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LUTHERAN BROTHERHOOD
A Fraternal Benefit Society FLEXIBLE PREMIUM
Minneapolis, Minnesota 55415 VARIABLE LIFE INSURANCE
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This is a legal contract between you and Lutheran Brotherhood. We accept
the Insured as a member. We issue this contract based on the Application
signed by the applicant and the payment of the initial premium. Upon
receiving proof of the Insured's death, we will pay the Death Proceeds (see
Section 2.3) to the beneficiary according to the provisions of this
contract.
The amount or duration of the Death Benefit may vary with the Accumulated
Value. As long as this contract remains in force and there is no Debt or
unpaid Monthly Deductions, the Death Proceeds will always be at least equal
to the Face Amount. If you meet the Death Benefit Guarantee Requirement
(see Section 4.6), this contract will remain in force at least until the
Death Benefit Guarantee Termination Date shown on page 3.
The Accumulated Value may increase or decrease daily based on the investment
experience of the Variable Account.
Right to Cancel. Please read this contract carefully. You may cancel the
contract before midnight of the latest of: (1) The 10th day after you first
receive it; (2) The 45th day after you complete Part I of the Application;
and (3) The 10th day after a notice of withdrawal right is mailed or
delivered to you. Do this by (1) sending or delivering written notice to
Lutheran Brotherhood, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or to
the representative through whom you bought it, and (2) returning the
contract. Notice given by mail and return of the contract by mail are
effective on being postmarked, properly addressed and postage prepaid. If
you cancel the contract, it will be deemed void from the beginning. Within
7 days after we receive notice of cancellation and the returned contract, we
will refund all premiums you have paid.
Life insurance payable at death.
Adjustable death benefit.
Flexible premiums.
Return on investments reflected in contract benefits.
Annual dividends payable if earned.
Settlement options to provide retirement income.
Signed for the Society at Minneapolis, Minnesota
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President SAMPLE /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Secretary SAMPLE /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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INSURED: ▇▇▇▇ ▇▇▇ AGE: 35 SEX: MALE
CONTRACT NUMBER: LV1234567 DATE OF ISSUE: MAY 1, 1997
INITIAL FACE AMOUNT: $ 50,000
W3-VC-VUL-1 (97)
Contract Number: LV1234567
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Table of Contents
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Cover Page
Index
Contract Schedule, Contract Data
Section 1 Definitions
Section 2 General Provisions
Section 3 Membership and Ownership
Section 4 Premiums and Reinstatement
Section 5 Insurance Coverage
Section 6 Accumulated Value and Surrender Provisions
Section 7 Monthly Deduction
Section 8 Loans
Section 9 Variable Account and Unit Value
Section 10 Exchange of Contract
Section 11 Beneficiary
Section 12 Dividends
Additional Benefits, Amendments, Application
Section 13 Dividends
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Index
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Section
Accumulated Value.............................................. 6
Allocation of Net Premiums..................................... 9
Annual Report.................................................. 2
Assignment..................................................... 3
Beneficiary.................................................... 3
Cash Surrender Value........................................... 6
Change of Death Benefit Option................................. 5
Change of Investment Policy.................................... 9
Continuation of Insurance...................................... 4
Cost of Insurance.............................................. 7
Death Benefit.................................................. 5
Death Benefit Guarantee........................................ 4
Death Benefit Guarantee Premium................................ 4
Death Benefit Guarantee Requirement............................ 4
Death Proceeds................................................. 2
Decrease Charge................................................ 7
Decrease in Face Amount........................................ 5
Deferment...................................................... 2
Dividends......................................................13
Entire Contract................................................ 2
Exchange Privilege.............................................10
General Account................................................ 9
Grace Period................................................... 4
Incontestability............................................... 2
Increase in Face Amount........................................ 5
Loan Account................................................... 8
Loans.......................................................... 8
Maintenance of Solvency........................................ 2
Membership..................................................... 3
Misstatement of Age or Sex..................................... 2
Monthly Deduction.............................................. 7
Net Premium.................................................... 4
Ownership...................................................... 3
Premium in Default and Grace Period............................ 4
Premiums....................................................... 4
Reinstatement.................................................. 4
Settlement Options.............................................11
Suicide........................................................ 2
Surrender...................................................... 6
Cash Surrender Value........................................ 6
Partial Surrender........................................... 6
Full Surrender.............................................. 6
Transfers Among Subaccounts.................................... 9
Unit Value..................................................... 9
Variable Account............................................... 9
W3-VC-VUL-2 page 2
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LUTHERAN BROTHERHOOD
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
For information about this contract,
consult your Lutheran Brotherhood
Representative or write to
us at our home office.
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Contract Schedule PLANNED
ANNUAL
PREMIUM
BASIC BENEFIT
FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE $1,000.00
PREMIUMS PAYABLE TO THE CONTRACT ANNIVERSARY AFTER AGE 100
PREMIUM CLASS: NON-TOBACCO
ACCUMULATED VALUES DEPEND ON INVESTMENT PERFORMANCE OF THE VARIABLE ACCOUNT
AND, EXCEPT AS PROVIDED BY PAYMENT OF THE DEATH BENEFIT GUARANTEE PREMIUM
(SEE SECTION 4.6), COVERAGE WILL TERMINATE IF THE CASH SURRENDER VALUE IS
NOT SUFFICIENT TO COVER THE MONTHLY DEDUCTION. INVESTMENT PERFORMANCE OR
PAYMENT OF PLANNED ANNUAL PREMIUMS MAY NOT BE SUFFICIENT TO CONTINUE THIS
CONTRACT IN FORCE.
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DEATH BENEFIT OPTION B (SEE SECTION 5.1)
LOAN INTEREST RATE 7.40% PER YEAR PAYABLE IN ADVANCE
DEATH BENEFIT GUARANTEE SEE SECTION 4.6
PREMIUM $35.03 PER MONTH
TERMINATION DATE CONTRACT ANNIVERSARY AFTER AGE 71
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INSURED: ▇▇▇▇ ▇▇▇ AGE: 35 SEX: MALE
CONTRACT NUMBER: LV1234567 DATE OF ISSUE: MAY 1, 1997
INITIAL FACE AMOUNT: $ 50,000
W3-VC-VUL-3 page 3
Date of Issue: May 1, 1997 Contract Number: LV1234567
INSURED: ▇▇▇▇ ▇▇▇
AGE: 35 SEX: MALE FLEXIBLE PREMIUM
INITIAL FACE AMOUNT: $50,000 VARIABLE LIFE INSURANCE
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CONTRACT CHARGES
ADMINISTRATIVE CHARGES
BASIC MONTHLY CHARGE $10.OO PER MONTH
INITIAL MONTHLY CHARGE $0.04 PER $1,000 OF FACE AMOUNT, CHARGED
ONLY IN FIRST 180 MONTHLY DEDUCTIONS
PARTIAL SURRENDER CHARGE $25.00 PER PARTIAL SURRENDER OR 2% OF
SURRENDER AMOUNT REQUESTED, IF LESS
PERCENT OF PREMIUM CHARGE 5.0% OF EACH PREMIUM
CURRENT CHARGE MAXIMUM CHARGE
PREMIUM PROCESSING CHARGE $ 0.50 PER PAYMENT 1.00 PER PAYMENT
AUTOMATIC PAYMENT PLANS $ 1.00 PER PAYMENT $ 2.00 PER PAYMENT
ALL OTHER PAYMENTS
CURRENT PREMIUM PROCESSING CHARGES ARE SUBJECT TO CHANGE. HOWEVER, THESE
CHARGES WILL NEVER EXCEED THE MAXIMUM CHARGES SHOWN ABOVE. YOU WILL BE
NOTIFIED OF ANY CHANGE IN CURRENT CHARGES.
DECREASE CHARGE #
MAXIMUM
BEGINNING OF DEFERRED CONTINGENT
CONTRACT ADMINISTRATIVE DEFERRED
YEAR CHARGE SALES CHARGE
1 $ 238.00 $ 90.00
2 214.00 90.00
3 190.00 90.00
4 166.00 90.00
5 142.00 90.00
6 118.00 88.50
7 94.00 70.50
8 70.00 52.50
9 46.00 34.50
10 22.00 16.50
11 X.XX X.XX
12 X.XX X.XX
13 X.XX X.XX
14 X.XX X.XX
15 X.XX X.XX
THEREAFTER X.XX X.XX
# DECREASE CHARGE IF THE INITIAL FACE AMOUNT IS DECREASED.
DEFERRED ADMINISTRATIVE CHARGE REDUCES BY $2.00 ON EACH MONTHLY ANNIVERSARY
THAT THE CONTRACT IS IN FORCE. BEGINNING IN CONTRACT YEAR 6, THE MAXIMUM
CONTINGENT DEFERRED SALES CHARGE REDUCES ON EACH MONTHLY ANNIVERSARY THAT
THE CONTRACT IS IN FORCE. ADDITIONAL DECREASE CHARGES WILL APPLY TO
INCREASES IN FACE AMOUNT.
W3-VC-VUL-4 page 4
Date of issue: MAY 1, 1997 Contract Number: LV1234567
INSURED: ▇▇▇▇ ▇▇▇
AGE: 35 SEX: MALE FLEXIBLE PREMIUM
INITIAL FACE AMOUNT: $ 50,000 VARIABLE LIFE INSURANCE
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BEGINNING COST OF INITIAL MONTHLY
ON CONTRACT ATTAINED INSURANCE CHARGE FOR
ANNIVERSARY AGE RATE * INCREASES #
MAY 1,
1997 35 $ 0.14 $ 0.04
1998 36 0.15 0.04
1999 37 0.16 0.04
2000 38 0.17 0.04
2001 39 0.18 0.04
2002 40 0.19 0.05
2003 41 0.21 0.05
2004 42 0.22 0.05
2005 43 0.24 0.05
2006 44 0.26 0.05
2007 45 0.28 0.05
2008 46 0.31 0.05
2009 47 0.33 0.05
2010 48 0.36 0.05
2011 49 0.39 0.05
2012 50 0.42 0.06
2013 51 0.46 0.06
2014 52 0.51 0.06
2015 53 0.56 0.06
2016 54 0.62 0.06
2017 55 0.68 0.06
2018 56 0.75 0.06
2019 57 0.82 0.06
2020 58 0.91 0.06
2021 59 1.00 0.06
2022 60 1.10 0.07
2023 61 1.22 0.07
2024 62 1.35 0.07
2025 63 1.50 0.07
2026 64 1.67 0.07
* MAXIMUM MONTHLY COST PER $1,000 INSURANCE FOR NON-TOBACCO PREMIUM CLASS,
BASED ON COMMISSIONERS 1980 STANDARD ORDINARY MORTALITY TABLE. AGE AT ISSUE
IS AGE LAST BIRTHDAY.
# MONTHLY CHARGE PER $1,000 OF INCREASE IN FACE AMOUNT UNDER SECTION 5.3 OR
UNDER ANY GUARANTEED INCREASE OPTION BENEFIT RIDER, CHARGED ONLY IN THE
FIRST 180 MONTHLY DEDUCTIONS ON OR AFTER THE EFFECTIVE DATE OF THE INCREASE.
W3-VC-VUL-5 page 5
Date of issue: MAY 1, 1997 Contract Number: LV1234567
INSURED: ▇▇▇▇ ▇▇▇
AGE: 35 SEX: MALE FLEXIBLE PREMIUM
INITIAL FACE AMOUNT: $ 50,000 VARIABLE LIFE INSURANCE
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BEGINNING COST OF INITIAL MONTHLY
ON CONTRACT ATTAINED INSURANCE CHARGE FOR
ANNIVERSARY AGE RATE * INCREASES #
MAY 1,
2027 65 $ 1.85 $ 0.07
2028 66 2.05 0.07
2029 67 2.26 0.07
2030 68 2.49 0.07
2031 69 2.74 0.07
2032 70 3.03 0.07
2033 71 3.36 0.07
2034 72 3.74 0.07
2035 73 4.17 0.07
2036 74 4.64 0.07
2037 75 5.15 0.07
2038 76 5.68 0.07
2039 77 6.24 0.07
2040 78 6.82 0.07
2041 79 7.46 0.07
2042 80 8.15 0.07
2043 81 8.93 o.xx
2044 82 9.81 o.xx
2045 83 10.79 o.xx
2046 84 11.84 o.xx
2047 85 12.95 o.xx
2048 86 14.09
2049 87 15.26
2050 88 16.44
2051 89 17.65
2052 90 18.92
2053 91 20.26
2054 92 21.73
2055 93 23.47
2056 94 25.81
2057 95 29.32
2058 96 zz.zz
2059 97 zz.zz
2060 98 zz.zz
2061 99 zz.zz
* MAXIMUM MONTHLY COST PER $1,000 INSURANCE FOR NON-TOBACCO PREMIUM CLASS,
BASED ON COMMISSIONERS 1980 STANDARD ORDINARY MORTALITY TABLE. AGE AT ISSUE
IS AGE LAST BIRTHDAY.
# MONTHLY CHARGE PER $1,000 OF INCREASE IN FACE AMOUNT UNDER SECTION 5.3 OR
UNDER ANY GUARANTEED INCREASE OPTION BENEFIT RIDER, CHARGED ONLY IN THE
FIRST 180 MONTHLY DEDUCTIONS ON OR AFTER THE EFFECTIVE DATE OF THE INCREASE.
W3-VC-VUL-5 Cl page 5 Continued
Date of issue: MAY 1, 1997 Contract Number: LV1234567
INSURED: ▇▇▇▇ ▇▇▇
AGE: 35 SEX: MALE FLEXIBLE PREMIUM
INITIAL FACE AMOUNT: $ 50,000 VARIABLE LIFE INSURANCE
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VARIABLE ACCOUNT INFORMATION
Investment Company - LB Series Fund, Inc.
Variable Account - LB Variable Insurance Account I
Each subaccount of the LB Variable Insurance Account I invests in a specific
portfolio of LB Series Fund, Inc. Subaccounts of the Variable Account and
the portfolios in which they invest are as follows:
Growth Subaccount - Amounts credited to this subaccount are invested in
the Growth Portfolio. This portfolio invests
primarily in equity securities.
High Yield Subaccount - Amounts credited to this subaccount are invested
in the High Yield Portfolio. This portfolio
invests primarily in high yield securities.
Income Subaccount - Amounts credited to this subaccount are invested in
the Income Portfolio. This portfolio invests
primarily in fixed income securities.
Opportunity Growth Subaccount - Amounts credited to this subaccount are
invested in the Opportunity Growth
Portfolio. This portfolio invests
primarily in smaller capitalization
equity securities.
World Growth Subaccount - Amounts credited to this subaccount are
invested in the World Growth Portfolio. This
portfolio invests primarily in equity
securities of established, non-U.S. companies.
Money Market Subaccount - Amounts credited to this subaccount are
invested in the Money Market Portfolio. This
portfolio invests primarily in money market
instruments.
LB Series Fund, Inc. receives investment advice for each portfolio from
Lutheran Brotherhood. As investment advisor, Lutheran Brotherhood charges LB
Series Fund, Inc. a daily investment advisory fee equal to an annual
percentage of the aggregate average daily net assets of LB Series Fund, Inc.
portfolios. For the Growth, High Yield, Income, Opportunity Growth and
Money Market Portfolios, that percentage is 0.40%; for the World Growth
Portfolio that percentage is 0.85%.
For a complete description of the Variable Account and the designated
portfolios, please refer to the current prospectus for LB Series Fund, Inc.
W3-VC-VUL-6 page 6
Contract Number: LV1234567
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1. DEFINITIONS
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Application. The application(s) and all amendments and supplements to the
application.
Attained Age. Attained Age on any day is the age last birthday of the
Insured on the Contract Anniversary on or immediately prior to that day.
Contract Anniversary. The Date of Issue on page 3 and the same month and
day for years after issue as in the Date of Issue.
Contract Date. The latest of (1) The Date of Issue; (2) The date we receive
at our Home Office the first premium payment on this contract; and (3) Any
other date agreed upon by you and us.
Contract Month. The period from one Monthly Anniversary to the next Monthly
Anniversary.
Contract Year. The first Contract Year begins on the Date of Issue and
continues until the end of the period for which the 12th Monthly Deduction
is made. Thereafter, Contract Years are successive periods during which 12
Monthly Deductions are made, each year beginning at the end of the prior
Contract Year and continuing to the end of the period for which the 12th
Monthly Deduction is made.
Debt. All unpaid contract loans less any unearned interest.
Increase Year. An Increase Year begins on the effective date of each
increase in Face Amount according to Section 5.3 and continues until the end
of the period for which the 12th Monthly Deduction on or after the effective
date of the increase is made. Thereafter, Increase Years are successive
periods during which 12 Monthly Deductions are made, each year beginning at
the end of the prior Increase Year and continuing to the end of the period
for which the 12th Monthly Deduction is made.
Insured. The person named as Insured on page 3.
Monthly Anniversary. The same day for months after issue as in the Date of
Issue.
SEC. Securities and Exchange Commission.
Valuation Day. Any day that the New York Stock Exchange is open for trading
or there is sufficient trading in a Fund portfolio's securities to affect
the Unit Value of the corresponding subaccount of the Variable Account.
Valuation Period. The period of time from the end of one Valuation Day to
the end of the next Valuation Day.
We, Our, Us, Society. Lutheran Brotherhood.
Written Notice. A written request signed by you and received by us at our
Home Office in Minneapolis, Minnesota.
You, Your, Yours. The owner of this contract.
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2. GENERAL PROVISIONS
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2.1 ENTIRE CONTRACT. The entire contract consists of:
1) This contract including any attached riders or amendments;
2) The Application attached to this contract.
3) The Articles of Incorporation and Bylaws of the Society which are
in force on the Date of Issue.
2.2 CHANGE OF CONTRACT. No change in this contract is valid unless it is
made in writing and signed by our President and Secretary.
W3-VC-VUL-7 page 7
Contract Number: LV1234567
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2. GENERAL PROVISIONS (continued)
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2.3 DEATH PROCEEDS. If the Insured dies before Attained Age 100, the
amount payable will be the sum, on the date of death, of:
1) The Death Benefit (see Section 5.1); and
2) Any insurance on the Insured's life provided by Additional Benefits
in this contract;
Less the sum of:
3) Any Debt; and
4) The amount, if any, needed to cover Monthly Deductions through the
month of death.
If the Insured dies at or after Attained Age 100, the amount payable will be
the Cash Surrender Value on the date of death.
2.4 STATEMENTS IN THE APPLICATION. We will not use any statement to
contest a claim or to have this contract declared invalid unless the
statement is contained in the Application. All statements made in the
Application are representations, not warranties.
2.5 INCONTESTABILITY. We will not contest the validity of this
contract after it has been in force during the Insured's lifetime
for two years from the Date of Issue except for any provisions granting
benefits in the event of total disability.
If the Face Amount is increased according to Section S.3, this provision
will apply to the increase from its effective date with regard to statements
made in the application for the increase. This provision will apply from the
date this contract is reinstated with regard to statements made in the
application for reinstatement.
2.6 MISSTATEMENT OF AGE OR SEX. If the Insured's age or sex has been
misstated, any contract values will be adjusted to the amounts that would
have been provided based on the correct age and sex, using the ratio of the
most recent Cost of Insurance Rates applied on this contract to the current
rates based on the correct age and sex.
2.7 EXCLUSION: SUICIDE. If the Insured dies by suicide, while sane or
insane, within two years after the Date of Issue, the Death Proceeds of this
contract are limited to premiums paid less the sum of:
1) Any Debt; and
2) Any Partial Surrenders.
If the Insured dies by suicide, while sane or insane, within two years after
the effective date of an increase in Face Amount according to Section 5.3,
the Death Proceeds with respect to the increase are limited to the Cost of
Insurance for the increase (see Section 7.2) plus the Initial Monthly Charge
for Increases for the increase included in any Monthly Deduction(s) made.
2.8 EXEMPTIONS FROM CLAIMS OF CREDITORS. To the extent permitted by law,
the proceeds of this contract and any payments under it will not be subject
to the claims of creditors or to any legal proceedings.
2.9 MAINTENANCE OF SOLVENCY. This provision applies only to benefits
provided through the General Account. These benefits will not change. If
the solvency of the Society becomes impaired, you may be required to make an
extra payment. The Board of Directors will determine the amount of any
extra payment. It will be based on each member's fair share of the
deficiency. The amount will be charged as a loan again the contract with
interest compounded at the rate of 5% per year.
You may prefer to make the extra payment by an equivalent reduction in
benefits or by a payment in cash. You may do this within 60 days from the
date we notify you of your share of the deficiency.
W3-VC-VUL-8 page 8
Contract Number: LV1234567
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2. GENERAL PROVISIONS (continued)
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2.10 DEFERMENT. Death Proceeds will normally be paid within 7 days after we
receive at our Home Office due proof of the Insured's death and all other
requirements necessary for us to make payment. The Cash Surrender Value,
Partial Surrenders and contract loans will normally be paid within 7 days
after we receive Written Notice of surrender or loan. However, we may defer
payment of any loan or surrender and any portion of the Death Benefit in
excess of the Face Amount while:
1) The New York Stock Exchange is closed for trading; or
2) The SEC requires that trading be restricted or declares an
emergency.
2.11 RESERVATION OF RIGHTS. To the extent permitted or required by law
(including SEC rules under the Investment Company Act of 1940), we reserve
the right to eliminate or modify:
1) The withdrawal rights provided in the Right to Cancel provision
(page 1) and in Section 5.4; and
2) The exchange rights provided in Sections 10.1 and 10.2.
2.12 ANNUAL REPORT. We will mail you a statement of the value of this
contract within 30 days after each Contract Anniversary. The report will
show the Accumulated Value, Cash Surrender Value, Death Benefit, all
payments and deductions since the last report and any outstanding Debt.
Any further information required by law will also be given to you.
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3. MEMBERSHIP AND OWNERSHIP
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3.1 MEMBERSHIP. The Insured is an adult member of the Society upon
reaching age 16. Rights and privileges of membership are set forth in the
Bylaws of the Society or in the Application. These rights and privileges
are separate from the ownership of this contract.
3.2 OWNERSHIP. The Insured is the owner unless another owner is named in
the Application. Ownership may be changed through assignment. While the
Insured is living, the owner may exercise all rights set out in this
contract. The owner has no membership rights unless the owner is the
Insured.
3.3 ASSIGNMENT. You may assign this contract. We are not bound by the
assignment unless it is in writing and filed at our Home Office. We are not
responsible for the validity or effect of any assignment. Any Debt on this
contract will have prior claim over any assignment. The Insured will keep
all membership rights and privileges.
W3-VC-VUL-9 page 9
Contract Number: LV1234567
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4. PREMIUMS AND REINSTATEMENT
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4.1 PREMIUM PAYMENTS. The amount of the Planned Annual Premium is shown on
page 3. The initial premium is due and payable on the Date of Issue.
Premiums may be paid at any time and in any amount before Attained Age 100,
subject to Section 4.3 Cumulative Premium Limit. You may pay more or less
than the Planned Annual Premium. However, except as provided in Section 4.6,
to continue the contract in force on each Monthly Anniversary the Cash
Surrender Value must be sufficient to cover the Monthly Deduction.
Premiums are payable at our Home Office. Upon request we will give you a
receipt, signed by an officer of the Society, for the premium paid.
4.2 NET PREMIUM. The Net Premium is the portion of each premium which is
applied to the subaccounts of the Variable Account. The Net Premium is
equal to the premium paid less the sum of:
1) The Percent of Premium Charge equal to 5% of the premium paid; and
2) The Premium Processing Charge. We reserve the right to change the
amount of this charge. However, the Premium Processing Charge will
never exceed the maximum charge shown on page 4.
4.3 CUMULATIVE PREMIUM LIMIT. The Internal Revenue Code provides for
exclusion of the Death Benefit from gross income. To qualify for the
exclusion, total premium payments must not exceed the limit stated in the
Code. The portion of any premiums paid in excess of that limit will be
refunded to you.
4.4 PREMIUM BILLING. We will send premium ▇▇▇▇▇▇▇▇ based on the amount and
frequency of premium payments which you request. You may change the amount
and, subject to our published rules, the frequency or method of billing by
giving Written Notice. If we do not receive any premium payments for 24
consecutive months, we will stop ▇▇▇▇▇▇▇▇.
4.5 PREMIUM IN DEFAULT AND GRACE PERIOD. If the Death Benefit Guarantee is
not in effect under Section 4.6, a premium is in default on a Monthly
Anniversary if the Monthly Deduction to be made on that day would result in
a Cash Surrender Value less than zero. Notice of the premium required to
keep this contract in force will be mailed to you at the address last known
to us. You will have a grace period of 61 days after the date we mail the
notice in which to pay the premium required. This contract will remain in
force during the grace period. Any accumulated value in the subaccounts for
this contract will be transferred to the General Account until we receive
the required premium.
If the required premium is paid within the grace period, any accumulated
value for this contract in the General Account but not in the Loan Account
will be transferred back to the subaccounts on the date we receive the
premium and we will deduct any Monthly Deductions not made while a premium
was in default. Otherwise, this contract will terminate without value at the
end of the grace period.
4.6 DEATH BENEFIT GUARANTEE. The Death Benefit Guarantee protects against
premium default due to investment experience. If, on a Monthly Anniversary:
1) The Death Benefit Guarantee Requirement is met; and
2) The Death Benefit Guarantee has not terminated;
then no premium will be in default even if the Monthly Deduction to be made
on that day would result in a Cash Surrender Value less than zero. If the
Monthly Deduction to be made on that day is greater than the Cash Surrender
Value, the deduction made will not exceed the Accumulated Value less any
Debt and we will pay the balance of the Monthly Deduction.
W3-VC-VUL-10 page 10
Contract Number: LV1234567
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4. PREMIUMS AND REINSTATEMENT (continued)
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4.6a Death Benefit Guarantee Requirement. On any Monthly Anniversary, the
Death Benefit Guarantee Requirement is met if (1) is greater than or equal
to (2) where:
1) Is the sum of:
a) Premiums paid; less
b) Any Partial Surrenders; and less
c) Any unpaid contract loans; and
2) Is the sum of Death Benefit Guarantee Premiums from the Date of Issue
through that Monthly Anniversary. For purposes of the Death Benefit
Guarantee Requirement, the Death Benefit Guarantee Premium will be
zero for any Monthly Anniversary that a premium is credited to this
contract under a disability waiver benefit rider.
If the Death Benefit Guarantee Requirement is not met on a Monthly
Anniversary but the Cash Surrender Value less any unearned interest is
greater than or equal to the sum of Death Benefit Guarantee Premiums from
the Date of Issue through that Monthly Anniversary, then the sum of premiums
paid as used above will be deemed to increase to the amount necessary to
meet the Death Benefit Guarantee Requirement.
When determining if the Death Benefit Guarantee Requirement is met, a
portion of any Partial Surrender or contract loan may be excluded. The
amount excluded is calculated on the date of the Partial Surrender or
contract loan and is equal to the lesser of:
1) The amount of Partial Surrender or unpaid contract loan; and
2) The excess, if any, of the Cash Surrender Value less unearned
interest on any unpaid contract loans over the greater of (a) and (b)
where:
a) Is the sum of premiums paid less the amount of any Partial
Surrenders and unpaid contract loans not previously excluded when
determining if the Death Benefit Guarantee Requirement was met;
and
b) Is the sum of Death Benefit Guarantee Premiums from the Date of
Issue through the Monthly Anniversary on or next after the date
of Partial Surrender or contract loan.
4.6b Death Benefit Guarantee Premium. The Death Benefit Guarantee Premium
on the Date of Issue is shown on page 3. If the Death Benefit Guarantee has
not terminated, a new Death Benefit Guarantee Premium will be determined
whenever:
1) The Death Benefit Option is changed;
2) The Face Amount is increased or decreased (An increase in Face
Amount may also result in a new Death Benefit Guarantee
Termination Date.);
3) The Premium Class is changed; or
4) Additional Benefits are increased, decreased, or added to or deleted
from this contract.
The new Death Benefit Guarantee Premium and Termination Date will be shown
on the supplemental contract schedule that we will mail to you.
4.6c Termination of Death Benefit Guarantee. The Death Benefit Guarantee
will terminate on the earlier of:
1) Any Monthly Anniversary that the Death Benefit Guarantee Requirement
is not met; and
2) The Death Benefit Guarantee Termination Date shown on page 3.
In the event of termination under (1), we will mail to you at the address
last known to us a notice of the premium needed to meet the Death Benefit
Guarantee Requirement and reinstate the Death Benefit Guarantee. If this
amount is not received at our Home Office within 31 days after the date we
mail the notice, the Death Benefit Guarantee cannot be reinstated.
W3-VC-VUL-ll page 11
Contract Number: LV1234567
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4. PREMIUMS AND REINSTATEMENT (continued)
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4.7 CONTINUATION OF INSURANCE COVERAGE. If you stop premium payments, this
contract will remain in force until the earliest of:
1) The date of death of the Insured;
2) The end of the grace period if the premium required to keep this
contract in force has not been paid;
3) The date you surrender this contract; and
4) The date this contract terminates from excess loan under Section 8.5.
4.8 REINSTATEMENT. This contract may be reinstated within five years after
the end of the grace period unless it has been surrendered. To reinstate we
require:
1) Evidence of insurability which meets our standards;
2) Payment to cover the Monthly Deductions that were not made during the
grace period;
3) Payment of an amount to keep this contract in force for at least two
months, based on unit values on the date of reinstatement; and
4) Payment or reinstatement of all Debt existing at the end of the grace
period.
The effective date of a reinstatement is the date the application for
reinstatement is approved by us. The Accumulated Value on that date will be
the sum of:
1) The accumulated values for this contract which were transferred to
the General Account at the time of premium default (see Section 4.5);
2) Any accumulated value for this contract in the Loan Account; and
3) The accumulated values provided by the payment made to reinstate;
Less the sum of:
4) Monthly Deductions that were not made during the grace period; and
5) The Monthly Deduction made on the date of reinstatement.
The Decrease Charge on the date of reinstatement will be equal to the
Decrease Charge at the end of the grace period when this contract
terminated. Section 2.5 Incontestability will apply from the date the
contract is reinstated with regard to statements made in the application for
reinstatement. Death Benefit Guarantee cannot be reinstated under this
provision.
W3-VC-VUL-12 page 12
Contract Number: LV1234567
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5. INSURANCE COVERAGE
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5.1 DEATH BENEFIT. The Death Benefit payable as part of the Death Proceeds
is determined as follows:
1) Option A. The Death Benefit on any day is the greater of:
a) The sum of the Face Amount and the Accumulated Value; and
b) The Accumulated Value multiplied by the Factor for the Attained
Age on that day (see Table of Factors).
2) Option B. The Death Benefit on any day is the greater of:
a) The Face Amount; and
b) The Accumulated Value multiplied by the Factor for the Attained
Age on that day (see Table of Factors).
The Death Benefit Option at issue of this contract is shown on page 3.
TABLE OF FACTORS
Attained Attained
Age Factor Age Factor
40 or less 2.50 61 1.28
41 2.43 62 1.26
42 2.36 63 1.24
43 2.29 64 1.22
44 2.22 65 1.20
45 2.15 66 1.19
46 2.09 67 1.18
47 2.03 68 1.17
48 1.97 69 1.16
49 1.91 70 1.15
50 1.85 71 1.13
51 1.78 72 1.11
52 1.71 73 1.09
53 1.64 74 1.07
54 1.57 75 to 90 1.05
55 1.50 91 1.04
56 1.46 92 1.03
57 1.42 93 1.02
58 1.38 94 1.01
59 1.34 95 to 99 1.00
60 1.30
5.2 CHANGE OF DEATH BENEFIT OPTION. You may change the Death Benefit
Option at any time except when the Death Benefit is a multiple of the
Accumulated Value according to Section 5.1(1)(b) or 5.1(2)(b). The change is
subject to the following:
1) You must give Written Notice.
2) If you change from Option B to Option A, the Death Benefit will not
change and the Face Amount will be decreased by the Accumulated Value
on the effective date of the change. The decrease in Face Amount
will be applied in the order specified in Section 5.5(2). However,
this change may not be made if it would reduce the Face Amount to
less than $5,000.
3) If you change from Option A to Option B, the Face Amount will not
change and the Death Benefit will be decreased by the Accumulated
Value on the effective date of the change.
4) The change may not be made if it would cause total premium payments
already made to exceed the Cumulative Premium Limit of the Internal
Revenue Code.
5) A new Death Benefit Guarantee Premium will be determined if the Death
Benefit Guarantee is in effect on the effective date of the change.
6) The effective date of the change will be the Monthly Anniversary on
or next after the date we receive Written Notice. The new Death
Benefit Option will be shown on the supplemental contract schedule
that we will mail to you.
W3-VC-VUL-13 page 13
Contract Number: LV1234567
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5. INSURANCE COVERAGE (continued)
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5.3 INCREASE IN FACE AMOUNT. You may increase the Face Amount any time
before the Contract Anniversary on or next after the Insured's 85th
birthday. The increase is subject to the following:
1) You must make written application to us at our Home Office.
2) We will require evidence of insurability which meets our standards.
3) The increase must be at least $25,000.
4) The Cash Surrender Value must be sufficient to cover the Monthly
Deduction on the effective date of the increase (unless the Death
Benefit Guarantee is in force).
5) The Initial Monthly Charge for Increases (see Section 7.1(3)) will be
charged on the effective date of the increase and then on each
Monthly Anniversary until 180 charges have been made.
6) A new schedule of Decrease Charges will apply to the increase in Face
Amount.
7) A new Death Benefit Guarantee Premium will be determined if the Death
Benefit Guarantee is in effect on the effective date of the increase.
8) The effective date of the increase will be the date shown on the
supplemental contract schedule that we will mail to you.
Section 2.5 Incontestability will apply to the increase from its effective
date with regard to statements made in the application for the increase in
Face Amount. Section 2.7 Exclusion: Suicide will apply to the increase from
its effective date.
5.4 RIGHT TO CANCEL INCREASE IN FACE AMOUNT. You may cancel any increase in
Face Amount by notifying your representative or giving Written Notice before
the latest of:
1) 10 days after you receive the supplemental contract schedule showing
the increase;
2) 45 days after you complete the application for the increase in Face
Amount; and
3) 10 days after a notice of withdrawal right is mailed or delivered to
you.
If you cancel any increase in Face Amount under this provision, the portion
of any Monthly Deduction(s) made which is due to the increase will be
applied as a Net Premium or, if you request, be refunded to you.
W3-VC-VUL-14 page 14
Contract Number: LV1234567
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5. INSURANCE COVERAGE
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5.5 DECREASE IN FACE AMOUNT. You may decrease the Face Amount at any time
before the Insured's Attained Age 100. The decrease is subject to the
following:
1) You must give Written Notice.
2) The decrease and Decrease Charge (see Section 7.3) will be applied,
in successive order, against:
a) The most recent increase in Face Amount;
b) The next most recent
increase(s); then
c) The Initial Face Amount.
3) The decrease may not be made if the Accumulated Value less Debt on
the effective date of the decrease is less than the Decrease Charge
for the decrease.
4) The Face Amount after the decrease must not be less than the minimum
required. For issue ages zero to 17, that minimum is $25,000. For all
other issue ages, that minimum is $50,000 for decreases made before
the Insured's Attained Age 50 and $25,000 for decreases made on or
after Attained Age 50.
5) The decrease may not be made if it would cause total premium payments
already made to exceed the Cumulative Premium Limit of the Internal
Revenue Code.
6) A new Death Benefit Guarantee Premium will be determined if the Death
Benefit Guarantee is in effect on the effective date of the decrease.
7) The effective date of the decrease will be the Monthly Anniversary on
or next after the date we receive Written Notice. That date will be
shown on the supplemental contract schedule that we will mail to you.
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6. ACCUMULATED VALUE AND SURRENDER PROVISIONS
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6.1 ACCUMULATED VALUE. On the Contract Date, the Accumulated Value is equal
to the Net Premium(s) received plus any interest earned on premiums for this
contract held in the General Account less the Monthly Deduction(s) made on
that date. On any later date that this contract is not in the grace period,
the Accumulated Value of this contract is the sum of the accumulated values
for this contract in the subaccounts and the Loan Account (see Section 8.3).
The accumulated value in any subaccount on a Valuation Day is equal to:
1) The number of units for this contract in that subaccount (see Section
9.5); multiplied by
2) The unit value for that subaccount (see Section 9.6).
The accumulated value in the Loan Account on any date is the sum of:
1) Any Debt;
2) Any interest on loans on this contract payable in advance to the next
Contract Anniversary, provided that interest has not been applied to
pay any Monthly Deductions; and
3) Any interest accrued in the Loan Account on loans on this contract.
The accumulated value for any day that is not a Valuation Day will be
determined on the next Valuation Day. During the grace period, the
Accumulated Value of this contract is equal to the sum of any accumulated
value for this contract transferred to the General Account at the time of
premium default plus any accumulated value for this contract in the Loan
Account.
W3-VC-VUL-15 page 15
Contract Number: LV1234567
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6. ACCUMULATED VALUE AND SURRENDER PROVISIONS (continued)
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6.2 FULL SURRENDER. You may surrender this contract for its Cash Surrender
Value by giving Written Notice while the Insured is living. The surrender
will be effective on the later of:
1) The date we receive Written Notice; and
2) The date you specify.
If surrender is effective on a Monthly Anniversary, the Accumulated Value is
determined without regard to the Monthly Deduction on that date. Insurance
coverage ceases on the effective date of the surrender.
6.3 CASH SURRENDER VALUE. The Cash Surrender Value on any date is equal to
the Accumulated Value less the sum of:
1) Any Debt;
2) The amount, if any, needed to cover unpaid Monthly Deductions; and
3) The Decrease Charges, if any, applied on that date to the Face Amount
and to any prior decreases in Face Amount (for which Decrease Charges
were not previously made) due to Partial Surrender or change of Death
Benefit Option.
6.4 PARTIAL SURRENDER. You may surrender a portion of the Accumulated Value
by giving Written Notice while the Insured is living. The Partial Surrender
includes the Partial Surrender Charge shown on page 4.
A Partial Surrender:
1) Must be at least $500;
2) Will reduce the Accumulated Value by the amount of the Partial
Surrender. The reduction will be applied against each subaccount of
the Variable Account according to the ratio for this contract of the
accumulated value in the subaccount to the sum of the accumulated
values in all the subaccounts. With our approval, you may choose
other allocations to the subaccounts;
3) Must not reduce the remaining Cash Surrender Value to less than $500;
4) If the Death Benefit Option is B, will affect the Face Amount as
follows:
a) If the Death Benefit on the effective date of the Partial
Surrender is equal to the Face Amount, then the surrender will
reduce the Face Amount by the amount of the Partial Surrender.
b) If the Death Benefit on the effective date of the Partial
Surrender is a multiple of the Accumulated Value according to
Section 5.1(2)(b), then the Face Amount will be reduced only if,
on that day, the amount of the surrender multiplied by the Factor
for the Attained Age on that day (see Table of Factors on page
13) exceeds the Death Benefit minus the Face Amount. In that
case, the Face Amount will be reduced by:
i) The amount of the Partial Surrender; less
ii) The Death Benefit less the Face Amount prior to the
surrender, divided by the Factor applied.
Any decrease in Face Amount will be applied in the order specified
in Section 5.S(2). The Face Amount may not be reduced to less than
$5,000. Decrease Charges are not applied at the time of Partial
Surrender; and
5) Will be effective on the date we receive Written Notice.
A Partial Surrender may cause the Death Benefit Guarantee to terminate.
W3-VC-VUL-16 page 16
Contract Number: LV1234567
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7. MONTHLY DEDUCTION
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7.1 MONTHLY DEDUCTION. The Monthly Deduction is made on the Contract Date
and on each subsequent Monthly Anniversary prior to the Insured's Attained
Age 100. If any Monthly Anniversary occurs prior to the Contract Date, the
deduction(s) for such day(s) will also be made on the Contract Date. The
Monthly Deduction made from the subaccounts of the Variable Account is the
sum of:
1) The monthly Cost of Insurance (see Section 7.2);
2) The monthly Administrative Charge. This charge is the sum of:
a) The Basic Monthly Charge of $10.00; and
b) Any Initial Monthly Charge. This is a charge per $1,000 of
Initial Face Amount. However, if the Initial Face Amount is
decreased according to Section 5.5, the charge will be based on
the Face Amount remaining after the decrease. The charge is made
on the Contract Date and then on each Monthly Anniversary until
180 charges have been made. The charge per $1,000 is shown on
page 4;
3) Any Initial Monthly Charge for Increases. This is a charge per $1,000
of increase in Face Amount. However, if the increased Face Amount is
later decreased according to Section 5.5, the charge will be based on
the amount of the increased Face Amount remaining after the decrease.
The charge is made on the effective date of each increase according
to Section 5.3 and then on each Monthly Anniversary until 180 charges
have been made. The charge is based on Attained Age on the date of
the increase. The charge per $1,000 is shown on page 5;
4) Any Decrease Charge which results from a requested decrease in Face
Amount according to Section 5.5; and
5) The monthly cost of any Additional Benefits.
However, if the Monthly Deduction is greater than the Cash Surrender Value
and the requirements of the Death Benefit Guarantee are met, the deduction
made will not exceed the Accumulated Value less any Debt. We will pay the
balance of the Monthly Deduction.
The Monthly Deduction is taken from each subaccount according to the ratio
for this contract of the accumulated value in the subaccount to the sum of
the accumulated values in all the subaccounts. With our approval, you may
choose other allocations of the Monthly Deduction.
7.2 COST OF INSURANCE. The Cost of Insurance is determined on the Contract
Date and on each Monthly Anniversary. It is equal to the Cost of Insurance
Rate multiplied by the Risk Amount divided by 1,000.
7.2a Cost of Insurance Rate. We will determine the Cost of Insurance Rate
monthly. The rate is based on the Insured's Premium Class, sex, Issue Age,
Face Amount and Attained Age.
The Premium Class for the Initial Face Amount is shown on page 3. The
Premium Class for any increase in Face Amount according to Section 5.3 will
be determined on the effective date of the increase. If the Death Benefit is
a multiple of the Accumulated Value according to Section 5.1(1)(b) or
5.1(2)(b), the Premium Class of the resulting increase in Death Benefit will
be the Premium Class shown on page 3. The Cost of Insurance Rate for the
Initial Face Amount and for any increase in Face Amount with the same
Premium Class as shown on page 3 will not exceed the rates shown on page 5.
However, for any Face Amount with a rated Premium Class, the maximum cost is
increased in one or both of the following ways as specified on page 5:
1) The maximum Cost of Insurance Rate is multiplied by a percentage
rating.
2) An extra monthly amount is added to the Cost of Insurance.
We may charge less than the maximum rate. Any change in Cost of Insurance
Rates will be based on the Initial Face Amount and any requested increases
in Face Amount and will apply to all insureds of the same Premium Class,
sex, Issue Age and attained age.
W3-VC-VUL-17 page 17
Contract Number: LV1234567
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7. MONTHLY DEDUCTION (continued)
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7.2b Risk Amount. The Risk Amount is equal to:
1) The Death Benefit divided by 1.0040741;
Less
2) The Accumulated Value (before the Cost of Insurance and the cost of
the disability waiver benefit, if any, is deducted).
If the Death Benefit Option is B and the Initial Face Amount has been
increased, the Accumulated Value will be considered part of the Initial Face
Amount. If the Accumulated Value is greater than the Initial Face Amount,
the excess will be considered to be part of successive increases in Face
Amount starting with the first increase.
7.3 DECREASE CHARGE. The Decrease Charge is charged on:
1) The effective date of each decrease in Face Amount you make according
to Section 5.5; and
2) Termination of this contract other than by death.
The Decrease Charge is applied as in Section 5.5(2).
If the Initial Face Amount is decreased, the Decrease Charge is the product
of:
1) The ratio of the decrease in Face Amount to the Initial Face Amount;
and
2) The sum of:
a) The Deferred Administrative Charge; and
b) The lesser of:
i) The Maximum Contingent Deferred Sales Charge; and
ii) 25% of premiums paid in the first Contract Year.
The Deferred Administrative Charge and the Maximum Contingent Deferred Sales
Charge are shown on page 4.
If an increase in Face Amount is decreased, the Decrease Charge is the
product of:
1) The ratio of the amount of the increase being decreased to the
initial amount of the increase in Face Amount; and
2) The sum of:
a) The Deferred Administrative Charge for the increase in Face
Amount; and
b) The lesser of:
i) The Maximum Contingent Deferred Sales Charge for the increase
in Face Amount; and
ii) 25% of the premium attributable to the increase in Face
Amount which is decreased (see Section 7.4).
For any increase in Face Amount, the Deferred Administrative Charge and the
Maximum Contingent Deferred Sales Charge will be shown on supplemental
schedule pages that we will mail to you.
7.4 ATTRIBUTABLE PREMIUM. For purposes of the Contingent Deferred Sales
Charge, the premium attributable to an increase in Face Amount is equal to
(1) multiplied by (2 + 3) where:
1) Is the ratio of the increase in Face Amount to the total Face Amount
including that increase;
2) Is the Cash Surrender Value on the effective date of the increase;
and
3) Is premiums paid during the Increase Year which begins on the
effective date of the increase.
W3-VC-VUL-18 page 18
Contract Number: LV1234567
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8. LOANS
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8.1 CONTRACT LOANS. After the Contract Date, you may obtain a loan from us
with this contract as sole security if:
1) You give Written Notice;
2) The loan with interest does not increase the total loan to more than
90% of the excess of the Accumulated Value over any Decrease Charge
on the date of the loan.
Accumulated value equal to the amount of the loan will be transferred from
the subaccounts to the Loan Account. The amount taken from each subaccount
will be according to the ratio for this contract of the accumulated value in
the subaccount to the sum of the accumulated values in all the subaccounts.
With our approval, you may choose other allocations from the subaccounts.
Contract loans may cause the Death Benefit Guarantee to terminate.
8.2 LOAN INTEREST. The loan interest rate is 7.4% per year. Interest on any
loan will be charged at that rate. It is payable in advance on the date of
the loan and on each Contract Anniversary. Interest is computed to the next
Contract Anniversary. If interest is not paid when due, it will be added to
the loan and bear interest at the same rate. If death or full surrender
occurs before the next Contract Anniversary, unearned interest will be added
to the proceeds payable.
8.3 LOAN ACCOUNT. The Loan Account is an account of the Society. Assets from
the Variable Account are transferred to the Loan Account in amounts equal to
contract loans on this and similar contracts.
Interest will be credited to this account at the rate of 0.48676% per month.
This is an effective rate of 6.0% per year. Loans on this contract will be
credited with interest while this contract is in force. Interest credited
will be transferred to the subaccounts on each Monthly Anniversary and on
the date the entire Debt is repaid in full. The amount transferred to each
subaccount will be according to the ratio for this contract of the
accumulated value in the subaccount to the sum of the accumulated values in
all the subaccounts.
8.4 REPAYMENT OF DEBT. All or part of the Debt may be repaid at any time
while the Insured is living. Each repayment must be at least $25. If there
is a loan on this contract, you must notify us if a payment to us is a
premium payment. Otherwise, it will be considered a repayment of Debt. No
charges are deducted from Debt repayments. Repayments of Debt, and any
unearned loan interest that was paid in advance on that portion of the Debt,
will be deducted from the Loan Account and transferred to each subaccount of
the Variable Account according to the ratio for this contract of the
accumulated value in the subaccount to the sum of the accumulated values in
all the subaccounts at the time of repayment or, if that sum is zero,
according to the Premium Allocation Percentages. With our approval, you may
choose other allocations to the subaccounts. Upon death or full surrender
any Debt will be deducted from the proceeds.
8.5 TERMINATION FROM EXCESS LOAN. If the Death Benefit Guarantee is not in
force, this contract will terminate when:
1) The Debt exceeds the Accumulated Value less the Decrease Charge
applied to the Face Amount and to any decreases in Face Amount (for
which Decrease Charges were not previously made) due to Partial
Surrender or change of Death Benefit Option; and
2) Sixty-one days have elapsed since we mailed a notice to you at the
address last known to US.
W3-VC-VUL-19 page 19
Contract Number: LV1234567
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9. VARIABLE ACCOUNT AND UNIT VALUE
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9.1 VARIABLE ACCOUNT. We have established the Variable Account shown on
page 6 as a separate investment account according to Minnesota laws. The
Variable Account is registered with the SEC as a unit investment trust under
the Investment Company Act of 1940.
The Variable Account has subaccounts which invest in shares of the LB Series
Fund, Inc. (the Fund). The Fund is registered with the SEC under the
Investment Company Act of 1940 as a diversified open-end management
investment company. Each subaccount purchases shares in a specified
portfolio of the Fund. Amounts allocated to each subaccount buy shares of
the portfolio for that subaccount at net asset value. The portfolios and
subaccounts are shown on page 6. We may add additional subaccounts to invest
in a new portfolio of the Fund or in a different investment company.
We own the assets of the Variable Account. Assets equal to the reserves and
other liabilities of the Variable Account may not be charged with
liabilities from any other business we conduct. However, we may transfer
assets of the Variable Account in excess of account reserves and liabilities
to our General Account.
Income and realized and unrealized gains and losses from each subaccount of
the Variable Account are credited to or charged against that subaccount. The
value of the assets in the Variable Account is determined at the end of each
Valuation Day.
9.2 GENERAL ACCOUNT. The General Account includes all assets we own that
are not in the Variable Account. The Loan Account and reserves for the Death
Benefit Guarantee are maintained in the General Account.
9.3 ALLOCATION OF NET PREMIUMS. Any premiums received before the Contract
Date are applied entirely to the General Account. On the Contract Date, the
amount in that account equal to the premium payments received will be
applied as a premium payment. Any balance remaining for this contract will
be applied as a Net Premium on that date. After the Contract Date, payments
are applied on the date we receive them.
Each Net Premium will be applied to the subaccounts of the Variable Account
according to the premium allocation percentages for this contract. The
initial premium allocation percentages are specified in the Application.
You may change these premium allocation percentages by giving Written
Notice. The change will be effective for each premium received with or after
your notice. The sum of the premium allocation percentages must be 100%, and
each premium allocation percentage must be a whole number not more than
100%. We reserve the right to adjust your allocation to eliminate fractional
percentages.
9.4 TRANSFERS AMONG SUBACCOUNTS. You may transfer some or all of the
accumulated values among the subaccounts of the Variable Account. You do
this by giving Written Notice. The transfer of accumulated value is subject
to the following:
1) The total amount transferred cannot be less than the smaller of:
a) $500; and
b) The accumulated value in the subaccount(s) from which the
transfer is being made.
2) The transfer will occur at the end of the day on which we receive
Written Notice.
We may defer making transfers subject to the same conditions as in Section
2.10 Deferment.
W3-VC-VUL-20 page 20
Contract Number: LV1234567
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VARIABLE ACCOUNT AND UNIT VALUE (continued)
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9.5 NUMBER OF UNITS. On the Contract Date, the number of units for this
contract in any subaccount is equal to:
1) The accumulated value for this contract in that subaccount; divided
by
2) The unit value for that subaccount.
The number of units for this contract in any subaccount may increase or
decrease at the end of each Valuation Period. The number of units increases
when, during the period:
1) Net Premiums are allocated to the subaccount;
2) Accumulated value is transferred to the subaccount from another
subaccount or from the General Account;
3) Repayments of Debt are transferred to the subaccount; or
4) Interest is transferred from the Loan Account to the subaccount.
The number of units decreases when, during the Valuation Period:
1) Monthly Deductions are taken from the subaccount;
2) Accumulated value is transferred from the subaccount to another
subaccount or to the General Account;
3) Partial Surrenders are applied against the subaccount; or
4) Contract loans are transferred from the subaccount.
The increase or decrease in the number of units for this contract in any
subaccount is equal to:
1) The dollar amount allocated or transferred to or from that
subaccount; divided by
2) The unit value for that subaccount at the end of the Valuation Period
during which the amounts are allocated or transferred.
9.6 UNIT VALUE. The unit value for a subaccount is equal to (1) divided by
(2) where:
1) Is the sum of:
a) The net asset value of the corresponding portfolio of the
subaccount at the end of the current Valuation Period; plus
b) The amount of any dividend or capital gain distribution made by
the portfolio if the "ex-dividend" date occurs during the
Valuation Period; plus or minus
c) A charge or credit for any taxes reserved for which we determine
to be a result of the investment operation of the portfolio;
Less
d) The risk charge we deduct for each day in the Valuation Period.
This charge for mortality and expense risks is guaranteed not to
exceed, on an annual basis, 0.75% of the daily value of the
subaccount.
2) Is the number of units of that subaccount for all contracts.
Unit values are determined at the end of each Valuation Day before the
transfer or allocation of any amounts to or from the subaccounts. The unit
values may increase or decrease on each Valuation Day.
W3-VC-VUL-21 page 21
Contract Number: LV1234567
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9. VARIABLE ACCOUNT AND UNIT VALUE (continued)
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9.7 CHANGE OF INVESTMENT POLICY. The investment policy for the Variable
Account is described on page 6. We may change the investment policy of the
Variable Account with the approval of the insurance supervisory officials of
the State of Minnesota. We will notify you if there is a material change in
investment policy.
9.8 CHANGE OF PORTFOLIO. We may determine that a portfolio has become
unsuitable for investment by a subaccount or shares of a portfolio may cease
to be available for investment. In such event, we may substitute another
portfolio of the investment company or invest in a different investment
company. This change would not be made unless approved by:
1) The SEC; and
2) If required, the insurance supervisory officials in the state where
this contract is delivered.
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10. EXCHANGE OF CONTRACT
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10.1 EXCHANGE PRIVILEGE. Within 24 months after the Date of Issue, you may
exchange this contract for any fixed benefit permanent life insurance
contract that we offer. The new contract will be on the Insured's life with
no evidence of insurability required. The exchange is subject to the
following:
1) You must make written application to us at our Home Office and
surrender this contract.
2) The exchange must be made while this contract is in force.
3) No premium may be in default at the time of the exchange.
4) The issue age and date of issue of the new contract are the same as
the issue age and Date of Issue for this contract. Premiums will be
based on rates in effect on the Date of Issue.
5) The new contract will have its own Incontestability and Suicide
provisions measured from the date of issue. As used in these
provisions, the date of issue will be this contract's Date of Issue.
6) The new contract will be issued in the same Premium Class as the
Initial Face Amount for this contract. The Premium Class for amounts
in excess of the Initial Face Amount will be according to Section
10.2(6). If this contract has an exclusion rider, the new contract
will also have such an exclusion rider.
7) The new contract will have, at your election, either:
a) A death benefit equal to the Death Benefit of this contract on
the effective date of the exchange; or
b) A net amount at risk equal to the Death Benefit of this contract
on the effective date of the exchange less the Accumulated Value
on that date.
8) The new contract may include a disability waiver benefit rider if:
a) This contract has a disability waiver benefit rider;
b) Exchange is made before the Contract Anniversary after the
Insured's 65th birthday; and
c) The new contract has premiums payable to at least age 85.
No other additional benefits will be allowed on the new contract
unless evidence of insurability which meets our standards is
provided.
9) Any outstanding Debt on this contract must be repaid.
10) The effective date of the exchange will be the date we receive this
contract and your written application.
W3-VC-VUL-22 page 22
Contract Number: LV1234567
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10. EXCHANGE OF CONTRACT
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10.2 EXCHANGE OF INCREASE IN FACE AMOUNT. Within 24 months after the
effective date of any increase in Face Amount according to Section 5.3, you
may exchange the increase in Face Amount for any fixed benefit permanent
life insurance contract that we offer. The new contract will be on the
Insured's life with no evidence of insurability required. The exchange is
subject to the following:
1) You must make written application to us at our Home Office.
2) The exchange must be made while this contract is in force.
3) No premium may be in default at the time of the exchange.
4) The issue age and date of issue of the new contract are the same as
the attained age and effective date for the increase in Face Amount.
Premiums will be based on rates in effect on the effective date of
the increase.
5) The new contract will have its own Incontestability and Suicide
provisions measured from the date of issue. As used in these
provisions, the date of issue will be the effective date of the
increase.
6) The new contract will be issued in the same Premium Class as the
increase in Face Amount. If this contract has an exclusion rider, the
new contract will also have such an exclusion rider.
7) The new contract will have, at your election, either:
a) A death benefit equal to the amount of the increase in Face
Amount; or
b) A net amount at risk equal to the increase in Face Amount less
the Accumulated Value of this contract on the effective date of
the exchange which is considered to be part of the increase in
Face Amount (see Section 7.2b).
8) The new contract may include a disability waiver benefit rider if:
a) This contract has a disability waiver benefit rider;
b) Exchange is made before the Contract Anniversary after the
Insured's 65th birthday; and
c) The new contract has premiums payable to at least age 85.
No other additional benefits will be allowed on the new contract
unless evidence of insurability which meets our standards is
provided.
9) The effective date of the exchange will be the date we receive your
written application.
10.3 CASH ADJUSTMENT ON EXCHANGE. Upon exchange, a cash adjustment may be
necessary to reflect differences between the accumulated values of this
contract and the new contract. The adjustment will be determined as of the
date we receive at our Home Office your written application for exchange. If
the cash adjustment is to be paid to you, we will make the payment when the
new contract is issued. If the adjustment is to be paid by you to us, we
will mail you notice of the amount due. If this amount is not paid within 31
days of the date we mail the notice, the exchanged coverage will terminate.
W3-VC-VUL-23 page 23
Contract Number: LV12345567
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11. BENEFICIARY
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11.1 BENEFICIARY. The beneficiary is named in the Application. You may
change the beneficiary by giving Written Notice while the Insured is living.
The change will become effective if:
1) We receive Written Notice; and
2) We acknowledge the change.
The effective date of the change will be the date the notice was signed. We
will not be liable for any payment made or action taken by us before we
receive the notice.
11.2 SUCCESSION OF BENEFICIARIES. You may designate one or more
beneficiaries to receive the Death Proceeds. You will classify each
beneficiary as primary or contingent. Upon the Insured's death, we will pay
the Death Proceeds to the beneficiaries of the Insured as follows:
1) Proceeds will be paid to the primary beneficiaries who are then
alive;
2) If no primary beneficiaries are living, proceeds will be paid to the
surviving contingent beneficiaries;
3) If no beneficiary survives, proceeds will be paid to the Insured's
estate.
Other designations or successions of beneficiaries may be arranged with us.
11.3 SHARE OF PROCEEDS. Unless you specify otherwise, each beneficiary
receiving proceeds will have an equal share in any Death Proceeds payable.
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12. SETTLEMENT PROVISIONS
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12.1 PAYMENT OF PROCEEDS. Proceeds from death or surrender are payable in a
lump sum unless otherwise provided. On Death Proceeds, we will pay interest
at the rate payable in Option I Interest Income or, if greater, the rate
required by law. Interest is payable from the date of death until the date
of settlement. Instead of a lump sum, proceeds of $2,000 or more may be paid
under any settlement option in Section 12.2 by means of a supplementary
contract which we will issue.
12.2 OPTIONAL PLANS OF SETTLEMENT. Proceeds payable under a settlement
option may be paid under one or more of the following options.
Option 1 - Interest Income. The proceeds may be left on deposit. We will pay
interest at a rate not less than 3% per year. These proceeds may be
withdrawn upon request.
Option 2 - Income of a Fixed Amount. We will pay an income of a fixed amount
at agreed upon intervals. The total income per year must be at least 6% of
the proceeds applied under this option. Interest will be credited on the
unpaid balance at a rate not less than 3 1/2% per year. Income will be paid
until the proceeds and interest are paid in full.
W3-VC-VUL-24 page 24
Contract Number: LV1234567
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12. SETTLEMENT PROVISIONS (continued)
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Option 3 - Income For a Fixed Period. We will pay an income for a fixed
number of years, not to exceed 30. Interest will be credited on the unpaid
balance at a rate not less than 3 1/2% per year. The income will not be less
than the amount shown in the table for this option below.
Option 4 - Life Income with Guaranteed Period. We will pay an income for the
lifetime of the payee. A guaranteed period of 10 or 20 years may be elected.
If the payee dies during the guaranteed period, payments will be continued
to the end of the period and will be paid to the payee's beneficiary. After
the first payment is made, this option may not be revoked or changed.
The income will not be less than the amount determined from the tables for
this option on page 26, based on the sex and adjusted age of the payee on
the date the first payment is due. Adjusted age is the age last birthday
decreased by the adjustment shown below:
Year of First Age
Payment Adjustment
1990-1999 0
2000-2009 1
2010-2019 2
2020-2029 3
2030-2039 4
2040-2049 5
* For each succeeding decade, the age adjustment continues to
increase by 1.
Option 5 - Other Options. The proceeds may be paid under any other
settlement option agreeable to us.
12.3 ELECTION OF AN OPTION. You may elect an option by Written Notice during
the Insured's lifetime. The option must be elected before proceeds become
payable. Assignees and third-party owners may elect an option only with our
consent. Election of Option 4 may be made only if the payee is a natural
person who is the Insured or a beneficiary.
If Death Proceeds are payable, the beneficiary may elect a settlement option
provided that:
1) The manner of settlement has not been restricted before the Insured's
death; and
2) The Death Proceeds have not been paid.
Election of an option is subject to these conditions:
1) Payments must not be less than $50;
2) Payments are made only at annual, semiannual, quarterly or monthly
intervals; and
3) The first payment, except under Option 1 Interest Income, is payable
as of the date the option becomes effective. Under Option 1, interest
is payable at the end of the first payment interval.
If the beneficiary does not receive Death Proceeds or elect a settlement
option by the date one year after we receive proof of the Insured's death,
Death Proceeds will then be calculated and applied under Option I - Interest
Income.
OPTION 3
Guaranteed Monthly Payments for Each $1,000 of Proceeds
Years Monthly Years Monthly Years Monthly Years Monthly Years Monthly
Payable Payment Payable Payment Payable Payment Payable Payment Payable Payment
1 84.65 7 13.37 13 7.93 19 5.96 25 4.96
2 43.05 8 11.89 14 7.48 20 5.75 26 4.84
3 29.19 9 10.75 15 7.10 21 5.56 27 4.73
4 22.26 10 9.83 16 6.76 22 5.39 28 4.62
5 18.11 11 9.08 17 6.46 23 5.23 29 4.53
6 15.34 12 8.46 18 6.20 24 5.09 30 4.44
Annual, Semiannual or Quarterly payments are 11.813, 5.957 and 2.991
respectively, times the Monthly payments.
W3-VC-VUL-24 page 25
Contract Number: LV1234567
OPTION 4
Male Payee - Monthly Life Income
GUARANTEED MONTHLY LIFE INCOME FOR EACH $1,000 OF PROCEEDS
Adjusted Payments Payments Adjusted Payments Payments
Age of Payee Guaranteed Guaranteed Age of Payee Guaranteed Guaranteed
on Date of for for on Date of for for
First Payment 10 years 20 years First Payment 10 years 20 years
40 3.86 3.82 65 5.80 5.16
45 4.09 4.02 66 5-94 5.22
50 4.38 4.26 67 6.08 5.28
68 6.23 5.33
55 4.74 4.54 69 6.38 5.38
60 5.20 4.85 70 6.54 5.43
61 5.31 4.91 71 6.71 5.48
62 5.42 4.97 72 6.87 5.52
63 5.54 5.04 73 7.05 5.55
64 5.67 5.10 74 7.22 5.59
Adjusted Payments Payments
Age of Payee Guaranteed Guaranteed
on Date of for for
First Payment 10 years 20 years
75 7.40 5.62
76 7.57 5.64
77 7.75 5.65
78 7.92 5.65
79 8.09 5.65
80 8.26 5.65
85 8.97 5.65
90 9.46 5.65
95 9.72 5.65
Female Payee - Monthly Life Income
GUARANTEED MONTHLY LIFE INCOME FOR EACH $1,000 OF PROCEEDS
Adjusted Payments Payments Adjusted Payments Payments
Age of Payee Guaranteed Guaranteed Age of Payee Guaranteed Guaranteed
on Date of for for on Date of for for
First Payment 10 years 20 years First Payment 10 years 20 years
40 3.65 3.64 65 5.25 4.91
45 3.84 3.81 66 5.37 4.98
67 5.50 5.05
50 4.07 4.01 68 5.63 5.12
55 4.36 4.27 69 5.77 5.19
60 4.75 4.57 70 5.91 5.25
61 4.84 4.64 71 6.07 5.32
62 4.93 4.70 72 6.23 5.37
63 5.03 4.77 73 6.40 5.43
64 5.14 4.84 74 6.58 5.48
Adjusted Payments Payments
Age of Payee Guaranteed Guaranteed
on Date of for for
First Payment 10 years 20 years
75 6.76 5.52
76 6.95 5.57
77 7.14 5.60
78 7.34 5.63
79 7.54 5.65
80 7.74 5.65
85 8.67 5.65
90 9.32 5.65
95 9.66 5.65
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13. DIVIDENDS
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13.1 DIVIDENDS. Each year we will determine our divisible surplus. This
contract's share, if any, will be credited as a dividend on the Contract
Anniversary. Since we do not expect this contract to contribute to
divisible surplus, it is not expected that any dividends will be credited.
13.2 DIVIDEND OPTIONS> You may choose to apply dividends under any of the
options listed below. Dividends will be applied under Option 13.2b Premium
Payment unless a different option has been chosen in writing.
13.2a Cash. Dividends are paid in cash.
13.2b Premium Payment. Dividends are applied as payment of a Net
Premium.
W3-VC-VUL-26 page 26
[logo]
LUTHERAN BROTHERHOOD
A Fraternal Benefit Society FLEXIBLE PREMIUM
Minneapolis, Minnesota 55415 VARIABLE LIFE INSURANCE
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FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE
Life insurance payable at death.
Adjustable death benefit.
Flexible premiums.
Return on investments reflected in contract benefits.
Annual dividends payable if earned.
Settlement options to provide retirement income.
Contract Number: LV1234567
W3-VC-VUL-27 (Blank)