EXHIBIT 99.1.A.(5)
VUL 97 NY
PLEASE READ YOUR POLICY CAREFULLY; it is a legal contract between you and
Prudential.
Flexible Premium Variable Life Insurance Policy. Insurance payable only upon
death. Cash values reflect premium payments, investment results, and charges.
Eligible for annual dividends as stated under Dividends.
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 Prudential
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.
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(VUL 97) NY 2
GUIDE TO CONTENTS
Contract Data
Insured's Information; Rating Class; Basic Contract Information; Notice; 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; Schedule of Maximum Surrender
Charges; Monthly Deductions from the Contract Fund for Other Benefits (if
applicable); Investment Options; The Prudential Variable Appreciable Account;
Variable Investment Options; Fixed Interest Rate Investment Option; Initial
Allocation of Invested Premium Amounts
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
Changing The Type Of Death Benefit
Beneficiary
Dividends
Participation; Dividend Options
Premium Payment
Payment of Premiums; Invested Premium Amount; Crediting the Initial Premium
Payment; Allocations
Contract Fund
Cash Value; Net Cash Value; Coverage Amount
Default
Excess Contract Debt Default; Cash Value Default; Notice of Default
Death Benefit Guarantee
Death Benefit Guarantee; Guarantee Values
Reinstatement
Separate Account
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Separate Account; Variable Investments; Separate Account Investments; Change
in Investment Policy
Fixed Investments
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(VUL 97) NY 2A
Transfers
Class One Investments; Class Two Investments; Dollar Cost Averaging
Surrender
Cash Value Option; Fixed Reduced Paid-up Insurance
Withdrawals
Effect on Contract Fund; Effect on Basic Insurance Amount
Loans
Loan Value; Contract Debt; Loan Requirements; Interest Charge; Preferred Loan;
Maximum Preferred Loan Amount; Effect on Contract Fund; Deferral
General Provisions
Annual Report; Payment of Death Claim; Currency; Misstatement of Age or Sex;
Assignment; Change in Plan; Factors Subject to Change; 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.
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CONTRACT DATA
INSURED
JOHN DOE Male, Issue Age 35
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RATING CLASS
Select Standard
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BASIC CONTRACT INFORMATION
Policy Number xx xxx xx
Contract Date January 1, 1997
Premium Period To the Insured's Attained Age 100
Beneficiary Mary Doe, wife
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NOTICE
The contract has no generally applicable guaranteed effective interest rate used
to determine contract values. The guaranteed interest rate credited on that
portion of the contract fund placed in the fixed interest rate investment option
is 4% a year. Excess interest credited on the fixed interest rate investment
option is not guaranteed and we have the right to change the interest rate from
time to time, but not less than the fixed interest rate investment option's
guaranteed interest rate.
Dividends are not guaranteed. We have the right to change the amount of any
dividend to be credited to the contract. This may result in lower total cash
values than were illustrated, or, if applicable, require you to pay more
premiums than were illustrated.
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TYPE OF DEATH BENEFIT (see Death Benefit Provisions)
Type B
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LIFE INSURANCE ON THE INSURED (as of the Contract Date)
Basic Insurance Amount $50,000.00
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MINIMUM INITIAL PREMIUM
The minimum initial premium due on the Contract Date is $68.13.
This amount, if paid at the beginning of each Contract Month, will accumulate
at 4% to equal or exceed the Limited Death Benefit Guarantee Values shown in the
Table of Death Benefit Guarantee Values, assuming no loans or withdrawals.
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CONTRACT DATA CONTINUED ON NEXT PAGE
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Page 3 (97)(NY)
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
CONTRACT LIMITATIONS
The minimum premium we will accept is $25.00.
The minimum basic insurance amount is $50,000.00.
The minimum increase in basic insurance amount is $10,000.00.
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 $200.00.
The Surrender Charge Threshold is $50,000.00
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ADJUSTMENTS TO PREMIUM PAYMENTS
From each premium paid we will:
Subtract an administrative charge of up to 7.5% of the premium (s) paid.
---------
Subtract a charge for sales expenses at a rate of up to 4% of the premium(s)
---------
paid.
The remainder of the premium is the invested premium amount.
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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
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Page 3A (97)(NY)
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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
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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.
adding any excess interest on that portion of the contract fund that is in a
------
fixed interest rate 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
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annual rate of not more than 0.90% (.00245475% a day) for mortality and
expense risks that we assume.
subtracting any withdrawals.
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subtracting an administrative charge of up to $25.00 for any withdrawals.
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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
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investment options exceeding twelve in any contract year.
subtracting any surrender charges that may result from a withdrawal,
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surrender, or reduction in the basic insurance amount.
And on each monthly date, we will adjust the contract fund by:
subtracting a charge for the cost of insurance of up to the maximum monthly
-----------
rate (see Table of Maximum Monthly Insurance Rates) multiplied by the coverage
amount divided by $1000.00. The coverage amount is equal to the death benefit
(See Death Benefit) minus the value of the contract fund. This charge is
deducted proportionally from each of the investment options in which you are
investing on each monthly date.
CONTRACT DATA CONTINUED ON NEXT PAGE
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Page 3B (97) (NY)
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
subtracting a charge for administrative expenses of up to $10.00 plus $0.07 per
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$1000.00 of the basic insurance amount within the first contract year.
subtracting a charge for administrative expenses of up to $10.00 plus $0.01 per
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$1000.00 of the basic insurance amount after the first contract year.
subtracting a charge of up to $0.01 per $1000.00 of the basic insurance
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amount to guarantee the minimum death benefit.
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SCHEDULE OF MAXIMUM SURRENDER CHARGES
For a full surrender at the beginning of the contract year indicated, the
maximum charge we will
deduct from the contract fund is shown below. For a full surrender at other
times, the surrender
charge will reflect the completed contract months that have passed since the
last anniversary.
For a Surrender Occurring
At the Start of The Maximum Surrender
Contract Year Charge is
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1 $446.82
2 $446.82
3 $446.82
4 $446.82
5 $446.82
6 $446.82
7 $446.82
8 $335.12
9 $223.41
10 $111.71
11 and later $0.00
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We may also deduct a surrender charge when you change the basic insurance amount
or 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.)
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CONTRACT DATA CONTINUED ON NEXT PAGE
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Page 3C (97)
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POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
INVESTMENT OPTIONS
THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT
This account is registered with the SEC under the Investment Company Act of
1940. Each 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. The Prudential Series Fund, Inc. and other funds identified below
are registered with the SEC under the Investment Company Act of 1940 as open-end
diversified management investment companies. Shares in the Series Fund are
currently offered continuously, without surcharges, at prices equal to the net
asset value of the portfolios. The net asset value is determined once daily on
each day the New York Stock Exchange is open for business.
Shares of the Prudential Variable Appreciable Account are purchased when:
1. You pay a premium (see Premium Payment) or a charge to reinstate the
contract (see Reinstatement);
2. You transfer an amount into a subaccount (see Transfers); and
3. You repay a loan (see Loans).
Shares of the Prudential Variable Appreciable Account are sold when:
1. You make a new loan or increase an existing loan (see Loans);
2. You make a withdrawal (see Withdrawals);
3. You transfer an amount out of a subaccount (see Transfers);
4. You surrender the contract for its net cash value (see Surrender); and
5. We subtract charges from the contract fund (see Contract Fund and
Adjustments to the Contract Fund).
We show below the available investment options and the funds and fund
portfolios they invest in.
These are Class One investments as described under Transfers.
VARIABLE INVESTMENT OPTIONS
Money Market
Diversified Bond
Conservative Balanced
Flexible Managed
High Yield Bond
Stock Index
Equity Income
Equity
Prudential Jennison
Global
FIXED INTEREST RATE INVESTMENT OPTION
The fixed interest rate investment option is funded by the general account
of the company.
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It is described in the Fixed Investments provision of this contract. This
is a Class Two investment as described under Transfers.
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CONTRACT DATA CONTINUED ON NEXT PAGE
Page 3D (97) (NY)
POLICY NO. XX XXX XXX
CONTRACT DATA CONTINUED
INITIAL ALLOCATION OF INVESTED PREMIUM AMOUNTS
Fixed Interest Rate 40%
Money Market 60%
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END OF CONTRACT DATA
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Page 3E (97)
POLICY NO. XX XXX XX
TABLE(S)
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 Limited Death Benefit Guarantee period is the first 32 contract years.
LIMITED LIFETIME
CONTRACT DEATH BENEFIT DEATH BENEFIT
ANNIVERSARY GUARANTEE VALUE GUARANTEE VALUE
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Contract Date $ 0 $ 0
1st $ 787.28 $ 3,057.08
2nd $ 1,606.05 $ 6,236.44
3rd $ 2,457.57 $ 9,542.98
4th $ 3,343.15 $ 12,981.78
5th $ 4,264.16 $ 16,558.13
6th $ 5,222.01 $ 20,277.54
7th $ 6,218.17 $ 24,145.72
8th $ 7,254.18 $ 28,168.63
9th $ 8,331.63 $ 32,352.46
10th $ 9,452.18 $ 36,703.64
11th $10,617.55 $ 41,228.87
12th $11,829.53 $ 45,935.10
13th $13,089.99 $ 50,829.58
14th $14,400.87 $ 55,919.84
15th $15,764.18 $ 61,213.71
16th $17,182.03 $ 66,719.34
17th $18,656.59 $ 72,445.19
18th $20,190.13 $ 78,400.08
19th $21,785.02 $ 84,593.16
20th $23,443.70 $ 91,033.97
21st $25,168.73 $ 97,732.41
22nd $26,962.76 $104,698.79
23rd $28,828.55 $111,943.82
24th $30,768.97 $119,478.65
25th $32,787.01 $127,314.88
TABLE(S) CONTINUED ON NEXT PAGE
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Page 4 (97)
POLICY NO. XX XXX XXX
LIMITED LIFETIME
CONTRACT DEATH BENEFIT DEATH BENEFIT
ANNIVERSARY GUARANTEE VALUE GUARANTEE VALUE
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26th $34,885.77 $135,464.56
27th $37,068.48 $143,940.22
28th $39,338.50 $152,754.91
29th $41,699.32 $161,922.19
30th $44,154.57 $171,456.16
31st $46,708.03 $181,371.49
32nd $49,363.63 $191,683.43
33rd $202,407.85
34th $213,561.24
35th $225,160.77
36th $237,224.28
37th $249,770.33
38th $262,818.22
39th $276,388.03
40th $290,500.63
41st $305,177.74
42nd $320,441.93
43rd $336,316.69
44th $352,826.44
45th $369,996.58
46th $387,853.52
47th $406,424.74
48th $425,738.81
49th $445,825.44
50th $466,715.54
51st $488,441.24
52nd $511,035.97
53rd $534,534.49
54th $558,972.95
55th $584,388.95
56th $610,821.59
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57th $638,311.53
58th $666,901.07
59th $696,634.19
60th $727,556.64
61st $759,715.99
62nd $793,161.71
63rd $827,945.26
64th $864,120.15
65th $901,742.04
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TABLE(S) CONTINUED ON NEXT PAGE
Page 4A (97)
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POLICY NO. XX XXX XXX
TABLE(S) CONTINUED
TABLE OF MAXIMUM MONTHLY INSURANCE RATES PER $1,000
CONTRACT MAXIMUM CONTRACT MAXIMUM
YEAR MONTHLY RATE YEAR MONTHLY RATE
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1 $0.22667 26 $ 2.01750
2 $0.24333 27 $ 2.20083
3 $0.26417 28 $ 2.40750
4 $0.28750 29 $ 2.63833
5 $0.31417 30 $ 2.89083
6 $0.34500 31 $ 3.15833
7 $0.37833 32 $ 3.43833
8 $0.41500 33 $ 3.72833
9 $0.45500 34 $ 4.03250
10 $0.49917 35 $ 4.36252
11 $0.54583 36 $ 4.72667
12 $0.59417 37 $ 5.13583
13 $0.64667 38 $ 5.59833
14 $0.70333 39 $ 6.11083
15 $0.76500 40 $ 6.67250
16 $0.83333 41 $ 7.27250
17 $0.91083 42 $ 7.88583
18 $0.99833 43 $ 8.50167
19 $1.09750 44 $ 9.12417
20 $1.20583 45 $ 9.77500
21 $1.32167 46 $10.47583
22 $1.44417 47 $11.24667
23 $1.57333 48 $12.10083
24 $1.70917 49 $13.02417
25 $1.85500 50 $13.98583
TABLE(S) CONTINUED ON NEXT PAGE
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Page 4B (97)
POLICY NO. XX XXX XXX
TABLE(S) CONTINUED
TABLE OF MAXIMUM MONTHLY INSURANCE RATES PER $1,000
CONTRACT MAXIMUM CONTRACT MAXIMUM
YEAR MONTHLY RATE YEAR MONTHLY RATE
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51 $14.95333 61 $29.32167
52 $15.90333 62 $35.08250
53 $16.87833 63 $45.08333
54 $17.89417 64 $62.09583
55 $18.90417 65 $83.33333
56 $19.92333
57 $20.98333
58 $22.21250
59 $23.78917
60 $25.93917
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We may charge less than the maximum monthly rates. At least once every five
years, but not more often than once a year, 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.
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TABLE(S) CONTINUED ON NEXT PAGE
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Page 4C (97)
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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 starting on
the contract anniversary.
INSURED'S INSURED'S
ATTAINED AGE FACTORS ATTAINED AGE FACTORS
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35 4.07 60 1.74
36 3.42 61 1.70
37 3.31 62 1.67
38 3.21 63 1.63
39 3.11 64 1.60
40 3.01 65 1.57
41 2.92 66 1.54
42 2.83 67 1.51
43 2.74 68 1.48
44 2.66 69 1.46
45 2.58 70 1.43
46 2.51 71 1.41
47 2.44 72 1.39
48 2.37 73 1.36
49 2.30 74 1.34
50 2.24 75 1.33
51 2.18 76 1.31
52 2.12 77 1.29
53 2.07 78 1.28
54 2.01 79 1.26
55 1.96 80 1.25
56 1.91 81 1.24
57 1.87 82 1.22
58 1.82 83 1.21
59 1.78 84 1.20
TABLE(S) CONTINUED ON NEXT PAGE
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Page 4D (97)
POLICY NO. XX XXX XXX
TABLE(S) CONTINUED
INSURED'S INSURED'S
ATTAINED AGE FACTORS ATTAINED AGE FACTORS
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85 1.19 93 1.12
86 1.18 94 1.11
87 1.17 95 1.10
88 1.16 96 1.08
89 1.16 97 1.07
90 1.15 98 1.06
91 1.14 99 1.05
92 1.13
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END OF TABLE(S)
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Page 4E (97) (NY)
(VUL 97) NY 5
DEFINITIONS
We, our and us. The Prudential Insurance Company of America (Prudential).
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.
Attained Age. The Insured's attained age at any time is the issue age plus
the length of time since the contract date. You will find the Insured's issue
age near the top of page 3.
Maturity Date. The maturity date is the contract anniversary when the Insured
reaches attained age 100.
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; 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
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application, to try to void the contract, to contest a change, or to deny a
claim.
Contract Modifications
Only a Prudential 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.
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(VUL 97) NY 6
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, with no one else's consent, 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 (described below) 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, increased by any
dividend credits and 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, increased by
any dividend credits and 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 either 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 in the
contract data pages.
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
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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 purposes 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.
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.
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(VUL 97) NY 7
Suicide Exclusion
If the Insured dies by suicide within two years from the issue date, this
contract will end and we will return the premiums paid, less any contract debt,
and less any withdrawals.
If the Insured 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 from the date
of death in accordance with applicable laws.
CHANGE IN BASIC INSURANCE AMOUNT
You may change the basic insurance amount. You may do so 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 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 the 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.
Any request for a change must be made on or after the first contract
anniversary.
We must not be paying premiums into the contract as a result of the Insured's
total disability.
We show under Contract Limitations a Surrender Charge Threshold. If you
decrease your basic insurance amount to an amount equal to or greater than this
threshold, we will not impose a surrender charge. If you decrease your basic
insurance 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) by the lesser of this difference
and the amount of the decrease and divide by the threshold amount. The result
is the maximum surrender charge we will deduct from the contract fund as a
result of this transaction.
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 also
recompute the contract's charges, values and limitations. A
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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,
values and limitations. 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.
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(VUL 97) 8
CHANGING THE TYPE OF DEATH BENEFIT
This contract has either a Type A or Type B death benefit (see Death Benefit).
Subject to our approval, you may change the type of death benefit after the
first contract year. If you do so, 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 you are changing from a Type B to a Type A death benefit, we will increase
the basic insurance amount by the amount in your contract fund on the date the
change takes effect.
If you are changing from a Type A to a Type B death benefit, we will reduce
the basic insurance amount by the amount in your contract fund on the date the
change takes effect. 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 show under Contract Limitations a Surrender Charge Threshold. If we
decrease your basic insurance amount to an amount equal to or greater than this
threshold, we will not impose a surrender charge. If we decrease your basic
insurance 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) by the lesser of this difference and
the amount of the decrease and divide by the threshold amount. The result is the
maximum surrender charge we will deduct from the contract fund as a result of
this transaction.
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.
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(VUL 97) NY 9
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, at our Home Office,
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.
DIVIDENDS
Participation
This contract will be eligible for a dividend on each contract anniversary if
the Insured is living. We will decide each year what part, if any, of our
surplus to credit to this contract as a dividend. We do not expect to credit any
dividends to this contract.
Dividend Options
While the contract is in force, you may choose any of the uses we show below
for any dividend. You must ask us in a form that meets our needs.
Cash. We will pay it to you in cash.
Increase Contract Fund. We will use it to increase your contract fund.
Paid-Up Life Insurance Addition. We will use it at the net single premium rate
as of the anniversary to provide a paid-up life insurance addition.
If you have not made another choice by 31 days after the anniversary, we will
use any dividend as we state under dividend option 2.
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(VUL 97) NY 10
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 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
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 and subtracted from the contract fund as shown under Adjustments to the
Contract Fund in
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the contract data pages. The amount in your 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 value 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.
Net Cash Value
The net cash value at any time is the cash value less any contract debt.
If the contract is in default, the net cash value is zero.
Coverage Amount
The coverage amount 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 value of the contract fund.
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(VUL 97) 11
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 charge. 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
Death Benefit Guarantee
On each monthly date 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.
Guarantee Values
We show the Limited Death Benefit Guarantee Period under the Table of Death
Benefit Guarantee Values in the contract data pages. When the monthly date
occurs within this period, we use the values shown in or derived from the
Limited Death Benefit Guarantee Value column to determine if the contract will
remain in force until the next monthly date. When the monthly date occurs after
this period, we use the values shown in or derived from the Lifetime Death
Benefit Guarantee Value column to determine if the contract will remain in force
until the next monthly date.
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(VUL 97) 12
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 beginning of the contract month that
coincides with or next follows 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.
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(VUL 97) NY 13
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 accounts 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 Investments
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 the Superintendent of the New York Insurance Department.
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
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 the Superintendent of the New
York Insurance Department. The process for obtaining consent is on file with the
Superintendent of the New York Insurance Department.
We will always keep assets in the separate accounts with a total value at
least equal to the amount of the variable investment options under contracts
like this one. To the extent those assets do not exceed that amount, we use them
only to support those contracts; we do not use those assets to support any other
business we conduct. We may use any excess over that amount in any way we
choose.
We will determine the value of the assets in each separate account and any
investment option on each day the New York Stock Exchange is open for business.
Change in Investment Policy
A portfolio of the fund might make a material change in its investment policy.
In that case, we will send you a notice of the change. Within 60 days after you
receive the notice, or within 60 days after the effective date of the change, if
later, you may transfer to the Fixed Account any amounts in the investment
option investing in that portfolio.
No material change in investment policy of a portfolio shall be made unless we
have filed such change with the Superintendent of the New York Insurance
Department.
FIXED INVESTMENTS
We list any fixed investment option available to you in the
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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. This excess
interest is non-forfeitable.
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(VUL 97) NY 14
TRANSFERS
You have the right to transfer amounts into or out of investment options up to
twelve times in each contract year without charge if the contract is not in
default, subject to certain restrictions depending on an investment's class. We
may charge for additional transfers in any contract year as we state under
Adjustments to the Contract Fund except that you may transfer all amounts into
the fixed interest rate investment option, without charge, during the first 18
months. The investment class for each investment is shown under Investment
Options in the contract data pages. 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.
Class One Investments
You may transfer amounts into or out of these investments.
Class Two Investments
You may transfer amounts into these investments. You may transfer out up to
25% of the amount in these investments once each contract year. Additional
transfers out of these investments may be made only with our consent.
Dollar Cost Averaging
You may elect to transfer money periodically from the Money Market Investment
Option into other variable investment options. The transfer can be either a
fixed dollar amount or a percentage of the amount you designate for this
purpose. The transfers may be made monthly, quarterly, semi-annually or
annually. It will take effect as of the end of the valuation period on the date
coinciding with the period you select. If the New York Stock Exchange is not
open on that date, or if that date does not occur in a particular month, the
transfer will take effect as of the end of the valuation period which
immediately follows that date. This feature will end when (1) $50 or less
remains of the amount you designated or (2) you ask us to cancel.
SURRENDER
You may surrender this contract for its net cash value or for a fixed reduced
paid-up insurance benefit. To do so, you must ask us in a form that meets our
needs. We may require you to send us the contract.
Cash Value Option
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 ten days, we will pay interest at the rate that then applies
to Option 3 (Interest Payment) of the Settlement Options provision.
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Fixed Reduced Paid-up Insurance
This will be paid-up life insurance on the Insured's life. We will pay the
amount of this insurance when the Insured dies. There will be cash values and
loan values. The loan interest rate will be 5%.
The amount of this insurance will be what is provided when we use the net cash
value at the net single premium rate. This rate depends on the Insured's issue
age and sex and on the length of time since the contract date.
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(VUL 97) NY 15
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 any charges associated with the 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 coverage
amount (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 show under Contract Limitations a Surrender Charge Threshold. If we
decrease your basic insurance amount to an amount equal to or greater than this
threshold, we will not impose a surrender charge. If we decrease your basic
insurance 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) by the lesser of this difference and
the amount of the decrease and divide by the threshold amount. The result is the
maximum surrender charge we will deduct from the contract fund as a result of
this transaction.
We will usually pay any withdrawal amount within seven days after we receive
your request and the contract (if we require it) 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
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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 ten days, we will pay interest at the rate of 3% a year.
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(VUL 97) NY 16
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 portion 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 of 5%.
Preferred Loan
Unless you ask us otherwise, on or after the 10th contract anniversary, a
portion of the amount you may borrow 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 of 4 1/2%.
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
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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 and we agree.
On each monthly date, if there is a contract loan outstanding, 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 and decrease the portion on which we credit the guaranteed
interest rate of 4% a year by the amount of loan you repay using your investment
allocation for future premium payments on file as of the loan payment date, plus
interest credits accrued on the loan since the last transaction date. 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.
For the possible effect of excess contract debt and/or failure to repay loans,
see Default on page 11.
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(VUL 97) NY 17
Deferral
We will usually pay any loan 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 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 ten days, we will pay interest at the rate that then applies to Option 3
(Interest Payment) of the Settlement Options provision.
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
cash surrender 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 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 the remainder for up to six months. If we
postpone payment of the death claim, we will pay interest from the date of death
to the date of payment at the rate that then applies to Option 3 (Interest
Payment) of the Settlement Options provision.
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
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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.
Administrative charges 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. The procedure for
computing rates is on file with the Department of Insurance.
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.
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(VUL 97) NY 18
BASIS OF COMPUTATION
Mortality Basis and Interest Rate
We compute maximum monthly insurance rates using:
the Commissioners 1980 Standard Ordinary Mortality Table;
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.
We compute all net single premiums and values for fixed reduced paid-up
insurance using:
the Commissioners 1980 Standard Ordinary Mortality Table;
the Insured's issue age, sex, smoker and non-smoker status and the length of
time since the contract date;
continuous functions based on 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.
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(VUL 97) 19
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 or until the
sum of the payments equals the amount put under this option. 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. The settlement will
share in our surplus to the extent and in the way we decide.
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 and 4 will be calculated assuming an effective
interest rate of at least 3 % a year. Under Option 3 it will be at an effective
rate of at least 3% a year.
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(VUL 97) 20
SETTLEMENT OPTIONS TABLES
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Flexible Premium Variable Life Insurance Policy. Insurance payable only upon
death. Cash values reflect premium payments, investment results, and charges.
VUL 97 NY 22
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