ALLIANZ LIFE INSURANCE COMPANY
OF NEW YORK
[One Chase Manhattan Plaza, 37th Floor]
[New York, New York 10005-1423]
INDIVIDUAL FLEXIBLE PURCHASE PAYMENT VARIABLE DEFERRED ANNUITY CONTRACT
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THIS CONTRACT IS ISSUED IN CONSIDERATION OF THE INITIAL PURCHASE
PAYMENT. THIS IS A VARIABLE ANNUITY CONTRACT WITH ANNUITY
PAYMENTS. CONTRACT VALUES INCREASE OR DECREASE DEPENDING ON THE
EXPERIENCE OF THE VARIABLE ACCOUNT SHOWN ON THE CONTRACT SCHEDULE.
ANNUITY PAYMENTS AND CONTRACT VALUES IN THE VARIABLE ACCOUNT ARE
NOT GUARANTEED AS TO FIXED DOLLAR AMOUNTS. WE WILL MAKE ANNUITY
PAYMENTS AS SET FORTH IN THIS CONTRACT BEGINNING ON THE INCOME
DATE. THIS IS A NONPARTICIPATING CONTRACT.
Signed for the Company at its home office on the Issue Date.
ALLIANZ LIFE INSURANCE COMPANY OF NEW YORK
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Secretary President
RIGHT TO EXAMINE: THIS CONTRACT MAY BE RETURNED WITHIN 10 DAYS AFTER
YOU RECEIVE IT. IT CAN BE MAILED OR DELIVERED TO EITHER US OR THE
REPRESENTATIVE 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 WE HAD NEVER
ISSUED IT. WE WILL PROMPTLY REFUND AN AMOUNT EQUAL TO THE SUM OF (I)
AND (II), WHERE (I) IS THE DIFFERENCE BETWEEN THE PURCHASE PAYMENTS,
INCLUDING ANY FEES OR OTHER CHARGES, AND THE AMOUNTS, IF ANY,
ALLOCATED TO THE VARIABLE ACCOUNT UNDER THE CONTRACT, LESS ANY
WITHDRAWALS, AND (II) IS THE CONTRACT VALUE.
This is a legal contract between you and the Company.
READ YOUR CONTRACT CAREFULLY
A Stock Company
Annuity Payments will not decrease as long as the investment return
of the Variable Account assets equals or exceeds 6.4% (assuming a
4.5% Assumed Investment Return) on an annual basis. Variable Account
expenses consist of a mortality and expense risk charge, a contract
maintenance charge, and transfer fees. These are shown on the
Contract Schedule page. The variable provisions can be found on pages
7, 8, 9, and 12 of this contract.
L40529-NY01 1
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GUIDE TO CONTRACT PROVISIONS
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Contract Schedule...................................3
Definitions.........................................4
Ownership...........................................6
Purchase Payments...................................7
Variable Account....................................7
Variable Account
Accumulation Unit Value
Mortality and Expense Risk Charge
Contract Maintenance Charge
Contract Value
Transfers
Suspension or Deferral of Payments
Withdrawals.........................................9
Annuity Provisions.................................10
Death Benefit .....................................13
General Provisions.................................15
Misstatement of Age or Sex
Income Date
Conditions for Termination of this Contract
L40529-NY01 2
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DEFINITIONS
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This section provides the meaning of terms used throughout this contract. Most
of these terms are capitalized throughout this contract to help you easily
recognize them. Provision titles, section titles, and terms used in the
Contract Schedule are also capitalized for your convenience.
COMPANY Allianz Life Insurance Company of New York. The
terms "we", "our", and "us" also refer to the
Company.
OWNER The person(s) or non-individual entitled to the
ownership rights stated in this contract. The
terms "you" and "your" also refer to the Owner.
The term "Contract Owner" may also be used to mean
Owner in some endorsements or riders.
ACCUMULATION PHASE The period prior to the Income Date during which
you can make Purchase Payments.
ACCUMULATION PORTION The part of this contract that is in the
Accumulation Phase. The Accumulation Portion
begins on the Issue Date and ends upon the
earliest of the following.
(a) The Business Day before the Income Date if
you take a Full Annuitization.
(b) The Business Day we process your request for
a full withdrawal.
(c) Upon the death of any Owner, unless this
contract is continued by the deceased Owner's
spouse, the Accumulation Portion will
terminate on the Business Day that the
Service Center receives both due proof of
death and an election of the death benefit
payment option.
ACCUMULATION UNIT The units into which we convert amounts invested
in the subaccount(s) of your selected Investment
Option(s) during the Accumulation Phase. This amount
is used to determine the death benefit during the
Accumulation Phase or the initial Annuity Payment.
ADJUSTED CONTRACT VALUE The Contract Value less any deduction
made that is an amount equal to the applicable
Premium Tax paid by the Company.
AGE The age as of the immediately preceding birthday
unless otherwise specified.
ANNUITANT The natural person upon whose continuation of life we
base any Annuity Payments involving life
contingencies. The Annuitant is the person designated
by the Owner. The Annuitant is shown on the Contract
Schedule.
ANNUITY OPTION An arrangement under which Annuity Payments are made
under this contract.
ANNUITY PAYMENTS The series of payments made to you or any Payee
you name beginning on any Income Date.
ANNUITY PHASE The period of time beginning on the first Income Date
during which Annuity Payments are made.
ANNUITY PORTION The part of this contract that is in the Annuity
Phase. If you take Partial Annuitizations, you may
have multiple Annuity Portions. Each Annuity
Portion begins on an Income Date and ends upon the
earliest of the following.
(a) Under Annuity Options 1 and 3, the death of the
last surviving Annuitant.
(b) Under Annuity Options 2 and 4, the death of the
last surviving Annuitant and the expiration of
the guaranteed period, or payment of the lump
sum payment of the remaining guaranteed Annuity
Payments.
(c) Under Annuity Option 5, death of the Annuitant
and payment of any lump sum refund.
ANNUITY RESERVE The assets which support the Annuity Option you
have selected during the Annuity Phase.
ANNUITY UNIT The units into which we convert amounts invested
in the subaccount(s) of your selected Investment
Option(s) during the Annuity Phase.
ASSUMED INVESTMENT The investment rate upon which we base variable
RATE (AIR) Annuity Payments.
L40529-NY01 4
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DEFINITIONS (CONTINUED)
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AUTHORIZED REQUEST A request that is received by the Service
Center in good order (that is, in a form that is
satisfactory to the Company).
BENEFICIARY The designated person(s) or entity(ies) to whom we
will pay the death benefit under this contract. You
name the Beneficiary(ies) at issue. You may later
change the Beneficiary(ies) by Authorized Request as
described in the Change of Beneficiary provision of
this contract.
For jointly owned contracts, the surviving Joint
Owner is the sole primary Beneficiary. Spousal Joint
Owners may also name contingent Beneficiaries. For
tax reasons non-spousal Joint Owners cannot name
contingent Beneficiaries.
BUSINESS DAY Each day on which the New York Stock Exchange is
open for trading, except when an Investment Option
does not value its shares. Our Business Day closes
when regular trading on the New York Stock Exchange
closes, which is usually at 4:00 p.m. Eastern Time.
We will process any instructions received after the
close of any Business Day on the next Business Day.
CONTRACT ANNIVERSARY A 12-month anniversary of the Issue Date of this
contract.
CONTRACT VALUE The Contract Value for any Business Day is
equal to the total dollar value accumulated in the
investment choices under this contract excluding
amounts applied to Annuity Payments.
CONTRACT YEAR A period of 12 consecutive months. The first
Contract Year begins on the Issue Date, and
subsequent Contract Years begin on the Contract
Anniversary. All Contract Years end on the day before
the next Contract Anniversary.
FULL ANNUITIZATON The application of all of the Adjusted
Contract Value to Annuity Payments according to the
Annuity Options in this contract and/or any attached
endorsements or riders.
GENERAL ACCOUNT
Our general investment account which contains all
the assets of the Company with the exception of
the Variable Account and other separate accounts.
INCOME DATE A date that Annuity Payments begin. The date
Annuity Payments are scheduled to begin is shown
on the Contract Schedule.
INVESTMENT OPTIONS The investment choices available under the Variable
Account. The Investment Options are shown on the
Contract Schedule.
ISSUE DATE The first day of this contract. It is also the
date when the first Contract Year begins. The Issue
Date is shown on the Contract Schedule and determines
the Contract Anniversaries, and the beginning of each
Contract Year.
JOINT ANNUITANT You can add a Joint Annuitant for the
Annuity Phase by providing an Authorized Request. If
we allow Joint Annuitants, we will base Annuity
Payments on the lives of both Joint Annuitants. We
are not liable for any actions taken by us before we
receive the Authorized Request.
JOINT OWNER A contract may be owned by Joint Owners. Joint
Owners have equal contract ownership rights. Both
Joint Owners must authorize the exercise of these
rights in writing unless otherwise allowed by us. If
Joint Owners are named, all references to Owner shall
mean Joint Owners. There can only be two Joint
Owners.
NET ASSET VALUE The value of a share of an underlying Investment
Option, less any investment management and portfolio
administration fees and expenses, as of the close of
trading on a Business Day.
PARTIAL ANNUITIZATION The application of a portion of the
Adjusted Contract Value to Annuity Payments according
to the Annuity Options in this contract and/or any
attached endorsements or riders.
PAYEE The person to whom Annuity Payments are made
payable. Unless you designate another Payee, you
will be the Payee of the Annuity Payments.
PREMIUM TAX Any Premium Taxes owed by the Company to any
governmental entity against Purchase Payments,
Contract Value or Annuity Payments.
L40529-NY01 5
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DEFINITIONS (CONTINUED)
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PURCHASE PAYMENT Any payment made toward this contract.
SERVICE CENTER The office shown on the Contract Schedule of
this contract. All notices, requests and Purchase
Payments must be sent to the Service Center.
VARIABLE ACCOUNT A separate account we maintain to which a portion of
our assets have been allocated for this contract and
certain other variable annuity contracts. The
Variable Account is shown on the Contract Schedule.
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OWNERSHIP
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ASSIGNMENT OF THIS You may assign or transfer all of your ownership
CONTRACT rights of this contract. An Authorized Request
specifying the terms of an assignment of this
contract must be provided to the Service Center. We
will record your assignment. We will not be
responsible for its validity or effect, including tax
consequences. We will also not be liable for actions
taken by us or payments made before we receive the
assignment.
If you assign this contract, you can exercise your
rights only with the written consent of the assignee
of record.
CHANGE OF OWNERSHIP You may change ownership of this contract to a new
Owner at any time. However, you must have our consent
to name an Owner that is a non-individual or if the
Guaranteed Minimum Death Benefit is greater than the
current Contract Value. The change is effective as of
the date the Authorized Request is signed. We are not
liable for any actions taken by us before we receive
the Authorized Request. A change of ownership will
automatically revoke any prior designation of Owner.
A change of ownership does not change the existing
designated Annuitant(s) or Beneficiary(ies). The new
Owner may request a change of Annuitant(s) and/or
Beneficiary(ies) by providing an Authorized Request.
We will not be responsible for any tax consequence of
any such change.
NON-INDIVIDUAL OWNERS If this contract is owned by a non-individual,
then we treat the Annuitant as the Owner for purposes
of any death benefit, income benefit, or any
endorsement or rider.
We will use the Age of the Annuitant to determine any
death benefit or income benefit.
The term "non-natural owner" may also be used to mean
"non-individual owner" in any endorsement and/or
rider.
CHANGE OF ANNUITANT You may change the Annuitant at any time
before the Income Date by an Authorized Request,
unless the Owner is a non-individual.
CHANGE OF BENEFICIARY For solely owned contracts, you may change the
primary Beneficiary(ies) or contingent
Beneficiary(ies) at any time before your death.
For jointly owned contracts the surviving Joint Owner
is the sole primary Beneficiary and cannot be
changed. However, if the Joint Owners are spouses,
you may change the contingent Beneficiary(ies) at any
time before your death. For tax reasons we do not
allow non-spousal Joint Owner(s) to appoint
contingent Beneficiaries.
Changes are subject to the rights of any irrevocable
Beneficiary(ies). You may change the named
Beneficiary(ies) by providing an Authorized Request.
The change will take effect as of the date the
Authorized Request is signed subject to any actions
taken by us prior to receipt of the Authorized
Request. If the Authorized Request reaches our
Service Center after an Owner dies but before we make
any payment, the change will be valid. We will not be
liable for any payment made by us or action taken by
us before the Service Center receives the change.
L40529-NY01 6
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PURCHASE PAYMENTS
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PURCHASE PAYMENTS The initial Purchase Payment is due on the
Issue Date. The Initial Purchase Payment, Minimum
Additional Purchase Payment and the Maximum Total
Purchase Payments allowed are shown on the Contract
Schedule.
NO DEFAULT This contract will not be in default if you do not
make additional Purchase Payments.
ALLOCATION OF PURCHASE We allocate your Purchase Payments to one or more of
PAYMENTS the Investment Options according to your
instructions. However, we reserve the right to
allocate the initial Purchase Payment to the Money
Market Investment Option until the expiration of the
Right to Examine period. Unless you inform us
otherwise, we allocate additional Purchase Payments
in the same manner as the initial Purchase Payment.
All allocations of Purchase Payments are subject to
the Allocation Guidelines shown on the Contract
Schedule. We guarantee that you will be allowed to
select at least fifteen Investment Options for such
allocations. This number will not decrease after the
Issue Date. You will be allowed to choose at least
this number of Investment Options from the Investment
Options specified in the Contract Schedule unless
Investment Options are eliminated or substituted.
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VARIABLE ACCOUNT
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VARIABLE ACCOUNT The Variable Account is shown on the Contract
Schedule. It consists of assets we have set aside and
have kept separate from the rest of our assets and
those of our other separate accounts. The assets of
the Variable Account, equal to reserves and other
liabilities of your contract and all other contracts
issued through the Variable Account, will not be
charged with liabilities arising out of any other
business we may conduct.
The Variable Account assets are divided into
subaccounts corresponding to the Investment Options
shown on the Contract Schedule. We may add,
substitute, or remove Investment Options shown on the
Contract Schedule, in the future.
Should the shares of any subaccount become
unavailable for investment by the Variable Account,
or our Board of Directors deems further investment in
the shares inapproporiate, we may limit further
Purchase Payment allocations to an Investment Option,
or substitute subaccount Accumulation Units of
another Investment Option for an Investment Option
you previously selected. No such limitations will be
imposed or substitutions made unless prior approval
is obtained from the New York State Insurance
Department.
VALUATION OF ASSETS Assets of the subaccounts will be valued at
their Net Asset Value on each Business Day, except
when an Investment Option does not value its shares.
ACCUMULATION UNITS The Purchase Payments you allocate to the Investment
Options are placed into subaccounts. Each
subaccount invests exclusively in one Investment
Option. Accumulation Units are used to account for
all amounts allocated to or withdrawn from the
Investment Options as a result of Purchase Payments,
withdrawals, transfers, Partial Annuitizations, or
fees and charges.
The number of subaccount Accumulation Units is
determined by dividing the amount allocated to, or
withdrawn from, the subaccount by the dollar value of
one subaccount Accumulation Unit at the end of the
Business Day as of which the transaction is processed
at the Service Center.
Purchase Payments, withdrawals and transfers to or
from a subaccount will result in the increase or
decrease in the number of subaccount Accumulation
Units.
ACCUMULATION UNIT VALUE The subaccount Accumulation Unit Value was
initially arbitrarily set. Subsequent subaccount
Accumulation Unit Values are determined by
multiplying the subaccount Accumulation Unit Value
for the immediately preceding Business Day by the
subaccount's Net Investment Factor for the current
Business Day.
The subaccount Accumulation Unit Value may increase
or decrease from Business Day to Business Day.
L40529-NY01 7
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VARIABLE ACCOUNT (CONTINUED)
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NET INVESTMENT FACTOR The Net Investment Factor for a
subaccount is determined by dividing (a) by (b) and
multiplying the result by [(1 - (c))] where:
(a) is equal to:
(1) the Net Asset Value of a subaccount
at the end of the current Business
Day;
(2) plus any dividend or capital gains
declared on behalf of the
subaccount that has an ex-dividend
date after the immediately
preceding Business Day and before
the close of business on the
current Business Day.
(b) is equal to the Net Asset Value of the
subaccount at the end of the immediately
preceding Business Day.
(c) is equal to :
(1) the Mortality and Expense Risk
Charge as shown on the Contract
Schedule for the current Business
Day and any additional calendar
days since the immediately
preceding Business Day;
(2) plus a charge for any tax liability
related to this contracts or the
Variable Account.
MORTALITY AND EXPENSE Each Business Day we deduct a Mortality and Expense
RISK CHARGE Risk Charge from the assets in each subaccount that
is equal, on an annual basis, to the amount shown on
the Contract Schedule. The Mortality and Expense Risk
Charge compensates the Company for assuming the
mortality and expense risks under this contract.
MORTALITY AND EXPENSE We guarantee that the dollar amount of Annuity
GUARANTEE Payments after the first will not be affected by
variations in mortality or expense experience.
CONTRACT MAINTENANCE We may deduct an annual Contract Maintenance Charge
CHARGE during the Accumulation Phase, prior to the Annuity
Phases Income Date. This charge is shown on the
Contract Schedule.
CONTRACT VALUE We determine the Contract Value in the Variable
Account by multiplying the number of Accumulation
Units in each subaccount by the subaccount
Accumulation Unit Value and then adding these results
together. Purchase Payments, withdrawals and
transfers from or to an Investment Option will result
in the addition of or the cancellation of
Accumulation Units in an Investment Option.
TRANSFERS You may transfer all or a part of your interest in an
Investment Option to another Investment Option by
making an Authorized Request. Transfer instructions
apply equally to the Accumulation Portion and any
Annuity Portions of this contract. You cannot make
transfers within only one portion of this contract.
We reserve the right to charge for transfers if the
number of free transfers exceeds the number shown on
the Contract Schedule. All transfers are subject to
the following criteria. Pre-scheduled transfer
programs may be available.
(a) Any Transfer Fee that we may impose is shown on
the Contract Schedule. We will deduct the
Transfer Fee proportionately from the balance in
the Investment Options from which you make the
transfer if you transfer less than the entire
amount in the Investment Options. If you
transfer the entire amount in the Investment
Options, then we will deduct the Transfer Fee
from the amount transferred. If you are
transferring from multiple Investment Options,
we will consider the transfer as a single
transfer and will deduct any Transfer Fee
proportionately from the Investment Option.
(b) We reserve the right to limit transfers until
the expiration of the Right to Examine period.
(c) Any transfer request must clearly specify:
(1) the amount you wish to transfer;
and
(2) the investment choices that are to
be affected.
(d) During the Income Phase, you cannot make
transfers from a fixed Annuity Payment stream to
a variable Annuity Payment stream.
(e) During the Income Phase, you can make transfers
from a variable Annuity Payment stream to
establish a new fixed Annuity Payment stream.
The number of Annuity Units canceled from a
subaccount will be equal in value to the amount
of Annuity Reserve transferred out of the
subaccount. The Annuity Reserve transferred out
of the Variable Account is defined as the
present value of the current variable payment
discounted with mortality at the Assumed
Investment Return. The amount transferred will
purchase fixed Annuity Payments at current
payout rates under the Annuity Option in effect
based on the Annuitant's Sex and Age at the time
of the transfer.
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VARIABLE ACCOUNT (CONTINUED)
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TRANSFERS (CONTINUED) Restrictions may be applied to prevent
any use of the transfer right which we consider to be
part of a market-timing program. A market-timing
program is one where transfers are made to or from
Investment Options in anticipation of expected future
changes in the performance of the Investment Options.
Market-timing may be characterized by frequent or
large trades or a grouping of trades for multiple
contract Owners. We reserve the right to impose the
following modifications and restrictions on transfers
between the Investment Options to prevent
market-timing activities.
(a) Requiring a minimum time period between each
transfer.
(b) Limiting the frequency of transfers.
(c) Not accepting a transfer request from, or
made on your behalf by a third party or a
registered representative.
(d) Limiting the dollar amounts that an Owner
may transfer between the Investment Options
at any one time.
(e) Not accepting transfer instructions other
than by first class U.S. mail.
(f) Prohibiting transfers into specific
Investment Options.
(g) Rejecting a transfer request or an
additional Purchase Payment.
If you elect to use this transfer privilege, we will
not be liable for transfers made in accordance with
your instructions. We will determine the number and
value of the subaccount Accumulation Units to be
transferred as of the end of the Business Day
immediately following our receipt of the Authorized
Request for transfer.
SUSPENSION OR DEFERRAL
OF PAYMENTS
We reserve the right to suspend or postpone
payments from the Variable Account for a
withdrawal or transfer for any of the following.
(a) The New York Stock Exchange is closed, other
than customary weekend and holiday closings.
(b) Trading on the New York Stock Exchange is
restricted.
(c) An emergency exists as a result of which
disposal of the Investment Option shares
held in the Variable Account as determined
by the Securities and Exchange Commission
(SEC) is not reasonably practicable or it is
not reasonably practicable to determine the
value of the Variable Account's net assets.
(d) During any other period when the SEC, by
order, so permits for the protection of
Owners.
Any suspension or postponement of payments will be in
accordance with the deferment provisions of the
federal Investment Company Act of 1940, as amended.
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WITHDRAWALS
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FULL AND PARTIAL During the Accumulation Phase, you may make, upon an
WITHDRAWALS Authorized Request, a full or partial withdrawal from
this contract. Withdrawals will result in the
cancellation of Accumulation Units from each
subaccount of your selected Investment Options in the
ratio that the value of each subaccount bears to the
total Contract Value in the Investment Options.
We will pay the amount of any withdrawal from the
Variable Account within seven days of receipt of an
Authorized Request unless the Suspension or Deferral
of Payments provision of this contract is in effect.
WITHDRAWAL CHARGE Upon a full or partial withdrawal of this contract we
may assess a Withdrawal Charge as shown on the
Contract Schedule. Under certain circumstances, we
allow withdrawals without the Withdrawal Charge as
set forth on the Contract Schedule or any attached
endorsements or riders. We will not assess the
withdrawal charge on any payments paid out as Annuity
Payments or as death benefits.
PARTIAL WITHDRAWAL The minimum amount that you can take as a partial
withdrawal and the minimum Contract Value that must
remain in this contract after a partial withdrawal is
shown on the Contract Schedule. Any request for a
partial withdrawal that would reduce the Contract
Value below this minimum will be treated as a request
for a full withdrawal.
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ANNUITY PROVISIONS
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ANNUITIZATION Annuity Payments will depend on the following criteria.
(a) The amount of Adjusted Contract Value
applied to the Annuity Payments on the
Income Date.
(b) The Age of the Annuitant and any Joint
Annuitant on the Income Date.
(c) The Sex of the Annuitant and any Joint
Annuitant, where permitted.
(d) The Annuity Option selected.
You can elect to receive Annuity Payments as
variable, or fixed, or a combination of both variable
and fixed Annuity Payments.
Variable Annuity Payments will also depend on the
following.
(a) The investment allocations that are in place
on the Income Date.
(b) The Assumed Investment Rate (AIR).
(c) The mortality table shown on the Contract
Schedule.
(d) The future performance of your selected
Investment Options.
Fixed Annuity Payments are guaranteed to be at least
equal to the Adjusted Contract Value, divided first
by $1,000 and then multiplied by the appropriate
fixed Annuity Payment amount for each $1,000 of value
for the fixed Annuity Option selected, as shown in
Table A on the Contract Schedule. The guaranteed
rates, as set forth in Table A, are based on an
interest rate of 1% guaranteed per year and the
1983(a) Individual Annuity Mortality Table with
mortality improvement projected 30 years using
Mortality Projection Scale G.
The Annuity Payments will be at least as favorable as
those that would be provided by the application of
the Adjusted Contract Value to purchase any single
premium immediate annuity contract offered by us at
the time for the same class of Annuitants.
FULL ANNUITIZATON You may apply all of the Adjusted Contract Value to
Annuity Payments according to the Annuity Provisions
in this contract and/or any attached endorsement or
rider.
PARTIAL ANNUITIZATION The Annuitant must be the Owner for each Partial
Annuitization. We do not allow Partial Annuitizations
for contracts that have Joint Owners. We do not allow
you to appoint a Joint Annuitant for Partial
Annuitizations.
You may take a Partial Annuitization by applying only
part of the Adjusted Contract Value to Annuity
Payments according to the Annuity Provisions in this
contract and/or any attached endorsements or riders.
A Partial Annuitization will decrease the amounts
available for withdrawals, payments of the death
benefit, and any additional Annuity Payments. Amounts
applied to a Partial Annuitization and Annuity
Payments made under a Partial Annuitization are not
subject to a Withdrawal Charge.
You can take one Partial Annuitization every 12
months. The maximum number of annuitizations we allow
at any one time is five. You cannot allocate
additional Adjusted Contract Value to an existing
stream of Annuity Payments. You also cannot transfer
amounts allocated to an Annuity Portion back to the
Accumulation Portion.
ANNUITY UNITS On the Income Date, if you select variable
Annuity Payments, we purchase Annuity Units of each
subaccount for your selected Investment Options.
Thereafter, the number of Annuity Units in each
subaccount generally remains unchanged unless you
make a transfer.
We determine how many Annuity Units of each
subaccount to purchase as follows. We first determine
the amount of the initial variable Annuity Payment.
The initial variable Annuity Payment is equal to (a)
divided by $1,000, with the result then multiplied by
(b), where:
(a) is the amount of Adjusted Contract Value
applied to variable Annuity Payments; and
(b) is the appropriate variable Annuity Payment
amount for each $1,000 of value for the
Annuity Option selected, as shown in Table B
on the Contract Schedule.
We then determine the amount of the initial variable
Annuity Payment that will come from each of the
subaccounts based on your most recent allocation
instructions. We determine the number of Annuity
Units to purchase for each subaccount by dividing the
amount of the initial variable Annuity Payment that
will come from each subaccount by the subaccount's
Annuity Unit Value on the Income Date.
L40529-NY01 10
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ANNUITY PROVISIONS (CONTINUED)
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ANNUITY UNITS On each Business Day after the Income Date, we
(CONTINUED) determine the value of a subaccount Annuity Unit as
follows.
We multiply the value of the Annuity Unit for the
immediately preceding Business Day by the Net
Investment Factor for the current Business Day and
then divide by the assumed Net Investment Factor for
the current Business Day.
The assumed Net Investment Factor is equal to one
plus the AIR, adjusted to reflect the number of
calendar days that have elapsed since the immediately
preceding Business Day.
The AIR that we will use for variable Annuity
Payments is 4.5%. We may agree with you to use a
different value, however the AIR may not exceed 4.5%.
All calculations will appropriately reflect the
variable Annuity Payment frequency selected.
On each subsequent variable Annuity Payment date, the
total variable Annuity Payment is the sum of the
variable Annuity Payments for each Investment Option.
The variable Annuity Payment for each Investment
Option is determined by multiplying the number of
subaccount Annuity Units for the Investment Option by
the subaccount Annuity Unit Value.
ANNUITY OPTION This contract provides for variable or fixed Annuity
SELECTION Payments under one of the following Annuity Options.
The Company may make available other payment options.
You can select an Annuity Option by an Authorized
Request. You may select and/or change the Annuity
Option by an Authorized Request, at least 30 days
before any Income Date.
DEFAULT ANNUITY OPTION If you do not select an Annuity Option by the Income
Date shown on the Contract Schedule, we will make
variable Annuity Payments to the Payee under Annuity
Option 2, a life annuity, with monthly payments over
five years guaranteed.
OPTION 1 - LIFE We will make Annuity Payments during the life of the
ANNUITY Annuitant. The last payment will be the one that is
due before the Annuitant's death.
OPTION 2 - LIFE We will make Annuity Payments during the life of the
ANNUITY WITH PAYMENTS Annuitant. If you take one single Full Annuitization
OVER 5, 10, 15 OR 20 and the Annuitant dies before the end of the selected
YEARS GUARANTEED guaranteed period we will continue to make Annuity
Payments to the Payee for the rest of the
guaranteed period. Alternatively, the Owner may elect
to have us make a lump sum payment.
Under a Partial Annuitization, if the Annuitant dies
before the end of the selected guaranteed period, we
will make a lump sum payment to the Beneficiary.
A lump sum payment under this Annuity Option is equal
to the present value of the remaining guaranteed
Annuity Payments, as of the date we receive proof of
the Annuitant's death and a payment election form at
our Service Center.
For variable Annuity Payments, we base the remaining
guaranteed Annuity Payments on the current value of
the Annuity Units and we use the AIR to calculate the
present value.
For fixed Annuity Payments, the lump sum alternative
is not available.
We require due proof of the Annuitant's death and
return of this contract before we will make any lump
sum payment.
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ANNUITY PROVISIONS (CONTINUED)
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OPTION 3- JOINT AND LAST We will make Annuity Payments during the
SURVIVOR ANNUITY joint lifetimes of the Annuitant and the
Joint Annuitant.
Upon the death of one Annuitant, Annuity
Payments to the Payee will continue during
the lifetime of the surviving Joint
Annuitant at a level of 100%, 75% or 50% of
the previous amount, as selected by the
Owner. The last payment will be the one that
is due before the last surviving Joint
Annuitant's death.
This Annuity Option is not available for
Partial Annuitization.
OPTION 4 - JOINT AND LAST We will make Annuity Payments during the
SURVIVOR ANNUITY WITH joint lifetimes of the Annuitant and the
PAYMENTS OVER 5, 10, 15 OR Joint Annuitant. Upon the death of one
20 YEARS GUARANTEED Annuitant, Annuity Payments to the Payee
will continue during the lifetime of the
surviving Joint Annuitant at 100% of the
amount that was paid when both Annuitants
were alive. However, if both Joint
Annuitants die before the end of the
selected guaranteed period, we will continue
to make Annuity Payments to the Payee for
the rest of the guaranteed period.
Alternatively, the Owner may elect to have us
make a lump sum payment. This Annuity Option's
lump sum payment is equal to the present value
of the remaining guaranteed Annuity Payments as
of the date we receive due proof of the last
surviving Joint Annuitant's death at the
Service Center.
For variable Annuity Payments, we base the
remaining guaranteed Annuity Payments on the
current value of the Annuity Units and we use
the AIR to calculate the present value.
For fixed Annuity Payments, the lump sum
alternative is not available.
We require due proof of death of both Joint
Annuitants and return of this contract before
we will make any lump sum payment.
This Annuity Option is not available for
Partial Annuitization.
OPTION 5 - REFUND LIFE We will make Annuity Payments during the
ANNUITY lifetime of the Annuitant; and the last
payment will be the one due before the
Annuitant's death. After the Annuitant's
death, the Payee may receive a lump sum
refund.
For a fixed Annuity Payment, the amount of the
refund will equal the amount applied to this
Annuity Option minus the total of all Annuity
Payments made under this option.
For variable Annuity Payments, the amount of
the refund will depend on the current
Investment Option allocation and will be the
sum of refund amounts attributable to each
Investment Option. We calculate the refund
amount for a given Investment Option using the
following formula: (a) x {[(b) x (c) x (d)/(e)]
- [(d) x (f)]}, where:
(a) is the Annuity Unit Value of the
subaccount for that Investment
Option as of the Business Day when
due proof of the Annuitant's death
is received at the Service Center;
(b) is the amount applied to variable
Annuity Payments on the Income
Date;
(c) is the allocation percentage in
that subaccount, in decimal form,
as of the Business Day when due
proof of the Annuitant's death is
received at the Service Center;
(d) is the number of Annuity Units used
in determining each variable
Annuity Payment attributable to
that subaccount as of the Business
Day when due proof of the
Annuitant's death is received at
the Service Center;
(e) is the dollar value of first
variable Annuity Payment; and
(f) is the number of variable Annuity
Payments made since the Income Date.
We will base this calculation upon the
allocation of Annuity Units in-force as of the
Business Day when due proof of the Annuitant's
death is received at the Service Center. If the
total refund determined using the above
calculation is less than or equal to zero, no
refund payment is due.
L40529-NY01 12
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DEATH BENEFIT
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PAYMENT OF DEATH BENEFIT
DURING THE ACCUMULATION
PHASE
The Company will require due proof of death,
selection of a death benefit payment option,
and any required governmental forms before
we pay any death benefit. Due proof of death
will be any one of the following.
(a) A certified copy of the death
certificate.
(b) A decree of a court of competent
jurisdiction as to the finding of
death.
(c) Any other proof satisfactory to the
Company.
All death benefits will be paid in
accordance with applicable law or
regulations governing death benefit
payments. If there is a delay in the payment
of death benefits, we will pay interest on
death benefits from date of death, in
accordance with New York Insurance Law
Section 3214.
DEATH OF SOLE OWNER DURING Upon the death of a sole Owner during the
THE ACCUMULATION PHASE Accumulation Phase, we will pay a death
benefit to the Beneficiary.
If the Beneficiary is the spouse of the
decedent, he or she may elect instead to
continue this contract as described below in
the Continuation of Contract by Surviving
Spouse provision.
DEATH OF JOINT OWNER(S) The surviving Joint Owner is the sole
DURING THE ACCUMULATION primary Beneficiary on a jointly owned
PHASE contract. Upon the death of any Joint Owner
during the Accumulation Phase, the surviving
Joint Owner will receive the death benefit.
If the surviving Joint Owner is the spouse
of the decedent, he or she may elect instead
to continue this contract as described below
in the Continuation of Contract by Surviving
Spouse provision.
If the Joint Owners were spouses and the
surviving Joint Owner dies before receiving
the death benefit, we will pay the death
benefit to any contingent Beneficiaries. If
the spousal Joint Owners did not name any
contingent Beneficiaries we will pay the
death benefit to the estate of the Joint
Owner who died last.
If the Joint Owners were not spouses and the
surviving Joint Owner dies before receiving
the death benefit, we will pay it to the
estate of the Joint Owner who died last.
CONTINUATION OF CONTRACT During the Accumulation Phase, a surviving
BY SURVIVING SPOUSE spouse who is either a surviving Joint Owner
or the Beneficiary of a sole Owner may elect
to continue this contract as a sole Owner,
instead of receiving payment of the death
benefit. The surviving spouse can continue
this contract and exercise all Contract
Owner's rights under this contract by making
an Authorized Request to the Service Center
before we pay the death benefit. In this
event, the Contract Value for the Valuation
Period during which this election is
implemented will be adjusted to equal the
death benefit. We will make that change as
of the end of the Business Day during which
we receive at the Service Center both due
proof of death and the election of the death
benefit payment option. Any part of the
Contract Value in the Investment Options
will be subject to investment risk.
If the surviving spouse continues this
contract, he or she may exercise all the
Owner's rights under this contract,
including naming a new Beneficiary or
Beneficiaries.
An election to continue this contract by a
surviving spouse who is either a surviving
Joint Owner or the Beneficiary of a sole
Owner is not treated as a distribution for
tax purposes.
DEATH OF ANNUITANT DURING No death benefit is payable upon the death
THE ACCUMULATION PHASE of an Annuitant who was not an Owner. The
Owner can name a new Annuitant. If the Owner
is a non-individual we will treat the death
of the Annuitant as the death of the Owner,
we will pay a death benefit to the
Beneficiary, and another Annuitant cannot be
named.
L40529-NY01 13
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DEATH BENEFIT (CONTINUED)
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TRADITIONAL DEATH BENEFIT The death benefit is equal to the greater of
AMOUNT DURING THE (a) or (b) less any deduction we make to
ACCUMULATION PHASE reimburse ourselves for any applicable
Premium Tax, where:
(a) is the Contract Value determined as
of the end of the Business Day
during which we receive in good
order at the Service Center both
due proof of death and an election
of the death benefit payment
option.
(b) is the Traditional Death Benefit
value, which is equal to the total
of all Purchase Payments received
reduced proportionately by:
(1) the percentage of Contract Value
taken as a withdrawal, including
any withdrawal charge, for each
withdrawal taken. If your contract
includes the Lifetime Plus Benefit
Rider then withdrawals include
Lifetime Plus Payments and any
Excess Withdrawals; and.
(2) the percentage of Contract Value
applied to Annuity Payments under a
Partial Annuitization, for each
Partial Annuitization taken.
Any part of the death benefit amount that had
been invested in the Variable Account remains in
the Variable Account until distribution begins.
From the time we determine the death benefit
until we make complete distribution, any amount
in the Variable Account will be subject to
investment risk, which is borne by the
Beneficiary.
DEATH BENEFIT PAYMENT If the Owner has not previously designated a
OPTIONS DURING THE death benefit payment option, a Beneficiary must
ACCUMULATION PHASE request that the death benefit be paid by one of
the payment options below.
Option A - A lump sum payment of the death
benefit.
Option B - Deferral of payment of the death
benefit for up to five years from the date of the
death of any Owner or any Joint Owner.
Option C - Payment of the death benefit as
an Annuity Payment under an Annuity Option
over the lifetime of the Beneficiary, or
over a period not extending beyond the life
expectancy of the Beneficiary. Distribution
must begin within one year of the date of
death of the Owner or any Joint Owner.
Any portion of the death benefit not applied to
Annuity Payments under an Annuity Option within
one year of the date of the Owner's death must be
distributed within five years of the date of
death.
If a lump sum payment is requested, we will pay
the amount from the Variable Account within seven
days of receipt of due proof of death and an
election of the death benefit payment option,
including any required governmental forms, unless
the Suspension or Deferral of Payments provision
in this contract is in effect.
DEATH OF OWNER Upon the death of a sole Owner, the Beneficiary
AND/OR ANNUITANT DURING becomes the Owner. Upon the death of any Joint
THE ANNUITY PHASE Owner, the surviving Joint Owner becomes the sole
Owner. We will not pay a death benefit in either
case, but any remaining Annuity Payments to the
Payee will continue as provided in the Annuity
Option(s) in effect.
If the decedent was an Annuitant and there is a
surviving Joint Annuitant, any remaining Annuity
Payments to the Payee will continue during the
lifetime of the Joint Annuitant, as provided by
the selected Annuity Option(s). We will not pay a
death benefit.
If the decedent was the only Annuitant, any
remaining Annuity Payments will continue as
provided for in the selected Annuity Option(s). We
will not pay a death benefit under Annuity Options
1 through 4. However, there may be a lump sum
refund due to the Payee under Annuity Option 5.
After all remaining Annuity Payments or lump sum
refunds have been paid, all Annuity Portions of
this contract will terminate.
CONDITIONS FOR This benefit will terminate on the earliest of the
TERMINATION OF THE following.
TRADITIONAL DEATH (a) The Business Day before the Income Date
BENEFIT that you take a Full Annuitization.
(b) The Business Day that the Traditional
Death Benefit value and the Contract
Value are both zero.
(c) The Business Day that the Accumulation
Portion terminates.
(d) The Business Day that this contract
terminates.
L40529-NY01 14
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GENERAL PROVISIONS
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ENTIRE CONTRACT We have issued this contract in consideration of
the initial Purchase Payment. This contract, any
attached application, endorsements, or riders,
together are the entire contract.
INCONTESTABILITY OF THIS We will not contest this contract.
CONTRACT
MISSTATEMENT OF AGE OR SEX We may require proof of Age of the Annuitant
before making any life contingent Annuity Payment
provided for in this contract. If there has been a
misstatement of the Annuitant's Age and/or Sex, we
will adjust the Annuity Payments to the amount
that would have been provided at the correct Age
and Sex.
Once Annuity Payments have begun, any
underpayments will be made up in one sum with the
next Annuity Payment, and overpayments will be
deducted from the future Annuity Payments until
the total is repaid. The annual interest rate to
be used in the calculation of the adjustments for
underpayments and overpayments is 5%.
ANNUAL REPORT We will send you a report at least once
each calendar year showing the number of
Accumulation Units credited to this contract, the
dollar value of each Accumulation Unit, the
Contract Value, the death benefit, the available
cash withdrawal and any applicable withdrawal
charges, transfer fees, and the contract
maintenance charge. This report will be sent to
your last known address.
NO DIVIDENDS ARE PAYABLE This is a nonparticipating contract. This contract
does not participate in our profits or surplus.
MODIFICATION OF CONTRACT We may modify this contract in order
to maintain compliance with state and federal
law. This contract may be changed or altered only
by our President or our Secretary. A change or
alteration must be made in writing.
INCOME DATE The Income Date must fall on the first day of the
calendar month. The earliest Income Date that you
can select is 13 months after the Issue Date. The
latest Income Date we allow is the first day of
the first calendar month following the Annuitant's
90th birthday. The Income Date will not be later
than what is permitted by applicable state or
federal law. You have the right to select the
Income Date at contract issue. Unless you select a
different Income Date, the Income Date shown on
the Contract Schedule is the latest Income Date
allowed for your contract. In order for Annuity
Payments to begin, you must make an Authorized
Request.
You can make an Authorized Request for a different
Income Date after the Issue Date.
L40529-NY01 15
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GENERAL PROVISIONS (CONTINUED)
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TAXES Taxes paid to any governmental entity will result
in an amount equivalent to the tax being charged
against the Contract Value. We will, in our sole
discretion, determine whether taxes have resulted
from the investment experience of the Variable
Account, our receipt of the Purchase Payment(s),
or commencement of Annuity Payments. We may, at
our discretion, pay taxes when due and deduct
that amount from the Contract Value at a later
date. This will not waive any right we may have
to deduct previously paid amounts at a later
date.
We reserve the right to establish a provision for
federal income taxes if we determine, in our sole
discretion, that we will incur such tax as a
result of the operation of the Variable Account.
We will deduct for any income taxes incurred as a
result of the operation of the Variable Account
whether or not there was a provision for taxes
and whether or not it was sufficient.
We will deduct any withholding taxes from any
payment we make, as required by applicable law.
PROTECTION OF PROCEEDS No Beneficiary may commute, encumber,
alienate or assign any payment under this
contract before it is due. To the extent
permitted by law, no payment will be subject to
the debts, contracts or engagements of any
Beneficiary or to any judicial process to levy
upon or attach the same for payment thereof.
EVIDENCE OF SURVIVAL Where any benefits under this
contract are contingent upon a person being alive
on a given date, we may require proof
satisfactory to us that the condition has been
met.
MINIMUM VALUES The Minimum Values for any paid-up
annuity, withdrawal value or death benefit
available under this contract are not less than
those required by the state where this contract
is delivered.
CONDITIONS FOR TERMINATION This contract will terminate when:
OF THIS CONTRACT (a) the Accumulation Portion terminates; and
(b) all Annuity Portions terminate; and
(c) all applicable death benefit payments have
been made.
L40529-NY01 16
ALLIANZ LIFE INSURANCE COMPANY
OF NEW YORK
[One Chase Manhattan Plaza, 37th Floor]
[New York, New York 10005-1423]
INDIVIDUAL FLEXIBLE PURCHASE PAYMENT VARIABLE DEFERRED ANNUITY
NON-PARTICIPATING
L40529-NY01