READ YOUR CONTRACT CAREFULLY
THIS IS A LEGAL CONTRACT
We promise to pay, subject to the provisions of this contract, the benefits
described by this contract.
We make this promise and issue this contract in consideration of the application
for this contract and the payment of the purchase payments.
The owner and the beneficiary are as named in the application unless they are
changed as provided for in this contract.
Minnesota Life Insurance Company, a stock company, is a subsidiary of Minnesota
Mutual Companies, Inc., a mutual insurance holding company. You are a member of
Minnesota Mutual Companies, Inc. which holds its annual meetings on the first
Tuesday in March of each year at 3:00 p.m. local time. The meetings are held at
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Signed for Minnesota Life Insurance Company at St. ▇▇▇▇, Minnesota, on the
contract date.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Secretary
Registrar
NOTICE OF YOUR RIGHT TO EXAMINE THIS CONTRACT FOR 10 DAYS.
IT IS IMPORTANT TO US THAT YOU ARE SATISFIED WITH THIS CONTRACT. IF YOU ARE NOT
SATISFIED, YOU MAY RETURN THE CONTRACT TO US OR TO YOUR AGENT WITHIN 10 DAYS OF
ITS RECEIPT. IF YOU EXERCISE THIS RIGHT, YOU WILL RECEIVE THE GREATER OF (a)
THE ACCUMULATION VALUE OF THIS CONTRACT ATTRIBUTABLE TO YOUR PURCHASE PAYMENTS,
OR (b) THE AMOUNT OF PURCHASE PAYMENTS PAID BY YOU UNDER THIS CONTRACT. WE WILL
PAY THIS REFUND WITHIN 7 DAYS AFTER WE RECEIVE YOUR NOTICE OF CANCELLATION.
ALL PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE INVESTMENT
EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT GUARANTEED AS TO
FIXED DOLLAR AMOUNT. THE SEPARATE ACCOUNT INFORMATION MAY BE FOUND AT PAGE __.
MINNESOTA LIFE
Minnesota Life Insurance Company
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▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
FLEXIBLE PAYMENT DEFERRED
VARIABLE ANNUITY CONTRACT
FIXED OR VARIABLE ANNUITY BENEFITS
A NONPARTICIPATING CONTRACT
99-70017
CONTRACT INDEX
Alphabetical Index to the Provisions of Your Contract
Page
----
Additional Information 18
Allocation of Purchase Payments 6
Amount Payable at Death 16
Annuity Payment Options 13
Annuity Provisions 12
Assignment 18
Beneficiary 18
Contract Charges 7
Definitions 3
General Information 5
Misstatement 18
Purchase Payments 5
Transfer Provisions 11
Valuation 9
Withdrawal and Surrender 11
99-70017 Minnesota Life 2
DEFINITIONS
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When we use the following words, this is what we mean:
1940 ACT
The Investment Company Act of 1940, as amended, or any similar successor federal
legislation.
ACCUMULATION UNIT
An accumulation unit is a measure of your interest in each sub-account of the
separate account.
ACCUMULATION VALUE
The sum of your values under this contract in the general account and/or the
separate account. In the general account, this is the general account
accumulation value. In the separate account, this is the separate account
accumulation value. The separate account portion is composed of your interest
in one or more sub-accounts of the separate account. Your interest in the
sub-accounts shall be valued separately. The total of those values will be the
separate account accumulation value.
AGE
The age of a person at nearest birthday.
ANNUITANT
The person named as annuitant on page 1 who may receive lifetime benefits under
this contract. Joint annuitants will be considered a single entity.
ANNUITY COMMENCEMENT DATE
The date on which annuity payments are elected to begin. This may be the
maturity date or a date you select prior to the maturity date.
ANNUITY PAYMENTS
Payments made at regular intervals to the annuitant or any other payee. Annuity
payments will be due and payable only on the first day of a calendar month.
BENEFICIARY
The person, persons or entity designated to receive any death benefits payable
under the contract. Prior to the commencement of annuity payments, the
beneficiary is the first person on the following list who is alive on the date
of your death: the joint owner (if any), the primary (Class 1) beneficiary, the
secondary (Class 2) beneficiary or if none of the above is alive, to the
executor or administrator of your estate.
CONTRACT ANNIVERSARY
The same day and month as the contract date for each succeeding year of this
contract.
CONTRACT DATE
The effective date of this contract. It is also the date from which we
determine contract anniversaries and contract years.
CONTRACT YEAR
A period of one year beginning with the contract date or a contract anniversary.
DEATH BENEFIT
The amount payable to the beneficiary upon your death.
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FIXED ANNUITY
Annuity payments with guaranteed payments of a pre-established dollar amount
during the payment period.
FUND
The mutual fund or separate investment portfolio within a series mutual fund
which is designated as an eligible investment for the separate account.
GENERAL ACCOUNT
All assets of Minnesota Life other than those in the Variable Annuity Account or
in other separate accounts established by us. You may not transfer or otherwise
allocate or contribute amounts to the general account that would cause the
general account accumulation value to exceed $1,000,000 without our prior
consent.
JOINT OWNER
The person designated to share equally in all rights and privileges of this
contract. Only your spouse may be named as joint owner. Both signatures will
be required to exercise your rights under this contract.
PURCHASE PAYMENTS
Amounts paid to us as consideration for the benefits provided by this contract.
Total purchase payments may not exceed $5,000,000 without our consent. The
amount of each Purchase Payment must be at least $2,000. This minimum may not
apply under certain automatic or group payment plans which may be established
and agreed to by us, or because of other retirement plan limitations.
SEPARATE ACCOUNT
A separate investment account titled Variable Annuity Account. This separate
account was established by us for this class of contracts under Minnesota law.
The separate account is composed of several sub-accounts. The assets of the
separate account are ours. Those assets are not subject to claims arising out
of any other business of ours.
SURRENDER VALUE
The amount payable to you on surrender of this contract is equal to the
accumulation value after deduction of all applicable charges. Amounts
surrendered may be subject to a deferred sales charge.
TRANSFER
A transfer is a reallocation of values under this contract. It may be between
the general account and the separate account or among the sub-accounts of the
separate account.
VALUATION DATE
Any date on which a fund is valued.
VALUATION PERIOD
The period between successive valuation dates measured from the time of one
determination to the next.
VARIABLE ANNUITY
Annuity payments which increase or decrease in amount to reflect the investment
experience of the separate account and its sub-accounts. The dollar amount of
each annuity payment is not guaranteed.
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WE, OUR, US
Minnesota Life Insurance Company.
WRITTEN REQUEST
A request in writing signed by you. In the case of joint owners, the signatures
of both owners will be required. In some cases, we may provide a form for your
use. We also may require that this contract be sent to our home office with
your written request.
YOU, YOUR
The owner of this contract. The owner may be the annuitant or someone else.
The owner shall be that person named as owner in the application. The owner may
be changed. Joint owners will be considered a single entity.
GENERAL INFORMATION
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WHAT IS YOUR AGREEMENT WITH US?
This contract and the copy of the application attached to it contain the entire
contract between you and us. Any statements made in the application either by
you or the annuitant will, in the absence of fraud, be considered
representations and not warranties. Also, any statement made either by you or
the annuitant will not be used to void this contract or defend against a claim
under this contract unless the statement is contained in the application.
No change or waiver of any of the provisions of this contract will be valid
unless made in writing by us. It must also be signed by our president, a vice
president, our secretary or an assistant secretary. No agent or other person
has the authority to change or waive any provision of this contract.
Any additional agreement attached to this contract will become a part of this
contract. It will be subject to all the terms and conditions of this contract
unless we state otherwise in the agreement.
HOW DO YOU EXERCISE YOUR RIGHTS UNDER THIS CONTRACT?
You can exercise all the rights under this contract. You can do this by making
a written request to us. You have these rights during the annuitant's lifetime
and before annuity payments begin. We will deal with you, unless this contract
provides otherwise, on the basis that you have full ownership and control of
this contract.
HOW WILL YOU KNOW THE VALUE OF YOUR CONTRACT?
At least annually, we will provide you with a report showing the current
accumulation value and surrender value of this contract. It will also show the
current accumulation unit values for each sub-account in which you have value.
In addition, we will provide you with an annual report which summarizes the
year's transactions. The report will be as of a date within two months of its
mailing.
PURCHASE PAYMENTS
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WHERE DO YOU MAKE PURCHASE PAYMENTS?
All purchase payments must be made at our home office. Our home office is at
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When we receive a purchase payment from you at our home office, we will send you
a confirmation.
DO YOU CHOOSE WHEN TO MAKE PURCHASE PAYMENTS?
Yes. You may choose when to make purchase payments. During periods in which
you are eligible for a withdrawal or surrender without charge due to your
confinement in a hospital or medical care facility; or, in the event you are
diagnosed with a terminal illness, additional purchase payments may not be
made. Eligibility for these benefits is as defined in the "Withdrawal and
Surrender" section of this contract.
ARE THERE OTHER METHODS OF MAKING PURCHASE PAYMENTS?
Yes. It may be possible for you to arrange with your employer to make your
purchase payments by payroll deduction. Or, under some plans, your employer may
make purchase payments on your behalf. Also, your bank or other financial
institution may consent to have your purchase payments automatically withdrawn
from your account and paid directly to us.
WHAT DEDUCTIONS ARE MADE FROM PURCHASE PAYMENTS?
There are usually no deductions made from the purchase payments. However, we do
reserve the right to make a deduction from the purchase payments for state
premium taxes, where applicable.
HOW ARE PURCHASE PAYMENTS ALLOCATED?
They are allocated to the general account or to the separate account and its
sub-accounts. The allocation is made as you direct. Initially, you must
indicate your allocation in the application. You may change your allocation for
future purchase payments by giving us written notice or by telephone where
permitted.
Applications received without instructions as to allocation will be treated as
incomplete. We will return such purchase payments immediately and in full if we
cannot credit them within five valuation days after receipt.
WHAT ARE THE INVESTMENTS OF THE SEPARATE ACCOUNT?
The separate account is divided into sub-accounts. For each sub-account, there
is a fund for the investment of that sub-account's assets. Purchase payments
are invested in the funds at their net asset value. The net asset value per
share for each fund is determined by adding the current value of all securities
and all other assets held by such fund, subtracting liabilities, and dividing
the remainder by the number of shares outstanding.
If investment in a fund should no longer be possible or if we determine it
becomes inappropriate for contracts of this class, we may substitute another
fund. Substitution may be with respect to existing accumulation values, future
purchase payments and future annuity payments.
No transfer of assets from one separate account to another affecting owners of
contracts delivered in a given state can be made except, where required, with
the approval of the Commissioner of Insurance of that state.
WHAT SUB-ACCOUNT OPTIONS ARE AVAILABLE?
The separate account is composed of the sub-accounts shown on page 1 as of the
contract date. Purchase payments may be applied to one or more of these
sub-accounts. They may also be made to any other sub-account which may be
established by us under the separate account for contracts of this class. We
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reserve the right to add, combine or remove any sub-accounts of the separate
account.
IS THERE A MINIMUM AMOUNT WHICH MUST BE ALLOCATED TO THE GENERAL ACCOUNT OR THE
SEPARATE ACCOUNT?
No.
MAY WE MAKE CHANGES TO THE SEPARATE ACCOUNT?
Yes. We reserve the right to transfer assets of the separate account to another
separate account. The transfer will be of assets associated with this class of
contracts. We will make that determination. If this type of transfer is made,
the term "separate account", as used in this contract, shall then mean the
separate account to which the assets were transferred.
We reserve the right, when permitted by law, to:
(a) deregister the separate account under the 1940 Act;
(b) restrict or eliminate any voting rights of contract owners or other
persons who have voting rights as to the separate account; and
(c) combine the separate account with one or more other separate accounts.
WHEN ARE PURCHASE PAYMENTS CREDITED TO THE CONTRACT?
Purchase payments are credited to the contract on the valuation date coincident
with or next following the day they are received in our home office. If they
are received on a day which is not a valuation date, those amounts will be
credited on the next valuation date.
MAY YOU STOP MAKING PURCHASE PAYMENTS?
Yes. You may stop making purchase payments at any time. If you stop making
purchase payments, the contract remains in force as a paid-up annuity according
to its terms. Its value may be applied to provide annuity payments at a later
date. You may make purchase payments again at any time before annuity payments
start unless the contract has been surrendered.
MAY WE CANCEL THE CONTRACT?
Yes. We may, in our discretion, cancel a contract if no purchase payments are
made for a period of two or more full contract years and both (a) the total
purchase payments made, less any withdrawals and associated charges, and (b) the
accumulation value of the contract, are less than $2,000. If such a
cancellation takes place, we will pay the accumulation value to you.
We will notify you of our intention to exercise these rights in our annual
report. We will act 90 days after the contract anniversary unless an additional
purchase payment is received before the end of that 90 day period.
CONTRACT CHARGES
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ARE THERE CHARGES UNDER THIS CONTRACT?
Yes. There may be a deferred sales charge. Also, there are certain charges
which are made directly to the separate account and a transaction charge.
WHAT IS THE DEFERRED SALES CHARGE?
The deferred sales charge is the charge made on contract withdrawals or
surrenders. It is made during the seven year period following the receipt of
99-70017 Minnesota Life 7
each purchase payment. The amount withdrawn plus any deferred sales charge is
deducted from the accumulation value. In the separate account, accumulation
units will be cancelled of a value equal to the applicable charge and the amount
of the withdrawal.
WHAT IS THE AMOUNT OF THE DEFERRED SALES CHARGE?
The amount of the deferred sales charge is determined from the percentages shown
in the table below. All purchase payments will be allocated to a withdrawal or
surrender on a first-in, first-out basis for the purpose of determining the
amount of the deferred sales charge. The deferred sales charge applies only to
withdrawal or surrender of purchase payments received by us within seven years
of the date of the withdrawal or surrender. The deferred sales charge
percentage is as shown in the table below:
Years Since
Payment/contribution Charge
-------------------- ------
0-1 7%
1-2 7
2-3 6
3-4 5
4-5 4
5-6 3
6-7 2
7 and thereafter -0-
The amount of the deferred sales charge is determined by: (a) calculating the
number of years each purchase payment being withdrawn has been in the contract;
(b) multiplying each purchase payment being withdrawn by the appropriate
deferred sales charge percentage in the table; and (c) adding the deferred sales
charge from all purchase payments as calculated in (b).
ARE THERE CIRCUMSTANCES WHERE THE DEFERRED SALES CHARGE WILL NOT APPLY?
Yes. The deferred sales charge will not apply when:
- Amounts are payable as a death benefit upon your death.
- Amounts are applied to provide annuity payments under an annuity payment
option.
- A withdrawal or surrender is requested any time after the first contract
anniversary due to your confinement in a hospital or medical care facility
as defined in the "Withdrawal and Surrender" section of the contract.
- A withdrawal or surrender is requested any time after the first contract
anniversary in the event you are diagnosed with a terminal illness as
defined in the "Withdrawal and Surrender" section of this contract.
- Amounts are withdrawn to pay the contract fee.
- Amounts are withdrawn in any calendar year that are less than or equal to
the greater of:
(a) Accumulation value less purchase payments not previously withdrawn; or
(b) 10% of the sum of purchase payments not previously withdrawn that have
been received by us within seven years of the date of withdrawal.
WHAT IS THE CONTRACT FEE UNDER THIS CONTRACT?
The contract fee is an annual charge deducted from the accumulation value on the
contract anniversary. The contract fee will apply when the greater of:
99-70017 Minnesota Life 8
(a) the accumulation value; or
(b) purchase payments less withdrawals;
is less than $50,000 at the end of the contract year.
The contract fee will be the lesser of $30 or 2% of the accumulation value at
the end of the contract year. The contract fee will be deducted on the contract
anniversary from the accumulation value on a pro rata basis from the general
account and all available variable sub-accounts.
WHAT IS THE TRANSACTION CHARGE UNDER THIS CONTRACT?
We reserve the right to deduct a transaction charge, not to exceed $10, for each
transfer when the frequency of such transfer request exceeds one every calendar
month. If applied, this charge will reduce the amount of your transfer.
ARE THERE CHARGES ASSOCIATED WITH THE SEPARATE ACCOUNT?
Yes, there are charges associated with the separate account. They are the
mortality risk charge, the expense risk charge and the administrative charge.
These charges are deducted on each valuation date from the separate account. On
an annual basis, they may not exceed 1.80% of the net asset value of the
separate account.
WHAT IS THE MORTALITY RISK PREMIUM CHARGE?
This is a charge to compensate us for the mortality guarantees we make under the
contract. Actual mortality results incurred by us shall not adversely affect
any payments or values under this contract. On an annual basis, it shall not
exceed .80% of the net asset value of the separate account.
WHAT IS THE EXPENSE RISK CHARGE?
This is a charge to compensate us for the guarantee that the deductions provided
in this contract will be sufficient to cover our actual expenses. Actual
expense results incurred by us shall not adversely affect any payments or values
under this contract. On an annual basis, it shall not exceed .60% of the net
asset value of the separate account.
WHAT IS THE ADMINISTRATIVE CHARGE?
The administrative charge is to compensate us for the administrative expenses
incurred by us. On an annual basis, it shall not exceed .40% of the net asset
value of the separate account.
VALUATION
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HOW IS YOUR ACCUMULATION VALUE DETERMINED?
It is determined separately for your accumulation value in the general account
and the separate account. The separate account value will include all
sub-accounts of the separate account.
For the general account, it is the sum of all purchase payments allocated to the
general account plus interest and transfers into the general account, less
deductions for any transfers out of the general account, previously applied
deferred sales charges and contract fees, and any previous withdrawals.
For each sub-account of the separate account, it is your accumulation units
multiplied by the accumulation unit value.
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HOW IS THE VALUE OF AN ACCUMULATION UNIT DETERMINED?
The number of accumulation units credited with respect to each purchase
payment is determined by dividing the portion of the purchase payment
allocated to each sub-account by the then current accumulation unit value for
that sub-account. This determination is made as of the valuation date
coincident with or next following the date on which we receive your purchase
payment at our home office. Once determined, the number of accumulation units
will not be affected by changes in the accumulation unit value. However, the
total number of accumulation units for a sub-account will be affected by
future contract transactions including that sub-account. In addition, the
units of each sub-account will be increased by subsequent purchase payments
and transfers to that sub-account. The units of each sub-account will be
decreased by deductions for contract fees, deferred sales charges, and for
transfers or withdrawals from that sub-account.
The accumulation unit value will increase or decrease on each valuation date.
The amount of any increase or decrease will depend on the net investment
experience of the sub-account of the separate account during the valuation
period. The value of an accumulation unit for each sub-account was originally
set at $1.00 on the first valuation date. For any subsequent valuation date,
its value is equal to its value on the preceding valuation date multiplied by
the net investment factor for that sub-account for the valuation period ending
on the subsequent valuation date.
WHAT IS THE NET INVESTMENT FACTOR FOR EACH SUB-ACCOUNT?
The net investment factor for a valuation period is the gross investment rate
for such valuation period, less a deduction for the charges associated with the
separate account at a rate of not more than 1.80% per annum.
The gross investment rate is equal to:
(a) the net asset value per share of a fund share held in the sub-account
of the separate account determined at the end of the current valuation
period; plus
(b) the per-share amount of any dividend or capital gain distributions by
the fund if the "ex-dividend" date occurs during the current valuation
period; divided by
(c) the net asset value per share of that fund share held in the
sub-account determined at the end of the preceding valuation period.
DOES THE CONTRACT CREDIT INTEREST ON THE GENERAL ACCOUNT?
Yes. This contract credits interest on the general account accumulation value
of this contract. Interest is credited at a rate of at least 3% per year,
compounded annually. We guarantee this rate for the life of this contract and
until an annuity payment begins.
MAY ADDITIONAL INTEREST BE CREDITED ON THE GENERAL ACCOUNT?
Yes. As conditions permit, we will credit additional amounts of interest to the
general account accumulation value.
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TRANSFER PROVISIONS
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MAY YOU MAKE TRANSFERS OF AMOUNTS UNDER THE CONTRACT?
Yes. Before annuity payments begin, you may make transfers by written request
or where permitted, by telephone. We will make the transfer on the basis of
accumulation unit values on the valuation date coincident with or next following
the day we receive the request at our home office.
You may make transfers among sub-accounts of the separate account or from the
separate account to the general account. You may also make transfers from the
general account to the separate account. However, once annuity payments begin
transfers from the general account to the separate account are not permitted.
Systematic transfer arrangements may also be available.
DO ANY OTHER RESTRICTIONS APPLY?
Yes. We reserve the right to limit the amount and frequency of transfers from
the general account to the separate account. We further reserve the right to
make a charge, not to exceed $10, for each transfer among the sub-accounts of
the separate account when the frequency of such transfer requests exceeds one
every calendar month. If applied, this charge will be deducted from your
accumulation value.
MAY TRANSFERS TAKE PLACE ONCE AN ANNUITY BEGINS?
Yes. However, transfers are limited. They may be made only with respect to any
variable annuity payments. See the "Annuity Payment Options" section of this
contract.
WITHDRAWAL AND SURRENDER
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MAY YOU WITHDRAW FUNDS FROM THIS CONTRACT?
Yes. At any time before annuity payments begin, you may request a partial
withdrawal from the accumulation value. You must make a written request for any
withdrawals. The amount of any withdrawal must be for at least $250. In the
event of a cash withdrawal, the accumulation value will be reduced by the amount
requested and by the deferred sales charge, if any.
Unless instructed otherwise by you, withdrawals will be made from your interest
in each sub-account of the separate account and the general account in the same
proportion that the value of your interest in any sub-account bears to your
total accumulation value. Withdrawal amounts will be determined as of the
valuation date coincident with or next following the date your written request
is received at our home office.
Systematic withdrawal plans of a fixed amount or a fixed amount over a specified
period are also available.
MAY YOU SURRENDER THE CONTRACT?
Yes. At any time before annuity payments begin, you may surrender this contract
for its surrender value. The surrender value will be determined as of the
valuation date coincident with or next following the date your written request
is received at our home office.
ARE THERE SPECIAL WITHDRAWAL OR SURRENDER PROVISIONS?
Yes. Deferred sales charges will not apply when:
99-70017 Minnesota Life 11
- A withdrawal or surrender is requested any time after the first contract
anniversary due to your confinement in a hospital or medical care facility
for at least 90 consecutive days. The request must be made while you are
still confined or within 60 days after the discharge from a hospital or
medical care facility after a confinement of at least 90 consecutive days.
Medical care facility means a facility operated pursuant to law or any
state licensed facility providing medically necessary inpatient care which
is: (a) prescribed by a licensed Physician in writing; and (b) based on
physical limitations which prohibit daily living in a non-institutional
setting.
- A withdrawal or surrender is requested any time after the first contract
anniversary in the event you are diagnosed with a terminal illness.
Terminal illness is a condition: (a) diagnosed by a licensed Physician;
and (b) is expected to result in death within 12 months for 80% of
diagnosed cases.
For purposes of these provisions, we must receive due proof, satisfactory to us,
of your confinement or terminal illness in writing. Physician means: (a) a
licensed medical doctor (MD) or a licensed doctor of osteopathy (DO) practicing
within the scope of his or her license; and (b) not you, the annuitant or a
member of either your or the annuitant's immediate families. If the owner of
this contract is other than a natural person, such as a trust or other similar
entity, benefits payable due to nursing home confinement or terminal illness
will be based upon the annuitant. If the owner, or annuitant in the case of a
contract owned by a non-natural person, is changed subject to the provisions of
this contract, a one year waiting period will apply before the new owner or
annuitant is eligible for these benefits.
HOW WILL WITHDRAWAL OR SURRENDER BENEFITS BE PAID?
We will pay these benefits in a single sum. If this contract is surrendered you
may elect one of the annuity payment options. This election is subject to the
provisions of this contract.
ANNUITY PROVISIONS
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WHEN DO ANNUITY PAYMENTS BEGIN?
You must notify us in writing: (a) that annuity payments are to be made to the
annuitant; (b) when these payments are to begin; (c) the form of the annuity;
and (d) what annuity payment option has been selected. We must receive this
notice at least 30 days before annuity payments are to begin. This contract
permits annuity payments to begin no later than age 85 or seven years after the
date of issue of this contract, whichever is later. However, the beginning date
for annuity payments must be consistent with any restrictions applicable to the
plan under which this contract may have been purchased.
WHAT VALUE IS AVAILABLE TO BE APPLIED TO PROVIDE ANNUITY PAYMENTS?
On the date annuity payments are to begin, we will apply the accumulation value.
WHAT TYPES OF ANNUITIES ARE AVAILABLE?
Both fixed and variable annuities are available under this contract.
ARE THERE RESTRICTIONS ON ANNUITY PAYMENTS?
Yes. We require that the first monthly fixed or variable annuity payment must
be at least $20. It may be less if a payment of a smaller minimum amount is
required by law. If the first monthly fixed or variable annuity
99-70017 Minnesota Life 12
payment would be less than that amount, we reserve the right to pay you the
surrender value in a lump sum. This payment would be in lieu of all other
rights under this contract.
In addition, we restrict the maximum amount which may be applied to provide a
fixed annuity under this contract. The maximum amount which may be applied
under this contract for a fixed annuity is $1,000,000.
MAY WE REQUIRE INFORMATION BEFORE MAKING ANNUITY PAYMENTS?
Yes. We reserve the right to require proof satisfactory to us of the age of the
annuitant and of any joint annuitant before payments begin.
We may also require proof that a person is alive before making any annuity
payment which is based on the survival of that person.
IF YOU MAKE NO ELECTION, WHEN DO ANNUITY PAYMENTS BEGIN?
If you do not elect another date, annuity payments will begin on the later of
the first day of the month immediately following: (a) the 85th birthday of the
annuitant; or (b) seven years after the date of issue of this contract.
IF YOU FAIL TO ELECT AN ANNUITY PAYMENT OPTION, IS THERE AN OPTION UNDER WHICH
ANNUITY PAYMENTS WILL BE MADE?
Yes. If you do not elect an annuity payment option, we will make monthly
payments on the basis of Option 2A, a life annuity with a period certain of 120
months.
IF YOU FAIL TO ELECT AN ANNUITY FORM, IS THERE A FORM UNDER WHICH ANNUITY
PAYMENTS WILL BE MADE?
Yes. If you do not elect an annuity payment form, we will make annuity payments
in the form of a variable annuity using the Money Market Sub-Account.
MUST AN ANNUITY PAYMENT OPTION BE ELECTED?
No. You may elect a lump sum payment instead. If you do so, you and the
annuitant shall have no further rights under this contract.
ANNUITY PAYMENT OPTIONS
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WHAT ANNUITY PAYMENT OPTIONS ARE AVAILABLE?
The following annuity payment options are available:
Option 1 -- Life Annuity -- annuity payments payable monthly for the lifetime of
the annuitant, ending with the last payment due prior to the annuitant's death.
Option 2 -- Life Annuity with a Period Certain -- annuity payments payable
monthly for the lifetime of the annuitant; provided, if the annuitant dies
before payments have been made for the entire period certain, those remaining
certain payments will be made to the beneficiary.
The period certain may be for 120 months (Option 2A); for 180 months (Option
2B); or for 240 months (Option 2C).
Option 3 -- Joint and Last Survivor Annuity -- annuity payments payable monthly
for the joint lifetimes of the annuitant and a designated joint annuitant. The
payments end with the last payment due before the survivor's
99-70017 Minnesota Life 13
death. If this option is elected, the contract and payments shall be the joint
property of the annuitant and the designated joint annuitant.
Option 4 -- Fixed Period Annuity -- annuity payments payable monthly for a fixed
period of from ten to twenty years. If the annuitant dies before all payments
for the fixed period are received, payments will continue for the remainder of
the fixed period to the beneficiary.
ARE OTHER ANNUITY PAYMENT OPTIONS AVAILABLE?
Yes. Other options may be available. They will be as agreed upon between you
and us.
HOW WILL ANNUITY PAYMENTS BE MADE?
Annuity payments under a fixed or variable annuity payment option will be made
on a monthly basis to the annuitant or other designated payee, unless we agree
to a different payment schedule.
AFTER THE DEATH OF THE ANNUITANT, MAY THE BENEFICIARY RECEIVE A LUMP SUM PAYMENT
INSTEAD OF THE REMAINING PERIOD CERTAIN ANNUITY PAYMENTS?
Yes. The beneficiary may elect to have the present value of the remaining
period certain payments paid in a lump sum. This right exists under Options 2
and 4.
The lump sum payment will be the commuted value of the remaining period certain
payments. It will be based on the then current dollar amount of one payment.
We will use the same interest rate which served as a basis for the annuity.
HOW IS THE AMOUNT OF A VARIABLE ANNUITY PAYMENT DETERMINED?
The dollar amount of the first variable annuity payment is determined by
applying the available value to a rate per $1,000 which is based on the
Individual Annuity 1983 Table A female mortality rates with an age setback of
one year and an interest rate of 4.50%, compounded annually. The amount of the
first variable annuity payment depends upon the annuity payment option selected,
the adjusted age of any annuitant and joint annuitant and the amount applied.
Annuitant and joint annuitant age are determined as of the annuity commencement
date and adjusted based on the year of commencement as follows:
Annuity Commencement Date Age Adjustment
------------------------- --------------
2000 - 2009 -1
2010 - 2019 -2
2020 - 2029 -3
2030 and later -4
A number of annuity units is determined by dividing this dollar amount by the
then current annuity unit value. This determination is made separately for each
sub-account of the separate account. The number of annuity units remains
unchanged during the period of annuity payments, except for transfers and in the
case of certain joint annuity payment options which provide for a reduction in
payment after the death of an annuitant.
The dollar amount of the second and later variable annuity payments is equal to
the number of annuity units determined for each sub-account multiplied by the
annuity unit value for that sub-account as of the due date of the payment. This
amount may increase or decrease.
99-70017 Minnesota Life 14
The value of an annuity unit for a sub-account is determined each month as of
the first day of the month. The value is equal to the annuity unit value for
that sub-account as of the first day of the preceding month multiplied by the
product of: (a) .996338; and (b) a sub-account investment factor. This
investment factor is the accumulation unit value for that sub-account on the
valuation date next following the fourteenth day of the preceding month divided
by the accumulation unit value for that sub-account on the valuation date next
following the fourteenth day of the second preceding month. For any date other
than the first of a month, the annuity unit value is that on the first day of
the next month.
The dollar amount determined for each sub-account will be aggregated for
purposes of making payment.
HOW IS THE AMOUNT OF A FIXED ANNUITY PAYMENT DETERMINED?
The tables shown in Appendix A are used to determine the amount of guaranteed
monthly fixed annuity payments. They show the dollar amount of each payment
that can be provided with each $1,000 of available value.
WILL THESE TABLES ALWAYS BE USED FOR ANNUITY PURCHASES?
Not necessarily. If, when annuity payments are elected, we are using tables of
annuity purchase rates for this class of contract which would result in larger
annuity payments, we will use those tables instead.
ONCE ANNUITY PAYMENTS BEGIN, MAY AN ANNUITY OPTION, WHETHER FIXED OR VARIABLE,
BE CHANGED?
No.
MAY AMOUNTS BE TRANSFERRED DURING THE ANNUITY PERIOD?
Yes. Amounts held as annuity reserves may be transferred among the variable
annuity sub-accounts during the annuity period. Annuity reserves may also be
transferred from a variable annuity to a fixed annuity during this time. The
maximum amount which may be applied for a fixed annuity is $1,000,000.
HOW DOES AN ANNUITANT CHANGE SUB-ACCOUNT ELECTIONS OR TRANSFER AMOUNTS TO A
FIXED ANNUITY?
The change must be made by written request. The annuitant and joint annuitant,
if any, must make such an election.
HOW WILL A TRANSFER OF VARIABLE ANNUITY SUB-ACCOUNTS BE MADE?
A transfer will be made on the basis of annuity unit values. The number of
annuity units from the sub-account being transferred will be converted to a
number of annuity units in the new sub-account. The annuity payment option will
stay the same.
When you tell us to make such a transfer it will be effective for future annuity
payments. Your transfer will be effective and funds will be actually
transferred in the middle of the month prior to the next annuity payment
affected by your request. We will use the described valuation procedures and
the adjusted age of the annuitant and any joint annuitant to determine an
initial variable annuity payment.
After this conversion, a number of annuity units in the new sub-account will be
payable under the elected option. The first payment after conversion will be of
the same amount as it would have been without the transfer. The number of
annuity units will be set at that number of units which are needed to pay that
same amount on the transfer date.
99-70017 Minnesota Life 15
ARE THERE ANY RESTRICTIONS ON ANNUITY SUB-ACCOUNT TRANSFERS?
Yes. We reserve the right to require that transfers during the annuity payment
period meet the following conditions:
- The transfer of an annuity reserve amount from any sub-account must be at
least equal to $5,000, or the entire amount of the reserve remaining in
that sub-account, if less.
- Variable annuity payments must be in effect for a period of 12 months
before a change may be made.
- Transfers are limited to one in any 12 month period.
Your written request for an annuity sub-account transfer must be received by us
at least 30 days in advance of the due date of the annuity payment subject to
the transfer.
MAY AMOUNTS HELD AS RESERVES TO PAY A VARIABLE ANNUITY BE TRANSFERRED TO A FIXED
ANNUITY?
Yes. However, the restrictions which apply to annuity sub-account transfers
will apply here as well.
When you tell us to make such a transfer it will be effective for future annuity
payments. Your transfer will be effective and funds will be actually
transferred in the middle of the month prior to the next annuity payment. We
will use the described fixed annuity pricing at the time of transfer to
determine an initial fixed annuity payment.
The amount transferred will then be applied to provide a fixed annuity amount.
This amount will be based upon the adjusted age of the annuitant and any joint
annuitant at the time of the transfer. The payment option will remain the same.
MAY AMOUNTS PAID AS A FIXED ANNUITY BE TRANSFERRED TO A VARIABLE ANNUITY?
No.
AMOUNT PAYABLE AT DEATH
--------------------------------------------------------------------------------
WHAT AMOUNT IS PAYABLE AT DEATH?
If you die before annuity payments begin, we will pay the death benefit of the
contract to the beneficiary. If the owner of this contract is other than a
natural person, such as a trust or other similar entity, we will pay the death
benefit to the beneficiary on the death of the annuitant, if death occurs prior
to the date that annuity payments begin.
If you die prior to your 80th birthday, the death benefit is the greater of:
(a) the accumulation value; (b) the sum of purchase payments adjusted for any
amounts previously withdrawn; or (c) the last stepped-up value prior to the date
of death, adjusted for any purchase payments and withdrawals occurring
thereafter.
If you die on or after your 80th birthday, the death benefit is the greater of:
(a) the accumulation value; (b) the sum of purchase payments adjusted for any
amounts previously withdrawn; or (c) the last stepped-up value prior to the date
of death, adjusted for any withdrawals occurring thereafter.
The stepped-up value will be determined on every third contract anniversary
prior to your 80th birthday. The stepped-up value is the greater of: (a)
99-70017 Minnesota Life 16
the accumulation value on that contract anniversary; or (b) the previous
stepped-up value, adjusted for any withdrawals occurring thereafter. Where
joint owners exist, there will be no further stepped-up values after the 80th
birthday of the oldest joint owner. After death of the first joint owner,
stepped-up values may resume on the next third contract anniversary that the
surviving joint owner continues the contract and has not reached his or her 80th
birthday.
The value of the death benefit will be determined as of the valuation date
coincident with or next following the day we receive at our home office due
proof of death and all related information necessary to make payment.
If there are joint owners of this contract, at the death of the first owner,
there will be no death benefit adjustment to the accumulation value, if the
surviving owner elects to continue the contract.
If any portion of the contract interest is payable to your designated
beneficiary who is your surviving spouse, that spouse shall be treated as the
contract owner for purposes of: (a) when payments must begin; and (b) the time
of distribution in the event of your spouse's death. In addition, if a
surviving spouse elects to assume his or her deceased spouse's contract, there
will be no adjustment to the accumulation value in the form of a death benefit.
If the annuitant dies after annuity payments begin, we will pay whatever amount
may be called for by the terms of the annuity payment option selected. The
remaining value in the contract must be distributed at least as rapidly as under
the option in effect as of the annuitant's death.
TO WHOM WILL WE PAY THOSE BENEFITS?
When we receive due proof of death satisfactory to us, we will calculate the
amount payable as a death benefit under this contract. Amounts will be payable
to the beneficiary or beneficiaries. The beneficiary will be the person or
persons named in the application for this contract unless you subsequently
change the beneficiary. In that event, we will pay the amount payable at death
to the beneficiary named in your last change of beneficiary request as provided
in this contract.
HOW WILL THE AMOUNT PAYABLE AT DEATH BE PAID?
We will pay that amount in a single sum unless another form of settlement has
been requested and agreed to by us. All payments by us are payable at our home
office. Proof of any claim under this contract must be submitted in writing to
us at our home office.
Any amounts due as a death benefit in excess of the accumulation value on the
date we receive due proof of death will be directed into the money-market
sub-account in fulfillment of the guaranteed death benefit provisions of the
contract.
WHEN MUST DEATH BENEFITS BE PAID?
If you die on or before the date when annuity payments begin and if the
designated beneficiary is a person other than your spouse, that beneficiary may
elect an annuity option measured by a period not longer than that beneficiary's
life expectancy. Annuity payments must begin not later than one year after your
death. If there is no designated beneficiary, then the entire interest in this
contract must be distributed within five years after your death. If the
annuitant dies after annuity payments have begun, any
99-70017 Minnesota Life 17
payments received by a non-spouse beneficiary must be distributed at least as
rapidly as under the method elected by the annuitant as of the date of death.
WHAT HAPPENS IF ONE OR ALL OF THE BENEFICIARIES DIE?
Before annuity payments begin, if a beneficiary dies, that beneficiary's
interest in this contract ends with that beneficiary's death. Only those
beneficiaries who survive will be eligible to share in a death benefit. If no
beneficiary survives you prior to the date an annuity begins we will pay the
accumulation value of this contract to the executors or administrators of your
estate.
After annuity payments have begun, if there is no beneficiary after the death of
the annuitant, any remaining value under the annuity option will be paid to the
annuitant's estate.
CAN YOU CHANGE THE BENEFICIARY?
Yes. You can file a written request with us to change the beneficiary. Your
written request will not be effective until it is recorded in our home office
records. After it has been recorded, it will take effect as of the date you
signed the request. However, if the annuitant dies before the request has been
recorded, the request will not be effective as to those death proceeds we have
paid before the request was recorded in our home office records.
ADDITIONAL INFORMATION
--------------------------------------------------------------------------------
CAN YOU ASSIGN THIS CONTRACT?
Unless this contract provides otherwise, you may assign all rights to this
contract during the lifetime of the annuitant. We will not be bound by any
assignment until we have recorded written notice of it at our home office. We
are not responsible for the validity of any assignment. An assignment will not
apply to any payment or action made by us before it was recorded. Any proceeds
payable to an assignee will be paid in a single sum. Any claim made by an
assignee will be subject to proof of the assignee's interest and the extent of
the assignment.
If this contract is issued pursuant to a retirement plan which receives
favorable tax treatment under the provisions of Section 401, 403, 404, 408, 408A
or 457 of the Internal Revenue Code, then, it may not be assigned, pledged or
otherwise transferred except under such conditions as may be allowed under
applicable law.
ARE THE CONTRACT BENEFITS PROTECTED?
Yes. To the extent permitted by law, no benefit provided by this contract will
be subject to any creditor's claim or process of law.
HOW WILL BENEFITS BE DETERMINED?
Any paid-up benefit, withdrawal benefit, surrender benefit, or any other benefit
described by this contract shall be calculated as of the date the provisions of
the contract are exercised.
WILL THERE BE AN ADJUSTMENT IF A PERSON'S AGE IS MISSTATED?
Yes. If a person's age has been misstated, the amount payable under this
contract as an annuity will be that amount which would have been paid based upon
that person's correct age. In the case of an overpayment, we may either deduct
the required amount from that person's payments under this contract; or, we may
require you to pay us in cash; or we may do both until we are
99-70017 Minnesota Life 18
fully repaid. In the case of an underpayment, we will pay the required amount
with the next payment.
MUST YOU PROVIDE ADDITIONAL INFORMATION?
Yes. You must provide any other information we need to administer this
contract. If you cannot do so, we may ask the person concerned for that
information. We shall not be liable for any payment based upon information
given to us in error or not given to us.
DO CONTRACT VALUES COMPLY WITH STATE REQUIREMENTS?
Yes. Amounts payable at death, withdrawal and surrender benefits, accumulation
values and the paid-up annuity benefit described by this contract are not less
than the minimum benefits required by any statute of the state in which this
contract is delivered.
WHAT ANNUITY RESERVES WILL WE HOLD UNDER THIS CONTRACT?
Reserves held by us for annuity payments under this contract shall not be less
than those reserves required by the law in the state in which this contract is
delivered.
MAY THIS CONTRACT BE MODIFIED?
Yes. This contract may be modified at any time by written agreement between you
and us. However, no such modification will adversely affect the rights of an
annuitant under this contract unless the modification is made to comply with a
law or government regulation. Such modification will be in writing. You will
have the right to accept or reject such a modification.
WHO OWNS THE GENERAL ACCOUNT AND THE SEPARATE ACCOUNT?
We have exclusive and absolute ownership of the assets of both the general
account and the separate account.
WHEN WILL LUMP SUM PAYMENTS BE MADE?
Usually, we will make payment within seven days after payment is called for by
the terms of the contract. However, in the case of payments from the general
account we reserve the right to defer payment of withdrawal or surrender
benefits for up to six months. We reserve the right to defer payment for any
period during which the New York Stock Exchange is closed for trading (except
for normal holiday closing) or when the Securities and Exchange Commission has
determined that a state of emergency exists which may make such determination
and payment impractical.
DO YOU HAVE ADDITIONAL VOTING RIGHTS?
Yes. If you have separate account accumulation or annuity units under this
contract you may direct us with respect to the voting rights of fund shares held
by us and attributable to this contract where shareholder approval is required
by law.
99-70017 Minnesota Life 19
APPENDIX A
The following tables show the minimum dollar amount of monthly fixed annuity
payment that can be provided with each $1,000 of available value.
The rates shown are based upon an interest rate of 3% per year, compounded
annually, and Individual Annuity 1983 Table A mortality rates with an age
setback of one year, blended to provide genderless rates. Dollar amounts for
ages or payment frequencies other than those shown here will be calculated on
the same basis and may be obtained from us upon request.
Annuitant and joint annuitant age is determined as of the annuity commencement
date and adjusted based on the year of commencement as follows:
Annuity Commencement Year Age Adjustment
------------------------- --------------
2000 - 2009 -1
2010 - 2019 -2
2020 - 2029 -3
2030 and later -4
Life with Life with Life with
Annuitant Life 120 Months 180 Months 240 Months
Adjusted Age (Option 1) (Option 2A) (Option 2B) (Option 2C)
------------ ---------- ----------- ----------- -----------
50 $3.92 $3.90 $3.87 $3.83
55 4.26 4.23 4.18 4.10
60 4.72 4.66 4.56 4.43
65 5.35 5.21 5.03 4.78
70 6.23 5.94 5.57 5.10
75 7.49 6.82 6.10 5.34
80 9.36 7.80 6.52 5.46
85 12.12 8.65 6.75 5.50
Joint and Last Survivor (Option 3)
Annuitant
Adjusted Age Joint Annuitant Adjusted Age
-------------- -----------------------------------------------------------------------------
40 45 50 55 60 65 70 75 80 85
----- ----- ----- ----- ----- ----- ----- ----- ----- -----
50 $3.29 $3.40 $3.52 $3.62 $3.70 $3.77 $3.82 $3.86 $3.88 $3.90
55 3.33 3.47 3.62 3.76 3.89 4.01 4.09 4.16 4.20 4.23
60 3.36 3.52 3.70 3.89 4.09 4.26 4.41 4.52 4.61 4.66
65 3.39 3.56 3.77 4.01 4.26 4.52 4.76 4.96 5.12 5.22
70 3.40 3.59 3.82 4.09 4.41 4.76 5.13 5.46 5.74 5.94
75 3.42 3.61 3.86 4.16 4.52 4.96 5.46 5.99 6.47 6.86
80 3.42 3.63 3.88 4.20 4.61 5.12 5.74 6.47 7.24 7.94
85 3.43 3.64 3.90 4.23 4.66 5.22 5.94 6.86 7.94 9.07
99-70018 Minnesota Life 20
Option 4 -- Fixed Period Annuity
Fixed Period Dollar Amount
Years of Payment
------------ -------------
10 $9.61
11 8.86
12 8.24
13 7.71
14 7.26
15 6.87
16 6.53
17 6.23
18 5.96
19 5.73
20 5.51
99-70018 Minnesota Life 21
APPENDIX A
The following tables show the minimum dollar amount of monthly fixed annuity
payment that can be provided with each $1,000 of available value.
The rates shown are based upon an interest rate of 3% per year, compounded
annually, and Individual Annuity 1983 Table A mortality rates with an age
setback of one year. Dollar amounts for ages or payment frequencies other than
those shown here will be calculated on the same basis and may be obtained from
us upon request.
Annuitant and joint annuitant age is determined as of the annuity commencement
date and adjusted based on the year of commencement as follows:
Annuity Commencement Year Age Adjustment
------------------------- --------------
2000 - 2009 -1
2010 - 2019 -2
2020 - 2029 -3
2030 and later -4
Life with Life with Life with
Male Annuitant Life 120 Months 180 Months 240 Months
Adjusted Age (Option 1) (Option 2A) (Option 2B) (Option 2C)
-------------- ---------- ----------- ----------- -----------
50 $4.19 $4.15 $4.10 $4.03
55 4.60 4.54 4.45 4.32
60 5.15 5.03 4.87 4.64
65 5.91 5.66 5.36 4.96
70 6.97 6.44 5.86 5.23
75 8.45 7.32 6.31 5.40
80 10.55 8.17 6.62 5.48
85 13.46 8.86 6.79 5.51
Female
Annuitant
Adjusted Age
------------
50 $3.84 $3.83 $3.81 $3.77
55 4.18 4.15 4.11 4.04
60 4.61 4.56 4.48 4.37
65 5.21 5.10 4.95 4.72
70 6.04 5.80 5.49 5.06
75 7.26 6.69 6.04 5.32
80 9.07 7.69 6.48 5.45
85 11.79 8.59 6.74 5.50
Joint and Last Survivor (Option 3)
Male Annuitant
Adjusted Age Female Annuitant Adjusted Age
-------------- --------------------------------------------------------------------------------------------
40 45 50 55 60 65 70 75 80 85
50 $3.29 $3.42 $3.56 $3.69 $3.82 $3.93 $4.01 $4.08 $4.12 $4.15
55 3.32 3.47 3.64 3.82 3.99 4.16 4.29 4.40 4.48 4.53
60 3.34 3.51 3.70 3.92 4.15 4.39 4.61 4.79 4.93 5.02
65 3.36 3.54 3.75 4.00 4.29 4.61 4.94 5.24 5.48 5.66
70 3.37 3.56 3.78 4.06 4.40 4.80 5.25 5.70 6.12 6.45
75 3.38 3.57 3.81 4.11 4.48 4.95 5.51 6.15 6.80 7.37
80 3.38 3.58 3.82 4.14 4.54 5.05 5.71 6.52 7.45 8.37
85 3.38 3.58 3.83 4.15 4.57 5.12 5.84 6.80 7.99 9.33
99-70019 Minnesota Life 20
Option 4 -- Fixed Period Annuity
Fixed Period Dollar Amount
Years of Payment
------------ -------------
10 $9.61
11 8.86
12 8.24
13 7.71
14 7.26
15 6.87
16 6.53
17 6.23
18 5.96
19 5.73
20 5.51
99-70019 Minnesota Life 21