicable Insured's Applicable
Age * Percentage Age * Percentage
------------ ---------- ----------- ----------
40 or less 250% 60 130%
41 243 61 128
42 236 62 126
43 229 63 124
44 222 64 122
45 215 65 120
46 209 66 119
47 203 67 118
48 197 68 117
49 191 69 116
50 185 70 115
51 178 71 113
52 171 72 111
53 164 73 109
54 157 74 107
55 150 75-90 105
56 146 91 104
57 142 92 103
58 138 93 102
59 134 94 or older 101
*Younger Insured's Age means age of the younger Insured on the issue date plus
the number of complete policy years this policy has been in effect.
9.4 POSTPONEMENT OF PAYMENT
We will usually pay any death benefit proceeds within seven (7) days after we
receive satisfactory proof of death of both Insureds.
9.5 DEATH OF FIRST INSURED
During the period following the death of one of the Insureds but prior to the
second death, this policy will remain in force subject to the grace period. The
death of the first Insured will have no effect on the cost of insurance rates
for this policy. Satisfactory proof of death of the first Insured should be
submitted to our Administrative Office within one year of the date of death.
9.6 SIMULTANEOUS DEATH
If a simultaneous death occurs, only one death benefit is payable.
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SECTION 10. POLICY CHANGES
AND EXCHANGE OF POLICY
10.1 CHANGE IN DEATH BENEFIT OPTIONS
You may change the death benefit option which is shown on the schedule pages and
is referred to in Section 9. The death benefit option may not be changed in the
first policy year and may only be changed once a year thereafter. The change
will become effective on the first monthly activity date on or next following
the date we approve your requested change.
If you change from Option A to Option B, the specified amount after the change
will equal the death benefit prior to the change, less the accumulation value as
of the date of change. A change from Option B to Option A will change the
specified amount to an amount equal to the death benefit as of the date of
change.
10.2 CHANGE IN THE SPECIFIED AMOUNT
After this policy has been in effect for one year, you can increase or decrease
the specified amount while both Insureds are living. To make a change, send a
written request to our Administrative Office. Any change will be effective on
the monthly activity date on or next following the date we approve the request,
unless you specify a later date. You may only change the specified amount once a
year.
10.3 DECREASING THE SPECIFIED AMOUNT
A decrease in the specified amount is subject to the following conditions:
a. A decrease may not be made during the first policy year nor during the
first 12 policy months following an increase in specified amount except
for a decrease which was the result of a partial withdrawal.
b. The specified amount in effect after any decrease may not be less
than $100,000.
c. No decrease is permitted which affects the tax qualifications of this
policy as described in Section 7702 of the Internal Revenue Code, as
amended.
10.4 INCREASING THE SPECIFIED AMOUNT
Any increase of the specified amount is subject to the following conditions:
a. An increase may not be made in the first policy year.
b. A supplemental application for the increase and satisfactory evidence of
insurability that both Insureds are insurable in the same rating classes
currently in effect for this policy.
c. The minimum amount of any increase is $50,000.
d. An increase cannot be made if either Insured was over age 85 on the most
recent policy anniversary.
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e. If an increase occurs during the first five policy years the Minimum
Premium will be increased on the date of change. The Minimum Benefit
requirement will reflect the change in the Minimum Premium from the date
of change.
f. If an increase occurs during the Guaranteed Death Benefit Period, the
Guaranteed Death Benefit Premium will be increased on the date of change.
The Guaranteed Death Benefit requirement will reflect the change in the
Guaranteed Death Benefit Premium from the date of change.
g. At the time of the increase, the accumulation value, less any surrender
charges less any outstanding policy debt must be at least equal to 12
times the current month's monthly deduction reflecting the increase in
specified amount. If this value is not sufficient to support these monthly
deductions for at least one year beyond the effective date of the
increase, additional premiums may be required. You will be notified of any
additional premium due.
10.5 SURRENDER CHARGE FOR INCREASES
An additional surrender charge will be imposed under this policy for each
requested increase in specified amount. The additional surrender charge will be
deducted upon the surrender of this policy at any time during the 14 years
following the increase. The amount of the additional surrender charge is shown
in the schedule pages. The amount of the surrender charge due to the increase in
each policy year after the increase is determined by multiplying the appropriate
rate from the schedule times the amount of the requested increase and dividing
by 1000. See the Schedule of Surrender Charges for Increases.
10.6 TIME PERIOD FOR SPECIAL TRANSFER
At any time within 24 months of the policy date shown on the schedule pages you
may request a transfer of the entire accumulation value in the Subaccounts to
the Fixed Account.
SECTION 11. LOAN BENEFITS
This policy has loan benefits that are described below. The amount of
outstanding loans plus accrued interest is called outstanding policy debt. Any
outstanding policy debt will be deducted from proceeds payable at the second
death, or on surrender.
11.1 MAKING A POLICY LOAN
After the first policy anniversary, you may obtain a policy loan from us. This
policy is the only security required. The Maximum Available Loan Amount is equal
to the net cash surrender value at the time of the loan less the monthly
deductions remaining for the balance of the policy year, less interest on the
policy debt including the requested loan to the next policy anniversary date.
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11.2 LOAN INTEREST
The maximum interest rate on any loan is 6% per year. We have the option of
charging less. Interest accrues daily and becomes a part of the policy debt.
Interest payments are due on each anniversary date. If interest is not paid when
due, it will be added to the policy debt and will bear interest at the rate
charged on the loan.
11.3 REDUCED LOAN INTEREST RATE
The loan interest rate will be reduced to a maximum of 4% for eligible loan
amounts. This reduced loan interest rate is available on and after the 10th
policy anniversary. The eligible loan amount for a reduced loan interest rate
will be equal to the accumulation value plus any previous withdrawals, minus
total premiums paid and minus any outstanding policy debt held at a reduced
interest rate. However, the total reduced loan amount cannot exceed the Maximum
Available Loan Amount. If a regular loan is in effect on the policy anniversary,
it will be converted to a loan with the reduced loan interest rate up to the
eligible amount. Interest on loans with a reduced interest rate will accrue at
the reduced loan rate.
11.4 OTHER BORROWING RULES
When a policy loan is made, or when interest is not paid when due, an amount
sufficient to secure the policy debt is transferred out of the Subaccounts and
the Fixed Account and into our general account. You may tell us how to allocate
that accumulation value among the Subaccounts and/or the Fixed Account provided
that the amount remaining in a Subaccount or the Fixed Account as a result of
the allocation is $100. Without specific direction, the accumulation value will
be allocated among the Subaccounts and/or the Fixed Account in the same
proportion that the policy's accumulation value in each Subaccount and the Fixed
Account bears to the total accumulation value in all Subaccounts and the Fixed
Account on the date we make the loan.
Accumulation value transferred into the general account to secure policy debt
will be credited with 3.5% interest annually. The interest earned will be
allocated to the Subaccounts and/or the Fixed Account in the same manner as net
premiums.
On any monthly activity date, if the policy debt exceeds the accumulation value
less any surrender charge and any accrued expense charges, you must pay the
excess. Unless the Minimum Benefit or Guaranteed Death Benefit is in effect, we
will send you a notice of the amount you must pay. If you do not pay this amount
within 61 days after we send notice, this policy will terminate without value.
We will send the notice to you and to any assignee of record at our
Administrative Office. See Section 4.1.
Any loan transaction will permanently affect the values of this policy.
11.5 REPAYING A POLICY DEBT
You can repay a policy debt in part or in full anytime during the life of either
Insured while this policy is in force. Repayment must be specifically identified
as such by you. When a loan repayment is made, accumulation value in the general
account related to that payment will be transferred into the Subaccounts and/or
the Fixed Account in the same proportion that net premiums are being allocated.
8065 23
SECTION 12. PAYMENT OPTIONS
Death benefit proceeds or the net cash surrender value will be paid in one lump
sum if no option is chosen. Subject to the rules stated below, all or part of
the proceeds can be paid under a payment option. During the lifetime of either
Insured you can choose a payment option. A beneficiary can choose a payment
option if you have not chosen one at the second death.
12.1 PAYMENT OPTION RULES
There are several important payment option rules:
a. An association, corporation, partnership or fiduciary can only receive a
lump sum payment or a payment under Option b.
b. If this policy is assigned, any amount due to the assignee will first be
paid in one sum. The balance, if any, may be applied under any payment
option.
c. If the payments under any option come to less than $100 each, we have the
right to make payments at less frequent intervals.
d. The rate of interest payable under Options ai, aii and b is guaranteed at
3% compounded annually. Payments under Option c and d are based on the
1983 Individual Annuity Tables projected 17 years with an interest rate of
3%.
To choose an option, you must send a written request satisfactory to us to our
Administrative Office.
12.2 DESCRIPTION OF OPTIONS
Option ai
Interest Payment Option. We will hold any amount applied under this option.
Interest on the unpaid balance will be paid or credited each month at a rate
determined by us.
Option aii
Fixed Amount Payable Option. Each payment will be for an agreed fixed amount.
Payments continue until the amount we hold runs out.
Option b
Fixed Period Payment Option. Equal payments will be made for any period selected
up to 20 years.
Option c
Lifetime Payment Option. Equal monthly payments are based on the life of a named
person. Payments will continue for the lifetime of that person. Variations
provide for guaranteed payments for a period of time or a lump sum refund.
8065 24
Option d
Joint Lifetime Payment Option. Equal monthly payments are based on the lives of
two named persons. While both are living, one payment will be made each month.
When one dies, payments will continue for the lifetime of the other. Variations
provide for a reduced amount of payment during the lifetime of the surviving
person.
SECTION 13. NOTES ON OUR COMPUTATIONS
13.1 BASIS OF COMPUTATION
In our computations, we assume that the minimum values and reserves held for
benefits guaranteed in the Fixed Account will earn interest at an annual rate of
3.5%. We use mortality rates from the Commissioners 1980 Standard Ordinary
Smoker and Nonsmoker, Male and Female Continuous Function Mortality Tables in
computing minimum values and reserves for this policy. The nonsmoker values from
these Tables are used for Insureds who are non-tobacco users and the smoker
values from these Tables are used for Insureds who are tobacco users. The male
values from these Tables are used for male Insureds. The female values from
these Tables are used for female Insureds.
13.2 METHODS OF COMPUTING VALUES
We have filed a detailed statement of the method we use to compute policy values
and benefits with the state where this policy was delivered. All these values
and benefits are not less than those required by the laws of that state.
Reserves are calculated in accordance with the Standard Non-Forfeiture Law and
Valuation Law of the state in which this policy is delivered. In no instance
will reserves be less than the net cash surrender values.
8065 25
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8065
TABLES OF SETTLEMENT OPTIONS
TABLE B (OPTION B) TABLE D (OPTION D)
MONTHLY INSTALLMENTS FOR MONTHLY INSTALLMENTS FOR EACH $1,000 OF NET PROCEEDS
EACH $1,000 OF NET PROCEEDS
MALE & MALE & MALE & MALE & MALE &
YEARS MONTHLY YEARS MONTHLY AGE FEMALE AGE FEMALE AGE FEMALE AGE FEMALE AGE FEMALE
- -------------------------------------------------------------------------------------
1 84.47 11 5.86 40 3.16 50 3.50 60 4.05 70 5.07 80 7.08
2 42.86 12 8.24 41 3.19 51 3.54 61 4.13 71 5.21 81 7.37
3 28.99 13 7.71 42 3.22 52 3.59 62 4.21 72 5.36 82 7.69
4 22.06 14 7.26 43 3.25 53 3.63 63 4.29 73 5.53 83 8.03
5 17.91 15 6.87 44 3.28 54 3.68 64 4.38 74 5.70 84 8.40
------------------------ ----------------------------------------------------------
6 15.14 16 6.53 45 3.31 55 3.74 65 4.48 75 5.89 85 8.79
7 13.16 17 6.23 46 3.34 56 3.79 66 4.58 76 6.10
8 11.68 18 5.96 47 3.38 57 3.85 67 4.69 77 6.32
9 10.53 19 5.73 48 3.42 58 3.92 68 4.81 78 6.55
10 9.61 20 5.51 49 3.46 59 3.98 69 4.93 79 6.81
- ------------------------- -------------------------------------------------------
INCOME FOR PAYMENTS OTHER THAN MONTHLY WILL BE FURNISHED BY OUR
ADMINISTRATIVE OFFICE UPON REQUEST.
TABLE D VALUES FOR COMBINATIONS OF AGES NOT SHOWN AND VALUES FOR 2 MALES OR
2 FEMALES WILL BE FURNISHED BY OUR ADMINISTRATIVE OFFICE UPON REQUEST.
TABLE C (OPTION C) MONTHLY INSTALLMENTS FOR EACH $1,000 OF NET PROCEEDS
FEMALE MALE
LIFE MONTHS CERTAIN CASH LIFE MONTHS CERTAIN CASH
AGE ONLY 60 120 180 240 REF. AGE ONLY 60 120 180 240 REF.
- ------------------------------------- ----------------------------------------
40 3.54 3.54 3.53 3.52 3.50 3.46 40 3.33 3.33 3.33 3.32 3.31 3.29
41 3.58 3.58 3.57 3.56 3.54 3.50 41 3.36 3.36 3.36 3.36 3.35 3.32
42 3.63 3.63 3.62 3.60 3.57 3.54 42 3.40 3.40 3.40 3.39 3.38 3.36
43 3.68 3.67 3.66 3.64 3.62 3.58 43 3.44 3.44 3.43 3.43 3.41 3.39
44 3.73 3.72 3.71 3.69 3.66 3.62 44 3.48 3.48 3.47 3.46 3.45 3.42
- --------------------------------------- ----------------------------------------
45 3.78 3.77 3.76 3.74 3.70 3.66 45 3.52 3.52 3.51 3.50 3.49 3.46
46 3.83 3.83 3.81 3.79 3.75 3.70 46 3.56 3.56 3.55 3.54 3.53 3.50
47 3.89 3.89 3.87 3.84 3.80 3.75 47 3.61 3.60 3.60 3.59 3.57 3.54
48 3.95 3.94 3.93 3.89 3.85 3.80 48 3.65 3.65 3.65 3.63 3.61 3.58
49 4.01 4.01 3.99 3.95 3.90 3.85 49 3.70 3.70 3.69 3.68 3.66 3.62
- --------------------------------------- ----------------------------------------
50 4.08 4.07 4.05 4.01 3.95 3.90 50 3.76 3.75 3.75 3.73 3.70 3.67
51 4.15 4.14 4.11 4.07 4.00 3.96 51 3.81 3.81 3.80 3.78 3.75 3.72
52 4.22 4.21 4.18 4.13 4.06 4.02 52 3.87 3.87 3.86 3.83 3.80 3.76
53 4.30 4.29 4.26 4.20 4.12 4.08 53 3.93 3.93 3.91 3.89 3.85 3.82
54 4.38 4.37 4.33 4.27 4.18 4.14 54 4.00 3.99 3.98 3.95 3.91 3.87
- --------------------------------------- ----------------------------------------
55 4.47 4.45 4.41 4.34 4.24 4.21 55 4.06 4.06 4.04 4.01 3.96 3.93
56 4.56 4.54 4.50 4.42 4.30 4.28 56 4.14 4.13 4.11 4.08 4.02 3.99
57 4.65 4.64 4.59 4.50 4.36 4.35 57 4.21 4.21 4.19 4.14 4.08 4.05
58 4.75 4.74 4.68 4.58 4.43 4.42 58 4.29 4.29 4.26 4.22 4.14 4.12
59 4.86 4.84 4.78 4.66 4.49 3.40 59 4.38 4.37 4.34 4.29 4.21 4.18
- --------------------------------------- ----------------------------------------
60 4.98 4.96 4.88 4.75 4.56 4.59 60 4.47 4.46 4.43 4.37 4.28 4.26
61 5.10 5.08 4.99 4.84 4.62 4.67 61 4.57 4.56 4.52 4.45 4.34 4.33
62 5.23 5.20 5.11 4.93 4.69 4.77 62 4.67 4.66 4.62 4.54 4.41 4.41
63 5.38 5.34 5.23 5.03 4.76 4.86 63 4.78 4.77 4.72 4.63 4.48 4.50
64 5.53 5.49 5.35 5.13 4.82 4.96 64 4.90 4.88 4.82 4.72 4.55 4.58
- --------------------------------------- ----------------------------------------
65 5.69 5.64 5.49 5.23 4.88 5.07 65 5.02 5.00 4.94 4.82 4.63 4.68
66 5.86 5.80 5.63 5.33 4.95 5.18 66 5.16 5.13 5.06 4.92 4.70 4.78
67 6.04 5.98 5.77 5.43 5.01 5.29 67 5.30 5.27 5.18 5.02 4.77 4.88
68 6.24 6.16 5.92 5.53 5.06 5.41 68 5.45 5.42 5.32 5.13 4.85 4.99
69 6.45 6.36 6.07 5.64 5.12 5.54 69 5.61 5.58 5.46 5.23 4.92 5.10
- --------------------------------------- ----------------------------------------
70 6.67 6.56 6.23 5.74 5.17 5.67 70 5.79 5.75 5.60 5.35 4.98 5.22
71 6.91 6.78 6.40 5.84 5.21 5.81 71 5.98 5.93 5.76 5.46 5.05 5.35
72 7.16 7.01 6.57 5.93 5.26 5.96 72 6.19 6.13 5.92 5.57 5.11 5.49
73 7.43 7.25 6.74 6.03 5.30 6.11 73 6.41 6.34 6.10 5.69 5.17 5.63
74 7.72 7.51 6.91 6.12 5.33 6.27 74 6.66 6.56 6.27 5.80 5.22 5.78
- --------------------------------------- ----------------------------------------
75 8.03 7.77 7.09 6.20 5.36 6.44 75 6.92 6.81 6.46 5.91 5.27 5.94
76 8.36 8.06 7.26 6.28 5.39 6.62 76 7.20 7.06 6.65 6.02 5.31 6.11
77 8.71 8.35 7.44 6.36 5.42 6.81 77 7.50 7.34 6.85 6.12 5.35 6.29
78 9.09 8.67 7.62 6.43 5.44 7.00 78 7.83 7.63 7.04 6.22 5.38 6.48
79 9.50 8.99 7.79 6.50 5.45 7.21 79 8.18 7.94 7.25 6.31 5.41 6.67
- --------------------------------------- ----------------------------------------
80 9.93 9.33 7.96 6.56 5.47 7.43 80 8.56 8.27 7.45 6.39 5.43 6.88
81 10.40 9.68 8.12 6.61 5.48 7.65 81 8.98 8.62 7.65 6.47 5.45 7.11
82 10.89 10.05 8.28 6.66 5.49 7.89 82 9.43 8.99 7.85 6.54 5.47 7.34
83 11.42 10.42 8.43 6.70 5.50 8.15 83 9.92 9.37 8.04 6.60 5.48 7.58
84 11.98 10.80 8.58 6.74 5.50 8.41 8410.45 9.78 8.22 6.65 5.49 7.84
85 12.58 11.19 8.71 6.77 5.51 8.69 8511.02 10.20 8.39 8.70 5.50 8.12
- --------------------------------------- ----------------------------------------
INCOME FOR PAYMENTS OTHER THAN MONTHLY WILL BE FURNISHED BY OUR
ADMINISTRATIVE OFFICE UPON REQUEST.
TABLE C VALUES FOR AGES BELOW 40 AND ABOVE 85, AND VALUES FOR 300 AND 360
MONTHS CERTAIN WILL BE FURNISHED BY OUR HOME OFFICE UPON REQUEST.
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Survivorship Flexible Premium Variable Life Insurance Policy.
Death benefit proceeds payable upon the second death.
Flexible premiums payable until the second death.
Some benefits reflect investment results.
Non-participating.
8065