Description of Issuance, Transfer and Redemption Procedures for Policies
Offered by the Separate Account IMO ("Variable Account")
of Allmerica Financial Life Insurance and Annuity Company
Pursuant to Rule 6e-3(T)(b)(12)(ii)
under the Investment Company Act of 1940
The Separate Account IMO ("Variable Account") of Allmerica Financial Life
Insurance and Annuity Company ("Company") is registered under the Investment
Company Act of 1940 ("1940 Act") as a unit investment trust. There are
currently 15 Sub-Accounts within the Variable Account. Procedures apply
equally to each subaccount and for purposes of this description are defined
in terms of the Variable Account, except where a discussion of both the
Variable Account and the individual Sub-Accounts is necessary. Each
Sub-Account invests in shares of a corresponding investment division of the
Allmerica Investment Trust ("Trust"), Variable Insurance Products Fund
("Fidelity VIP"), or T. Rowe Price International Series, Inc. ("T. Rowe
Price"), each of which is a "series" type of mutual fund registered under the
1940 Act. The investment experience of a Sub-Account of the Variable Account
depends on the market performance of its corresponding investment division of
the Trust, Fidelity VIP or T. Rowe Price. Although flexible premium variable
life insurance policies funded through the Variable Account may also provide
for fixed benefits supported by the Company's General Account, this
description assumes that net premiums are allocated exclusively to the
Variable Account and that all transactions involve only the Sub-Accounts of
the Variable Account, except as otherwise explicitly stated herein.
I. "PUBLIC OFFERING PRICE": PURCHASE AND RELATED TRANSACTIONS -- SECTION 22(D)
AND RULE 22C-L
This section outlines Policy provisions and administrative procedures
which might be deemed to constitute, either directly or indirectly, a
"purchase" transaction. Because of the insurance nature of the
policies, the procedures involved necessarily differ in certain
significant respects from the purchase procedures for mutual funds and
annuity plans. The chief differences revolve around the structure of
the cost of insurance charges and the insurance underwriting process.
Certain Policy provisions, such as reinstatement and loan repayment, do
not result in the issuance of a Policy but require certain payments by
the Policy Owner and involve a transfer of assets supporting Policy
reserve into the Variable Account.
a. INSURANCE CHARGES AND UNDERWRITING STANDARDS
Premium payments are not limited as to frequency and number, but
there are limitations as to amount. No premium payment may be less
than $50 without the Company's consent, and the total of all premiums
paid can never exceed the then current maximum premiums determined by
Internal Revenue Service rules. If at any time a premium is paid
which would result in total premiums exceeding the current maximum
premium limitations, the Company will return the amount in excess of
such maximums to the Policy Owner.
The Policy will remain in force so long as the Policy value less any
outstanding debt is sufficient to pay certain monthly charges imposed
in connection with the Policy. Cost of insurance charges for the
policies will not be the same for all Policy Owners. The insurance
principle of pooling and distribution of mortality risks is based
upon the assumption that each Policy Owner pays a cost of insurance
charge commensurate with the Insured's mortality risk, which is
actuarially determined based upon factors such as age, health and
occupation. In the context of life insurance, a uniform mortality
charge (the "cost of insurance charge") for all Insured's would
discriminate unfairly in favor of those Insured's representing
greater mortality risks to the disadvantage of those representing
lesser risks. Accordingly, there will be a different "price" for
each actuarial category of Policy Owners because different cost of
insurance rates will apply. While not all Policy Owners will be
subject to the same cost of insurance
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rate, there will be a single "rate" for all Policy Owners in a given
actuarial category. The Policies will be offered and sold pursuant
to the Company's underwriting standards and in accordance with state
insurance laws. Such laws prohibit unfair discrimination among
Insureds, but recognize that premiums must be based upon factors such
as age, health and occupation. Tables showing the maximum cost of
insurance charges will be delivered as part of the Policy.
b. APPLICATION AND INITIAL PREMIUM PROCESSING
Upon receipt of a completed application from a prospective Policy
Owner, the Company will follow certain insurance underwriting
procedures designed to determine whether the proposed Insured is
insurable. This process may involve such verification procedures as
medical examinations and may require that further information be
provided by the proposed Policy Owner before a determination can be
made. A Policy cannot be issued until this underwriting procedure
has been completed.
If at the time of Application a prospective Policy Owner makes a
payment equal to at least one monthly deduction for the Policy as
applied for, the Company will provide fixed conditional insurance in
the amount of insurance applied for, up to a maximum of $500,000,
pending underwriting approval. This coverage will continue for a
maximum of 90 days from the date of the application or enrollment
form or, if required, the completed medical exam. If the application
is approved, the Policy will be issued as of the date the terms of
the Conditional Insurance Agreement were met. If the prospective
Policy Owner does not wish to make any payment until the Policy is
issued, upon delivery of the Policy the Company will require payment
of sufficient premium to place the insurance in-force.
Pending completion of insurance underwriting and Policy issuance
procedures, the initial premium will be held in the Company's General
Account. If the application is approved and the Policy is issued and
accepted, the initial premium held in the General Account will be
credited with interest not later than the date of receipt of the
premium at the Company's Principal Office. If a Policy is not
issued, the premiums will be returned to the Applicant without
interest.
If the application or enrollment form is approved and the Policy is
issued and accepted, upon issuance and acceptance of the Policy the
Company generally allocates Policy Value according to the Policy
Owner's instructions. However, if the Policy provides for a full
refund of payments under its "Right to Examine Policy" provision as
required in certain states and described below under Section II(g),
the Company will initially allocate sub-account investments to the
Money Market Fund. The allocation to the Money Market Fund will be
for four days after the expiration of the "Right to Examine"
provision of the Policy. Generally, this will be for 14 days from
issuance and acceptance of the Policy (based on a 10 day "Right to
Examine" period).
These processing procedures are designed to provide insurance,
starting with the date of the application, to the proposed Policy
Owner in connection with payment of the initial premium and will not
dilute any benefit it payable to any existing Policy Owner. Although
a Policy cannot be issued until the underwriting process has been
completed, the proposed Policy Owner will receive immediate insurance
coverage, if he has paid an initial premium and proves to be
insurable.
The Company will require that the Policy be delivered within a
specific delivery period to protect itself against anti-selection by
the prospective Policy Owner resulting from a deterioration of the
health of the proposed Insured. Generally, the period will not
exceed the shorter of 30 days from the date the Policy is issued and
75 days from the date of Part 2 of the Application.
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c. PREMIUM ALLOCATION
"Net premiums" are credited to the Policy as of the date the premium
payments are received by the Company, with the possible exception of
the first net premium. Net premiums are equal to the gross premiums
minus the payment expense charge. The payment expense charge
compensates the Company for applicable state and local taxes on
premiums paid for the Policy, and for federal taxes imposed for
deferred acquisition costs ("DAC taxes"), and to partially compensate
for sales expenses. It will be adjusted to reflect any increase or
decrease in the applicable state or local premium tax rate.
The Policy Owner may allocate net premiums among the Company's
General Account and up to fifteen Sub-Accounts of the Variable
Account. The Policy Owner may change the allocation of net premiums
without charge at any time by providing written notice to the
Principal Office. The change will be effective as of the date of
receipt of the notice at the Principal Office. The Policy Owner may
transfer amounts among all of the Sub-Accounts and the General
Account, subject to certain restrictions, but at no time may have
allocations in more than twenty Subaccounts.
d. REPAYMENT OF LOAN
A loan made under this Policy may be repaid with an amount equal to
the original loan plus loan interest.
When a loan is made, the Company will transfer from each Sub-Account
of the Variable Account to the General Account an amount of that
Sub-Account's Policy value equal to the loan amount allocated to the
Sub-Account. Since the Company will credit such assets with current
annual interest at 4.00%, which is below the interest rate charged on
the loan (currently 4.8%, and guaranteed not to exceed 6.0%), the
Company will retain the difference between these rates in order to
cover certain expenses and contingencies. Upon repayment of debt,
the Company will reduce the Policy value in the general account
attributable to the loan and transfer assets supporting corresponding
reserves to the Sub-Accounts according to either Policy Owner's
instruction or, if none, the premium payment allocation percentages
then in effect. Loan repayments allocated to the Variable Account
cannot exceed Policy Value previously transferred from the Variable
Account to secure the debt.
A preferred loan option is automatically available, unless the Policy
Owner requests otherwise. The preferred loan option is available on
that part of an outstanding loan that is attributable to policy
earnings. The term "policy earnings" means that portion of the
Policy Value that exceeds the sum of the payments made less all
partial withdrawals and withdrawal charges. The guaranteed annual
interest rate credited to the policy value securing a preferred loan
is 4.0%. The interest rate charged on a preferred loan is currently
4.0% (guaranteed not to exceed 4.5%).
e. POLICY REINSTATEMENT
If the surrender value is insufficient to cover the next monthly
deduction plus loan interest accrued, or if Policy debt exceeds the
Policy value, the Company will notify the Policy Owner and any
assignee of record. The Policy Owner will then have a grace period
of 62 days, measured from the date the notice is mailed, to make
sufficient payments to prevent termination.
Failure to make a sufficient payment within the grace period will
result in termination of the Policy without any Policy value. The
death benefit payable during the grace period will be reduced by any
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overdue charges. If the Insured dies during the grace period, the
death proceeds will still be payable, but any monthly deductions due
and unpaid through the Policy month in which the Insured dies will be
deducted from the death proceeds.
If the Policy has not been surrendered and the Insured is alive, the
terminated Policy may be reinstated anytime within three years after
the date of default by submitting the following to the Company: (1) a
written application for reinstatement; (2) evidence of insurability
satisfactory to the Company; and (3) a premium that, after the
deduction of the premium expense charges, is large enough to cover
the minimum amount payable, as described below.
If reinstatement is requested the Policy Owner must pay the monthly
deduction for the three-month period beginning on the date of
reinstatement. The surrender charge on the date of reinstatement is
the surrender charge that was in effect on the date of termination.
The Policy Value on the date of reinstatement is:
- The net payment made to reinstate the Policy and interest earned
from the date the payment was received at our Principal Office PLUS
- The Policy Value less any outstanding loan on the date of default
(not to exceed the surrender charge on the date of reinstatement)
MINUS
- The Monthly Deductions due on the date of reinstatement
f. CORRECTION OF MISSTATEMENT OF AGE
If the Company discovers that the age of the Insured has been
misstated, the death benefit and any rider benefits will be those
which would be purchased by the most recent deduction for the cost of
insurance and the cost of rider benefits at the correct age.
g. CONTESTABILITY
A Policy is contestable for two years, measured from the issue date,
for material misrepresentations made in the initial application for
the Policy. Policy changes may be contested for two years after the
effective date of a change, and a reinstatement may be contested for
two years after the effective date of reinstatement. No statement
will be used to contest a Policy unless it is contained in an
application.
h. REDUCTION IN COST OF INSURANCE RATE CLASSIFICATION
By administrative practice, the Company will reduce the cost of
insurance rate classification for an outstanding Policy if new
evidence of insurability demonstrates that the Policy Owner qualifies
for a lower classification. After the reduced rating is determined,
the Policy Owner will pay a lower monthly cost of insurance charge
each month. If new evidence of insurability provided in connection
with an increase in Face Amount demonstrates that the Policy Owner is
in a higher risk classification, the higher cost of insurance rate
will apply only to the increase in Face Amount.
II. "REDEMPTION PROCEDURE": SURRENDER AND RELATED TRANSACTIONS
The policies provide for the payment of monies to a Policy Owner or
beneficiary upon presentation of a Policy. Generally except for the
payments of death proceeds, the imposition of cost of insurance
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and administrative charges, and the possible effect of a contingent
surrender charge, the payee will receive a pro rata or proportionate
share of the Variable Account's assets, within the meaning of the 1940
Act, in any transaction involving "redemption procedures". The amount
received by the payee will depend upon the particular benefit for which
the Policy is presented, including, for example, the cash surrender
value or death benefit. There are also certain Policy provisions (e.g.,
partial withdrawals or the loan privilege) under which the Policy will
not be presented to the Company but which will affect the Policy Owner's
benefits and may involve a transfer of the assets supporting the Policy
reserve out of the Variable Account. Any combined transactions on the
same day which counteract the effect of each other will be allowed. The
Company will assume the Policy Owner is aware of the possible
conflicting nature of the transactions and desires their combined
result. If a transaction is requested which the Company will not allow
(e.g., a request for a decrease in Face Amount which lowers the Face
Amount below the stated minimum) the Company will reject the whole
transaction and not just the portion which causes the disallowance. The
Policy Owner will be informed of the rejection and will have an
opportunity to give new instructions.
a. SURRENDER FOR CASH VALUES
The Company will pay the net cash surrender value within seven days
after receipt, at its Principal Office, of the Policy and a signed
request for surrender. Computations with respect to the investment
experience of each Sub-Account will be made at the close of trading
of the New York Stock Exchange on each day in which the degree of
trading in the corresponding portfolio might materially affect the
net return of the Sub-Account and on which the Company is open. This
will enable the Company to pay a net cash value on surrender based on
the next computed value after the surrender request is received. For
valuation purposes, the surrender is effective on the date the
Company receives the request at its Principal Office (although
insurance coverage ends the day the request is mailed).
The Policy value (equal to the value of all accumulations in the
Variable Account) may increase or decrease from day to day depending
on the investment experience of the Variable Account. Calculation of
the Policy value for any given day will reflect the actual premiums
paid, expenses charged and deductions taken. The Company will deduct
a charge for premium taxes, DAC taxes, and a 3.0% sales load from
each premium payment. The balance (net premium) is allocated to the
Variable Account according to Policy Owner's instructions. The
Company will also make monthly deductions from a Policy to cover the
cost of insurance, including optional benefits provided by rider.
Other possible deductions from the Policy (which will occur on a
Policy-specific basis) include a charge for partial withdrawals, a
charge for increases in Face Amount and a charge for certain
transfers.
A surrender charge on a withdrawal exceeding the "Free 10%
Withdrawal" deducted from Policy Value for up to 10 years from Date
of Issue of the Policy or from the date of increase in Face Amount.
This charge applies only on a full surrender or decrease in Face
Amount within ten years of the date of issue or of an increase in
Face Amount. The maximum Surrender Charge is equal to a specified
amount that varies with the age, sex, and underwriting class of the
Insured for each $1,000 of the Policy's Face Amount. The amount of
the Surrender Charges decreases annually to 0% by the 10th Contract
year.
If there are increases in the Face Amount, each increase will have a
corresponding surrender charge. These charges will be specified in a
supplemental schedule of benefits at the time of the increase.
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The Company will make the payment of net cash surrender value out of
its General Account and, at the same time, transfer assets from the
Variable Account to the General Account in an amount equal to the
Policy reserves in the Variable Account. If the Policy is
surrendered in the first Policy year, any unpaid first year monthly
administrative charges will be deducted at surrender, in addition to
any contingent surrender charges which may be applicable.
For purposes of calculating actual Surrender Charges, premium and
Policy value will be allocated to the initial Face Amount and
subsequent increases in Face Amount according to the ratio of the
respective Guideline Annual Premiums.
A Surrender Charge may be made on a decrease in the Face Amount. A
surrender charge may be deducted on a decrease in the Face Amount.
On a decrease, the surrender charge deducted is a fraction of the
charge that would apply to a full surrender. The fraction is the
product of the decrease divided by the current Face Amount times the
surrender charge. Where a decrease causes a partial reduction in an
increase or in the initial Face Amount, the Company will deduct a
proportionate share of the surrender charge for that increase or for
the initial Face Amount.
b. CHARGES ON PARTIAL WITHDRAWAL
For each partial withdrawal, The Company deducts a transaction fee of
2.0% of the amount withdrawn, not to exceed $25. This fee is
intended to reimburse us for the cost of processing the withdrawal.
A partial withdrawal charge may also be deducted from Policy Value.
However, in any Policy year, the Policy Owner may withdraw, without a
partial withdrawal charge, up to 10% of the policy value minus the
total of any prior free withdrawals in the same Policy year ("Free
10% Withdrawal"). The right to make the Free 10% Withdrawal is not
cumulative from Policy year to Policy year.
The Company imposes the partial withdrawal charge on any withdrawal
greater than the Free 10% Withdrawal. The charge is of 5.0% of the
excess withdrawal up to the surrender charge. If no surrender charge
applies on withdrawal, no partial withdrawal charge will apply. The
Company will reduce the Policy's outstanding surrender charge by the
partial withdrawal charge deducted, proportionately reducing the
deferred sales and administrative charges. The partial withdrawal
charge deducted will decrease existing surrender charges in inverse
order.
c. DEATH BENEFIT
The Company will normally pay a death benefit to the beneficiary
within seven days after receipt, at its Principal Office, of the
Policy, due proof of death of the Insured, and all other requirements
necessary to make payment.
The death proceeds payable will depend on the option in effect at the
time of death. Federal tax law requires a Guideline Minimum Death
Benefit in relation to Policy Value for a Contract to qualify as life
insurance. Under current Federal tax law, either the Guideline
Premium Test or the Cash Value Accumulation Test can be used to
determine if the Contract complies with the definition of "life
insurance" under the Code. At the time of application, the Policy
Owner may elect either of the tests. If the Policy Owner elects the
Guideline Premium Test, the Policy Owner will have the choice of
electing the Death Benefit Option 1 or the Death Benefit Option 2. If
the Policy Owner elects the Cash Value Accumulation Test, the Death
Benefit Option 3 will apply.
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GUIDELINE PREMIUM TEST AND CASH VALUE ACCUMULATION TEST - There are
two main differences between the Guideline Premium Test and the Cash
Value Accumulation Test. First, the Guideline Premium Test limits
the amount of premium that may be paid into a Contract, while no such
limits apply under the Cash Value Accumulation Test. Second, the
factors that determine the Guideline Minimum Death Benefit relative
to the Policy Value are different.
The Guideline Premium Test limits the amount of premiums payable
under a Contract to a certain amount for an Insured of a particular
age and sex. Under the Guideline Premium Test, the Policy Owner may
choose between the Death Benefit Option 1 or the Death Benefit Option
2. After issuance of the Contract, the Policy Owner may change the
selection from the Death Benefit Option 1 to the Death Benefit Option
2, or vice versa.
The Cash Value Accumulation Test requires that the Death Benefit must
be sufficient so that the cash Surrender Value does not at any time
exceed the net single premium required to fund the future benefits
under the Contract. Under the Cash Value Accumulation Test, required
increases in the Guideline Minimum Death Benefit (due to growth in
Policy Value) will generally be greater than under the Guideline
Premium Test. If the Policy Owner chooses the Cash Value
Accumulation Test, ONLY the Death Benefit Option 3 is available.
Under the Death Benefit Option 1, the death benefit is the greater of
either the Face Amount of insurance or the Guideline Minimum Sum
Insured. Under the Death Benefit Option 2, the death benefit is the
greater of either (a) the Face Amount of insurance PLUS Policy value
or (b) the guideline minimum sum Insured. The guideline minimum sum
Insured is calculated by multiplying the applicable percentage from
the following table for the Insured person's age (nearest birthday)
at the beginning of the Policy year of determination to the-policy
value.
GUIDELINE MINIMUM DEATH BENEFIT FACTORS
Age of Insured Percentage of
on Date of Death Policy Value
---------------- -------------
40 and under...................................... 250%
45................................................ 215%
50................................................ 185%
55................................................ 150%
60................................................ 130%
65................................................ 120%
70................................................ 115%
75................................................ 105%
80................................................ 105%
85................................................ 105%
90................................................ 105%
95 and above...................................... 100%
For the ages not listed, the progression between the listed ages is
linear.
Death Benefit Option 3 (Cash Value Accumulation Test). Under Option
3, the Death Benefit will equal the greater of (1) the Face Amount or
(2) the Policy Value multiplied by the applicable factor, as set
forth in the Policy. The applicable factor depends upon the
Underwriting Class, sex (unisex if required by law), and
then-attained age of the Insured. The factors decrease slightly from
year to year as the attained age of the Insured increases.
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The Company will make payment of the death proceeds out of its
general account, and will transfer assets from the Variable Account
to the general account in an amount equal to the reserve in the
Variable Account attributable to the Policy. The excess, if any, of
the death proceeds over the amount transferred will be paid out of
the general account reserve maintained for that purpose.
d. DEFAULT AND OPTIONS ON LAPSE
The duration of insurance coverage depends upon the Policy value
being sufficient to cover the monthly deductions plus loan interest
accrued. If the Policy value at the beginning of a month is less
than the deductions for that month plus loan interest accrued, a
grace period of 62 days will begin. Written notice will be sent to
the Policy Owner and any assignee on the Company's records stating
that such a grace period has begun and giving the amount of premium
payment necessary to prevent termination.
If sufficient payment is not received during the grace period, the
Policy will terminate without value. Notice of such termination will
be sent to the Owner and any assignee. If the Insured should die
during the grace period, an amount sufficient to cover the overdue
monthly deductions and other charges will be deducted from the death
proceeds.
e. POLICY LOAN
The policies provide that Policy Owner may take a loan of up 90% of
an amount equal to Policy value less surrender charges. The Policy
value for this purpose will be that next computed after receipt, at
the Principal Office, of a loan request. Payment of the loan amount
will be made to the Policy Owner within seven days after such receipt.
The amount of any outstanding loan plus accrued interest is called
"debt". When a loan is made, the portion of the assets in the
Variable Account (which is a portion of the surrender value and which
also constitutes a portion of the reserves for the death benefit)
equal to the debt created thereby is transferred by the Company from
the Variable Account to the general account. Allocation of the loan
among Sub-Accounts will be according to the Policy Owner's request.
If this allocation is not specified or not possible, the loan will be
allocated based on the proportion the Policy value in the General
Account, less debt, and the Policy value in each Sub-Account bears to
the total Policy value, less debt. Policy value in each Sub-Account
equal to the Policy loan allocated to such Subaccount will be
transferred to the General Account, and the number of Accumulation
Units equal to the Policy value so transferred will be canceled.
Because of the transfer, a portion of the Policy is not variable
during the loan period and, therefore, the death benefit and the
surrender value are permanently affected by any debt, whether or not
repaid in whole or in part. The Company credits the Policy value in
the General Account attributable to the loan with a rate of return
equal to an effective annual yield of 4.00%.
Loan Interest is payable in arrears at the current annual rate of
4.80% (4.00% for preferred loans). This rate may change, but is
guaranteed not to exceed 6.00% (4.50% for preferred loans). Interest
is payable at the end of each Policy year or on a pro rata basis for
such shorter period as the loan may exist. Loan interest is due on
each Policy anniversary. If not paid when due, it is added to the
loan principal and bears interest at the same rate of interest. If
the resulting loan principal exceeds the Policy value in the General
Account, the Company will transfer Policy value equal to the excess
debt from the Policy value in each Sub-Account to the General
Account; as security for the excess debt. The Company will allocate
the amount transferred among the Sub-Accounts in the same proportion
that the Policy value in each Sub-Account bears to the total Policy
values in all Sub-Accounts.
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Failure to repay a loan will not necessarily terminate the Policy.
If the Policy Value is not sufficient to cover the monthly deductions
for the cost of insurance and administrative expenses, the Policy
will go into a 62 day grace period as described above.
f. TRANSFERS AMONG SUBACCOUNTS
Amounts may be transferred, upon request, at any time from any
Sub-Account of the Variable Account to one or more other
Sub-Accounts. Transfers from a Sub-Account of the Variable Account
will take effect as of the receipt of a written request at the
Principal Office. The first twelve transfers are free of charge;
however, the Company will make an administrative charge of $10
(guaranteed not to exceed $25) for additional transfers in a Policy
year. Transfers resulting from Policy loans, the exercise of
conversion rights, automatic transfers, and reallocation of Policy
value within 20 days of issue, will not be subject to a transfer
charge, and will not be counted for purposes of the limitation on the
number of 'free' transfers allowed in each Policy year. Automatic
transfers do not reduce the remaining number of transfers which may
be made without charge.
Transfer charges, if any, are allocated by Policy Owner request to
one Sub-Account. If an allocation is not specified or not possible
the allocations will be based on the proportion that the values in
each of the Sub-Accounts of the Variable Account bears to the total
unloaded Policy value.
g. RIGHT OF WITHDRAWAL PROCEDURES
The Policy Owner has the right to examine and cancel the Policy by
returning it to the Company Along with a written request for
cancellation to the Company or one of its representatives on or
before the 10 days after receipt of the Policy (or longer when state
law so requires).
If the Policy provides for a full refund under its "Right to Examine
Policy" provision as required in a particular state, the refund will
be the greater of the entire payment or the Policy value plus
deductions under the Policy or by the funds for taxes, charges or
fees. If the Policy does not provide for a full refund, the refund
will be the amounts allocated to the fixed account, the policy value
in the Variable Account, and all fees, charges and taxes which have
been imposed.
A free look privilege also applies after a requested increase in Face
Amount. After an increase, the Company will mail or deliver notice
of the "Free Look" with respect to the increase. The Policy Owner
will have the right to cancel the increase within 10 days, and
receive a credit for charges that would not have been deducted but
for the increase. Such charges with respect to the increase will be
added to Policy value, unless the Policy Owner requests a refund of
such charges.
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