INSURING AGREEMENT:
PLEASE
READ YOUR POLICY CAREFULLY
This
policy is a legal contract between the Owner (you, your) and Nationwide Life
Insurance Company (we, our, us, the Company).
INSURING
AGREEMENT:
We
issue
this policy in consideration of your application and the payment of the Initial
Premium. We agree to pay the death Proceeds to the Beneficiary upon receiving
proof that the Insured has died while this policy is in force and before the
Maturity Date. We agree to pay the maturity Proceeds to you if the Insured
is
living on the Maturity Date.
You
and
we are bound by the conditions and provisions of this policy.
The
Cash Surrender Value of this policy will vary from day to day. It may increase
or decrease depending on the investment experience of the Variable Account.
Refer to the Nonforfeiture Provisions on page 10 for details. There is no
guaranteed Cash Surrender Value.
The
amount or duration or duration of the death benefit maywill be variable or
fixed
and depend on the investment experience of the Variable Account. The death
benefit may increase or decrease. The death benefit will never be less than
the
Specified Amount as long as your policy is in force. Refer to the Death Benefit
Provisions on page 9 for details.
RIGHT
TO EXAMINE POLICY
You
may return this policy to us within (1) 10 days after you get it, or (2) 45
days
after you sign the application, or (3) 10 days after we mail or deliver the
Notice of Withdrawal Right, whichever is latest. The policy, with a written
request for cancellation, must be mailed or delivered to our Home Office or
to
the representative who sold it to you. The returned policy will be treated
as if
we never issued it, and we will refund any premiums paidrefund any premiums
paid.
If
you
have any questions about your policy or need additional insurance service,
contact your representative or write to our Home Office.
Signed
at
our Home Office on the Policy Date.
[
Secretary President
·
Adjustable death benefit ·
Flexible
premiums payable during Insured's lifetime until the Maturity Date
·
Death
Proceeds payable at Insured's death prior to the Maturity Date
·
Maturity
Proceeds payable on the Maturity Date ·
Non-Participating
·
Not
eligible for dividends ·
Investment experience reflected in benefits
1
________________________________________CONTENTS_____________________________________
PROVISIONSPAGE
Annual
Report
Assignment
Beneficiary
Cash
Surrender
Value
Cash
Value
Death
Benefit
Definitions
Error
in
Age or
Sex
Exchange
of Policy
Provision
Fixed
Account
Grace
Period
Guaranteed
Policy
Continuation
Illustration
of Benefits and
Values
Incontestability
Insured
Insuring
Agreement
Loan
Monthly
Cost of Insurance
Non-guaranteed
Persistency Credit
Nonforfeiture
Optional
Modes of Settlement
Ownership
Partial
Surrender
Policy
Data Page
Premium
Payments
Reinstatement
Suicide
Termination
Transfers
Valuation
of Assets in a Variable Account
Variable
Account
2
DEFINITIONS
ATTAINED
AGE:
Attained
Age is the Issue Age plus the number of full years since the Policy
Date.
BENEFICIARY:
The
Beneficiary is the person to whom the Proceeds are paid upon the Insured's
death
while your policy is in force. The Beneficiary is named in the application,
unless changed.
CASH
SURRENDER VALUE:
The Cash
Surrender Value of your policy on any date is the Cash Value minus any
Indebtedness, minus the Adjusted Sales Load Life Insurance Rider forfeiture
charge, minus any surrender charge.
CASH
VALUE:
Your
policy's Cash Value is the sum of the Cash Value in each Subaccount, the Fixed
Account, and the Policy Loan Account. Refer to the Nonforfeiture Provision
for
details.
COMPANY:
The
Company is the Nationwide Life Insurance Company. "We," "our", and "us" refer
to
the Company.
CONTINGENT
BENEFICIARY:
The
Contingent Beneficiary will become the Beneficiary if the named Beneficiary
dies
prior to the date of the death of the Insured. The Contingent Beneficiary is
named in the application, unless changed.
CONTINGENT
OWNER:
The
Contingent Owner will become the Owner if the named Owner dies prior to the
date
of the death of the Insured. The Contingent Owner is named in the application,
unless changed.
FIXED
ACCOUNT:
A Fixed
Account is an investment option which is funded by the General Account of the
Company.
FUND:
A Fund
is the underlying mutual fund in which Subaccount assets are invested. There
is
a Fund that corresponds to each Subaccount in a Variable Account. The Funds
are
listed on the Policy Data Page with the corresponding Subaccounts.
GENERAL
ACCOUNT:
The
General Account is made up of all of our assets other than those held in any
separate investment account.
HOME
OFFICE:
The Home
Office of the Company is at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇.
INDEBTEDNESS:
Indebtedness is any amount you owe us as a result of a policy loan. Indebtedness
consists of principal amount plus accrued interest.
INITIAL
INVESTMENT DATE:
The
Initial Investment Date is the later of the Policy Date or the date we receive
the Required Initial Premium at our Home Office.
INSURED:
The
Insured is the person whose life is covered by this insurance policy and is
named in the application.
ISSUE
AGE:
Issue
Age is the Insured's age on the last birthday on or before the Policy Date.
It
is shown on the Policy Data Page.
MATURITY
DATE:
The
Maturity Date is the policy anniversary, from the Policy Date, on or next
following the Insured's 100th birthday.
MINIMUM
REQUIRED DEATH BENEFIT:
The
Minimum Required Death Benefit is the lowest death benefit which will qualify
the policy as life insurance under Section 7702 of the Internal Revenue
Code.
MINIMUM
SPECIFIED AMOUNT:
The
Minimum Specified Amount is shown on the Policy Data Page. Changes to the policy
which result in a Specified Amount below the Minimum Specified Amount will
not
be processed. Refer to Specified Amount Decreases and Partial Surrender
Provisions for details.
3
NET
AMOUNT AT RISK:
The Net
Amount at Risk on a monthly anniversary from the Policy Date is the death
benefit minus the Cash Value, calculated prior to deduction of the base policy
cost of insurance charge. On any other day, the Net Amount at Risk is the death
benefit minus the Cash Value.
NET
PREMIUM:
The Net
Premium is equal to the actual premium minus the percent of premium loading
charge. The Maximum Percent of Premium Loading charge is shown on the Policy
Data Page. The Company may, at its sole discretion, apply a lower percent of
premium charge.
OWNER:
The
Owner has all rights under this policy and is named in the application unless
later changed and endorsed on this policy. "You" or "your" refer to the Owner
of
this policy.
PARTIAL
SURRENDER AMOUNT: This
is
the amount requested by you as a partial surrender. We reserve the right to
deduct a fee from this amount. The maximum fee is shown on the Policy Data
Page.
PLANNED
PREMIUM:
The
Planned Premium is the amount of premium you have told us that you intend to
pay. We will send you premium payment notices according to the amount and mode
of premium payment you select.
POLICY
CONTINUATION PREMIUMS:
The
Policy Continuation Premiums are shown on the Policy Data Pages. The Policy
Continuation Premiums are used to measure the total premium amount that must
be
paid during the Guaranteed Policy Continuation Period to keep the Guaranteed
Policy Continuation Provision in effect.
POLICY
DATA PAGE:
The
Policy Data Page contains more detailed information about the policy, some
of
which is unique and particular to the Owner, the Beneficiary, and the
Insured.
POLICY
DATE:
The
Policy Date is the date on which your policy becomes in force and insurance
coverage takes effect. It is shown on the Policy Data Page. Policy years and
policy months are measured from the Policy Date.
POLICY
LOAN ACCOUNT:
The
Policy Loan Account is that portion of the Cash Value which results from policy
loans.
PROCEEDS:
Proceeds
may constitute the amount of money payable to the Beneficiary if the Insured
dies while your policy is in force, or the amount of money payable to you upon
a
surrender or the Maturity Date.
REQUIRED
INITIAL PREMIUM:
The
Required Initial Premium is the premium required for coverage to become
effective on the Policy Date. It is shown on the Policy Data Page.
RIDER:
A Rider
is an optional benefit or feature available for purchase with the
policy.
SEC:
The SEC
is Securities and Exchange Commission.
SPECIFIED
AMOUNT:
The
Specified Amount is a dollar amount used to determine the death benefit of
your
policy. It is shown on the Policy Data Page.
SUBACCOUNT:
A
Subaccount is a part of a Variable Account. We use Subaccounts to account for
your allocations of Net Premium and Cash Value among the Variable Account
investment options available under your policy. The Subaccounts are listed
on
the Policy Data Page.
VALUATION
DATE:
A
Valuation Date is any day on which the Home Office and the New York Stock
Exchange are both open for business. Orders to purchase, redeem, and/or transfer
among the Sub-Accounts must be received by the time we specify for that
Subaccount. Any orders that are received after the specified time will be
processed and valued as of the next Valuation Date.
VALUATION
PERIOD:
A
Valuation Period is the interval of time between a Valuation Date and the next
Valuation Date.
VARIABLE
ACCOUNT:
A
Variable Account is a separate investment account of the Company that funds
specified, non-guaranteed investment options available under the policy. The
Variable Accounts are listed on the Policy Data Page.
4
GENERAL
POLICY PROVISIONS
ENTIRE
CONTRACT:
The
entire contract consists of this policy, the Policy Data Page, any attached
Riders or endorsements, and the attached copy of any written application,
including any written supplemental applications. No agent, registered
representative, or other person may change this policy or waive any of its
provisions. Any agreement, to alter this policy must be in writing, signed
by
our president or secretary and attached to or endorsed on your policy. We will
not be bound by any promise or representations made by any agent or other
persons.
This
policy will be governed by the laws of the state where it is issued for
delivery.
APPLICATION:
All
statements made in an application are considered representations and not
warranties. In issuing this policy, we have relied on the statements made in
any
application to be true and complete to the best of your knowledge and belief.
No
such statement will be used to void the policy or to deny a claim unless a
material misstatement is made on the application.
INCONTESTABILITY:
We will
not contest payment of the Proceeds upon the Insured's death based on the
initial Specified Amount after this policy has been in force during the
Insured's lifetime for two years from the Policy Date. For any increase in
Specified Amount requiring evidence of insurability, we will not contest payment
of the Proceeds based on such an increase after it has been inforce during
the
Insured's lifetime for two years from the effective date of the increase. The
contestable period for a policy issued as a conversion or as a reinstatement
is
measured from the original policy's issue date.
SUICIDE:
If the
Insured commits suicide, within two years from the Policy Date, we will not
pay
the Proceeds normally payable on the Insured's death. Instead, we will pay
the
Beneficiary an amount equal to all premiums paid prior to the Insured's death,
less any Indebtedness, and less any partial surrenders. For any increase in
Specified Amount requiring evidence of insurability, if the Insured commits
suicide, within two years from the effective date of any such increase, we
will
not pay the Proceeds associated with such an increase. Instead, our liability
with respect to such an increase will be limited to its cost of insurance
charges. The suicide period for a policy issued as a conversion or as a
reinstatement is measured from the original policy's issue date.
ERROR
IN AGE OR SEX:
If the
age or sex of the Insured has been misstated, the death benefit and Cash Value
will be adjusted. The adjusted death benefit will be (1) multiplied by (2)
and
then the result added to (3) where:
| 1. |
is
the Net Amount at Risk at the time of the Insured's
death;
|
| 2. |
is
the ratio of the monthly cost of insurance applied in the policy month
of
death and the monthly cost of insurance that should have been applied
at
the true age and sex in the policy month of death;
and
|
| 3. |
is
the Cash Value at the time of the Insured's
death.
|
The
Cash
Value will be adjusted to reflect the cost of insurance charges based on the
correct age and sex from the Policy Date.
EFFECTIVE
DATE OF COVERAGE:
The
effective date of coverage of any person insured under your policy is as
follows:
| 1. |
the
Policy Date is the effective date for all coverage provided in the
original application;
|
| 2. |
for
any increase or addition to coverage, the effective date will be the
monthly anniversary, from the Policy Date, on or next following the
date
we approve the supplemental application;
and
|
| 3. |
for
any insurance that has been reinstated, the effective date will be
the
monthly anniversary, from the Policy Date, on or next following the
date
we approve your request for
reinstatement.
|
TERMINATION:
All
coverage under your policy will terminate when any one of the following events
occurs:
| 1. |
you
request in writing that the coverage
terminates;
|
| 2. |
the
Insured dies;
|
| 3. |
the
policy matures;
|
| 4. |
the
grace period ends; or
|
| 5. |
you
surrender the policy for its Cash Surrender
Value.
|
ANNUAL
REPORT:
We will
send you a report at least once a year which shows the current Cash Value,
Cash
Surrender Value, amount of insurance, premiums paid, minimum monthly premiums,
all charges since the last report and outstanding policy Indebtedness. The
report will also include any other information required by laws and regulations,
or by the Superintendent of Insurance. We will mail this report to you at your
address in the application or another address you specify.
5
ILLUSTRATION
OF BENEFITS AND VALUES:
We will
provide a projection of illustrative future benefits and values under this
policy at any time. Your written request and payment of a service fee set by
us
at the time of the request will be required. The maximum service fee will be
$25.00 per illustration.
NONPARTICIPATION:
This is
a nonparticipating policy on which no dividends are payable. Your policy will
not share in our profits or surplus earnings.
CURRENCY:
Any
money we pay, or that is paid to us, must be denominated in currency of the
United States of America.
SIGNATURE
GUARANTEE AND REQUIRED DOCUMENTATION:
For your
protection, a written request for a surrender, a partial surrender, policy
loan,
or a change in ownership must be signed.
WAIVER
AND ESTOPPEL: Our
failure to enforce any provision of this Policy in one or more instances shall
not be deemed, and may not be construed or relied upon, as a waiver of such
provision. Nor shall any waiver or relinquishment of any right or power
hereunder in any one or more instance be deemed, and may not be construed or
relied upon as, a continuing waiver or relinquishment of that right or power
at
any other time or times.
OWNER,
BENEFICIARY AND ASSIGNMENT PROVISIONS
OWNER:
While
the Insured is living, all rights in your policy belong to you.
OWNERSHIP
AT YOUR DEATH:
You may
name a Contingent Owner who will become the Owner of the policy if you die
before the Insured. If there is no Contingent Owner at the time of your death
and you predecease the Insured, your estate will become the Owner of the
policy.
DESIGNATING
AND CHANGING OWNERSHIP:
You may
name a Contingent Owner or a new Owner at any time while the Insured is living.
If a new Owner is named, any earlier designation of Owner(s) or Contingent
Owner(s) is automatically revoked. Any change must be in a written form
satisfactory to us and received at our Home Office. Once received, the change
will take effect as of the date you signed it. The change will not affect any
payment made or any action we take before it was received. We may require that
you send us your policy for endorsement before making a change.
BENEFICIARY:
The
Beneficiary is the person(s) who is entitled to receive the Proceeds upon the
death of the Insured. The Contingent Beneficiary is the person(s) entitled
to
receive the Proceeds if no Beneficiary is alive at the time of the death of
the
Insured.
DESIGNATING
AND CHANGING THE BENEFICIARY AND THE CONTINGENT
BENEFICIARY: You
may
designate on the application one or more Beneficiary(ies), and one or more
Contingent Beneficiaries. While the Insured is alive, you may change any
Beneficiary or Contingent Beneficiary designation unless the Beneficiary has
been designated as irrevocable. However, you may change an irrevocable
Beneficiary with the written consent of the irrevocable Beneficiary. Any change
must be in a written form satisfactory to us. We must receive the change at
our
Home Office. We may require that we receive the policy for endorsement before
we
make the change. Once we receive the change, the change will be effective as
of
the date it was signed; provided, however, that we will not be liable to any
person for any action or payment we make prior to making the
change.
PAYMENTS
TO THE BENEFICIARY: We
will
pay the Proceeds, upon the Insured's death, to the Beneficiary(ies) that
survives the Insured. If no Beneficiary survives the Insured, the Contingent
Beneficiary(ies) becomes the Beneficiary(ies) and will be paid the Proceeds.
If
no Beneficiary or Contingent Beneficiary survives the Insured, we will deem
you
(or your estate) to be the Beneficiary and pay you (or your estate) the death
benefit Proceeds.
If
there
are multiple payees of the Proceeds, we will pay them on a pro-rata basis,
unless you instruct us prior to the Insured's death to pay them on some other
basis.
ASSIGNMENT:
While
the Insured is living, you may assign any or all rights under your policy.
We
will not be bound by any assignment unless it is in a written form acceptable
to
us and is received at our Home Office. An assignment will not affect any
payments made or actions taken by us before we receive it. The assignment will
be subject to any Indebtedness owed to us before it was received. The interest
of any Beneficiary will be subject to the rights of any assignee of record
at
our Home Office. We will not be responsible for the sufficiency or validity
of
any assignment.
6
PREMIUM
PROVISIONS
PREMIUM
PAYMENTS:
The
Required Initial Premium is due on the Policy Date. It will be credited on
the
Initial Investment Date. Any due and unpaid monthly deductions will be
subtracted from the Cash Value at this time. Insurance will not be effective
until the Required Initial Premium is paid. The Required Initial Premium is
shown on the Policy Data Page.
Premiums
other than the Required Initial Premium may be paid at any time while your
policy is in force subject to the limits described below. Planned premium
payment reminder notices will be furnished upon request. You may pay the
Required Initial Premium to us at our Home Office or to an authorized agent.
All
premiums after the first are payable at our Home Office. Premium receipts will
be furnished upon request.
PERCENT
OF PREMIUM LOADING CHARGE: We
deduct
a percent of premium loading charge from each Premium you make to this policy
to
reimburse us for premium taxes paid, if any, and to recover expenses related
to
the sale of this policy.
We
may
waive the percent of premium loading charge on the initial Premium paid into
this policy as part of a sponsored exchange program as permitted under the
securities laws and/or rules or by order of the Securities and Exchange
Commission.
LIMITS:
Additional premium payments may be made at any time while your policy is in
force. However, we reserve the right to require satisfactory evidence of
insurability before accepting any additional premium payment which results
in
any increase in the Net Amount at Risk. Also, we will refund any portion of
any
premium payment which is determined to be in excess of the premium limit
established by law to qualify your policy as a contract for life insurance.
We
may also require that any existing policy Indebtedness is repaid prior to
accepting any additional premium payments.
LAPSE
PROVISIONS
LAPSE:
Your
policy will remain in force so long as the Cash Surrender Value, on the monthly
anniversary from the Policy Date, is sufficient to cover the monthly deduction
for charges. Otherwise, your policy will lapse, subject to the Guaranteed Policy
Continuation Provision and a grace period. When your policy lapses, insurance
coverage and any Riders you have selected will have no value.
GUARANTEED
POLICY CONTINUATION PROVISION:
During
the guaranteed policy continuation period, your policy will not lapse while
the
sum of all your premium payments (including the Required Initial Premium),
minus
any Indebtedness and partial surrenders, is greater than or equal to the sum
of
the “Policy Continuation Premiums” (as shown on the Policy Data Page) due
through the most recent monthly anniversary from the Policy Date. This amount
may vary by policy duration, and it may be affected by any changes to your
policy. Regardless of your premium payments, as long as the Cash Surrender
Value
remains positive, your policy will remain in force. If premium payments are
insufficient to maintain the Guaranteed Policy Continuation Provision, we will
send you a notice stating the premium required to maintain the provision. From
the date in which the notice is postmarked, we will allow 31 days for the
premium payment.
In
the
event that the Owner has paid the necessary monthly death benefit guarantee
premiums, and the Cash Value in the policy has dropped to zero, we will waive
any policy charges in excess of the Cash Value. Negative Cash Values will not
be
possible.
GRACE
PERIOD:
Before
the end of a grace period, your policy will not lapse if you pay the lesser
of
three times the current monthly deduction for charges or enough premium to
maintain the Guaranteed Policy Continuation Provision, if applicable. We will
pay the Proceeds upon the Insured's death during a grace period. Also, you
may
surrender your policy for its Cash Surrender Value during a grace period. We
will send you a notice of your lapse pending status when you enter the grace
period, at your address in the application or another address you specify,
stating the amount of premium required. This notice will be sent out within
30
days of entering the grace period. From the date on which the notice is
postmarked, the grace period will last for 61 days.
REINSTATEMENT:
Within
three years of the end of a grace period (and before the Maturity Date), you
may
request to reinstate your policy that has lapsed. You must submit your request
in writing. We may require you to provide further evidence of insurability
that
is satisfactory to us. You will need to pay enough premium to cover the monthly
deductions for charges while your policy was within a grace period, and to
cover
three times the current monthly deduction for charges from the date we reinstate
your policy. That date will be on the next monthly anniversary from the Policy
Date after which we approved your request for reinstatement. If the policy
is in
the guaranteed policy continuation period, you must pay sufficient premium
to
keep the policy in force for three months from the date of reinstatement or
pay
sufficient premium to make the sum of all premiums paid to date, including
the
Required Initial Premium, minus any Indebtedness, and minus any partial
surrender amounts, greater than the sum of Policy Continuation Premiums due
since the Policy Date, including such premium for the current monthly
anniversary. For your policy to be reinstated, you will also either need to
pay
any Indebtedness, or have it reinstated. Upon reinstatement, the Cash Value
of
your policy, before any premium payments or loan repayments, will be set equal
to the lesser of the Cash Value at the end of the grace period, or the surrender
charge for the year from the Policy Date in which we reinstate your policy.
The
surrender charge will be determined according to the surrender charge schedule
on the Policy Data Pages; the policy year is measured from the original Policy
Date.
7
DEATH
BENEFIT PROVISIONS
DEATH
BENEFIT:
If the
Insured dies while the policy is in force prior to the Maturity Date, your
policy will provide a death benefit. The death benefit will be determined in
accordance with one of the following options, whichever is in effect on the
date
of the Insured's death, subject to the Minimum Required Death Benefit. The
current Death Benefit Option in effect is shown on the Policy Data
Page.
The
amount of the death benefit may depend upon the investment experience of the
Variable Account. The amount of the death benefit is fixed provided the death
benefit is equal to the Specified Amount but the duration of the death benefit
will be variable and depend on the investment experience of the Variable
Account. If the death benefit is equal to the applicable percentage of the
Cash
Value, then the amount and duration of the death benefit is variable and will
depend on the investment experience of the Variable Account.
Option
1:
The
death benefit will be the Specified Amount on the date of death.
Option
2:
The
death benefit will be the Specified Amount plus the Cash Value on the date
of
death.
For
either death benefit option, the Minimum Required Death Benefit is the
applicable percentage, as defined by the Internal Revenue Service and shown
on
the Policy Data Page, multiplied by the Cash Value on the Valuation
Day.
DEATH
PROCEEDS:
The
actual amount of money payable to the Beneficiary if the Insured dies while
your
policy is in force prior to the Maturity Date equals:
| 1. |
the
death benefit provided by your policy;
plus
|
| 2. |
any
insurance on the Insured's life that may be provided by Riders;
minus
|
| 3. |
any
Indebtedness; minus
|
| 4. |
any
due and unpaid monthly deductions accruing during the grace
period.
|
We
will
pay these Proceeds to the Beneficiary after we receive at our Home Office proof
of death satisfactory to us and such other information as we may reasonably
require. The actual proceeds payable on the Insured's death are subject to
the
conditions and adjustments defined in other policy provisions, such as
Nonforfeiture, Loan and General Policy Provisions.
If
any
premium is paid after a monthly anniversary and the Insured then dies before
the
next monthly anniversary, the proceeds will be increased by all or any portion
of that premium which did not increase the death benefit.
MATURITY
DATE EXTENSION:
If the
Insured is alive on the original Maturity Date of the policy, you may extend
the
Maturity Date. Unless you elect otherwise, the Maturity Date will be extended
until the date the Insured dies and the following will apply:
| 1. |
No
premium payments will be allowed after the original Maturity
Date.
|
| 2. |
Increases
to the Specified Amount will not be permitted after the original Maturity
Date.
|
| 3. |
Death
Benefit Option changes will not be permitted after the original Maturity
Date.
|
| 4. |
On
the original Maturity Date, 100% of the Cash Value in the Subaccounts
will
be transferred to the Fixed Account, which is funded by the General
Account of the Company, and transfers out of the Fixed Account will
not be
permitted.
|
| 5. |
No
further monthly deductions will be taken after the original Maturity
Date.
The cost of insurance charges will be zero after the original Maturity
Date.
|
| 6. |
The
Specified Amount for Maturity Date Extension will be equal to the
Specified Amount at the Insured's Attained Age 85, less items (a) and
(b)
where:
|
| (a) |
is
any decrease to the Specified Amount after the Insured's Attained Age
85;
and
|
| (b) |
is
an adjustment for partial surrenders taken after Insured's Attained
Age
85.
|
The
amount of the adjustment varies based on the Death Benefit Option and the
Insured's Attained Age, and is defined within the chart below:
Insured's
Attained Age
86-90
91 and Older
Death
Benefit Option
1
Amount
by
which the Amount
proportionate to
base
policy Specified the
ratio
of the surrender
Amount
is
reduced due to
the
cash value prior
to
the
surrender. to
the
surrender.
Death
Benefit Option
2
0 0
| 7. |
Policy
loans and partial surrenders are permitted after age 100 on the same
basis
as for ages 91 through 100. Loan repayments will be permitted after
age
100.
|
8
This
policy may not qualify under the Federal tax code as life insurance after
attained age 100. If the policy is deemed to not qualify as life insurance,
it
may be subject to adverse tax consequences. Please consult your tax advisor
before making any decision regarding maturity date
extension.
DEATH
BENEFIT OPTION CHANGES:
After
the first policy year, you may change the death benefit option under your policy
from Option 1 to Option 2 or from Option 2 to Option 1. If the change is from
Option 1 to Option 2, the Specified Amount will be decreased by the amount
of
the Cash Value. If the change is from Option 2 to Option 1, the Specified Amount
will be increased by the amount of the Cash Value. We will adjust the Specified
Amount such that the Net Amount at Risk remains constant before and after the
death benefit option change. The effective date of change will be the monthly
anniversary from the Policy Date on or next following the date we approve the
request for change.
Only
one
Death Benefit Option change is permitted in a policy year. We will refuse a
death benefit option change which would reduce the Specified Amount to a level
where the total premiums already paid exceeds the premium limit, if any,
established by law to qualify your policy as a contract for life insurance.
In
order for a death benefit option change to become effective, the Cash Surrender
Value, after the change, must be sufficient to keep the policy in force for
at
least three months.
SPECIFIED
AMOUNT INCREASES:
At any
time after the first year from the Policy Date, you may request an increase
in
Specified Amount. Your request must be in writing to our Home Office on our
official forms. Any increase shall be subject to the following
conditions:
| 1. |
you
must provide evidence of insurability satisfactory to
us;
|
| 2. |
the
increase must be for a minimum of
$10,000;
|
| 3. |
the
Cash Surrender Value is sufficient to keep this policy in force with
the
new Specified Amount for at least three
months;
|
| 4. |
the
Owner may make an additional premium payment at the time an increase
is
requested in order to raise the Cash Surrender Value to a sufficient
level; and
|
| 5. |
age
at time of increase must satisfy the same age requirements as new
issues.
|
An
approved increase will have an effective date of the monthly anniversary from
the Policy Date on or next following the date we approve the supplemental
application unless you request a different date. We reserve the right to limit
the number of increases in Specified Amount to one each year from the Policy
Date.
SPECIFIED
AMOUNT DECREASES:
At any
time after the first year from the Policy Date, you may request a decrease
in
the Specified Amount. Any decrease will be effective on the monthly anniversary
from the Policy Date, on or next following our receipt of your request unless
you request a different date. We will send you a new Policy Data Page following
the Specified Amount decrease. Any such decrease shall reduce insurance in
the
following order:
| 1. |
against
insurance provided by the most recent
increase;
|
| 2. |
against
the next most recent increases successively;
and
|
| 3. |
against
insurance provided under the original
application.
|
We
reserve the right to limit the number of decreases in the Specified Amount
to
one each year from the Policy Date. We will refuse a request for a decrease
which would:
| 1. |
reduce
the Specified Amount below the Minimum Specified Amount;
or
|
| 2. |
disqualify
this policy as a contract for life
insurance.
|
A
surrender charge will only be assessed on a Specified Amount decrease if upon
decreasing, a Specified Amount increase is surrendered in its
entirety.
NONFORFEITURE
PROVISIONS
CASH
VALUE:
The Cash
Value of your policy is the sum of the Cash Value in each Subaccount, the Fixed
Account, and the Policy Loan Account. The Cash Value in each Subaccount on
the
Initial Investment Date is equal to the portion of the Net Premium allocated
to
the Subaccount minus a pro-rata monthly deduction for the month following the
Policy Date.
9
The
Cash
Value in each Subaccount on each subsequent Valuation Period is equal to (1)
plus (2) plus (3) minus (4) minus (5) minus (6), where:
(1) is
the
Cash Value in the Subaccount on the preceding Valuation Period multiplied by
its
net investment factor for
the
current Valuation Period;
(2) is
any
Net Premiums or other amounts allocated to the Subaccount during the current
Valuation Period;
(3) is
any
amounts transferred to the Subaccount during the current Valuation
Period;
(4) is
any
amounts transferred from the Subaccount during the current Valuation
Period;
(5) is
the
portion of any monthly deductions which are due and charged to the Subaccount
during the current Valuation Period; and
(6) is
any
Partial Surrender Amount allocated to the Subaccount during the current
Valuation Period.
The
Cash
Value in the Policy Loan Account is zero, unless you take a policy loan. If
you
take a policy loan, then the Cash Value in the Policy Loan Account on the loan
date is equal to the amount of the loan. The loan amount is transferred from
a
Variable Account in proportion to the Cash Value in each Subaccount on the
date
of the loan. Loan amounts will be transferred from the Fixed Account only when
insufficient amounts are available in the Variable Account.
The
Cash
Value in the Policy Loan Account on each subsequent Valuation Period is equal
to
(1) plus (2) plus (3) minus (4) minus (5) where:
(1) is
the
Cash Value in the Policy Loan Account on the preceding Valuation
Period;
| (2) |
is
interest credited during the current Valuation
Period;
|
| (3) |
is
any amounts transferred to the Policy Loan Account because of additional
policy loans and any due and unpaid loan interest during the current
Valuation Period;
|
| (4) |
is
the amount of any loan repayments you make during the current Valuation
Period; and
|
| (5) |
is
any amount of interest transferred from the Policy Loan Account to
the
Variable Account or the Fixed Account during the current Valuation
Period.
|
The
Cash
Value in the Fixed Account is zero unless some or all of the Cash Value is
allocated to the Fixed Account. The Cash Value in the Fixed Account on the
Initial Investment Date is equal to the portion of the Net Premium allocated
to
the Fixed Account minus a pro-rata monthly deduction for the month following
the
Policy Date. The Cash Value in a Fixed Account on each subsequent Valuation
Day
is equal to (1) plus (2) plus (3) minus (4) minus (5) minus (6)
where:
(1) the
Cash
Value in the Fixed Account on the preceding Valuation Day; plus
(2) interest
credited during the current Valuation Period; plus
(3) any
Net
Premiums or other amounts allocated to the Fixed Account during the current
Valuation Period; minus
(4) any
amounts transferred from the Fixed Account during the current Valuation Period;
minus
(5) the
portion of any monthly deductions which are due and charged to the Fixed Account
during the current Valuation Period; minus
(6) any
Partial Surrender Amounts allocated to the Fixed Account during the current
Valuation Period.
MONTHLY
DEDUCTION:
The
monthly deduction for each month from the Policy Date, shall be calculated
as:
| 1. |
the
mortality and expense risk charge. The Maximum Mortality and Expense
Risk
Charge is shown on the Policy Data Page;
plus
|
| 2. |
the
monthly expense charge. This charge will not exceed the Maximum Monthly
Policy Expense Charges shown on the Policy Data Page;
plus
|
| 3. |
the
monthly cost of any additional benefits provided by any Riders;
plus
|
| 4. |
the
monthly cost of insurance.
|
The
monthly deductions other than the mortality and expense risk charge will be
charged proportionately to the Cash Values in each Subaccount and the Fixed
Account, unless otherwise elected. The mortality and expense risk charge will
be
charged proportionately to the Cash Values in each Subaccount only, unless
otherwise elected.
10
MONTHLY
COST OF INSURANCE:
A
deduction will be made on the Policy Date, and each monthly anniversary from
the
Policy Date, for the monthly cost of insurance. This monthly deduction will
be
charged proportionately to the Cash Values in each Subaccount and the Fixed
Account, unless otherwise elected. The monthly cost of insurance for each policy
month is determined by multiplying the monthly cost of insurance rate by the
Net
Amount at Risk. The monthly cost of insurance rate is described under the Cost
of Insurance Rates Provision.
If
there
have been increases or decreases in the Specified Amount, then the Cash Value
shall be first considered a part of the initial Specified Amount.
COST
OF INSURANCE RATES:
A
separate monthly cost of insurance rate is used to obtain the monthly cost
of
insurance for the Insured's initial Specified Amount and each increase in
Specified Amount. Each rate is based on the Insured's Issue Age, sex,
underwriting class, and any substandard rating at the time the initial Specified
Amount was issued, or increase took effect, and on the duration since that
time.
It is possible for a different rate class to apply to the Insured's initial
Specified Amount and each increase in Specified Amount. A description of the
allocation of how the net amount at risk is allocated among the initial
Specified Amount and each increase in Specified Amount is provided in the
Monthly Cost of Insurance section of this policy. A statement on allocation
of
net amount at risk is contained in the actuarial memorandum filed with the
Insurance Department of the state in which this policy was delivered. A portion
of the cost of insurance is used to provide for acquisition expense arising
from
issue of the policy. These expenses tend to be higher in early policy
years.
These
rates will never be greater than the Guaranteed Maximum Monthly Cost of
Insurance Rates shown on the Policy Data Page. The basis for these Guaranteed
Maximum Cost of Insurance Rates is shown in the Basis of Computation on the
Policy Data Page.
INTEREST
CREDITING:
Any Cash
Value allocated to the Policy Loan Account will be credited interest daily.
The
guaranteed minimum annual effective rate is shown on the Policy Data Page.
Interest in excess of the minimum guaranteed rate may be credited.
Any
Cash
Value allocated to the Fixed Account will be credited interest daily. The
guaranteed minimum annual effective rate is shown on the Policy Data Page.
Interest in excess of the minimum guaranteed rate may be credited. The current
interest rate in effect at the time of transfer to the Fixed Account will be
guaranteed through the end of the calendar quarter. Thereafter, any excess
interest rates will be guaranteed for the following three months.
NON-GUARANTEED
PERSISTENCY CREDIT: Your
policy may be eligible for a persistency credit if this policy is maintained
through the Eligibility Date stated on the Policy Data Page. This persistency
credit is not guaranteed, and we may discontinue the program at any time.
Availability of the persistency credit will end on the date this policy
terminates (see Termination provision). If a persistency credit is paid, it
will
be calculated and applied as follows:
Beginning
on the first monthly anniversary following the Eligibility Date stated on the
Policy Data Page and on each monthly anniversary thereafter, we may credit
your
policy with a persistency credit. If paid, the monthly credit will be a
percentage, up to the Maximum Persistency Credit Percentage stated on the Policy
Data Page multiplied by your policy's Cash Value allocated to the Variable
Account, including any Net Premium applied to the Variable Account that day
but
after any loan, transfer, or surrender requests are processed, on the applicable
monthly anniversary. If paid, the persistency credit is calculated before
monthly deductions are processed. If paid, we add the credit proportionately
to
your investment options according to your most recent allocation
instructions.
MINIMUM
LEGAL VALUES:
The cash
surrender, loan and other values in your policy are at least as large as those
set by law in the state where it is delivered. Where required, we have given
the
insurance regulator a detailed statement of how we compute values and
benefits.
CONTINUATION
OF INSURANCE:
If the
premium payments are not made, insurance coverage under this policy and any
benefits provided by any Rider (except the Term Insurance to Age 80 Rider)
will
be continued in force. Such coverage will be continued as provided in the Grace
Period Provision. This provision will neither continue the policy beyond the
Maturity Date, nor continue any Rider beyond the date for its termination,
as
provided in the Rider. For more information regarding the Term Insurance to
Age
80 Rider, please refer to the Rider.
The
scheduled premiums together with any additional premium payments may not
continue the policy in force until the Maturity Date even if these amounts
are
paid as scheduled and no further changes take place. The period for which the
policy will continue will depend on:
| 1. |
the
scheduled premiums and the timing and amount of any additional premium
payments;
|
| 2. |
changes
in the Specified Amount and death benefit
options;
|
| 3. |
investment
experience of the policy;
|
11
| 4. |
changes
in monthly expense and cost of insurance
charges;
|
| 5. |
changes
in the cost of additional benefits provided by Riders, if any;
and
|
| 6. |
policy
loans.
|
SURRENDER
CHARGE:
When
this policy lapses or is surrendered, a surrender charge is deducted from the
Cash Value. Surrender charges are calculated separately for the initial
Specified Amount and each increase in Specified Amount. The amount and duration
of the surrender charges for each segment of coverage are shown in the Table
of
Maximum Surrender Charges on the Policy Data Page. A Specified Amount decrease
or partial surrender may result in a surrender charge.
COMPLETE
SURRENDER:
Your
policy may be surrendered for its Cash Surrender Value at any time while it
is
in force. You must submit a written request on a form acceptable to us. We
may
also require the return of your policy. The date of surrender will be the date
we receive your written request at our Home Office. The Cash Surrender Value
will be determined as of the end of the Valuation Period during which your
request is received. All coverage will end on the date of
surrender.
We
will
normally pay the Cash Surrender Value amount within ten working days after
receipt of your written request and any required forms. If we are unable to
mail
the Cash Surrender Value to you within ten working days, we will pay interest
on
the amount at an annual interest rate as specified under settlement option
1.
Interest payable, only if it exceeds $25.00, will be calculated from the date
of
receipt of your written request and any required forms.
On
each
anniversary, you have the option to transfer the Cash Surrender Value into
the
Fixed Account and place this policy on extended term insurance. The amount
of
extended term insurance will equal the death benefit less any Indebtedness.
The
extended term insurance will be in force for as long a period as the Cash
Surrender Value will buy at the Attained Age of the Insured. The Cash Value
of
the extended term insurance at any time is equal to its cost at the Attained
Age
of the Insured at that time. The cost of the extended term insurance will be
based upon 3% interest and the 1980 CET Mortality Table.
On
each
anniversary, you have the option to transfer the Cash Surrender Value into
the
Fixed Account and apply the Cash Surrender Value to purchase a guaranteed fixed
paid-up benefit. The amount of the paid-up benefit will be the amount the Cash
Surrender Value can buy at the Attained Age of the Insured. The Cash Surrender
Value will be determined before the monthly policy expense charge is taken.
The
Cash Value of the paid-up benefit at any time is equal to its cost at the
Attained Age of the Insured at that time. The cost of the paid-up benefit will
be based upon 3% interest and the policy's guaranteed mortality
table.
PARTIAL
SURRENDER:
A
partial surrender may be made at any time after the first policy year while
this
policy is in force. You must submit a written request. We may also require
that
this policy be sent to us. We reserve the right to limit the number of partial
surrenders in a policy year to one a year from the Policy Date. A partial
surrender will not increase the Net Amount at Risk. In addition, a partial
surrender will be allowed only if after the partial surrender, this policy
continues to qualify as a contract for life insurance. We reserve the right
to
deduct a fee from the Partial Surrender Amount you requested. The maximum fee
is
$25.00 or 2% of the partial surrender, whichever is less.
When
a
partial surrender is made, we will reduce the Cash Value by the Partial
Surrender Amount.
We
will
also reduce the Specified Amount by the amount necessary to prevent an increase
in the Net Amount at Risk. However, the reduction to the Specified Amount will
not be greater than the Partial Surrender Amount.
Any
such
decrease to the Specified Amount as a result of an ordinary partial surrender
will reduce insurance in the following order:
| 1. |
against
the insurance provided by the most recent
increase;
|
| 2. |
against
the next most recent increase successively;
and
|
| 3. |
against
the insurance under the original
application.
|
We
will
allocate partial surrenders first among the Subaccounts in proportion to the
Cash Value in each Subaccount as of the partial surrender date, unless otherwise
elected. Partial surrenders will be transferred from the Fixed Account only
when
insufficient amounts are available in the Variable Subaccounts. A partial
surrender is subject to the following conditions:
| 1. |
the
minimum partial surrender is $200;
|
| 2. |
during
policy years two through ten, the sum of all partial surrenders in
a
policy year cannot exceed 10% of the Cash Surrender Value as of the
beginning of that year.
|
| 3. |
after
the completion of ten years from the Policy Date, the maximum amount
of a
partial surrender is the Cash Surrender Value less the greater of $500
or
three monthly deductions;
|
| 4. |
a
partial surrender may not reduce the Specified Amount below the Minimum
Specified Amount;
|
12
| 5. |
a
partial surrender will not be permitted if it violates the definition
of
life insurance under section 7702 of the Internal Revenue Code;
and
|
| 6. |
Nationwide
reserves the right to defer payment for a period permitted by law,
but not
more than six months from the date of the written partial surrender
request.
|
A
surrender charge will only be assessed on a partial surrender if upon surrender,
a Specified Amount increase is surrendered in its entirety.
We
will
normally pay the partial surrender amount within ten working days after receipt
of your written request and any required forms. If we are unable to mail the
partial surrender amount to you within ten working days, we will pay interest
on
the amount at an annual interest rate as specified under settlement option
1.
Interest payable, only if it exceeds $25.00, will be calculated from the date
of
receipt of your written request and any required forms.
CHANGES
IN POLICY COST FACTORS:
Changes
in cost of insurance rates, credited interest rates or other policy expense
charges will be by class and will be based on changes in future expectations
for
factors such as:
| 1. |
investment
earnings;
|
| 2. |
mortality;
|
| 3. |
persistency;
|
| 4. |
expenses;
and
|
| 5. |
taxes.
|
The
cost
factors for your policy will be reviewed when the cost factors for new policies
change, no more frequent than once a year and no less frequent than once every
five years.
LOAN
PROVISIONS
POLICY
LOAN:
You may
request a loan at any time while your policy is in force. All loans must be
requested in writing on a form acceptable to us. The loan date is the date
we
process the loan. We have the right to defer granting a policy loan, except
in
the case where the loan will be used to pay premiums, for up to six months
after
it is requested. We recommend that you consult with a tax advisor before taking
a loan.
We
will
normally pay the loan amount within ten working days after receipt of your
written request and any required forms. If we are unable to mail the loan amount
to you within ten working days, we will pay interest on the amount at an annual
interest rate as specified under settlement option 1. Interest payable, only
if
it exceeds $25.00, will be calculated from the date of receipt of your written
request and any required forms.
MAXIMUM
AND MINIMUM LOAN VALUE:
A loan
may not increase Indebtedness to exceed the maximum loan value as of the date
of
any loan. The maximum loan value is (1) plus (2) plus (3) minus (4) on the
loan
date, where:
(1)
is
90% of the Cash Value in the Variable Accounts;
(2)
is
100% of the Cash Value in the Fixed Account;
(3)
is
100% of the Cash Value in the Policy Loan Account; and
(4)
is
100% of the surrender charge.
The
minimum loan amount is $200.
LOAN
COLLATERAL AND CREDITED INTEREST:
You must
assign your policy to us as collateral for a loan. We will establish a Policy
Loan Account equal to the amount of the loan. We will credit the Policy Loan
Account with interest daily at the rate shown on the Policy Data
Page.
LOAN
INTEREST ON INDEBTEDNESS:
The loan
interest rate is shown on the Policy Data Page. Interest is charged daily
against Indebtedness and is payable at the end of each year or at the time
of
loan repayment. Unpaid interest will be transferred from the Variable Account
and added to the existing Indebtedness as of the due date and will be charged
interest at the same rate as the rest of the Indebtedness.
LOAN
REPAYMENT:
All or
part of a loan may be repaid to us at any time while your policy is in force
during the Insured's lifetime. The minimum repayment is $50. Any payment
intended as a loan repayment, rather than a premium payment, must be identified
as such. Any Indebtedness that exists at the end of the grace period may not
be
repaid unless this policy is reinstated.
13
EFFECT
OF LOAN:
When you
take a loan, we will transfer an amount equal to the policy loan from a
Subaccount or the Fixed Account to the Policy Loan Account. Any loan interest
that becomes due and unpaid will also be transferred. Amounts transferred to
the
Policy Loan Account will earn interest daily from the date of transfer. When
you
repay part or all of a loan, we will transfer an amount equal to the amount
you
repay from the Policy Loan Account to a Subaccount or the Fixed Account. We
reserve the right to require that any loan repayments resulting from loans
transferred from the Fixed Account must be allocated to the corresponding Fixed
Account.
Unless
you specify otherwise, we will allocate loans among the Subaccounts in
proportion to the Cash Value in each Subaccount as of the loan date. Loan
amounts will be transferred from the Fixed Account only when insufficient
amounts are available in the Subaccounts. Any loan interest which becomes due
and is unpaid will be transferred to the Policy Loan Account in proportion
to
the Cash Values in each Subaccount. Unless specified, loan repayments will
be
allocated among the Subaccounts using the Fund allocation factors in effect
on
the date of the repayment, subject to any other restrictions the Company may
impose.
Since
the
amount you borrow is removed from a Subaccount or the Fixed Account, a loan
will
have a permanent effect on any death benefit and Cash Surrender Value of this
policy. The effect may be favorable or unfavorable. This is true whether you
repay the loan or not. If not repaid, Indebtedness will reduce the amount of
any
Proceeds.
TERMINATION
OF POLICY:
If the
total Indebtedness ever equals or exceeds the Cash Value less the Adjusted
Sales
Load Life Insurance Rider forfeiture charge (if applicable) less the surrender
charge, your policy will enter a grace period, as described in the Grace Period
Provision.
EXCHANGE
OF POLICY PROVISIONS
RIGHT
OF EXCHANGE:
Within
24 months from the Policy Date, you may exchange this policy for a new fixed
benefit life insurance policy on the life of the Insured. We will not require
evidence of insurability for this exchange.
CONDITIONS:
Your
right to make this exchange is subject to the following conditions:
| 1. |
You
must ask for the exchange in writing to our Home Office on our official
forms.
|
| 2. |
You
must surrender this policy to us.
|
| 3. |
We
must have your written request and this policy at our Home Office while
this policy is in force and not in its Grace
Period.
|
| 4. |
You
must pay us any money due on the exchange. The amount due on the exchange
is the amount needed such that the Cash Surrender Value of the new
policy
is the same as the Cash Surrender Value of this
policy.
|
| 5. |
If
the Cash Surrender Value of this policy exceeds the Cash Surrender
Value
of the new policy, the amount due is zero. You may request the excess,
if
any, of the Cash Surrender Value of this policy over the Cash Surrender
Value of the new policy.
|
| 6. |
The
face amount of the new policy is at least the same as the current face
amount of the variable life insurance
policy.
|
EXCHANGE
DATE: The
exchange date will be the later of:
| 1. |
the
date we receive this policy and your written request at our Home Office;
or
|
| 2. |
the
date we receive at our Home Office any sum due to be paid for such
an
exchange.
|
This
new
policy will take effect on the exchange date only if the Insured is then living.
This policy will terminate when the new policy takes effect.
NEW
POLICY:
The new
policy may be any permanent fixed benefit plan of life insurance that is
currently offered by us on the Policy Date. After the exchange date, the new
policy will not be affected by the investment experience of any separate
investment account. The new policy will have a death benefit on the exchange
date not more than the death benefit of this policy immediately prior to the
exchange date. The new policy will have the same Policy Date and Issue Age
as
this policy. The initial Specified Amount and any increase in Specified Amount
will have the same rate class as the one in this policy. Any Indebtedness may
be
transferred to the new policy.
VALUATION
OF ASSETS IN A VARIABLE ACCOUNT
DETERMINING
INVESTMENT RESULTS:
The Cash
Value will change with a change in the investment results of the Subaccounts.
An
index called an accumulation unit value measures changes in a Subaccount's
investment experience. Each Subaccount has its own accumulation unit
value.
14
For
each
Subaccount, the accumulation unit value was initially set at $10.00. The
accumulation unit value for a Subaccount in each subsequent Valuation Period
is
equal to (1), multiplied by (2), where:
(1) is
the
Subaccount's accumulation unit value for the preceding Valuation Period;
and
| (2) |
is
the Subaccount's net investment factor for the subsequent Valuation
Period.
|
The
number of units purchased or canceled by a premium payment withdrawal, transfer
or charge is the amount of money divided by the unit value. The Cash Value
in
the Subaccount is the number of units multiplied by the unit value.
NET
INVESTMENT FACTOR:
Because
the net investment factor may be greater than or less than one, the accumulation
unit value may increase or decrease from one Valuation Period to the next;
however, the accumulation unit value remains constant throughout a Valuation
Period. The net investment factor for a Subaccount for a Valuation Period is
obtained by dividing (1) by (2), where:
(1) is
the
net of:
(a) the
net
asset value per underlying investment measurement unit of the Fund held in
the
Subaccount at the end of the current
Valuation Period; plus
|
(b)
|
the
per underlying investment measurement unit amount of any dividend
and
capital gains distributions made by a security held in the Subaccount
if
the “ex-dividend” date occurs during the current Valuation Period; plus or
minus
|
|
(c)
|
a
per underlying investment measurement unit charge or credit for taxes
reserved for, if any, which is determined by the Company to have
resulted
from the investment operations of the
Subaccount.
|
(2) is
the
net of:
(a)
the
net
asset value per share of the Fund held in the Subaccount determined as of the
end of the immediately
preceding
Valuation Period; plus or minus
| (b) |
the
per underlying investment measurement unit charge or credit for taxes
reserved for in the immediately preceding
|
Valuation Period.
THE
VARIABLE ACCOUNT, ALLOCATIONS, TRANSFERS AND CHANGES
VARIABLE
ACCOUNT:
A
Variable Account is a separate investment account for the Company. One or more
are named on the Policy Data Page. The Variable Account is subject to the laws
of Ohio and the laws of the state in which the policy is delivered.
We
own
the assets of the Variable Account; we keep them separate from the assets of
our
General Account. We maintain assets which are at least equal to the reserves
and
other liabilities of the Variable Account. Such assets will not be charged
with
liabilities that arise from any other business we conduct. We may transfer
to
our General Account assets which exceed the reserves and other liabilities
of a
Variable Account.
We
will
determine the value of the assets in the Variable Account at the end of each
Valuation Period. The value will be determined at least monthly.
SUBACCOUNTS:
The
Variable Account may have multiple Subaccounts. We list them on the Policy
Data
Page. You determine, using Fund allocation factors, how Net Premiums will be
allocated among the Subaccounts. You may choose to allocate nothing to a
particular Subaccount. Any allocation you make must be at least 1%; you may
not
choose a fractional percent. The sum of the Fund allocation factors, together
with your Fixed Account allocation must equal 100%.
During
the "Right to Examine Policy" period, Net Premiums will be allocated to a
Subaccount that invest in a money market Fund or to the Fixed Account. The
day
following the end of this period, the Cash Value in that Subaccount will be
transferred to the variable Subaccounts according to your chosen Fund allocation
factors. Also, any subsequent Net Premiums will be allocated according to your
chosen factors. Fund allocation factors during and immediately after the “Right
to Examine Policy” period, are shown on the Policy Data Page. After the “Right
to Examine Policy” period has expired, you may transfer amounts among the
Subaccounts. Transfers will take effect on the date your written request is
received at our Home Office, subject to any restrictions imposed by a
Fund.
You
may
change the allocation for future Net Premiums at any time while your policy
is
in force. To do so, you must notify us in writing in a form that meets our
approval. The change will take effect on the date we receive your written
request at our Home Office.
Income
and realized and unrealized gains and losses from assets in each Subaccount
are
credited to, or charged against, the Subaccount. This is without regard to
income, gains, or losses in our other Subaccounts, separate investment accounts,
or our General Account.
15
RIGHT
TO TRANSFER: You
may
transfer amounts among the Subaccounts on a daily basis. Transfers may be made
via any method deemed acceptable by us. We reserve the right to refuse or limit
any transfer request, or take any action we deem necessary with respect to
transfers among specified Subaccounts in order to protect policy Owners and
Beneficiaries from negative investment results that may arise from harmful
investment practices employed by certain Owners or their representative. Our
failure to exercise our rights under this section shall not be construed as
a
waiver of our rights.
CHANGES
OF FUND:
A Fund
might, in our judgment, become unsuitable for investment by a Subaccount. This
might happen because of a change in investment policy, a change in the laws
or
regulations, the shares are no longer available for investment, or for some
other reason. If that occurs, we have the right to substitute another Fund.
But
we would first notify you and seek approval from the SEC and the Superintendent
of Insurance of the State of Ohio and of the state in which the policy is
delivered. We would also get any other required approvals.
CHANGES
OF INVESTMENT POLICY:
We may
materially change the investment policy of a Variable Account. We must tell
you
and obtain all necessary regulatory approvals. If you object, you may convert
this policy to a substantially comparable Flexible Premium General Account
Life
Insurance Policy offered by us on the life of the Insured. The conversion will
be effective on the date we receive your request. You have the later of 60
days
from the date the investment policy changes or 60 days from when we tell you
your options to make this conversion. We will not require evidence of
insurability for this conversion.
The
new
policy will not be affected by the investment experience of any Variable
Account. The new policy will be for an amount of insurance not exceeding the
death benefit of this policy on the date of the conversion.
OTHER
CHANGES:
To the
extent permitted by applicable laws and regulations (including any order of
the
SEC), we may make changes as follows:
| 1. |
A
Variable Account may be operated as a management company under the
Investment Company Act of 1940, or in any other form permitted by law,
if
we deem it to be in the best interest of the policy
Owners.
|
| 2. |
A
Variable Account may be deregistered under the Investment Company Act
of
1940 in the event registration is no longer
required.
|
| 3. |
A
Variable Account may be combined with other separate investment
accounts.
|
| 4. |
The
provisions of this policy may be modified to comply with any other
applicable federal or state laws.
|
In
the
event of such changes, we may make appropriate endorsement on this policy having
an interest in a Variable Account and take other actions as may be necessary
to
effect such a change. Any such changes will require the prior approval of the
Superintendent of the New York Insurance Department.
DOLLAR
COST AVERAGING:
At
issue, premium may be allocated to the Fixed Account or other select
Subaccounts. Over time, amounts will automatically be transferred from these
originating accounts to the regular Subaccount allocations on a monthly basis.
Dollar cost averaging is a long-term investment program that provides for
regular, level investments over time. The Company makes no guarantees that
dollar cost averaging will result in a profit or protect against loss. Transfers
will be processed until either the value in the originating accounts is
exhausted or the Owner instructs the Home Office in writing to cancel the
transfers. The Company reserves the right to discontinue establishing new dollar
cost averaging programs. The Company also reserves the right to assess a
processing fee for this service. The maximum processing fee is $20 per
month.
AUTOMATIC
ASSET REBALANCING:
You may
elect to add or discontinue the automatic rebalancing feature at any time.
If
this feature is elected, assets will automatically be rebalanced into a
pre-selected allocation of funds at a pre-selected frequency. Assets in the
Fixed Account are not eligible for asset rebalancing and assets may not be
rebalanced into the Fixed Account. Asset rebalancing will have no effect on
the
allocation of future premium payments.
FIXED
ACCOUNT PROVISIONS
FIXED
ACCOUNT:
The
Fixed Account is funded by the General Account of the Company. The Fixed Account
is credited with interest as described under the Nonforfeiture Provisions.
When
interest above the guaranteed rate is credited to the Fixed Account, it is
non-forfeitable. In addition to allocating your Net Premiums to one or more
of
the Subaccounts described above, you may direct all or part of your Net Premiums
into the Fixed Account.
16
RIGHT
TO TRANSFER: You
may
transfer amounts between the Fixed Account and the Subaccounts, subject to
the
limits below, without penalty or adjustment. The transfer will be effective
on
the Valuation Day next following the receipt of your request. We reserve the
right to limit the number of transfers between the Fixed Account and the
Subaccounts during any policy year to one. Transfers between the Fixed Account
and the Subaccounts may be made once per Valuation Period without any fees
or
other charges.
We
reserve the right to limit the amount transferred from the Fixed Account during
a policy year to 25% of that portion of the Cash Value attributable to the
Fixed
Account at the end of the prior policy year.
Transfers
to the Fixed Account may not be made prior to the first policy anniversary
or
within 12 months of any prior transfer. We reserve the right to restrict the
amount transferred to the Fixed Account to 20% of that portion of the Cash
Value
attributable to the Subaccounts at the end of the prior Valuation Period. We
reserve the right to refuse transfers to the Fixed Account if the Fixed Account
is greater than or equal to 30% of the Cash Value.
PROCEEDS
AND SETTLEMENT PROVISIONS
PAYMENT
OF PROCEEDS:
Unless
an optional mode of settlement is elected, we will pay the Proceeds in a lump
sum. Death Benefit Proceeds will include interest at the rate of at least 2.5%
per year from the date of death or from the maturity date, if applicable. We
will determine once a year any interest to be paid in excess of the rate of
2.5%. If you elect an optional mode of settlement, we will pay the Proceeds
from
our General Account, and the sum will no longer be affected by the investment
experience of any Subaccount.
OPTIONAL
MODES OF SETTLEMENT: Policy
settlement may be made in a lump sum or by other available options listed below
upon our receipt of complete instructions and any other information we may
reasonably require. More than one settlement option may be chosen. However,
settlement options other than lump sum may only be chosen if the total amount
to
be applied under an option is at least $2,000.00 and each payment is at least
$20.00.
While
this policy is in force and prior to the Maturity Date or the death of the
Insured whichever occurs first, you may choose, revoke, or change settlement
options at any time (subject to the limits stated above). If
the
Insured dies while this policy is in force and no settlement option is recorded
as having been elected, then the Beneficiary will be permitted to choose a
settlement option.
If no
other settlement option has been chosen, payment will be made in a lump
sum.
Settlement
options must be chosen, revoked, or changed by proper written request. After
an
election, revocation, or change is recorded at our Home Office listed on the
face page of this policy, it will become effective as of the date it was
requested; provided, however, that we will not be liable to any person for
any
action or payment we make prior to recording the change. We may require proof
of
age of any person to be paid under a settlement option. Any change of
Beneficiary prior to the effective date of the settlement contract will
automatically revoke any settlement option that is in effect.
At
the
time of policy settlement under any settlement option other than lump sum,
we
will issue a settlement contract in exchange for the policy. The effective
date
of the settlement contract will be the date the Insured died, the Maturity
Date,
or the date the policy is surrendered. Payments will be made at the beginning
of
the selected 12, 6, 3, or 1 month interval starting with the effective date
of
the settlement contract.
Settlement
option payments are not assignable. To the extent allowed by law, settlement
option payments are not subject to the claims of creditors or to legal
process.
1. Life
Income with Payments Guaranteed: Amounts
applied to this option will be paid for a term equal to, the greater of the
named payee's remaining lifetime, or the selected guarantee period of 10, 15,
or
20 years. The amount payable monthly for each $1,000 applied to this option
is
shown in the Option 1 Table in the Policy Data Page.
2. Joint
and Survivor Lifetime Income: Amounts
applied to this option will be paid and continued during the lifetimes of the
named payees, as long as either payee is living. The amount payable monthly
for
each $1,000 applied to this option for selected age and sex combinations is
shown in the Option 2 Table in the Policy Data Page, amounts payable for
combinations of age and sex not shown will be furnished on request. Payments
will be made jointly.
17
|
3.
|
Life
Annuity: Amounts
applied to this option will be paid during the lifetime of the named
payee. The
amount payable will be based on our current individual immediate
annuity
purchase rates on the effective date of the settlement
contract.
Annuity purchase rates are subject to change. Upon request, we will
quote
the amount currently payable under this settlement
option.
|
|
4.
|
Any
Other Option: Settlement
options not set forth in this policy, may be available. You may request
any other form of settlement option, subject to our approval. The
amount
and period available under any other option will be determined by
us.
|
For
Settlement Option Tables, please see Policy Data Page.
POSTPONEMENT
OF PAYMENTS:
We will
normally pay any amount payable upon the Insured's death, or on maturity,
surrender, any partial surrender or policy loan, within seven days after we
receive your written request, proof of death or any other information we may
reasonably require to pay a claim. When the surrender value or payment of a
loan
comes from the Fixed Account, payments can be postponed for a period of six
months. However, such payments, to the extent they depend upon the value of
the
Variable Account, may be postponed if:
| 1. |
the
New York Stock Exchange is closed (except for customary holiday closings);
or
|
| 2. |
the
SEC requires trading be restricted or declares an
emergency.
|