Exhibit 99.5(a)
The Manufacturers Life Insurance Company (U.S.A.)
A Stock Company
Service Office: 200 Bloor Street East, Toronto, Canada, M4W 1E5
FLEXIBLE PREMIUM SURVIVORSHIP VARIABLE LIFE INSURANCE POLICY.
PAYABLE ON DEATH OF THE LAST-TO-DIE OF THE LIVES INSURED. ADJUSTABLE DEATH
BENEFIT.
FLEXIBLE PREMIUMS PAYABLE UNTIL THE EARLIER OF LAST DEATH, OR THE POLICY
ANNIVERSARY WHEN THE YOUNGEST OF THE LIVES INSURED REACHES ATTAINED AGE 100 OR
WOULD HAVE REACHED ATTAINED AGE 100 IF LIVING.
CASH SURRENDER VALUES AND BENEFITS FOR A PORTION OF THE POLICY VALUES ALLOCATED
TO AN INVESTMENT ACCOUNT REFLECT THE INVESTMENT EXPERIENCE OF THE UNDERLYING
SUB-ACCOUNTS. INVESTMENT OPTIONS ARE DESCRIBED IN THE "POLICY VALUE COMPOSITION"
AND THE "INVESTMENT OPTIONS" PROVISIONS. NON-PARTICIPATING (NOT ELIGIBLE FOR
DIVIDENDS).
IMPORTANT NOTICE
To claim a benefit or request a change in your policy, contact
our nearest representative or write to our Service Office at
the address above.
Please tell us promptly of any change in your address.
WE STRONGLY URGE THAT, BEFORE YOU TAKE ANY ACTION TO REPLACE
THIS OR ANY OTHER POLICY, YOU ASK THE ADVICE OF THE COMPANY
THAT ISSUED THE POLICY.
[MANULIFE FINANCIAL LOGO]
Manulife Financial and the block design are registered service marks of The
Manufacturers Life Insurance Company and are used by it and its subsidiaries.
LIVES INSURED JOHN M. DOE
MARY C. DOE
POLICY NUMBER 12 345 678
FLEXIBLE PREMIUM SURVIVORSHIP VARIABLE LIFE INSURANCE POLICY.
PAYABLE ON DEATH OF THE LAST-TO-DIE OF THE LIVES INSURED. ADJUSTABLE DEATH
BENEFIT.
FLEXIBLE PREMIUMS PAYABLE UNTIL THE EARLIER OF LAST DEATH, OR THE POLICY
ANNIVERSARY WHEN THE YOUNGEST OF THE LIVES INSURED REACHES ATTAINED AGE 100 OR
WOULD HAVE REACHED ATTAINED AGE 100 IF LIVING.
CASH SURRENDER VALUES AND BENEFITS FOR A PORTION OF THE POLICY VALUES ALLOCATED
TO AN INVESTMENT ACCOUNT REFLECT THE INVESTMENT EXPERIENCE OF THE UNDERLYING
SUB-ACCOUNTS. INVESTMENT OPTIONS ARE DESCRIBED IN THE "POLICY VALUE COMPOSITION"
AND THE "INVESTMENT OPTIONS" PROVISIONS. NON-PARTICIPATING (NOT ELIGIBLE FOR
DIVIDENDS).
In this policy "you" and "your" refer to the owner(s) of the policy. "We", "us"
and "our" "refer" to The Manufacturers Life Insurance Company (U.S.A.).
If all of the Lives Insured die while the policy is in force, on the last death
we will pay the Insurance Benefit to the beneficiary, subject to the provisions
of the policy. The Lives Insured and the beneficiary are named in the Policy
Information section of this policy and in the application for this policy, a
copy of which is attached to this policy. The death benefit is described in the
"Insurance Benefit" provision.
The Insurance Benefit is payable following the death of the last-to-die of the
Lives Insured. However, you must give us proof of each death as soon as it
occurs. Proof of death for all the Lives Insured is important for us to
accurately determine benefits under the policy.
YOUR NET PREMIUMS ARE ADDED TO YOUR POLICY VALUE. YOU MAY ALLOCATE THEM TO ONE
OR MORE OF THE INVESTMENT ACCOUNTS AND TO THE FIXED ACCOUNT.
THE PORTION OF YOUR POLICY VALUE THAT IS IN AN INVESTMENT ACCOUNT WILL VARY FROM
DAY TO DAY. THE AMOUNT IS NOT GUARANTEED; IT MAY INCREASE OR DECREASE, DEPENDING
ON THE INVESTMENT EXPERIENCE OF THE UNDERLYING SUB-ACCOUNTS FOR THE INVESTMENT
ACCOUNTS THAT YOU HAVE CHOSEN.
THE PORTION OF YOUR POLICY VALUE THAT IS IN THE FIXED ACCOUNT WILL ACCUMULATE,
AFTER DEDUCTIONS, AT RATES OF INTEREST WE DETERMINE. SUCH RATES WILL NOT BE LESS
THAN AN EFFECTIVE ANNUAL RATE OF 4%.
THE AMOUNT OF THE INSURANCE BENEFIT, OR THE DURATION OF THE INSURANCE COVERAGE,
OR BOTH, MAY BE VARIABLE OR FIXED UNDER SPECIFIED CONDITIONS AND MAY INCREASE OR
DECREASE AS DESCRIBED IN THE "INSURANCE BENEFIT" PROVISION.
READ YOUR POLICY CAREFULLY. IT IS A CONTRACT BETWEEN YOU AND US.
RIGHT TO RETURN POLICY. WITHIN THE LATER OF: (1) TEN DAYS AFTER YOU RECEIVE YOUR
POLICY, IF IT DOES NOT REPLACE ANOTHER POLICY; OR (2) THIRTY DAYS AFTER YOU
RECEIVE YOUR POLICY, IF IT REPLACES ANOTHER POLICY, YOU CAN RETURN THE POLICY
FOR CANCELLATION BY DELIVERING OR MAILING IT TO US OR THE AGENT WHO SOLD IT.
IMMEDIATELY ON DELIVERY OR MAILING, THE POLICY WILL BE VOID FROM THE BEGINNING.
WE WILL REFUND IN FULL THE PAYMENT MADE.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
A STOCK COMPANY
[MANULIFE LOGO]
John Des Prez III James D. Gallagher
President Secretary
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TABLE OF CONTENTS
PAGE
Policy Information......................................... 3
Table Of Guaranteed Maximum Cost Of Insurance Rates........ 4
Definitions................................................ 5
Payment Of Premiums........................................ 6
No-Lapse Guarantee......................................... 7
Policy Termination......................................... 7
Reinstatement.............................................. 8
Insurance Benefit.......................................... 8
Policy Value............................................... 10
Policy Value Composition................................... 11
Separate Account And Sub-Accounts.......................... 12
Investment Options......................................... 13
Policy Loan Conditions..................................... 15
Changing The Death Benefit Option Or The Face Amount....... 16
Surrender And Withdrawals.................................. 17
Right To Postpone Payment Of Benefits...................... 19
Right To Cancel Increases.................................. 19
Suicide.................................................... 19
Beneficiary................................................ 20
Ownership And Assignment................................... 20
Protection Against Creditors............................... 21
Currency And Place Of Payment.............................. 21
Contract................................................... 21
Validity................................................... 21
Non-Participating..........................................
Age And Sex................................................ 21
How Values Are Computed.................................... 22
Annual Statement........................................... 22
Tax Considerations......................................... 22
Any endorsements, any supplementary benefits, and a copy of the application,
follow page 22.
Page 2
POLICY INFORMATION
LIVES INSURED NO. 1 - JOHN M. DOE AGE AT POLICY DATE: 35
NO. 2 - MARY C. DOE AGE AT POLICY DATE: 35
POLICY NUMBER 12 345 678 POLICY DATE: JAN 1, 2001
ISSUE DATE: FEB 1, 2001
OWNER JOHN M. DOE AND MARY C. DOE, JOINTLY IF LIVING,
OTHERWISE THE SURVIVOR
BENEFICIARY AS DESIGNATED IN THE APPLICATION OR SUBSEQUENTLY CHANGED
PREMIUM MODE ANNUALLY
BEGINNING ON
MON DAY YEAR PLANNED PREMIUM
JAN 01 2001 $800.00
THIS POLICY PROVIDES LIFE INSURANCE COVERAGE FOR THE LIFETIME OF THE LIVES
INSURED IF SUFFICIENT PREMIUMS ARE PAID. PREMIUM PAYMENTS IN ADDITION TO THE
PLANNED PREMIUM SHOWN MAY NEED TO BE MADE TO KEEP THIS POLICY AND COVERAGE IN
FORCE.
CHANGES IN THE CURRENT COST OF INSURANCE RATES; THE AMOUNT, TIMING AND FREQUENCY
OF THE PLANNED PREMIUM; THE INTEREST RATE BEING CREDITED TO THE FIXED ACCOUNT;
THE INVESTMENT EXPERIENCE OF THE SUB-ACCOUNTS; CHANGES TO THE DEATH BENEFIT
OPTION; CHANGES IN THE FACE AMOUNT; LOAN ACTIVITY; AND PARTIAL WITHDRAWALS OR
MONTHLY DEDUCTIONS FOR ANY SUPPLEMENTARY BENEFITS THAT APPLY AND ARE ATTACHED TO
THIS POLICY WILL AFFECT THE PERIOD OF COVERAGE. ALSO REFER TO THE POLICY
TERMINATION PROVISION OF YOUR POLICY.
PLAN DETAILS, RISK CLASSIFICATION AND ADDITIONAL RATING ARE SHOWN ON THE NEXT
PAGE.
Page 3.0A
POLICY INFORMATION (CONTINUED) - POLICY 12 345 678
LIVES INSURED NO. 1 - JOHN M. DOE
NO. 2 - MARY C. DOE
POLICY NUMBER 12 345 678
PLAN FLEXIBLE PREMIUM SURVIVORSHIP VARIABLE LIFE INSURANCE
PAYABLE ON DEATH OF THE LAST-TO-DIE OF THE LIVES INSURED
NON-PARTICIPATING
FACE AMOUNT $250,000.00
DEATH BENEFIT OPTION 1
SEX NO. 1 - MALE
NO. 2 - FEMALE
RISK
CLASSIFICATION NO. 1 - NON-SMOKER,STANDARD CLASS
NO. 2 - NON-SMOKER,STANDARD CLASS
ADDITIONAL
RATING NO. 1 - NOT APPLICABLE
NO. 2 - NOT APPLICABLE
PAGE 3.0B
POLICY INFORMATION (CONTINUED) - POLICY 12 345 678
TABLE OF CHARGES
PREMIUM LOAD:
A CHARGE NOT TO EXCEED 15.0% OF EACH PREMIUM PAID IN THE FIRST TEN POLICY
YEARS.
MONTHLY ADMINISTRATION CHARGE:
A CHARGE NOT TO EXCEED $0.175 FOR EACH $1,000 OF FACE AMOUNT IN THE FIRST
POLICY YEAR.
MORTALITY AND EXPENSE RISKS CHARGE:
A CHARGE NOT TO EXCEED 0.100% IS DEDUCTED MONTHLY FROM EACH INVESTMENT
ACCOUNT VALUE FOR 15 POLICY YEARS AND THEN REDUCES TO 0.025% THEREAFTER.
THIS REDUCTION IN THE CHARGE IS GUARANTEED.
MONTHLY COST OF INSURANCE CHARGE:
SEE THE MONTHLY DEDUCTIONS SECTION OF THE POLICY VALUE PROVISION FOR
DETAILS. THE COST OF ANY SUPPLEMENTARY BENEFIT IS DESCRIBED IN THE
SUPPLEMENTARY BENEFIT PAGE ATTACHED TO THIS POLICY.
PAGE 3.1A
POLICY INFORMATION (CONTINUED) - POLICY 12 345 678
TABLE OF CHARGES (CONTINUED)
SURRENDER CHARGE:
A SURRENDER CHARGE WILL BE DEDUCTED FROM YOUR POLICY VALUE UNDER CERTAIN
CONDITIONS AND WILL REDUCE OVER TIME ACCORDING TO THE GRADING PERCENTAGES SHOWN
IN THE TABLE BELOW. SEE THE POLICY VALUE, CHANGING THE DEATH BENEFIT OPTION OR
FACE AMOUNT, SURRENDER AND WITHDRAWALS PROVISIONS FOR DETAILS.
THE SURRENDER CHARGE IS DETERMINED AS FOLLOWS:
FOR THE INITIAL FACE AMOUNT:
(I) 3.75 MULTIPLIED BY EACH $1,000 OF FACE AMOUNT; PLUS
(II) 82.5% OF THE SUM OF PREMIUMS PAID IN THE FIRST POLICY YEAR, UP TO THE
SURRENDER CHARGE PREMIUM LIMIT SHOWN ON PAGE 3.2.
FOR AN INCREASE IN FACE AMOUNT, THE SURRENDER CHARGE WILL BE NO GREATER THAN:
(I) THE FACTOR APPLICABLE TO THE YOUNGEST OF THE LIVES INSURED'S ATTAINED AGE
AT THE DATE OF THE INCREASE AS DETERMINED FROM THE TABLE ON PAGE 3.1C,
MULTIPLIED BY EACH $1,000 OF FACE AMOUNT INCREASE; PLUS
(II) THE SURRENDER CHARGE PREMIUM LIMIT FOR THE INCREASE.
TABLE OF GRADING PERCENTAGES DURING THE SURRENDER CHARGE PERIOD
(APPLIES TO THE INITIAL FACE AMOUNT AND SEPARATELY TO EACH
SUBSEQUENT FACE AMOUNT INCREASE)
SURRENDER AGE AND GRADING PERCENTAGE**
CHARGE PERIOD* 0-75 76 77 78 79 80+
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1 93% 92% 92% 91% 90% 90%
2 86% 85% 84% 83% 81% 80%
3 80% 78% 76% 75% 72% 70%
4 73% 71% 69% 66% 63% 60%
5 66% 64% 61% 58% 54% 50%
6 60% 57% 53% 50% 45% 40%
7 53% 50% 46% 41% 36% 30%
8 46% 42% 38% 33% 27% 20%
9 40% 35% 30% 25% 18% 10%
10 33% 28% 23% 16% 9% 0%
11 26% 21% 15% 8% 0%
12 20% 14% 7% 0%
13 13% 7% 0%
14 6% 0%
15 0%
* PERIODS SHOWN ARE AFTER END OF POLICY YEAR.
** AGE FOR THE INITIAL FACE AMOUNT REFERS TO THE ISSUE AGE OF THE
YOUNGEST OF THE LIVES INSURED UNDER THIS POLICY AT ISSUE; OR FOR A
SUBSEQUENT FACE AMOUNT INCREASE, AGE REFERS TO THE ATTAINED AGE OF
THE YOUNGEST OF THE LIVES INSURED AT THE TIME OF THE INCREASE.
PAGE 3.1B
POLICY INFORMATION (CONTINUED) - POLICY 12 345 678
TABLE OF CHARGES (CONTINUED)
TABLE OF GUARANTEED SURRENDER CHARGE FACTORS PER $1,000 OF FACE AMOUNT INCREASE
YOUNGEST OF THE LIVES
INSURED'S ATTAINED AGE FACTOR
---------------------- ------
38 AND UNDER 3.75
39 4.25
40 4.75
41 5.25
42 5.75
43 6.25
44 6.75
45 7.25
46 7.75
47 8.25
48 AND OLDER 8.50
PAGE 3.1C
POLICY INFORMATION (CONTINUED) - POLICY 12 345 678
TABLE OF VALUES
REFER TO YOUR POLICY PROVISIONS FOR DETAILS ON THE TERMS AND VALUES SHOWN IN
THIS TABLE.
SURRENDER CHARGE PREMIUM LIMIT $1,105.71
NO-LAPSE GUARANTEE PREMIUM $750.00
NO-LAPSE GUARANTEE PERIOD FIRST 20 POLICY
YEARS
MINIMUM FACE AMOUNT $250,000.00
MINIMUM FACE AMOUNT INCREASE OR DECREASE $50,000.00
TRANSFER FEE $25.00
(FOR TRANSFERS IN EXCESS OF 12 IN A POLICY YEAR)
ASSET ALLOCATION BALANCER CHARGE
CURRENT $0.00
MAXIMUM $15.00
DOLLAR COST AVERAGING CHARGE
CURRENT $0.00
MAXIMUM $5.00
FIXED ACCOUNT MAXIMUM TRANSFER PERCENTAGE 15%
FIXED ACCOUNT MAXIMUM TRANSFER AMOUNT $500.00
FIXED ACCOUNT RATE 3%
WITHDRAWAL TIER AMOUNT PERCENTAGE 10%
ANNUAL LOAN INTEREST CHARGED RATE 5.25%
MAXIMUM LOAN INTEREST CREDITED DIFFERENTIAL 1.25%
DEATH BENEFIT DISCOUNT FACTOR 1.0032737
FIRST YEAR GUARANTEED MONTHLY COST OF INSURANCE
RATE PER THOUSAND 0.000207
PAGE 3.2
POLICY INFORMATION (CONTINUED)
SUPPLEMENTARY BENEFITS
BENEFIT RETURN OF PREMIUM DEATH BENEFIT
LIFE INSURED NO. 1 - JOHN J. DOE
NO. 2 - MARY C. DOE
AGE AT
EFFECTIVE DATE NO. 1 - 35
NO. 2 - 35
SEX NO. 1 - MALE
NO. 2 - FEMALE
RISK CLASSIFICATION NO. 1 - NON-SMOKER, STANDARD CLASS
NO. 2 - NON-SMOKER, STANDARD CLASS
EFFECTIVE DATE MAY 1, 2002
BENEFICIARY AS DESIGNATED IN THE APPLICATION OR
SUBSEQUENTLY CHANGED
BENEFIT AMOUNT AS DETERMINED BY THE RETURN OF PREMIUM DEATH BENEFIT
COVERAGE PROVISION
MAXIMUM BENEFIT $100,000.00
AMOUNT
ADDITIONAL RATING NOT APPLICABLE
REFERENCE TO THE LIFE INSURED IN THE RETURN OF PREMIUM DEATH BENEFIT RIDER
REFERS TO THE PERSONS WHOSE LIFE IS COVERED BY THE POLICY AS REFERENCED ABOVE.
ALL PROVISIONS IN THE RIDER WHICH ARE BASED ON THE DEATH OF THE LIFE INSURED
WILL BE BASED ON THE DEATH OF THE LAST SURVIVOR OF THE PERSONS SO NAMED.
REFERENCE TO DEATH BENEFIT GUARANTEE IN THE RETURN OF PREMIUM DEATH BENEFIT
RIDER REFERS TO THE EXTENDED NO-LAPSE GUARANTEE.
Page 3.3
POLICY INFORMATION (CONTINUED) - POLICY 12 345 678
SUPPLEMENTARY BENEFITS
BENEFIT SUPPLEMENTARY INSURANCE OPTION
PAYABLE ON SECOND DEATH
LIFE INSURED NO.1 - JOHN M. DOE
NO.2 - MARY C. DOE
AGE AT
EFFECTIVE DATE NO.1 - 35
NO.2 - 35
EFFECTIVE DATE JANUARY 1, 2001
BENEFICIARY AS DESIGNATED IN THE APPLICATION OR
SUBSEQUENTLY CHANGED
BENEFIT AMOUNT $ 250,000.00
MINIMUM BENEFIT $ 250,000.00 OR 10% OF THE POLICY
FACE AMOUNT, WHICHEVER IS GREATER
SEX NO.1 - MALE
NO.2 - FEMALE
RISK
CLASSIFICATION NO.1 - NON-SMOKER, STANDARD CLASS
NO.2 - NON-SMOKER, STANDARD CLASS
ADDITIONAL
RATING NO.1 - NOT APPLICABLE
NO.2 - NOT APPLICABLE
Page 3.5
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
GUARANTEED MAXIMUM MONTHLY RATES PER $1,000
OF NET AMOUNT AT RISK
FOR THE LIVES INSURED UNDER THIS POLICY
DURATION MONTHLY DURATION MONTHLY DURATION MONTHLY
(POLICY RATE (POLICY RATE (POLICY RATE
YEARS) YEARS) YEARS)
1 0.000207 23 0.103964 45 3.953521
2 0.000665 24 0.122184 46 4.558705
3 0.001212 25 0.143495 47 5.253161
4 0.001864 26 0.168742 48 6.055917
5 0.002654 27 0.198793 49 6.980966
6 0.003598 28 0.235576 50 8.015102
7 0.004763 29 0.281020 51 9.149825
8 0.006128 30 0.336457 52 10.364422
9 0.007748 31 0.401980 53 11.654835
10 0.009612 32 0.478377 54 13.000300
11 0.011830 33 0.565716 55 14.412617
12 0.014426 34 0.664435 56 15.891977
13 0.017472 35 0.777709 57 17.459834
14 0.021034 36 0.911511 58 19.156860
15 0.025213 37 1.080715 59 21.054761
16 0.030130 38 1.268137 60 23.368153
17 0.036011 39 1.507613 61 26.517002
18 0.043094 40 1.795237 62 31.354662
19 0.051658 41 2.130491 63 39.595173
20 0.061825 42 2.513928 64 54.652603
21 0.073840 43 2.944356 65 83.333333
22 0.087887 44 3.421111
THE ABOVE RATES HAVE BEEN INCREASED FOR ANY ADDITIONAL RATING SHOWN IN THE
POLICY INFORMATION SECTION.
Page 4
DEFINITIONS
THE FOLLOWING TERMS HAVE SPECIFIC MEANINGS IN YOUR POLICY. PLEASE REFER TO THESE
DEFINITIONS AS YOU READ YOUR POLICY.
ADDITIONAL RATING is an increase in the Cost of Insurance Rate for any of the
Lives Insured who do not meet, at a minimum, our underwriting requirements for
the standard Risk Classification.
AGE means each of the Lives Insured's age on their birthday closer to the Policy
Date.
ATTAINED AGE on any date means the Age plus the number of whole years that have
elapsed since the Policy Date.
BUSINESS DAY is any day that the New York Stock Exchange is open for trading,
and trading is not restricted. The net asset value of the underlying shares of a
Sub-Account will be determined as of the end of each Business Day. We will deem
each Business Day to end at the close of regularly scheduled trading of the New
York Stock Exchange (currently 4:00 p.m. Eastern Time) on that day.
CASH SURRENDER VALUE equals the Policy Value less the Surrender Charge and any
outstanding Monthly Deductions due.
FIXED ACCOUNT is that part of the Policy Value which reflects the value you have
in our general account.
GROSS WITHDRAWAL is the amount of partial Net Cash Surrender Value you request
plus any Surrender Charge applicable to the withdrawal.
INVESTMENT ACCOUNT is that part of the Policy Value that reflects the value you
have in one of the Sub-Accounts.
ISSUE DATE is the date shown in the Policy Information section from which the
Suicide and Validity provisions are applied.
LIFE INSURED is the last-to-die of the Lives Insured.
LIVES INSURED are the persons whose lives are insured under this policy as set
out in the Policy Information section. References to the youngest of the Lives
Insured means the youngest person insured under this policy when it is first
issued.
LOAN ACCOUNT is that part of the Policy Value which reflects the value
transferred from the Fixed Account or the Investment Accounts as collateral for
a policy loan.
NET CASH SURRENDER VALUE is the Cash Surrender Value less the Policy Debt.
NET POLICY VALUE is the Policy Value less the value in the Loan Account.
NET PREMIUM is the gross premium paid less the Premium Load. It is the amount of
premium allocated to the Fixed Account and/or Investment Accounts.
POLICY DATE is the date shown in the Policy Information section from which
charges for the first Monthly Deduction are calculated. The Policy Date is used
to determine POLICY YEARS, POLICY MONTHS AND POLICY ANNIVERSARIES.
(continued)
Page 5
DEFINITIONS (continued)
POLICY DEBT as of any date equals (a) plus (b) plus (c) minus (d), where:
(a) is the total amount of loans borrowed as of such date;
(b) is the total amount of any unpaid loan interest charges which have been
borrowed against the policy on a Policy Anniversary;
(c) is any interest charges accrued from the last Policy Anniversary to the
current date; and
(d) is the total amount of loan repayments as of such date.
POLICY VALUE is the sum of the values in the Loan Account, the Fixed Account and
the Investment Accounts.
SEPARATE ACCOUNT refers to Separate Account A of The Manufacturers Life
Insurance Company (U.S.A.).
SERVICE OFFICE is the office that we designate to service this policy as shown
on the back cover of your policy.
SUB-ACCOUNT refers to one of the sub-accounts of the Separate Account.
SURRENDER CHARGE PERIOD is the period following the Issue Date of the policy or
following any increase in Face Amount during which we will assess surrender
charges. Surrender charges will apply during this period if you surrender the
policy, make a partial withdrawal, or if it terminates due to default.
SURRENDER CHARGE PREMIUM LIMIT is used to determine the Surrender Charge. The
Surrender Charge Premium Limit for the initial Face Amount is shown in the Table
of Values in the Policy Information section. You will be advised of the
Surrender Charge Premium Limit for any increase in Face Amount.
WITHDRAWAL TIER AMOUNT as of any date is the Net Cash Surrender Value at the
previous Policy Anniversary, multiplied by the Withdrawal Tier Amount Percentage
shown in the Table of Values in the Policy Information Section.
WRITTEN REQUEST is your request to us which must be in a form satisfactory to
us, signed and dated by you, and filed at our Service Office.
PAYMENT OF PREMIUMS
No insurance will take effect under this policy before we approve the
application and receive the initial premium. The minimum initial premium is
one-twelfth of the No-Lapse Guarantee Premium shown in the Table of Values in
the Policy Information section.
Subsequent premiums can be paid at any time at our Service Office, and in any
amount subject to the limits described below. On request, we will give you a
receipt signed by one of our officers.
You may pay premiums until the youngest of the Lives Insured reaches Attained
Age 100 or would have reached Attained Age 100 if living. At that time, Monthly
Deductions will cease and no further premiums may be paid. If there is a Policy
Debt under the policy, loan interest will continue to accrue daily as specified
under the Policy Loan Conditions provision.
LIMITS. Each premium payment after the first is subject to the following
limitations under Section 7702 of the Internal Revenue Code of 1986, or any
other equivalent section of the Code:
(a) we have the right to refuse or refund any premium payments that would
cause this policy to fail to qualify as life insurance under the Internal
Revenue Code; and
(b) we reserve the right to request that you provide us with satisfactory
evidence of insurability if a premium payment would result in an increase
in the Death Benefit that is greater than the increase in Policy Value.
Page 6
NO-LAPSE GUARANTEE
Your policy includes a No-Lapse Guarantee. The guarantee period applicable to
this policy is shown in the Table of Values in the Policy Information section.
During your No-Lapse Guarantee Period, if the Net Cash Surrender Value falls to
zero or below, your policy will not go into default provided it satisfies the
cumulative premium test.
CUMULATIVE PREMIUM TEST. The test will be performed at the beginning of any
Policy Month that your policy would otherwise be in default in the absence of
the No-Lapse Guarantee. Your policy will satisfy the test if the sum of the
premiums paid, less any Policy Debt, and less any Gross Withdrawals taken on or
before the date of the test, is equal to or greater than the sum of the monthly
No-Lapse Guarantee Premiums due from the Policy Date to the date of the test.
The No-Lapse Guarantee Premium is shown as an annualized amount in the Table of
Values in the Policy Information section.
This amount will change if any of the following changes occur under your policy:
(a) you add, terminate or change a Supplementary Benefit;
(b) you change the Death Benefit Option under your policy;
(c) there is a decrease in the Face Amount of insurance due to a partial
withdrawal;
(d) you change the Face Amount of insurance; or
(e) there is a change in the Risk Classification of any of the Lives Insured.
We will inform you of any change to the No-Lapse Guarantee Premium resulting
from any such change. The revised premium will be effective from the date of the
change. For the purpose of performing the cumulative premium test, we will use
the No-Lapse Guarantee Premium in effect as of the Policy Date up to the date of
the change, including any revised premium in effect as of the date of a prior
change.
POLICY TERMINATION
DEFAULT. Unless the policy has met the No-Lapse Guarantee requirements, it will
go into default if, at the beginning of any Policy Month, the Net Cash Surrender
Value would go to zero or below after we take the Monthly Deduction that is due
for that month.
GRACE PERIOD. We will allow 61 days from the date that the policy goes into
default, for you to pay the amount that is required to bring the policy out of
default. At least 30 days prior to the termination of coverage, we will send a
notice to your last known address, specifying the amount you must pay to bring
the policy out of default. If we have notice of a policy assignment on file at
our Service Office, we will also mail a copy of the notice of the amount due to
the assignee on record.
The amount required to bring the policy out of default is equal to (a) plus (b)
plus (c) where:
(a) is the amount necessary to bring the Net Cash Surrender Value to zero, if
it is less than zero, at the date of default; and
(b) is the Monthly Deduction due on the date of default, plus the next two
Monthly Deductions; and
(c) is the applicable Premium Load.
(continued)
Page 7
POLICY TERMINATION (continued)
If the policy is in the No-Lapse Guarantee Period, then the following amount, if
less than the amount stated above, will bring the policy out of default. This
amount is equal to (a) plus (b), where:
(a) is the amount, if any, necessary to satisfy the No-Lapse Guarantee
cumulative premium test at the date of default; and
(b) is the No-Lapse Guarantee Premium for the next two Policy Months.
If the amount necessary to bring the policy out of default has not been paid by
the end of the grace period, the policy will terminate.
TERMINATION DATE. This policy terminates on the earliest of the following
events:
(a) the end of the grace period for which you have not paid the amount
necessary to bring the policy out of default;
(b) surrender of the policy for its Net Cash Surrender Value; or
(c) the death of the Life Insured.
REINSTATEMENT
You can ask us to reinstate your policy only if it terminates at the end of a
grace period in which you did not make a required payment. The policy cannot be
reinstated if any of the Lives Insured die after the policy has terminated. You
can reinstate the policy if you:
(a) make a Written Request for reinstatement within 5 years after the date
your policy terminates;
(b) provide us with evidence of insurability satisfactory to us on the Lives
Insured or on the survivor(s) who were insured at the end of the Grace
Period; and
(c) pay a premium equal to the amount that was required to bring the policy
out of default immediately prior to termination, plus the amount needed to
keep the policy in force to the next scheduled date for payment of the
Planned Premium.
If we approve your request,
(a) the reinstatement date will be the later of the date we approve your
request or the date we receive the required payment at our Service Office;
and
(b) any Surrender Charges will be reinstated to the amount they were at the
date of default.
The Policy Value on the date of reinstatement, prior to the crediting of any Net
Premium paid on the reinstatement, will be equal to the Policy Value on the date
the policy terminated. If the policy is in a Surrender Charge Period when it
terminates, upon reinstatement the period will be the same as at the date of
default.
INSURANCE BENEFIT
The Insurance Benefit is payable when the Life Insured dies, but you must
provide us with proof when any of the Lives Insured die.
If the Life Insured dies while the policy is in force, we will pay the Insurance
Benefit to the beneficiary on receiving due proof of death of the last-to-die of
the Lives Insured, subject to the Age and Sex, Suicide and Validity provisions.
If the Life Insured dies after we receive a request from you to surrender the
policy, there will be no Insurance Benefit. We will pay the amount payable under
the Surrender And Withdrawals provision instead.
(continued)
Page 8
INSURANCE BENEFIT (continued)
INSURANCE BENEFIT. The Insurance Benefit payable is:
(a) the Death Benefit as described below; plus
(b) any amounts payable under any Supplementary Benefits that form part of the
policy; less
(c) the value of the Policy Debt as of the date of death.
If the Life Insured dies during a grace period, the Insurance Benefit described
above will be modified as follows:
(a) the Insurance Benefit will be reduced by any outstanding Monthly
Deductions due; and
(b) the Policy Value used in the calculation of the Death Benefit will be the
Policy Value as of the default date.
DEATH BENEFIT. The Death Benefit will depend on whether Death Benefit Option 1
or 2 is in effect on the date of death.
Under Option 1, the Death Benefit is the Face Amount of the policy at the date
of the Life Insured's death.
Under Option 2, the Death Benefit is the Face Amount of the policy, plus the
Policy Value at the date of the Life Insured's death.
MINIMUM DEATH BENEFIT. To ensure that the policy continues to qualify as life
insurance under the Internal Revenue Code, the Death Benefit will never be less
than the Minimum Death Benefit. The Minimum Death Benefit is equal to the Policy
Value at the date of death, multiplied by the Minimum Death Benefit Percentage
for the Attained Age of the youngest of the Lives Insured, or the Attained Age
such person would have reached if living. The Minimum Death Benefit Percentages
are shown in the Table of Minimum Death Benefit Percentages shown below.
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
ATTAINED AGE APPLICABLE PERCENTAGE
------------ ---------------------
40 and under 250%
45 215%
50 185%
55 150%
60 130%
65 120%
70 115%
75 105%
90 105%
95 and above 100%
To determine the Applicable Percentage, we will use the Attained Age of the
youngest of the Lives Insured, or the Attained Age such person would have
reached if living.
For ages not shown, the Applicable Percentage can be found by reducing the above
Applicable Percentages proportionately.
SIMULTANEOUS DEATH. If the Lives Insured die simultaneously or in circumstances
rendering it uncertain who is the Life Insured, the oldest of the Lives Insured
will be deemed to have been the Life Insured. No payment will be made on the
death of the other Lives Insured.
PAYMENT OF INSURANCE BENEFIT. We will pay the Insurance Benefit in one lump sum
with interest calculated from the date of the Life Insured's death to the date
of payment. The rate will be at the rate prescribed by the state. If the state
does not specify the interest rate, we will use the rate for insurance benefits
left on deposit with us.
Page 9
POLICY VALUE
INITIAL NET PREMIUM. We will allocate your initial Net Premium plus any earned
interest on the later of the date our underwriters approve issuance of the
policy or the date we receive the initial premium at our Service Office.
Interest will be credited as of the date we received the initial premium payment
at the rate of return then being earned on allocations to the Money Market
Trust. This initial allocation will become your Policy Value to which subsequent
Net Premiums will be allocated.
SUBSEQUENT NET PREMIUMS. As of the Business Day we receive your subsequent
premium payments at our Service Office, we will add your Net Premium to your
Policy Value. We will do this before we take any deductions due as of that
Business Day.
MONTHLY DEDUCTIONS. At the beginning of each Policy Month, a deduction is taken
from your policy to cover Monthly Administration Charges and the cost to provide
the insurance coverage.
The first Monthly Deduction is taken on the later of the date our underwriters
approve issuance of the policy or the date we receive at least the initial
premium at our Service Office.
Monthly Deductions are due until the Policy Anniversary on which the youngest of
the Lives Insured reaches or would have reached Attained Age 100 if living. If
the policy is in force on that date, it will remain in force without further
premium payments or Monthly Deductions, subject to the Policy Loan Conditions
provision.
The Monthly Deduction for any Policy Month is the sum of the following amounts
determined as of the beginning of that month:
(a) the Monthly Administration Charge shown in the Table Of Charges in the
Policy Information section;
(b) the Mortality and Expense Risks Charge shown in the Table Of Charges in
the Policy Information section;
(c) the monthly cost of any Supplementary Benefits you have added to your
policy; and
(d) the monthly Cost of Insurance for the Lives Insured.
Unless you have requested otherwise, we will take Monthly Deductions from the
Fixed Account and the Investment Accounts in the same proportion that the Policy
Value in each of these accounts bears to the Net Policy Value immediately prior
to the deduction.
The Cost of Insurance for a specific Policy Month is determined as the rate for
the Cost of Insurance for that month, as described below, multiplied by the net
amount at risk.
For Death Benefit Option 1, the net amount at risk is equal to (a) minus (b),
where:
(a) is the Death Benefit as of the first day of the Policy Month, divided by
the Death Benefit Discount Factor shown in the Table of Values in the
Policy Information section; and
(b) is the Policy Value as of the first day of the Policy Month after the
deduction of the monthly Cost of Insurance for the Lives Insured.
For Death Benefit Option 2, the net amount at risk is equal to the Face Amount
of insurance.
(continued)
Page 10
POLICY VALUE (continued)
The rates for the Cost of Insurance, as of the Policy Date and subsequently for
each Face Amount increase, are blended and based on the Lives Insured's Age,
Sex, Risk Classification and duration that the coverage has been in force. The
Cost of Insurance Rate shown in the Table of Values in the Policy Information
section is payable for the first Policy Year. After the first Policy Year, the
Cost of Insurance will generally increase on each Policy Anniversary. The Cost
of Insurance calculation will reflect any Additional Rating shown in the Policy
Information section.
We will re-determine Cost of Insurance rates from time to time on a basis that
does not discriminate unfairly within any class of lives insured. The Cost of
Insurance rates will never exceed those shown in the Table of Guaranteed Maximum
Cost of Insurance Rates on Page 4.
OTHER DEDUCTIONS. We will deduct a Surrender Charge if during the Surrender
Charge Period shown in the Policy Information section:
(a) you surrender the policy for its Net Cash Surrender Value;
(b) you make one or more partial withdrawals in a Policy Year totaling more
than the Withdrawal Tier Amount; or
(c) you do not pay an amount due at the end of a grace period, and the policy
terminates.
See the Surrender And Withdrawals provision for details.
POLICY VALUE COMPOSITION
Your Policy Value at any time is equal to the sum of the values you have in the
Loan Account, the Fixed Account and the Investment Accounts.
LOAN ACCOUNT VALUE. The amount you have in the Loan Account at any time equals:
(a) amounts transferred to it for loans or borrowed loan interest; plus
(b) interest credited to it; less
(c) amounts transferred from it for loan repayment.
For the details of the Loan Account see the Policy Loan Conditions provision.
FIXED ACCOUNT VALUE. The amount you have in the Fixed Account at any time
equals:
(a) Net Premiums allocated to it; plus
(b) amounts transferred to it; plus
(c) interest credited to it; less
(d) amounts deducted from it; less
(e) amounts transferred from it; less
(f) amounts withdrawn from it.
Interest will be credited to amounts in the Fixed Account at an effective annual
rate of no less than the Fixed Account Rate shown in the Table of Values in the
Policy Information Section. The actual interest rate used will be set by us from
time to time. For all transactions, interest is calculated from the date of the
transaction.
INVESTMENT ACCOUNT VALUE. The amount you have in an Investment Account at any
time equals the number of units in that Investment Account, multiplied by the
unit value of the corresponding Sub-Account at that time.
(continued)
Page 11
POLICY VALUE COMPOSITION (continued)
The number of units in an Investment Account at any time equals (a) minus (b),
where:
(a) is the number of units credited to the Investment Account because of:
(1) Net Premiums allocated to it; and
(2) amounts transferred to it; and
(b) is the number of units canceled from the Investment Account because of:
(1) amounts deducted from it;
(2) amounts transferred from it; and
(3) amounts withdrawn from it.
The number of units credited or canceled for a given transaction is equal to the
dollar amount of the transaction, divided by the unit value as of the Business
Day of the transaction. See the Unit Value Calculation section of the Separate
Account And Sub-Accounts provision for details on how unit values are
determined.
SEPARATE ACCOUNT AND SUB-ACCOUNTS
The Separate Account is authorized to invest in the shares of Manufacturers
Investment Trust, or another management investment company. Each Sub-Account of
the Separate Account purchases shares of a corresponding Fund of Manufacturers
Investment Trust or another management investment company.
FUND SUBSTITUTION. A Fund might, in our judgment, become unsuitable for
investment by a Sub-Account. This might happen because of a change of investment
policy; or a change in the applicable laws or regulations; or because the shares
are no longer available for investment; or for some other reason.
If a Fund becomes unsuitable for investment, we have the right to substitute
another Fund or another management investment company. Before doing this, we
would first seek, where required, approval from the Securities and Exchange
Commission and the Insurance Commissioner of the state in which this policy is
delivered.
To the extent permitted by applicable federal and state law, we also have the
right, without your approval, to:
(a) create new separate accounts;
(b) combine any two or more separate accounts including the Separate Account;
(c) make available additional Sub-Accounts investing in additional Funds of
Manufacturers Investment Trust, or another investment company;
(d) eliminate existing Sub-Accounts and stop accepting new allocations and
transfers into the corresponding Fund;
(e) operate the Separate Account as a management investment company under the
Investment Company Act of 1940 or in any other form permitted by law;
(f) de-register the Separate Account under the Investment Company Act of 1940;
(g) transfer assets between the Separate Account and other separate accounts;
and
(h) combine Sub-Accounts or to transfer assets in one Sub-Account to another
Sub-Account.
(continued)
Page 12
SEPARATE ACCOUNT AND SUB-ACCOUNTS (continued)
The investment objectives of a Sub-Account within the Separate Account will not
be changed materially without first filing the change with the Insurance
Commissioner of our state of domicile. We will inform you of any changes deemed
to be material.
UNIT VALUE CALCULATION. We will determine the unit values for each Sub-Account
as of the end of each Business Day. When we need to determine a Policy Value or
an amount after the end of a Business Day, or on a day that is not a Business
Day, we will do so as of the next Business Day.
The value of a unit of each Sub-Account was initially fixed at $10 for the first
Business Day that an amount was allocated, or transferred to the particular
Sub-Account. For any subsequent Business Day, the unit value for that
Sub-Account is obtained by multiplying the unit value for the immediately
preceding Business Day by the net investment factor for the particular
Sub-Account on such subsequent Business Day.
NET INVESTMENT FACTOR. The net investment factor for a Sub-Account on any
Business Day is equal to (a) divided by (b), where:
(a) is the net asset value of the underlying Fund shares held by that
Sub-Account as of the end of such Business Day before any policy
transactions are made on that day; and
(b) is the net asset value of the underlying Fund shares held by that
Sub-Account as of the end of the immediately preceding Business Day after
all policy transactions were made for that day.
We reserve the right to adjust the above formula for any taxes determined by us
to be attributable to the operations of the Sub-Account.
SEPARATE ACCOUNT ASSETS. The assets held in each Sub-Account are used to support
the Policy Values of Single Premium and Flexible Premium Variable Life Insurance
policies. The Separate Account will be used to fund only variable life insurance
benefits.
Income, gains and losses of the Separate Account are credited to, or charged
against, the applicable Sub-Accounts without regard to our other income, gains
and losses.
The assets of the Separate Account are our property. The part of the assets that
is equal to the Investment Account values in respect of all Single Premium and
Flexible Premium Variable Life Insurance policies will not be charged with
liabilities from any other business we conduct. We can transfer to our general
account, Separate Account assets in excess of the liabilities of the Separate
Account arising under the Single Premium and Flexible Premium Variable Life
Insurance policies supported by the Separate Account.
INVESTMENT OPTIONS
ALLOCATIONS. You may allocate Net Premiums to the Fixed Account or any of the
Investment Accounts. Unless you change the initial premium allocation specified
in your application for this policy, it will continue to apply to subsequent
premium payments.
Allocation percentages must be zero or a whole number not greater than 100. The
sum of the allocation percentages must equal 100. You may change the allocation
percentages by Written Request to our Service Office. The change will take
effect as of the date we receive your request at our Service Office. You may
also change your allocation percentages by telephone if a currently valid
authorization form is on file with us.
TRANSFERS. By Written Request you may transfer portions of your Policy Value
among the Investment Accounts and the Fixed Account. We will also permit
telephone transfers if a currently valid authorization form is on file with us.
(continued)
Page 13
INVESTMENT OPTIONS (continued)
Transfers are subject to the following restrictions:
(a) you can make as many transfers in a Policy Year as you want. There is no
charge for the first twelve transfers in any Policy Year. If you make more
than twelve transfers in any Policy Year, the Transfer Fee shown in the
Table of Values in the Policy Information section will apply to each
subsequent transfer in that Policy Year. We will consider all transfer
requests received on the same Business Day as one transfer;
(b) you may transfer the Policy Value from any of the Investment Accounts to
the Fixed Account without incurring the transfer charges in (a) above,
provided such transfers occur within:
(1) eighteen months after the Issue Date, as shown in the Policy
Information section of this policy; or
(2) the later of (i) or (ii) below:
(i) 60 days from the effective date of a material change in the
investment objectives of any of the Sub-Accounts; or
(ii) 60 days from the notification date of any such change.
(c) the maximum amount that you can transfer out of the Fixed Account in any
one Policy Year is limited to the greater of:
(1) the Fixed Account Maximum Transfer Percentage shown in the Table of
Values in the Policy Information section, multiplied by the value in
the Fixed Account at the previous Policy Anniversary; or
(2) the Fixed Account Maximum Transfer Amount shown in the Table of
Values in the Policy Information section.
(d) any transfer out of the Fixed Account may not involve a transfer to the
Investment Account for the Money Market Trust; and
(e) transfer privileges are subject to any restrictions that may be imposed by
the Trust.
ASSET ALLOCATION BALANCER TRANSFERS. If you elect this option, we will
automatically transfer amounts among your specified Investment Accounts in order
to maintain your designated percentage in each account. We will effect the
transfers six months after the Policy Date and each six month interval
thereafter.
The current and maximum Asset Allocation Balancer Charge for transfers under
this option are shown in the Table of Values in the Policy Information section
of this policy. We will provide you with 90 days written notice of any change in
the current amount.
When you change your premium allocation instructions, your Asset Allocation
Balancer will change so the two are identical. This change will automatically
occur unless you instruct us otherwise, or a Dollar Cost Averaging request is in
effect.
We reserve the right to cease to offer this option as of 90 days after we send
you written notice.
DOLLAR COST AVERAGING. If you elect this option, we will automatically transfer
amounts each month from one Investment Account to one or more of the other
Investment Accounts or the Fixed Account. You must select the amount to be
transferred and the accounts.
If the value in the Investment Account from which the transfer is being made is
insufficient to cover the transfer amount, we will not effect the transfer and
we will notify you.
(continued)
Page 14
INVESTMENT OPTIONS (continued)
The current and maximum Dollar Cost Averaging Charge for transfers under this
option are shown in the Table of Values in the Policy Information section of
this policy. We will provide you with 90 days written notice of any change in
the current amount.
We reserve the right to cease to offer this option as of 90 days after we send
you written notice.
POLICY LOAN CONDITIONS
At any time while this policy is in force and has an available loan value, you
can get a loan by Written Request. We may require a loan agreement from you as
the policy is the only security for the loan.
AVAILABLE LOAN VALUE. The available loan value on any date is 90% of the Net
Cash Surrender Value.
LOAN ACCOUNT. When you take out a loan, or when loan interest charges are
borrowed, we will do a transfer from the Fixed Account and/or one or more of the
Investment Accounts into the Loan Account. Amounts we transfer into the Loan
Account cover the loan principal plus loan interest due to the next Policy
Anniversary.
A Loan Sub-Account exists for each Investment Account and for the Fixed Account.
Amounts transferred to the Loan Account are allocated to the appropriate Loan
Sub-Account to reflect the account from which the transfer was made.
You may tell us how much of the amount to be transferred to the Loan Account you
wish to allocate to your value in the Fixed Account and each of the Investment
Accounts. If you do not tell us, we will allocate the amounts to be transferred
in the same proportion that your value in the Fixed Account and the Investment
Accounts bears to the Net Policy Value.
When an amount to be transferred is allocated to an Investment Account, we will
redeem units of that Investment Account sufficient in value to cover the
allocated amount. These transfers do not count as a transfer for the purposes of
the Transfers section of the Investment Options provision.
Interest is credited to the Loan Account and interest is also charged on the
Policy Debt, as described under the Loan Interest Charged and the Loan Interest
Credited sections of this provision.
LOAN INTEREST CHARGED. Interest will accrue daily on loans. In the event that
you do not pay the Loan Interest Charged in any Policy Year, it will be borrowed
against the policy and added to the Policy Debt in arrears at the Policy
Anniversary. We will allocate the amount borrowed for interest payment in the
same proportion that your value in the Fixed Account and the Investment Accounts
bears to the Net Policy Value as of the Policy Anniversary.
Loan interest will continue to be charged if there is an outstanding loan when
Monthly Deductions and premium payments cease at the youngest of the Lives
Insured's Attained Age 100. The policy will go into default at any time the
Policy Debt exceeds the Policy Value. At least 61 days prior to termination, we
will send a notice to your last known address. If you had filed a notice of
assignment with us, we will also send a copy of the notice to the last known
address of the assignee on record. Payment of the loan interest during the
61-day grace period will bring the policy out of default.
The rate of interest charged is fixed at the effective Annual Loan Interest
Charged Rate shown in the Table of Values in the Policy Information section.
LOAN INTEREST CREDITED. Interest will accrue daily to amounts in the Loan
Account. The effective annual Loan Interest Credited Rate is the difference
between the Loan Interest Charged Rate and the Loan Interest Credited
Differential.
(continued)
Page 15
POLICY LOAN CONDITIONS (continued)
The Maximum Loan Interest Credited Differential is shown in the Table of Values
in the Policy Information section.
In no event will the Loan Interest Credited rate be less than the Fixed Account
Rate shown in the Table of Values in the Policy Information section.
LOAN REPAYMENT. You may repay the Policy Debt in whole or in part at any time
prior to the death of the Life Insured, and while the policy is in force. When
you repay a loan, we credit the amount to the Loan Account, and make a transfer
to the Fixed Account and/or the Investment Accounts.
We will allocate loan repayments as follows:
(a) first to the Fixed Account, until the associated Loan Sub-Account is
reduced to zero;
(b) then to each Investment Account in the same proportion that the value in
the corresponding Loan Sub-Account bears to the value of the Loan Account.
While a loan exists, we will treat the amounts you pay as premiums, unless you
request in writing that they be treated as loan repayments. However, when a
portion of the Loan Account amount is allocated to the Fixed Account, where
permitted by state law, we reserve the right to require that amounts you pay be
treated as loan repayments.
CHANGING THE DEATH BENEFIT OPTION OR THE FACE AMOUNT
You may change your Death Benefit Option or your Face Amount of insurance by
Written Request. Such changes are subject to the general conditions of this
provision and the conditions described in the section for each type of change.
The following general conditions apply to changes in Death Benefit Option or
Face Amount of insurance:
(a) changes may be made once in each Policy Year after the first Policy
Anniversary;
(b) changes will take effect as of the beginning of the next Policy Month
following the date we approve the request; and
(c) we reserve the right to limit any changes that would cause this policy to
fail to qualify as life insurance under the Internal Revenue Code.
A Death Benefit Option Change, or a Face Amount Change will cause a change in
the No-Lapse Guarantee Premium. For increases in Face Amount the Surrender
Charge Premium Limit will also change. An additional Surrender Charge Premium
Limit will be associated only with the new Face Amount if it has been added
after restoring prior decreases.
We will inform you of the new premium amounts at the time of the change.
CHANGE FROM DEATH BENEFIT OPTION 1 TO DEATH BENEFIT OPTION 2.
The Face Amount of insurance after the change from Option 1 to Option 2 will be
(a) minus (b), where:
(a) is the Face Amount of insurance immediately before the change; and
(b) is the Policy Value as of the effective date of the change.
We will not allow the change in Death Benefit Option if it would cause the Face
Amount to decrease below the Minimum Face Amount shown in the Table of Values in
the Policy Information section.
(continued)
Page 16
CHANGING THE DEATH BENEFIT OPTION OR THE FACE AMOUNT (continued)
CHANGE FROM DEATH BENEFIT OPTION 2 TO DEATH BENEFIT OPTION 1.
The Face Amount of insurance after the change from Option 2 to Option 1 will be
(a) plus (b), where:
(a) is the Face Amount of insurance immediately before the change; and
(b) is the Policy Value as of the effective date of the change.
We will not increase the Surrender Charge because of the increase in the Face
Amount of insurance resulting from this change.
DECREASE IN FACE AMOUNT. The Minimum Face Amount Decrease is shown in the Table
of Values in the Policy Information section. We may change this amount as of 90
days after we send you written notice of the change. We will not allow a
decrease if it would cause the Face Amount to go below the Minimum Face Amount
shown in the Table Of Values in the Policy Information section.
When you request a decrease in the Face Amount of insurance, we will reduce the
Face Amount in the following order:
(a) the amounts of insurance provided by any increases you may have requested
to the policy Face Amount, starting with the most recent increase until
all such increases are reduced; then
(b) the initial Face Amount of the policy.
INCREASE IN FACE AMOUNT. The Lives Insured shown in the Policy Information
Section must all be alive when you request an increase in the Face Amount of
insurance. You must provide us with evidence of insurability on the Lives
Insured that is satisfactory to us. The Minimum Face Amount Increase is shown in
the Policy Information section. We may change this amount as of 90 days after we
send you written notice of the change.
We reserve the right to refuse a Face Amount increase if the Attained Age of any
of the Lives Insured at the date the increase would be effective is greater than
the maximum issue age for new policies at that time.
The Face Amount of insurance will increase in the following order:
(a) we will restore the Face Amount reduced by the most recent decrease first;
followed by
(b) the next most recent decrease until all decreases are restored; then
(c) we will add the new Face Amount of insurance.
There will be no new Surrender Charge associated with the restoration of prior
decreases under (a) or (b) above. However, there will be a new Surrender Charge
associated with the new Face Amount under (c). We will inform you of any new
Surrender Charges at the time of the increase.
You will not necessarily have to pay additional premium with an increase in Face
Amount, but the new Surrender Charge may require an additional premium payment
to prevent the policy from going into default.
For Surrender Charge purposes, the premiums attributable to the new Face Amount
will not exceed the Surrender Charge Premium Limit associated with that
increase.
SURRENDER AND WITHDRAWALS
SURRENDER OF THE POLICY. You may surrender this policy for its Net Cash
Surrender Value at any time prior to the death of the Life Insured. We will
determine the Net Cash Surrender Value as of the end of the Business Day on
which we receive the policy and your Written Request for surrender at our
Service Office. After we receive your surrender request, no insurance will be in
force.
(continued)
Page 17
SURRENDER AND WITHDRAWALS (continued)
If you surrender your policy during the Surrender Charge Period, we will deduct
a Surrender Charge from your Policy Value in calculating the Net Cash Surrender
Value. If you have increased the Face Amount of insurance, the Surrender Charge
will be the sum of the Surrender Charge for the initial Face Amount plus the
Surrender Charge for each increase as shown in the Policy Update page amending
the policy. No additional Surrender Charge will be imposed on any portion of an
increase in Face Amount that restores a prior decrease.
PARTIAL NET CASH SURRENDER VALUE WITHDRAWAL. You may request a partial Net Cash
Surrender Value withdrawal once each Policy Month after the first Policy
Anniversary. You may make this request provided there is a Net Cash Surrender
Value for the policy. The partial Net Cash Surrender Value withdrawal will be
done as of the end of the Business Day on which we receive your Written Request.
You may specify the accounts from which we should make the partial Net Cash
Surrender Value withdrawal. If we do not receive such instructions, we will make
the withdrawal in the same proportion that the value in the Fixed Account and
the Investment Accounts bears to the Net Policy Value.
If the sum of partial Net Cash Surrender Value withdrawals in any Policy Year
during the Surrender Charge Period is greater than the Withdrawal Tier Amount
for that year, we will deduct a pro-rata Surrender Charge from the Policy Value.
The portion of a partial Net Cash Surrender Value withdrawal that is considered
above the Withdrawal Tier Amount includes all previous partial Net Cash
Surrender Value withdrawals that have occurred in the current Policy Year.
The pro-rata charges deducted will equal the sum of the pro-rata Surrender
Charge for the initial Face Amount and any previous increase in Face Amount.
This amount is (a) divided by (b), multiplied by (c), where:
(a) is the amount of the partial Net Cash Surrender Value withdrawal in excess
of the Withdrawal Tier Amount;
(b) is the Net Cash Surrender Value prior to the withdrawal, in excess of the
Withdrawal Tier Amount; and
(c) is the current total Surrender Charge prior to the withdrawal.
We will allocate the deduction of the pro-rata charges for the withdrawal to the
Fixed Account and the Investment Accounts in the same proportion that the
withdrawal from each account bears to the total withdrawal.
If the withdrawal plus the pro-rata Surrender Charge allocated to a particular
account are greater than the value of that account, we will reduce the portion
of the withdrawal allocated to that account. We will reduce the allocated
portion so that the withdrawal plus the pro-rata charges allocated to the
account equal the value of the account.
If Death Benefit Option 1 is in effect at the time of the withdrawal, the Face
Amount will be reduced by:
(a) the amount of the withdrawal plus the pro-rata Surrender Charge, if at the
time of the withdrawal the Death Benefit equals the Face Amount; otherwise
(b) the amount, if any, by which the withdrawal plus the pro-rata Surrender
Charge exceeds the difference between the Death Benefit and the Face
Amount.
(continued)
Page 18
SURRENDER AND WITHDRAWALS (continued)
If there has been a prior increase in Face Amount, then the Face Amount will be
decreased in the same order as if you had requested the decrease. See the
Decrease in Face Amount section of the Changing The Death Benefit Option Or The
Face Amount provision. Withdrawals will be limited if they would otherwise cause
the Face Amount to fall below the Minimum Face Amount shown in the Table of
Values in the Policy Information section.
Each time we deduct the pro-rata Surrender Charge for a partial withdrawal, we
will reduce the remaining Surrender Charge in the same proportion that the
Surrender Charge deducted bears to the total Surrender Charge immediately before
the partial withdrawal.
Partial Net Cash Surrender Value withdrawals do not affect the Face Amount of
your policy if Death Benefit Option 2 is in effect.
RIGHT TO POSTPONE PAYMENT OF BENEFITS
We reserve the right to postpone the payment of Net Cash Surrender Values,
partial Net Cash Surrender Value withdrawals, policy loans and the portion of
the Insurance Benefit that depends on Investment Account values, for any period
during which:
(a) the New York Stock Exchange (Exchange) is closed for trading (other than
customary week-end and holiday closings), or trading on the Exchange is
otherwise restricted;
(b) an emergency exists as defined by the Securities and Exchange Commission
(SEC), or the SEC requires that trading be restricted; or
(c) the SEC permits a delay for the protection of policyholders.
We also reserve the right to postpone payments for up to six months if such
payments are based on values that do not depend on the investment performance of
the Sub-Accounts.
In addition, we may deny transfers under the circumstances stated in (a), (b)
and (c) above, and in the Transfers section of the Investment Options provision.
RIGHT TO CANCEL INCREASES
If you request an increase in Face Amount which results in a new Surrender
Charge, you have the same rights to cancel the increase as described on the
front cover of this policy, under the Right to Return Policy. If canceled, the
Policy Value and the Surrender Charge will be recalculated to the amounts they
would have been, had the increase not taken place. You may request a refund for
all or a portion of premiums paid during this period. Upon payment of the
refund, we will recalculate the Policy Value and the Surrender Charge to the
amounts they would have been, had the premiums not been paid.
SUICIDE
If within two years after the Issue Date any of the Lives Insured die by
suicide, while sane or insane, the policy will terminate and our liability will
be limited to:
(a) the premiums paid; less
(b) any partial Net Cash Surrender Value withdrawals; and less
(c) the Policy Debt.
If any of the Lives Insured die by suicide, while sane or insane, within two
years after the effective date of an increase in Face Amount, we will credit the
amount of any Monthly Deductions taken for the increase and reduce the Face
Amount to what it was prior to the increase. If the last death is by suicide,
the Death Benefit for that increase will be limited to the Monthly Deductions
taken for the increase.
We reserve the right under this provision to obtain evidence of the manner and
cause of death of the Lives Insured.
Page 19
BENEFICIARY
The following four sections will apply unless there is a beneficiary appointment
in force that provides otherwise.
BENEFICIARY CLASSIFICATION. You can appoint beneficiaries for the Insurance
Benefit in three classes: primary, secondary and final. Beneficiaries in the
same class will share equally in the Insurance Benefit payable to them.
PAYMENT TO BENEFICIARIES. We will pay the Insurance Benefit:
(a) to any primary beneficiaries who are alive when the Life Insured dies; or
(b) if no primary beneficiary is then alive, to any secondary beneficiaries
who are then alive; or
(c) if no primary or secondary beneficiary is then alive, to any final
beneficiaries who are then alive.
CHANGE OF BENEFICIARY. Until the Life Insured's death you can change the
beneficiary by Written Request unless you make an irrevocable designation. We
are not responsible if the change does not achieve your purpose. The change will
take effect as of the date you signed such request. It will not apply to any
payments we made or any action we may have taken before we received your Written
Request.
DEATH OF BENEFICIARY. If no beneficiary is alive when the Life Insured dies, the
Insurance Benefit will be payable to you; or to your estate if you are the Life
Insured. Unless otherwise provided, if a beneficiary dies before the seventh day
after the death of the Life Insured, we will pay the Insurance Benefit as if the
beneficiary had died before the Life Insured.
OWNERSHIP AND ASSIGNMENT
Until the Life Insured's death, without the consent of any beneficiary, except
an irrevocable beneficiary, you as owner can:
(a) receive any amount payable under your policy;
(b) exercise all rights and privileges granted by the policy; and
(c) assign the policy.
An assignment does not bind us until we receive it in writing at our Service
Office. We are not responsible for its validity or its effects. It should be
filed with us in duplicate. We will return a copy.
CHANGE OF OWNER. Until the Life Insured's death, the owner can change the
ownership of the policy by Written Request. The change will take effect as of
the date you signed the Written Request. It will not apply to any payments we
made or any action we may have taken before we received your Written Request.
TRUSTEE OWNER. Should the owner be a trustee, payment to the trustee(s) of any
amount to which the trustee(s) is (are) entitled under the policy, either by
death or otherwise, will fully discharge us from all liability under the policy
to the extent of the amount so paid.
JOINT OWNERSHIP. Two or more owners will own the policy as joint tenants with
right of survivorship, unless otherwise requested on the application or in any
subsequent assignment of the policy. On death of any of the owners, the deceased
owner's interest in the policy passes to the surviving owner(s).
Any rights and privileges that may be exercised by the owner, may be exercised
only with the consent of all joint owners.
(continued)
Page 20
OWNERSHIP AND ASSIGNMENT (continued)
SUCCESSOR OWNER. Upon the owner's death during the lifetime of the Lives
Insured, a named successor owner will, if then living, have all the owner's
rights and interest in the policy. Until the Life Insured's death, the owner,
without the consent of any revocable beneficiary or any successor owner, can
cancel or change the designation of successor owner. This may be done from time
to time by agreement in writing with us.
PROTECTION AGAINST CREDITORS
If permitted by state law, all payments shall be exempt from the debts and
contracts of the owners and beneficiaries, and from seizure by court order.
CURRENCY AND PLACE OF PAYMENT
All payments to or by us will be in U.S. currency. We will make payments from
our Service Office. We may require proof that the person claiming any payment is
entitled to it.
CONTRACT
The policy, application, supplementary benefits, and any endorsements form your
whole contract. A copy of the application is attached to the policy and deemed a
part of it. We will not be bound by any statement that is not in the application
or the policy.
Only our President or one of our Vice-Presidents can agree to amend or modify
the policy or waive any of its provisions. Any change must be in writing.
Statements made by any of the Lives Insured are representations, not warranties,
unless fraud is involved. We will not use any statement by you or any of the
Lives Insured to deny a claim, unless it is written in the application or any
supplement to the application.
VALIDITY
We have the right to contest the validity of this policy based on material
misstatements made in the initial application or an application for policy
change that requires evidence of insurability. However, we cannot contest the
validity of your policy after it has been in force during the lifetime of the
Lives Insured for two years from the Issue Date.
We cannot contest the validity of an applied for increase in Face Amount or the
addition of a Supplementary Benefit after such increase or addition has been in
force during the lifetime of the Lives Insured for two years from the date of
such increase or addition.
We can contest after two years if the policy has been reinstated and has been in
force during the lifetime of the Lives Insured for less than two years from the
reinstatement date. If this is the case, we can only contest the validity in
respect of any fact material to the reinstatement that was misrepresented.
NON-PARTICIPATING
Your policy is non-participating. It does not earn dividends.
AGE AND SEX
If the Age or Sex of any of the Lives Insured was misstated in the application,
we will change the Face Amount of insurance. The new Face Amount will be
determined so that the Death Benefit will be that which the most recent Cost of
Insurance deduction would have purchased for the correct Age and Sex.
Page 21
HOW VALUES ARE COMPUTED
We provide Cash Surrender Values that are at least equal to those required by
law. A detailed statement of the method of computing the values of this policy
has been filed with the insurance department of the state in which this policy
is delivered.
We use the Commissioners 1980 Standard Ordinary Smoker/Non-Smoker Mortality
Table in computing reserves, and in determining Maximum Cost of Insurance Rates.
Values relating to amounts in the Fixed Account are computed at the Fixed
Account Rate shown in the Table of Values in the Policy Information section.
ANNUAL STATEMENT
Within 30 days after each Policy Anniversary, we will send you a report showing:
(a) the Death Benefit;
(b) the Policy Value;
(c) the current allocation of money in the Fixed Account, the Loan Account and
each of the Investment Accounts;
(d) the value of the units in each chosen Investment Account;
(e) any Loan Account balance and loan interest charged since the last report;
(f) the premiums paid and policy transactions for the year; and
(g) any further information required by law.
TAX CONSIDERATIONS
It is the intent that this policy be considered as life insurance for tax
purposes, to comply with Section 7702 of the Internal Revenue Code of 1986, or
any other equivalent section of the code. We reserve the right to limit the
amount of premiums paid for this policy, or to make any other reasonable
adjustments to the terms or conditions of this policy if it becomes necessary to
allow it to qualify as life insurance.
This provision should not be construed to guarantee that the policy will be
treated as life insurance or that the tax treatment of life insurance will never
be changed by the future actions of any tax authority.
Page 22
ENDORSEMENT
PRO-RATA SURRENDER CHARGES ON FACE AMOUNT DECREASES
This endorsement has been added to and made part of the policy to which it is
attached. Should any provisions in your policy conflict with this endorsement,
the provisions of this endorsement will prevail.
This endorsement takes effect on the Policy Date shown in the Policy Information
section of your policy.
It amends your policy when you decrease the Face Amount of Insurance, to allow
for the deduction of a pro-rata Surrender Charge during the Surrender Charge
Period. The Surrender Charge Period is shown in the Policy Information section
of your policy.
PRO-RATA SURRENDER CHARGE. If you decrease the Face Amount of insurance during
the Surrender Charge Period, we will deduct a pro-rata Surrender Charge from the
Policy Value. The pro-rata Surrender Charge deducted for the initial Face Amount
or for any previous increase in Face Amount will equal (a) divided by (b),
multiplied by (c), where:
(a) is the amount of the decrease in Face Amount or previous increase in Face
Amount;
(b) is the amount of the corresponding initial Face Amount or previous
increase in a Face Amount, prior to the decrease; and
(c) is the current total Surrender Charge for the corresponding initial Face
Amount or previous increase in Face Amount, immediately prior to the
decrease.
We will allocate the deduction of the pro-rata charges for the decrease to the
Fixed Account and the Investment Accounts in the same proportion that the value
in each account bears to the Net Policy Value.
A decrease in Face Amount caused by a change from Death Benefit Option 1 to 2
will not incur the pro-rata Surrender Charge described above.
Each time we deduct the pro-rata Surrender Charge for a Face Amount decrease, we
will reduce the remaining Surrender Charge in the same proportion that the
Surrender Charge deducted bears to the total Surrender Charge immediately before
the Face Amount decrease.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
/s/ John Des Prez III
President
ENDORSEMENT
UNISEX
In order to provide insurance on a unisex basis, all references to the sex of
the Lives Insured in this policy and in any forms attached to it are hereby
withdrawn. This policy is further amended as described below.
AFFECTED PROVISION AMENDMENT
Age and Sex Reference to the Lives Insured's sex
does not apply. No change will be made
because of a misstatement of sex.
How Values are Computed The Commissioners 1980 Standard Ordinary
Smoker/Non-Smoker Mortality Table D is
used for determining the Guaranteed
Maximum Cost of Insurance Rates.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
/s/ John Des Prez III
President
SUPPLEMENTARY BENEFIT
RETURN OF PREMIUM DEATH BENEFIT
This benefit is part of the policy to which it is attached. Should any
provisions in the policy conflict with this benefit, the provisions of this
benefit will prevail.
The life insured for this benefit is the same person who is the life insured
under your policy, as shown in the Policy Information page for this benefit.
EFFECTIVE DATE. This benefit is effective on the Effective Date shown in the
Policy Information page for this benefit provided that Death Benefit Option 1 is
in effect under the policy on that date.
BENEFIT. This benefit provides an additional insurance amount, payable on the
death of the life insured. On receiving due proof that the life insured died
while the benefit is in force, we will pay the Benefit Amount to the same
beneficiary and in the same manner as the proceeds payable under the policy. The
Benefit Amount will not be payable if death occurs after the first two Policy
Years while the policy is being kept in force under the No-Lapse Guarantee
provision.
BENEFIT AMOUNT. The benefit is equal to the amount of the Return of Premium
Death Benefit coverage as described below. The Maximum Benefit Amount is shown
in the Policy Information page for this benefit.
RETURN OF PREMIUM DEATH BENEFIT COVERAGE. The amount of the Return of Premium
Death Benefit coverage is determined as follows:
(a) it has an initial value equal to the initial premium paid;
(b) each subsequent premium will increase the coverage at the time of premium
payment by an amount equal to the premium paid;
(c) each partial Net Cash Surrender Value Withdrawal taken under the policy
will reduce the coverage at the time of withdrawal by an amount equal to
the withdrawal plus any applicable Surrender Charge, except that the
coverage will not reduce to less than zero; and
(d) each request for a decrease in the Benefit Amount will reduce the coverage
on the effective date of the decrease by the amount of the decrease
requested.
CESSATION OF INCREASES. Increases in the Return of Premium Death Benefit
coverage will cease at the earlier of:
(a) the beginning of the Policy Month coincident with or next following the
date we approve your Written Request for a change to policy Death Benefit
Option 2; or
(b) the date as of which Monthly Deductions cease and no further premium can
be paid under the policy.
After increases cease, we will not take into account any more premiums paid in
determining the amount of the Return of Premium Death Benefit coverage.
DECREASE IN BENEFIT AMOUNT. You may make a Written Request to decrease the
Benefit Amount. The decrease will take effect at the beginning of the Policy
Month coincident with or next following the date we approve the request. The
Return of Premium Death Benefit coverage will be reduced by the amount of the
requested decrease. Decreases in the Benefit Amount are not subject to pro-rata
Surrender Charges.
PARTIAL NET CASH SURRENDER VALUE WITHDRAWALS. If you make a Written Request for
a partial Net Cash Surrender Value withdrawal under the policy while this
benefit is in force, we will process the withdrawal so that it first reduces the
amount of the Return of Premium Death Benefit coverage. Any withdrawals will be
subject to a pro-rata Surrender Charge in accordance with the Surrender and
Withdrawals provision of the policy. Also, the Face Amount of insurance under
the policy will be reduced by the amount by which the withdrawal plus the
Surrender Charge exceeds the amount of the Return of Premium Death Benefit
coverage.
COST OF INSURANCE. The rates for the Cost of Insurance are based on the life
insured's Age, Sex, Risk Classification, and the duration that the Return of
Premium Death Benefit coverage has been in force. The rates for the Cost of
Insurance under this benefit will always be less than or equal to the rates for
the cost of insurance under the policy. We will re-determine Cost of Insurance
rates from time to time on a basis that does not discriminate unfairly within
any class of life insured. The Cost of Insurance rate per dollar is the rate per
$1000 divided by 1000.
(continued)
Page 1
SUPPLEMENTARY BENEFIT
RETURN OF PREMIUM DEATH BENEFIT
The Cost of Insurance is charged monthly as part of the Monthly Deductions for
the policy and ceases when Monthly Deductions cease under the policy. The
monthly cost is equal to (a) multiplied by (b), where:
(a) is the rate per dollar for the Cost of Insurance for that month divided by
the result of subtracting the per dollar Cost of Insurance rate for that
month from 1.
(b) is the Return of Premium Face Amount at the beginning of the Policy Month
divided by the Death Benefit Discount Factor shown in the Policy
Information section.
Solely for purposes of determining the monthly cost for this benefit, at the
beginning of any Policy Month in which the Policy Value exceeds the total of the
Face Amount of your policy and the Benefit Amount payable under any applicable
Supplementary Benefit on the life insured, we will consider the Return of
Premium Death Benefit coverage amount to be reduced by such excess.
The Cost of Insurance calculation will reflect any Additional Rating Shown in
the Policy Information section. The monthly Cost of Insurance rates per $1000
will never exceed those shown in the Table of Guaranteed Maximum Cost of
Insurance Rates on Page 4 plus any Additional Rating.
NO-LAPSE GUARANTEE. The No-Lapse Guarantee in your policy applies to this
benefit during the first two Policy Years only. Following this period, at any
time the policy is being kept in force under the No-Lapse Guarantee provision
the following conditions will apply to this benefit:
(a) cost of Insurance deductions will be suspended until the Net Cash
Surrender Value of the policy is greater than zero;
(b) the Benefit Amount will be excluded from the policy Death Benefit. The
Death Benefit will be based on the Face Amount of the policy only; and
(c) satisfactory evidence of insurability will be required to reactivate the
Return of Premium Benefit Amount after it has been excluded from the
policy Death Benefit.
DEATH BENEFIT GUARANTEE. If the Death Benefit Guarantee is included in your
policy, it does not apply to this benefit.
VALIDITY. We cannot contest the validity of this benefit after it has been in
force during the life insured's lifetime for two years from the Effective Date
of this benefit.
We can contest after two years if evidence of insurability is provided to
reactivate the Benefit Amount. In this case we can contest within 2 years from
the reactivation date in respect of any material evidence that was
misrepresented.
SUICIDE. If the life insured dies by suicide, while sane or insane, within two
years after the Effective Date of this benefit, this benefit will terminate and
we will pay only the amount of Monthly Deductions charged for the benefit.
TERMINATION. This benefit terminates at the same time as the policy. It cannot
be terminated prior to the policy.
This benefit may be reinstated with the policy, subject to the same conditions
that apply for reinstating the policy. Upon reinstatement, the amount of the
Return of Premium Death Benefit coverage will be equal to the amount at
termination, plus the amount of the premium paid for reinstatement.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
/s/ John Des Prez III
President
Page 2
SUPPLEMENTARY BENEFIT
SUPPLEMENTARY INSURANCE OPTION
TERM LIFE INSURANCE
PAYABLE ON SECOND DEATH
This benefit is part of your policy. Except where the benefit provides
otherwise, it is subject to all the provisions of your policy.
EFFECTIVE DATE. The effective date for this benefit is shown in the Policy
Information section.
LIFE INSURED is the last-to-die of the Lives Insured.
LIVES INSURED are the persons whose lives are insured under your policy, as
shown in the Policy Information section.
BENEFIT. This benefit provides an additional insurance amount which is level
term life insurance. On receiving due proof that the Life Insured died while the
benefit was in force, we will pay the benefit amount to the same beneficiary and
in the same manner as the proceeds payable under your policy.
BENEFIT AMOUNT. The Benefit Amount is shown in the Policy Information section.
CHANGING THE BENEFIT AMOUNT. The Benefit Amount can be increased or decreased
only when a corresponding change occurs under your policy resulting from your
Written Request to change the policy Face Amount. The change in the Benefit
Amount will be subject to the following:
(a) the amount of the change will be in the same percentage as the change in
the Face Amount under your policy;
(b) the change will be subject to the same policy conditions that apply to
changing the Face Amount of your policy;
(c) the change will take effect on the same effective date as the Face Amount
change under your policy; and
(d) a decrease in the Face Amount of your policy could cause this benefit to
terminate as described in the Termination section below.
MINIMUM DEATH BENEFIT. The Minimum Death Benefit provision under your policy is
deleted and replaced by the following:
To ensure that the policy continues to qualify as life insurance under the
Internal Revenue Code, the sum of the Death Benefit under your policy and the
Benefit Amount payable under the Supplementary Insurance Option will never be
less than the Minimum Death Benefit. The Minimum Death Benefit is equal to the
Policy Value multiplied by the Minimum Death Benefit Percentage for the Attained
Age of the youngest of the Lives Insured, or the Attained Age such person would
have reached if living. The Minimum Death Benefit Percentages are shown in the
Table of Minimum Death Benefit Percentages shown below.
TABLE OF MINIMUM DEATH BENEFIT PERCENTAGES
ATTAINED AGE APPLICABLE PERCENTAGE
40 and under 250%
45 215%
50 185%
55 150%
60 130%
65 120%
70 115%
75 105%
90 105%
95 and above 100%
To determine the Applicable Percentage, we will use the Attained Age
of the youngest of the Lives Insured, or the Attained Age such
person would have reached if living.
For ages not shown, the Applicable Percentage can be found by
reducing the above Applicable Percentages proportionately.
(continued)
Page 1
SUPPLEMENTARY INSURANCE OPTION
TERM LIFE INSURANCE
PAYABLE ON SECOND DEATH
BENEFIT COST. The monthly cost of the benefit is one of the Monthly Deductions
under your policy. The monthly cost is equal to (a) multiplied by (b), where:
(a) is the monthly cost of insurance rate per $1,000 of benefit amount; and
(b) is the benefit amount divided by $1,000.
Solely for purposes of determining the monthly cost for this benefit, if, at the
beginning of any policy month, the Policy Value exceeds the Face Amount of your
policy, we will consider the Benefit Amount to be reduced by such excess.
The rates for the Cost of Insurance are based on the Lives Insured's Age, sex,
Risk Classification, and the duration that the coverage has been in force. The
rates for the Cost of Insurance under this benefit will always be less than or
equal to the rates for the Cost of Insurance under the policy. We will determine
Cost of Insurance rates from time to time, on a basis that does not discriminate
unfairly within any class of lives insured.
The Cost of Insurance calculation will reflect any Additional Rating shown in
the Policy Information section. The Cost of Insurance rates will never exceed
those shown in the Table Of Guaranteed Maximum Cost Of Insurance Rates on page 4
of your policy, plus any Additional Rating.
VALIDITY. We cannot contest the validity of this benefit after it has been in
force during the lifetime of the Lives Insured for two years from the effective
date of this benefit.
For an increase in the Benefit Amount, the validity period will start on the
effective date of the increase.
SUICIDE. If any of the Lives Insured die by suicide, while sane or insane,
within two years after the effective date of this benefit, this benefit will
terminate and we will pay only the amount of premiums paid for the benefit.
If any of the Lives Insured die by suicide, while sane or insane, within two
years after the effective date of an increase in Benefit Amount, we will credit
the amount of any Monthly Deductions taken for the increase and reduce the
Benefit Amount to what it was prior to the increase. If the last death is by
suicide, for that increase in Benefit Amount, we will pay only the Monthly
Deductions taken for the increase.
NO-LAPSE GUARANTEE. The No-Lapse Guarantee in your policy applies to this
benefit only during the first two Policy Years.
DEFAULT. This benefit will not go into default during the first two Policy Years
if the No-Lapse Guarantee requirements are met under your policy. Otherwise,
this benefit will go into default if, at the beginning of any Policy Month, the
Net Cash Surrender Value under your policy would go to zero or below after we
take the Monthly Deduction that is due for that month. After the second Policy
Year, this benefit could go into default even if your policy does not go into
default.
GRACE PERIOD. We will allow 61 days from the date that this benefit goes into
default, for you to pay the amount that is required to bring this benefit out of
default or it will terminate. At least 30 days prior to the termination of
coverage, we will send a notice to your last known address, specifying the
amount you must pay to bring this benefit out of default. If we have notice of a
policy assignment on file at our Service Office, we will also mail a copy of the
notice of the amount due to the assignee of record.
The amount required to bring this benefit out of default is equal to (a) plus
(b) plus (c) where:
(a) is the amount necessary to bring the Net Cash Surrender Value under your
policy to zero, if it is less than zero, at the date of default of this
benefit; and
(continued)
Page 2
SUPPLEMENTARY INSURANCE OPTION
TERM LIFE INSURANCE
PAYABLE ON SECOND DEATH
(b) is the monthly cost of this benefit due on the date of default of this
benefit, plus the cost for the next two Policy Months; and
(c) is the applicable Premium Load.
TERMINATION. This benefit terminates on the earliest of:
(a) termination of your policy;
(b) the end of the grace period for which you have not paid the amount
necessary to bring this benefit out of default;
(c) the date there is a decrease in the Face Amount of your policy which would
cause the amount of this benefit to fall below the Minimum Benefit shown
in the Policy Information section;
(d) the Policy Anniversary nearest the date the younger of the Lives Insured
reaches Attained Age 100, or would have reached Attained Age 100 if
living, or
(e) the Policy Anniversary following the date we receive your Written Request
for termination of this benefit.
This benefit cannot be reinstated after it terminates.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
/s/ John Des Prez III
President
Page 3
SUPPLEMENTARY BENEFIT
POLICY SPLIT OPTION
This benefit is part of your policy. Should any provisions in your policy
conflict with this benefit, the provisions of the benefit will prevail.
EFFECTIVE DATE. This benefit takes effect on the Policy Date.
LIVES INSURED. These are the persons whose lives are insured under your policy,
as shown on page 3 of your policy.
BENEFIT. This benefit provides you with the option to evenly split your policy
if one of the Contingent Events listed below occurs. The Face Amount and the
Policy Value of your policy will be split into two separate policies, one on
each of the Lives Insured. The Face Amount to be split will not include any Four
Year Term Insurance amount in force under the policy.
No evidence of insurability will be required on either of the Lives Insured to
exercise this option.
CONTINGENT EVENTS. You may exercise the option to split your policy if either of
the following events occur:
(a) a final divorce decree which ends the marriage of the Lives Insured.
(b) a change in Federal estate tax law which results in either:
(1) removal of the unlimited marital deduction provision; or
(2) reduction of at least 50% in the level of estate taxes payable on
death.
EXERCISING THE OPTION. You are eligible to exercise the option on the date of
the final divorce decree, or on the effective date of the change in tax law.
Both Lives Insured must be alive on the date you exercise the option. We must
receive your Written Request within 90 days after the date you become eligible.
IMPACT ON YOUR ORIGINAL POLICY. To effect the split of your original policy, the
following amounts will be divided and transferred equally to each new policy:
(a) the value of your original policy's Investment Accounts, Guaranteed
Interest Account and Loan Account; and
(b) any existing Policy Debt under your original policy.
If only one new policy becomes effective, the other half of the Policy Value as
described in (a) above, minus one-half of any existing Policy Debt will be
payable. We will deduct one-half of any surrender charge applicable under the
original policy from the amount payable.
Your original policy will terminate on the date we transfer and/or pay the
amounts as described above. Any assignment of your original policy will apply to
each new policy.
NEW POLICY. Any new policy resulting from the split of your original policy will
be subject to the following conditions:
(continued)
Page 1
POLICY SPLIT OPTION
(a) it can be any variable life non-participating policy covering one insured,
that is offered by us at the time you exercise the option;
(b) it can include any of the Supplementary Benefits on your original policy,
provided they are available on the new policy;
(c) the face amount of each new policy will be for one-half of the Face Amount
of your original policy and any supplementary benefit amounts in force
when you exercise the option. The new policy must conform to our rules for
minimum face amount;
(d) the new policy will take effect on the date the original policy
terminates, and will not provide any insurance until such time;
(e) the new policy will have a current Policy Date;
(f) we will base the premiums for each new policy on the attained age and risk
class of each of the Lives Insured at the time of the policy split;
(g) the new policy will be subject to any applicable surrender charges under
the new policy.
SUICIDE AND VALIDITY. The Suicide and Validity provisions will start anew as
described in the new policy.
BENEFIT COST. The cost of the benefit is one of the Monthly Deductions under
your policy. The annual cost is $0.75 per $1000 of the total current Face Amount
of insurance, excluding any Four Year Term Insurance amount.
TERMINATION. This benefit terminates on the earliest of:
(a) the death of one of the Lives Insured under your policy;
(b) the date we receive your Written Request to split your policy;
(c) the date you surrender your policy for cash; or
(d) the date we receive your Written Request for cancellation of this benefit.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
/s/ John Des Prez III
President
Page 2
SUPPLEMENTARY BENEFIT
FOUR YEAR TERM
This benefit is part of your policy. Should any provisions in your policy
conflict with this benefit, the provisions of this benefit will prevail.
EFFECTIVE DATE. The benefit takes effect on the Policy Date set out in the
Policy Information section of your policy.
LIFE INSURED is the last-to-die of the Lives Insured.
LIVES INSURED are the persons whose lives are insured under your policy, as set
out in the Policy Information section of your policy.
BENEFIT. This benefit provides an additional insurance amount, payable on the
death of the Life Insured. The amount is set out in the Policy Information
section of your policy.
On receiving due proof that the Life Insured died while the benefit was in
force, we will pay the death benefit amount to the same beneficiary and in the
same manner as the proceeds payable under your policy.
EXPIRY DATE. This benefit will terminate four years from the Policy Date. It
cannot be renewed after the Expiry Date set out in the Policy Information
section of your policy.
BENEFIT COST. There are no Monthly Deductions for this benefit.
SUICIDE. If any of the Lives Insured die by suicide, whether sane or insane,
within two years after the Issue Date, the amount of any insurance under this
benefit will not be paid.
VALIDITY. With respect to each of the Lives Insured, we cannot contest the
validity of this benefit after it has been in force during each person's
lifetime for two years from the Issue Date.
BENEFIT REDUCTION. The amount of insurance under this benefit will reduce
proportionally upon the occurrence of any of the following:
(a) any reduction in the Face Amount of your basic policy; or
(b) a partial Net Cash Surrender Value withdrawal made under your policy.
TERMINATION. This benefit terminates on the earliest of:
(a) the benefit Expiry Date set out in the Policy Information section of your
policy;
(b) the termination date of your policy; or
(c) the date we receive your Written Request for cancellation of this benefit.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
/s/ John Des Prez III
President
RIDER
EXTENDED NO-LAPSE GUARANTEE
This rider is a part of your policy. Should any provisions in your policy
conflict with this rider, the provisions of this rider will prevail.
EFFECTIVE DATE. This rider is effective on the Policy Date as shown on Page 3 of
the policy.
BENEFIT. This benefit extends the No-Lapse Guarantee Period provided by your
policy. The Extended No-Lapse Guarantee Period applicable to this policy is
shown in the Policy Information section of your policy under Supplementary
Benefits. Provided this benefit is in effect, we guarantee that during this
extended period, your policy will not go into default if the Net Cash Surrender
Value falls to zero or below provided the policy satisfies an Extended
Cumulative Premium Test as described below.
EXTENDED CUMULATIVE PREMIUM TEST. This test will be performed at the beginning
of any Policy Month, during the Extended No-Lapse Guarantee Period that your
policy would otherwise be in default in the absence of this rider.
Your policy will satisfy the test if (a) is equal to or greater than (b), where:
(a) is the sum of the premiums paid, less any Policy Debt, and less any Gross
Withdrawals taken on or before the date of any test; and
(b) is the sum of the monthly Extended No-Lapse Guarantee Premiums due from
the Policy Date to the date of the test.
The Extended No-Lapse Guarantee Premium is shown as an annualized amount in the
Policy Information section of your policy under Supplementary Benefits. The
monthly Extended No-Lapse Guarantee Premium is one twelfth of this annualized
amount.
The Extended No-Lapse Guarantee Premium will change if any of the following
changes occur under your policy:
(a) you add, terminate or change a Supplementary Benefit;
(b) you change the Death Benefit Option under your policy;
(c) there is a decrease in the Face Amount of insurance due to a partial
withdrawal;
(d) you change the Face Amount of insurance; or
(e) there is a change in the Risk Classification of any of the Lives Insured.
We will inform you of any change to the Extended No-Lapse Guarantee Premium
resulting from any such change. The revised premium will be effective from the
date of the change. For the purpose of performing the Extended Cumulative
Premium Test, we will use the Extended No-Lapse Guarantee Premiums in effect as
of the Policy Date up to the date of the change, including any revised premiums
in effect as of the date of a prior change.
We will allow a 61 day grace period from the date your policy goes into default
for you to pay the amount required to bring your policy out of default. This
amount will be (a) plus (b) plus (c), where:
(a) is the amount necessary to bring the Net Cash Surrender Value to zero if
it is less than zero at the date of default;
(b) is the Monthly Deduction due on the date of default, plus the next two
Monthly Deductions; and
(c) is the applicable Premium Load.
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(continued)
EXTENDED NO-LAPSE GUARANTEE
If the Extended No-Lapse Guarantee is in effect, then the following amount, if
less than the amount stated above, will bring the policy out of default. The
amount is equal to (a) plus (b), where:
(a) is the amount needed to satisfy the Extended Cumulative Premium Test;
(b) is the Extended No-Lapse Guarantee Premium for the next two Policy Months.
BENEFIT COST. The cost of the benefit is one of the Monthly Deductions under
your policy. The monthly cost is shown in the Policy Information section of your
policy under Supplementary Benefits.
TERMINATION. The Extended No-Lapse Guarantee terminates on the earliest of the
following dates:
(a) at the end of the Extended No-Lapse Guarantee Period shown in the Policy
Information section of your policy under Supplementary Benefits;
(b) at the end of the grace period for which you have not paid the amount
necessary to bring the policy out of default;
(c) the date the policy terminates;
(d) the end of the Policy Month in which we receive your written request for
termination of this benefit.
The Extended No-Lapse Guarantee cannot be reinstated once it has been
terminated.
THE MANUFACTURERS LIFE INSURANCE COMPANY (U.S.A.)
/s/ John Des Prez III
President
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