[LOGO OF SECURITY FIRST LIFE INSURANCE COMPANY]
ANNUITY CONTRACT This is a group annuity contract issued to the group contractholder upon Security First Life
Insurance Company's ("Company") acceptance of the application. When issued, the contract
is a legal agreement between the group contractholder and the Company. To be covered under
the contract a person must complete an enrollment form and arrange for purchase payments to
be made. Each person so enrolled is called a participant.
The Company agrees to pay an annuity to the annuitant. An annuity is a series of payments.
Unless another choice is made, payments will be made monthly starting on the normal annuity
date. The payments will continue for the annuitant's lifetime but not for less than 120 months.
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Other payment options may be elected.
If the annuitant dies before the annuity date, a settlement will be made in accordance with the
Settlement on Death provision. The Company may require proof that any payee is living on
the date a payment is due.
All terms on this and the following pages are a part of this contract.
20-Day Right To Examine This Contract. At any time within 20 days after receipt of this
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annuity contract, it may be returned for cancellation by delivering it to the Company at its
administrative office shown herein. Such delivery or mailing of the contract shall void it from
the beginning, and the parties shall be in the same position as if it had not been issued. All
purchase payments for the contract shall be refunded.
THIS DOCUMENT IS A LEGAL CONTRACT BETWEEN THE GROUP CONTRACTHOLDER AND THE COMPANY.
READ THIS CONTRACT CAREFULLY.
Signed for the Company at its home office on the contract date.
/s/ [ILLEGIBLE]
President
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Secretary
ALL PAYMENTS AND VALUES UNDER THIS CONTRACT WHICH ARE BASED
ON INVESTMENT IN THE SEPARATE ACCOUNT ARE VARIABLE AND ARE
NOT GUARANTEED AS TO FIXED DOLLAR AMOUNT.
Group Flexible Payment Annuity
Providing Variable Benefits
Life Annuity with 10-Years Certain
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Starting on the Normal Annuity Date
Non-Participating
No Dividends
SFL 234 234-
[LOGO OF SECURITY FIRST LIFE INSURANCE COMPANY]
TABLE OF CONTENTS
ARTICLE PAGE
Introduction........................................ 00
Contract Specifications............................. 00
1 Description of Certain Terms used in this Contract.. 00
2 General Terms....................................... 00
3 Participant's Account Provisions.................... 00
4 Valuation and Nonforfeiture Provisions.............. 00
5 Settlement.......................................... 00
6 Settlement on Death................................. 00
7 Annuity Income...................................... 00
8 Method of Calculating Annuity Income Payments....... 00
9 Annuity Purchase Rates.............................. 00
2
ALPHABETICAL CODE
SECTION
4.02 Accumulated Payment.............................................................. 00
3.04 Accumulation Units............................................................... 00
4.06 Administrative Fee............................................................... 00
7.02 Alternate Annuity Income Rates................................................... 00
7.03 Alternate Assumed Investment Return.............................................. 00
7.01 Annuity Income Options........................................................... 00
4.01 Annuity Value.................................................................... 00
4.03 Cash Surrender................................................................... 00
4.02 Cash Value....................................................................... 00
5.05 Cessation of Purchase Payments................................................... 00
2.03 Change of Contract............................................................... 00
Communications................................................................... 00
2.01 Contract......................................................................... 00
4.09 Conversion Between Series........................................................ 00
3.03 Crediting Accumulation Units..................................................... 00
2.08 Data Provided to the Company..................................................... 00
4.05 Deferral of Payment.............................................................. 00
2.07 Designation of Beneficiary....................................................... 00
8.01 Determination of Monthly Guaranteed Minimum Fixed Dollar Annuity Payments........ 00
8.02 Determination of Monthly Variable Annuity Payment for the First Year............. 00
8.04 Determination of Monthly Variable Annuity Payments for the Second and Subsequent
Years............................................................................ 00
Guaranteed Minimum Interest Rates................................................ 00
2.05 Incontestability................................................................. 00
5.04 Minimum Amount to Payee.......................................................... 00
4.08 Minimum Benefits................................................................. 00
2.09 Misstatement of Age.............................................................. 00
2.02 Nonparticipating................................................................. 00
5.02 Normal Form of Settlement........................................................ 00
8.03 Number of Annuity Units.......................................................... 00
5.03 Optional Annuity Date and Optional Settlement.................................... 00
2.06 Ownership and Assignment......................................................... 00
4.04 Partial Surrenders............................................................... 00
3.01 Participant's Account............................................................ 00
Plan............................................................................. 00
4.07 Premium Taxes.................................................................... 00
3.02 Purchase Payments................................................................ 00
Rescission....................................................................... 00
2.10 Separate Account................................................................. 00
8.04 Separate Account Annuity Unit Values............................................. 00
5.01 Settlement of Participant's Account.............................................. 00
6.01 Settlement on Death Before the Annuity Date...................................... 00
6.02 Settlement on Death of Payee..................................................... 00
3.05 Splitting Units.................................................................. 00
Statements of Account............................................................ 00
2.11 Substitution of Fund Shares...................................................... 00
2.04 Termination of Contract.......................................................... 00
4.10 Transfer to Other Annuities Issued by the Company................................ 00
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[LOGO OF SECURITY FIRST LIFE INSURANCE COMPANY]
CONTRACT DATA
Group Contract Number 234000000
Group Contract Date May 1, 1985
Group Contractholder State of Delaware
Issued for Delivery in, and Subject to the Laws of
the State of Delaware
CONTRACT SPECIFICATIONS
PLAN The plan is a Deferred Compensation Plan. The
Plan is designed to comply with the requirements of
Section 457 of the Internal Revenue Code of 1986,
("Code") as amended. A copy of the Plan has been made
available to each participant and a copy is
maintained with the group contractholder. Ownership
of this contract is vested entirely in the group
contractholder and only the group contractholder can
make elections with respect thereto.
The Company requires that a copy of the currently
effective Plan document accompany the application,
for its information. The terms and provisions of the
Plan do not for any purpose form any part of this
contract and are not binding on the Company.
Notwithstanding the fact that the Company may have
knowledge of the terms of the Plan, the obligations
of the Company are measured and determined solely by
the terms and provisions of this contract. Any form
required under the Plan must be submitted to the
Company.
Purchase payments made with respect to a participant
will be allocated among the currently offered
accounts in accordance with the latest recorded
written request of the group contractholder with
respect to the participant.
The currently offered accounts are as follows:
(1) Money Market Series of Security First Trust
(2) Bond Series of Security First Trust
(3) Growth and Income Series of Security First Trust
(4) ▇. ▇▇▇▇ Price Growth Stock Fund
STATEMENTS OF ACCOUNT Prior to the annuity date,
statements of account will be provided for each
participant as of the end of each calendar quarter in
which a transaction occurred but in no event less
often than once per year.
COMMUNICATIONS Write to the Company at its
administrative office shown below:
Security First Life Insurance Company
P.O. Box 92193
Los Angeles, California 90009
SFL 234-4 4
[LOGO OF SECURITY FIRST LIFE INSURANCE COMPANY]
ARTICLE 1
DESCRIPTION OF CERTAIN TERMS USED A. ACCUMULATION UNIT A measuring unit used
IN THIS CONTRACT to determine the value of a participant's
interest in a series at any time before
annuity payments commence.
B. ANNUITANT The person who is to receive
annuity payments and who is identified as
the participant.
C. ANNUITY A series of income payments made
to an annuitant for a defined period of
time.
D. ANNUITY Date The date the series of
annuity income payments begins to a
participant.
E. ANNUITY UNIT A measuring unit used to
determine the amount of annuity payments
based on a series after such payments have
commenced.
F. BENEFICIARY A person who has the right
to receive a participant's account values
on the death of the participant.
G. CERTIFICATE The form that describes
participants' rights in the contract.
H. CERTIFICATE DATE The date the
certificate is issued or, if no certificate
is issued, the date a Participant's Account
is established.
I. CERTIFICATE YEAR The 12 month period
following the certificate date and each
anniversary thereof.
J. CONTRACT The legal agreement between the
group contractholder and the Company
covering the rights of the whole group.
K. FIXED ANNUITY An annuity that provides
guaranteed level payments.
L. FUND Any registered management
investment company, or series thereof, in
which the assets of the separate account
may be invested.
M. GENERAL ACCOUNT Assets of the Company,
except those in the separate account or any
other segregated asset account.
N. GROUP CONTRACTHOLDER The owner of this
Contract.
O. NORMAL ANNUITY DATE The first day of the
month coincident with or immediately
preceding the month a participant must
commence a distribution under the Plan, but
in no event later than the month in which
the participant attains age 85.
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P. PARTICIPANT An eligible person who has
submitted a completed enrollment form to
the Company.
Q. PARTICIPANT'S ACCOUNT The sum of the
values of the accumulation units credited
to a participant.
R. PAYEE Any person receiving payment of
benefits under the contract.
S. PURCHASE PAYMENT Any amount received by
the Company for a participant under this
Contract.
T. SEPARATE ACCOUNT A segregated asset
account established by the Company under
the Delaware Insurance Code. The income or
losses of the separate account are free
from any other liabilities of the Company's
other business.
U. SERIES The accumulation unit values and
annuity unit values maintained separately
for each fund whose securities are owned by
the separate account.
V. VALUATION DATE Any business day (on
which the New York Stock Exchange is open
for trading) on which the accumulation and
annuity unit values are calculated.
Accumulation unit values will be determined
each business day, and annuity unit values
will be determined once each week.
W. VALUATION PERIOD The time from one
valuation date to the next.
X. VARIABLE ANNUITY An annuity' whose
payments vary annually according to the net
investment results of a series of the
separate account.
SFL 234-5 5
ARTICLE 2
GENERAL TERMS 2.01 THE CONTRACT The group contract is this document and the application (the "Contract").
Only an officer of the Company can change the contract or waive any of the Company's
rights. These changes must be made in writing. Any contract terms referring to "filing" or
"receipt" of documents means filing or receipt at the Company's administrative office shown
on page 4.
2.02 NON-PARTICIPATING This contract does not share in the earnings of the Company.
2.03 CHANGE OF CONTRACT The group contractholder and the Company may change the
contract by mutual agreement at any time. Changes must be made in writing. Any changes
must comply with the state laws where the contract is delivered. The Company, by itself, may
change only the following contract terms:
(a) Terms that apply to participants enrolling after the effective date of the change.
(b) Terms that apply to the excess of any purchase payments received in any certificate year
over the purchase payments received during the first certificate year, for participant accounts
established before the effective date of the change.
(c) Terms that may be necessary to make the contract conform to any federal or state law.
regulation or ruling.
2.04 TERMINATION OF CONTRACT This contract will terminate when the Company has fulfilled
all its obligations.
2.05 INCONTESTABILITY After two years from the date of issue, the Company cannot void this
contract due to any misstatements on the application.
2.06 OWNERSHIP AND ASSIGNMENT This contract belongs to the group contractholder. A
participant may exercise ownership rights affecting his or her account only if the participant's
interest in that account is nonforfeitable. In the absence of such nonforfeitable participant's
interest, individual certificates will be issued only at the request of the group contractholder. A
participant's contract rights are subject to the rights of any irrevocable beneficiary.
The Company will honor any assignment of rights in this contract only after it is received in
writing by the Company. The Company is not responsible for the validity of the assignment.
Unless otherwise permitted in the Code if this contract is issued to purchase annuities for
individuals under Section 401 of the Code, the contract may not be assigned to anyone except
the Company.
2.07 DESIGNATION OF BENEFICIARY A participant may name, and change, the beneficiary. The
request must be in writing and made before the participant dies. No change will take effect
unless it is received. When received, the request will take effect as of the date signed, subject
to payment or other action taken by the Company before it was received. An irrevocable
beneficiary must agree to any such change.
2.08 DATA PROVIDED TO THE COMPANY The Company may require the group contractholder
and participants to provide data needed to administer the contract. The data must be in a form
satisfactory' to the Company.
2.09 MISSTATEMENT OF AGE The age of an annuitant or a payee may affect the amount of
annuity income payments made to a payee. If the age is misstated, future payments under that
annuity income option will be adjusted.
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[LOGO OF SECURITY FIRST LIFE INSURANCE COMPANY]
2.10 THE SEPARATE ACCOUNT The separate
account was established by the Company in
1980 under Delaware law. It is registered
under the Investment Company Act of 1940
(the "Act"). Its assets are invested only in
shares of one or more funds. The separate
account will vote fund shares in accordance
with instructions received from the group
contractholder.
2.11 SUBSTITUTION OF FUND SHARES The
separate account may not change the fund
shares of a series unless approved by a vote
of a majority of the units entitled to vote
and as provided by the Act. The separate
account may buy other securities for other
series or contract, or, if requested by a
participant, convert units from one series
or contract to another.
ARTICLE 3
PARTICIPANT'S ACCOUNT PROVISIONS 3.01 PARTICIPANT'S ACCOUNT The Company will
establish a participant's account for each
person who becomes a participant. A
participant's account consists of
accumulation units provided by the values of
the purchase payments made for the
participant. The value of a participant's
account is the sum of the values of those
accumulation units.
3.02 PURCHASE PAYMENTS Purchase payments for
any participant must be at least $20 each
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and $240 annually.
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3.03 CREDITING ACCUMULATION UNITS Each
purchase payment will be applied to provide
accumulation units. The number of
accumulation units credited for a series is
determined by dividing the amount of the
purchase payment allocated to the series
less any premium taxes deducted, by the
appropriate accumulation unit value for the
series on the day the Company received the
purchase payment.
3.04 ACCUMULATION UNITS The separate account
accumulation unit value for each series was
first set at $5. This value is determined
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each business day. It is equal to the value
on the prior day multiplied by a net
investment factor. The net investment factor
is:
(a) the net asset value of a fund share at
the close of the current business day plus
the per share amount of any fund
distribution less taxes (per share), divided
by
(b) the net asset value of a share at the
close of the prior business day, and less
(c) the actuarial risk fee factor of
0.003425% for each calendar day from the
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prior business day to the current business
day.
3.05 SPLITTING UNITS The Company may split
the value of any units in the best interest
of the group contractholder, participants,
annuitants and the Company. If split, strict
equity will be preserved. Such split will
have no major effect upon the benefits or
provisions of this Contract.
SFL 234-7 7
ARTICLE 4
VALUATION AND 4.01 ANNUITY VALUE The annuity value of a
NONFORFEITURE PROVISIONS participant's account is the amounts that can be
applied to an annuity income option in this
contract. It is the sum of the values of any
accumulation units, reduced by premium taxes, if
any.
4.02 CASH VALUE The cash value of a
participant's account is equal to the value of
the accumulation units in a participant's
account, reduced by a surrender charge and a
transaction charge of $10. The surrender charge
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equals 5% of the value of any accumulation units
surrendered. No surrender charge will be
deducted in the determination of cash value with
respect to a surrender that occurs after the
sixth anniversary of the certificate date or a
surrender that results from the death,
disability, retirement or hardship withdrawal of
or by the participant in accordance with the
terms and conditions of the plan.
In the event that a participant has an existing
account with the Company under another group
annuity contract issued to the group
contractholder with respect to the plan and
should the date of issuance of a certificate
under such other group contract precede the
certificate date (the "alternative certificate
date"), then the certificate date used in the
determination of surrender charges will be the
alternate certificate date.
4.03 CASH SURRENDER A participant's account may
be surrendered for its cash value before the
annuity date. Requests for surrender must be in
writing.
4.04 PARTIAL SURRENDERS Partial surrenders from
the cash value of a participant's account may be
made before the annuity date. Any partial
surrender is subject to a transaction charge of
$10. Requests for partial surrenders must be in
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writing. No partial surrender will be allowed if
it results in any series having a value, after
the surrender, of less than $500, unless the
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entire series is being surrendered.
When a partial surrender is made from any
series, the number of accumulation units in that
series will be reduced by the number of units
equal in value to the amount surrendered plus
$10, which sum shall be divided by one minus the
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surrender charge percentage described in
Section 4.02.
4.05 DEFERRAL OF PAYMENT Payments of full or
partial surrenders from a series may be
suspended under the following conditions:
(a) During any period in which the New York
Stock Exchange is closed ( other than customary
weekend or holiday closing) or;
(b) When the Securities and Exchange Commission
determines that trading on such exchange is
restricted or that an emergency exists; and, as
a result the separate account may not reasonably
dispose of its securities or fairly value its
assets; or
(c) For such other periods as the Securities and
Exchange Commission may by order direct for the
protection of variable contractholders and
participants.
4.06 ADMINISTRATIVE FEE On each anniversary of
the certificate date, the participant's account
will be reduced by an administrative fee of not
more than $9.50 plus $2.50 for each series in
----- -----
which the participant has accumulation units.
The deduction is made by cancelling a number of
accumulation units equal in value to the
administrative fee. The fee will be prorated
among the series in the participant's account on
the basis of the relative values of the series
as of the date of the deduction.
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[LOGO OF SECURITY FIRST LIFE INSURANCE COMPANY]
That portion of the administrative fee equal to $9.50 will be
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waived in the event that a similar fee is charged to a
participant with an account under another group annuity
contract issued by the Company to the group contractholder
with respect to the Plan.
4.07 PREMIUM TAXES The Company may deduct from a
participant's account any premium tax payable by it. If a
premium tax deduction is made, it will be made on or after at
the time the tax is payable by the Company.
4.08 MINIMUM BENEFITS The value of a paid-up annuity, cash
surrender, or settlement on death under this contract will
not be less than the minimum required by the state laws where
the contract is delivered.
4.09 CONVERSION BETWEEN SERIES Accumulation or annuity units
may be converted from one series to another by written
election or, if permitted by the Company, by telephone. Such
election must specify the total value of units to be
converted and the series to be decreased and the series to be
increased. The Company will make the conversion on the first
valuation date after receipt of a written election.
Conversions requested by telephone will be effective within a
reasonable time in accordance with policies established by
the Company. No conversion of units may take place within two
calendar weeks before the annuity date or any anniversary
thereof.
A transaction charge of $10 will be charged for each
--
allowable conversion. The charge will be allocated to the
series from which the conversion is made.
The minimum amount that may be converted at any time is the
lesser of $500 or the balance of the value of accumulation
----
units allocated to the Series to be converted.
4.10 TRANSFER TO OTHER ANNUITIES ISSUED BY THE COMPANY A
participant may transfer all or a portion of the annuity
value of the participant's account to another group annuity
contract issued by the Company to the group contractholder
with respect to the plan.
The minimum transfer from a Series is the lesser of $500 or
----
the balance of the value of accumulation units allocated to
the Series.
A transaction charge of $10 will be deducted from the amount
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of any transfer.
ARTICLE 5
SETTLEMENT 5.01 SETTLEMENT OF PARTICIPANT'S ACCOUNT Settlement of a
participant's account means any of the following
(a) The start of annuity income payments to the annuitant or
beneficiary.
(b) A payment of the cash value in a lump sum.
The amount applied under an annuity income option is the
annuity value. The first payment under any annuity option
will be made on the annuity date. Proof of age is required
before payments start under any of the first four options
listed in Article 7.
5.02 NORMAL FORM OF SETTLEMENT A participant must be living
on the date annuity payments are to begin. Unless another
choice is made, the Company will pay the annuitant a series
of payments in the form of a variable life annuity with 120
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monthly payments certain, the second option in Article 7. The
payments will begin on the normal annuity date.
SFL 234-9 9
5.03 OPTIONAL ANNUITY DATE AND OPTIONAL SETTLEMENT Before
annuity payments begin, an optional annuity date or a
different annuity income option may be elected, if not
prohibited by the plan. The optional annuity date may be the
first day of any month not later than the normal annuity
date. The election must be made at least 3l days before the
--
optional annuity date. Any of the annuity income options may
be elected. The annuity value on the optional annuity date
will be applied.
5.04 MINIMUM AMOUNT TO PAYEE Any annuity income option
payment must be at least $50 from each series included in
---
the payment. if any payment from any series is less than
$50, the Company may change the payment interval so that
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payments are greater than $50 from that series.
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5.05 CESSATION OF PURCHASE PAYMENTS Upon 60 days' written
--
notice to the other, the group contractholder or the Company
may declare that, as of the date stated in the notice (that
date being called a "date of cessation of purchase
payments"), no further purchase payments will be made to
certain or all participant accounts.
If a date of cessation of purchase payments has been
declared for certain participant accounts, the group
contractholder with respect to a participant may by written
request make a change of allocation of the participant's
purchase payments. When no change of allocations is
received, the Company may in its discretion return all
Purchase Payments affected by the declaration of the Date of
Cessation of Purchase Payments, or allocate such purchase
payments in accordance with the participant's current
allocation among accounts.
No new participant accounts will be established after the
date of cessation of purchase payments is declared with
respect to all accounts.
OPTIONS ON DATE OF CESSATION OF PURCHASE PAYMENTS
Upon declaring the date of cessation of purchase payments
for all accounts or upon receiving notice of this
declaration by the Company, the group contractholder may by
written request elect one of the following options. If the
group contractholder has not elected an option within 30
--
days of the date of cessation of purchase payments; option
(A) will be deemed to have been elected.
OPTION (A) Maintenance of Participant Account Values:
The Company will maintain each participant's
account value until settlement of such account.
OPTION (B) Installment Settlement of Guaranteed Contract
Values: The Company will pay the sum of the
accumulation payment values with respect to
participants as of the date of cessation of
purchase payments in 20 equal quarterly
--
installments to a person designated in writing
by the group contractholder as the successor
insurer of the Plan or to the group
contractholder.
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[LOGO OF SECURITY FIRST LIFE INSURANCE COMPANY]
ARTICLE 6
SETTLEMENT ON 6.01 SETTLEMENT ON DEATH BEFORE THE ANNUITY DATE If
DEATH a participant dies before the annuity date and the
beneficiary is the participant's spouse, the spouse
shall be deemed to be the participant and will
succeed to all rights of the participant.
If a participant dies before the annuity date and
the beneficiary is not the spouse of the
participant, the beneficiary may elect:
1. To receive annuity income under Annuity Income
Options One, Two or Five. Election of an annuity
option is subject to the following conditions:
a. Election must begin within one year of the
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participant's death;
b. The guaranteed period under Option Two or the
designated period under Option Five may not be
longer than the beneficiary's life expectancy
under the applicable tables specified by the
Internal Revenue Service.
c. The annuity value as of the date of the first
annuity payment will be applied.
OR
2. To receive a lump sum settlement equal to the
cash value on the date the payment is made. If the
lump sum settlement becomes payable because of the
death of a participant prior to attaining age 65,
--
the lump sum settlement will be equal to the larger
of:
a. The sum of all purchase payments, less payments
previously applied to an annuity option or a partial
surrender, or
b. The annuity value of the participant's account,
less administrative fees.
In any event, distribution under the lump sum option
above must be made within 5 years of the death of
--
the participant.
If there is more than one named beneficiary living
at the time of the participant's death, each will
share in the proceeds equally, unless the
participant has elected otherwise.
If the participant outlives all beneficiaries, the
proceeds will be paid to the participant's estate in
a lump sum.
No beneficiary will have the right to assign,
anticipate or commute any future payments under any
of the options, except as provided in the election
or by law.
The rights to the proceeds will pass as if the
participant outlived the beneficiary if:
a. The beneficiary dies at the same time as the
participant; or
b. The beneficiary dies within 15 days of the
--
participant's death and prior to the date due proof
of the participant's death is received by the
Company. Due proof of death will be a certified
death certificate, an attending physician's
statement, a decree of a court of competent
jurisdiction as to the finding of death, or such
other documents as the Company may, at its option,
accept.
6.02 SETTLEMENT ON DEATH OF PAYEE Upon the death of
a payee, any remaining payments certain under
options Two or Three or Five, in Article 7 will be
paid to the named beneficiary.
If no beneficiary is alive at the payee's death, the
payee's estate will receive a lump sum payment. This
lump sum will be the present value of the remaining
payments certain at the payee's death. The present
value will be computed on the basis of the interest
rate used to compute the benefit.
If as the result of a payee's death, variable life
annuity payments are being continued to a
beneficiary, that beneficiary may elect at any time
to receive in a lump sum the present value of the
remaining number of payments certain.
SFL 234-11 11
ARTICLE 7 7.01 ANNUITY INCOME OPTIONS Except as may be
ANNUITY INCOME limited by Article 6 or by options:
a. OPTION ONE--LIFE ANNUITY A series of annuity
income payments made monthly during the payee's
life. The payments will stop with the last
payment due before the death of the payee. No
further payments will be made after the death of
the payee.
b. OPTION TWO--LIFE ANNUITY WITH 120,180 OR 240
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MONTHLY PAYMENTS CERTAIN A series of annuity,
income payments made monthly for the guaranteed
period elected and thereafter during the payee's
life. The guaranteed period may be 120,180 or
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240 months. If the payee dies before the end of
the guaranteed period, payments for the
remainder of the guaranteed period will be paid
to the beneficiary.
c. OPTION THREE--INSTALLMENT REFUND LIFE ANNUITY
A series of annuity income payments made monthly
during the payee's life. If the payee dies
before receiving the "minimum number" of
payments, payments will continue to the
beneficiary. The "minimum number" of payments is
equal to the amount applied under this option
divided by the first monthly payment. Any
payments made after the death of the payee will
stop when the Company has paid out a total
number of payments equal to the "minimum number"
of payments.
d. OPTION FOUR--JOINT AND FULL TO SURVIVOR
ANNUITY A series of annuity income payments made
monthly during the lifetime of both of two
payees. If one of the payees dies, the payments
will continue to the other. The payments will
end with the last payment due before the death
of the remaining payee.
e. OPTION FIVE--DESIGNATED PERIOD ANNUITY--FIXED
DOLLAR ONLY A series of fixed annuity income
payments made monthly for a period of years. Any
number of years from 5 through 30 may be chosen.
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Payments will be made to the payee or
beneficiary even if the payee dies. Payments
stop at the end of the period selected.
Monthly payments for 3 years may be elected
-
under this option for a participant who is age 60
--
or over on the annuity date, or who has
submitted evidence of election to begin payments
under the employer's retirement program.
f. Other options may be available as agreed upon
by the Company.
7.02 ALTERNATE ANNUITY INCOME RATES If
settlement is made under any annuity option,
payment will be based on the larger of the
following:
(a) The Company's current annuity settlement
option rates applicable to this Contract (fixed
dollar only).
(b) The annuity purchase rates found in Article 9.
7.03 ALTERNATE ASSUMED INVESTMENT RETURN If
allowed by the laws of the state in which this
Contract is issued, a participant may elect
variable annuity benefits determined on an
assumed investment return of 3.50%, 5% or 6% in
---- - -
lieu of the 4.25% return assumed in the contract.
----
12
[LOGO OF SECURITY FIRST LIFE INSURANCE COMPANY]
ARTICLE 8
METHOD OF CALCULATING 8.01 DETERMINATION OF MONTHLY GUARANTEED MINIMUM
ANNUITY INCOME PAYMENTS FIXED DOLLAR ANNUITY PAYMENTS The payment amount
shown in Tables 1 and 2 in Article 9 will be
used to determine the monthly payments under a
fixed payment option. The tables show the dollar
amount of the monthly payments which can be
purchased with each $1,000 of the general
account's annuity value, after deduction of any
applicable premium taxes. Amounts shown use the
1971 INDIVIDUAL ANNUITY MORTALITY TABLE,
---------------------------------------
modified, with an assumed rate of return of
3.50% per year.
-----
8.02 DETERMINATION OF MONTHLY VARIABLE ANNUITY
PAYMENT FOR THE FIRST YEAR Variable annuity
payment amounts will be determined at the
annuity date, and will remain the same for one
year from that date. Amounts may vary each year
thereafter.
The age of payees born after 1915 must be
adjusted using the following table. Adjusted
ages for payees born after 1995 are available
from the Company. The payee's actual age will be
based on the birthday nearest the time the first
payment is due.
CALENDAR YEAR OF BIRTH ADJUSTED AGE
1915 or Prior................ Actual Age
1916--1935................... Actual Age Minus 1
1936--1955................... Actual Age Minus 2
1956--1975................... Actual Age Minus 3
1976--1995................... Actual Age Minus 4
THESE ADJUSTMENTS APPLY ONLY TO TABLES 1 AND 2
SHOWN ON THE NEXT PAGES. THESE AGE ADJUSTMENTS
DO NOT APPLY TO ANY OTHER ANNUITY INCOME RATES
UNLESS SO SPECIFIED BY THE COMPANY.
Tables 3 and 4 show the factors used to
determine variable annuity income payments based
on a 4.25% assumed investment rate. They are
-----
based on the MODIFIED SELECT SECURITY FIRST
------------------------------
ANNUITY MORTALITY TABLE projected to the year
-----------------------
2000 on projection scale C (modified) and 4.25%
---- -----
interest, reduced for the first 10 years of any
period certain by l%.
--
The monthly payment for the first year is
determined by:
(a) dividing the separate account annuity value
by $1,000.
(b) multiplying the result from (a) by the
annuity premium rate shown in column 1 of Table
3 or 4 for the option elected for the adjusted
age of payee, and
(c) multiplying the result of (b) by the monthly
payment factor in column 2 of Table 3 or 4.
If there are values in more than one series,
determine the monthly payment for each series as
above.
8.03 NUMBER OF ANNUITY UNITS The number of
annuity units for any series is determined by
dividing the first year monthly payment by the
separate account annuity unit value for that
series for the valuation period that includes
the settlement date. The number of annuity units
thus determined will not change unless the
participant converts annuity units from one
series to another. Such annuity units converted
will be based on the same assumed investment
return.
SFL 234-13 13
8.04 DETERMINATION OF MONTHLY VARIABLE ANNUITY PAYMENTS FOR
THE SECOND AND SUBSEQUENT YEARS The amounts of the second
and subsequent years' monthly variable annuity payments are
not pre- determined, and may change from year to year,
based on the variations in the annuity unit value. The
annuity unit value varies with the variations of net
investment results above and below the assumed investment
rate.
As of each anniversary of the settlement date, the Company
will determine the amount of monthly payments for each
series for the year then beginning. It will be determined
by multiplying the number of separate account annuity units
for that series by the annuity unit value for the same
series for the valuation period in which the first payment
for that year is due.
The Company guarantees that the amount of each variable
annuity payment will not be affected by variations in the
mortality experience of payees nor by expenses incurred by
the Company in the administration of such benefits.
8.05 SEPARATE ACCOUNT ANNUITY UNIT VALUES The separate
account annuity unit value for each series was originally
established at $5. This value for any subsequent valuation
--
period is determined for each series by:
(a) multiplying the annuity unit value of the series for
the immediately preceding valuation period by
(b) annuity change factor for the second preceding
valuation period.
The annuity change factor for any valuation period is
determined for each series by dividing:
(a) the accumulation unit value at the end of the valuation
period by
(b) the accumulation unit value at the end of the previous
valuation period. and multiplying the result by
(c) the interest neutralization factor.
For weekly valuation periods and a 4.25% assumed net
-----
investment rate, the interest neutralization factor is
0.9991999.
---------
14
ARTICLE 9
ANNUITY PURCHASE RATES
GUARANTEED DOLLAR AMOUNT OF MONTHLY PAYMENT WHICH
IS PURCHASED WITH EACH $1,000 APPLIED
LIFE ANNUITIES--FIXED DOLLAR
TABLE 1
SINGLE LIFE ANNUITIES JOINT AND FULL TO SURVIVOR
------------------------------------------- ---------------------------
No 120 180 240
Period Months Months Months Installment Joint Monthly
Age Certain Certain Certain Certain Refund Age Payment
------------------ ------- ------- ------- ------- ----------- ----- -------
60.................. $5.31 $5.17 $4.99 $4.77 $4.91 60 $4.49
61.................. 5.43 5.27 5.08 4.83 5.00 61 4.58
62.................. 5.56 5.38 5.17 4.89 5.10 62 4.67
63.................. 5.70 5.50 5.26 4.95 5.20 63 4.76
64.................. 5.85 5.62 5.35 5.01 5.30 64 4.86
65.................. 6.00 5.74 5.44 5.07 5.41 65 4.97
66.................. 6.17 5.88 5.54 5.13 5.53 66 5.09
67.................. 6.35 6.01 5.63 5.18 5.66 67 5.21
68.................. 6.55 6.16 5.73 5.24 5.79 68 5.34
69.................. 6.75 6.30 5.83 5.29 5.93 69 5.49
70.................. 6.98 6.46 5.93 5.34 6.07 70 5.64
71.................. 7.21 6.63 6.02 5.38 6.23 71 5.80
72.................. 7.47 6.79 6.12 5.42 6.39 72 5.98
73.................. 7.75 6.96 6.21 5.46 6.56 73 6.17
74.................. 8.04 7.13 6.30 5.49 6.75 74 6.37
75.................. 8.36 7.31 6.38 5.52 6.95 75 6.59
Any payee who is over age 85 at the date annuity payments are due will be
--
considered as actual age 85 on that date. Monthly payments for ages not shown
--
will be furnished by the Company on request.
TABLE 2
DESIGNATED PERIOD ANNUITIES--FIXED DOLLAR
YEARS OF AMOUNT OF YEARS OF AMOUNT OF YEARS OF AMOUNT OF
PAYMENTS MONTHLY PAYMENT PAYMENTS MONTHLY PAYMENT PAYMENTS MONTHLY PAYMENT
------------------ --------------- -------- --------------- -------- ----------------
5................... $ 18.12 14 $ 7.49 23 $ 5.24
6................... 15.35 15 7.10 24 5.09
7................... 13.38 16 6.76 25 4.96
8................... 11.90 17 6.47 26 4.84
9................... 10.75 18 6.20 27 4.73
10.................. 9.83 19 5.97 28 4.63
11.................. 9.09 20 5.75 29 4.53
12.................. 8.46 21 5.56 30 4.45
13.................. 7.94 22 5.39
SFL 234-15 Page 15
ANNUITY PREMIUM RATES PER $1,000 OF VALUE APPLIED (COLUMN (1)) AND
MONTHLY PAYMENT FACTORS (COLUMN (2))
TABLE 3 SINGLE LIFE ANNUITIES--VARIABLE
MONTHLY PAYMENTS CERTAIN
-------------------------------------------------------
ADJUSTED NONE 120 180 240
AGE OF ------------- ------------- ------------- -------------
PAYEE (1) (2) (1) (2) (1) (2) (1) (2)
-------- ------ ------ ------ ------ ------ ------ ------ ------
60..... 62.596 .08946 61.992 .08713 60.305 .08611 58.126 .08539
61..... 63.710 .08975 63.123 .08723 61.294 .08614 58.873 .08538
62..... 64.922 .09003 64.340 .08730 62.333 .08614 59.628 .08535
63..... 66.252 .09028 65.653 .08736 63.424 .08613 60.387 .08532
64..... 67.715 .09049 67.068 .08739 64.564 .08611 61.142 .08527
65..... 69.298 .09072 68.578 .08741 65.743 .08607 61.884 .08523
66..... 71.005 .09101 70.199 .08742 66.959 .08603 62.606 .08518
67..... 72.817 .09137 71.905 .08744 68.191 .08599 63.294 .08513
68..... 74.732 .09180 73.692 .08747 69.430 .08595 63.941 .08508
69..... 76.751 .09231 75.557 .08751 70.665 .08590 64.539 .08503
70..... 78.880 .09290 77.496 .08755 71.886 .08586 65.082 .08499
71..... 81.010 .09372 79.469 .08763 73.069 .08583 65.563 .08495
72..... 83.231 .09465 81.498 .08770 74.214 .08579 65.984 .08491
73..... 85.539 .09570 83.575 .08777 75.309 .08574 66.347 .08487
74..... 87.982 .09683 85.701 .08781 76.345 .08568 66.657 .08483
75..... 90.293 .09833 87.805 .08788 77.293 .08563 66.912 .08480
TABLE 4 JOINT AND FULL TO SURVIVOR--VARIABLE
ADJUSTED NO PAYMENTS CERTAIN
AGE OF -------------------
BOTH PAYEES (1) (2)
----------- ------ ------
60...... 57.810 .08526
61...... 58.742 .08535
62...... 59.741 .08545
63...... 60.817 .08554
64...... 61.976 .08564
65...... 63.220 .08575
66...... 64.548 .08594
67...... 65.961 .08616
68...... 67.460 .08643
69...... 69.049 .08674
70...... 70.732 .08711
71...... 72.468 .08758
72...... 74.294 .08813
73...... 76.208 .08875
74...... 78.229 .08943
75...... 80.243 .09032
Any payee who is over age 85 at the date annuity payments are due will be
--
considered as actual age 85 on that date. Factors for adjusted ages not shown
--
will be furnished by the Company on request.
ANNUITY CONTRACT
FLEXIBLE PAYMENT DEFERRED ANNUITY
PROVIDING VARIABLE BENEFITS
10 YEAR CERTAIN LIFE ANNUITY
STARTING ON THE ANNUITY DATE
NON-PARTICIPATING
NO DIVIDENDS
[LOGO OF SECURITY LIFE INSURANCE FIRST COMPANY]
COMMUNICATIONS
Write to the Company at its Administrative Office shown below:
Security First Life Insurance Company
P.O. Box 92193
Los Angeles, California 90009
SECURITY FIRST LIFE INSURANCE COMPANY
1300 DELAWARE TRUST BUILDING, P.O. BOX 25130, WILMINGTON, DELAWARE 19899