1
EXHIBIT 4(b)
The Variable Annuity Life Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
[VALIC LOGO] Houston, Texas 77019
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* An American General Company
In return for the Purchase Payment(s) for this contract (the "Contract"), THE
VARIABLE ANNUITY LIFE INSURANCE COMPANY ("VALIC") will:
* allocate Purchase Payment(s) under this Contract as directed
by the Contract Owner,
* pay annuity benefits as provided in this Contract, and
* provide the Contract Owner, the Annuitant and the Beneficiary
with the rights and benefits contained in the Contract.
READ YOUR CONTRACT CAREFULLY
See Table of Contents Page
This Contract is a legal agreement between the Contract Owner and VALIC. The
conditions and provisions on this and the following pages are made a part of
the Contract. All conditions and provisions are subject to applicable state
laws.
EXECUTED AT VALIC'S HOME OFFICE ON THE DATE OF ISSUE.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇ [ILLEGIBLE]
(Secretary) (President)
ANNUITY PAYMENTS AND SURRENDER VALUES PROVIDED BY THIS CONTRACT WHEN BASED ON
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT. VARIABLE PROVISIONS ARE DETAILED ON PAGE
8.
THIS CONTRACT MAY BE RETURNED WITHIN TEN (10) DAYS TO THE HOME OFFICE OF VALIC
OR TO ANY AUTHORIZED AGENT OF VALIC FOR CANCELLATION OF PREMIUM IF YOU ARE NOT
SATISFIED FOR ANY REASON. VALIC WILL RETURN ALL PREMIUMS FOR THIS CONTRACT
WITHIN TEN (10) DAYS AFTER IT RECEIVES NOTICE OF CANCELLATION AND THE RETURNED
POLICY.
ANNUITANT: ▇▇▇▇▇ ▇. ▇▇▇
CONTRACT OWNER: ▇▇▇▇ ▇. ▇▇▇
CONTRACT NUMBER: 98765 DATE OF ISSUE: 2-1-96
INDIVIDUAL FIXED AND VARIABLE ANNUITY PAYMENT
DEFERRED ANNUITY CONTRACT
NON-PARTICIPATING
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TABLE OF CONTENTS
Page Page
---- ----
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . 4 SECTION 6 CODE REQUIREMENTS AND PROVISIONS
SECTION 2 PURCHASE PAYMENTS AND THE FOR RETIREMENT PLAN CONTRACTS . . . . 12
ACCUMULATION PERIOD . . . . . . . . . . 4 6.01 Special Provisions Applicable . . . . 12
2.01 Purchase Payments . . . . . . . . . . . 4 6.02 Qualified Retirement Plans and Tax
2.02 Allocation of Purchase Payments . . . . 5 Sheltered Annuity Plans . . . . . . . 12
2.03 Fixed Subaccount Value . . . . . . . . 5 6.03 Non-Qualified and Unfunded Deferred
2.04 Variable Subaccount Value . . . . . . . 5 Compensation Plans . . . . . . . . . 12
2.05 Minimum Contract Value . . . . . . . . 5 6.04 Direct Rollovers . . . . . . . . . . 12
2.06 Suspension of Purchase Payments . . . . 6 6.05 Limit on Purchase Payments for
SECTION 3 CHARGES UNDER THE CONTRACT . . . . . . 6 Section 402(g) . . . . . . . . . . . 12
3.01 Charge for Premium Taxes . . . . . . . 6 6.06 Withdrawal Restrictions for Amounts
3.02 Charge for Partial and Total Transferred from a Section 403(b)(7)
3.03 Surrenders . . . . . . . . . . . . . . 6 Custodial Account . . . . . . . . . . 12
Charge for Annual Contract SECTION 7 GENERAL PROVISION . . . . . . . . . . 12
Maintenance . . . . . . . . . . . . . . 6 7.01 The Contract . . . . . . . . . . . . 12
3.04 Charge to the Separate Account . . . . 7 7.02 Incontestability . . . . . . . . . . 13
SECTION 4 TRANSFERS AND SURRENDERS . . . . . . . 7 7.03 Misstatement of Age . . . . . . . . . 13
4.01 Transfers . . . . . . . . . . . . . . . 7 7.04 Proof of Survival . . . . . . . . . . 13
4.02 Surrenders . . . . . . . . . . . . . . 7 7.05 Assignment . . . . . . . . . . . . . 13
4.03 Minimum Surrender Value . . . . . . . . 7 7.06 Non-Participating . . . . . . . . . . 13
SECTION 5 ANNUITY BENEFITS . . . . . . . . . . . 7 7.07 Change of Contract by Mutual
5.01 Annuity Date . . . . . . . . . . . . . 7 Agreement . . . . . . . . . . . . . . 13
5.02 Election to Commence Annuity 7.08 Beneficiary . . . . . . . . . . . . . 13
Payments . . . . . . . . . . . . . . . 8 7.09 Death Payment Provisions . . . . . . 13
5.03 Annuity Unit Value . . . . . . . . . . 8 7.10 Suspension of Payments . . . . . . . 14
5.04 Annuity Options . . . . . . . . . . . . 8 7.11 Deferral of Surrender . . . . . . . . 14
5.05 Automatic Annuity Option . . . . . . . 8 7.12 Minimum Benefit . . . . . . . . . . . 14
5.06 Minimum Annuity Payment . . . . . . . . 8 7.13 Reports to Contract Owners . . . . . 14
5.07 Betterment of Rates . . . . . . . . . . 8 7.14 Voting Rights . . . . . . . . . . . . 14
5.08 Allocation of Variable and Fixed 7.15 Substitution of Fund Shares . . . . . 15
Annuities . . . . . . . . . . . . . . . 9 7.16 Separate Account . . . . . . . . . . 15
5.09 Annuity Tables . . . . . . . . . . . 9-11
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SECTION I
DEFINITIONS
1.01 ACCUMULATION PERIOD -- the time between the date of the first Purchase
Payment and the Annuity Date.
1.02 ACCUMULATION UNIT ("UNIT") -- a unit of interest of the Contract Owner
in a Separate Account Division which is accumulated in a Variable
Subaccount before annuity payments begin. The value of a Unit will
vary with the net investment return of the respective Separate Account
Division.
1.03 ACCUMULATION VALUE -- the sum of the values of the Fixed Subaccounts
and the Variable Subaccounts under the Contract.
1.04 ANNUITANT -- the person on whose life annuity payments will be based.
Annuity payments will paid to the Annuitant. If the Annuitant dies
before the Annuity Date, the Beneficiary may receive payments.
1.05 ANNUITY DATE -- the date on which annuity payments start.
1.06 ANNUITY PERIOD -- the time during which annuity payments are made.
1.07 ANNUITY UNIT -- A measuring unit used in calculating the amount of
annuity payments. The value of an Annuity Unit for a Variable
Subaccount will vary with the net investment return of the Separate
Account Division selected. The value will be adjusted according to the
Assumed Investment Rate chosen by the Annuitant.
1.08 ASSUMED INVESTMENT RATE -- the rate used to determine the first
monthly annuity payment per thousand dollars of Accumulation Value in
the Variable Subaccount(s).
1.09 BENEFICIARY -- The person who will receive payments, if any, on the
Annuitant's death.
1.10 CONTRACT OWNER -- the Annuitant, the employer, or other entity
designated as the owner on page one.
1.11 CONTRACT YEAR -- a twelve month period starting with the issue date of
the Contract and each anniversary of that date.
1.12 FIXED SUBACCOUNT -- a particular subaccount under the Contract into
which net Purchase Payments and accumulated value under a fixed
annuity contract may be allocated. Reserves for these allocations are
held in VALIC's General Account. The portion of Accumulation Value
under Fixed Subaccount One which may be transferred to another
subaccount may be limited. The timing of transfers from Fixed
Subaccount Two to other subaccounts may be limited. Fixed Subaccounts
One and Two are discussed more fully in the Article labelled
"Transfers and Surrenders."
1.13 FUND -- an investment portfolio which is the underlying investment
medium for net Purchase Payments credited to a separate Account
Division.
1.14 GENERAL ACCOUNT -- the assets of VALIC other than those in the
Separate Account or any other separate account. Reserves for any fixed
annuity are maintained in the General Account.
1.15 HOME OFFICE -- the main office of VALIC at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
1.16 PURCHASE PAYMENT -- an amount paid to VALIC by, or on behalf of, an
Annuitant.
1.17 SEPARATE ACCOUNT -- the segregated asset account referred to as
Separate Account A. Separate Account A was established by VALIC under
the Texas Insurance Code to receive and invest the net Purchase
Payments made under variable annuity contracts.
1.18 SEPARATE ACCOUNT DIVISIONS ("DIVISIONS") -- subdivisions of the
Separate Account, each of which invest in a different variable
investment with a particular investment objective and strategy, and
into which the net Purchase Payments and accumulated value under a
variable annuity contract may be applied.
1.19 SURRENDER VALUE -- the Accumulation Value of a Contract less the
surrender charge, if any, which is the amount payable upon surrender
of the Contract.
1.20 VARIABLE SUBACCOUNT -- a particular subaccount under the Contract into
which net Purchase Payments and accumulated value under a variable
annuity contract may be allocated. Amounts in each Variable Subaccount
are invested in a Separate Account Division.
SECTION 2
PURCHASE PAYMENTS AND THE ACCUMULATION PERIOD
2.01 PURCHASE PAYMENT(S)
The Contract Owner may make Purchase Payments at any time during the
Accumulation Period for credit to the Contract. Purchase Payments made under a
retirement plan are subject to the terms of the plan.
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When a Purchase Payment is received in the Home Office of VALIC, a
deduction will be made to cover any premium taxes due, resulting in a net
Purchase Payment.
Each net Purchase Payment is allocated by the Contract Owner to Fixed
and/or Variable Subaccounts. Each net Purchase Payment allocated to a Variable
Subaccount is applied separately to a Division to provide Units. The number of
Units is equal to the net Purchase Payment per Variable Subaccount divided by
the dollar value of one Unit for the respective Division for the valuation
period of receipt. The number of Units will not vary with changes in the dollar
value of a Unit. The value of a Unit in each Division may vary from one
valuation period to the next.
2.02 ALLOCATION OF PURCHASE PAYMENTS
When this Contract is used on a flexible payment basis, Purchase
Payments must be at least $30 per Variable Subaccount or Fixed Subaccount.
If no Purchase Payments will be made to the Contract after the first,
the single Purchase Payment must be at least $1,000.
VALIC reserves the right to limit Purchase Payment allocations among
subaccounts to seven at any one time.
2.03 FIXED SUBACCOUNT VALUE
The Fixed Subaccount value of this Contract shall include:
o Purchase Payments allocated to the Fixed Subaccount(s);
o amounts transferred from Variable Subaccounts;
o interest earned on either of the above; and
shall be reduced by:
o any transfers from the Fixed Subaccount(s);
o amounts deducted in connection with any partial surrenders; and
o annual Contract maintenance charges.
Prior to the Annuity Date the interest credited shall be at a rate
determined by VALIC. The interest rate shall not be less than an effective rate
of 4 1/2% per year.
2.04 VARIABLE SUBACCOUNT VALUE
The Variable Subaccount value of this Contract for any valuation
period is equal to the value invested under Variable Subaccounts.
The value of each of the Contract's Variable Subaccounts is determined
by multiplying the Unit value for the Division underlying that subaccount on
that date by the number of Units in the Division underlying the Variable
Subaccount. The value of a Unit may increase or decrease according to the
investment performance of the Division underlying the Variable Subaccount.
The current value of a Unit is equal to the value of such Unit for the
immediately preceding valuation period times the Net Investment Factor for the
current period.
The Net Investment Factor for a Division is the sum of 1.000000 plus
the Net Investment Rate for that Division.
The Net Investment Rate for any valuation period for a Division is the
Gross Investment Rate for that Division for the valuation period less:
o the daily charge for the period at an annual rate of 1%, and
o charges for any taxes payable by the Separate Account or
reserves held for such taxes.
The Gross Investment Rate for a Division is computed on each day the
New York Stock Exchange is open for trading. It is computed at least once a day
at the time trading closes. It covers the valuation period since the last prior
computation. The Gross Investment Rate is equal to:
o the investment income and capital gains and losses, both
realized and unrealized, on the assets of that Division during
such period, divided by
o the amount of such assets at the beginning of the period.
The Gross Investment Rate may be either positive or negative.
2.05 MINIMUM CONTRACT VALUE
If both the total Accumulation Value for this Contract and Purchase
Payments, reduced by any amounts deducted in connection with any partial
surrenders, fall below $300 during the Accumulation Period, and no Purchase
Payments have been made for two Contract Years, this Contract may be
automatically surrendered and the Surrender Value paid to the Contract Owner.
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2.06 SUSPENSION OF PURCHASE PAYMENTS
When this Contract is issued on a flexible payment basis, Purchase
Payments may be suspended at any time without penalty. If additional Purchase
Payments are not made and the Contract is not surrendered, the Fixed Subaccount
value will continue to earn interest and the number of Units under Variable
Subaccounts will remain constant. The value of Units will continue to vary. The
Accumulation Value will continue to be subject to Contract charges during the
period of suspension. The Contract Owner may resume making Purchase Payments at
any time prior to the Annuity Date so long as the Contract has not been
surrendered.
SECTION 3
CHARGES UNDER THE CONTRACT
3.01 CHARGE FOR PREMIUM TAXES
A deduction is made from each Purchase Payment to cover premium taxes,
when applicable. Any such deduction will be made either from Purchase Payments
when received, or from the amount applied to effect an annuity at the time
annuity payments commence, depending on applicable state law. If no amount for
premium tax was deducted, but tax later is found to be due, VALIC reserves the
right to reduce the Accumulation Value of the Contract, the number of Units
under a Variable Annuity, or the amount of Fixed Annuity payments by the amount
of the tax due at the time such determination is made. If an amount for any
premium taxes was deducted but later is found not to be due, VALIC will apply
the amount deducted to increase the Accumulation Value of the Contract, the
number of Units under a Variable Annuity, or the amount of Fixed Annuity
payments at the time such determination is made.
3.02 CHARGE FOR PARTIAL AND TOTAL SURRENDERS
A partial or total surrender may be subject to a surrender charge. The
surrender charge is equal to the lesser of 5% of (a) any Purchase Payment
received during the most recent 60 months prior to receipt of the surrender
request by VALIC at its Home Office, or (b) the amount of the surrender. It is
always assumed that the most recent Purchase Payments are withdrawn first, and
no surrender charge is ever imposed on any amount not actually withdrawn.
If no Purchase Payments have been received during the most recent 60
months or if the Contract has been in effect for 15 years or longer, there will
be no charge for partial or total surrenders. There is no surrender charge if
the Contract has been in effect for 5 years or longer and the Annuitant has
attained age 59 1/2.
Up to 10% of the Accumulation Value in any Contract Year may be
withdrawn without a surrender charge. The surrender charge will be applicable
only to the amount withdrawn that exceeds 10%. The percentage withdrawn will be
calculated as the ratio of the amount withdrawn to the Accumulation Value
immediately prior to the withdrawal. If multiple withdrawals are made in a
Contract Year, the percentage withdrawn for each withdrawal will be added
together to determine the 10% free withdrawal portion.
Once a surrender charge has been imposed on any Purchase Payment, that
payment or portion thereof will not thereafter be treated as a Purchase Payment
for purposes of the charge.
The surrender charge is not imposed upon annuitization at the Annuity
Date upon any payments received by an Annuitant or Beneficiary in lieu of
annuity payments during the Annuity Period, or upon payments to a Beneficiary
when an Annuitant dies during the Accumulation Period.
There is no surrender charge if the Annuitant is eligible for and has
qualified to receive Social Security disability benefits. VALIC may ask for
proof of disability. Proof of disability will be made by sending VALIC a
certified copy of a Social Security Administration determination of disability.
The amount payable upon full surrender in the case of disability will be
the Accumulation Value on the date VALIC receives due proof of disability.
VALIC may reduce the surrender charge under this Section.
3.03 CHARGE FOR ANNUAL CONTRACT MAINTENANCE
A Contract maintenance charge of $20 will be assessed by VALIC for the
first Contract Year. An annual Contract maintenance charge of $15 will be
assessed for the second and later Contract Years during the Accumulation
Period. The charge is due in quarterly installments beginning on the first day
of the calendar quarter following the first date a Purchase Payment is credited
to the Contract. The charge is assessed on the last day of the calendar quarter
in which it is due. VALIC will reduce the Accumulation Value of the Contract to
cover this charge.
If the Contract is surrendered during a calendar quarter, the full
quarterly assessment will be made at the time of the surrender, and VALIC will
reduce the Surrender Value of the Contract to cover this charge.
The Contract maintenance charge is not guaranteed and may, with prior
regulatory approval if required, be changed.
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3.04 CHARGE TO THE SEPARATE ACCOUNT
To cover other administrative expenses and mortality risks, VALIC will
assess the Separate Account a daily charge of .00274%. This charge equals an
annual rate of 1% of the average daily net asset value of the Separate Account
Divisions attributable to the Contract.
SECTION 4
TRANSFERS AND SURRENDERS
4.01 TRANSFERS
(a) Before annuity payments begin, the Contract Owner may transfer
amounts held under this Contract among Variable Subaccounts or from Variable
Subaccounts to the Fixed Subaccount(s). VALIC reserves the right to limit such
transfers to intervals of not less than 30 days.
Up to 20% of the Accumulation Value under Fixed Subaccount One may be
transferred each Contract Year. If multiple transfers are made in a Contract
Year, the percentage of the Accumulation Value transferred each time will be
added together to determine the 20% transfer limit for that Contract Year. For
each transfer, the percentage transferred is the ratio of the amount
transferred to the Fixed Subaccount One Accumulation Value immediately prior to
the transfer. However, if the Accumulation Value remaining under Fixed
Subaccount One would be less than $500, such value may be transferred in full
at that time.
After a Contract Owner transfers amounts to Fixed Subaccount Two, no
further transfers from Fixed Subaccount Two may be made for 90 days. The 90 day
transfer period may be changed at any time. However, the transfer period may
not exceed 180 days.
(b) During the Annuity Period the Annuitant may transfer amounts
among Divisions underlying a Variable Annuity or from the Divisions underlying
a Variable Annuity to provide a Fixed Annuity. Transfers may not be made at
intervals of less than 365 days. Transfers of amounts providing a Fixed Annuity
may not be made to provide a Variable Annuity during the Annuity Period.
(c) Transfers will be made only when VALIC receives written
instructions at its Home Office. Instructions must be made on a form furnished
by VALIC.
(d) Transfers shall be made at the Unit value next determined
after receipt by VALIC of a valid, complete transfer request.
(e) Transfers may not be made if values under the Contract
will be accumulated in more than the maximum number of subaccounts available at
any one time. VALIC reserves the right to limit allocations among subaccounts
to seven at any one time.
4.02 SURRENDERS
A Contract Owner may make partial or total surrenders of the Surrender
Value of the Contract at any time during the Accumulation Period. The
Accumulation Value for purposes of determining the surrender charge is that
next computed after the request for surrender is received at VALIC's Home
Office.
4.03 MINIMUM SURRENDER VALUE
In the case of a full surrender of the Contract prior to the Annuity
Date, the value received under the Fixed Subaccounts shall never be less than
Purchase Payments allocated to the Fixed Subaccounts, less any amounts
transferred to Variable Subaccounts and less any previous partial surrenders.
SECTION 5
ANNUITY BENEFITS
5.01 ANNUITY DATE
The Annuity Date shall be selected by the Contract Owner. Such date
may be the first day of any calendar month following the Annuitant's 50th
birthday but may not be later than the Annuitant's 75th birthday if the Contract
is issued under a qualified plan and 85th birthday if the Contract is issued as
a non-qualified deferred annuity. In the absence of an election, the Annuity
Date shall be the first day of the month during which the Annuitant attains age
75 if the Contract is issued under a qualified plan and age 85 if the Contract
is issued as a non-qualified deferred annuity.
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5.02 ELECTION TO COMMENCE ANNUITY PAYMENTS
An election to commence Annuity Payments must be made in writing on a
form provided by VALIC. Payments will start on the first day of the month
following 30 days after the election is received at VALIC's Home Office.
5.03 ANNUITY UNIT VALUE
The Value of a Fixed Annuity Unit is fixed at $1.00. The current value
of an Annuity Unit in a Division is equal to the value of such Annuity Unit for
the immediately preceding valuation period times the product of (a) an Assumed
Investment Rate factor per day of the current valuation period and (b) the
applicable Net Investment Factor for such valuation period for the Division.
The Assumed Investment Rate will equal 3 1/2% unless the Annuitant chooses an
Assumed Investment Rate other than 3 1/2%, if permitted by state law or
regulations, of 4 1/2% or 5%. If the Annuitant chooses an Assumed Investment
Rate of 3 1/2%, the Assumed Investment Rate factor above will equal 0.999906. If
an Assumed Investment Rate other than 3 1/2% is chosen, the factor for 4 1/2%
will equal .999879 and the factor for 5% will equal .999866. The value of a
Unit may increase or decrease according to the investment performance of the
Division underlying the Variable Subaccount.
5.04 ANNUITY OPTIONS
The Annuitant may elect to have payments made under any of the Options
below or any other Option which is mutually agreeable. Payments may be received
on either a fixed or a variable basis, or both, except that payments under the
Fifth Option must be made on a fixed basis.
FIRST OPTION - LIFE ANNUITY - An annuity payable monthly during the
Annuitant's life. Payments shall cease with the last one due before
the Annuitant's death.
SECOND OPTION - LIFE ANNUITY WITH 60, 120, OR 180 MONTHLY PAYMENTS
GUARANTEED - An annuity payable monthly during the Annuitant's life.
If, at the death of the Annuitant, payments have been made for less
than the number of months selected, payments will be made to a
Beneficiary for the rest of the guaranteed period.
THIRD OPTION - UNIT REFUND LIFE ANNUITY - An annuity payable monthly
during the Annuitant's life. Payments cease with the last one due
before the Annuitant's death. At the Annuitant's death the Beneficiary
may receive an additional payment. The payment under a Fixed Annuity,
if any, is equal to the Fixed Annuity value of the Participant's
Account at the Annuity Date which has not previously been paid out in
the form of annuity payments. The payment under a Variable Annuity, if
any, is equal to the then current value of any Annuity Units which
have not been paid out in the form of annuity payments. The number of
Annuity Units at the Annuity Date is the total value applied to this
Option divided by the Annuity Unit value used to calculate the first
annuity payment.
FOURTH OPTION - JOINT AND LAST SURVIVOR ANNUITY - An annuity payable
monthly during the joint lives of the Annuitant and a named second
person and thereafter during the life of the survivor.
FIFTH OPTION - PAYMENTS FOR A DESIGNATED PERIOD - An annuity payable
monthly for a selected number of years between three and thirty.
Any Option chosen by the Annuitant must comply with applicable tax
laws and regulations.
5.05 AUTOMATIC ANNUITY OPTION
If the Annuitant does not elect one of the Options prior to the
Annuity Date, annuity payments will be made in accordance with the Second
Option, with payments being guaranteed for a ten year period, unless this
Option is contrary to applicable tax laws or regulations.
5.06 MINIMUM ANNUITY PAYMENT
An Annuity Option may not be elected under a Fixed or Variable Annuity
unless an annuity payment of at least $25 would be provided under that Option.
If a combination of Fixed and Variable Annuities is elected, each Fixed Annuity
payment and each portion of a Variable Annuity payment based on Division must
equal at least $25.
5.07 BETTERMENT OF RATES
If greater benefits would result for a Fixed Annuity, the amount of
the Annuitant's monthly payment will be the monthly payment produced by the
then current settlement option rates, which will not be less than the rates
used for a currently issued immediate annuity of the same form. It shall have a
single stipulated payment equal to the Accumulation Value of the Contract being
applied to effect the annuity. Any commuted values allowed will be determined
based on the Option elected and the Assumed Investment Rate used to determine
the purchase rate for such annuities.
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5.08 ALLOCATION OF VARIABLE AND FIXED ANNUITIES
In the absence of notification to the contrary, when an annuity is
effected for an Annuitant, Fixed Subaccount accumulations will provide a Fixed
Annuity and Variable Subaccount Units will provide a Variable Annuity (Annuity
Units in the Separate Account) based on the Divisions in which the Variable
Subaccounts were invested immediately prior thereto. If the Fifth Option is
elected, the Accumulation Value will provide a Fixed Annuity.
(a) Variable Annuity -- An annuity with payments varying according
to the net investment return of the Divisions selected. The
number of Annuity Units in each Variable Subaccount is
determined by dividing the first monthly payment by the
Annuity Unit value of the applicable Division as of the tenth
day before the Annuity Date.
Once variable payments have begun, the number of Annuity Units
per payment remain fixed. However, subsequent transfers among
the Divisions or from a Division to provide a Fixed Annuity
after annuity payments begin will result in a recalculation of
the number of Annuity Units.
The dollar amount of the second and later Variable Annuity
payments is not set and may change from month to month. The
actual amount of each Variable Annuity payment after the first
is equal to the number of Annuity Units under the Variable
Subaccounts times the Annuity Unit value of the applicable
Division as of the tenth day prior to the date the payment is
due.
VALIC guarantees that the dollar amount of each annuity
payment after the first shall not be adversely affected by
actual expenses or variations in mortality experience which
differ from those assumed for the first payment
(b) Fixed Annuity -- An annuity with payments which remain fixed
as to dollar amount. Payments after the first will never be
less than the first monthly payment. Payments may be increased
at VALIC's discretion.
5.09 ANNUITY TABLES
The following tables show the amount required to purchase a first
monthly payment of $1.00. Tables A, B, and C are calculated using Assumed
Investment Rates of 3 1/2%, 4 1/2%, and 5% per year, respectively, for Variable
Annuities and a mortality table constructed from the 1983 Table a. The amount
applied to effect an annuity will be the Accumulation Value on the tenth date
preceding the date the first payment is due. The amount of each payment will
depend upon the Annuitant's age at the birthday nearest to the time the first
payment is due. The table used will depend upon the Assumed Investment Rate
selected by the Annuitant.
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TABLE A
DOLLAR AMOUNT REQUIRED TO PURCHASE A VARIABLE ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 3 1/2%
Options 1, 2 and 3 -- Single Life Annuities
Monthly Payments Guaranteed
--------------------------------------
Age None 60 120 180 Cash Refund
50 $233.36 $233.71 $234.82 $236.75 $240.70
51 229.87 230.25 231.45 233.54 237.65
52 226.30 226.72 228.01 230.29 234.54
53 222.65 223.10 224.51 226.98 231.36
54 218.93 219.41 220.93 223.62 228.12
55 215.11 215.64 217.28 220.22 224.82
56 211.21 211.78 213.57 216.77 221.45
57 207.23 207.84 209.79 213.28 218.02
58 203.15 203.81 205.94 209.76 214.53
59 198.98 199.70 202.03 206.21 210.96
60 194.73 195.51 198.06 202.64 207.33
61 190.38 191.24 194.04 199.05 203.63
62 185.95 186.90 189.97 195.47 199.85
63 181.45 182.50 185.86 191.89 195.99
64 176.88 178.03 181.73 188.35 192.18
65 172.25 173.52 177.57 184.84 188.25
66 167.56 168.95 173.41 181.39 184.24
67 162.81 164.34 169.24 178.00 180.31
68 158.01 159.70 165.09 174.70 176.25
69 153.16 155.01 160.95 171.49 172.11
70 148.26 150.30 156.85 168.40 168.10
71 143.31 145.57 152.79 165.44 163.94
72 138.33 140.83 148.81 162.62 159.70
73 133.32 136.10 144.91 159.98 155.66
74 128.31 131.39 141.11 157.51 151.45
75 123.30 126.73 137.44 155.22 147.15
Option 4 -- Joint and Survivor Life Annuity
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇: Number of Years Younger Than Older Annuitant
Age of Older -------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
50 $256.95 $258.82 $260.70 $262.61 $264.53 $266.46 $268.39 $270.33 $272.26 $274.19 $276.10
51 253.87 255.79 257.73 259.69 261.67 263.66 265.66 267.66 269.65 271.64 273.61
52 250.69 252.67 254.67 256.69 258.73 260.78 262.84 264.90 266.96 269.00 271.04
53 247.42 249.45 251.52 253.60 255.70 257.81 259.93 262.06 264.18 266.29 268.39
54 244.06 246.15 248.27 250.41 252.58 254.75 256.94 259.13 261.31 263.49 265.66
55 240.59 242.75 244.93 247.14 249.36 251.60 253.85 256.11 258.36 260.61 262.85
56 237.03 239.25 241.49 243.76 246.05 248.36 250.68 253.00 255.32 257.64 259.94
57 233.37 235.64 237.95 240.29 242.65 245.02 247.41 249.80 252.19 254.57 256.95
58 229.60 231.94 234.31 236.72 239.14 241.59 244.04 246.50 248.96 251.42 253.87
59 225.73 228.13 230.57 233.04 235.54 238.05 240.58 243.11 245.64 248.17 250.70
60 221.75 224.22 226.72 229.26 231.83 234.41 237.01 239.62 242.23 244.83 247.43
61 217.66 220.19 222.77 225.38 228.02 230.68 233.35 236.03 238.71 241.39 244.07
62 213.47 216.07 218.71 221.39 224.10 226.83 229.58 232.34 235.10 237.86 240.61
63 209.17 211.84 214.55 217.30 220.08 222.89 225.71 228.55 231.39 234.23 237.05
64 204.78 207.50 210.28 213.10 215.96 218.84 221.74 224.66 227.57 230.49 233.40
65 200.28 203.07 205.91 208.80 211.73 214.69 217.67 220.66 223.66 226.66 229.65
66 195.69 198.54 201.45 204.40 207.40 210.43 213.49 216.57 219.65 222.73 225.80
67 191.01 193.92 196.89 199.91 202.98 206.08 209.22 212.37 215.53 218.70 221.86
68 186.24 189.21 192.24 195.33 198.46 201.64 204.84 208.07 211.32 214.56 217.81
69 181.38 184.41 187.50 190.65 193.85 197.10 200.38 203.68 207.00 210.33 213.66
70 176.44 179.52 182.68 185.89 189.16 192.47 195.82 199.20 202.60 206.01 209.42
71 171.42 174.55 177.77 181.04 184.37 187.75 191.17 194.62 198.10 201.59 205.08
72 166.33 169.51 172.78 176.11 179.51 182.95 186.44 189.96 193.51 197.07 200.65
73 161.17 164.40 167.71 171.10 174.56 178.07 181.63 185.22 188.83 192.47 196.12
74 155.97 159.22 162.58 166.02 169.53 173.11 176.73 180.39 184.08 187.79 191.51
75 150.73 154.01 157.39 160.87 164.44 168.07 171.75 175.48 179.24 183.02 186.82
Page 10
UIT-585-96 QU1IXSTA
11
TABLE B
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 4 1/2%
Options 1, 2 and 3 -- Single Life Annuities
Monthly Payments Guaranteed
-----------------------------------------
Age None 60 120 180 Cash Refund
50 $204.42 $204.75 $205.77 $207.48 $209.57
51 201.83 202.19 203.30 205.15 207.29
52 199.16 199.55 200.75 202.77 204.94
53 196.41 196.84 198.14 200.33 202.52
54 193.58 194.05 195.45 197.84 200.04
55 190.67 191.17 192.70 195.30 197.48
56 187.67 188.21 189.87 192.70 194.84
57 184.58 185.17 186.97 190.07 192.18
58 181.40 182.04 184.00 187.39 189.42
59 178.12 178.82 180.97 184.67 186.59
60 174.75 175.51 177.87 181.92 183.68
61 171.28 172.12 174.70 179.14 180.76
62 167.73 168.64 171.48 176.35 177.73
63 164.09 165.09 168.21 173.55 174.63
64 160.36 161.48 164.90 170.76 171.46
65 156.57 157.79 161.55 167.99 168.31
66 152.70 154.05 158.18 165.24 165.04
67 148.76 150.24 154.78 162.54 161.70
68 144.75 146.38 151.38 159.88 158.28
69 140.67 142.46 147.97 157.30 154.96
70 136.53 138.50 144.57 154.80 151.48
71 132.31 134.50 141.20 152.39 147.92
72 128.04 130.46 137.87 150.10 144.48
73 123.73 126.41 134.59 147.93 140.90
74 119.38 122.37 131.39 145.90 137.25
75 115.01 118.33 128.27 144.02 133.53
Option 4 -- Joint and Survivor Life Annuity
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇: Number of Years Younger Than Older Annuitant
Age of Older -------------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
50 $222.59 $223.88 $225.17 $226.47 $227.77 $229.07 $230.36 $231.64 $232.91 $234.17 $235.41
51 220.43 221.77 223.11 224.46 225.82 227.16 228.51 229.84 231.16 232.47 233.77
52 218.19 219.58 220.97 222.38 223.78 225.18 226.58 227.97 229.35 230.71 232.06
53 215.86 217.30 218.75 220.21 221.67 223.13 224.58 226.02 227.46 228.88 230.28
54 213.44 214.94 216.44 217.96 219.47 220.99 222.50 224.00 225.49 226.97 228.43
55 210.93 212.48 214.05 215.62 217.19 218.77 220.34 221.90 223.45 224.98 226.50
56 208.32 209.94 211.56 213.19 214.83 216.46 218.09 219.71 221.32 222.92 224.50
57 205.62 207.29 208.98 210.67 212.37 214.06 215.76 217.44 219.12 220.77 222.42
58 202.82 204.55 206.30 208.06 209.82 211.58 213.33 215.08 216.82 218.55 220.25
59 199.91 201.71 203.52 205.34 207.17 209.00 210.82 212.64 214.44 216.23 218.00
60 196.90 198.76 200.64 202.53 204.42 206.32 208.21 210.10 211.97 213.83 215.67
61 193.78 195.71 197.65 199.61 201.58 203.54 205.51 207.46 209.41 211.34 213.25
62 190.56 192.55 194.56 196.59 198.63 200.67 202.70 204.73 206.75 208.75 210.74
63 187.23 189.28 191.37 193.46 195.57 197.68 199.80 201.90 203.99 206.07 208.13
64 183.79 185.91 188.06 190.23 192.41 194.60 196.79 198.97 201.14 203.30 205.43
65 180.25 182.44 184.65 186.89 189.15 191.41 193.68 195.94 198.19 200.42 202.64
66 176.60 178.85 181.14 183.45 185.78 188.12 190.46 192.80 195.14 197.45 199.75
67 172.85 175.17 177.53 179.91 182.31 184.72 187.15 189.57 191.98 194.38 196.76
68 169.00 171.39 173.81 176.26 178.74 181.23 183.73 186.23 188.72 191.20 193.67
69 165.05 167.50 169.99 172.52 175.06 177.63 180.20 182.78 185.36 187.93 190.47
70 161.00 163.52 166.08 168.67 171.29 173.93 176.58 179.24 181.90 184.55 187.18
71 156.85 159.43 162.06 164.73 167.42 170.13 172.86 175.60 178.34 181.07 183.79
72 152.62 155.26 157.95 160.69 163.45 166.24 169.05 171.86 174.68 177.49 180.30
73 148.30 150.99 153.75 156.55 159.39 162.25 165.13 168.03 170.92 173.82 176.70
74 143.91 146.65 149.46 152.32 155.23 158.17 161.13 164.10 167.07 170.05 173.02
75 139.46 142.24 145.09 148.01 150.98 153.99 157.02 160.07 163.13 166.18 169.23
Page 1Oa
UIT-581-96 QU1IXSTB
12
TABLE C
DOLLAR AMOUNT REQUIRED TO PURCHASE AN ANNUITY
WITH A FIRST MONTHLY PAYMENT OF $1.00
AT AN ASSUMED INVESTMENT RATE OF 5%
Option 1, 2 and 3 -- Single Life Annuities
Monthly Payments Guaranteed
Age None 60 120 180 Cash Refund
50 $192.14 $192.47 $193.45 $195.06 $196.46
51 189.89 190.25 191.32 193.06 194.47
52 187.57 187.96 189.12 191.01 192.45
53 185.18 185.60 186.85 188.91 190.34
54 182.70 183.16 184.51 186.76 188.17
55 180.14 180.64 182.11 184.55 185.92
56 177.50 178.04 179.63 182.30 183.60
57 174.77 175.35 177.09 180.00 181.21
58 171.95 172.58 174.47 177.65 178.81
59 169.03 169.71 171.79 175.27 176.29
60 166.02 166.77 169.04 172.85 173.70
61 162.91 163.73 166.22 170.40 171.03
62 159.72 160.62 163.35 167.93 168.35
63 156.43 157.42 160.43 165.45 165.57
64 153.06 154.16 157.45 162.97 162.71
65 149.62 150.82 154.44 160.50 159.78
66 146.09 147.42 151.40 158.04 156.86
67 142.49 143.95 148.32 155.62 153.83
68 138.82 140.42 145.24 153.24 150.73
69 135.07 136.83 142.14 150.92 147.55
70 131.25 133.19 139.04 148.66 144.44
71 127.35 129.50 135.96 146.49 141.20
72 123.39 125.77 132.90 144.42 137.89
73 119.38 122.02 129.89 142.45 134.51
74 115.32 118.25 126.94 140.61 131.31
75 111.23 114.50 124.08 138.90 127.92
Option 4 -- Joint and Survivor Life Annuity
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇: Number of Years Younger Than Older Annuitant
Age of Older ---------------------------------------------------------------------------------------------------------
Annuitant 0 1 2 3 4 5 6 7 8 9 10
50 $208.17 $209.24 $210.32 $211.39 $212.47 $213.53 $214.59 $215.64 $216.67 $217.69 $218.70
51 206.35 207.47 208.60 209.72 210.84 211.96 213.06 214.16 215.24 216.31 217.36
52 204.46 205.63 206.80 207.98 209.15 210.31 211.47 212.61 213.74 214.86 215.96
53 202.49 203.71 204.93 206.15 207.37 208.59 209.80 210.99 212.18 213.34 214.49
54 200.43 201.70 202.98 204.25 205.53 206.79 208.06 209.30 210.54 211.76 212.96
55 198.28 199.61 200.94 202.27 203.60 204.92 206.24 207.54 208.83 210.11 211.36
56 196.05 197.43 198.82 200.20 201.59 202.97 204.34 205.70 207.05 208.38 209.69
57 193.72 195.16 196.60 198.05 199.49 200.93 202.36 203.78 205.19 206.58 207.95
58 191.30 192.79 194.30 195.80 197.31 198.81 200.30 201.78 203.25 204.70 206.13
59 188.77 190.33 191.90 193.47 195.03 196.60 198.15 199.70 201.22 202.74 204.23
60 186.15 187.77 189.40 191.03 192.66 194.29 195.91 197.52 199.11 200.69 202.25
61 183.41 185.10 186.79 188.49 190.19 191.89 193.58 195.26 196.92 198.56 200.18
62 180.58 182.33 184.09 185.86 187.63 189.39 191.15 192.90 194.63 196.34 198.03
63 177.64 179.45 181.28 183.12 184.96 186.79 188.63 190.44 192.25 194.03 195.79
64 174.59 176.47 178.36 180.27 182.18 184.09 186.00 187.89 189.77 191.63 193.47
65 171.43 173.38 175.34 177.32 179.31 181.29 183.27 185.24 187.20 189.13 191.05
66 168.17 170.19 172.22 174.27 176.33 178.39 180.45 182.49 184.53 186.54 188.53
67 164.81 166.89 168.99 171.11 173.24 175.38 177.51 179.64 181.75 183.85 185.92
68 161.34 163.49 165.66 167.85 170.06 172.27 174.48 176.69 178.88 181.06 183.21
69 157.77 159.99 162.23 164.49 166.77 169.06 171.34 173.63 175.91 178.16 180.40
70 154.10 156.38 158.69 161.03 163.38 165.74 168.11 170.47 172.83 175.17 177.49
71 150.32 152.67 155.05 157.46 159.89 162.33 164.77 167.22 169.65 172.08 174.48
72 146.45 148.86 151.32 153.80 156.30 158.81 161.34 163.86 166.38 168.88 171.37
73 142.49 144.96 147.48 150.03 152.61 155.20 157.80 160.40 163.00 165.59 168.16
74 138.45 140.97 143.55 146.17 148.82 151.49 154.17 156.85 159.53 162.20 164.85
75 134.34 136.91 139.53 142.21 144.93 147.67 150.43 153.19 155.96 158.71 161.45
Page 10b
UIT-585-96 QU1IXSTC
13
Option 5 -- Payment for a Designated Period
Years of Payment Years of Payment
---------------- ----------------
3 $ 34.26 17 $154.56
4 44.90 18 161.29
5 55.19 19 167.50
6 65.15 20 173.91
7 74.74 21 179.86
8 84.03 22 185.53
9 93.02 23 190.84
10 101.73 24 196.46
11 110.01 25 201.61
12 118.20 26 206.61
13 125.94 27 211.42
14 133.51 28 215.98
15 140.85 29 220.75
16 147.93 30 224.72
FREQUENCY OF PAYMENTS. Annuity payments under this Contract will be made
monthly. If such payments would amount to less than $25 each, VALIC reserves
the right to make less frequent payments. If at any time the annual rate of
payment to any payee is less than $100, VALIC may make a lump sum payment of
the remaining annuity value to the payee.
Page 11
UIT-585-96 QU1IXSTD
14
SECTION 6
CODE REQUIREMENTS AND PROVISIONS FOR RETIREMENT PLAN CONTRACTS
6.01 SPECIAL PROVISIONS APPLICABLE
This Section will apply over contrary Contract provisions if the
application for this Contract indicates that it will be issued under one of the
following tax deferred retirement programs.
6.02 QUALIFIED RETIREMENT PLANS (INCLUDING PLANS COVERING SELF-EMPLOYED
INDIVIDUALS) AND TAX SHELTERED ANNUITY PLANS
(a) The Annuitant shall always be the employee for whose benefit Purchase
Payments have been made.
(b) Nothing in this Contract shall prevent the transfer of the Contract
from the trustee of a plan to an individual as an alternative in whole
or in part for a cash lump sum distribution from the plan.
(c) A person other than the Annuitant's spouse may not be the designated
second person under the Fourth Option unless, as of the Annuity Date,
the actuarially determined present value of the payments to be made to
the Annuitant is more than 50% of the actuarially determined present
value of the aggregate payments to be made to the Annuitant and the
survivor or unless it is agreed that payments to the designated second
person will not extend beyond the life of the Annuitant's spouse.
(d) A designated period under Option Five may not be chosen unless, as of
the Annuity Date, the actuarially determined present value of the
payments to be made to the Annuitant is more than 50% of the
actuarially determined present value of the aggregate payments to be
made to the Annuitant and the Beneficiary. Tax laws and regulations
may also require that the designated period not extend beyond the life
expectancy of the Annuitant or the life expectancy of the Annuitant
and the Beneficiary.
(e) This provision may be treated as a plan provision accepting voluntary
deductible employee contributions.
(f) The Participant's rights under this Contract are subject to the terms
of the Contract Owner's plan.
6.03 NON-QUALIFIED AND UNFUNDED DEFERRED COMPENSATION PLANS
The Annuitant's employer shall be the Contract Owner. The Contract Owner
has all rights under the Contract. The Annuitant is named for bookkeeping
reasons only.
If there is any conflict between the intent of this Section and the
Contract, this Section shall apply.
6.04 DIRECT ROLLOVERS
If any benefit payable under a Contract constitutes an "eligible rollover
distribution" within the meaning of section 402 of the Internal Revenue Code of
1986, as amended ("the Code"), the Annuitant has the right to elect to have
such distribution paid directly to an "eligible retirement plan" in a
transaction designated under the Code as a "direct rollover." Before any
eligible rollover distribution is made to the Annuitant, we will provide the
Annuitant with a written explanation of the Annuitant's right to make a direct
rollover and the tax consequences of making or not making a direct rollover. No
surrender, withdrawal, or other benefit distribution that constitutes an
eligible rollover distribution will be made to the Annuitant under a Contract,
unless the Code's requirements applicable to eligible rollover distributions
have been satisfied. Except for eligible rollover distributions, VALIC reserves
the right to make payments only to the Annuitant or the Annuitant's
Beneficiary.
6.05 LIMIT ON PURCHASE PAYMENTS FOR SECTION 402(g)
An Annuitant's salary reduction Purchase Payments may not exceed the limits
of section 402(g) of the Code. VALIC reserves the right to refund excess
Purchase Payments.
6.06 WITHDRAWAL RESTRICTIONS FOR AMOUNTS TRANSFERRED FROM A SECTION
403(b)(7) CUSTODIAL ACCOUNT
Equivalent withdrawal restrictions as to those imposed upon a section
403(b) tax deferred annuity contract also apply to any portion of the
Accumulation Value that is attributable to Purchase Payments representing
amounts directly transferred from a custodial account under section 403(b)(7)
of the Code.
SECTION 7
GENERAL PROVISIONS
7.01 THE CONTRACT
This Contract is the entire Contract. All statements made by or on behalf
of the Annuitant shall be deemed representations. Such statements shall not be
deemed warranties. Only the President or a Vice President of VALIC may change
this Contract. Any such changes must be in writing.
Page 12
UIT-585-96 QU1IXSTE
15
7.02 INCONTESTABILITY
This Contract is incontestable after two years from the date of issue.
7.03 MISSTATEMENT OF AGE
If an Annuitant's age has been misstated, or that of any Beneficiary under
a settlement option which conditions payment upon the Beneficiary's survival,
any amount payable by VALIC shall be such as would be provided on the basis of
the correct information. If a correction of age is made while payments are
being made hereunder, the amount of any underpayment shall be paid in full with
the next payment due. The amount of an overpayment shall be deducted from
amounts otherwise payable hereunder.
7.04 PROOF OF SURVIVAL
If any payment is conditioned upon a payee's survival, VALIC may ask for
proof that the payee is living. If proof is requested, payments will not be
made or considered due until VALIC receives proof.
7.05 ASSIGNMENT
In no event can this Contract or the rights under it be sold, assigned,
discounted or pledged as collateral for a loan or as security for the
performance of an obligation. The Annuitant's vested rights under this Contract
are nonforfeitable and this Contract or the rights under it may not be
transferred to any person other than VALIC. Unless contrary to applicable law,
including federal tax law, the values hereunder are not subject to any creditor
claims.
This Section does not apply when the Contract is issued under a non-
qualified and unfunded deferred compensation plan.
7.06 NON-PARTICIPATING
This Contract is non-participating and does not share in the profits or
surplus of VALIC.
7.07 CHANGE OF CONTRACT BY MUTUAL AGREEMENT
Notwithstanding any of the terms of this Contract, the Contract Owner and
VALIC, by an agreement in writing on any date agreed upon may change, from time
to time, any or all terms of this Contract if it is deemed advisable to do so
to conform the Contract to requirements of applicable laws or regulations.
Consent of any Beneficiary shall not be required for any change except where an
irrevocable Beneficiary has been designated.
7.08 BENEFICIARY
The Annuitant may change any Beneficiary designation during the Annuitant's
life. An irrevocably named Beneficiary can be changed only with that
Beneficiary's written consent. Any new designation must be filed in writing
with VALIC at its Home Office. Upon receipt, the notice shall take effect as of
its signature date. It shall be subject to any action taken by VALIC prior to
receipt. An Annuitant's right to name or change a Beneficiary is subject to any
applicable tax laws and regulations.
Unless otherwise provided, proceeds will be distributed in accordance with
the following provisions. Two or more Beneficiaries living at the Annuitant's
death shall share the proceeds equally. If any of two or more Beneficiaries die
before the Annuitant, all proceeds shall be payable to any surviving
Beneficiary(ies). If no named Beneficiary is living at the Annuitant's death,
the proceeds shall be payable to the Annuitant's estate. If the Beneficiary
dies at the same time as the Annuitant, rights to the proceeds shall be
determined as though he or she died before the Annuitant. The Beneficiary's
death shall be deemed at the same time as the Annuitant's if it occurs within
15 days of the Annuitant's death. VALIC may ask for proof of survival from any
person entitled to payment. If the Beneficiary dies while receiving payments
under the Second or Fifth Options, the value of remaining payments, if any,
shall be paid to the estate of said Beneficiary.
7.09 DEATH PAYMENT PROVISIONS
If an Annuitant dies before the Annuity Date, a death benefit is payable.
The death benefit is the greater of (a) the Accumulation Value on the date
VALIC receives proof of death or (b) 100% of Purchase Payments reduced by
amounts deducted in connection with any surrenders.
Proof of death may be made by sending VALIC a certified copy of the death
certificate, a certified copy of a decree of a court of competent jurisdiction
as to death, a written statement by an attending physician, or any other proof
satisfactory to VALIC.
Page 13
UIT-585-96 QU1IXSTF
16
The Beneficiary may elect within 60 days after it is payable to receive the
death payment as a lump sum or under an Annuity Option. The Beneficiary will
then be entitled to exercise the investment options and other rights an
Annuitant would have during the Annuity Period, subject to the rules below:
o Nonspouse Beneficiary -- Payments which start within 1 year of death
may be made for a period no longer than life expectancy. Payments
which do not start within 1 year of death must be paid in full within
5 years of death.
o Spouse Beneficiary -- Payments may start at any time they could have
started to the Annuitant. If the spouse dies before payments start,
the Beneficiary will then be subject to the rules above.
If an Annuitant dies after the Annuity Date, a death benefit may be
payable. The Beneficiary may elect within 60 days after it is payable to elect
one of the following alternatives unless the Annuitant elected the Fourth
Option:
(a) receive the death benefit in a lump sum;
(b) continue to receive annuity payments under the terms of the Contract
and receive remaining variable annuity payments in a lump sum at any
time thereafter; or
(c) elect to have the value of any annuity payments applied to the Fifth
Option on a fixed basis. The designated period chosen may not be
longer than the period remaining under the Annuitant's option.
If the Beneficiary elects (b) or (c) above, the Beneficiary is entitled to
exercise all the investment options and other rights under the Contract. The
lump sum under (a) and (b) is the present value of remaining payments,
discounted at the Assumed Investment Rate, and based on the current Annuity
Unit value for (a), or the value next determined after receipt of the request
at VALIC's Home Office for (b).
7.10 SUSPENSION OF PAYMENTS
VALIC reserves the right to suspend or postpone payments under the Separate
Account for any period when: (1) the New York Stock Exchange is closed (other
than customary weekend and holiday closings); (2) when trading on the Exchange
is restricted; (3) when an emergency prevents disposal of securities held in
the Separate Account or it is not reasonably practicable to determine the value
of the Separate Account's net assets; or (4) during any other period when the
Securities and Exchange Commission, by order, so permits for the protection of
security holders. Securities and Exchange Commission rules shall govern as to
whether (2) and (3) exist.
7.11 DEFERRAL OF SURRENDER
VALIC may defer payment of any surrender of amounts accumulated in Fixed
Subaccounts. Deferral shall not exceed six months from the receipt of written
notice at the Home Office. Interest shall be paid if payment is deferred for
thirty (30) days or more at a rate as determined by VALIC.
7.12 MINIMUM BENEFIT
Any paid up annuity, cash surrender or death payment available under this
Contract shall not be less than the minimum benefits required by any statute of
the state in which the Contract is delivered.
7.13 REPORTS TO CONTRACT OWNERS
Contract Owners with Variable Subaccount allocations and Annuitants with
Annuity Units will receive a Separate Account financial report twice a year.
This report, distributed pursuant to Section 30(d) of the Investment Company
Act of 1940, shows the number of Units and dollar value of a Unit for each
Division of the Separate Account as well as other comparative financial data.
All Contract Owners will receive, at least annually, a statement showing
dollar amounts attributable to all his or her subaccounts, investment
performance in those subaccounts since the prior statement, and where
applicable, the number and value of any Units or Annuity Units attributable to
a subaccount. All statements will be mailed by VALIC within two months of the
date of the information contained therein.
7.14 VOTING RIGHTS
The Separate Account will vote Fund shares held in a Division which
correspond to this Contract's interest in such Divisions, in accordance with
instructions received from the individual having voting rights under this
Contract. If the Contract Owner participates in the investment experience of
the Separate Account, the Contract Owner will have the voting rights under this
Contract before: (a) total withdrawal; (b) the Annuity Date, or (c) the
Annuitant's death, whichever occurs first. If after the Annuity Date the payee
participates in the investment experience of the Separate Account, the payee(s)
shall have the voting rights.
Page 14
UIT-585-96 QU1IXSTG
17
7.15 SUBSTITUTION OF FUND SHARES
If Fund shares are not available, or if, in the judgment of VALIC, such
shares are no longer appropriate in view of the purposes of the Separate
Account, shares of another open-end investment company or a portfolio of same
may be substituted for Fund shares held in the Separate Account or to be
purchased by future Purchase Payments or transfers under this Contract. In the
event any substitution occurs, VALIC will notify the Contract Owner within five
days and will issue an endorsement to the Contract reflecting such changes.
7.16 SEPARATE ACCOUNT
That portion of the Separate Account assets equal to the reserves and other
contract liabilities with respect to the Separate Account are not chargeable
with liabilities arising out of any other business VALIC may conduct. Income,
gains, and losses, whether or not realized, from assets allocable to the
Separate Account, are credited to or charged against such account without
regard to VALIC's other income, gains, or losses.
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