FIDELITY SECURITY LIFE INSURANCE COMPANY
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Fidelity Security Life Insurance Company (referred to as "we, us and our"). We
will make Annuity Payments as described in this Contract beginning on the
Annuity Date.
This Contract is issued in return for the payment of the initial purchase
payment.
[10] DAY RIGHT TO EXAMINE
This Contract may be returned within [10] days after you receive it by mailing
or delivering the contract to either us or the agent who sold it. Return of this
Contract by mail is effective on being postmarked, properly addressed and
postage prepaid. The returned Contract will be treated as if it were never
issued. We will promptly refund your Contract Value as of the Business Day we
receive your Contract. Your Contract Value may be more or less than your
purchase payment.
Signed for the Company.
------------------------------ ------------------------------
Secretary President
INDIVIDUAL FLEXIBLE PURCHASE PAYMENT
DEFERRED VARIABLE AND FIXED ANNUITY CONTRACT
NONPARTICIPATING
NO DIVIDENDS
READ YOUR CONTRACT CAREFULLY.
ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN
BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE
VARIABLE AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNT.
THE VARIABLE PROVISIONS OF THIS CONTRACT CAN BE FOUND ON PAGES __ AND __.
TABLE OF CONTENTS
PAGE
CONTRACT SCHEDULE.........................................................3
DEFINITIONS...............................................................8
GENERAL PROVISIONS.......................................................10
ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS..............................11
BENEFICIARY PROVISIONS...................................................11
PURCHASE PAYMENT PROVISIONS..............................................12
CONTRACT VALUE PROVISION.................................................12
FIXED ACCOUNT PROVISIONS.................................................13
SEPARATE ACCOUNT PROVISIONS..............................................13
TRANSFER PROVISIONS......................................................15
DEATH BENEFIT PROVISIONS.................................................16
ANNUITY PROVISIONS.......................................................18
SURRENDER PROVISIONS.....................................................21
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE SEPARATE ACCOUNT.......................................22
DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE FIXED ACCOUNT..........................................22
RESERVES, VALUES AND BENEFITS............................................22
CONTRACT SCHEDULE
OWNER: [▇▇▇▇ ▇▇▇] AGE AT ISSUE: [ ]
JOINT OWNER: [▇▇▇▇ ▇▇▇] AGE AT ISSUE: [ ]
ANNUITANT: [▇▇▇▇ ▇▇▇] AGE AT ISSUE: [ ]
CONTRACT NUMBER: [ ] ISSUE DATE: [ ]
PLAN TYPE: [Non-qualified] ANNUITY DATE: [ ]
PURCHASE PAYMENTS: [Purchase payments can be made either as "Lump Sum Payments" or
as "Easy Pay Payments."
Lump Sum Payments: Any purchase payment of $5,000 or more.
Easy Pay Payment: $50 or more per month.
Maximum Total Purchase Payments: The maximum total of all purchase
payments is $500,000 without our
prior consent.]
BENEFICIARY: [As designated by you at Issue Date unless changed in accordance with the
Contract provisions.]
PRODUCT EXPENSE CHARGE: [We assess each Subaccount of the Separate Account a
Product Expense Charge against the average daily net asset
value of the Subaccount as follows:
Lump Sum Payments: 0.90%, on an annual basis.
Easy Pay Payments: For contracts
that have a Contract Value
of $100,000 or more, 0.90%,
on an annual basis. For
contracts that have a
Contract Value less than
$100,000, 1.50%, on an
annual basis.
INVESTMENT OPTIONS:
[Investors Mark Series Fund, Inc.
Money Market Portfolio
Growth & Income Portfolio
Large Cap Growth Portfolio
Small Cap Equity Portfolio
▇▇▇▇▇▇ Institutional Products Trust
▇▇▇▇▇▇/BIAM IPT - International Fund]
SEPARATE ACCOUNT: [FSL SEPARATE ACCOUNT M]
ALLOCATION GUIDELINES:
[1. Currently, you can select from any of the Subaccounts or the
Fixed Account. However, we reserve the right to limit this in the
future.
2. If the purchase payments and forms required to issue a Contract
are in good order, the initial purchase payment will be credited
to your Contract within two (2) business days after receipt at
the Annuity Service Office. Additional purchase payments will be
credited to your Contract as of the Business Day they are
received.
3. Allocations must be in whole numbers. Each allocation must be at
least $25. Allocations made pursuant to a pre-approved
Rebalancing or Dollar Cost Averaging programs are not subject to
these limitations.]
TRANSFERS:
NUMBER OF PERMITTED: [Currently, there are no limits on the number of
transfers between Subaccounts that can be made during the Accumulation Period.
We reserve the right to change this.
Currently, during the Accumulation Period, you can make twelve (12)
transfers every Contract Year without charge. You can transfer Contract Values
into the Fixed Account from the Subaccounts.
Currently, during the Accumulation Period, you can only make one transfer
in a calendar quarter out of the Fixed Account into the Subaccounts.
Currently, during the Annuity Period, you can make four (4) transfers each
Contract Year between Subaccounts or out of the Subaccounts into the General
Account.]
TRANSFER FEE: [We will charge $50 for each additional transfer during the
Accumulation Period in excess of twelve (12) transfers in any Contract Year.
Transfers made at the end of the "Right to Examine Period" by us and any
transfers made pursuant to the Dollar Cost Averaging or Rebalancing Programs or
as a result of a Loan, will not be counted in determining the application of any
Transfer Fee.]
MINIMUM AMOUNT TO BE TRANSFERRED: [$500, or your entire interest in the
Fixed Account or the Subaccount, if less. This requirement is waived if the
transfer is pursuant to the Dollar Cost Averaging or Rebalancing Programs or as
a result of a Loan.]
MINIMUM AMOUNT WHICH MUST REMAIN IN THE FIXED ACCOUNT OR
ANY SUBACCOUNT AFTER A TRANSFER: [$100]
SURRENDERS AND INTERNAL TRANSFERS:
SURRENDER CHARGE: [A Surrender Charge is assessed against purchase payments
surrendered. The Surrender Charge is calculated at the time of each surrender.
Each purchase payment is tracked from the date of its receipt and the type of
purchase payment. Purchase Payments will be deducted on a Last-in-First-out
(LIFO) basis. Surrender Charges are determined in accordance with the following
schedule:
SURRENDER CHARGES
Number of Complete Years % Charge
------------------------ --------
from Receipt of Purchase Payment Easy Pay Lump Sum
-------------------------------- -------- --------
0-1 6% 7%
1 6 6
2 6 5
3 5 4
4 5 3
5 4 2
6 3 1
7 2 0
8 2 0
9 1 0
10 and thereafter 0 0
WAIVER OF SURRENDER CHARGE: [Each Contract Year a partial surrender of 10%
of the Contract Value may be made free from any Surrender Charge on a
non-cumulative basis.
It is our current practice to waive Surrender Charges for an Owner of one of our
annuity contracts who wishes to transfer Contract Values to another of our
annuity contracts. The following will apply to such internal transfers:
1. there is an internal transfer fee of 2% of the amount transferred when
you make a transfer of Contract Value to another contract (including
this contract) issued by us;
2. once transferred into the other contract, the amount transferred will
be subject to a Adjusted Surrender Charge in accordance with the
following schedule:
ADJUSTED SURRENDER CHARGES
Number of Complete Years You have been
Number of Complete our Annuity Customer.
Years from Transfer 5 Years or less 5-10 Years 10 Years +
------------------- --------------- ---------- ----------
0-1 6% 4% 3%
1 5 3 3
2 4 2 2
3 3 1 1
4 2 0 0
5 1 0 0
6 and longer 0 0 0
3. if your contract was issued prior to the effective date of this
registration, or is no longer subject to a withdrawal or surrender charge
we will not assess the internal transfer fee for the first internal
transfer you make. Once Contract Values are in the new contract they will
be subject to the Adjusted Surrender Charges. Any subsequent internal
transfer will be subject to items 1 and 2 above.
MINIMUM PARTIAL SURRENDER: [$500, or your entire interest in the Fixed
Account or Subaccount]
MINIMUM CONTRACT VALUE WHICH MUST REMAIN IN THE CONTRACT
AFTER A PARTIAL SURRENDER: [Lump Sum $5,000; Easy Pay $1,000]
FIXED ACCOUNT:
CURRENT INTEREST RATE AS OF ISSUE DATE: [X%, guaranteed through the
end of the current calendar year]
MINIMUM GUARANTEED INTEREST RATE: [3%]
ENDORSEMENTS:
[IRA Endorsement]
[403(b) Endorsement]
[Unisex Endorsement]
[Company Completion Benefit]
[Loan Provision Endorsement]
[401 Plan Endorsement]
[457 Plan Endorsement]
[Terminal Illness and Nursing Home or Hospital Confinement Endorsement]
[▇▇▇▇ 408(a) Endorsement]
ANNUITY SERVICE OFFICE:
FIDELITY SECURITY LIFE INSURANCE COMPANY
[▇▇▇▇ ▇▇▇▇▇▇▇▇]
[▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇]
DEFINITIONS
ACCUMULATION UNIT - A unit of measure used to calculate the Contract Value in a
Subaccount of the Separate Account.
ACCUMULATION PERIOD - The period prior to the Annuity Date during which you can
make purchase payments.
ANNUITANT - The natural person on whose life Annuity Payments are based. You may
change the Annuitant at any time prior to the Income Date unless the Owner is
not a natural person. On or after the Annuity Date, any reference to Annuitant
shall also include any Joint Annuitant.
ANNUITY OR ANNUITY PAYMENTS - The series of payments made to the Owner or other
named payee after the Annuity Date under the Annuity Option elected.
ANNUITY DATE - The date on which Annuity Payments begin. The Annuity Date is
shown on the Contract Schedule.
ANNUITY PERIOD - The period starting on the Annuity Date during which Annuity
Payments are paid.
ANNUITY SERVICE OFFICE - The office indicated on the Contract Schedule to which
notices, requests and purchase payments must be sent. All sums payable by us
under the Contract are payable through the Annuity Service Office.
ANNUITY UNIT - A unit of measure used to calculate Variable Annuity Payments
after the Annuity Date.
ATTAINED AGE - The age of any Owner or Annuitant on his/her birthday nearest the
date for which age is being determined.
BENEFICIARY - The person(s) or entity(ies) who will receive any death benefit
payable under this Contract.
BUSINESS DAY - Each day that the New York Stock Exchange and we are open for
business. The Separate Account will be valued each Business Day.
COMPANY - Fidelity Security Life Insurance Company.
CONTRACT ANNIVERSARY - An anniversary of the Issue Date of this Contract.
CONTRACT VALUE - The sum of your interest in the Fixed Account and the
Subaccounts of the Separate Account.
CONTRACT YEAR - One year from the Issue Date and from each Contract Anniversary.
FIXED ACCOUNT - A portion of the General Account into which you can allocate
purchase payments or transfer Contract Value. At our discretion, we may from
time to time declare an excess interest rate for this Account. The Fixed Account
is only available prior to the Annuity Date.
FIXED ANNUITY - A series of payments made during the Annuity Period which are
guaranteed as to dollar amount by us and do not vary with the investment
experience of the Separate Account.
Fixed Annuity payments are made out of our General Account.
GENERAL ACCOUNT - Our general investment account which contains all of our
assets with the exception of the Separate Account and other segregated asset
accounts.
INVESTMENT OPTION - The investment choices within the Separate Account available
under the Contract. Current Investment Options are shown on the Contract
Schedule.
ISSUE DATE - The date this Contract was issued. The Issue Date is shown on the
Contract Schedule.
JOINT OWNER - If there is more than one Owner, each Owner shall be a Joint Owner
of the Contract. Joint Owners have equal ownership rights and must both
authorize any exercising of those ownership rights unless otherwise allowed by
us. Any Joint Owner must be the spouse of the other Owner, unless limited by
state law.
OWNER - The person(s) or entity(ies) entitled to the ownership rights under this
Contract. If Joint Owners are named, all references to Owner shall mean Joint
Owners.
SEPARATE ACCOUNT - A separate investment account of the Company designated on
the Contract Schedule.
SUBACCOUNT - Separate Account assets are divided into Subaccounts. Assets of
each Subaccount will be invested in shares of an Investment Option.
VARIABLE ANNUITY - A series of payments made during the Annuity Period which
vary in amount with the investment experience of each applicable Subaccount.
GENERAL PROVISIONS
THE CONTRACT - The entire contract consists of this Contract and application,
riders or endorsements attached to this Contract.
INCONTESTABILITY - We will not contest this Contract at any time following the
Issue Date.
NON-PARTICIPATING - This Contract will not share in any distribution of
dividends.
MISSTATEMENT OF AGE OR SEX - We may require proof of age or sex of the Annuitant
before making any life Annuity Payments under this Contract. If the age or sex
of the Annuitant has been misstated, the amount payable will be the amount that
the Contract Value would have provided at the correct age or sex.
Once Annuity Payments have begun, any underpayments will be made up in one sum
with the next Annuity Payment. Any overpayments will be deducted from future
Annuity Payments until the total is repaid.
CONTRACT SETTLEMENT - This Contract must be returned to us prior to any
settlement. Prior to any payment of a death claim, due proof of death must be
submitted to us.
PROTECTION OF PROCEEDS - No Beneficiary may commute, encumber, alienate or
assign any payments under this Contract. To the extent permitted by law, no
payments will be subject to the debts, contracts or engagements of any payee or
to any judicial process to levy upon or attach the same for payment thereof.
REPORTS - At least once each calendar year we will furnish you with a report
showing the Contract Value and any other information as may be required by law.
Reports will be sent to your last known address.
TAXES - Any taxes paid to any governmental entity relating to this Contract will
be deducted from the purchase payments or Contract Value when incurred. We will,
at our sole discretion, determine when taxes have resulted from: the investment
experience of the Separate Account; receipt by us of the purchase payments; or
commencement of Annuity Payments. We may, at our sole discretion, pay taxes when
due and deduct that amount from the Contract Value at a later date. Payment at
an earlier date does not waive any right we may have to deduct amounts at a
later date. We will deduct any withholding taxes required by applicable law.
EVIDENCE OF SURVIVAL - We may require satisfactory evidence of the continued
survival of any person(s) on whose life Annuity Payments are based.
MODIFICATION OF CONTRACT - This Contract may be modified by us in order to
maintain compliance with applicable state and federal law. This Contract may be
changed or altered only by our President or our Secretary. A change or
alteration will be made in writing.
ANNUITANT, OWNERSHIP, ASSIGNMENT PROVISIONS
OWNER - You, as the Owner, have all the interest and rights under this Contract.
The Owner is the person designated as such on the Issue Date, unless changed.
You may change the Owner at any time. A change of Owner will automatically
revoke any prior designation of Owner. A request for change must be:
1. made in writing; and
2. received by us at the Annuity Service Office.
The change will become effective as of the date the written request is signed. A
new designation of Owner will not apply to any payment made or action taken by
us prior to the time the new designation was received.
JOINT OWNER - A Contract may be owned by Joint Owners. Any Joint Owner must be
the spouse of the other Owner, unless limited by state law. Upon the death of
either Owner, the surviving Joint Owner will be the primary Beneficiary. Any
other Beneficiary designation will be treated as a contingent Beneficiary unless
otherwise indicated in a written notice to us.
ANNUITANT - The Annuitant is the person on whose life Annuity Payments are
based. The Annuitant is the person designated by you at the Issue Date, unless
changed prior to the Annuity Date. The Annuitant may not be changed in a
Contract which is owned by a non-individual. Any change of Annuitant is subject
to our underwriting rules then in effect.
ASSIGNMENT - You may, at any time during your lifetime, assign your rights under
this Contract. We will not be bound by any assignment until written notice of
the assignment is received by us at the Annuity Service Office. We are not
responsible for the validity of any assignment. We will not be liable as to any
payment or other settlement made by us before receipt of written notice of the
assignment.
BENEFICIARY PROVISIONS
BENEFICIARY - The Beneficiary designation in effect on the Issue Date will
remain in effect, unless changed. Unless you provide otherwise, the death
benefit will be paid in equal shares or all to the survivor as follows:
1. to the primary Beneficiaries who survive you and/or the Annuitant's
death, as applicable; or if there are none,
2. to the contingent Beneficiaries who survive you and/or the Annuitant's
death, as applicable; or if there are none,
3. to your estate.
CHANGE OF BENEFICIARY - Subject to the rights of any irrevocable Beneficiary,
you may change the primary Beneficiary or contingent Beneficiary. A change may
be made by filing a written request with us at the Annuity Service Office. The
change will take effect as of the date the written request is signed. We will
not be liable for any payment made or action taken before we record the change.
PURCHASE PAYMENT PROVISIONS
PURCHASE PAYMENTS - The initial purchase payment is due on the Issue Date. The
minimum subsequent purchase payment and maximum total purchase payments are
shown on the Contract Schedule. We reserve the right to reject any purchase
payment.
CHANGE IN PURCHASE PAYMENTS - Subject to the minimum and maximum payments shown
on the Contract Schedule, you may increase or decrease or change the frequency
of subsequent purchase payments.
ALLOCATION OF PURCHASE PAYMENTS - The allocation of purchase payments is made
in accordance with the selection made at the Issue Date. We have reserved the
right to allocate initial purchase payments to a Money Market Subaccount. Unless
you elect otherwise, subsequent purchase payments will be allocated in
accordance with your initial selection. Allocation of the purchase payments is
subject to the allocation guidelines set forth in the Contract Schedule.
NO DEFAULT - Unless you make a total surrender, this Contract will remain in
force until the Annuity Date. This Contract will not be in default if subsequent
purchase payments are not made.
CONTRACT VALUE PROVISION
CONTRACT VALUE - The Contract Value for any Business Day is the sum of the
Contract Value in each of the Subaccounts of the Separate Account and the
Contract Value in the Fixed Account as of such Business Day.
The Contract Value in a Subaccount of the Separate Account is determined by
multiplying the number of Accumulation Units allocated to the Contract for the
Subaccount by the Accumulation Unit Value.
Surrenders will result in the cancellation of Accumulation Units in a Subaccount
or a reduction in the Fixed Account.
FIXED ACCOUNT PROVISIONS
FIXED ACCOUNT VALUE - The Fixed Account Value at any time is equal to :
1. the purchase payments allocated to the Fixed Account; plus
2. amounts transferred to the Fixed Account; plus
3. interest credited to the Fixed Account; less
4. any prior partial surrenders and Surrender Charges deducted from the
Fixed Account; less
5. amounts transferred from the Fixed Account; less
6. any applicable premium taxes or Transfer Fees deducted from the Fixed
Account.
INTEREST TO BE CREDITED - We guarantee that the interest to be credited to the
Fixed Account will not be less than the Minimum Guaranteed Interest Rate shown
on the Contract Schedule. We may credit additional interest at our sole
discretion to the Fixed Account option. The Current Interest Rate as of the
Issue Date is shown on the Contract Schedule.
SEPARATE ACCOUNT PROVISIONS
THE SEPARATE ACCOUNT - The Separate Account is designated on the Contract
Schedule and consists of assets set aside by us, which are kept separate from
our general assets and all of our other Separate Account assets. The assets of
the Separate Account, equal to reserves and other liabilities of your Contract
and those of other owners, will not be charged with liabilities arising out of
any other business we may do.
The Separate Account assets are divided into Subaccounts. The assets of the
Subaccounts are allocated to the Investment Options shown on the Contract
Schedule.
INVESTMENTS OF THE SEPARATE ACCOUNT - Purchase payments applied to the Separate
Account are allocated to a Subaccount of the Separate Account. We may, from time
to time, add additional Investment Options to those options shown on the
Contract Schedule. You may be permitted to transfer Contract Values to the
additional Investment Option. However, the right to make any transfer will be
limited by any terms and conditions in effect at the time of transfer.
If the shares of any of the Investment Options become unavailable for investment
by the Separate Account, or our Board of Directors deems further investment in
these shares inappropriate, we may limit further purchase of such shares or
substitute shares of another Investment Option for shares already purchased
under this Contract.
VALUATION OF ASSETS - Assets of the Separate Account are valued at their fair
market value in accordance with our procedures.
ACCUMULATION UNIT - Accumulation Units shall be used to account for all amounts
allocated to or surrendered from a Subaccount of the Separate Account as a
result of purchase payments, surrenders, transfers, or fees and charges. We will
determine the number of Accumulation Units of a Subaccount purchased or
canceled. This is done by dividing the amount allocated to (or the amount
withdrawn from) the Subaccount, by the dollar value of one Accumulation Unit of
the Subaccount as of the Business Day during which the request for the
transaction is received at the Annuity Service Office.
NET INVESTMENT FACTOR - The Net Investment Factor for each Subaccount is
determined by dividing A by B and multiplying by (1-C) where:
A is (i) the net asset value per share of the Investment Option
held by the Subaccount at the end of the current Business Day;
plus
(ii) any dividend or capital gains per share declared on
behalf of such Investment Option that has an ex-dividend date
as of the current Business Day.
B is the net asset value per share of the Investment Option held
by the Subaccount for the immediately preceding Business Day.
C is (i) the Business Day equivalent of the daily Product Charge
which is shown on the Contract Schedule; plus
(ii) a charge factor, if any, for any taxes or any tax reserve
we have established as a result of the operation of this
Subaccount.
ACCUMULATION UNIT VALUE - The Accumulation Unit Value for each Subaccount was
arbitrarily set initially at $10. Subsequent Accumulation Unit Values for each
Subaccount are determined by multiplying the Accumulation Unit Value for the
immediately preceding Business Day by the Net Investment Factor of the
Subaccount for the current Business Day.
The Accumulation Unit Value may increase or decrease from Business Day to
Business Day.
PRODUCT EXPENSE CHARGE - We deduct a Product Expense Charge from each Subaccount
of the Separate Account which is equal, on an annual basis, to the amount shown
on the Contract Schedule.
TRANSFER PROVISIONS
TRANSFERS - A transfer is subject to the following:
1. the maximum number of transfers without a Transfer Fee is shown on the
Contract Schedule;
2. we reserve the right to assess a Transfer Fee if the number of
transfers exceeds the maximum number of permissible free transfers not
subject to a Transfer Fee. We will notify you of the imposition of any
Transfer Fee. Any Transfer Fee we may impose is deducted from the
amount which is transferred;
3. you may not make a transfer until after the end of the Right to
Examine Period;
4. the minimum amount which may be transferred is shown on the Contract
Schedule;
5. a transfer will be effected as of the end of a Business Day when we
receive an acceptable transfer request containing all required
information including the amount which is to be transferred, and the
Subaccount(s) and/or the Fixed Account affected;
6. neither us or our Annuity Service Office are liable for a transfer
made in accordance with your instructions;
7. we reserve the right to restrict transfers between Subaccounts to a
maximum of twelve (12) per contract year and to restrict transfers
from being made on consecutive Business Days. We also reserve the
right to restrict transfers into and out of the Fixed Account;
8. your right to make transfers is subject to modification if we
determine, in our sole opinion, that the exercise of the right by one
or more Owners is, or would be, to the disadvantage of other Owners.
Restrictions may be applied in any manner reasonably designed to
prevent any use of the transfer right which is considered by us to be
to the disadvantage of other Owners. A modification could be applied
to transfers to, or from, one or more of the Subaccounts and could
include, but is not limited to:
a. the requirement of a minimum time period between each transfer;
b. not accepting a transfer request from an agent acting under a
power of attorney on behalf of more than one Owner; or
c. limiting the dollar amount that may be transferred between the
Subaccounts by an Owner at any one time;
9. during times of drastic economic or market conditions, we may suspend
the transfer privilege temporarily without notice and treat transfer
requests based on their separate components (a redemption order with a
simultaneous request for purchase of another Subaccount). In such a
case, the redemption order would be processed at the source
Subaccount's next determined Accumulation Unit. However, the purchase
into the new Subaccount would be effective at the next determined
Accumulation Unit value for the new Subaccount only after we receive
the proceeds from the source Subaccount, or we otherwise receive cash
on behalf of the source Subaccount;
10. transfers do not change the allocation instructions for future
purchase payments;
11. you may elect to make transfers by telephone. However, to elect this
option you must first make a written request in a form acceptable to
us. If there are Joint Owners, unless we are instructed to the
contrary, instructions by telephone will be accepted from either one
of the Joint Owners. We will use reasonable procedures to confirm that
instructions communicated by telephone are genuine;
12. transfers made during the Annuity Period are subject to the following:
a. you may make the number of transfers each Contract Year as set
forth in the Contract Schedule between the Subaccounts of the
Separate Account;
b. you may not make a transfer from the General Account to the
Separate Account;
c. the amount transferred to the General Account from a Subaccount
of the Separate Account will be based upon current Company
practice for such requests at the time of the transfer; and
d. you may not make a transfer within three (3) business days of an
Annuity Calculation Date.
DEATH BENEFIT PROVISIONS
DEATH OF OWNER DURING THE ACCUMULATION PERIOD - The death benefit will be paid
to the Beneficiary(ies) designated by you upon your death, or the death of any
Joint Owner, during the Accumulation Period. Upon the death of a Joint Owner,
the surviving Joint Owner, if any, will be treated as the primary Beneficiary.
Any other Beneficiary designation on record at the time of death will be treated
as a contingent Beneficiary.
DEATH BENEFIT AMOUNT DURING THE ACCUMULATION PERIOD - The death benefit will be
the greater of:
(i) the purchase payments, less any surrenders and related Surrender
Charges;
(ii) the Contract Value determined as of the end of the Business Day during
which we receive both due proof of death and an election for the
payment method.
The amount of the death benefit is determined as of the end of the Business Day
during which we receive both due proof of death and an election for the payment
method. The death benefit amount remains in the Separate Account and/or Fixed
Account until distribution begins. From the time the death benefit is determined
until complete distribution is made, any amount in the Subaccount will be
subject to investment risk which is borne by the Beneficiary.
DEATH BENEFIT OPTIONS DURING THE ACCUMULATION PERIOD - A Beneficiary must elect
the death benefit to be paid under one of the options below in the event of the
death of an Owner during the Accumulation Period. In addition, if the
Beneficiary is the spouse of the Owner, he or she may elect to continue the
Contract in his or her own name and exercise all the Owner's rights under the
Contract. In this event, the Contract Value will be adjusted to equal the death
benefit.
Option 1 - lump sum payment of the death benefit; or
Option 2 - the payment of the entire death benefit within five (5)
years of the date of the death of the Owner or any Joint Owner; or
Option 3 - payment of the death benefit under an Annuity Option over
the lifetime of the Beneficiary or over a period not extending beyond
the life expectancy of the Beneficiary with distribution beginning
within one (1) year of the date of death of the Owner or any Joint
Owner.
Any portion of the death benefit not applied under Option 3 within one (1) year
of the date of the Owner's or Joint Owner's death must be distributed within
five (5) years of the date of death.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments Provision is in effect.
Payment to the Beneficiary, other than in a single sum, may only be elected
during the 60-day period beginning with the date of receipt of proof of death.
DEATH OF OWNER DURING THE ANNUITY PERIOD - If the Owner or a Joint Owner, who is
not the Annuitant, dies during the Annuity Period, any remaining payments under
the Annuity Option elected will continue at least as rapidly as under the method
of distribution in effect at the time of the Owner's death. Upon the death of
the Owner during the Annuity Period, the Beneficiary becomes the Owner.
DEATH OF ANNUITANT - Upon the death of an ▇▇▇▇▇▇▇▇▇, who is not the Owner,
during the Accumulation Period, the Owner automatically becomes the Annuitant.
The Owner may designate a new Annuitant, subject to the Company's underwriting
rules then in effect. If the Owner is a non-natural person, the death of the
primary Annuitant will be treated as the death of the Owner and a new Annuitant
may not be designated.
Upon the death of the Annuitant during the Annuity Period, the death benefit, if
any, will be as specified in the Annuity Option elected. Death benefits will be
paid at least as rapidly as under the method of distribution in effect at the
Annuitant's death.
PAYMENT OF DEATH BENEFIT - We will require due proof of death before any death
benefit is paid. Due proof of death will be:
1. a certified death certificate;
2. a certified decree of a court of competent jurisdiction as to the
finding of death;
3. a written statement by a medical doctor who attended the deceased; or
4. any other proof satisfactory us.
Any death benefit will be paid in accordance with applicable law or regulations
governing death benefit payments.
ANNUITY PROVISIONS
ANNUITY DATE - You elect the Annuity Date at the time of issue. The Annuity Date
is shown on the Contract Schedule. The Annuity Date must be the first or
fifteenth day of a calendar month and must be at least one (1) month after the
Issue Date. The Annuity Date may not be later than the first day of the calendar
month following the Annuitant's [85th] birthday. If there are joint annuitants,
it is the birthday of the oldest Annuitant that is applicable.
Prior to the Annuity Date, you may, subject to the above, change the Annuity
Date upon thirty (30) days prior written notice to us at the Annuity Service
Office.
ANNUITY CALCULATION DATE - We will determine the amount of your Variable Annuity
Payments, including the first, no more than ten (10) Business Days prior to the
payment date. The payment dates for your Annuity Payments will be the same day
each month as the date you selected for the Annuity Date, i.e. the first or the
fifteenth.
FREQUENCY AND AMOUNT OF ANNUITY PAYMENTS - Annuity Payments will be paid as
monthly installments or at any frequency acceptable to you and us. The Contract
Value on the Annuity Date is applied to the Annuity Table for the Annuity Option
elected. If the amount of the Contract Value to be applied under an Annuity
Option is less than $5,000, we reserve the right to make one lump sum payment in
lieu of Annuity Payments. If the amount of any Annuity Payment would be or
become less than $100, we will reduce the frequency of payments to an interval
which will result in each payment being at least $100.
BASIS OF PAYMENTS - The Annuity Tables are based on the 1983 Individual Annuity
Mortality Table with mortality projected to the year 2000 by projection scale G
and with an annual effective interest rate of [3%].
ANNUITY OPTIONS - The following Annuity Options may be elected:
Option 1 - Life Annuity - A monthly income payable during the lifetime
of the Annuitant and terminating with the last payment preceding
his/her death.
Option 2 - Life Annuity with a Guaranteed Period - A monthly income
payable during the lifetime of the Annuitant with the guarantee that
if, at the death of the Annuitant, payments have been made for less
than a stated certain period, which may be five (5), ten (10), fifteen
(15) or twenty (20) years, as elected, the monthly income will be
continued during the remainder of the elected period. However, the
Owner may elect to receive a single sum payment. A single sum payment
will be equal to the present value of remaining payments as of the date
of receipt of due proof of death commuted at the assumed investment
rate of [3%].
Option 3 - Survivorship Annuity - A monthly income payable during the
joint lifetime of the Annuitant and another named individual and
thereafter during the lifetime of the survivor, ceasing with the last
income payment due prior to the death of the survivor.
Option 4 - Any other option that is mutually agreed upon between you
and the Company will be available.
ELECTION OF ANNUITY OPTION - The Annuity Option is elected by you. If no Annuity
Option is elected, Option 2 with ten (10) years guaranteed will automatically be
applied. Prior to the Annuity Date, you may, upon thirty (30) days prior written
notice to us, change the Annuity Option.
ANNUITY - You can elect to have the Annuity Option payable as a Fixed Annuity or
a Variable Annuity or a combination. If you do not tell us and if all of the
Contract Value on the Annuity Calculation Date is allocated to the Fixed
Account, the Annuity will be paid as a Fixed Annuity. If all of the Contract
Value on that day is allocated to the Separate Account, the Annuity will be paid
as a Variable Annuity. If the Contract Value on that day is allocated to both
the Fixed Account and the Separate Account, the Annuity will be paid as a
combination of a Fixed Annuity and a Variable Annuity to reflect the allocation
between the Accounts. Variable Annuity Payments will reflect the investment
performance of the Separate Account in accordance with the allocation of the
Contract Value to the Subaccounts on the Annuity Date. Unless another payee is
designated, you will be the payee of the Annuity Payments.
The Contract Value will be applied to the applicable Annuity Tables. The Annuity
Table used will depend upon the Annuity Option elected. The amount of the first
payment for each $1,000 of Contract Value is shown in the Annuity Tables and is
based on the Annuitant's Attained Age. If, as of the Annuity Calculation Date,
the then current Annuity Option rates applicable to this class of contracts
provide a first Annuity Payment greater than that which is guaranteed under the
same Annuity Option under this Contract, the greater payment will be made.
FIXED ANNUITY - The Fixed Account Value will be used to determine the Fixed
Annuity monthly payment. The first monthly Annuity Payment will be based upon
the Annuity Option elected, the Annuitant's Attained Age and the appropriate
Annuity Option Table.
VARIABLE ANNUITY - Variable Annuity Payments:
1. are not predetermined as to dollar amount; and
2. will vary in amount with the net investment results of the applicable
Subaccount(s) of the Separate Account.
The dollar amount of Variable Annuity Payments for each applicable Subaccount
after the first payment is determined as follows:
1. the dollar amount of the first Variable Annuity Payment is divided by
the value of an Annuity Unit for each applicable Subaccount as of the
Annuity Calculation Date. This establishes the number of Annuity Units
for each monthly payment. The number of Annuity Units for each
applicable Subaccount remains fixed during the Annuity Period;
2. the fixed number of Annuity Units per payment in each Subaccount is
multiplied by the Annuity Unit Value for that Subaccount for the
Annuity Calculation Date. This result is the dollar amount of the
payment for each applicable Subaccount.
The total dollar amount of each Variable Annuity Payment is the sum of all
Subaccount Variable Annuity Payments.
ANNUITY UNIT - The value of an Annuity Unit for each Subaccount of the Separate
Account was arbitrarily set initially at $10. This was done when the first
Investment Option shares were purchased.
The Subaccount Annuity Unit Value at the end of any subsequent Business Day is
determined by multiplying the Subaccount Annuity Unit Value for the immediately
preceding Business Day by the net investment factor for the day for which the
Annuity Unit Value is being calculated; and multiplying the result by a factor
for the Business Day which negates the assumed interest rate used to develop the
Annuity Tables.
NET INVESTMENT FACTOR - The Net Investment Factor for any Subaccount of the
Separate Account for any Business Day after the first payment is determined by
dividing:
1. the Accumulation Unit Value as of the current Business Day; by
2. the Accumulation Unit Value as of the immediately preceding Business
Day.
The Net Investment Factor may be greater or less than one, as the Annuity Unit
Value may increase or decrease.
MORTALITY AND EXPENSE GUARANTEE - We guarantee that the dollar amount of each
Annuity Payment after the first Annuity Payment will not be affected by
variations in actual mortality or expenses.
SURRENDER PROVISIONS
SURRENDERS - Prior to the Annuity Date, you may, upon written request received
by us at the Annuity Service Office, make a total or partial surrender of the
Surrender Value. A surrender will result in the cancellation of Accumulation
Units from each applicable Subaccount of the Separate Account or a reduction in
the Fixed Account Value in the ratio that the Subaccount Value and/or the Fixed
Account Value bears to the total Contract Value. You must specify in writing in
advance which units are to be canceled, or which values are to be reduced, if
other than the above method is desired. We will pay the amount of any surrender
within seven (7) days of receipt of a request in good order unless the
Suspension or Deferral of Payments or Transfers from the Separate Account
provision or the Deferral of Payments or Transfers from the Fixed Account
provision is in effect.
Each partial surrender must be for an amount which is not less than the amount
shown on the Contract Schedule or, if smaller, the remaining Surrender Value.
The minimum Surrender Value which must remain in the Contract after a partial
surrender is shown on the Contract Schedule. The Surrender Value is the Contract
Value less any applicable Surrender Charge and less any Premium or other taxes.
SURRENDER CHARGE - Upon surrender of all or a portion of the Contract Value, a
Surrender Charge as set forth on the Contract Schedule may be assessed. Under
certain circumstances a surrender may be allowed without the imposition of a
Surrender Charge.
For a partial surrender, the Surrender Charge will be deducted from the
remaining Surrender Value, if sufficient, or from the amount surrendered. The
Surrender Charge will be deducted by canceling Accumulation Units from each
applicable Subaccount or reducing the Fixed Account Value in the ratio that the
Subaccount Value and/or Fixed Account bears to the total Contract Value. The
Owner must specify in writing in advance if other than the above method of
cancellation is desired.
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE SEPARATE ACCOUNT
We reserve the right to suspend or postpone payments for a surrender or transfer
for any period when:
1. the New York Stock Exchange is closed (other than customary weekend
and holiday closings);
2. trading on the New York Stock Exchange is restricted;
3. an emergency exists as a result of which disposal of securities held
in the Separate Account is not reasonably practicable or it is not
reasonably practicable to determine the value of the Separate
Account's net assets; or
4. during any other period when the Securities and Exchange Commission,
by order, so permits for the protection of Owners.
The applicable rules and regulations of the Securities and Exchange Commission
will govern as to whether the conditions described in (2) and (3) exist.
DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE FIXED ACCOUNT
We reserve the right to defer payment for a surrender or transfer from the Fixed
Account for the period permitted by law but not for more than six (6) months
after written election is received by us at the Annuity Service Office.
RESERVES, VALUES AND BENEFITS
All reserves are greater than, or equal to, those required by statute. Any
values and death benefits that may be available under this Contract are not less
than the minimum benefits required by any law of the state in which this
Contract is delivered.
TABLES