Exhibit 1.A.(5)(a)
Individual Specimen Flexible Premium Variable Life Insurance Policy
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WESTERN RESERVE LIFE Home Office: Columbus, Ohio
ASSURANCE CO. OF OHIO Administrative Office:
(A STOCK COMPANY) 4333 Edgewood Road, N.E.-Cedar Rapids, Iowa 52499
(319) 398-8511
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IN THIS POLICY the Primary Insured is named on the Policy Schedule page. The
Primary Insured will be referred to as YOU or YOUR. Western Reserve Life
Assurance Co. of Ohio will be referred to as WE, OUR or US.
IF YOU DIE before the Maturity Date and while this Policy is In Force, WE WILL
PAY the Death Benefit Proceeds to the Beneficiary upon receipt of due proof,
satisfactory to Us, of Your death. THE AMOUNT OF THE DEATH BENEFIT PROCEEDS WILL
INCREASE OR DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS
IN THE SEPARATE ACCOUNT.
IF YOU ARE ALIVE on the Maturity Date and this Policy is In Force, WE WILL PAY
the Net Surrender Value as of the Maturity Date. CASH VALUES WILL INCREASE OR
DECREASE IN ACCORDANCE WITH THE POLICY VALUE PROVISIONS AND THE INVESTMENT
EXPERIENCE OF THE SUBACCOUNTS IN THE SEPARATE ACCOUNT. CASH VALUES ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT.
THE PROVISIONS on the following pages are part of this Policy.
IN WITNESS WHEREOF, We have signed this Policy at Our Office in Cedar Rapids,
Iowa as of the Policy Date.
/s/ WILLIAM H. GEIGER /s/ JOHN R. KENNEY
Secretary President
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RIGHT TO EXAMINE POLICY
The Owner may cancel this Policy by returning it to Us at 4333 Edgewood
Road, N.W., Cedar Rapids, Iowa 52499 or to the representative through whom
it was purchased within 10 days after receipt. If the Policy is returned
within this period, it will be void from the beginning and a refund will be
made to the Owner. The refund will equal the sum of:
1. The difference between the Initial Premium paid and the amount allocated
to any Accounts under the Policy; plus
2. The total amount of monthly deductions made and any other charges
imposed on amounts allocated to the Accounts; plus
3. The value of amounts allocated to the Accounts on the date We or Our
agent receive the returned Policy.
If state law prohibits the calculation above, the refund will be the total
of all premiums paid for this Policy.
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Modified Single Premium Variable Life Insurance Policy
Death Benefit Proceeds Payable at Death of Insured Prior to Maturity Date
Net Surrender Value Payable at Maturity Date
Non-Participating - No Dividends
Some Benefits Reflect Investment Results
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POLICY GUIDE
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POLICY SCHEDULE.............................. 3 DEATH BENEFIT PROVISIONS.................... 9
Death Benefit............................. 9
TABLE OF SURRENDER CHARGES................... 3 Specified Amount.......................... 9
Limitation Percentage..................... 10
TABLE OF GUARANTEED RATES.................... 4 Death Benefit Proceeds.................... 10
DEFINITIONS.................................. 5 PREMIUM PROVISIONS.......................... 10
Accounts................................... 5 Payment................................... 10
Age........................................ 5 Premiums.................................. 10
Anniversary................................ 5 Grace Period.............................. 11
Beneficiary................................ 5
Death Benefit Proceeds..................... 5 SEPARATE ACCOUNT PROVISIONS................. 11
Fixed Account.............................. 5 The Separate Account...................... 11
In Force................................... 5 Subaccounts............................... 11
Initial Premium............................ 5 Transfers................................. 12
Loan Reserve............................... 5 Addition, Deletion or Substitution of
Maturity Date.............................. 5 Investments............................. 12
Monthiversary.............................. 5 Change of Investment Objective............ 12
Net Surrender Value........................ 5 Unit Value................................ 13
Office..................................... 6
Policy Date................................ 6 POLICY VALUE PROVISIONS..................... 13
Reallocation Date.......................... 6 Allocation of Premiums.................... 13
SEC........................................ 6 Monthly Deductions........................ 14
Separate Account........................... 6 Monthly Policy Charge..................... 14
Series Fund(s)............................. 6 Monthly Cost of Insurance................. 14
Subaccount................................. 6 Monthly Cost of Insurance Rates........... 14
Termination................................ 6 Subaccount Value.......................... 15
Valuation Date............................. 6 Fixed Account Value....................... 15
Valuation Period........................... 6 Cash Value................................ 15
Written Notice............................. 6 Surrender................................. 16
Net Surrender Value....................... 16
GENERAL PROVISIONS........................... 7 Surrender Charge.......................... 16
The Policy................................. 7 Withdrawals............................... 16
Ownership.................................. 7 Continuation of Insurance................. 17
Beneficiary................................ 7 Insufficient Value........................ 17
Assignment................................. 7 Basis of Computations..................... 17
Incontestability........................... 7 Policy Loans.............................. 17
Suicide.................................... 8
Issue Age and Sex.......................... 8
Periodic Report............................ 8
Termination................................ 8
Policy Payment............................. 8
Optional Methods of Settlement............. 8
Payments and Transfers..................... 8
Extended Maturity Date..................... 9
Conversion Rights.......................... 9
Protection of Proceeds..................... 9
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WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
CEDAR RAPIDS, IOWA
POLICY SCHEDULE
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PRIMARY INSURED: John Doe
ISSUE AGE AND SEX: 35 - MALE POLICY NUMBER: 01-12345678
SPECIFIED AMOUNT: $204,416 POLICY DATE: December 01, 1998
INITIAL PREMIUM: $50,000 REALLOCATION DATE: December 16, 1998
MATURITY DATE: December 01, 2063 REALLOCATION ACCOUNT: Fixed Account
RATE CLASS: Standard
SEPARATE ACCOUNT PROVISIONS
SEPARATE ACCOUNT: WRL SERIES LIFE ACCOUNT
ASSET BASED CHARGES POLICY YEARS
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(Expressed as an Annual Percentage) 1-10 11 +
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SEPARATE ACCOUNT CHARGES
Daily Charge: .50% .50%
Monthly Deduction Charge: 2.00% 1.00%
FIXED ACCOUNT CHARGES
Monthly Deduction Charge: 2.00% 1.00%
DEFERRED SURRENDER CHARGES: Surrender Charges are the percentage shown below
times the Initial Premium.
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Surrender Surrender
Policy Year Charge Policy Year Charge
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At Issue 9.75%
1 9.75% 6 7.00%
2 9.50% 7 6.00%
3 9.25% 8 4.00%
4 9.00% 9 2.00%
5 8.00% 10+ 0.00%
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WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
CEDAR RAPIDS, IOWA
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
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POLICY NUMBER: 01-12345678
Guaranteed Rate Basis for the Initial Specified Amount on Primary Insured
Commissioners 1980 Standard Ordinary Tobacco User and Non Tobacco User
Mortality Table
Male Lives
Tobacco User Classification
Annual Cost of Insurance Rates Per $1,000
(The monthly cost of insurance calculations will use one-twelfth
of these rates.)
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Attained Age Annual Rate Attained Age Annual Rate
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35 2.63 36 2.81
37 3.04 38 3.30
39 3.60 40 3.94
41 4.34 42 4.75
43 5.22 44 5.71
45 6.27 46 6.83
47 7.44 48 8.08
49 8.80 50 9.56
51 10.44 52 11.42
53 12.54 54 13.80
55 15.14 56 16.59
57 18.09 58 19.69
59 21.35 60 23.19
61 25.26 62 27.59
63 30.23 64 33.14
65 36.29 66 39.57
67 43.01 68 46.55
69 50.32 70 54.48
71 59.09 72 64.33
73 70.32 74 76.66
75 83.77 76 91.10
77 98.52 78 105.91
79 113.49 80 121.59
81 130.41 82 140.20
83 151.03 84 162.49
85 174.20 86 185.78
87 197.06 88 209.37
89 221.52 90 233.69
91 246.12 92 259.33
93 276.30 94 298.15
95 329.96 96 384.55
97 480.20 98 657.98
99 1000.00
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DEFINITIONS
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ACCOUNTS Allocation options including the Fixed Account and the
Subaccounts of the Separate Account.
AGE Issue Age refers to the Age on the Insured's last birthday
prior to the Policy Date. Attained Age refers to the Issue Age
plus the number of completed policy years.
ANNIVERSARY The same day and month as the Policy Date for each succeeding
year the Policy remains In Force.
BENEFICIARY The person or persons specified by the Owner to receive the
Death Benefit Proceeds.
DEATH The amount payable upon Your death in accordance with the
BENEFIT Death Benefit Provisions.
PROCEEDS
FIXED ACCOUNT Allocation option(s) other than the Separate Account.
IN Condition under which the coverage is active and the Insured's
FORCE life remains insured.
INITIAL The amount which must be paid before coverage begins. The
PREMIUM amount is shown on the Policy Schedule page.
LOAN RESERVE A portion of the Fixed Account used as collateral for any
policy loan.
MATURITY The date when coverage under the Policy will terminate if the
DATE Primary Insured is living and the Policy is In Force, unless
extended in accordance with the Extended Maturity Date
provision.
MONTHIVERSARY The day of each month coinciding with the Policy Date. If there
is no day in a calendar month which coincides with the Policy
Date, the Monthiversary will be the first day of the next
month.
NET SURRENDER The amount payable upon surrender in accordance with the Policy
VALUE Value Provisions of this Policy.
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OFFICE Refers to Our administrative office located in Cedar Rapids,
Iowa.
POLICY The date coverage is effective and monthly deductions commence
DATE under the Policy. Policy months, years and anniversaries are
measured from the Policy Date, as shown on the Policy Schedule
page.
REALLOCATION The date on which any premiums are reallocated from the
DATE Reallocation Account to the Accounts elected by the Owner on
the application. The Reallocation Date is shown on the
Policy Schedule page.
SEC The United States Securities and Exchange Commission.
SEPARATE A separate investment account shown on the Policy Schedule page
ACCOUNT which is composed of several subaccounts established to receive
and invest premiums under the Policy.
SERIES FUND(S) Designated mutual fund(s) from which each Subaccount of the
Separate Account will buy shares.
SUBACCOUNT A sub-division of the Separate Account. Each Subaccount invests
exclusively in the shares of a specified Series Fund portfolio.
TERMINATION Condition when the Insured's life is no longer insured under
the coverage provided.
VALUATION DATE Any day We are required by law to value the assets of the
Separate Account.
VALUATION The period commencing at the end of one Valuation Date and
PERIOD continuing to the end of the next succeeding Valuation Date.
WRITTEN NOTICE Written Notice means a notice by the Owner to Us requesting or
exercising a right of the Owner as provided in the Policy
provision of the General Provisions. In order for a notice to
be considered a Written Notice, it must: be in writing, signed
by the Owner; be in a form acceptable to Us; and contain the
information and documentation, as determined in Our sole
discretion, necessary for Us to take the action requested, or
for the Owner to exercise the right specified. A Written Notice
will not be considered complete until all necessary supporting
documentation required or requested by Us has been received by
Us at Our administrative Office.
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GENERAL PROVISIONS
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THE POLICY This Policy is issued in consideration of the attached
application and payment of the Initial Premium. This Policy and
the attached application constitute the entire contract. All
statements in these applications, in the absence of fraud, will
be deemed representations and not warranties. No statement can
be used to void this Policy or be used in defense of a claim
unless it is contained in the written application. No policy
provision can be waived or changed except by endorsement. Such
endorsement must be signed by Our President or Secretary.
OWNERSHIP This Policy belongs to the Owner. The Owner, as named in the
application or as subsequently changed, may exercise all rights
under this Policy during Your lifetime including the right to
transfer ownership. If the Owner should die during Your
lifetime, ownership of this Policy will pass to the Owner's
estate if no contingent owner is named.
We will not be bound by any change in the ownership designation
unless it is made by Written Notice. The change will be
effective on the date the Written Notice is accepted by Us. If
We request, this Policy must be returned to Our administrative
Office for endorsement.
BENEFICIARY The Beneficiary, as named in the application or subsequently
changed, will receive the benefits payable at Your death. If
the Beneficiary dies before You, the Contingent Beneficiary, if
named, becomes the Beneficiary. If no Beneficiary or Contingent
Beneficiary survives You, the benefits payable upon Your death
will be paid to the Owner or the Owner's estate.
We will not be bound by any change in the Beneficiary
designation unless it is made by Written Notice. The change
will be effective on the date the Written Notice was signed;
however, no change will apply to any payment We made before the
Written Notice is received. If We request, this Policy must be
returned to Our Office for endorsement.
ASSIGNMENT This Policy may be assigned. We will not be bound by any
assignment unless made by Written Notice. The assignment will
be effective on the date the Written Notice is received at Our
Office and accepted by Us. We assume no responsibility for the
validity of any assignment.
INCONTESTABILITY This Policy shall be incontestable after it has been In Force,
while You are still alive, for two years from the Policy Date.
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SUICIDE If You die by suicide, while sane or insane, within two years
from the Policy Date, this Policy shall terminate and Our total
liability, including all Riders attached to this Policy, will
be limited to the total premiums paid, less any loans and prior
withdrawals, during such period.
ISSUE AGE If Your date of birth or sex is not correctly stated, the death
AND SEX benefit will be adjusted based on what the Initial Premium
would have purchased based on Your correct date of birth and
sex.
PERIODIC We will send a periodic report to the Owner at least once each
REPORT policy year. The periodic report will show:
1. The current Cash Value; 4. Any current policy
2. The current Net Surrender Value; loans;
3. The current death benefit; 5. Activity since the
last report.
Additional activity within each Subaccount showing investment
experience will also be provided. The periodic report provided
nearest the end of the calendar year will show projected values
for the following year.
TERMINATION This Policy will terminate on the earliest of:
1. The Maturity Date; 3. The end of the grace period;
2. The date of Your death; 4. The date of surrender.
POLICY All proceeds to be paid upon Termination will be paid
PAYMENT in one sum unless an optional method of settlement is elected.
Instead of a single amount, the payee may elect to receive the
proceeds under the terms of the next provision.
OPTIONAL METHODS At the time that any proceeds are due in a single payment, if
OF SETTLEMENT requested in writing, We will inform the payee of all other
forms of settlement including annuities, with or without life
contingencies. Interest will be at an annual rate that We
decide, but not less than the rate required by law.
PAYMENTS AND All payments and transfers from the Subaccounts will be
TRANSFERS processed as provided in this Policy unless one of the
following situations exists:
1. The New York Stock Exchange is closed; or
2. The SEC requires that trading be restricted or declares an
emergency; or
3. The SEC allows Us to defer payments to protect Our
policyowners.
We reserve the right to defer the payment of any Fixed Account
values for the period permitted by law, but not for more than
six months.
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EXTENDED The Owner may request that the Maturity Date shown on the
MATURITY Policy Schedule page be extended. The request must be in
DATE writing and received by Us at least 90 days, but no more than
180 days, prior to the scheduled Maturity Date. The Owner must
request that the Maturity Date be extended each Policy
Anniversary following the Maturity Date as shown on the Policy
Schedule page. Any Riders In Force on the scheduled Maturity
Date will terminate on that date and will not be extended.
Interest on any outstanding policy loan will continue to accrue
during the period for which the Maturity Date is extended.
If the Maturity Date is extended, on each Valuation Date the
Specified Amount will be adjusted to equal the Cash Value and
the Limitation Percentage will be 100%. No additional Premium
payments will be permitted except if required to prevent lapse
of this Policy. Future monthly deductions will be waived.
CONVERSION At any time upon written request within the first two policy
RIGHTS years, the Owner may elect to transfer all Subaccount values to
the Fixed Account without a transfer charge.
PROTECTION OF Unless the Owner directs by filing Written Notice, no
PROCEEDS Beneficiary may assign any payments under this Policy before
the same are due. To the extent permitted by law, no payments
under this Policy will be subject to the claims of creditors of
any Beneficiary.
DEATH BENEFIT PROVISIONS
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DEATH BENEFIT The death benefit is the greater of:
1. the Specified Amount; or
2. the Limitation Percentage times the Cash Value of this
Policy on the date of Your death.
SPECIFIED AMOUNT The Specified Amount is as shown on the Policy Schedule page,
adjusted for any withdrawals as provided in the Withdrawal
Provision of the Policy Value Provisions.
Page 9
LIMITATION The Limitation Percentage is a percentage based on Your
PERCENTAGE Attained Age at the beginning of the policy year equal to:
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Attained Age Limitation Percentage
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40 and under 250%
41 through 45 250% minus 7% for each Age over Age 40
46 through 50 215% minus 6% for each Age over Age 45
51 through 55 185% minus 7% for each Age over Age 50
56 through 60 150% minus 4% for each Age over Age 55
61 through 65 130% minus 2% for each Age over Age 60
66 through 70 120% minus 1% for each Age over Age 65
71 through 75 115% minus 2% for each Age over Age 70
76 through 90 105%
91 through 94 105% minus 1% for each Age over Age 90
95 and over 100%
DEATH The Death Benefit Proceeds is the amount payable by Us under
BENEFIT this Policy upon Your death, provided this Policy has not
PROCEEDS terminated prior to Your death. Except as provided in the
Suicide section of the General Provisions, the Death Benefit
Proceeds will be equal to:
1. The death benefit; minus
2. Any monthly deductions due during the grace period; minus
3. Any outstanding policy loan; minus
4. Any accrued policy loan interest.
PREMIUM PROVISIONS
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PAYMENT The Initial Premium shown on the Policy Schedule page must be
paid on or before the Policy Date.
PREMIUMS While this Policy is In Force, additional premiums may be paid
at any time prior to the Maturity Date shown on the Policy
Schedule page. We reserve the right to limit or refund any
premium if:
1. The amount is below Our current minimum payment requirement;
or
2. The premium would increase the death benefit by more than
the amount of the premium; or
3. The premium would disqualify this Policy as a life insurance
contract as defined by the United States Internal Revenue
Code and applicable regulations.
Page 10
GRACE PERIOD If the Net Surrender Value on any Monthiversary is not
sufficient to cover the monthly deductions on such day, We will
mail a notice to the last known address of the Owner and any
assignee of record. A grace period of 61 days after the mailing
date of the notice will be allowed for the payment. The notice
will specify the minimum payment and the final date on which
such payment must be received by Us to keep the Policy In
Force. The Policy will remain In Force during the grace period.
If the amount due is not received by Us within the grace
period, all coverage under the Policy will terminate without
value at the end of the grace period.
SEPARATE ACCOUNT PROVISIONS
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THE SEPARATE The variable benefits under this Policy are provided through
ACCOUNT the Separate Account as shown on the Policy Schedule page. The
assets of the Separate Account are Our property. Assets equal
to the reserve and other contractual liabilities under all
policies issued in connection with the Separate Account will
not be charged with liabilities arising out of any other
business We may conduct. If the assets of the Separate Account
exceed the liabilities arising under the policies supported by
the Separate Account, then the excess may be used to cover the
liabilities of Our general account. The assets of the Separate
Account shall be valued as often as any policy benefits vary,
but at least monthly.
SUBACCOUNTS The Separate Account has various Subaccounts with different
investment objectives. We reserve the right to add or remove
any Subaccount of the Separate Account. Income, if any, and any
gains or losses, realized or unrealized, from assets in each
Subaccount are credited to, or charged against, the amount
allocated to that Subaccount without regard to income, gains,
or losses in other Subaccounts. Any amount charged against the
investment base for federal or state income taxes will be
deducted from that Subaccount. The assets of each Subaccount
are invested in shares of a corresponding Series Fund
portfolio. The value of a portfolio share is based on the value
of the assets of the portfolio determined at the end of each
Valuation Period in accordance with applicable law.
Page 11
TRANSFERS The Owner may transfer all or a portion of this Policy's value
in each Subaccount to other Subaccounts or the Fixed Account.
We reserve the right to charge a $10 fee for each transfer in
excess of twelve per policy year. This charge will be deducted
from the funds transferred. A request for a transfer must be
made in a form satisfactory to Us. The transfer will ordinarily
take effect on the first Valuation Date on or following the
date the request is received at Our Office.
ADDITION, We reserve the right to transfer assets of the Separate
DELETION OR Account, which We determine to be associated with the class of
SUBSTITUTION contracts to which this Policy belongs, to another Separate
OF INVESTMENTS Account. If this type of transfer is made, the term "Separate
Account", as used in this Policy, shall then mean the Separate
Account to which the assets were transferred. We also reserve
the right to add, delete, or substitute investments held by any
Subaccount.
We reserve the right, when permitted by law, to:
1. Deregister the Separate Account under the Investment Company
Act of 1940;
2. Manage the Separate Account under the direction of a
committee at any time;
3. Restrict or eliminate any voting privileges of owners or
other persons who have voting privileges as to the Separate
Account;
4. Combine the Separate Account or any Subaccount(s) with one
or more other Separate Accounts or Subaccounts;
5. Operate the Separate Account as a management investment
company;
6. Establish additional Subaccounts to invest in either a new
series of the Series Fund, or in shares of another
diversified, open-end registered investment company; and
7. Fund additional classes of variable life insurance contracts
through the Separate Account.
CHANGE OF We reserve the right to change the investment objective of a
INVESTMENT Subaccount. If required by law or regulation, an investment
OBJECTIVE objective of the Separate Account, or of a Series Fund
portfolio designated for a Subaccount, will not be materially
changed unless a statement of the change is filed with and
approved by the appropriate insurance official of the state of
Our domicile or deemed approved in accordance with such law or
regulation. If required, approval of or change of any
investment objective will be filed with the Insurance
Department of the state where this Policy is delivered.
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UNIT VALUE Some of the policy values fluctuate with the investment results
of the Subaccounts. In order to determine how investment
results affect the policy values, a unit value is determined
for each Subaccount. The unit value of each Subaccount was
originally established at $10 per unit. The unit value may
increase or decrease from one Valuation Period to the next.
Unit values also will vary between Subaccounts. The unit value
of any Subaccount at the end of a Valuation Period is the
result of:
1. The total value of the assets held in the Subaccount. This
value is determined by multiplying the number of shares of
the designated Series Fund portfolio owned by the
Subaccount times the net asset value per share; minus
2. A charge equal to the daily net assets of the Sub-Account
multiplied by the daily equivalent of the Daily Charge. The
maximum annual factor for the Daily Charge is shown on the
Policy Schedule page; minus
3. The accrued amount of reserve for any taxes or other
economic burden resulting from the application of tax laws
that are determined by Us to be properly attributable to
the Subaccount; and the result divided by
4. The number of outstanding units in the Subaccount.
The use of the unit value in determining contract values is
described in the Policy Value Provisions.
POLICY VALUE PROVISIONS
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ALLOCATION OF The premium will be allocated to the Accounts on the first
PREMIUM Valuation Date on or following the date the premium is received
at Our Office; except any premium or portion of premium
received prior to the Policy Date will be allocated on the
first Valuation Date on or following the Policy Date. Any
premium received prior to the Reallocation Date will be
allocated to the Reallocation Account. On the first Valuation
Date on or following the Reallocation Date, the values in the
Reallocation Account will be transferred in accordance with the
Owner's current premium allocation instructions.
We reserve the right to limit any allocation to any Account to
no less than 1%. No fractional percentages may be permitted.
The allocation may be changed by the Owner. The request for
change of allocations must be in a form satisfactory to Us. The
allocation change will be effective on the date the request for
change is recorded by Us.
Page 13
MONTHLY On the Policy Date and on each Monthiversary thereafter, a
DEDUCTIONS monthly deduction for this Policy will be made from the
Policy's Cash Value in an amount equal to the sum of the
following:
1. The Monthly Policy Charge based on the assets of the
Separate Account; plus
2. The Monthly Policy Charge based upon the assets of the Fixed
Account; plus
3. The Monthly Cost of Insurance Charge for this Policy, if
any; plus 4. The Monthly Charge for benefits provided by
Riders attached to this Policy, if any.
Deductions will be withdrawn from each Account in accordance
with the Owner's current premium allocation. If the value of
any Account is insufficient to pay its part of the monthly
deduction, the monthly deduction will be taken on a pro rata
basis from all Accounts.
MONTHLY POLICY The Monthly Policy Charge applicable to the Separate Account is
CHARGE equal to:
1. The Separate Account Monthly Deduction Charge divided by 12;
multiplied by
2. The sum of the Subaccount Values on the Valuation Date of
each monthly deduction.
The Monthly Policy Charge applicable to the Fixed Account is
equal to:
1. The Fixed Account Monthly Deduction Charge divided by 12;
multiplied by
2. The Fixed Account value on the Valuation Date of each
monthly deduction, minus any outstanding loans.
The Separate Account and Fixed Account Monthly Deduction
Charges are shown on the Policy Schedule page.
MONTHLY COST OF We reserve the right to impose a maximum Monthly Cost of
INSURANCE Insurance Charge. This charge may not exceed the death benefit
minus the Cash Value, and the difference multiplied by the
appropriate monthly cost of insurance rate.
Currently we do not impose this charge. Should this charge be
imposed in the future, all future Deferred Surrender Charges
will be waived.
MONTHLY COST The Guaranteed Maximum Monthly cost of insurance rates are
OF INSURANCE based on the sex, Attained Age, plan of insurance and
RATES rating class of the person(s) insured. Any change in the
current cost of insurance rates will not exceed those shown in
the Table of Guaranteed Maximum Life Insurance Rates.
Page 14
SUBACCOUNT At the end of any Valuation Period, the Subaccount value is
VALUE equal to the number of units that the Policy has in the
Subaccount, multiplied by the unit value of that Subaccount.
The number of units that the Policy has in each Subaccount is
equal to:
1. The initial units purchased on the Policy Date; plus
2. Units purchased as a result of any additional premiums; plus
3. Units purchased through transfers from another Account;
minus
4. Those units that are redeemed to pay for monthly deductions
as they are due; minus
5. Any units that are redeemed to pay for cash withdrawals;
minus
6. Any units that are redeemed as part of a transfer to another
Account.
FIXED ACCOUNT At the end of any Valuation Period, the Fixed Account value is
VALUE equal to:
1. The premiums allocated to the Fixed Account; plus
2. Any amounts transferred from a Subaccount to the Fixed
Account; plus
3. Total interest credited to the Fixed Account; minus
4. Any amounts charged to pay for monthly deductions as they
are due; minus
5. Any amounts withdrawn from the Fixed Account to pay for cash
withdrawals; minus
6. Any amounts transferred from the Fixed Account to a
Subaccount.
Interest on the Fixed Account will be compounded daily at a
minimum guaranteed effective annual interest rate of 3% per
year. We may declare from time to time various higher current
interest rates. Each payment or transfer to the Fixed Account
will be credited with the current interest rate at the time of
payment or transfer. In declaring any higher rates to be
applied to any Fixed Account values, We may include an expense
charge of up to 1% per year, however, in no event will any net
effective annual interest rate be less than 3%.
On transfers from the Fixed Account to a Subaccount, We reserve
the right to impose the following limitations:
1. Written Notice be received by Us within 30 days after an
Anniversary.
2. The transfer will take place on the date We receive such
Written Notice.
3. The maximum amount that may be transferred is the greater of
(a) 25% of the amount in the Fixed Account; or (b) the
amount transferred in the prior policy year from the Fixed
Account.
We further reserve the right to defer payment of any amounts
from the Fixed Account for no longer than six months after We
receive such Written Notice.
CASH VALUE At the end of any Valuation Period, the Cash Value of the
Policy is equal to the sum of the Subaccount values plus the
Fixed Account value.
Page 15
SURRENDER While this Policy is In Force, the Owner may surrender this
Policy for the Net Surrender Value. Payment will usually be
made within seven days of Written Notice, subject to the Policy
Payment section of the General Provisions.
NET SURRENDER The Net Surrender Value is the amount payable upon surrender of
VALUE this Policy. The Net Surrender Value as of any date is equal
to:
1. the Cash Value as of such date; minus
2. any Surrender Charge as of such date; minus
3. any outstanding policy loan; minus
4. any accrued loan interest.
SURRENDER During the first 9 policy years, a Surrender Charge will be
CHARGE incurred upon surrender of this Policy. This charge will be
based upon the Deferred Surrender Charges shown on the Policy
Schedule page.
WITHDRAWALS Cash withdrawals may be made any time after the first policy
year and while this Policy is In Force. Only one withdrawal is
allowed during any 12 month period.
The maximum amount of withdrawal is:
1. the Cash Value as of the date of withdrawal; minus
2. the total premium paid; minus
3. any outstanding policy loans plus accrued loan interest.
When a withdrawal is made, the Cash Value will be reduced by
the amount of the withdrawal. The Specified Amount will also be
reduced by an amount equal to:
1. the initial Specified Amount; divided by
2. the Initial Premium; times
3. the amount of the withdrawal.
In no event will any withdrawal reduce the Specified Amount
below $1,000.
The Accounts from which the withdrawal will be made may be
specified in the Written Notice. If no Account is specified,
the withdrawal amount will be withdrawn from each Account in
accordance with the Owner's current allocation instructions.
Payment will usually be made within seven days of Written
Notice, subject to the Policy Payment section of the General
Provisions of this Policy.
Page 16
CONTINUATION OF Subject to the Grace Period section of the Premium Provisions,
INSURANCE insurance coverage under this Policy will be continued In Force
until the Net Surrender Value is insufficient to cover the
monthly deductions. This provision shall not continue this
Policy beyond the Maturity Date shown on the Policy Schedule
page.
INSUFFICIENT If the Net Surrender Value on any Monthiversary is not
VALUE sufficient to cover the monthly deductions then due, this
Policy shall terminate subject to the Grace Period section of
the Premium Provisions.
BASIS OF Policy values and reserves are at least equal to those required
COMPUTATIONS by law. A detailed statement of the method of computation of
values and reserves has been filed with the insurance
department of the state in which this Policy was delivered.
POLICY During the continuance of this Policy, the Owner can borrow
LOANS against this Policy an amount which is not greater than 90% of
the Cash Value, minus:
1. any Surrender Charge as of such date; minus
2. any outstanding policy loans; minus
3. any accrued policy loan interest.
The amount of any policy loan may be limited to no less than
$500, except as noted below.
When a loan is made, an amount equal to the loan will be
withdrawn from the Accounts and transferred to the loan
reserve. The loan reserve is a portion of the Fixed Account
used as collateral for any policy loan. The Owner may specify
the Account or Accounts from which the withdrawal will be made.
If no Account is specified, the withdrawal will be made from
each Account in accordance with the Owner's current premium
allocation instructions.
The loan date is the date We process a loan request. Payment
will usually be made within seven days of the date We receive
proper loan request, subject to the Policy Payment section of
the General Provisions of this Policy. This Policy will be the
sole security for the loan.
While this Policy is In Force, any loan may be repaid.
Interest on any loan will be at the maximum policy loan rate of
6% payable in arrears. We reserve the right to charge a lower
loan rate on all or a portion of any loan. Interest is due at
each Anniversary. Interest not paid when due will be added to
the loan on each Anniversary.
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At each Anniversary, We will compare the amount of the
outstanding loan to the amount in the loan reserve. We will
also make this comparison anytime the Owner repays all or part
of the loan. At each such time, if the amount of the
outstanding loan exceeds the amount in the loan reserve, We
will withdraw the difference from the Accounts and transfer it
to the loan reserve, in the same fashion as when a loan is
made. If the amount in the loan reserve exceeds the amount of
the outstanding loan, We will withdraw the difference from the
loan reserve and transfer it to the Accounts in accordance with
the Owner's current allocation instructions. However, We
reserve the right to require the transfer to the Fixed Account
if such loans were originally transferred from the Fixed
Account.
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WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
Home Office: Columbus, Ohio
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499
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Modified Premium Variable Life Insurance Policy
Death Benefit Proceeds Payable at Death of Insured Prior to Maturity Date
Net Surrender Value Payable at Maturity Date
Non-Participating - No Dividends
Some Benefits Reflect Investment Results