EXHIBIT 1.A.(5)
PLEASE READ YOUR POLICY CAREFULLY; it is a legal contract between you and Pruco
Life Insurance Company.
Flexible Premium Variable Universal Life Insurance Policy. Insurance payable
only upon death. Cash values reflect premium payments, investment results, any
interest credited to the fixed investment options, and charges. Non-
participating.
We will promptly pay the beneficiary the death benefit described under the Death
Benefit provision of this contract if we receive due proof that the Insured
died. We make this promise subject to all the provisions of this contract.
The amount and duration of the death benefit may be fixed or variable, depending
on the payment of premiums, the investment experience of the variable investment
options, any interest credited to the fixed investment options, and the charges
made.
The cash value may increase or decrease daily, depending on the payment of
premiums, the investment experience of the variable investment options, any
interest credited to the fixed investment options, and the charges made. There
is no guaranteed minimum cash value.
If there is ever a question about this contract, please see a Pruco Life
Insurance Company representative or contact one of our offices.
Right to Cancel Contract. You may return this contract to us within 10 days
after you receive it. All you have to do is take the contract or mail it to one
of our offices or to the representative who sold it to you. It will be canceled
and we will return your money in accordance with applicable law.
EXHIBIT 1.A.(5)
GUIDE TO CONTENTS
Contract Data
Insured's Information; Rating Class; Basic Contract Information; Type of Death
Benefit; Life Insurance on the Insured; Minimum Initial Premium; Contract
Limitations; Other Benefits (if applicable); Adjustments to Premium Payments;
Adjustments to the Contract Fund; Monthly Deductions from the Contract Fund for
Other Benefits (if applicable); Schedule of Maximum Surrender Charges; Variable
Investment Options; Fixed Interest Rate Investment Option; Initial Allocation of
Invested Premium Amounts
Tables
Segment Table; Table Of Death Benefit Guarantee Values; Table Of Maximum Monthly
Insurance Rates Per $1000; Table Of Attained Age Factors
Definitions
The Contract
Entire Contract; Contract Modifications;
Incontestability
Ownership
Death Benefit Provisions
Death Benefit; Additional Death Benefits; Method of Payment; Suicide Exclusion;
Interest on Death Benefit;
Change in Basic Insurance Amount
Surrender Charge on Decreases
Cost of Insurance
Changing The Type Of Death Benefit
Beneficiary
Premium Payment
Payment of Premiums; Invested Premium Amount; Crediting the Initial Premium
Payment; Allocations
Contract Fund
Cash Value; Net Cash Value; Net Amount at Risk
Default
Excess Contract Debt Default, Cash Value Default, Notice of Default
Death Benefit Guarantee
Reinstatement
Separate Account
Separate Account; Variable Investment Options; Separate Account Investments
Fixed Investments
EXHIBIT 1.A.(5)
Transfers
Surrender
Withdrawals
Effect on Contract Fund; Effect on Basic Insurance Amount
Loans
Loan Value; Contract Debt; Loan Requirements; Interest Charge; Preferred Loans;
Maximum Preferred Loan Amount; Effect on Contract Fund
General Provisions
Annual Report; Payment of Death Claim; Currency; Misstatement of Age or Sex;
Assignment; Change in Plan; Factors Subject To Change; Non-Participating;
Applicable Tax Law
Basis of Computation
Mortality Basis and Interest Rate; Minimum Legal Values
Settlement Options
Options Described; Interest Rate
Settlement Options Tables
A copy of the application and any riders or endorsements can be found at the end
of the contract.
EXHIBIT 1.A.(5)
EXHIBIT 1.A.(5)
PROCESSING DATE: XXX XX XXXX
CONTRACT DATA
Insured's Information
[JOHN DOE] [Male], Issue Age [35]
================================================================================
Rating Class
(See Segment Table on Page 4)
================================================================================
Basic Contract Information
Policy Number [xx xxx xx]
Contract Date [January 1, 2001]
Premium Period During the life of the Insured up to attained age 100
Beneficiary [Mary Doe, wife]
Loan Interest Rate 5.00%
Preferred Loan Interest Rate 4.10%
================================================================================
Type of Death Benefit (see Death Benefit Provisions)
Type [A]
================================================================================
Life Insurance on the Insured
Basic Insurance Amount [$75,000.00]
================================================================================
Minimum Initial Premium
The minimum initial premium due on the Contract Date is [$67.77.]
================================================================================
Contract Limitations
The minimum premium we will accept is $25.00.
CONTRACT DATA CONTINUED ON THE NEXT PAGE
Page 3 (2000)
EXHIBIT 1.A.(5)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
The minimum Basic Insurance Amount is $50,000.00.
The minimum increase in Basic Insurance Amount is $25,000.00.
The minimum decrease in Basic Insurance Amount is $10,000.00.
The minimum amount you may withdraw is $500.00.
The minimum amount you may borrow is $500.00.
================================================================================
Adjustments to Premium Payments
From each premium paid we will:
subtract a charge of up to 7.5% for any taxes attributable to premiums.
--------
For purposes of this charge, the term "taxes attributable to premiums"
shall include: (a) any federal, state or local income tax, (b) any premium,
excise, or business tax, and (c) any other type of tax (or component
thereof) measured by or based upon the amount of premium received by us.
subtract a charge for sales expenses at a rate of up to 6% of the premiums
--------
paid.
The remainder of the premium is the invested premium amount.
================================================================================
Adjustments to the Contract Fund
On the Contract Date the contract fund is equal to the invested premium amount
credited on that date, minus any of the charges described below which may be
-----
due on that date.
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3A (2000)
EXHIBIT 1.A.(5)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
On each day after the contract date, we will adjust the contract fund by:
adding any invested premium amounts.
------
adding any increase due to investment results of the variable investment
------
options.
adding guaranteed interest at an effective annual rate of 4% (0.01074598% a
------
day) on that portion of the contract fund that is not in a variable investment
option (see Fixed Investments and Loans).
adding any excess interest on that portion of the contract fund that is not
------
in a variable investment option.
subtracting any decrease due to investment results of the variable
-----------
investment options.
subtracting a charge against the variable investment options at an
-----------
effective annual rate of not more than 0.45% (.00123012% a day) for
mortality and expense risks we assume.
subtracting any withdrawals.
-----------
subtracting an administrative charge of up to $25.00 for any withdrawals.
-----------
subtracting an administrative charge of up to $25.00 for any change in
-----------
basic insurance amount.
subtracting an administrative charge of up to $25.00 for each transfer
-----------
between variable investment options exceeding twelve in any contract year.
subtracting any surrender charge that may result from a withdrawal,
-----------
surrender, or reduction in the basic insurance amount.
And on each monthly date, we will adjust the contract fund by:
subtracting a monthly charge for administrative expenses for the basic
-----------
insurance amount effective on the contract date (see Segment Table) of up
to [$0.14] per $1000 of the basic insurance amount during the first five
contract years and zero thereafter plus $20.00 for the first two contract
years and $10.00 thereafter.
subtracting a monthly charge for the cost of insurance (see Cost of
-----------
Insurance).
================================================================================
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3B (2000)
EXHIBIT 1.A.(5)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
Schedule of Maximum Surrender Charges
For a full surrender of the segment effective on [<the contract
date><XX/XX/XXXX>], the maximum charge we will deduct from the contract fund is
shown below.
For a Surrender Occurring The Maximum Surrender
During Target Year Charge is:
------------------ ----------
1 $[677.70]
2 $[609.93]
3 $[542.16]
4 $[474.39]
5 $[406.62]
6 $[338.85]
7 $[271.08]
8 $[203.31]
9 $[135.54]
10 $[67.77]
11 and later [$0.00]
We may also deduct a surrender charge when you decrease the basic insurance
amount or change the type of death benefit, and when you make a withdrawal.
(See Change in Basic Insurance Amount, Changing the Type of Death Benefit, and
Withdrawals.)
================================================================================
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3C (2000)
EXHIBIT 1.A.(5)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
Variable Investment Options
The Pruco Life Variable Universal Account
Each variable investment option of this account invests in a specific
portfolio of The Prudential Series Fund, Inc. and such other funds as we
may specify from time to time. We show the available variable investment
options of the account below. Unless we say otherwise, the variable
investment options invest in funds or fund portfolios with the same names.
This account is registered with the SEC under the Investment Company Act of
1940.
The Prudential Series Fund, Inc.
[Diversified Bond Portfolio]
[Equity Portfolio]
[High Yield Bond Portfolio]
[Money Market Portfolio]
[Prudential Jennison Portfolio]
[Stock Index Portfolio]
[SP AIM Aggressive Growth Portfolio]
[SP Alliance Large Cap Growth Portfolio]
[SP Alliance Technology Portfolio]
[SP Davis Value Portfolio]
[SP Deutsche International Equity Portfolio]
[SP INVESCO Small Company Growth Portfolio]
[SP MFS Capital Opportunities Portfolio]
[SP MFS Mid Cap Growth Portfolio]
[SP Prudential U.S. Emerging Growth Portfolio]
[SP Small/Mid Cap Value Portfolio]
CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3D (2000)
EXHIBIT 1.A.(5)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
Fixed Interest Rate Investment Option
The fixed interest rate investment option is funded by the general account of
the Company. It is described in the Fixed Investments provision of this
contract.
================================================================================
Initial Allocation of Invested Premium Amounts
[Fixed Interest Rate Investment Option] [40%]
[Equity Portfolio] [60%]
================================================================================
END OF CONTRACT DATA
Page 3E (2000)
EXHIBIT 1.A.(5)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
TABLE(S)
Segment Table
This table is used to compute the charge for the cost of insurance and the
surrender charge on decreases in the basic insurance amount. See the Cost of
Insurance, Changing the Type of Death Benefit, Withdrawals, and Change in Basic
Insurance Amount provisions for details. The information shown below for each
segment starts on the effective date of that segment.
Segment, Surrender
Issue Age, & Charge
Effective Date Rating Class (RC) Threshold
--------------------------------------------------------
Contract Date $75,000.00 Basic Insurance $75,000.00
Amount
Issue Age 35
RC = Nonsmoker
================================================================================
TABLE(S) CONTINUED ON NEXT PAGE
Page 4 (2000)
EXHIBIT 1.A.(5)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
TABLE(S) CONTINUED
Table of Death Benefit Guarantee Values
These values are used to determine the death benefit guarantee as described
under Death Benefit Guarantee. The values on contract anniversaries are shown
below. On a date that falls between two anniversaries, the value will fall
between the values for those anniversaries considering the time that has passed
since the last anniversary.
The Death Benefit Guarantee period is (the first XX contract years)(during the
lifetime of the Insured).
Contract Death Benefit
Anniversary Guarantee Value
- --------------------------------------------------------------------------------
Contract Date $0
1/st/ [$535.08]
2/nd/ [$1,091.56]
3/rd/ [$1,670.30]
4/th/ [$2,272.19]
5/th/ [$2,898.16]
6/th/ [$5,194.40]
7/th/ [$6,185.30]
8/th/ [$7,215.83]
9/th/ [$8,287.58]
10/th/ [$9,402.20]
11/th/ [$10,561.41]
12/th/ [$11,766.99]
13/th/ [$13,020.79]
14/th/ [$14,324.74]
15/th/ [$15,680.85]
16/th/ [$17,091.20]
17/th/ [$18,557.97]
18/th/ [$20,083.41]
19/th/ [$21,669.87]
20/th/ [$23,319.78]
21/st/ [$25,035.69]
22/nd/ [$26,820.24]
23/rd/ [$28,676.17]
24/th/ [$30,606.34]
25/th/ [$32,613.71]
EXHIBIT 1.A.(5)
26/th/ [$34,701.38]
27/th/ [$36,872.56]
28/th/ [$39,130.58]
29/th/ [$41,478.92]
30/th/ [$43,921.20]
TABLE(S) CONTINUED ON NEXT PAGE
Page 4A (2000)
EXHIBIT 1.A.(5)
PROCESSING DATE: XXX XX, XXXX
POLICY NO. XX XXX XXX
TABLE(S) CONTINUED
Contract Death Benefit
Anniversary Guarantee Value
31/st/ [$77,605.09]
32/nd/ [$82,017.35]
33/rd/ [$86,606.10]
34/th/ [$91,378.40]
35/th/ [$96,341.60]
36/th/ [$101,503.32]
37/th/ [$106,871.51]
38/th/ [$112,454.43]
39/th/ [$118,260.67]
40/th/ [$124,299.16]
41/st/ [$130,579.19]
42/nd/ [$137,110.42]
43/rd/ [$143,902.90]
44/th/ [$150,967.08]
45/th/ [$158,313.82]
46/th/ [$165,954.43]
47/th/ [$173,900.67]
48/th/ [$182,164.76]
49/th/ [$190,759.41]
50/th/ [$199,697.85]
51/st/ [$208,993.82]
52/nd/ [$218,661.63]
53/rd/ [$228,716.16]
54/th/ [$239,172.87]
55/th/ [$250,047.84]
56/th/ [$261,357.81]
57/th/ [$273,120.18]
58/th/ [$285,353.05]
59/th/ [$298,075.23]
60/th/ [$311,306.30]
61/st/ [$325,066.61]
62/nd/ [$339,377.33]
63/rd/ [$354,260.48]
64/th/ [$369,738.96]
65/th/ [$385,836.58]
- -----------------------------------------------------------------------
TABLE(S) CONTINUED ON NEXT PAGE
================================================================================
Page 4B (2000)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
TABLE(S) CONTINUED
Table of Maximum Monthly Insurance Rates per $1,000
Rating Class: NONSMOKER
Insured's Maximum Insured's Maximum
Attained Age* Monthly Rate Attained Age* Monthly Rate
-----------------------------------------------------------------
35 [0.14417] 65 [1.85417]
36 [0.15167] 66 [2.05167]
37 [0.16167] 67 [2.26333]
38 [0.17250] 68 [2.49333]
39 [0.18417] 69 [2.74833]
40 [0.19833] 70 [3.03667]
41 [0.21333] 71 [3.36583]
42 [0.22917] 72 [3.74583]
43 [0.24667] 73 [4.17583]
44 [0.26583] 74 [4.64833]
45 [0.28750] 75 [5.15333]
46 [0.31083] 76 [5.68667]
47 [0.33583] 77 [6.24417]
48 [0.36333] 78 [6.82917]
49 [0.39333] 79 [7.46000]
50 [0.42750] 80 [8.15667]
51 [0.46667] 81 [8.93750]
52 [0.51167] 82 [9.81833]
53 [0.56333] 83 [10.79500]
54 [0.62083] 84 [11.84833]
55 [0.68500] 85 [12.95416]
56 [0.75500] 86 [14.09833]
57 [0.82917] 87 [15.26333]
58 [0.91167] 88 [16.44416]
59 [1.00417] 89 [17.65750]
60 [1.10750] 90 [18.92083]
61 [1.22250] 91 [20.26333]
62 [1.35500] 92 [21.73500]
63 [1.50500] 93 [23.47917]
64 [1.67167] 94 [25.81917]
TABLE(S) CONTINUED ON NEXT PAGE
Page 4C (2000)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
TABLE(S) CONTINUED
Insured's Maximum Insured's Maximum
Attained Age* Monthly Rate Attained Age* Monthly Rate
-----------------------------------------------------------------
95 [29.32167] 98 [62.09583]
96 [35.08250] 99 [83.33333]
97 [45.08333]
* For the segment amount(s) effective on the contract date (see Segment
Table), the Insured's attained age is the issue age found on page 3 plus
the length of time since the contract date.
For any segment amount(s) effective after the contract date, the Insured's
attained age is the issue age of that segment plus the length of time since
its effective date.
We may charge less than the maximum monthly rates. From time to time, we will
consider the need to change the rates we charge. We describe the factors we use
to determine such changes under General Provisions.
See the Basis of Computation for a description of the basis we use to compute
these rates.
-----------------------------------------------------------------------------
TABLE(S) CONTINUED ON NEXT PAGE
Page 4D (2000)
PROCESSING DATE: XXX XX XXXX
POLICY NO. XX XXX XXX
TABLE(S) CONTINUED
Table of Attained Age Factors
These factors are used to determine your death benefit as described under Death
Benefit Provisions.
These factors apply during each contract year.
Contract Year Factors Contract Year Factors
- --------------------------------------------------------------------------
35 [4.22] 68 [1.57]
36 [4.08] 69 [1.54]
37 [3.95] 70 [1.50]
38 [3.82] 71 [1.47]
39 [3.69] 72 [1.44]
40 [3.57] 73 [1.41]
41 [3.45] 74 [1.39]
42 [3.34] 75 [1.36]
43 [3.23] 76 [1.34]
44 [3.13] 77 [1.32]
45 [3.03] 78 [1.30]
46 [2.93] 79 [1.28]
47 [2.84] 80 [1.26]
48 [2.75] 81 [1.24]
49 [2.67] 82 [1.23]
50 [2.58] 83 [1.21]
51 [2.50] 84 [1.20]
52 [2.43] 85 [1.18]
53 [2.35] 86 [1.17]
54 [2.28] 87 [1.16]
55 [2.22] 88 [1.15]
56 [2.15] 89 [1.14]
57 [2.09] 90 [1.13]
58 [2.03] 91 [1.12]
59 [1.98] 92 [1.11]
60 [1.92] 93 [1.10]
61 [1.87] 94 [1.09]
62 [1.82] 95 [1.07]
63 [1.77] 96 [1.06]
64 [1.73] 97 [1.05]
65 [1.69] 98 [1.03]
66 [1.65] 99 [1.02]
67 [1.61]
- --------------------------------------------------------------------------
END OF TABLE(S)
Page 4E (2000)
DEFINITIONS
We, our, us and Pruco Life. Pruco Life Insurance Company.
You and your. The owner(s) of the contract.
Insured. The person named as the Insured on the first page. He or she need not
be the owner.
SEC. The Securities and Exchange Commission.
Issue Date. The contract date shown on the first page.
Anniversary or contract anniversary. The same day and month as the contract date
in each later year.
Contract Year. A year that starts on the contract date or on an anniversary.
Monthly Date. The contract date and the same day as the contract date in each
later month.
Contract Month. A month that starts on a monthly date.
Target Year. A year beginning on the effective date of a basic insurance amount
segment (see Segment Table) and on the same day and month in a later year.
THE CONTRACT
Entire Contract
This policy and any attached copy of an application, including an application
requesting a change, form the entire contract. We assume that all statements in
an application are made to the best of the knowledge and belief of the person(s)
who make them; in the absence of fraud, they are deemed to be representations
and not warranties. We rely on those statements when we issue the contract and
when we change it. We will not use any statement, unless made in an application,
to try to void the contract, to contest a change, or to deny a claim.
Contract Modifications
Only a Pruco Life officer with the rank or title of vice president may agree to
modify this contract, and then only in writing.
Incontestability
Except as we state in the next sentence, we will not contest this contract after
it has been in force during the Insured's lifetime for two years from the issue
date. The exceptions are: (1) non-payment of enough premium to pay the required
charges; and (2) any change in the contract that requires our approval and that
would increase our liability. For any such change, we will not contest the
change after it has been in effect for two years during the lifetime of the
Insured.
(VUL 2000) 5
OWNERSHIP
Unless a different owner is named in the application, the owner of the contract
is the Insured. If a different owner is named, we will show that owner in an
endorsement to the contract. This ownership arrangement will remain in effect
unless you ask us to change it.
You may change the ownership of the contract by sending us a request in a form
that meets our needs. We may ask you to send us the contract to be endorsed. If
we receive your request in a form that meets our needs, and the contract if we
ask for it, we will file and record the change, and it will take effect as of
the date you signed the request.
While the Insured is living, the owner alone is entitled to any contract benefit
and value, and to the exercise of any right and privilege granted by the
contract or by us.
DEATH BENEFIT PROVISIONS
We will pay a benefit to the beneficiary at the Insured's death if this contract
is in force at the time of that death; that is, if it has not been surrendered
and it is not in default past the grace period.
If the contract is not in default, the amount we will pay will be the death
benefit determined as of the date of the Insured's death reduced by any contract
debt (described under Loans).
If the contract is in default, and the Insured's death occurs in the grace
period (described under Default), we will pay the death benefit reduced by any
contract debt and the amount needed to pay charges through the date of death.
If the Insured's death occurs past the grace period, no death benefit is
payable.
Death Benefit
This contract has a Type A or Type B death benefit. We show the type of death
benefit that applies to this contract under Type of Death Benefit.
If this contract has a Type A death benefit, the death benefit on any date is
equal to the greater of: (1) the basic insurance amount, and (2) the contract
fund before deduction of any monthly charges due on that date, multiplied by the
attained age factor that applies.
If this contract has a Type B death benefit, the death benefit on any date is
equal to the greater of: (1) the basic insurance amount plus the contract fund
before deduction of any monthly charges due on that date, and (2) the contract
fund before deduction of any monthly charges due on that date, multiplied by the
attained age factor that applies.
For the purpose of computing the death benefit, if the contract fund is less
than zero we will consider it to be zero. Your basic insurance amount and
attained age factors are shown in the contract data pages.
(VUL 2000) 6
Additional Death Benefits
This contract may provide additional benefits, which may be payable on an
Insured's death. If it does, they will be listed on a contract data page, and a
form describing the benefit will be included in this contract. Any such benefit
will be payable only if the contract is not in default past the grace period at
the time of the death.
Method of Payment
You may choose to have any death benefit paid in a single sum or under one of
the optional modes of settlement shown in the Settlement Options provision.
Suicide Exclusion
If the Insured, whether sane or insane, dies by suicide within two years from
the Issue Date, this contract will end and we will return the premiums paid.
The following statement applies only with respect to an increase in the basic
insurance amount resulting from a request you make in accordance with the Change
In Insurance Amount provision of this contract. If the Insured, whether sane or
insane, dies by suicide after two years from the issue date but within two years
of the effective date of an increase in the basic insurance amount, we will pay,
as to the increase in amount, no more than the sum of the premiums paid on and
after the effective date of the increase.
Interest on Death Benefit
Any death benefit described above will be credited with interest. The amount
will be the greater of: (1) interest calculated in accordance with applicable
laws, and (2) interest calculated from the date of death at a rate declared by
Pruco Life.
CHANGE IN BASIC INSURANCE AMOUNT
You may change the basic insurance amount, subject to our approval and all these
conditions and the paragraphs that follow:
You must ask for the change in a form that meets our needs.
The change must be one permitted by our current underwriting rules.
The amount of an increase or decrease must be at least equal to the minimum
increase or decrease in basic insurance amount shown under Contract Limitations
in the contract data pages.
The basic insurance amount after a decrease must be at least equal to the
minimum basic insurance amount shown under Contract Limitations in the contract
data pages.
If we ask you to do so, you must send us the contract to be endorsed.
You must prove to us that the Insured is insurable for any increase.
The contract must not be in default.
We may deny any increase if it would cause the number of segments shown in the
Segment Table in the data pages to exceed ninety-nine.
We will not permit an increase before the first contract anniversary.
Surrender Charge on Decreases
We may impose a partial surrender charge if you decrease the basic insurance
amount. We describe the method we use to determine the maximum partial surrender
charge we will deduct from the contract fund below.
If there is only one segment (see Segment Table), we will reduce that segment's
basic insurance amount by the amount of the decrease. If there is more than one
segment, we will decrease the basic insurance amount of each segment based on
the proportion of its basic insurance amount to the total of all basic insurance
segment amounts in effect just before the change.
For any segment incurring a decrease in the basic insurance amount to an amount
equal to or greater than the Surrender Charge Threshold shown in the Segment
Table, we will not impose a surrender charge. For any segment incurring a
decrease in the basic insurance amount to an amount below this threshold, we
will subtract the new basic insurance amount from the threshold amount. We will
then multiply the surrender charge (see Schedule Of Maximum Surrender Charges
for that segment) by the lesser of this difference and the amount of the
decrease and divide by the threshold amount and deduct the result from the
contract fund.
We may decline the change if we determine it would cause the contract to fail to
qualify as life insurance under the applicable tax law. A change will take
effect only if we approve your request for it at our Home Office and will take
effect on the date we approve it. If we approve the change, we will recompute
the contract's charges and values in the appropriate tables. A change in the
basic insurance amount may also affect the amount of any extra benefits this
contract might have. We will send you new contract data pages showing the
amount and effective date of the change and the recomputed charges and values.
If the Insured is not living on the effective date, the change will not take
effect. We may deduct the administrative charge (shown under Adjustments to the
Contract Fund) for the change.
(VUL 2000) 7
EXHIBIT 1.A.(5)
COST OF INSURANCE
On each monthly date, we will deduct a charge for the cost of insurance from the
contract fund. To determine the maximum charge for the cost of insurance, we use
the following method:
We determine the maximum cost of insurance rate for each currently effective
basic insurance segment amount shown in the Segment Table in the data pages
using the maximum monthly rate shown under the Table of Maximum Monthly
Insurance Rates for the appropriate rating class. If there is only one basic
insurance segment amount currently in effect, we multiply the rate by the net
amount at risk (the death benefit minus the contract fund) divided by $1000 to
compute the maximum charge for the cost of insurance.
If there are two or more basic insurance segments currently in effect, we first
allocate the total net amount at risk (the death benefit minus the contract
fund) to each basic insurance segment based on the proportion of its basic
insurance amount to the total of basic insurance amounts for all segments
currently in effect. We multiply the rate by the allocated net amount at risk
divided by $1000 for each basic insurance segment and add the results to
determine the total maximum charge for the cost of insurance.
CHANGING THE TYPE OF DEATH BENEFIT
This contract has a Type A or Type B death benefit (see Death Benefit). Subject
to our approval, you may change the type of death benefit. We will adjust the
basic insurance amount so that the death benefit immediately after the change
will remain the same as the death benefit immediately before the change. If
there is more than one segment (see Segment Table), we will adjust the basic
insurance amount of each segment based on the proportion of its basic insurance
amount to the total of basic insurance amounts for all segments in effect just
before the adjustment.
Type A to B
If you are changing from a Type A to a Type B death benefit, we will reduce the
basic insurance amount by the contract fund on the date the change takes effect.
Type B to A
If you are changing from a Type B to a Type A death benefit, we will increase
the basic insurance amount by the contract fund on the date the change takes
effect.
We may deduct from the contract fund the administrative charge shown for changes
in the basic insurance amount under Adjustments to the Contract Fund. If the
change in the type of death benefit results in a reduction in the basic
insurance amount, the basic insurance amount after the decrease must be at least
equal to the minimum basic insurance amount, which we show under Contract
Limitations in the contract data pages. We may deduct from the contract fund a
surrender charge for a reduction in the basic insurance amount as described in
the Change in Basic Amount provision.
A change in the type of death benefit will take effect only if we approve your
request at our Home Office. If we approve the change, we will recompute the
contract's charges, values and limitations shown in the contract data pages.
The change will take effect on the monthly date that coincides with or next
follows the date we approve your request. We will send you new contract data
pages showing the amount and effective date of the change in basic insurance
amount and the recomputed charges, values and limitations.
Your request for a change must be in a form that meets our needs. We may
require you to send us this contract before we make the change.
(VUL 2000) 8
EXHIBIT 1.A.(5)
BENEFICIARY
You may designate or change a beneficiary by sending us a request in a form that
meets our needs. We may ask you to send us the contract to be endorsed. If we
receive your request, and the contract if we ask for it, we will file and record
the change and it will take effect as of the date you signed the request. But if
we make any payment(s) before we receive the request, we will not have to make
the payment(s) again. Any beneficiary's interest is subject to the rights of any
assignee we know of.
When a beneficiary is designated, any relationship shown is to the Insured,
unless otherwise stated. To show priority, we may use numbered classes, so that
the class with first priority is called class 1, the class with next priority is
called class 2, and so on. When we use numbered classes, these statements apply
to beneficiaries unless the form states otherwise:
One who survives the Insured will have the right to be paid only if no one in a
prior class survives the Insured.
One who has the right to be paid will be the only one paid if no one else in the
same class survives the Insured.
Two or more in the same class who have the right to be paid will be paid in
equal shares.
If none survives the Insured, we will pay in one sum to the Insured's estate.
Before we make a payment, we have the right to decide what proof we need of the
identity, age, or other facts about any persons designated as beneficiaries. If
beneficiaries are not designated by name and we make payment(s) based on that
proof, we will not have to make the payment(s) again.
(VUL 2000) 9
EXHIBIT 1.A.(5)
PREMIUM PAYMENT
Payment of Premiums
The minimum initial premium shown in the contract data pages is due on or before
the contract date. There is no insurance under this contract until that premium
is paid. We may require an additional premium if adjustments to premium
payments plus any contract fund charges due on or before the payment date exceed
the minimum initial premium.
Subject to the limitations below, additional premiums may be paid at any time
during the Insured's lifetime as long as the contract is not in default beyond
the grace period. Premiums may be paid at one of our offices or to one of our
authorized representatives. We will give a signed receipt upon request. The
minimum premium we will accept is shown on a contract data page. We have the
right to refuse to accept a premium payment that would in our opinion cause this
contract to fail to qualify as life insurance under applicable tax law. We also
have the right to refuse to accept any payment that increases the death benefit
by more than it increases the contract fund.
Invested Premium Amount
The invested premium amount is the portion of each premium you pay that we add
to the contract fund. It is equal to the premium paid minus the adjustments to
premium payments shown on a contract data page.
Crediting the Initial Premium Payment
If we receive the first premium payment on or before the contract date, we will
credit the invested premium amount to the contract fund on the contract date.
If we receive the first premium payment after the contract date, we will credit
the premium amount to the contract fund on the payment date.
Allocations
We will allocate 100% of any invested premium into the Money Market Investment
Option until the end of the Right to Cancel Contract period described on the
contract jacket. At the end of this period, unless you ask us otherwise, we will
re-allocate the amount in the Money Market Investment Option in accordance with
the Initial Allocation of Invested Premium Amounts shown in the contract data
pages.
You may allocate all or a part of your invested premium amount to one or more of
the investment options listed in the contract data pages. You may choose to
allocate nothing to a particular investment option. You may not choose a
fractional percentage.
The initial allocation of invested premium amounts is shown on a contract data
page. You may change the allocation for future invested premium amounts at any
time if the contract is not in default. To change your allocation, simply
notify us in a form that meets our needs. The change will take effect on the
date we receive your notice; we will send you a confirmation of the transaction.
CONTRACT FUND
When you make your first premium payment, the invested premium amount, less any
charges due on or before that day, becomes your contract fund. Amounts are
added to and subtracted from the contract fund as shown under Adjustments to the
Contract Fund in the contract data pages. The contract fund is used to pay
charges under this contract and will determine, in part, whether this contract
will remain in force or go into default. The contract fund is also used to
determine your loan and surrender values, the amount you may withdraw, and the
death benefit.
Cash Value
The cash value at any time is the contract fund less any surrender charge. We
show the maximum surrender charge for each segment (see Segment Table) in the
Schedule of Maximum Surrender Charges for that segment. If there are two or more
segments, we will add their surrender charges and deduct the total from the
contract fund.
Net Cash Value
The net cash value at any time is the cash value less any contract debt.
EXHIBIT 1.A.(5)
If the contract is in default, the net cash value is zero.
Net Amount at Risk
The net amount at risk is used to determine the cost of insurance as described
under Adjustments to the Contract Fund. It is equal to the death benefit (see
Death Benefit) minus the contract fund.
(VUL 2000) 10
EXHIBIT 1.A.(5)
DEFAULT
Excess Contract Debt Default
If contract debt ever grows to be equal to or more than the cash value, the
contract will have excess contract debt and will be in default.
Cash Value Default
On each monthly date, we will determine the cash value. If the cash value is
greater than zero and the contract has no excess contract debt, the contract
will remain in force until the next monthly date. If the cash value is zero or
less, the contract is in default unless it remains in force under the Death
Benefit Guarantee.
Notice of Default
If the contract is in default, we will mail you a notice stating the amount we
will need to keep the contract in force. That amount will equal a premium which
we estimate will keep the contract in force for three months from the date of
default. We grant a 61-day grace period from the date we mail the notice to pay
this amount. The contract will remain in force during this period. If that
amount is not paid to us by the end of the 61-day grace period, the contract
will end and have no value.
DEATH BENEFIT GUARANTEE
On each monthly date during the Death Benefit Guarantee period shown under the
Table of Death Benefit Guarantee Values, and while the contract is in force, we
will:
Accumulate premium payments at 4% annual interest; and
Accumulate any withdrawal amounts at 4% annual interest.
We then subtract amount 2 from amount 1 and compare the result to the values
shown in or derived from the Table of Death Benefit Guarantee Values for such
monthly date. If the result is equal to or greater than the appropriate value
and the contract has no excess contract debt, the contract will remain in force
until the next monthly date. If the result is less than the appropriate value
and any of the events described under Default have occurred, the contract is in
default as described under Default.
The Table of Death Benefit Guarantee Values shows such values on contract
anniversaries. On a date that falls between two anniversaries, the value will
fall between the values for those anniversaries considering the time that has
passed since the last anniversary.
(VUL 2000) 11
EXHIBIT 1.A.(5)
REINSTATEMENT
If this contract ends without value, as described under Default, you may
reinstate it. The following conditions must be satisfied:
The contract must not have been in default for more than 5 years.
You must prove to us that the Insured is insurable for the contract.
You must pay us a charge equal to: (a) an amount, if any, required to bring the
cash value to zero on the date the contract went into default, plus (b) the
deductions from the contract fund during the grace period following the date of
default, plus (c) a premium that we estimate will be sufficient after
administrative charges to cover the deductions from the contract fund for three
monthly dates starting on the date of reinstatement.
Any contract debt (with interest to date at the rate(s) we set for loans as we
state under Loans) must be restored or paid back. If that debt with interest
would exceed the loan value of the reinstated contract, the excess must be paid
to us before reinstatement.
The date of reinstatement will be the date we approve your request. We will
deduct all required charges from your payment and put the balance in your
contract fund. If we approve the reinstatement, we will credit the contract fund
with a refund of that part of any surrender charge deducted at the time of
default which would have been charged if the contract were surrendered
immediately after reinstatement.
(VUL 2000) 12
EXHIBIT 1.A.(5)
SEPARATE ACCOUNT
Separate Account
The words separate account, when we use them in this contract without
qualification, mean any separate account we establish to support variable life
insurance contracts like this one. We list the separate account(s) available to
you in the contract data pages. We may establish additional separate accounts.
We will notify you within one year if we do so.
Variable Investment Options
A separate account may offer one or more variable investment options. We list
them in the contract data pages. We may establish additional variable investment
options. We will notify you within one year if we do so. We may also eliminate
existing variable investment options, but only with the consent of the SEC and,
where required, of the insurance regulator of our state of domicile and/or where
this contract is delivered.
Income and realized and unrealized gains and losses from assets in each variable
investment option are credited to, or charged against, that variable investment
option. This is without regard to income, gains, or losses in other variable
investment options.
Separate Account Investments
We may invest the assets of different separate accounts in different ways. But
we will do so only with the consent of the SEC and, where required, of the
insurance regulator of our state of domicile and/or where this contract is
delivered.
The assets of the separate account shall be available to cover the liabilities
of the general account only to the extent that the assets exceed the liabilities
of the separate account arising under the variable life insurance policies
supported by the separate account.
We will determine the value of the assets in each separate account registered
with the SEC under the Investment Company Act of 1940 and any variable
investment option on each day the New York Stock Exchange is open for business.
FIXED INVESTMENTS
We list any fixed investment option available to you in the contract data pages.
We may establish additional fixed investment options. We will notify you within
one year if we do so. You may allocate all or part of your invested premium
amount to an available fixed investment option. As stated under Adjustments to
the Contract Fund, we credit fixed investment options with guaranteed interest
and we may credit them with excess interest.
(VUL 2000) 13
EXHIBIT 1.A.(5)
TRANSFERS
You have the right to transfer amounts into or out of variable investment
options and into any fixed investment option up to twelve times in each contract
year without charge if the contract is not in default. Additional transfers may
be made during each contract year, but only with our consent. We may charge for
additional transfers as we state under Adjustments to the Contract Fund.
Transfers out of any fixed investment option may be made only with our consent.
We may restrict the number, timing and amount of transfers in accordance with
our rules if your transfer activity is determined by us to be disruptive to the
variable investment option or to the disadvantage of other contract owners. We
may prohibit transfer requests made by an individual acting under a power of
attorney on behalf of more than one contract owner.
To make a transfer, you must ask us in a form that meets our needs. Unless
otherwise restricted, the transfer will take effect on the date we receive your
notice at our Home Office.
SURRENDER
You may surrender this contract for its net cash value (see Contract Fund). To
do so, you must ask us in a form that meets our needs. We may require you to
send us the contract.
We will usually pay any net cash value within seven days after we receive your
request and the contract at our Home Office. But we have the right to postpone
paying you the part of the net cash value that is to come from any variable
investment option provided by a separate account registered under the Investment
Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the
SEC requires that trading be restricted or declares an emergency. We have the
right to postpone paying you the remainder for up to six months. If we do so
for more than thirty days, we will pay interest at the rate of 3% a year.
(VUL 2000) 14
EXHIBIT 1.A.(5)
WITHDRAWALS
You may make withdrawals from the contract subject to all these conditions and
the paragraph that follows:
You must ask for the withdrawal in a form that meets our needs.
The net cash value after withdrawal may not be less than or equal to zero after
deducting (a) any charges associated with the withdrawal and (b) an amount that
we estimate will be sufficient to cover the contract fund deductions for two
monthly dates following the date of withdrawal.
You may not withdraw less than the minimum amount shown under Contract
Limitations.
The basic insurance amount after withdrawals must be at least equal to the
minimum basic insurance amount shown under Contract Limitations.
Any amount withdrawn may not be repaid except as a premium subject to charges.
Effect on Contract Fund
We will reduce your contract fund on the date we approve your request by the
withdrawal amount and any charges listed under Adjustments to the Contract Fund.
Unless you request otherwise and we agree, we will take any withdrawal
proportionately from all investment options that apply to the contract.
We may charge an administrative fee as stated under Adjustments to the Contract
Fund.
Effect on Basic Insurance Amount
If you have a Type B death benefit, withdrawals will not affect the basic
insurance amount.
If you have a Type A death benefit and the withdrawal would cause the net amount
at risk (see Contract Fund) to increase, we will reduce the basic insurance
amount and, consequently, your death benefit to offset this increase. The
reduction in the basic insurance amount will never be more than the withdrawal
amount. If we reduce the basic insurance amount, we will recompute the
contract's charges, values and limitations. We will send you new contract data
pages showing these changes. We may also deduct a surrender charge from the
contract fund as described in the Change in Basic Insurance Amount provision.
We will usually pay any withdrawal amount within seven days after we receive
your request and the contract at our Home Office. But we have the right to
postpone paying you the part of the net cash value that is to come from any
variable investment option provided by a separate account registered under the
Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed;
or (2) the SEC requires that trading be restricted or declares an emergency. We
have the right to postpone paying you the remainder for up to six months. If we
do so for more than thirty days, we will pay interest at the rate of 3% a year.
(VUL 2000) 15
EXHIBIT 1.A.(5)
LOANS
Subject to the minimum loan requirement and the requirements of this provision,
you may at any time borrow any amount up to the current loan value less any
existing contract debt.
Loan Value
If the contract is not in default, the loan value at any time is equal to the
sum of (a) 90% of the cash value attributable to the variable investment
options, and (b) the balance of the cash value.
If the contract is in default, it has no loan value.
Contract Debt
Contract debt at any time means the loan on the contract at that time, plus the
interest we have charged that is not yet due and that we have not yet added to
the loan.
Loan Requirements
For us to approve a loan, the following requirements must be met: you must
assign this contract to us as sole security for the loan; the Insured must be
living; and the resulting contract debt must not be more than the loan value.
If there is already contract debt when you borrow from us, we will add the new
amount you borrow to that debt.
Interest Charge
We will charge interest daily on any loan. Interest is due on each contract
anniversary, or when the loan is paid back, whichever comes first. If interest
is not paid when due, it becomes part of the loan. Then we start to charge
interest on it, too. Except as stated below, we charge interest at an effective
annual rate shown under Loan Interest Rate in the contract data pages.
Preferred Loans
Unless you ask us otherwise, a portion of the amount you may borrow on or after
the 10th contract anniversary will be considered a Preferred Loan up to an
amount equal to the maximum preferred loan amount described below. Preferred
Loans are charged interest at an effective annual rate shown under Preferred
Loan Interest Rate in the contract data pages.
Maximum Preferred Loan Amount
The maximum preferred loan amount available starting on the 10th contract
anniversary is (A) minus (B), where (A) is the total amount you may borrow, and
(B) is the total premiums paid less total withdrawals, if any. If (B) is less
than zero, we will consider it to be zero.
Effect on Contract Fund
When you take a loan, the amount of the loan continues to be a part of the
contract fund and is credited with interest at an effective rate of 4% a year.
We will reduce the portion of the contract fund allocated to the investment
options by the amount you borrow, and by loan interest that becomes part of the
loan if it is not paid when due.
We will take any loan proportionately from all investment options that apply to
the contract unless you ask us otherwise.
On each monthly date, if there is a contract loan outstanding at any time during
the previous month, we will increase the portion of the contract fund in the
investment options by interest credits accrued on the loan since the last
monthly date. When you repay all or part of a loan, we will increase the portion
of the contract fund in the investment options by the amount of that repayment.
To do this, we will use your investment allocation for future premium payments
on file as of the loan payment date. We will also decrease the portion of the
contract fund on which we credit the guaranteed interest rate of 4% a year by
the amount of loan you repay.
We will not increase the portion of the contract fund allocated to the
investment options by loan interest that is paid before we make it part of the
loan. We reserve the right to change the manner in which we allocate loan
repayments. If we make such a change, we will do so for all contracts like this
one. We will send you notice of any change.
(VUL 2000) 16
EXHIBIT 1.A.(5)
GENERAL PROVISIONS
Annual Report
Once each contract year we will send you a report. It will show: the current
death benefit; the amount of the contract fund in each investment option; the
net cash value; any contract debt and the interest rate we are charging;
premiums paid, investment results, charges deducted, and withdrawals taken since
the last report. The report may also show any other data that may be required
where this contract is delivered.
Payment of Death Claim
If we settle this contract in one sum as a death claim we will usually pay the
proceeds within seven days after we receive at our Home Office proof of the
Insured's death and any other information we need to pay the claim. But we have
the right to postpone paying the part of the proceeds that is to come from a
variable investment option if: (1) the New York Stock Exchange is closed; or
(2) the SEC requires that trading be restricted or declares an emergency. We
have the right to postpone paying the remainder for up to six months.
Currency
Any money we pay, or that is paid to us, must be in United States currency. Any
amount we owe will be payable at our Corporate Office.
Misstatement of Age or Sex
If the Insured's stated age or sex or both are not correct, we will change each
benefit and any amount to be paid to what the most recent deductions from the
contract fund would have provided at the Insured's correct age and sex.
Assignment
We will not be deemed to know of an assignment unless we receive it, or a copy
of it, at our Home Office. We are not obliged to see that an assignment is
valid or sufficient. This contract may not be assigned to any employee benefit
plan or program without our consent. This contract may not be assigned if such
assignment would violate any federal, state, or local law or regulation
prohibiting sex distinct rates for insurance.
Change in Plan
You may be able to have this contract changed to another plan of life insurance.
Any change may be made only if we consent, and will be subject to conditions and
charges that are then determined.
Factors Subject To Change
Charges deducted from premium payments and the contract fund may change from
time to time, subject to the maximums shown in the contract data pages. In
deciding whether to change any of these charges, we will periodically consider
factors such as mortality, persistency, expenses, taxes and interest and/or
investment experience to see if a change in our assumptions is needed. Charges
for taxes attributable to premiums will be set at one rate for all contracts
like this one. Changes in other factors will be by class. All changes will be
determined only prospectively; that is, we will not recoup prior losses or
distribute prior gains by means of these changes.
Non-Participating
This contract will not share in our profits or surplus earnings. We will pay no
dividends on it.
Applicable Tax Law
This contract has been designed to satisfy the definition of life insurance for
Federal income tax purposes under Section 7702 of the Internal Revenue Code of
1986, as amended. We reserve the right, however, to decline any change we
determine would cause this contract to fail to qualify as life insurance under
the applicable tax law. This includes changing the basic insurance amount,
withdrawals, and changing the type of death benefit. We also have the right to
change this contract, to require additional premium payments, or to make
distributions from this contract to the extent necessary to continue to qualify
this contract as life insurance. Finally, we reserve the right to take whatever
action is necessary to prevent the contract from becoming a modified endowment
contract under Section 7702A of the Internal Revenue Code unless you have
otherwise indicated to us in writing that you want a modified endowment
contract.
(VUL 2000) 17
EXHIBIT 1.A.(5)
BASIS OF COMPUTATION
Mortality Basis and Interest Rate
We compute maximum monthly insurance rates using:
the Commissioners 1980 Standard Ordinary Smoker and Nonsmoker Mortality Tables
without Ten Year Select Factors;
the issue age, sex, smoker and non-smoker status, and rating class of the
Insured and the length of time since the contract date;
age last birthday; and
an effective interest rate of 4% a year.
Minimum Legal Values
The cash surrender values provided by this contract are at least as large as
those set by law where it is delivered. Where required, we have given the
insurance regulator a detailed statement of how we compute values and benefits.
(VUL 2000) 18
EXHIBIT 1.A.(5)
SETTLEMENT OPTIONS
Options Described
You may choose to have the proceeds (that is, any death benefit or any amount
payable upon surrender of the contract) paid in a single sum or under one of the
optional modes of settlement described below.
If the person who is to receive the proceeds of this contract wishes to take
advantage of one of these optional modes, we will furnish, on request, details
of the options we describe below or any others we may have available at the time
the proceeds become payable.
Option 1 (Instalments for a Fixed Period)
We will make equal payments for up to 25 years. The Option 1 Table shows the
minimum amounts we will pay.
Option 2 (Life Income)
We will make equal monthly payments for as long as the person on whose life the
settlement is based lives, with payments certain for 120 months. The Option 2
Table shows the minimum amounts we will pay. But, we must have proof of the
date of birth of the person on whose life the settlement is based.
Option 3 (Interest Payment)
We will hold an amount at interest. We will pay the interest annually, semi-
annually, quarterly, or monthly.
Option 4 (Instalments of a Fixed Amount)
We will make equal annual, semi-annual, quarterly, or monthly payments for as
long as the available proceeds provide.
Option 5 (Non-Participating Income)
We will make payments like those of any annuity we then regularly issue that:
(1) is based on United States currency; (2) is bought by a single sum; (3) does
not provide for dividends; and (4) does not normally provide for deferral of the
first payment. Each payment will be at least equal to what we would pay under
that kind of annuity with its first payment due on its contract date. If a life
income is chosen, we must have proof of the date of birth of any person on whose
life the option is based. Option 5 cannot be chosen more than 30 days before
the due date of the first payment.
Interest Rate
Payments under Options 1, 3 and 4 will be calculated assuming an effective
interest rate of at least 3% a year. We may include more interest.
(VUL 2000) 19
EXHIBIT 1.A.(5)
SETTLEMENT OPTIONS TABLES
(VUL 2000) 20
EXHIBIT 1.A.(5)
ENDORSEMENTS
(Only we can endorse this contract.)
Flexible Premium Variable Universal Life Insurance Policy. Insurance payable
only upon death. Cash values reflect premium payments, investment results, any
interest credited to the fixed investment options, and charges. Non-
participating.
(VUL 2000) 21