1
Form TA1031-97
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Here Is Your
Transamerica Occidental Life Insurance Policy
From Transamerica Occidental Life Insurance Company
Please Read it Carefully
This flexible premium variable life insurance policy is a legal contract between
you ("the owner") and Transamerica Occidental Life Insurance Company ("we" and
"the Company"). If you pay the required premiums, we will pay your beneficiary
the net death benefit when the person you are insuring ("the insured") dies
prior to the Maturity Date or, if the insured is alive on the Maturity Date, we
will pay the surrender value to the owner on the Maturity Date.
You may change the amount of insurance as well as the payments you make subject
to provisions of this policy. Except as otherwise provided in the paid-up
insurance option, you may direct your net payments into an account that has a
guaranteed minimum interest rate, and into as many as [seven] sub-accounts (if
available) of an account that has a rate of return that will vary.
These two accounts are called the Fixed and Variable Accounts.
The value of the Variable Account may increase or decrease according to its
investment results. For more details, please see the Variable Account Policy
Value provision on page 13.
The value in the Fixed Account will accumulate interest at a rate set by us
which will not be less than 4% a year.
The amount of the death benefit may be variable or fixed. The length of time
this policy will remain in force will be variable. Please refer to the Death
Benefit provisions and the Policy Value provisions in this policy for additional
information.
There may be little or no surrender value remaining on the final payment date.
Your Right to Examine
This Policy
You have the right to void this policy by returning it to our Variable Life
Service Center at 440 Lincoln Street, P.O. Box 3800, Worcester, MA 01653, or to
one of our authorized representatives by the later of:
o ten days after receiving it, or
o 45 days after you sign the application.
If you return the policy, it will be void from the date of its issue, and you
will receive a refund equal to the total of:
o the difference between any payments made, including fees or other charges,
and the amounts allocated to the Variable Account, and
o the value of the amounts in the Variable Account on the date the returned
policy is received at our Variable Life Service Center,
and
o any fees or other charges imposed on amounts in the Variable Account.
Signed for the Company at Los Angeles, California, on the date of issue.
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Executive Vice President, General Counsel and Corporate
Secretary
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President and CEO
Transamerica Occidental Life Insurance Company
Home Office: 1150 South Olive Street
Los Angeles, CA 90015
Variable Life Service Center: 440 Lincoln Street
P.O. Box 3800
Worcester, MA 01653
Table of Contents
Cover Page..................................................1
Specifications Page...................................3
Riders/Endorsements...............................3
Monthly Insurance Protection Charges....5
Important Definitions...............................7
General Provisions ....................................8
Information About You and
the Beneficiary.........................................9
What You Should Know About
the Premiums..........................................10
Information About the Value
of Your Policy........................................11
What You Should Know About
the Variable Account..............................13
What You Should Know About
the Fixed Account..................................14
What You Should Know About
Transfers...................................................15
If You Want to Borrow from Your
Policy........................................................16
Details on Surrender and
Partial Withdrawals..................................16
What You Should Know About
the Death Benefit...................................18
Paid-Up Insurance Option......................20
Payment of Benefits...............................21
Alphabetical Index
Addition, Deletion or Substitution
of Investments.........................................14
Allocation of Payments..........................11
Assignment..............................................9
Basis of Value of Fixed Account...........15
Beneficiary...............................................9
Decrease in Face Amount......................20
Entire Contract........................................8
Fixed Account.......................................14
Fixed Account Policy Value..................15
Foreclosure............................................16
Increase in Face Amount.......................19
Lapse......................................................10
Loans on Policy.....................................16
Misstatement of Age or Sex.....................8
Monthly Insurance Protection Charge.....5
Net Death Benefit................................18
Net Investment Factor............................13
Owner......................................................9
Paid-Up Insurance Option......................20
Partial Withdrawals................................17
Payment Options....................................21
Policy Value...........................................11
Postponement of Payment......................17
Preferred Loan Option...........................16
Premium Grace Period......................... 10
Premiums................................................10
Protection of Benefits...............................8
Reinstatement.........................................11
Right to Contest Policy...........................8
Right to Examine....................................1
Suicide Exclusion....................................8
Surrender..............................................16
Transfers...............................................15
Valuation Dates and Periods.................14
Variable Account.................................13
Variable Account Policy Value............13
Form 9031-97 TA
4
Form 9031-97 TA
Who is Insured and For How
Much?
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Owner's Name: John Doe
Insured's Name: John Doe
Insured's Age at Issue: 35
Underwriting Class: Standard Male Non-Smoker
Policy Number: 12345
Initial Face Amount: $100,000
Date of Issue: June 1, 1997
Monthly Processing Date: On the 1st day of each month
Your Final Payment Date: June 1,
2062. Coverage will expire prior
to the final payment date if the
surrender value is insufficient
to continue coverage to such
date. Please refer to the
Premium Grace Period and Policy
Lapse provision on page 10 for
more information.
The Death Benefit Option You Have Chosen:
Level Death Benefit Option - The
death benefit will be the face
amount of your policy if the
insured dies on or before the
Final Payment Date. As the
policy value increases, the
insurance protection amount
decreases, keeping the death
benefit level. ( But, see
Required Minimum Amount of Death
Benefit provision on page 19.)
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Additional Insurance Benefits
Living Benefits Rider
Waiver of Payment Rider
Children's Insurance Rider
Guaranteed Insurability Rider
Guaranteed Death Benefit Rider
Your Maximum Payment
Federal tax laws limit the amount you may pay into
your policy. These limits are based upon the amount
Guideline Single Premium: $14,733.71
of your insurance coverage and your age, sex, and
underwriting class at the date the policy is issued.
Guideline Level Premium: $1,289.52
They are called Guideline Premiums. Your payments may not exceed the
greater of the guideline single premium or the total of the guideline
level premiums.
The Charges You Will Pay
Payment Expense Charge: [ 4%] of each payment to cover federal, state and
local taxes, and certain sales and administrative costs; see page 11. We
reserve the right to increase or decrease this charge to reflect changes in
federal, state and local taxes.
Monthly Insurance Protection Charge: See pages 5 and 12.
Surrender Charge for Initial Face Amount: If you surrender this policy
during the first 10 policy years, you will be charged a surrender charge as
shown below:
Year Surrender Charge
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1 $1,276
2 $1,148
3 $1,020
4 $893
5 $765
6 $638
7 $510
8 $382
9 $255
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10 $127
Partial Withdrawal Transaction Charges: If you withdraw part of your funds,
you will pay a transaction charge of $25 or 2% of the amount withdrawn,
whichever is less. You may also pay a charge of 5% on any "excess"
withdrawal; this charge will not be higher than the surrender charge; see
page 16.
Change in Face Amount: If you increase the face amount of this policy, you
will pay a $40 transaction charge. If you decrease the face amount of this
policy, you will pay $40 plus part of the surrender charge; see page 19.
Statement of Projected Values Charge: You may be charged a fee of u
to $25 if you request a statement of
projected values.
Allocation Change Charges: You may be charged a fee of up to $25 if you
change the sub-accounts from which monthly insurance protection charges are
deducted. You may also be charged a fee of up to $25 if you change your
allocations for net payments.
Transfer Charge: You may make 12 transfers in any policy year free of
charge. After 12 transfers, you may be charged up to $25 to transfer funds
from one account to another; see page 15.
Variable Account Mortality and Expense Risk Charge: You will be assessed a
daily charge on the daily net asset value of the Variable Account for the
mortality and expense risks assumed by us. This daily charge is currently
at a rate equivalent to [.65%] on an annual basis and may not exceed a rate
equivalent to .80% on an annual basis.
Variable Account Administration Charge: You will be charged a daily charge
at a rate equivalent to .15% on an annual basis on the daily net asset
value of the Variable Account for a period not to exceed 20 policy years.
Minimum Monthly Payment: A monthly amount of $43.40 is used to determine if
your policy will lapse within 48 months of the date of issue of your
policy. If you increase or decrease the face amount, add or delete a rider,
or change the smoking class of the policy this monthly amount will change.
The new amount will be used to determine if your policy will lapse within
48 months of the date of issue, except that if you increase the face amount
of the policy, the new amount will be used to determine if your policy will
lapse within 48 months of the date of the face amount increase.
Your Monthly Insurance Protection Charges are Guaranteed
Never to Go Higher Than the Following:
Insurance Waiver of Insurance Waiver of
Protection Rate ($) Per Payment Protection Rate ($) Per Payment
Age $1,000 Rate ($) Per $1,000 Age $1,000 Rate ($) Per $1,000
- ----------- -------------------------- ------------------------- ----------- -------------------------- -------------------------
- ----------- -------------------------- ------------------------- ----------- -------------------------- -------------------------
[35 0.14 0.05 70 2.94
36 0.14 0.05 71 3.26
37 0.15 0.05 72 3.63
38 0.16 0.05 73 4.05
39 0.17 0.05 74 4.54
40 0.19 0.05 75 5.06
41 0.20 0.06 76 5.62
42 0.22 0.06 77 6.21
43 0.23 0.06 78 6.83
44 0.25 0.06 79 7.49
45 0.27 0.06 80 8.22
46 0.29 0.07 81 9.05
47 0.32 0.07 82 9.99
48 0.34 0.08 83 11.07
49 0.37 0.08 84 12.26
50 0.41 0.09 85 13.55
51 0.44 0.10 86 14.91
52 0.48 0.11 87 16.34
53 0.53 0.12 88 17.80
54 0.59 0.13 89 19.33
55 0.65 0.15 90 20.94
56 0.72 0.17 91 22.66
57 0.79 0.18 92 24.57
58 0.87 0.20 93 26.76
59 0.96 0.22 94 29.63
60 1.06 0.14 95 33.93
61 1.17 0.14 96 41.27
62 1.29 0.14 97 56.03
63 1.43 0.14 98 83.33
64 1.60 0.14 99 83.33]
65 1.78
66 1.97
67 2.18
68 2.41
69 2.66
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Paid Up Insurance Table
Table of Guaranteed Net Single Premiums
Per $1,000 of Insurance
----------------------------- ------------------------------ ------------------------------ ------------------------------
Age Net Single Premium ($) Age Net Single Premium ($)
----------------------------- ------------------------------ ------------------------------ ------------------------------
----------------------------- ------------------------------ ------------------------------ ------------------------------
[35 197.08 70 624.87
36 204.57 71 639.93
37 212.41 72 654.65
38 220.53 73 669.34
39 228.93 74 683.74
40 237.63 75 697.71
41 246.55 76 711.28
42 255.81 77 724.44
43 265.32 78 737.25
44 275.20 79 749.77
45 285.38 80 762.04
46 295.87 81 774.03
47 306.69 82 785.69
48 317.79 83 796.94
49 329.27 84 807.66
50 341.07 85 817.83
51 353.13 86 827.45
52 366.57 87 836.59
53 378.32 88 845.35
54 391.35 89 853.90
55 404.60 90 862.38
56 418.12 91 870.99
57 431.87 92 879.97
58 445.87 93 889.58
59 460.11 94 900.15
60 474.57 95 911.96
61 489.21 96 925.13
62 504.03 97 939.68
63 519.02 98 955.52
64 534.12 99 973.33]
65 549.22
66 564.33
67 579.47
68 594.62
69 609.75
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21
Form TA1031-97
Important Definitions
Age means how old the insured is on the birthday closest to the date of issue
and, subsequently, to the policy anniversary.
Assignee is the person to whom you have transferred your ownership of this
policy.
Company means Transamerica Occidental Life Insurance Company, also referred to
as we, our, and us. Our telephone number is [1-800-782-8315].
Date of issue is stated on page 3. Policy months, years and anniversaries are
measured from this date.
Evidence of insurability is the information, including medical information, that
we use to decide whether to issue the requested coverage, to determine the
underwriting class for the person insured, or to determine whether the policy
may be reinstated.
Face amount is the amount of insurance you elect to buy in the application or
enrollment form and which we agree to issue. The face amount is shown on page 3
of the policy. The death benefit is based on the face amount; see the Net Death
Benefit provisions beginning on page 18.
Final payment date is the policy anniversary nearest the insured's 100th
birthday. No payments may be made by you after this date. No monthly insurance
protection charges will be deducted from the policy value after this date.
Generally, the net death benefit after this date will equal 101% of the policy
value minus any outstanding loan, except as otherwise provided in the Guaranteed
Death Benefit Rider.
Insurance protection amount is the death benefit minus the policy value.
Maturity Date is the policy anniversary nearest age 115.
Monthly insurance protection charge is the amount of money we deduct from the
policy value each month to pay for the insurance and any riders; see page 12 for
more details.
Monthly processing date is the day of the month the monthly insurance protection
charge is deducted from the policy value. This date is shown on page 3.
Net payment is your payment to us less the payment expense charge shown on page
4.
Outstanding loan means all unpaid policy loans plus interest due or accrued on
such loans.
Policy change means any change in the face amount, the underwriting class, the
addition or deletion of a rider, or a change in the death benefit option.
Policy value is the sum of the values in the Variable Account and the Fixed
Account.
Premium means a payment you must make to keep the policy in force.
Variable Life Service Center means our office located at 440 Lincoln St., P.O.
Box 3800, Worcester, MA 01653.
Pro rata refers to an allocation among the sub-accounts of the Variable Account
and the Fixed Account. A pro rata allocation will be in the same proportion that
the policy value in each sub-account of the Variable Account and the policy
value in the Fixed Account have to the total policy value net of any outstanding
loans.
Rider is an optional benefit which may be added to your policy and which may
require an additional charge.
Specification pages contain information specific to your policy, and are located
after the Table of Contents in your policy.
Sub-accounts are subdivisions of the Variable Account investing exclusively in
the shares of one or more Funds.
Surrender Value is the policy value less any surrender charges and less any
outstanding loans.
Underwriting class means the insurance risk classification that we assign to the
insured based on the information in the application or enrollment form and any
other evidence of insurability we obtain. The insured's underwriting class
affects the monthly insurance protection charge and the amount of the payments
required to keep the policy in force.
Written request is a request you make in writing in a form which is satisfactory
to us and which is filed at our Variable Life Service Center.
You or your means the owner of this policy as shown in the application or in the
latest change filed with us.
General Provisions
Entire Contract: We have issued this policy in consideration of the application
and your initial premium payment. A copy of the application is attached and is a
part of this policy. The entire contract also includes: a copy of any
application to increase the face amount or to change to a different underwriting
class; any new specification pages; and any supplemental pages. The policy,
including the application and any endorsements and riders, forms our contract
with you.
All statements made by or for the insured will be considered representations and
not warranties. We will not use any statements made by or for the insured to
deny a claim unless the statement is in an application and an application is
attached to this policy when it is issued or delivered. Our representatives are
not permitted to change this policy or extend the time for paying premiums. Only
our President or a Vice President together with our Secretary may change the
provisions of this policy, and then only in writing.
Our Right to Contest the Policy is Limited: A contest is any action taken by us
to cancel your insurance or deny a claim based on untrue or incomplete answers
in your application. Except for fraud or nonpayment of premiums, this policy
will be incontestable after it has been in force during the lifetime of the
insured for two years from the date of issue. This provision does not apply to
any riders providing benefits specifically for disability or death by accident.
If the policy's total face amount is increased, or the underwriting class is
changed at your request, we cannot contest the increase or change after it has
been in force for 2 years from the effective date and the insured is alive.
Nonparticipating: No insurance dividends will be paid on this policy.
Adjustment of Cost Factors: We determine the monthly insurance protection charge
and Fixed Account interest rates which are used to calculate the policy value,
subject to the guarantees noted in this policy.
We will determine the rate for the monthly insurance protection charge for each
policy month on the monthly processing date for that policy month. The monthly
insurance protection rates will depend on: the insured's gender; the insured's
smoking status; the insured's class of risk; the number of years that the policy
has been in force; and the insured's age.
A table of guaranteed maximum monthly insurance protection charge rates for the
base policy is shown on page 5. We may use rates lower than the guaranteed
maximum monthly
insurance protection charge rates. We will never use higher
rates.
Any change in the rates for monthly insurance protection charges will apply to
all policies in the same underwriting class, will be prospective, and will be
based on our expectations as to future cost factors. Such cost factors may
include, but are not limited to: mortality expenses, interest, persistency, and
any applicable federal, state and local taxes.
Suicide Exclusion: If the insured dies by suicide, while sane or insane, within
two years from the date of issue, we will be liable only for the amount of
payments made to us less any outstanding loans and amounts withdrawn. If the
face amount is increased at your request, and then the insured commits suicide
within two years, while sane or insane, we will not pay the increased amount.
Instead the beneficiary will receive the monthly insurance protection charges
paid for this increase, plus any net death benefit otherwise payable.
Misstatement of Age or Sex: If the insured's age or sex is not correctly
stated, we will adjust the death benefit.
This amount will be:
o the policy value, plus
o the insurance protection amount that would have been purchased by the last
monthly insurance protection charge using the correct age and sex.
No adjustment will be made if:
o the insured dies after the final payment date; or
o the underwriting class is unisex and there has been a misstatement only
of sex.
Protection of Benefits: To the extent allowed by law, the benefits provided by
this policy cannot be reached by the beneficiary's creditors. No beneficiary may
assign, transfer, anticipate or encumber the policy value or benefit unless you
give them this right.
Periodic Report: We will mail a report to you at your last known address
at least once a year. This report will
provide the following information:
o death benefit;
policy values in each sub-account and in the Fixed Account;
the value of the policy if it is surrendered;
payments made by you and the monthly insurance protection charges
deducted by us since the last report; and
o outstanding loan and any other information required
by law.
Termination of Policy -- This policy will terminate at the earliest of:
1. The date we receive your written request to surrender or
terminate;
2. The Maturity Date; or
3. The date of lapse or foreclosure.
Information About You and the Beneficiary
Owner: The insured is the owner of this policy unless another person (which
could include a trust, corporation, partnership, etc.) is named as owner in the
application. The owner may change the ownership of this policy without the
consent of any beneficiary. Whenever the face amount of insurance is increased,
the insured must agree.
Assignment: You may change the ownership of this policy by sending us a
written request. An absolute assignment will
transfer ownership of the policy from you to another person called the assignee.
You may also assign this policy as collateral to a collateral assignee. The
limitations on your ownership rights while a collateral assignment is in effect
are specified in the assignment.
We will not be bound by an assignment unless it has been recorded at our
Variable Life Service Center. When recorded, it will take place as of the date
it was signed by you. Any rights created by the assignment will be subject to
any payments made or actions taken by us before the change is recorded. We are
not responsible for assuring that any assignment or any assignee's interest is
valid.
Beneficiary: The beneficiary is the person you name to receive the net death
benefit. The beneficiary's interest will be affected by any assignment you make.
If you assign this policy as collateral, all or a portion of the net death
benefit will first be paid to the collateral assignee; any money left over from
the amount due the assignee will go to those otherwise entitled to it.
Your choice of beneficiary may be revocable or irrevocable. You may change a
revocable beneficiary at any time by written request; but an irrevocable
beneficiary must agree to any change in writing. You will also need an
irrevocable beneficiary's permission to exercise other rights and options
granted by this policy. Unless you have asked otherwise, this policy's
beneficiary will be revocable.
Any change of the beneficiary must be made while the insured is living. This
change will take place on the date the request is signed, even if the insured is
not living on the day we receive it. Any rights created by the change will be
subject to any payments made, or actions taken, before we receive the written
request.
If a beneficiary dies before the insured, his or her interest in this policy
will pass to any surviving beneficiaries in proportion to their share in the net
death benefit, unless you have requested otherwise. If all beneficiaries die
before the insured, the net death benefit will pass to you or your estate.
Common Disaster Option: The common disaster option may be elected in the
application or later by written request. If the common disaster option is in
effect on the date of the insured's death, the beneficiary must be alive a
certain number of days following the insured's date of death in order to be
entitled to receive a benefit; otherwise we will pay the net death benefit as
though the beneficiary died before the insured. The number of days which the
beneficiary must live after the insured's death is selected by you when you
elect the common disaster option.
What You Should Know About the Premiums
Premiums: This policy will not be in force until the first full premium is paid
to us. Additional payments may be made to us at any time through the final
payment date, but before the date of death of the insured or the date the
paid-up insurance option is exercised. Payments must be sent either to our
Variable Life Service Center or to our authorized representative.
If you request it in writing, we will send you a signed receipt after payment.
The payment amount which must be paid to keep the policy in force is described
in the Premium Grace Period and Policy Lapse provision.
Maximum Payment Limits: We may limit the amount you pay to us in any policy
year. This limit will not be less than the guideline level premium; however, the
sum of all payments made from the issue date, minus any partial withdrawals, may
not be more than the greater of:
o the guideline single premium, or
o the sum of the guideline level premiums on the date of payment.
The guideline premium limits are shown on page 3. These premium limitations will
not apply if they prevent you from paying us enough to keep the policy in force.
Guideline premium limits are determined according to rules in the federal tax
law, and will be adjusted as that law changes.
If the payments made exceed the amount allowable for this policy to continue to
qualify as a life insurance contract under Section 7702 of the Internal Revenue
Code and the regulations thereunder, as applicable to this policy from time to
time, we will remove the excess amount of payments made from the policy, with
interest. Such an excess amount could occur, for example, as a result of a
partial withdrawal or other change in the benefits or terms of the policy, since
the guideline premium limit allowable for the policy may be reduced. The portion
of the payment that cannot be accepted as premium will be applied first against
any outstanding policy loans. We will refund to you any excess amount (including
interest) not later than 60 days after the end of that policy year.
The amount refundable will not exceed the surrender value of the policy. If the
entire surrender value is refunded, we will treat the transaction as a full
surrender of your policy.
Premium Grace Period and Policy Lapse: We will send you a notice if your
payments and surrender value are not enough to keep the policy in force. Your
policy will continue for 62 days from the date contained in the notice, which is
the grace period.
The first day of the grace period is called the date of default. We will send
the notice to your last known address, or to the person you name to receive this
notice, showing the due date and the amount of premium you must pay to keep the
policy in force.
The date when the grace period begins and the amount you must pay depends on how
long the policy has been in force and whether there have been any increases in
the face amount.
Beginning on the date this policy is issued or the effective date of any
increase in the face amount, whichever is later, and continuing for the next 47
monthly processing dates, the grace period will begin when both the following
conditions occur:
(a) the surrender value is less than the amount needed to pay the next
monthly insurance protection charge; and
(b) the sum of the payments made minus any outstanding loans, partial
withdrawals and withdrawal charges since the latest of the following three
dates:
o the date this policy is issued, or
o the effective date of any increase in the face amount, or
o the date of any policy change which changes the
minimum monthly payment;
is less than the minimum monthly payment multiplied by the number of
months which have elapsed since that date.
Thereafter, the grace period will begin if the surrender value on a monthly
processing date is less than the amount needed to pay the next monthly insurance
protection charge plus any loan interest accrued.
The minimum monthly payment, which is shown on page 4, may change if the policy
is changed; it will be listed in new specification pages provided to you.
The death benefit during the grace period will be reduced by any overdue
charges. The policy will lapse if the amount shown in the notice remains unpaid
at the end of the grace period. The policy terminates on the date of lapse.
Reinstatement: If this policy has lapsed or has been foreclosed for failure to
pay loan interest, and has not been surrendered, it may be restored (called
"reinstated" in this policy) within three years after the date of default or
foreclosure and before the Maturity Date. We will reinstate the policy on the
monthly processing date following the day we receive all of the following items:
o a written application for reinstatement,
o evidence of insurability satisfactory to us, and
o a payment large enough to keep the policy in force for three months.
You may repay or reinstate any outstanding loan on the date of default or
foreclosure.
Your reinstatement premium will be allocated to the Fixed Account until we
approve your application, at which time we will transfer the reinstatement
premium, plus accrued interest, as you directed in your last payment allocation
request.
The date of reinstatement is the later of the date we approve the reinstatement
application or the date the payment required to reinstate this policy is
received by us. The policy value on the reinstatement date is:
o the net payment to reinstate the policy, including the interest
earned from the date we received your
payment; plus
o an amount equal to the policy value less any outstanding loan on the default
date, to the extent that the outstanding loan is less than the surrender charge
on the reinstatement date; less
o the monthly insurance protection charge due on thereinstatement date.
The surrender charge on the reinstatement date is the charge which would have
been in effect if the policy had remained in force from the date it was issued.
Reinstatement of Paid-Up Insurance: If this policy is in force as paid-up
insurance and later terminates for failure to pay policy loan interest, the
paid-up insurance may be reinstated during the insured's lifetime, but no more
than three years after the date of foreclosure and before the Maturity Date, by
providing us with the following:
o evidence of insurability satisfactory to us; and
o payment or reinstatement of the outstanding loan on the date of the default.
Interest is payable on this outstanding loan from the date of termination to the
date of reinstatement at the interest rate of 8% per year.
The date of reinstatement is the later of the date we approve the reinstatement
application or the date the payment required to reinstate this policy is
received by us. The death benefit of the reinstated paid-up insurance will be
the same as the death benefit on the date of termination.
Information About the Value of Your Policy
Net Payment and Allocation of New Payments: A net payment is a payment made to
us reduced by the payment expense charge. This charge is based, in part, on
local, state and federal taxes we must pay. The charge is shown on page 4.
Each net payment will be added to the policy value. The policy value consists of
the total of the values in the Variable Account and the Fixed Account.
You may allocate the net payment to:
o any of the sub-accounts which are available at the time the payment
is made; and/or
o the Fixed Account.
The Company reserves the right to limit the number of sub-
accounts which are available at one time, but in no event will this be less than
7. All percentage allocations must be in whole numbers, with the total
allocation to all selected accounts equaling 100%. A processing charge may be
made for changing the net payment allocation. The maximum charge allowed is
shown on page 4, " Allocation Change Charges."
Allocation of Initial Payments: If you make a payment with your application or
at any time before the policy is approved for issue by us, we may put that net
payment into the Fixed Account on the date we receive it at our Variable Life
Service Center. Not later than two days after the date this policy is approved
for issue by us, the policy value you elected to allocate to the Variable
Account will be transferred from the Fixed Account to either the sub-accounts
you have selected or to the Money Market sub-account. In any event, we will
transfer any Variable Account policy values from the Money Market sub-account to
the sub-accounts you have selected not later than the expiration of the period
during which you may exercise your right to examine this policy and request a
refund of your payments.
Monthly Insurance Protection Charge: Beginning on the date this policy is
issued, and through the final payment date, we will deduct a monthly insurance
protection charge from the policy value. Except as otherwise prescribed in the
paid-up insurance option, you may choose a sub-account from which this monthly
charge will be deducted. If you do not make a choice, we will deduct the charge
pro rata. If the sub-account you choose does not have enough funds to cover the
charge, we will deduct the charge as if you had not made any choice. We reserve
the right to charge for changes made to the sub-accounts from which monthly
insurance protection charges are deducted. The maximum charge allowed is shown
on page 4, "Allocation Change Charges."
Charges allocated to the Fixed Account will be deducted on a last-in, first-out
basis. This means that we use the most recent payments to pay the fees.
The monthly insurance protection charge equals the sum of the charges that apply
to:
o the initial face amount, plus
o each increase in the face amount, plus
o any rider benefits.
We will determine the monthly insurance protection charge each month. Any
changes in this charge will apply to all policies in the same underwriting
class. If you decrease the face amount of the policy, we will adjust the monthly
insurance protection charge according to the Benefit Change provision on page
19.
The monthly insurance protection charge for the initial face amount will not be
more than (1) multiplied by (2) where:
(1) is the insurance protection rate shown for the insured's age in the
Table on page 5; and
(2) is the initial face amount divided by 1,000.
For the purposes of this calculation, if the Level Death Benefit Option (see
page 19) is in effect, the initial face amount will be reduced by the policy
value, minus charges for rider benefits at the beginning of the month, but not
less than zero.
If you increase the face amount, the monthly insurance protection charge for the
amount of the increase will not be more than (3) multiplied by (4) where:
(3) is the insurance protection rate applicable to the increased face
amount for the insured's age; and
(4) is the amount of the increase in the face amount divided by 1,000.
For purposes of this calculation, if the Level Death Benefit Option is in effect
and the policy value is higher than the initial face amount, the excess policy
value, minus charges for rider benefits at the beginning of the month, will be
used to reduce any increases in the face amount in the order in which the
increases were issued.
If the death benefit is the "guideline minimum death benefit" required for the
policy to qualify as life insurance under the federal tax law ( see page 19),
the monthly insurance protection charge for the portion of the death benefit
which exceeds the face amount (i.e., initial face amount plus any increases)
will not be higher than (5) multiplied by (6) divided by 1,000 where:
(5) is the insurance protection rate applicable to the initial face amount;
and
(6) is the death benefit less:
o the greater of the face amount or the policy value
if the Level Death Benefit Option is in
effect, or
o the face amount plus the policy value, if the
Adjustable Death Benefit Option (see page 19)
is in effect.
Insurance Protection Rates: The cost of insurance rate includes an expense
factor and a mortality factor. The expense factor covers a portion of our
acquisition costs, taxes, and administrative expenses. The mortality factor is
based on the insured's:
o age,
o sex (unless this policy is issued in a unisex class as
indicated on the specification pages); and
o underwriting class.
The guaranteed rates are based on:
o the Commissioners Ultimate 1980 Standard Ordinary Mortality Table, Male, or
Female, or Table B for unisex risks (Smoker or Non-Smoker versions of these
tables are used if the insured is over 17 years of age on the date of issue),
and
o appropriate increases in such tables for non-standard risks.
The insurance protection rates actually charged will never be higher than the
guaranteed rates. We will review the actual insurance protection rates for this
policy whenever we change .
these rates for new policies. In any event, rates will be
reviewed not more often than once each year, but not less than
once in a five-year period.
What You Should Know About the Variable Account
Variable Account: The value of your policy will vary if it is funded through
investments in the sub-accounts of the Variable Account. This account is
separate from our Fixed Account. We have exclusive and absolute ownership and
control of all assets, including those in the Variable Account. However, the
portion of assets in the Variable Account equal to the reserves and liabilities
of the policies which are supported by this account will not be charged with
liabilities that come from any other business we conduct.
This account, which we established to support variable life insurance policies,
is registered with the Securities and Exchange Commission (SEC) as a unit
investment trust under the Investment Company Act of 1940. It is also governed
by the laws of the State of California.
This account has several sub-accounts. Each sub-account invests its assets in a
separate series of a registered investment company (called a "Fund"). We reserve
the right, when the law allows, to change the name of the Variable Account or
any of its sub-accounts. You will find a list in your application of the
sub-accounts in which you may invest.
Variable Account Policy Value: Not later than two days after the date this
policy is approved for issue by us, the policy value you elected to allocate to
the Variable Account may be transferred from the Fixed Account to either the
sub-accounts you have selected or to the Money Market sub-account. We will
transfer the Variable Account policy values from the Money Market sub-account to
the sub-accounts you have selected not later than the expiration of the period
during which you may exercise your right to examine this policy and request a
refund of your payments. Net payments made thereafter which are allocated to the
sub-accounts will purchase additional units of the sub-accounts.
The number of units purchased in each sub-account is equal to the portion of the
net payment allocated to the sub-account, divided by the value of the applicable
unit as of the valuation date the payment is received at our Variable Life
Service Center or on the date value is transferred to the sub-account from
another sub-account or the Fixed Account. If we receive your payment on a date
which is not a valuation date, we will use the value of the applicable unit on
the first valuation date following the date we receive your payment to determine
the number of units that the net payment will purchase.
The number of units will remain fixed unless (1) changed by a subsequent split
of unit value, or (2) reduced because of a transfer, policy loan, partial
withdrawal, withdrawal charge, transaction charge, monthly insurance protection
charge deduction, surrender or surrender charge allocated to the sub-account.
Any transaction described in (2) will result in the cancellation of a number of
units which are equal in value to the amount of the transaction. On each
valuation date we will value the assets of each sub-account in which there has
been activity. The policy value in a sub-account at any time is equal to the
number of units this policy then has in that sub-account multiplied by the
sub-account's unit value. The value of a unit for any sub-account for any
valuation period is determined by multiplying that sub-account's unit value for
the immediately preceding valuation period by the net investment factor for the
valuation period for which the unit value is being calculated. The unit value
will reflect the investment advisory fee and other expenses incurred by the
registered investment companies.
Net Investment Factor: This measures the investment performance of a sub-account
during the valuation period that has just ended. The net investment factor is
the result of (a) plus (b), divided by (c), minus (d) and minus (e) where:
(a) is the net asset value per share of a Fund share held in the
sub-account determined at the end of the current valuation period,
(b) is the per share amount of any dividend or capital gain distributions
made by the Fund on shares held in the sub-account if the "ex-dividend" date
occurs during the currenvaluation period,
(c) is the net asset value per share of a Fund share held in the
sub-account determined as of the end of the immediately preceding valuation
period;
(d) is a charge for mortality and expense risks in the valuation period.
The current mortality and expense risk charge is shown on the specification
pages. The mortality and expense risk charge may be increased or decreased,
but it will never exceed the maximum rate shown on the specification pages;
and
(e) is an administration charge for the valuation period. The current
administration charge is shown on the specification pages. The administration
charge may be decreased, but will never exceed the rate shown on the
specification pages. The administration charge period will not exceed 20 policy
years.
Since the net investment factor may be more or less than one, the unit value may
increase or decrease. You bear the investment risk. We reserve the right
(subject to any required regulatory approvals) to change the method we use to
determine the net investment factor.
Valuation Dates and Periods: A valuation date is each day that the New York
Stock Exchange (NYSE) is open for business and any other day in which there is
enough trading in the Variable Account's underlying portfolio securities to
materially affect the value of the Variable Account. A valuation period is the
period between valuation dates.
Addition, Deletion or Substitution of Investments: We may not change the
investment policy of the Variable Account without the approval of the Insurance
Commissioner of California. This approval process is on file with the Insurance
Commissioner of your state.
We reserve the right, subject to compliance with applicable law, to add to,
delete from, or substitute for the shares of a Fund that are held by the
Variable Account or that the Variable Account may purchase. We also reserve the
right to eliminate the shares of any Fund if they are no longer available for
investment, or if we believe investing more in any eligible Fund is no longer
appropriate for the purposes of the Variable Account.
We will notify you before we substitute any of your shares in the Variable
Account. However, this will not prevent the Variable Account from buying other
shares of underlying securities for other series or classes of policies, or from
permitting a conversion between series or classes of policies or contracts if
holders request it, subject to compliance with any state or federal
requirements.
We reserve the right to establish other sub-accounts, and to make them available
to any class or series of policies as we think appropriate. Each new sub-account
would invest in a new investment company or in shares of another open-end
investment company. We also reserve the right to eliminate or combine existing
sub-accounts of the Variable Account and to transfer the assets between
sub-accounts, when allowed by law.
If we make any substitutions or changes that we believe are necessary or
appropriate, we may make changes in this policy by written notice to reflect the
substitutions or changes. If we think it is in the best interests of our policy
owners, we may operate the Variable Account as a management company under the
Investment Company Act of 1940, or we may de-register it under that Act if the
registration is no longer required. We may also combine it with other separate
accounts.
Federal Taxes: If we must pay taxes on the Variable Account, we will charge you
for that tax. Although the account is not now taxable, we reserve the right to
make a charge for taxes if the account becomes taxable.
Splitting of Units: We reserve the right to split the value of a unit, either to
increase or decrease the number of units. Any splitting of units will have no
material effect on policy benefits.
What You Should Know About the Fixed Account
Fixed Account: The Fixed Account is a part of our General Account. The General
Account consists of all assets owned by us, other than those in the Variable
Account and other separate accounts. Except as limited by law, we have sole
control over the investment of these General Account assets. You do not share
directly in the investment experience of the General Account, but are allowed to
allocate and transfer funds into the Fixed Account.
Fixed Account Interest Rates: The interest rates credited to the policy value in
the Fixed Account are set by us, but will never be less than 4% per year. We may
establish higher interest rates, and the initial interest rates and the renewal
interest rates may be different.
o Net payments allocated to the Fixed Account will be credited at the initial
interest rate in effect on the day we receive your payment at our Variable Life
Service Center, and the initial interest rate is guaranteed until the next
policy anniversary unless you borrow from that policy value.
o Funds transferred from a sub-account of the Variable Account to the Fixed
Account will be credited with interest at the initial interest rate in effect on
the valuation date of the transfer, and the initial interest rate is guaranteed
until the next policy anniversary unless you borrow from that policy value.
o Policy values in the Fixed Account on the policy anniversary will be credited
with interest at the renewal interest rate in effect on the policy anniversary,
and the renewal interest rate is guaranteed for one year so long as those values
remain in the Fixed Account and are not borrowed.
o The interest rate we use for that portion of the policy value that equals the
outstanding loan will be at least 6% per year. The interest rate will be higher
if the policy qualifies under the Preferred Loan provision; see page 16.
Fixed Account Policy Value: On each monthly processing date, the policy value
of the Fixed Account is:
o the policy value in this account on the preceding monthly
processing date increased by one month's interest, plus
o net payments received since the last monthly processing date which are
allocated to the Fixed Account plus the interest accrued from the date the
payments are received by us, plus
o Variable Account policy value transferred to the Fixed Account from any
sub-accounts since the preceding monthly processing date, increased by
interest from the date the policy value is transferred, minus
o policy value transferred from the Fixed Account to a
sub-account since the preceding monthly processing date and interest
accrued on these transfers from the transfer date to the monthly processing
date, minus
o partial withdrawals from the Fixed Account, partial withdrawal transaction
charges and withdrawal charges since the last monthly processing date, and
interest accrued on these withdrawals and charges from the withdrawal date
to the monthly processing date, minus
o any transaction charges allocated to the Fixed Account for any changes in the
face amount since the last monthly processing date and interest accrued on such
charges to the monthly processing date, minus
o the portion of the monthly insurance protection charge allocated to the policy
value in the Fixed Account.
During any policy month, the Fixed Account policy value will be calculated on a
consistent basis. In no event will the Fixed Account policy value be less than
the guaranteed cash value shown in the Paid-Up Insurance Table after the paid-up
option has been exercised.
Basis of Value of the Fixed Account: We base the minimum surrender value in the
Fixed Account on the Commissioners Ultimate 1980 Standard Ordinary Mortality
Table, Male or Female or Table B for unisex risks (or appropriate increases in
such tables for rated risks) with interest at 4% each year, compounded annually;
however, if the insured is over age 17 on the date of issue, the minimum
surrender value is based on the Smoker or Non-Smoker versions of such tables.
Actual policy values are based on interest and insurance protection rates that
we set. We have filed a detailed description of the way we determine this value
with the State Insurance Department. All values equal or exceed the minimums
required by law in the states in which this policy is delivered.
What You Should Know About Transfers
While this policy is in force other than as paid-up insurance, you may transfer
amounts between the Fixed Account and the sub-accounts or among sub-accounts, on
request.
You may transfer, without charge, all or part of the policy value in the
Variable Account to the Fixed Account once during the first 24 months after the
policy is issued, and once during the first 24 months after you have increased
the face amount in order to convert to a fixed-only product. If you do so,
future payments will be allocated to the Fixed Account unless you specify
otherwise. All other transfers are subject to the following rules, and will be
permitted with our approval.
We will determine the minimum and maximum amounts that may be transferred
according to the rules that are in effect at the time of the transfer.
We also reserve the right to limit the number of transfers that can be made in
each policy year, and to set other reasonable rules controlling transfers.
If a transfer would reduce the policy value in a sub-account to less than the
current minimum balance required for such accounts, we reserve the right to
include the remaining value in the amount transferred.
You will not be charged for the first twelve transfers in a policy year, but a
transfer charge of up to $25 may be made on each additional transfer. Any
transfer charge will be deducted from the amount that is transferred. Transfers
that result from a policy loan or repayment of a loan are not subject to these
rules.
If You Want to Borrow from Your Policy
This policy is the only security you need to borrow from it.
Amount You May Borrow: The total amount of loans you may have outstanding at any
time is the loan value. Except as otherwise provided in the paid-up insurance
option, the loan value in the first policy year is 75% of (a) minus (b) where:
(a) is the policy value minus the surrender charge, and
(b) is the monthly insurance protection charges and interest which will be
due on the loan through the end of the policy year.
The loan value in the second policy year and any year after is 90% of the
result of the policy value minus the surrender
charge.
If you do not specify from which accounts you want to borrow, we will allocate
the loan pro rata.
In order to secure the outstanding loan, we will transfer the policy value in
each sub-account equal to the policy loan allocated to each sub-account to the
Fixed Account.
Loan Interest: You will pay interest on your loan at an annual rate of 8%.
Interest accrues daily, and is payable at the end of each policy year. Any
interest that is not paid on time will be added to the loan principal and bear
interest at the same rate. If this makes the principal higher than the policy
value in the Fixed Account, we will offset this shortfall by transferring funds
from the Variable Account to the Fixed Account. We will allocate the transferred
amount pro rata among the sub-accounts in the same proportion that the value in
each sub-account has to the total value in all of them.
Repaying the Outstanding Loan: You may repay any part of any outstanding loan at
any time while the Insured is living before this policy lapses and before the
Maturity Date. When you repay it, we will transfer the policy value that is in
the Fixed Account to the various sub-accounts and increase the value in
them. You may tell us how to allocate repayments, but if you do not, we will
allocate them according to the most recent payment allocation choices you have
made. Loan repayments made to the Variable Account cannot be higher than the
amounts you transferred from it to secure the outstanding loan.
If you wish to make a loan repayment, you must tell us that the payment you
send us is for that purpose. Unless your payment is clearly marked as a loan
repayment, we will assume it is a premium payment unless it is received after
the final payment date. When we receive a loan repayment, we will apply it to
the portion of the policy value that secures the loan. If the
loan payment exceeds the loan balance, we will apply the balance as a premium
payment.
Foreclosure: If at any time the amount of the outstanding loan is higher than
the policy value, minus the surrender charge, we will terminate the policy. We
will mail a notice of this termination to the last known address of you and any
assignee. If the excess outstanding loan is not paid within 62 days from the
date contained in the notice, the policy will terminate with no value. You may
reinstate this policy according to the Reinstatement provision on page 11.
Preferred Loan Option: The preferred loan option is available after the 10th
policy year. The guaranteed annual interest rate credited to the portion of the
policy value securing a preferred loan is 7.5%.
After the 10th policy year, any outstanding loan will be treated as a preferred
loan from that date forward, unless you revoke the preferred loan option on that
outstanding loan. The interest credited to the portion of the policy value
securing the non-preferred loans will not be less than 6% per year.
This option may be revoked by you at any time.
This option will be canceled if the Paid-Up Life Insurance Option is elected.
Details on Surrender and Partial Withdrawals
Surrender: You may cancel this policy and receive its surrender value as long as
the insured is living on the date we receive your written request in our
Variable Life Service Center. The policy will be canceled on that day. You may
choose to receive the surrender value in a lump sum or under a payment option.
Surrender Value: Except as otherwise provided in the paid-up
insurance option, the surrender value equals the policy value minus the
outstanding loan and surrender charges.
You will find the surrender charge for the initial face amount on page 4. Any
changes in this charge when you increase or decrease the face amount will be
shown in new specification pages.
Partial Withdrawals: Partial withdrawals are not allowed during the first policy
year or if your policy is in force as paid-up insurance. After the first policy
year, you may withdraw part of the surrender value on written request. Each
withdrawal must be at least $500. We will deduct a 2% partial withdrawal
transaction charge (maximum $25) from the policy value each time you make a
partial withdrawal.
We also may deduct a withdrawal charge from the policy value. However, a portion
of the partial withdrawal will not be subject to the withdrawal charge. This
amount equals (a) minus (b), where:
(a) is 10% of the policy value on the date we receive the written request
at our Variable Life Service Center, and
(b) is the total of the withdrawals (or portions of them) made in the same
policy year which were exempt from the withdrawal charge.
We will charge you on the balance of the withdrawal, called the "excess
withdrawal." This charge is calculated by multiplying the excess withdrawal
amount by 5%. The charge will never exceed the surrender charge in effect on the
withdrawal date.
Your policy's surrender charge will be reduced by any withdrawal charges
previously paid. There will be no "excess withdrawal" charge if no surrender
charge applies to the policy on the withdrawal date.
The withdrawal charge will decrease existing surrender charges in the following
order:
o first, the most recent increase's surrender charge,
second, the next most recent increase's surrender charges in succession,
and
o last, the initial face amount's surrender charge.
If you elected the Level Death Benefit Option, the face amount and policy value
will be reduced by the amount of the partial withdrawal, and the policy value
will be further reduced by the partial withdrawal transaction and withdrawal
charges. The face amount will be decreased in the following order:
o first, the most recent increase,
o second, the next most recent increases in succession, and
o last, the initial face amount.
If you elected the Adjustable Death Benefit Option, the policy value will be
reduced by the amount of the partial withdrawal, plus the partial withdrawal
transaction and withdrawal charges.
We will not permit a partial withdrawal if it reduces the face amount to less
than $50,000.
If you do not allocate a partial withdrawal and its charges among the Fixed
Account and each sub-account, we will allocate that amount pro rata.
Postponement of Payment: We may postpone any transfer from the Variable
Account, or payment of any amount payable on:
o surrender, o partial withdrawal, o transfer, o policy loan, or o death of the
insured.
The postponement will continue during any period when:
o trading on the NYSE is restricted as determined by the SEC, or the NYSE is
closed for days other than weekends and holidays,
or
o the SEC by order has permitted such suspension, or
o the SEC has determined that such an emergency exists that disposal of
portfolio securities or valuation of assets is not reasonably practical.
We may also postpone any transfer from the Fixed Account or payment of any
portion of the amount payable on surrender, partial withdrawal or policy loan
from the Fixed Account for not more than six months from the day we receive your
written request and, if it is required, your policy. If we postpone those
payments for 30 days or more, the amount postponed will earn interest during
that period at a rate of not less than 3% per year or such higher rate as
required by law. We will not postpone payments to pay premiums on our policies.
.
What You Should Know About the Death Benefit
Guideline Minimum Sum Insured Table
Attained Attained
Age Percentage Age Percentage
40 or less 250% 60 130%
41 243% 61 128%
42 236% 62 126%
43 229% 63 124%
44 222% 64 122%
45 215% 65 120%
46 209% 66 119%
47 203% 67 118%
48 197% 68 117%
49 191% 69 116%
50 185% 70 115%
51 178% 71 113%
52 171% 72 111%
53 164% 73 109%
54 157% 74 107%
55 150% 75 - 90 105%
56 146% 91 104%
57 142% 92 103%
58 138% 93 102%
59 134% 94-115 101%
Net Death Benefit: If the insured dies before the
Maturity Date and before the policy is terminated, we
will pay the net death benefit. The net death benefit
is equal to the death benefit reduced by certain
amounts, as described below. The death benefit is
determined as of the date we receive due proof of the
insured's death at our Variable Life Service Center.
Due proof of death is a valid death certificate or
other evidence satisfactory to us.
The amount of the net death benefit depends upon: (1)
whether the date the insured dies is after, or on or
before, the final payment date; (2) whether the paid-up
insurance option is in effect on the date of the
insured's death; and (3) which death benefit option is
in effect on the date of death of the insured.
If the insured dies on or before the final payment date
and the paid-up insurance option has not been
exercised, then the net death benefit is determined by
deducting from the death benefit under the Level Death
Benefit Option or the Adjustable Death Benefit Option
(which are described later) the following: any
outstanding loan and monthly insurance protection
charges due and unpaid through the policy month in which the insured dies, as
well as any partial withdrawals and withdrawal charges.
If the paid- up insurance option has been exercised before the insured's
death, then the net death benefit is the paid-up insurance death benefit
minus any outstanding loan; (see page 20).
Except as otherwise provided in the Guaranteed Death Benefit Rider, if the
insured dies after the final payment date and the paid-up insurance option
has not been exercised, then the net death benefit will be equal to 101% of
the policy value, minus any outstanding loan and minus any partial
withdrawals and withdrawal charges.
If the net death benefit is paid in a lump sum, interest will be earned at
our declared interest rate for sums held on deposit, but not less than 2.5%
per year, beginning on the date we receive notice of death at our Variable
Life Service Center. We will pay a higher interest rate if required by state
law. We will credit interest from an earlier date (for example, from the date
of the insured's death) if required by state law.
Required Minimum Amount of Death Benefit: This
policy is intended to qualify under Section 7702 of the Internal Revenue Code as
a life insurance contract for federal tax purposes. The provisions of this
policy (including any rider or endorsement) shall be interpreted to ensure such
tax qualification, regardless of any language to the contrary.
At no time will the amount of the death benefit under the policy ever be less
than the amount needed to ensure such tax qualification. To the extent that the
death benefit is increased, appropriate adjustments will be made in any monthly
insurance protection charges or supplemental benefits as of that time,
retroactively or otherwise, that are consistent with such an increase. Such
adjustments may be made by right of setoff against any death benefits payable.
The death benefit under this policy will not be less than the Guideline Minimum
Sum Insured as specified in the tax code. This is calculated by multiplying the
policy value by the percentage shown in the preceding table. The guideline
minimum sum insured varies by attained age. The amounts shown in the table are
determined to provide a death benefit at least as great as those in the federal
tax law, and will be adjusted according to any changes in that law applicable to
this policy.
Death Benefit Options: You have two options for determining the amount of the
death benefit. The option you elected in your application is shown on page 3.
These options are not available after the final payment date or if the policy is
in force as paid-up insurance.
Under the Level Death Benefit Option, the death benefit is the greater of:
o the face amount, or
o the guideline minimum sum insured.
Under the Adjustable Death Benefit Option, the death benefit is the greater of:
o the face amount plus the policy value on the date we receive proof of death
(we will refund monthly insurance protection charges deducted from the policy
value after the insured's date of death), or
o the guideline minimum sum insured.
You may change the death benefit option by making a written request. That change
will be made on the next monthly processing date after we receive your request.
o If you change from the Level Death Benefit Option to the Adjustable Death
Benefit Option, the face amount under the Adjustable Death Benefit Option will
be equal to the death benefit under the Level Death Benefit Option, minus the
policy value on the date of change.
o If you change from the Adjustable Death Benefit Option to the Level Death
Benefit Option, the face amount will be equal to the death benefit under the
Adjustable Death Benefit Option on the date of change.
You may not change your death benefit option more than once in any policy year,
or if the change reduces the face amount to less than $50,000.
Benefit Change: You may increase or decrease the face amount of insurance
if you make a written request during the insured's
lifetime.
You may not change the face amount if it does not meet the minimum death benefit
requirement set by federal tax law.
Increase: To increase the face amount:
o you must complete our application and provide us with evidence of
insurability satisfactory to us; and
o the insured's age must not be over our maximum issue age for new
insurance; and
o you must pay a $40 transaction charge, plus the net premium sufficient to keep
the policy in force for two months if the surrender value is less than this
amount.
This increased face amount will become effective on the first monthly processing
date on, or following, the date that all the conditions are met. We will deduct
the $40 transaction charge from the policy value on the effective date of
increase. You may choose the sub-account from which these charges will be
deducted; but if you do not choose, we will allocate the charges pro-rata. We
will provide you new specification pages, including a Supplemental Monthly
Insurance Protection Charge Table if the insured's underwriting class changes.
These pages will include the following information:
o effective date of the increase,
o amount of the increase,
o underwriting class,
o new minimum monthly payment,
o new guideline premiums, and
o new surrender charges applicable to the entire policy.
We reserve the right to set a limit on the minimum amount of an increase in the
face amount. No increase may be less than our minimum limit in effect on the
date we receive your request.
You may return the new specification pages to us by the later of ten days after
receiving them or 45 days after you complete the "Application Form" which shows
the amount of the increase. If you return these pages within the period
described above, we will consider the increase void from the beginning. We will
add the charges back to the policy value unless you request otherwise.
We will also cancel any surrender charge for the increase.
Decrease: You may decrease the face amount of the policy at any time. It will be
effective on the first monthly processing date after we receive your written
request. You must pay a $40 transaction charge. The face amount will be
decreased or eliminated in the following order:
o first, the most recent increase,
second, the next most recent increases successively, and
o last, the initial face amount.
We will deduct a $40 transaction charge and a surrender charge from the policy
value on the date of the decrease. The surrender charge will be the surrender
charge for the face amounts which are decreased or eliminated in the order as
noted above.
You may choose the sub-account from which these charges will be deducted; but if
you do not choose, we will allocate the charges pro rata.
We will provide you with new specification pages. These pages will include the
following information:
effective date of the decrease,
amount of the decrease and the face amount remaining in force,
new minimum monthly payment, if any,
new guideline premiums, and
new surrender charges applicable to the entire policy.
You may not decrease the face amount to less than $50,000. We reserve the
right to establish a minimum limit on the amount of
any decrease.
Paid-Up Insurance Option
Benefit: This is insurance, usually having a reduced face amount for the
lifetime of the insured with no further premiums due. The amount of paid-up
insurance is the amount that the surrender value can provide as a net single
premium applied at the insured's age and underwriting class on the date this
option is exercised. The paid-up insurance death benefit may not exceed the
death benefit in effect on the date this option is exercised. In the event that
the surrender value exceeds the net single premium for the death benefit on the
date this option is exercised, the excess surrender value will be paid to you.
Basis of Values: The policy value and net single premium of the paid-up
insurance meet the minimum standards which are set by state law. The net single
premium is based on the Commissioners Ultimate 1980 Standard Ordinary Mortality
Table, Smoker or Non-Smoker; Male or Female or Table B for unisex risks (or
appropriate increases in such tables for non-standard risks). Interest will not
be less than 4 1/2%. See page 6 for the table showing the guaranteed net single
premiums per $1,000 of insurance.
Exercise of Option: The paid-up insurance option may be exercised by you on
written request. Policy value in the Variable Account will be transferred to the
Fixed Account on the date your written request to exercise this option is
received in our Variable Life Service Center. We will issue supplemental
specification pages that show the policy is paid- up effective as of the monthly
processing date following receipt of the written request.
The supplemental specification pages will show:
o the effective date of paid-up insurance,
o the paid-up death benefit,
o guaranteed cash surrender values, and
o riders.
Effect on the Policy: After the policy becomes paid-up, no further payments may
be made by you. You may not increase or decrease the face amount. You may not
make partial withdrawals or transfer funds to the Variable Account; however, you
may make policy loans or surrender the policy for its net cash value. Riders
will continue only with our consent.
The guaranteed cash value of the paid-up insurance equals the net single premium
for the paid-up insurance at the insured's attained age. The net single premium
is determined on the same basis as is used for the purchase price of the paid-up
insurance. The net cash value is the cash value less any outstanding loan. The
loan value of paid-up insurance is the amount that, with interest at 8% per
year, equals the cash value of the paid-up policy as of the next policy
anniversary.
24
Form TA1031-97
Payment of Benefits
Payment Options: Upon written request, the surrender value or all or part of the
net death benefit may be placed under one or more of the payment options offered
by us at the time the request is made. If you make no election, we will pay the
benefit in a single sum.
A certificate will be provided to the payee describing the payment option
selected.
If a payment option is selected, the beneficiary, when filing proof of claim,
may pay us any amount that otherwise would be deducted from the net death
benefit.
The amounts payable under these options are paid from the General Account. The
options are not based on the investment experience of the Variable Account.
The amount applied under any one option for any one payee must be at least
$5,000. The periodic payment for any one payee must be at
least $50.
Subject to the Owner and Beneficiary provisions, you may change any option
selection before the net death benefit becomes payable. If you make no
selection, the beneficiary may select an option when the proceeds become
payable.
Summary:
Flexible Premium Variable Life Insurance Policy
Adjustable Sum Insured
Death Proceeds Payable at Death of Insured
Flexible Premiums Payable to the Final Payment Date
Coverage to the Maturity Date and Amount of Policy Value Not Guaranteed
Nonparticipating.
9
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
CHILDREN'S INSURANCE RIDER
This rider is part of the policy to which it is attached if it is shown in the
specification pages. The insured under the policy is the insured under this
rider. "Insured Child" is defined below.
Benefit
Benefit - The Company will pay the children's insurance benefit upon receipt of
due proof that an Insured Child died while this rider was in force. The amount
of the children's insurance benefit is shown in the specification pages. Unless
requested otherwise, the beneficiary under this rider is the owner.
Insured Child Description - "Acquired" means born, legally adopted or attained
the status of stepchild.
"Insured Child" means an acquired child of the insured who:
o is named in the application for this rider and on the date of the
application has not reached his or her 18th birthday; or
o is acquired during the insured's lifetime after the date of the application
but before such child's 18th birthday.
No child can be an Insured Child while under the age of 14 days. A person will
cease to be an Insured Child on the policy anniversary nearest the earlier of
the Insured Child's 25th birthday and/or the insured's 65th birthday.
Period of Term Insurance - The term insurance on each Insured Child will begin
on the date of coverage under this rider if the child is an Insured Child on
such date; otherwise the term insurance will begin on the date the Insured Child
is acquired and is 14 days old. The term insurance will expire on the date the
child ceases to be an Insured Child.
Paid-Up Term Insurance - If the insured dies while this rider is in force, the
term insurance in force on each Insured Child will be converted to paid-up term
insurance. The paid-up term insurance on each child will terminate on the date
the child ceases to be an Insured Child. This rider may be surrendered at any
time while the paid-up term insurance is in force for its net reserve on the
date of surrender. However, if this rider is surrendered within 30 days after a
policy anniversary, the value will not be less than the net reserve on such
anniversary. We will furnish a statement of the values for this rider upon
request.
Conversion
Conversion - You may convert the insurance on the life of an Insured Child if
such request is made:
o within 60 days before the term insurance on the life of an Insured Child
expires;
o during the Insured Child's lifetime; and
o while the rider is in force.
You may convert to a new policy issued by Transamerica Occidental Life Insurance
Company. Evidence of insurability will not be required.
New Policy Description - The new policy will be issued:
o on any form of individual life insurance, other than term, being issued
by us on the date of issue of the new policy;
o on the life of the Insured Child only; and
o at the Insured Child's age and for the premium rates in effect on the
date of issue of the new policy.
(Over)
Form TA1096-97
Conversion (continued)
The sum insured may not be less than our minimum issue limit for the new policy.
The sum insured may be up to 5 times the amount of insurance under this rider on
the Insured Child. The new policy will not become binding unless the first
premium is paid during the lifetime of the Insured Child and within 31 days
after the expiration of the term insurance under this rider.
The date of issue of the new policy will be the day after the expiration of the
term insurance under this rider.
The new policy will be subject to any assignments outstanding against this
rider. Riders will be available on the new policy subject to evidence of
insurability and consent of the Company. The time periods of the suicide and
incontestability provisions of the new policy will expire on the same date as
such provision in this rider would have expired.
General
Incontestability - Except for fraud or failure to pay the charges, this rider
cannot be contested after it has been in force, during the insured's lifetime,
for two years from its date of issue. The insurance on any Insured Child named
in the application cannot be contested after it has been in force, during the
Insured Child's lifetime, for two years from the date of issue of this rider.
Misstatement of Age - If the age of a child has been misstated and if the child
would not have been an Insured Child upon his or her death if the age had been
correctly stated, no benefit will be payable if the child dies. Any benefit paid
to the beneficiary because of the death of such child shall be repaid to the
Company. If the age of the insured has been misstated, the termination date of
the Insured Child's coverage will be based upon the insured's correct age.
Termination - Coverage under the rider will terminate on the first to occur of:
o the end of the grace period of a required premium in default; or
o the termination or maturity of the policy except as provided in the
Paid-Up Term Insurance provision; or
o the day before the policy anniversary nearest the insured's age 65; or
o the last day of the policy month in which you request the termination.
General - The specification pages (see page 3 of the policy) will show the date
of issue of this rider.
Charges for this rider are payable as part of the monthly insurance protection
charges due under this policy. The monthly charge is shown on page 5.
Except as otherwise provided, all conditions and provisions of the policy apply
to this rider.
Signed for Transamerica Occidental Life Insurance Company at Los Angeles,
California and effective on the date of issue of the policy to which this rider
is attached, unless a different date is shown here.
- -------------------------------------------------------------------------
[GRAPHIC OMITTED]
- -------------------------------------------------------------------------
- -------------------------------------------------------------------------
[GRAPHIC OMITTED]
- -------------------------------------------------------------------------
Executive Vice President, General Counsel President and CEO
and Corporate Secretary
Form TA1096-97
10
Form TA1097-97
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
Guaranteed Insurability Rider
This rider is a part of the policy to which it is attached if it is shown in the
specification pages of the policy. The insured under the policy is the insured
under this rider.
Benefit - Subject to the terms of this rider, on each option date you may
increase the face amount of insurance without evidence of insurability if
written request is made:
during the lifetime of the insured; and
while this rider and policy are in force.
Option Dates - The first option date for this rider is shown in the
specification pages of the policy. Option dates will then occur on every second
anniversary of the first option date until the policy anniversary nearest age 40
or until the fifth option date, whichever is later.
Exercise of Increase Option - Options may be exercised on the life of the
insured not earlier than 60 days prior to, nor later than 31 days after, an
option date. The specification pages of the policy show the "option amount" and
the "total option amount". The total option amount is the maximum aggregate face
amount of insurance which may be purchased through this rider. Each time the
option to increase the face amount of insurance is exercised, the total option
amount is reduced by the amount of the insurance purchased. The face amount
which may be purchased at one time may not exceed the option amount or, if less,
the total option amount remaining. The increased face amount may not be less
than $10,000.
The insurance protection charges for the increased face amount will be
calculated in the same manner as the charges for other increases in the face
amount. The guaranteed insurance protection charges will not exceed the
guaranteed charges in effect on the date of issue of this rider.
Supplemental specification pages will be issued. They will include the following
information:
the effective date of the increased face amount;
the amount of the increase; and
the surrender charge.
The supplemental specification pages will also show a new minimum monthly
payment and new guideline premiums which will apply to the entire policy. There
is no administrative charge for the exercise of this option.
If the surrender value on the date of issue of an increase is less than the
insurance protection charges due on the policy you must pay the grace period
premium to us. The effective date of the increase in face amount will be the
monthly processing date following the date of the written request. If the
insured dies after the date of the written request and before the increased face
amount takes effect, we will refund any premium paid to exercise this option.
The time periods in the suicide and incontestable clauses for the increased face
amount will be measured from the date of issue of this rider.
Waiver of Payments - If this policy contains a waiver of payment rider on the
effective date of the increased face amount, the waiver of payment benefit may
be increased without evidence of insurability. If waiver of payment benefits are
being paid on the increase date, the increased benefit will become payable on
the increase date.
If on the effective date of an increase the waiver of payment benefit is
designated in the specification pages as the monthly insurance protection
charges, this benefit will be increased by the insurance protection charges for
the increased face amount.
If the waiver of payment benefit on an increase date is shown in the
specification pages as a dollar amount, this benefit will be increased by the
smaller of:
the waiver of payment benefit on the option date minus 1/12 of the sum of
the payments made by you over the last 12 months; or the amount shown in
the waiver of payment benefit table.
- ------------------------------------------------------
Waiver of Payment Benefit Table
- ------------------------------------------------------
- --------------- --------------------------------------
Monthly Benefit
Attained Increase Per $1,000
Ages Face Amount Increased:*
- --------------- --------------------------------------
- --------------- --------------------------------------
18-19 $ .50
20-29 .63
30-39 1.00
40-49 1.50
50-54 2.00
55-59 2.75
- --------------- --------------------------------------
- ------------------------------------------------------
*In no event may the waiver of payment benefit be
increased to exceed the monthly equivalent of your
periodic payment.
- ------------------------------------------------------
Incontestability - Except for fraud or failure to pay the monthly insurance
protection charges, this rider cannot be contested after it has been in force
for two years from its date of issue.
Termination - This rider will terminate on the first to occur of:
the end of the grace period of a premium in default; or
the end of the policy month following a request for termination; or
the last option date; or
the date of issue of an increase which, when added to the sum of all prior
increases under this rider, reduces the total option amount remaining to
less than $10,000.
General - The specification pages (see page 3 of the policy) will show for this
rider:
the date of issue;
the first option date;
the option amount; and
the total option amount.
Except as otherwise provided, any additional benefits or riders will not be
added or increased without our prior consent.
Reinstatement of this rider will not revive any option date which occurred
during the period of lapse.
Charges for this rider are payable as a part of the monthly insurance protection
charges due under this policy. The monthly insurance protection charge for this
rider is shown on page 5 of the policy.
Except as otherwise provided, all conditions and provisions of the policy apply
to this rider.
Signed for Transamerica Occidental Life Insurance Company at Los Angeles,
California and effective on the date of issue of the policy to which this rider
is attached, unless a different date is shown here.
- ---------------------------------------------------
[GRAPHIC OMITTED]
- ---------------------------------------------------
- ---------------------------------------------------
[GRAPHIC OMITTED]
- ---------------------------------------------------
Executive Vice President, General Counsel President and CEO
and Corporate Secretary
11
1
Form TA1093-97
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
Option To Accelerate Death Benefits
(Living Benefits Rider)
This rider is a part of the policy to which it is attached. The insured under
this rider is the insured under the policy. This rider does not apply to any
benefits provided by other riders under this policy.
Benefit - While this rider is in force, you may elect to receive a portion of
the net death benefit called the "living benefit," prior to the insured's death
under this option subject to the definitions, conditions and limitations in this
rider. This option may only be exercised once.
Definitions - "Option amount" means that portion of the death benefit which you
elect to apply under this option. The option amount must be at least $25,000 and
may not exceed the least of:
one-half of the death benefit on the date the option is elected; or
the amount that would reduce the face amount to our minimum issue limit
for this policy; or
$250,000.
"Option percentage" is the option amount divided by the death benefit.
"Living benefit" is the option amount which has been reduced for interest and
other factors. It is equal to the lump sum benefit under this rider, and is the
amount used to determine the monthly benefit. The living benefit will not be
less than the surrender value of the policy multiplied by the option percentage.
The following factors will be used to calculate the living benefit:
age;
sex, unless the policy is issued on a unisex basis;
life expectancy;
policy value;
outstanding loan;
rate of interest currently being credited to the Fixed Account including
those values which are subject to outstanding loan;
face amount;
death benefit option;
current cost of insurance rates; and
an expense charge of $150.
An amount equal to the outstanding loan multiplied by the option percentage will
be deducted from the living benefit. The remaining outstanding loan will
continue in force.
The assumptions we use to calculate the living benefit may change from time to
time. The factors used to compute the living benefit will be set and changed
only prospectively; that is, based on changes in future expectations. We will
not change these factors to recoup any prior losses or distribute past gains
under the rider.
"Proof of claim satisfactory to us" shall include:
a request signed by the insured and owner to disclose all facts
concerning the insured's health;
records of the attending physician, including a prognosis of the insured;
and
if we request, a medical examination of the insured at our expense
conducted by a physician we choose.
Conditions - Upon written request you may elect to receive payment under the
accelerated death benefit option subject to the following conditions:
the policy is in force;
a written consent has been given by any collateral assignee, irrevocable
beneficiary and the insured if you are not the insured; if the policy was
delivered in a community property state, we may require your spouse to
sign the consent; and
the insured qualifies for the option.
Exercising the Option - If you provide proof of claim and a certification of a
qualified physician satisfactory to us that the insured has an illness or
physical condition which can reasonably be expected to result in death in 12
months or less, you may elect to receive the living benefit in equal monthly
payments for 12 months. For each $1,000 of living benefit, each payment will be
at least $85.21. This assumes an annual interest rate of 5%.
If the insured dies before all the payments have been made, we will pay the
beneficiary in one sum the present value of the remaining payments due under
this rider calculated at the interest rate we use to determine those payments.
If you do not wish to receive monthly payments, you may elect to receive the
living benefit in a lump sum.
Effect on Policy - The policy's death benefit will be decreased by the option
amount. Such decrease will be effective on the monthly processing date following
the date of the written request.
Existing insurance will be decreased or eliminated in the following order:
first, the most recent increase;
second, the next most recent increases successively; and
last, the initial face amount.
Any surrender charge applicable to the decrease in the face amount will be
waived. The amount of the charge which is waived will be:
the surrender charge applicable to any increased face amount which is
eliminated in the order set forth above; plus
a pro rata share of the surrender charge applicable to a partial
reduction in an increase or in the original face amount.
New specification pages will be issued. These pages will include the following
information:
the effective date of the decrease;
the amount of the decrease and the benefit remaining in force;
the revised surrender charge;
the revised minimum monthly payment, if any; and
the new guideline premiums.
The policy value will be reduced in the same proportion as the reduction in the
death benefit. Riders will continue in force.
Exclusion - No benefit will be paid under this rider if a claim results,
directly or indirectly, from a suicide attempt or a self-inflicted injury (while
sane or insane) for any period during which a suicide exclusion is applicable.
Termination - This rider will terminate on the first to occur of:
the date the living benefit is paid or the first monthly installment of
the living benefit is paid; or
the end of the grace period of a premium in default; or
the termination or maturity of the policy while the insured is alive; or
at any time on your written request.
General - The specification pages (see page 3 of the policy) will show the date
of issue of this rider.
The living benefit will be made available to you on a voluntary basis only.
Accordingly:
(a) If you are required by law to exercise this option to satisfy the claim of
creditors, whether in bankruptcy or otherwise, you are not eligible for this
benefit.
(b) If you are required by a government agency to exercise this option in order
to apply for, obtain, or retain a government benefit or entitlement, you are not
eligible for this benefit.
Except as otherwise provided, all conditions and provisions of the policy apply
to this rider.
TAX QUALIFICATION: This rider is intended to provide a qualified accelerated
death benefit that is excludable from gross income for federal income tax
purposes. To that end, the provisions of this rider and the policy are to be
interpreted to ensure or maintain such tax qualification, notwithstanding any
other provisions to the contrary. Whether any tax liability may be incurred when
benefits are paid under this rider could depend on whether the owner is also the
insured and on how the Internal Revenue Service interprets applicable provisions
of the Internal Revenue Code. As with any tax matter, the owner and any other
recipient of this benefit should each consult his own tax advisor to evaluate
any tax impact of this benefit.
Signed for Transamerica Occidental Life Insurance Company at Los Angeles,
California and effective on the date of issue of the policy to which this rider
is attached, unless a different date is shown here.
- --------------------------------------------------------
[GRAPHIC OMITTED]
- --------------------------------------------------------
- --------------------------------------------------------
[GRAPHIC OMITTED]
- --------------------------------------------------------
Executive Vice President, General Counsel President and CEO
and Corporate Secretary
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
CHILDREN'S INSURANCE RIDER
This rider is part of the policy to which it is attached if it is shown in the
specification pages. The insured under the policy is the insured under this
rider. "Insured Child" is defined below.
Benefit
Benefit - The Company will pay the children's insurance benefit upon receipt of
due proof that an Insured Child died while this rider was in force. The amount
of the children's insurance benefit is shown in the specification pages. Unless
requested otherwise, the beneficiary under this rider is the owner.
Insured Child Description - "Acquired" means born, legally adopted or attained
the status of stepchild.
"Insured Child" means an acquired child of the insured who:
o is named in the application for this rider and on the date
of the application has not reached his or her 18th
birthday; or
o is acquired during the insured's lifetime after the date of the application
but before such child's 18th birthday.
No child can be an Insured Child while under the age of 14 days. A person will
cease to be an Insured Child on the policy anniversary nearest the earlier of
the Insured Child's 25th birthday and/or the insured's 65th birthday.
Period of Term Insurance - The term insurance on each Insured Child will begin
on the date of coverage under this rider if the child is an Insured Child on
such date; otherwise the term insurance will begin on the date the Insured Child
is acquired and is 14 days old. The term insurance will expire on the date the
child ceases to be an Insured Child.
Paid-Up Term Insurance - If the insured dies while this rider
is in force, the term insurance in force on each Insured Child
will be converted to paid-up term insurance. The paid-up term
insurance on each child will terminate on the date the child
ceases to be an Insured Child. This rider may be surrendered
at any time while the paid-up term insurance is in force for its
net reserve on the date of surrender. However, if this rider is
surrendered within 30 days after a policy anniversary, the
value will not be less than the net reserve on such anniversary.
We will furnish a statement of the values for this rider upon request.
-------------------------------
Conversion -------------------------------
Conversion - You may convert the insurance on the life of an Insured Child if
such request is made:
o within 60 days before the term insurance on the life of an
Insured Child expires;
o during the Insured Child's lifetime; and
o while the rider is in force.
You may convert to a new policy issued by Transamerica
Occidental Life Insurance Company. Evidence of insurability
will not be required.
New Policy Description - The new policy will be issued:
o on any form of individual life insurance, other than term,
being issued by us on the date of issue of the new policy;
o on the life of the Insured Child only; and
o at the Insured Child's age and for the premium rates in
effect on the date of issue of the new policy.
(Over)
Form TA1096-97
-------------------------------
Conversion (continued)
-------------------------------
The sum insured may not be less than our minimum issue limit for the new policy.
The sum insured may be up to 5 times the amount of insurance under this rider on
the Insured Child. The new policy will not become binding unless the first
premium is paid during the lifetime of the Insured Child and within 31 days
after the expiration of the term insurance under this rider.
The date of issue of the new policy will be the day after the expiration of the
term insurance under this rider.
The new policy will be subject to any assignments outstanding against this
rider. Riders will be available on the new policy subject to evidence of
insurability and consent of the Company. The time periods of the suicide and
incontestability provisions of the new policy will expire on the same date as
such provision in this rider would have expired.
General
Incontestability - Except for fraud or failure to pay the charges, this rider
cannot be contested after it has been in force, during the insured's lifetime,
for two years from its date of issue. The insurance on any Insured Child named
in the application cannot be contested after it has been in force, during the
Insured Child's lifetime, for two years from the date of issue of this rider.
Misstatement of Age - If the age of a child has been misstated and if the child
would not have been an Insured Child upon his or her death if the age had been
correctly stated, no benefit will be payable if the child dies. Any benefit paid
to the beneficiary because of the death of such child shall be repaid to the
Company. If the age of the insured has been misstated, the termination date of
the Insured Child's coverage will be based upon the insured's correct age.
Termination - Coverage under the rider will terminate on the first to occur of:
o the end of the grace period of a required premium in
default; or
o the termination or maturity of the policy except as
provided in the Paid-Up Term Insurance provision; or
o the day before the policy anniversary nearest the insured's
age 65; or
o the last day of the policy month in which you request the
termination.
General - The specification pages (see page 3 of the policy) will show the date
of issue of this rider.
Charges for this rider are payable as part of the monthly
insurance protection charges due under this policy. The
monthly charge is shown on page 5.
Except as otherwise provided, all conditions and provisions of the policy apply
to this rider.
Signed for Transamerica Occidental Life Insurance Company at Los Angeles,
California and effective on the date of issue of the policy to which this rider
is attached, unless a different date is shown here.
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Executive Vice President, General Counsel President and CEO
and Corporate Secretary
Form TA1096-97
TRANSAMERICA OCCIDENTAL LIFE INSURANCE COMPANY
-------------------------------
Waiver of Payment Rider ---------------------------------
This rider is part of the policy to which it is attached if it is shown in the
specification pages of the policy. The insured
under the policy is the insured under this rider.
Benefit - On each monthly processing date, while the insured is totally
disabled, we will add to the policy value the waiver of payment benefit. This
benefit is the largest of:
o the amount shown in the specification pages; or
o the minimum monthly payment for the face amount covered by this rider during
a period when the minimum monthly payment applies; or
o the monthly insurance protection charges applicable to the face amounts and
other riders covered by this rider.
The waiver of payment benefit is subject to:
o our receipt of due proof of such total disability; and
o evidence the total disability:
o began while this rider was in force; and
o began before the policy anniversary nearest
insured's age 65; and
o has continued for at least 4 months; and
o the other terms and conditions of this rider.
The benefit will begin with the policy month following the date total disability
begins or the policy anniversary nearest the insured's age 5, if later. The
benefit will not be provided for any period more than one year prior to the date
we received written notice of claim. We will credit the policy value with any
benefit which applies to the time during which benefits are payable.
Each monthly benefit will be allocated in accordance with the payment allocation
in effect on the date each benefit is credited to the policy value.
If the insured's total disability occurs before the policy anniversary nearest
the insured's age 60, the benefit will end when total disability ends. If the
total disability occurs on or after the policy anniversary nearest the insured's
age 60, the benefit will continue during such total disability but not beyond
the policy anniversary nearest the insured's age 65 or two years, whichever is
longer.
Benefits will cease on the next monthly processing date following the end of a
period of total disability.
Definitions of Total Disability - Total disability means the insured is unable
to engage in any occupation as a result of disease or bodily injury.
"Occupation" means attendance at school if the insured is not old enough to
legally end his or her formal education. Otherwise "occupation" means any
occupation for which the insured is or becomes reasonably fitted by training,
education or experience.
Total loss of the following as a result of disease or bodily injury shall be
deemed total disability:
o speech
o hearing in both ears; or
o the sight of both eyes; or
o the use of both hands; or
o the use of both feet; or
o the use of one hand and one foot.
Risks Not Covered - No benefit will be provided if total disability results,
directly or indirectly, from:
o an act of war, whether such war is declared or
undeclared, and the insured is a member of the armed
forces of a country or combination of countries; or
o any bodily injury occurring or disease first manifesting itself prior to the
date of issue of this rider. However, no claim for total disability
commencing after two years from the date of issue will be denied on the
ground that the disease or impairment not excluded from coverage by name or
specific description existed prior to the date of issue of this rider.
(over)
Form TA1094-97
Notice and Proof of Claim - Written notice of claim must be sent to our Variable
Life Service Center:
o during the lifetime of the insured; and
o while the insured is totally disabled; and
o not later than 12 months after this rider terminates.
Proof of claim must be sent to our Variable Life Service Center within 6 months
of the notice of claim. Failure to give notice and proof within the time
required will not void or reduce any claim if it can be shown that notice and
proof were given as soon as was reasonably possible.
Proof of continued total disability must be furnished at our request. Failure to
do so will end the benefit. Such proof will include an authorization to disclose
facts concerning the insured's health, and may include medical exams of the
insured conducted by physicians chosen by us. Such medical exams will be at our
expense. After total disability has continued for 24 months, proof will not be
required more than once a year, nor after the policy anniversary nearest age 65.
Benefit Changes - The benefit may be changed on written request. An increase
will only be allowed if the insured is under age 60 and we receive:
o evidence of insurability that is satisfactory to us; and
o payment to us of the premium sufficient to keep the policy in force if the
surrender value is less than all charges due on the policy.
No increase, when added to the existing benefit, shall exceed the following
limits:
Maximum Benefit Table
Monthly Benefit
Attained Per $1,000
Age Face Amount
0-19 $1.00
20-29 1.25
30-39 2.00
40-49 3.00
50-54 4.00
55 and above 5.50
The waiver of payment benefit will be reduced if it exceeds the maximum benefit
after the face amount of the policy is reduced. The monthly benefit may not
exceed the amount shown in the Maximum Benefit Table.
The effective date of the changed benefit will be the first monthly processing
date on or after the date all conditions are met. The changed benefit will be
shown in supplementary specification pages. The charges for an increased benefit
will be shown in a Supplemental Insurance Protection Charge Table if the
insured's underwriting class changes.
Incontestability - Except for fraud or failure to pay the monthly insurance
protection charges, this rider cannot be contested after the end of the
following time periods:
o the initial benefit cannot be contested after the rider has been in force
during the insured's lifetime and without the occurrence of the total
disability of the insured for two years from the date of issue; and
o an increase in the benefit cannot be contested after the increased benefit
has been in force during the insured's lifetime and without the occurrence
of the total disability of the insured for two years from its effective
date.
Termination - This rider will terminate on the first to occur of:
o the end of the grace period of a premium in default; or
o the termination or maturity of the policy; or
o the day before the policy anniversary nearest age 65,
except as provided in the Benefit provision; or
o the end of the policy month following a request for
termination.
Rider Charge - Charges for this rider are paid as a part of the monthly
insurance protection charges due under the policy.
The monthly charge is the waiver charge shown in the
Insurance Protection Charge Table multiplied by the
greater of:
o the monthly insurance protection charges applicable
to the face amount and other riders covered by this
rider; or
o one-half of the waiver of payment benefit shown in the
specification pages.
Form TA1094-97
General - The specification pages (see page 3 of the policy) will show the date
of issue of this rider.
When an increase in face amount or an additional rider is applied for, waiver of
payment coverage must also be requested. We reserve the right to decline
issuance of the waiver of payment coverage for the increased face amount or
additional rider benefit. If total disability begins during the grace period of
a past due premium, such a premium will be payable.
The waiver of payment benefit will not reduce any amount payable under the
policy.
Except as otherwise provided, all conditions and provisions of the policy apply
to this rider.
Signed for Transamerica Occidental Life Insurance Company at Los Angeles,
California and effective on the date of issue of the policy to which this rider
is attached, unless a different date is shown here.
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Executive Vice President, General Counsel President and CEO
and Corporate Secretary
Form TA1094-97