1
EXHIBIT 5
THE TRAVELERS INSURANCE COMPANY - ONE TOWER SQUARE - HARTFORD, CT 06183
A STOCK COMPANY
CORPORATE FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
We will pay the Death Benefit to the Beneficiary upon receipt at Our Office of
Due Proof of the Insured's Death while this policy is in force. Refer to the
"Death Benefit" provision on Page 5 and to the "Policy Values" section on Page 6
for information on determining the amount payable at death.
READ YOUR POLICY CAREFULLY
This is a legal contract between you and us.
RIGHT TO CANCEL
We want you to be satisfied with the policy you have purchased. We urge you to
examine it closely. If, for any reason, you are not satisfied, you may return
the policy to us or to the agent from whom it was purchased to be cancelled
within the latest of:
1. 10 days after the policy was delivered to you; or
2. 10 days after we have mailed or delivered the Notice of the Right to
Cancel to you; or
3. 45 days after the date the application for this policy was signed.
Within 7 days after our receipt of your request In Writing for a refund, we will
refund to you the Contract Value of the policy on the date we receive the
returned policy; plus any charges and expenses which may have been deducted;
less any Loan Account value. After the policy is returned, it will be considered
as if it were never in effect.
Signed at Hartford, Connecticut
/S/ [SIG]
President
CORPORATE FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY
INSURANCE PAYABLE AT INSURED'S DEATH
NON-PARTICIPATING
THE AMOUNT AND DURATION OF THE DEATH BENEFIT AND OTHER VALUES PROVIDED BY THIS
POLICY ARE BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT(S). ALL
SEPARATE ACCOUNT VALUES ARE VARIABLE, MAY INCREASE OR DECREASE, AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.
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TABLE OF CONTENTS
Right to Cancel Policy Jacket
Policy Summary Page 3
Definitions Page 4
Benefits--Basic Policy Page 5
Policy Values Page 6
Premium and Valuation Provisions Page 8
Fixed Account Provisions Page 8
Separate Account Option Valuation Page 9
Transfers Between Investment Options Page 9
Continuation of Insurance, Grace Period and Reinstatement Page 10
Exchange Option Page 10
Ownership Rights Page 11
General Provisions Page 11
Settlement Options
A copy of the application and any riders follows the Settlement Options.
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POLICY SUMMARY
POLICY NUMBER: STATED AMOUNT: $ 100,000
INSURED : JOHN DOE POLICY DATE: MAY 01, 1999
AGE: 35 ISSUE DATE: MAY 01, 1999
MATURITY DATE: MAY 01, 2064
MONTHLY DEDUCTION DAY: 1ST DAY OF MONTH
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BENEFIT DESCRIPTION
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INITIAL STATED AMOUNT: $ 100,000
RENEWAL STATED AMOUNT $ 100,000
INITIAL PREMIUM: $ 469
PLANNED PREMIUM: $ 469
PLANNED PREMIUMS PAYABLE: ANNUALLY
TARGET PREMIUM: [$ 4118]
INSURANCE OPTION: [1] (LEVEL)
MINIMUM STATED AMOUNT [$ 50,000]
MINIMUM ANNUAL EFFECTIVE RATE: 3%
MAXIMUM CHANGE AGE [80]
MINIMUM INCREASE AMOUNT: [$ 5,000]
MINIMUM LOAN AMOUNT: WE RESERVE THE RIGHT TO LIMIT THE MINIMUM LOAN AMOUNT TO $500
MAXIMUM LOAN AMOUNT: 100% OF (CONTRACT VALUE MINUS SURRENDER PENALTIES INCLUDING
INDEBTEDNESS) AS OF THE DATE WE RECEIVE YOUR LOAN REQUEST.
INTEREST RATE
CHARGED TO LOAN ACCOUNTS: 5% CHARGED IN ARREARS
ANNUAL INTEREST RATE
CREDITED TO LOAN ACCOUNTS: 4%
DEATH BENEFIT INTEREST FACTOR: 1.00327374
MINIMUM PARTIAL SURRENDER
AMOUNT: WE RESERVE THE RIGHT TO LIMIT THE MINIMUM
PARTIAL SURRENDER AMOUNT TO $500
SALES EXPENSE CHARGE: GUARANTEED NOT TO EXCEED [12%] UP TO TARGET PREMIUM ALL YEARS.
[8%] ABOVE TARGET PREMIUM ALL YEARS.
MONTHLY ADMINISTRATIVE
EXPENSE CHARGE: [$5.00] PER MONTH (GUARANTEED NOT TO EXCEED $10.00) [ALL]
YEARS, PLUS [$0.10] PER THOUSAND OF STATED AMOUNT. THIS
LOAD APPLIES TO THE INITIAL STATED AMOUNT AND ANY APPLIED
FOR INCREASES IN COVERAGE. THE DURATION OF THE LOAD IS
MEASURED FROM THE SEGMENT EFFECTIVE DATE.
RATE CLASS: MALE PREFERRED NONSMOKER
PAGE 3(A)
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POLICY SUMMARY
POLICY NUMBER: STATED AMOUNT: $ 100,000
INSURED : JOHN DOE POLICY DATE: MAY 01, 1999
AGE: 35 ISSUE DATE: MAY 01, 1999
MATURITY DATE: MAY 01, 2064
MONTHLY DEDUCTION DAY: 1ST DAY OF MONTH
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SEPARATE ACCOUNT:
THE TRAVELERS FUND UL FOR VARIABLE LIFE INSURANCE
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INVESTMENT OPTIONS:
[FIXED FUND
ALLIANCE GROWTH PORTFOLIO
AMERICAN ODYSSEY INTERMEDIATE-TERM BOND FUND
BANKERS TRUST SMALL CAP INDEX FUND
CAPITAL APPRECIATION FUND (JANUS)
DREYFUS CAPITAL APPRECIATION PORTFOLIO
DREYFUS SMALL CAP PORTFOLIO
EQUITY INCOME PORTFOLIO (FIDELITY)
EQUITY INDEX PORTFOLIO (GREENWICH STREET)
FIDELITY CONTRAFUND PORTFOLIO - SERVICE CLASS
FIDELITY VIP II ASSET MANAGER PORTFOLIO
LARGE CAP PORTFOLIO (FIDELITY)
FRANKLIN SMALL CAP INVESTMENTS FUND CLASS 2
JANUS BALANCED PORTFOLIO
JANUS GLOBAL TECHNOLOGY PORTFOLIO
JANUS WORLDWIDE GROWTH PORTFOLIO
MFS EMERGING GROWTH PORTFOLIO
MFS MID CAP GROWTH PORTFOLIO
MFS RESEARCH PORTFOLIO
MFS TOTAL RETURN PORTFOLIO
SALOMON BROTHERS VARIABLE CAPITAL FUND
SALOMON BROTHERS VARIABLE STRATEGIC BOND FUND
SALOMON BROTHERS VARIABLE TOTAL RETURN FUND
STRATEGIC STOCK PORTFOLIO
TRAVELERS CONVERTIBLE BOND PORTFOLIO
TRAVELERS HIGH YIELD BOND TRUST
TRAVELERS MONEY MARKET PORTFOLIO
TRAVELERS U.S. GOVERNMENT SECURITIES PORTFOLIO
WARBURG PINCUS TRUST EMERGING MARKETS PORTFOLIO
AIM CAPITAL APPRECIATION PORTFOLIO
BANKERS TRUST EAFE EQUITY INDEX FUND
DELAWARE SMALL CAP VALUE SERIES
DELAWARE INVESTMENTS REIT SERIES
DIVERSIFIED STRATEGIC GROWTH PORTFOLIO (GREENWICH STREET)
LAZARD INTERNATIONAL STOCK PORTFOLIO
SALOMON BROTHERS VARIABLE INVESTORS FUND
SMITH BARNEY LARGE CAPITALIZATION GROWTH PORTFOLIO
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO
SOCIAL AWARENESS STOCK PORTFOLIO
STRONG SCHAFER VALUE FUND II
TRAVELERS DISCIPLINED SMALL CAP PORTFOLIO
TRAVELERS DISCIPLINED MID CAP PORTFOLIO
VAN KAMPEN ENTERPRISE PORTFOLIO]
PAGE 3(B)
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POLICY SUMMARY
POLICY NUMBER: STATED AMOUNT: $ 100,000
INSURED : JOHN DOE POLICY DATE: MAY 01, 1999
AGE: 35 ISSUE DATE: MAY 01, 1999
MATURITY DATE: MAY 01, 2064
MONTHLY DEDUCTION DAY: 1ST DAY OF MONTH
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THE MAXIMUM INVESTMENT OPTION DAILY DEDUCTION FOR ALL INVESTMENT OPTIONS (IN
BASIS POINTS) IS [.2055] FOR ALL POLICY YEARS.
INFORMATION ABOUT THE SEPARATE ACCOUNT IS PROVIDED IN THE PROSPECTUS FOR THE
SEPARATE ACCOUNT. YOU SHOULD CAREFULLY REVIEW THE PROSPECTUS.
WE RESERVE THE RIGHT TO LIMIT FREE TRANSFERS AMONG THE INVESTMENT OPTIONS TO
SIX TIMES IN ANY POLICY YEAR AND TO CHARGE A $10 FEE FOR EACH ADDITIONAL
TRANSFER THAT WE ALLOW.
WE WILL ALLOCATE ANY NET PREMIUM TO ANY INVESTMENT OPTION WHICH HAD BEEN
SELECTED DURING THE RIGHT TO CANCEL PERIOD.
PREMIUM FOR THE BASIC POLICY MAY BE PAID UNTIL THE MATURITY DATE. CHARGES FOR
RIDERS ARE PAYABLE TO THE EXPIRY DATE. NO INSURANCE WILL BE IN EFFECT UNLESS
AT LEAST ONE DEDUCTION AMOUNT HAS BEEN PAID.
INSURANCE UNDER THIS POLICY MAY END BEFORE THE MATURITY DATE IF PREMIUM PAYMENT
AND/OR INVESTMENT EXPERIENCE ARE INSUFFICIENT TO CONTINUE INSURANCE TO SUCH
DATE.
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TABLE OF MAXIMUM MONTHLY GUARANTEED COST OF INSURANCE RATES
(MONTHLY RATE FOR EACH $1,000 OF COVERAGE)
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POLICY MAXIMUM POLICY MAXIMUM POLICY MAXIMUM
YEAR RATE YEAR RATE YEAR RATE
- ---- --------- ----- -------- ---------- --------
1 0.1810 23 1.0932 45 8.2619
2 0.1935 24 1.1894 46 9.0119
3 0.2077 25 1.2942 47 9.8582
4 0.2236 26 1.4109 48 10.8223
5 0.2420 27 1.5430 49 11.9024
6 0.2629 28 1.6923 50 13.0775
7 0.2854 29 1.8597 51 14.3247
8 0.3097 30 2.0454 52 15.6263
9 0.3365 31 2.2459 53 16.9762
10 0.3649 32 2.4605 54 18.3754
11 0.3950 33 2.6886 55 19.8343
12 0.4277 34 2.9344 56 21.3788
13 0.4620 35 3.2068 57 23.0518
14 0.4989 36 3.5147 58 24.9371
15 0.5399 37 3.8670 59 27.2442
16 0.5852 38 4.2723 60 30.4453
17 0.6381 39 4.7329 61 35.4922
18 0.6968 40 5.2401 62 44.5151
19 0.7640 41 5.7847 63 62.8314
20 0.8380 42 6.3595 64 83.3333
21 0.9180 43 6.9577 65 83.3333
22 1.0030 44 7.5852
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RATE CLASS: MALE PREFERRED NONSMOKER
THE RATES USED FOR THE COST OF INSURANCE DEDUCTION ARE GUARANTEED NOT TO EXCEED
THE MAXIMUM RATES SHOWN ABOVE. THE RATES ARE BASED ON THE 1980 COMMISSIONER'S
STANDARD ORDINARY MORTALITY TABLE. THE COST OF INSURANCE IS DEDUCTED ON THE
MONTHLY DEDUCTION DAY.
PAGE 3 (COI)
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POLICY SUMMARY
POLICY NUMBER: STATED AMOUNT: $ 100,000
INSURED : JOHN DOE POLICY DATE: MAY 01, 1999
AGE: 35 ISSUE DATE: MAY 01, 1999
MATURITY DATE: MAY 01, 2064
MONTHLY DEDUCTION DAY: 1ST DAY OF MONTH
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MINIMUM AMOUNT INSURED: THE FOLLOWING PERCENTAGE OF THE CASH VALUE ARE THE
MINIMUM AMOUNT INSURED ON ANY POLICY ANNIVERSARY.
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POLICY MAXIMUM POLICY MAXIMUM POLICY MAXIMUM
YEAR RATE YEAR RATE YEAR RATE
- ---- --------- ----- -------- ---------- --------
1 250% 23 142% 45 105%
2 250% 24 138% 46 105%
3 250% 25 134% 47 105%
4 250% 26 130% 48 105%
5 250% 27 128% 49 105%
6 250% 28 126% 50 105%
7 243% 29 124% 51 105%
8 236% 30 122% 52 105%
9 229% 31 120% 53 105%
10 222% 32 119% 54 105%
11 215% 33 118% 55 105%
12 209% 34 117% 56 104%
13 203% 35 116% 57 103%
14 197% 36 115% 58 102%
15 191% 37 113% 59 101%
16 185% 38 111% 60 101%
17 178% 39 109% 61 101%
18 171% 40 107% 62 101%
19 164% 41 105% 63 101%
20 157% 42 105% 64 101%
21 150% 43 105% 65 100%
22 146% 44 105%
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RATE CLASS: MALE PREFERRED NONSMOKER
PAGE 3(C)
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DEFINITIONS
ACCUMULATION UNIT: a standard of measurement used to determine the values in
each Investment Option.
AGE: the Insured's age as of the Insured's last birthday.
BENEFICIARY(IES): the person(s) named to receive the benefits of this policy at
the Insured's death.
CASH SURRENDER VALUE: the Contract Value less any Indebtedness.
CONTRACT VALUE: the sum of the values held in the Investment Options, the Loan
Account and the Fixed Account.
DEATH BENEFIT: the amount payable to the Beneficiary if the Insured dies while
the policy is in force.
DEDUCTION AMOUNT: a monthly charge, deducted from the Contract Value, which is
comprised of the cost of insurance charge and any other monthly charge shown on
the Policy Summary and any charge for supplemental benefits.
DEDUCTION DAY: is the day of each month on which the Deduction Amount is
deducted. Shown on the Policy Summary.
DUE PROOF OF THE INSURED'S DEATH: a copy of a certified death certificate; a
copy of a certified decree of a court of a competent jurisdiction as to the
finding of death; a written statement by a medical doctor who attended the
deceased; or any other proof satisfactory to us.
FIXED ACCOUNT: a part of the General Account of the Company.
GENERAL ACCOUNT: the General Account is made up of all of our assets other than
those held in any separate investment account.
IN WRITING: in a written form satisfactory to us and received at Our Office.
INDEBTEDNESS: any amount you owe to us as a result of a policy loan.
Indebtedness consists of principal amount plus any accrued interest.
INSURED: the person on whose life this policy is issued. Shown on the Policy
Summary.
INVESTMENT OPTION: an open-ended management investment company, or a portfolio
thereof, to which values may be directed under the Separate Account. Shown on
the Policy Summary.
ISSUE DATE: the date on which we issue the policy. Shown on the Policy Summary.
LOAN ACCOUNT: the account to which we transfer the amount of any policy loan and
to which we credit interest.
MATURITY DATE: an anniversary of the Policy Date on which the policy matures
(see Maturity Benefit, page 5). Shown on the Policy Summary.
MAXIMUM INVESTMENT OPTION DAILY DEDUCTION: the maximum charge that we deduct
from each Investment Option to cover our mortality and expense risk charges.
Shown on the Policy Summary.
MINIMUM AMOUNT INSURED: a stated percentage of the Contract Value determined as
of the first day of the Policy Month. Shown on the Policy Summary.
NET AMOUNT AT RISK: the Amount Insured for the month divided by the Death
Benefit Interest Factor minus the Contract Value.
NET PREMIUM: actual premium minus the sales expense charges. The sales expense
charge is shown on the Policy Summary. We may, at Our discretion, apply a lower
percentage of premium charges.
OUR OFFICE: The Travelers Insurance Company, Policyholder Services, One Tower
Square, Hartford, Connecticut 06183-5071 or any other office which we may
designate for the purpose of administering this policy.
OWNER: The Owner has all rights under this Policy and is named in the
Application.
POLICY ANNIVERSARY: an anniversary of the Policy Date.
POLICY DATE: the date on which the policy becomes effective. Shown on the Policy
Summary.
POLICY MONTH: twelve one-month periods during the Policy Year, each of which
begins on the Policy Date or the monthly Deduction Day. This date will not be on
the 29th, 30th or 31st of any given month.
POLICY YEAR: each successive twelve-month period; the first beginning with the
Policy Date.
RENEWAL STATED AMOUNT: a dollar amount used to determine the Death Benefit of
the policy subsequent to the first Policy Year. Shown on the Policy Summary.
SEC: the Securities and Exchange Commission.
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SEPARATE ACCOUNT: an account which We established for this class of policies and
certain other policies. The Separate Account is shown on the Policy Summary and
is divided into segments that correspond to the Investment Options.
STATED AMOUNT: a dollar amount used to determine the Death Benefit of the
policy. It is equal to the Initial Stated Amount for the first Policy Year and
the Renewal Stated Amount thereafter. Shown on the Policy Summary.
UNDERWRITING PERIOD: the time from when We receive a completed application until
the Issue Date of the policy.
VALUATION DATE: a day on which policy values are determined. This is any day on
which the New York Stock Exchange is open for trading and we are open for
business.
VALUATION PERIOD: the period between successive valuations.
VARIABLE ACCOUNT: one or more Variable Accounts are named on the Policy Summary,
each of which is a Separate Account.
WE, US, OUR: The Travelers Insurance Company.
YOU, YOUR: the owner(s) of this policy.
BENEFITS-BASIC POLICY
DEATH BENEFIT
Upon receipt at Our Office of Due Proof of the Insured's Death while the policy
is in force, we will pay to the Beneficiary the Death Benefit of the policy. The
Death Benefit will be the Amount Insured at the time of death, less any:
1. Indebtedness; and
2. amount payable to an assignee under a collateral assignment of the
policy; and
3. monthly Deduction Amount due but not paid.
The Death Benefit may be limited as provided under the Misstatement, Contest and
Suicide provisions on Page 11 and 12 of this policy. The Death Benefit depends
on the Death Benefit Option in effect at the date of death and any increase or
decrease you have made to the Initial Stated Amount. Benefits provided by any
rider attached to this policy will end according to the termination provision(s)
therein.
MATURITY BENEFIT
If the Insured is living on the Maturity Date, we will pay you the Contract
Value as of the Maturity Date, less any:
1. Indebtedness;
2. monthly Deduction Amount due but not paid; and
3. amount payable to an assignee under a collateral assignment of the
policy.
Upon maturity, insurance will end and we will have no other obligation under
this policy.
DEATH BENEFIT OPTIONS AND AMOUNT INSURED
There are three Death Benefit Options, which are as follows:
Under Option 1 (the Level Death Benefit Option), the Amount Insured is the
greater of the Stated Amount or any Minimum Amount Insured on the Insured's date
of death.
Under Option 2 (the Variable Death Benefit Option), the Amount Insured is the
greater of the Stated Amount plus the Contract Value, or any Minimum Amount
Insured on the Insured's date of death.
Under Option 3 (the Annual Increase Option), the Amount Insured is the greater
of :
1. (a) plus (b) where:
a. is the Stated Amount as of the Insured's date of death; and
b. is the greater of zero and the lesser of (i) and (ii) where:
(i) is the Option 3 maximum increase shown on the Policy Summary; and
(ii) is the total premium payments less any partial surrenders (all
accumulated to the Insured's date of death at the interest rate; or
2. any Minimum Amount Insured on the Insured's date of death.
REQUESTED CHANGES IN DEATH BENEFIT OPTIONS
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At any time after the first Policy Year, you may change your Death Benefit
option under your policy from Option 1 to Option 2; or from Option 2 to Option
1; or from Option 3 to Option 1. You may not make a change to Option 3 or from
Option 3 to Option 2. We will adjust the Stated Amount such that the Net Amount
at Risk remains constant. The effective date of the change will be the Monthly
Deduction Day on or following the date we approve the request for the change.
The remaining Amount Insured and the remaining Stated Amount in effect after any
change may not be less than the respective minimum amounts shown on the Policy
Summary.
REQUESTED CHANGES IN STATED AMOUNT
Increases -- At any time after the first Policy Year and prior to the earlier of
the Insured's attaining the Maximum Change Age or his/her death, you may request
an increase to the Stated Amount. The minimum amount of the increase is $5,000.
The request must be made In Writing to Our Office. The increase will be
effective on the date shown on the supplemental Policy Summary we will send you.
We will require evidence of insurability satisfactory to us if you request an
increase. We reserve the right to limit the number of increases to the Stated
Amount to one each policy year.
Decreases -- At any time after the first Policy Year, you may request a decrease
to the Stated Amount. The decrease will be effective on the later of the monthly
Deduction Day on or following our receipt of your request at Our Office, or the
monthly Deduction Day on or immediately following the date you request it to be
effective. We reserve the right to limit the number of decreases to the Stated
Amount to one each policy year.
The decrease will be applied as follows: first against the most recent increase
in the Stated Amount; then to other increases in the Stated Amount in the
reverse order in which they occurred; and last, to the Initial Stated Amount.
After any change, the Stated Amount in effect may not be less than the Minimum
Stated Amount shown on the Policy Summary or which would disqualify this policy
as a contract for life insurance. We will send you a supplemental Policy Summary
reflecting any change.
POLICY VALUES
CONTRACT VALUE
The Contract Value on the Policy Date is equal to the Net Premium. On each
Valuation Date, the Contract Value is equal to the sum of the accumulated values
in the Investment Options and the Fixed Account plus any Loan Account value. The
accumulated value of an Investment Option equals A times B where:
A is the number of Accumulation Units on the Valuation Date; and
B is the then current Accumulation Unit Value for that Investment
Option.
Policy values on other days are calculated in a manner consistent with this
method.
DEDUCTION AMOUNT
The first monthly Deduction Day is the Policy Date. The monthly Deduction Day is
shown on the Policy Summary.
The Deduction Amount will be charged monthly against each Investment Option and
the Fixed Account in proportion to the value of each Investment Option and the
Fixed Account on each monthly Deduction Day. The Deduction Amount is equal to:
1. the cost of insurance; plus
2. the charge(s) associated with any rider(s); plus
3. the monthly administrative charge shown on the Policy Summary;
plus
4. the cost of supplemental benefits,if any, for which a separate
charge is shown on the Policy Summary; plus
5. any other applicable charges shown on the Policy Summary.
The maximum guaranteed cost of insurance for any month is equal to C times the
result of A minus B where:
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A is the Amount Insured for the month divided by the Death
Benefit Interest Factor shown on the Policy Summary;
B is the Contract Value on the monthly Deduction Day;
C is the cost shown in the Maximum Monthly Guaranteed Cost of
Insurance table on the Policy Summary at the Insured's age,
divided by $1,000.
The maximum guaranteed cost of insurance rates shown on the Policy Summary are
based on the Insured's age, sex and rate class for the Initial Stated Amount and
each increase in the Stated Amount. We may use rates lower than those shown. We
will base any future changes in these rates only on our future expectations as
to investment earnings, mortality, expenses and persistency.
The monthly Deduction Amount for the following month will be taken out of the
Contract Value on the monthly Deduction Day shown on the Policy Summary. If the
Cash Surrender Value is not enough to pay the Deduction Amount due and no
further premiums are paid, the Grace Period will go into effect (see Grace
Period, Page 10).
CASH SURRENDER VALUE
The Cash Surrender Value is equal to the Contract Value less any Loan Account
value as shown on the Policy Summary. It will not be less than the minimum Cash
Surrender Value required by the insurance laws of the state in which this policy
is delivered. A detailed statement of the method of calculating the Cash
Surrender Values has been filed with the insurance department of the state in
which this policy is delivered.
CASH SURRENDER
While the Insured is living and this policy is in force, you may request, In
Writing, a full or partial surrender. You may do so without the consent of any
Beneficiary, unless irrevocably named. We will calculate your Cash Surrender
Value as of the day we receive your request In Writing and will pay this amount
within seven days after such request.
If you request a full surrender, the policy will end on the effective date of
the surrender.
A partial surrender may be made at any time after the first Policy Year while
this policy is in force. We will not make a partial surrender to you for less
than the Minimum Partial Surrender Amount shown on the Policy Summary. The
amount of any partial cash surrender may not exceed the Cash Surrender Value. If
you request a partial surrender, the Contract Value will be reduced by the
amount surrendered. We will reduce the Stated Amount by the amount necessary to
prevent an increase in the Net Amount at Risk. The Death Benefit and Amount
Insured will also be reduced as a result of the Cash Surrender. The deduction
from the Contract Value will be made on a pro-rata basis against the Contract
Value of each Investment Option unless you request otherwise In Writing. Partial
Surrenders will be transferred from the Fixed Account only when insufficient
amounts are available in your Investment Options. After the reduction, the
Amount Insured must be no less than the Minimum Amount Insured shown on the
Policy Summary.
POLICY LOANS
We will make a loan to you with the policy as security if you assign this policy
to us while it is in force. The loan must be requested In Writing. The amount of
the loan and all existing Indebtedness may not be more than the maximum loan
value shown on the Policy Summary as of the loan date. The loan date is the date
we process the loan. We will not make a loan to you or increase an outstanding
loan for less than the Minimum Loan Amount shown on the Policy Summary.
The loan interest rate is shown on the Policy Summary. Interest is charged
daily and is payable at the end of each Policy Year. Unpaid interest will be
added to existing Indebtedness as of the due date and will be charged interest
at the same rate as the rest of the loan.
When you take a loan, we will transfer an amount equal to the Policy Loan from
the Investment Options to the Loan Account in proportion to the Contract Value
in each Investment Option as of the loan date. Loan Amounts will be transferred
from the Fixed Account only when insufficient amounts are available in the
Investment Options. Any loan interest that becomes due and unpaid will also be
transferred. The Loan Account will be maintained while a loan is outstanding and
will be credited interest at a rate at least equal to the Annual Interest Rate
Credited to Loan Accounts as shown on the Policy Summary.
While the Insured is living and the policy is still in effect, all or part of
any loan may be repaid. Payment received while there is an outstanding loan on
the policy will be applied as follows: first towards repayment of any loan
interest due; next toward repayment of the loan principal; and last as a premium
payment to the policy. When you repay part or all of the loan, we will transfer
an amount equal to the amount you repay from the Loan Account to the Investment
Options or the Fixed Account. We reserve the right to require that any loan
repayments resulting from loans transferred from the
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Fixed Account must be allocated to the Fixed Account; otherwise loan repayments
will be allocated among the Investment Options using the Fund allocation factors
in effect on the date of the repayment.
The Grace Period provision will go into effect if the Indebtedness exceeds the
Contract Value.
PREMIUM AND VALUATION PROVISIONS
PREMIUM
An initial lump sum premium payment must be made to the policy and is due and
payable before the policy becomes effective. All premiums are payable at Our
Office or to one of our authorized representatives.
PREMIUM ALLOCATION
Net Premiums will be allocated among the Investment Options and the Fixed
Account based upon the allocation that you choose. Any allocation must be at
least 5% and must be a whole percentage, with the sum of the fund allocations
equal to 100%.
Any subsequent Net Premiums will be allocated according to your most recently
chosen factors.
You may change the allocation for future Net Premiums at any time while your
policy is in force. To do so, you must notify us In Writing. The change will
take effect on the date we receive your written request.
ADDITIONAL PREMIUM PAYMENTS
You may make additional premium payments at any time while your policy is in
force. We reserve the right to require evidence of insurability before accepting
additional premium payments which result in an increased net amount at risk.
We will return any additional premium payments made which would exceed the
limits prescribed by federal income tax laws or regulations which would prevent
the policy from qualifying as life insurance.
FIXED ACCOUNT PROVISIONS
The Fixed Account is funded by the General Account of the Company. In addition
to allocating your Net Premiums to the Investment Options, you may direct all or
part of your Net Premiums into the Fixed Account.
The accumulated value in the Fixed Account is zero unless some or all of the
Contract Value is allocated to the Fixed Account. The accumulated value in the
Fixed Account on the Policy Date is equal to the portion of the net premium
allocated to the Fixed Account. Interest will be credited daily on any Contract
Value allocated to the Fixed Account and the portion of the Fixed Account's
Deduction Amount will be charged monthly. The guaranteed minimum annual
effective rate is shown on the Policy Summary. Interest in excess of the minimum
guaranteed may be credited.
You may transfer amounts between the Fixed Account and the Investment Options
without penalty or adjustment, subject to the following limitations. We reserve
the right to limit the number of transfers between the Fixed and Separate
Account to two in any Policy Year.
Transfers from the Fixed Account must be made within 30 days after your Policy
Anniversary or semi-anniversary. We reserve the right to limit the amount
transferred from the Fixed Account to the Investment Options to 25% of the
Contract Value in the Fixed Account.
Transfers to the Fixed Account may not be made prior to the first Policy
Anniversary or within 12 months of any prior transfer. We reserve the right to
restrict the amount transferred to the Fixed Account to 20% of the portion of
the Contract Value attributable to the Investment Options at the end of the
prior Valuation Period. We reserve the right to refuse transfers to the Fixed
Account if the Fixed Account is greater than or equal to 30% of the Contract
Value.
SEPARATE ACCOUNT OPTION VALUATION
ACCUMULATION UNITS
The number of Accumulation Units to be credited to each Investment Option once a
premium payment has been received by us will be determined by dividing the
premium applied to that Investment Option by the current
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Accumulation Unit Value of that Investment Option.
ACCUMULATION UNIT VALUE
The value of an Accumulation Unit for each Investment Option was initially set
at $1.00. We will determine the Accumulation Unit value for each Investment
Option on each Valuation Date by multiplying the value on the immediately
preceding Valuation Date by the corresponding net investment factor (see Net
Investment Factor provision, Page 9) for that Investment Option for the
Valuation Period just ended.
The value of an Accumulation Unit on any date other than a Valuation Date will
be equal to its value as of the next Valuation Date.
NET INVESTMENT FACTOR
The net investment factor is a factor applied to measure the investment
performance of an Investment Option from one Valuation Period to the next. The
net investment factor for an Investment Option for any Valuation Period is
determined by dividing a by b and subtracting C where:
a is
1. the net asset value per share of the Investment Option as of
the Valuation Date; plus
2. the per-share amount of any dividend or capital gain
distributions by the Investment Option if the ex-dividend
date occurs in the Valuation Period just ended; plus or minus
3. a per-share charge or credit, as we may determine on the
Valuation Date for tax reserves; and
b is
1. the net asset value per share of the Investment Option as of
the last prior Valuation Date; plus or minus
2. the per-share or per-unit charge or credit for tax reserves as
of the end of the last prior Valuation Date; and
c is the applicable Investment Option deduction for the Valuation
Period.
Assets in each Investment Option will be valued at fair market value in
accordance with accepted accounting practices and applicable laws and
regulations.
TRANSFERS BETWEEN INVESTMENT OPTIONS
As long as this policy is in effect, you may request that we transfer all or a
part of the Contract Value (minus Loan Account value) from an Investment Option
to any other Investment Option available under this policy at the time of
request. Such transfers must be in accordance with our rules. We reserve the
right to limit the number of free transfers between Investment Options as shown
on the Policy Summary. We reserve the right to charge the reasonable
administrative fee specified on the Policy Summary for transfers beyond that
number.
Transfers between Investment Options will result in the addition or deletion of
Accumulation Units having a total value equal to the dollar amount being
transferred to or from a particular Investment Option. The number of
Accumulation Units will be determined by dividing the amount transferred by the
Accumulation Unit Value of the Investment Options involved as of the next
Valuation Date after we receive your request for transfer at Our Office.
For transfers to and from the Fixed Account, please see the Fixed Account
Provision.
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CONTINUATION OF INSURANCE, GRACE PERIOD AND REINSTATEMENT
CONTINUATION OF INSURANCE
Subject to the Grace Period provision below, if sufficient premium payments are
not made, this policy will continue until the day on which the Cash Surrender
Value would not be enough to pay the monthly Deduction Amount due, or until the
Maturity Date, if earlier. The Continuation of Insurance benefit will not be
less than the minimum benefit required by the insurance laws of the state in
which this policy is delivered.
GRACE PERIOD
Thirty days after the Cash Surrender Value is insufficient to pay the Deduction
Amount due, we will send you a notice of required premium to your last known
address. If the required premium is not paid within 31 days after the notice is
sent, the policy will lapse. The policy will have no Contract Value. The policy
will continue through the Grace Period, but if the required payment has not been
received at Our Office, the policy will terminate at the end of the Grace
Period. If the Insured dies during the Grace Period, the Death Benefit payable
will be reduced by any Deduction Amount due but not paid and by any
Indebtedness.
REINSTATEMENT
This policy may be reinstated at any time within three years from the date to
which the monthly Deduction Amount had been paid, if:
1. the policy was not surrendered for cash; and
2. evidence of insurability acceptable to us is furnished; and
3. all monthly Deduction Amounts past due are paid; and
4. premium at least equal to the following three monthly Deduction
Amounts is paid; and
5. all Indebtedness is repaid or restored.
Upon reinstatement, the Contract Value of the policy prior to applying any
premiums or loan repayments will be the Contract Value at the end of the Grace
Period.
The effective date of the reinstated policy will be the Deduction Date on or
next following the date the application for reinstatement is approved by us.
Unless you have specified otherwise, all amounts will be allocated based on the
Fund allocation factors in effect at the start of the Grace Period.
EXCHANGE OPTION
At any time during the first two Policy Years, you may request, In Writing, to
elect to irrevocably transfer all Investment Option Contract Values to the Fixed
Account.
Upon election of this option, no future transfers to the Investment Options will
be allowed and all future premiums will be allocated to the Fixed Account.
Upon election of this option, future Contract Values will not be affected by the
investment experience of any Separate Account. No evidence of insurability is
required to exercise this option.
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OWNERSHIP RIGHTS
OWNERSHIP
The original owner(s) is (are) shown on the application(s). During the Insured's
lifetime, you may, without the consent of any Beneficiary unless irrevocably
named, exercise all rights and options that this policy provides and that we
permit.
Ownership is transferable by assignment. No assignment is binding on us until we
receive a copy of the assignment In Writing. We will not determine if an
assignment is valid. Proof of interest must be filed with any claim under a
collateral assignment.
BENEFICIARY
The original Beneficiary is stated in the application. Unless the Beneficiary is
irrevocably named, you may name a new Beneficiary during the Insured's lifetime
and while this policy is in force by notifying us In Writing. Any change will be
effective from the date you signed the notice of change, even if the Insured is
not living when we receive the notice. We will have no further responsibility
for any payment we made before we received the notice at Our Office.
If no Beneficiary survives the Insured, you will be the Beneficiary. If you are
the Insured, your estate will be the Beneficiary. The rights of any collateral
assignee may affect the interest of the Beneficiary.
GENERAL PROVISIONS
ENTIRE CONTRACT
The entire contract consists of this policy and the application, a copy of which
is attached. The policy is issued in consideration of the application and the
payment of premium. We will not use any statement to void this policy or to deny
a claim under it, unless that statement is contained in an attached written
application. All statements in the application will be considered as being made
to the best knowledge and belief of the applicant and not as promises of truth.
CHANGES
This policy may only be altered by a written agreement signed by one of our
officers.
NO DIVIDENDS
This policy is non-participating. It does not share in our surplus earnings, so
you will receive no dividends under it.
MISSTATEMENT
If the age and/or sex of the Insured was incorrectly stated in the application,
all benefits will be adjusted to the amount which the premiums paid would have
purchased at the correct age and/or sex, based on the most recent cost of
insurance charge.
Proof of age may be filed at any time at Our Office.
SUICIDE
If, within two years from the Issue Date, the Insured dies due to suicide, while
sane or insane, the Death Benefit will be limited to the premiums paid, less any
Loan Account value and amount of any partial surrenders.
If you have applied for an increase to the Stated Amount, this Suicide provision
will be measured from the effective date of the increase with respect to payment
of the increase amount.
If this policy is reinstated, this Suicide provision will be measured from the
reinstatement date.
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CONTEST
No misstatements made in any application for this policy will be used to contest
payment of any Death Benefit after the policy has been in force during the
Insured's lifetime for two years from the Issue Date.
If you have applied for an increase to the Stated Amount, this Contest
provision will be measured from the effective date of the increase with respect
to payment of the increase amount. If this policy is reinstated, this Contest
provision will be measured from the reinstatement date.
SEPARATE ACCOUNT
We have exclusive and absolute ownership and control of the assets of the
Separate Account and its Investment Options. The assets of the Separate Account
will be available to cover the liabilities of our general account only to the
extent that those assets exceed the reserves and other policy liabilities of the
Separate Account arising under the variable life insurance policies supported by
the Separate Account. The assets of the Separate Account will be valued on each
Valuation Date. Our determination of the value of an Accumulation Unit by the
method described in the policy will be conclusive. To the extent required by
law, the investment policy of the Separate Account will not be changed without
the approval of the Insurance Commissioner of Connecticut. This approval process
is on file with the Commissioner of the state where this policy is issued for
delivery.
SUBSTITUTION OF SEPARATE ACCOUNT OR INVESTMENT OPTION
If the use of a Separate Account or Investment Option is no longer possible, or
in our judgment becomes inappropriate for the purposes of this policy, we may
substitute another Separate Account or Investment Option without your consent.
Substitution may be made with respect to both existing premium payments and
investment of future premium payments. However, no such substitution will be
made without notice to you and without prior approval of the Securities and
Exchange Commission and the approval of the Insurance Commissioner of the state
where this policy is issued for delivery, to the extent required by law. We may
also add other Investment Options under the policy.
EMERGENCY PROCEDURE
We reserve the right to suspend or postpone the date of any payment of any
benefit or values (including the payments of cash surrenders and policy loans)
(1) when the New York Stock Exchange is closed (except for holidays or
weekends); (2) when trading on the Exchange is restricted; (3) when an emergency
exists as determined by the Securities and Exchange Commission so that disposal
of the securities held in the Separate Account is not reasonably practicable or
it is not reasonably practicable to determine the value of the Separate
Account's net assets; or (4) when the Securities and Exchange Commission has
ordered that the right of surrender be suspended for your protection; or (5)
during any other period when the Securities and Exchange Commission, by order,
so permits for your protection. We reserve the right to suspend or postpone the
date of any payment of any benefit or values (including the payments of cash
surrenders and policy loans) for up to six months when policy values are being
withdrawn from the Fixed Account. Any provision of this policy which specifies a
Valuation Date or provides for surrenders or loans will be superseded by this
Emergency Procedure.
VOTING RIGHTS
You, or the Beneficiary after the Insured's death, will be entitled to certain
voting rights with respect to the Investment Options to which you have allocated
premiums.
If current law requires, you will be entitled to instruct us how to vote at
meetings of the shareholders of the Investment Options. We will determine the
number of votes to which you will be entitled to instruct us. If there is a
change in the law which permits us to vote the shares of the Investment Options
without direction from you, we reserve the right to do so.
MATURITY OF AN INVESTMENT OPTION
If any Contract Value is attributable to an Investment Option having a specified
maturity date, the Contract Value in that Investment Option as of such maturity
date will be allocated to the money market Investment Option specified on the
Policy Summary, unless you request otherwise. We will send written notice to
your last known address at least thirty days in advance of the maturity date of
that Investment Option. To select an allocation to an Investment Option other
than the money market Investment Option, we must receive your notification In
Writing at least seven days before the maturity date of that Investment Option.
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ANNUAL STATEMENT
As often as required by law, but at least once in each Policy Year, we will send
you a statement showing:
1. the Contract Value, Stated Amount and Amount Insured; and
2. the premiums paid, deductions, surrenders and loans made during
the preceding Policy Year; and
3. total Loan Account value.
ILLUSTRATIVE REPORTS
You may request an up-to-date illustrative report of values based on past
results and current assumptions.
We will provide the illustrative report within a reasonable time. We may charge
a reasonable service fee, not to exceed $15 (unless prohibited by state law).
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INSURED TERM INSURANCE RIDER
This Rider is made a part of the policy to which it is attached. Except where
this Rider provides otherwise, it is subject to all conditions of the policy.
This Rider has no contract value associated with it.
DEFINITIONS
Base Death Benefit - The maximum of (a) and (b) where: (a) is the Stated Amount
of the policy and (b) is the minimum Insurance Amount.
Insured - The Insured as specified in the Policy Summary.
Insured Term Benefit - The amount equal to the greater of (a) or (b) where (a)
is the Target Stated Amount less the Base Policy Death Benefit and (b) is equal
to zero.
Stated Term Amount - Initial Target Stated Amount less Initial Stated Amount.
Target Stated Amount - The total amount of insurance coverage, including both
the base policy and the term insurance. The initial Target Stated Amount is
shown on the Policy Summary.
BENEFIT
If the Insured's death occurs while the policy and this Rider are in force, then
We will pay the Insured Term Benefit to the Beneficiary upon Our receipt of Due
Proof of the Insured's death. We will deduct from the Insured Term Benefit any
unpaid charges accruing to Us at the time of death. If no Beneficiary survives
the Insured, You will be the Beneficiary. If You are the Insured, Your estate
will be the Beneficiary. The rights of any collateral assignee may affect the
interest of the Beneficiary.
CHANGE IN TARGET STATED AMOUNT
You may request an increase or a decrease in your Target Stated Amount. An
increase to the Target Stated Amount will be allocated amongst the Stated Amount
and the Stated Term Amount in proportion to the amounts on the Issue Date. The
minimum amount of increase in the Target Stated Amount is the Minimum Insurance
Amount as shown on the Policy Summary.
TERM
Subject to the Termination provision, this Rider is effective until the Rider
Expiry Date shown on the Policy Summary.
CHARGE
This Rider is issued in consideration of the application for it and the
deduction of the additional charge as shown on the Policy Summary. The maximum
additional charge per $1,000 is equal to 110% of the Guaranteed Cost of
Insurance Rates plus $ 0.01 per month per $1,000 for the first 20 years. We may
use rates less than those shown, which will be based upon Our expectations as to
future experience.
The cost per $1,000 of the Insured Term Benefit is determined on each Deduction
Day. It is based on the age, sex, rate class and duration of the Insured.
ISSUE DATE
The Issue Date of this Rider is the same as that of the policy unless otherwise
shown on the Policy Summary.
CONTEST
When applied to this Rider, this provision will be measured from the Issue Date
of the Rider.
MISSTATEMENT
If the age and/or sex of the Insured was incorrectly stated in the application,
all benefits under this Rider will be adjusted to the amount that the charge
paid would have purchased at the correct age and/or sex.
SUICIDE
If within two years from the Issue Date of this Rider, the Insured's death
occurs and is due to suicide while sane or insane, the amount payable under this
Rider will be limited to the charges paid under this Rider.
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TERMINATION
This Rider will terminate on the earliest of:
1. subject to the Grace Period provision of the policy, the date on which
the Cash Surrender Value would not be enough to pay charges due for the
policy and the Rider; or
2. the policy termination or maturity; or
3. the Rider Expiry Date.
THE TRAVELERS INSURANCE COMPANY
/S/ [SIG]
President