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EXHIBIT 1.(5)
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MONY
LIFE INSURANCE
COMPANY OF
AMERICA
Signed for MONY Life Insurance
Company of America, a stock company,
on the Date of Issue.
Administrative Office
1740 Broadway New York, NY 10019
Operations Center
One MONY Plaza,
PO Box 4830, Syracuse, NY 13221
1(800) 487-6669
Home Office
40 North Central Avenue,
Phoenix, AZ 85004
MICHAEL I. ROTH, Chairman
SAMUEL J. FOTI, President
DAVID S. WALDMAN, Secretary
RIGHT TO RETURN POLICY - THIS POLICY MAY BE RETURNED TO US WITHIN TEN DAYS FROM
THE DATE YOU RECEIVE IT BY DELIVERING OR MAILING IT TO OUR ADMINISTRATIVE
OFFICE, A LOCAL OFFICE OF OURS, OR TO ANY AGENT OF OURS. WE WILL THEN REFUND ANY
PREMIUM PAID. THE POLICY WILL BE CONSIDERED NEVER TO HAVE BEEN ISSUED. IF YOU
RETURN BY MAIL THE CANCELLATION WILL BE EFFECTIVE ON THE DATE IT IS POSTMARKED
(IF PROPERLY ADDRESSED WITH POSTAGE PREPAID).
MONY Life Insurance Company of America will pay the benefits provided in this
Policy, subject to all the policy provisions.
INSUREDS:
NAME: Jane Doe
ISSUE AGE: 35
CLASS: Standard Class - Non Smoker
NAME: John Doe
ISSUE AGE: 35
CLASS: Standard Class - Non Smoker
POLICY NUMBER: B 0000-00-00
POLICY DATE: 04-01-1998
INITIAL SPECIFIED AMOUNT: $100,000
DATE OF ISSUE: 04-01-1998
MATURITY DATE: 04-0l-2063
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BRIEF DESCRIPTION
THIS IS A LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY DATE POLICY.
SPECIFIED AMOUNT MAY BE INCREASED OR DECREASED. NET PREMIUMS MAY BE ALLOCATED TO
ONE OR MORE SUB-ACCOUNTS OF THE VARIABLE ACCOUNT OR TO THE GUARANTEED INTEREST
ACCOUNT. IF THE VALUES HAVE BEEN SUFFICIENT TO CONTINUE THE POLICY IN FORCE:
DEATH PROCEEDS ARE PAYABLE IN EVENT OF DEATH OF THE SURVIVING INSURED (NO
BENEFIT IS PAYABLE UPON THE DEATH OF THE FIRST INSURED TO DIE) BEFORE THE
MATURITY DATE; CASH VALUE, IF ANY, IS PAYABLE IF EITHER INSURED IS LIVING AT THE
MATURITY DATE. DEATH BENEFIT AND POLICY VALUES REFLECT INVESTMENT RESULTS.
FLEXIBLE PREMIUMS UNTIL THE MATURITY DATE. NONPARTICIPATING (NO DIVIDENDS
PAYABLE).
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IMPORTANT NOTICE(s)
THIS POLICY IS A LEGAL CONTRACT BETWEEN THE POLICY OWNER AND THE COMPANY. READ
YOUR POLICY CAREFULLY.
THE AMOUNT OR THE DURATION OF THE DEATH BENEFIT (OR BOTH) MAY INCREASE OR
DECREASE DEPENDING ON INVESTMENT RESULTS. BUT THE DEATH BENEFIT WILL NEVER BE
LESS THAN THE SPECIFIED AMOUNT IN FORCE LESS ANY DEBT. SEE DEATH PROCEEDS DEATH
BENEFIT OPTIONS SECTION TO DETERMINE DEATH PROCEEDS.
THE FUND VALUE IN THE VARIABLE ACCOUNT INCREASES OR DECREASES DEPENDING ON
INVESTMENT RESULTS. THERE IS NO GUARANTEED MINIMUM FUND VALUE, CASH VALUE OR
SURRENDER VALUE. SEE FUND VALUE, CASH VALUE, SURRENDER AND SUB-ACCOUNT UNIT
VALUE SECTIONS.
B1-98 LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE PAGE 1
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TABLE OF CONTENTS
Section Page
1. BENEFITS AND PREMIUMS, CHARGES AND EXPENSES............................................................3
Policy Description; Death Benefit; Riders; Premium; Specifications And Charges.
2. GUARANTEED MONTHLY INSURANCE RATES....................................................................3B
Table Of Younger Insured's Attained Age And Corresponding Rate.
3. VARIABLE ACCOUNT, THE FUNDS AND SUB-ACCOUNTS...........................................................4
Listing Of Sub-Accounts And Funds.
4. ABOUT THIS POLICY......................................................................................5
An Overview Of Basic Policy Provisions.
5. WE WILL PAY............................................................................................6
Payment Of Death Proceeds; How Death Proceeds Are Determined.
6. PREMIUMS...............................................................................................6
Payment Of Premiums; Guideline Premium Limit; Net Premium; Premiums
Before Or At Delivery; Allocation Of Net Premiums; Scheduled Premiums;
Unscheduled Premiums
7. DEATH PROCEEDS-DEATH BENEFIT OPTIONS...................................................................8
Death Benefit Options; Change In Death Benefit Options.
8. FUND VALUE.............................................................................................9
How Fund Value Is Determined.
9. CASH VALUE.............................................................................................9
Cash Value Of The Policy.
10. TRANSFERS..............................................................................................9
Types Of Transfers; Allocation Rules.
11. SURRENDER.............................................................................................10
Surrender For Cash Value.
12. PARTIAL SURRENDER.....................................................................................10
Partial Surrenders; Surrender Fees; Allocation Rules; Effect On Death Benefit.
13. SURRENDER CHARGE......................................................................................11
Surrender Charge; Surrender Charge After Increase In Specified Amount.
14. LOANS.................................................................................................11
Loan Value; Loan Interest; Allocation Rules.
15. LOAN ACCOUNT..........................................................................................12
Loan Account; Annual Loan Interest Rate; Interest Allocation.
16. OPTIONAL POLICY CHANGES...............................................................................13
Increasing And Decreasing The Specified Amount; Changing The Death Benefit
Option.
17. OPTION TO SPLIT POLICY................................................................................13
Terms And Conditions For Splitting Policy Into Two Individual Life Policies.
FOR INFORMATION OR TO MAKE
A COMPLAINT, CALL 1-800-487-MONY (1-800-487-6669)
OR WRITE TO US AT OUR OPERATIONS CENTER:
ONE MONY PLAZA, PO BOX 4830, SYRACUSE, NY 13221
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Section Page
18. RIGHTS OF OWNER.......................................................................................16
Owner Of The Policy; Owner's Rights.
19. BENEFICIARY...........................................................................................16
Beneficiary Of The Policy; Changing The Beneficiary.
20. THE VARIABLE ACCOUNT..................................................................................16
Variable Account; Sub-Accounts; Changes To The Variable Account.
21. SUB-ACCOUNT UNIT VALUE................................................................................17
Unit Value Determination.
22. THE GUARANTEED INTEREST ACCOUNT.......................................................................18
Guaranteed Interest Account; Interest Rate Applied To The Guaranteed Interest
Account.
23. MONTHLY DEDUCTION.....................................................................................18
Monthly Deduction Determination; Monthly Deduction Allocation.
24. GRACE PERIOD..........................................................................................18
Minimum Monthly Premium; Notice of Insufficient Premium/Value; Length of
Grace Period.
25. REINSTATEMENT.........................................................................................19
Period And Requirements For Reinstatement.
26. COST OF INSURANCE.....................................................................................20
Cost Of Insurance Determination; Amount At Risk.
27. INSURANCE RATE........................................................................................21
Insurance Rate Determination; Review Of Insurance Rate.
28. CONTINUATION OF INSURANCE.............................................................................21
Continuation Of Policy If Premium Payments Are Not Continued.
29. DEFINITION OF LIFE INSURANCE..........................................................................21
Cash Value Accumulation Test; Guideline Premium/Cash Value Corridor Test.
30. BASIS OF CALCULATION..................................................................................22
Method Of Calculations On File With State Supervisory Official.
31. DATES AND POLICY PERIODS..............................................................................22
How Dates Are Determined; How Periods Are Measured.
32. GENERAL PROVISIONS....................................................................................22
The Contract; Statements In Application;
Incontestability; Misstatement Of Age Or Gender;
Suicide Exclusion; Assignment; Policy Payment;
Relationships; Postponement Of Certain Payments Or
Transfers; Reports; Projection of Benefits And Values;
Nonparticipation.
33. SETTLEMENT OPTIONS....................................................................................24
Election Of Settlement Options; Settlement (Payout) Options Available; Minimum
Monthly Income Tables.
ENDORSEMENTS, IF ANY
RIDERS, IF ANY
APPLICATION
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1. SCHEDULE OF BENEFITS AND PREMIUMS, CHARGES AND EXPENSES
BENEFITS AND PREMIUMS
Last Survivor Flexible Premium Variable Life Policy
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Death Benefit Option 1 in effect
Specified Amount In Force $100,000
Guaranteed Monthly Insurance Rates for Initial Specified Amount see Section 2
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Guaranteed Death Benefit Rider
Guarantee period to later of 10th policy
anniversary or the date the younger Insured attains
(or would have attained) age 70
Monthly Guarantee Premium $39.72
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Four Year Term Insurance Rider Initial Amount $100,000
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First Premium $50.00
Scheduled Premiums $50.00
at 1 Policy Month intervals measured from 5-1-98
Guideline Premium Limit as of Policy Date $9760.43
Minimum Monthly Premium $31.00
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Under the terms of the Policy, the scheduled premium shown above may not continue the Policy inverse to the Maturity Date even
if this amount is paid as scheduled. The period for which the Policy will continue will depend on: the amount of premiums
paid; changes in Specified Amount and death benefit options; changes in interest credited, expenses, fund performance and
mortality deductions; deductions for riders and benefits and any partial surrenders and policy loans. During the first three
policy years, premiums paid less partial surrenders (excluding their fees) must equal the Minimum Monthly Premium times the
number of months the Policy has been in force. Election of the Guaranteed Death Benefit Rider can provide for guaranteed
continuation of the Policy and some riders if certain requirements are met.
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CHARGES AND EXPENSES
Transfer Charge Current $0
(subject to change; see Transfers, Section 10)
Guaranteed Maximum $25
Daily Mortality and Expense Risk Charge. 000959%
(0.35% annually)
Sales Charge
6% of each premium received until the total
of all premiums received in the year equals
$461.23; plus 3% of each premium received in
excess of that amount during years 1 through
10.
3% of each premium received during years 11
and later.
Premium Tax Charge
2.25% of each premium received subject to
change based upon changes in applicable state
tax laws or cost to the Company.
Federal Tax Charge
1.5% of each premium received subject to
change based upon changes in applicable
federal tax laws or cost to the Company.
Administrative Charge
$7.50 per month is included in the monthly
deduction on a Monthly Anniversary Day.
Per $1,000 Initial Specified Amount Charge
$7.00 per month during years 1 through 10.
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SECTION 1 CONTINUED
Table of Death Benefit Percentages;
Cash Value Accumulation Test
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Attained Age Of Applicable Death Attained Age Of Applicable Death
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Younger Insured Benefit Percentage Younger Insured Benefit Percentage
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35 785.8 68 197.2
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36 752.0 69 190.2
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37 719.7 70 183.6
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38 688.7 71 177.4
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39 659.2 72 171.5
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40 630.9 73 166.1
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41 603.9 74 160.9
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42 578.0 75 156.1
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43 553.4 76 151.7
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44 529.8 77 147.5
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45 507.2 78 143.7
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46 485.7 79 140.1
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47 465.1 80 136.8
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48 445.4 81 133.7
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49 426.6 82 130.8
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50 408.7 83 128.2
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51 391.5 84 125.8
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52 375.1 85 123.7
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53 359.5 86 121.7
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54 344.6 87 119.9
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55 330.4 88 118.2
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56 316.9 89 116.6
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57 303.9 90 115.2
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58 291.6 91 113.8
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59 279.9 92 112.4
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60 268.7 93 111.0
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61 258.0 94 109.5
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62 247.9 95 108.1
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63 238.3 96 106.6
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64 229.1 97 105.1
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65 220.5 98 104.1
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66 212.3 99 103.0
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67 204.5 100 101.0
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PAGE 3-CONT.
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1A. SURRENDER CHARGE
The surrender charge as of the policy date for the Initial Specified
Amount is $461.23
The surrender charge for the Initial Specified Amount declines each
year and is the applicable percentage (shown in the table below) of
the surrender charge as of the policy date.
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Policy Year Applicable % Policy Year Applicable %
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1 100% 7 40
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2 90 8 30
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3 80 9 20
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4 70 10 10
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5 60 11 and later 0
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6 50
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See surrender charge section for the effect of any change in
Specified Amount.
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2. GUARANTEED MONTHLY INSURANCE RATES FOR INITIAL SPECIFIED AMOUNT
Rates are per $1,000 of Amount at Risk - see Cost of Insurance
section.
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Younger Insured's Younger Insured's
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Attain Age Rate Attained Age Rate
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35 .00006 67 .61475
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36 .00070 68 .72150
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37 .00129 69 .84601
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38 .00199 70 .99430
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39 .00283 71 1.17414
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40 .00387 72 1.39468
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41 .00512 73 1.66251
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42 .00658 74 1.98046
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43 .00830 75 2.34948
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44 .01030 76 2.76899
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45 .01269 77 3.23953
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46 .01547 78 3.76645
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47 .01875 79 4.36390
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48 .02256 80 5.05200
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49 .02707 81 5.85173
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50 .03243 82 6.78444
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51 .03884 83 7.85568
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52 .04661 84 9.05986
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53 .05595 85 10.38554
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54 .06693 86 11.82373
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55 .07993 87 13.36648
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56 .09497 88 15.01179
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57 .11205 89 16.77412
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58 .13173 90 18.67204
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59 .15495 91 20.75205
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60 .18258 92 23.10056
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61 .21591 93 25.91960
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62 .25695 94 29.68300
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63 .30744 95 35.41389
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64 .36792 96 45.47716
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65 .43908 97 66.01833
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66 .52120 98 83.33333
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99 83.33333
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PAGE 3B
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3. VARIABLE ACCOUNT. THE FUNDS AND SUB-ACCOUNTS
See Variable The Variable Account is MONY America Variable Account L and includes the
Account Sub-accounts listed below.
section for
further The Sub-accounts available for investment purposes, and the corresponding
information portfolios of the applicable funds are:
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SUB-ACCOUNT APPLICABLE FUND
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Money Market MONY Series Fund, Inc.
Government Securities MONY Series Fund, Inc.
Intermediate Term Bond MONY Series Fund, Inc.
Long Term Bond MONY Series Fund, Inc.
Equity Income Enterprise Accumulation Trust
Growth and Income Enterprise Accumulation Trust
Growth Enterprise Accumulation Trust
Equity Enterprise Accumulation Trust
Managed Enterprise Accumulation Trust
Capital Appreciation Enterprise Accumulation Trust
Small Company Value Enterprise Accumulation Trust
Small Company Growth Enterprise Accumulation Trust
International Growth Enterprise Accumulation Trust
High Yield Bond Enterprise Accumulation Trust
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The MONY Series Fund, Inc. is organized under the laws of Maryland. The
Enterprise Accumulation Trust is organized under the laws of Massachusetts. Each
fund is registered with the Securities and Exchange Commission (SEC) as an open
end, diversified management investment company under the Investment Company Act
of 1940.
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4. ABOUT THIS POLICY
The following is an overview of some basic policy provisions to aid your
understanding. The specific provisions of the Policy are found in the pages
following this overview. In the event of a discrepancy between this overview and
any specific provisions of this Policy, the specific Policy provisions will
control.
This is a Last Survivor Flexible Premium Variable Life to Maturity Date
Insurance policy. This Policy goes into effect on the Policy Date. This Policy
is a "promise to pay" the Death Proceeds in the event the last surviving Insured
(the second Insured to die) dies before the Maturity Date while the Policy is in
force. Payment will be made when we receive due proof of the death of the last
surviving Insured. The Insureds are the persons on whose lives the policy is
based. "Specified Amount in Force" is the Initial Specified Amount, adjusted for
any increases or decreases in Specified Amount. The Death Proceeds are paid to
the Beneficiary. If either Insured is living on the Maturity Date, while the
Policy is in force, we will pay the Cash Value, if any, to the Owner(s).
Maturity Date means the policy anniversary following the younger Insured's 100th
Birthday and is shown on page 1.
The value of this Policy is based on Premiums which you allocate to either the
Variable Account and/or the Guaranteed Interest Account. The Fund Value is the
combined value of the Variable Account, the Guaranteed Interest Account and the
Loan Account BEFORE the surrender charge. The Cash Value, if any, is the value
AFTER the surrender charge and any Debt is deducted. The "Guaranteed Interest
Account" is a "fixed" account and is part of our General Account. The Variable
Account is an account which is separate from our General Account. The value of
the Variable Account can increase or decrease depending on investment
experience. The Variable Account is made up of several Sub-accounts
(subdivisions) with different investment objectives. Each Sub-account invests
only in the shares of its own portfolio of its fund. The measure of value in a
Sub-account is called a Unit.
The value of Units in a Sub-account can only change on a Business Day. A
Business Day is any day the New York Stock Exchange is open for trading or on
any other day there is enough trading to change the Unit value of a Sub-account.
Trading refers to the securities held by the portfolio.
A "Monthly Anniversary Day" is the first Business Day of each policy month. Each
month, a Monthly Deduction (the cost of insurance, cost of additional benefits,
an Administrative Charge and a Per $1,000 of Specified Amount Charge) is
deducted from the Fund Value.
If, on a Monthly Anniversary Day, additional payments by you are required to
keep this Policy in force, we will send a notice of INSUFFICIENT PREMIUM or
INSUFFICIENT VALUE to you. A grace period of 61 days will be allowed for payment
of the required amount.
When we refer to "I" or "my" in a question, or to "you" or "your" in an answer,
we mean the Owner. The Owner is the person who holds the Policy and who has the
rights of ownership. The Owner chooses any options the Policy offers. When we
refer to "we", "us" and "our", we mean MONY Life Insurance Company of America.
"Administrative Office" means our office at 1740 Broadway, New York, N.Y. 10019
and also includes our Operations Center at One MONY Plaza, P.O. Box 4830,
Syracuse, NY 13221.
You can read more about the terms used in the summary on the following pages.
"Beneficiary" (see Section 19)
"Cash Value" (see Section 9)
"Death Proceeds" (see Section 7)
"Fund Value" (see Section 8)
"Grace Period" (see Section 24)
"Guaranteed Interest Account" (see Section 22)
"Monthly Deduction" (see Section 23)
"Owner" (see Section 18)
"Specified Amount in Force" (see Section 16)
"Units" and "Sub-account (see Section 21)
unit value"
"Variable Account" and (see Section 20)
"Sub-accounts
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5. WE WILL PAY
WHAT WILL THE COMPANY PAY AND WHEN WILL THEY PAY IT?
If the surviving lnsured dies before the Maturity Date and while this Policy is
in force, I will pay the Death Proceeds of the Policy to the Beneficiary.
Payment will be made subject to all the provisions of this Policy, when we
receive due proof of death at our Administrative Office.
If the proceeds are not paid by the end of 30 days from the date we receive due
proof of death of the last surviving Insured, we will pay interest on the
proceeds if required by the state in which the Policy is delivered at the rate
specified by that state. If interest is payable, it will be paid from date of
the death to date of payment of proceeds.
We must be given due proof of the first death as soon as possible.
Payment in any case will only be made in accordance with all the provisions of
this Policy. We must receive due proof of the death of both Insureds.
If either Insured is living at the Maturity Date, we will pay the Cash Value, if
any, to the Owner(s).
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6. PREMIUMS
WHERE DO I PAY PREMIUMS?
Premiums after the first may be paid at any time to us at our Administrative
Office or through any agent or other person authorized by us to accept them in
exchange for a receipt signed by our Treasurer and by the person receiving the
payment.
The next three questions and answers apply only to policies where the Guideline
Premium/Cash Value Corridor Test has been selected as the Definition of Life
Insurance.
IS THERE A LIMIT ON PREMIUMS?
Yes. Premiums after the first (shown in section 1), are limited as described
below. We will not accept any part of an unscheduled premium if that part would
result in the sum of all premiums paid, less any partial surrenders (including
their fees), being in excess of the Guideline Premium Limit that then applies to
the Policy.
We reserve the right to reject all or a portion of any unscheduled premium if
part (b) of either Death Benefit Option 1 or Death Benefit Option 2 is in
effect.
How is the Guideline Premium Limit determined?
The Guideline Premium Limit that applies to the Policy at any time will never be
more than as determined in accordance with Section 7702 of the Internal Revenue
Code of 1986 as now or later amended or any further amendment of such Code
superseding or modifying that section. The Guideline Premium Limit that applies
to the Policy on the Policy Date is shown in Section 1.
CAN THE GUIDELINE PREMIUM LIMIT CHANGE?
Yes. Changes in the Specified Amount in Force, the Death Benefit Option in
effect or an additional benefit provided by rider will change the Guideline
Premium Limit. In the event of any such change, we reserve the right to reduce
the Policy's Fund Value after deduction of any surrender charge, so that the
Guideline Premium Limit that applies to the Policy is not violated. The amount
by which we reduce the Fund Value after deduction of any surrender charge, will
be refunded to you in cash. We will issue an endorsement to reflect any such
change and it will include the revised Guideline Premium Limit that then applies
to the Policy.
WHAT IS A NET PREMIUM?
A net premium is a premium paid by you, less the Sales Charge, Premium Tax
Charge and Federal Tax Charge shown in Section 1.
WHEN MUST I PAY THE FIRST PREMIUM AND WILL THE PREMIUM EARN INTEREST?
You must pay the first premium before or at delivery of the Policy. The premium
will earn interest at a rate not less than 4.5%. Interest will be credited
annually from the later of the Policy Date and the Business Day that falls on,
or next follows, the date we receive it at our Administrative Office until the
date we transfer it to the
PAGE6
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Sub-accounts and/or Guaranteed Interest Account as you have chosen. If you do
not accept the Policy at delivery, we will refund any premium paid without
interest.
WILL ANY SUBSEQUENT PREMIUMS EARN INTEREST DURING THE "RIGHT TO RETURN POLICY"
PERIOD?
Any premium we receive after delivery of the Policy but before the end of the
"Right to Return Policy" period (see page 1) will also earn interest at a rate
not less than a 4.5% annual interest rate.
WHEN IS THIS VALUE TRANSFERRED INTO THE ACCOUNTS I'VE CHOSEN?
If you have not returned the Policy, at the end of the "Right to Return Policy"
period, we transfer the net premiums with interest less any monthly deductions
that may apply to the Sub-accounts and/or the Guaranteed Interest Account as you
have chosen. When we do this, we use the most recent valid scheduled premium
allocation choice we have from you. If we have no valid scheduled premium
allocation choice from you, we will transfer the net premiums with interest,
less deductions to the Money Market Sub-account.
AFTER THE "RIGHT TO RETURN POLICY" PERIOD, WHERE ARE NET PREMIUMS ALLOCATED?
After the "Right to Return Policy" period, we allocate net premiums to the
Sub-Accounts and/or the Guaranteed Interest Account as chosen by you on the day
we receive them if it is a Business Day. If the day we receive the premium is
not a Business Day, we allocate it on the next Business Day. When we do this, we
use the most recent valid scheduled premium allocation choice we have from you.
If we have no valid scheduled premium allocation choice from you, we will
allocate the net premiums, less deductions to the Money Market Sub-account.
ARE THERE ANY ALLOCATION RULES FOR SCHEDULED PREMIUMS?
Yes, allocations must be made in whole percentages. If a Sub-account or the
Guaranteed Interest Account is to receive any allocation, the allocation must be
at least 10% and the total must equal 100% of the net premium. We use the most
recent valid allocation choice we have from you. You may change your allocation
choice by writing to us at our Administrative Office. A change will take effect
within 7 days after we receive that notice.
WILL I RECEIVE ANY NOTICE REGARDING SCHEDULED PREMIUMS?
Yes, we will send reminder notices to you for the payment of the scheduled
premiums shown in Section 1.
CAN I CHANGE THE AMOUNT AND INTERVAL OF SCHEDULED PREMIUMS?
Yes, you can change the amount and interval of payment of scheduled premiums by
writing to us. But the new payment interval must satisfy our rules in use at the
time of the change.
CAN I MAKE UNSCHEDULED PREMIUM PAYMENTS?
Yes, additional premium payments may be made at any time. However, we will not
accept any part of an unscheduled premium if that part will result in total
premiums paid less any partial surrenders (including their fees) in excess of
the Guideline Premium Limit, if applicable.
CAN I EARMARK AN UNSCHEDULED PREMIUM FOR AN ALLOCATION DIFFERENT FROM MY REGULAR
ALLOCATION CHOICE?
Yes, you can choose a specific allocation for an unscheduled premium and it will
not change your allocation choice for future scheduled premiums. Allocations
must be by amount or percentage in whole numbers only. If a Sub-account or the
Guaranteed Interest Account is to receive any allocation, the allocation must be
at least 10% and the total must equal 100% of the net premium.
If you do not give us a specific allocation for the unscheduled premium, or if
your allocation choice is not valid, we will use the most recent valid scheduled
premium allocation choice we have from you.
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7. DEATH PROCEEDS-DEATH BENEFIT OPTIONS
WHAT ARE THE DEATH PROCEEDS OF THE POLICY?
THE DEATH PROCEEDS WILL BE PAID TO THE BENEFICIARY WHEN WE RECEIVE DUE PROOF OF
THE DEATH OF THE SURVIVING INSURED WHILE THIS POLICY IS IN FORCE. THE DEATH
PROCEEDS WILL BE THE SUM OF:
- -- the Death Benefit; and
- -- any Death Benefit provided by any additional benefit rider in force on the
date of death.
LESS:
- -- any Debt due us on this Policy; and
- -- if the death of the surviving Insured occurs during any period for which a
monthly deduction has not been made, any monthly deduction that may apply to
that period, including the deduction for the month of death.
WHAT IS THE DEATH BENEFIT UNDER DEATH BENEFIT OPTION 1?
If Death Benefit Option 1 is in effect on the date of death of the surviving
Insured, the Death Benefit is the greater of:
(a) the Specified Amount in Force on the date of death; and
(b) the Fund Value on the date of death multiplied by the applicable percentage
(see below).
WHAT IS THE DEATH BENEFIT UNDER DEATH BENEFIT OPTION 2?
If Death Benefit Option 2 is in effect on the date of death of the surviving
Insured, the Death Benefit is the greater of:
(a) the Specified Amount in Force on the date of death, plus the Fund Value on
the date of death; and
(b) the Fund Value on the date of death multiplied by the applicable percentage
(see below).
WHAT IS THE APPLICABLE PERCENTAGE?
The applicable percentage varies based on the definition of life insurance test
you choose in the application for this Policy. Once the test is chosen, it may
not be changed. If the Cash Value Accumulation Test is chosen, the applicable
percent ages are as shown in Section 1 of this Policy. If the Guideline
Premium/Cash Value Corridor Test is chosen, the applicable percentage of the
Fund Value used to determine the Death Benefit payable is
- --------------------------------------------------------------------------
Younger Insured's Applicable Percentage
Attained Age on of Fund Value
date of Second
Death
- --------------------------------------------------------------------------
40 or under 250%
- --------------------------------------------------------------------------
41-45 250% less 7% for each year over attained age 40
- --------------------------------------------------------------------------
46-50 215% less 6% for each year over attained age 45
- --------------------------------------------------------------------------
51-55 185% less7% for each year over attained age 50
- --------------------------------------------------------------------------
56-60 150% less 4% for each year over attained age 55
- --------------------------------------------------------------------------
61-65 130% less 2% for each year over attained age 60
- --------------------------------------------------------------------------
66-70 120% less 1% for each year over attained age 65
- --------------------------------------------------------------------------
71-74 115%less 2% for each year over attained age 70
- --------------------------------------------------------------------------
75-90 105%
- --------------------------------------------------------------------------
91-94 105% less 1% for each year over attained age 90
- --------------------------------------------------------------------------
95-99 101%
- --------------------------------------------------------------------------
101 101%
- --------------------------------------------------------------------------
UNDER WHAT CIRCUMSTANCES WILL THE DEATH BENEFIT OPTION CHANGE AUTOMATICALLY?
If a Waiver of Monthly Deduction Benefit rider or a Waiver of Specified Premium
rider is part of this Policy, and if Death Benefit Option 1 is in effect, it
will automatically change to Death Benefit Option 2 under the terms and
conditions explained in that rider.
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8. FUND VALUE
WHAT IS THE FUND VALUE ON THE POLICY DATE?
The Fund Value on the Policy Date is the net Premiums received by us on or
before the Policy Date with interest, if applicable, less the monthly deduction
due on the Policy Date.
WHEN ARE FUND VALUE CALCULATIONS MADE?
After the Policy Date, Fund Value calculations are made on Business Days. If a
Fund Value calculation has to be made for a day that is not a Business Day, then
we will use the next Business Day.
HOW IS THE FUND VALUE DETERMINED ON A BUSINESS DAY?
The Fund Value on a Business Day is determined as follows:
(a) Determine the Fund Value in each Sub-account on that Day (see below for
details).
(b) Total the Fund Value in each Sub-account on that Day.
(c) Add the Fund Value in the Guaranteed Interest Account on that Day (see below
for details).
(d) Add any amounts in the Loan Account on that Day.
(e) Add interest credited on that Day on the amounts in (d) since the last
Monthly Anniversary Day.
(f) Add any net Premiums received on that Day.
(g) Deduct any Transfer Charges on that Day.
(h) Deduct any partial surrender, and its fee, made on that Day.
(i) Deduct any monthly deduction to be made on that Day.
REGARDING (a) ABOVE, HOW IS THE FUND VALUE FOR EACH SUB-ACCOUNT DETERMINED ON
THAT BUSINESS DAY?
For each Sub-account we multiply the number of Units credited to that
Sub-account by its Unit value on that Day. The multiplication is done BEFORE the
purchase or redemption of any Units on that Day.
REGARDING (c) ABOVE, WHAT MAKES UP THE FUND VALUE IN THE GUARANTEED INTEREST
ACCOUNT ON THAT BUSINESS DAY?
The Fund Value in the Guaranteed Interest Account on that Day is the accumulated
value with interest of net Premiums allocated, and amounts transferred, to the
Guaranteed Interest Account BEFORE that Day, decreased by allocations against
the Guaranteed Interest Account BEFORE that Day for: (i) any partial surrender,
and its fee; (ii) any amounts transferred from the Guaranteed Interest Account,
and Transfer Charge; and (iii) any monthly deductions.
HOW IS THE FUND VALUE DETERMINED ON A MONTHLY ANNIVERSARY DAY FOR PURPOSES OF
CALCULATING THE COST OF INSURANCE AND THE COST OF ANY WAIVER OF MONTHLY
DEDUCTION RIDER?
The Fund Value on a Monthly Anniversary Day for purposes of calculating the cost
of insurance and the cost of any Waiver of Monthly Deduction Rider is determined
as described in items (a) through (h) above.
- --------------------------------------------------------------------------------
9. CASH VALUE
WHAT IS THE CASH VALUE OF THIS POLICY?
The Cash Value of this Policy at any time is the Fund Value, less the surrender
charge and less any Debt.
- --------------------------------------------------------------------------------
10. TRANSFERS
WHEN CAN I MAKE TRANSFERS?
Transfers may be made only after the "Right to Return Policy" period has ended.
WHAT TRANSFERS CAN I MAKE?
There are 2 types of transfers you can make. Each type is explained (along with
any rules and limitations) below:
TYPE 1. Transfers FROM a Sub-account. There are no restrictions on this type of
transfer.
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TYPE 2. Transfers FROM the Guaranteed Interest Account. This type of transfer
can only be made ONCE per policy year. Your request for this type of transfer
MUST be received at our Administrative Office WITHIN 10 DAYS BEFORE OR 30 DAYS
AFTER a policy anniversary.
There is no limit on transfers INTO a Sub-account or the Guaranteed Interest
Account.
WHEN WILL A TRANSFER REQUEST TAKE EFFECT?
Type 1 transfers will take effect on the Business Day that falls on, or next
follows, the date we receive the request at our Administrative Office. Type 2
transfers will take effect on the policy anniversary or, if later, (subject to
above rules), on the Business Day that falls on, or next follows, the date we
receive the request at our Administrative Office.
WHAT IS THE CHARGE FOR A TRANSFER AND HOW DOES IT WORK?
Each request for a transfer is considered one transaction and is subject to a
Transfer Charge. The current amount of that charge is shown on page 3. We may
increase the charge but it will never be more than the guaranteed maximum shown
on page 3.
If we change the amount of the charge we will send an endorsement to show the
change.
IF A TRANSFER CHARGE IS APPLICABLE, HOW IS IT ALLOCATED AMONG THE ACCOUNTS?
The Transfer Charge is allocated against the first of the Sub-accounts and/or
the Guaranteed Interest Account from which Fund Value is being transferred.
CAN I CHANGE THIS POLICY TO A POLICY THAT DOES NOT DEPEND ON THE INVESTMENT
RESULTS OF A SEPARATE ACCOUNT?
Yes. During the first 24 months after the Date of Issue of the Policy, the
entire amount of Fund Value in the Sub-accounts may be transferred to the
Guaranteed Interest Account. Election of this exchange transfer will change this
Policy to a policy that is not dependent upon the investment results of a
separate account. There will be no Transfer Charge for an exchange transfer. On
the date an exchange transfer takes effect, the premium allocation will be
changed so that all future net premiums will be allocated to the Guaranteed
Interest Account only.
- --------------------------------------------------------------------------------
11. SURRENDER
WHEN MAY I SURRENDER THE POLICY AND WHAT IS ITS VALUE ON SURRENDER?
You may surrender the Policy at any time during either Insureds' lifetime for
its Cash Value, if any. If the Policy is surrendered within 30 days of a policy
anniversary, the following will apply. The portion of the Cash Value of the
policy in the Guaranteed Interest Account on the surrender date will not be less
than the Cash Value in the Guaranteed Interest Account on that anniversary. The
Cash Value on that anniversary will be adjusted for amounts attributable to: any
partial surrender and its fee; any transfer to or from the Guaranteed Interest
Account and applicable Transfer Charge, and any policy loan.
- --------------------------------------------------------------------------------
12 PARTIAL SURRENDER
CAN I WITHDRAW MONEY FROM THE POLICY?
Yes, money may be withdrawn by making a partial surrender.
WHAT ARE THE RULES AND LIMITATIONS FOR A PARTIAL SURRENDER?
A partial surrender of this Policy may be made for any amount of at least $500
which, with its fee (see below), is less than the Policy's Cash Value on the
date of the partial surrender. A partial surrender may not result in a Specified
Amount in Force less than $100,000. Nor may it result in a remaining Cash Value
of less than $500.
IS THERE A FEE FOR A PARTIAL SURRENDER?
Yes, a partial surrender fee equal to $10 will apply to each partial surrender.
The amount of a partial surrender, plus its fee, will be deducted from the Fund
Value of the Policy on the date of the partial surrender. The fee will be
retained by us.
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WHEN WILL PARTIAL SURRENDERS TAKE EFFECT?
Partial surrenders will take effect on the Business Day that falls on, or next
follows, the date we receive your request at our Administrative Office.
HOW CAN 1 SPECIFY PARTIAL SURRENDER ALLOCATIONS AND ARE THERE MINIMUMS?
You can specify partial surrender allocations by amount or percentage.
Allocations by percentage must be in whole percentages and the minimum
percentage is 10% against any Sub-account or the Guaranteed Interest Account.
Percentages must total 100%.
We will not accept an allocation which does not comply with the above rules or
if there is not enough Fund Value in a Sub-account or the Guaranteed Interest
Account to provide its share of the allocation.
WHAT IF I DON'T SPECIFY AN ALLOCATION?
If you do not specify an allocation, we will not accept the request for partial
surrender.
HOW WILL THE PARTIAL SURRENDER FEE BE ALLOCATED?
Each Sub-account and/or the Guaranteed Interest Account will be charged its
pro-rata share of the partial surrender fee, based on the allocation percentages
you specify for the partial surrender.
HOW WILL A PARTIAL SURRENDER AFFECT THE AMOUNT OF DEATH BENEFIT AND SPECIFIED
AMOUNT IN FORCE?
If Death Benefit Option 1 is in effect on the day on which a partial surrender
is made, we shall then reduce the Specified Amount in Force on that day by the
amount of the partial surrender, excluding its fee. But the amount of partial
surrender cannot result in a Specified Amount in Force less than $100,000.
If Death Benefit Option 2 is in effect on the day on which a partial surrender
is made, the Fund Value on that day will be reduced by the amount of the partial
surrender, plus its fee. The Specified Amount in Force on that day will be
unaffected.
HOW DO PARTIAL SURRENDERS AFFECT THE SURRENDER CHARGE DESCRIBED IN SURRENDER
CHARGE SECTION 13?
Partial surrenders have no effect on the amount of surrender charge that may be
applicable.
- --------------------------------------------------------------------------------
13. SURRENDER CHARGE
WHAT IS THE SURRENDER CHARGE FOR THE INITIAL SPECIFIED AMOUNT?
The surrender charge for the Initial Specified Amount is shown in Section lA.
WHAT EFFECT DOES AN INCREASE IN SPECIFIED AMOUNT HAVE ON THE SURRENDER CHARGE?
A new separate surrender charge will be determined for each increase in
Specified Amount and will be provided in the endorsement issued to reflect that
increase. The surrender charge for the Specified Amount in Force reflects any
charge attributable to the Initial Specified Amount and to each increase in
Specified Amount.
WHEN WILL A SURRENDER CHARGE BE ASSESSED?
A full surrender will result in all of the outstanding surrender charge (if any)
being assessed against the Fund Value.
- --------------------------------------------------------------------------------
14. LOANS
MAY I OBTAIN A LOAN FROM THE POLICY?
Yes, loans may be obtained at any time while this Policy has a loan value. The
loan value is up to 90% of the Cash Value on the date of the loan. A proper
assignment of this Policy to us will be needed.
PAGE 11
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- --------------------------------------------------------------------------------
IS THERE ANY INTEREST CHARGED ON LOANS AND HOW IS IT PAYABLE?
Loan interest at an annual rate of 5.25% will be charged in arrears on new or
outstanding loans (4.75% in policy years 11 and later). This includes a loan
continued after any reinstatement of the Policy. Loan interest will accrue from
day to day between policy anniversaries. Interest will be payable in arrears on
each policy anniversary.
WHAT ELSE SHOULD I KNOW ABOUT LOANS?
The Policy will be the sole security for any policy loan. But it need not be
given to us for endorsement unless we ask for it
Any reference to Debt under this Policy means total loan principal under this
Policy plus any accrued loan interest.
If ever the Debt exceeds the Fund Value less any outstanding surrender charge,
this Policy will end. But we must first give at least 61 days notice of
INSUFFICIENT VALUE. Any Debt may be repaid in whole or part before the surviving
Insureds' death.
Any written notice referred to in this "Loans" Section will be mailed to the
last known address of the Owner or any assignee of record.
WHEN WILL LOANS TAKE EFFECT?
Loans will take effect on the Business Day that falls on, or next follows, the
date we receive the request for the loan at our Administrative Office.
HOW CAN I SPECIFY LOAN ALLOCATIONS AND ARE THERE MINIMUMS?
You can specify loan allocations by amount or percentage. Allocations by
percentage must be in whole percentages and the minimum percentage is 10%
against any Sub-account and/or the Guaranteed Interest Account. Percentages must
total l00%
We will not accept an allocation which does not comply with the above rules or
if there is not enough Cash Value in a Sub-account and/or the Guaranteed
Interest Account to provide its share of the allocation.
WHAT IF I DON'T SPECIFY AN ALLOCATION?
If you do not specify an allocation, we will not accept the request for loan.
WHAT HAPPENS IF I DON'T PAY THE LOAN INTEREST WHEN IT'S DUE?
Any interest not paid when due will be added to the loan and bear interest at
the 5.25(degree)/o annual rate (4.75% in policy years 11 and later). It will be
deducted from the Fund Value of each Sub-account and/or the Guaranteed Interest
Account in the same proportion each bears to the total Fund Value on the policy
anniversary.
HOW WILL DEBT REPAYMENTS BE ALLOCATED?
Any Debt repayment must be earmarked as such and will be allocated to the
Sub-accounts and/or the Guaranteed Interest Account in accordance with the most
recent valid scheduled premium allocation choice we have from you.
- --------------------------------------------------------------------------------
15. LOAN ACCOUNT
WHAT IS THE LOAN ACCOUNT AND HOW IS INTEREST CREDITED TO IT?
The Loan Account is a portion of the Policy's Fund Value that was transferred
from the Sub-accounts and/or the Guaranteed Interest Account to secure any
outstanding loan. The Loan Account will earn interest at a rate not less than
4.5% per year. Any interest in excess of this rate will be credited in a manner
determined by us. The Fund Value of the Loan Account in excess of the Debt will
be allocated to the Sub-accounts and/or the Guaranteed Interest Account in a
manner determined by us.
WHAT IF I PAY THE ENTIRE DEBT BETWEEN POLICY ANNIVERSARIES?
If the entire Debt is repaid on a date that is not a policy anniversary, we
determine the interest earned on the Loan Account from the last date it was
calculated to the date that payment was received by us at our Administrative
Office. This interest will be allocated on the date of repayment among the
Sub-accounts and/or the Guaranteed Interest Account in accordance with the most
re-
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cent valid scheduled premium allocation we have from you (see Premiums section
6).
- --------------------------------------------------------------------------------
16. OPTIONAL POLICY CHANGES
WHAT CHANGES CAN I MAKE TO THE POLICY?
You may request an increase or a decrease to the Specified Amount. You may also
request a change in Death Benefit Option. Requests for these changes may be made
by writing to us at our Administrative Office. We will issue an endorsement to
the Policy to show any such change.
ARE THERE ANY RULES OR LIMITATIONS REGARDING A REQUEST FOR AN INCREASE IN
SPECIFIED AMOUNT?
Yes. The rules and limitations for a requested increase in Specified Amount are:
(1) Both Insureds must be living;
(2) The request can not be made after the policy anniversary on which the
older Insured attains the maximum age we then allow for increases;
(3) Monthly deductions are not being waived under the terms of a Waiver
of Monthly Deduction Benefit Rider.
(4) Specified Premiums are not being waived under the terms of a Waiver
of Specified Premium Rider.
HOW DO I REQUEST AN INCREASE IN SPECIFIED AMOUNT?
You must submit a supplemental application to us and provide evidence
satisfactory to us of the insurability of both Insureds.
WHEN WILL AN INCREASE TAKE EFFECT?
The increase will take effect on the Monthly Anniversary Day that falls on, or
next follows, the date we approve it.
ARE THERE ANY RULES OR LIMITATIONS REGARDING A DECREASE IN SPECIFIED AMOUNT?
Yes. We will reject any requested decrease if that decrease would result in a
Specified Amount, which is less than $100,000.
WHEN WILL THE DECREASE TAKE EFFECT AND HOW WILL IT BE APPLIED?
The decrease will take effect on the Monthly Anniversary Day that falls on, or
next follows, the date we approve it.
The decrease will be applied as follows:
(a) first, to reduce the amount provided by the most recent increase in
Specified Amount;
(b) next, to reduce the next most recent increases, successively;
(c) finally, to reduce the Initial Specified Amount.
WHEN WILL A CHANGE IN DEATH BENEFIT OPTION TAKE EFFECT AND HOW WILL THE
SPECIFIED AMOUNT BE AFFECTED?
Any change in Death Benefit Option will take effect on the Monthly Anniversary
Day that falls on, or next follows, the date on which we approve the request to
change the Option.
If the change is from Option 2 to Option 1, the Specified Amount in Force will
be increased by the amount of the Fund Value on the effective date of the
change. If the change is from Option 1 to Option 2, the Specified Amount in
force will be decreased by the amount of the Fund Value on the effective date of
the change. But, the Specified Amount in Force after the decrease cannot be less
than $100.000.
ARE THERE ANY REQUIREMENTS FOR A CHANGE IN DEATH BENEFIT OPTION?
We reserve the right to request evidence satisfactory to us of the insurability
of both Insureds for a change from Option 1 to Option 2.
- --------------------------------------------------------------------------------
17. OPTION TO SPLIT POLICY
CAN I SPLIT THE POLICY?
Yes. At your request, this Policy may be split (exchanged) into two individual
single life policies, one on the life of each Insured.
WHAT ARE THE TERMS AND CONDITIONS FOR A SPLIT?
The terms and conditions for a split are as follows:
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(1) A written request for the split must be received by us at our
Administrative Office.
(2) Evidence of insurability of both Insureds, as required by us, must be
given at the time the request for the split is made (see below for
details).
(3) Each Insured must be insurable for the new policy under our published
rules in effect on the Effective Date. If either Insured does not
meet those rules, that Insured will receive his or her share of the
Cash Value of this Policy in cash.
(4) Both Insureds must be living on the Effective Date.
(5) Payment to us of any cost due (see Split Cost or Credit) plus, if
required, payment of the first premium for each new policy.
(6) Any assignee must agree in writing to the split.
(7) At least one Insured must receive a new policy as a result of the
split.
(8) Payment to us of any monthly deduction(s) payable under this Policy
as of the Effective Date.
WHAT ARE THE REQUIREMENTS FOR EVIDENCE OF INSURABILITY FOR A SPLIT?
For splits requested within 6 months of the event described in (a) below, no new
evidence of insurability will be required.
For splits requested within 6 months of the events described in (b) or (c)
below, we may waive certain requirements for evidence of insurability. We will
require proof of (b) or (c) at the time the request for a split is received.
Any split requested more than 6 months after an event described in (a), (b) or
(c) will be subject to our standard requirements for evidence of insurability.
(a) Tax Law Change- If the Insureds are married to each other and there is a
change to Federal Estate Tax Law, which results in either:
(i) a repeal of the Unlimited Marital Deduction; or
(ii) a reduction of at least 50% of the maximum rate of estate
tax which was in effect on the Date of Issue of this
Policy;
(b) Divorce - If the Insureds were married to each other on the Date of
Issue of this Policy and a final decree of divorce ending the
Insureds marriage is issued;
(c) Business Dissolution - If the business partnership or corporation
under which both Insureds were employed on the Date of Issue of this
Policy is dissolved.
WHEN WILL THE SPLIT BE EFFECTIVE?
If all of the above conditions are met, the split will take effect on the
Effective Date. The Effective Date is the first Monthly Anniversary Day next
following the latest of:
(a) the date(s) we approve or decline the application(s) for the new
policy(ies); and
(b) the date we receive payment at our Administrative Office of all
amounts due us for both new policies.
WHAT TYPE OF POLICY CAN EACH NEW POLICY BE AND WHAT WILL THE POLICY DATE OF THE
NEW POLICY(IES) BE?
The new policy or policies can be any flexible premium variable adjustable life
policy which was available on the Date of Issue of this Policy or any other
policy we agree to make available. Each Insured may elect a different new
policy.
The Policy Date of each new policy will be the same as this Policy's.
WHAT WILL THE GUARANTEED COST OF INSURANCE RATES OF THE NEW POLICY(IES) BE BASED
ON?
Guaranteed cost of insurance rates for each new policy will be based on each
Insured's:
(a) gender;
(b) age on the Date of Issue of this Policy; and
(c) class of risk as follows: for splits requested within 6 months of a Tax
Law change, each Insured's class of risk on the later of the Date of Issue
of this Policy or the effective date of the most recent increase in
Specified Amount; for all other splits, each Insured's class of risk on
the Effective Date.
PAGE 14
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WHAT WILL THE SPECIFIED AMOUNT OF THE NEW POLICY(IES) BE?
The Specified Amount of each new policy will equal one half of this Policy's
Specified Amount, exclusive of any coverage provided by rider under this Policy.
WHAT WILL BE DEDUCTED FROM THIS POLICY'S FUND VALUE PRIOR TO THE SPLIT?
Prior to implementing the split, we will deduct from this Policy's Fund Value:
- - any Debt, unless that Debt is repaid to us in cash; and
- - a $200 service charge. If that Fund Value is less than $200, the
difference will be added to any cost (see Split Cost or Credit).
WHAT WILL BE EACH NEW POLICY'S FUND VALUE ON THE EFFECTIVE DATE?
The Fund Value of each new policy on the Effective Date will be:
- - one half of the Fund Value of this Policy, less
- - the difference between one half of the outstanding surrender charge for
this Policy and the new policy's surrender charge, if any.
WHAT WILL BE EACH NEW POLICY'S SURRENDER CHARGE ON THE EFFECTIVE DATE?
The surrender charge of each new policy will be the amount that would have
applied had that new policy been issued on the Date of Issue of this Policy.
IS THERE A COST OR CREDIT FOR THE SPLIT AND HOW IS IT DETERMINED?
If the Fund Value of any new policy would be greater than the guideline premium
limit that would have been applicable had that policy been issued on the Date of
Issue of this Policy, then that excess will be a credit (refunded to the Owner).
If the Cash Value of the new policy is not enough to cover the monthly
deductions until the next premium due date, then the difference will be a cost
(payable to us). For purposes of this calculation, zero interest under the new
policy will be assumed
All amounts are determined as of the Effective Date and after the values of this
Policy have been allocated to each new policy.
WHAT IF A DISABILITY WAIVER BENEFIT RIDER IS IN EFFECT UNDER THIS POLICY?
If a Disability Waiver Benefit Rider is in effect under this Policy on either
Insured, then the new policy for that Insured will include a Disability Waiver
Benefit Rider.
CAN OTHER ADDITIONAL BENEFITS OR ADJUSTMENTS BE INCLUDED IN EITHER NEW POLICY?
Any other additional benefit may be included in either new policy or other
adjustments may be allowed only: (a) with our approval; and (b) subject to any
requirements we then consider necessary.
WHAT IF THERE IS AN EXISTING ASSIGNMENT ON THIS POLICY?
Each new policy will be subject to any existing assignment of this Policy.
HOW WILL THE INCONTESTABILITY AND SUICIDE PROVISIONS OF THE NEW POLICIES BE
MEASURED IF A SPLIT IS MADE WITHOUT EVIDENCE OF INSURABILITY?
For splits made without evidence of insurability, the Incontestability and
Suicide provisions of the new policies will be measured from the Issue Date of
this Policy.
WHAT WILL THE COMPANY PAY IN CASE OF THE SUICIDE OF THE INSURED UNDER EITHER NEW
POLICY?
Despite anything else in the "Suicide Exclusion" provision of either new policy,
in case of the suicide of the Insured in the manner and within the period
specified in that provision, the amount payable by us will be limited to the sum
of (a) and (b), where: (a) is the Cash Value of the new policy
PAGE 15
20
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on the Effective Date, less any part of that Cash Value which has since been
paid to the Owner; and (b) is the premiums paid under the new policy to the date
of death.
- --------------------------------------------------------------------------------
18. RIGHTS OF OWNER
WHO IS THE OWNER OF THE POLICY AND WHAT RIGHTS DOES THE OWNER HAVE?
While either Insured is living, all rights, benefits, options and privileges
under this Policy or allowed by us belong to the Owner unless otherwise provided
by endorsement. These rights include the right to change the Beneficiary, to
assign the Poicy, to transfer policy values or make full or partial surrenders,
all in accordance with our rules and procedures. The Owner is the person so
named in the attached application for this Policy unless otherwise provided by
endorsement.
- --------------------------------------------------------------------------------
19. BENEFICIARY
WHO IS THE BENEFICIARY?
The Beneficiary is the person to whom the proceeds of the Policy are payable
upon the death of the last surviving Insured. The Beneficiary is the person so
named in the attached application for this Policy unless otherwise provided by
endorsement.
If the beneficiary designation requires the Beneficiary to be living or
surviving, then, unless otherwise provided, that Beneficiary must be living on
the 14th day after the surviving Insured's death or, if earlier, the date we
receive due proof of the surviving Insured's death. The share of the Death
Proceeds of any Beneficiary who is not living on that earlier day will be
payable to the remaining Beneficiaries. Payment will be made in the manner
provided for in that designation.
WHAT IF THERE IS NO BENEFICIARY NAMED OR THEN LIVING?
Unless otherwise provided in the Beneficiary designation, the Death Proceeds
will be payable to the surviving Insured's executors or administrators.
CAN I CHANGE THE BENEFICIARY?
Yes, you can change the Beneficiary, unless you have given up this right, as
long as either Insured is living by writing to us at our Administrative Office.
You do not need to return the Policy to make the change unless we ask for it.
WHEN WILL A CHANGE OF BENEFICIARY TAKE EFFECT?
A change will take effect when we record it retroactively as of the date the
request was signed. We shall not be charged with notice of a change of
Beneficiary until the change is received at our Administrative Office. The
change will be subject to any payment made or action taken by us before we
received your request.
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20. THE VARIABLE ACCOUNT
WHAT IS THE VARIABLE ACCOUNT AND WHAT IS ITS PURPOSE?
The Variable Account is an investment account established and maintained by us,
separate from our general account or other separate accounts. The variable
benefits under this Policy are provided through investments we make in the
Variable Account. It is used for our flexible premium variable life policies
and, if permitted by law, may be used for other policies.
WHAT ELSE SHOULD I KNOW ABOUT THE VARIABLE ACCOUNT?
We own the assets in the Variable Account. Assets equal to the reserves and
other liabilities of the Variable Account will not be charged with liabilities
that arise from any other business we conduct. We may from time to time transfer
to our general account, assets which exceed the reserves and other liabilities
of the Variable Account.
The Variable Account is registered with the Securities and Exchange Commission
(SEC) as a unit investment trust under the Investment Company Act of 1940. It is
also governed by the laws of the state of Arizona.
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WHAT CHANGES CAN THE COMPANY MAKE TO THE VARIABLE ACCOUNT?
We may, to the extent permitted by applicable laws and regulations, make these
changes:
(a) the Variable Account may be operated as a management company under
the Investment Company Act of 1940; or
(b) the Variable Account may be de-registered under that Act if
registration is no longer required; or
(c) the Variable Account may be combined with any of our other separate
accounts.
WHAT SHOULD I KNOW ABOUT SUB-ACCOUNTS?
We use the assets of each separate Sub-account to buy shares in a corresponding
portfolio of the applicable fund. (See Section 3).
WHAT RIGHTS DOES THE COMPANY HAVE TO CHANGE SUB-ACCOUNTS?
We reserve the right to establish new Sub-accounts or eliminate one or more
Sub-accounts if marketing needs, tax considerations or investment conditions
warrant.
Any new Sub-accounts may be made available to existing policies on a basis to be
determined by us. If any of these changes are made, we may by appropriate
endorsement change the Policy to reflect the change.
Income and realized and unrealized gains or losses from assets of each
Sub-account are credited to or charged against that Sub-account without regard
to income, gains or losses in the other Sub-accounts, our general account or any
other separate accounts. We reserve the right to credit or charge a Sub-account
in a different manner if required, or appropriate, by reason of a change in the
law.
WHEN WILL THE COMPANY VALUE THE ASSETS IN THE SUB-ACCOUNTS?
We will value the assets of each Sub-account on each Business Day after the
assets in its corresponding fund portfolio have been valued on that Day.
WHAT CHANGES CAN THE COMPANY MAKE TO THE PORTFOLIO?
If, in our judgment, a portfolio no longer suits the purposes of the Policy due
to a change in its investment objectives or restrictions, we may substitute
shares of another portfolio of that fund or shares of another investment fund.
But, we will notify you before doing so and, to the extent required by law, we
will get prior approval from the SEC and the Arizona Insurance Department. Such
approval process is on file with the Arizona Insurance Department. We also will
get any other required approvals.
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21. SUB-ACCOUNT UNIT VALUE
WHAT IS THE UNIT VALUE OF EACH SUB-ACCOUNT?
The unit value of each Sub-account on its first Business Day was set at $10. The
unit value of each Sub-account on any subsequent Business Day is obtained by
subtracting (b) from (a) and dividing the result by (c), where:
(a) is the per share net asset value on the Business Day of the applicable
fund portfolio in which the Sub-account invests times the number of such
shares held in the Sub-account before the purchase or redemption of any
shares on that Day.
(b) is the Daily Mortality and Expense Risk Charge accrued as of that Business
Day. The Daily Mortality and Expense Risk Charge is a percentage (shown in
Section 1) of the Sub-account's net asset value on the previous Business
Day. (If the previous day was not a Business Day, then the Daily Mortality
and Expense Risk Charge is the percentage shown in Section 1 times the
number of days since the last Business Day times the Sub-account's net
asset value on that last Business Day.)
(c) is the total number of Units held in the Sub-account on the Business Day
before the purchase or redemption of any Units on that Day.
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For any Policy transaction which is applied to a Sub-account, the dollar amount
of transaction is divided by the Sub-account unit value to determine the number
of units credited or subtracted from a Sub-account.
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22. GUARANTEED INTEREST ACCOUNT
WHAT IS THE GUARANTEED INTEREST ACCOUNT?
The Guaranteed Interest Account is an account, which is part of our general
account. The general account consists of all of our assets except those held by
the Variable Account and other separate accounts maintained by us.
WHAT INTEREST RATE APPLIES TO THE GUARANTEED INTEREST ACCOUNT?
The guaranteed annual interest rate that applies in the calculation of the Fund
Value in the Guaranteed Interest Account is 4.5%(0.0121%, compounded daily).
Interest in excess of the guaranteed rate may be applied in the calculation of
that Fund Value in a manner determined by us. We may use different rates of
interest for different portions of the Fund Value in the Guaranteed Interest
Account.
- --------------------------------------------------------------------------------
23. MONTHLY DEDUCTION
WHAT IS THE MONTHLY DEDUCTION?
The monthly deduction on a Monthly Anniversary Day for the following policy
month is the sum of (a) through (d), where:
(a) is the cost of insurance (see
Cost of Insurance section below).
(b) is the cost of any additional benefits provided by rider.
(c) is the Administrative Charge (shown in Section 1).
(d) is the per $1,000 Specified Amount in Force charge.
HOW IS A MONTHLY DEDUCTION ALLOCATED BEFORE THE END OF THE "RIGHT TO RETURN
POLICY" PERIOD?
Any monthly deduction to be made before the end of the "Right to Return Policy"
period (see page 1) will be charged against the net premiums accumulated with
int.
HOW ARE MONTHLY DEDUCTIONS ALLOCATED AFTER THE END OF THE "RIGHT TO RETURN
POLICY" PERIOD?
Monthly deductions made after the end of the "Right to Return Policy" period
will be allocated against each Sub-account and/or the Guaranteed Interest
Account in the same proportion that the Policy's Fund Value held in each bears
to the total Fund Value of the Policy on that Business Day.
WHAT EFFECT DOES AN INCREASE IN SPECIFIED AMOUNT HAVE ON THE PER $1,000
SPECIFIED AMOUNT CHARGE?
An additional per $1,000 charge will be determined for each increase in
Specified Amount and will be provided in the endorsement issued to reflect that
increase. The charge for the Specified Amount in Force reflects any charge
attributable to the Initial Specified Amount and to each increase in Specified
Amount.
- --------------------------------------------------------------------------------
24. GRACE PERIOD
WHAT IS THE GRACE PERIOD?
The grace period is the time we allow you to pay any amount needed to keep this
Policy in force.
WILL I BE NOTIFIED IF I NEED TO PAY ADDITIONAL AMOUNTS TO KEEP THIS POLICY IN
FORCE?
Yes. During the first three policy years, we will send a notice of INSUFFICIENT
PREMIUM if you must pay an additional amount to keep this Policy in force.
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After the first three policy years, we will send a notice of INSUFFICIENT VALUE
if you must pay an additional amount to keep this Policy in force.
IS THERE A MINIMUM MONTHLY PREMIUM?
Yes. The Minimum Monthly Premium is shown in Section 1. The Minimum Monthly
Premium after any increase in Specified Amount will be provided in the
endorsement issued to reflect that increase. The Minimum Monthly Premium is not
reduced after any decrease in Specified Amount.
WHEN ARE THE PREMIUMS I'VE PAID INSUFFICIENT TO KEEP THE POLICY IN FORCE?
(1) On each Monthly Anniversary Day during the first three policy years,
we total all premiums paid and subtract any partial surrenders
(excluding their fees) and any Debt.
(2) Then we calculate the sum of:
(i) the Minimum Monthly Premium shown in Section 1 times the
number of months the Policy has been in force; plus
(ii) any increase in the Minimum Monthly Premium due to an
increase in Specified Amount times the number of months
that increase has been in effect.
If the amount from (1) above is less than the amount from (2) above, we will
send a notice of INSUFFICIENT PREMIUM to the last known address of the Owner or
any assignee of record at least 61 days before the Policy ends. The Cash Value
of the Policy must also be less than zero for this notice to be sent.
WHAT AMOUNT MUST I PAY AFTER A NOTICE OF INSUFFICIENT PREMIUM IS SENT AND, IS
THERE A GRACE PERIOD FOR THAT PAYMENT?
A. After you receive a notice of INSUFFICIENT PREMIUM, you must pay:
(i) any balance needed on the Monthly Anniversary Day to cover
the Minimum Monthly Premium for the following month plus;
(ii) an amount equal to 1 Minimum Monthly Premium.
A grace period of 61 days from the date of the notice will be allowed for
payment of the above amount. The Policy is in force during the grace period.
WHEN IS THE VALUE OF THE POLICY INSUFFICIENT TO KEEP THE POLICY IN FORCE?
After the first three policy years, on each Monthly Anniversary Day, if the Cash
Value is not enough to cover the monthly deduction (see Monthly Deduction
Section 23) for the following month, we will send a notice of INSUFFICIENT VALUE
to the last known address of the Owner or any assignee of record at least 61
days before the Policy ends.
WHAT AMOUNT MUST I PAY AFTER A NOTICE OF
INSUFFICIENT VALUE IS SENT AND, IS THERE A GRACE PERIOD FOR THAT PAYMENT?
B. After you receive a notice of INSUFFICIENT VALUE, you must pay:
(i) any balance needed for the monthly deduction plus;
(ii) an amount equal to 2 monthly deductions.
A grace period of 61 days from the date of the notice will be allowed for
payment of the above amount. The Policy is in force during the grace period.
WHAT HAPPENS IF I DON'T PAY THE AMOUNT DESCRIBED?
If the payment described in A or B above, as applicable, is not received within
the grace period, the Policy will end at the end of the grace period and any
remaining Cash Value on that date will be refunded.
- --------------------------------------------------------------------------------
25. REINSTATEMENT
IF THE POLICY ENDS AT THE END OF THE GRACE PERIOD, MAY IT BE REINSTATED?
Yes. If the Policy ends at the end of the grace period, the Policy may be
reinstated.
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WHAT IS THE PERIOD OF REINSTATEMENT AND WHAT IS REQUIRED TO REINSTATE THE
POLICY?
Reinstatement may only be done within 5 years after the Monthly Anniversary Day
at the beginning of the grace period. We shall need:
(a) evidence satisfactory to us of the insurability if both Insureds;
(b) payment of a premium large enough to cover:
(i) the balance needed as described in subsection A or B of Grace
Period, whichever is applicable, (see Section 24 above); and
(ii) an amount sufficient to keep the Policy in force for at least
1 month from the reinstatement date.
(c) payment or reinstatement of any Debt due us on the Policy, plus payment of
interest on any reinstated Debt from the beginning of the grace period to
the end of the grace period at the rate which applies to policy loans on
the date of reinstatement. This is an annual rate of 5.25% for policy
years 1 through 10; 4.75% for policy years 11 and later.
We will reinstate any surrender charge that would have been outstanding on the
date of reinstatement had the Policy remained in force.
IF I FULFILL THE ABOVE REQUIREMENTS FOR REINSTATEMENT, WHEN WILL THE POLICY BE
REINSTATED?
The reinstatement date will be the Monthly Anniversary Day that falls on, or
immediately precedes, the date the application for reinstatement is approved by
us.
- --------------------------------------------------------------------------------
26. COST OF INSURANCE
HOW IS THE COST OF INSURANCE DETERMINED?
The cost of insurance is determined on a monthly basis on a Monthly Anniversary
Day. It is determined separately for each of the following, in the order shown:
(a) the Initial Specified Amount; and
(b) each increase in Specified Amount, successively, in the order in which it
took effect; and
(c) either (i) or (ii) below, depending upon the Death Benefit Option in
effect on the Monthly Anniversary Day:
(i) if Death Benefit Option 1 is in effect, and excess between the
Death Benefit payable on that Day and the Specified Amount then in
force; or
(ii) if Death Benefit Option 2 is in effect, any excess between the
Death Benefit payable on that Day less the Fund Value on that Day,
less the Specified Amount then in force.
The cost of insurance on a Monthly Anniversary Day for each of (a), (b), (c)(i)
and (c)(ii) above is calculated by multiplying its insurance rate (see Insurance
Rate section below) by its Amount At Risk (defined below) divided by 1,000. The
insurance rate that applies to (c)(i) and (c)(ii) is the same as the rate that
applies to the most recent increase in Specified Amount. (If there has been no
increase, the rate for the Initial Specified Amount applies.)
WHAT IS THE "AMOUNT AT RISK"?
If Death Benefit Option 1 is in effect, the "Amount At Risk" on the Monthly
Anniversary Day is the difference between (1) and (2), where: (1) is the Death
Benefit that would have been payable in the event of the death of the surviving
Insured on that Day divided by 1.003675; and (2) is the Fund Value on that Day
determined as de-scribed in the last paragraph of the Fund Value section before
any monthly deduction made on that Day. The Policy's Fund Value on the Monthly
Anniversary Day is applied in the order shown to (a), (b) and, if applicable,
(c)(i) above, to determine the Amount At Risk for each. If the Fund Value when
so applied equals or exceeds the Initial Specified Amount divided by 1.003675,
there is no Amount At Risk for that Initial Specified Amount and no cost of
insurance for it. If the Fund Value when so applied equals or exceeds the
Initial Specified Amount plus any increase in Specified Amount divided by
1.003675, there is no Amount at Risk for that increase and no cost of insurance
for it.
If Death Benefit Option 2 is in effect, the "Amount At Risk" on the Monthly
Anniversary Day is the Specified Amount in Force plus the amount described in
(c)(ii) above, if applicable.
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27. INSURANCE RATE
WHAT IS THE INSURANCE RATE FOR THE LNITIAL SPECIFIED AMOUNT BASED ON?
The insurance rate for the Initial Specified Amount is based jointly on both
Insureds' gender, age on the Policy Date, "Class of Risk", the number of years
since the Policy Date, and the amount of Initial Specified Amount. "Class of
Risk" for the Initial Specified Amount is the class of risk to which each
Insured belonged on the Policy Date and is shown on Page 1.
WHAT IS THE INSURANCE RATE FOR ANY OPTIONAL INCREASES IN SPECIFIED AMOUNT BASED
ON?
The insurance rate for any optional increase in Specified Amount will be based
jointly on both Insureds' gender, age on the effective date of the increase,
"Class of Risk" on that date, number of years since that date, and the total
Specified Amount including the increase.
WHEN ARE MONTHLY INSURANCE RATES REVIEWED AND ON WHAT BASIS ARE ANY CHANGES IN
MONTHLY INSURANCE RATES MADE?
Each year we shall review the monthly insurance rates to determine if any change
should be made. Monthly insurance rates will be based on our expectations as to
future: (a) mortality; (b) investment earnings; (c) expenses, and (d)
persistency. But, we guarantee that the insurance rates for the Initial
Specified Amount will never be more than the rates shown in the Guaranteed
Monthly Insurance Rates for Initial Specified Amount table in Section 2. And,
insurance rates for any optional increase in Specified Amount will never be more
than the guaranteed rates provided by us at the time the increase takes effect.
WHAT ARE GUARANTEED RATES BASED ON?
All guaranteed rates are based on the 1980 Commissioners Standard Ordinary Age
Last Birthday Smoker or Nonsmoker Mortality Tables as applicable, with interest
at the rate of 4.5% a year (0.0121%, compounded daily) with appropriate increase
for rated risk. Any change in insurance rates will be on a uniform basis for
Insureds of the same age, gender and class of risk. Changes in rates and the way
in which they are determined will be filed with the insurance supervisory
official of the state in which the Policy is delivered.
- --------------------------------------------------------------------------------
28. CONTINUATION OF INSURANCE
IF I DON'T CONTINUE PREMIUM PAYMENTS, HOW LONG WILL THE POLICY BE CONTINUED?
If premium payments are not continued? the Policy will be continued only as long
as stated in (a) or (b) below, as applicable:
(a) during the first 3 policy years, if the Cash Value of the Policy is less
than zero, as long as the sum of all premiums paid less any partial
surrenders (excluding their fees) and less any Debt is equal to or greater
than the sum of each Minimum Monthly Premium times the number of in force
policy months during which that premium was applicable; or
(b) in all other situations, as long as the Cash Value is sufficient to cover
any monthly deductions. (See Grace Period section 24.)
This Continuation of Insurance provision will not continue the Policy beyond the
Maturity Date. Nor will it continue any additional benefit rider beyond its date
for termination.
- --------------------------------------------------------------------------------
29. DEFINITION OF LIFE INSURANCE TEST
WHAT CRITERIA DOES THE INTERNAL REVENUE CODE USE TO DEFINE THIS POLICY AS LIFE
INSURANCE?
In order for the Policy to be deemed "life insurance" according to the Internal
Revenue Code of 1986 as now or later amended, one of the following tests must be
met.
(1) Cash Value Accumulation Test - The Death Benefit must be greater than or
equal to the Fund Value multiplied by the Cash Value Accumulation Test
Death Benefit Percentage.
(2) Guideline Premium/Cash Value Corridor Test -The Death Benefit must be
greater than or equal to the Fund Value multiplied by the Guideline
Premium/Cash Value Corridor Test Death Benefit Percentage. In addition,
premium payments less any partial surrenders including their fees may not
exceed the Guideline Premium Limit. (See Premiums section 6)
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WHO DECIDES WHICH TEST WILL APPLY TO THIS POLICY?
You elect which of the above tests will apply in the application for the Policy.
Once elected it may not be changed for the duration of the Policy.
- --------------------------------------------------------------------------------
30. BASIS OF CALCULATION
WHAT SHOULD I KNOW ABOUT THE BASIS OF CALCULATION?
The method of determining Cash Values, surrender charge and other charges has
been filed with the insurance supervisory official of the state in which this
Policy is delivered. The values under this Policy are not less than the minimum
values required by the law of the state in which the Policy is delivered.
Minimum Cash Values are based on the 1980 Commissioners Standard Ordinary Age
Last Birthday Smoker or Nonsmoker Mortality Tables, as applicable and interest
at an annual rate of 4.5% a year.
- --------------------------------------------------------------------------------
31. DATES AND POLICY PERIODS
HOW ARE PERIODS MEASURED IN THE POLICY?
Months, years and anniversaries are measured from the Policy Date unless we
state otherwise. Policy months start on the same date in each calendar month as
the Policy Date. That means if the Policy Date is on the 1st of the month, then
each policy month will start on the 1st of the month
WHAT IF THE POLICY DATE IS A DATE THAT DOESN'T OCCUR IN ALL MONTHS, SUCH AS THE
31ST?
If the Policy Date is the 29th, 30th or 31st of a month, there will be some
calendar months when there is no such date. For those months the policy month
will start on the last day of the calendar month.
Where dates are shown, the numbers stand for month, day and year, in that order.
The Policy Date is shown on Page 1.
32. GENERAL PROVISIONS
WHAT MAKES UP THIS CONTRACT?
This Policy is a contract and has been issued in consideration of the
application and payment of the first premium (shown in Section 1). The
application, a copy of which is attached, and any supplemental applications are
a part of the Policy. Any such supplemental application will be attached to the
Policy. The Policy, any attached riders and/or endorsements, the application and
any supplemental applications make up the entire contract.
The questions in this Policy, including the questions in any rider or
endorsement attached hereto, are for purposes of convenience and reference only.
They do not form a part of and shall not in any way limit or affect the meaning
or interpretation of any of the terms and conditions of this Policy.
HOW DOES THE COMPANY USE THE STATEMENTS I MAKE IN THE APPLICATION?
All statements made in the application will be considered to be representations
and not warranties. No statement may be used to make this Policy invalid or to
deny a claim under it, unless the statement is contained in the written
application, a copy of which must have been attached to the Policy at issue or
delivery or on the effective date of any increase in Specified Amount.
WHEN WILL THIS POLICY BE INCONTESTABLE?
With respect to the life of each Insured, this Policy will be incontestable, as
to statements made in the application for it, after it has been in force during
the lifetime of that Insured for 2 years from its Date of Issue, except as to
any provision for benefits in case of disability. But, with respect to the life
of each Insured, any optional increase in Specified Amount or any reinstatement
will be incontestable, as to statements made in the application for it, only
after the increase or reinstatement has been in force during the lifetime of
that Insured for 2 years from the date it took effect.
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WHAT IF EITHER LNSURED'S AGE OR GENDER HAS BEEN MISSTATED?
If the age, date of birth or gender of either Insured has been misstated, the
amount of any Death Benefit will be the sum of (a) and (b), where:
(a) is the Fund Value on the date of death of the surviving Insured; and
(b) is the Amount At Risk on the last Monthly Anniversary Day, multiplied by
the ratio of the insurance rate on the last Monthly Anniversary Day based
on the incorrect age or gender to the insurance rate that would have
applied on that Day based on the correct age or gender.
A misstatement of age or gender does not affect the Fund Value.
WHAT DOES THE COMPANY PAY IN CASE OF THE SUICIDE OF EITHER INSURED?
If either Insured commits suicide, within 2 years of the Date of Issue, the
amount payable by us will be limited to the amount of the premiums paid less:
(a) any Debt; and (b) any partial surrenders and their fees. But, in case of the
suicide of either Insured, within 2 years of the date any optional increase in
Specified Amount took effect, the amount payable by us with respect to that
increase will be limited to its cost.
HOW DOES THE COMPANY HANDLE AN ASSIGNMENT OF THE POLICY?
We shall not be charged with notice of assignment of any interest in this Policy
until the assignment (or a copy) is received and recorded by us at our
Administrative Office. We are not responsible as to the validity or effect of
any assignment. We may rely solely on the statement of the assignee as to the
amount of his or her interest. All assignments will be subject to any Debt on
this Policy. The interest of any Beneficiary (except an irrevocable beneficiary)
or other person will be subordinate to any assignment, whenever made. The
assignee will receive any sum payable to the extent of his or her interest.
WHAT MAY THE COMPANY REQUIRE FOR POLICY PAYMENT?
In any settlement of this Policy, by reason of death, surrender, or otherwise,
we may require the return of the Policy. Any Debt on this Policy will be
deducted when we determine the proceeds.
Due proof of death or disability must be submitted to us at our Administrative
Office
WHAT DO RELATIONSHIPS IN ANY DESIGNATION REFER TO?
Relationships used in any Beneficiary or other designation will refer to the
Insureds unless the wording indicates otherwise.
WHO HAS THE AUTHORITY TO CHANGE THIS POLICY?
No change in the Policy will be valid until it is approved by one of our
executive officers. This approval must be endorsed on or attached to this
Policy. No agent or other person has authority to change the Policy, waive any
of its provisions or accept representations or information not in the written
application.
CAN THE COMPANY POSTPONE CERTAIN PAYMENTS OR TRANSFERS?
We will usually pay any amount payable on surrender, partial surrender or loan
within 7 days after we receive written request for the payment at our
Administrative Office. We will usually pay any Death Proceeds within 7 days
after we receive due proof of death of the last surviving Insured.
But, any payment involving Cash Value in the Guaranteed Interest Account (except
when used to pay premiums) may be postponed for up to 6 months from the date we
receive the request for a surrender or receive due proof of death. And, any
payment involving a determination of Cash Value in Sub-accounts (except when
used to pay premiums), may be postponed in any case whenever:
(a) the New York Stock Exchange is closed (except for customary weekend
and holiday closings), or trading on the New York Stock Exchange is
restricted as determined by the Securities and Exchange Commission
(SEC); or
PAGE 23
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(b) the SEC determines that a state of emergency exists, so that
valuation of the assets of the Variable Account or disposal of
securities is not reasonably practicable.
Transfers among Sub-accounts, and allocations to and against Sub-accounts, also
may be postponed under the circumstances described in (a) or (b) above.
WHAT REPORTS WILL THE COMPANY SEND?
We will send a report at least annually to the Owner showing the then current
status of the Policy. It will show since the last report: premiums received;
expense charges (including any Transfer Charges); cost of insurance and any
riders; interest earned on Fund Value in the Loan Account; interest earned on
Fund Value in the Guaranteed Interest Account; and any partial surrenders (and
their fees).
It will show as of the current report date: Death Benefit; Specified Amount;
Cash Value; and any Debt. It will also show as of the current and prior report
dates: Fund Value; Sub-account Unit values; Fund Value in the Guaranteed
Interest Account; and any other information required by state law or regulation.
We will also send to the Owner any reports required by the Investment Company
Act of 1940.
WILL THE COMPANY PROVIDE AN ILLUSTRATION WHICH PROJECTS FUTURE BENEFITS AND
VALUES?
Yes. We will provide a projection of illustrative future benefits and values at
any time after the first policy anniversary upon: (a) written request; and (b)
payment of a service fee. The fee will be the one then in effect for this
service, but in no case more than $25. The illustration will be based on (a) the
current Policy status as to Specified Amount, Death Benefit Option and scheduled
premiums; and (b) any other assumptions that are needed and that we agree to.
IS THIS POLICY ELIGIBLE TO EARN DIVIDENDS?
No, this Policy is nonparticipating and does not earn any dividends.
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33. SETTLEMENT OPTIONS
WHAT IS A SETTLEMENT OPTION?
Instead of being paid in a single sum, you may elect to receive any death or
surrender proceeds from this Policy in the form of a Settlement Option. If you
elect a Settlement Option in the form of income payments, the dollar amount of
the payments and how long will we pay them (for example, over the lifetime of a
single Payee or joint Payees), will depend on the terms of that settlement.
CAN ANY PROCEEDS BE PAID IN A SINGLE SUM?
Yes, if one of the Settlement Options described below is not elected, any death
or surrender proceeds will be paid in a single sum.
WHOM CAN I SELECT AS THE PAYEE UNDER A SETTLEMENT OPTION?
Any natural person (not a business entity or trust) in his or her own right. The
Payee must be the person to whom proceeds are payable under this Policy.
WHEN CAN I ELECT A SETTLEMENT OPTION?
At any time while either Insured is living, you may elect to have the proceeds
paid under one of the Settlement Options described below.
HOW CAN I ELECT OR CHANGE A SETTLEMENT OPTION FOR DEATH PROCEEDS?
You may choose an option or change a prior election while either Insured is
living by sending written request to us at our Administrative Office. However,
we must record this choice or change. You do not need to return the Policy to us
to make the choice or change unless we ask for it.
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WHAT IS THE MINIMUM AMOUNT OF PROCEEDS I CAN ELECT TO HAVE APPLIED TOWARD ONE OF
THESE SETTLEMENT OPTIONS?
The amount of proceeds applied toward any of these Settlement Options must be at
least $1,000.
CAN THE PAYEE CHOOSE A SETTLEMENT OPTION?
Yes, if the Payee was to receive the proceeds in a single sum, the Payee may
instead choose one of the Settlement Options for proceeds not yet paid. This
must be done by written request to us at our Administrative Office not more than
1 month after the proceeds become payable.
WHAT SETTLEMENT OPTIONS ARE AVAILABLE?
- -- Option 1. Interest Income - Under this option, we hold the proceeds and
credit the interest earned on those proceeds to the Payee. We set the rate of
interest for each year, but that rate will never be less than 2 3/4% a year.
This option will continue until the earlier of the date the Payee dies or the
date you elect another Settlement Option.
- -- Option 2. Income for Specified Period - Under this option, the Payee receives
an income for the number of years chosen. We then calculate an income that will
be based on the Minimum Monthly Income Table 2 for that period. Note that the
longer the period selected (i.e. number of years) the lower the dollar amount
per $1,000 of proceeds. Payments may be increased by additional interest as we
may determine for each year.
- -- Option 3. Single Life Income - Under this option, a number of years called
the period certain is chosen. We will then pay income to a single Payee for as
long as that Payee lives or for the number of years chosen (the period certain),
whichever is longer. If the Payee dies after the of end of the period certain,
the income payments will stop.
The period certain elected may be:
(a) 0, 10, or 20 years; or
(b) until the total income payments equal the proceeds applied (this is called
a refund period certain).
The amount of the income payments will be figured by us on the date the proceeds
become payable. This amount will be at least as much as the applicable amount
shown in the Minimum Monthly Income Table 3. The income amounts are based on the
1983 Table a (discrete functions, without projections for future mortality) with
3 1/2(degree)/o interest.
If the income payments for the period certain elected are the same as income
payments based on another available longer period certain, we will deem an
election to have been made for the longer period certain.
Option 3A. Joint Life Income - We pay income during the joint lifetime of two
people (the Payee and another person). That means if one person dies, we will
continue to pay the same income (or a lesser income) to the survivor for as long
as the survivor lives.
The survivor may receive the same dollar amount that we were paying before the
first Payee died or two-thirds of that amount depending on the election made at
the time of settlement. Note that if the lesser (two-thirds) amount paid to the
survivor is elected, the dollar amount payable while both persons are living
will be larger than it would have been if the same amount paid to the survivor
had been elected.
The amount of income payable while both persons are living (the joint lifetime)
will be figured by us on the date the proceeds become payable. This amount will
be at least as much as the applicable amount shown in the Minimum Monthly Income
Table 3A. The minimum income amounts are based on the 1983 Table a (discrete
functions, without projections for future mortality) with 3 1/2% interest.
If a person for whom Option 3A is chosen dies before the first income amount is
payable, the survivor will receive settlement instead under Option 3 with 10
years certain.
Option 4. Income of Specified Amount - Under this Option, the dollar amount of
the income payments is chosen. We will pay that amount for as long as the
proceeds and interest last; but, the dollar amount chosen must add up to a
yearly amount of at least 10% of the proceeds applied. Interest will be credited
annually on the balance of the proceeds. We set the rate of interest for each
year, but that rate will never be less than 2 3/4% a year.
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ARE ANY OTHER SETTLEMENT OPTIONS AVAILABLE?
Yes, the proceeds may be settled under any other option we may agree to.
HOW OFTEN WILL THE PAYEE RECEIVE INCOME PAYMENTS?
Payment will be made monthly unless quarterly, semi-annual or annual payment is
requested by you (or the Payee) when the option is chosen. If payments of the
chosen frequency would be less than $25 each, we may use a less frequent payment
basis.
Multiply the monthly payment by the appropriate factor to obtain less frequent
payment amounts.
Ann. Semi- Quar-
Ann. terly
- --------------------------------------------------------------------------------------
OPTION 2 11.85 5.97 2.99
- --------------------------------------------------------------------------------------
OPTION 3 0 Years Certain 11.68 5.90 2.97
- --------------------------------------------------------------------------------------
OPTION 3 20 Years Certain, or 11.80 5.95 2.99
Refund Period Certain
- --------------------------------------------------------------------------------------
OPTION 3 10 Years Certain or 11.74 5.92 2.97
OPTION 3A
WILL I (OR THE PAYEE) RECEIVE AN EXPLANATION OF THE SETTLEMENT OPTION?
Yes, you (or the Payee) will receive a supplementary contract when the proceeds
are settled under one of these options. The contract will state the terms of the
settlement.
WHAT WILL BE PAID WHEN THE PAYEE DIES AFTER THE EFFECTIVE DATE OF THE
SUPPLEMENTARY CONTRACT?
The amount payable under each Option at the Payee's death will be paid as stated
below in a single sum to the Payee's executors or administrators unless
otherwise provided in the settlement approved by us at the time it was chosen.
Option 1 or 4 - Any unpaid proceeds and interest to the date of death.
Option 2 or 3 - The amount which, with compound annual interest, would have
provided any future income premiums for: (a) the specified period (Option 2); or
(b) the specified period certain (Option 3). Interest will be at the rate or
rates assumed in computing the amount of income.
WHAT ELSE SHOULD I KNOW ABOUT SETTLEMENT OPTIONS?
Before we pay Option 3 or 3A, we shall need proof of age of the Payee(s) which
satisfies us.
- --------------------------------------------------------------------------------
MINIMUM MONTHLY INCOME TABLES
These Tables show the minimum monthly income per $1,000 of proceeds applied
under the applicable option.
Table 2 - Income for a Specified Period Option
Years Monthly Years Monthly
Amount Amount
- ------------------------------------------------------------------------------------------------
1 $84.37 11 $8.75
2 42.76 12 8.13
3 28.89 13 7.60
4 21.96 14 7.15
5 17.80 15 6.76
6 15.03 16 6.41
7 13.06 17 6.11
8 11.58 18 5.85
9 10.42 19 5.61
10 9.50 20 5.39
Page 26
31
- --------------------------------------------------------------------------------
MINIMUM MONTHLY INCOME TABLES (CONTINUED)
TABLE 3 - SINGLE LIFE INCOME OPTION.
The life income shown is based on the Payee's age last birthday on the due date
of the first income payment.
- --------------------------------------------------------------------------------
10 Years Certain 20 Years Certain 10 Years Certain 20 Years Certain
Male Female AGE Male Female Male Female AGE Male Female
$3.21 $3.14 10 $3.20 $3.13 $3.74 $3.56 35 $3.71 $3.55
3.22 3.15 11 3.21 3.14 3.78 3.59 36 3.75 3.58
3.23 3.16 12 3.23 3.15 3.82 3.62 37 3.78 3.61
3.24 3.17 13 3.24 3.17 3.86 3.65 38 3.82 3.64
3.26 3.18 14 3.25 3.18 3.90 3.69 39 3.85 3.67
3.27 3.19 15 3.27 3.19 3.94 3.72 40 3.89 3.70
3.29 3.20 16 3.28 3.20 3.99 3.76 41 3.93 3.73
3.30 3.22 17 3.30 3.21 4.04 3.80 42 3.98 3.77
3.32 3.23 18 3.31 3.23 4.09 3.84 43 4.02 3.81
3.34 3.24 19 3.33 3.24 4.14 3.88 44 4.06 3.84
3.36 3.26 20 3.35 3.25 4.20 3.92 45 4.11 3.88
3.37 3.27 21 3.37 3.27 4.25 3.97 46 4.16 3.93
3.39 3.29 22 3.38 3.28 4.31 4.02 47 4.21 3.97
3.41 3.30 23 3.40 3.30 4.38 4.07 48 4.26 4.01
3.43 3.32 24 3.42 3.32 4.44 4.12 49 4.31 4.06
3.46 3.34 25 3.45 3.33 4.51 4.18 50 4.37 4.11
3.48 3.36 26 3.47 3.35 4.58 4.24 51 4.42 4.16
3.50 3.38 27 3.49 3.37 4.66 4.30 52 4.48 4.21
3.53 3.40 28 3.52 3.39 4.74 4.36 53 4.54 4.27
3.56 3.42 29 3.54 3.41 4.82 4.43 54 4.60 4.32
3.58 3.44 30 3.57 3.43 4.91 4.51 55 4.66 4.38
3.61 3.46 31 3.59 3.45 5.00 4.58 56 4.72 4.44
3.64 3.49 32 3.62 3.48 5.10 4.66 57 4.78 4.51
3.67 3.51 33 3.65 3.50 5.20 4.75 58 4.85 4.57
3.71 3.54 34 3.68 3.52 5.31 4.84 59 4.91 4.64
10 Years Certain 20 Years Certain 0 Years Certain
Male Female AGE Male Female Male AGE Female
$5.42 $4.93 60 $4.97 $4.71 $3.46 25 $3.34
5.54 5.04 61 5.04 4.77 3.59 30 3.44
5.67 5.14 62 5.10 4.84 3.75 35 3.57
5.80 5.25 63 5.16 4.91 3.96 40 3.73
5.94 5.37 64 5.22 4.98 4.22 45 3.93
6.08 5.50 65 5.28 5.05 4.56 50 4.20
6.23 5.63 66 5.33 5.12 4.99 55 4.54
6.38 5.77 67 5.38 5.19 5.57 60 5.00
6.54 5.92 68 5.43 5.25 6.39 65 5.64
6.71 6.07 69 5.48 5.32 7.53 70 6.53
6.88 6.23 70 5.52 5.38
7.05 6.40 71 5.55 5.43
7.22 6.58 72 5.59 5.48 Refund Period
7.40 6.76 73 5.62 5.53 Certain
7.57 6.95 74 5.64 5.57 Male AGE Female
--------------------------
7.75 7.15 75 5.66 5.60 $3.44 25 $3.33
7.92 7.34 76 5.68 5.63 3.56 30 3.42
8.09 7.54 77 5.70 5.66 3.70 35 3.54
8.26 7.74 78 5.71 5.68 3.88 40 3.69
8.42 7.94 78 5.72 5.70 4.11 45 3.87
8.57 8.14 80+ 5.73 5.71 4.38 50 4.11
4.73 55 4.40
5.18 60 4.78
5.76 65 5.28
6.52 70 5.94
* AND UNDER
+ AND OVER
The minimum income for any age not shown in the 0 Years Certain and Refund
Period Certain columns is calculated on the same mortality and interest
assumptions as the minimum income ages shown and will be quoted on request.
- --------------------------------------------------------------------------------
TABLE 3A - JOINT LIFE INCOME OPTION
The income shown is based on the ages (at last birthday on the due date of the
first income payment) of the 2 persons during whose joint lifetime payments are
to be made.
- ---------------------------------------------------------------------------------------------------------------------------
SAME INCOME CONTINUED TO SURVIVOR TWO-THIRDS OF INCOME CONTINUED TO SURVIVOR
- ------------------------------------------------------------ ---------------------------------------------------------
AGE AGE
OF AGE OF MALE OF AGE OF MALE
FEMALE FEMALE
50 55 60 65 70 50 55 60 65 70
- ------------------------------------------------------------ ---------------------------------------------------------
50 $3.89 $3.98 $4.04 $4.09 $4.13 50 $4.20 $4.35 $4.51 $4.69 $4.89
55 4.03 4.16 4.27 4.36 4.42 55 4.36 4.54 4.73 4.95 5.18
60 4.16 4.34 4.51 4.66 4.78 60 4.55 4.76 4.99 5.25 5.53
65 4.27 4.51 4.76 4.99 5.20 65 4.76 5.01 5.29 5.62 5.97
70 4.37 4.66 4.99 5.34 5.67 70 4.99 5.28 6.04 6.04 6.49
The minimum income for any other combination of ages or for 2 persons of the
same gender are calculated on the same mortality and interest assumptions as
the minimum income for the combination of ages shown and will be quoted on
request.
32
This is a LAST SURVIVOR FLEXIBLE PREMIUM VARIABLE LIFE TO MATURITY DATE POLICY.
Specified Amount may be increased or decreased. Net premiums may be allocated to
one or more Sub-accounts of the Variable Account or to the Guaranteed Interest
Account. If the values have been sufficient to continue the Policy in force:
death proceeds are payable in event of death of the surviving Insured (no
benefit is payable upon the death of the first insured to die) before the
Maturity Date; Cash Value, if any, is payable if either Insured is living at the
Maturity Date. Death Benefit and Policy Values reflect investment results.
Flexible premiums until the Maturity Date. Nonparticipating (no dividends
payable).
B1-98