Exhibit 1.A.(5)(b)
Joint Specimen Flexible 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, Western Reserve Life Assurance Co. of Ohio will be referred to
as WE, OUR or US.
WE WILL pay the Death Benefit Proceeds to the Beneficiary upon the death of the
Surviving Insured when We receive proof that both Joint Insureds died while this
Policy is In Force. THE AMOUNT OF THE DEATH BENEFIT PROCEEDS WILL INCREASE OR
DECREASE DEPENDING ON THE INVESTMENT EXPERIENCE OF THE SUBACCOUNTS IN THE
SEPARATE ACCOUNT.
WE WILL pay the Net Surrender Value to the Owner if at least one of the Joint
Insureds is alive on the Maturity Date and while this Policy is In Force. 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 Owners may cancel this Policy by returning it to Us at 4333 Edgewood
Road, N.E., 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 Owners. The refund will equal the sum of:
1. The difference between the Single 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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Joint Survivorship Modified Single Premium Variable Life Insurance Policy
Death Benefit Proceeds Payable at Death of Surviving 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 PREMIUM PROVISIONS.......................... 11
TABLE OF SURRENDER CHARGES................... 3 Payment................................... 11
TABLE OF GUARANTEED RATES.................... 4 Premiums.................................. 11
DEFINITIONS.................................. 5 Grace Period.............................. 11
Accounts................................... 5 SEPARATE ACCOUNT PROVISIONS................. 11
Age........................................ 5 The Separate Account...................... 11
Anniversary................................ 5 Subaccounts............................... 12
Beneficiary................................ 5 Transfers................................. 12
Death Benefit Proceeds..................... 5 Addition, Deletion or Substitution of
Fixed Account.............................. 5 Investments............................. 12
In Force................................... 5 Change of Investment Objective............ 13
Initial Premium............................ 5 Unit Value................................ 13
Joint Insureds............................. 5 POLICY VALUE PROVISIONS..................... 13
Loan Reserve............................... 5 Allocation of Premium..................... 13
Maturity Date.............................. 5 Monthly Deductions........................ 14
Monthiversary.............................. 6 Monthly Policy Charge..................... 14
Net Surrender Value........................ 6 Monthly Cost of Insurance................. 14
Office..................................... 6 Monthly Cost of Insurance Rates........... 15
Policy Date................................ 6 Subaccount Value.......................... 15
Reallocation Date.......................... 6 Fixed Account Value....................... 15
SEC........................................ 6 Cash Value................................ 16
Separate Account........................... 6 Surrender................................. 16
Series Fund(s)............................. 6 Net Surrender Value....................... 16
Subaccount................................. 6 Surrender Charge.......................... 16
Surviving Insured.......................... 6 Withdrawals............................... 16
Termination................................ 6 Continuation of Insurance................. 17
Valuation Date............................. 6 Insufficient Value........................ 17
Valuation Period........................... 7 Basis of Computations..................... 17
Written Notice............................. 7 Policy Loans.............................. 17
GENERAL PROVISIONS........................... 7 POLICY SPLIT OPTION....................... 18
The Policy................................. 7 Split Option.............................. 18
Ownership.................................. 7 Specified Amount.......................... 19
Beneficiary................................ 7 Cash Value................................ 19
Assignment................................. 8 Issue Limits andPremium Rate
Incontestability........................... 8 Classification.......................... 19
Suicide.................................... 8 Premiums.................................. 19
Issue Age and Sex.......................... 8 Policy Date............................... 19
Periodic Report............................ 8 Owner/Beneficiary......................... 19
Termination................................ 8
Policy Payment............................. 9
Optional Methods of Settlement............. 9
Payments and Transfers..................... 9
Extended Maturity Date..................... 9
Conversion Rights.......................... 9
Protection of Proceeds..................... 9
DEATH BENEFIT PROVISIONS..................... 10
Death Benefit.............................. 10
Specified Amount........................... 10
Limitation Percentage...................... 10
Death Benefit Proceeds..................... 10
Page 2
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
CEDAR RAPIDS, IOWA
POLICY SCHEDULE
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JOINT INSUREDS: John Doe
Jane Doe
POLICY NUMBER: 01-23456789 POLICY DATE: December 01, 1998
SPECIFIED AMOUNT: $243,440 REALLOCATION DATE: December 16, 1998
INITIAL PREMIUM: $ 50,000 MATURITY DATE: December 01, 2053
REALLOCATION ACCOUNT: Fixed Account
SEPARATE ACCOUNT PROVISIONS
SEPARATE ACCOUNT: WRL SERIES LIFE ACCOUNT
ASSET BASED CHARGES POLICY YEARS
- -------------------
(Expressed as an Annual Percentage) 1-10 11 +
----- ----
SEPARATE ACCOUNT CHARGES
Daily Charge: .50% .50%
Monthly Deduction Charge: 1.50% .50%
FIXED ACCOUNT CHARGES
Monthly Deduction Charge: 1.50% .50%
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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Page 3
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
CEDAR RAPIDS, IOWA
TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE RATES
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POLICY NUMBER: 01-23456789
Guaranteed Rate Basis for Initial Specified Amount on Joint Insureds
Commissioners 1980 Standard Ordinary Tobacco User and Non-Tobacco User
Mortality Table
John Doe: Male Issue Age 45, Standard, Tobacco User Classification
Jane Doe: Female Issue Age 45, Standard, 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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Policy Year Annual Rate Policy Year Annual Rate
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1 0.031 2 0.103
3 0.191 4 0.298
5 0.426 6 0.580
7 0.764 8 0.987
9 1.256 10 1.572
11 1.941 12 2.362
13 2.834 14 3.361
15 3.957 16 4.649
17 5.471 18 6.462
19 7.650 20 9.035
21 10.605 22 12.346
23 14.226 24 16.272
25 18.552 26 21.170
27 24.282 28 27.978
29 32.314 30 37.300
31 42.872 32 48.913
33 55.335 34 62.166
35 69.569 36 77.756
37 86.921 38 97.215
39 108.829 40 121.323
41 134.456 42 148.060
43 162.130 44 176.728
45 191.696 46 207.860
47 225.060 48 244.153
49 266.749 50 296.863
51 341.982 52 414.444
53 537.477 54 744.016
55 1000.00
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Page 4
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 each Joint 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 BENEFIT PROCEEDS The amount payable upon the death of the Surviving
Insured in accordance with the Death Benefit
Provisions.
FIXED ACCOUNT Allocation option(s) other than the Separate
Account.
IN FORCE Condition under which the coverage is active and the
Surviving Insured's life remains insured.
INITIAL PREMIUM The amount which must be paid before coverage
begins. The amount is shown on the Policy Schedule
page.
JOINT INSUREDS The persons whose lives are insured under this
Policy, as shown on the Policy Schedule pages.
LOAN RESERVE A portion of the Fixed Account used as collateral
for any policy loan.
MATURITY DATE The date when coverage under the Policy will
terminate if either Joint Insured is living and the
Policy is In Force, unless extended in accordance
with the Extended Maturity Date provision.
Page 5
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
VALUE the Policy Value Provisions of this Policy.
OFFICE Refers to Our administrative office located in Cedar
Rapids, Iowa.
POLICY DATE The date coverage is effective and monthly
deductions commence 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
DATE the Reallocation Account to the Accounts elected by
the Owner on the application. The Reallocation
Account is shown on the Policy Schedule page.
SEC The United States Securities and Exchange
Commission.
SEPARATE A separate investment account shown on the Policy
ACCOUNT Schedule page 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.
SURVIVING INSURED The Joint Insured who remains alive after the other
Joint Insured has died.
TERMINATION Condition under which the insurance coverage is no
longer In Force under this Policy.
VALUATION DATE Any day We are required by law to value the assets
of the Separate Account.
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VALUATION The period commencing at the end of one Valuation
PERIOD Date and continuingto the end of the next succeeding
Valuation Date.
WRITTEN NOTICE Written Notice means a notice by the Owners to Us
requesting or exercising a right of the Owners 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 Owners; 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 Owners 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.
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 while
either or both of the Joint Insureds is living. If
two Owners are named, this Policy will be owned
jointly and the consent of each Owner will be
required to exercise ownership rights under this
Policy.
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 upon the death of the Surviving Insured. If
the Beneficiary dies before the Surviving Insured,
the Contingent Beneficiary, if named, becomes the
Beneficiary. If no Beneficiary or Contingent
Beneficiary survives the Surviving Insured, the
benefits payable at the Surviving Insured's death
will be paid to the Owner or the Owner's estate.
Page 7
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 either Joint Insured is still alive,
for two years from the Policy Date.
SUICIDE If either Joint Insured dies 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 either Joint Insured's date of birth or sex is
AND SEX not correctly stated, the death benefit will be
adjusted based on what the Initial Premium would
have purchased based on the correct date of birth
and sex.
PERIODIC REPORT We will send a periodic report to the Owner at least
once each policy year. The periodic report will
show:
1. The current Cash Value; 4. Any current
2. The current Net Surrender Value; policy 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 to 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
2. The date of the Surviving grace period;
Insured's death; 4. The date of
surrender.
Page 8
POLICY PAYMENT All proceeds to be paid upon Termination will be
paid 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 OF At the time that any proceeds are due in a single
SETTLEMENT payment, if requested in writing, We will inform the
payee of all other forms of a settlement
including annutiies, 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
TRANSFERS be 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.
EXTENDED MATURITY The Owners may request that the Maturity Date shown
DATE on the Policy Schedule page be extended. The request
must be in 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
RIGHTS two policy years, the Owner may elect to transfer
all Subaccount values to the Fixed Account
without a transfer charge.
PROTECTION OF Unless the Owner direct 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.
Page 9
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 the Surviving
Insured's 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.
LIMITATION The Limitation Percentage is a percentage based on
PERCENTAGE the Attained Age of the younger Joint Insured at the
beginning of the policy year equal to:
--------------------- ------------------------------------------
Attained Age Limitation Percentage
--------------------- ------------------------------------------
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 BENEFIT PROCEEDS The Death Benefit Proceeds is the amount payable by
Us under this Policy provided this Policy has not
terminated prior to the Surviving Insured's 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.
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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.
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 Owners 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
ACCOUNT through 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.
Page 11
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.
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, DELETION OR We reserve the right to transfer assets of the
SUBSTITUTION OF Separate Account, which We determine to be
INVESTMENTS associated with the class of contracts to which this
Policy belongs, to another Separate 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.
Page 12
CHANGE OF We reserve the right to change the investment
INVESTMENT OBJECTIVE objective of a Subaccount. If required by law or
regulation, an investment 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.
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
PREMIUM first 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
Owners' current allocation premium instructions.
Page 13
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 Owners. 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.
MONTHLY On the Policy Date and on each Monthiversary
DEDUCTIONS thereafter, a 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 Owners' 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
CHARGE Account is 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
INSURANCE Cost of 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.
Page 14
MONTHLY COST OF INSURANCE The Guaranteed Maximum Monthly cost of insurance
RATES rates are based on the sex, Attained Age, plan
of insurance and 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.
SUBACCOUNT At the end of any Valuation Period, the Subaccount
VALUE value is 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
VALUE Account value is 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 with-drawals; 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.
Page 15
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.
SURRENDER While this Policy is In Force, the Owners 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
VALUE surrender of 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
CHARGE will be 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.
Page 16
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
Owners' 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.
CONTINUATION OF Subject to the Grace Period section of the Premium
INSURANCE Provisions, 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
VALUE not 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
COMPUTATIONS those required 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 LOANS During the continuance of this Policy, the Owners
can borrow 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 loan; 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 Owners 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 Owners'
current premium allocation instructions.
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.
Page 17
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 Owners repay 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 Owners' 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.
POLICY SPLIT OPTION
================================================================================
SPLIT OPTION Subject to our evidence of insurability
requirements, the Owners may request to split this
Policy, not including any Riders, and purchase two
permanent individual fixed account life insurance
policies offered by Us at the time of the request,
one on the life of each Joint Insured. The Owners
may request this Split Option by notifying Us at Our
Office in writing within 90 days following either:
1. The later of the enactment or the effective date
of a change in the federal estate tax laws that
would reduce or eliminate the unlimited marital
deduction; or
2. The date of entry of a final decree of divorce
with respect to the Joint Insureds; or
3. Written confirmation of a dissolution of a
business partnership of which the partners are
the Joint Insureds.
If more than one person owns this Policy, each Owner
must agree to the split.
SPECIFIED AMOUNT The initial Specified Amount for each new policy
cannot be greater than 50% of this Policy's
Specified Amount, not including the face amount of
any Riders.
CASH VALUE Cash value and indebtedness under this Policy will
be allocated equally to each of the new policies. If
one Joint Insured does not meet our insurability
requirements, We will pay the Owner one half of this
Policy's Net Surrender Value and issue only the
policy covering that Joint Insured who meets our
insurability requirements; or, the Owner may elect
to keep this Policy In Force on both Joint Insureds
and no new policies will be issued.
Page 18
ISSUE LIMITS AND PREMIUM The new policies will be subject to our minimum and
RATE CLASSIFICATION maximum specified amounts and issue ages for the
plan of insurance selected.
If one of the Joint Insureds is older than the new
policy's maximum Issue Age at the time the Split
Option is requested, Our approval must be obtained
to exercise this Split Option.
PREMIUMS The premiums for the new policies wil be based on
each Joint Insured's Attained Age and premium rate
class as determined by current evidence of
insurability. Premiums are payable as of the policy
dates for each new policy.
POLICY DATE The policy date for each new policy will be the
Monthiversary following notification to Us to
execute this Split Option.
OWNER/BENEFICIARY The Owner and Beneficiary for the new policies will
be those named in this Policy, unless otherwise
specified.
Page 19
WESTERN RESERVE LIFE ASSURANCE CO. OF OHIO
Home Office: Columbus, Ohio
Administrative Office:
4333 Edgewood Road, N.E.
Cedar Rapids, Iowa 52499
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Joint Survivorship Modified Single Premium Variable Life Insurance Policy
Death Benefit Proceeds Payable at Death of Surviving Insured Prior
to Maturity Date
Net Surrender Value Payable at Maturity Date
Non-Participating - No Dividends
Some Benefits Reflect Investment Results