THE VARIABLE ANNUITY CONTRACT
ISSUED BY
METLIFE INSURANCE COMPANY USA
AND
METLIFE INVESTORS USA SEPARATE ACCOUNT A
SERIES VA
(OFFERED ON AND AFTER OCTOBER 7, 2011)
FEBRUARY 14, 2015
This prospectus describes the flexible premium deferred variable annuity
contract offered by MetLife Insurance Company USA (MetLife USA or we or us).
The contract is offered for individuals and some tax qualified and non-tax
qualified retirement plans.
The annuity contract has 64 investment choices - a Fixed Account that offers an
interest rate guaranteed by us, and 63 Investment Portfolios listed below.
MET INVESTORS SERIES TRUST (CLASS B OR, AS NOTED, CLASS C OR CLASS E):
AllianceBernstein Global Dynamic Allocation Portfolio*
Allianz Global Investors Dynamic Multi-Asset Plus Portfolio*
American Funds (Reg. TM) Balanced Allocation Portfolio
(Class C)+
American Funds (Reg. TM) Growth Allocation Portfolio
(Class C)
American Funds (Reg. TM) Growth Portfolio (Class C)
American Funds (Reg. TM) Moderate Allocation Portfolio
(Class C)+
AQR Global Risk Balanced Portfolio*
BlackRock Global Tactical Strategies Portfolio*
BlackRock High Yield Portfolio
Clarion Global Real Estate Portfolio
ClearBridge Aggressive Growth Portfolio
Goldman Sachs Mid Cap Value Portfolio
Harris Oakmark International Portfolio
Invesco Balanced-Risk Allocation Portfolio*
Invesco Comstock Portfolio
Invesco Mid Cap Value Portfolio
Invesco Small Cap Growth Portfolio
JPMorgan Core Bond Portfolio
JPMorgan Global Active Allocation Portfolio*
Loomis Sayles Global Markets Portfolio
Lord Abbett Bond Debenture Portfolio
Met/Eaton Vance Floating Rate Portfolio
Met/Franklin Low Duration Total Return Portfolio
Met/Templeton International Bond Portfolio#
MetLife Asset Allocation 100 Portfolio
MetLife Balanced Plus Portfolio*
MetLife Multi-Index Targeted Risk Portfolio*
MFS (Reg. TM) Emerging Markets Equity Portfolio
MFS (Reg. TM) Research International Portfolio
PanAgora Global Diversified Risk Portfolio*
PIMCO Inflation Protected Bond Portfolio
PIMCO Total Return Portfolio
Pioneer Fund Portfolio
Pioneer Strategic Income Portfolio (Class E)
Pyramis (Reg. TM) Government Income Portfolio*
Pyramis (Reg. TM) Managed Risk Portfolio*
Schroders Global Multi-Asset Portfolio*
SSgA Growth and Income ETF Portfolio+
SSgA Growth ETF Portfolio
T. Rowe Price Large Cap Value Portfolio
T. Rowe Price Mid Cap Growth Portfolio
Third Avenue Small Cap Value Portfolio
1
METROPOLITAN SERIES FUND:
Baillie Gifford International Stock Portfolio (Class B)
Barclays Aggregate Bond Index Portfolio (Class G)*
BlackRock Money Market Portfolio (Class B)
Frontier Mid Cap Growth Portfolio (Class B)
Jennison Growth Portfolio (Class B)
Met/Artisan Mid Cap Value Portfolio (Class B)
Met/Dimensional International Small Company Portfolio (Class B)
MetLife Asset Allocation 20 Portfolio (Class B)+
MetLife Asset Allocation 40 Portfolio (Class B)+
MetLife Asset Allocation 60 Portfolio (Class B)+
MetLife Asset Allocation 80 Portfolio (Class B)
MetLife Mid Cap Stock Index Portfolio (Class G)
MetLife Stock Index Portfolio (Class B)
MFS (Reg. TM) Value Portfolio (Class B)
MSCI EAFE (Reg. TM) Index Portfolio (Class G)
Neuberger Berman Genesis Portfolio (Class B)
Russell 2000 (Reg. TM) Index Portfolio (Class G)
T. Rowe Price Large Cap Growth Portfolio (Class B)
Van Eck Global Natural Resources Portfolio (Class B)#
Western Asset Management U.S. Government Portfolio (Class B)
WMC Core Equity Opportunities Portfolio (Class E)
* If you elect the GWB v1 rider, a GMIB Max rider, or a GMIB Max and an EDB Max
rider, you must allocate your Purchase Payments and Account Value among these
Investment Portfolios. (See "Purchase - Investment Allocation Restrictions for
Certain Riders - Investment Allocation and Other Purchase Payment Restrictions
for the GMIB Max, EDB Max, and GWB v1 Riders.") If you elect the GLWB rider,
you must allocate a portion of your Purchase Payments and Account Value among
these Investment Portfolios. (See "Purchase - Investment Allocation
Restrictions for Certain Riders - Investment Allocation and Other Purchase
Payment Restrictions for the GLWB.") These Investment Portfolios are also
available for investment if you do not elect the GLWB rider, the GWB v1 rider,
a GMIB Max rider or an EDB Max rider.
+ If you elect the GLWB rider, you are permitted to allocate a portion of your
Purchase Payments and Account Value among these Investment Portfolios. (See
"Purchase - Investment Allocation Restrictions for Certain Riders -
Investment Allocation and Other Purchase Payment Restrictions for the GLWB.")
These Investment Portfolios are also available for investment if you do not
elect the GLWB rider.
# This portfolio is only available for investment if certain optional riders
are elected. (See "Purchase - Investment Allocation Restrictions for Certain
Riders - Investment Allocation and Other Purchase Payment Restrictions for
GMIB Plus IV, EDB III, GMIB Plus III, and EDB II.")
Please read this prospectus before investing and keep it on file for future
reference. It contains important information about the MetLife USA Variable
Annuity Contract.
To learn more about the MetLife USA Variable Annuity Contract, you can obtain a
copy of the Statement of Additional Information (SAI) dated February 14, 2015.
The SAI has been filed with the Securities and Exchange Commission (SEC) and is
legally a part of the prospectus. The SEC maintains a Web site
(http://www.sec.gov) that contains the SAI, material incorporated by reference,
and other information regarding companies that file electronically with the
SEC. The Table of Contents of the SAI is on Page ___ of this prospectus. For a
free copy of the SAI, call us at (800) 343-8496, visit our website at
WWW.METLIFEINVESTORS.COM, or write to us at: 11225 North Community House Road,
Charlotte, NC 28277.
The contracts:
o are not bank deposits
o are not FDIC insured
o are not insured by any federal government agency
o are not guaranteed by any bank or credit union
o may be subject to loss of principal
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
February 14, 2015
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1. THE ANNUITY CONTRACT
This prospectus describes the Variable Annuity Contract offered by us.
The variable annuity contract is a contract between you as the Owner, and us,
the insurance company, where we promise to pay an income to you, in the form of
Annuity Payments, beginning on a designated date that you select. Until you
decide to begin receiving Annuity Payments, your annuity is in the ACCUMULATION
PHASE. Once you begin receiving Annuity Payments, your contract switches to the
INCOME PHASE.
The contract benefits from tax deferral. Tax deferral means that you are not
taxed on earnings or appreciation on the assets in your contract until you take
money out of your contract. For any tax qualified account (e.g., an IRA), the
tax deferred accrual feature is provided by the tax qualified retirement plan.
Therefore, there should be reasons other than tax deferral for acquiring the
contract within a qualified plan. (See "Federal Income Tax Status.")
The contract is called a variable annuity because you can choose among the
Investment Portfolios and, depending upon market conditions, you can make or
lose money in any of these portfolios. If you select the variable annuity
portion of the contract, the amount of money you are able to accumulate in your
contract during the Accumulation Phase depends upon the investment performance
of the Investment Portfolio(s) you select. The amount of the Annuity Payments
you receive during the Income Phase from the variable annuity portion of the
contract also depends, in part, upon the investment performance of the
Investment Portfolio(s) you select for the Income Phase. We do not guarantee
the investment performance of the variable annuity portion. You bear the full
investment risk for all amounts allocated to the variable annuity portion.
However, there are certain optional features that provide guarantees that can
reduce your investment risk (see "Living Benefits").
In most states, the contract also contains a FIXED ACCOUNT option (contact your
registered representative regarding your state). The Fixed Account is part of
our general account and offers an interest rate that is guaranteed by us. The
minimum interest rate depends on the date your contract is issued but will not
be less than 1%. Your registered representative can tell you the current and
minimum interest rates that apply. Because of exemptive and exclusionary
provisions, interests in the Fixed Account have not been registered under the
Securities Act of 1933, and neither the Fixed Account nor the general account
has been registered as an investment company under the Investment Company Act
of 1940. If you select the Fixed Account, your money will be placed with our
other general account assets, and the amount of money you are able to
accumulate in your contract during the Accumulation Phase depends upon the
total interest credited to your contract. The Fixed Account is part of our
general account. Our general account consists of all assets owned by us other
than those in the Separate Account and our other separate accounts. We have
sole discretion over the investment of assets in the general account. If you
select a fixed Annuity Payment option during the Income Phase, payments are
made from our general account assets. All guarantees as to Purchase Payments or
Account Value allocated to the Fixed Account, interest credited to the Fixed
Account, and fixed Annuity Payments are subject to our financial strength and
claims-paying ability.
The amount of the Annuity Payments you receive during the Income Phase from a
fixed Annuity Payment option of the contract will remain level for the entire
Income Phase. (Please see "Annuity Payments (The Income Phase)" for more
information.)
As Owner of the contract, you exercise all interests and rights under the
contract. You can change the Owner at any time, subject to our underwriting
rules (a change of ownership may terminate certain optional riders). The
contract may be owned generally by Joint Owners (limited to two natural
persons). We provide more information on this under "Other Information -
Ownership."
All contract provisions will be interpreted and administered in accordance with
the requirements of the Internal Revenue Code (the "Code"). Any Code references
to "spouses" include those persons who are married spouses under state law,
regardless of sex.
2. PURCHASE
The contract may not be available for purchase through your broker dealer
("selling firm") during certain periods. There are a number of reasons why the
contract periodically may not be available, including that the insurance
company wants to limit the volume of sales of the contract. You may wish to
speak to your registered representative about how this may affect your
purchase. For example, you may be required to submit your purchase application
in Good Order prior to or on a stipulated date
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types of living benefit riders - guaranteed income benefits, a guaranteed
withdrawal benefit, and a guaranteed lifetime withdrawal benefit:
Guaranteed Income Benefits
--------------------------
o GMIB Max (GMIB Max V, GMIB Max IV, GMIB Max III, and GMIB Max II)
o Guaranteed Minimum Income Benefit Plus (GMIB Plus IV and GMIB Plus III)
Our guaranteed income benefit riders are designed to allow you to invest your
Account Value in the Investment Portfolios, while assuring a specified
guaranteed level of minimum fixed Annuity Payments if you elect the Income
Phase. The fixed Annuity Payment amount is guaranteed regardless of investment
performance or the actual Account Value at the time you annuitize. Prior to
exercising the rider and annuitizing your contract, you may make withdrawals up
to a maximum level specified in the rider and still maintain the benefit
amount.
Guaranteed Withdrawal Benefit
-----------------------------
o Guaranteed Withdrawal Benefit (GWB v1)
The Guaranteed Withdrawal Benefit rider is designed to allow you to invest your
Account Value in the Investment Portfolios, while guaranteeing that at least
the entire amount of Purchase Payments you make will be returned to you through
a series of withdrawals, provided withdrawals in any Contract Year do not
exceed the maximum amount allowed under the rider.
Guaranteed Lifetime Withdrawal Benefit
--------------------------------------
o Guaranteed Lifetime Withdrawal Benefit (GLWB)
The GLWB rider is designed to allow you to invest your Account Value in the
Investment Portfolios, while guaranteeing that you will receive lifetime income
regardless of investment performance. The guarantee is subject to the
conditions described in "Guaranteed Lifetime Withdrawal Benefit - Operation of
the GLWB," including the condition that withdrawals before a defined age or
withdrawals that exceed the maximum amount allowed under the rider in a
Contract Year will reduce or eliminate the guarantee. In states where approved,
you may also elect the GLWB Death Benefit for an additional charge if you elect
the GLWB rider.
GUARANTEED MINIMUM INCOME BENEFIT (GMIB)
If you want to invest your Account Value in the Investment Portfolio(s) during
the Accumulation Phase, but you also want to assure a specified guaranteed
level of minimum fixed Annuity Payments during the Income Phase, we offer an
optional rider for an additional charge, called the Guaranteed Minimum Income
Benefit (GMIB). The purpose of the GMIB is to provide protection against market
risk (the risk that the Account Value allocated to the Investment Portfolio(s)
may decline in value or underperform your expectations).
As described in more detail in "Annuity Payments (The Income Phase)," you can
choose to apply your Account Value to fixed Annuity Payments, variable Annuity
Payments, or a combination of both. The dollar amount of your Annuity Payments
will vary to a significant degree based on the market performance of the
Investment Portfolio(s) to which you had allocated Account Value during the
Accumulation Phase (and based on market performace during the Income Phase, in
the case of variable Annuity Payments).
With the GMIB, the minimum amount of each fixed Annuity Payment you receive
during the Income Phase is guaranteed regardless of the investment performance
of the Investment Portfolios during the Accumulation Phase or your actual
Account Value at the time you elect the Income Phase. Prior to exercising the
rider, you may make specified withdrawals that reduce your Income Base (as
explained below) during the Accumulation Phase and still leave the rider
guarantees intact, provided the conditions of the rider are met. Your
registered representative can provide you an illustration of the amounts you
would receive, with or without withdrawals, if you exercised the rider.
In states where approved, you may purchase the GMIB if you are age 78 or
younger on the effective date of your contract. You may not have this benefit
and another living benefit (Guaranteed Withdrawal Benefit or Guaranteed
Lifetime Withdrawal Benefit) in effect at the same time. Once elected, the GMIB
rider may not be terminated except as stated below.
SUMMARY OF THE GMIB
THE FOLLOWING SECTION PROVIDES A SUMMARY OF HOW THE GMIB WORKS. A MORE DETAILED
EXPLANATION OF THE OPERATION OF THE GMIB IS PROVIDED, IN THE SECTION BELOW
CALLED "OPERATION OF THE GMIB."
Under the GMIB, we calculate an "Income Base" that determines, in part, the
minimum amount you receive as fixed Annuity Payments under the GMIB rider if
you elect the Income Phase. The Income Base is the greater of two
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GUARANTEED WITHDRAWAL BENEFIT
If you want to invest your Account Value in the Investment Portfolio(s) during
the Accumulation Phase, but also want to assure that your entire Purchase
Payment will be guaranteed to be returned to you, we offer an optional rider
for an additional charge, called the Guaranteed Withdrawal Benefit (GWB). The
purpose of the GWB rider is to provide protection against market risk (the risk
that the Account Value allocated to the Investment Portfolio(s) may decline in
value or underperform your expectations).
The GWB rider is designed to allow you to invest your Account Value in the
Investment Portfolios, while guaranteeing that at least the entire amount of
Purchase Payments you make will be returned to you through a series of
withdrawals, provided withdrawals in any Contract Year do not exceed the
maximum amount allowed under the rider. You may begin taking withdrawals under
the GWB rider immediately or at a later time. This means that, regardless of
negative investment performance, you can take specified annual withdrawals
until the entire amount of the Purchase Payments you made during the time
period specified in your rider has been returned to you.
In states where approved, you may purchase the GWB rider if you are age 80 or
younger on the effective date of your contract. You may not have this benefit
and another living benefit (GMIB or Guaranteed Lifetime Withdrawal Benefit) or
an Enhanced Death Benefit rider in effect at the same time. Once elected, the
GWB rider may not be terminated except as stated below.
SUMMARY OF THE GUARANTEED WITHDRAWAL BENEFIT RIDER
THE FOLLOWING SECTION PROVIDES A SUMMARY OF HOW THE GUARANTEED WITHDRAWAL
BENEFIT (GWB) RIDER WORKS. A MORE DETAILED EXPLANATION OF THE OPERATION OF THE
GWB IS PROVIDED IN THE SECTION BELOW CALLED "OPERATION OF THE GUARANTEED
WITHDRAWAL BENEFIT."
The GWB guarantees that the entire amount of Purchase Payments you make will be
returned to you through a series of withdrawals over time. THE GWB DOES NOT
GUARANTEE WITHDRAWALS FOR YOUR LIFETIME.
Under the GWB, we calculate a "Total Guaranteed Withdrawal Amount" (TGWA) that
determines, in part, the maximum amount you may receive as withdrawals each
year ("Annual Benefit Payment") without reducing your guarantee. The TGWA is
multiplied by the applicable withdrawal rate to determine your Annual Benefit
Payment. The rider guarantee may be reduced if your annual withdrawals are
greater than the Annual Benefit Payment.
IT IS IMPORTANT TO RECOGNIZE THAT THE TGWA IS NOT AVAILABLE TO BE TAKEN AS A
LUMP SUM AND DOES NOT ESTABLISH OR GUARANTEE YOUR ACCOUNT VALUE OR A MINIMUM
RETURN FOR ANY INVESTMENT PORTFOLIO. However, if you cancel the Guaranteed
Withdrawal Benefit rider after a waiting period of at least 15 years, the
Guaranteed Principal Adjustment will increase your Account Value to the
Purchase Payments credited within the first 120 days of the date that we issue
the contract, reduced proportionately for any withdrawals. (See "Operation of
the Guaranteed Withdrawal Benefit - Cancellation and Guaranteed Principal
Adjustment" below.)
While the GWB rider is in effect, you may only make subsequent Purchase
Payments during the GWB Purchase Payment Period. (See "Restrictions on
Subsequent Purchase Payments" below.)
OPERATION OF THE GUARANTEED WITHDRAWAL BENEFIT
The following section describes how the Guaranteed Withdrawal Benefit (GWB)
operates. When reading the following descriptions of the operation of the GWB
(for example, the "Total Guaranteed Withdrawal Amount," "Annual Benefit
Payment," and "Payment Enhancement Feature" sections), refer to the GWB Rate
Table at the end of this section of the prospectus for the specific rates and
other terms applicable to your GWB rider.
(See Appendix E for examples illustrating the operation of the GWB.)
TOTAL GUARANTEED WITHDRAWAL AMOUNT. While the Guaranteed Withdrawal Benefit
rider is in effect, we guarantee that you will receive a minimum amount over
time. We refer to this minimum amount as the TOTAL GUARANTEED WITHDRAWAL
AMOUNT. The initial Total Guaranteed Withdrawal Amount is equal to your initial
Purchase Payment. We increase the Total Guaranteed Withdrawal Amount (up to a
maximum of $5,000,000) by each additional Purchase Payment received during the
GWB Purchase Payment Period (see "Restriction on Subsequent Purchase Payments"
below). If you take a withdrawal that does not exceed the Annual Benefit
Payment (see "Annual Benefit Payment" below), then we will not reduce the Total
Guaranteed Withdrawal Amount.
58
Purchase Payments even if your Account Value declines to zero due to
market performance, so long as you do not take Excess Withdrawals.
o IF YOU HAVE ELECTED THE GWB, YOU SHOULD CAREFULLY CONSIDER WHEN TO BEGIN
TAKING WITHDRAWALS. IF YOU BEGIN TAKING WITHDRAWALS TOO SOON, YOU MAY
LIMIT THE VALUE OF THE GWB, BECAUSE THE GWB WITHDRAWAL RATE IS DETERMINED
BY WHEN YOU TAKE YOUR FIRST WITHDRAWAL (SEE THE GWB RATE TABLE). AS SHOWN
IN THE GWB RATE TABLE, WAITING TO TAKE YOUR FIRST WITHDRAWAL WILL RESULT
IN A HIGHER GWB WITHDRAWAL RATE. The GWB Withdrawal Rate is used to
determine the amount of your Annual Benefit Payment, as described above.
Once your GWB Withdrawal Rate has been determined, it will never increase
or decrease.
MANAGING YOUR WITHDRAWALS. It is important that you carefully manage your
annual withdrawals. To retain the full guarantees of this rider, your annual
withdrawals (including any withdrawal charge) cannot exceed the Annual Benefit
Payment each Contract Year. In other words, you should not take Excess
Withdrawals. IF YOU DO TAKE AN EXCESS WITHDRAWAL, WE WILL RECALCULATE THE TOTAL
GUARANTEED WITHDRAWAL AMOUNT AND REDUCE THE ANNUAL BENEFIT PAYMENT TO THE NEW
TOTAL GUARANTEED WITHDRAWAL AMOUNT MULTIPLIED BY THE GWB WITHDRAWAL RATE.
IN ADDITION, AS NOTED ABOVE, IF YOU TAKE AN EXCESS WITHDRAWAL, WE WILL REDUCE
THE REMAINING GUARANTEED WITHDRAWAL AMOUNT IN THE SAME PROPORTION THAT THE
WITHDRAWAL REDUCES THE ACCOUNT VALUE. THESE REDUCTIONS IN THE TOTAL GUARANTEED
WITHDRAWAL AMOUNT, ANNUAL BENEFIT PAYMENT, AND REMAINING GUARANTEED WITHDRAWAL
AMOUNT MAY BE SIGNIFICANT. You are still eligible to receive the remainder of
the Remaining Guaranteed Withdrawal Amount so long as the withdrawal that
exceeded the Annual Benefit Payment did not cause your Account Value to decline
to zero. AN EXCESS WITHDRAWAL THAT REDUCES THE ACCOUNT VALUE TO ZERO WILL
TERMINATE THE CONTRACT.
If you take an Excess Withdrawal in a Contract Year, you may be able to
reduce the impact of the Excess Withdrawal on your Total Guaranteed Withdrawal
Amount and Annual Benefit Payment by making two separate withdrawals (on
different days) instead of a single withdrawal. The first withdrawal should be
equal to your Annual Benefit Payment (or remaining Annual Benefit Payment if
withdrawals have already occurred in the Contract Year); this withdrawal will
not reduce your Total Guaranteed Withdrawal Amount or Annual Benefit Payment,
but will reduce the Remaining Guaranteed Withdrawal Amount. The second
withdrawal (on a subsequent day) should be for the amount in excess of the
Annual Benefit Payment (or remaining Annual Benefit Payment); this withdrawal
will reduce your Total Guaranteed Withdrawal Amount, Annual Benefit Payment, and
Remaining Guaranteed Withdrawal Amount. For an example of taking multiple
withdrawals in this situation, see Appendix E, "GWB - Excess Withdrawals -
Single Withdrawal vs. Multiple Withdrawals."
You can always take Non-Excess Withdrawals. However, if you choose to receive
only a part of your Annual Benefit Payment in any given Contract Year, your
Annual Benefit Payment is not cumulative and your Remaining Guaranteed
Withdrawal Amount and Annual Benefit Payment will not increase. For example, if
your Annual Benefit Payment is 4% of your Total Guaranteed Withdrawal Amount,
you cannot withdraw 2% of the Total Guaranteed Withdrawal Amount in one year
and then withdraw 6% of the Total Guaranteed Withdrawal Amount the next year
without making an Excess Withdrawal in the second year.
Income taxes and penalties may apply to your withdrawals, and withdrawal
charges may apply to withdrawals during the first Contract Year unless you take
the necessary steps to elect to take such withdrawals under a Systematic
Withdrawal Program. Withdrawal charges will also apply to withdrawals of
Purchase Payments that exceed the free withdrawal amount. (See
"Expenses-Withdrawal Charge.")
REQUIRED MINIMUM DISTRIBUTIONS. For IRAs and other contracts subject to Section
401(a)(9) of the Internal Revenue Code, you may be required to take withdrawals
to fulfill minimum distribution requirements generally beginning at age 70 1/2.
If your contract is an IRA or other contract subject to Section 401(a)(9) of
the Internal Revenue Code, and the required distributions are larger than the
Total Guaranteed Withdrawal Amount multiplied by the GWB Withdrawal Rate, we
will increase your
60
Option, if necessary, so your aggregate Annuity Payments will not be less than
what you would have received under the GWB rider.
USE OF AUTOMATED REQUIRED MINIMUM DISTRIBUTION PROGRAM AND SYSTEMATIC
WITHDRAWAL PROGRAM WITH GWB
For IRAs and other contracts subject to Section 401(a)(9) of the Internal
Revenue Code, you may be required to take withdrawals to fulfill minimum
distribution requirements generally beginning at age 70 1/2.
Used with the GWB rider, our Automated Required Minimum Distribution Program
can help you fulfill minimum distribution requirements with respect to your
contract without reducing the Total Guaranteed Withdrawal Amount (TGWA) and
Remaining Guaranteed Withdrawal Amount (RGWA) on a proportionate basis.
(Reducing the TGWA and RGWA on a proportionate basis could have the effect of
reducing or eliminating the guarantees of the GWB rider.) The Automated
Required Minimum Distribution Program calculates minimum distribution
requirements with respect to your contract and makes payments to you on a
monthly, quarterly, semi-annual, or annual basis.
Alternatively, you may choose to enroll in both the Automated Required Minimum
Distribution Program and the Systematic Withdrawal Program (see "Access to Your
Money - Systematic Withdrawal Program"). In order to avoid taking withdrawals
that could reduce the TGWA and RGWA on a proportionate basis, withdrawals under
the Systematic Withdrawal Program should not exceed the GWB Withdrawal Rate
multiplied by the TGWA each Contract Year. Any amounts above the GWB Withdrawal
Rate multiplied by the TGWA that need to be withdrawn to fulfill minimum
distribution requirements can be paid out at the end of the calendar year by
the Automated Required Minimum Distribution Program. For example, if you elect
the GWB, enroll in the Systematic Withdrawal Program, and elect to receive
monthly payments equal to the GWB Withdrawal Rate multiplied by the TGWA, you
should also enroll in the Automated Required Minimum Distribution Program and
elect to receive your Automated Required Minimum Distribution Program payment
on an annual basis, after the Systematic Withdrawal Program monthly payment in
December.
If you enroll in either the Automated Required Minimum Distribution Program or
both the Automated Required Minimum Distribution Program and the Systematic
Withdrawal Program, you should not make additional withdrawals outside the
programs. Additional withdrawals may result in the TGWA, RGWA, and Annual
Benefit Payment being reduced.
To enroll in the Automated Required Minimum Distribution Program and/or the
Systematic Withdrawal Program, please contact our Annuity Service Center.
GWB RATE TABLE
The GWB Rate Table lists the following for the GWB:
o the GWB Withdrawal Rate: if you take withdrawals that do not exceed the GWB
-------------------
Withdrawal Rate multiplied by the Total Guaranteed Withdrawal Amount,
those withdrawals will not reduce the Total Guaranteed Withdrawal Amount
and Annual Benefit Payment. (Taking withdrawals that do exceed the GWB
Withdrawal Rate multiplied by the Total Guaranteed Withdrawal Amount will
reduce the Total Guaranteed Withdrawal Amount and Annual Benefit Payment,
and may have a significant negative impact on the value of the benefits
available under the GWB - see "Operation of the Guaranteed Withdrawal
Benefit-Managing Your Withdrawals.") For IRAs and other Qualified
Contracts, also see "Operation of the Guaranteed Withdrawal
Benefit-Required Minimum Distributions.";
o the GWB Purchase Payment Period, which is the period of time following the
---------------------------
contract issue date during which you may make subsequent Purchase Payments
(see "Operation of the Guaranteed Withdrawal Benefit - Restrictions on
Subsequent Purchase Payments"); and
o the Payment Enhancement Rate, which is the percentage by which the GWB
------------------------
Withdrawal Rate will be increased if you request and meet the requirements
of the Payment Enhancement Feature under the GWB rider (see "Operation of
the Guaranteed Withdrawal Benefit-Payment Enhancement Feature").
DIFFERENT VERSIONS OF THE GWB. From time to time, we may introduce new versions
of the GWB. If we introduce a new version of the rider, we generally will do so
by updating the GWB Rate Table to show the new version, together with any prior
versions, the dates each rider version was offered, and the specific rates and
other terms applicable to each version. Changes to the GWB Rate Table after the
date of this prospectus, reflecting a new version of the rider, will be made in
a supplement to the prospectus.
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GUARANTEED LIFETIME WITHDRAWAL BENEFIT
If you want to invest your Account Value in the Investment Portfolio(s) during
the Accumulation Phase, but also want to guarantee that you will receive
lifetime income regardless of investment performance (subject to the conditions
described in "Operation of the GLWB" below, including the condition that
withdrawals before the Lifetime Withdrawal Age or withdrawals that are Excess
Withdrawals will reduce the payments under the guarantee or, if such
withdrawals reduce the Account Value to zero, eliminate the guarantee), we
offer a rider for an additional charge, called the Guaranteed Lifetime
Withdrawal Benefit (GLWB). Currently we offer two variations of the GLWB rider:
FlexChoice Level and FlexChoice Expedite (see "GLWB Variations" below.)
The GLWB rider is designed to allow you to invest your Account Value in the
Investment Portfolios, while guaranteeing that you will receive lifetime income
regardless of investment performance, subject to the conditions described in
"Operation of the GLWB" below. You may begin taking withdrawals under the GLWB
rider immediately or at a later time; however, any withdrawals taken prior to
the Lifetime Withdrawal Age will reduce the Benefit Base (see "Managing Your
Withdrawals" below).
In states where approved, you may purchase the GLWB rider if you are at least
age 50 and not older than age 85 on the effective date of your contract. You
may not select this rider together with the GWB v1 rider, a GMIB rider, an EDB
rider, the optional Annual Step-Up Death Benefit, or the Earnings Preservation
Benefit. Once selected, the GLWB rider may not be terminated except as stated
below.
SUMMARY OF THE GLWB
THE FOLLOWING SECTION PROVIDES A SUMMARY OF HOW THE GLWB RIDER WORKS. A MORE
DETAILED EXPLANATION OF THE OPERATION OF THE GLWB RIDER IS PROVIDED IN THE
SECTION BELOW CALLED "OPERATION OF THE GLWB."
The GLWB rider guarantees that you will receive lifetime income regardless of
investment performance, subject to the conditions described in "Operation of
the GLWB" below (including the condition that withdrawals before the Lifetime
Withdrawal Age or withdrawals that are Excess Withdrawals will reduce the
payments under the guarantee or, if such withdrawals reduce the Account Value
to zero, eliminate the guarantee). THE GLWB RIDER DOES NOT GUARANTEE LIFETIME
INCOME IF YOUR ACCOUNT VALUE IS REDUCED TO ZERO DUE TO A WITHDRAWAL PRIOR TO
THE LIFETIME WITHDRAWAL AGE OR A WITHDRAWAL THAT IS AN EXCESS WITHDRAWAL (SEE
"MANAGING YOUR WITHDRAWALS" BELOW).
Under the GLWB rider, we calculate a Benefit Base (the "Benefit Base") that
determines the maximum amount you may receive as withdrawals each Contract Year
after the Lifetime Withdrawal Age (the "Annual Benefit Payment") without
reducing your Benefit Base, and determines the amount of any lifetime payments
if the Account Value is reduced to zero. The Benefit Base is multiplied by the
applicable GLWB Withdrawal Rate while the Account Value is greater than zero to
determine your Annual Benefit Payment. The Benefit Base is multiplied by the
applicable GLWB Lifetime Guarantee Rate to determine your Annual Benefit
Payment if your Account Value is reduced to zero and lifetime payments are to
begin. The Benefit Base will be reduced for any withdrawal prior to the
Lifetime Withdrawal Age or any Excess Withdrawal (and any subsequent
withdrawals in the Contract Year that an Excess Withdrawal occurs). In any
event, withdrawals under the GLWB rider will reduce your Account Value and
death benefits.
IT IS IMPORTANT TO RECOGNIZE THAT THE BENEFIT BASE IS NOT AVAILABLE TO BE TAKEN
AS A LUMP SUM OR PAID AS A DEATH BENEFIT AND DOES NOT ESTABLISH OR GUARANTEE
YOUR ACCOUNT VALUE OR A MINIMUM RETURN FOR ANY INVESTMENT PORTFOLIO. However,
if you cancel the GLWB rider after a waiting period of at least ten (10) years
(the "Guaranteed Principal Adjustment Eligibility Date") the Guaranteed
Principal Adjustment will increase your Account Value to the Purchase Payments
credited within the first 120 days of the date that we issue the contract
reduced proportionately for any withdrawals, if greater than the Account Value
at the time of the cancellation. (See "Cancellation and Guaranteed Principal
Adjustment" below.)
While the GLWB rider is in effect, we may reject subsequent Purchase Payments
by sending advance written notice if any of the changes listed in the section
"Investment Allocation Restrictions for Certain Riders - Investment Allocation
and Other Purchase Payment Restrictions for the GLWB - Potential Restrictions
on Subsequent Purchase Payments" occur. Restrictions on
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subsequent Purchase Payments will remain in effect until the GLWB rider is
terminated unless we provide advance written notice to you otherwise.
OPERATION OF THE GLWB
The following section describes how the GLWB operates. When reading the
following description of the operation of the GLWB rider (for example, the
"Benefit Base" and "Annual Benefit Payment" sections), refer to the GLWB Rate
Table at the end of this section for the specific rates and other terms
applicable to your GLWB rider.
(See Appendix F for examples illustrating the operation of the GLWB.)
BENEFIT BASE. While the GLWB rider is in effect, we guarantee that you will
receive lifetime income regardless of investment performance, subject to the
conditions described below. To determine the maximum amount that may be
withdrawn in the current Contract Year (the "Annual Benefit Payment"), we
multiply the Benefit Base by the GLWB Withdrawal Rate (see "GLWB Rate Table")
while the Account Value is greater than zero. The initial BENEFIT BASE is equal
to your initial Purchase Payment. We increase the Benefit Base by each
additional Purchase Payment. Any withdrawals taken prior to the date you reach
the Lifetime Withdrawal Age (see "GLWB Rate Table" below) will reduce the
Benefit Base in the same proportion that such withdrawal (including Withdrawal
Charges, if any) reduces the Account Value (a "Proportional Adjustment"). For
example, if the Benefit Base is $120,000, the Account Value is $100,000 and you
withdraw $10,000 (including any Withdrawal Charge), then your Benefit Base is
decreased by $12,000 to $108,000 [$120,000 x ($10,000/$100,000) = $12,000]. Any
withdrawals taken after the Lifetime Withdrawal Age that do not exceed, or
cause the cumulative withdrawals in the Contract Year to exceed, the Annual
Benefit Payment, will not reduce the Benefit Base. We refer to this type of
withdrawal as a "Non-Excess Withdrawal." If, however, you take a withdrawal
that exceeds the Annual Benefit Payment (or results in cumulative withdrawals
for the current Contract Year that exceed the Annual Benefit Payment), then
such withdrawal, and any subsequent withdrawals that occur in that Contract
Year, will trigger a Proportional Adjustment to the Benefit Base. We refer to
this type of withdrawal as an "Excess Withdrawal." DEPENDING ON THE RELATIVE
AMOUNTS OF THE BENEFIT BASE AND THE ACCOUNT VALUE, SUCH PROPORTIONAL ADJUSTMENT
MAY RESULT IN A SIGNIFICANT REDUCTION TO THE BENEFIT BASE (PARTICULARLY WHEN
THE ACCOUNT VALUE IS LOWER THAN THE BENEFIT BASE), AND COULD HAVE THE EFFECT OF
REDUCING OR ELIMINATING THE TOTAL AMOUNT YOU ARE GUARANTEED TO RECEIVE UNDER
THE GLWB RIDER (SEE "MANAGING YOUR WITHDRAWALS" BELOW).
On each contract anniversary on or before the Rollup Rate Period End Date (see
"GLWB Rate Table"), if no withdrawals occurred in the previous Contract Year,
the Benefit Base will be increased by an amount equal to the Rollup Rate (see
"GLWB Rate Table") multiplied by the Benefit Base before such increase. The
Benefit Base will not be increased by the Rollup Rate if: (1) a withdrawal has
occurred in the Contract Year ending immediately prior to that contract
anniversary, or (2) after the Rollup Rate Period End Date. The Rollup Rate, if
applicable, is applied before deducting any rider charge and before taking into
account any Automatic Step-Up occurring on such contract anniversary (see
"Automatic Step-Up" below).
ANNUAL BENEFIT PAYMENT. After the Lifetime Withdrawal Age, the ANNUAL BENEFIT
PAYMENT is the maximum amount that may be withdrawn in the current Contract
Year without triggering a Proportional Adjustment to the Benefit Base (prior to
the Lifetime Withdrawal Age, there is no Annual Benefit Payment). After the
Lifetime Withdrawal Age, the initial Annual Benefit Payment is equal to the
initial Benefit Base multiplied by the applicable GLWB WITHDRAWAL RATE. Your
GLWB Withdrawal Rate is determined by when you take your first withdrawal after
the Lifetime Withdrawal Age (see "GLWB Rate Table"). As shown in the GLWB Rate
Table, waiting to take your first withdrawal will result in a higher GLWB
Withdrawal Rate. The GLWB Withdrawal Rate will not change once determined. If
the Benefit Base is later recalculated (for example, because of additional
Purchase Payments, the Automatic Step-Up, or Excess Withdrawals), the Annual
Benefit Payment is reset equal to the new Benefit Base multiplied by the GLWB
Withdrawal Rate.
Each time a withdrawal is made in a Contract Year, we decrease the Annual
Benefit Payment for that Contract Year by such withdrawal and the remaining
amount is the "Remaining Annual Benefit Payment." If the Benefit Base is
increased due to a subsequent Purchase Payment, causing the Annual Benefit
Payment to increase, the Remaining
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higher income amounts if the current annuity option rates applied to the
Account Value on the date payments begin exceed the payments under the
GLWB rider. Also, income provided by annuitizing under current annuity
rates may be higher due to different tax treatment of this income compared
to the tax treatment of the payments received under the GLWB rider.
GLWB VARIATIONS. We currently offer two variations of the GLWB rider. The two
variations are FlexChoice Level and FlexChoice Expedite. The GLWB Withdrawal
Rate and GLWB Lifetime Guarantee Rate will vary depending on the variation you
choose. Depending on your expectations and preferences, you can choose the
variation that best meets your needs.
Prior to issuance, you must select either:
o FlexChoice Level: offers a steady GLWB Withdrawal Rate and GLWB Lifetime
Guarantee Rate throughout your lifetime; or
o FlexChoice Expedite: offers a higher GLWB Withdrawal Rate while your Account
Value is greater than zero and a reduced GLWB Lifetime Guarantee Rate if
your Account Value is reduced to zero.
For both variations, you may elect to have your Annual Benefit Payments paid
for the life of you and your spouse, provided your spouse is no younger than
the Minimum Spousal Age, using the applicable Joint Lifetime Guarantee Rate
(see "GLWB Rate Table").
MANAGING YOUR WITHDRAWALS. It is important that you carefully manage your
annual withdrawals. To retain the full guarantees of this rider, your annual
withdrawals (including any withdrawal charge) cannot exceed the Annual Benefit
Payment each Contract Year. In other words, you should not take Excess
Withdrawals. IF YOU DO TAKE AN EXCESS WITHDRAWAL, WE WILL RECALCULATE THE
BENEFIT BASE IN THE SAME PROPORTION THAT THE WITHDRAWAL (INCLUDING ANY
WITHDRAWAL CHARGE) REDUCES THE ACCOUNT VALUE AND REDUCE THE ANNUAL BENEFIT
PAYMENT TO THE NEW BENEFIT BASE MULTIPLIED BY THE APPLICABLE GLWB WITHDRAWAL
RATE. In addition, you should not take withdrawals of any amount prior to the
Lifetime Withdrawal Age. IF YOU TAKE A WITHDRAWAL PRIOR TO THE LIFETIME
WITHDRAWAL AGE, WE WILL RECALCULATE THE BENEFIT BASE IN THE SAME PROPORTION
THAT THE WITHDRAWAL (INCLUDING ANY WITHDRAWAL CHARGE) REDUCES THE ACCOUNT
VALUE. THESE REDUCTIONS IN THE BENEFIT BASE CAUSED BY WITHDRAWALS PRIOR TO THE
LIFETIME WITHDRAWAL AGE, AND IN THE BENEFIT BASE AND THE ANNUAL BENEFIT PAYMENT
CAUSED BY EXCESS WITHDRAWALS, MAY BE SIGNIFICANT. You are still eligible to
receive lifetime payments so long as the Excess Withdrawal or withdrawal prior
to the Lifetime Withdrawal Age did not cause your Account Value to decline to
zero. AN EXCESS WITHDRAWAL (OR ANY WITHDRAWAL PRIOR TO LIFETIME WITHDRAWAL AGE)
THAT REDUCES THE ACCOUNT VALUE TO ZERO WILL TERMINATE THE CONTRACT AND CAUSE
LIFETIME PAYMENTS TO NOT BE AVAILABLE.
If you take an Excess Withdrawal in a Contract Year, you may be able to reduce
the impact of the Excess Withdrawal on your Benefit Base and Annual Benefit
Payment by making two separate withdrawals (on different days) instead of a
single withdrawal. The first withdrawal should be equal to your Annual Benefit
Payment (or Remaining Annual Benefit Payment if withdrawals have already
occurred in the Contract Year); this withdrawal will not reduce your Benefit
Base (and Annual Benefit Payment). The second withdrawal (on a subsequent day)
should be for the amount in excess of the Annual Benefit Payment (or Remaining
Annual Benefit Payment); this withdrawal will reduce your Benefit Base and
Annual Benefit Payment. For an example of taking multiple withdrawals in this
situation, see Appendix F, "Withdrawals - Withdrawals After the Lifetime
Withdrawal Age - Excess Withdrawals."
You can always make Non-Excess Withdrawals. However, if you choose to receive
only a part of your Annual Benefit Payment in any given Contract Year, your
Remaining Annual Benefit Payment does not carry over into subsequent Contract
Years. For example, if your Annual Benefit Payment is 4% of your Benefit Base,
you cannot withdraw 2% in one year and then withdraw 6% the next year without
making an Excess Withdrawal in the second year.
Income taxes and penalties may apply to your withdrawals. Withdrawal charges
may apply to withdrawals during the first Contract Year unless you take the
necessary steps to elect to take such withdrawals under a Systematic Withdrawal
Program. Withdrawal charges will also apply to withdrawals of Purchase Payments
that exceed the free withdrawal amount in any Contract Year. (See "Expenses -
Withdrawal Charges.")
REQUIRED MINIMUM DISTRIBUTIONS. For IRAs and other contracts subject to Section
401(a)(9) of the Code, you may be required to take withdrawals to fulfill
minimum
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and receiving both a living benefit and a death benefit and the cost of the
combined riders will be higher than the cost of either a GLWB rider or other
available death benefits individually. Please note that other standard or
optional death benefits are available under the contract. You should also
understand that once GLWB rider lifetime payments begin or the GLWB rider
terminates, the GLWB Death Benefit will be terminated.
SUMMARY OF THE GLWB DEATH BENEFIT
Under the GLWB Death Benefit, we calculate a "GLWB Death Benefit Base" that, if
greater than the Principal Protection death benefit (see "Death Benefit -
Standard Death Benefit - Principal Protection") will be paid instead of the
Principal Protection death benefit. All other provisions of your contract's
death benefit will apply.
OPERATION OF THE GLWB DEATH BENEFIT
The following section describes how the GLWB Death Benefit operates. When
reading the following descriptions of the operation of the GLWB Death Benefit
(for example, "Excess Withdrawals," "Non-Excess Withdrawals," "Rollup Rate,"
"Rollup Rate Period End Date," "Automatic Step-Up" and "Benefit Base"), refer
to the "Guaranteed Lifetime Withdrawal Benefit" section above.
If you select the GLWB Death Benefit, the amount of the death benefit will be
the greater of:
(1) the GLWB Death Benefit Base; and
(2) the Principal Protection death benefit.
(See Appendix G for examples illustrating the operation of the GLWB Death
Benefit.)
GLWB DEATH BENEFIT BASE. The GLWB DEATH BENEFIT BASE is an amount used to
determine your death benefit, and is also the amount the GLWB Death Benefit
rider charge is applied. As of the Issue Date, the initial GLWB Death Benefit
Base is equal to your initial purchase payment. The GLWB Death Benefit Base
will be increased by the amount of each purchase payment made, and reduced for
all withdrawals as described below.
The GLWB Death Benefit Base cannot be withdrawn in a lump sum.
MANAGING YOUR WITHDRAWALS. It is important that you carefully manage your
annual withdrawals to retain the full benefit of this rider. In other words,
you should not take Excess Withdrawals.
IF YOU TAKE AN EXCESS WITHDRAWAL, WE WILL REDUCE THE GLWB DEATH BENEFIT BASE IN
THE SAME PROPORTION THAT THE WITHDRAWAL (INCLUDING ANY WITHDRAWAL CHARGE)
REDUCES THE ACCOUNT VALUE. THE REDUCTION IN THE GLWB DEATH BENEFIT BASE MAY BE
SIGNIFICANT. You are still eligible to receive the death benefit so long as the
Account Value does not decline to zero.
ANY WITHDRAWALS TAKEN PRIOR TO THE DATE YOU REACH THE LIFETIME WITHDRAWAL AGE
WILL TRIGGER A PROPORTIONAL ADJUSTMENT TO THE GLWB DEATH BENEFIT BASE.
After the Lifetime Withdrawal Age, the GLWB Death Benefit Base will be reduced
for all withdrawals. Non-Excess Withdrawals reduce the GLWB Death Benefit Base
by the amount of the withdrawal. Excess Withdrawals, and any subsequent
withdrawals that occur in that Contract Year, trigger a Proportional Adjustment
to the GLWB Death Benefit Base.
If you take an Excess Withdrawal in a Contract Year, you may be able to reduce
the impact of the Excess Withdrawal on your GLWB Death Benefit Base by making
two separate withdrawals (on different days) instead of a single withdrawal.
The first withdrawal should be equal to your Annual Benefit Payment (or
Remaining Annual Benefit Payment if withdrawals have already occurred in the
Contract Year); this withdrawal will reduce your GLWB Death Benefit Base by the
amount of the withdrawal. The second withdrawal (on a subsequent day) should be
for the amount in excess of the Annual Benefit Payment (or Remaining Annual
Benefit Payment); this withdrawal will cause a Proportional Adjustment to your
GLWB Death Benefit Base. For an example of taking multiple withdrawals in this
situation, see Appendix G, "Withdrawals - Withdrawals After the Lifetime
Withdrawal Age - Excess Withdrawals."
On each contract anniversary on or before the Rollup Rate Period End Date, if
no withdrawals occurred in the previous Contract Year, the GLWB Death Benefit
Base will be increased by an amount equal to the Rollup Rate multiplied by the
GLWB Death Benefit Base before such increase. The GLWB Death Benefit Base will
not be increased by the Rollup Rate if: (1) a withdrawal has occurred in the
Contract Year ending immediately prior to that contract anniversary, or (2)
after the Rollup Rate Period End Date.
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8. PERFORMANCE
We periodically advertise subaccount performance relating to the Investment
Portfolios. We will calculate performance by determining the percentage change
in the value of an Accumulation Unit by dividing the increase (decrease) for
that unit by the value of the Accumulation Unit at the beginning of the period.
This performance number reflects the deduction of the Separate Account product
charges (including certain death benefit rider charges) and the Investment
Portfolio expenses. It does not reflect the deduction of any applicable account
fee, withdrawal charge, or applicable optional rider charges. The deduction of
these charges would reduce the percentage increase or make greater any
percentage decrease. Any advertisement will also include total return figures
which reflect the deduction of the Separate Account product charges (including
certain death benefit rider charges), account fee, withdrawal charges,
applicable optional rider charges, and the Investment Portfolio expenses.
For periods starting prior to the date the contract was first offered, the
performance will be based on the historical performance of the corresponding
Investment Portfolios for the periods commencing from the date on which the
particular Investment Portfolio was made available through the Separate
Account.
In addition, the performance for the Investment Portfolios may be shown for the
period commencing from the inception date of the Investment Portfolios. These
figures should not be interpreted to reflect actual historical performance of
the Separate Account.
We may, from time to time, include in our advertising and sales materials
performance information for funds or investment accounts related to the
Investment Portfolios and/or their investment advisers or subadvisers. Such
related performance information also may reflect the deduction of certain
contract charges. We may also include in our advertising and sales materials
tax deferred compounding charts and other hypothetical illustrations, which may
include comparisons of currently taxable and tax deferred investment programs,
based on selected tax brackets.
We may advertise the living benefit and death benefit riders using
illustrations showing how the benefit works with historical performance of
specific Investment Portfolios or with a hypothetical rate of return (which
rate will not exceed 12%) or a combination of historical and hypothetical
returns. These illustrations will reflect the deduction of all applicable
charges including the portfolio expenses of the underlying Investment
Portfolios.
You should know that for any performance we illustrate, future performance will
vary and results shown are not necessarily representative of future results.
9. DEATH BENEFIT
UPON YOUR DEATH
If you die during the Accumulation Phase, we will pay a death benefit to your
Beneficiary (or Beneficiaries). The Principal Protection is the standard death
benefit for your contract. At the time you purchase the contract, depending on
availability in your state, you can select the optional Annual Step-Up Death
Benefit rider or the EDB Max V rider. At the time you purchase the contract,
depending on availability in your state, you can select the GLWB Death Benefit
if you have selected the optional Guaranteed Lifetime Withdrawal Benefit (GLWB)
living benefit rider (see "Living Benefits - Guaranteed Lifetime Withdrawal
Benefit"). You can also select the Additional Death Benefit - Earnings
Preservation Benefit, either individually or with the Annual Step-Up Death
Benefit rider. If you are age 79 or younger at the effective date of your
contract, you may select the Annual Step-Up Death Benefit rider or the Earnings
Preservation Benefit. If you are age 72 or younger at the effective date of
your contract, you may select the EDB Max V rider. The EDB Max V rider is
currently available for purchase in all states. The EDB Max IV, EDB Max III,
EDB Max II, Enhanced Death Benefit III, Enhanced Death Benefit II, and
Compounded-Plus Death Benefit riders are not available for purchase.
The EDB Max V rider may only be elected if you have elected the GMIB Max V
rider. The EDB Max IV rider could only be elected if you elected the GMIB Max
IV rider. The EDB Max III rider could only be elected if you elected the GMIB
Max III rider. The EDB Max II rider could only be elected if you elected the
GMIB Max II rider. The Enhanced Death Benefit III rider could only be elected
if you elected the GMIB Plus IV rider. The Enhanced Death Benefit II rider
could only be elected if you elected the GMIB Plus III rider. The Earnings
Preservation Benefit may not be elected with the GLWB Death Benefit or an
Enhanced Death Benefit rider (EDB Max V, EDB Max IV, EDB Max III, EDB Max II,
Enhanced Death Benefit III, Enhanced Death Benefit II). The Earnings
Preservation Benefit rider could be elected with the Compounded-Plus
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Death Benefit rider. You may only select the GLWB Death Benefit if you have
also selected the optional GLWB rider.
The death benefits are described below. There may be versions of each rider
that vary by issue date and state availability. In addition, a version of a
rider may become available (or unavailable) in different states at different
times. Please check with your registered representative regarding which
version(s) are available in your state. If you have already been issued a
contract, please check your contract and riders for the specific provisions
applicable to you.
The death benefit is determined as of the end of the Business Day on which we
receive both due proof of death and an election for the payment method. Until
the Beneficiary (or the first Beneficiary if there are multiple Beneficiaries)
submits the necessary documentation in Good Order, the Account Value
attributable to his/her portion of the death benefit remains in the Investment
Portfolios and is subject to investment risk.
Where there are multiple Beneficiaries, any guaranteed death benefit will only
be determined as of the time the first Beneficiary submits the necessary
documentation in Good Order. If the guaranteed death benefit payable is an
amount that exceeds the Account Value on the day it is determined, we will
apply to the contract's Account Value an amount equal to the difference between
the death benefit payable and the Account Value, in accordance with the current
allocation of the Account Value. The remaining death benefit amounts are held
in the Investment Portfolios until each of the other Beneficiaries submits the
necessary documentation in Good Order to claim his/her death benefit and are
subject to investment risk until we receive his/her necessary documentation.
If you have a Joint Owner, the death benefit will be paid when the first Owner
dies. Upon the death of either Owner, the surviving Joint Owner will be the
primary Beneficiary. Any other Beneficiary designation will be treated as a
contingent Beneficiary, unless instructed otherwise.
If a non-natural person owns the contract, the Annuitant will be deemed to be
the Owner in determining the death benefit. If there are Joint Owners, the age
of the older Owner will be used to determine the death benefit amount.
If we are presented with notification of your death before any requested
transaction is completed (including transactions under a dollar cost averaging
program, the Automatic Rebalancing Program, the Systematic Withdrawal Program,
or the Automated Required Minimum Distribution Program), we will cancel the
request. As described above, the death benefit will be determined when we
receive both due proof of death and an election for the payment method.
ENHANCED DEATH BENEFIT AND DECEDENT CONTRACTS
If you are purchasing this contract with a nontaxable transfer of the death
benefit proceeds of any annuity contract or IRA (or any other tax-qualified
arrangement) of which you were the Beneficiary and you are "stretching" the
distributions under the IRS required distribution rules, you may not purchase
an Enhanced Death Benefit rider.
STANDARD DEATH BENEFIT - PRINCIPAL PROTECTION
The death benefit will be the greater of:
(1) the Account Value; or
(2) total Purchase Payments, reduced proportionately by the percentage
reduction in Account Value attributable to each partial withdrawal
(including any applicable withdrawal charge).
If the Owner is a natural person and the Owner is changed to someone other than
a spouse, the death benefit amount will be determined as defined above;
however, subsection (2) will be changed to provide as follows: "the Account
Value as of the effective date of the change of Owner, increased by Purchase
Payments received after the date of the change of Owner, reduced
proportionately by the percentage reduction in Account Value attributable to
each partial withdrawal (including any applicable withdrawal charge) made after
such date."
In the event that a Beneficiary who is the spouse of the Owner elects to
continue the contract in his or her name after the Owner dies, the death
benefit amount under the Principal Protection death benefit will be determined
in accordance with (1) or (2) above.
(See Appendix H for examples of the Principal Protection death benefit rider.)
OPTIONAL DEATH BENEFIT - ANNUAL STEP-UP
You may select the Annual Step-Up death benefit rider if you are age 79 or
younger at the effective date of your contract. If you select the Annual
Step-Up death benefit rider, the death benefit will be the greatest of:
(1) the Account Value; or
(2) total Purchase Payments, reduced proportionately by
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We may also offer a payment option, for both Non-Qualified Contracts and
certain Qualified Contracts, under which your Beneficiary may receive payments,
over a period not extending beyond his or her life expectancy, under a method
of distribution similar to the distribution of required minimum distributions
from Individual Retirement Accounts. If this option is elected, we will issue a
new contract to your Beneficiary in order to facilitate the distribution of
payments. Your Beneficiary may choose any optional death benefit available
under the new contract. Upon the death of your Beneficiary, the death benefit
would be required to be distributed to your Beneficiary's Beneficiary at least
as rapidly as under the method of distribution in effect at the time of your
Beneficiary's death. (See "Federal Income Tax Status.") To the extent permitted
under the tax law, and in accordance with our procedures, your designated
Beneficiary is permitted under our procedures to make additional Purchase
Payments consisting of monies which are direct transfers (as permitted under
tax law) from other Qualified Contracts or Non-Qualified Contracts, depending
on which type of contract you own, held in the name of the decedent. Any such
additional Purchase Payments would be subject to applicable withdrawal charges.
Your Beneficiary is also permitted to choose some of the optional benefits
available under the contract, but certain contract provisions or programs may
not be available.
If a lump sum payment is elected and all the necessary requirements are met,
the payment will be made within 7 days. Payment to the Beneficiary under an
Annuity Option may only be elected during the 60 day period beginning with the
date we receive due proof of death.
If the Owner or a Joint Owner, who is not the Annuitant, dies during the Income
Phase, any remaining payments under the Annuity Option elected will continue at
least as rapidly as under the method of distribution in effect at the time of
the Owner's death. Upon the death of the Owner or a Joint Owner during the
Income Phase, the Beneficiary becomes the Owner.
SPOUSAL CONTINUATION
If the primary Beneficiary is the spouse of the Owner, upon the Owner's death,
the Beneficiary may elect to continue the contract in his or her own name. Upon
such election, the Account Value will be adjusted upward (but not downward) to
an amount equal to the death benefit amount determined upon such election and
receipt of due proof of death of the Owner. Any excess of the death benefit
amount over the Account Value will be allocated to each applicable Investment
Portfolio and/or the Fixed Account in the ratio that the Account Value in the
Investment Portfolio and/or the Fixed Account bears to the total Account Value.
The terms and conditions of the contract that applied prior to the Owner's
death will continue to apply, including the ability to make Purchase Payments,
with certain exceptions described in the contract.
For purposes of the death benefit on the continued contract, the death benefit
is calculated in the same manner as it was prior to continuation except that
all values used to calculate the death benefit, which may include a highest
anniversary value and/or an annual increase amount (depending on whether you
elected an optional death benefit), are reset on the date the spouse continues
the contract. If the contract includes both a GMIB rider and an Enhanced Death
Benefit rider, the Annual Increase Amount for the GMIB rider is also reset on
the date the spouse continues the contract.
Spousal continuation will not satisfy minimum required distribution rules for
Qualified Contracts other than IRAs (see "Federal Income Tax Status").
Any Internal Revenue Code reference to "spouse" includes those persons who are
married spouses under state law, regardless of sex.
DEATH OF THE ANNUITANT
If the Annuitant, not an Owner or Joint Owner, dies during the Accumulation
Phase, you automatically become the Annuitant. You can select a new Annuitant
if you do not want to be the Annuitant (subject to our then current
underwriting standards). However, if the Owner is a non- natural person (for
example, a trust), then the death of the primary Annuitant will be treated as
the death of the Owner, and a new Annuitant may not be named.
Upon the death of the Annuitant after Annuity Payments begin, the death
benefit, if any, will be as provided for in the Annuity Option selected. Death
benefits will be paid at least as rapidly as under the method of distribution
in effect at the Annuitant's death.
CONTROLLED PAYOUT
You may elect to have the death benefit proceeds paid to your Beneficiary in
the form of Annuity Payments for life or over a period of time that does not
exceed your Beneficiary's life expectancy. This election must be in
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o change the Beneficiary.
o change the Annuitant before the Annuity Date (subject to our underwriting
and administrative rules).
o assign the contract (subject to limitation).
o change the payment option.
o exercise all other rights, benefits, options and privileges allowed by the
contract or us.
The Owner is as designated at the time the contract is issued, unless changed.
Any change of Owner is subject to our underwriting rules in effect at the time
of the request.
JOINT OWNER. The contract can be owned by JOINT OWNERS, limited to two natural
persons. Upon the death of either Owner, the surviving Owner will be the
primary Beneficiary. Any other Beneficiary designation will be treated as a
contingent Beneficiary unless otherwise indicated.
BENEFICIARY. The BENEFICIARY is the person(s) or entity you name to receive any
death benefit. The Beneficiary is named at the time the contract is issued
unless changed at a later date. Unless an irrevocable Beneficiary has been
named, you can change the Beneficiary at any time before you die. If Joint
Owners are named, unless you tell us otherwise, the surviving Joint Owner will
be the primary Beneficiary. Any other Beneficiary designation will be treated
as a contingent Beneficiary (unless you tell us otherwise).
ABANDONED PROPERTY REQUIREMENTS. Every state has unclaimed property laws which
generally declare non-ERISA annuity contracts to be abandoned after a period of
inactivity of three to five years from the contract's maturity date (the latest
day on which annuity payments may begin under the contract) or the date the
death benefit is due and payable. For example, if the payment of a death
benefit has been triggered, but, if after a thorough search, we are still
unable to locate the Beneficiary of the death benefit, or the Beneficiary does
not come forward to claim the death benefit in a timely manner, the death
benefit will be paid to the abandoned property division or unclaimed property
office of the state in which the Beneficiary or the Owner last resided, as
shown on our books and records, or to our state of domicile. (Escheatment is
the formal, legal name for this process.) However, the state is obligated to
pay the death benefit (without interest) if your Beneficiary steps forward to
claim it with the proper documentation. To prevent your contract's proceeds
from being paid to the state's abandoned or unclaimed property office, it is
important that you update your Beneficiary designations, including addresses,
if and as they change. Please call (800) 343-8496 to make such changes.
ANNUITANT. The ANNUITANT is the natural person(s) on whose life we base Annuity
Payments. You can change the Annuitant at any time prior to the Annuity Date,
unless an Owner is not a natural person. Any reference to Annuitant includes
any joint Annuitant under an Annuity Option. The Owner and the Annuitant do not
have to be the same person except as required under certain sections of the
Internal Revenue Code or under a GMIB rider (see "Living Benefits - Guaranteed
Minimum Income Benefit (GMIB)").
ASSIGNMENT. You can assign a Non-Qualified Contract at any time during your
lifetime. We will not be bound by the assignment until the written notice of
the assignment is recorded by us. We will not be liable for any payment or
other action we take in accordance with the contract before we record the
assignment. AN ASSIGNMENT MAY BE A TAXABLE EVENT.
If the contract is issued pursuant to a qualified plan, there may be
limitations on your ability to assign the contract.
LEGAL PROCEEDINGS
In the ordinary course of business, MetLife USA, similar to other life
insurance companies, is involved in lawsuits (including class action lawsuits),
arbitrations and other legal proceedings. Also, from time to time, state and
federal regulators or other officials conduct formal and informal examinations
or undertake other actions dealing with various aspects of the financial
services and insurance industries. In some legal proceedings involving
insurers, substantial damages have been sought and/or material settlement
payments have been made.
It is not possible to predict with certainty the ultimate outcome of any
pending legal proceeding or regulatory action. However, MetLife USA does not
believe any such action or proceeding will have a material adverse effect upon
the Separate Account or upon the ability of MetLife Investors Distribution
Company to perform its contract with the Separate Account or of MetLife USA to
meet its obligations under the contracts.
FINANCIAL STATEMENTS
Our financial statements and the financial statements of the Separate Account
have been included in the SAI.
107
APPENDIX A
CONDENSED FINANCIAL INFORMATION
The following charts list the Condensed Financial Information (the Accumulation
Unit value information for the Accumulation Units outstanding) for contracts
issued as of December 31, 2013. See "Purchase - Accumulation Units" in the
prospectus for information on how Accumulation Unit values are calculated.
Chart 1 presents Accumulation Unit values for the lowest possible combination
of Separate Account product charges and death benefit rider charges, and Chart
2 presents Accumulation Unit values for the highest possible combination of
such charges. Charges for the optional Enhanced Death Benefits, Guaranteed
Minimum Income Benefits, Guaranteed Withdrawal Benefit, Guaranteed Lifetime
Withdrawal Benefit and GLWB Death Benefit are assessed by canceling
Accumulation Units and, therefore, these charges are not reflected in the
Accumulation Unit Value. The Statement of Additional Information (SAI) contains
the Accumulation Unit values for all other possible combinations of Separate
Account product charges and death benefit rider charges. (See Page 2 for how to
obtain a copy of the SAI.)
CHART 1
1.30% SEPARATE ACCOUNT PRODUCT CHARGES
NUMBER OF
ACCUMULATION ACCUMULATION ACCUMULATION
UNIT VALUE AT UNIT VALUE AT UNITS
BEGINNING OF END OF OUTSTANDING AT
PERIOD PERIOD END OF PERIOD
--------------- --------------- --------------------
MET INVESTORS SERIES TRUST
ALLIANCEBERNSTEIN GLOBAL DYNAMIC ALLOCATION SUB-ACCOUNT (CLASS B)
10/07/2011 to 12/31/2011 9.435354 9.742614 87,472,237.4879
01/01/2012 to 12/31/2012 9.742614 10.585963 152,978,381.8960
01/01/2013 to 12/31/2013 10.585963 11.613923 169,731,736.2495
============ ==== ========== ========= ========= ================
AMERICAN FUNDS (Reg. TM) BALANCED ALLOCATION SUB-ACCOUNT (CLASS C)
10/07/2011 to 12/31/2011 9.182069 9.580447 88,414,204.6982
01/01/2012 to 12/31/2012 9.580447 10.735389 85,232,171.0952
01/01/2013 to 12/31/2013 10.735389 12.560555 81,824,939.1748
============ ==== ========== ========= ========= ================
AMERICAN FUNDS (Reg. TM) GROWTH ALLOCATION SUB-ACCOUNT (CLASS C)
10/07/2011 to 12/31/2011 8.417697 8.870103 33,789,739.8558
01/01/2012 to 12/31/2012 8.870103 10.169637 32,240,225.3491
01/01/2013 to 12/31/2013 10.169637 12.558744 31,724,135.7482
============ ==== ========== ========= ========= ================
AMERICAN FUNDS (Reg. TM) GROWTH SUB-ACCOUNT (CLASS C)
10/07/2011 to 12/31/2011 8.195941 8.690929 17,807,338.5059
01/01/2012 to 12/31/2012 8.690929 10.071748 16,242,611.5614
01/01/2013 to 12/31/2013 10.071748 12.902859 14,509,677.2773
============ ==== ========== ========= ========= ================
AMERICAN FUNDS (Reg. TM) MODERATE ALLOCATION SUB-ACCOUNT (CLASS C)
10/07/2011 to 12/31/2011 9.700617 10.050728 49,359,885.5178
01/01/2012 to 12/31/2012 10.050728 10.995520 47,394,261.0616
01/01/2013 to 12/31/2013 10.995520 12.320964 44,429,541.9266
============ ==== ========== ========= ========= ================
A-1
C. GWB - Excess Withdrawals - Single Withdrawal vs. Multiple Withdrawals
--- ------------------ ------------------------------------------
Assume you make an initial Purchase Payment of $100,000. Your initial Account
Value would be $100,000, your initial Total Guaranteed Withdrawal Amount would
be $100,000, and your initial Remaining Guaranteed Withdrawal Amount is
$100,000. Also assume the GWB Withdrawal Rate is 5%, making your Annual Benefit
Payment $5,000 ($100,000 x 5%).
Assume due to poor market performance your Account Value is reduced to $80,000
and you decide to make a $10,000 withdrawal, which reduces your Account Value
to $70,000 ($80,000 - $10,000). Since your $10,000 withdrawal exceeds your
Annual Benefit Payment of $5,000, your Total Guaranteed Withdrawal Amount and
Remaining Guaranteed Withdrawal Amount will be reduced in the same proportion
that the withdrawal reduced the Account Value. The reduction is equal to the
withdrawal amount ($10,000) divided by the Account Value before such withdrawal
($80,000), which equals 12.5%. The Total Guaranteed Withdrawal Amount and
Remaining Guaranteed Withdrawal Amount would be reduced to $87,500 ($100,000
reduced by 12.5%). In addition, after such withdrawal, the Annual Benefit
Payment would be reset equal to $4,375 (5% x $87,500).
Assume instead that you withdrew $10,000 in two separate withdrawals (on
different days) of $4,000 and $6,000. Your first withdrawal of $4,000 reduces
your Account Value to $76,000 ($80,000 - $4,000). Since your first withdrawal
of $4,000 does not exceed your Annual Benefit Payment of $5,000, your Total
Guaranteed Withdrawal Amount is not reduced, and the Remaining Guaranteed
Withdrawal Amount is reduced by such withdrawal to $96,000. Your second
withdrawal (on a subsequent day) of $6,000 reduces your Account Value to
$70,000 ($76,000 - $6,000). Since your second withdrawal causes your cumulative
withdrawals ($4,000 + $6,000 = $10,000) for the current Contract Year to exceed
the Annual Benefit Payment of $5,000, your Total Guaranteed Withdrawal Amount
and Remaining Guaranteed Withdrawal Amount will be reduced in the same
proportion that the second withdrawal reduced the Account Value. The reduction
is equal to the entire amount of the second withdrawal ($6,000) divided by the
Account Value before such withdrawal ($76,000), which equals 7.9%. The Total
Guaranteed Withdrawal Amount would be reduced to $92,100 ($100,000 reduced by
7.9%), and the Remaining Guaranteed Withdrawal Amount would be reduced to
$88,416 ($96,000 reduced by 7.9%). In addition, after the second withdrawal,
the Annual Benefit Payment would be reset equal to $4,605 (5% x $92,100).
D. GWB - How the Automatic Annual Step-Up Works
--------------------------------------------
As described in Example A above, when you purchase a contract and elect the
optional GWB rider, the initial Account Value and Total Guaranteed Withdrawal
Amount are equal to the initial Purchase Payment. The initial Annual Benefit
Payment is equal to the initial Total Guaranteed Withdrawal Amount multiplied
by your GWB Withdrawal Rate.
Assume that on the first contract anniversary the Account Value is greater than
the Total Guaranteed Withdrawal Amount. As shown in the graphic example below,
the Automatic Annual Step-Up will increase the Total Guaranteed Withdrawal
Amount to equal the Account Value. The Remaining Guaranteed Withdrawal Amount
will also be increased to equal the Account Value. The Annual Benefit Payment
will be set equal to the newly recalculated Total Guaranteed Withdrawal Amount
multiplied by the GWB Withdrawal Rate.
Assume that on the second contract anniversary the Account Value is once again
greater than the Total Guaranteed Withdrawal Amount. As shown in the graphic
example below, the Automatic Annual Step-Up will again increase the Total
Guaranteed Withdrawal Amount to equal the Account Value. The Remaining
Guaranteed Withdrawal Amount will also be increased to equal the Account Value.
The Annual Benefit Payment will be set equal to the newly recalculated Total
Guaranteed Withdrawal Amount multiplied by the GWB Withdrawal Rate.
Even if the Account Value decreases after the second contract anniversary, the
Total Guaranteed Withdrawal Amount and Annual Benefit Payment will not decrease
as long as you do not take Excess Withdrawals.
The graphic example below shows how the Automatic Annual Step-Ups on the first
and second contract anniversaries increase the Total Guaranteed Withdrawal
Amount. It also shows the contract Owner choosing to begin withdrawals of the
Annual Benefit Payment on the fifth contract anniversary.
Automatic Annual Step-Ups may only occur on contract anniversaries prior to the
Owner's 86th birthday. If an Automatic Annual Step-Up occurs, we may reset the
GWB rider charge to a rate that does not exceed the lower of: (a) the GWB
E-3