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EXHIBIT (4)(b)
VDCA-2000 NY
Pruco Life Insurance Company of New Jersey
Newark, NJ 07102
A Stock Company Subsidiary of
The Prudential Insurance Company of America
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED VARIABLE
ANNUITY CONTRACT
Nonparticipating
ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO DOLLAR AMOUNT.
This is an annuity contract. Subject to the provisions of the Contract, and in
consideration of any Purchase Payments you make and we accept, we will make
Annuity Payments starting on the Annuity Date shown on the Contract Data pages.
Please read the Contract carefully; it is a legal contract between you and Pruco
Life Insurance Company. Expense charges applicable to the Contract are shown on
the Contract Data pages. If you have a question about the Contract, or a claim,
see your representative or contact the Annuity Service Center.
Right to Cancel Contract
This Contract may be returned within 10 days after you receive it. It can be
mailed or delivered to either us, at the Annuity Service Center, or the
representative who sold it to you. Return of this Contract by mail is effective
on being postmarked, properly addressed and postage prepaid. The returned
Contract will be cancelled upon our receipt, and we will return an amount equal
to the sum of (i) the difference between Purchase Payments received, including
any fees or other charges, and the amount(s) allocated to the Allocation Options
under the Contract, and (ii) the Contract Value as of the date the Contract is
mailed or delivered to us or the representative who sold it to you.
READ YOUR CONTRACT CAREFULLY
TABLE OF CONTENTS
CONTRACT DATA PAGES
DEFINITIONS
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PURCHASE PAYMENTS
CONTRACT VALUE
VARIABLE SEPARATE ACCOUNT
DCA FIXED RATE INVESTMENT OPTION
FIXED RATE INVESTMENT OPTION
CONTRACT MAINTENANCE CHARGE
TRANSFERS
WITHDRAWALS
PROTECTED VALUE
GUARANTEED MINIMUM DEATH BENEFIT
ANNUITY AND SETTLEMENT OPTIONS
BENEFICIARY
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS FROM THE
SEPARATE ACCOUNT
GENERAL PROVISIONS
VALUES AND BENEFITS
ANNUITY SETTLEMENT TABLES
CONTRACT DATA
PURCHASE PAYMENTS:
Initial Purchase Payment:
Minimum Subsequent Purchase Payment: $1,000. For IRA contracts, the Minimum
Subsequent Purchase Payment is $1,000. The Minimum Subsequent Purchase Payment
for automatic purchase plans, if available, is $100.
Annual Purchase Payment Limits: The total of all Purchase Payments (net of
Purchase Payments withdrawn) made into this Contract in the first Contract Year
may not exceed $7,000,000. The total of all Purchase Payments (net of Purchase
Payments withdrawn) made into this Contract in any Contract Year after the first
Contract Year may not exceed $2,000,000. Purchase Payments of greater value may
be allowed with our prior approval.
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Aggregate Purchase Payment Limit: The total of all Purchase Payments (net of
Purchase Payments withdrawn) made into this Contract may not exceed $7,000,000.
Purchase Payments of greater value may be allowed with our prior approval.
BENEFICIARY:
As designated by Owner at Contract Date unless changed in accordance with the
Contract provisions.
CONTRACT MAINTENANCE CHARGE:
If your Contract Value is less than $50,000, we will charge a Contract
Maintenance Charge of the lesser of $30 or 2% of the Contract Value. This charge
is deducted on the Contract Anniversary and when a surrender of the Contract
occurs, if the Contract Value at the time is then less than $50,000. The
Contract Maintenance Charge will be deducted on a pro-rata basis from all
Allocation Options to which your Contract Value is allocated. During the Annuity
Period, we reserve the right to assess an annual Contract Maintenance Charge of
$30. The decision to assess this charge may depend on the Annuity or Settlement
Option selected. We reserve the right to increase the Contract Maintenance
Charge, but it will not exceed $60 per Contract Year, and to raise the Contract
Value amount over which we will waive the Contract Maintenance Charge.
INSURANCE CHARGE:
This charge depends on whether you have elected the Guaranteed Minimum Death
Benefit ("GMDB") feature. This charge is deducted daily from the assets in each
of the Subaccounts. If you do not elect the GMDB feature, you do not elect a
GMDB Protected Value option either, and your death benefit is equal to the base
death benefit as described in the GMDB section of the contract.
[ ] You have not elected the GMDB feature. Therefore, the daily rate is
0.00380909%, which is equivalent to an annual rate of 1.40%.
[ ] You have elected the GMDB feature and the GMDB Protected Value option of the
Step-Up. Therefore, the daily rate is 0.00434896%, which is equivalent to an
annual rate of 1.60%.
ALLOCATION OPTIONS:
VARIABLE INVESTMENT OPTIONS:
The following variable investment options are available through allocation to
subaccounts of the Pruco Life of New Jersey Flexible Premium Variable Annuity
Account. We reserve the right to limit the availability of the below options, if
necessary, in order to comply with federal, state or local law.
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[The Prudential Series Fund, Inc.
Prudential Global Portfolio
Prudential ▇▇▇▇▇▇▇▇ Portfolio
Prudential Money Market Portfolio
Prudential Stock Index Portfolio
SP Aggressive Growth Asset Allocation Portfolio
SP AIM Aggressive Growth Portfolio
SP AIM Growth and Income Portfolio
SP Alliance Large Cap Growth Portfolio
SP Alliance Technology Portfolio
SP Balanced Asset Allocation Portfolio
SP Conservative Asset Allocation Portfolio
▇▇ ▇▇▇▇▇ Value Portfolio
SP Deutche International Equity Portfolio
SP Growth Asset Allocation Portfolio
SP INVESCO Small Company Growth Portfolio
▇▇ ▇▇▇▇▇▇▇▇ International Growth Portfolio
SP Large Cap Value Portfolio
SP MFS Capital Opportunities Portfolio
SP MFS Mid Cap Growth Portfolio
SP PIMCO High Yield Portfolio
SP PIMCO Total Return Portfolio
SP Prudential U.S. Emerging Growth Portfolio
SP Small/Mid Cap Value Portfolio
SP Strategic Partners Focused Growth Portfolio
▇▇▇▇▇ ▇▇▇▇▇ Series
Janus Aspen Series Growth Portfolio - Service Shares]
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INTEREST RATE INVESTMENT OPTIONS:
The following interest rate investment options are currently available.
We may add other options in the future.
DCA FIXED RATE INVESTMENT OPTION
FIXED RATE INVESTMENT OPTION
ALLOCATION GUIDELINES:
Currently, you may select any Allocation Option which is available at the time
the Purchase Payment or transfer is made, with the exception of the DCA Fixed
Rate Investment Option for which there may be certain limitations. An amount of
at least $5,000 must be allocated to the DCA Fixed Rate Investment Option, and
at least 1% of the Invested Purchase Payment must be allocated to any other
Allocation Option. Allocations made pursuant to automatic rebalancing or dollar
cost-averaging (not part of a DCA Program) are not subject to these limitations.
We reserve the right to limit the availability of the above Allocation Options,
if necessary, in order to comply with federal, state or local law.
TRANSFERS:
Number of Transfers Permitted: Currently, there are no limits on the number of
transfers that can be made among Subaccounts. We reserve the right to change
this, but the Owner will always be allowed at least 12 transfers among
Subaccounts in a Contract Year.
Transfer Charge: The Transfer Charge for each transfer after the first 12 in a
Contract Year is $25. The charge is taken pro-rata from the Allocation Options
from which the transfer is made. Transfers made due to automatic rebalancing or
dollar cost-averaging (whether or not part of a DCA Program) will not be counted
for purposes of the Transfer Charge.
Minimum Amount to be Transferred: Subject to the restrictions contained in the
Contract on transfers, the minimum transfer amount is $250 or your entire
interest in any Allocation Option, if less. This requirement is waived if the
transfer is pursuant to automatic rebalancing. The minimum periodic transfer
amount for amounts transferred pursuant to the dollar cost averaging feature or
from the DCA Fixed Rate Investment Option under a DCA Program is $100.
WITHDRAWALS:
Withdrawal Charge: The Withdrawal Charge is a percentage of the amount withdrawn
that is subject to a charge, and depends on the number of Contract Anniversaries
that have elapsed since a Purchase Payment was made.
Charge-Free Amount: A certain amount (the Charge-Free Amount) may
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be withdrawn without incurring a Withdrawal Charge. The Charge-Free Amount
available in any current Contract Year is calculated as of the Contract
Anniversary date and is equal to 10% of the sum of all Purchase Payments
received in excess of all Purchase Payments withdrawn and is applied on a
first-in, first-out basis.
Minimum Amount Which May Be Withdrawn: The minimum amount which
may be withdrawn is $250. The minimum amount which may be withdrawn under
a systematic withdrawal plan is $100.
Minimum Contract Value Which Must Remain in the Contract After a Withdrawal: The
minimum Contract Value which must remain in the Contract in order to keep the
Contract inforce after a withdrawal is $2,000.
DCA FIXED RATE INVESTMENT OPTION:
Minimum Guaranteed Interest Rate: 3%
Initial Interest Segment Interest Rate: [7%]
FIXED RATE INVESTMENT OPTION:
Minimum Interest Crediting Rate: 3%
Initial Interest Segment Interest Rate: [5%]
ENDORSEMENTS:
Individual Retirement Annuity Endorsement
ANNUITY SERVICE CENTER:
Annuity Service Center
P.O. Box 14215
New Brunswick, NJ 08906-4215
DEFINITIONS
ACCUMULATION PERIOD: The period from, and including, the Contract Date to, but
excluding, the Annuity Date.
ADJUSTED CONTRACT VALUE: The Contract Value as of the Annuity Date less any
applicable charges for any type of tax (or component thereof) measured by or
based on the amount of Purchase Payment we receive. The applicable Annuity Table
is applied to this amount to determine the initial Annuity Payment.
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ALLOCATION OPTIONS: Those investment options available under the Contract as of
any given time to which Contract Value may be allocated. Allocation Options as
of the Contract Date are shown on the Contract Data pages.
ANNUITANT: The person named on the first page upon whose continuation of life
any Annuity Payment involving life contingencies depends. If the Annuitant dies
before the Annuity Date, the Co-Annuitant, if applicable, becomes the Annuitant,
if the requirements for changing Annuity Date are met (see definition of Annuity
Date). If there is no surviving or eligible Co-Annuitant, and the Annuitant was
not the Owner, the Owner becomes the Annuitant. You then have 60 days from the
date we receive due proof of death of the Annuitant or Co-Annuitant to name a
new Annuitant. If no new Annuitant is named during that 60 day period, the Owner
will remain the Annuitant. You may not change an Annuitant or Co-Annuitant and
may add or remove an Annuitant or Co-Annuitant only with our prior approval.
ANNUITY DATE: The date the first Annuity or Settlement Payment to the Payee is
due. The Annuity Date is shown on the original Contract Data pages. You must
have our permission to change the Annuity Date. The maximum annuity age is age
90. If there is a new Annuitant due to the death of the Annuitant, and the new
Annuitant is older than the prior Annuitant, the Annuity Date will be based on
the age of the new Annuitant; however any such changed Annuity Date must be at
least one year after the Contract Date, must be earlier than the date shown on
the Contract Data pages, cannot be later than the Contract Anniversary next
following the new Annuitant's 90th birthday and must be consistent with
applicable law at the time.
ANNUITY OR SETTLEMENT PAYMENTS: The series of payments made to you or any named
payee after the Annuity Date as described under the Annuity or Settlement Option
selected.
ANNUITY PERIOD: The period of time, beginning on the Annuity Date, during which
Annuity or Settlement Payments are made.
ANNUITY SERVICE CENTER: The office indicated on the Contract Data pages to which
notices, requests and Purchase Payments must be sent. All sums payable to us
under the Contract must be sent to the Annuity Service Center. The Annuity
Service Center address may be changed at any time. You will be notified in
advance and in writing of any change in address.
BENEFICIARY: The person(s) or entity(ies) who has the right to receive the death
benefit when the Owner dies.
BUSINESS DAY: Any day the New York Stock Exchange and the Company are open for
business.
CHARGE-FREE AMOUNT: The Charge-Free Amount is a portion of the Contract Value
that may be withdrawn without incurring a Withdrawal Charge.
CO-ANNUITANT: The person shown on the Contract
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Data pages who becomes the Annuitant upon the death of the Annuitant before the
Annuity Date. No Co-Annuitant may be designated if the Owner is a non-natural
person.
COMPANY: Pruco Life Insurance Company of New Jersey, a New Jersey corporation.
CONTRACT ANNIVERSARY: The same day and month as the Contract Date in each later
year.
CONTRACT DATE: The date shown on the Contract Data pages on which the first
Contract Year begins.
CONTRACT SURRENDER VALUE: The Contract Value less any applicable Withdrawal
Charge, Contract Maintenance Charge or charge for any type of tax (or component
thereof) measured by or based on the amount of Purchase Payment we receive.
CONTRACT VALUE: The dollar value as of any Business Day prior to the Annuity
Date of all amounts accumulated under this Contract.
CONTRACT YEAR: A year which starts on the Contract Date or on a Contract
Anniversary.
DCA Fixed Rate Investment Option: A portion of the General Account into which
you may allocate Invested Purchase Payments. It does not share in the investment
experience of any Subaccount of the Variable Separate Account.
DCA Interest Segment: A DCA Interest Segment is a portion of the DCA Option that
is created whenever you allocate all or part of an Invested Purchase Payment to
the DCA Option.
DCA Program: A DCA Program permits you to allocate all or part of an Invested
Purchase Payment to the DCA Option and automatically transfer amounts on a
periodic basis from the DCA Option to selected Variable Investment Options for a
given period of time.
EARNINGS: The excess of the Contract Value over the sum of all Purchase Payments
made and not yet withdrawn.
GOOD ORDER: An instruction received at the Annuity Service Center, utilizing
such forms, signatures and datings as we require, that is sufficiently complete
and clear that we do not need to exercise any discretion to follow such
instructions. We will notify you if an instruction is not in Good Order.
INTEREST RATE INVESTMENT OPTION(S): Those interest rate option(s) available
under the Contract as of any given time. Interest Rate Investment Option(s) as
of the Contract Date are shown on the Contract Data pages.
INVESTED PURCHASE PAYMENTS: The balance of each Purchase Payment after we make
any applicable deduction for charges for any type of tax (or component thereof)
measured by or based on the amount of Purchase
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Payment we receive.
OWNER: The person or entity named on the Contract Data pages who has ownership
rights as defined under the Contract. You may change the Owner subject to our
underwriting rules. Any change of an Owner will be effective when we process the
request.
PAYEE: The person who has a right to receive Annuity or Settlement Payments
under the Annuity and Settlement Options provision of this Contract. The Payee
can be designated as revocable or irrevocable at your discretion. If you do not
designate a Payee at least 5 Business Days before the Annuity Date, the Owner
will become the Payee.
PURCHASE PAYMENT: A payment you make to this Contract.
SUBACCOUNT: Variable Separate Account assets are divided into Subaccounts.
Assets of each Subaccount will be invested in shares of a Variable Investment
Option.
VARIABLE INVESTMENT OPTION: Those investment options available under the
Contract through the Subaccounts as of any given time. Variable Investment
Options as of the Contract Date are shown on the Contract Data pages.
VARIABLE SEPARATE ACCOUNT: A segregated asset account maintained by us to
support this and certain other contracts. The segregated asset account(s)
available as of the Contract Date is shown on the Contract Data pages.
WE, OUR AND US: Pruco Life Insurance Company of New Jersey.
WITHDRAWAL CHARGE: A charge assessed on partial or full withdrawals during the
Withdrawal Charge Period. The Withdrawal Charge equals a percentage, shown on
the Contract Data pages, of the amount subject to the charge.
WITHDRAWAL CHARGE PERIOD: The number of Contract Anniversaries since each
Purchase Payment during which Withdrawal Charges are applied to withdrawals of
amounts in the Contract. The Withdrawal Charge Period is shown on the Contract
Data pages.
YOU AND YOUR: The Owner of the Contract.
PURCHASE PAYMENTS
PURCHASE PAYMENTS: The initial Purchase Payment must be paid on the Contract
Date. In general, subsequent Purchase Payments may be made at any time before
the Annuity Date. However, no Purchase Payments may be made on or after the
Owner's or Annuitant's 80th birthday. The Minimum Subsequent Purchase Payment,
Annual Purchase Payment Limits and Aggregate Purchase Payment Limit are shown on
the Contract Data pages.
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ALLOCATION OF PURCHASE PAYMENTS: Invested Purchase Payments are allocated to one
or more of the Allocation Options in accordance with your selection. The
allocation of the initial Invested Purchase Payment is made in accordance with
your selection made on the Contract Date. You may change the allocation of
future Invested Purchase Payments at any time. If, after the Initial Purchase
Payment, we receive a Purchase Payment without allocation instructions, we will
allocate the corresponding Invested Purchase Payment in the same proportion as
the most recent Purchase Payment you made (unless that was a Purchase Payment
you directed us to allocate on a one-time-only basis.) Assuming that all other
requirements are received in Good Order, we reserve the right to allocate your
initial Invested Purchase Payment to the Money Market Subaccount until we
receive your allocation selection. All allocations of Invested Purchase Payments
are subject to the Allocation Guidelines shown on the Contract Data pages.
Currently, you may select any Allocation Option which is available at the time
the Purchase Payment or transfer is made, with the exception of the DCA Option
for which there may be certain limitations. However, we reserve the right to
limit this in the future. If the Purchase Payment and forms required to issue a
Contract are in Good Order, the initial Invested Purchase Payment will be
credited to your Contract within two (2) Business Days after receipt at the
Annuity Service Center. Additional Invested Purchase Payments will be credited
to your Contract as of the Business Day they are received.
CONTRACT VALUE
Your Contract Value is the total of all amounts credited to your Contract as of
any Business Day as a result of your initial Invested Purchase Payment and the
increases and decreases described below.
On the Contract Date, the Contract Value is equal to the initial Invested
Purchase Payment. After that, the Contract Value as of any Business Day is
determined by starting with the Contract Value at the end of the previous day
and adjusting it for items that increase it or decrease it.
Items that increase the Contract Value are: Invested Purchase Payments, positive
investment performance in a Subaccount and interest credited to an Interest Rate
Investment Option.
Items that decrease the Contract Value are: withdrawals and the charges
associated with them, negative investment performance in a Subaccount; Insurance
Charge; Contract Maintenance Charge, if applicable; Transfer Charge; and charges
for any type of tax (or component thereof) measured by or based on the amount of
Purchase Payment we receive.
Investment results and interest are credited daily and the Insurance Charge is
deducted daily. The Contract Maintenance charge is deducted annually as of the
Contract Anniversary and upon a total withdrawal. Other charges are assessed
only if the appropriate event occurs.
To determine the value of the Variable Investment Options under your Contract,
we use a unit of measure called an accumulation unit. Each day we determine the
value of an accumulation unit for each of the Variable Investment Options. We do
this
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by: (1) adding up the total amount of money allocated to a specific investment
option; (2) subtracting from that amount insurance charges and any other
applicable charges, such as for taxes; and (3) dividing this amount by the
number of outstanding accumulation units.
When you make a Purchase Payment, we credit your contract with accumulation
units of the subaccount or subaccounts selected. The number of accumulation
units credited to your Contract is determined by dividing the amount of the
Purchase Payment allocated to an investment option by the unit price of the
accumulation unit for that investment option. We calculate the unit price for
each investment option after the New York Stock Exchange closes each day and
then credit your Contract. The value of the accumulation units can increase,
decrease, or remain the same from day to day.
VARIABLE SEPARATE ACCOUNT
THE VARIABLE SEPARATE ACCOUNT: The Variable Separate Account is designated on
the Contract Data pages. It consists of assets we have set aside and have kept
separate from the rest of our assets and those of our other separate accounts.
The assets of the Variable Separate Account, equal to reserves and other
liabilities of your Contract and those of other owners, will not be charged with
liabilities arising out of any other business we may conduct. The operation of
the Variable Separate Account is subject to the laws of the state in which the
Contract is delivered.
The Variable Separate Account assets are divided into Subaccounts. The assets of
the Subaccount are allocated to the Variable Investment Option(s) shown on the
Contract Data pages. We may restructure, eliminate or combine Subaccounts or add
to or eliminate Variable Investment Option(s) from those shown. You may be
permitted to transfer your Contract Value or allocate Invested Purchase Payments
to the additional Subaccount(s). However, the right to make such transfers or
allocations will be limited by any terms and conditions we may impose.
Should the shares of any Variable Investment Option(s) become unavailable for
investment by the Variable Separate Account, we deem further investment in the
shares inappropriate, or if required for tax reasons, we may limit further
purchase of such shares or substitute shares of another Variable Investment
Option for shares already purchased.
VALUATION OF ASSETS: The value of the shares held by the Subaccounts in the
Variable Investment Options will be based on the net asset value of the
Investment Option on each Business Day.
INSURANCE CHARGE: Each Business Day, we deduct an Insurance Charge from the
Subaccounts of the Variable Separate Account which is equivalent, on an annual
basis, to the amount shown on the Contract Data pages. The amount of the
Insurance Charge is based on whether you have elected the GMDB.
DCA FIXED RATE INVESTMENT OPTION
DCA PROGRAM: If a DCA Program is elected, you may allocate all or part of your
Invested Purchase Payments to the DCA Fixed Rate Investment Option ("DCA
Option"). The DCA Program provides for a systematic
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transfer of the funds allocated to the DCA option on a periodic basis from the
DCA Option to selected Variable Investment Options for a given number of
payments. However, you may not transfer any Contract Value to the DCA Option
from the other Allocation Options.
INTEREST TO BE CREDITED: A DCA Interest Segment is a portion of the DCA Option
that is created when you allocate all or part of an Invested Purchase Payment to
the DCA Option. We credit interest to the amount in each DCA Interest Segment
daily at the daily equivalent of a specific rate declared for that DCA Interest
Segment until the earliest of: 1) the date the amount in the DCA Interest
Segment is transferred out of the DCA Interest Segment; 2) the date the amount
in the DCA Interest Segment is withdrawn; 3) the date as of which any death
benefit payable is determined, and 4) the Annuity Date. The initial Interest
Segment Interest Rate applicable for Invested Purchase Payments allocated to the
DCA Option on the Contract Date is shown on the Contract Data pages. Interest
rates for future allocations to the DCA Option will be declared on or before the
date when those allocations are made. The declared rates will never be less than
the Minimum Guaranteed Interest Rate shown on the Contract Data pages. The
current effective interest rates can be found by contacting the representative
who sold you this Contract or by calling the Annuity Service Center.
TRANSFERS: Invested Purchase Payments allocated to the DCA Option are
transferred systematically on a periodic basis to the Variable Investment
Options which you have specified. We will transfer the amount allocated in a
series of equal payments on each transfer date such that the amount of each
payment corresponds to the number of payments for the period selected for the
transfers. The final transfer includes the interest credited during the period
(but see below for the effect of withdrawals). The first periodic transfer from
the DCA Option is made as of the date of the allocation of the applicable
Invested Purchase Payment. Subsequent transfers are made on the periodic
anniversary of the first transfer (for example, monthly or quarterly). The final
transfer amount includes the interest credited during the elected period. Once
the initial transfer has been processed, the transfer period may not be changed.
The Variable Investment Options to which the transfers are being made may be
changed. Transfers from the DCA Option do not count toward the maximum number of
free transfers permissible under the Contract.
EFFECT OF WITHDRAWALS ON TRANSFERS: Withdrawals from the DCA Option are
permitted. We will recalculate the periodic transfer amount to reflect the
reduction in the DCA Option caused by the withdrawal. This recalculation may
include some or all of the interest credited to the date of the next scheduled
transfer. Any interest that is not included in the recalculated transfer amount
will be paid with the final transfer amount, unless there is another subsequent
withdrawal. Deductions of the Contract Maintenance Charge and Insurance Charge
are treated as withdrawals for this purpose. If a withdrawal reduces the
periodic transfer amount to below $100, the remaining balance in the DCA Option
will be transferred to the Variable Investment Options that you had most
recently selected for the DCA program on the next scheduled transfer date. If a
withdrawal request does not specify the Allocation Options from which the
withdrawal is to be made, we will take the withdrawal on a pro-rata basis from
all Allocation Options to which your Contract Value is then allocated.
Systematic withdrawals from the
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DCA Option are permitted.
DEFERRAL OF PAYMENTS OR TRANSFERS FROM THE GENERAL ACCOUNT: We reserve the right
to defer payment for a withdrawal or transfer from the DCA Option for the period
permitted by law, but for not more than six months after a request in Good Order
is received by us at the Annuity Service Center.
FIXED RATE INVESTMENT OPTION
INTEREST RATE: The initial Interest Segment Interest Rate applicable to the
Fixed Rate Investment Option on the Contract Date is shown on the Contract Data
page. We will credit interest to amounts allocated to the Fixed Rate Investment
Option at the daily equivalent of the rate shown for this Option. Interest rates
for future allocations or transfers to this Option will be declared when those
allocations or transfers are made. The declared rates will never be less than
the Minimum Interest Crediting Rate shown on the Contract Data page.
INTEREST SEGMENT: An interest segment is created whenever you allocate or
transfer an amount to the Fixed Rate Investment Option. We credit interest to
the amount in each interest segment daily at a specific rate declared for that
interest segment until the earliest of: the date it is withdrawn; the date it is
transferred to another Allocation Option; the maturity date of the segment; and
the date as of which a death benefit is determined.
TRANSFERS: At the maturity date of an interest segment, you have 30 days during
which you may elect to transfer the amount in that interest segment into any of
the Allocation Options available on that date, other than a DCA Option. Once you
have made an election, and we have received it, it may not be reversed. Amounts
that are transferred to another interest segment, if available at that time,
during the 30 day period will receive the rate that is effective as of the
maturity date for that interest segment. Amounts that you withdraw or transfer
into another Allocation Option during the 30 day period will receive interest
from the maturity date to the date of withdrawal or transfer at the rate that
would have applied to those amounts had you taken no action within the 30 day
period. If you do not make an election to transfer within 30 days following the
maturity date of the segment, we will transfer the amount in the interest
segment on the maturity date to an interest segment with the same duration to
maturity as the maturing interest segment.
CONTRACT MAINTENANCE CHARGE
We deduct an annual Contract Maintenance Charge shown on the Contract Data page.
We determine your Contract Value as of your Contract Anniversary and make any
deductions required on a pro-rata basis from all Allocation Options to which
your Contract Value is allocated. If a total withdrawal is made on other than a
Contract Anniversary, we will determine your Contract Value and make a deduction
for the Contract Maintenance Charge the same as we would if it were a Contract
Anniversary.
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TRANSFERS
TRANSFERS DURING THE ACCUMULATION PERIOD: A transfer is subject to the
following:
the maximum number of transfers which may be made, the maximum number of
transfers which are not subject to a Transfer Charge and the minimum amount
which may be transferred are shown on the Contract Data pages;
a Transfer Charge is deducted if a transfer exceeds the maximum number of free
transfers. The Transfer Charge is shown on the Contract Data pages. The Transfer
Charge is deducted from the amount which is transferred;
a transfer will be effected as of the end of the Business Day when we receive a
request in Good Order;
we are not responsible for the consequences resulting from a transfer made in
accordance with your instructions.
No transfers are permitted after the Annuity Date.
WITHDRAWALS
WITHDRAWALS: During the Accumulation Period, you may, upon a request in Good
Order, make a total or partial withdrawal of the Contract Surrender Value. You
may specify the Allocation Option(s) from which a withdrawal will be taken. If
you do not so specify, we will take the withdrawal on a pro-rata basis from all
Allocation Option(s) to which your Contract Value is allocated.
We will pay the amount of any withdrawal within 7 days of receipt of request in
Good Order unless the "Suspension or Deferral of Payments Provision" is in
effect. If we postpone payment of a withdrawal for more than 7 days after we
receive your withdrawal request, we will pay interest. The interest will be
calculated daily from the date we receive your request, at the effective annual
rate of 3%. No interest will be paid if the amount of interest calculated is
less than $25.
Each partial withdrawal must be for an amount which is not less than the amount
shown on the Contract Data pages. The minimum Contract Value which must remain
in the Contract after a partial withdrawal in order to keep the Contract inforce
is shown on the Contract Data pages. If the amount of the withdrawal requested
would reduce the Contract Value below this minimum, we will give you the maximum
amount available that, with the Withdrawal Charge, would not reduce the Contract
Value below such minimum. Special rules may apply for IRAs.
WITHDRAWAL CHARGE: A Withdrawal Charge may apply if you make a withdrawal during
the Withdrawal Charge Period for a Purchase Payment. The amount of the
Withdrawal Charge varies with the number of Contract Anniversaries that have
elapsed since a Purchase Payment was made, and is a percentage, shown on the
Contract Data pages, of the
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amount withdrawn that is subject to the charge. If a withdrawal is effective on
the day before a Contract Anniversary, the Withdrawal Charge percentage used
will be the one as of the following Contract Anniversary. If you request a
partial withdrawal, we will deduct an amount from the Contract Value that is
sufficient to pay the Withdrawal Charge and provide you the amount requested.
For purposes of determining the Withdrawal Charge, withdrawals of the
Charge-Free Amount will be taken first from Purchase Payments, on a first-in,
first-out basis. Withdrawals in excess of the Charge-Free Amount will come first
from Purchase Payments, also on a first-in, first-out basis, and will be subject
to Withdrawal Charges, if applicable, even if Earnings are available on that
date. Once all Purchase Payments have been withdrawn, further withdrawals will
be taken from any remaining Earnings. Earnings are not subject to Withdrawal
Charges.
Withdrawal Charges will never be greater than that permitted by any applicable
law or regulation.
PROTECTED VALUE
The Protected Value is the amount which is applied to provide a Guaranteed
Minimum Death Benefit ("GMDB") for your beneficiaries.
If you elect the GMDB feature, as shown on the Contract Data pages, the GMDB
Protected Value is calculated daily and is equal to the "Step-Up". Before the
first Contract Anniversary, the Step-Up is the initial Invested Purchase Payment
increased by subsequent Invested Purchase Payments and proportionally reduced by
the effect of withdrawals. The Step-Up on each Contract Anniversary will be
reset to the greater of the previous Step-Up and the Contract Value as of such
Contract Anniversary. Between Contract Anniversaries, the Step-Up will be
increased by Invested Purchase Payments and proportionally reduced by the effect
of withdrawals.
After the Contract Anniversary coinciding with or next following the Owner's
80th birthday, we stop increasing the GMDB Protected Value, except by subsequent
Invested Purchase Payments made on or after such Contract Anniversary. This
means that we do not increase the Step-Up by an appreciation in the Contract
Value. But when you make a withdrawal on or after such Contract Anniversary, we
still reduce the GMDB Protected Value proportionally by the effect of that
withdrawal.
Where the words "proportionally reduced by the effect of withdrawals" are used,
the withdrawal reduces those values in the same proportion as it reduces the
Contract Value. We calculate the proportion by dividing the Contract Value after
the withdrawal (including Withdrawal Charges) by the Contract Value immediately
prior to the withdrawal. The resulting percentage is multiplied by the
applicable values (before the withdrawal) in determining the GMDB Protected
Value.
GUARANTEED MINIMUM DEATH BENEFIT
The GMDB is a feature providing for the option to receive an enhanced death
benefit upon the death of the Owner during the Accumulation Period. If available
at that time, the GMDB feature must be elected
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when you purchase your Contract. The amount of the GMDB is based on the GMDB
Protected Value (see Protected Value section above).
If you have elected the GMDB feature, and if the Owner dies before the Annuity
Date, the death benefit payable to your beneficiary will be as described below:
Upon receipt of due proof of death and any other documentation we need, the
beneficiary is entitled to receive a death benefit equal to the greater of:
the Contract Value as of the date we receive due proof of death and any other
documentation we need; and
the GMDB Protected Value as of the date we receive due proof of death and any
other documentation we need.
If you do not elect the GMDB feature, upon receipt of due proof of death and any
other documentation we need, the beneficiary is entitled to receive a base death
benefit equal to the greater of:
the Contract Value as of the date we receive due proof of death and any other
documentation we need; and
the initial Invested Purchase Payment increased by subsequent Invested Purchase
Payments and reduced by the effect of withdrawals.
If the ownership of the Contract changes as a result of an assignment, the value
of the death benefit will be reset to the Contract Value as of the date of the
assignment. Such value will be treated as a Purchase Payment made on that date
for purposes of computing the death benefit.
The Beneficiary may, within 60 days of providing proof of death, elect to take
the death benefit under one of the death benefit payout options listed below,
provided that any payout option shall not include a period certain that exceeds
the life expectancy of the Beneficiary. The Beneficiary will be the sole
measuring life in determining the amount of any such payout option. If no payout
option is selected within the 60 days, the death benefit will be payable as a
lump sum.
If a Beneficiary of the Owner having priority to be paid a death benefit is the
spouse of the Owner at the time of the Owner's death, the Contract will continue
and the spouse will become the Owner. The spouse may, within 60 calendar days of
providing proof of death, elect to take the death benefit under any of the
payout options available under this Contract. If the contract continues, and the
new Annuitant is older than the prior Annuitant, the Annuity Date will be based
on the age of the new Annuitant.
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The death benefit payout options are:
Choice 1 lump sum payment of the death benefit; or
Choice 2 the payment of the entire death benefit within 5 years of the Owner's
date of death; or
Choice 3 payment of the death benefit under an Annuity or Settlement Option over
the lifetime of the
Beneficiary or over a period not extending beyond the life expectancy of the
Beneficiary with distribution beginning within one year of the Owner's date of
death.
Any portion of the death benefit not applied under Choice 3 within one year of
the Owner's date of death must be distributed within five years of the Owner's
date of death.
Once a death benefit becomes payable, the Payee's interest in any Annuity
Benefit under the Contract will cease.
If a lump sum payment is requested, the amount will be paid within seven (7)
days of receipt of proof of death and the election, unless the Suspension or
Deferral of Payments Provision is in effect.
DEATH OF ANNUITANT DURING THE ACCUMULATION PERIOD: If the Annuitant dies before
the Annuity Date, the Co-Annuitant, if applicable, becomes the Annuitant. If
there is no surviving Co-Annuitant, and the Annuitant was not the Owner, the
Owner becomes the Annuitant. You have the right to name a new Annuitant within
60 days. If the Owner is a non-natural person, the death of the Annuitant will
be treated as the death of the Owner, a new Annuitant may not be designated, and
the Annuitant will be deemed to be the Owner for purposes of determining the
death benefit.
DEATH OF ANNUITANT DURING THE ANNUITY PERIOD: If the Annuitant dies on or after
the Annuity Date, the Settlement Option then in effect will govern whether or
not we will continue to make any payments. The death of a non-Annuitant Owner
has no effect on the payout during the Annuity Period.
PAYMENT OF DEATH BENEFIT: We will require due proof of death and any other
documentation we request in Good Order before any death benefit is paid. All
death benefits will be paid in accordance with applicable law or regulations
governing death benefit payments.
SPECIAL TAX CONSIDERATIONS: There are special tax rules that apply to IRA and
other qualified contracts during both the Accumulation Period and Annuity Period
governing distributions upon the death of the Owner. These
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rules are contained in provisions in the attached endorsements and supersede any
other distribution rules contained in the Contract.
The preceding provisions regarding the death of the Owner are intended to
satisfy the distribution at death requirements of section 72(s) of the Internal
Revenue Code of 1986, as amended. We reserve the right to amend this Contract by
subsequent endorsement as necessary to comply with applicable tax requirements,
if any, which are subject to change from time to time. Such additional
endorsements, if necessary to comply with amended tax requirements, will be
mailed to you and become effective within 30 days of mailing, unless you notify
us in writing, within that time frame, that you reject the endorsement.
ANNUITY AND SETTLEMENT OPTIONS
GENERAL: On the Annuity Date, the Adjusted Contract Value will be applied under
the Annuity or Settlement Option you have selected. If the Adjusted Contract
Value is less than $2,000, or if the payment under any option selected would be
less than $20 per month, we reserve the right to pay out the Adjusted Contract
Value in a lump sum. We guarantee that the dollar amount of each payment, once
determined, will not be affected by variations in mortality or expense
experience.
SELECTION OF AN ANNUITY OR SETTLEMENT OPTION: You may select an Annuity or
Settlement Option by notifying us of the selected option in Good Order. If no
Annuity or Settlement Option is selected, or if the chosen Option is not
received in Good Order, Option 2, Life Income Annuity Option, will automatically
be applied. You may, at any time prior to the Annuity Date, by a request in Good
Order 30 days in advance, select and/or change the Annuity or Settlement Option.
If an annuity option is selected, the payment amount will be calculated using
the Annuity Settlement Tables shown on Page 15. This payment amount will never
be less than what the amount of your Contract Value would purchase under any
comparable single premium immediate annuity we are then offering for sale to a
similar class of annuitants.
ANNUITY AND SETTLEMENT OPTIONS: This Contract provides for payments under one of
the Annuity or Settlement Options described below. Any other Annuity or
Settlement Option acceptable to us may be selected.
OPTION 1 - FIXED PERIOD ANNUITY OPTION. We will make equal payments for a period
you choose, from 5 years up to 25 years. At your choice, we will make such
payments annually, semi-annually, quarterly or monthly. The Option 1 Table shows
the minimum amounts we will pay.
OPTION 2 - LIFE INCOME ANNUITY OPTION. We will make payments for as long as the
Annuitant lives, with payments certain for 120 months. At your choice, we will
make such payments annually, semi-annually, quarterly or monthly. Table 2 shows
the minimum amounts we will pay.
OTHER ANNUITY OR SETTLEMENT OPTIONS: We may offer or consent to other settlement
options, including life income annuity options with payments certain for a
period of other than 120 months. Contact the representative
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who sold you the Contract or call the toll-free number listed on your quarterly
statement for information.
ANNUITY: Unless you designate another Payee, you will be the Payee of the
Annuity Payments. The Adjusted Contract Value will be applied to the applicable
Annuity Table contained in this Contract based upon the Annuity Option you have
selected. The amount of the first payment for each $1,000 of Adjusted Contract
Value is shown in the Annuity Tables. If when Annuity Payments begin we are
using tables of annuity rates for these Contracts which result in larger Annuity
Payments, we will use those tables instead. Annuity Payments will depend on the
age and sex of the Annuitant, where permitted.
ANNUITY BENEFITS NOT SUBJECT TO WITHDRAWAL CHARGES: The Annuity Benefit will not
be subject to a Withdrawal Charge if you choose Option 1 or Option 2. In
addition to the methods of payment described in this Contract, you may choose
from other methods of payment which are not subject to a Withdrawal Charge.
BENEFICIARY
BENEFICIARY: The Beneficiary designation in effect on the Contract Date will
remain in effect until changed. The Beneficiary is entitled to receive the
benefits to be paid at the death of the Owner during the Accumulation Period.
When a Beneficiary is designated, any relationship shown is to the Owner unless
otherwise specified.
To show priority among Beneficiaries, we will label the classes, so that the
class with first priority is called the primary class, the class with next
priority is called the secondary class, and so on. The following statements
apply to Beneficiaries unless the Contract Data pages, Contract endorsement or
any change request that we have processed specifies otherwise:
One who survives the Owner will have the right to be paid only if no one in a
prior class survives the Owner.
One who has the right to be paid will be the only one paid if no one else in the
same class survives the Owner.
Two or more in the same class who have the right to be paid will be paid in
equal shares.
If no one survives the Owner, we will pay in one sum to the Owner's estate.
Unless you notify us otherwise in writing received in Good Order, when there is
insufficient evidence to determine the order of death, we will deem the Owner to
be the last survivor and make payment to the Owner's Beneficiary.
Before we make a payment, we have the right to decide what reasonable proof we
need of the identity, age or any other facts about any persons designated
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as Beneficiaries. If Beneficiaries are not designated by name and we make
payment(s) based on that proof, we will not have to make the payment(s) again.
CHANGE OF BENEFICIARY: To initiate a change of Beneficiary, call the toll-free
number listed on your statement or contact the representative who sold you the
Contract. We will send you a change request form. We may also ask you to send us
the Contract. The change of beneficiary will take effect on the date you sign
the change request form, provided such request is received in Good Order. Then,
any previous Beneficiary's interest will end as of the date the change request
is signed and we receive it in Good Order, even if the Owner is not living when
we process the change request.
SUSPENSION OR DEFERRAL OF PAYMENTS OR TRANSFERS
FROM THE SEPARATE ACCOUNT
We reserve the right to suspend or postpone payments from the Separate Account
for a withdrawal or transfer for any period when:
the New York Stock Exchange is closed (other than customary weekend and holiday
closings);
trading on the New York Stock Exchange is restricted;
an emergency exists as a result of which disposal of shares of the Investment
Options held in the Separate Account is not reasonably practicable or it is not
reasonably practicable to determine the value of such shares; or
during any other period when the Securities and Exchange Commission, by order,
so permits for the protection of Owners;
provided that applicable rules and regulations of the Securities and Exchange
Commission will govern as to whether the conditions described in (2) and (3)
exist.
GENERAL PROVISIONS
THE CONTRACT: The entire Contract consists of this Contract, and any attached
application, endorsements or riders. This Contract may be changed or altered
only by our President or Secretary. Any change, modification or waiver must be
made in writing. This Contract may not be modified by us without your consent
except as may be required by applicable law, including changes necessary to
comply with IRS requirements for annuity contracts, or as set forth in this
Contract.
ASSIGNMENT OF A CONTRACT: A request in Good Order specifying the terms of an
assignment of a Contract must be provided to the Annuity Service Center. We are
under no obligation to verify the assignment's validity or sufficiency. We will
not be liable for any payment made or action taken before we record the
assignment. If any Owner is living on the Annuity Date and an assignment
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is in effect on that date, we have the right to pay the Contract Surrender Value
in one lump sum to the assignee where notice in Good Order is received. Partial
assignments, collateral or otherwise, are not allowed without our approval. We
reserve the right to restrict or refuse any assignment.
An assignment which results in a change of ownership will affect the value of
the death benefit. Please see the section of the Contract entitled, "Guaranteed
Minimum Death Benefit", for more information.
We will not be responsible for the validity or tax consequences of any
assignment. Any assignment made after the death benefit has become payable will
be valid only with our consent.
If the Contract is assigned, your rights may only be exercised with the consent
of the assignee of record.
NON-PARTICIPATING IN SURPLUS: This Contract does not share in any distribution
of our profits or surplus.
INCONTESTABILITY: We will not contest this Contract. We consider all statements
made in the application for this Contract to be representations, not warranties.
MISSTATEMENT OF AGE OR SEX: We may require proof of age of the Annuitant before
making any life contingent Annuity Payment provided for by this Contract. If the
age or sex of the Annuitant has been misstated, the amount payable will be the
amount that the Contract Value would have provided at the true age or sex.
Once Annuity Payments have begun, any underpayments, with interest at 5%, will
be made up in one sum with the next Annuity Payment, and overpayments, with
interest at 5%, will be deducted from the future Annuity Payments until the
total is repaid.
CONTRACT SETTLEMENT: This Contract must be returned to us upon any settlement.
REPORTS: We will send you a report four times each calendar year until the
Annuity Date showing your Contract Value and other relevant information about
your Contract. We will also furnish an annual report of the Separate Account.
These reports will be sent to your last known address.
TAXES: Any taxes, including any type of tax (or component thereof) measured by
or based upon any portion of the Purchase Payment we receive, paid to any
governmental entity will be charged against the Contract Value, unless a
deduction was made for this tax in calculating the Invested Purchase Payment
amount. We will, in our sole discretion, determine when taxes have resulted
from: the investment experience of the Separate Account; receipt by us of the
Purchase Payment(s); or commencement of Annuity Payments. We may, at our
discretion, pay taxes when due and deduct that amount from the Contract Value at
a later date. Payment at an earlier date does not waive any right we may have to
deduct amounts at a later date. We reserve the right to establish a provision
for federal income taxes if we determine, in our sole discretion, that we will
incur a tax as a result of the operation of the Separate Account. We will deduct
for any income taxes incurred by it as a result of the operation of the Separate
Account whether or not there was
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a provision for taxes and whether or not it was sufficient. We will deduct any
withholding taxes required by applicable law.
EVIDENCE OF SURVIVAL: Before we make a payment, we have the right to require
reasonable proof of continued life and any other documentation we need to make a
payment. We can require this proof for any person whose life or death determines
whether or to whom we must make the payment.
PROTECTION OF PROCEEDS: No Beneficiary may commute, encumber, alienate or assign
any payments under this Contract before they are due. To the extent permitted by
law, no payments will be subject to the debts, contracts or engagements of any
Beneficiary or to any judicial process to levy upon or attach the same for
payment thereof.
VALUES AND BENEFITS
Any cash values, paid up annuities and death benefits that may be available
under this Contract are not less than the minimum benefits required by the law
of any state in which this Contract is delivered.
ANNUITY SETTLEMENT TABLES
Tables 1 and 2 below are applied to the Adjusted Contract Value to compute the
minimum amount of the annuity payment. Table 1 is used to compute the minimum
annuity payment under Option 1 (Fixed Period Annuity Option). Table 2 is used to
compute the minimum annuity payment under Option 2 (Life Income Annuity Option).
The rates in Tables 1 and 2 are applied per $1000 of Adjusted Contract Value.
The annuity payments in Table 2 are based on the Annuitant's Adjusted Age and
sex. The Adjusted Age is the Annuitant's age last birthday prior to the date on
which the first Annuity payment is due, adjusted as shown in the "Translation of
Adjusted Age" Table.
When we computed the amounts shown in Table 2, we adjusted the Annuity 2000
Mortality Table to an age last birthday basis, less two years, with projected
mortality improvements (modified Scale G), and an interest rate of 3% per year.
We will calculate annuities for other certain periods using the same interest
and mortality assumptions as in Table 2.
INDIVIDUAL FLEXIBLE PREMIUM DEFERRED VARIABLE ANNUITY CONTRACT.
NON-PARTICIPATING. ANNUITY PAYMENTS AND VALUES PROVIDED BY THIS CONTRACT, WHEN
BASED ON THE INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE
NOT GUARANTEED AS TO DOLLAR AMOUNT.